• 750 Bases In 80 Countries Is Too Many For Any Nation: Time For The US To Bring Its Troops Home
  750 Bases In 80 Countries Is Too Many For Any Nation: Time For The US To Bring Its Troops Home

  Authored by Doug Bandow via AntiWar.com,

  President Joe Biden did what his three predecessors could or would not: halt a seemingly endless war. It took two decades, but American troops no longer are fighting in Afghanistan.

  An important aspect of the US withdrawal was closing Washington’s bases, which once spread across the country. Uncle Sam left Bagram Air Base, America’s biggest facility in Afghanistan, on his way home.

  However, some 750 American military facilities remain open in 80 nations and territories around the world.

  

  No other country in human history has had such a dominant presence. Great Britain was the leading colonial power, but its army was small. London had to supplement its own troops with foreign mercenaries, as in the American Revolution. In wars with great powers Britain provided its allies with financial subsidies rather than soldiers.

  Previous empires, such as Rome, Persia, and China, were powerful in their own realms but had little reach beyond. The latter never reached outside Asia. Persia was twice halted by the Greek city states. As great as Rome became, its writ never went much beyond the Mediterranean, with Central Europe, North Africa, and the Mideast its boundaries. The New World remained beyond the knowledge let alone control of all three.

  A new Quincy Institute study by American University’s David Vine and World Beyond War’s Patterson Deppen and Leah Bolger details the global US military presence. Washington has nearly three times as many bases as embassies and consulates. America also has three times as many installations as all other countries combined. The United Kingdom has 145. Russia two to three dozen. China five. Although the number of US facilities has fallen in half since the end of the Cold War, the number of nations hosting American bases has doubled. Washington is as willing to station forces in undemocratic as democratic countries.

  The study figures the annual cost of this expansive base structure to be about $55 billion. Adding increased personnel expenses takes the total up to $80 billion. Wealthier countries, which needlessly enjoy what amounts to defense welfare, typically cover a portion of the cost through “host nation support.” Not so Washington’s newest clients. Indeed, through the Global War on Terror over the last two decades the US military spent as much as $100 billion on new construction, mostly in countries, like Iraq and Afghanistan, which were financial black holes.

  Although American bases face intense local opposition in some areas, such as Okinawa, facilities are seen as welcome money-makers in others. When President Donald Trump proposed pulling US forces out of Germany many locals’ greatest concern was economic. Indeed, the whining of local politicians who saw America’s presence as a financial rather than security issue was loud enough to heard across “the Pond.” Not only did they believe that Americans owed them military protection. In their view Americans also had a duty to bolster their economies.

  However, the price of Washington’s globe-spanning is more than economic. Explained Vine, et al.:

  “These bases are costly in a number of ways: financially, politically, socially, and environmentally. US bases in foreign lands often raise geopolitical tensions, support undemocratic regimes, and serve as a recruiting tool for militant groups opposed to the US presence and the governments its presence bolsters. In other cases, foreign bases are being used and have made it easier for the United States to launch and execute disastrous wars, including those in Afghanistan, Iraq, Yemen, Somalia, and Libya.”

  Perhaps the most expensive installations were those established in Saudi Arabia after the first Gulf War. By renting out members of the US military as bodyguards for the Saudi royals Washington underwrote one of the most vile dictatorships in existence, a veritable totalitarian state with no political, religious, or social liberty. Although Crown Prince Mohammed “Slice & Dice” bin Salman, responsible for the murder and dismemberment of Saudi journalist Jamal Khashoggi three years ago, has loosened some social strictures, he has greatly tightened political controls.

  Worse from a foreign policy standpoint, America’s presence is one of the grievances which motivated Osama bin Laden to target the US Then Deputy Defense Secretary Paul Wolfowitz admitted in February 2003, before the invasion of Iraq, that America’s regional presence had cost “far more than money.” US bombing of Iraq and US troops in Saudi Arabia had “been Osama bin Laden’s principal recruiting device.” After the planned invasion, he added: “I can’t imagine anyone here wanting to … be there for another 12 years to continue helping recruit terrorists.”

  Perhaps the most serious price of endless bases has been endless wars. Obviously, causation is complex. However, going to war usually leads to creation of new facilities. Such installations encourage a continuing military presence. Existence of nearby bases reduces the marginal cost of intervening and increases the maximal temptation to make new commitments, meddle in local controversies, and enter nearby conflicts. Observed the Quincy study: “Since 1980, US bases in the greater Middle East have been used at least 25 times to launch wars or other combat actions in at least 15 countries in that region alone. Since 2001, the US military has been involved in combat in at least 25 countries worldwide.”

  American military facilities also raise expectations of host and neighboring nations. After Iran attacked Saudi oil facilities in September 2019 the well-pampered Saudi royals expected US retaliation but were sorely disappointed. Although President Donald Trump was right to allow the Saudis to “fight their own wars,” as he had tweeted five years before, America’s military presence, which Trump had increased, encouraged Riyadh to expect more – and might have motivated a more conventional president to act.

  Vine, et al. point to other costs as well. The Department of Defense is a terrible environmental actor. Although its practices have much improved in recent years, the accumulated damage is enormous. There also are questions about Washington’s tendency to load up US territories, such as Guam, with military installations. Such areas are not exactly foreign, but the Quincy report contended that the heavy base presence “helped perpetuate their colonial relationship with the rest of the United States and their peoples’ second class US citizenship.”

  Alas, DOD is less than forthcoming about the number of bases it maintains overseas. According to the report: “Until Fiscal Year 2018, the Pentagon produced and published an annual report in accordance with US law. Even when it produced this report, the Pentagon provided incomplete or inaccurate data, failing to document dozens of well-known installations. For example, the Pentagon has long claimed it has only one base in Africa – in Djibouti. But research shows that there are now around 40 installations of varying sizes on the continent; one military official acknowledged 46 installations in 2017.”

  The Biden administration should make rationalizing the US base network a priority. Indeed, this should be an integral part of the Global Posture Review that the president announced in his February speech to State Department employees. He explained that Defense Secretary Lloyd Austin would lead the process “so that our military footprint is appropriately aligned with our foreign policy and national security priorities. It will be coordinated across all elements of our national security.”

  The initial task should be publicly listing military installations and their purposes. Then facilities should be consolidated, even if doing so angers local politicians and communities. After all, this process should be relatively painless overseas, in contrast to domestic base closures, which inevitably trigger fevered local and congressional opposition.

  The next step would be tougher but necessary. The administration should rethink the underlying commitments used to justify the bases. Europe has no need of a US military presence for defense: the continent enjoys an 11-1 economic advantage and more than 3-1 population edge over Russia. South Korea has a 55-1 economic and 2-1 population superiority over the North. The Mideast Gulf monarchies are well-armed and now working with Israel as well as each other. Washington’s presence in Iraq is unnecessary, since it and its neighbors could together confront any remaining threats from the Islamic State. America’s intervention in the Syrian civil war never made sense. The Marine Expeditionary Force stationed on Okinawa is tied to Korean rather than Chinese contingencies and America’s bases there unfairly burden the local population.

  Ending US security guarantees and avoiding fights not America’s own would allow Washington to shutter many existing military facilities. Halting endless wars in the Mideast would diminish the importance of logistical nodes in Germany and elsewhere. In appropriate cases the US could replace its bases with emergency access to foreign facilities to deal with unexpected contingencies. In broad sweep Washington should move from frontline to reserve status around the world.

  The international threat environment has changed dramatically since the end of World War II, yet America’s global network persists. The impact of the Soviet collapse and Warsaw Pact dissolution was too great not to have eliminated some US facilities, but otherwise the Pentagon has been reluctant to leave existing bases.

  The only sure way to close a local installation, it seems, is to lose a war, as in Vietnam and Afghanistan. That needs to change. America no longer can afford to garrison the globe. The Biden administration should make the US into a normal country again. And that means no more imperial legions stationed around the world for purposes other than America’s defense.

  Tyler Durden
  Sat, 10/09/2021 – 23:00

• Forget Silver, Nevada Is Now The Lithium State
  Forget Silver, Nevada Is Now The Lithium State

  Lithium is one of the most in-demand commodities in the world today.

  With the ongoing shift to electric vehicles (EVs) and clean energy technologies, governments and EV manufacturers are rushing to secure their supply chains as demand for lithium soars.

  But, as Visual Capitalist notes, while the US is lagging behind in the global lithium race, it is only now starting to realize the need to catch up to China’s strong foothold. This infographic from Scotch Creek Ventures highlights the rising demand for lithium and the need for a domestic supply chain in the United States.

  

  What’s Driving the Demand for Lithium?

  Global lithium production more than doubled in the last four years to 82,000 metric tons in 2020, up from 38,000 metric tons in 2016. Here are some of the factors driving the lithium rush:

  1. More EVs on the Road:
     EV sales have been accelerating in recent years. Between 2016 and 2020, annual electric car sales increased by 297%, up from around 750,000 to nearly 2.9 million cars last year.

  2. Falling Battery Prices:
     Declining lithium-ion battery prices are allowing EVs to compete more aggressively with gas-powered cars. Since 2013, battery costs have fallen 80% with a volume-weighted average of $137/kWh in 2020.

  3. Rise of the Battery Megafactories:
     More battery manufacturing capacity means more demand for the critical minerals that go into batteries. As of March 2021, there were 200 battery megafactories in the pipeline to 2030, and 122 of those were already operational. According to Benchmark Mineral Intelligence, if all 200 battery megafactories were operating at full capacity, their annual demand for lithium would be 3 million tonnes. That’s almost 37 times the 82,000 tonnes produced in 2020.

  Although the demand for lithium is rising globally, its supply chain from mines to batteries relies on a only few critical nations.

  China’s Lithium Dominance

  In 2020, Australia, Chile, and China collectively made up 88% of global lithium production. After mining, the lithium supply chain involves refining, processing, and packaging the lithium into batteries—and the majority of this occurs in China.

  In 2019, China produced 80% of the world’s refined battery chemicals, in addition to 73% of lithium-ion battery cells. What’s more, of the 200 battery megafactories in the pipeline to 2030, 148 are in China. As a result, China is far ahead of other countries in the race for lithium and batteries.

  On the other hand, the U.S. is heavily reliant on imports for its supply of lithium, with only one lithium-producing mine in the country. As demand increases, this lack of production could threaten U.S. energy independence in the future. To address this and gaps in the supply of other critical minerals, U.S. President Biden also signed an executive order aiming to build secure supply chains for strategic minerals.

  But where is lithium in the United States?

  Nevada: The Lithium State

  Nevada is known as the Silver State for its rich history of silver mining. Today, it’s the only source of lithium production in the U.S.

  Clayton Valley and Kings Valley, two of the country’s largest lithium deposits, are in Nevada. The country’s only producing mine, Albemarle’s Silver Peak Mine, produces around 5,000 tonnes of lithium every year in Clayton Valley. Furthermore, the region is among the world’s richest closed-basin brine deposits based on grade and tonnage.

  In addition to a rich lithium deposit, mining companies in Clayton Valley can also reap the advantages of Nevada as a jurisdiction. These include access to infrastructure, a skilled mining workforce, and proximity to a battery manufacturing base with Tesla Gigafactory 1. But that’s not all—in 2020, the Fraser Institute gave Nevada the top spot for mining investment attractiveness globally.

  Meeting Lithium Demand for Energy Independence

  As countries work to expand EV adoption, critical battery metals like lithium are becoming geopolitically significant, and their supply could redefine energy independence going forward. For this reason, the U.S., EU, and Canada all have lithium on their list of minerals that are critical to national security.

  The U.S. needs to build a domestic lithium supply chain from the ground up, and Nevada has the potential to support it with lithium in Clayton Valley. Scotch Creek Ventures is developing two lithium mining projects in Clayton Valley to supply lithium for the green future.

  Tyler Durden
  Sat, 10/09/2021 – 22:30

• One Ring To Rule Us All: A Global Digital Fiat Currency
  One Ring To Rule Us All: A Global Digital Fiat Currency

  Via SchiffGold.com,

  We’ve written extensively about the “war on cash.”

  In a nutshell, governments would love to do away with cash in order to better track and control their citizens. There have been numerous moves closer to a cashless society in recent years, from capping ATM withdrawals to doing away with large-denomination bills. Last year, China launched a digital yuan pilot program and the US has floated moving toward a digital dollar.

  We got a first-hand look at what happens when governments restrict access to cash when India plunged into a cash crisis after the country’s government enacted a policy of demonetization in November 2016.

  It’s bad enough that various countries are exploring ways to move toward cashlessness, but there’s an even worse scenario – a global digital currency.

  Economist Thorsten Polleit compares it to the “master ring” in J.R.R. Tolkien’s classic Lord of the Rings.

  

  The following article was originally published by the Mises Wire.

  1.

  Human history can be viewed from many angles. One of them is to see it as a struggle for power and domination, as a struggle for freedom and against oppression, as a struggle of good against evil.

  That is how Karl Marx (1818–83) saw it, and Ludwig von Mises (1881–1973) judged similarly. Mises wrote:

  The history of the West, from the age of the Greek Polis down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders.

  But unlike Marx, Mises recognized that human history does not follow predetermined laws of societal development but ultimately depends on ideas that drive human action.

  From Mises’s point of view, human history can be understood as a battle of good ideas against bad ideas.

  Ideas are good if the actions they recommend bring results that are beneficial for everyone and lead the actors to their desired goals;

  At the same time, good ideas are ethically justifiable, they apply to everyone, anytime and anywhere, and ensure that people who act upon them can survive.

  On the other hand, bad ideas lead to actions that do not benefit everyone, that do not cause all actors to achieve their goals and/or are unethical.

  Good ideas are, for example, people accepting “mine and yours”; or entering into exchange relationships with one another voluntarily. Bad ideas are coercion, deception, embezzlement, theft.

  Evil ideas are very bad ideas, ideas through which whoever puts them into practice is consciously harming others. Evil ideas are, for example, physical attacks, murder, tyranny.

  2.

  With Lord of the Rings, J. J. R. Tolkien (1892–1973) wrote a literary monument about the epic battle between good and evil. His fantasy novel, published in 1954, was a worldwide success, not least because of the movie trilogy, released from 2001 to 2003.

  What is Lord of the Rings about? In the First Age, the deeply evil Sauron—the demon, the hideous horror, the necromancer—had rings of power made by the elven forges.

  Three Rings for the Elven-kings under the sky,

  Seven for the Dwarf-lords in their halls of stone,

  Nine for Mortal Men doomed to die,

  One for the Dark Lord on his dark throne

  In the Land of Mordor where the Shadows lie.

  One Ring to rule them all, One Ring to find them,

  One Ring to bring them all, and in the darkness bind them.

  In the Land of Mordor where the Shadows lie.

  But Sauron secretly forges an additional ring into which he pours all his darkness and cruelty, and this one ring, the master ring, rules all the other rings.

  When Sauron puts the master ring on his finger, he can read and control the minds of everyone wearing one of the other rings.

  The elves see through the dark plan and hide their three rings. The seven rings of the dwarves also fail to subjugate their bearers. But the nine rings of men proved to be effective: Sauron enslaved nine human kings, who were to serve him.

  Then, however, in the Third Age, in the battle before Mount Doom, Isildur, the eldest son of King Elendils, severed Sauron’s ring finger with a sword blow. Sauron is defeated and loses his physical form, but he survives.

  Now Isildur has the ring of power, and it takes possession of him. He does not destroy the master ring when he has the opportunity, and it costs him his life. When Isildur is killed, the ring sinks to the bottom of a river and remains there for twenty-five hundred years.

  Then the ring is found by Smeagol, who is captivated by its power. The ring remains with its finder for nearly five hundred years, hidden from the world.

  Over time, Sauron’s power grows again, and he wants the Ring of Power back. Then the ring is found, and for sixty years, it remains in the hands of the hobbit Bilbo Baggins, a friendly, well-meaning being who does not allow himself to be seduced by the power of the One Ring.

  Years later, the wizard Gandalf the Gray learns that Sauron’s rise has begun, and that the Ring of Power is held by Bilbo Baggins.

  Gandalf knows that there is only one way to defeat the ring and its evil: it must be destroyed where it was created, in Mordor.

  Bilbo Baggins’s nephew, Frodo Baggins, agrees to take the task upon himself. He and his companions—a total of four hobbits, two humans, a dwarf, and an elf—embark on the dangerous journey.

  They endure hardship, adversity, and battles against the dark forces, and in the end, they succeed at what seemed impossible: the destruction of the ring of power in the fires of Mount Doom. Good triumphs over evil.

  3.

  The ring in Tolkien’s Lord of the Rings is not just a piece of forged gold. It embodies Sauron’s evil, corrupting everyone who lays hands or eyes on it, poisons their soul, and makes them willing helpers of evil.

  No one can wield the cruel power of the One Ring and use it for good; no human, no dwarf, no elf.

  Can an equivalent for Tolkien’s literary portrait of the evil ring be found in the here and now? Yes, I believe so, and in the following, I would like to offer you what I hope is a startling, but in any case, entertaining, interpretation.

  Tolkien’s Rings of Power embody evil ideas.

  The nineteen rings represent the idea that the ring bearers should have power over others and rule over them.

  And the One Ring, to which all other rings are subject, embodies an even darker idea, namely that the bearer of this master ring has power over all other ring bearers and those ruled by them; that he is the sole and absolute ruler of all.

  The nineteen rings symbolize the idea of establishing and maintaining a state (as we know it today), namely a state understood as a territorial, coercive monopoly with the ultimate power of decision-making over all conflicts.

  However, the One Ring of power stands for the particularly evil idea of creating a state of states, a world government, a world state; and the creation of a single world fiat currency controlled by the states would pave the way toward this outcome.

  4.

  To explain this, let us begin with the state as we know it today. The state is the idea of the rule of one over the other.

  This is how the German economist, sociologist, and doctor Franz Oppenheimer (1864–1946) sees it:

  The state … is a social institution, forced by a victorious group of men on a defeated group, with the sole purpose of regulating the dominion of the victorious group over the vanquished and securing itself against revolt from within and attacks from abroad…. This dominion had no other purpose than the economic exploitation of the vanquished by the victors.

  Joseph Stalin (1878–1953) defined the state quite similarly:

  The state is a machine in the hands of the ruling class to suppress the resistance of its class opponents.

  The modern state in the Western world no longer uses coercion and violence as obviously as many of its predecessors.

  But it, too, is, of course, built on coercion and violence, asserts itself through them, and most importantly, it divides society into a class of the rulers and a class of the ruled.

  How does the state manage to create and maintain such a two-class society of rulers and ruled?

  In Tolkien’s Lord of the Rings, nine men, all of them kings, wished to wield power, and so they became bearers of the rings, and because of that, they were inescapably bound to Sauron’s One Ring of power.

  This is quite similar to the idea of the state. To seize, maintain, and expand power, the state seduces its followers to do what is necessary, to resort to all sorts of techniques: propaganda, carrot and stick, fear, and even terror.

  The state lets the people know that it is good, indispensable, inevitable. Without it, the state whispers, a civilized coexistence of people would not be possible.

  Most people succumb to this kind of propaganda, and the state gets carte blanche to effectively infiltrate all economic and societal matters—kindergarten, school, university, transport, media, health, pensions, law, security, money and credit, the environment—and thereby gains power.

  The state rewards its followers with jobs, rewarding business contracts, and transfer payments. Those who resist will end up in prison or lose their livelihood or even their lives.

  The state spreads fear and terror to make people compliant—as people who are afraid are easy to control, especially if they have been led to believe that the state will protect them against any evil.

  Lately, the topics of climate change and coronavirus have been used for fear-mongering, primarily by the state, which is skillfully using them to increase its omnipotence: it destroys the economy and jobs, makes many people financially dependent on it, clamps down on civil and entrepreneurial freedoms.

  However, it is of the utmost importance for the state to win the battle of ideas and be the authority to say what are good ideas and what are bad ideas.

  Because it is ideas that determine people’s actions.

  The task of winning over the general public for the state traditionally falls to the so-called intellectuals—the people whose opinions are widely heard, such as teachers, doctors, university professors, researchers, actors, comedians, musicians, writers, journalists, and others.

  The state provides a critical number of them with income, influence, prestige, and status in a variety of ways—which most of them would not have been able to achieve without the state. In gratitude for this, the intellectuals spread the message that the state is good, indispensable, inevitable.

  Among the intellectuals, there tend to be quite a few who willingly submit to the rings of power, helping—consciously or unconsciously—to bring their fellow men and women under the spell of the rings or simply to walk over, subjugate, dominate them.

  Anyone who thinks that the state (as we know it today) is acceptable, a justifiable solution, as long as it does not exceed certain power limits, is seriously mistaken.

  Just as the One Ring of power tries to find its way back to its lord and master, an initially limited state inevitably strives towards its logical endpoint: absolute power.

  The state (as we know it today) is pushing for expansion both internally and externally. This is a well-known fact derived from the logic of human action.

  George Orwell put it succinctly: “The object of power is power.”  Or, as Hans-Hermann Hoppe nails it, “[E]very minimal government has the inherent tendency to become a maximal government.”

  Inwardly, the state is expanding through all sorts of interventions in economic and social life, through regulations, ordinances, laws, and taxes.

  Outwardly, the economically and militarily strongest state will seek to expand its sphere of influence. In the most primitive form, this happens through aggressive campaigns of conquest and war, in a more sophisticated form, by pursuing political ideological supremacy.

  In recent decades the latter has taken the form of democratic socialism. To put it casually, democratic socialism means allowing and doing what the majority wants.

  Under democratic socialism, private property is formally upheld, but it is declared that no one is the rightful owner of 100 percent of the income from their property.

  People no longer strive for freedom from being ruled but rather to participate in the rule. The result is not people pushing back the state, but rather coming to terms and cooperating with it.

  The practical consequence of democratic socialism is interventionism: the state intervenes in the economy and society on a case-by-case basis to gradually make socialist ideals a reality.

  All societies of the Western world have embraced democratic socialism, some with more authority than others, and all of them use interventionism. Seen in this light, all Western states are now acting in concert.

  What they also have in common is their disdain for competition, because competition sets undesirable limits to the state’s expansive nature.

  Therefore, larger states often form a cartel. Smaller, less powerful states are compelled to join—and if they refuse, they will suffer political and economic disadvantages.

  But the cartel of states is only an intermediate step. The logical endpoint that democratic socialism is striving for is the creation of a central authority, something like a world government, a world state.

  5.

  In Tolkien’s Lord of the Rings, the One Ring, the ring of power, embodies this very dark idea: to rule them all, to create a world state.

  To get closer to this goal, democracy (as we understand it today) is proving to be an ideal trailblazer, and that’s most likely the reason why it is praised to the skies by socialists.

  Sooner or later, a democracy will mutate into an oligarchy, as the German-Italian sociologist Robert Michels pointed out in 1911.

  According to Michels, parties emerge in democracies. These parties are organizations that need strict leadership, which is handed to the most power-hungry, ruthless people. They will represent the party elite.

  The party elite can break away from the will of the party members and pursue their own goals and agendas. For example, they can form coalitions or cartels with elites of other parties.

  As a result, there will be an oligarchization of democracy, in which the elected party elites or the cartel of the party elites will be the kings of the castle. It is not the voters who will call the tune but oligarchic elites that will rule over the voters.

  The oligarchization of democracy will not only afflict individual states but will also affect the international relations of democracies.

  Oligarchical elites from different countries will join together and strengthen each other, primarily by creating supranational institutions.

  Democratic socialism evolves into “political globalism”: the idea that people should not be allowed to shape their own destiny in a system of free markets but that it should be assigned and directed by a global central authority.

  The One Ring of power drives those who have already been seduced by the common rings to long for absolute power, to elevate themselves above the rest of humanity. Who comes to mind?

  Well, various politicians, high-level bureaucrats, court intellectuals, representatives of big banking, big business, Big Pharma and Big Tech and, of course, big media—together they are often called the “Davos elite” or the “establishment.”

  Whether it is about combating financial and economic crises, climate change, or viral diseases—the one ring of power ensures that supranational, state-orchestrated solutions are propagated; that centralization is placed above decentralization; that the state, not the free market, is empowered.

  Calls for the “new world order,” the “Great Transformation,” the “Great Reset” are the results of this poisonous mindset inspired by the one ring of power.

  National borders are called into question, property is relativized or declared dispensable, and even a merging of people’s physical, digital, and biological identities—transhumanism—is declared the goal of the self-empowered globalist establishment.

  But how can political globalism be promoted at a time when there are (still) social democratic nation-states that insist on their independence? And where people are separated by different languages, values, and religions?

  How do the political globalists get closer to their badly desired end of world domination, their world state?

  6.

  Sauron is the undisputed tyrant and dictator in his realm of darkness. He operates something like a command economy, forcing his subjects to clear forests, build military equipment, and breed Orcs.

  There are neither markets nor money in Sauron’s sinister kingdom. Sauron takes whatever he wants; he has overcome exchange and money, so to speak.

  Today’s state is not quite that powerful, and it finds itself in economies characterized by property, division of labor, and monetary exchange.

  The state wants to control money—because this is one of the most effective ways to gain ultimate power.

  To this end, the modern state has already acquired the monopoly of money production; and it has replaced gold with its own fiat money.

  Over time, fiat money destroys the free market system and thus the free society. Ludwig von Mises saw this as early 1912. He wrote:

  It would be a mistake to assume that the modern organization of exchange is bound to continue to exist. It carries within itself the germ of its own destruction; the development of the fiduciary medium must necessarily lead to its breakdown. (6)

  Indeed, fiat money not only causes inflation, economic crises, and an unsocial redistribution of income and wealth. Above all, it is a growth elixir for the state, making it ever larger and more powerful at the expense of the freedom of its citizens and entrepreneurs.

  Against this backdrop, it should be quite understandable why the political globalists see creating a single world currency as an important step toward seizing absolute power.

  In Europe, what the political globalists want “on a large scale” has already been achieved “on a small scale”: merging many national currencies into one.

  In 1999, eleven European nation-states gave up their currencies and merged them into a single currency, the euro, which is produced by a supranational authority, the European Central Bank.

  The creation of the euro provides the blueprint by which the world’s major currencies can be converted into a single world currency.

  This is what the 1999 Canadian Nobel laureate in economics, Robert Mundell, recommends:

  Fixing the exchange rates between the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound against each other and also fixing them against a new unit of account, the INTOR. And hocus pocus: here is the world fiat currency, controlled by a cartel of central banks or a world central bank.

  7.

  Admittedly, creating a single world fiat currency seems to have little chance of being realized at first glance. But maybe at second glance.

  First of all, there is a good economic reason for having a single world currency: if all people do business with the same money, the productive power of money is optimized. From an economic standpoint, the optimal number of monies in the world is one.

  What is more, nation-states have the monopoly of money within their respective territory, and since they all adhere to democratic socialism, they also have an interest in ensuring that there is no currency competition—not even between different state fiat currencies. This makes them susceptible to the idea of reducing the pluralism of currencies.

  Furthermore, one should not misinterpret the so-called rivalry between the big states such as the US and China and between China and Europe, which is being discussed in the mainstream media on a regular basis.

  No doubt that there is a rivalry between the national rulers: they do not want to give up the power they have gained in their respective countries; they want to become even more powerful.

  But the rivalry between the oligarchic democracies of the West has already weakened significantly, and there are great incentives for the oligarchic party elites to work together across borders.

  In fact, it is the oligarchization of democracy in the Western world that allowed for the rapprochement with a socialist-communist regime: the state increasingly taking control of the economic and societal system.

  This development could be called “the Chinacization of the West.”

  The way the Western world has dealt with the coronavirus—the suspension, perhaps the termination of constitutional rights and freedoms—undoubtedly shows where the journey is headed: to the authoritarian state that is beyond the control of the people—as is the case in Communist China. The proper slogan for this might be “One System, Many Countries.”

  Is it too farfetched to assume that the Western world will make common cause with Communist China not only on health issues but also on the world currency issue? The democratic socialists in the West and the Chinese Communist Party have a great deal of common ground and common interest, I would think.

  It is certainly no coincidence that China has pushed hard for the Chinese renminbi to be included in the International Monetary Fund’s special drawing rights, and that the IMF already agreed in November 2015.

  8.

  The issue of digital central bank money, something the world’s major central banks are working on, could be a catalyst in the creation of a single world currency.

  The issue of digital central bank money not only heralds the end of cash—the anonymous payment option for citizens and entrepreneurs.

  Once people start using digital central bank money, it will be easy for the central bank and the state to spy on people’s transactions.

  The state will not only know who pays what, when, where, and what for. It will also be in a position to determine who gets access to the deposits: who gets them and who doesn’t.

  China is blazing the trail with its “social credit system”: behavior conforming to the Communist regime is rewarded, behavior that does not is punished.

  Against this backdrop, digital central bank money would be particularly effective at stifling unwanted political opposition.

  Digital central bank money will not only replace cash, but it will also increasingly compete with money from commercial banks.

  Why should you keep your money with banks that are exposed to the risk of default when you can keep it safe with the central bank that never goes bankrupt?

  Once commercial bank deposits can be exchanged one to one for digital central bank money—and this is to be expected—the credit and monetary system is de facto fully nationalized.

  Because under these conditions, the central bank transfers its unlimited solvency to the commercial banking sector.

  This completely deprives the financial markets of their function of determining the cost of capital—and the state-planned economy becomes a reality.

  In fact, this is the type of command and control economy that emerged in National Socialist Germany in the 1930s. The state formally retained ownership of the means of production.

  But with commands, prohibitions, laws, taxes, and control, the state determines who is allowed to produce what, when, and under what conditions, and who is allowed to consume what, when, and how much.

  In such a command and control economy, it is quite conceivable that the form of money production will change—away from money creation through lending toward the issue of helicopter money.

  The central bank determines who gets how much new money and when. The amount of money in people’s bank accounts no longer reflects their economic success. From now on, it is the result of arbitrary political decisions by the central banks, i.e., the rulers.

  The prospect of being supplied with new money by the state and its central bank—that is, receiving an unconditional basic income—will presumably drive hosts of people into the arms of the state and bring any resistance to its machinations to a shrieking halt.

  9.

  Will the people, the general public, really subscribe to all of this?

  Well, government-sponsored economists, in particular, will do their very best to inform us about the benefits of having a globally coordinated monetary policy; that stabilizing the exchange rates between national currencies is beneficial; that if a supranational controlled currency—with the name INTOR or GLOBAL—is created, we will achieve the best of all worlds. And as the issuance of digital central bank money has shut down the last remnants of a free capital market, the merging of different national currencies into one will be relatively easy.

  The single world currency creature that the political globalists want to create will be a fiat money, certainly not a commodity money.

  Such a single world fiat currency will not only suffer from all the economic and ethical defects which weigh on national fiat currencies.

  It will also exacerbate and exponentiate the damages a national fiat currency causes. The door to a high inflation policy would be pushed wide open—as nobody could escape the inflationary single world fiat currency.

  The states are the main beneficiaries: they can get money from the world central bank at any time, provided they adhere to the rules set out by the world central bank and the special interest groups that govern it.

  This creates the incentive for national states to relinquish sovereignty rights and to submit to supranational rules—for example, in taxation and financial market regulation.

  It is therefore the incentive resulting from a single world currency that paves the way toward a world government and a world state.

  In this context, please note what happened in the euro area: the starting point was not the creation of the EU superstate, which was to be followed by the introduction of the euro. It was exactly the opposite: the euro was introduced to overcome national sovereignty and ultimately establish the United Nations of Europe.

  One has good reason to fear that the idea of issuing a world fiat currency—which the master ring relentlessly pushes for—would bring totalitarianism—that would most likely dwarf the regimes established by Joseph Stalin, Adolf Hitler, Mao Zedong, Pol Pot, and other criminals.

  10.

  In Tolkien’s Lord of the Rings, evil is eventually defeated. The story has a happy ending. Will it be that easy in our world?

  The ideas of having a state (as we know it today), of tolerating it, of cooperating with it, of giving the state total control over our money, of accepting fiat money, are deeply rooted in people’s minds as good ideas.

  Where are the forces supposed to come from that will enlighten people about the evil that the state (as we know it today) brings to humanity?

  Particularly when in kindergartens, schools, and universities—which are all in the hands of the state—the teachings of collectivism-socialism-Marxism are systematically drummed into people’s (especially impressionable children’s) heads, when the teachings of freedom, free market and free society, and capitalism are hardly or not at all imparted to the younger generation?

  Who will explain to people the uncomfortable truth that even a minimal state will become a maximal state? That states’ monopolies over money will lead to a single world currency and thus world tyranny?

  It does not take much to become bleak when it comes to the future of the free economic and social order.

  However, it would be rather shortsighted to get pessimistic.

  Those who believe in Jesus Christ can trust that God will not fail them. If we cannot think of a solution to the problems at hand, the believers can trust God. Because “[e]ven in the darkest night, there is a bright light shining somewhere.”

  Or: please remember the Enlightenment movement in the eighteenth century. At that time, the Prussian philosopher Immanuel Kant explained the “unheard of” to the people, namely that there is such a thing as “autonomy of reason.”

  It means that you and I have the indisputable right to lead our lives independently; that we should handle it according to self-imposed rules, rules that we determine ourselves based on good reason.

  People back then understood Kant’s message. Why should such an intellectual revolution—triggered by the writings and words of a free thinker—not be able to repeat itself in the future?

  Or: the fact that people have not yet learned from bad experience does not mean that they won’t eventually learn from it.

  When it comes to thinking about changes for the better, it is important to note that it is not the mass of people that matters, but the individual.

  Applied to the conditions in today’s world, among those thinkers who can defeat evil and help the good make a breakthrough are Ludwig von Mises, Murray Rothbard, and Hans-Hermann Hoppe—and all those following their teachings and fearlessly disseminating them—as scholars or as fans.

  They are—in terms of Tolkien’s Lord of the Rings—the companions. They give us the intellectual firepower and the courage to fight and defeat evil.

  I don’t know if Ludwig von Mises knew Tolkien’s Lord of the Rings. But he was certainly well aware of the struggle between good and evil that continues throughout human history.

  In fact, the knowledge of this struggle shaped Mises’s maxim of life, which he took from the verse of the Roman poet Virgil (70 to 19 BC):

  “Tu ne cede malis, sed contra audentior ito,” which means “Do not give in to evil but proceed ever more boldly against it.”

  I want to close my interpretation with a quote from Samwise Gamgee, the loyal friend and companion of Frodo Baggins.

  In a really hopeless situation, Sam says to Frodo: “There is something good in this world, Mr. Frodo. And it’s worth fighting for.”

  So if we want to fight for the good in this world, we know what we have to do: we have to fight for property and freedom and against the darkness that the state (as we know it today) wishes to bring upon us, especially with its fiat money.

  In fact, we must fight steadfastly for a society of property and freedom!

  Tyler Durden
  Sat, 10/09/2021 – 22:00

• Lebanese Army Seizes Over 28 Tons Of Ammonium Nitrate In Town With Terror Ties
  Lebanese Army Seizes Over 28 Tons Of Ammonium Nitrate In Town With Terror Ties

  The Lebanese Army announced this week that it has seized over 28 tons of ammonium nitrate during a raid at a gas station in Arsal in the Bekaa region, which is near the border with Syria. The fertilizer can be used in bomb-making, and the seizure comes after hundreds of tons of the same substance caused the August 2020 blast which killed 200 people and decimated whole neighborhoods in Beirut. 

  “Following information about the presence of ammonium nitrate in the town of Arsal, on October 4, an army patrol and military intelligence raided a gas station in the town, and seized 28,275 kilogrammes of ammonium nitrate,” Lebanon’s army announced in a Tuesday statement.

  

  Three Syrian men and a Lebanese citizen were arrested for improper storage, and possible charges that they skirted proper permits from the Economy Ministry – though it remains that given the area it was found is also a farming community, it could be that it was legitimately meant to be used as fertilizer. Some reports said it was being stored in a truck at the gas station.

  According to Middle East news source The National, “The quantities seized on Monday sparked fears among Lebanese that dangerous chemicals continue to be improperly stored, putting the country at risk of another incident at a time of economic crisis.”

  Currently Lebanese authorities are testing it the substance to see its concentration, according to the army statement: “It added that the bags storing the material indicated a nitrogen content of 26 per cent. The Army sent samples of the seized substance to check the percentage of nitrogen it contains.”

  Arsal is a town that has been under the authorities’ microscope ever since the height of the Syrian war. “Arsal has become notorious in Lebanon after extremists from Syria briefly took over the small border town and engaged in deadly clashes with the Lebanese army in 2014,” The National noted.

  A new footage of the 🇱🇧 #BeirutBlast/2020 has circulated on social media, showing the speed of the massive destruction that occurred within seconds. pic.twitter.com/wrU75yGv33

  — INTELSky (@Intel_Sky) October 6, 2021

  https://platform.twitter.com/widgets.js

  “Days of fighting between the army, Al Nusra Front and ISIS killed at least 19 soldiers, dozens of civilians and 60 militants,” the report said. “Hezbollah is also active on Lebanon’s porous border with Syria.”

  Various conspiracy theories being floated as to who is ultimately to blame for the Aug.4 2020 Beirut port explosion range from Hezbollah involvement, to blame placed on the Iranians, to Syria’s Assad – with some speculating the Israelis were behind it. However, consensus is that it was an accident after years of horrible neglect by government oversight authorities allowed unsafe and unstable amounts of ammonium nitrate to sit in a port warehouse, the immense blast was likely triggered when maintenance and wielding work ignited the substance.

  Tyler Durden
  Sat, 10/09/2021 – 21:30

• Is The Small Business Sector Being Deliberately Targeted For Destruction?
  Is The Small Business Sector Being Deliberately Targeted For Destruction?

  Authored by Brandon Smith via Alt-Market.us,

  The past 18 months have not been kind to small businesses. If you were unfortunate enough to live in a blue state during the onset of the covid lockdowns and you own a brick-and-mortar business then you have probably spent a large part of that 18 months closed, or struggling to stay open with a skeleton crew of employees. If you did manage to get a PPP loan from the government during shutdown you are now realizing that the 24-week grace period is running out and you will probably have to pay most if not all of that money back soon. Many who tried to get a PPP loan failed because the money was quickly chewed up by major corporations instead of being reserved for small businesses.

  

  And this isn’t even the beginning of the list of troubles for small companies. I have to say, unless a large part of your business is handled online your chances of staying solvent are slim. This is not the fault of most business owners, though, it is a consequence of artificially created conditions and restrictions.

  What do I mean by this? Well let’s look at some factors that many people might not be aware of…

  Here’s why small businesses are suffering

  For example, both state and federal governments have been offering some level of covid unemployment stimulus. In the case of federal programs this could amount to $300 extra a week on top of a person’s existing unemployment checks, even more if their state has a separate program. This has created a massive drought in the employee pool. No one wants to work when they can stay home, do nothing and make more money than they ever were before the pandemic. The reality is that there are jobs everywhere right now, but almost no one is applying.

  This has led to major corporations and retailers offering unheard of sign-on bonuses in the range of $300 to $500. Some companies are offering to pay people just to put in an application. Many are offering incredible wage increases in the range of $15 an hour for unskilled labor.

  But guess who can’t make offers like that? The majority of small businesses. Large corporate chains have enjoyed endless stimulus packages from the federal government and the central bank and as long as this continues they will always be able to outbid small businesses for employees. And though the federal covid checks are slowly winding down, there are still millions of people receiving regular unemployment for many months to come. In a bizarre twist, the jobless are now flush with cash and are in no hurry to rejoin the workforce. Small companies simply cannot compete and lure these workers from their covid vacations.

  On top of this, we are now witnessing a dynamic which I have been warning would happen for years now – a stagflationary grind. That’s right, the debate that has been raging for a decade among alternative economists is finally over: It’s not a deflationary depression or a Weimar-style hyperinflationary collapse that is bringing America down, but a crippling stagflationary malaise. This means that U.S. GDP will continue to decline and certain sectors of the economy will continue to decline while prices on many products (primarily necessities) will continue to increase or remain very high.

  This creates a conundrum for small business owners – Their overhead is rising and this is shrinking their profit margins. But, if they raise prices it makes it even harder to compete with large corporations that are able to keep prices lower for longer because they have government stimulus backing them up. So, not only are brick and mortar businesses unable to compete for employees, they also can’t compete in terms of prices as the cost of materials and goods spikes. It’s inevitable, they will have to close down. There were over 200,000 extra small business closures in the past year alone due to covid and the lockdowns.

  With small businesses being hit with a perfect storm leading to mass closures, the end result will be that only major corporations will be left to offer services in the near future, and I’ve been wondering for the past several months now if this is not part of the plan…

  Re-engineering the Great Depression

  I am reminded of the situation that took place during the Great Depression involving small banks. In the 1920s there were thousands of small town and county banks across the country that were unaffiliated with major banks like J.P. Morgan or Chase National. It might sound strange to hear it but before the Depression many banks used to be small mom and pop businesses. By the end of the 1930s over 9000 small banks had failed, and the primary beneficiaries were the major corporate banks that absorbed all the assets into their portfolios for pennies on the dollar.

  In other words, the banking industry and the massive power it holds today was consolidated in the wake of the economic collapse of the 1930s, and nothing was ever the same again. This beneficial crisis was helped along by the Federal Reserve, which had artificially lowered rates through the 1920s, only to rip rates higher in the late 1920s and the early 1930s. In an address to economist Milton Friedman on his birthday, former Fed Chairman Ben Bernanke admitted that the Fed was essentially responsible for the disaster of the Great Depression, stating:

  “In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.

  Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

  It’s interesting to me that the collapse that the Federal Reserve “accidentally” caused just happened to be the same collapse that allowed their good friends in corporate banking to centralize financial power for decades to come.

  Today, we may be seeing a similar scenario unfolding. Look at it this way – The lockdowns were completely unnecessary. They didn’t stop infection rates and thus they didn’t save any lives anyway. In fact, the states with the harshest lockdowns and strictest mask mandates also had the worst infection spikes.

  The covid unemployment programs are mostly unnecessary and only justified by the pointless lockdowns. And the stagflationary conditions have been mainly inflamed by the trillions in stimulus that the federal government and the Federal Reserve printed from thin air to pay for the unnecessary covid response programs and unemployment. The covid checks and loans have conjured a workforce calamity, but they have also fueled a retail buying spree which is mostly enriching manufacturing hubs like China, triggering exploding shipping demand and shipping costs, straining the supply chain, jamming up cargo ports and raising overall prices by leaps and bounds.

  Every single element of this crisis has been engineered. And I would suggest the possibility that, like in the Great Depression, major corporations are once again in a convenient position to devour the small business sector and become the only game in town for all retail and services.

  Not only do corporations benefit from the death of small business, but so does the Biden Administration in its relentless pursuit of covid vaccine mandates. Consider for a moment that small businesses are the antithesis to covid controls. Why? Because they offer people who refuse to take the experimental vaccines an alternative to major retailers that might demand to see their vax passports. Small businesses are much more likely to defy the draconian mandates, so Biden also wins by removing competition to the corporate oligarchy that support his controls.

  Even if a small business complies with the passport mandates it will not save them, because the amount of extra costs involved in enforcement will be too much for most of them. Constantly policing customers and employees for up-to-date vaccine cards will become a full time job. Any slip up could mean a $70,000 to $700,000 fine, and because they have already submitted to the passports those businesses will have no backup from the community if they try to refuse to pay. They will ultimately close down anyway.

  Without liberty minded small businesses, the only options left for the unvaxxed will be self employment (which will also be made more difficult over time), or barter and black markets.

  Ironically, it is this threat that also creates an opportunity for small business owners. If they band together within their communities and let their communities know that they absolutely will not enforce the vaccine passports on employees or customers, then they could actually have a way to compete with and defeat the big box stores. They would have far more potential workers applying for jobs so their employee pool would grow at this critical time, and, they would gain all the customers in their area that also refuse to comply with the jab. Unless they are operating in a blue county, they will likely gain considerable business.

  All the incentives are there. Small businesses will succeed and local communities will have options for defiance of medical tyranny. Will it anger the overlords? Yes, but who cares. They want to put you out of business anyway, so why not take a risk and fight back? The choice is to make a stand now, or live under the heel of a boot for the rest of your days. That’s all there is.

  However, these measures need to be taken now before it’s too late. I also expect that as stagflationary pressures mount smaller businesses and the communities around them will have to start considering alternatives to the U.S. dollar. Precious metals are one option, along with barter and trade or local scrip as long as it is backed by commodities. There is much to be done. It is time for small businesses to accept the possibility that they have been targeted for destruction; they can do nothing and wait for the hammer to fall, or they can take measures to protect themselves. I suggest the latter.

  *  *  *

  With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.

  Tyler Durden
  Sat, 10/09/2021 – 21:00

• China's Xi: Taiwan's "Complete Reunification" With The "Motherland" Must Be Fulfilled
  China’s Xi: Taiwan’s “Complete Reunification” With The “Motherland” Must Be Fulfilled

  Chinese President Xi Jinping addressed the growing tensions surrounding the Taiwan issue during a speech Friday given in Beijing to mark the 110th anniversary of the “Xinhai Revolution” that brought down the last imperial dynasty, paving the way to establishment of the Republic of China.

  Not quite as bellicose as the last Taiwan-focused remarks he gave in a fiery address in July, Xi emphasized China is fully committed to full reunification of the island to the “motherland by peaceful means”. He vowed that a “one country, two systems” policy will “definitely” be implemented at some point in the near future. It “must be and can be realized,” he said.

  

  “To achieve the reunification of the motherland by peaceful means is most in line with the overall interests of the Chinese nation, including our compatriots in Taiwan,” Xi said in the address.

  In a veiled warning against the West, and in particular the United States, Xi called the issue “entirely China’s internal affair”:

  “No one should underestimate the Chinese people’s determination and strong ability to defend [our] national sovereignty and territorial integrity. The historical task of the complete reunification of the motherland must be fulfilled, and it will definitely be fulfilled,” Xi said.

  He additionally urged Taiwan to “stand on the right side of history jointly to create the glorious cause of the full reunification and the great rejuvenation of the Chinese nation”.

  However, it’s being widely noted that he emphasized “peaceful” means of reunification, without spelling out exactly how that scenario would happen:

  Chinese President Xi Jinping promised on Saturday to realize peaceful “reunification” with Taiwan, though did not directly mention the use of force after a week of tensions with the Chinese-claimed island that sparked international concern.

  Chinese President Xi Jinping vowed to realize peaceful ‘reunification’ with Taiwan, though he did not directly mention the use of force https://t.co/MEjUsBBmu3 pic.twitter.com/t2mqZbUMF2

  — Reuters (@Reuters) October 9, 2021

  https://platform.twitter.com/widgets.js

  This was a much softer tone compared to the early July speech which he gave on the occasion of the 100th anniversary of the Chinese Communist Party.

  For that prior event the president had donned  a gray Mao suit and said the nation is committed to Taiwan reunification ensuring continued “stability” in Hong Kong, vowing that any outside “bullying” powers will inevitably “get their heads bashed”.

  Tyler Durden
  Sat, 10/09/2021 – 20:30

• Furious School Parents Will Not Be Silenced – Doesn't AG Garland Have Better Things To Do?
  Furious School Parents Will Not Be Silenced – Doesn’t AG Garland Have Better Things To Do?

  Authored by Mark Glennon via Wirepoints.org,

  It’s tempting to see the new directive by Attorney General Merrick Garland as merely a transparent attempt to intimidate parents into silence over opinions that the Biden Administrations doesn’t like. However, it’s worth going though some of the other reasons why this misconduct by federal law enforcement is is so appalling, and to remind parents why they should not be deterred.

  Many parents in Illinois and across the country have spoken out recently with unprecedented anger in unprecedented numbers at school board meetings and beyond. Their complaints have been about Critical Race Theory in classrooms, mask mandates and explicit materials for minors about sexuality and gender. We’ve written here often supporting some of those complaints. My colleague Ted Dabrowski and I have participated in some of the efforts directed toward our own childrens’ schools.

  

  U.S. Attorney General Merrick Garland

  But on Monday, Garland issued a directive to the FBI and federal law enforcement officials across the nation to focus on alleged criminal conduct in protests by parents.

  Outrage ensued immediately, and appropriately, from parents, their organizations and commentators who are infuriated that a threat of federal law enforcement is being used to try to scare them out of constitutionally protected speech.

  Garland’s Department of Justice has responded simply by saying it isn’t true, and its defenders, particularly MSNBC, have cited examples of conduct by parents that allegedly were either inappropriate or illegal.

  Linked here are Garland’s directive and an accompanying DOJ press release. They should be read in conjunction with a letter sent by the National School Boards Association late last month to President Biden, which gave rise to the directive. It claimed that school officials are “under immediate threat” and asked Biden to sic nearly the full force of the national security establishment on offending parents.

  It contains these astonishing requests, from which you would think the entire Taliban is loose in America:

  NSBA respectfully asks that a joint collaboration among federal law enforcement agencies, state and local law enforcement, and with public school officials be undertaken to focus on these threats. NSBA specifically solicits the expertise and resources of the U.S. Department of Justice, Federal Bureau of Investigation (FBI), U.S. Department of Homeland Security, U.S. Secret Service, and its National Threat Assessment Center regarding the level of risk to public schoolchildren, educators, board members, and facilities/campuses. We also request the assistance of the U.S. Postal Inspection Service to intervene…. including any technical assistance necessary from, and state and local coordination with, its National Security Branch and Counterterrorism Division, as well as any other federal agency with relevant jurisdictional authority and oversight. Additionally, NSBA requests that such review examine appropriate enforceable actions against these crimes and acts of violence under the Gun-Free School Zones Act, the PATRIOT Act in regards to domestic terrorism, the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, the Violent Interference with Federally Protected Rights statute, the Conspiracy Against Rights statute, an Executive Order to enforce all applicable federal laws for the protection of students and public school district personnel, and any related measure.

  The DOJ was happy to oblige. It’s directive, as you can see in the documents they released, is much shorter but conveys the same point.

  And the DOJ made sure that school boards and officials will be trained in how to be claimed as victims who can call on those enforcement mechanisms. From the DOJ press release:

  The Justice Department will also create specialized training and guidance for local school boards and school administrators. This training will help school board members and other potential victims understand the type of behavior that constitutes threats, how to report threatening conduct to the appropriate law enforcement agencies, and how to capture and preserve evidence of threatening conduct to aid in the investigation and prosecution of these crimes.

  Keep in mind that a real crime requires violence or a threat to commit either violence or some other illegal act. But most of the offensive conduct being referenced by the media and school officials is not criminal. Is it criminal to say, for example “we will get you,” or “we will not forget this,” or “your career is education is dead”?

  Some such things may be vile and reprehensible, like saying “we know where you live,” but criminality is a different matter. The meanings of many statements are not clear nor is their criminality.

  Yes, there are other, worse examples of some actual, criminal conduct, including violence, which should not be tolerated. But neither the DOJ nor anybody else has put up any evidence that it is widespread enough to justify such an unprecedented federal response.

  That’s part of why Garland’s directive is so pernicious. He could have provided a useful service by delineating what is prosecutable and what isn’t. Instead, he used the tactic of exploiting the murkiness about where the line gets drawn between criminal conduct and protected speech, thereby purposely chilling what is constitutionally protected.

  “Garland knows this is dangerous nonsense. I personally know that he knows it.” That’s from Andrew McCarthy, who worked under Garland in the DOJ.

  McCarthy further wrote that “Garland incorrectly — indeed, outrageously for someone of his experience as a Justice Department official and federal appellate judge — claimed that free-speech principles yield not only to “threats of violence” but also to “efforts to intimidate individuals based on their views.”

  Why is the federal government getting involved at all in this? Crimes like those at issue are the domain of local officials.

  In fact, the constitutionality of federal involvement is highly questionable. At least two state attorneys general, in Arizona and Missouri, already blasted the DOJ for that reason and more may be coming. McCarthy, too, made that point in the column linked above.

  Selective enforcement of law for political reasons is reprehensible in itself, and it’s brazen in this case. If conduct like parents’ at school boards, even when intimidating, is colorable as a federal offense, where was the DOJ when rioting, vandalism and destruction of statues was overlooked for being supposedly acceptable protest?

  Doesn’t the DOJ have better things to do?

  Here in Illinois, it’s been over two years since a federal criminal investigation was opened about Gov. JB Pritzker’s removal of toilets to reduce property taxes. It’s still open. The event happened over four years ago. His reelection is approaching and his state would like to know if he will be its next indicted governor. But now the U.S. Attorney’s office in northern Illinois, which is handling the case, is ordered to spend time on parents and school boards.

  How about if federal resources were directed instead to, oh, say, enforcing the border? Or providing what assistance they can to major cities like Chicago being destroyed by crime?

  Garland’s biggest error is underestimating parental devotion to children. Few forces in nature are more unrelenting. Parents will not be frightened off from doing what is right for their offspring by the FBI or anybody else.

  Garland apparently has a different notion of parental devotion. It turns out that his son-in-law is the co-founder and president of Panorama Education, which sells teacher training and curriculum for race-focused surveys and conducts trainings on systemic oppression, white supremacy, unconscious bias, and intersectionality. CRT-type stuff, the primary thing parents are complaining about.

  Parents, know that there is safety in numbers. Countless other parents around the country will not stand for this.

  We will not change what we say and write.

  Nor should you.

  Tyler Durden
  Sat, 10/09/2021 – 20:00

• Former Central Banker Says US Economy Already In Recession
  Former Central Banker Says US Economy Already In Recession

  In his latest note, SocGen’s Albert Edwards made an ominous – if obvious – comparison: “as energy prices surge with a backdrop of central bank tightening it’s starting to feel a bit like July 2008” referring to that moment of “unparalleled central bank madness as the ECB raised rates just as oil prices hit $150 and the recession arrived.” Then, looking at the dire impact that higher yields would have on the economy and markets which are still convinced the inflation (and in the case of European energy, hyperinflation) is transitory, he warned that not only has stagflation arrived, but that investors should “think hard about the likelihood that higher energy prices and bond yields will trigger a ‘wholly unexpected’ recession. For that is where the biggest risk might lie for investors.”

  For once, Albert’s doomsday grumblings may be behind the curve, because according to former BOE central banker during the 2008 financial crisis and current Dartmouth College professor, David Blanchflower, and Alex Bryson of University College London, despite rising employment and wages, the US is already in a recession according to the recent plunge in consumer expectations. In a paper published on Thursday titled “The Economics of Walking About and Predicting US Downturns“, the establishment economist duo concluded that consumer expectations indexes from the Conference Board and University of Michigan tend to predict American downturns 18 months in advance.

  

  “The economic situation in 2021 is exceptional, however, since unprecedented direct government intervention in the labor market through furlough-type arrangements has enabled employment rates to recover quickly from the huge downturn in 2020,” wrote Blanchflower and Bryson quoted by Bloomberg. “However, downward movements in consumer expectations in the last six months suggest the economy in the United States is entering recession now, even though employment and wage growth figures suggest otherwise.”

  Can we predict recessions with expectations from social surveys? It seems so. See @D_Blanchflower presentation on our work at GLO yesterday: https://t.co/zHN5eWGNDj @UCLSocRes

  — Alex Bryson (@AlexanderBryson) October 7, 2021

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  According to the authors, “all the recessions since the 1980s have been predicted by at least 10 and sometimes many more point drops in expectations indices.” Additionally, a single monthly rise of at least 0.3 percentage points in unemployment and two consecutive months of employment rate declines are also notable leading indicators.

  The economists concludes that “this is a bold call of course, and not consistent with consensus and only time will tell if we are right.” However, they add “equivalent falls in these data in 2007 were an early indicator of recession, missed at the time by policymakers and economists. There is a possibility of course, that these data are giving a false steer. However, missing the declines in these variables in 2007, as most policymakers and economists did, proved fatal. It is our hope such mistakes will not be repeated this time around. They missed it last time, hopefully they won’t miss it this time. These qualitative data trends need to be taken seriously.”

  As we noted at the end of September, the Conference Board’s gauge of current conditions fell to 143.4, a five-month low, while the group’s expectations index dropped to 86.60 the lowest since November.

  

  Potentially offsetting this plunge, the University of Michigan’s gained. However, as we also noted, while one is private-entity sourced the other is government sponsored. Figure out which one is which from the chart below.

  

  Tyler Durden
  Sat, 10/09/2021 – 19:32

• Government Spending Cannot "Stimulate" The Economy
  Government Spending Cannot “Stimulate” The Economy

  Authored by Patrick Barron via The Mises Institute,

  Government economic policy is completely backwards. We are told that massive deficit spending, interest rates driven to zero, and now higher taxes on the “rich” will bring the American economy out of the doldrums or whatever fake malady seems to be popular. It is hard to imagine an economy in the doldrums when unemployment, the scourge of mankind for decades, is so low that businesses cannot attract enough workers. That’s number one; i.e., is the US economy really so bad? I admit that it always could be better, but we are not in the Great Depression of the 1930s, in which one-fourth of those seeking work could not find a job. At least not yet. Stay tuned, though.

  

  Stimulus Spending and the Cantillon Effect

  But let’s get back to the main point: Whether or not the US economy is underperforming, can government spending help? That has been the mantra since Keynesianism swept the economic and then government hallways shortly after World War II. So, we may ask ourselves, just how does government stimulus spending work? Well, from what I can conclude, the government sells its debt to the Fed (called monetizing the debt, which increases the monetary base), spends it on all kinds of programs, some (but not all) of us get more money in our pockets and spend it. So, we can see that, from government’s perspective, spending is the key. More spending MUST mean that the economy is doing better. Keynesian economists call this increasing aggregate demand, just a fancy name for more spending.

  The implied mechanism is that more spending via money created out of thin air somehow draws more goods out of hiding. Why these goods were hiding is not quite clear, except that aggregate demand was deemed to be too low. On the face of it, it appears logical. Let’s say that you are the surprise inheritor of a great deal of money from a distant relative. Your personal lifestyle certainly will be stimulated. But let’s consider the source of this windfall—your distant relative. He certainly did not print buckets of money that he left you in his will. Either he earned the money himself or inherited it from someone who did. In other words, the source of your newfound wealth was previous production. You are the new owner of that wealth. Whether you produced it or someone else, you are the new owner of what Professor Frank Shostak calls “something for something.” This is in contrast to receiving stimulus dollars printed by the government. Now you have received “something for nothing.” It is pure monetary inflation without any previous production in exchange. Therefore, any stimulus in the form of increased spending is pure smoke and mirrors, masking capital decumulation. The result is rising prices, at a minimum, and possibly hyperinflation if carried too far.

  But let me give you two thought experiments. For the first one, let’s assume that you and some others are marooned on an uncharted island, similar to the plot of the hit TV comedy Gilligan’s Island. The only resources you have are whatever washed ashore when your ship sank, whatever natural resources are at hand, and whatever survival skills you possess. Now let’s suppose that some large boxes wash ashore later. You rush to open them and find that they contain millions and millions of dollars in paper Federal Reserve notes. Not knowing when, or even if, you will be found, what good are these millions to you and your fellows? Do you all cheer, because now you all are rich? Since your most urgently desired goods certainly are not paper dollars, I doubt it. You all are left with the original resources—natural resources at hand, whatever goods washed ashore earlier, and your survival skills. But, you may say, I do not live on an uncharted island. I certainly can spend the millions and enrich my life. OK, now let’s assume that in the middle of the night Federal Reserve chairman Jerome Powell wakes you and slides a suitcase with a million dollars in Federal Reserve notes under your bed. Wow! What would you do? You might spend a little time thinking how to spend the money, but sooner or later you will take your suitcase of money and start to spend. Then you are shocked to find out that Mr. Powell, like a magical Santa Claus, visited every one of America’s 300 million-plus citizens and gave everyone of them a suitcase with a million dollars in Federal Reserve notes, too. You find that all the luxury cars are gone from dealers’ lots. When you enquire about ordering one, you find that the price has skyrocketed. When government engages in stimulus spending, the same thing happens, only on a smaller scale. A fortunate few, mostly bankers and bond dealers, get the newly printed money first. They buy current goods at current prices. Good for them! But subsequent receivers of the new money find that prices have gone up and their newly acquired money really doesn’t do them that much good. Then people much further down the line as recipients of the new money find that prices have gone up and their incomes haven’t gone up nearly as much or not at all (think of retirees on fixed pensions). Rather than enticing production out of hiding, government stimulus spending has caused a transfer of wealth from the later receivers of new money to the earlier receivers of new money. This is known in economic circles as the Cantillon effect.

  A Four-Point Plan from Forty Years Ago

  So, what can government do, if anything, to aid the economy? I have four main points, all from the Republican platform of 1980. (These four points were articulated by vice presidential candidate George Herbert Walker Bush on the steps of the capitol building in Springfield, Illinois, in the summer of 1980. I was in attendance.)

  1. Return to sound money by freezing the money supply. That requires two reforms. First, do not increase the monetary base by selling government debt to the central bank. Government must spend only what it raises in taxes or obtains through honest borrowing in the bond market. Secondly, forbid the ability of banks to engage in credit expansion through fractional reserve banking, whereby banks themselves create money out of thin air when they increase lending.

  2. Cut government spending. Of course, this is exactly opposite of what government does today, but government spending is parasitical on the real economy. Government does not create goods and services itself. It can only hand out what it has taken from others. It is the private economy that brings people what they most urgently want, not what government thinks they want or what government wants them to have.

  3. Number three, reduce regulations. The free market economy and the legal system are all that is needed to bring people what they most urgently want . Disputes are best resolved in the commercial and criminal justice systems.

  4. Number four, once the budget is balanced, finally goes into surplus, and the debt is slowly being reduced, government can begin to cut taxes. Tax reductions will take money from the destructive power of government spending and increase the capital accumulation power of the private sector. Since the money supply has remained the same, increased production will result in a slow and steady fall in prices, benefiting all levels of society. The cost of living will fall and the standard of living will rise.

  The American people need to be told the truth. Government can help the economy only by protecting you and your property. A free market economy, limited government, and the rule of law are the keys to prosperity and peace.

  Tyler Durden
  Sat, 10/09/2021 – 19:00

• The US Is Officially A Banana Republic: The Top 1% Now Own More Wealth Than The Entire Middle Class
  The US Is Officially A Banana Republic: The Top 1% Now Own More Wealth Than The Entire Middle Class

  In some ways, we sympathize with Neel Kashkari’s fake “concern” about the unprecedented wealth inequality that has emerged in the US in recent years and which has resulted in a slow, methodical and relentless destruction of the US middle class … or rather make that precedented because there was another time when the top 0.1% had amassed as much wealth and it was just before the Great Depression.

  

  After all, who hasn’t seen charts such as these showing the tremendous divergence in income earned by America’s Top 1% at the expense of the middle and lower classes:

  

  Or that the top 10% now own 70% of all the US wealth, the same as the middle and lower classes combined…

  

  … up 10% from the 60% of wealth they controlled at the start of the century.

  

  Yet we find Kashkari’s “jaw-dropping” virtue signalling proposal to grant the Fed wealth redistribution power not only laughable but absolutely terrifying: after all it was the Fed’s ZIRP and QE that was behind the greatest wealth redistribution in the past decade…

  

  … a redistribution that started almost 50 years ago, when Nixon decided to end the Fed’s biggest nemesis – the US gold standard – launching an unprecedented increase in income growth for the “Top 1%”, even as the income of the “Bottom 90%” has remained unchanged ever since 1971.

  

  For those confused, Rabobank’s Michael Every put it best: of course the Fed can redistribute wealth but “that redistribution has been from the poor and middle-class to the rich, not the other way round.“

  Unfortunately, as we showed back in November 2019, it may already be too late to fix the US: as the following stunning chart shows, the US is already effectively a banana republic if one defines such a nation as one which has a small but ultrapowerful and unaccountable kleptocracy which gets richer year after year by stealing from the rapidly shrinking middle class.

  Here is the problem: while the US has one one of the highest median incomes in the entire world, with only three countries boasting a higher income, it is who gets to collect this money that is the major problem, because as the chart also shows, with just a 50% share of the population in middle-income households, the US is now in the same category as such “banana republics” as Turkey, China and, drumroll, Russia.

  

  What is just as stunning: according to the OECD, more than half of the countries in question have a more vibrant middle class than the US.

  Alas, since November 2019 it has only gotten worse… much worse because as a result of the unprecedented wealth redistribution unleashed by the covid pandemic, America’s has truly cemented its banana republic status as the wealth of the top 1% exploded as a direct result of the Fed pumping trillions into the stock market and levitating asset values, while the lower and middle classes stagnated.

  Two weeks ago, when discussing the latest US record household net worth number, which hit an all time high of $142 trillion or up $31 trillion since Covid, we showed that it would be great if this wealth increase was spread evenly across most Americans, but unfortunately, most Americans have not benefited from recent gains in wealth.

  Indeed, the latest data as of Q1 shows that the top 1% accounts for over $41.5 trillion of total household net worth, with the number rising to over $90 trillion for just the top 10%. Meanwhile, the bottom half of the US population has virtually no assets at all. On a percentage basis, just the Top 1% now own a record 32.1% share of total US net worth, or $45.6 trillion. In other words, the richest Americans have never owned a greater share of US household income than they do, largely thanks to the Fed. Meanwhile, the bottom 50% own just 2% of all net worth, or a paltry $2.8 trillion. They do own most of the debt though…

  

  And the saddest chart of all: the wealth of the bottom 50% is virtually unchanged since 2006, while the net worth of the Top 1% has risen by 132% from $17.9 trillion to $41.5 trillion.

  

  All of which brings us to the latest update from the Fed on Household Wealth distribution published on Friday and covering the second quarter of 2021, and which revealed yet another jawdropping fact about America’s full transformation into a banana republic.

  According to the Fed data, which breaks down the distribution of wealth according to income quintile (or 20% bucket) with a special carve out for the top 1%, the middle 60% of US households by income (those in the 20% to 80% income range) – a measure economists use as a definition of the middle class – saw their combined assets drop from 26.7% to 26.6% of national wealth as of June, the lowest in Federal Reserve data, while for the first time the super rich had a bigger share, at 27%.

  

  While especially true for the top 1%, it is all the rich that have benefited at the expense of the extinction of the US middle class – as the next chart shows, over the past 30 years, 10 percentage points of American wealth has shifted to the top 20% of earners, who now hold 70% of the total. The bottom 80% are left with less than 30%.

  

  Some context: while “middle class” is a fluid concept, many economists use income to define the group. The 77.5 million families in the middle 60% make about $27,000 to $141,000 annually, based on Census Bureau data. As Bloomberg notes, their share in three main categories of assets – real estate, equities and private businesses – slumped in one generation. That made their lives more precarious, with fewer financial reserves to fall back on when they lose their jobs.

  On the other end, the top 1% represents those 1.3 million households out of a total of almost 130 million, who roughly make more than $500,000 a year. The concentration of wealth in the hands of a fraction of the population is at the core of some of the country’s major political battles. It was also made possible entirely by the Fed, which as Stanley Druckenmiller said back in May echoing what we have said since our inception back in 2009, has been the single “greatest engine of wealth inequality” in history (to which we would also add the end of the gold standard under Nixon).

  Here’s the clip. This is epic. pic.twitter.com/TRg49e47wG

  — Rudy Havenstein, making prohibited claims. (@RudyHavenstein) May 16, 2021

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  “If the economic system isn’t working for the clear majority of the population, it will eventually lose political support,” Nathan Sheets, newly appointed chief economist at Citigroup Inc., said by email. “This observation is motivating many of the economic reforms that the Biden Administration is putting forward.”

  And while Joe Biden is seeking to “bolster” working- and middle-class families with a $3.5 trillion package before Congress that includes assistance with child care, education and health care paid for with tax increases on high-income individuals, what he will do is make the rich even richer as the Fed will have to monetize all those trillions in new debt, boosting risk asset prices even higher, and while the middle class spends any one-time fiscal stimulus merely to cover soaring costs of everyday items like rent and gas, it is the top 1% who will benefit the most again as they stock portfolios hit new all time highs.

  It’s not just stocks that have benefited the super rich: housing has too. While a generation ago, the middle class held more than 44% of real estate assets in the country, it is now down to 38%. The pandemic generated a boom in housing values that has benefited most those who owned real estate in the first place. It also led to soaring rents this year, which hurt those who can’t afford a house. The self-feeding loop was yet another source of wealth transfer for the wealthier. 

  So the next time someone abuses the popular phrase  “they hate us for our [fill in the blank]”, perhaps it’s time to counter that “they” may not “hate” us at all, but rather are making fun of what has quietly and slowly but surely become the world’s biggest banana republic?

  And it has not Russia, nor China, nor any other foreign enemy to blame except one: the Federal Reserve Bank of the United States. 

  Tyler Durden
  Sat, 10/09/2021 – 18:30

• "First Big Winter Storm" Of Season To Bring "Feet Of Snow" To Western US
  “First Big Winter Storm” Of Season To Bring “Feet Of Snow” To Western US

  A series of weather systems will traverse the western part of the US into the central region early next week. According to the National Weather Service, significant snowfall could fall in portions of the northern Rockies. 

  The Southeast and Florida are still into showers and scattered thunderstorms today. Warmer than average temperatures for the Plains, and next week we’ll track the first big winter storm that will bring FEET of snow to the West and freezing cold temperatures. #Staytuned pic.twitter.com/h4SmjuLYi2

  — Janice Dean (@JaniceDean) October 8, 2021

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  After record drought, excessive heat, and wildfires, the first signs of winter with heavy snowfall are expected in the Rocky Mountains early next week. Cold air from two jet streams will send temperatures diving across the northern Rockies and the south-central Rocky Mountains through at least mid-week. Cooler air will continue making its way into the mountains of Colorado and High Plains of Montana, Wyoming, and even western Dakotas and western Nebraska. 

  

  Accumulating snow is expected in high elevations of the Sierra Nevada to the central and northern Rockies. Billings, Montana; Casper, Wyoming, parts of Salt Lake City, and foothills west of Collins-Boulder-Denver Front Range urban corridor could expect snow. 

  NWS tweeted a 3-7 day weather outlook through next Thursday and said, “heavy snow is expected for portions of the northern Rockies.” 

  

  Weather models show more than a foot of snow is expected for higher elevations. 

  

  The first significant snow event of the year comes as concerns mount some US power grids are unprepared for cooler weather. The green energy transition has been such a failure, pushing up natural gas prices worldwide, that nearly a quarter of US utilities are switching to coal this fall/winter. But declining mining output and labor shortages have resulted in low coal supplies and utilities might be forced to initiate rolling blackouts to protect grids. 

  Next week’s winter impact area of cooler weather has an abundance of coal, natgas, and crude burning power plants. 

  

  Further south, one major concern is that temperatures across Texas are expected to dive over the next few weeks. It remains to be seen if The Lone Star has rid itself of grid troubles. 

  

  It’s important to note that US Lower 48 mean temps are declining as the colder weather arrives. If your home is heated by fossil fuels, such as heating oil, now is the time to fill up before a shortage materializes or prices continue moving higher. 

  

  While the West is cold and snow is imminent, mild weather continues across the Eastern US next week. 

  Tyler Durden
  Sat, 10/09/2021 – 18:00

• Kemp: Forget Russian Intentions, Fundamentals Drove Up Europe's Gas Price
  Kemp: Forget Russian Intentions, Fundamentals Drove Up Europe’s Gas Price

  By John Jemp, Reuters energy market analyst and reporter

  European policymakers and some traders blame Russia for the low volume of gas stored across the region which has sent both gas and electricity prices surging to record highs.

  Russia’s pipeline gas export monopoly Gazprom has met commitments for long-term contracts, its clients confirm. But it has not raced to book extra pipeline capacity for spot buyers, despite European calls for more supplies.

  Some policymakers and traders have speculated additional gas has been deliberately withheld to make a diplomatic point and accelerate the approval of the Nord Stream 2 pipeline. Others say Russia has withheld gas to create a shortage, drive up prices and increase export revenues, similar to the way the OPEC+ producer group raises oil prices and its revenues.

  The other possibility is Russia has not supplied more gas because it faces its own shortage and wants to rebuild domestic stocks after they were depleted by a cold winter in 2020/21.

  There is no empirical way to determine which theory is correct or what Russia’s intentions have been. But whatever the reason, the result is the same: gas is in short supply and European energy prices have hit record levels.

  Escalating energy prices are a global phenomenon. Shortages of gas, coal, electricity and to a lesser extent oil are evident across North America and Asia as well as Europe. In every case, very high and rapidly rising prices this year are a reaction to very low and rapidly falling prices last year during the coronavirus-driven recession.

  Energy prices have always been strongly cyclical. In this instance, an exceptionally severe cyclical slump in 2020 has produced an equally extreme cyclical upswing in 2021.

  Energy production and consumption fell sharply last year, with consumption generally falling earlier and faster than production, leading to a big rise in inventories, and intensifying the downward pressure on prices. Since then, the process has reversed. Energy consumption has recovered rapidly, while production has come back more slowly, leading to a big inventory draw and intensifying the price rise.

  In the gas market, the long cold winter across North America and Eurasia depleted inventories even further and accelerated the routine cyclical swing from slump to boom conditions.  Compared with five-year averages, energy inventories have moved from large surpluses in 2020 through neutral in the winter of 2020/21 to deficits by late 2021.

  

  In Europe, the volume of gas in storage started the winter of 2020/21 at a near-record level of 1,069 Terawatt-hours (TWh) but ended at just 323 TWh. The winter drawdown of 2020/21 was the second-largest on record and left inventories at their lowest for three years.

  

  The United States experienced a similar though less severe draw that left working gas stocks in underground storage slightly below the same average. By the start of spring 2021, conditions for a future gas shortage and a sharp rise in prices were in place if production and deliveries did not rise faster than normal over the summer.

  When Russia failed to increase deliveries to Europe above contracted levels, and U.S. shale producers failed to increase drilling, the potential shortage in the spring of 2021 was transformed into an actual shortage by the autumn.

  Squeezing

  “You always squeeze with the grain of a market, never against it,” as one senior commodity trader once told me. Tight fundamentals and deliberate squeezes are inseparable. But it is the tight fundamentals that create conditions for a squeeze not the other way around.

  Did Russia spot an opportunity this year to squeeze an already tight market by deliberately reducing gas exports? Or did Russia prioritize rebuilding its own depleted inventories? We will probably never know. But what is clear is that most or all of the rise in gas, coal and electricity prices in Europe and the rest of the world can be explained in terms of regular supply-demand fundamentals.

  If the gas market had been comfortably supplied earlier this year, Russia would not have been able to increase prices by withholding production, whether or not that was its intention. In the same way, if the oil market had been comfortably supplied, with rising output from U.S shale fields and other sources, OPEC+ supply curbs would not have been able to lift prices by so much.

  Price slumps promote retrenchment and consolidation among energy producers, leaving those that survive with more pricing power and higher revenues when the cycle turns up again.

  Current energy shortages are an extreme version of the normal industry cycle, an exceptional price spike in 2021 in reaction to the exceptional slump in 2020.

  By the same logic, the exceptionally high prices of 2021 are creating conditions for a more balanced or even oversupplied market later in 2022 and 2023.

  Tyler Durden
  Sat, 10/09/2021 – 17:38

• SpaceX Hits $100 Billion Valuation In Recent Share Sale From Existing Investors
  SpaceX Hits $100 Billion Valuation In Recent Share Sale From Existing Investors

  Elon Musk’s SpaceX has officially hit a $100 billion valuation. 

  The news comes after the company completed a share sale from existing investors last week, according to CNBC.

  The company has an agreement to sell up to $755 million in stock from current insiders at a price of $560 per share. This moves the company’s valuation to $100.3 billion.

  No new capital was raised from the offering, which was consummated at a 33% increase from the company’s last valuation of $74 billion, which was assigned to the company in February 2021. At the time, the company raised $1.2 billion.

  

  With its $100 billion valuation, CNBC notes, the company is now officially a “centicorn” – a term used for a $1 billion “unicorn” one hundred times over. 

  SpaceX has raised billions over the last few years to work on its Starship and Starlink projects. Starlink is the company’s plan to build a network of thousands of satellites to provide high speed internet. Starship is the company’s rocket that is being planned to move cargo and missions on the moon and Mars.

  Starship’s next step is to reach orbit, while Starlink has already launched 1,740 satellites and already has over 100,000 users participating in a public beta.

  And unlike Tesla’s Full Self Driving public beta, Starlink’s is far less likely to launch you into inanimate objects at high rates of speed for no particular reason. 

  Here’s how SpaceX’s valuation has grown over the last two decades:

  SpaceX’s valuation:

  2021: $100 billion
  2020: $46 billion
  2019: $33 billion
  2018: $25 billion
  2017: $21 billion
  2015: $10 billion
  2010: $1 billion
  2009: $547 million
  2008: $410 million
  2007: $280 million
  2005: $163 million
  2002: $27 million

  — Jon Erlichman (@JonErlichman) October 8, 2021

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  Tyler Durden
  Sat, 10/09/2021 – 17:30

• Breakfast Inflation Strikes As Oat Prices Hit Record Highs
  Breakfast Inflation Strikes As Oat Prices Hit Record Highs

  Americans are accustomed to a bowl of cereal as their go-to breakfast meal is about to experience a price increase because of rapid food inflation.  

  This year, a devastating drought in North American oat fields has resulted in the lowest harvest for the cereal grain in years, pushing prices to record highs, a warning sign that breakfast inflation is imminent. 

  Scorching heat waves in Candian oat fields slashed production to an 11-year low. Canada, the world’s biggest exporter, ships most of its oats to the US, its largest consumer. 

  The result so far has been a new record high in oats futures trading on the CME. The sudden spike in prices has yet to ripple through supply chains to affect consumers, though that will be coming. 

  

  According to Bloomberg, “the situation for North American farmers was so dire in the summer that many cut their losses and harvested damaged plants to be sold as feed for animals.” 

  What this means for consumers is that dwindling supplies and record-high prices will soon affect foods like cereals, oatmeal, and granola bars, all popular breakfast items. 

  Randy Strychar, president of Ag Commodity Research and Oatinformation.com, said Cheerios, the US’ most popular cereal, is made entirely of oats. He said there’s no substitute for the ingredient: “You can’t make a Cheerio out of barley.” 

  General Mills, the maker of Cheerios and Nature Valley granola bars, nor Quaker Oats Company, the maker of oatmeal, among others, have yet to announce price increase of their oat products, but that could be imminent or at least create an illusion of stable prices through shrinkflation. 

  As for Oatly Group AB, the world’s largest oat milk company, they’re able to source in the Baltics and other countries in addition to Canada to mitigate soaring prices. As for smaller North-American oat-milk producers, they could be forced to raise prices. 

  Another popular breakfast food facing higher prices is sugary donuts, according to Krispy Kreme, Inc., who recently warned ingredients, such as flour, butter, milk, oil, and sugar, are forcing the company to raise prices.  

  Global food prices rose to a new decade high last month, according to a United Nations index. 

  

  Breakfast foods might soon be the latest causality of soaring food inflation impacting the working poor the hardest. 

  Tyler Durden
  Sat, 10/09/2021 – 16:30

• The Economy Needs Higher Rates
  The Economy Needs Higher Rates

  Submitted by The Swarm Blog,

  In a RealVision interview, Greenlight capital’s founder David Einhorn recently said:

  “I’m not in the transitory-inflation crowd. The private sector is allocating all the money to the fast-growing software, eating-the-world companies. It’s not allocating money to companies that actually make things and provide other kinds of services that people find less exciting, meaning there are shortages of these things now.”

  In fact, after two decades of a downturn in economic activity, it is possible to argue that low interest rates policy has been a failed experiment.

  

  There is no free lunch in economics, meaning that every decision taken by authorities has consequences, even when it comes to supplying cheap money. I have already discussed the negative externalities due to lose monetary policies and infinite bailouts, such as a growing squeeze of working and middle classes (see There Ain’t No Such Thing as a Free Lunch – Part 1), and capital misallocation (see Part 2).

  Those policies are based on the idea that low rates will favor investment decisions and fuel a powerful economic boom, which is a fallacy. Of course, authorities may provide temporary forms of relief when a crisis occurs in order to stabilize the system and to avoid a spiral of defaults. However, such measures should not become the new paradigm, as capitalism is based on the relationship between risk and return. Said differently, interest rates need to be high enough so as to incite wealthy agents to invest in new projects, looking for high returns on equity, and so that they can repeat that again and again on the long run.

  Besides, the economy evolves towards a form of punctuated equilibrium, which means that crises should not be treated as “accidents” but rather as structural and necessary events. In other words, the objective of any serious political or monetary authority should not be to avoid downturns at any cost, but to fight distortions and to ensure stability.

  Today, we live in countries where what matters the most is to make quick and significant capital gains. People are no longer investing in projects, they are just gambling on markets, willing to be part of the next major vertical move. This means buying stocks of young technology companies with absolutely no balance sheet and selling a vague promise of a killer product, or panic-buying shares of zombie firms with absolutely no future prospect, and let’s not even talk about NFTs.

  Even if some people argue that we have entered the so-called “exponential age” where only digital activities would matter, manufacturing remains the lifeblood of an economy. According to Czech-Canadian thinker Vaclav Smil, there is no innovation and no sustainable growth perspectives without a healthy manufacturing sector [1]. And this can only occur in an environment characterized by normalized interest rates.

  The economy can survive to higher rates. On the long run, it even needs them. The thing is, everyone is afraid of the consequences of such a move.

  Indeed, the corollary of that idea is the necessity for Western countries to solve their debt problem. As long as the debt situation worsens, the economy will continue to evolve towards an ultra-speculative machine that will destroy any serious prospect of creating long-term tangible assets, jeopardizing America and Europe’s chances for the future. Like it or not, but China has taken a reformist turn since 2015.

  Unfortunately, I deem such a change very unlikely.

  • First, too many people are being fooled by soaring asset prices. Even in the financial industry, people are convinced that bull runs reflect the fact that the economy is doing well. You would be surprised to find out how many people really believe in the efficient markets hypothesis. Meanwhile, every folk who tries to alert on risks is mocked and called “Cassandra.” Some persons even had the privilege of receiving a visit from the SEC just because of that, as if spreading bearish opinions was a federal crime in some democracies.

  • The second problem is the fact that a worrying number of political leaders are too corrupt to do anything about that. Beyond the case of Fed presidents trading stocks or municipals bonds, everyone should bear in mind that the speaker of the House has been making millions thanks to call options trades. If the people in charge of changing the rules are influenced by market prices, then who is going to push for serious reforms?

  • Last but not least, central banks are trapped as they opened a Pandora’s box in 2020 by adding too much risk to their balance sheet. Indeed, a growing share of the value of major currencies like the dollar or the euro is now backed by risky assets such as corporate bonds (including high yield ETFs). Therefore, the Fed and the ECB must ensure that the market price of those securities never fall, in order to guarantee the value of their currencies. Otherwise, that would mean losing control over the currency. But as capital markets are now conditioned to infinite QE policy, central banks have no choice but to keep expanding their balance sheet to support the value of those assets, meaning that they are forced to buy even more risky things (Janet Yellen once suggested that the Fed should buy stocks), leading to a problematic vicious circle.

  Nevertheless, at some point, we will have no choice but to change direction, wishing that this be done with discipline and without malice. Of course, one should expect a significant crisis, given that speculative excesses will not be absorbed smoothly. But everything comes with a price, and the economy really needs higher rates.

  If we do not initiate change on our own, then sooner or later our countries will be impacted by even more dramatic events. As Jonathan Tepper conjectured [2], “risk is like energy and cannot be destroyed, it can only be transformed.”

  * * *

  [1] Smil, V. (2013) Made in the USA: The Rise and Retreat of American Manufacturing. MIT Press.

  [2] Tepper, J. (2020) “COVID-19 Has Exposed Our Financial Fragility.” UnHerd.

  Tyler Durden
  Sat, 10/09/2021 – 16:00

• Southwest Pilots Union Sues To Block Airline's Vaccination Mandate
  Southwest Pilots Union Sues To Block Airline’s Vaccination Mandate

  In what appears to be one of the first cases of a union pushing back against the new COVID vaccination requirements handed down by the Biden Administration, a union representing pilots at Southwest Airlines is suing to stop the vaccine requirement from being forced until a lawsuit is resolved.

  

  Bloomberg reports that the union representing Southwest’s pilots has asked a court to grant a temporary stay against the federal vaccination rules until an ongoing lawsuit over what they allege are violations of US labor laws is resolved.

  In a court filing on Friday, the Southwest Airlines Pilots Association also asked for an immediate hearing on the request before a federal court in Dallas, claiming the carrier has continued to take unilateral actions that violate terms of the Railway Labor Act, which governs relations between airlines and employee unions. The “unilateral action” in question is the company’s attempt (at the Biden Administration’s direction) to force workers to either get the jab, or be fired or sent on unpaid leave, Bloomberg reports.

  “The new vaccine mandate unlawfully imposes new conditions of employment and the new policy threatens termination of any pilot not fully vaccinated by December 8, 2021,” the legal filing said. “Southwest Airlines’ additional new and unilateral modification of the parties’ collective bargaining agreement is in clear violation of the RLA.”

  According to the guidelines set out by President Biden (and “voluntarily” embraced by most of the major airlines), Southwest has a deadline of Oct. 4 under the federal mandate for employees to get jabbed or have an approved medical or religious exemption. SW is affected by the mandate because it has contracts with the federal government (like many large businesses).

  The union represents 9,000 pilots at the airline, and a strike could easily disrupt American air travel (remember the air traffic controllers strike in the 1980s?)

  For whatever reason, the airline isn’t backing down, insisting that the vaccination mandate (which airline CEOs have gone on TV to defend) isn’t an issue subject to labor-management negotiation, and that anybody who refuses the jab without an exemption will be fired.

  “The airline disagrees with SWAPA’s claims that any Covid-related changes over the past several months require negotiation,” Southwest said in an emailed statement. The carrier is committed to working with its unions “as we continue navigating the challenges presented by the ongoing pandemic.”

  Unfortunately for the Southwest, the vaccine mandate isn’t the only COVID-related policy that the pilots have taken issue with.

  Other policies the union seeks to block include Southwest’s Covid quarantine rules for pilots and an infectious disease control policy that it says significantly altered work conditions, rules and rates of pay, until the two sides negotiate a resolution to alleged contract violations outlined in its original Aug. 30 lawsuit. The changes violate a “status quo” provision of the RLA by not maintaining terms of an existing contract during negotiations, the lawsuit claimed.

  Pilots are also uniquely at risk because (as a growing number of Nordic countries impose new restrictions on mRNA vaccines, and amid skepticism about whether vaccines are really worth it for the young and healthy) an adverse reaction to the vaccine could cost them their pilots’ license.

  Pilots are at a unique risk because adverse reactions to a vaccine could affect their ability to pass periodic medical examinations required to maintain their license. The union wants to negotiate, among other things, how such instances would be covered by long-term disability policies.

  Understandably, before agreeing to all these restrictions, the union wants to make sure any pilot affected in this manner receive disability.

  As we wait to see whether pilots at other unions push back in a similar way, over in the UK, restrictions on travelers and pilots are actually being relaxed.

  Tyler Durden
  Sat, 10/09/2021 – 15:30

• Virginia Judge Hands Victory To Parents, Sides Against Prosecutor On School Board Recall
  Virginia Judge Hands Victory To Parents, Sides Against Prosecutor On School Board Recall

  Authored by Jack Phillips via The Epoch Times,

  A Virginia-based parent group attempting to oust five Loudoun County School Board members was given a small win after a Loudoun County Circuit Court judge ruled Tuesday in favor of the organization’s recall petition against a board member who sought to dismiss it.

  

  On Tuesday, a judge denied Loudoun County school board member Beth Barts’ motion to dismiss the case and also removed Loudoun County Commonwealth’s Attorney Buta Biberaj from the case.

  The group Fight For Schools and others have alleged that Barts was involved in a private Facebook group that violated the School Board’s Code of Conduct and other laws after members allegedly tried to attempt to reveal private information about parents and opponents.

  Judge Jeanette Irby, meanwhile, ruled that Biberaj should be removed from the case due to a public perception issue, arguing the public may not trust the prosecutor to be impartial.

  “I have the utmost respect for Ms. Biberaj … however, if she continued on this case there would never be acceptance on this case,” Irby said, according to local media outlets.

  An attorney for Citizens of Leesburg, another plaintiff in the case, cited a Twitter post made by Biberaj in which she shared a letter to the editor published in Loudoun Now that supported the district’s diversity, equity, and inclusion work—which is closely aligned with the quasi-Marxist critical race theory that’s now at the center of many heated school board debates across the United States.

  Biberaj was also listed as a member of the same private Facebook group in which Barts had belonged—Anti-Racist Parents of Loudoun—where members were allegedly sought to reveal private information, or “doxx,” parents and opponents of critical race theory.

  The Epoch Times has contacted the Loudoun County Commonwealth’s Attorney’s office and the school district for comment.

  Ian Prior, who is involved in the charge to remove Barts from the school board, said he is pleased with the judge’s decision on Tuesday.

  “We are ecstatic,” Prior told WJLA.

  “I can say for months, parents have been asking for a seat at the table. We haven’t been heard by the school board. They haven’t given us that opportunity. The leaders here haven’t stepped up to try to come to resolution about what’s going on in schools, but yesterday the court gave us that seat at the table.”

  “I feel like the judge looked at the evidence and made a decision that was right,” Fight for Schools supporter Erin Dunbar, also a parent, said after the hearing, according to Loudoun Now.

  “I think she’s unbiased. She’s looking at the evidence in front of her and I think she’s actually going to give us a fair trial.”

  Earlier this year, when she was censured over her social media activity, Barts said in a statement:

  “It’s not my job to be liked. It’s my job to ask hard questions, work to provide the best education for our kids, make sure our teachers are paid what they really deserve, and represent the people of Leesburg.”

  Her statement came after School Board Vice Chairwoman Atoosa Reaser asserted in March that Barts repeatedly violated the school board’s code of conduct.

  Meanwhile, a several-month-long Loudoun County Sheriff’s Office investigation found that social media posts in the private Facebook group did not constitute criminal action, according to local media. The office, as a result, did not pursue criminal charges against any of the members after they received complaints alleging “evidence of organized criminal activity intended to infringe upon 1st Amendment rights and [violations of] certain laws surrounding the crimes of stalking, harassment, and racketeering.”

  Tyler Durden
  Sat, 10/09/2021 – 15:00

• US 'Committed' To Open-Ended Occupation Of Syria As Countries Begin Normalization With Assad
  US ‘Committed’ To Open-Ended Occupation Of Syria As Countries Begin Normalization With Assad

  Authored by Dave DeCamp via AntiWar.com, 

  On Thursday, a senior Syrian Kurdish official was in Washington and met with US officials who told her that the US would continue its military presence in eastern Syria.

  “Recently, everybody thought the United States would withdraw but they were clearly saying they would stay as long as the Islamic State presence persisted,” Ilham Ahmed told Reuters.

  

  Ahmed is a leader of the Syrian Democratic Council, the political wing of the Kurdish-led Syrian Democratic Forces (SDF), who the US support in eastern Syria.

  The US uses ISIS as an excuse to stay in Syria, but its occupation and support for the SDF is part of the broader campaign against the Syrian government of Bashar al-Assad. Most of Syria’s oil fields are in the region of Syria where the US has its presence, and the occupation keeps the vital resource out of the hands of Damascus.

  On top of the military presence, the US maintains crippling economic sanctions on Syria that specifically target the energy and construction sectors, making it difficult for the country to rebuild. Last week, after Jordan reopened its border in Syria, the State Department said the US has no plans to normalize or improve relations with Damascus.

  

  Ahmed signaled that the SDF might be open to talks with the Syrian government, this even as the Biden administration remains on isolating Damascus through a severe sanctions regimen. 

  “Countries like Russia also made preparations to assist for a healthier dialogue with the Syrian regime,” she said.

  Key read for Syria hands. Biden team is easing the public into the idea that Jordan’s state resilience and stability is more geopolitically important for US interests-especially with the Asia Pivot-than maintaining an international consensus against Assad.https://t.co/8qNbIKQsib

  — Nicholas A Heras (@NicholasAHeras) October 8, 2021

  https://platform.twitter.com/widgets.js

  The SDF has previously warned Washington that it could join forces with Assad if the US pulls its troops out of Syria.

  Tyler Durden
  Sat, 10/09/2021 – 14:00

• "So Deeply, Deeply Wrong" – Lithuanian Without Vaccine Pass Describes Life Under Medical Tyranny
  “So Deeply, Deeply Wrong” – Lithuanian Without Vaccine Pass Describes Life Under Medical Tyranny

  As governments around the world begin instituting Covid-19 ‘passports’ which will dictate the level of participation one is afforded within society – regardless of naturally acquired immunity or actual risk to the public from the unvaccinated (considering that the majority of transmission occurs in the home), people have begun to push back against authoritarian tactics to control privileges and push vaccines.

  ANTI VACCINE MANDATE PROTEST, ROME
  pic.twitter.com/I7o5e3hLsE

  — The_Real_Fly (@The_Real_Fly) October 9, 2021

  https://platform.twitter.com/widgets.js

  In America, the ‘my body, my choice’ crowd has suddenly invented conditions for their own mantra.

  SUPERCUT!

  This is starting to feel a lot like … communism pic.twitter.com/x9yfq5uz9h

  — Tom Elliott (@tomselliott) October 8, 2021

  https://platform.twitter.com/widgets.js

  Regardless of how well vaccination rates and lockdowns actually work:

  After vaccinating over 85% of its population, Singapore 🇸🇬 finally flattened the curve, but along the wrong axis: pic.twitter.com/jHjczPGooE

  — Dr. Eli David (@DrEliDavid) October 8, 2021

  https://platform.twitter.com/widgets.js

  You really have to be impressed at Australia’s complete inability to control their outbreak, even with some of the strictest, harshest lockdowns & mask policies in the world

  Imagine if anyone was willing to acknowledge how destructive & ineffective The Science™ actually is pic.twitter.com/Lwh9SbE3SX

  — IM (@ianmSC) October 8, 2021

  https://platform.twitter.com/widgets.js

  For those wondering how life under a strict Covid pass looks, keep reading – as Lithuanian citizen Gluboco Lietuva (@gluboco) describes the hell he and his wife are currently living due to their decision not to get vaccinated.

  My country of Lithuania has imposed very severe measures against people who do not have a Covid Pass.

  How severe?

  • You’re banned from large supermarkets.
  • Banned from non-essential stores.
  • Banned from restaurants.

  And a lot more.

  Here’s what has happened:

  1/ pic.twitter.com/aO7xN2WoZO

  — Gluboco Lietuva (@gluboco) September 23, 2021

  https://platform.twitter.com/widgets.js

  (Continued via threadreaderapp):

  Lithuania is a small EU country of 2.8 million people.

  

  Lithuania introduced a Covid Pass in May. It’s called the “Opportunity Pass”. The Opportunity Pass allows you the opportunity to participate in society. Without the Opportunity Pass, you don’t have opportunity: your rights are restricted.

  

  The government app shows the fun you’ll have participating in the opportunities of society if you have the Opportunity Pass. There is no illustration of life for people without the Pass.

  

  In August, Lithuania passed a law to restrict the rights of people who don’t have the Covid Pass. Other countries are moving in that direction. In Lithuania, it’s already in force: all restrictions are already fully effective, and enforcement is strict.

  

  Without a Pass, you may not enter any shopping center or large supermarket. At the entrances, people queue in line to be verified. Guards scan the Pass of each person. If you have a valid Pass, the light flashes green and beeps. Then you may enter. No Pass, no entrance.

  

  Without a Pass, you may only shop in small stores which mainly sell food, pharmaceuticals, glasses and contact lenses, veterinary goods, or farming supplies. You may not enter stores which mainly sell other products.

  

  Without a Pass, you may not enter any restaurant, cafe, or bar. Without a Pass, you may not enter banks or insurance companies, except for essential purposes – e.g., pensions or social benefits – where the service lasts no longer than 15 minutes.

  

  Without a Pass, you may not visit patients in medical facilities or senior care/residential homes. The only exception is for terminally-ill patients and children under 14 years of age, if the doctor gives advance permission.

  Without a Pass, you may not enter indoor public events or spaces, such as conferences, fitness centers, or beauty services like hair and nails.

  The Pass is in the form of a QR code. Most people get it on their phones thru e-banking/e-signature. Those without phones can get a paper printout.

  

  Officials launched a re-vaccination program in September. Seniors began receiving third dose boosters last week. The whole population will follow afterwards. The Vice-Minister of Health stated: “We are likely to start the fourth and fifth booster shots in several months.”

  My country was occupied by the USSR, 1944-1990. We fought for – and won – independence. Hundreds of thousands of people took real risks opposing Soviet tyranny. On one day, 30% of the entire population joined hands to form a 675-km chain in support of freedom.

  

  Our population now is apathetic about losing freedoms previous generations fought for.

  We battled Soviet propaganda and “Show me your documents!” authoritarianism,only to acquiesce to media-led propaganda and technocratic health authoritarianism of “Show me your Covid Pass!”

  

  Principled Covid Pass opposition is caricatured as conspiracy-theorist, anti-vaxxer. Honest debate is dismissed. Mainstream leaders – politicians, officials, media, educated elite – openly wish death upon opponents of the Pass “so we can finally end this pandemic”.

  

  Under Soviet occupation, political dissent was suppressed, news was censored. Now, we’ve returned to a regime of censorship – this time, enforced by mob rule rather than government. Principled opponents don’t speak freely. Fear of the mob makes people censor themselves.

  

  By my count, 14 of the 27 EU countries now have domestic Covid Pass restrictions. But Lithuania is much further along than most. Other countries are planning restrictions such as broad bans on supermarkets and all non-essential shopping. Here, it’s already reality.

  

  The current reality in Lithuania foreshadows the future that faces other countries if they continue down the path of Covid Pass restrictions: Europe, the US, the UK, Australia, Canada…

  To me, this should be a global news headline:
  —
  “Lithuania bans citizens from society. Other EU countries following soon.”
  —

  But there’s virtually no reporting in English about this massive change in society. Or about the hatred and de-humanization which has resulted. My wife and I have 2 kids. She’s pregnant with our third. We’re very ordinary. Not important, not connected. Together we earn 3000 eur/month: not rich, not poor. My favorite activity is foraging wild mushrooms in the forest with my family (the chanterelles are heavenly!)

  

  I’ve never cared about politics before Covid. Never been to a protest in my life. Never been involved in activism. In short, I’m not political. But I am moral. And the Covid Pass regime is a deep moral wrong.

  

  My wife and I refuse to be caricatured as crazed anti-vaxxers. We are not illiterate, innumerate, or anti-science. We do not believe in conspiracy theories. Vaccines have saved millions of lives: smallpox,polio, measles… And Covid vaccination can be beneficial for many people. It’s a personal medical decision for each individual in consultation with a doctor. What we strongly oppose is the coercion of the Covid Pass regime.

  

  There are legitimate reasons for restricting the rights of citizens when society itself could be destroyed. Covid is a deadly disease. But it is not an existential threat which justifies ripping apart our society. The Covid Pass regime is vindictive, intended to punish. In just a few months, the new rules have turned my country into a two-tier society of discrimination and hate. Restriction by restriction, it is shredding the bonds that hold us all together in one society.

  My wife and I have lost our rights as citizens. We are not allowed to shop, eat out, get our hair cut, or go to the bank, gym, or library. We were both suspended from our jobs. This is deeply wrong.

  Our leaders encourage hatred of us. Our countrymen openly wish for our death. And it’s all amplified by the media and cheered on by likes and retweets. This is deeply wrong.

  

  Othering. Discrimination. Blame for disease. Accusation of wartime betrayal. Incitement. Hatred. Persecution. This is not a history textbook. This is the reality of life for my family in 2021. Our humanity has been erased. This is wrong. So deeply, deeply wrong.

  

  There is a lot of fear around us, and fear leads to anger. But we shouldn’t let that fear control us. We shouldn’t let that fear make us forget who we are as individuals. A mob may say that people without a Covid Pass should be banished from society. A mob may wish for hate and death. But as individuals, people would never accept this de-humanization of their families, friends, and neighbors.

  In Lithuania, the Covid Pass is already a reality. But other countries around the world are very quickly moving down the same path. Lithuania’s Covid Pass regime is a harbinger of what will happen everywhere if enough people don’t unite in principled opposition. With this message, I hope to reach people not as a mob, but as individuals.

  I hope to show people – as individuals – the reality of life in a Covid Pass regime. Because I hope – and truly believe – that as individuals, we will recognize the inhumanity and unite to stop it. I’m not social media savvy. I only joined Twitter this week solely to share info on the Covid Pass regime. I don’t want recognition, money, or credit. My only goal is to reach people with this message.

  I’m just an ordinary man trapped in a Kafkaesque world of mind-numbing absurdity. So I’d be grateful for your help to share this message so that together, we can unite to stop this madness. And then I can forget about Covid Pass regimes and get back to my wild mushrooms.🙂 If you want to know more, I wrote a detailed article about Lithuania’s Covid Pass regime and its effects on my family. The article contains my contact info as well as links to government websites for verification of all restrictions described here.

  Tyler Durden
  Sat, 10/09/2021 – 13:30

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• A Message To Fauci: You Are In No Position To Dictate The "Greater Good"
  A Message To Fauci: You Are In No Position To Dictate The “Greater Good”

  Authored by Brandon Smith via Alt-Market.us,

  How does a fraud like Anthony Fauci find himself in the highest paid position in US bureaucracy? Well, Fauci’s career is a rather shocking testament to the reality of our government and our era – The more corrupt you are the more favors and promotions you will receive.

  

  Fauci is well known as a shameless opportunist among many within the medical research community. For example, the creator of the Polymerase Chain Reaction (PCR) Test, Kary Mullis, had nothing but disdain for Fauci. Mullis was an interesting figure who valued scientific honesty above all else. He often warned that his PCR test could be exploited to inflate infection numbers by identifying remnants of a virus in person’s body without distinguishing whether or not they are actually “infected” (sick). Sadly, his test is no be used in this exact manner today to exaggerate infection rates of the covid-19 virus.

  In interviews Mullis has referred to Anthony Fauci as a “liar”, arguing that he is a bureaucrat that “doesn’t know anything about anything”. Mullis noted that people like Fauci have an agenda that is outside of the public good, and that they have no problem misrepresenting the science to the populace to achieve their goals. It should also be noted that YouTube has made it their mission to consistently erase any traces of the Mullis interviews mentioning Fauci from their website.

  It is also not surprising that Fauci’s rampant fear mongering over AIDS in the 1980’s has gone mostly unmentioned by the mainstream media. His claim that 1 in 5 heterosexual Americans would be dead from AIDS by 1990 has been summarily memory-holed and the guy is treated like a scientific genius by the journalistic community in 2021.

  If there is any justice in this world then Fauci should really go down in history as one of the primary initiators of the Covid pandemic, being that he was the head of the National Institutes of Health (NIH) that funded Gain of Function research on corona-viruses at the Wuhan Lab in China. This is the same research that Fauci blatantly lied about to congress on multiple occasions. And, the Wuhan lab is the same lab that evidence suggests was the ground zero source of the Covid-19 outbreak.

  It is important to note that it was Fauci and the NIH that LIFTED the ban on gain of function research on deadly viruses in 2017, and it was well known around this time that the Level 4 Wuhan lab in China was not secure.

  If anyone is responsible for global covid deaths, it is Fauci, the Chinese government and anyone else involved in that gain of function research which is primarily used to WEAPONIZE viruses under the guise of creating “therapeutics.” Gain of function research was originally banned under the Biological Weapons Convention which went into effect in 1975, unless it was being used for therapeutics. Now ALL gain of function research that is revealed publicly is labeled as therapeutics even if it is actually designed to produce biological weapons. This is sometimes referred to as “dual use research.”

  The prevailing narrative continues to be that even if the virus came from the Wuhan lab then it was surely an accident. I continue to believe according to the available evidence that Covid-19 was deliberately released in order to create a global crisis which could then be exploited by the establishment to introduce extreme controls over the populace to the point of medical totalitarianism. But of course, there is no smoking gun to prove this, only common sense.

  If we take the notorious Event 201 into account things get a little weird. Event 201 was a war game held by the World Economic Forum and the Bill and Melinda Gates Foundation. Its claimed purpose was to simulate the effects of a deadly coronavirus pandemic “spread by animals” to humans and to develop the policies governments and their corporate partners should employ to deal with it. Interestingly, this simulation was held in October of 2019, only two months before the REAL THING happened. Nearly every policy suggested by the participants of Event 201 has now been adopted by most governments, including the social media censorship campaign against anyone that questions the origins of the virus and the safety of the experimental mRNA vaccines.

  

  Anthony Fauci and friends….

  WEF founder Klaus Schwab was quick to announce at the start of the pandemic that Covid-19 was the “perfect opportunity” to launch the “Great Reset”, which is a globalist plan to completely erase free market systems and replace them with a highly centralized socialist framework. The WEF envisions a world in which carbon related power is banned, all financial transactions become digital and are monitored and controlled by central authorities, and they have even suggested that one day people will “own nothing and be happy”. This is a reference to the so-called “shared economy” of the future, where the concept of personal property is abolished and all people will live in communal housing collectives where necessities are rationed or rented out to them by the government.

  Something must have went wrong with covid, however, because the Event 201 death estimates for such a virus were around 65 million within the first year of the outbreak. This of course never happened with Covid-19. So, the resistance to the mandates has been high, or much higher apparently than the globalists expected. They have been forced to engage in an endless fear campaign for the past 18 months over a virus with a mere 0.26% median death rate. It is a virus that well over 99.7% of all people will survive and it has an extremely low chance of long term effects on those who do actually end up hospitalized. In the majority of states the hospitalization rates are between 10-35 people for every 100,000 people infected.

  These numbers come from the CDC and the medical establishment at large, yet they are ignored by propagandists like Fauci, just as Fauci has continued to ignore natural immunity as a factor in covid mandates. It might seem bizarre to almost any scientist, doctor and virologist not paid by the government, but Fauci has argued that natural immunity should be ignored when compared to vaccination. Multiple studies from around the world now show that natural immunity is up to 27 times more effective at preventing covid infection than the vaccines, but those with natural immunity are considered a threat to others under the new mandates unless they are also vaxxed.

  This simply makes no sense from a scientific perspective until you realize that the mandates are not about science, they are about authoritarianism. Fauci is the US front man for a campaign of medical tyranny being imposed in every nation; this is why he does not care about natural immunity. The idea of it is inconvenient to his narrative, so he pretends it is inconsequential.

  It is perhaps ironic that Fauci himself is becoming inconsequential as he is slowly fading away from the media limelight. I have noticed that ever since the NIH gain of function information was released to the public Fauci has been in the media less prominently. A documentary produced by National Geographic and soon to be distributed by Disney+ portrays the conman as a misunderstood savior and is sure to be a trash fire. That said, it does represent a clear last-ditched effort to save the man’s false reputation.

  There is a good reason for all of this. Fauci’s distaste for personal freedom has been well documented and is making him extremely unpopular. He even recently argued on CNN in favor of vaccine mandates using this perverse position:

  “There comes a time when you do have to give up what you consider your individual right of making your own decision for the greater good of society.”

  Fauci and his globalist ilk can be distilled down to this single mantra: Do as you are told for the greater good. But who gets to determine what the “greater good” is? Isn’t it disturbing that it’s always the same elitists that end up in that position? I know that leftists in particular love the idea of the vaccine mandates and worship Fauci, and they say we skeptics should “listen to the science”, but Fauci is not a scientist, he’s a door-to-door salesman, and as I’ve noted above the REAL science does not support the arguments for forced vaccinations or lockdowns.

  Hell, I keep asking the same questions on the mandates in these articles and not a single leftists or pro-vax proponent has come up with a valid or logical response, but out of morbid curiosity I would love to see Fauci give his answers:

  1) Covid has a median death rate of only 0.26%, so why should we take ANY risk on an experimental mRNA vaccine with no long term testing to prove its safety?

  2) Why not give support to the 0.26% of people actually at risk from dying due to covid instead of spending billions of dollars on Big Pharma producing a rushed vaccine that you plan to force on the 99.7% of people who are not at risk?

  3) In majority vaccinated countries like Israel, over 60% of covid hospitalizations are fully vaccinated people. The exponential rise of fully vaccinated patients in multiple nations suggests that the vaccines do not work. Why should we take a vaccine that has been proven not to be effective?

  4) If you believe the vaccines actually do work despite all evidence to the contrary, then why should vaccinated people fear anything from unvaccinated people? How are we a threat to them?

  5) If the vaccines don’t work, then doesn’t this mean the mandates are pointless and the people that are most safe are the people with natural immunity? Shouldn’t we be applauding the naturally immune and encouraging treatment instead of useless vaccination?

  6) Since the vaccines actually don’t work according to the data, isn’t it time to stop blindly dismissing treatments like Ivermectin and focus on trials and studies that research these alternatives? Why the vitriolic propaganda campaign to label Ivermectin nothing more than “horse paste” when it is actually a long used Nobel Prize winning treatment for human ailments? Is it because the experimental covid vaccines would lose their emergency authorization status under the FDA if effective treatments exist?

  7) Why are government funded scientists so keen on defending Big Pharma to the point of ignoring all data that contradicts their claims? Are you just embarrassed of being wrong, or are you corrupt?

  8) Who decided you are qualified to determine what constitutes the “greater good?”

  Globalists and errand boys like Fauci will never be able to answer these questions without twisting the narrative. They will say “What about the 700,000 dead in the US?” to play on the idea that the freedom minded lack empathy for their fellow man. Of course, around 40% of those deaths are patients from nursing homes with preexisting conditions, so we have no idea if they died from covid or from their previous ailments. Also, millions of people die every year from a plethora of communicable diseases including the flu and pneumonia, and we never tried to lock down the entire country and crush people’s civil rights because of this.

  If we maintained a running tally of flu and pneumonia deaths year after year as we are doing with covid, then the ever increasing number of bodies would seem just as forbidding. Society cannot function when it is preoccupied with death.

  Yes, around 0.26% of people die from covid, but life goes on for everyone else. Our freedoms are more important than your irrational fears. Our freedoms are more important than globalist agendas for centralization. Our freedoms ARE the greater good. Without them our society dies, and as our society dies millions more people will die from the inevitable collapse and tyranny that will follow; far more than will ever die from covid.

  This is why nothing Fauci says has any relevance to us. He is so transparent in his corruption that he might as well be invisible. We will continue to ignore his declarations and admonitions and we will continue to fight back against the vaccine passports and restrictions. When all is said and done, if Fauci, Biden and other globalist puppets try to use force to impose their agenda upon us then there will come a day very soon when they will be held accountable for their crimes against humanity, and then they will wish they were invisible.

  *  *  *

  If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.

  Tyler Durden
  Fri, 10/08/2021 – 23:40

• Chuck Schumer Urges President Biden To Crack Down On "Ghost Guns"
  Chuck Schumer Urges President Biden To Crack Down On “Ghost Guns”

  It comes as no surprise that the federal government is continuing its crusade against ghost guns, or ready-to-assemble gun kits, also known as 80% lowers. The latest is Sen. Chuck Schumer, who demanded that the Biden administration crackdown on these untraceable firearms. 

  “There is absolutely no doubt about it – ghost guns continue to haunt New York, and pose a serious threat to our public safety,” Schumer told reporters earlier this week.

  “We’re asking the administration to act: Close the ghost gun loophole as quickly as we can,” he added. “Stop ghost guns from coming into our city, our communities that are killing [people], particularly our kids.”

  Schumer said ghost guns are sold as separate components and don’t need a background check to purchase. He warned when these components are pieced together, they create a fully operational firearm that can end up in the wrong hands of “felons” and “spousal abusers.”

  The Senate majority leader said the ATF should define these “partially complete frames” as firearms and subject buyers to background checks. 

  

  In May, the Department of Justice proposed a rule that would require gun shops and online retailers to conduct background checks on those who wanted to purchase 80% lowers. The proposed rule also wanted manufacturers to add serial numbers to the frames. He predicted that if the federal government passed such a law, it would prevent ghost guns from ending up in the wrong hands. 

  But not so fast, says Baltimore-based gunshop and gun policy advocacy group The Machine Gun Nest (TMGN), who warned that more regulation of the firearms industry would only push criminals to print 3D weapons.

  “Nowadays, all someone needs is a 3D printer off Amazon, a few spindles of pla filament, and a CAD file to print a weapon at home. There’s simply no way for the government to continue a regulation spree on the industry and for any successful outcomes to materialize. It’s a losing war, just like the war on drugs.

  “What will the Feds ban next? 3D Printers?” TMGN opined. 

  During the last year and a half of panic gun buying, mostly due to the virus pandemic and social unrest of 2020, Americans also hoarded ghost gun kits in anticipation the government would crack down on these unserialized frames. 

  If there’s one thing the government likes doing, it’s the art of control, and the best way to do that is to continue regulating the gun industry into non-existence. 

  Tyler Durden
  Fri, 10/08/2021 – 23:20

• Singapore Drops AI Chatbot After Giving Inappropriate Advice About COVID
  Singapore Drops AI Chatbot After Giving Inappropriate Advice About COVID

  Singapore’s Ministry of Health (MOH) removed an AI chatbot from its website after it went ‘haywire’ and provided people with inappropriate answers to COVID-related questions, according to Singapore newspaper Today. 

  Dubbed “Jamie,” the AI chatbot uses Natural Language Processing engine to figure out questions asked by the public. 

  Things recently took a turn for the worse when the chatbot left some residents in disbelief by its answers about family planning advice when asked about the virus. 

  An example of one of the conversations posted on Reddit shows one user asking the AI chatbot, “My son tested covid positive what should I do?”

  The chatbot responded: 

  “You should practice safe sex through the correct and consistent use of condoms, or abstinence, for at least the whole duration of your female partner’s pregnancy.”

  

  Another conversation posted online shows a resident asking, “Where can I get an ART?” ART refers to rapid antigen tests. However, the chatbot was far from helpful and offered the “polio vaccine” instead. 

  

  MOH was quick to remove the chatbot from its website after what it calls “misaligned” replies. Local media reports Ask Jamie is functional on dozens of other government websites and appears to be working fine. It remains a mystery why the chatbot gave terrible advice when residents asked COVID questions. 

  Tyler Durden
  Fri, 10/08/2021 – 22:40

• 15 Common Dynamics Of SHTF Collapses
  15 Common Dynamics Of SHTF Collapses

  Authored by Fabian Ommar via The Organic Prepper blog,

  When it comes to how we see and prepare for SHTF, thinking in terms of real and probable rather than fictional and possible can make a big difference. Even though SHTF has many forms and levels and is in essence complex, random, diverse and unsystematic, some patterns and principles are common to the way things unfold when it hits the fan.

  With Toby and Selco’s Seven Pillars of Urban Preparedness as inspiration, I came up with a different list of the 15 dynamics and realities of collapses.

  

  #1 SHTF is nuanced and happens in stages

  Thinking about SHTF as an ON/OFF, all-or-nothing endgame is a common mistake that can lead to severe misjudgments and failures in critical areas of preparedness. Part (or parts) of the system crash, freeze, fail, or become impaired. This is how SHTF happens in the real world. And when it does, people run for safety first, i.e., resort to more familiar behaviors, expecting things to “go back to normal soon.” 

  By “normal behaviors,” I mean everything from hoarding stuff (toilet paper?) to rioting, looting, and crime, and yes, using cash – as these happen all the time, even when things are normal. But no one becomes a barterer, a peddler, a precious metals specialist in a week. Society adapts as time passes (and the situation requires). That’s why preppers who are also SHTF survivors (and thus talk from personal experience) insist that abandoning fantasies and caring for basics first is crucial. This is not a coincidence. It is how things happen in the real world. 

  Recently I wrote about black markets and the role of cash in SHTFs, emphasizing these things take precedence except in a full-blown apocalypse – which no one can say if, when, or how will happen (because it never has?). Now, I don’t pretend to be the owner of the truth, but those insisting changes in society happen radically or abruptly should check this article about the fallout in Myanmar.

  #2 Everything crawls until everything runs

  Number two is a corollary to #1. SHTF happens in stair-steps, but most people failing to prepare and getting caught off-guard is evidence of the difficulty of the human brain to fully grasp the concept of exponential growth. It bears telling the analogy of the stadium being filled with water drops to illustrate this.

  Let’s say we add one drop into a watertight baseball stadium. The deposited volume doubles every minute (i.e., one minute later, we add two more drops, then four in the next minute, eight in the next, then sixteen, and so on). How long would it take to fill the entire stadium? Sitting at the top row, we’d watch for 45 minutes as the water covered the field. Then at the 48-minute mark, 50% of the stadium would be filled. Yes, that’s only 3 minutes from practically empty to half full. At this point, we have just 60 seconds to get out: the water will be spilling before the clock hits 49 minutes.

  This is an important dynamic to understand and keep in mind because it applies to most things. Another example: it took over 2 million years of human prehistory and history for the world’s population to reach 1 billion, and less than 250 years more to grow to almost 8 billion. 

  #3 The system doesn’t vanish or change suddenly

  Based on history, the Mad Max-like scenario some so feverishly advocate is not in our near future.  

  The Roman Empire unraveled over 500 years. We may not be at the tipping point of our collapse or the last minute of the flooding stadium, as illustrated in #2 above. But time is relative, and those 60 seconds can last five, ten, fifteen years. Things are accelerating, but there’s no way to tell at which point in the curve we are.

  That doesn’t mean things will be normal in that period. A lot has happened to people and places all over the Roman empire during those five-plus centuries: wars, plagues, invasions, droughts, shortages, all hell broke loose. Our civilization has already hit the iceberg, and the current order is crumbling. There will be shocks along the way, some small and some big. But SHTF is a process, not an event.

  #4 History repeats, but always with a twist

  That’s because nature works in cycles, and humans react to scarcity and abundance predictably and in the same ways. Also, we’re helpless in the face of the most significant and recurring events. But things are never the same. Technology improves, social rules change, humankind advances, the population grows. This (and lots more) adds a variability factor to the magnitude, gravity, and reach of outcomes.

  What better proof than the COVID-19 pandemic just surpassing the 1918 Spanish Flu death toll in the US? It’ll probably do so everywhere else, too. Even if we don’t believe the official data (then or now), we’re not yet out of this new coronavirus situation. 

  #5 SHTF is about scarcity

  A shrink in resources invariably leads to changes in the individual’s standard of living or entire society (depending on the circumstances, depth, and reach of the disaster or collapse). Then it starts affecting life itself (i.e., people dying).

  Essentially, when things really hit the fan, abundance vanishes, and pretty much everything reverts to the mean: food becomes replenishment, drinking becomes hydration, sleeping becomes rest, home becomes shelter, and so on. Surviving is accepting and adapting to that. 

  #6 The consequences matter more than the type of event

  I’ll admit to being guilty of debating probable causes of SHTF more often than I should, mainly when it comes to the economy and finance going bust. That’s from living in a third-world country, with all the crap that comes with it. 

  It’s what I have to talk, warn, and give advice about. I still find it essential to be aware and thoughtful of the causes. But it’s for the consequences that we must prepare for: instability, corruption, bureaucracy, criminality, inflation, social unrest, divisiveness, wars, and all sorts of conflicts and disruptions that affect us directly.

  #7 Life goes on 

  Humankind advances through hardship but thrives in routine. We crave normalcy and peace, and over the long term, pursue them. Contrary to what many think, life goes on even during SHTF. And things tend to return to normal after the immediate threats cease or get contained. 

  At least some level of normal, considering the circumstances. For example, in occupied France, the bistros and cafés continued serving and entertaining the population and even the invaders (the Nazi army). It was hard, as is always the case anywhere there’s war, poverty, tyranny – but that doesn’t mean the world has ended. 

  #8 SHTF pileup

  Disasters and collapses add instability, volatility, and fragility to the system, which can compound and cause further disruptions. Sometimes, unfavorable cycles on various fronts (nature and civilization) can also converge and generate a perfect storm.

  It’s crucial to consider that and try to prepare as best we can for multiple disasters happening at once or in sequence, on various levels, collective and individual – even if psychologically and mentally. And if the signs are any indication, we’re entering such a period of simultaneous challenges.

  #9 Snowball effect

  Daisy based her excellent article on the 10 most likely ways to die when SHTF on the principle of large-scale die-off caused by a major disaster, like an EMP or other. This theory is controversial and the object of endless discussions. Some say it’s an exaggeration. But in my opinion, that’s leaving a critical factor out of the equation.

  Consider the following: according to WPR and the CDC, before COVID-19, the mortality rate in the US was well below 1% (2.850.000 per year, or about 8.100 per day). If the mortality rate increases to just 5%, this alone would spark other SHTFs, potentially more serious and harmful than the first.

  That five-fold jump in mortality would result in more than 16 million dead per year or 44.000 per day. That’s 5% we’re talking about, not 20 or 30. If there’s even a protocol to deal with something like that, I’m not aware. It would be catastrophic on many levels over a shorter period (say, a few months).

  Early in the CV19 pandemic, some cities had trouble burying the dead, and the death rate was still below 1%. Sure, other factors were playing. But the point is, things can snowball: consequences and implications are too complex and potentially far-reaching. Think about the effects on the system.

  #10 SHTF is a situation, but it’s also a place 

  Things are hitting the fan somewhere right now. Not in the overblowing media but the physical world: the Texas border, third-world prisons, gang-ruled Haiti, in Taliban-raided Afghanistan, in the crackhouse just a few blocks from an affluent neighborhood, under the bridges of many big cities worldwide, in volcano-hit islands. 

  There are thousands of places where people are bugging out, suffering, or dying of all causes at this very moment. If you’re not in any SHTF, consider yourself lucky. Be grateful, too: being able to prepare is a luxury. 

  #11 Choosing one way or another has a price

  Being unprepared and wrong has a price. However, so does being prepared and wrong. Though some benefits exist regardless of what happens, the investment in terms of time, finance, and emotion to be prepared could be applied elsewhere or used for other finalities (career, a business, relationships, etc.) rather than some far-out collapse.

  Since so much in SHTF is unknown and open, and resources are limited even when things are normal, survival and preparedness are essentially trade-offs. We must read the signals, weigh the options, consider the probabilities, make an option, and face the consequences. That’s why striving for balance is so important.

  #12 SHTF is dirty, smelly, ugly

  This is undoubtedly one of the most striking characteristics of SHTF: how bad some places and situations can be. Most people have no idea, and they don’t want to know about this. Those who fantasize about being in SHTF should think twice. Abject misery and despair have a distinct smell of excrement, sewage, death, rotting material, pollution, trash, burned stuff, and all kinds of dirt imaginable. And insects. The movies don’t show these things. But bad smells and insects infest everything and everywhere, and it can be maddening. 

  During my street survival training, I get to visit some really awful places and witness horrible things. The folks eventually going out with me invariably get shocked, sometimes even sickened, when they see decadence up and close for the first time. Even ones used to dealing with the nasties – it’s hard not to get affected. 

  For instance, drug consumption hotspots are so smelly and nasty that someone really must have to be on crack just to stand being there. It’s hell on earth, and I can’t think of another way to describe these and other places like third-world prisons, trash deposits, and many others. Early on, being in these places would make me question why I do this. It never becomes “normal.” We just adapt. But seeing these realities changes our life and the way we see things.

  #13 The Grid is fragile

  It’s baffling how this escapes so many. Most people I know are in constant marvel with modern civilization. They look around, pointing and saying, “Are you crazy? Too big to fail! There’s no way this can go away! Nothing has ever happened!“. 

  We have someone to take our trash, slaughter, process our food, treat our sick, purify our water, treat our sewage, protect us from wrongdoers and evil people (and keep them locked), control the traffic, and defend our rights. 

  Peeking behind the curtains is a red pill moment. What keeps The Grid up and running is not something small, but it’s fragile. The natural state of things is not an insipid, artificially controlled environment. On the positive side, it makes us feel more grateful, humble, and also more responsible.  

  #14 The frog in the boiling water

  That’s you and me and everyone around us. There’s no other way around it. We’re the suckers who get squeezed and pay the bill whenever something happens, anywhere and everywhere. It’s always our freedom, rights, money, and privacy that gets attacked, threatened, stolen.  

  Not only because the 1% screws us at the top, but because we’re the big numbers, the masses. And only those who work and produce something can bear the brunt of whatever bad happens to society and civilization. 

  Make no mistake: whenever the brown stuff hits the fan, it will fall on us. It’s no reason to revolt but to acknowledge that, ultimately, we’re responsible for ourselves. 

  #15 People can make things worse

  Just have a look around and see what’s happening. Selco himself will tell you that the most dangerous thing about the SHTF is other people.

  Conclusion

  Sometimes, the mechanics, brutality, and harshness of SHTF end up in the background of personal narratives and emotional accounts. Being more knowledgeable and cognizant of some general aspects of collapses may allow flexibility, creativity, improvisation, adaptation, resiliency, and other broad and effective strategies.

  Or, simply provide material for reflection and debate, really. 

  Either way, even those who haven’t been through collapse can still learn from history, from others’ experiences, from human behavior, from the facts. Just be sure to see the world for what it is and not from what you think. Because it will go its own way, and reality will assert itself all the same.

  What are your thoughts about the dynamics of an SHTF scenario? Are there any you want to add? Does this match up with your personal expectations? Let’s discuss it in the comments.

  *  *  *

  Fabian Ommar is the author of The ULTIMATE Survival Gear Handbook and  Street Survivalism

  Tyler Durden
  Fri, 10/08/2021 – 22:20

• Aussie Freedom Blogger Arrested At Home For Alleged 'Breach Of Public Health Act'
  Aussie Freedom Blogger Arrested At Home For Alleged ‘Breach Of Public Health Act’

  Australian blogger Simeon Boikov – known as the “Aussie Cossack” – has been arrested a home for reportedly violating lockdown rules.

  Boikov, a citizen journalist whose YouTube channel covers police brutality and lockdown measures, livestreamed as three NSW cops entered his home and arrested him for “an alleged breach of the Public Health Act” on Oct. 4.

  As of this writing, it’s unclear what Boikov was charged over, however it comes days after he posted a video mocking the arresting officer, Seargeant Kingston. In a longer video (below), Kingston calls Boikov an “absolute menace” who was suspected of committing an offense by parking his car and getting out of it – which Boikov says he did ‘to exercise.’

  More:

  In Australia, police aren’t even allowing citizens to do exercise outside without mask. pic.twitter.com/ZMFIZ5BAKW

  — 🧢מאק (@beingrealmac) October 6, 2021

  https://platform.twitter.com/widgets.js

  Following the arrest, Boikov’s wife posted a clip where she says officials are discussing bail, but has no more information on what’s going on.

  Several commenters slammed the arrest in the comments section:

  

  In several videos on his YouTube channel, Boikov can be seen spotlighting police brutality and intimidation tactics against the public, walking into public places without a mask to challenge local mandates, instructing people on how to legally protest. In short, he’s a huge thorn in the side of the NSW government.

  In 2015, Boikov was questioned by NSW joint counterterrorism police after traveling to eastern Ukraine to meet with pro-Russia separatists who were the subject of Australian sanctions following the downing of flight MH17.

  Tyler Durden
  Fri, 10/08/2021 – 22:00

• US Debates Promising 'No First Use' Of Nuclear Weapons
  US Debates Promising ‘No First Use’ Of Nuclear Weapons

  Authored by Jason Ditz via AntiWar.com,

  For the handful of nations armed with nuclear weapons, the circumstances under which they’d be used are always an important consideration. This is particularly true of the United States, which has one of the world’s largest arsenals, and is the only nation that has used nuclear arms offensively during a war.

  Often debated, but as yet never confirmed, is the possibility of “no first use,” a promise to the world that the US won’t attack anybody with nuclear arms. At present, China is the only nuclear power with a no first use policy, while India has a somewhat more limited promise not to nuke non-nuclear states. The US has so far refused calls to take such a position.

  

  President Biden is in the process of debating a new nuclear posture like finally making a “no first use” pledge. The Obama Administration was reportedly close to such a move, but ultimately changed its mind.

  The upshot would be that nuclear first strikes are morally unconscionable, and that the “no first use” policy is really a bare minimum of decency, even if it is a level of decency above and beyond not having actively started a nuclear holocaust yet.

  The debate is likely to be a high-profile one, as despite the straightforward ethical decision there are some outspoken proponents who favor the US remaining ambiguous on who it will nuke, and when. Biden is believed to be at least considering “no first use,” and Sen. Jim Risch (R-ID) is positioning himself as the primary opponent, claiming US allies are “very, very upset” with the prospect of changing posture.

  Sen. Risch, the ranking member of the Foreign Relations Committee, suggested that such a pledge would give comfort to the enemy, adding that “there are scenarios where you can imagine a first strike.”

  “A legally-binding no-first-use commitment—through congressional legislation or a multilateral treaty—would make a nuclear first-strike order illegal, drawing a clear line for US military officers.” @jmsleight in @BulletinAtomic https://t.co/8FweByyONe

  — Global Zero (@globalzero) October 6, 2021

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  Advocates say a proper policy change would reduce the chances of getting into a civilization-ending nuclear war with China or Russia by reducing the risk that either of them comes to the mistaken belief that the US is about to nuke them. Throughout the Cold War, such confusion happened, and nearly resulted in devastating exchanges.

  Tyler Durden
  Fri, 10/08/2021 – 21:40

• One US State Already Has A De Facto 'Vaccine Passport' Requirement Just To Enter
  One US State Already Has A De Facto ‘Vaccine Passport’ Requirement Just To Enter

  Much of the American public might be surprised to find out that for months there’s already been a de facto ‘vaccine passport’ policy in effect to enter one US state. And already there’s been a handful of people busted at the “state border” (legal questions of Constitutionality aside) attempting to enter the islands with a fake vaccine proof card. 

  “People are pressing their luck entering Hawaii with fake vaccination cards or test results, an offense that can carry jail time,” The Hill reports. It’s the vacation paradise destination that the Chicago woman with the “Maderna” card got caught this summer trying to enter. Also initially a father and son from California marked the first case that gained national attention. 

  

  In the latest incident, a couple in their 30’s flew from Los Angeles with what’s being described as faking a negative Covid test. The Guardian reports that “According to a police statement last week, they uploaded false results into the state’s system, which flagged the documents and prompted an investigation.”

  The travelers were subsequently arrested and sent back to California and are now awaiting a court date. The attempts to get around Covid testing and vaccine mandates are apparently geared toward avoiding a lengthy hotel quarantine stay at personal cost upon entering Hawaii. 

  As The Hill details, some people were caught falsifying vaccine cards even for their children – despite the underage children being ineligible to receive the vaccine in the first place – but now face stiff legal penalties, including the possibility of jail time: 

  According to Hawaii News Now, fake cards hold a penalty of up to $5,000 or a prison term of up to a year, however, Newsweek reports that a 24-year old man from New York could face seven years in prison for allegedly submitting a fake card.

  The trend has been observed nationally. So far the most sophisticated fake vax record bust has come out of New York and Jersey, given in that prior instance one of the schemers had access to state computer records.

  As we detailed in early September, a woman in New Jersey who was known to clients as “AntiVaxMomma” – which she goes by on Instagram – had been charged by police with offering false documents, criminal possession of a forged instrument and conspiracy. Police said she was known to have sold some 250 fake COVID-19 vaccine cards over the previous months for about $200 each in the New York City area.

  Woman Arrested Trying to Enter Hawaii With ‘Maderna’ Covid-19 Vaccine Card https://t.co/SckoI6vA4g pic.twitter.com/V121PNCNHz

  — Gizmodo (@Gizmodo) September 1, 2021

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  The scheme was among the more elaborate ones uncovered of late, given that customers could offer $250 more for someone she was working with to enter the card buyer’s name into a New York state vaccination database, according to ABC News. This would then grant the ‘fake’ card verification status if checked against state health systems.

  Meanwhile, within Hawaii the state has already rolled out a COVID vaccine passport for residents to access gyms, bars, and restaurants – akin to large US cities like New York and San Francisco. “The state calls it a digital smart health card and says it would work the same way as the Safe Travels vaccine exception, where people would have to upload a copy of the vaccination card to a secure website,” local media detailed. However, at this early phase it’s not yet fully mandated, but businesses are being encouraged to enforce it on their premises.

  Tyler Durden
  Fri, 10/08/2021 – 21:20

• Is Gunvor Getting Flushed? How NatGas 'Netbacks' Are Crushing The Secretive Commodity Trader
  Is Gunvor Getting Flushed? How NatGas ‘Netbacks’ Are Crushing The Secretive Commodity Trader

  Earlier this week, we noted that some of the world’s largest commodity traders were facing massive margin calls from wrong-way spread trades in the natural gas markets.

  According to reports, it appears the trading shops have all been hammered by a spread (or arbitrage trade) gone wrong.

  For years, the prices of European (red) and US natural gas (green) have traded within a well-defined range. When the spread between the two reaches one extreme or the other, you buy one and sell the other – easy, right ?

  

  Source: Bloomberg

  So as European NatGas prices surged in Q2, it reached a notable extreme relative to US NatGas, prompting traders to instigate the strategy of selling European Gas and Buying US Gas in the hopes the spread compresses.

  The strategy backfired last month when European gas prices soared due to a variety of factors including low inventories, high demand for gas in Asia, low Russian and LNG supply to Europe, and outages.

  Since then, the situation appears to have grown more grim, as Bloomberg reports that major energy traders including Gunvor Group. and Mercuria Energy Group. have reduced the size of their trading positions and increased borrowing from lenders to cover large margin calls stemming from the unprecedented surge in European gas prices, according to people familiar with the matter.

  Specifically, Bloomberg reports that both Gunvor, the biggest independent trader of liquefied natural gas, and Mercuria, a major power and gas trader, asked banks for additional credit to fund margin calls arising from their hedging positions, said the people, who asked not to be named because the information is private. 

  

  But, as ‘Structurer’, Jacques Simon, details in the following report, the situation could be far more grave for Gunvor…

  TL;DR…

  • Two weeks ago Gunvor was in the debt market for the 1st time since 2013 according to BBG. We note that Gunvor is the world largest LNG independent trader and also the biggest by % share among the houses with this exposure.

  • The trader is a net buyer of netbacks (a type of contract under which it receives the Henry hub index and pays the TTF or Platts JKM index to the producers).

  • Recently it has changed its LNG head in Singapore and we are also aware that Gunvor Singapore uses a strategy called “the box” whereas the trader locks the arbitrage spread at predetermined levels by swap hedges.

  • U.S website Zerohedge reports that Gunvor is facing massive margin calls as the global natural gas arb explodes.

  • Among the injured will be ABN amro, Credit Agricole, Rabobank, SG, Natixis, ING and Unicredit.

  • The margin calls are between $3.6B and $6.1B in the coming months for a company with a $2.5B net equity.

  • We will explain what is “the box” and then show our calculations for the margin calls and summarize our assumptions below.

  • The banks have offloaded $300M worth of their credit-risk on Gunvor last September to the bond market but since then the Dutch TTF-Henry spread has gone parabolic and the group’s financial position has significantly deteriorated.

  • The trader’s future is purely and simply in the hands of Goldman Sachs, Citi and the long swap dealers at TTF.

  *  *  *

  GUNVOR FINANCIAL POSITION

  Gunvor is very secretive on their financial positions, only releasing partial and selective information.

  Gunvor’s debt is unrated.

  The trader turnover is 94 million mt/year and the rule of thumb is that each 1$ in sale is backed by 5$ of debt. With the turnover growth we believe Gunvor debt is minimum $20B.

  If the House capital is $2.5B in H1-2021 then we derive that Debt/Capital ratio is 8X.

  

  THE NETBACKS

  Netbacks are based on the premise that the spread between two global LNG markets are underpinned by the transportation costs.

  The arbitrage flows is from the low price market towards the higher price market putting a downward pressure on the overpriced market, and has the effect of reimposing a netback-based parity between the markets. Netbacks assume an access to financing, prompt cargoes in the cheap market, and shipping capacity.

  • DUTCH TTF-HH-Transportation costs-Tolling fee= NETBACK TTF

  • JKM-HH-Transportation costs-Tolling fee= NETBACK JKM

  IF NETBACK TTF >= NETBACK JKM, the trader will ship the LNG to TTF until the equation parity is restored again.

  The caveat: It is another mean-reversion trade based on moderate volatility.

  

  See, Druz, T., Capra Energy Group, “When will European LNG Imports Recover ?” (2021)

  THE “BOX”

  1. Gunvor Singapore buys TTF netbacks which are defined as the Dutch TTF minus Henry Hub minus the Freight U.S Gulf Coast to Europe minus a $2.45-2.55 tolling fee. Gunvor is now long the TTF and that it must pay to the producer in exchange for the gas.

  2. To protect its margin the trader sells the TTF and buys the HH times the number of cargoes per month.

  3. Based on the current TTF/HH spread and the hedged level the trade becomes a “box” if Gunvor is long freight.

  Typically when the spread goes over the pre-hedge level, the freight cost rises => and Gunvor (long) absorbs the risk because it leases a 10-year fleet. In this situation Gunvor still makes a profit despite a $2-3 margin call on the hedge because it can resell the physical cargo or resell the freight voyage (relet).

  However this is not the behavior observed during Q3 and in Q4-21… As the TTF-HH goes above the 90th percentile value (blue line) while the freight (purple) has not converged with the arbitrage.

  Gunvor has not captured the arbitrage with the freight.

  What a trader employee at Gunvor did was underwriting a gigantic amount of risk (CALLs like optionssellers.com…) analogous to multiple times the trading-firm capital.

  

  The difference between the generic netback 2010-2020 and the 90th percentile TTF-HH spread represents the profitable trading hedgeable area for the trader “in the box” and where we presume a merchant trader would put some price risk covers against the TTF to pay the producers.

  As you can see the netback is now trading above the 90%P TTF-HH spread for Q4 and CAL22 leaving Gunvor with major curve losses.

  Most of the people out there think the physical trader can settle at a profit if it delivers the cargoes.

  This is not as simple given the financial exposure and box strategy employed by Gunvor in natural gas.

  The severity, timeline length combined force us to make further determinations regarding the risk of major default.

  If you are in the media/commodity headhunters/by-standers or even a Gunvor employee it’s time to pay attention right now.

  GUNVOR PHYSICAL LNG/GAS EXPOSURE

  The first step in our model is to determine the physical exposure by Gunvor in LNG/GAS.

  -Gunvor has ~42% of its total exposure linked to LNG/GAS according to the 2019 Gunvor Group Summary.

  The annual physical exposure of 20.32 million metric ton of LNG is factored by @ 0.80 for the proportion of netbacks SP&As in the portfolio and by 0.75 for the proportion marketed from November to March. This gives us 12.192 million ton of LNG equivalent.

  In the absence of any disclosure by Gunvor Group and based on 2020 volume we believe it forms a conservative assessment of how the trading house sources and markets its LNG.

  The conversion in mmbtu is 645.09 millions mmbtu or ~64,509 contracts equivalent.

  Thus at the present moment we determine that Gunvor has +64,509 long exposure on the TTF-HH spread falling in line with what Gunvor is (or was until last year) as the largest independent LNG trader in the world.

  GUNVOR MARGIN CALL MODEL

  With the physical exposure we use two hedging models to imply the current margin calls under the TTF-HH curve.

  As we stated earlier in “the box” we assume that the trader has hedged the physical netbacks at the 90th percentile TTF-HH spread. If it’s not the case we would be underestimating Gunvor’s actual margin call losses.

  STACK HEDGE VS ROLL HEDGE

  Assumption 1:

  Gunvor uses a strip hedge and the 64,509 exposure is evenly spreaded across the curve.

  

  With a $3.6 billion margin call it is the less severe of the two cases for Gunvor but still the TTF-HH netback doesn’t make even or below the 90P TTF/TTF line until next July which speaks for the fact that Gunvor Group is consumed by the $3.6B financial loss.

  

  Assumption 2:

  If Gunvor has elected to use a stack hedge, the Geneva-based trader hedges its price exposure on netback contracts by selling 64,509 nearby expiring month contracts.

  Since the curve has inverted, and increased, the stack and roll position generates enormous negative cash-flows. Under these conditions the current margin call is $6.1B.

  This is 2.5x the trader capital and Gunvor has to settle the swaps in cash at the TTF, the maths and market work effectively at wiping out the trader.

  

   

  To conclude there is a catch-22 moment for the banks who have extended credit lines to a Gunvor’s model relying on cheap bank financing.

   

  *  *  *

  Gunvor was in fact in the debt market to finance a mega margin call on TTF/HH, JKM/HH 3 weeks ago. The verdict is that Gunvor is now boxed. We are totally unapologetic about this.

  In our median estimate Gunvor faces a 5B$ capital shortfall: the trader is on a slippery slope, not capitalized at all while its margin calls will roll across several months.

  Our quantitative models lend credit to the argument that TTF no longer represents the supply & demand fundamentals.

  Gunvor is getting flushed. The market has a job to perform but is not done yet. For us as an analyst it has explained the extreme-volatility in the TTF gas market.

  

  The FT can officially start to write an obituary. 

  Something big is coming, watch your email inbox. We have calculated the implied margin call. (If you know someone at Gunvor they’ve to take their bonus now rather than wait for 31th December coming).

  “While there have been margin calls associated with the European natural gas price rally, Gunvor maintains a healthy liquidity position and instruments to manage any further volatility,”

  – Gunvor Spokesman.

  To the contrary our credible sources indicate that Gunvor Group trading activity in Geneva is effectively frozen with its remaining gunpowder serving to manage its decay. The bonuses in arrears won’t get paid.

  The trader’s future is purely and simply in the hands of Goldman Sachs, Citi and the long swap dealers at TTF.

  By December 31th, we call for 80-84 Rue du Rhone to be already gone.

  

  Bon voyage Gunvor.

  Tyler Durden
  Fri, 10/08/2021 – 21:00

• "Catastrophic" Property Sales Mean China's Worst Case Scenario Is Now In Play
  “Catastrophic” Property Sales Mean China’s Worst Case Scenario Is Now In Play

  No matter how the Evergrande drama plays out – whether it culminates with an uncontrolled, chaotic default and/or distressed asset sale liquidation, a controlled restructuring where bondholders get some compensation, or with Beijing blinking and bailing out the core pillar of China’s housing market – remember that Evergrande is just a symptom of the trends that have whipsawed China’s property market in the past year, which has seen significant contraction as a result of Beijing policies seeking to tighten financial conditions as part of Xi’s new “common prosperity” drive which among other things, seeks to make housing much more affordable to everyone, not just the richest.

  As such, any contagion from the ongoing turmoil sweeping China’s heavily indebted property sector will impact not the banks, which are all state-owned entities and whose exposure to insolvent developers can easily be patched up by the state, but the property sector itself, which as Goldman recently calculated is worth $62 trillion making it the world’s largest asset class, contributes a mind-boggling 29% of Chinese GDP (compared to 6.2% in the US) and represents 62% of household wealth.

  

  It’s also why we said that for Beijing the focus is not so much about Evegrande, but about preserving confidence in the property sector.

  Remember: for China this is not about Evergrande, it’s about preserving confidence in the property sector

  — zerohedge (@zerohedge) September 22, 2021

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  But first, a quick update on Evergrande, which – to nobody’s surprise – we learned today is expected to default on its offshore bond payment obligations imminently according to investment bank Moelis, which is advising a group of the cash-strapped developer’s bondholders. Evergrande, which is facing one of the country’s largest defaults as it wrestles with more than $300 billion of debt, has already missed coupon payments on dollar bonds twice last month.

  The missed payments, worth a combined $131 million, have left global investors wondering if they will have to swallow large losses when 30-day grace periods end for coupons that were due on Sept. 23 and Sept. 29. A separate group of creditors to Jumbo Fortune Enterprises who are advised by White & Case, are also waiting for a $260 million bond principal repayment, after a bond guaranteed by Evergrande matured last Friday, and unlike the offshore bonds, does not have a 30 day grace period (although five business days ‘would be allowed’ if the failure to pay were due to administrative or technical error).

  The Jumbo Fortune payment is being closely watched because of the risks of cross-default for the real estate giant’s other dollar bonds; it would also be the firm’s first major miss on maturing notes instead of just coupon payments since regulators urged the developer to avoid a near-term default. And with the five business days up as of today, and with a payment yet to be made, it appears that this weekend we will get news of a declaration of involuntary default from the creditor group which will set in motion the Evegrande default dominoes.

  With that background in mind, let’s move on to the truly chilling latest developments: it now appears that China does not need Evergrande to officially default to unleash a property crisis – one has already arrived.

  Recall that in September, sketched out Goldman’s three scenarios on China’s housing sector – a base case, a severe scenario and a third “hard landing.”

  

  While readers can find the full details here, we focus on the worst case, “Scenario 3”, which Goldman summarized as follows:

  In the third and most bearish scenario, land sales and housing starts fall 30% and property sales, house prices and completions drop 10% from 2021 to 2022. The tightening in financial conditions doubles that in the second scenario. Note that in this scenario, the tightening is of the same magnitude as the tightening in Goldman’s China Financial Conditions Index (FCI) from November 2017 to June 2018 when domestic credit tightening and the US-China trade war rattled the financial market significantly.

  Quantifying this dire scenario, Goldman envisions a China where new property starts tumble 30%, completions drop 10% alongside sales volumes and ASPs. If this scenario comes to pass it would also wipe out at least 4% of China’s 2022 GDP, potentially resulting in full-year contraction at the second largest economy in the world, an outcome that would have catastrophic implications for the rest of the world. And with Goldman’s warning that such a scenario would lead to a tightening in financial conditions similar to what happened “from November 2017 to June 2018 when domestic credit tightening and the US-China trade war rattled the financial market significantly” and one can therefore see that while contagion from an Evergrande default may skip China’s banks, it would have no less dire consequences for global markets and economies.

  With that preamble in mind, we bring readers’ attention to a little noticed report in Shanghai Securities News, citing China Real Estate Information Corp. research (link), which revealed that more than 90% of China’s top 100 property developers’ sales declined in September by an average of 36% from the same period last year. According to the report:

  • Sept. sales totaled 759.6b yuan ($118BN), down 36.2% from September 2020 and 17.7% lower from the same period in 2019, deepening a downward spiral that started in July
  • Among companies, 60% of developers saw sales decrease by more than 30% y/y in Sept.
  • Beijing, Shenzhen and Guangzhou saw transaction volume of residential properties decline 30% y/y, while Shanghai fell 45%

  We had to do a double take when we saw this because these are absolutely terrifying numbers and are, to put it bluntly, scarier than Goldman’s “worst case scenario“; what’s worse this sudden collapse in China’s property market is taking place before Evergrande has even defaulted, an event which would lead to a glacial freeze in the property market as potential buyers hold off expecting liquidation firesales from the property giant in hopes of getting bargains. The problem is that in addition to being the world’s largest asset, China’s property market is also the world’s largest ponzi scheme, and without constant inflow of new capital it would implode, especially when factoring in the 90 million vacant apartment which just sit inert and which would promptly be dumped by anxious owners, flooding the market with excess inventory and sending prices crashing.

  It didn’t take long for the market to notice what is going on and otherwise healthy property developers, which are in far better financial health than Evergrande, promptly collapsed: China Jinmao Holdings plunged as much as 10%, China Overseas Grand Oceans Group tumbled -7.9%, Sunac -3.7%, Country Garden Holdings -3%, Agile Group -2.8%, and so on.

  

  But keep in mind that all of the above presupposes just one major default, that of Evergrande. Alas, it’s going to be far, far worse because in a reflexive toxic spiral, one property values fall, the entire property sector will collapse, leading to an epic bursting of a housing bubble that is order of magnitude greater than the US housing market was in 2007/2008.

  As Bloomberg writes, Chinese property firms “may face a wave of defaults” next year if China Evergrande Group’s deepening debt crisis shuts access to a key source of funding and conditions don’t ease for heavily indebted borrowers. As we have documented extensively in the past month, there’s growing alarm that the liquidity crisis at Evergrande will spill over to other developers as President Xi maintains measures to cool the property market while maintaining China’s “three red lines” rules on property sector leverage (a new report from the FT today found that no less than half of China’s 30 top developers were in breach of at least one of said lines).

  

  Fears of contagion risks intensified this week after a surprise default by Fantasia Holdings Group spurred a dramatic selloff in the offshore market.

  

  That sent yields on China dollar junk bonds to 17.5%, the highest in about a decade, while Evergrande’s dollar bond prices sank to a record low. After plunging 80%, Evergrande’s HK-traded stock remains halted.

  

  Distressed debt veteran Michel Lowy said in a Bloomberg TV interview that the nation’s developers are facing a “triple whammy” with dwindling access to offshore financing, “catastrophic” September pre-sales and a limited onshore banking market. Translation: both organic (i.e., operation) and external sources of cash have dried up.

  That could spark a “large wave of defaults” if the offshore market remains shut for riskier borrowers going into next year, said Lowy, chief executive officer of his alternative asset manager SC Lowy. For dollar bonds – which in the coming Evegrande default will be at the very bottom of the pre-petition claims waterfall leaving them with negligible recoveries at best – the risk is that the increase in yields becomes indiscriminate and makes it impossible for developers to refinance maturing debt, triggering a succession of missed payments across the industry.

  If they end up being locked out from the market and unable to rollover coming maturities, and with operating cash flow drying up, the only recourse is the dreaded liquidation firesale which would be the pin that bursts China’s housing bubble.

  “Ultimately it’s a liquidity game,” said Lowy. “How many months can you survive until at some point the central government will relent and start releasing liquidity pressures on developers?”

  And while much has been written about the turmoil in China’s dollar, or offshore bond market, the distress is starting to spread to the onshore bond market too. As Bloomberg notes, signs of strain in China’s $12 trillion domestic credit market after months of resilience may add to borrowers’ refinancing pressures. Stress levels rose in both the local and offshore bond markets in September, Bloomberg’s China Credit Tracker showed.

  Take yuan-denominated bonds sold by Xiamen Yuzhou Grand Future Real Estate Development Co., Yango Group Co. and Aoyuan Corp. Group all of which plunged to record lows Friday while two local bonds from a Fantasia Holdings Group unit were briefly halted following sharp declines. Yango denied social media reports that one of its housing projects had been halted indefinitely, and said that it had sufficient cash to repay debt.

  And while Bloomberg still has its onshore credit stress indicator at a positively bubbly level 3 (vs 2 in August), expect this to get much, much worse as the property sector implosion accelerates. As for the offshore bond credit stress indicator, well at least it can’t get any worse.

  

  Needless to say, once the “stress level” in China’s far bigger, $12 trillion onshore bond market approaches levels currently at the offshore, property-dominated market, all bets are off.

  Yet what makes the situation especially dire is that while Beijing would eagerly step in to bailout every insolvent bank and corporations until a few years ago, the one time when China’s economy desperately needs a bailout from the state is when Xi decided to be silent. Authorities have been allowing defaults to rise in recent years in order to curb moral hazard and encourage better pricing of risk in its debt markets. Property firms’ missed payments made up 36% of the record 175 billion yuan in onshore corporate bond defaults this year.

  Yet if Xi allows the entire $62 trillion Chinese property sector to sink, the outcome will be orders of magnitude more dire than Lehman.

  “It’s very difficult to see a solution right now,” said Hao Hong, head of research and chief strategist at BoCom International, who agrees that the Evergrande crisis could drag on. China’s Evergrande strategy would be to “let as many people bear the cost as possible,” to lessen the pain for any one individual, Hong said. However, if the broader population loses faith in what is China’s biggest asset while the market waits for a resolution – something the latest sales data confirm is already taking place – then the consequences will be catastrophic.

  So while some observers have compared Evergrande’s woes to the epic collapse of Lehman, the truth is that the coming default is just the trigger event whose downstream effects would pull down the entire Chinese bubble house of apartments cards, something the latest housing data show is already in play. Because at the end of the day, no Ponzi scheme can continue if the participants lose faith in a favorable outcome, and at $62 trillion China’s housing sector is the world’s biggest Ponzi scheme. Which is why other experts have said this isn’t a Lehman Brothers moment— it could be far worse, if one views China’s gargantuan real estate sector as rotten to the core.

  Which it is.

  Tyler Durden
  Fri, 10/08/2021 – 20:46

• Stunning Video Show "Supposedly Retired," F-117 Nighthawk Stealth Fighters In Action
  Stunning Video Show “Supposedly Retired,” F-117 Nighthawk Stealth Fighters In Action

  For the last year, we’ve noted a series of reports (read: here & here) of (supposedly retired) Lockheed F-117 Nighthawk stealth attack aircraft conducting combat training missions over the skies of California.  

  The latest sighting of the world’s first stealth aircraft, which first debuted in the early 1980s and retired in 2008, after the Lockheed Martin F-22 Raptor stealth fighter aircraft was first fielded, was in mid-September at the Fresno Air National Guard Base, California. 

  The US Air Force released a statement at the time stating “two F-117 Nighthawk aircraft” would be conducting “air combat training missions.” 

  

  This is the first time that F-117s have landed in Fresno. Their presence immediately received attention from aviation geeks who captured the planes operating in Fresno in never before seen 4k resolution video, according to The Aviationist. 

  The Pentagon appears to be bringing some of these legacy stealth aircraft back to active duty as tensions between the US and China continue to soar with Taiwan in focus. 

  Four decommissioned F-117s were secretly deployed to the Middle East in 2017 to launch surgical strikes. The reason for the deployment was simple; Russia and Syria had shut down Syrian airspace by mid-2016. The U.S.-led coalition was unwilling to lose a fifth-generation aircraft to Russia’s S-400 missile systems in Syria. 

  As of January 2021, there were 48 F-117s in Type 1000 storage, meaning the planes could swiftly return to active service. 

  Tyler Durden
  Fri, 10/08/2021 – 20:40

• Key Witness In Assange Case Jailed After Allegedly Fabricating Statement In Court, Going On Crime Spree: Report
  Key Witness In Assange Case Jailed After Allegedly Fabricating Statement In Court, Going On Crime Spree: Report

  Authored by Katabella Roberts via The Epoch Times (emphasis ours),

  A leading witness in the United States Justice Department’s case against WikiLeaks founder Julian Assange has been jailed in Iceland, Stundin reported.

  Sigurdur Thordarson, a hacker and convicted pedophile, was remanded in custody in Iceland’s highest security prison, Litla Hraun, on Sept. 24 after being arrested when he arrived back in Iceland from a trip to Spain.

  

  Officials requested he be detained indefinitely to halt an “ongoing crime spree,” claiming he posed a “clear and present” threat to the public and was at high-risk of re-offending and violating the law. The judge agreed.

  His lawyer, Hunbogi J. Andersen, confirmed the news to Stundin, a well-known Icelandic biweekly.

  The Epoch Times has contacted Thordarson’s lawyer for comment.

  U.S. prosecutors have indicted Assange on 18 criminal charges of breaking an espionage law and conspiring to hack government computers.

  WikiLeaks published a U.S. military video in 2010 showing a 2007 attack by Apache helicopters in Baghdad that killed a dozen people, including two Reuters news staff. It then released thousands of secret classified files and diplomatic cables, which included critical appraisals of world leaders, from Russian President Vladimir Putin to members of the Saudi royal family.

  Assange sought refuge inside Ecuador’s London embassy for seven years from 2012 until he was arrested in April 2019 for skipping bail during a separate legal battle.

  He is now in London’s high-security Belmarsh Prison but the United States is currently seeking his extradition from the UK. If it succeeds, he could face up to 175 years in jail. Assange has argued he won’t get a fair trial in the United States.

  Thordarson was given immunity by the FBI in exchange for testimony against Assange, but later admitted to Stundin that he had fabricated statements to implicate the WikiLeaks founder and contradicted what he was quoted as saying in U.S. court documents, casting doubt on the indictment against Assange.

  

  Thordarson told U.S. courts that he was asked by Assange to “commit computer intrusion and steal additional information, including audio recordings of phone conversations between officials in NATO Country-1, including members of parliament.”

  However, he told Stundin that this was in fact a lie, explaining that Assange, “never asked him to hack or access phone recordings of MPs” and that such recordings were provided to them by a third party. He added that Assange was not involved but that he later offered to show the recordings to the WikiLeaks founder, without knowing what they contained.

  Thordarson also told U.S. courts that he and Assange had attempted but failed to decrypt a file stolen from an Icelandic bank. However Thordarson admitted to Stundin that these were actually files that were widely circulated online in 2010 and believed to be related to the collapse of Icelandic Landsbanki in the 2008 financial crisis, which does not support his initial claims that they were “stolen,” as it was assumed they were distributed by whistleblowers from inside the bank.

  Thordarson admitted to a host of other misleading and fabricated comments he made against Assange that can be found in the indictment.

  He also told Stundin that he had continued with a “crime spree” after it was discovered that he had used money raised for WikiLeaks through merchandise sales in 2010 to embezzle more than $50,000 from the organization.

  Thordarson said: “The idea behind all the companies [that I run in Iceland] is to squeeze out every last penny, knowing it will inevitably lead to bankruptcy by request of the tax authorities and the bill would end with them. Is it illegal? No, it’s just very immoral, that much I would agree with. But I have not heard of anyone being convicted for this sort of thing.”

  Stundin also claims that Thordarson allegedly forged his own lawyer’s signature in order to “fraudulently inflate the net worth of his company’s assets.”

  It is not known whether his recent admissions to Stundin played a role in his recent arrest.

  Tyler Durden
  Fri, 10/08/2021 – 20:20

• Over 1,000 Crew Members Are Stranded On 'Abandoned' Cargo Ships Globally Without Pay Or Food
  Over 1,000 Crew Members Are Stranded On ‘Abandoned’ Cargo Ships Globally Without Pay Or Food

  Pandemic-driven global trade disruptions and an increasing number of shipping companies abandoning their own vessels over mounting debts including older vessels deemed too costly to repair has led to the rise in the phenomenon of crewmembers simply being abandoned at sea, often left to fend for themselves as they await pay which sometimes never comes. 

  A Friday investigative report in The Wall Street Journal has detailed some of the shocking stories of tanker crew members left adrift after companies abandoned vessels or sold or transferred them, or couldn’t pay mounting debts, while trying to survive oftentimes on little food even while moored close to resort locations in places like Dubai – or in other cases floating off the Suez Canal or at Black Sea ports.

  “The $14 trillion shipping industry, responsible for 90% of world trade, has left in its wake what appears to be a record number of cargo-ship castaways,” the report begins. “Abandonment cases are counted when shipowners fail to pay crews two or more months in wages or don’t cover the cost to send crew members home, according to the International Maritime Organization, a United Nations agency.”

  

  The UN agency recorded a doubling in the number of abandonment cases for 2020, with the number expected to grow once again for 2021 particularly after a noticeable surge in cases now getting media attention.

  WSJ cites the industry labor union, International Transport Workers’ Federation, to detail that over 1,000 international crew members are currently abandoned. But the report assures the true number of those left aboard container ships and bulk carriers whose transport operations have been halted is likely way higher, given individual crew members’ reluctance to come forward for fear of not getting hired by other freight companies. 

  Though most of those who effectively overnight became “castaways” choose to stay aboard abandoned ships until they get paid, in many cases they legally cannot disembark even if they wanted to due to complex local laws dictating policies of many ports. The Wall Street Journal explains: 

  Some governments require sailors to remain aboard as guarantors until shipowners pay port authorities for berth fees and other charges. More often, sailors refuse to disembark, convinced they will never recoup months or years of lost wages if they leave. Seafarers stuck on board generally borrow money from friends and family to feed themselves and crewmates.

  Many say they will stay put until the ship is sold for scrap, which can take years, rather than go home empty-handed.

  Some survive for up to a year on rice and water, or perhaps the goodwill and care packages of nearby ships and people on land, and others might stay put for literally years. The report noted that one engineer aboard a stranded tanker on the Black Sea has been there for four years. 

  This is a stunning story about the ugly realities in shipping. The numbers of seafarers abandoned is growing, exacting a terrible human toll. “We cannot survive here.” https://t.co/jOLtH8OwRa via @WSJ

  — Paul Page (@PaulPage) October 8, 2021

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  Abandoned seafarers have described the ships as turning into a “prison” and a “slave ship”. One ongoing saga off Romania in the Black Sea involves four crewmembers awaiting the resolution of a high level Romanian court case to determine who is responsible for payment of debts involving the ship’s owner. Legally they simply aren’t allowed off the vessel. In some instances the WSJ documented stories of unpaid workers contemplating suicide. Some of them literally face starvation, and in these instances sometimes attract the help of local charities.

  Moored ships hit by storms with crew aboard – yet not able to disembark – is another example of some of the more dramatic and immediate threats to safety these workers face. And then there’s this instance noted in the WSJ report: “Off the coast of Yemen, one of the world’s largest oil supertankers, laden with 1.1 million barrels of crude, sits decaying in a war zone. An errant rocket or the ship’s corroding steel hull could trigger an explosion and massive spill.”

  Currently, there are efforts underway among a handful of large nations – namely China, Indonesia and the Philippines – whose ships make up the bulk of international sea freight traffic, to establish an ‘abandonment fund’ to help with emergency assistance for stranded crew. However, it could encourage companies to continue shrugging off responsibility, as is still continually happening according to the report. 

  Tyler Durden
  Fri, 10/08/2021 – 20:00

• Buchanan: Are China's Threats To Taiwan A Bluff?
  Buchanan: Are China’s Threats To Taiwan A Bluff?

  Authored by Pat Buchanan,

  Monday, four dozen Chinese military aircraft flew into Taiwan’s air defense zone, climaxing a weekend of provocations that saw nearly 150 sorties of China-based fighters and bombers.

  The U.S. State Department countered by issuing a stern statement warning Beijing about the adverse effect on regional “stability” of such “provocative military activity.”

  Yet even as the waves of Chinese military aircraft entered Taiwan’s air defense zone, President Joe Biden was reassuring Japan’s new Prime Minister Fumio Kishida that the U.S. would defend the Senkakus from any Chinese attack.

  Controlled by Japan but claimed by China, the Senkakus are uninhabited rocks in the East China Sea.

  Our alliances in the Pacific dating to the 1950s have put us in an odd position. The Biden administration says it will fight to defend the Senkakus and fight if the Philippines attempt a military retrieval of atolls and reefs in the South China Sea that China has seized, occupied and fortified.

  For Taiwan, however, a democratic island of 14,000 square miles and 23 million people, and for Hong Kong, a formerly free city of 7 million, we will not commit to fight — though human rights and democracy are said to be central to the Biden foreign policy.

  We will fight for Japan’s right to hold the Senkakus and Manila’s right to retrieve Mischief Reef, but not to ensure the rights of the 30 million people of Hong Kong and Taiwan.

  

  What is China, dispatching bombers and fighters around the southern and eastern coasts of Taiwan, up to?

  This is an unmistakable message to America that, about Taiwan, Beijing is serious. China is warning the U.S. and its allied and associated powers — Australia, Japan, India — that it will, in the last analysis, fight to prevent an independent Taiwan.

  Taiwan is a red line for China. Is it for us?

  This latest challenge comes after the public humiliation of the United States in Afghanistan, about which China has been crowing since August.

  Yet, these four days of Chinese intrusions into the air defense zone of Taiwan do not necessarily portend an imminent invasion or attack.

  For such an attack would risk a U.S. response in East Asia and a political and diplomatic confrontation if not a military one. The impact on the world economy of a collision between the world’s largest militaries and the world’s largest economies would be devastating.

  The stakes involved here are huge, but who would benefit from such a war?

  If after the fall of Afghanistan and the humiliation of the U.S. defeat and departure, the U.S. abandoned Taiwan, U.S. credibility would be shot in Asia. Asia and the world would conclude that China owned the future.

  As for credibility, China has a well-established record.

  China started and finished the recent war in the Himalayas with India. It warned Hong Kong to stifle the democracy protests that went violent in 2019. When Hong Kong failed to do so, Beijing acted and is now completing the full absorption of the city into the mainland.

  On its warnings and threats, China tends to follow through.

  Of all the islets and reefs in the South China Sea it has taken from Vietnam, the Philippines and other neighbors, China has surrendered not a one. Though charged with “genocide” against the Uyghurs, it has persisted in its persecution, as it has in its suppression of Tibetans and Christians.

  Chinese President Xi Jinping and his party are unapologetic about their Communist values and Marxist beliefs.

  Still, China has its problems, none of which would be solved and all of which would be exacerbated by any major clash with the United States.

  China is facing energy shortages and blackouts from a lack of fuel for its coal-fired power plants, its primary source of energy.

  After decades of a “one couple, one child” policy, China is facing a demographic crisis. In parts of the country, deaths now exceed births. China’s women have a fertility rate below replacement levels. China is aging and shrinking, and declining populations correspond with declining powers.

  But if it is hard to see any benefit to China to come out of war with the United States, it is equally hard to see any benefit for the USA.

  China will never relinquish its claim to Taiwan, whose independence is recognized today by only a handful of nations.

  China is a nation many fear and respect, but whose regime few see as a friend. For Beijing has historic claims in every direction — on lands held by Russia and India, and to islands and reefs claimed by Vietnam, Malaysia, Singapore, Brunei, the Philippines and Japan. It has a claim on Taiwan and on all the islands Taiwan claims in the East and South China Seas.

  Yet, though facing the world’s most menacing power 100 miles away, Taiwan, as of 2019, was still spending less than 2% of GDP on defense.

  Refusing to invest in your own defense, and relying on America to come and fight your wars, seems to be a tradition with America’s allies.

  Tyler Durden
  Fri, 10/08/2021 – 19:40

• Nobel Peace Prize Goes To Journalists Who Stood Up To "Authoritarian" Governments
  Nobel Peace Prize Goes To Journalists Who Stood Up To “Authoritarian” Governments

  Russian dissident Alexei Navalny can add his name to the growing list of candidates who have been shafted by the Nobel Committee this year (many grumbled when the creators of the mRNA COVID jabs didn’t win the medicine Nobel).

  

  The Nobel Committee announced Friday that the winners of this year’s Nobel Peace Prize are a pair of journalists who challenged “authoritarian” regimes with their fearless reporting, the Committee said. The prize ultimately went to Maria Ressa, the editor and founder of the Rappler, an independent Philippines digital-media outlet that has persisted with critical coverage of ‘strongman’ President Rodrigo Duterte and his use of death squads to extrajudiciallly purge drug dealers and other criminals.

  “Free, independent and fact-based journalism serves to protect against abuse of power, lies and war propaganda,” the committee said in a statement.

  “Without freedom of expression and freedom of the press, it will be difficult to successfully promote fraternity between nations, disarmament and a better world order to succeed in our time,” it added.

  She will share the prize with Russian journalist Dmitry Muratov, founding editor of the independent Novaya Gazeta newspaper, what the committee said was one of the few remaining “independent” news sources in Russia. The newspaper was founded in the 1990s, and was helped by an initial investment in former Soviet Leader (and fellow Peace Prize recipient) Mikhail Gorbachev.

  Ressa, who cut her death reporting from conflict zones, said even this didn’t prepare her from the backlash she would face from Duterte and his supporters since founding the Rappler in 2011.

  “There were so many hate messages … Ninety hate messages an hour, 90 rape threats per minute,” the first Nobel laureate from the Philippines told Reuters in 2017.

  As a result of her reporting, Ressa is currently free on bail as she appeals a six-year prison sentence handed down last year for a libel conviction, Ressa expressed “shock and disbelief” on Friday after sharing the prize. She says she has had to post bail ten times after being arrested as a result of her reporting.

  The Nobel committee said their award was an endorsement of free speech rights, which it said are under threat worldwide. The Rappler remains embroiled in a legal tussle with the government to have its license revoked, allegedly for violating laws on foreign ownership, even as Ressa attests that the outlet is “100% Filipino-owned”.

  Back in Russia, Novaya Gazeta has published investigative stories that have been at times critical of the Russian government’s conduct in the war in Chechnya, and investigations into the wealth controlled by oligarchs. Navalny, though his documentaries, has done similar types of investigations. But unlike Navalny, at least six of Novaya Gazeta’s journalists have been killed since the start of its existence (Navalny claims to have been poisoned by the Kremlin twice).

  

  Source: Statista

  Globally, the number of journalists killed peaked in 2012, and has since declined. But while the Nobel Committee focused on journalists who bravely held “authoritarian” regimes accountable (Duterte, the Filipino strongman, has just declared his retirement from politics), it’s perhaps overlooking the fact that in the US, the home of “the free press”, public trust in the media remains at rock-bottom levels.

  Tyler Durden
  Fri, 10/08/2021 – 19:20

• The Assault On Merit Continues: MIT Cancels University Of Chicago Professor
  The Assault On Merit Continues: MIT Cancels University Of Chicago Professor

  By Mark Glennon of Wirepoints

  America’s plunge into insanity, particularly in higher education, apparently hasn’t bottomed yet.

  

  Dorian Abbot is a professor in the Department of the Geophysical Sciences at the University of Chicago. He was invited to give the annual Carlson Lecture at the Massachusetts Institute of Technology, which apparently is a major honor in Abbot’s field. Abbot’s topic was to be climate habitability and the potential for life on other planets.

  But a Twitter mob, as Abbot describes it, composed of a group of MIT students, postdocs, and recent alumni, demanded that he be uninvited. Sure enough, just six days later, MIT called Abbot to say the lecture was cancelled because they didn’t want the controversy.

  The particular viewpoint at issue here is especially noteworthy: Abbot wants universities to hire and promote based on what he calls MFE — Merit, Fairness, and Equality, “whereby university applicants are treated as individuals and evaluated through a rigorous and unbiased process based on their merit and qualifications alone.”

  Merit? Heaven forbid that.

  The assault on merit was initially a subtext lurking behind the woke movement. Now, however, the mob is open about it.

  Some examples in Illinois:

  • A bill is pending in the Illinois General Assembly that would ban discrimination based on any characteristic that disadvantages somebody, the implications of which are absurd, as explained here. The bill already passed the House and two Senate committees.

  • Mayor Lori Lightfoot sponsored a resolution at the US Conference of mayors equating “meritocracy” with racism.

  • Cook County’s Racial Equity Policy statement defines “equity” as full inclusion regardless of “ability.”

  For the MIT lecture, Abbot’s political views had no relation to the the topic he was to speak about. That doesn’t matter to the mob, which wants its enemies silenced on everything.

  One who wrote about the Abbot/MIT affair is Chicago native and University of Chicago alum Jonathan Turley. “What occurred at MIT this month is a chilling reminder that even a premier institution will yield to anti-free speech campaigns,” Turley wrote. “The result is cringing obedience to a rising orthodoxy on our campuses.”

  But the most important point was made by Abbot himself, who described the whole episode in Substack. Here’s his conclusion:

  • It’s time to say no to the mob, no to the cancellations. And it’s time to be forthright about your true opinions. 

  • This is not a partisan issue. Anyone who is interested in the pursuit of truth and in promoting a healthy and functioning society has a stake in this debate. Speaking out now may seem risky. But the cost of remaining silent is far steeper.

  Tyler Durden
  Fri, 10/08/2021 – 19:00

• Manhattan Apartment Purchases Hit Three Decade High Amid 'Buying Frenzy'
  Manhattan Apartment Purchases Hit Three Decade High Amid ‘Buying Frenzy’

  The latest housing data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate signals “confidence” has returned to the Manhattan housing market, according to Bloomberg.

  Third-quarter data shows apartment sales in the borough totaled 4,523, the most in any quarter, dating back to 1989. The median price for homes that sold rose 1.4% from a year earlier to $1.12 million.

  

  “There’s more optimism and a sense of safety in the market,” said Jonathan Miller, president of Miller Samuel. “And there’s a sense that Covid discounts are evaporating quickly. They’re not going to have a lot of life left in them.”

  Buyers quickly moved in to buy the dip as bidding wars broke out, and the share of deals above the listing prices was 8.3%, the highest in three years. Also, the average time an apartment spent on the market was 152 days, 10% less than the prior quarter. 

  “People learned a decade ago that when you get a buying opportunity like this, you want to take advantage of it,” said Greg Heym, chief economist at brokerage Brown Harris Stevens, which released a separate report on the state of the Manhattan real estate market. 

  The buying frenzy helped diminish Manhattan’s massive pile of apartment inventories. Real estate firm the Corcoran Group noted there were 6,850 apartments for sale as of mid-September, 28% fewer than a year ago. However, inventories remain stubbornly high. “Buyers still have a significant amount of control over the transactions,” Miller said.

  Employers have been slow to bring back workers to the office this fall, but a separate report by Cushman & Wakefield predicts the return-to-office trend may accelerate in the first quarter of 2022.

  Kastle Systems, which aggregates data from its swipe-card access systems, shows only 29% of office workers in the city are back at their desks. That number is expected to pick up early next year. 

  

  However, commercial real estate remains in a terrible glut that may not be resolved until 2025. 

  Tyler Durden
  Fri, 10/08/2021 – 18:40

• Florida State Board Sanctions Eight School Districts For Defying Ban On Mask Mandates
  Florida State Board Sanctions Eight School Districts For Defying Ban On Mask Mandates

  Authored by Jannis Falkenstern via The Epoch Times (emphasis ours),

  

  PUNTA GORDA, Fla.–The Florida Department of Education on Thursday sanctioned eight Florida school districts for defying the state’s ban on school mask mandates.

  School districts in Brevard, Broward, Duval, Hillsborough, Leon, Miami-Dade, Orange and Palm Beach counties now face financial penalties.

  Commissioner Richard Corcoran reported to the board that none of the eight counties had provided any information proving that they were in compliance with state law before Thursday’s meeting.

  “They can’t pick and choose which parts of the law they want to follow,” Corcoran said as he was handing out the penalties to the school districts.  He also gave the districts 48 hours to amend their policies before the penalties went into effect.

  The state law the commissioner was referring to is an emergency rule adopted last month by the Florida Department of Health, that props up the Parent’s Bill of Rights. The rule requires that parents can opt-out their children from wearing mask mandates imposed by schools. The rule states that opting out of mask requirements is “at the parent or legal guardian’s sole discretion.”

  The commissioner recommended that sanctions in the amount of one-twelfth of each school board member’s annual salary be withheld. In addition, the commissioner recommended withholding funding in the amount equal to any federal grant the districts receive, namely the Project Safe Grant.

  The Biden administration has dedicated taxpayer money from the Project Safe Grant to repaying school districts the funding lost due to defying state bans on school mask mandates.

  These grants according to Corcoran serve to “backfill” what was withheld from Broward and Alachua districts for not complying with state law regarding mask mandates. Last month the U.S. Department of Education chose to award COVID-19 aid funds to cover salaries of board members in Broward and Alachua Counties.  Corcoran said they were the only two districts in the country to apply for and receive this type of grant funding.

  Corcoran reported during the meeting that Alachua had received a total of $147,710 in grants from Project Safe Grant and Broward has received approximately $420,000. The state began withholding Alachua’s funding on Aug. 28 which so far totals $13,429. The six remaining counties were also penalized but their funding totals were not readily available by press time.

  The state commissioner said the federal grants served to “buy off school districts” and said the federal government was interfering with the state board’s responsibility to govern its educational system, which is in violation of the tenth amendment of the constitution.

  “Every Floridian should be offended by the federal government’s interference in state education issue,” he said. “We will not be strong-armed by the federal government.”

  Superintendents from each county were allowed five minutes to defend their policies.  All eight superintendents argued their policies were in compliance and should not have sanctions imposed as they were following the law and serving students in the name of safety.

  Orange County Superintendent Barbara Jenkins read her defending statement to the state board during the meeting and said, “the action was legal” and “the action was necessary” given the “alarming rise” of school-related COVID-19 cases during the August surge fueled by the contagious delta variant.”

  Public comments were taken before the meeting began.  A majority of the callers were from Brevard County saying the district was not in compliance and the parents complained they were removed from a board meeting earlier in the week, which they contend was a violation of Florida Sunshine Law and asked the board to investigate.  Most asked for salaries to be withheld while one parent wanted them to take the consequences a step further.

  “I would like to see the board remove the superintendent and the board members,” Catherine Delaney a parent of a Brevard County student said. “I want them held accountable; we don’t want lawbreakers on our school boards.”

  Tyler Durden
  Fri, 10/08/2021 – 18:20

• China Demanding Answers Over US Nuclear Sub "Underwater Collision" In Indo-Pacific Waters
  China Demanding Answers Over US Nuclear Sub “Underwater Collision” In Indo-Pacific Waters

  China is demanding to know answers and says it’s deeply “concerned” over the incident with the US nuclear submarine in international waters in the Indo-Pacific which was revealed for the first time Thursday. A Navy-affiliated news outlet reported that a US nuclear attack submarine had been damaged in the Western Pacific after suffering an “underwater collision” – although it’s not clear what the sub collided with. The collision took place on Oct. 2.

  “China is seriously concerned over this incident,” China’s foreign ministry’s spokesman Zhao Lijian said Friday. He urged immediate transparency over the incident, “including the exact location of the incident, the purpose of this trip, and details of what the submarine encountered,” according to the statement. 

  

  However, no other follow-up details were issued since the initial US Navy report, only that the vessel is in a “safe and stable” condition. Presumably China and other regional countries could be suspicious or concerned that the incident is bigger than what the US is letting on – for example there’s the question, albeit unlikely, of nuclear material leakage. Reports are indicating it happened somewhere in the South China Sea.

  The Seawolf-class nuclear submarine the USS Connecticut is now returning to port in the US 7th Fleet in Guam, where it’s expected to arrive within the next day. The Navy says the safety of the crew remains its top priority. A Navy official said 11 sailors were injured during the incident, suffering moderate to minor injuries.

  As BBC notes, “the last known incident where a submerged US submarine struck another underwater object was in 2005, when the USS San Francisco hit an underwater mountain at full speed near Guam. One sailor died in the incident.”

  And further an analysts interviewed in BBC said whatever the submarine struck had to be “something big” to cause nearly a dozen injuries to crew: 

  Alexander Neill, a Singapore-based defence and security expert, told the BBC the number of injuries caused by the collision suggested the submarine probably “hit something big” and was “going really fast”.

  The incident, he said, was “uncommon but not unheard of” and had exposed how busy the area was with military activities.

  The USS Connecticut is in a “safe and stable condition” after the incident on 2 October, said a statement by the US Pacific Fleet https://t.co/aRzqWCWSQQ

  — Sky News (@SkyNews) October 8, 2021

  https://platform.twitter.com/widgets.js

  Neill added of the growing and crowded ship traffic situation in the region: “The South China Sea has been increasingly saturated with naval vessels from a number of different countries. While there’s been a lot of show of force by surface vessels you don’t see the level of activity under the surface.”

  Without doubt if the situation were reversed – for example if a Chinese or Russian nuclear submarine had an accident in the Atlantic Ocean or somewhere off the US coast, Washington would be insistent on answers. 

  Tyler Durden
  Fri, 10/08/2021 – 18:00

• Taibbi: The Cult Of The Vaccine
  Taibbi: The Cult Of The Vaccine

  Authored by Matt Taibbi via TK News,

  Yesterday, I ran a story that had nothing to do with vaccines, about the seeming delay of the development of a drug called molnupiravir (see the above segment with the gracious hosts of The Hill: Rising for more). In the time it took to report and write that piece, conventional wisdom turned against the drug, which is now suspected of ivermectinism and other deviationist, anti-vax tendencies, in the latest iteration of our most recent collective national mania — the Cult of the Vaccine.

  The speed of the change was incredible. Just a week ago, on October 1st, the pharmaceutical giant Merck issued a terse announcement that quickly became big news. Molnupiravir, an experimental antiviral drug, “reduced the risk of hospitalization or death” of Covid-19 patients by as much as 50%, according to a study.

  The stories that rushed out in the ensuing minutes and hours were almost uniformly positive. AP called the news a “potentially major advance in efforts to fight the pandemic,” while National Geographic quoted a Yale specialist saying, “Having a pill that would be easy for people to take at home would be terrific.” Another interesting early reaction came from Time:

  Vaccines will be the way out of the pandemic, but not everyone around the world is immunized yet, and the shots aren’t 100% effective in protecting people from getting infected with the COVID-19 virus. So antiviral drug treatments will be key to making sure that people who do get infected don’t get severely ill.

  This is what news looks like before propagandists get their hands on it. Time writer Alice Park’s lede was sensible and clear. If molnupiravir works — a big if, incidentally — it’s good news for everyone, since not everyone is immunized, and the vaccines aren’t 100% effective anyway. As even Vox put it initially, molnupiravir could “help compensate for persistent gaps in Covid-19 vaccination coverage.”

  Within a day, though, the tone of coverage turned. Writers began stressing a Yeah, but approach, as in, “Any new treatment is of course good, but get your fucking shot.” A CNN lede read, “A pill that could potentially treat Covid-19 is a ‘game-changer,’ but experts are emphasizing that it’s not an alternative to vaccinations.” The New York Times went with, “Health officials said the drug could provide an effective way to treat Covid-19, but stressed that vaccines remained the best tool.”

  If you’re thinking it was only a matter of time before the mere fact of molnupiravir’s existence would be pitched in headlines as actual bad news, you’re not wrong: Marketwatch came out with “‘It’s not a magic pill’: What Merck’s antiviral pill could mean for vaccine hesitancy” the same day Merck issued its release. The piece came out before we knew much of anything concrete about the drug’s effectiveness, let alone whether it was “magic.”

  Bloomberg’s morose “No, the Merck pill won’t end the pandemic” was released on October 2nd, i.e. one whole day after the first encouraging news of a possible auxiliary treatment whose most ardent supporters never claimed would end the pandemic. This article said the pill might be cause to celebrate, but warned its emergence “shouldn’t be cause for complacency when it comes to the most effective tool to end this pandemic: vaccines.” Bloomberg randomly went on to remind readers that the unrelated drug ivermectin is a “horse de-worming agent,” before adding that if molnupiravir ends up “being viewed as a solution for those who refuse to vaccinate,” the “Covid virus will continue to persist.”

  In other words, it took less than 24 hours for the drug — barely tested, let alone released yet — to be accused of prolonging the pandemic. By the third day, mentions of molnupiravir in news reports nearly all came affixed to stern reminders of its place beneath vaccines in the medical hierarchy, as in the New York Times explaining that Dr. Anthony Fauci, who initially told reporters the new drug was “impressive,” now “warned that Americans should not wait to be vaccinated because they believe they can take the pill.”

  Since the start of the Trump years, we’ve been introduced to a new kind of news story, which assumes adults can’t handle multiple ideas at once, and has reporters frantically wrapping facts deemed dangerous, unorthodox, or even just insufficiently obvious in layers of disclaimers. The fear of uncontrolled audience brain-drift is now so great that even offhand references must come swaddled in these journalistic Surgeon General’s warnings, which is why whenever we read anything now, we almost always end up fighting through nests of phrases like “the debunked conspiracy theory that COVID-19 was created in a lab” in order to get to whatever the author’s main point might be.

  This lunacy started with the Great Lie Debate of 2016, when reporters and editors spent months publicly anguishing over whether to use “lie” in headlines of Donald Trump stories, then loudly congratulated themselves once they decided to do it. The most histrionic offender was the New York Times, previously famous for teaching readers to digest news in code (“he claimed” for years was Times-ese for “full of shit”) but now reasoned a “more muscular terminology,” connoting “a certain moral opprobrium,” was needed to distinguish the “dissembling” of a politician like Bill Clinton from Trump’s whoppers. “I did not have sexual relations with that woman” could be mere falsehood, but “I will build a great great wall” required language that “stands apart.”

  The key term was moral opprobrium. Moralizing was exactly what journalists were once trained not to do, at least outside the op-ed page, but it soon became a central part of the job. When they used they word “lie,” the Times explained, they wanted us to know that was because “from the childhood schoolyard to the grave, this is a word neither used nor taken lightly.” Put another way, the Times didn’t want people reading about something Donald Trump said, grasping that it was a lie, and, say, chuckling about how ridiculous it was. If the New York Times sent the word “lie” up the flagpole, they now expected an appropriately solemn salute.

  This was the beginning of an era in which editors became convinced that all earth’s problems derived from populations failing to accept reports as Talmudic law. It couldn’t be people were just tuning out papers for a hundred different reasons, including sheer boredom. It had to be that their traditional work product was just too damned subtle. The only way to avoid the certain evil of audiences engaging in unsupervised pondering over information was to eliminate all possibility of subtext, through a new communication style that was 100% literal and didactic. Everyone would get the same news and also be instructed, often mid-sentence, on how to respond.

  At first this expressed itself via regurgitation of Approved Unambiguous Phraseology™ handed down from official or law enforcement sources, like “Russia’s election interference activities,” e.g. “Page’s alleged coordination with Russia’s election interference activities.” However, it wasn’t long before the stage-direction factor in coverage went berserk, as I noted last year after this question by Anderson Cooper in a presidential debate:

  COOPER: Mr. Vice President, President Trump has falsely accused your son of doing something wrong while serving on a company board in Ukraine. I want to point out there’s no evidence of wrongdoing by either one of you.

  The phrase, “no evidence of wrongdoing,” was a mandatory add last year in all coverage involving Ukraine, Joe Biden, and Hunter Biden, from the Guardian (“No evidence the younger Biden did anything illegal”) to CNBC (“There is no evidence that Trump or Giuliani has produced which shows that Hunter Biden was engaged in wrongdoing”) to Newsweek (“Although there is no evidence of illegal wrongdoing by the Bidens in those dealings”) to NBC (“No evidence of wrongdoing on the part of either Biden”) to AP (“There has been no evidence of wrongdoing by either the vice president or his son”) to the New York Times, Los Angeles Times, Axios, and countless others.

  The language was absurd on multiple levels, beginning with its incorrectness — unless they were talking purely about a legal definition, the issue of whether or not there was “wrongdoing” in Hunter Biden accepting a no-show $50,000-a-month job from a crooked Ukrainian energy firm was a matter for readers to decide, not an issue of fact. Still, a lot of people not only swallowed it, but vomited these and other terms back up again, over and over, on social media, or to their friends and family, or to anyone at all, in what became a new way for a certain kind of person to relate to the world.

  As a student in the Soviet Union I noticed subscribers to what Russians called the sovok mindset talked in interminable strings of pogovorki, i.e goofball proverbs or aphorisms you’d heard a million times before (“He who takes no risk, drinks no champagne,” or “Work isn’t a wolf, it won’t run off into the woods,” etc). This was a learned defense mechanism, adopted by a people who’d found out the hard way that anyone caught not speaking nonstop nonsense could be suspected of harboring original thoughts. Voluble stupidity is a great disguise in a society where silence is suspect.

  We’re similarly becoming a nation of totalitarian nitwits, speaking in a borrowed lexicon of mandatory phrases and smelling heresy in anyone who doesn’t. This cult reflex was bad during the Russiagate years, but it’s gone into overdrive since the arrival of COVID. The CNN writer who thinks it’s necessary to put a disclaimer in the lede of a story about molnupiravir, of all things, is basically claiming he or she is afraid a theoretical unvaccinated person might otherwise read the story and be encouraged to not take the vaccine.

  Except, if that theoretical unvaccinated person could be convinced by anything CNN said or did, they’d have already gotten the shot, because the network runs ten million stories a day directly imploring people to get vaccinated or die. News flash: the instinct to armor-plate even unrelated news subjects with layer after layer of insistent vaccine dogma is not for the non-immunized, who mostly don’t watch outlets like CNN or read the New York Times. Outlets apply that neurotic messaging for their own target audiences, who’ve been trained to live in terror of un-contextualized content, which everyone knows leads to Trump, fascism, and death.

  I’d be the last person to claim there aren’t dumb people out there in America, but at least the audiences of channels like Fox and OAN know that content has been designed for them. The people gobbling down these pieces by Bloomberg and the Times that have the journalistic equivalent of child-proof caps on every paragraph that even parenthetically mentions COVID really believe that content has been dumbed down for some other person. They think it’s someone else who can’t handle news that vaccines work and that there also might be a pill that treats the disease, without freaking out or coming to politically unsafe conclusions. So they put up with being talked to like children — demand it, even. Which is nuts. Right? It is nuts, isn’t it?

  Tyler Durden
  Fri, 10/08/2021 – 17:40

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• Ireland Agrees To Minimum Global Corporate Tax Deal Leaving Hungary, Estonia As EU's Last Holdouts
  Ireland Agrees To Minimum Global Corporate Tax Deal Leaving Hungary, Estonia As EU’s Last Holdouts

  While the Democrats kick the can on the debt ceiling as a bitter partisan fight threatens to derail President Biden’s entire domestic agenda, a key piece of his foreign agenda has just fallen into place.

  In a commitment that should clear the way for the OECD to lead a global corporate tax reform initiative that would represent the biggest change to international corporate tax rates in a century, Ireland has agreed to abandon its 12.5% corporate tax rate and sign up for the new 15% minimum global corporate rate being pushed by the Biden Administration.

  

  Donohoe

  According to the FT, the deal is expected to cost Ireland €2 billion ($2.3 billion) in lost revenues in the coming years.

  Finance Minister Paschal Donohoe told the FT that this change in the baseline tax rate would be the only significant change as part of the agreement – although it is of course “very, very significant”, since having the lowest corporate tax rates in its neighborhood has been a cornerstone of Irish economic policy for decades.

  The new rate will affect 1,556 companies in Ireland that employ some 500,000 people, including US tech giants like Apple, Google and Amazon.

  Ireland is joining 140 countries that have agreed via the OECD to the levy of 15% on multinationals. It reached the deal by persuading the OECD to allow it to keep the 12.5% rate for smaller domestic companies with a turnover of less than €750MM. Donohoe added that he had been unsure the OECD would agree to the carve out – but securing Ireland’s participation was critical to making the new policy work, since the idea is to de-incentivize multinationals from leaving the US.

  Donohoe said the change would likely be permanent, and that the change would be “right for Ireland” (in exchange for agreeing to the minimum rate, the US intends to allow European countries to take a bigger piece of the overall corporate tax pie).

  “I believe that change will be right for Ireland and I believe it is also right for Ireland to be playing a positive role in implementing what I believe will be an important agreement,” he said in an interview, adding the deal provided “certainty and stability.”

  Asked if the new rate would remain forever, he said: “I can’t see in my lifetime this kind of circumstances developing again…15 will mean 15.”

  […]

  “We’re all depending on each other to be able to implement this collectively and comprehensively,” Donohoe said. But he added: “I have enough confidence now that this is going to happen globally for me to believe that it’s appropriate that Ireland go into it now.”

  The agreement with Ireland was secured during a meeting in Paris. Details of the international framework have yet to be completed, including the amount that of the tax offset mentioned above. To entice countries to agree, the deal will impose new taxes on multinationals that must be paid in countries where they operate, but aren’t necessarily based. This is known as the “Pillar One” of the deal.

  The president of the Irish Tax Institute, Karen Frawley, said that rejecting the deal would make Ireland look like a “tax haven”, which would have left it with a “damaged” reputation.

  Per the FT, EU members Estonia and Hungary are among the remaining holdouts. For the deal to have any hope of succeeding, the EU needs to secure unanimous support from its 27 members, and then there are still other low-tax nations (including, for example, Singapore), that must be brought on as well.

  Interestingly, polling shows 59% of Irish residents opposed increasing the corporate tax rate but Mark Redmond, CEO of the American Chamber of Commerce of Ireland “warmly welcomed” Ireland’s decision.

  “The revised agreement ensures essential predictability, stability and certainty for multinational employers,” he said. US FDI in Ireland accounts for about 20% of private sector jobs.

  The Irish government expects the higher minimum rate will actually lead to lower revenue, though the FT didn’t go into detail on this. One reporter pointed out that the “headline rate” isn’t that big of a deal for multinationals, anyway.

  I would be cautious about overinterpreting what seems to be good news here:https://t.co/BU9J7Udpt1

  *Headline* corp tax rate isn’t that big a deal for the multinationals that shift profits to Ireland. Attraction historically has been the *effective* rate which tends to be 0-5%.

  — Matthew C. Klein (@M_C_Klein) October 7, 2021

  https://platform.twitter.com/widgets.js

  It’s widely expected that the new global tax rate won’t take effect until at least 2023.

  Tyler Durden
  Fri, 10/08/2021 – 02:45

• What Governments Got Wrong About The Global Energy Transition
  What Governments Got Wrong About The Global Energy Transition

  By Tsvetana Paraskova of OilPrice.com

  The energy crisis in Europe exposed the complexity of a transition to green energy: it is not happening overnight, and it cannot be done successfully with the old tricks. Energy systems, markets, and grids globally need fundamental changes to legislation, regulation, and oversight in order to accommodate 100-percent zero-emission sources. And even in that case, power systems need flexibility and backups in order to avert similar crises down the road as many parts of the world commit to net-zero emissions by 2050 or 2060.

  

  The current crisis in the UK is a cautionary tale about how not to rush to green energy, Rochelle Toplensky of The Wall Street Journal notes.

  Net-zero electricity systems need an entirely new set of rules in all areas of the energy systems and power markets, as well as enough flexibility to offset environmental factors such as low wind speeds, which happened in the UK last month.

  The UK has cut its reliance on coal dramatically over the past decade.

  But its power systems are not yet as resilient to a major transition to low-carbon energy sources as to prevent concerns about its power supply, the Journal’s Toplensky argues.

  The current energy crisis in the UK, the rest of Europe, and in major energy importers in Asia is a warning to policymakers that the transition cannot be rushed before new rules are set in place and backup battery storage is built en masse to support soaring new solar and wind capacity.

  Boosting power grid resilience, building battery storage, and widespread use of the much-touted green hydrogen will require trillions of U.S. dollars of investment, government support, and much greater coordination and cooperation among industry and policymakers at the national and international level.

  Everyone knew that the energy transition would not be cheap. The ongoing energy crisis shows that no one can put the cart before the horse in the transition – backups and flexibility are vital for any successful energy system.

  UK Power Crisis Shows Challenges To Green Transition 

  Even the UK, which has pledged to phase out coal-fired power generation by October 2024, had to fire up an old coal plant last month in order to meet its electricity demand. 

  The country which kick-started the Industrial Revolution with coal saw the share of the fuel drop to a record-low in 2020 – coal generated just 1.8 percent of electricity, down from 28.2 percent in 2010, as per government data. Renewable generation, on the other hand, hit a record 43.1 percent in 2020, outpacing annual fossil fuel generation for the first time.

  During many days in recent years, wind power generated the largest share of Britain’s electricity, surpassing natural gas. This is a commendable move toward clean energy but does not change the fact that wind power generation depends on…the speed of the wind. On those unfortunate days when the wind doesn’t blow, as it happened on most days in September, natural gas is used more in power generation, driving up gas and power prices and also increasing coal generation because of the sky-high prices of natural gas.

  Although households face higher energy bills, they are protected to some extent because of the so-called Energy Price Cap in the UK. But it is this price cap – when power providers are unable to pass the full extent of surging costs onto consumers – that has already led to nine UK providers going out of business. Just last week, three suppliers said they were ceasing trade, and the Office of Gas and Electricity Markets, Ofgem, had to choose new suppliers to take over the failed businesses.

  The UK likely needs new regulations on how its domestic power market operates, which should take into account the net-zero commitment and increased green energy share in electricity generation, analysts say.

  The European Union is also looking at potential changes to the way wholesale electricity markets operate, European Energy Commissioner, Kadri Simson, said this week.

  Demonization Of Fossil Fuels Cuts Backup Options 

  The two oil price crashes in the past five years, as well as the increasingly louder calls for shunning investment in fossil fuels, have led to chronic underinvestment in new supplies of oil, gas, and coal, especially in developed economies aspiring to reach net-zero by 2050.

  These days, however, those developed economies are scrambling for fossil fuel supplies to ensure they will keep the lights on. The surging price of coal and natural gas is leaving many energy-intensive businesses in Europe vulnerable to the price shock because the energy transition hasn’t reached the point where anything other than gas can efficiently power fertilizer or steel production.

  However, investment from the fossil fuel industry has declined in recent years. Moreover, Wall Street investors have been shunning traditional energy because of poor returns, Jeff Currie, global head of commodities research at Goldman Sachs, told Bloomberg in an interview earlier this week. 

  “The new economy is over-invested and the old economy is starved,” he said. “Gas, coal, oil, metals, mining – you pick – the old economy, it is severely underinvested,” Currie noted.

  Major Challenges Ahead To Avoid “A Disorderly Mess”

  Since the world continues to need a lot of fossil fuels despite the green push, supply shortages and price spikes are in the cards in the future, too.

  “[I]t is important to recognise that the transition is, as its derivation suggests, a process of moving from one state to another, and if it is to be successful must involve the managed decline of the existing energy system as well as its transformation towards a future state,” James Henderson and Anupama Sen of the Oxford Institute for Energy Studies (OIES) wrote in a paper last month. 

  “Policymakers have set countries on this essential road, and technology is the key to accelerating the process, but many complex questions remain to be resolved if the world is to avoid the transition becoming a disorderly mess,” they say.

  Tyler Durden
  Fri, 10/08/2021 – 02:00

• Big Tech Q3 Earnings
  Big Tech Q3 Earnings

  By Nick Colas of DataTrek

  US corporate earnings season is fast approaching, and Big Tech’s announcements will be key to the market’s direction. Wall Street has been cutting numbers for some names (GOOG, AMZN) and not raising estimates for AAPL, MSFT or FB. The good news is that the Street expects every Big Tech company to print Q3 results that are BELOW Q2 actuals. That’s likely too pessimistic; 2019, for example, saw no seasonality between Q2 and Q3. Big Tech may not be Q4 leadership (cyclicals should be), but they should be no impediment to a market rally later in the quarter.

  We have been saying Q3 US corporate earnings season should be a bright spot that counteracts an otherwise troubled equity market narrative, so today we will discuss upcoming Big Tech earnings. Add up the S&P 500 weightings for Apple (6.0 percent), Microsoft (5.8 pct), Google (4.3 pct), Amazon (3.8 pct) and Facebook (2.1 pct) and you have 22 percent of the index. How markets respond to earnings reports from these 5 companies matters just about as much as the combined impact of announcements from the Industrials, Consumer Staples, Energy, Real Estate, Materials and Utilities sectors (a combined 24 pct of the S&P).

  Let’s start with the most important point: Big Tech has not been immune from the recent trend of Wall Street analysts cutting their Q3 earnings estimates that we’ve been talking about every Sunday for the last month. Numbers have come down for Amazon and Google, and have remained only constant for Apple, Microsoft, and Facebook. As the following 30/60-day earnings revision trends show, Amazon has seen its Q3 expectations slashed over the last 2 months, Facebook’s Q3 estimates actually rose, and Q3 estimates for Google, Apple and Microsoft are basically unchanged:

  • Apple: $1.23/share expected, +$0.01 over the last 60 days, flat over the last 30 days
  • Microsoft: $2.07/share expected, +$0.01 over the last 60 days, flat over the last 30 days
  • Google: $23.40/share expected, +$0.07 over the last 60 days, but -$0.08 over the last 30 days
  • Amazon: $8.92/share expected, -$4.02/share over the last 60 days, -$0.09 over the last 30 days
  • Facebook: $3.17/share expected, +$0.22 over the last 60 days, flat over the last 30 days

  Now, the funny thing about all these estimates is that in every single case they are lower than what these companies reported in Q2 2021. That fits the oddity we’ve also been mentioning in our weekly earnings updates: Wall Street analysts are expecting the S&P 500 to print lower aggregate Q3 earnings ($49/share) than actual Q2 results ($53/share).

  That has struck us as excessively pessimistic in a cyclical recovery (even if it has been slowing through Q3), and Big Tech’s Q3 2021 earnings expectations when compared to how quarterly earnings typically trend between Q2 and Q3 supports that view:

  • Apple’s $1.23 Q3 estimate is lower than Q2’s actual $1.30. In 2019, the company reported $0.55/share (split adjusted) in Q2 and $0.76/share in Q3, so seasonality doesn’t seem to be an issue for Apple’s quarterly earnings progression.
  • Microsoft’s $2.07 Q3 estimate is lower than Q2’s actual $2.17/share. As with Apple’s 2019 results, MSFT saw no drop from Q2 ($1.37/share) to Q3 ($1.38) in that year.
  • Google’s $23.40 Q3 estimate is meaningfully lower than Q2’s actual $27.26. In 2019 the company took a charge for a regulatory fine, but its operating earnings were essentially unchanged from Q2 to Q3 ($9.9 billion in each quarter).
  • Amazon’s $8.92 Q3 estimate is well below Q2’s actual of $15.21. That is a 41 percent drop, and perhaps correct given the incremental costs the company faces. But the Q2 to Q3 2019 earnings progression was $5.22 to $4.23, only a 19 percent decline.
  • Facebook’s $3.17 Q3 estimate is also far below Q2’s actual of $3.61. In 2019, Q3 saw earnings increase, to $2.12, from $1.99 in Q2.

  Takeaway (1): you can see why US Big Tech has had a tough slog in the last month (flat/down Q3 earnings expectations), but estimates seem too low just based on what these companies reported for Q2. Seasonality doesn’t explain the expected drop, nor do economic factors. Now, that doesn’t mean Big Tech can be market leaders over the balance of the year; our “Pandemic Peacetime” paradigm points to other, more cyclical, groups playing that role. But nor should they embarrass themselves when they report Q3 results and take the market down with them.

  Takeaway (2): going from the “micro” of 5 companies’ earnings reports to the “macro” of what this says about US large cap stocks, we think markets broadly agree with our point that Q3 earnings reports will surprise meaningfully to the upside. That’s why the S&P 500 is only off 4 percent from its early September highs despite cuts to earnings estimates, a slowing US economy, a de facto announcement of Fed bond purchase tapering and 2022 rate hikes, not to mention DC’s recent debt limit wrangling. That’s good and bad news, because it put all the market’s eggs in one basket. For that reason, we expect market volatility to continue at least until more than half the S&P 500 has reported (i.e., late in the month).

  Tyler Durden
  Thu, 10/07/2021 – 22:40

• Indian Central Bank Accumulating Large Quantities Of Gold Almost Under The Radar
  Indian Central Bank Accumulating Large Quantities Of Gold Almost Under The Radar

  Submitted by Ronan Manly of BullionStar.com

  While large one-off central bank gold purchases get a lot of media attention and the same is true for central banks accumulating gold reserves over a two or three month period, sizeable accumulation of gold by central banks on a month in, month out basis, with the exception of the Chinese and Russian central banks, tends to go almost unnoticed.

  A prime case in point is the gold buying strategy of India’s central bank, the Reserve Bank of India (RBI), which almost under the radar, has now become one of the world’s biggest and most consistent central bank gold buyers every year for the last four years.    

  Starting in early 2018 and up to the end of August 2021, over that time the RBI has added a staggering 166 tonnes to it’s strategic gold reserves, and now holds a claimed 724.24 tonnes of gold, making India the 9th largest sovereign gold holder in the world, well ahead of the Netherlands (in 10th place), and within shouting distance of Japan (8^th place).   

  Arguably, this stealthy gold accumulation by the Indian official sector is now becoming more apparent since two of the big guns that are normally active in the central bank gold buying market, the central banks of Russia and China, are currently ‘taking a break’.

  

  According to it’s official figures, China (via the People’s Bank of China) last added to it’s monetary gold reserves in September 2019, leaving it with a unchanged official total of 1948 tonnes of gold since then. This is notwithstanding the fact there is widespread skepticism about the real size of China’s sovereign gold reserves. 

  Additionally, the Russian Federation (via the Bank of Russia) officially stopped buying gold in the domestic Russian market at the end of March 2020 and actually made an official announcement about this hiatus at the time. Due to this pause since March 2020, Russia’s official gold reserves have essentially remained unchanged except for some tiny adjustments, and Russia currently claims to hold 2,294.5 tonnes of monetary gold.

  With these two gold buying giants now officially “off the grid”, the gold buying activities of the Indian central now come into sharper focus.

  India’s central bank, Reserve Bank of India (RBI), continues to buy gold, adding another 13 tonnes during August. The RBI now holds 724 tonnes of gold reserves. YTD, RBI has added 47.66 tonnes, and since 2018 has added 166 tonnes. See RBI table attached https://t.co/On9GhlT8VI pic.twitter.com/9KZwfZ3gDh

  — BullionStar (@BullionStar) September 23, 2021

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  The Details    

  According to the Reserve Bank of India’s latest FX Reserves report dated 16 September 2021, the RBI, as of 27 August, held 724.24 tonnes of gold. See report online here and in pdf here. Compared to the same report from 30 July 2021 when the RBI held a total of 711.18 tonnes, this shows that the RBI added 13.06 tonnes to it’s gold reserves during August 2021.

  

  Prior to August, the RBI had already purchased a combined 34.6 tonnes of gold during five months of 2021 (in February, March, May, June and July). Adding the 13.06 tonnes of gold that the RBI bought in August, this means that so far in 2021, the Indian central bank has bought 47.66 of gold, which on an annualized basis would be 71.5 tonnes, and would be more than the gold buying totals of Hungary (63 tonnes bought in March), and Brazil (62.3 tonnes bought during May, June and July). See “Hungarian central bank boosts its gold reserves by 3000% in less than 3 years” and “Brazil’s Central Bank refuses to answer any questions about its Gold Reserves”.

  RBI – Consistent Gold Buyer since 2018

  This sizeable gold buying by the Indian central bank in 2021 is not a one off, and it continues a trend that began in early 2018. The following statistics come from World Gold Council (EGC) data (which itself is based on IMF data that each central bank submits to the IMF (on a voluntary basis)).

  During 2018, the RBI accumulated a total of 42.3 tonnes of gold, with gold purchases claimed to be made in each of the 10 months from March to December 2018.

  The following year in 2019, the RBI was again a substantial buyer of gold, adding a total of 34.5 tonnes during seven of the twelve months (each month from January to April, and again in each month between October and December).

  During 2020, the RBI bought another 41.7 tonnes of gold, again by pursuing the ‘buy often and consistently’ strategy, adding gold to it’s reserves in each month except for January and September.

  Therefore, over the three years of 2018 – 2020 inclusive, the Reserve Bank of India purchased 118.5 tonnes of gold. Adding the 47.66 tonnes of gold purchased so far in 2021 (up to the end of August), this means that since early 2018, the RBI has bought a whopping 166.16 tonnes of gold.

  You will also see that the 47.66 tonnes bought by the RBI so far in 2021 (up to month 8) is more than the total amount of gold that the RBI bought in each of 2018, 2019 and 2020. So far in August 2021, the RBI has been buying an average of 6 tonnes of gold per month, compared to buying an average of 2.5 tonnes per month in each of 2018 and 2020, and an average of 2.9 tonnes per month in 2019. So not only is RBI’s gold buying consistently happening in most months, the quantities of gold that the RBI is buying each year are accelerating,

  Additionally, given that the RBI purchased gold in each of 10 months of 2018, in each of 7 months of 2019, and in each of 10 months of 2020, and has purchased gold in 6 of the 8 months so far this year, we should therefore expect further gold buying by the Indian central bank in at least one or two (or maybe even all) of the remaining months of 2021.

  Whichever way you look at it, the total amount of gold accumulated by the RBI since early 2018 is sizable and ranks up there among the top central bank gold buying nations.

  Between 2020 and year-to-date 2021, the Indian central bank has purchased a combined 89.4 tonnes of gold, which is just marginally less than the largest central bank gold buyer over that same period, the Bank of Thailand, which bought 90.2 tonnes. See “Thai central bank leads pack, buying 90 tonnes of gold over April and May”. 

  Over the period from the beginning of 2019 up to year-to-date 2021, the Reserve Bank of India has added 123.9 tonnes of gold. This is second only to Russia’s 182 tonnes of gold buying over that same period, and more than Poland’s 100 tonne gold purchase over the same timeframe (see “Poland joins Hungary with Huge Gold Purchase and Repatriation”)

  Over the period from the start of 2018 through to year-to-date 2021, in which the Indian central bank accumulated 166.2 tonnes of gold, this is third only to Russia’s huge gold buying over that period (456.7 tonnes) and not too much less than Turkey’s claimed 209.7 tonnes of gold buying over the same timeframe. For the rationale on Russian and Turkish central bank gold purchases, see “Turkey and Russia Highlight Gold’s Role as a Strategically Important Asset”.

  Where is the RBI Gold Held?

  The 166 tonnes of gold purchased by the Indian central bank since 2018 is also nearly as much as the 200 tonnes of gold that India claimed to have bought from the International Monetary Fund (IMF) in October 2009, in what the IMF called an ‘off-market’ transaction. There is little information known about how this sale by the IMF to India was transacted and, like everything in the central bank gold market, the real details remain secret. See “IMF Gold Sales – Where ‘Transparency’ means ‘Secrecy’” for more details on the IMF gold sales.

  So where is the RBI’s 724.24 tonnes of gold held? This is where it gets interesting.

  From the RBI Annual report for 2021 (up to March 30, 2021), we see that of the RBI’s claimed gold holdings, “292.30 metric tonnes is held as backing for notes issued and shown separately as an asset of Issue Department”, while the rest “is treated as an asset of Banking Department”.

  However, the gold held by the Banking Department and the gold held by the Issue Department are both classified as part of the RBI’s foreign exchange reserves, along with foreign currencies, and IMF SDRs.

  

  Table XII.4 of the 2021 RBI annual report also illustrates these two components of the RBI’s gold holdings, where, from year to year, an unchanged 292.30 tonnes is classified as “Gold held for backing notes issued (held in India)”, while the rest of the gold holdings are classified as “Gold held as asset of Banking Department (held abroad)”, which as of 31 March 2021 amounted to 403.01 tonnes.

  

  The gold which the RBI holds in India is actually held in the vaults of the RBI’s building in Nagpur, in the state of Maharashtra. See below for more on the RBI’s gold vaults in Nagpur.

  Turning to the latest half-yearly RBI “Report on Management of Foreign Exchange Reserves”, dated 12 May 2021, we find in section I.6. “Management of Gold Reserves”, that the RBI gold that is held abroad (outside India), is held at the Bank of England and with the Bank for International Settlements (BIS).

  “I.6. Management of Gold Reserves

  As at end-March 2021, the Reserve Bank held 695.31 metric tonnes of gold. While 403.01 metric tonnes of gold is held overseas in safe custody with the Bank of England and the Bank of International Settlements (BIS), 292.30 tonnes of gold is held domestically.”

  Interestingly, the previous version of this “Report on Management of Foreign Exchange Reserves”, dated 8 December 2020, also mentioned that some of the RBI’s gold was in the from of gold deposits (in other words gold loans to bullion banks), as the wording says:  

  “As at end-September 2020, the Reserve Bank held 668.25 tonnes of gold (including gold deposits of 9.04 tonnes). While 366.91 tonnes of gold is held overseas in safe custody with the Bank of England and the Bank of International Settlements (BIS), 292.30 tonnes of gold is held domestically.”

  Of the RBI’s two components of gold, the 292 tonnes attributed to the RBI’s Issue Department has been constant since at least 2002, save for a few tiny additions over the years due to an increase in gold coin holdings.   

  While it’s not clear where the RBI purchased 166 tonnes of gold over 2018-2021, the fact that all of this increase is held abroad and the fact that all of RBI’s gold stored internationally is with the Bank of England and the BIS, then it’s logical to conclude that the RBI’s gold purchases over 2018-2021were at the Bank of England in London, or via gold transactions with the BIS, or both.

  Note that the BIS maintains gold storage accounts in Berne with the Swiss National Bank (SNB), in London at the Bank of England, and in New York with the Federal Reserve Bank of New York (FRBNY). As the BIS states on it’s website under banking services (for central banks):

  “Gold location exchange, safekeeping and settlement: loco London, Berne or New York”

  So any reference to the BIS holding RBI gold either means that the RBI has lent gold out to bullion banks using the gold loan (deposit) services of the BIS, or the RBI has bought gold from the BIS and holds this gold in a sub-account of the BIS in either Berne (SNB), London (Bank of England) or New York (FRBNY).

  

  If we go back to mid-2009, to before the RBI supposedly purchased 200 tonnes of gold from the IMF, we find in the “Report on Foreign Exchange Reserves” dated 16 July 2009, that:

  “I.7. Management of Gold Reserves

  The Reserve Bank holds about 357 tonnes of gold forming about 3.8 per cent of the total foreign exchange reserves in value terms as on March 31, 2009. Of these, 65 tonnes are being held abroad since 1991 in deposits / safe custody with the Bank of England and the BIS.

  Eagle-eyed readers will see that, of this 357 tonnes, with 65 tonnes stored aboard as of mid 2009, that left 292 tonnes of RBI gold stored in India at that time, i.e. the unchanged 292 tonnes of gold has been stored in India for many years.

  Looking at the RBI’s “Report on Foreign Exchange Reserves” dated 19 January 2010, i.e. after the RBI’s supposed 200 tonnes gold purchase from the IMF, we again see reference to the gold held abroad since 1991:

  I.7. Management of Gold Reserves

  The Reserve Bank held about 357.75 tonnes of gold forming about 3.7 per cent of the total foreign exchange reserves in value terms as at the end of September 2009. Of these, 65.49 tonnes are being held abroad since 1991 in deposits / safe custody with the Bank of England and the Bank for International Settlements.

  In November 2009, the Reserve Bank concluded the purchase of 200 metric tonnes of gold from the International Monetary Fund (IMF), under the IMF’s limited gold sales programme.  The purchase was an official sector transaction and was executed over a two week period during October 19-30, 2009 at market-based prices. As a result of this purchase, the Reserve Bank’s gold holdings have increased from 357.75 tonnes to 557.75 tonnes.

  So before supposedly buying 200 tonnes of IMF gold in 2009, the RBI had held 65.49 tonnes of gold at the Bank of England  and / or with the BIS.

  

  Which IMF Gold was Sold to India?

  Assuming that the IMF did sell 200 tonnes of gold to the Indian central bank in October 2009, then where was this gold located when ownership was transferred from the IMF to the RBI?

  IMF gold is stored in 4 “gold depositories” across the world. These 4 gold depositories are the Federal Reserve Bank of New York, the Bank of England in London, the Banque de France in Paris, and the Reserve Bank of India in Nagpur India. For details, see “The IMF’s Gold Depositories – Part 1, The Legal Background” and “The IMF’s Gold Depositories – Part 2, Nagpur and Shanghai, the Indian and Chinese connections“.

  The most logical answer is that the IMF gold transferred to the RBI in 2009 had been held in the Bank of England vaults in London. Why? Firstly, the IMF gold sale to the RBI in October 2009 definitely did not use IMF stored in Nagpur, India. This is because the 200 tonnes purchase in 2009 was immediately classified by the RBI as “held abroad” as soon as it was transacted. Besides, the IMF never had as much as 200 tonnes of gold stored at the Nagpur depository. The most IMF gold that was ever stored in Nagpur was 144.4 tonnes. Additionally, some of the IMF gold held in India is of variable quality and includes confiscated smuggled gold and other non-good delivery gold from domestic mine production.

  Secondly, the IMF gold held in the New York and Paris depositories (i.e. FRB New York and Banque de France) is not / was not in good delivery form. To quote the IMF during the 1970s when it previously conducted gold sales:  

  “…most of the gold of the Fund is not in the form of individually stamped and weighed bars but consists, with the exception of the gold held in depositories in the United Kingdom and India, of melts, comprising 18-22 individual bars, which will first need to be identified, weighed, and selected before they can be delivered.”

  “A melt is an original cast of a number of bars, usually between 18 and 22. The bars of an unbroken melt are stamped with the melt number and fineness but weight-listed as one unit; when a melt is broken, individual bars must be weighed and stamped for identification. It is the practice in New York and Paris to keep melts intact.”

  “As indicated in the staff paper on Gold Sales (EBS/76/46, 2/2/76), most of the Fund’s gold held with the Federal Reserve Bank of New York and the Banque de France is in the form of melts. Before the gold can he offered in gold auctions a part of these holdings has to be transformed into individually weighed and identified bars.

  For details see “The IMF’s Gold Depositories – Part 3, Gold Swaps and the Quality of the IMF Gold”.

  And additionally, as the Banque de France commented to National Geographic in February 2011:

  “Buyers don’t want the beat-up American gold. In a nearby room pallets of it are being packed up and shipped to an undisclosed location, where the bars will be melted down and recast in prettier forms.”

  So with the IMF gold in Nagpur being a hodgepodge of mostly low quality old gold, and with IMF gold in New York and Paris being in the form of bundled up old US Assay Office melts and even some low quality coin bars, then it would be logical for the IMF in October 2009 to sell the RBI some of its good delivery gold which was stored in London (which, until at least the late 1970s, was predominantly held in the form of Rand Refinery 400 oz gold bars).

  Thirdly, prior to October 2009, the only gold which the RBI stored abroad was with the Bank of England and the BIS, and after October 2009 this was still the case, so the 200 tonnes of gold which the IMF acquired in October 2009 had to have come from IMF gold bars that the IMF had stored at the Bank of England, because this is the only remaining IMF gold depository when the other 3 IMF gold depositories are excluded.

  Note that prior to 2009, the RBI had not purchased any gold in the preceding years between 2002 – 2008 (which is the earliest data that is available on the World Gold Council website).

  Conclusion

  So putting this all together, we know that of the 724.24 tonnes that the Indian central bank claims to hold, 292.3 tonnes in held by the RBI in its vaults in Nagpur, India, and the rest, 432 tonnes, is held with the Bank of England and the BIS. Of this 432 tonnes, 65.5 tonnes has been held with the Bank of England / BIS since 1991, 200 tonnes was bought from the IMF in 2009 and is stored at the Bank of England, and the rest, 166 tonnes (purchased over 2018 – 2021) is held with the Bank of England / BIS.

  But similar to all central banks the world over, the Indian central bank never publishes any physical audits of the RBI gold, never publishes weight lists (bar lists) of the gold bars held, never published a breakdown of much RBI gold is held by the Bank of England and how much is held by the BIS, and never publishes any information about gold loans or gold swaps nor how much gold is out on loan with bullion banks.

  The 292.3 tonnes of gold held by the RBI in Nagpur has been held for many years. Some since pre-Independence times, and some accumulated during the 1950s – 1960s. This gold is not high quality / purity. In fact, in July 2014, the RBI was in discussions with bullion banks about conducting gold location and quality swaps whereby the RBI would provide this old / inferior quality gold to the banks, and swap it for access to Good Delivery gold bars in London. See Economic Times article here – “RBI plans to swap old gold in Nagpur vault with purer variety”.

  

  Appendix – The Gold Vault in RBI Nagpur

  For those who are interested in central bank gold vaults, and especially vaults which claim to gold IMF gold, I will leave you with an intriguing old report from the RBI website which was published in February 1984 and which is titled “Report of the Committee on Security Arrangements, Vol 1” (pdf RBI CR671). This report gives some insight into the RBI’s gold vault in Nagpur at that time. From pages 107 – 109:  

  “Gold vaults

  5.8 The Bank has in its custody a considerable quantity of gold not only on its own account as Reserve Gold for note issue but also balances held in safe custody on behalf of Government of India and the International Monetary Fund. The bulk of this gold is held in Nagpur. The major portion of the remaining gold is held in Bombay.

  In regard to the custody and operation of the gold vaults, the Committee would recommend the following :-

  (a) Nagpur

  (i) The main door of the gold vault is enclosed in a grilled enclosure in the patrol corridor

  (ii) The actual joint custodians of the gold balances are the Assistant Currency Officer and the Treasurer. In view of the nature of the treasure, viz gold and the fact that not only is it the Reserve Bank of India’s own gold but also gold of the Government of India and the International Monetary Fund which means that it is not merely the tangible value of the gold that is involved but also the intangible, viz. the image of the Reserve Bank as the custodian of the gold of the World body and the Central Government that is involved, it will be more appropriate to elevate the status of the joint custodians.

  On the analogy of the holding of one key by the Treasurer, the head of the cash department, the other key may be held by the other comparable head of the issue department, viz. the Currency Officer (Administration). This will also be in keeping with the controlling key being held by the Manager.

  (b) (ii) In Nagpur, the original keys of the joint custodians are held in safes, under the third lock of the Manager, and the safes themselves are kept in different vaults.

  A lot may have changed in the Nagpur vaults since 1984, although a lot may have remained the same. And with the RBI vault in Nagpur being an IMF gold depository, the IMF would undoubtedly prefer that the world forgets that the Nagpur gold vault even exists. 

  This article was originally published on the BullionStar.com website under the same title “Indian Central Bank accumulating large quantities of Gold almost under the Radar”.

  Tyler Durden
  Thu, 10/07/2021 – 22:10

• San Francisco Eases Indoor Mask Requirements As UK Removes 47 Countries From Travel "Red List"
  San Francisco Eases Indoor Mask Requirements As UK Removes 47 Countries From Travel “Red List”

  Here’s something you don’t see every day: headlines about the authorities dialing back COVID-related restrictions, as CNBC’s Carl Quintanilla pointed out in a tweet.

  Three headlines, all today:

  * SAN FRANCISCO TO EASE INDOOR MASK REQUIREMENTS AS OF OCT 15

  * GERMAN HEALTH MINISTER SPAHN SAYS NO FURTHER COVID MEASURES NECESSARY IN AUTUMN, WINTER

  * U.K. REMOVES HOTEL QUARANTINE ON ARRIVAL FOR 47 NATIONS @DeItaone @JohnSpall247

  — Carl Quintanilla (@carlquintanilla) October 7, 2021

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  Most notably, San Francisco is easing its indoor mask requirements beginning Oct. 15 – or next week. The decision comes after several high-profile California politicians including Gov. Gavin Newsom and San Francisco Mayor London Breed have been caught violating their own COVID guidelines.

  

  And it’s not just San Francisco, the county, along with seven of its neighbors, will mostly remove local mandates as COVID cases continue to decline and vaccination rates rise (this second requirement may prove to be a bit of a snag), according to the San Francisco Examiner.

  Here’s more:

  The eight Bay Area counties with indoor mask mandates currently in place must reach moderate levels of transmission as defined by the Centers for Disease Control and Prevention and low hospitalization rates as defined by the local health officer. In counties that haven’t reached 80% of the population vaccinated, the orders may be lifted three weeks after children ages 5-11 are granted access to vaccines.

  San Francisco will partially lift its mask mandate a week from Friday, assuming local COVID cases and hospitalizations remain stable or decline over the next week. At that time, people may stop wearing masks at indoor spaces that require proof of vaccination — including gyms, offices and places that host small gatherings — as long as no children under 12 are present and other ventilation and safety measures are in place.

  The criteria announced Thursday apply to Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara and Sonoma counties, which all reinstated indoor mask mandates in August amid the delta surge. Solano County did not put in place a local mandate.

  […]

  “I’m excited that we’re once again at a place where we can begin easing the mask requirements, which is the direct result of the fact that we have one of the highest vaccination rates in the country, our cases have fallen, and our residents have done their part to keep themselves and those around them safe,” said San Francisco Mayor London Breed in a statement.

  On top of all this, relaxing SF’s mask requirements might help law enforcement end the epidemic of shoplifting afflicting the City by the Bay.

  Moving on from San Francisco to Europe, Germany’s Health Minister Jens Spahn said Thursday that he believes Europe’s biggest economy will be able to forego additional COVID-related restrictions during the fall and winter since the country’s vaccination rate is actually higher than authorities had previously believed.

  According to Reuters, Spahn said that a study by Germany’s RKI had found that the number of people vaccinated against COVID was 5% higher than the government had believed. This, according to Spahn, means the existing rules requiring people to show evidence of showing a negative test or having been vaccinated or recovered on entering an indoor space or event should be enough.

  “As things stand, this vaccination rate means no further restrictions are needed,” he said.

  But it wasn’t all good news. While the UK removed 47 countries from its “red list” of countries where travelers must quarantine after returning, with Transportation Secretary Grant Shapps, UK health authorities also reported more than 40K cases in a single day for the first time in a month, according to Sky News.

  Still, travelers in the UK need a Day 2 test if they’re fully vaccinated, and a pre-departure test if they’re not, even to travel to countries on the green list.

  Whether restrictions are further relaxed will likely depend on which direction case numbers break toward during the coming week.

  Tyler Durden
  Thu, 10/07/2021 – 21:40

• In Stunning Rebuke, Poland's Top Court Rules Polish Law Takes Presedence Over The EU
  In Stunning Rebuke, Poland’s Top Court Rules Polish Law Takes Presedence Over The EU

  In a stinging rebuke to Europe’s unelected bureaucrats, and a major escalation in the rule of law crisis between Warsaw and Brussels, Poland’s constitutional court ruled on Thursday that Polish law can take precedence over EU law amid an ongoing dispute between the European bloc and the eastern European member state. The decision by the Constitutional Tribunal came after Polish Prime Minister Mateusz Morawiecki requested a review of a decision by the EU’s Court of Justice (ECJ) that gave the bloc’s law primacy. Two out of 14 judges on the panel dissented from the majority opinion.

  “The attempt by the European Court of Justice to involve itself with Polish legal mechanisms violates … the rules that give priority to the constitution and rules that respect sovereignty amid the process of European integration,” the ruling said, in an outcome that could have wide-reaching consequences for Europe when the next crisis hits.

  Meanwhile, Brussels considers the Constitutional Tribunal illegitimate due to the political influence imposed upon Poland’s judiciary by the ruling Law and Justice party (PiS).

  As the FT’s Henry Foy notes, it is “Hard to overstate the importance of this ruling.” He goes on to note that “Poland is *the* EU success story of eastern enlargement, and the biggest recipient – by a long long way – of EU taxpayer money since 2004. And now it is saying that it refuses to recognize a fundamental part of the whole project.”

  Hard to overstate the importance of this ruling.
  Poland is *the* EU success story of eastern enlargement, and the biggest recipient – by a long long way – of EU taxpayer money since 2004.
  And now it is saying that it refuses to recognise a fundamental part of the whole project. https://t.co/79nHpqpI1w

  — Henry Foy (@HenryJFoy) October 7, 2021

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  As DW reports, the court had looked specifically at the compatibility of provisions from EU treaties, which are used by the European Commission to justify having a say in the rule of law in member states, with Poland’s constitution.

  A ruling by the ECJ in March said that the EU can force member states to disregard certain provisions in national law, including constitutional law. The ECJ says that Poland’s recently implemented procedure for appointing members of its Supreme Court amounts to a violation of EU law. The ruling from the ECJ could potentially force Poland to repeal parts of the controversial judicial reform.

  Meanwhile, the EU is withholding billions of euros of aid for post-pandemic rebuilding in Poland over concerns that the rule of law is being degraded in the country.

  “The primacy of constitutional law over other sources of law results directly from the Constitution of the Republic of Poland,” PiS government spokesman Piotr Muller wrote on Twitter after the court’s decision. “Today (once again) this has been clearly confirmed by the Constitutional Tribunal.”

  Dzisiejszy wyrok TK w zasadniczej części uwzględnia wniosek premiera @MorawieckiM. Nadrzędność prawa konstytucyjnego nad innymi źródłami prawa wynika literalnie z Konstytucji RP. Dzisiaj (po raz kolejny) wyraźnie potwierdził to Trybunał Konstytucyjny.

  — Piotr Müller (@PiotrMuller) October 7, 2021

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  However, the EPP group, the center-right bloc in the European Parliament to which PiS belongs, come out strongly against the court’s ruling: “It’s hard to believe the Polish authorities and the PiS Party when they claim that they don’t want to put an end to Poland’s membership of the EU. Their actions go in the opposite direction. Enough is enough,” Jeroen Lenaers, MEP and spokesperson for the group, said. “The Polish Government has lost its credibility. This is an attack on the EU as a whole,” he added.

  Previously, the European Parliament called on Morawiecki to cancel the court case in a resolution passed last month. It stressed the “fundamental nature of primacy of EU law as a cornerstone principle of EU law”, which however now is put in doubt.

  Poland has come under repeated fire from the EU including over issues to do with LGBTQ rights and women’s rights and media freedom, and in general for refusing to do whatever Brussels tells it do.

  As DW notes, the judiciary reforms by the PiS government have been seen as a threat to Poland’s membership within the 27-member bloc as well as to the stability of the EU as a whole.

  That said, the court’s decision on Thursday came as little surprise. The presiding judge, Julia Przylebska, is a government loyalist who was appointed by the ruling party. Similar to the highly partial US Supreme Court justices who are anything but impartial themselves.

  Jack Parrock, DW’s correspondent in Brussels, highlighted the importance the decision could have on Poland’s role in the EU.

  “One of the cornerstones of EU membership is that EU law has primacy over all other laws and that the European Court of Justice is the top court within the European Union and what these judges are saying is that in some aspects they don’t believe that that is the case,” he told DW.

  “This all started because the European Court of Justice essentially ruled that certain aspects of judicial tampering that the government was doing in Poland’s judiciary were not in line with EU law,” Parrock explained.

  “This has been an ongoing saga, and this is a pretty major issue now for the EU. We’ve already seen some pretty strong reactions coming from European parliamentarians and I’m sure we’re going to see some harsh criticism of this ruling coming from the European Commission,” he added.

  Needless to say, the EU was not happy, and promptly escalated the war of words tweeting that “The Commission will not hesitate to make use of its powers under the Treaties to safeguard the uniform application & integrity of Union law.”

  Snap reaction from @EU_Commission:
  “We will analyse the ruling … in detail and we will decide on the next steps. The Commission will not hesitate to make use of its powers under the Treaties to safeguard the uniform application & integrity of Union law.https://t.co/UvVflwMLRN

  — Yannis Koutsomitis (@YanniKouts) October 7, 2021

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  Tyler Durden
  Thu, 10/07/2021 – 21:10

• Oh My: Amazon Looks At Leaving Seattle Over City Council Hostility
  Oh My: Amazon Looks At Leaving Seattle Over City Council Hostility

  Authored by Ed Morrissey via HotAir,

  

  To paraphrase Animal House, Andy Jassy hasn’t dropped the big one — yet — but he put it in play this week. After years of deteriorating relations with their home city of Seattle and its ultra-progressive city council, Amazon’s CEO made it known that the online giant may look for greener pastures. Citing the city’s hostility toward their presence, Jassy suggested that the suburbs are looking better and better for a new home to its 50,000-employee home base (via Instapundit):

  The world’s largest online retailer is by far the biggest private employer in Seattle with more than 50,000 workers. That distinction has proved a headache in recent years, with some residents and government officials blaming the company for exacerbating homelessness and traffic.

  “I’d say the last five years, the city council has become less enamored with business or with Amazon,” Jassy said during an event hosted by technology news site GeekWire. “It’s just been rougher.” …

  The company, which is wrapping up construction of an expanded Seattle headquarters campus, has since shifted its expansion planning toward neighboring cities like Bellevue and Redmond. Bellevue, just east of Seattle, “is where most of our growth will end up being,” Jassy said. He added that he wouldn’t be surprised if Amazon opened other offices in additional cities in the region.

  Bloomberg notes that Amazon may have contributed to the current state of hostilities with the city. Three years ago, they made a $1 million contribution to the local chamber of commerce’s campaign to get more moderates on the city council. That worked out as well as could be expected in the pre-CHAZ era of Seattle; it backfired and left the impression that Amazon wanted to buy its own city council. The winning ultra-progressives came into office with an even bigger axe to grind against the city’s biggest capitalist organization.

  Post-CHAZ and post-riot, one has to wonder whether Seattle voters might regret that choice. Even some of the city’s leadership had reason to regret that final expression of ultra-progressive activism. Remember Jenny Durkan’s abrupt about-face on CHAZ after the activists targeted her home?

  The big question here is whether Amazon regrets its massive investment in its new Seattle HQ enough to abandon it and take the loss. Jassy might just be looking for more leverage with a now-chastened city council, but they’re not that chastened, and the situation hasn’t improved over the last year. Jassy may not completely abandon Seattle, but he can move enough of the business out of the council’s jurisdiction to make their budgeting a lot more complicated in the future. And it’s not just Amazon feeling the Bern, either. Things got so bad for Boeing that they decamped in 2001 for Chicago, as Don Surber reminds readers:

  Seattle’s hostility to business led to Boeing’s departure for Chicago in 2001. The company was founded in Seattle in 1916. It decided last year to shutter its last factory in Seattle. …

  No, to really kill business, you need a government that is hostile and frankly jealous of success. In 22 short years, the garage business became the top retailer in the country. Seattle is doing everything it can to force Amazon out.

  The CEO finally got the hint because when it comes to Democrat policy, there is no such thing as unintended consequences. Seattle wants Amazon out. So be it.

  Seattle’s city council doesn’t really want Amazon out. It wants Amazon to fund The Revolution, and resents the company’s refusal to do so. The council keeps escalating the stakes and assumes — weirdly — that Amazon has more invested in Seattle for its online business model than Boeing did for its manufacturing model. At some point, Jassy will have to call Seattle’s bluff and take the short-term loss on its commercial real estate venture, or the city council will have to back down from its capitalist bête noire. I’d put my bet on the former, and sooner rather than later. Either way, the radical leftists in Seattle are playing out a lose-lose scenario.

  Tyler Durden
  Thu, 10/07/2021 – 20:40

• September Payrolls Preview: It Will Be A Beat, The Question Is How Big
  September Payrolls Preview: It Will Be A Beat, The Question Is How Big

  After a strong initial claims report and a solid ADP private payrolls print, all eyes turn to the most important economic data point of the week, and the month, Friday’s nonfarm payrolls report due at 830am ET on Friday, where consensus expects a 500K print- more than double last month’s disappointing 235K print – as well as a drop in the unemployment rate to 5.1% and an increase in average hourly earnings to 4.6%. And unlike last month, when we correctly predicted the big miss in August payrolls, this time we agree that tomorrow’s report will be a beat, the only question is how big.

  Here is a snapshot of what to expect tomorrow:

  • Total Payrolls: 500K, Last 235K
  • Private Payrolls: 450K, Last 243K
  • Unemployment Rate: 5.1%, Last 5.2%
  • Labor force participation rate: 61.8%, Last 61.7%
  • Average Hourly Earnings Y/Y: 4.6%, Last 4.3%
    • Average Hourly Earnings M/M: 0.4%, Last 0.6%
  • Average Weekly Hours: 34.7, Last 34.7

  As Newsquawk writes in its NFP preview, September’s jobs data, the last before the Fed’s November 3rd policy meeting, will be framed in the context of the central bank’s expected taper announcement, where a merely satisfactory report would likely to be enough for the FOMC to greenlight a November announcement to scale-back its USD 120BN/month asset purchases.

  Goldman economists are more bullish than normal, and estimate nonfarm payrolls rose 600k in September, above consensus of +500k, and they note that “labor demand remains very strong, and we believe the nationwide expiration of enhanced unemployment benefits on September 5 boosted effective labor supply and job growth—as it did in July and August in states that ended federal benefits early.” As a result, Goldman is assuming a 200k boost in tomorrow’s numbers and a larger boost in October. The bank also believes the reopening of schools contributed to September job growth, by around 150k. Despite these tailwinds, Big Data employment signals were mixed, and dining activity rebounded only marginally.

  Labor market proxies have been constructive for the month: ADP’s gauge of payrolls surprised to the upside, although analysts continue to note that the direct relationship between the official data and the ADP’s gauge is tenuous, despite the gap being under 100k over the last three reports. The number of initial jobless claims and continuing claims has eased back between the survey periods of the August and September jobs data, although analysts note that more recent releases have shown an uptick in claims potentially clouding the outlook. The ISM business surveys have signaled employment growth in the month, with manufacturing employment rising into growth territory again, but services sector hiring cooled a little in the month, but remains expansionary; survey commentary continues to allude to a tight labour market. The Bureau of Labor Statistics will release the September employment situation report at 13:30BST/08:30EDT on October 8th.

  POLICY: The September jobs report might have reduced relevance on trading conditions given that Fed officials have effectively confirmed that, barring a collapse in the jobs data, it is on course to announce a tapering of its asset purchases at the November 3rd meeting. Accordingly, trading risks may be skewed to the downside, rather than to the upside, where a significant payrolls miss may present obstacles to the Fed announcing its taper. Additionally, it is worth being cognizant of how efforts in Washington to raise the debt ceiling are progressing; as yet, officials have not struck a deal, and are in the process of enacting stop gap legislation to allow funding into December; some analysts suggest that the Fed may be reticent to tighten policy in the face of potential default risks.

  PAYROLLS: The consensus looks for 500k nonfarm payrolls to be added to the US economy in September (prev. 235k), which would be a cooler rate of growth than the three- and six-month average rate, though in line with the 12-month average (3-month average is 750k/month, the six-month average is 653k/month, and the 12-month average is 503k/month – that technically at least suggests an improving rate of payrolls growth in recent months). Aggregating the nonfarm payrolls data since March 2020, around 5.33mln Americans remain out of work relative to pre-pandemic levels.

  MEASURES OF SLACK: The Unemployment Rate is expected at 5.1% (prev. 5.2%); Labour Force Participation previously at 61.7% vs 63.2% pre-pandemic; U6 measure of underemployment was previously at 8.8% vs 7.0% prepandemic; Employment-population ratio was previously 58.5% vs 61.1% pre-pandemic. These measures of slack are likely to provide more insight into how Fed officials are judging labour market progress, with many in recent months noting that they are closely watching the Underemployment Rate, Participation Rate, and the Employment-Population Ratio for a better handle on the level of slack that remains in the economy. Analysts would be encouraged the closer these get to pre-pandemic levels.

  EARNINGS: Average Hourly Earnings expected at +0.4% M/M (prev. +0.6%); Average Hourly Earnings expected at +4. 6% Y/Y (prev. +4.3%); Average Workweek Hours expected at 34.7hrs (prev. 34.7hrs). Aggregating the nonfarm payrolls data since March 2020, around 5.33mln Americans still remain out of work relative to pre-pandemic levels.

  ADP: The ADP National Employment Report showed 568k jobs added to the US economy in September, topping expectations for 428k, and a better pace than the prior 340k (revised down from 374k initially reported). ADP itself said that the labor market recovery continued to make progress despite the marked slowdown in the rate of job additions from the 748k pace seen in Q2. It also noted that Leisure & Hospitality remained one of the biggest beneficiaries to the recovery, though said that hiring was still heavily impacted by the trajectory of the pandemic, especially for small firms. ADP thinks that the current bottlenecks in hiring will likely fade as the pandemic situation continues to improve, and that could set the stage for solid job gains in the months ahead. On the data methodology, analysts continue to note that ADP’s model incorporates much of the prior official payrolls data, other macroeconomic variables, as well as data from its own payrolls platform; “Payrolls were soft in August, thanks to the hit to the services sector from the Delta variant, and that weakness likely constrained ADP data,” Pantheon Macroeconomics said. “The overshoot to consensus, therefore, suggests that the other inputs to ADP’s model were stronger than we expected, but none of the details are published, so we don’t know if the overshoot was model-driven or due to stronger employment data at ADP’s clients.”

  INITIAL JOBLESS CLAIMS: Initial jobless claims data for the week that coincides with the BLS jobs report survey window saw claims at around 351k – little changed from the 349k for the August jobs data survey window – where analysts said seasonal factors played a role in boosting the weekly data, while there may have been some lingering Hurricane Ida effects; the corresponding continuing claims data has fallen to 2.802mln in the September survey period vs 2.908mln in the August survey period. In aggregate, the data continues to point to declining trend, although in recent weeks the level of jobless claims has been picking up again.

  BUSINESS SURVEYS: The Services and Manufacturing ISM reports showed divergent trends in September, with the service sector employment sub-index easing a little to 53.0 from 53.7, signalling growth but at a slower rate, while the manufacturing employment sub-index rose back into expansionary territory, printing 50.2 from 49.0 prior. On the manufacturing sector, ISM said companies were still struggling to meet labour-management plans, but noted some modest signs of progress compared to previous months: “Less than 5% of comments noted improvements regarding employment, compared to none in August,” it said, “an overwhelming majority of panelists indicate their companies are hiring or attempting to hire,” where around 85% of responses were about seeking additional staffing, while nearly half of the respondents expressed difficulty in filling positions, an increase from August. “The increasing frequency of comments on turnover rates and retirements continued a trend that began in August,” ISM said. Meanwhile, in the services sector, employment activity rose for a third straight month; respondents noted that employees were flocking to better-paying jobs and there was a lack of pipeline to replace these staff, while other respondents talked of labor shortages being experienced at all levels.

  ARGUING FOR A BETTER-THAN-EXPECTED REPORT:

  • End of federal enhanced unemployment benefits. The expiration of federal benefits in some states boosted labor supply and job-finding rates over the summer, and all remaining such programs expired on September 5. The July and August indicated a cumulative 6pp boost to job-finding probabilities from June to August for workers losing $300 top-up payments and a 12pp boost for workers losing all benefits. Some of the 6mn workers who lost some or all benefits on September 5 got a job by September 18—in time to be counted in tomorrow’s data. Goldman assumes a +200k boost to job growth from this channel, with a larger increase in subsequent reports (+1.3mn cumulatively by year end).

  

  • School reopening. The largest 100 school districts are all open for in-person learning, catalyzing the return of many previously furloughed teachers and support staff. While full normalization of employment levels would contribute 600k jobs (mom sa, see left panel of the chart below), some janitors and support staff did not return due to hybrid teaching models, and job openings in the sector are only 200k above the pre-crisis level (see right panel). Relatedly, the BLS’s seasonal factors already embed the usual rehiring of education workers on summer layoff, so if fewer janitors returned to work than in a typical September, this would reduce seasonally adjusted job growth, other things equal. Taken together, assume a roughly 150k boost from the reopening of schools in tomorrow’s report.

  

  • Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hardto get – edged down to 42.5 from 44.4, still an elevated level. Additionally, JOLTS job openings increased by 749k in July to a new record high of 10.9mn.
  • ADP. Private sector employment in the ADP report increased by 568k in September, above consensus expectations for a 430k gain, implying strong growth in the underlying ADP sample. Additionally, schools generally do not use ADP payroll software, arguing for a larger gain from school reopening in the official payroll measure.

  ARGUING FOR A WEAKER-THAN-EXPECTED REPORT:

  • Delta variant. Rebounding covid infection rates weighed on services consumption and the labor market in August. And while US case counts began to decline in early September, restaurant seatings on Open Table rebounded only marginally. leisure and hospitality employment rose in September, but probably not at the ~400k monthly pace of June and July.
  • Employer surveys. The employment components of our business surveys were flat to down, whereas we and consensus forecast a pickup in job growth. Goldman’s services survey employment tracker remained unchanged at 54.5 and the manufacturing survey employment tracker declined 0.4pt to 57.8. And while the Goldman Sachs Analyst Index (GSAI) decreased 0.8% to 68.5, the employment component rose1.9% to 71.9.

  NEUTRAL FACTORS:

  • Big Data. High-frequency data on the labor market were mixed between the August and September survey weeks, on net providing little guidance about the underlying pace of job growth. Three of the five measures tracked indicate an at-or-above-consensus gain (Census Small Business Pulse +0.5mn, ADP +0.6mn,Google mobility +2mn), but the Homebase data was an outlier to the downside. At face value, it would indicate a large outright decline in payrolls. The Census Household Pulse (-0.6mn) was also quite weak, though encouragingly, it also indicated a large drop in childcare-related labor supply headwinds as schools reopened.
  • Seasonality. The September seasonal hurdle is relatively low: the BLS adjustment factors generally assume a 600-700k decline in private payrolls (which exclude public schools), compared to around -100k on average in July and August. Continued labor shortages encouraged firms to lay off fewer workers at the end of summer. Partially offsetting this tailwind, the September seasonal factors may have evolved unfavorably due to the crisis—specifically by fitting to last September’s reopening-driven job surge (private payrolls +932k mom sa).
  • Jobless claims. Initial jobless claims fell during the September payroll month, averaging 339k per week vs. 378k in August despite a boost from individuals transitioning or attempting to transition to state programs. Across all employee programs including emergency benefits, continuing claims fell dramatically (-3.3mn)–but again for non-economic reasons (federal enhanced programs expired). Continuing claims in regular state programs decreased 106k from survey week to survey week.
  • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas rebounded 11% month-over-month in September after decreasing by 14% over the prior two months (SA by GS). Nonetheless, layoffs remain near the three-decade low on this measure (in 1993).

  Tyler Durden
  Thu, 10/07/2021 – 20:10

• Senate Advances $480 Billion Debt Ceiling Deal After 11 Republicans Join Democrats To Invoke Cloture
  Senate Advances $480 Billion Debt Ceiling Deal After 11 Republicans Join Democrats To Invoke Cloture

  Update (2105ET): The Senate has officially advanced the short-term debt limit by a simple majority vote of 50-48, after 11 GOP lawmakers joined Democrats in a vote to invoke cloture, achieving the 60-vote filibuster threshold.

  The $480 billion increase will now move to the House, where it could be considered as early as next week. It should be enough to last through at least early December.

  *  *  *

  Update (2000ET):  The debt ceiling can has been kicked to December.

  After Senate Majority Leader Chuck Schumer set up Thursday night vote on a short-term debt ceiling increase that would leave the battle to be rejoined less than two months from now, in the middle of an already packed congressional agenda, moments ago a procedural cloture vote which needed 60 votes – meaning at least 10 Republicans would need to join McConnell in agreeing to concede – took place and as expected, amid all the high theatrical drama, not 10 but 11 Republicans votes were found to join the Democrats in a 61-38 vote.

  The Senate has narrowly voted, 61-38, to bypass a GOP filibuster of the short-term debt limit bill, with 11 Republicans joining all 50 Dems to pass the 60-vote threshold needed to proceed to a final vote.

  GOP YES VOTES HERE: https://t.co/agFKJBS0c6

  — Frank Thorp V (@frankthorp) October 8, 2021

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  The republicans voting Aye were:

  • Barrasso
  • Blunt
  • Capito
  • Collins
  • Cornyn
  • McConnell
  • Murkowski
  • Portman
  • Rounds
  • Shelby
  • Thune

  So with the vote having passed (Incidentally, Mitt Romey voted no), the next vote to follow tonight will be a vote to raise the debt ceiling by $480 billion where is a simple majority vote is needed, which the Democrats will be able to muster on their own, in the process punting the debt ceiling discussion for some time in mid-December, when as noted earlier, the bond market is already bracing for the next round of high drama with mid-December Bills “kinking” relative to the prior week.

  

  * * *

  Update (1440ET): According to The Hill, several Senate Republicans aren’t exactly thrilled with the debit limit deal brokered by GOP leader Mitch McConnell (R-KY) and Senate Majority Leader Charles Schumer (D-NY) – arguing that the Republicans gave Democrats and easy way out. 

  

  Several Senate Republican sources said members of their caucus were “surprised and disappointed” when McConnell unveiled the parameters of the deal with Schumer on Wednesday.

  One GOP senator said “you could hear a pin drop” when McConnell shared the details of his plan to allow Democrats to raise the debt ceiling to “a fixed number” without having to undergo the arduous process of amending the 2022 budget resolution and holding multiple time-consuming vote-a-ramas on the Senate floor. -The Hill

  According to Sen. Kevin Cramer (R-ND), some of his GOP colleagues had whiplash after 46 Senate Republicans signed an August letter warning Schumer that they “will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle.”

  “I’m not surprised that they are a little surprised and disappointed, because of course 46 Republicans signed a letter saying they wouldn’t vote for an increase,” said Cramer, adding “I think they feel like maybe we could have pushed it a little longer.“

  “The problem is the Republican members feel like we’re blinking and blinking a little earlier than might be necessary,” he continued, adding that the upcoming Columbus Day recess slated to begin this weekend “probably entered into the calculation.”

  “It’s not insignificant because people have plans and all that but plans aside, your plans to go on a CODEL [congressional delegation trip] are not the highest priority, the government is,” Cramer said. “I think some people wanted to go closer [to the deadline] and feel like we blinked too soon.”

  The biggest downside of the deal, in the view of these disappointed Republicans, is that the their conference will divide over a procedural vote on bringing a two-month extension of the debt limit to the floor for an up-or-down vote.

  Republicans have said for months that they would not provide any assistance to Democrats in raising the debt limit, especially since Democrats are working on a $3.5 trillion human infrastructure package that would raise taxes by hundreds of billions of dollars.

  But now they face the prospect of having to vote on a cloture motion to bypass a filibuster so that Democrats can pass the short-term debt limit increase with a simple-majority vote.

  At least 10 Republicans need to vote for the procedural motion to pave the way for legislation that would raise the debt limit by $480 billion, which is enough to cover the U.S. government’s financial obligations until Jan. 3. -The Hill

  According to the report, it appeared as though McConnell is facing a tough time rounding up enough GOP votes to bypass a filibuster and allow the two-month debt limit increase proceed to the floor – after which Democrats would then pass it on their own.

  Several Republican Senators are still on the fence – which could complicate matters. They include Sens. John Thune of SD and Roy Blunt of MO.

  Thune says Rs do not have 10 votes to break their party’s filibuster. He said they’ll get there but it will be a “painful birthing process”

  — Jake Sherman (@JakeSherman) October 7, 2021

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  Just to be clear:

  Rs are demanding 60 votes to overcome the filibuster on the debt limit. This only hurts Rs, who now have to find 10 Rs to vote for cloture.

  Schumer offered them all week to do this at a majority threshold. Now McConnell wants it at a majority threshold!

  — Jake Sherman (@JakeSherman) October 7, 2021

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  That said, National Republican Senatorial Committee Chairman Rick Scott (R-FL) said he expects there will be a 60-vote threshold for advancing the debt deal.

  “There’s going to be a cloture vote,” he said.

  *  *  *

  Update (1312ET): According to the NYT’s Manu Raju, the debt-ceiling deal might be hitting a snag: many GOP senators don’t want to vote for it, meaning McConnell needs to secure at least 10 GOP votes to pass the bill over a GOP filibuster.

  Many GOP senators really don’t want to vote for the debt ceiling hike to add $480B to the borrowing limit. Because there will be objections, there almost certainly will be a 60-vote threshold — meaning 10 GOP senators will be needed to get to final passage. GOP meeting now

  — Manu Raju (@mkraju) October 7, 2021

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  * * *

  Update (1300ET): As the Democratic leadership scrambles to get the short-term debt-ceiling deal passed, the Democratic leadership is ramping up its criticisms of Minority Leader Mitch McConnell, as one might expect.

  Sen. Dick Durbin on debt-hike deal: “It was a reckless and irresponsible strategy, which Senator McConnell finally realized.” https://t.co/fbdz8wgBTr pic.twitter.com/OyiwDdMDUb

  — The Hill (@thehill) October 7, 2021

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  Some more details about the new deal: after passing the Senate via a series of likely unanimous votes, the amended bill must also pass the House, which is in recess.

  Speaking Thursday on the Senate floor, McConnell said “the pathway our Democratic colleagues have accepted will spare the American people any near term crisis.” The deal also means “there’ll be no question they’ll have plenty of time” to use the reconciliation process to approve a long-term increase.

  * * *

  Update (1140ET): Fox News’ senior Hill correspondent and seasoned political reporter Chad Pergram shared some new details about the debt-ceiling deal. The updated bill  (which is technically an amendment) doesn’t mention a date and solely authorizes the $480 billion needed for the Treasury to pay debts coming due between now and early December.

  But Pergram’s report also shared some new details suggesting that the margin between the “drop dead” date and actual default might be thinner than previously believed.

  According to Pergram’s sources, the Treasury started using cash from emergency accounts over the summer, and the deal doesn’t include any additional funding to replenish these accounts.

  1) The updated bill (technically an amdt) is stark in its language. It does not mention a date and only refers to raising the debt ceiling by $480 billion.

  — Chad Pergram (@ChadPergram) October 7, 2021

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  2) What is significant here is that there is NO LANGUAGE which bars Treasury from re-prioritizing payments or using extraordinary measures.

  But…

  — Chad Pergram (@ChadPergram) October 7, 2021

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  3) Fox is told the $480 billion is really just to make sure that Treasury has the necessary money to pay the bills which will come due between now and December 3.

  Treasury started to exhaust other accounts to keep payments going out the door in July.

  — Chad Pergram (@ChadPergram) October 7, 2021

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  4) Under the terms of this agreement…and what is IMPLIED..is that Treasury will only use THIS MONEY TO PAY THE BILLS IT OWES. There would be no replenishing of the accounts it began to draw from earlier this year.

  — Chad Pergram (@ChadPergram) October 7, 2021

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  5) If Treasury WERE to start to squirrel away money, then Treasury would come up short and NOT have the money necessary to make good on the debts which will come due over the next two months.

  — Chad Pergram (@ChadPergram) October 7, 2021

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  That could contribute to the perception that Dec. 3 truly is a “hard” deadline, and that the closer we get to it without a long-term deal, the greater the risk to the market.

  * * *

  Update (1125ET): As we await a Senate vote on the short-term debt ceiling deal, Goldman’s political analyst Alec Philips has just chimed in with a brief note to clients, advising that the $480 billion debt-ceiling increase was larger than he had anticipated, meaning that the real deadline for a more long-term deal (or at the very least another can-kick) is probably “somewhat later than Dec. 3”.

  Media reports indicate that Senate leaders have struck a deal to raise the debt ceiling by $480bn (i.e., to $28.88 trillion). This is intended to carry the Treasury to December 3, at which point an additional debt limit increase or suspension would be required. The amount is higher than we would have anticipated the Treasury would need to get to that date, so there appears to be a good chance that the actual deadline for the next increase will come somewhat later than Dec. 3. That said, it is probably not sufficient to last past the end of the year, so it appears likely that Congress will need to address the issue in December as expected, either as part of the next reconciliation bill, a standalone bill, or part of a spending package for FY22 to extend spending authority past the current expiration, which Congress also set at Dec. 3 when it passed its continuing resolution on Sep. 30.

  Meanwhile, the T-bills market responded to news of the deal by shifting the “kink” in the curve out to December.

  * * *

  Update (1115ET): Cogs are already turning to tee up a vote on the short-term debt deal on Thursday.

  Schumer is moving to amend the House debt ceiling bill with the deal that he cut with McConnell. he is filing cloture now

  — Jake Sherman (@JakeSherman) October 7, 2021

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  Of course, as part of the deal, GOP senators will vote to raise the debt limit, something that McConnell had initially tried to avoid by pushing to force the Democrats to use reconciliation, a process that could have allowed them to bypass a GOP filibuster, but Dems – including President Biden – complained doing so would be unworkable and complex.

  * * *

  Update (1020ET): Following reports earlier this morning about a short-term deal to suspend America’s debt ceiling, Senate Majority Leader Chuck Schumer was on the tape just a few minutes ago confirming that a short-term deal has indeed been reached, and that he hopes the Senate will vote on the measure Thursday.

  “I have some good news…we’ve reached agreement to extend the debt ceiling through early December,” Schumer said during opening remarks on the Senate floor.

  US stocks celebrated the headline by sending the S&P 500 and Dow surging past key technical levels, as we pointed out. 

  🚨🚨🚨 Schumer: “We’ve reached an agreement to extend the debt ceiling through early December.”

  Vote as soon as today.

  — Jake Sherman (@JakeSherman) October 7, 2021

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  Punchbowl News’ Jake Sherman reports that the deal will raise the debt limit by $480 billion – the figure that Treasury says is required – to extend the deadline until Dec. 3, giving the Dems’ a little bit of wiggle room to continue their divisive, bitter factional battle over President Biden’s domestic agenda, which includes an infrastructure bill and an even larger expansion of the social safety net.

  The Dec. 3 deadline lines up with the short-term extension of government spending signed by Biden a week ago.

  NEWS: The Senate will hike the debt limit by $480b — that’s what Treasury says it needs to get to Dec. 3.

  Debt limit and government funding lined right up for December.

  — Jake Sherman (@JakeSherman) October 7, 2021

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  Minority Leader Mitch McConnell first offered the deal on Wednesday and leaders negotiated the details into Thursday. Defying expectations, the deal – which is really just a short-term can-kick – comes more than a week before the Oct. 18 “drop dead” date quoted by Treasury Sec. Janet Yellen (which is really just a point in a range that could be days or weeks, since the Treasury can’t say exactly when it would run out of money).

  While the market celebrated, White House reporters criticized the deal, with one claiming it’s such a weak can-kick that it’s “not even a band-aid…it’s like, the scrap of Kleenex that you found lying around that you have to use…” The criticism lined up with an analysis by Goldman strategists.

  It’s not even a band-aid. It’s like, the scrap of kleenex that you found lying around that you have to use because you can’t find a band-aid anywhere in your house https://t.co/XJ9dc2SBA3

  — Seung Min Kim (@seungminkim) October 7, 2021

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  Another reporter noted that the early December deadline could create even more problems for Democrats, since they have other important issues and deadlines coming up in December.

  The deal is a temporary bandaid on the issue

  While the bill avoids a calamitous shock to the U.S. economy as we approach the default date of Oct. 18, the Senate will have to deal with the cliff again come December — a month where they also face several other important deadlines https://t.co/EPpoYHqSDt

  — Alayna Treene (@alaynatreene) October 7, 2021

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  As we reported earlier, Goldman’s top political strategist Alec Phillips published a note to clients advising that McConnell’s short-term offer likely wouldn’t be that attractive to Democrats.

  * * *

  Following negotiations that stretched late into Wednesday evening, Democrats and Republicans have reportedly forged a compromise deal on a short-term increase in the the debt ceiling which will avoid default, but as Bloomberg notes, “threatens to exacerbate year-end clashes over trillions in government spending.”

  

  In moving forward, Democrats appear to be on the verge of accepting a proposal from GOP leader Sen. Mitch McConnell (R-KY) which would raise the debt limit by a specific amount – enough to move things into December, when Congress will have to vote again to avoid a default.

  While the details aren’t totally clear, McConnell’s offer was to allow a vote on extending the debt limit at a fixed collar amount – which Goldman’s Alec Phillips expects a number on over the next day or so.

  “We’re making good progress,” Senate Majority Leader Chuck Schumer said in early Thursday morning comments from the Senate floor, adding “we hope to have agreement tomorrow morning,” adding that the Senate would come back into session at 10 a.m. Thursday.

  That said, this is classic can-kicking which will have consequences down the road, as Democrats will likely attempt to move forward with their massive tax and spending package and separate infrastructure bill while at the same time funding the government to avoid yet another potential shutdown after December 3.

  News of a possible debt-ceiling accord stoked the biggest positive turnaround in the equity market in more than seven months, as the S&P 500 Index closed up 0.4% after tumbling earlier. In the bond market, traders bid back up the prices of Treasuries set to mature in the window around a potential default. Investors then moved on to gauge which securities may now be most at risk of a missed or delayed payment under the new congressional timeframe. -Bloomberg

  Treasury Secretary Janet Yellen has warned that the US would likely default after October 18 without congressional action. At present, the current debt limit is $28.4 trillion, while the Treasury reported that it had $343 billion in combined extraordinary measures and cash on hand.

  As an approximation, during the period from Sep. 29 to Dec. 3, 2019, debt subject to limit (this includes marketable and non-marketable debt) increased by $356bn and the cash balance declined by $50bn, suggesting that the Treasury would use around $400bn in borrowing capacity by early December if cash flows are similar this year. Since the Treasury still had more than $300bn in room under the debt limit at the end of September, a debt limit increase to only $28.5-$28.6 trillion might be sufficient to accomplish the intent of the agreement, but the Treasury will be the final word on this and the amount will depend on expected cash flows this year. -Goldman Sachs

  And while a fixed dollar amount (vs. a calendar-based solution) injects a bit of uncertainty as to when exactly the next deadline will hit, the debt deal alleviates concerns which were beginning to reverberate throughout the investment community. Earlier this week, McConnell sidestepped a question over whether any major banks or wall street titans had contacted him over the debt ceiling fight.

  It was thought that the investment community would hammer Washington if lawmakers bumbled into a debt ceiling crisis. 

  Worry started to permeate Washington that rating agencies could downgrade the creditworthiness of the U.S. before Oct. 18 – the deadline when Treasury says the U.S. will run out of cash. –Fox News

  Senate Democrats have considered the debt deal a victory –  with Sen. Elizabeth Warren (D-MA) exclaiming on Wednesday that “McConnell caved,” adding “And now we’re going to spend our time doing child care, health care, and fighting climate change.”

  From here, the focus will undoubtedly return to negotiations over Biden’s fiscal agenda – and in particular, the stalemate within the Democratic party between Senate moderates Joe Manchin (WV) and Kyrsten Sinema (AZ), who have vowed to sink any reconciliation plan that exceeds $1.5 trillion, and House progressives, who will likewise tank the $1.2 trillion bipartisan infrastructure deal unless Manchin and Sinema bend the knee.

  Assuming that drags into December, expect fireworks into the end of the year.

  Tyler Durden
  Thu, 10/07/2021 – 20:06

• Energy Crisis May Unleash Winter Blackouts Across US, Insider Warns 
  Energy Crisis May Unleash Winter Blackouts Across US, Insider Warns 

  The energy crisis that is rippling through Asia and Europe could unleash electricity shortages and blackouts in the U.S., according to Bloomberg. 

  Ernie Thrasher, CEO of Xcoal Energy & Resources LLC., told energy research firm IHS Markit that U.S. utilities quickly turn to more coal because of soaring natural gas prices. 

  “We’ve actually had discussions with power utilities who are concerned that they simply will have to implement blackouts this winter,” Thrasher warned.

  He said, “They don’t see where the fuel is coming from to meet demand,” adding that 23% of utilities are switching away from gas this fall/winter to burn more coal. 

  With natgas, coal, and oil prices all soaring is a clear signal the green energy transition will take decades, not years. Walking back fossil fuels for unreliable clean energy has been a disaster in Asia and Europe. These power-hungry continents are scrambling for fossil fuel supplies as stockpiles are well below seasonal trends ahead of cooler weather. 

  A similar story is playing out in the U.S., where increased demand for coal might not be reached by mining companies. We noted Thursday morning that boosting output might be challenging due to years of decommissioning mines to reduce carbon emissions and transition the economy from fossil fuels to green energy. There’s also been a steady decline of miners over the last three and a half decades. 

  

   “That whole supply chain is stretched beyond its limits,” Thrasher said. “It’s going to be a challenging winter for us here in the United States.”

  Utility company Duke Energy Corp.’s Piedmont Natural Gas unit, covering North and South Carolina customers, warned power bills this winter are set to rise due to high natgas prices and low production. 

  A pure-play coal company that is already benefiting from the demand surge and rising prices is Peabody Energy Corporation. As cooler weather fast approaches, the company may see increased demand for its thermal coal that utility companies use to produce electricity. On a technical basis, a so-called bullish “golden cross” was just triggered. 

  

  The troubled green energy transition gives the fossil fuel industry new hope, especially “Making Coal Great Again.” 

  Tyler Durden
  Thu, 10/07/2021 – 19:40

• Twitch Hack Exposes How Top Streamers Earn Millions Of Dollars On Platform
  Twitch Hack Exposes How Top Streamers Earn Millions Of Dollars On Platform

  The hacker, or hackers, who stole and published reams of invaluable source code, internal security tools and creator payouts from Twitch – the Amazon-owned streaming service that’s popular with gamers and has come to dominate the world of “eSports” (to be sure, there are plenty of Twitch streamers who aren’t focused on video games, but we digress) – allegedly managed to “own” Jeff Bezos by – claiming in a 4chan post that “Jeff Bezos paid $970MM for this, we’re giving it away for free #dobettertwitch” – they also exposed how much money some of the platform’s most popular streamers are raking in.

  The leaked data showed popular streamers raking in payouts from Twitch ranking in six-figure territory, with the top earners pulling in millions of dollars.

  According to one leaked document listing Twitch’s top earners shows gross earnings since 2019 reached $9.6MM for the platform’s top account, “CriticalRole.” This account, which is run by a set of voice actors, according to its Twitch page, generated an average of $370,000 a year, according to the document. The list points to 13 accounts that have made more than $108,000 a year and at least 80 that have collected more than $1MM since 2019.

  Several Twitch streamers confirmed via social-media posts that the leaked payout figures were consistent with what they earned on the platform. The data showed some users reaching payouts in the six figures.

  This isn’t exactly a surprise: data on the highest-earning eSports stars collected by Statista shows that players are raking in more than $100MM in aggregate earnings. While that’s still peanuts compared to professional athletes in the major American sports leagues, earnings have soared over the last decade.

  You will find more infographics at Statista

  On Twitch, streamers can generate income via advertising, sponsorships and tips from viewers. But Twitch cuts bespoke deals with its most popular streamers, part of a strategy to lock them (and their audience) into the platform.

  Scott Hellyer, a streamer who has been part of Twitch’s partner program for six years, said in a direct message on Twitter that information about his payouts was exposed in the breach.

  “I really hope that no major personal info (Full names, emails, address, phone number, banking info) gets out in the rumored next part of the leak,” said Mr. Hellyer, who has about 72,000 followers on his channel, “tehMorag.” “I’ll take the heat if people are surprised about how much I make in the coming days, and try to have an open dialog about it.”

  Amazon bought Twitch back in 2014 for nearly $1 billion in cash. The platform boasts 2.5MM viewers tuned in at any given time, with more than 7MM creators using the platform.

  But now that the source code has been published, cybersecurity experts are warning Twitch users to exercise extreme caution to protect their accounts and any sensitive personal data, since hackers can now comb through the source code in search of vulnerabilities that can be exploited. While the hacker who pulled off the original Twitch hack apparently took measures to avoid releasing any sensitive data that could harm others, others might not be so accommodating.

  Tyler Durden
  Thu, 10/07/2021 – 19:10

• Musk Says Tesla Will Move Headquarters To Austin, Texas
  Musk Says Tesla Will Move Headquarters To Austin, Texas

  Tesla is moving its headquarters to Austin, Texas, from Silicon Valley, CEO Elon Musk said Thursday during the company’s annual shareholder meeting in the Austin area, where the company is building a factory. He stressed that Tesla will continue to expand in both California and Nevada, saying “we will continue to expand our activities in California. This is not a matter of Tesla leaving California. Our intention is to increase output from Freemont and giga-Nevada by 50%.”

  As part of the overhaul, Musk unveiled what appears to be Tesla’s new logo: “Don’t Mess With Tesla.”

  

  Some other highlights from the meeting courtesy of Bloomberg:

  • Elon Musk said that the Shanghai plant is now outproducing the Fremont plant.
  • Musk hopes the chip shortage will abate, saying the year has been a “constant struggle” with the supply chain, but said there is also a shaip shortage, which was logistically challenging.
  • Tesla has no plans to offer a dividend, which is something several retail investors had asked about.
  • Musk repeated his call for a carbon tax

  One investor asked if Tesla would start issuing a dividend. To which Musk responded: “When a company offers dividends, it’s kind of cresting the hill. They’ve run out of things to invest in internally. We’ve not run out of things to invest in by a long shot.”

  Musk also addressed Cybertruck production, saying it will start at the end of next year, with volume production in 2023. “Hopefully we can also produce the Semi and new Roadster in 2023.”

  Ironically, Musk stressed that his goal is to make Tesla cars as affordable as possible but is seeing cost pressure in the supply chain, so they had to increase prices temporarily.

  Tyler Durden
  Thu, 10/07/2021 – 19:02

• Biden Doesn't Know That Vaccinated Individuals Can Still Spread Covid
  Biden Doesn’t Know That Vaccinated Individuals Can Still Spread Covid

  The sitting president of the United States, advised by the nation’s top infectious diseases specialists, doesn’t know what is now common knowledge; that vaccinated individuals can still spread Covid-19.

  

  For those keeping track, this is the second major issue Biden had no knowledge of – the first being an international spat with France over a tri-lateral submarine agreement.

  Speaking in Elk Grove Village, Illinois on Thursday, Biden urged more employers to institute strict vaccine requirements – calling them “tough medicine” that will help bring the United States out of the Covid-19 pandemic.

  In addition to failing to recognize naturally-acquired immunity for individuals who have recovered from Covid, Biden made clear that he has no idea vaccinated people can still spread the virus.

  “If you seek care at a healthcare facility, you should have a certainty that the people providing that care are protected from Covid and cannot spread it to you,” Biden said, explaining the rationale behind forcing healthcare workers and other professionals to get vaccinated or lose their job.

  Watch (relevant portion starts at 50 seconds):

  President Biden on enacting vaccine mandates: “We’re making sure healthcare workers are vaccinated because if you seek care at a healthcare facility, you should have the certainty that the people providing that care are protected from COVID and cannot spread it to you.” pic.twitter.com/eiS2nQM4QA

  — Breaking911 (@Breaking911) October 7, 2021

  Biden’s latest false statement comes one week after his own CDC director Rochelle Walensky said that vaccines “can’t prevent transmission.”

  “Our vaccines are working exceptionally well. They continue to work well for Delta with regard to severe illness and death – they prevent it, but what they can’t do anymore is prevent transmission,” she told CNN‘s Wolf Blitzer. “So if you’re going home to someone who is not vaccinated…I would suggest you wear a mask in public indoor settings,” she continued.

  CDC director Rochelle Walensky says that the vaccine *cannot* prevent transmission. So why are all these Pro-Vaxxers saying that it can? pic.twitter.com/8aaDTh8N3T

  — Anthony Brian Logan (ABL) 🇺🇸 (@ANTHONYBLOGAN) October 2, 2021

   Again, this is common knowledge by now:

  • Emerging data suggest that Delta could spread more readily than other coronavirus variants among people vaccinated against COVID-19. (Nature, Aug. 12)

  • Vaccinated People With Breakthrough Infections Can Spread The Delta Variant, CDC Says (NPR, Jul. 30)

  • UC study finds similarities in COVID viral loads between vaccinated, unvaccinated people (KTXL, Oct. 6)

  • CDC study says COVID-19 can spread in vaccinated (AP, Sep. 21)

  Alas, the president of the United States – or whoever wrote that speech – doesn’t follow the science.

  Cover photo: Ashlee Rezin/Sun-Times

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  Tyler Durden
  Thu, 10/07/2021 – 18:50

• NASA Engineer Earns Crypto By Helping Crowdsource Stock Picks
  NASA Engineer Earns Crypto By Helping Crowdsource Stock Picks

  One NASA engineer is using his smarts not only planning to explore outer space, but also earning cryptocurrency by picking stocks.

  When 32-year-old Hayden Burgoyne isn’t plotting a mission to explore Jupiter’s moons as part of project Europa Clipper, the Los Angeles resident spends his spare time as an amateur quant – poring through market data for Paul Tudor Jones-backed crowdsourcing firm Numerai, according to Bloomberg. 

  

  Without revealing their models, the contributors pick stocks they think will outperform in the coming month and make bets in online trading tournaments using a digital currency issued by Numerai. The San Francisco-based firm, established in 2015, then invests in the corresponding stocks. 

  Those picks from the likes of Burgoyne, a world away from Wall Street, have powered the market-neutral fund to a 9% gain this year through August. In 2020 it was up 8% when many storied quants faltered.

  “I have no finance background so it puts people like me on an equal footing with somebody with an economics PhD,” he told Bloomberg. 

  

  Burgoyne uses an “assortment of data” on 5,000 stocks to make his picks. He uses metrics like price history to valuation ratios, sometimes without even knowing what the underlying metrics are.

  Those who perform well get “NMR” tokens, which are now worth about $50 a piece. 

  Numerai founder Richard Craib commented: “By setting up the problem and being in charge of data people look at, we can get exactly the type of signal we want. Although they might not work individually, when you combine them altogether the increase in accuracy and performance is huge.”

  

  Craib also commented on paying out in crypto: “Even if we gave away 100% of our profits of the fund to our users we will never be able to pay as much. What I like about cryptocurrencies is the idea that actually through the community, the cryptocurrency is valuable for its own reasons.”

  Burgoyne has 630 NMR tokens backing his predictions. 

  Another Numerai trader, Sharon Moran, commented: “As a mother of three with a daughter in private college, there’s the money consideration. But the ability to learn and grow and apply some of what I’ve been learning as far as modeling was the initial motivation.” 

  And people are taking notice: one pension fund that has $45 million in assets with Numerai could increase their allocation to $130 million if the firm hits “certain milestones”. 

  While quant funds and factor-based investing have consistently shown themselves to be unreliable at best, crowdsourcing ideas as a quant model still hasn’t been fully vetted. And something is working for Numerai. 

  Tyler Durden
  Thu, 10/07/2021 – 18:40

• Labor Strikes Target Big Food As Workers Seize On Industry Turmoil
  Labor Strikes Target Big Food As Workers Seize On Industry Turmoil

  By Chris Casey of Food Dive,

  At food plants around the country this year, workers have been making themselves heard about the state of wages, working hours and conditions.

  

  Just this week, roughly 1,400 Kellogg workers at ready-to-eat cereal plants in four states — Michigan, Pennsylvania, Nebraska and Tennessee — went on strike after their contract expired. In a statement, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) said its goal is to “obtain a fair contract that provides a living wage and good benefits.”

  Anthony Shelton, BCTGM’s president, said Kellogg workers “have been working long, hard hours, day in and day out, to produce Kellogg ready-to-eat cereals for American families” but that the company has responded by cutting benefits and threatening to send jobs to Mexico if employees don’t accept the company’s proposals.

  “Kellogg is making these demands as they rake in record profits, without regard for the well-being of the hardworking men and women who make the products that have created the company’s massive profits,” Shelton said in a statement. 

  Just a couple weeks earlier, more than a thousand workers returned to their jobs at Mondelēz Nabisco factories in five states after a walkout that lasted nearly six weeks. It also was led by BCTGM. The workers were protesting what they considered unfair changes in overtime rules and shift lengths.

  This came a few months after hundreds of Frito-Lay employees in Topeka, Kansas, were on strike in July for 19 days, demanding better hours and higher pay. That same month, dozens of Teamster truck drivers gathered to strike against Coca-Cola in West Virginia, rejecting a contract that would reportedly have made them pay more for health insurance and give them less commission.

  Some of these strikes, including those at Mondelēz and Frito-Lay plants, have reached their conclusion after the manufacturers came to terms with workers and their unions. And some, like the strike affecting Kellogg plants, are only ratcheting up. The turmoil reflects a unique set of conditions — a labor shortage, growing demand and supply chain disruptions in the midst of a pandemic — that has given labor unions extra leverage, and food manufacturers a greater incentive to meet their demands. 

  CPGs are currently hobbled by a massive labor shortage. There are now 4.9 million more people who are either not working or not looking for work compared to pre-pandemic times, The Washington Post recently reported. At the same time, demand for food has skyrocketed, rising 8.7% in the second quarter of this year alone, as people spend more time at home, the Consumer Brands Association reported. This has left CPG manufacturers scrambling to increase production with fewer workers and a shaky, fragile supply chain — all while dealing with continued uncertainty over the outlook for COVID-19.

  The leverage that workers and labor advocates currently enjoy is a recent change in fortunes. The power of unions, specifically in the food manufacturing sector, had deteriorated during the past four decades as companies avoided meeting worker demands by moving many jobs overseas, according to Bryant Simon, labor scholar and history professor at Temple University.

  But the COVID crisis, Simon believes, has provided a unique opportunity for American factory workers to reassess their pivotal role in the food industry.

  “Workers are like, ‘Look, I’m not going to work on these terms anymore, and you’ve given me a chance to explore some other options,’ ” Simon said.

  Uncertain outcomes

  The Mondelēz strike demonstrates how all of these factors can come into play.

  The dispute began in May when workers were offered a new contract that would increase hourly shifts from eight hours to 12, without additional overtime pay for the first five days of the week. A Mondelēz spokesperson told CBS News at the time that the changes were intended to “promote the right behaviors” among workers. 

  Meanwhile, some Mondelēz employees at its Chicago factory told The New York Times they had worked 16-hour shifts during the pandemic to keep up with the increased demand for the snack giant’s most popular products, such as Oreos.

  Workers were also worried that their jobs would be sent to Mexico, similiar to what happened in 2016, when Mondelēz cut nearly 1,000 jobs at plants in Chicago and Philadelphia. 

  Mondelēz International spokesperson Laurie Guzzinati told Food Dive in August that the contract negotiations were “not about” moving jobs to Mexico and that the company was committed to keeping its U.S workforce. 

  Workers in Portland, Ore., launched the first walkout on Aug. 10, with signs reading “No contract, no snacks,” “Weekends are family time” and “Spit out that Oreo” populating the picket line. As the strikes spread to other states — Illinois, Virginia, Colorado and Georgia — they quickly made national headlines. Actor Danny DeVito and Vermont Sen. Bernie Sanders came out in support of the workers. 

  The snacks giant told Food Dive that it began negotiating with the union “as soon as the action took place in Portland.” In its last quarterly earnings call on Sept. 9, Mondelēz’s CEO Dirk Van De Put said that after the company requested contract changes to increase capacity at its plants as well as product inventory, it “foresaw that it would not be an easy conversation.” He said Mondelēz was making a new offer to the union, which included increased wages, a higher 401(k) match and more flexible hours. The company was not willing to reinstate its pension plan. 

  The new terms sealed the deal. In a statement after its members voted to approve the new four-year contract, BCTGM said that they “made enormous sacrifices” to reach a deal “that preserves our Union’s high standards for wages, hours and benefits for current and future Nabisco workers.” BCTGM did not respond to multiple requests for comment by Food Dive.

  The Kellogg strikes, meanwhile, may not be coming to a quick, amicable conclusion any time soon.

  BCTGM called for a strike a month after Kellogg announced plans to invest $45 million in restructuring its ready-to-eat cereal supply chain, which includes cutting more than 200 jobs at its Battle Creek factory. The company said it is shifting production to more efficient production lines, even as it struggled with shortages of factory line workers and truck drivers at many of its plants.

  BCTGM representatives said last week that Kellogg did not provide workers with a “comprehensive offer” during contract negotiations like it had stated.

  In a statement to Food Dive, Kellogg spokesperson Kris Bahner said the company is “disappointed by the union’s decision to strike,” and that its proposed new contract provides wage and benefits increases “while helping us meet the challenges of the changing cereal business.” Bahner said the company hopes to reach an agreement with the union soon. 

  Raising the stakes of negotiations even further: Kellogg filed a lawsuit on Tuesday against BCTGM in the U.S. District Court of Nebraska, saying that it “seeks to recover damages for ongoing breaches of a labor agreement.” The cereal giant said the union’s “improper actions” have the intention of inflicting “significant economic harm” to the company before a contract agreement is able to be met.

  What’s next for labor

  Despite this test of wills between labor and food manufacturers, the “ultimate leverage” for workers in 2021 is their ability to create negative publicity for their parent company through strikes to make them appear “union-busting” in hopes of spurring a consumer boycott of their products, said Erik Loomis, a labor expert and University of Rhode Island professor.

  Loomis said this can bring about more immediate benefits to unions compared to legal frameworks, which are often not on the side of workers and could take months or years to result in better contracts.

  The use of social media to spread organization efforts and make the public aware of working conditions makes today’s strikes different to those of the past, according to Simon with Temple University. In the case of Mondelēz, calls for a boycott of Nabisco snacks like Oreos and Wheat Thins gained traction on social media during the strikes, with users uploading photos of shelves stocked with unsold Oreos and Chips Ahoy! cookies at grocery stores.

  However, relying on public support to dictate change has its drawbacks. Simon said wage increases for food manufacturing workers is a larger “ideological hurdle” because many consumers ultimately may not be willing to pay more for food products to support higher wages. This is despite the fact that the annual mean salary of a food factory employee is under $33,000, significantly lower than the roughly $56,000 national average for all jobs, according to Bureau of Labor Statistics data. Food prices have also been rising during the pandemic as manufacturers pass along higher costs for ingredients, manufacturing, packaging and transportation. 

  Loomis expects strikes to continue due to the supply chain crisis, and as workers see more examples of successful organizing taking place.

  Meanwhile, under the Biden administration, the political climate is also friendlier to unions. The PRO Act (Protecting the Right to Organize), which passed Congress in March with five Republicans joining, is supported by The White House. One of its biggest elements — monetary punishments for companies that infringe on workers’ union-based rights — was added as part of the budget reconciliation bill package currently being debated in the Senate.

  “You’re going to see more strikes within the legal sense,” Loomis said. “Even outside of that, workers will take matters into their own hands when they feel it is necessary to do so.”

  Tyler Durden
  Thu, 10/07/2021 – 18:15

• JPMorgan: Institutions Are Rotating Out Of Gold Into Bitcoin As A Better Inflation Hedge
  JPMorgan: Institutions Are Rotating Out Of Gold Into Bitcoin As A Better Inflation Hedge

  For much of the summer, when bitcoin was shedding its April 15 all time high of $63,000 by more than half, Wall Street was bombarded with weekly notes from JPMorgan’s cross-asset strategist Nikolaos Panigirtzoglou who would encourage selling, telling institutional clients that upward momentum had fizzled and that the only logical direction for bitcoin was lower. Those notes ended abruptly in July when Bitcoin reversed sharply and start its latest upward trek, and were instead replaced with warnings that there is too much euphoria in the market and thus the only logical direction for bitcoin was… you can guess the rest.

  

  Well, maybe not, because on Wednesday bitcoin soared higher, surging above $55,000 and once again sporting a market cap of over $1 trillion, and pushing the total market cap of all crypto markets above $2.3 trillion (still below the market cap of one Apple, Inc.), and suddenly the doom and gloom from JPM’s Panigirtzoglou has done a 180, with the quant writing in his latest Flows and Liquidity report published overnight that “the increase in the share of bitcoin is a healthy development as it is more likely to reflect institutional participation than smaller cryptocurrencies.”

  Blindsided by the surge in bitcoin, the JPM strategist was also wrong about the institutional preference for bitcoin vs ethereum, writing two weeks ago that “JPMorgan: Institutional Investors Are Piling Into Ethereum, Leaving Bitcoin” – starting in early October, the two largest cryptos have decoupled with Bitcoin clearly outperforming its smaller peer.

  

  Not surprisingly Panigirtzoglou addressed this latest flub, writing in his note that “we had argued before our position proxies based on CME futures had showed strong preference for ethereum vs. bitcoin by institutional investors during most of August and September. But as shown in Figure 16 this preference appears to be have been reversing since the end of September with a sharp rebound in the position proxy for bitcoin. This rebound reflects at least partly short covering as indicated by Figure 17 which depicts bitcoin futures liquidations across all futures exchanges. According to Figure 17 short bitcoin futures position liquidations appear to have picked up over the past week or two.”

  

  Having completed his damage control homework, Panigirtzoglou then shifted to the main thrust of his note, which was once again trying to explain why bitcoin was surging, where he offered three distinct reasons. While the first two have been extensively discussed here in the past few weeks, and we thus found them of marginal value, it was his third point that may have some insight especially when presented to gold bugs, namely that “institutional investors appear to be returning to bitcoin perhaps seeing it as a better inflation hedge than gold.”

  Here is what JPM believes has triggered the bitcoin recovery:

  1. the recent assurances by US policy makers that there is no intention to follow China’s steps towards banning the usage or mining of cryptocurrencies;
  2. the recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s bitcoin adoption. According to President Bukele 2.7m Salvadorians had onboarded by early October the Chivo wallet which uses the Lightning Network. We have to admit we are skeptical of this second explanation; and
  3. the reemergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge. Bitcoin’s allure as an inflation hedge has perhaps been strengthened by the failure of gold to respond in recent weeks to heightened concerns over inflation, behaving more as a real rate proxy rather than inflation hedge.

  The last point is notable, especially since we have frequently noted the growing price divergence between actual gold and its digital counterpart, which while not only providing a credible diversification tool to risk assets (compared the return of bitcoin to any other asset class YTD) has also shown a strong correlation with soaring inflation expectations in recent months, unlike gold which is sharply lower for the year.

  In the chart below, JPMorgan shows “tentative signs that the previous shift away from gold into bitcoin seen during most of Q4 2020 and the beginning of 2021 has started re-emerging in recent weeks.”

  

  If JPM is correct (this time) and if indeed bitcoin is emerging as not only an accepted inflation hedge – certainly better than gold – but as an asset JPM will push to its institutional clients, especially those sporting a balanced, 60/40 portfolio, the potential inflows into bitcoin and cryptos in general would be remarkable if even a small portion of the global 60/40 portfolio is reallocated toward the digital currency, an outcome One River’s CIO Eric Peters has been predicting for a long time.

  Tyler Durden
  Thu, 10/07/2021 – 17:50

• $137 Million Racism Verdict Against Tesla May Be Cut In Half On Appeal
  $137 Million Racism Verdict Against Tesla May Be Cut In Half On Appeal

  A $137 million verdict against Tesla for failing to prevent racism against contract employee Owen Diaz may be cut in half if the automaker appeals. 

  Law professor Michael Selmi said the original verdict of punitive damages about 20 times as large as actual damages is “well in excess” of typical punishment, according to Bloomberg.

  Punitive damages are usually calculated at 9 to 1 or 10 to 1, the report notes. 

  This means the $137 million award is “unlikely to survive a challenge,” according to Selmi. 

  This doesn’t mean the jury didn’t send a strong message in the case. One juror told Bloomberg: “They claim to have a zero tolerance policy, but suspended rather than fired, and ignored rather than rectified or retrained their employees on proper prevention.”

  Recall, a jury awarded Diaz $137 million for enduring “racist abuse” while working for the company. 

  Diaz’s attorneys told CNBC that the case was only able to move forward because Diaz didn’t sign one of the company’s mandatory arbitration agreements. 

  One attorney, J. Bernard Alexander, said: “We were able to put the jury in the shoes of our client. When Tesla came to court and tried to say they were zero tolerance and they were fulfilling their duty? The jury was just offended by that because it was actually zero responsibility.”

  

  Diaz found the work at Tesla through a staffing agency in 2015 and told the jury that coworkers told him to “go back to Africa” and left racist graffiti in the company’s restrooom. They also left a racist drawing in his workspace, he told the court.

  Back in August, Tesla was forced to pay another former employee $1 million for enduring racism while working at the company. The former employee won a ruling that the company failed to stop his supervisors from calling him the “N-word” at the company’s Fremont factory.

  Melvin Berry won the discrimination award after a closed-door proceeding that came on the heels of “years of complaints from Black workers that Tesla turned a blind eye to the commonplace use of racial slurs on the assembly line,” Bloomberg wrote at the time. 

  Similarly, it was also alleged that the company was slow to remove graffiti containing hate symbols.

  Berry was hired by Tesla in 2015 and quit within 18 months. He claimed that when he confronted a supervisor about being called the “N-word” he was forced to work longer hours and “push a heavier cart”.

  Diaz commented on the verdict, stating: “I’m really happy to be able to shine a light on what happened. I want it to be less about me and more about what’s going on at Tesla. It’s like they saw right through the smoke and mirrors. They were courageous in saying ‘enough’ to this billion-dollar company and say, ‘This is not acceptable.”’

  Tyler Durden
  Thu, 10/07/2021 – 17:25

• De Blasio Misused Public Resources For Family's Benefit: Report
  De Blasio Misused Public Resources For Family’s Benefit: Report

  New York Mayor Bill de Blasio misused public resources for his own political and personal benefit – and has not reimbursed the city for security costs related to his presidential campaign, according to the New York Times, citing a city investigation released on Thursday.

  Among other things, de Blasio deployed his security detail to move his activist daughter to Gracie Mansion, while the city spent nearly $320,000 for members of his security detail to travel during his presidential campaign trips in 2019.

  

  According to the Times:

  The report painted a deeply unflattering portrait of Mr. de Blasio’s reliance on his security detail — behavior that a top investigator said amounted to the mayor having his own personal “concierge service” to shuttle around relatives and staffers.

  It found that the use of a police van and personnel to help move Mr. de Blasio’s daughter was “a misuse of N.Y.P.D. resources for a personal benefit,” and that Howard Redmond, the police inspector in charge of the family’s security detail, had “actively obstructed and sought to thwart this investigation.”

  At a news conference, Margaret Garnett, the commissioner of the investigation department, said that Mr. Redmond had deleted communications and that he had tried to destroy his cellphone after he was told to surrender it. She said that she had referred Mr. Redmond’s conduct to the Manhattan district attorney’s office for a criminal investigation into obstruction of justice.

  De Blaso, who has just three months left in office as he mulls a run for New York governor, has faced multiple investigations into his fundraising practices during his time in office – including a 2017 incident in which prosecutors raised questions but ultimately declined to bring criminal charges.

  The mayor pushed back on Thursday, criticizing the findings as “naïve” and blaming advice he had received about using the detail.

  “I’m honored to be the mayor of this city, but my first responsibility is as a father and a husband,” he said, adding “And so I think of the safety of my family all the time.”

  Just not on his own dime, apparently.

  According to the report, de Blasio’s misuse of his security detail during his failed presidential campaign in 2019 ran the city nearly $320,000 – which includes hotels, meals, rental cars and flights for members of the detail – who accompanied de Blasio on multiple campaign stops.

  “Government resources should be used for government business,” said Betsy Gotbaum, the executive director of Citizens Union, a good-government group, adding “The mayor should reimburse these funds immediately.”

  More:

  The report also cited several occasions where the mayor’s detail was used to pick up his brother from the airport, and to drive him to pick up a Zipcar in Palmyra, N.J. The detail also drove Mr. de Blasio’s brother “to an Alamo rental car location without the mayor present.”

  Asked if Mr. de Blasio was using his security detail as “glorified Uber drivers,” Ms. Garnett said there was a culture of treating the officers like they were City Hall staffers and a “concierge service.”

  The report made recommendations to prevent the misuse of the mayor’s security detail in the future. One was for the Conflicts of Interest Board to publicly release advice for elected officials about the use of city resources in connection with political activities. -NYT

  In addition, de Blasio’s security detail was used to drive his son, Dante, between NYC and Yale University in Connecticut – with one detective recalling that it happened “approximately seven or eight times without the mayor or first lady present.”

  After Dante graduated, he continued to benefit from his father’s taxpayer-funded security detail, as well as rides from the police every weekday morning from Gracie Mansion to his workplace in Brooklyn.

  De Blasio’s office also hit back – citing several examples of threats his children faced, yet failing to explain why that should fall on the shoulders of New York taxpayers.

  Tyler Durden
  Thu, 10/07/2021 – 17:11

• Afghan Gun Shop Bonanza: US-Supplied Weapons Including .50 Cals Being Sold To Public
  Afghan Gun Shop Bonanza: US-Supplied Weapons Including .50 Cals Being Sold To Public

  Since the botched US evacuation and withdrawal at the end of August, Afghanistan seems to have become one big gun bizarre where individuals with enough cash can purchase an array of American-supplied weapons and advanced equipment from right off the streets – no questions asked.

  A New York Times report has found not only small arms like pistols and military assault rifles are showing up in gun shops around major cities like Kabul and Kandahar, but two-way radios and even grenades and night vision goggles along with ample ammunition. The American military items were “originally provided to the Afghan security forces under a U.S. training and assistance program that cost American taxpayers more than $83 billion through two decades of war,” the report emphasizes.

  

  The NY Times report noted that American M4 carbines are going for about $4,000, and at least $1,200 for Beretta M9 handguns, with other NATO-supplied handguns common among Afghan police forces going for about $350. Many of these had been acquired by local gun dealers as the Taliban was gobbling up territory during the rapid US draw down. Desperate Afghan soldiers who hadn’t been paid would gain far more than a month’s salary by essentially pawning their weapons to local dealers.

  Russian-made rocket-propelled grenade launchers are also popping up in local gun shops, for about $1,100, and Kalashnikov rifles – perhaps already long ubiquitous in the region – going for an average of $900.

  One shop owner in the southern city of Kandahar told the Times: “American-made weapons are in great demand, as they work very well and people know how to use them.” Another dealer said: 

  “We used to work as a mobile team,” he said. “We would meet many government soldiers and officers to buy weapons from them. After that we would take those weapons to the Taliban and sell it to them, or to anyone who would give us a good price.”

  

  Further the Times report details that “A third gun merchant in Kandahar, who asked not to be identified because the Taliban had warned him not to speak to the news media, said dealers had sold weapons as large as anti-aircraft guns to the Taliban this summer.” 

  “Now, he said, he sold American-made M4s and .50-caliber machine guns, as well as weapons manufactured by other nations, including rocket launchers and Kalashnikov assault rifles,” she shop keeper added.

  

  Interestingly, the Taliban is trying to claim that it has imposed a strict accounting system for US weapons seized after the American troop exit, with a spokesman cited in the report as commenting on whether the weapons were being sold on the streets to the public: “I totally deny this; our fighters cannot be that careless.” He added dubiously: “Even a single person cannot sell a bullet in the market or smuggle it.”

  The Taliban official claimed they “are all listed, verified and are all saved and secure under the Islamic Emirate for the future army.” But the Times investigative team verified that significant amounts of American weapons were being sold openly in shops, and that dealers have continued to receive new merchandise in waves.

  Tyler Durden
  Thu, 10/07/2021 – 17:00

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• German Parking Garage Unveils Dedicated Spaces For LGBTQ And Migrant Drivers
  German Parking Garage Unveils Dedicated Spaces For LGBTQ And Migrant Drivers

  Today in “our obsession with inclusiveness is once again leading us back to segregating people” news, a car park in Germany is unveiling dedicated parking spaces for LGBTQ and migrant drivers.

  The three “diversity” parking spaces were put up in an underground car park in Hanau city centre, according to the Daily Mail.

  Hanau is considered a city of diversity already, the report noted. Hanau’s population was “already ethnically diverse” before the 2015 migrant crisis. 

  The aim of the spots was to “help people who feel a special need for protection,” according to Thomas Morlock, Chairman of the Supervisory Board of the lot.

  

  Morlock told the Daily Mail the spaces were built to set a “conspicuously colourful symbol for diversity and tolerance”.

  He said they “are not necessarily meant” to be used by a “seperate group of people”.

  And of course, as the Daily Mail puts it, the kicker:

  “It is not immediately clear how the authorities intend to monitor whether people who park in the spaces are in fact part of the LGBTQ community or migrants…”

  Keep up the great work, Herr Morlock. 

  Tyler Durden
  Thu, 10/07/2021 – 02:45

• France & The Fraying Of NATO
  France & The Fraying Of NATO

  Authored by Gary Leupp via Counterpunch.org,

  Biden has infuriated France by arranging the agreement to provide nuclear-powered submarines to Australia. This replaces a contract to purchase a fleet of diesel-powered subs from France. Australia will have to pay penalties for breach of contract but the French capitalists will lose around 70 billion dollars. The perceived perfidy of both Canberra and Washington has caused Paris to compare Biden to Trump. The UK is third partner in the agreement so expect post-Brexit Franco-British relations to deteriorate further.

  This is all good, in my opinion!

  

  It’s also a good thing that Biden’s withdrawal of U.S. troops from Afghanistan was poorly orchestrated with the lingering “coalition partners” such as Britain, French and Germany, producing angry criticism. It’s great that the British prime minister proposed to France a “Coalition of the Willing” to continue the fight in Afghanistan following the U.S. withdrawal—and better that it was dead in the water. (Maybe the French better than the Brits remember the Suez Crisis of 1956, the disastrous joint Anglo-French-Israeli effort to reimpose imperialist control over the canal. Not only did it lack U.S. participation; Eisenhower rationally shut it down after warnings from the Egyptians’ Soviet advisors.) It’s good that these three countries heeded the U.S. command to uphold their NATO promise to stand with the U.S. when attacked; that they lost over 600 troops in a fruitless effort; and that in the end the U.S. didn’t see fit to even involve them in the end plans. It’s good to wake up to the fact that the U.S. imperialists could care less about their input or their lives. but only demand their obedience and sacrifice.

  It’s wonderful that Germany, despite obnoxious U.S. opposition, has maintained its involvement in the Nordstream II natural gas pipeline project along with Russia. The last three U.S. administrations have opposed the pipeline, claiming it weakens the NATO alliance and helps Russia (and urging purchase of more expensive U.S. energy sources instead—to enhance mutual security, don’t you see). The Cold War arguments have fallen on deaf ears. The pipeline was completed last month. Good for global free trade and for national sovereignty, and a significant European blow to U.S. hegemony.

  It’s great that Trump in Aug. 2019 raised the ridiculous prospect of purchasing Greenland from Denmark, indifferent to the fact that Greenland is a self-governing entity, within the Kingdom of Denmark. (It is 90% Inuit, and led by political parties pressing for greater independence.) It’s marvelous that when the Danish prime minister gently, with good humor, refused his ignorant, insulting and racist proposal, he exploded in rage and cancelled his state visit including state dinner with the queen. He offended not only the Danish state but popular opinion throughout Europe with his boorishness and colonial arrogance. Excellent.

  Trump personally, needlessly insulted the prime minister of Canada and the chancellor of Germany with the same childish language he’d used against political opponents. He raised questions in Europeans’ and Canadians’ minds about the value of an alliance with such vileness. That was a major historical contribution.

  Good also that, in Libya in 2011, Hillary Clinton working with the French and British leaders secured UN approval for a NATO mission to protect civilians in Libya. And that, when the U.S.-led mission exceeded the UN resolution and waged full-out war to topple the Libyan leader, enraging China and Russia who called out the lie, some NATO nations declined to participate or turned back in disgust. Another U.S. imperialist war based on lies creating disorder and flooding Europe with refugees.

  It was good only in the fact that it exposed once again the utter moral bankruptcy of the U.S.A. so widely now associated with images of Abu Ghraib, Bagram, and Guantanamo. All in the name of NATO.

  *  *  *

  Over the last two decades, with the Soviet Union and “communist threat” receding memories, the U.S. has systematically expanded this anti-Soviet, anti-communist postwar alliance called NATO to surround Russia. Any unprejudiced person looking at a map can understand Russia’s concern. Russia spends about a fifth of what the U.S. and NATO spend on military expenses. Russia is not a military threat to Europe or North America. So—the Russians have been asking since 1999, when Bill Clinton broke his predecessor’s promise to Gorbachev and resumed NATO expansion by adding Poland, Hungary and Czechoslovakia—why do you keep trying to expend to surround us?

  Meanwhile more and more Europeans are doubting the leadership of the United States. That means doubting the purpose and value of NATO. Formed to confront an imaginary Soviet invasion of “western” Europe, it was never deployed in war during the Cold War. Its first war indeed was the Clintons’ war on Serbia in 1999. This conflict, which severed the Serbian historical heartland from Serbia to create the new (dysfunctional) state of Kosovo, has since been repudiated by participants Spain and Greece who note that the UN resolution authorizing a “humanitarian” mission in Serbia explicitly stated that the Serbian state remain undivided. Meantime (after the bogus “Rambouillet agreement” was signed) the French foreign minister complained that the U.S. was acting like a hyper-pouissance (“hyperpower” as opposed to mere superpower).

  The future of NATO lies with the U.S., Germany, France and the UK. The last three were long members of the EU, which while a rival trading bloc generally coordinated policies with NATO. NATO has overlapped the EU such that virtually all of the countries admitted to the military alliance since 1989 have first joined NATO, then the EU. And within the EU—which is after all, a trading bloc that competes with North America—the UK long served as a kind of U.S. surrogate urging cooperation with Russian trade boycotts, etc. Now the U.K. has split from the EU, unavailable to, say, pressure Germany to avoid deals with the Russians Washington opposes. Good!

  Germany has a number of reasons to want to increase trade with Russia and has now shown the will to stand up to the U.S. Germany and France both challenged George W. Bush’s Iraq war based on lies. We should not forget how Bush (promoted lately as a statesman by the Democrats!) rivaled his successor Trump as a vulgar, lying buffoon. And if Obama seemed a hero in contrast, his magnetism ebbed as Europeans learned that they were all being monitored by the National Security Agency, and that the calls of Angela Merkel and the Pope were bugged. This was the land of freedom and democracy, always boasting about liberating Europe from the Nazis and expecting eternal payoff in the form of bases and political deference.

  It has been 76 years since the fall of Berlin (to the Soviets, as you know, not to the U.S.);

  72 since the founding of the North Atlantic Treaty Organization (NATO);

  32 since the fall of the Berlin Wall and the promise by George W. H. Bush to Gorbachev NOT to expand NATO further;

  22 since the resumption of NATO expansion;

  22 since the U.S.-NATO war on Serbia including the aerial bombing of Belgrade;

  20 since NATO went to war at U.S. behest in Afghanistan, resulting in ruin and failure;

  13 years since the U.S. recognized Kosovo as an independent country, and NATO announced the near-term admission of Ukraine and Georgia, resulting in the brief Russo-Georgia War and Russian recognition of the states of South Ossetia and Abkhazia;

  10 years since the grotesque NATO mission to destroy and sew chaos in Libya, producing more terror throughout the Sahel and tribal and ethnic violence in the crumbling country, and producing more waves of refugees;

  7 since the bold, bloody U.S.-backed putsch in Ukraine that placed a pro-NATO party in power, provoking the ongoing rebellion among ethnic Russians in the east and obliging Moscow to re-annex the Crimean Peninsula, inviting unprecedented ongoing U.S. sanctions and U.S. pressure on allies to comply;

  5 since a malignant narcissist moron won the U.S. presidency and soon alienated allies by his pronouncements, insults, evident ignorance, a belligerent approach, raising questions in a billion minds about the mental stability and judgment of the voters of this country;

  1 year since a career warmonger who has long vowed to expand and strengthen NATO, who became the Obama administration’s point man on Ukraine after the 2014 coup, his mission being to clean up corruption to prepare Ukraine for NATO membership (and who is the father of Hunter Biden who famously sat on the board of Ukraine’s leading gas company 2014-2017 making millions for no apparent reason or work done) became president.

  1 year since the world saw repeatedly on TV the 9 minute video of an open, public police lynching on the streets of Minneapolis, surely many among the views wondering what right this racist nation has to lecture China or anyone on human rights.

  9 months since the U.S. capitol was stormed by U.S. brown shirts brandishing Confederate flags and fascist symbols and calling for the hanging of Trump’s vice president for treason.

  It is a long record of terrifying Europe with seemingly unstable leaders (Bush no less than Trump); harassing Europe with demands it minimizes trade with Russia and China and obey U.S. rules on Iran, and demanding participation in its imperialist wars far from the North Atlantic to Central Asia and Northern Africa.

  It is also a record of provoking Russia while expanding the anti-Russian juggernaut. It has meant actually using NATO militarily (as in Serbia, Afghanistan, and Libya) to cement the military alliance under U.S. direction, the stationing of 4000 U.S. troops in Poland, and threatening flights in the Baltic. Meanwhile, multiple U.S. agencies work overtime to plot “color revolutions” in the counties bordering Russia: Belarus, Georgia, Ukraine.

  NATO is dangerous and evil. It should be terminated. Opinion polls in Europe suggest a rise in NATO skepticism (good in itself) and opposition (better). It was already split seriously once: in 2002-2003 over the Iraq War. Indeed the manifest criminality of the Iraq War, the obvious willingness of the Americans to use disinformation, and the buffoonic personality of the U.S. president probably shocked Europe as much as the beastly Trump.

  The amusing thing is that Biden and Blinken, Sullivan and Austin, all seem to think none of this happened. They really seem to think that the world respects the United States as the (natural?) leader of something called the Free World —of nations committed to “democracy.” Blinken tells us and Europeans we’re confronting, “autocracy” in the form of China, Russia, Iran, North Korea, Venezuela all threatening us and our values. They seem think they can return to the 1950s, explain their moves as reflections of “American Exceptionalism,” posture as champions of “human rights,” cloak their interventions as “humanitarian missions,” and arm-twist their client-states into joint action. At present NATO is being pushed by Biden to identify (as it did in its last communique) the PRC as a “security threat” to Europe.

  But the reference to China was controversial. And NATO is divided on the matter of China. Some states do not see much of a threat and have every reason to expand ties with China, especially with the advent of the Belt and Road projects. They know that China’s GDP will soon exceed that of the U.S. and that the U.S. is not the economic superpower it was after the war when it established its hegemony over most of Europe. It has lost much of its basic strength but, like the Spanish Empire in the eighteenth century, none of its arrogance and brutality.

  Even after all the exposure. Even after all the shame. Biden flashing his trained smile announces “America is back!” expecting the world—especially “our allies”—to delight in the resumption of normalcy. But Biden should recall the stony silence that met Pence’s announcement at the Munich Security Conference in February 2019 when he conveyed Trump’s greetings. Do not these U.S. leaders not realize that in this century Europe’s GDP has come to match the U.S.’s? And that few people believe that the U.S. “saved” Europe from the Nazis, and then staved off the Soviet Communists, and revived Europe with the Marshall Plan, and continues to this day to protect Europe from the Russia that threatens to march west at any moment?

  Blinken wants to pick up and move on and lead the world forward. Back to normal! Sound, reliable U.S.leadership is back!

  Oh really? the French might ask. Stabbing a NATO ally in the back, sabotaging a signed $66 billion deal with far-off Australia? “Doing,” as the French foreign minister put it, “something Mr. Trump would do”? Not only France but the EU has denounced the U.S.-Australia deal. Some NATO members question how the Atlantic Alliance is served by a business dispute between members that pertains to what the Pentagon calls the “Indo-Pacific” region. And why—when the U.S. is attempting to secure NATO’s participation in a strategy of containing and provoking Beijing—it is not bothering to coordinate with France?

  Is Blinken unaware that France is an imperialist country with vast holdings in the Pacific? Does he know about the French naval facilities at Papeete, Tahiti, or the army, navy and air force bases in New Caledonia? The French conducted their nuclear blasts at Mururora, for god’s sake. As an imperialist country, does not France have the same right as the U.S. to gang up on China with Australia, in France’s corner of the Pacific? And if its close ally the U.S. decides to undermine the deal, should not etiquette have dictated that it at least inform its “oldest ally” about its intentions?

  The French condemnation of the submarines deal has been unprecedentedly sharp, in part, I imagine, due to the implicit disparagement of France as a great power. If the U.S. is urging its allies to join with it in confronting China, why does it not consult with France about an arms deal designed to do that, especially when it supplants one already openly negotiated by a NATO ally? Isn’t it clear that Biden’s appeals for “alliance unity” mean uniting, behind U.S. leadership around preparations for war on China?

  Gradually NATO is fraying. Again, this is a very good thing. I had worried that Biden would quickly work to integrate Ukraine into the alliance, but Merkel seems to have told him no. Europeans don’t want to be dragged into another U.S. war, especially against their great neighbor whom they know much better than Americans and have every reason to befriend.

  France and Germany, who (recall) opposed the U.S. war-based-on-lies on Iraq in 2003, are finally losing patience with the alliance and wondering what membership means other than joining with the U.S. in its quarrels with Russia and China.

  Tyler Durden
  Thu, 10/07/2021 – 02:00

• Ivermectin – Truth & Totalitarianism
  Ivermectin – Truth & Totalitarianism

  Authored by Justus R. Hope via TheDesertReview.com,

  Calling out the lie

  

  “Merck stock surged 10% Friday after it said its investigational pill cuts the risk of hospitalization and death in COVID-19 patients…The pill reduced the risk of hospitalization or death by about 50%,” Merck and its partner, Ridgeback Biotherapeutics, said in a statement Friday.

  “This is a phenomenal result. This is a profound game-changer to have an oral pill that had this kind of effect, this magnitude of effect in patients who are at high risk who are already symptomatic,” former FDA Commissioner Scott Gottlieb said Friday on CNBC about results of the interim analysis.

  “Meanwhile, shares of COVID vaccine makers Pfizer and Moderna fell 2.5% and 10%, respectively.”

  This puts Dr. Scott Gottlieb between a rock and a hard place.

  On the one hand, as a member of Pfizer’s Board of Directors, he is paid handsomely to attend a few board meetings per year, yet on the other hand, he must not be too glowing in his praise of the antiviral, which might lead people away from the Pfizer vaccine. Moreover, it could affect sales just as it has already dropped the stock price.

  In 2020, Gottlieb was paid $338,587 by Pfizer. In 2020, he also earned $525,850 as a director of Illumina. Due to his former FDA Chief status, Gottlieb is in high demand as one word of favor from him can send a stock price soaring.

  He has served on multiple other boards, including Tempus Labs, National Resilience, and the Mount Sinai Health System. It must be a daunting task to walk the line by promoting one corporate interest while not offending any of the others.

  But the good news is that soon, Pfizer, too, will be peddling their antiviral drug, which should make up for any drop in their vaccine sales.

  “Pfizer is testing whether its pill—PF-07321332—can prevent infection in people exposed to the virus or benefit patients who have not been hospitalized with COVID-19.”

  Roche and Atea are not far behind with their antiviral pills, and soon all of Big Pharma can get in on the action. They have timed it perfectly.

  While shutting down any competition from repurposed drugs like HCQ or Ivermectin, they deftly rolled out the vaccines first, making sure not to confuse the consumer with antiviral pills that would only be allowed AFTER the majority of the population had been vaccinated. 

  The one glitch is that Merck’s Molnupiravir only surfaced AFTER a prominent scandal involving Merck lying three times.

  Just as Peter would disown Christ three times before the cry of the rooster, Merck would turn their back on their creation with three lies about Ivermectin before they would accept the payoff from the United States government.

  On February 4, 2021, Merck, the corporation behind the monumental Mectizan Program, which rescued the world from River Blindness, told three untruths about Ivermectin.

  Lie #1: No scientific basis for a potential therapeutic effect against COVID-19 from preclinical studies;

  FALSE:  https://www.sciencedirect.com/science/article/pii/S0166354220302011

  Lie #2: No meaningful evidence for clinical activity or clinical efficacy in patients with COVID-19 disease.

  FALSE: https://covid19criticalcare.com/wp-content/uploads/2021/01/FLCCC-Alliance-Response-to-the-NIH-Guideline-Committee-Recommendation-on-Ivermectin-use-in-COVID19-2021-01-18.pdf

  https://covid19criticalcare.com/wp-content/uploads/2020/12/One-Page-Summary-of-the-Clinical-Trials-Evidence-for-Ivermectin-in-COVID-19.pdf

  Lie #3: A concerning lack of safety data in the majority of studies.

  FALSE: https://committees.parliament.uk/writtenevidence/36858/pdf/

  However, the Monash preclinical study disproved the first statement showing a massive 99.98% reduction in viral load with a single Ivermectin treatment in cell culture.

  The second statement is disproved by the FLCCC’s Public Statement issued January 18, 2021, that reports colossal evidence for Ivermectin’s clinical activity and efficacy against COVID-19 in clinical settings:

  a. Large reductions in mortality rates;

  b. Shorter durations of hospital stay;

  c. Profound reductions in the infectivity rate in both pre- and post-exposure prophylaxis studies;

  d. Faster times to clinical recovery;

  e. Faster times to viral clearance.

  Finally, the third statement concerning “lack of safety data” contradicts the published WHO safety data. In 3.7 billion doses of Ivermectin given over four decades, Ivermectin has proven exceedingly safe.

  Moreover, more than anyone, Merck is in the position to know Ivermectin’s true safety profile as they provided those billions of doses for the Mectizan Donation program.

  However, lying was required, and the payoff came on Wednesday, June 9, 2021, when Merck got a fat reward. They announced the US government had agreed to pay $1.2 billion for 1.7 million doses of their new antiviral, Molnupiravir, BEFORE clinical testing showed either effectiveness or safety. Our hard-earned tax dollars were irresponsibly handed over to Merck by an agency charged with a fiduciary duty to protect our health.

  So in the end, Scott Gottlieb did not endanger Pfizer’s bottom line. Just as Moderna was choreographed to go first in the vaccine rollout, Merck was first with the antiviral, and Pfizer first with the booster. They would take turns as there was more than enough profit to go around. Soon it would be Pfizer’s turn at the antiviral trough, but they had to be patient for now. There was an order and method to this.

  But the craftiest strategy of all was Merck’s: Accuse the other side of that which you are guilty.

  This quote has been variously attributed to Karl Marx, Vladimir Lenin, and Joseph Goebbels, the Nazi propaganda minister. Regardless of its source, it has proven remarkably effective as a propaganda tactic throughout modern history, and Merck was betting on this to sell the public on Molnupirivar. However, the move backfired. In the case of Ivermectin, they falsely argued that it was ineffective and unsafe while their own drug suffered from both.

  For example, one could argue, “There is a concerning lack of safety data” regarding Molnupirivar. Indeed, it does not have decades of safety data like Ivermectin; it does not even have years. The little safety data pertains to a dearth of Phase II and Phase III clinical trials, which total less than a few thousand patients.

  While Ivermectin’s safety data with over 40 years of treatment in over 3.7 billion doses is truly robust, Molnupiravir’s safety numbers are barely rudimentary. In short, Molnupiravir’s safety data is concerning because of its lack. 

  Of more concern is a recent study showing the alarming potential of Molnupiravir’s metabolite, NHC, to induce mutations. In a peer-reviewed study published in the Journal of Biological Chemistry, the author writes, “The mutagenic effect of NHC has been shown in animal cell cultures, raising concerns on the potential risk of molnupiravir-induced tumorigenesis and the emergence of detrimental mutations in sperm precursor cell generation and embryo development.”

  I don’t know about you, but that would be enough for most of my patients to decide against this drug. With all due respect to Dr. Gottlieb, if the choice were between a drug with a 40-year safety profile of excellence versus a new experimental one that could introduce mutations into germ cells, it would be a no brainer.

  As if this were not enough, another group of researchers at the Lineberger Comprehensive Cancer Center associated with the University of North Carolina at Chapel Hill are also concerned. 

  They write, “The concern would be that mutations in host DNA could contribute to the development of cancer or cause birth defects either in a developing fetus of through incorporation into sperm precursor cells.” 

  This may be the best time to mention that cheap, repurposed drugs, all FDA approved as safe for other conditions, are one of the best ways to address terminal cancers. They have well-defined and often long-term safety profiles, and cocktails of such old drugs hold great promise as adjuncts in cancer prevention and treatment. Moreover, unlike experimental new medicines with little safety testing, repurposed drugs will not give you cancer.

  As for meaningful clinical activity or efficacy in patients with COVID-19, there are also concerns with Molnupiravir. The hospital trials were stopped early. Where is the data for inpatients? Where is the data for patients on ventilators? Where is the evidence for pre-exposure prophylaxis? 

  The limited trials that have been performed only suggest a correlation between Molnupiravir use and a lower rate of hospitalization and fewer deaths based on low numbers of patients. But the evidence is lacking on safety, prevention of disease, and treatment of late disease. This is where the evidence on Ivermectin is overwhelming.

  However, the evidence of effectiveness for Molnupiravir is sketchy at best.

  Moreover, on the use of Molnupiravir in mild and moderate disease, we have one study – only partially completed – showing 7.3% death OR hospitalization in the drug group versus 14.1% of those receiving placebo. The fact that deaths were combined with hospitalizations does not mean that 48% fewer in the treatment group died. It means the sum of deaths and hospitalizations was 48% lower in the treatment group.

  Moreover, the study only involved 775 patients. This is far too few on which to base an approval. Right? Isn’t that what we have been told regarding Ivermectin? After all, we now have over 32 randomized controlled trials of Ivermectin in COVID, reflecting a 58% improvement in the Ivermectin groups compared to placebo. Thus, we have 65 clinical trials in total involving 655 scientists and 47,717 patients. We have been told this is insufficient evidence, so the Merck data on 775 patients cannot possibly be enough if we use the same standard.

  With Ivermectin, we see an average of 86% improvement in 14 prophylaxis studies, a 66% improvement in 29 early treatment trials, a 40% improvement in 22 late treatment trials, a 57% improvement in the 26 mortality trials. This data has been updated to October 1, 2021.

  c19ivermectin.com 

  So, even assuming Molnupiravir effectively reduces death PLUS hospitalization by 48%, we still do not know how reliable this figure will be when looking only at death. Ivermectin’s reduction in death in mild to moderate COVID-19 surpasses this number. 

  Assuming more studies confirm Molnupiravir’s lesser effect at reducing mortality in mild to moderate disease, we are still left with uncomfortable questions about its safety. However, Ivermectin’s excellent long term safety profile is solid, and this alone will lead many to choose Ivermectin OVER Molnupirivar, especially when factoring in the possibilities of mutagenesis and gene toxicity.

  The price of around $700 per course of treatment which involves ten pills, makes it vastly more expensive than Ivermectin, which might be fine if it were considerably more effective. But it isn’t, it is less effective, and it is potentially MUCH more dangerous. The fact the choice is being “forced” does not make it more appealing.

  Perhaps the most distasteful dimension is that the drug was developed through deceit and propaganda under Merck’s scandal with Ivermectin.  

  It is part of an overall mandated program that robs people of their God-given liberty to choose their own medical treatment. 

  The mandates have been fraught with division among leading scientists, including Dr. Robert Malone. Dr. Robert Malone discovered in-vitro and in-vivo RNA transfection and invented mRNA vaccines while he was at the Salk Institute in 1988. He helped draft “The Physicians Declaration,” which was announced at the Global COVID Summit held in Rome, Italy.

  The Physician’s Declaration is not unlike the US Declaration of Independence, as both documents enumerate a series of injustices that create the need for a Declaration.

  In the case of the US Declaration of Independence, those injustices included taxation without representation, not providing fair hearings or trials – the lack of due process – and “exciting domestic insurrections amongst us.” 

  In the case of the Rome Physician’s Declaration, these injustices include public policymakers who have forced a “one size fits all treatment strategy” to the Pandemic resulting in “needless illness and death.” In addition, physicians have been subject to censorship of ideas, barriers from pharmacies, threats of censure, and loss of license for upholding their Hippocratic Oath to do no harm.

  Censorship of  Senate testimony of Harvard and Yale-educated physicians by YouTube at the behest of government agencies should not be tolerated in a democratic society.

  When the WHO and CDC degenerate into captured agencies that no longer serve the medical interests of the people, something needs to change.

  The United States declared itself free from oppression from England in 1776 with the signing of the Declaration of Independence.

  As of today’s date, some 10,000 physicians and health scientists have also signed the modern Physician Declaration and accused the public health agencies of “crimes against humanity.”

  Physicians have declared through this document that they “must be free to practice the art and science of medicine without fear of retribution, censorship, slander, or disciplinary action” and that physicians shall not be restricted from prescribing safe and effective treatments.  A fully informed patient should have the right to choose or decline medical treatment. This absolute right MUST be restored.

  Taking a stand for truth is what is essential now. Over the last 18 months, Americans, indeed citizens of the developed world spanning from the United Kingdom to Australia, have been fed a steady diet of propaganda by  Big Pharma and Big Regulators being aided and abetted by complicit governments, media, and Big Tech.

  These corrupt organizers seem to be driven by a desire for money, power, and control. Most citizens are either willing participants or are those who feel powerless to object. Most physicians who are part of organized medicine dare not speak out for fear of consequences. The NIH influences most of the world’s medical research through the strategic use of its nearly $50 billion annual budget. As a result, it can affect most medical societies, medical journals, most research, and thus it can and does control the way data is analyzed. 

  The top medical journals have even published fraudulent studies to discredit unprofitable repurposed drugs.

  These same medical journals have appointed questionable figures to investigate the origins of COVID-19, those with ties to coverups, and those who are likely to maintain the coverup.

  From the AMA to the FDA to the New England Journal to the Lancet, the NIH controls organized medicine around the globe. But it cannot do so alone, especially abroad, which is why the WHO also figures prominently.

  The WHO budget is about 10% of the NIH at $5.8 billion. 

  The Gates Foundation contributes roughly 10% of the WHO budget. Thus both Dr. Anthony Fauci, director of the NIAID – an arm of the NIH, and Bill Gates, vaccine proponent of the world, play significant roles.

  All those physicians who signed Dr. Malone’s Physician Declaration are genuinely courageous, just as were Thomas Jefferson, Ben Franklin, and John Hancock, those men of courage who signed the US Declaration of Independence. 

  And, whether or not most recognize it, we, the citizens of the United States, those of Australia, and the United Kingdom, are living in an increasingly totalitarian world, run by Big Pharma, Big Regulators, and Big Tech where the politicians and governments are secondary.

  This concept is very similar to the “soft totalitarianism” described in the book Live Not by Lies by Rod Dreher. In a thoughtful review, Abe Greenwald notes, “Lies are the lifeblood of totalitarianism; to resist, therefore, is to hold fast to the truth.”

  Our world’s current soft totalitarianism goes unrecognized by most because it is so different in appearance from that of the Soviet Union, yet it is every bit as deadly. In quoting Dreher, totalitarian society is defined by, “An ideology (that) seeks to displace all prior traditions and institutions with the goal of bringing all aspects of society under control of that ideology…A totalitarian state is one that aspires to nothing less than defining and controlling reality.” 

  In this Pandemic, those who do not conform to lockdowns, mask wear, or vaccination protocols are vilified, regardless of the science. As Greenwald observes, our totalitarianism is couched in the guise of “helping and healing others.” We live in a totalitarian “therapeutic culture.” Those who do not conform are branded as “the enemy (of the state).”

  Dreher writes, “It masks its hatred of dissenters from its utopian ideology of helping and healing…In therapeutic culture, which has everywhere triumphed, the great sin is to stand in the way of the freedom of others to find happiness as they wish.”

  As Aleksandr Solzhenitsyn often said, the antidote to totalitarianism has always been exposing the truth and then living in truth. It is what is essential now. Just as evil hates the light, lies hate the truth.  

  Dreher correctly observes that living in truth requires courage to stand up for what is right. For example, he offers this quote from a Slovakian dissident:

   “The question is, which is going to win: fear or courage?” he says. “In the beginning, it was mostly a matter of fear. But once you started experiencing freedom—and you felt it, you felt freedom through the things you did— your courage grew. We experienced all this together. We helped one another to gradually build up the courage to do bigger things, like join the Candle Demonstration.” 

  Fear is now falling while courage is rising. The word is slowly getting out through alternative media. Doctors are organizing resistance groups. Whereas six months ago, few patients had heard about Ivermectin, today most know about it, and many take it. 

  There is a reason that so many health care professionals are speaking out against the mandates, and it may have something to do with the fact healthcare is their field. For example, if airline pilots, experts in their field, refused to fly on a specific model of 747 aircraft, would an average person wish to know why, or would they blindly jump on that plane – because the FAA declared it safe? Help get the truth out.

  To patients everywhere, to all those whose voices have been silenced during this Pandemic, I advise the courage to live in the truth, share this message with others, and never yield to fear by remaining silent. Please share this article with your physician(s), share the link below, and ask them to sign the Physician’s Declaration. We are at 10,000 signatures now. When I started a petition on www.change.org this spring, it was taken down by the censors. However, this declaration cannot be taken down.

  Let us reach at least a million signatures. Then, when the signature box is opened for signing by the general public, please sign as well.

  I now invite all physicians and medical scientists to join in truth with Dr. Malone, Dr. Fareed, Dr. McCullough, Dr. Tyson, and Dr. Kory and sign the Rome Physician’s Declaration here. Let us stand for truth, freedom, and Human Rights, which shall always prevail over totalitarianism. Let us honor our sacred Hippocratic Oath.

  Tyler Durden
  Thu, 10/07/2021 – 00:10

• US Stealth Jets Become First Fighters To Fly From Japanese Ship Since WWII
  US Stealth Jets Become First Fighters To Fly From Japanese Ship Since WWII

  In yet another move signaling the deepening US-Japan military relationship, two US stealth fighters practiced taking off and landing on Japan’s largest warship, the JS Izumo. The flights happened Sunday, with Japan’s Ministry of Defense releasing photos and video of the event early this week, hyping the major advance in its Maritime Self-Defense Force’s operations.

  Crucially it marked the first time since World War II that fixed-wing aircraft operated from a Japanese warship. Marine Corps Commandant Gen. David Berger was earlier quoted as saying, “We’re not going to go on deployment but we’re actually going to fly U.S. Marine Corps F-35s off of a Japanese ship.”

  3 OCT, the #JMSDF conducted verification of takeoff and landing of the USMC F-35B to JS #IZUMO.
  The JMSDF continues to steadily carry out the necessary modifications to the IZUMO class to acquire the capability to operate the F-35Bs. pic.twitter.com/0gtPNzrxQC

  — Japan Maritime Self-Defense Force (@jmsdf_pao_eng) October 5, 2021

  https://platform.twitter.com/widgets.js

  Japan’s military is working on adapting 24,000-ton Izumo class helicopter carriers for fixed-wing operations. The pair of US aircraft – Marine Corps F-35B Lighting II Joint Strike Fighters – conducted successful short takeoff, vertical landings from the mid-sized carrier’s deck.

  The period of joint Japanese and Marine aircraft trials are set to continue aboard the Izumo through October 7. One aviation analysis monitoring site hailed in its headline that “Japan rejoins aircraft carrier club with USMC F-35B landing.”

  Of course, China is sure to take note given also given no less than five total navies currently engaged in warship exercises off Japan, including the US and UK:

  Two U.S. carrier strike groups drilled with the United Kingdom’s Carrier Strike Group 21 (CSG21) and a Japanese big-deck warship over the weekend in a major naval exercise in the waters off the southeast of Okinawa, Japan.

  The exercise involved six different navies – the U.S Navy, the U.K. Royal Navy, the Japan Maritime Self-Defense Force, the Royal Netherlands Navy, the Royal Canadian Navy and the Royal New Zealand Navy – making up a total of 17 surface ships, which included four aircraft carriers.

  

  The drills come after a tense weekend over contested skies near Taiwan, which saw China PLA jet incursions set multiple records in terms of number of aircraft breaching the self-ruled island’s defense identification zone – including 56 jets on Monday alone. 

  The Drive, meanwhile, further details Japan’s near-term carrier ambitions and cooperation with the US Marines as follows:

  After the concept of fixed-wing operations is proven aboard the Izumo, that warship will then undergo more extensive revisions to better support F-35Bs during routine operations over sustained periods. So far, the vessel has received a heat-resistant flight deck to cope with the F-35B’s scorching exhaust, as well as changes to the lighting and deck markings.

  VIDEO: Japan’s Largest Warship Launches U.S. Marine F-35s; First Fighters to Fly from Japanese Ship Since WWII – USNI Newshttps://t.co/zOS6Rc1WeI pic.twitter.com/HHeJ7MIv7W

  — U.S. Naval Institute (@NavalInstitute) October 5, 2021

  https://platform.twitter.com/widgets.js

  Amid the major joint exercises off Japan, White House spokesperson Jen Psaki said to reporters on Monday, “We urge Beijing to cease its military, diplomatic, and economic pressure and coercion against Taiwan,” and added that the US will “continue to assist Taiwan in maintaining a sufficient self-defense capability.”  

  Notably, Japan has lately become more vocally and firmly in Washington’s corner of late on the Taiwan issue – also as Japan is engaged in its own small contested island dispute with China off its south – so Beijing is sure to see the latest warship and carrier exercises as aimed in its direction.

  Tyler Durden
  Wed, 10/06/2021 – 23:50

• Colorado Hospital Set To Deny Kidney Transplant For Unvaxxed Woman
  Colorado Hospital Set To Deny Kidney Transplant For Unvaxxed Woman

  Now that vaccines are widely available and 56% of the US population is vaccinated (significantly missing President Biden’s Jul. 4 target of 70%), a little less than half of the country is unvaxxed and subjected to shocking and dehumanizing discrimination, making life very stressful. 

  Across the country, the hot-button subject entering the fall is COVID vaccination passes for restaurants and football stadiums in certain cities, counties, and or even states. This has made life painful for the unvaxxed (as planned by the administration) who can’t go to their favorite eatery or cheer on their favorite sports team.

  However, the latest discrimination story of an unvaxxed person is terrifying.

  A Colorado woman with stage 5 kidney failure is scrambling to find a new hospital because she and her donor are unvaxxed, and the hospital system has given them 30 days to get vaccinated or be taken off the transplant list. 

  UCHealth, a healthcare system headquartered in Aurora, Colorado, adopted new transplant rules requiring patients to be fully vaccinated. 

  “Here I am, willing to be a direct donor to her. It does not affect any other patient on the transplant list,” Jaimee Fougner, Leilani Lutali’s kidney donor, told Colorado-based news station CBS4. 

  

  “How can I sit here and allow them to murder my friend when I’ve got a perfect kidney and can save her life?” Fougner said. 

  Lutali received a letter from UCHealth last week explaining she and Fougner had until the end of October to begin the vaccine process, or they would be removed from the transplant list. 

  “I said I’ll sign a medical waiver. I have to sign a waiver anyway for the transplant itself, releasing them from anything that could possibly go wrong,” said Lutali. “It’s surgery, it’s invasive. I sign a waiver for my life. I’m not sure why I can’t sign a waiver for the COVID shot.”

  In August, UCHealth told Lutali that being vaxxed wouldn’t be a requirement for the surgery. “At the end of August, they confirmed that there was no COVID shot needed at that time,” she said. “Fast forward to Sept. 28. That’s when I found out. Jamie learned they have this policy around the COVID shot for both for the donor and the recipient.”

  Lutali received this letter from the hospital:

  

  Both met at bible study almost a year ago, and for either religious reasons or too many uncertainties, they refuse to take the vaccine. 

  “It’s your choice on what treatment you have. In Leilani’s case, the choice has been taken from her. Her life has now been held hostage because of this mandate,” Fougner added.

  They’re still searching for a hospital in Colorado that will do the transplant for unvaxxed people. This is the latest in the shocking discrimination against unvaxxed people. 

  Tyler Durden
  Wed, 10/06/2021 – 23:30

• WHO Approves First Malaria Vaccine After 30 Years Of Development
  WHO Approves First Malaria Vaccine After 30 Years Of Development

  More than three decades after scientists at GlaxoSmithKline started developing it, a malaria vaccine was finally approved Wednesday by the WHO. The vaccine could help save the lives of 400,000 people who still succumb to malaria every year (more than 50% are children under 5), most in sub-Saharan Africa. The vaccine is formulated for inoculating young children as well as adults.

  

  Per WSJ, the WHO’s endorsement is a critical step for enabling production and the rollout of the jab, which unfortunately could take years to come into wide use across the continent of Africa.

  The malaria jab will be administered in four doses. It has already been used to inoculate more than 800K children in Ghana, Kenya and Malawi as part of a long-running pilot program.

  In a press release announcing its approval, the WHO said the jab offers “a glimmer of hope” for the Continent’s most vulnerable children and others.

  “Today’s recommendation offers a glimmer of hope for the continent which shoulders the heaviest burden of the disease and we expect many more African children to be protected from malaria and grow into healthy adults,” said WHO Regional Director for Africa Matshidiso Moeti in the release.

  Notably, the vaccine – called TS,S or Mosquirix – is the first jab to ever be deployed against a parasitic disease. The jab was designed to work against Plasmodium falciparum, the most common malaria parasite in Africa, and the deadliest.

  “This is a historic moment. The long-awaited malaria vaccine for children is a breakthrough for science, child health and malaria control,” WHO Director-General Tedros Adhanom Ghebreyesus said in the press release.

  But before anybody gets too excited, WSJ points out that the vaccine was only shown to reduce severe malaria cases by 30%. Because of this, and the difficulty of distribution, it could take years to see how effective the vaccine is in the real world.

  While it typically doesn’t overwhelm hospitals, malaria has been steadily killing people by the hundreds of thousands for years.

  Yet its development and approval wasn’t considered an emergency?

  Tyler Durden
  Wed, 10/06/2021 – 23:10

• NYT Gives Russia-Gate CPR, WSJ Pronounces It Dead
  NYT Gives Russia-Gate CPR, WSJ Pronounces It Dead

  Authored by Ray McGovern via AntiWar.com,

  Those who may still think it was Russia that “interfered” with the 2016 election owe it to themselves to read the Sussmann indictment/charging document.

  Spoiler:

  It was the very top officials of the Clinton campaign aided by a lawyer crooked as a hound’s hind leg that interfered in 2016.

  The tricks tried by Sussmann and associates might make even GOP “strategists” like Lee Atwater and Karl Rove blush.

  One must recall that back in 2016 the Clinton campaign folks and their well-heeled coterie of attorneys were sure Mrs. Clinton would win. As the Sussmann charging document shows, there was some expectation of high-level posting in the “incoming” Clinton administration and – alas – absolutely no thought of indictment. This goes a long way to explain the brazenness of it all.

  As discredited former FBI Director James Comey put it in his apologia-sans-apology book, A Higher Loyalty, 

  “I was making decisions in an environment where Hillary Clinton was sure to be the next president …”

   Needless to say, a Clinton presidency would confer automatic immunity on key campaign miscreants and lawyers like Sussmann. Worse still for them, it appears likely that others of their breed may also find themselves criminally referred to the Department of Justice.

  

  High Stakes

  Were the stakes not so high, one might find it amusing how hard the Times tries to stanch the stench of that long-dead red herring about Donald Trump colluding with the Russians and blaming his victory on – inter alia – Russian “hacking”. But the stakes remain high, and too many people are still suffering from Mad-Maddow/Trump Derangement Syndrome, with the attendant dangers of adding to the current high tension with nuclear-armed Russia.

  In Friday’s article, Times authors Charlie Savage and Adam Goldman bend over backwards in an attempt to “make the worse case the better.”

  Socrates was accused (falsely) of precisely that, but there is no sign yet that anyone at the Times is about to take the hemlock.

  In contrast, The NY Times pettifoggery is absent from today’s Wall Street Journal authoritative piece by the Journal’s Editorial Board, titled “Durham Cracks the Russia Case.”

  Referring to the Sussmann indictment, the Journal editors write:

  “This is no ho-hum case of deception. The special counsel’s 27-page indictment is full of new, and damning, details that underscore how the Russian collusion tale was concocted and peddled by the Clinton campaign. …

  “Sussmann is accused of making false statements to then-FBI general counsel James Baker in a Sept. 19, 2016 meeting when he presented documents purporting to show secret internet communications between the Trump Organization and Russia-based Alfa Bank.

  “The indictment adds new details about the sweeping nature of the Clinton campaign’s effort to falsely tag Donald Trump as in bed with the Russians. The document alleges this extended far beyond the opportunity-research firm Fusion GPS and the fake “dossier” produced by Christopher Steele – though both played a role in the broader effort.”

  “Campaign Lawyer-1” mentioned in the indictment has been identified as former Perkins Coie lawyer/Clinton campaign general counsel, Marc Elias. The indictment makes clear that Elias brought up to date Clinton campaign manager Robby Mook, communications director Jennifer Palmieri and foreign policy adviser (now Biden’s national security adviser) Jake Sullivan a few days before Sussmann is said to have lied to the FBI. The latest news is that more indictments may be in the offing.

  This week came additional information suggesting that Durham has still more up his sleeve. A new set of subpoenas is reported to have been served on Perkins Coie after Sussmann was charged.

  So it seems possible – just possible – that special counsel John Durham may be allowed to proceed to full-scale prosecution – this time. His record, however, counsels caution. He had the goods on CIA torturers, for example, and sneaked meekly off when he was told to stop. And so it goes.

  Tyler Durden
  Wed, 10/06/2021 – 22:50

• Hollywood Stagehands Vote Overwhelmingly For Authorization To Strike
  Hollywood Stagehands Vote Overwhelmingly For Authorization To Strike

  Members of Hollywood’s International Alliance of Theatrical Stage Employees have authorized its union to strike over the weekend.

  The decision comes after “months of failed negotiations” between the union and the Alliance of Motion Picture and Television Producers, CNBC reported this week.

  Matthew Loeb, president of IATSE, said in a statement Monday: “The members have spoken loud and clear. This vote is about the quality of life as well as the health and safety of those who work in the film and television industry. Our people have basic human needs like time for meal breaks, adequate sleep, and a weekend. For those at the bottom of the pay scale, they deserve nothing less than a living wage.″

  This means a strike is now on the table if talks break down further. It marks the first time the IATSE has authorized a strike, with over 90% of eligible ballots cast and about 98% of voters authorizing the strike. 

  “We deeply value our IATSE crew members and are committed to working with them to avoid shutting down the industry at such a pivotal time, particularly since the industry is still recovering from the economic fallout from the COVID-19 pandemic,” the AMPTP responded.

  Recall, we wrote days ago about how negotiations were breaking down. 

  

  The union has a membership of about 60,000, most of whom are based in Los Angeles. They are threatening to walk off the job, should the union’s leadership – which is countrywide – decide. This means that a strike would affect studios across the U.S., not just in Los Angeles. 

  In total, 1 million jobs “directly tied to film and TV production” could be affected.

  Alongside of a historic labor shortage coming back from the pandemic, production has been on the rise as the studio arms of companies like Netflix and Amazon look to build out their content. Both Netflix and Walt Disney have told shareholders that the lack of new content has been a headwind for streaming sign-ups. 

  The Alliance of Motion Picture and Television Producers says it “put forth a deal-closing, comprehensive proposal that meaningfully addresses the IATSE’s key bargaining issues.” 

  But the union isn’t amused. It wrote to its members: “As you may be aware, negotiations with the major producers have reached a standstill. They refused to reply to our last proposal.”

  The union is pushing for rest and meal breaks, as well as higher pay for its lowest earners, some of whom only make $15 per hour. 

  Tyler Durden
  Wed, 10/06/2021 – 22:30

• The Deep Politics Of Vaccine Mandates
  The Deep Politics Of Vaccine Mandates

  Authored by Charles Lipson via RealClearPolitics.com,

  The debate over President Biden’s vaccine mandates has focused, understandably, on the tradeoff between individual rights to make medical choices and the potential harm the unvaccinated pose to others.

  That tradeoff is unavoidable.

  It is simply wrong for Biden to say, “It’s not about freedom.” It is.

  It is equally wrong for some Republican governors to say it is all about freedom.

  It’s also about the external effects of each person’s choice. To pretend that tradeoff doesn’t exist is demagoguery. But then, so is most American politics these days.

  

  What’s missing or underappreciated in this debate?

  The most important thing is that the Biden administration’s “mandate approach” is standard-issue progressivism. The pushback is equally standard. The mandates exemplify a dispute that has been at the heart of American politics for over a century, ever since Woodrow Wilson formulated it as a professor and then president. That agenda emphasizes deference to

  • Experts, not elected politicians,

  • Rational bureaucratic procedures,

  • Centralized power in the nation’s capital, not in the federal states, and

  • A modern, “living constitution,” which replaces the “old” Constitution of 1787 and severs the restraints it imposed on government power.

  Implemented over several decades, this progressive agenda has gradually become a fait accompli, without ever formally amending the Constitution. The bureaucracies began their massive growth after World War II and especially after Lyndon Johnson’s Great Society initiatives of the mid-1960s (continued, with equal vigor, by Richard Nixon).

  The judicial shackles were broken earlier, when Franklin Roosevelt threatened to pack the Supreme Court in 1937. Although FDR never followed through, his threat did the trick. The justices yielded to his pressure and began rubber-stamping New Deal programs that, until then, they had rejected as unconstitutional. Gradually, the older judges retired and Roosevelt picked friendly replacements. These judicial issues have reemerged now that progressives no longer dominate the Supreme Court. They are again threatening to pack the court and demanding that today’s justices stick with precedents set by their progressive predecessors (“stare decisis”).

  The pushback against vaccine mandates is partly a debate about these progressive issues concerning the president’s authority and constitutional strictures.

  Mandate opponents say the federal government lacks the constitutional authority to impose these requirements, at least beyond its own workforce. They add that, if the president does wish to impose new rules, he and his executive agencies must go through the normal regulatory process. That process is slow — indeed, too slow to cope with an emergency.

  Biden himself seemed to recognize these constitutional limitations before deciding to ignore them — the second time he’s done so in his brief presidency. That’s a very troubling development, even if the courts overrule his decisions.

  The first time was his fiat decision to extend the moratorium on rent payments, which had been imposed during the worst days of the pandemic. Biden explicitly stated his unconstitutional rationale: It would take the courts time to rule against him and, until then, he could implement the policy. Of course, he also had a political rationale: to placate his party’s far left, which had mobilized over this issue.

  Biden’s extension on the rent moratorium had a second, troubling dimension. It was promulgated by the Centers for Disease Control as a “public health issue.” That was a transparently false rationale in summer 2021 and dealt with housing issues far beyond the CDC’s expertise. The unintended consequence of the moratorium extension, beyond bankrupting small landlords, is to undermine the basic rationale for all progressive rulemaking: that the rules are being made by experts who know much more about their specialized area than do ordinary citizens or their elected representatives. What, pray tell, do experts on infectious disease know about the complexities of the U.S. housing market? Zero.

  Progressive politics depends on public acceptance that experts really know what’s best and that their decisions will produce good outcomes. But trust in experts has collapsed alongside trust in all American institutions over the past half-century. The turning point was the disastrous war in Vietnam, advocated by LBJ’s Harvard advisers and the Whiz Kids in Robert McNamara’s Pentagon. Their failure was captured in the title of David Halberstam’s 1973 bestseller, “The Best and the Brightest.” The calamitous Afghan withdrawal underscored Halberstam’s sarcastic point.

  So did the failure of so many Great Society programs, begun with such hope and fanfare. The most painful experience was “urban renewal,” especially the massive program of building high-rise towers for welfare recipients. Before those towers were torn down, they had destroyed two or three generations of families. Part of the tragedy was that, like so many federal programs, the towers were built everywhere at once. If they had been tried out in a few cities, the problems would have been obvious, the failures remedied or the program abandoned. But Washington almost never does that. Congress funds and the bureaucracies implement mammoth, nationwide programs with no opportunity for feedback or mid-course corrections.

  As public mistrust of institutions grew, a few institutions initially escaped the scorn. The military, for instance, was highly regarded until recently. It will take a heavy blow from the Afghan failure and the new, high-priority program of ideological training for troops. Government health officials were also highly regarded, at least until the botched rollout of Obamacare and the scandals at Veterans’ Affairs hospitals. Still, the public trusted the CDC and Dr. Anthony Fauci at the beginning of the pandemic. They trust them far less today, thanks to false and misleading statements, secrecy about funding the Wuhan virology lab, the absence of clear guidance on many issues, and blunt regulations that ignore important variations, such as natural immunity.

  The effect of this growing mistrust was painfully apparent in President Biden’s mandate announcement. He didn’t rely on persuasion or trust in federal experts. He hectored, demonized, shamed, politicized, and threatened. That has become his routine, along with his refusal to answer the public’s pressing questions.

  Biden’s political problem is that he faces real resistance from voters if he can’t solve the COVID problem, both because it is so serious and because he ran on being able to handle it better than Trump. Since Biden’s speech last week spent a lot of time attacking Republican governors, it was also an exercise in preemptive blame-shifting, in case the mandates fail.

  His approach makes political sense, but it has at least two problems beyond the constitutional questions. One is that it politicizes vaccinations, which could have unintended consequences. Among the most obvious, it shifts the issue away from doctors and public health professionals and into the contentious political arena. Another is that it raises questions about the administration’s hypocrisy. Why do all federal employees, including those with natural immunity, need to get vaccinations but not the illegal immigrants arriving from Central America? That’s clearly a political decision, not a medical one, and it undermines the legitimacy of Biden’s whole approach, which stresses public health and medical experts.

  The president’s speech had another major feature: It relied on vitriolic “wedge politics.” But Biden was elected partly because he promised to end the vitriol and divisiveness of the Trump years. He hasn’t done that. The poster child for his tendentious governing strategy is the second, $3.5 trillion “human infrastructure” bill. Not only does it have no Republican support, it has met serious resistance from centrist Democrats. On his signature spending bills, like his vaccine mandates, Biden is pursuing a unilateral, aggressively partisan approach.

  There’s no question the delta variant poses serious health risks and that, in general, vaccinations help both the individuals who get the jab and everyone around them. But there are serious questions about whether sticks or carrots are the best way to increase vaccination rates; how to convince people to get the vaccine now that trust in public-health experts has eroded; whether politicizing the issue is self-defeating; and what authority Washington has to impose mandates beyond its own workforce.

  The questions about the federal government’s authority — its effectiveness, its constitutionality, and its potential overreach — are among the most important in American politics. They have been for a century, and they won’t be resolved anytime soon.

  Tyler Durden
  Wed, 10/06/2021 – 22:10

• White House Discloses Number Of Nukes In US Stockpile For 1st Time In Years
  White House Discloses Number Of Nukes In US Stockpile For 1st Time In Years

  For the first time in years, and in a stark reversal from the Trump presidency – who had ordered a blackout of the data during his administration – the Biden White House has made public the number of nuclear weapons in the US stockpile.

  Citing the importance of “increasing transparency” the State Department said in a Tuesday official report that it is “releasing newly declassified information on the U.S. nuclear weapons stockpile to update the information previously released in September 2017.” The report indicated 3,750 nuclear warheads currently in America’s stockpile, and among these 2,000 waiting to be dismantled.

  

  Biden and Trump had been clearly divided on the issue during the 2020 presidential campaign, with Biden at the time vowing that “administration will work to maintain a strong, credible deterrent while reducing our reliance and excessive expenditure on nuclear weapons.” Trump for his part had greatly ratcheted up spending on the Defense and Energy departments to sustain and modernize the nuclear arsenal, having last requested $44.5 billion for fiscal year 2021.

  According to the newly released official count by the State Dept:

  As of September 2020, the U.S. stockpile of nuclear warheads consisted of 3,750 warheads. This number represents an approximate 88 percent reduction in the stockpile from its maximum (31,255) at the end of fiscal year 1967, and an approximate 83 percent reduction from its level (22,217) when the Berlin Wall fell in late 1989. The below figure shows the U.S. nuclear weapons stockpile from 1945 through September 30, 2020.

  The bulk of this dismantling of non-strategic nuclear weapons occurred since 1991 – which correspond to the collapse of the Soviet Union – with the stockpile of nuclear weapons declining over 90% since the end of the Cold War.

  

  This involved the US dismantling 11,683 nuclear warheads from 1994 to 2020, and an additional 711 nuclear warheads since September 30, 2017, according to the numbers.

  The official report gave as rationale for making the numbers public, including to US ‘enemies’ and rivals like Russia and China, the following: “Increasing the transparency of states’ nuclear stockpiles is important to nonproliferation and disarmament efforts, including commitments under the Nuclear Non-Proliferation Treaty, and efforts to address all types of nuclear weapons, including deployed and non-deployed, and strategic and non-strategic,” the State Department said.

  Tyler Durden
  Wed, 10/06/2021 – 21:50

• Biden Tells Japan's New PM That US Will Defend Senkaku Islands From China
  Biden Tells Japan’s New PM That US Will Defend Senkaku Islands From China

  Authored by Dave DeCamp via AntiWar.com, 

  President Biden told Japan’s new Prime Minister Fumio Kishida in a phone call on Monday that the US would defend the Senkaku Islands in the event of a Chinese attack.

  The Senkakus, known as the Diayous in China, are a group of uninhabited islands in the East China Sea. They are currently controlled by Japan and are also claimed by China and Taiwan.

  

  In a statement on the call, Japan’s Foreign Ministry said that Biden had “reaffirmed the US’s unwavering commitment to the defense of Japan including the application of Article V of the Japan-US Security Treaty to the Senkaku Islands.”

  Article V is the section of the US-Japan Security Treaty that outlines the mutual defense agreement between the two countries. Kishida told reporters on Tuesday that President Biden had given “strong remarks on the US commitment to defend Japan, including Article V.”

  The Senkaku Islands have turned into a potential flashpoint for a conflict between the US and China since the Obama administration when the US first affirmed it would come to Japan’s defense if the islands were attacked.

  The Biden administration first made the pledge that it would defend the Senkakus to Japan back in January when Secretary of Defense Lloyd Austin first spoke with his Japanese counterpart.

  

  Kishida said that he and Biden agreed to work together on “challenges facing neighboring regions such as China and North Korea.” The Japanese leader said he wants to strengthen military ties with the US as well as other “democracies” in Asia and Europe.

  Tyler Durden
  Wed, 10/06/2021 – 21:30

• "Osama Bin Laden Is Probably More Popular" – NY Dems Scoff As De Blasio Reportedly Explores Run For Governor
  “Osama Bin Laden Is Probably More Popular” – NY Dems Scoff As De Blasio Reportedly Explores Run For Governor

  Whether Democrats or Republicans, there’s one political question that most Americans can agree on: Mayor Bill de Blasio is leaving NYC in much worse shape than he found it eight years ago.

  Yet, despite facing near-universal criticism, and polling at under 1% nationally during his presidential campaign (which became the butt of endless jokes), political reporters in New York State are sounding the alarm Wednesday morning that the mayor best known for surging crime rates and economic inequality (and eating his pizza with a fork and knife) is exploring a run for governor of the Empire State.

  

  Earlier this morning, the NYT‘s Katie Glueck reported on Twitter that she had spoken with at least three people close to the mayor who say he’s been holding talks about a potential gubernatorial run, while sounding out some former aides about their potential interest in joining his campaign.

  News: Bill de Blasio has begun to tell people that he plans to run for governor of New York, per 3 people w/direct knowledge of convos. He has also sounded out trusted former aides about their interest in a potential campaign.
  W/ ⁦@danarubinstein⁩ https://t.co/laaROU4LYm

  — Katie Glueck (@katieglueck) October 6, 2021

  https://platform.twitter.com/widgets.js

  Shortly after breaking the news, Glueck shared some amusing comments about de Blasio’s prospects, shared by fellow Dems who clearly weren’t concerned about protecting their identities. “Osama bin Laden is probably more popular in Suffolk County than Bill de Blasio,” said said Rich Schaffer, the chairman of the county’s Democratic committee, who has already endorsed sitting governor Kathy Hochul (the state’s first female governor) in her bid for a full term.

  turns out some NY Dems have some thoughts on this.

  “Osama bin Laden is probably more popular in Suffolk County than Bill de Blasio,” said the chairman of the county’s Democratic committee.https://t.co/laaROUmnmW

  — Katie Glueck (@katieglueck) October 6, 2021

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  As the NYT reminds us, there was one memorable moment during the race for the Democratic Primary for mayor where the candidates were asked during a debate whether they would accept de Blasio’s endorsement. Only Andrew Yang raised his hand (though there was some speculation that de Blasio was ‘secretly backing’ Eric Adams, the primary’s winner, who will very likely be elected to succeed de Blasio at Gracie Mansion).

  He’s also already facing significant competition, and not just from Hochul: New York AG Letitia James, who burnished her rep by leading the investigation into former Gov. Andrew Cuomo’s sexual transgressions, is believed to be running. So is Jumaane Williams, a progressive Brooklyn Democrat and the city’s current public advocate (a job that once belonged to de Blasio), who is popular with NYC’s professional-class progressives. Should James win the governorship, she would be the first black woman elected governor in any state in the country.

  What does de Blasio have to say about that? Per the NYT:

  Asked whether New York should have another white male governor – Ms. Hochul is the first woman to lead the state; Ms. James and Mr. Williams are Black, and Ms. James could be the first Black woman to govern any state in the country – Mr. de Blasio appeared to brush aside the question last week.

  “We need people of all backgrounds to be involved in government,” he said.

  We’re starting to suspect that even de Blasio doesn’t support a de Blasio candidacy. But as another NY political reporter pointed out, de Blasio doesn’t need to win the governorship to benefit from his campaign. The game is a popular one in the US: run to build up a war chest, then use that war chest not to campaign, but to influence other politicians (because that money can then be given away).

  Like now ex-Democrat Andrew Yang, de Blasio doesn’t have to win to gain much. He can raise a campaign chest and then use that to leverage influence. More or less what the Manhattan DA investigated him for when de Blasio brokered pass-through contributions via county committees.

  — Alyssa Katz (@alykatzz) October 6, 2021

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  But we thought Democrats were supposed to be the ‘principled’ ones?

  Tyler Durden
  Wed, 10/06/2021 – 21:10

• Dry Bulk Shipping Rates Hit $80,000 Per Day As Buyers Scramble For Coal
  Dry Bulk Shipping Rates Hit $80,000 Per Day As Buyers Scramble For Coal

  By Greg Miller of FreightWaves,

  Yet another sign of stress for energy supplies and global supply chains: Spot rates for large dry cargo ships just topped $80,000 per day for the first time since 2009, and freight derivatives for the fourth quarter — a period when rates for these vessels normally pull back — just spiked.

  

  Not long ago, it was a different story. On Sept. 20, headlines were dominated by Chinese property developer Evergrande and its impending collapse; fallout to construction and steel demand would assumedly hit future Chinese buying of commodities carried on dry cargo vessels.

  Dry bulk stocks plunged. While spot rates for Capesizes (bulkers with capacity of around 180,000 deadweight tons) held firm at $53,800 per day, forward freight agreement (FFA) derivatives did not. Amid what one broker called “mayhem,” the Q4 FFA contract sank to $36,750 per day, with the December contract all the way down to $29,500. The FFA market signaled: Party over.

  Two weeks later, it has a new message: Party not over. Festivities shall continue until year-end.

  

  As of Tuesday, spot Capesize rates were up to $80,877 per day, based on the Baltic Exchange 5TC index. That’s 50% higher than two weeks ago when sentiment briefly dimmed.

  Fears on Chinese property development still loom large, but now there’s an even bigger spotlight on Chinese factory blackouts due to electricity rationing and dwindling coal supplies in both China and India.

  More coal to keep the power on in the winter should equal higher bulker rates.

  

  And as with container shipping, rampant port congestion is slashing effective ship supply, adding more support to rates. Braemar ACM Shipbroking estimates that 5.7% of the entire global dry bulk fleet is now waiting offshore of China.

  FFAs have shot up even faster than physical rates, accelerating their rise on Tuesday. “There are few superlatives appropriate for the price moves,” wrote brokerage Clarksons regarding Tuesday’s FFA trading, citing “monstrous gains.”

  The Q4 Capesize FFA closed at $61,500 per day, up 67% from levels on Sept. 20, with October contracts up 78%, November 59% and December 63% over the same two-week stretch.

  Dry bulk shipping stocks rallied. The Breakwave Dry Bulk Shipping ETF, an exchange-traded fund that buys FFAs, rose 9% Tuesday and hit its highest level since its debut in 2018.

  Shares of Navios Holdings jumped 16%. Shares of Diana Shipping rose 9% and Eagle Bulk 7%. Golden Ocean, Safe Bulkers and Star Bulk gained 6%, and Genco Shipping 5%.

  Tyler Durden
  Wed, 10/06/2021 – 20:50

• China Manipulating Google, Bing Search Results To Advance Covid-19 Conspiracy Theories
  China Manipulating Google, Bing Search Results To Advance Covid-19 Conspiracy Theories

  China has been taking advantage of a ‘data void’ in order to flood social media platforms with Chinese-backed conspiracy theories regarding the origins of Covid-19, which in turn affects algorithmic results from popular search engines such as Google and Bing, according to the Washington Post, citing a Tuesday report by the Alliance for Securing Democracy (ASD).

  The Chinese posts have almost exclusively focused on a theory that Covid-19 was created in a lab at Fort Detrick, home to the US Army’s Medical Research Institute of Infectious Diseases (USAMRIID) – which will ring a bell for anyone who read The Hot Zone, and was then purposefully spread throughout Wuhan, China during the October 2019 Military World Games.

  

  By saturating social media platforms with this theory, it now crops up when people search for other things via popular search engines.

  What’s particularly noteworthy about the campaign, researchers said, is that the officials have tapped into a highly effective means for spreading misinformation and disinformation: filling the Internet with misleading content on issues where there’s a dearth of reliable information. The result is that when users search for these more obscure topics — when they type “Fort Detrick” into Google or Bing — they are more likely to see Chinese-backed conspiracy theories.

  …

  According to the report, news search results for Fort Detrick across Google, YouTube and Bing were “dominated” by state-run Chinese media such as CGTN and the Global Times at various times since May. Researchers called the outlets “central to Beijing’s information operations.” -WaPo

  “It gives an advantage to those who are trying to promote this conspiracy because they continue to publish on it over and over and over and over, so that when someone who’s not familiar with the term just Googles it … you tend to get the conspiracy theorist’s point of view,” said Bret Schafer, a media and digital disinformation fellow at ASD who co-authored the report.

  China’s disinformation campaign conceals their own involvement

  We know from government contracts, FOIA records, and leaked emails that the US government was conducting risky gain-of-function research on US soil until former President Obama banned it in 2014 over ethical questions raised by the scientific community. The ‘research’ included manipulating bat Covid to be more transmissible to humans. Instead, the research was shifted overseas to the Wuhan Institute of Virology and laundered through New York nonprofit EcoHealth Alliance – whose CEO Peter Daszak secured lucrative contracts to study and manipulate bat coronaviruses in Wuhan China four months before Obama’s ban.

  The first $666,442 installment of EcoHealth’s $3.7 million NIH grant was paid in June 2014, with similar annual payments through May 2019 under the “Understanding The Risk Of Bat Coronavirus Emergence” project.

  

  Then, in 2017, a subagency of the National Institutes of Health (NIH) – headed by Dr. Anthony Fauci – resumed funding a controversial grant to genetically modify bat coronaviruses in Wuhan, China without the approval of a government oversight body.

  Notably, the WIV “had openly participated in gain-of-function research in partnership with U.S. universities and institutions” for years under the leadership of Dr. Shi ‘Batwoman’ Zhengli, according to the Washington Post‘s Josh Rogin.

  

  In 2017 the “Potential Pandemic Pathogens Control and Oversight (P3CO) Framework was formed within the Department of Health and Human Services (HHS),” which was tasked with evaluating the risks involved with enhancing dangerous pathogens, as well as whether proper safeguards are in place, before a grant into ‘gain-of-function’ or similarly risky research can be issued. Fauci’s National Institute of Allergy and Infectious Diseases (NIAID) – the subagency which funded EcoHealth – didn’t think the grant needed review, and resumed their relationship with Daszak without flagging it for the P3CO committee, an NIH spokesperson told the Daily Caller.

  We also know (thanks to a FOIA lawsuit by The Intercept) that Daszak wanted to release ‘Chimeric Covid Spike Proteins‘ Into Bat Populations Using ‘Skin-Penetrating Nanoparticles,’ only to be denied by DARPA on the grounds that it was too risky.

  

  The bid was submitted by Daszak, who was hoping to use genetic engineering to cobble “human-specific cleavage sites” onto bat Covid ‘which would make it easier for the virus to enter human cells’ – a method which would coincidentally answer a longstanding question among the scientific community as to how SARS-CoV-2 evolved to become so infectious to humans.

  

  

  Daszak’s proposal also included plans to commingle high-risk natural coronaviruses strains with more infectious, yet less deadly versions. His ‘bat team’ of researchers included Dr. Shi Zhengli from the Wuhan Institute of Virology, as well as US researchers from the University of North Carolina and the US Geological Survey National Wildlife Health Center.

  “This is a roadmap to the high-risk research that could have led to the current pandemic,” said Gary Ruskin, executive director of U.S. Right To Know, a group that has been investigating the origins of Covid-19 (via The Intercept).

  And so – China’s Fort Detrick propaganda completely ignores the international collaboration between the US NIH and Wuhan scientists.

  Further reading:

  • Fauci In 2012: Gain-Of-Function Research ‘Worth Risk Of Lab Accident Sparking Pandemic’

  • Fauci-Funded EcoHealth Refuses To Give Wuhan Documents To Congress

  • ‘EcoHealth Alliance’ Orchestrated Key Scientists’ Statement On “Natural Origin” Of SARS-CoV-2

  • Video Of Live Bats In Wuhan Lab Reveals Daszak Lied In Now-Deleted Tweet

  • “Sadly, It Starts With Two Lies”: Peter Daszak’s Latest Wuhan Screed Shredded

  Tyler Durden
  Wed, 10/06/2021 – 20:30

• Would Americans Benefit From A Government Default?
  Would Americans Benefit From A Government Default?

  Authored by Ryan McMaken via The Mises Institute,

  The Biden administration’s rhetoric on the debt ceiling has become nothing short of apocalyptic.

  

  The Treasury Department has announced that a failure to increase the debt ceiling “would have catastrophic economic consequences” and would, as NBC news claims, constitute a “doomsday scenario” that would “spark a financial crisis and plunge the economy into recession.”

  Apparently, the memo went out to the debt peddlers that they are not to hold back when sowing maximum fear over the thought that the US might government might pause its incessant debt accumulation even for a few days. 

  The reality, however, is quite something else.  While a failure to raise the debt ceiling would no doubt cause short-term disruptions, the fact is the medium- and long-term effects would prove beneficial by reining in the regime’s chokehold on the American economy and financial system. 

  This is explained in a recent column by Peter St. Onge in which he examines just how much of a problem default really is:

  In 2021 the US government plans to spend $6.8 trillion. Of which about half is borrowed — $3 trillion. So if they can’t raise the ceiling, they’d have to cut that $3 trillion.

  Mainstream media, naturally, claims this is the end of the world. CBS estimates it would cost 6 million jobs and $15 trillion in lost wealth—comparable to the 2008 crisis, which was also caused by the federal government. CNN, more colorfully, claims cascading job losses and “a near-freeze in credit markets.” They conclude, falsely, that “No one would be spared.”

  Considering the source, we can guess these predictions are overblown. So what would happen?

  Well, $3 trillion is a lot of money—roughly 15% of America’s GDP. But we have to remember where that $3 trillion came from. The government, after all, doesn’t actually create anything, every dollar it spends came out of somebody else’s pocket. Whose pocket? Part of the $3 trillion was bid away from private borrowers like businesses, and the rest was siphoned from peoples’ savings by the Federal Reserve creating new money.

  This means that, yes, GDP would decline sharply. But wealth would actually grow, perhaps substantially. The businesses would be able to buy things they need, while the savers keep their money that was doing useful things like paying their retirement.

  So GDP drops, wealth soars.

  Now, there will be near-term pain, simply because the GDP drop comes before the private borrowing ramps up, while those retirement savings are no longer being siphoned to pay for parties at strip clubs or, say, another trillion for farting cows.

  So, yes, it will be a sharp drop in GDP. But so long as government stays out of the way, choosing the prudent 1920 response of doing nothing, the recovery will be very rapid. Why would they do nothing? After all, governments don’t like staying out of the way these days. Because a government that suddenly loses half it’s budget is going to find a lot of things not worth doing. Given a choice between defunding government workers’ pensions or defunding economy-crushing Green New Deals, governments will choose their own.

  So that’s short-term: pain, but less than it seems. And that’s where the magic begins. Because ending deficits fundamentally reduces governments’ long-term ability to prey on the people’s wealth.

  This is because debt and money printers are much less obvious than taxes, which are painful and make more enemies. So a default becomes a “back door” to move government back towards its traditional “parasite” role rather than the “predator” role it’s taken on since Nixon unleashed the money printers. Especially since Covid-19, when lockdowns were bought with fresh money and deficits. I wrote about this predatory evolution a few months ago, but the bottom line is government default is a tremendous investment in our future prosperity.

  Ultimately, when a media pundit or Janet Yellen predicts the end of the world if debt doesn’t continue to skyrocket ever upward, they are simply calling for a continuation of the status quo.

  And what does the status quo mean? It means a world in which the US government continues to spent trillions of dollars it doesn’t have, made possible through monetizing massive amounts of debt and forcing taxpayers to devote ever more of their own wealth and income to paying off an ever-more-huge chunk of interest. 

  It also means more government spending, which—regardless of whether it’s funded by debt or by taxes—causes malinvestment and, through the redistribution of wealth, rewards the politically powerful at the expense of everyone else. In other words, its keeps Pentagon generals and Big Pharma executives living in luxury while the taxpayers are lectured about the need to “pay America’s bills.” 

  Rather, as Mark Thornton noted in  2011, the right thing to do is lower the debt ceiling. Thornton explains the many benefits, ranging from effective deregulation to freeing up capital for the private sector: 

  If Congress passed legislation that systematically reduced the debt ceiling over time, the economy could be rebuilt on a solid foundation. Entrepreneurs in the productive sectors would realize that an ever-increasing proportion of resources (land, labor, and capital) would be at their disposal, while companies that capitalized on the federal budget would have an ever-declining share of such resources.

  Congress would have to cut the pay and benefits of its employees (FDR cut them by 25 percent in the depths of the Great Depression) as well as the number of such employees. Real wage rates would decline, allowing entrepreneurs to hire more employees to produce consumer-valued goods.

  Congress would have to cut back on its far-flung regulatory operations, which are in fact one of the biggest drags on the economy due to the burden and uncertainty that Obama and Congress have created in terms of healthcare, financial-market, and environmental regulations. A recent study by the Phoenix Center found that even a small reduction of 5 percent, or $2.8 billion, in the federal regulatory budget would result in about $75 billion in increased private-sector GDP each year and the addition of 1.2 million jobs annually. Eliminating the job of even a single regulator grows the American economy by $6.2 million and creates nearly 100 private-sector jobs annually.

  Under a reduced debt ceiling, the federal government would also have to sell off some of its resources. It has tens of thousands of buildings that are no longer in use and tens of thousands of buildings that are significantly underused—about 75,000 buildings in total. It also controls over 400 million acres of land, or over 20 percent of all land outside of Alaska, which is almost wholly owned by the government. There is also the Strategic Petroleum Reserve and many other assets that could be sold off to cover short-term budget shortfalls.

  Of course, reducing the debt ceiling would force the government to stop borrowing so much money from credit markets. This would leave significantly more credit available for the private sector. The shortage of capital is one of the most often cited reasons for the failure of the economy to recover.

  Lowering the debt ceiling would force federal-government budget cutting on a large scale, and this would free up resources (labor, land, and capital) and force a cutback in the federal government’s regulatory apparatus. This would put Americans back to work producing consumer-valued goods.

  Unfortunately, the public has been fed a steady diet of rhetoric in which any reduction in government spending will bring economic Armageddon. But it’s all based on economic myths, and Thornton concludes:

  Passing an increase in the debt ceiling merely perpetuates the myth that there is any ceiling or control or limit on the government’s ability to waste resources in the short run and its willingness to pass the burden of this squander onto future generations.

  Tyler Durden
  Wed, 10/06/2021 – 20:10

• Top Secret CIA Cable Admits "Dozens" Of Agents Abroad Are Being Captured, Killed
  Top Secret CIA Cable Admits “Dozens” Of Agents Abroad Are Being Captured, Killed

  It was revealed this week in a bombshell New York Times report that the CIA has raised the alarm with all its overseas stations and officers that an unusually high number of US informants are being captured and executed abroad. There are “dozens” of such instances, according to an agency memo.

  The report is an incredibly rare instance of the media getting hold of a fresh, very recent highly classified memo that’s also sure to be embarrassing for the agency. “The message, in an unusual top-secret cable, said that the CIA’s counterintelligence mission center had looked at dozens of cases in the last several years involving foreign informants who had been killed, arrested or most likely compromised,” the NYT writes. 

  “Although brief, the cable laid out the specific number of agents executed by rival intelligence agencies — a closely held detail that counterintelligence officials typically do not share in such cables.”

  

  The cable warned its officers across the globe against put “mission over security” – which it strongly suggested was a key cause that’s leading to poor tradecraft, putting agents at risk. “Agents” in this context means foreign and local assets recruited by the CIA to spy in their home countries, a dangerous endeavor which puts all the risk on the foreign person (and their family) who feeds sensitive information to their CIA handler. 

  The cable also cited the growing capabilities and awareness on the part of foreign and rival agencies of US intelligence’s methods. According to the NY Times synopsis of what’s in the top secret memo:

  The cable highlighted the struggle the spy agency is having as it works to recruit spies around the world in difficult operating environments. In recent years, adversarial intelligence services in countries such as Russia, China, Iran and Pakistan have been hunting down the CIA’s sources and in some cases turning them into double agents.

  Especially the growing biometric technology deployed by China is seen as a serious problem for maintaining local assets’ cover.

  The report continues by spelling out, “The large number of compromised informants in recent years also demonstrated the growing prowess of other countries in employing innovations like biometric scans, facial recognition, artificial intelligence and hacking tools to track the movements of CIA officers in order to discover their sources.”

  Pakistani intelligence very effective at hunting down CIA sources and flipping them into double agents, according to this must-read NYT reporting on a secret agency cable.

  https://t.co/X0zYIsVw7Z

  — Rupert Stone (@RupertStone83) October 5, 2021

  https://platform.twitter.com/widgets.js

  Though this wasn’t addressed in the cable, there’s also the possibility of leaks and the question of double-agents gaining compromising material, further exposing other assets. 

  The NY Times report further quotes former CIA operatives who described a somewhat flawed internal system and bureaucracy that’s set up to reward ambition but not recognize when officers prudently exercise restraint. Promotions are often handed out to operatives who recruit the most agents abroad. 

  One former CIA operative, Douglas London, told The Times, “No one at the end of the day is being held responsible when things go south with an agent.” But of course in general it remains that few if anyone are ever held accountable for failures when it comes to Washington’s massive national security state bureaucracy. 

  Tyler Durden
  Wed, 10/06/2021 – 19:50

• DOJ Announces Launch Of National Crypto Enforcement Team As FDIC Mulls Insuring Stablecoins
  DOJ Announces Launch Of National Crypto Enforcement Team As FDIC Mulls Insuring Stablecoins

  One of the catalysts behind crypto’s impressive surge in the past week emerged last Friday, when the WSJ reported that the Biden admin was seeking to regulate stablecoin issuers as banks and was “considering ways to impose bank-like regulation on the cryptocurrency companies that issue stablecoins, including prodding the firms to register as banks.” Coming at the same time as both Jerome Powell and Gary Gensler said they did not seek to bank crypto, the news was confirmation that the regulatory apparatus was seeking to integrate the crypto space within the confines of the state – especially since taxes on cryptos are expected to generate tens of billions in government revenues to the Democrats “deficit neutral” multi-trillion spending plan. In short, this was very good news for digital tokens as it eliminated the worst possible outcome: a China-style terminal crackdown on the sector.

  Today, we got more good news when Cointelegraph reported that an official from the Office of the Attorney General said the United States government is going to take a more active role in enforcement action against actors using cryptocurrencies for money laundering and other cybercrimes. In effect, the DOJ is already policing cryptos as if they were securities, providing an implicit security to investors even though the formal regulatory treatment of cryptos remains nebulous.

  Speaking at the Aspen Institute Cyber Summit on Wednesday, Deputy Attorney General Lisa Monaco said the Justice Department had launched the National Cryptocurrency Enforcement Team, who aim is to target platforms “that help criminals launder or hide their criminal proceeds.” Monaco cited her office’s work against Darknet-based Bitcoin (BTC) mixing service Helix in August but said the U.S. government should be doing more.

  “We want to strengthen our capacity to dismantle the financial ecosystem that enables these criminal actors to flourish and — quite frankly — to profit from what they’re doing,” said Monaco. “We’re going to do that by drawing on our cyber experts and cyber prosecutors and money-laundering experts.”

  Monaco, who has often been a central figure in the U.S. government’s response to major ransomware and cyberattacks involving cryptocurrency payments, added that “cryptocurrency exchanges want to be the banks of the future. We need to make sure that folks can have confidence when they’re using these systems, and we need to make sure we’re poised to root out abuse that can take hold on them.” She should know: she was part of a task force that “found and recaptured” millions of dollars worth of Bitcoin paid to the allegedly Russia-based DarkSide hackers following an attack on the Colonial Pipeline system in May.

  What Monaco didn’t say is that by accelerating enforcement actions, the DOJ was in effect providing confidence to millions of retail investors that someone was looking after their interest in a market which the government had for years depicted as the “wild wild west.” Needless to say, such as intervention will only increase retail participation.

  Meanwhile, in a clear indication that the government is already planning how to capitalize, and not penalize, the incipient stablecoin industry, the Federal Deposit Insurance Corp, or FDIC, a key U.S. banking regulator, is reportedly studying whether certain stablecoins might be eligible for its coverage, Coindesk reported citing five people familiar with the agency’s thinking said.

  The agency is trying to analyze what so-called pass-through FDIC insurance might look like for the reserves that stablecoin issuers hold at banks, the sources said. Such coverage would insure holders of the tokens against losses up to $250,000 if the bank holding the collateral were to fail.

  The FDIC is also looking at what regular, direct deposit insurance might look like for banks that want to issue stablecoins, people familiar with the discussions said.

  “This is all part of a process by which they are trying to bring stablecoins into the banking system in a responsible manner,” one insider said. “It depends on what’s backing the stablecoins. If it’s backed by reserves at the Fed[eral Reserve] for cash then I think you just make the argument that it’s a deposit. If it’s backed by Treasurys, I think you’ll have a hard time treating it as a deposit.”

  That all may be, but once again it misses the forest for the trees, namely that the government is taking increasingly permissive steps to give new investors some implicit comfort that the government is watching out for their interests and, in the case of stablecoins, that they may even be insured from total losses should the stablecoin issuer collapse.

  That said, it wasn’t exactly clear how an FDIC backstop would work for stablecoins: if the FDIC went ahead and provided deposit insurance for stablecoins, it would apply only if a bank that was banking a stablecoin issuer or that was issuing a stablecoin itself went into receivership. Even in this scenario, it’s rare that FDIC insurance would enter into the picture because the agency generally takes a failed bank’s assets and deposits and sells them to a healthy bank.

  “The FDIC is probably looking at whether stablecoins can count as deposits or whether someone’s ownership of a stablecoin is a deposit at the stablecoin issuer,” said Todd Phillips, a former FDIC lawyer who is now the director of financial regulation and corporate governance at the Center for American Progress, a Washington think tank.

  The coverage could present challenges for issuers. Typically, these companies identify customers when they deposit cash for stablecoins or redeem the tokens for cash. But since stablecoins run on open, public blockchain networks (usually Ethereum), theoretically anyone with a crypto wallet that hasn’t been blacklisted can receive stablecoins from and send them to other wallets.

  “One thing to remember is that each person has insurance of only up to $250,000,” said Phillips. “So, the stablecoin issuer would need to keep track of who is the current holder of their stablecoin, and how many they own.” Whatever the FDIC insures has to not compromise the rest of the agency’s mission, he said.

  How the agency proceeds could potentially help protect consumers, Phillips added.

  “The FDIC basically has one overriding mission which is to ensure the safety of the Deposit Insurance Fund, the DIF,” Phillips said. “If the FDIC were to insure a stablecoin, that insurance would come out of the DIF and the FDIC will want to be very sure that they are on legal footing and that whatever they do doesn’t risk the DIF.”

  “The FDIC has strict rules as to which institutions may call themselves FDIC-insured or use the FDIC logo for advertising,” he said. “Just as how the FDIC’s logo on a bank’s website allows savers to be confident that the bank is a safe, insurance of particular stablecoins and permission to use the FDIC logo would provide clarity about which stablecoins, up to the insurance limit, will not lose value.”

  It’s likely that the agency will ask for public comment from the industry before any actual policy change is taken, Phillips said.

  “I also imagine there are conversations going on between the four FDIC directors, since you need a majority of them to approve a new regulation,” he said.

  Tyler Durden
  Wed, 10/06/2021 – 19:31

• Inventory At US Car Dealers Falls To New Record Low
  Inventory At US Car Dealers Falls To New Record Low

  As discussed yesterday, US light vehicle sales for September came at a seasonally adjusted annualized rate of 12.2MM per Wards and 12.3MM per Motor Intelligence, a number below consensus expectations of 12.5MM. A US SAAR in the low 12MM range is down about 25% yoy from about 16.3MM in September 2020 and down in the mid single digits sequentially from the August SAAR of about 13.1MM. The biggest reason for the decline is the continued record low inventory levels.

  

  Some more details:

  In September, car sales were down about 33% yoy, SUV sales were down about 20% yoy, and pickup truck sales were down about 30% yoy. Pickups and SUVs as a percent of total units were 19% and 55%, respectively (vs. 20% and 51% in September 2020). Per Motor Intelligence, Ford sales were down about 18% yoy and GM sales were down about 53% yoy in September. Ford’s market share in September increased yoy to 15% from 14%, and GM’s market share declined yoy to 11% from 17%. We believe that GM faced particularly acute challenges in 3Q21 (after doing relatively better in 2Q).

  Contrary to ICEs, September EV sales were up about 26% yoy, and hybrid sales were up about 32% yoy, per Motor Intelligence. Notably, Tesla does not report monthly sales. That said, Tesla reported strong 3Q21 global deliveries that were +73% yoy, implying that its EV sales in September in the US were likely strong.

  Incentive spending per vehicle was down over 40% yoy, and down about 3% sequentially in September. Not surprisingly, in a market that has never been tighter, September’s industry incentive spending per vehicle was down over 40% yoy and down about 3% sequentially to about $2.4K per vehicle (per Motor Intelligence). Industry pricing should remain strong as component shortages continue to weigh on production in the short term, and dealer inventory remains low.

  

  Inventory

  Finally, the punchline: according to Goldman, inventory at US dealers declined sequentially to ~900k from just below 1.0 mn in August 2021, and down from 2.6 mn in September 2020. Industry DOI came in at 22 days compared to 23 days in August 2021 and 48 days in September 2020. Pickup truck DOI was 35 days (vs. 32 in August 2021 and 48 in September 2020), SUV DOI was 20 days (vs. 21 in August 2021 and 47 in September 2020), and car DOI was 16 days (vs. 18 in August 2021 and 51 in September 2020).

  Inventories at dealers continued to fall from already historically low levels, and it will take time for inventory at dealers to return to normalized levels given the strong demand for vehicles coupled with ongoing supply chain challenges (particularly with semiconductor chip shortages, but also due to shipping constraints).

  

  Implications

  Similar to prior months, historically low inventory levels at dealerships continue to weigh on industry sales, and since nothing is likely to change in the short-term, finished vehicle inventory supply/demand will remain tight over the near to intermediate term and weigh on industry sales, driven primarily by supply chain issues (such as semiconductor shortages) coupled with strong sell-through (demand indicators are generally strong, albeit moderating slightly). As a result, most strategists expect new vehicle pricing to remain at a high level in 2021 and decline only modestly over the course of 2022.

  Tyler Durden
  Wed, 10/06/2021 – 19:10

• As US Stocks Stumble, SecState Blinken Suddenly Urges China To "Act Responsibly" On Evergrande
  As US Stocks Stumble, SecState Blinken Suddenly Urges China To “Act Responsibly” On Evergrande

  Since the crisis in China’s housing market begin to explode as Evergrande’s massive ponzi pile-up started to plunge – which followed China’s tech crackdown that smashed Chinese tech firms lower, and China’ education system crackdown which pummeled China’s education stocks – the ‘expected’ contagion has apparently been modest at worst and Washington’s politerati have been quiet on the issues “over there.”

  However, the last couple of weeks have seen the teflon market in the US start to shake a little…

  

  Which may help to explain why Secretary of State Antony Blinken has suddenly decided to chime in, demanding China “act responsibly” in how it addresses (translation: bails out) the potential impact of an Evergrande default crisis.

  “China has to make sovereign economic decisions for itself, but we also know that what China does economically is going to have profound ramifications, profound effects, on literally the entire world because all of our economies are so intertwined,” Blinken said Wednesday in an interview in Paris with Bloomberg Television.

  “So certainly when it comes to something that could have a major impact on the Chinese economy we look to China to act responsibly and to deal effectively with any challenges,” he added.

  In other words – “fix it!” – before this things blows up all the good work we have done by puking trillions of free money into markets. Ironically, this demand is coming as US political chaos escalates.

  We look forward to Beijing demanding that Washington “act responsibly” in dealing with USA’s sovereign risk…

  

  Source: Bloomberg

  The message: “Don’t throw stones in glass houses (or shower there).”

  Tyler Durden
  Wed, 10/06/2021 – 18:50

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• Swiss Police Raid Credit Suisse Offices As Greensill Investigation Heats Up
  Swiss Police Raid Credit Suisse Offices As Greensill Investigation Heats Up

  Unsurprisingly given the large number of municipalities in Germany, Switzerland and elsewhere that invested in Greensill, either via Credit Suisse and its ‘trade finance’ funds, or by placing deposits with Greensill’s Bavaria-based bank. In the end, plenty of small towns were swindled by Greensill’s downfall – it wasn’t all wealthy individuals and sovereign wealth funds.

  And so, as the months have passed since Greensill filed for administration, prosecutors around the world have been ramping up investigations into the firm with a focus on fraud or wrongdoing perpetrated by its leaders, or its enablers (including banks like Credit Suisse that helped package and sell Greensill’s assets in their “trade finance” funds.

  

  Well, with the noose presumably closing around Greensill, the FT reports that Swiss police have raided the offices of Credit Suisse and seized documents relating to the collapse of Credit Suisse’s $10 billion in Greensill funds.

  The raid was ordered by Zürich’s cantonal public prosecutor. Credit Suisse acknowledged the raid to the FT, but the bank insisted CS wasn’t the target of the probe, and was merely cooperating with the probe into Greensill.

  However, the notion that CS might bear some criminal liability here isn’t all that far-fetched. It has already been established that Credit Suisse sold the trade-finance funds – packed with assets that were essentially a collection of invoices – to top clients by touting their high ratings and supposedly low risk structure.

  Long before Greensill’s collapse, it was revealed by the FT that the CS trade finance funds might be functioning, in reality, as a way to secretly (and perhaps illegally)  prop up SoftBank Vision Fund portfolio companies.

  Even the FT acknowledges that charges against Credit Suisse would be a problem for CS, especially on top of all the class-action lawsuits that have been filed.

  A number of class-action lawsuits have already been filed by angry investors. Criminal charges by Swiss authorities would be a significant fillip for their legal efforts, in which questions have been raised over the tight relationship between Credit Suisse and Greensill, and the amount of due diligence the bank did.

  Whatever prosecutors find in this trove of documents, we’re certainly waiting with baited breath to see what prosecutors in this case do next.

  Tyler Durden
  Wed, 10/06/2021 – 02:45

• Europe's Energy Crisis Presents A Real Danger
  Europe’s Energy Crisis Presents A Real Danger

  Authored by Daniel Lacalle,

  This week the wholesale price of electricity has exceeded the psychological barrier of 200 euros per megawatt hour in most countries of the European Union. Although the daily price currently only affects 15% of the energy sold, since the rest is locked for almost twelve months since last winter at much lower prices, it is a sign of future risk. Thousands of contracts are going to have to be revised with huge price increases in the next three months when the locked contracts expire.

  The price of liquefied natural gas (LNG) has soared to $34/mmbtu delivered in December and January. In comparable energy terms it would be about $197 per barrel of oil equivalent, according to Morgan Stanley. Meanwhile, the price of natural gas (NBP) has risen more than 200% in 2021.

  

  The price of CO2 emission rights has increased more than 1,000% since 2017, and more than 200% in 2021.

  This concept, which is a hidden tax for which the governments of the European Union are going to collect more than 21 billion euros in 2021, adds to the inflationary spike.

  These extraordinary tax revenues should be used to mitigate the price increases in consumer bills and avoid an energy crisis in Europe that will sink the recovery.

  Two key factors explain the rise in energy prices and in both there is a responsibility of governments:

  1. The forced closure of the economy is a key factor to understand the damage generated in the supply chains, and

  2. the prohibition of investment in gas resources and abandoning nuclear in Germany has led to a more volatile and expensive energy mix in peak demand periods.

  This, coupled with a political decision to impose a volatile and intermittent energy mix has left Europe much more dependent and exposed to gas price fluctuations.

  Renewable energies work 20% of the time and when they do not work, the only guarantee of supply is to use natural gas, which tends to happen as Asia demand rises and when its price has skyrocketed.

  Of course, demand is a very important factor, but we cannot forget that, in natural gas, as in coal, there is no supply problem. There is, in fact, excess capacity.

  Under normal circumstances, the price of natural gas and CO2 would have moderated once the base effect dissipated -in June-, but we forget the disastrous impact of monetary and government interventionism.

  The rise in CO2 emission rights is directly the fault of the tax voracity of European governments, which have massively limited the supply of these rights so that the price rises. Additionally, the increase of many goods and services is directly due to the massive money supply growth in 2020, well above the demand for money, generating inflation by political decree.

  I do not understand how the fiscal voracity of some governments blinds them to two important risks:

  1. an energy crisis that leaves businesses and families suffocated by a price increase caused by political decisions, and

  2. a massive reaction of the population against environmental policies when they see prices skyrocket due to planning errors (more volatile and intermittent energy mix and dependent on gas) and legislation (charging citizens with the full cost of environmental policies and making those who pollute pay, and those who do not, pay even more ).

  The most cautious estimates warn that the energy crisis can leave up to 25% of companies (small and medium enterprises, SMEs) in Europe in bankruptcy – since for them energy is 33% of their costs – and erode up to 1.5% of growth of the eurozone, which is already poor anyhow.

  

  Europe needs a balanced and non-ideological energy mix and a competitive energy transition where it is essential to have nuclear and natural gas as back-up where technology and competition drive competitiveness.

  Additionally, the Eurozone cannot create extractive mechanisms that destroy the purchasing power of citizens’ wages and savings and then blame others for inflation.

  What Europe needs is more competition, technology and innovation and less interventionism. This energy crisis is not going to be the fault of the market, but of the ideological stubbornness of politicians who ignore economic calculations.

  Tyler Durden
  Wed, 10/06/2021 – 02:00

• Whitehead: The Police State's Reign Of Terror Continues… With Help From The Supreme Court
  Whitehead: The Police State’s Reign Of Terror Continues… With Help From The Supreme Court

  Authored by John W. Whitehead & Nisha Whitehead via The Rurtherford Institute,

  “Rights aren’t rights if someone can take them away. They’re privileges.”

  – George Carlin

  You think you’ve got rights? Think again.

  All of those freedoms we cherish—the ones enshrined in the Constitution, the ones that affirm our right to free speech and assembly, due process, privacy, bodily integrity, the right to not have police seize our property without a warrant, or search and detain us without probable cause—amount to nothing when the government and its agents are allowed to disregard those prohibitions on government overreach at will.

  

  This is the grim reality of life in the American police state.

  In fact, in the face of the government’s ongoing power grabs, our so-called rights have been reduced to mere technicalities, privileges that can be granted and taken away, all with the general blessing of the courts.

  This is what one would call a slow death by a thousand cuts, only it’s the Constitution being inexorably bled to death by the very institution (the judicial branch of government) that is supposed to be protecting it (and us) from government abuse.

  Court pundits, fixated on a handful of politically charged cases before the U.S. Supreme Court this term dealing with abortion, gun rights and COVID-19 mandates, have failed to recognize that the Supreme Court—and the courts in general—sold us out long ago.

  With each passing day, it becomes increasingly clear that Americans can no longer rely on the courts to “take the government off the backs of the people,” in the words of Supreme Court Justice William O. Douglas. When presented with an opportunity to loosen the government’s noose that keeps getting cinched tighter and tighter around the necks of the American people, what does our current Supreme Court usually do?

  It ducks. Prevaricates. Remains silent. Speaks to the narrowest possible concern.

  More often than not, it gives the government and its corporate sponsors the benefit of the doubt, seemingly more concerned with establishing order and protecting government interests than with upholding the rights of the people enshrined in the U.S. Constitution.

  Rarely do the concerns of the populace prevail.

  Every so often, the justices toss a bone to those who fear they have abdicated their allegiance to the Constitution. Too often, however, the Supreme Court tends to march in lockstep with the police state.

  As a result, the police and other government agents have been generally empowered to probe, poke, pinch, taser, search, seize, strip and generally manhandle anyone they see fit in almost any circumstance.

  In recent years, for example, the Court has ruled that police officers can use lethal force in car chases without fear of lawsuits; police officers can stop cars based only on “anonymous” tips; Secret Service agents are not accountable for their actions, as long as they’re done in the name of “security”; citizens only have a right to remain silent if they assert it; police have free reign to use drug-sniffing dogs as “search warrants on leashes,” justifying any and all police searches of vehicles stopped on the roadside; police can forcibly take your DNA, whether or not you’ve been convicted of a crime; police can stop, search, question and profile citizens and non-citizens alike; police can subject Americans to virtual strip searches, no matter the “offense”; police can break into homes without a warrant, even if it’s the wrong home; and it’s a crime to not identify yourself when a policeman asks your name.

  Moreover, it was a unanimous Supreme Court which determined that police officers may use drug-sniffing dogs to conduct warrantless searches of cars during routine traffic stops. That same Court gave police the green light to taser defenseless motorists, strip search non-violent suspects arrested for minor incidents, and break down people’s front doors without evidence that they have done anything wrong.

  The cases the Supreme Court refuses to hear, allowing lower court judgments to stand, are almost as critical as the ones they rule on. Some of these cases have delivered devastating blows to the rights enshrined in the Constitution.

  By remaining silent, the Court has affirmed that: legally owning a firearm is enough to justify a no-knock raid by police; the military can arrest and detain American citizens; students can be subjected to random lockdowns and mass searches at school; police officers who don’t know their actions violate the law aren’t guilty of breaking the law; trouble understanding police orders constitutes resistance that justifies the use of excessive force; and the areas immediately adjacent to one’s apartment can be subjected to warrantless police surveillance and arrests.

  Make no mistake about it: when such instances of abuse are continually validated by a judicial system that kowtows to every police demand, no matter how unjust, no matter how in opposition to the Constitution, one can only conclude that the system is rigged.

  By refusing to accept any of the eight or so qualified immunity cases before it last year that strove to hold police accountable for official misconduct, the Supreme Court delivered a chilling reminder that in the American police state, “we the people” are at the mercy of law enforcement officers who have almost absolute discretion to decide who is a threat, what constitutes resistance, and how harshly they can deal with the citizens they were appointed to ‘serve and protect.”

  This is how qualified immunity keeps the police state in power.

  Lawyers tend to offer a lot of complicated, convoluted explanations for the doctrine of qualified immunity, which was intended to insulate government officials from frivolous lawsuits, but the real purpose of qualified immunity is to rig the system, ensuring that abusive agents of the government almost always win and the victims of government abuse almost always lose.

  How else do you explain a doctrine that requires victims of police violence to prove that their abusers knew their behavior was illegal because it had been deemed so in a nearly identical case at some prior time?

  It’s a setup for failure.

  A review of critical court rulings over the past several decades, including rulings affirming qualified immunity protections for government agents by the U.S. Supreme Court, reveals a startling and steady trend towards pro-police state rulings by an institution concerned more with establishing order, protecting the ruling class, and insulating government agents from charges of wrongdoing than with upholding the rights enshrined in the Constitution.

  Indeed, as Reuters reports, qualified immunity “has become a nearly failsafe tool to let police brutality go unpunished and deny victims their constitutional rights.”

  Worse, as Reuters concluded, “the Supreme Court has built qualified immunity into an often insurmountable police defense by intervening in cases mostly to favor the police.”

  For those in need of a reminder of all the ways in which the Supreme Court has made us sitting ducks at the mercy of the American police state, let me offer the following.

  As a result of court rulings in recent years, police can claim qualified immunity for warrantless searches. Police can claim qualified immunity for warrantless arrests based on mere suspicion. Police can claim qualified immunity for using excessive force against protesters. Police can claim qualified immunity for shooting a fleeing suspect in the back. Police can claim qualified immunity for shooting a mentally impaired person. Police officers can use lethal force in car chases without fear of lawsuits. Police can stop, arrest and search citizens without reasonable suspicion or probable cause.  Police officers can stop cars based on “anonymous” tips or for “suspicious” behavior such as having a reclined car seat or driving too carefully. Police can forcibly take your DNA, whether or not you’ve been convicted of a crime.  Police can use the “fear for my life” rationale as an excuse for shooting unarmed individuals. Police have free reign to use drug-sniffing dogs as “search warrants on leashes.” Not only are police largely protected by qualified immunity, but police dogs are also off the hook for wrongdoing.

  Police can subject Americans to strip searches, no matter the “offense.” Police can break into homes without a warrant, even if it’s the wrong home. Police can use knock-and-talk tactics as a means of sidestepping the Fourth Amendment. Police can carry out no-knock raids if they believe announcing themselves would be dangerous. Police can recklessly open fire on anyone that might be “armed.” Police can destroy a home during a SWAT raid, even if the owner gives their consent to enter and search it. Police can suffocate someone, deliberately or inadvertently, in the process of subduing them.

  To sum it up, we are dealing with a nationwide epidemic of court-sanctioned police violence carried out with impunity against individuals posing little or no real threat.

  So where does that leave us?

  For those deluded enough to believe that they’re living the American dream—where the government represents the people, where the people are equal in the eyes of the law, where the courts are arbiters of justice, where the police are keepers of the peace, and where the law is applied equally as a means of protecting the rights of the people—it’s time to wake up.

  We no longer have a representative government, a rule of law, or justice.

  Liberty has fallen to legalism. Freedom has fallen to fascism.

  Justice has become jaded, jaundiced and just plain unjust.

  And for too many, as I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, the American dream of freedom and justice for all has turned into a living nightmare.

  Given the turbulence of our age, with its government overreach, military training drills on American soil, domestic surveillance, SWAT team raids, asset forfeiture, wrongful convictions, profit-driven prisons, corporate corruption, COVID mandates, and community-wide lockdowns, the need for a guardian of the people’s rights has never been greater.

  Tyler Durden
  Wed, 10/06/2021 – 00:05

• Which Countries Have The Most Nuclear Weapons?
  Which Countries Have The Most Nuclear Weapons?

  In theory, nuclear weapon stockpiles are closely held national secrets. The leading countries have rough estimates that aren’t regularly updated, newly nuclear countries keep their capabilities vague and unclear, and Israel has never officially confirmed a nuclear weapons program.

  But, as Visual Capitalist’s Omri Wallach details below, thanks to limited disclosures, records, and leaks, we can visualize the full extent (Editor’s note: Exact numbers of nuclear warheads possessed by countries are closely guarded state secrets, with the FAS estimate being the closest, most-used, and most-trusted international approximation available) of the world’s nuclear arsenal. This graphic uses estimated nuclear warhead inventories from the Federation of American Scientists as of August 2021.

  Based on these estimates, there are just nine countries with nuclear weapons in the world

  

  Nuclear Weapons, by Country

  The nuclear arms race has always centered around the U.S. and Russia.

  After the end of World War II and well into the Cold War, the world’s two superpowers raced to build more nuclear weapons (and more capable nuclear weapons) than the other.

  Even while international organizations lobbied for the end of nuclear proliferation, the world’s nuclear weapon stockpile grew to a peak of 70,300 total warheads in 1986.

  As arms agreements and non-proliferation treaties started to gain greater momentum, the U.S. and Russia cut back on stockpiles while new countries with nuclear weapons started to pop up.

  

  Despite reducing their stockpiles significantly since the end of the Cold War, Russia and the U.S. still own around 90% of all nuclear warheads in the world.

  Far behind them are China and France, which started testing nuclear weapons in 1964 and 1960 respectively. The UK has the fifth-most nuclear weapons today, though it was the third country in the world to develop them after the U.S. and Russia in 1952.

  The countries with fewer than 200 nuclear weapons are regional rivals India and Pakistan, which first tested nuclear weapons in the 1970s, and North Korea, which began to operate uranium fabrication plants and conduct explosive tests in the 1980s.

  Israel is also estimated to have fewer than 200 nuclear weapons, and reports have its weapons program dating back to the 1960s. However, the country has never confirmed or announced its nuclear capabilities.

  Countries With Nuclear Weapons, by Warhead Status

  Though the world has 13,132 nuclear weapons, that doesn’t mean they’re all ready to fire.

  Weapons (or “warheads”) are delivered by missile, and countries don’t keep all of their nuclear warheads primed for use. The estimation of nuclear stockpiles also clarifies whether warheads are considered deployed, reserved, or retired:

  • Deployed warheads are deployed on intercontinental missiles, at heavy bomber bases, and on bases with operational short-range delivery systems.
  • Reserve warheads are in storage and not deployed on launchers.
  • Retired warheads are still intact but in queue for dismantlement.

  

  Only four countries have officially deployed warheads, while the majority of the world’s nuclear stockpile is in reserve. This is partially due to estimates ranging from relatively transparent in the case of the U.S. to opaque and uncertain for countries like China and North Korea.

  But some countries are expected to further bolster their stockpiles. The UK government announced it would increase its stockpile to no more than 260 warheads, and U.S. intelligence expects China, India, and Pakistan to increase their stockpiles.

  Though the world’s nuclear stockpile will likely continue dwindling on account of U.S. and Russia retirements, the 2021 landscape of countries with nuclear weapons shows that proliferation is still underway.

  Tyler Durden
  Tue, 10/05/2021 – 23:45

• China's Belt And Road Faces Growing Opposition From Participating Countries As Debts Mount
  China’s Belt And Road Faces Growing Opposition From Participating Countries As Debts Mount

  Authored by Daniel Holl via The Epoch Times,

  China’s Belt and Road Initiative (BRI) is facing growing opposition from participating countries as their debts associated with Chinese projects mount, according to a recent study.

  

  Launched in 2013 by Chinese leader Xi Jinping, the BRI might be losing its impetus due to a debt-based backlash, according to a study from AidData, a research lab at William & Mary’s Global Research Institute.

  The study analyzed 13,427 projects backed by China in more than 165 countries over 18 years. The projects’ total value amounts to $843 billion.

  AidData found that 35 percent of BRI’s projects dealt with implementation problems, “such as corruption scandals, labor violations, environmental hazards, and public protests.”

  Brad Parks, one of the study’s authors, said “a growing number of policymakers in low- and middle-income countries are mothballing high profile BRI projects because of overpricing, corruption and debt sustainability concerns.”

  Global Expansion

  The BRI—which serves as a tool for the Chinese Communist Party’s (CCP) global expansion—finances enormous loans to developing nations for building infrastructure.

  The ostentatious projects have been described as being a part of so-called debt-trap diplomacy since the often unpayable loans will force the nations to repay China with goods or land.

  Chinese state-owned banks provide the countries with loans they can barely afford. The loans are then used to pay Chinese companies in order to build infrastructure, including the development of roads, ports, power plants, mines, telecommunications, or banking institutions.

  When the nations are unable to pay, they must grant China assets like long-term exploitation rights for natural resources, or leases of infrastructure built using the loans.

  

  A Chinese worker carrying materials for a project that is part of China’s Belt and Road Initiative in Laos, on Feb. 8, 2020 (Aidan Jones/AFP via Getty Images)

  According to AidData’s report, 42 low- and middle-income countries have public debt exposure to China that exceeds 10 percent of its gross domestic product (GDP).

  “China has used debt rather than aid to establish a dominant position in the international development finance market,” the report said.

  The report said that researchers estimated that a government of an average low-to-middle-income country participating in the BRI are underreporting its actual and potential repayment obligations to China by an amount that is equivalent to 5.8 percent of its GDP.

  “Collectively, these underreported debts are worth approximately $385 billion,” the report said.

  When agreeing to join BRI, countries expect the new infrastructure will boost their GDPs enough to not only to repay the debt, but also profit in the future. However, most nations do not become prosperous from the projects, according to Antonio Graceffo, an economics professor.

  Graceffo has argued that the poorest nations are overburdened with BRI debt, citing a Central Banking report that stated 23 percent of countries involved in the initiative said BRI debt is building external debt up to unsustainable levels.

  For instance, in December 2017 Sri Lanka leased the major Hambantota Port to Beijing for 99 years, due to its inability to pay BRI owed loans of $1.4 billion. This gave the CCP a key base in the Indian Ocean.

  

  A general view of the port facility at Hambantota in Sri Lanka, on Feb. 10, 2015. (Lakruwan Wanniarachchi/AFP/Getty Images)

  In an article published by the Gatestone Institute, Lawrence A. Franklin stated that BRI’s economic benefits—mainly in third-world countries—are questionable, and “a few of these bilateral packages appear contrived to imprison already impoverished states into realms of permanent economic vassalage to China.”

  Franklin further said that Beijing’s goals with BRI are not only economic but also strategic and political. Its “projects seem not designed so much to win new friends as to win new dependents, especially in areas either neglected by the West or in the Western sphere of influence.”

  AidData’s study also evaluated that since 2013, there were many suspensions and cancellations in BRI participant countries. Malaysia canceled $11.58 billion in projects, Kazakhstan nearly $1.5 billion, and Bolivia over $1 billion. It further states in some countries “there’s clear evidence of ‘buyer’s remorse’.”

  The report also mentions that China’s annual international development finance commitments are double that of the United States’ and other major countries.

  Meanwhile, in June, the United States announced a new G7 initiative Build Back Better World (B3W), whose objective is to supply developing countries with financial support to build infrastructure.

  “B3W is going to increase choice in the infrastructure financing market, which could lead to some high-profile BRI defections,” Parks said.

  Tyler Durden
  Tue, 10/05/2021 – 23:25

• Coffee Is America's Favorite Drink
  Coffee Is America’s Favorite Drink

  October 1 was International Coffee Day, created in 2015 to promote and celebrate the beverage.

  Katharina Buchholz points out that The Statista Global Consumer Survey shows that Americans are in fact quite fond of the drink. In the survey, coffee was named by more U.S. adults as a regularly consumed beverage than bottled water.

  

  You will find more infographics at Statista

  59 percent of respondents said they regularly drank coffee, followed by 58 percent who consumed bottled water.

  Almost as many people – 53 percent – said they regularly grabbed a soft drink. Alcoholic drinks – among those 21 years and older – proved less popular.

  Beer still beat wine at 31 percent vs. 28 percent popularity.

  Tyler Durden
  Tue, 10/05/2021 – 23:05

• The Cost And Irritation Of Abandoning Common Sense In Dealing With COVID
  The Cost And Irritation Of Abandoning Common Sense In Dealing With COVID

  Authored by Roger Kimball, op-ed via The Epoch Times,

  So, St. Anthony Fauci has come down from his mountain top with a new list of “thou-shall-nots” and the news that it is “too early” to say whether he will allow families and friends to congregate for Christmas.

  

  It is not too early for the body politic to engage in one gigantic spasm of retroperistalsis and expel that tyrannical medical pest from the community.

  After all, Dr. Fauci is the chap who tells anyone who will listen that, when it comes to vaccine mandates, “There comes a time when you do have to give up what you consider your individual right of making your own decision for the greater good of society.”

  Ah, yes, “greater good of society”—as defined, it goes without saying, by A. Fauci.

  It is long past time for this fomenter of hysteria to go. He has being terrorizing the American populace for decades.

  Give him a padded cell, a mirror, and a TV camera and he will be happy.

  Back in the 1980s, Fauci was a superspreader of the myth that an important vector for the transmission of HIV was heterosexual intercourse.

  For the last couple of years, he has been terrifying the public with tales from the crypt about the virus he helped develop with American taxpayer money for “gain of function” research in a Chinese virology lab in Wuhan.

  The fact that this Bela Lugosi of the medical establishment is also a publicity addict who can’t pass a television camera without primping and dispensing contradictory but depressing dicta makes him a public nuisance.

  You see his baneful influence everywhere.

  In our former newspaper of record, for example, The New York Times. 

  On Oct. 1, the Times ran one of its long emetic specials on COVID, the Delta Diaries.

  Deploying their signature mixture of nauseating human interest pabulum and tendentious statistics, they paid homage to the CCP virus for giving them something to write about now that Donald Trump is, for the time being, off the menu.

  According to the Times, the fact that the deaths of 700,000 people in the United States have been attributed to the virus means that it is now officially more deadly than the Spanish ’flu epidemic of 1918, which killed about 675,000 people in the United States.

  Remember the old saw about “lies, damned lies, and statistics”?

  The Times specializes in that wheeze.

  The CCP Virus can be serious, no doubt about it. But it represents a significant threat to a tiny part of the population, mostly the elderly, especially those with certain co-morbidities like diabetes and obesity.

  The Spanish ’flu, by contrast, cut a wide swathe through the young and healthy.

  The so-called Delta variant seems to be more infectious but less virulent than the original.

  It has affected some younger people, much to the delight of the Times and other members of Fauci fan club.

  But the Times story is just the Gray-Lady version of a domestic-strife story like those in the sensationalistic rags you see in the supermarket checkout line. “Betts and Andy on the Rocks: What Really Happened on Their Honeymoon.”

  Now on to those numbers.

  One critical distinction you won’t find mentioned in the Times cri-de-coeur is the difference between dying from the CCP virus and dying with it. Millions upon millions are infected.

  It is, after all, a very contagious virus.

  But not only is it the case that many who are infected experience mild or no symptoms, it is also the case that many who are infected with the virus and happen to die in fact die from other things.

  Remember the chap who was in fatal motorcycle accident, spread like jam across the highway, but had his death listed as due to COVID because the goo “tested positive”?

  Another set of numbers you rarely see in the reporting about COVID fatalities is the age of the people who died.

  The average life expectancy for males in the United States is around 78.

  If Mr. Smith, who suffers from diabetes and high-blood pressure, comes down with COVID and dies at 87, is his death due to COVID?

  You see why I like to say that the great thing about COVID is that it abolished death from old age.

  It also essentially abolished death from influenza.

  Generally there are anywhere from 20,000 to 40,000 deaths from the ’flu in this country per annum.

  Last year there were some 700. Amazing.

  The CCP virus is a seasonal respiratory virus. The key to public health regarding it is the achievement of herd immunity.

  Masks, lockdowns, and “social distancing” impede achievement of herd immunity.

  The Harvard epidemiologist Martin Kulldorff and Stanford’s Dr. Jay Bhattacharya got it exactly right when they wrote last spring that “The idea that everybody needs to be vaccinated is as scientifically baseless as the idea that nobody does. COVID vaccines are essential for older, high-risk people and their caretakers and advisable for many others. But those who’ve been infected are already immune.”

  At last, the clear voice of common sense—which is also, by the way, the voice of that “science” we’re supposed to be following.

  Messrs. Kulldorff and Bhattacharya go on to offer these wise observations:

  • “Vaccine passports are unjust and discriminatory.”

  • “Most of those endorsing the idea belong to the laptop class—privileged professionals who worked safely and comfortably at home during the epidemic.”

  • “Millions of Americans did essential jobs at their usual workplaces and became immune the hard way. Now they would be forced to risk adverse reactions from a vaccine they don’t need.”

  • “Passports would entice young, low-risk professionals, in the West and the developing world, to get the vaccine before older, higher-risk but less affluent members of society. Many unnecessary deaths would result.”

  • “The widespread use of vaccines against polio, measles, mumps, rubella, rabies and other pathogens has saved millions of lives. Vaccines are one of the most important inventions in human history—the reason that before last year many in the West had forgotten that infectious disease could pose a population wide threat.”

  • “Those pushing for coercive COVID vaccination threaten all this progress by undermining public trust in vaccines. In this sense, they are more dangerous than the small group of so-called anti-vaxxers have ever been.”

  What a pity that the media did not elevate experts like Martin Kulldorff and Jay Bhattacharya to the sacrosanct position it saved for Anthony Fauci.

  We all would have been saved a great deal of irritation not to mention economic ruin and political despotism.

  Tyler Durden
  Tue, 10/05/2021 – 22:45

• Visualizing The Rise Of Cryptocurrency Transactions
  Visualizing The Rise Of Cryptocurrency Transactions

  After Bitcoin and cryptocurrency’s wild bull run in late 2020 and early 2021, many holders are now using cryptocurrencies for their intended purpose: payments.

  In fact, as Visual Capitalist’s Niccolo Conte notes, every day, approximately $12 billion are transferred across the Bitcoin, Ethereum, and Litecoin blockchains, with millions of people using cryptocurrency for payments daily.

  This graphic sponsored by CoinPayments looks at the rising transactions of the Bitcoin, Ethereum, and Litecoin networks.

  

  Cryptocurrency Transactions are Rising in Value and Number

  While prices are often the focus when crypto is in the spotlight, transaction counts show how much a network is being used as a medium of exchange. In just over five years, daily transactions across the Bitcoin, Ethereum, and Litecoin networks increased sixfold, from just 250,000 to more than 1.5 million transactions a day.

  In mid-2017, Ethereum overtook Bitcoin in daily transactions as ETH was necessary to participate in ICOs (initial coin offerings), which fueled much of the speculation in the 2017 price run. With Ethereum still hosting thousands of ERC-20 and ERC-721 tokens on its blockchain today, its transaction counts have grown to be much higher compared to Bitcoin and Litecoin’s.

  Along with crypto’s rising transaction numbers, the average USD value per transaction has increased by a minimum of 4x over the past five years.

  

  Crypto Spenders are Searching for Merchants

  As transaction counts and values rise, merchants play a vital part in pushing forward the adoption of digital currencies for payments.

  Many cryptocurrency users consider merchant adoption as a key barometer of success for crypto adoption. While companies like AT&T, Namecheap, and Overstock already accept crypto payments, there are still many businesses around the world which don’t offer cryptocurrency as a method of payment.

  In a survey of over 8,000 U.S. consumers, 66.7% of crypto owners and 54.2% of non-owners said that not enough merchants accept cryptocurrency. Along with this, 47% of crypto owners said they seek out merchants that accept crypto for purchases, indicating clear demand for more crypto-accepting businesses.

  How Can Merchants Make the Most of the Crypto Boom?

  As the world embraces crypto, merchants need the in-store and online tools to be part of this next wave of commerce. Accepting crypto opens merchants up to an untapped audience of new consumers, eager to spend their crypto.

  CoinPayments makes it easy to start accepting crypto payments at online checkout and with POS systems, with features like auto-coin conversion and over 2,000 coins supported.

  Find out more about how the crypto market is growing, adapting to consumer needs, and the opportunity it presents to merchants around the world.

  Tyler Durden
  Tue, 10/05/2021 – 22:25

• Buchanan: Biden Becomes A Bernie Sanders Democrat?
  Buchanan: Biden Becomes A Bernie Sanders Democrat?

  Authored by Pat Buchanan,

  “We’ve got the president of the United States on our side,” said Sen. Bernie Sanders Sunday on ABC’s “This Week.”

  “Got 96% of the members of the Democratic caucus in the House on our side. We got all but two senators at this point in the Democratic caucus on our side. We’re going to win this thing.”

  The socialist senator from Vermont may be overly optimistic about how the party deadlock on Capitol Hill unfolds. But about the balance of forces inside the party, and the direction where it is headed, Sanders is probably not wrong.

  Progressive Democrats won the week.

  

  President Joe Biden confirmed it by casting his lot with the liberal-left on the sequencing of the $1.2 trillion infrastructure bill and $3.5 trillion social safety net bill pending in Congress.

  When Biden went to the Hill Friday, it was thought he was coming to rescue and liberate the Senate-passed infrastructure bill being held hostage by progressives until they got their way on the larger bill.

  Progressives had threatened to sink the roads-and-bridges bill in Speaker Nancy Pelosi’s House, unless they received solid assurances that both houses would simultaneously take up and approve the $3.5 trillion bill.

  When Biden reached the Hill, however, he threw in with the hostage-takers. He asked for a delay in House passage of his own infrastructure bill, until the demands of the progressives were addressed and met.

  Pelosi agreed and has put off any House vote on the infrastructure bill until the end of October.

  Biden had ditched the Biden Democrats and cast his lot with Sanders & Co. Let’s hold off voting on my own infrastructure bill, until we can also deliver what the progressives demand of us, he was saying.

  The real impediment blocking progress, Biden said, was two senators, Joe Manchin and Kyrsten Sinema, who are blocking the resolution of the issue, which is that all Democrats should agree to enact both bills.

  By capitulating to the progressives’ demand — which translates to, “Both bills or no bill!” — Biden revealed where he thinks the power in the party resides, where the future is, and what he wants as his legacy.

  This is not the first time Biden has moved left to accommodate a rising consensus. As vice president, though a self-proclaimed devout Catholic, Biden stepped out in front of Barack Obama to endorse same-sex marriage.

  During the 2020 campaign, Biden abandoned a lifetime belief about abortion and pledged to remove the Hyde Amendment — a restriction on federal funding of abortions — from federal law.

  Cradle Catholic Joe has become our most pro-abortion president.

  But while the moderate-versus-progressive faceoff could still end in a rout for the left, the probability is that the infrastructure bill becomes law and the social safety net bill ends up between Manchin’s $1.5 trillion ceiling and its current $3.5 trillion price tag.

  One way to solve the sticker-price problem is through subterfuge — reduce the duration from, say, 10 years to five, in the expectation that no future GOP administration would terminate an entitlement program upon which millions of Americans had come to depend for half a decade.

  As Milton Friedman reminded us, “Nothing is so permanent as a temporary government program.”

  Nevertheless, this is truly the “transformative” legislation that The New York Times depicted as providing “a cradle-to-grave reweaving of a social safety net.”

  This Build Back Better bill would provide family and medical leave for illness and the birth of a child, affordable child care during infancy, two years of universal pre-kindergarten, child credits and federal income tax credits, and two years in a community college.

  If passed in its present form, government will have an ever-present role in the life of a child, almost from conception until his or her early 20s.

  This would also include established programs of welfare, Medicaid, aid to education, subsidized housing, rent supplements, school breakfasts and lunches, and food stamps.

  If this bill does not die in the fall, what will America look like a few years hence?

  Government will have expanded in both size and the numbers of employees, and in relation to a shrinking private sector. A panoply of new programs will expand eternally with the cost growing inexorably. The dependency of U.S. citizens on their government will grow.

  And this doesn’t even touch upon another aspect.

  The IRS is to be expanded, and corporate taxes, estate taxes and capital gains taxes are to rise. Government will also step in to force a shift away from coal and oil and gas, with which the country is hugely endowed, to wager America’s future on solar and wind.

  Hopefully, Manchin and Sinema will employ the leverage they have to prevent the worst of the damage this historically high level of spending — with inflation already rising above 5% — will do.

  But as to whether the Democrats are a Bernie party or a Biden party, Joe settled that Friday with his capitulation.

  Tyler Durden
  Tue, 10/05/2021 – 22:05

• Poland Central Bank To Buy 100 Tons Of Gold In 2022
  Poland Central Bank To Buy 100 Tons Of Gold In 2022

  In a time when institutions are increasingly shifting away from fiat currency and looking toward cryptos, it is worth recalling that at least when it comes to central banks, there is no digital gold. There is just gold.

  To be sure, in a time of unprecedented economic and social turmoil, central bankers’ appetite for gold continues to grow, providing a bright spot for the traditional haven as investor interest ebbs. According to the World Gold Council, global reserves expanded 333.2 tons in the first half of 2021, 39% higher than the five-year average for the period. Strong purchases by Thailand, Hungary and Brazil stood out, with WGC analyst Louise Street predicting that If central banks continue to buy at the levels seen recently, it will provide a supportive element for the market.

  

  Alas, the past year has not been kind to gold and after rising above $2000 during the hyper-print phase of the covid pandemic, gold has steadily declined to the mid $1700s as a global surge in inflation has forced central banks to restart monetary tightening.

  

  However, for at least one central bank gold’s continued decline is welcome news, because according to Poland’s Gazeta Wroclawska, Governor Adam Glapinski – the head of the country’s central bank, the National Bank of Poland – plans to increase gold reserves by 100 tons next year to strengthen country’s financial stability.

  In the interview, Glapinski said his plan may take effect when he will be re- elected as Governor as his current term ends in mid-2022. However, in the same interview, the governor also said he plans to introduce 1,000 zloty banknote, an indication that the gold may be coming only to offset even more money printing down the line.

  No matter his intentions, however, Glapinski has been good for Poland’s gold reserves: during his term, the amount of gold in reserves has more than doubled to 229 metric tons.

  

  Tyler Durden
  Tue, 10/05/2021 – 21:45

• Hidden Bankruptcy: The Reality Behind Uncle Sam's Inflated Bar Tab
  Hidden Bankruptcy: The Reality Behind Uncle Sam’s Inflated Bar Tab

  Authored by Matthew Piepenburg via GoldSwitzerland.com,

  Below, we look at The hidden bankruptcy of the US in the wake of even more inflationary forces confirmed by cost-of-living-adjustments, Uncle Sam’s interest expenses, objectively unloved Treasuries and a roaring as well as convenient COVID narrative.

  

  Math vs. Double-Speak

  Given the fact that just about everything coming out of the mouths of debt-cornered policy makers requires a lie-detector and “double-speak” translator, we’ve been arguing since the moment the Fed began peddling the “transitory inflation” meme/myth to think differently.

  In short: It’s our view that inflation is a snowball growing, not melting.

  Toward this end, we’ve written and spoken at length as often as we can as to the many converging forces pointing toward rising inflation—from increased governmental guarantees (controls) over commercial bank loans, commodity super cycles to just plain economic realism, as inflation (and hence currency debasement) is the only tool left (beyond bankruptcy, taxation and “growth”) to service otherwise unsustainable debt levels: A hidden bankruptcy.

  But let us not stop there, as other inflationary storm clouds are on the horizon yet ignored (not surprisingly) by an increasingly clueless financial media.

  Another Glaringly-Ignored Inflation Indicator—COLA 2.2022

  In particular, we are thinking about the U.S. Cost of Living Adjustment (“COLA”) for 2022 which could easily reach 6%, the highest of its kind since 1982.

  It would seem that the U.S. Social Security Administration, unlike Powell, is aware of inflation, and therefore preparing (i.e., “adjusting”) for the same.

  As the price for entitlement obligations rises, so too will the level of money printing to pay for the same, a veritable vicious circle for rising inflation.

  Then there’s simple math.

  We’ve talked about the Realpolitik of negative real rates as the final and desperate way for debt-soaked sovereigns to service their debt.

  The signs of this are literally everywhere.

  If we take, for example, a 1.4% Treasury Yield and subtract a potential 6% COLA increase for Social Security, we get -4.6% real rates, which will be a boon for alternative stores of value like gold and silver or “currencies” like BTC (as well as farmland and high-end real estate, which is continuing to enjoy a debt-jubilee of negative 3% real (i.e., “free” mortgages).

  The necessary evil of negative real rates also speaks to the ongoing taper debate…

  Giving Clarity to the Taper Debate

  As tweets by twits pour across the electronic universe, it’s often important to notice what is not being “tweeted,” such as the interest expense on Uncle Sam’s national bar tab.

  As the financial world hangs on the edge of its seat to see if the Fed will taper its QE (i.e., money printing) program and send bonds (and stocks) to the floor and rates toward the sky, they’ve ignored some basic math and a key chart.

  Specifically, we are referring to the chart below representing the true interest expense on the debt bar-tab of a now fully debt-intoxicated Uncle Sam:

  

  With central-bank “accommodated” asset bubbles (from stocks to real estate to art) now at historically unprecedented levels, tax receipts flowing into the U.S. coffers from the ever-growing millionaire-to-billionaire class have been rising.

  This may seem good for that punch-drunk Uncle Sam, but what no one is talking about is that despite even those “capital gain” receipts, the interest expense (i.e., “bar tab”) in D.C. is now an astronomical 111% of those same tax receipts.

  In other words, U.S. tax income doesn’t come close to even paying interest (let alone that archaic concept known as “principal”) on growing U.S. debt obligations.

  Can anyone say, “Uh-oh?”

  Given the stark but ignored reality of unpayable U.S. debt, the implications going forward are fairly clear.

  First, the Fed will not be able to “taper,” as less QE will mean an even higher interest rate, and thus higher interest expense on debt it still can’t pay at today’s artificially low rates.

  Stated otherwise, a “taper” would only add helicopters of gasoline to a debt fire that is already burning the Divided States of America.

  Given the dangers of such a taper, it likely won’t happen because it can’t happen, and this means more money printing and hence more negative real rates creating a hidden bankruptcy ahead, a weaker USD and rising precious metal prices, among others.

  But What If the Fed Tapers?

  Alternatively, should the Fed somehow turn hawkish and taper its QE support in the face of a debt forest fire, Treasuries will sell off dramatically, rates will rise, markets will tank, and the USD will surge—not good for Gold, BTC or just about anything else.

  Does it Matter?

  But as we’ve also tried to make crystal clear, there is no way the Fed will taper QE liquidity before it sets up a back-channel for even more liquidity from the Standing Repo Facility, Reverse Repo Facility and FIMA swap lines, which are all just “QE” by other names.

  In simple speak, therefore, the “taper debate” is no debate, as the Fed has many liquidity tricks up its greasy sleeves.

  In addition to liquidity tricks, the Fed has some ugly bonds to buy.

  Embarrassing Treasuries

  As we’ve said so many times, the biggest issue today is unsustainable and embarrassing debt levels requiring inflation (hidden bankruptcy), compliments of policy makers rather than a viral pandemic narrative out of all proportion to its confused scientific truths.

  COVID has been an all-too timely and convenient pretext for blaming global debt ($300T) or U.S. public debt ($28.5T) on a flu rather than a sordid history of grotesque mismanagement from politico’s and bankers that was in play long before the first headlines out of Wuhan.

  Furthermore, COVID monetary and fiscal policy measures effectively became a (hidden) pretext for a second market bailout greater in scope (yet better in optics) than the post-Lehman bailout of those otherwise Too Big to Fail banks.

  In short, the façade (and branding) of a humanitarian crisis allowed a market-saving liquidity rescue (Bailout 2.0) to an otherwise Dead-on-Arrival bond market in late 2019.

  In case this sounds too controversial to consider, please follow the Treasury market rather than our bemused nouns and adjectives, not to mention our total lack of scientific/medical credentials.

  Bad IOUs

  Just like friends don’t accept IOUs from drug addicts, global investors heading into 2020 stopped buying Uncle Sam’s Treasuries.

  In simple-speak, Uncle Sam just seemed too debt-drunk to trust.

  As a result, his Treasury bonds, once seen as “safe havens,” were finally seen as “bad jokes”—akin to the paper coming out of equally discredited zip codes like Greece, Italy or Spain.

  For this reason, foreigners in a nervous 2020 (unlike a broken 2009) had not only stopped buying U.S. Treasuries, they were selling them.

  Yep.

  Months ago, smart voices from the Street, including Stan Druckenmiller, were warning about the implications of such a shift in financial consciousness/trust.

  Druckenmiller’s Astonishment

  Specifically, Druckenmiller spoke of something he’d never seen in over 40 years as a market veteran.

  That is, as stocks were tanking in the spring of 2020, he also saw the bond market lose 18 points in one day.

  This correlated fall in stocks and bonds was not, as everyone “tweeted,” a reaction to the fiscal profligacy of the CARES Act, but more sadly a very new trend by foreigners to get rid of increasingly discredited U.S. IOUs.

  Folks, this is a critical shift.

  For over two decades (including during the Great Financial Crisis of 2009), U.S. Treasuries (and the USD) were once seen as “safe” landing places for foreign money rather than a risky bet.

  Now, instead of seeing an annual average $500B inflow into U.S. bonds, we are seeing annual outflows of $500B…

  When you tack on a $700B current account deficit in D.C. to a net loss of $1 trillion in Treasury support, whose left to “fill the gap” and buy those unwanted IOU’s?

  You guessed it: The Fed.

  And how will they come up the money to cover these purchases?

  You guessed it again: They’ll mouse-click that “money” out of thin air to create a stealthy, hidden bankruptcy.

  Needless to say, such realism (i.e., objective math) puts a lot of pressure on the U.S. Dollar as the Fed is forced to create even more money at a record pace to buy otherwise unwanted Treasuries.

  But what kept the USD from falling in favor by end of 2020, if no one was buying our bonds but the Fed?

  Well, the short answer is that all that foreign money (from sovereign wealth funds and foreign central banks) once ear-marked for our once-credible U.S. Treasury bonds went instead into those massive U.S. digital transformation companies who benefited most from a locked-down new mad world, namely GOOG, ZOOM and MSFT etc.

  And how did Druckenmiller describe this shift?

  Simple. He called it a “raging new mania.”

  From Mania to Desperate

  Foreign money once reserved for “safe haven” bonds was (and is) pouring into an already over-sized equity bubble.

  By July, the USD had peaked, but after a peak comes, well…a fall for the Greenback—all very good for commodities, real estate, growth tech stocks and, of course, precious metals.

  Back to the “What If” of a Naked Taper

  But (and this is a very big “but”), what if the Fed were insane enough to taper QE without any back-door liquidity from foreign swap lines and the repo programs?

  Again, ugly Treasuries would get even uglier, tank in price, sending rates and the USD higher and gold lower, along with a sharp sell-off in risk assets—i.e., corporate stocks and bonds.

  But again, we don’t think this will happen, because as desperate as central bankers are, they are equally predictable.

  Predictable Behavior?

  That is, they know that such a naked taper (i.e., a taper without a back door repo or swap-induced liquidity) would cause rates to spike, and hence Uncle Sam’s bar-tab to default.

  As the Fed’s Vice Chair intimated last year, US Treasuries (Uncle Sam’s bar tab) are simply too big to fail.

  This means we can expect more liquidity (QE or repo/swap) and hence more, not less inflation.

  The Fed is stuck in a self-inflicted dilemma–between letting inflation rip (to partially service America’s bar tab and “declaring” a hidden bankruptcy) or watching markets sink to the bottom of time.

  For now, which choice do you think these banking, pro-market cabal thinkers will make?

  The Realpolitik of COVID

  Meanwhile, and regardless of one’s views on the vaccine mandates, case fatality rates vs. infection rates, or mask wearing vs. mask annoyance, no one needs our amateur medical advice.

  But looking at COVID as a policy tool rather than as controversial health issue, it’s also fairly clear that the powers that be will be milking this fear-porn-to-policy trick for all its worth for as long as its worth.

  Why?

  Again, COVID is a wonderful narrative to justify more debt and more instant liquidity (i.e., fiat monetary expansion) and hence more inflation to inflate away the debt of debt-drunk nations already fatally in debt pre-COVID.

  Rightly or wrongly, there are already scientists out of the UK (namely Oxford vaccine creator Sarah Gilbert) with more IQ-power and credibility than Fauci or Fergusson (admittedly not a high bar), who are already signaling that COVID will resemble little more than a common cold by next year.

  This, if true (and no one really knows anyway), would be good for the world—but would the policy makers like this?

  A post-COVID normal would be a boon to commerce and economic activity, and hence a boon to the velocity of money, which would kick inflation into ultra-high-gear.

  High inflation will mean higher rates, which scare debt-soaked politicians and central bankers, unless inflation rises higher than those rates and negative real yields become the norm, which, again, we think is the realistic (i.e., only option) for these financial magicians running our governments, lives and central banks.

  In such a scenario, gold will smile upon the inflation to come.

  In short, and however we look at it, inflation is the new norm, and negative real rates are no less so, regardless of how the taper or COVID debate plays out.

  As the future unfolds, gold, whose price is waiting for confirmation of such inflation, will only grow stronger as the “transitory” meme gets weaker by the day.

  Tyler Durden
  Tue, 10/05/2021 – 21:25

• Watch: DEA Agent, Gunman Killed In Gun Battle On Arizona Amtrak Train
  Watch: DEA Agent, Gunman Killed In Gun Battle On Arizona Amtrak Train

  A shocking video has surfaced on YouTube of Monday’s gun battle inside an Amtrak train stopped at an Arizona station between federal agents and a gunman. 

  A Drug Enforcement Administration (DEA) agent was shot dead by a man who opened fire inside the second level of the double-decker coach. Agents conducted a routine sweep for drugs and guns on the train bound for New Orleans when the incident unfolded yesterday morning. 

  

  Tucson Police Chief Chris Magnus told reporters that a police officer on the platform who heard the gunfire was also shot. Besides the dead DEA agent, he said the gunman barricaded himself inside a train bathroom and was pronounced dead at the scene. There was no mention if the suspect took his own life or was killed by gunfire from either federal agents, police, or SWAT personnel. 

  YouTube channel “Virtual Railfan” captured the crazy shootout on video. They said:

  “Occasionally, we catch surprising events in front of our cameras, including wildlife, weather, accidents, weddings, silliness… and some much, much more serious. This was one of those. Our hearts and prayers go out to those affected by the shooting, and we continue to assist local, federal and railroad law enforcement to not only investigate, but to help prevent such tragedies in the future. For details as they emerge, please seek out a trusted news source.” 

  Here’s the video: 

  What remains a mystery is the motive behind the suspect’s action and if police found anything of interest after the shootout. There are more questions than answers. 

  Tyler Durden
  Tue, 10/05/2021 – 21:05

• "A Politically-Motivated Abuse Of Power" – GOP Rep. Rages At AG Garland's 'Weaponization' Of The DoJ Against Dissenting Parents
  “A Politically-Motivated Abuse Of Power” – GOP Rep. Rages At AG Garland’s ‘Weaponization’ Of The DoJ Against Dissenting Parents

  Update (1700ET): Republican Congressman for Colorado’s 4th District, Ken Buck, has penned an excellent reply for Garland’s overreach, taking apart the AG’s “weaponization” of the DoJ point by point…

  “Your memorandum is a politically-motivated abuse of power and displays a lack of reasoned, sound judgment… confronting parents to oppose the views of the Biden administration and its socialist agenda…”

  🚨My letter to AG Garland today:

  AG Garland is using the DOJ to intimidate and silence parents who are exercising their First Amendment rights. This is an egregious and unprecedented abuse of power. pic.twitter.com/ZSJ9ENjCu6

  — Rep. Ken Buck (@RepKenBuck) October 5, 2021

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  *  *  *

  One day after a North Carolina school board adopted a policy that would discipline or dismiss teachers if they incorporate critical race theory (CRT) into their teaching of the history of the United States, The Epoch Times’ Ivan Pentchoukov reports that Attorney General Merrick Garland on Oct. 4 announced a concentrated effort to target any threats of violence, intimidation, and harassment by parents toward school personnel.

  

  The announcement also comes days after a national association of school boards asked the Biden administration to take “extraordinary measures” to prevent alleged threats against school staff that the association said was coming from parents who oppose mask mandates and the teaching of critical race theory.

  Garland directed the FBI and U.S. attorneys in the next 30 days to convene meetings with federal, state, and local leaders within 30 days to “facilitate the discussion of strategies for addressing threats against school administrators, board members, teachers, and staff,” according to a letter (pdf) the attorney general sent on Monday to all U.S. attorneys, the FBI director, the director of the Executive Office of U.S. Attorneys, and the assistant attorney general of the DOJ’s criminal division.

  

  According to the DOJ, further efforts will be rolled out in the coming days, including a task force that will determine how to use federal resources to prosecute offending parents as well as how to advise state entities on prosecutions in cases where no federal law is broken. The Justice Department will also provide training to school staff on how to report threats from parents and preserve evidence to aid in investigation and prosecution.

  “In recent months, there has been a disturbing spike in harassment, intimidation, and threats of violence against school administrators, board members, teachers, and staff who participate in the vital work of running our nation’s public schools,” Garland wrote.

  “While spirited debate about policy matters is protected under our Constitution, that protection does not extend to threats of violence or efforts to intimidate individuals based on their views.”

  School boards across the nation have increasingly become an arena for heated debate over culture, politics, and health. Parents groups have ramped up pressure on boards over the teaching of critical race theory and the imposition of mask mandates. The debate is split sharply along political lines, with Democrats largely in favor of critical race theory and mask mandates, and Republicans opposing both.

  The amount and severity of the threats against officials are not known, but Garland’s letter suggests the phenomenon is widespread.

  Full AG Garland Statement (with our thoughts):

  MEMORANDUM FOR DIRECTOR, FEDERAL BUREAU OF INVESTIGATION; DIRECTOR, EXECUTIVE OFFICE FOR U.S. ATTORNEYS ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION UNITED STATES ATTORNEYS

  FROM:       THE ATTORNEY GENERAL

  SUBJECT:    PARTNERSHIP AMONG FEDERAL, STATE, LOCAL, TRIBAL, AND TERRITORIAL LAW ENFORCEMENT TO ADDRESS THREATS AGAINST SCHOOL ADMINISTRATORS, BOARD MEMBERS, TEACHERS, AND STAFF

  In recent months, there has been a disturbing spike in harassment, intimidation, and threats of violence against school administrators, board members, teachers, and staff who participate in the vital work of running our nation’s public schools. While spirited debate about policy matters is protected under our Constitution, that protection does not extend to threats of violence or efforts to intimidate individuals based on their views.

  [ZH: But intimidating parents who dare to have the view that the nation’s founding fathers and the founding documents are not in fact systemically racist and does not want their children taught that is the case is ok?]

  Threats against public servants are not only illegal, they run counter to our nation’s core values. Those who dedicate their time and energy to ensuring that our children receive a proper education in a safe environment deserve to he able to do their work without fear for their safety.

  [ZH: “Dedication” to a “proper education” is admirable; indoctrination in Marxism is not]

  The Department takes these incidents seriously and is committed to using its authority and resources to discourage these threats, identify them when they occur, and prosecute them when appropriate. In the coming days, the Department will announce a series of measures designed to address the rise in criminal conduct directed toward school personnel.

  [ZH: What exactly is the crime?]

  Coordination and partnership with local law enforcement is critical to implementing these measures for the benefit of our nation’s nearly 14,000 public school districts. To this end, I am  directing the Federal Bureau of Investigation, working with each United States Attorney, to convene meetings with federal, state, local, Tribal, and territorial leaders in each federal judicial district within 30 days of the issuance of this memorandum. These meetings will facilitate the discussion of strategies for addressing threats against school administrators, board members, teachers, and staff, and will open dedicated lines of communication for threat reporting, assessment, and response.

  [ZH: We wonder how many local law enforcement officials, while busily watching for vaccine passport offenders, and mask-mandate refusers, will acquiesce to enforcing these new laws to protect the very people who are preaching that America’s systemic racism starts with the men (and women) in blue?]

  The Department is steadfast in its commitment to protect all people in the United States from violence, threats of violence, and other forms of intimidation and harassment.

  [ZH: Presumably intimidation and emotional harassment of young white boys and girls for their ‘whiteness’, privilege, and systemic racism is beyond that ‘protection’?]

  As Chris Rufo (@RealChrisRufo) tweeted: “The Biden administration is rapidly repurposing federal law enforcement to target political opposition.”

  The Biden administration is rapidly repurposing federal law enforcement to target political opposition.

  They want to reclassify dissent as “disinformation” and “domestic terrorism,” justifying an unprecedented intervention, both directly and in partnership with tech companies.

  — Christopher F. Rufo ⚔️ (@realchrisrufo) October 4, 2021

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  Rufo goes on to note that:

  “Neither the Attorney General’s memo nor the full Justice Department press release cites any significant, credible threat. This is a blatant suppression tactic, designed to dissuade citizens from participating in the democratic process at school boards.“

  

  Parents have led the charge against controversial issues such as Critical Race Theory (CRT), masking mandates and vaccine requirements.

  CRT holds that America is fundamentally racist, yet it teaches people to view every social interaction and person in terms of race. Its adherents pursue “antiracism” through the end of merit, objective truth and the adoption of race-based policies.

  This is Courtney Ann Taylor, a mother in Georgia. She’s one of the many parents who’ve HAD IT with mask mandates, especially for young kids in school.

  Share this video! pic.twitter.com/pyG3fYmgVI

  — Errol Webber (@ErrolWebber) April 22, 2021

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  In Loudoun County, Virginia, two parents were arrested in June for trespassing while protesting CRT and a transgender policy at the school district because they refused to leave the rowdy meeting that was declared an unlawful assembly.

  In July, a man was arrested at a school board meeting and charged with a felony because a gun reportedly fell out of his pocket, the Indianapolis Star reported. 

  In Utah, 11 anti-mask protestors were arrested on misdemeanor charges for allegedly disrupting a school board meeting in May, the Salt Lake Tribune reported. The protestors entered the school board meeting and shouted obscenities, which resulted in an early end to the meeting.

  Senator Tom Cotton  (@SenTomCotton) tweeted his thoughts:

  “Parents are speaking out against Critical Race Theory in schools. Now the Biden administration is cracking down on dissent.”

  

  Just this week, Ron Paul explained why it is so important for parents to control the education of their children:

  During last week’s Virginia gubernatorial debate, Democratic candidate Terry McAuliffe promised that as governor he would prevent parents from removing sexually explicit books from school libraries, because he doesn’t think “parents should be telling schools what they should teach.”

  McAuliffe’s disdain for parents who think they should have some say in their children’s education is shared by most “progressives,” as well as some who call themselves conservatives. They think parents should obediently pay the taxes to fund the government schools and never question any aspect of the government school program.

  School officials’ refusal to obey the wishes of parents extends to the anti-science mask mandates. Mask mandates are not only useless in protecting children from a virus they are at low risk of becoming sick from or transmitting, the mandated mask-wearing actually makes children sick! Yet school administrators refuse to follow the science if that means listening to parents instead of the so-called experts.

  Replacing parental control with government control of education (and other aspects of child raising) has been a goal of authoritarians since Plato. After all, it is much easier to ensure obedience if someone has been raised to think of the government as the source of all wisdom and truth, as well as the provider of all of life’s necessities.

  In contrast to an authoritarian society, a free society recognizes that parents have both the responsibility and the right to provide their children with a quality education that reflects the parents’ values. Teachers who use their positions to indoctrinate children in beliefs that contradict the views of the parents are the ones overstepping their bounds.

  Restoring parental control of education should be a priority for all who believe in liberty. If government can override the wishes of parents in the name of “education” or “protecting children’s health” then what area of our lives is safe from government intrusion?

  Fortunately, growing dissatisfaction with government schools is leading many parents to try to change school policies.

  “It is shameful that activists are weaponizing the US Department of Justice against parents,” Nicole Neily, president of Parents Defending Education told the Daily Caller News Foundation in response to the memorandum.

  “This is a coordinated attempt to intimidate dissenting voices in the debates surrounding America’s underperforming K-12 education – and it will not succeed. We will not be silenced.”

  Tyler Durden
  Tue, 10/05/2021 – 20:48

• We Have One Market Concerned About Valuations, And Another Where Price Discovery Is Broken
  We Have One Market Concerned About Valuations, And Another Where Price Discovery Is Broken

  By Ven Ram, Bloomberg markets commentator and analyst

  The first lesson that aspiring medical doctors are taught is simple: first, do no harm. Central banks may want to embrace the same principle.

  U.S. stocks have been wobbly of late, with both the S&P 500 Index and the Nasdaq Composite tumbling more than one standard deviation a handful of times in the past month. For reasons, consider a host of factors, including spiraling oil prices that are bound to ripple through the economy and push up prices of services and goods, the Fed’s looming taper, concerns about China and lofty valuations that have left investors second-guessing whether current elevated levels are viable.

  That is as it should be: markets are nothing but a series of dots plotted every day on the basis of information available then but only connected as a coherent sketch over time. That inherently means markets are volatile, but, oh, do they work beautifully over time as they adjust higher and lower to every new input in the economy.

  Juxtapose that against bond markets that have completely lost the plot. Here we are, on the cusp of taper and a possible series of rate hikes down the line, and while Treasury 10-year yields have inched higher somewhat of late, volatility in rates is nowhere what you would expect and seem completely divorced from concerns that are dogging stocks. Blame it, at least to a great extent, on the Fed’s unbridled balance-sheet expansion, with the monetary authority buying bonds at a breakneck pace of more than $1 million a minute.

  So we have one part of the market concerned about current valuations and correcting itself. Yet, we have another corner where price discovery is broken, and the principal difference as things stand between those two spaces is the overwhelming presence of a buyer at first retort masquerading as the lender of last resort.

  

  Markets function best when they are allowed to get on with their assigned task by themselves.

  Tyler Durden
  Tue, 10/05/2021 – 20:45

• GM's Autonomous Cruise Division May Hit $50 Billion In Revenue "Over The Next Couple Years"
  GM’s Autonomous Cruise Division May Hit $50 Billion In Revenue “Over The Next Couple Years”

  GM’s Cruise autonomy division, who is actually working on robotaxis (unlike another company who claimed to be doing so Tesla ) is now telling its investors its ride-hailing business could eventually reach $50 billion in revenue over the next couple of years.

  The company also plans on charging riders as soon as next year, Cruise Chief Executive Officer Dan Ammann is expected to say this week, according to Bloomberg. Ammann will also note that the company could expand in 2023 if California regulators allow it to. 

  GM is presenting its ride hailing business to investors on October 6 and October 7. The company will explain how ride hailing, mixed with EVs and connected technologies, could soon start increasing the automaker’s top line.

  Cruise has spent billions trying to get their technology to a jumping off point, so bringing in billions in revenue (or any revenue at all) would be a notable positive for the division. It has taken more time establishing approvals for robotic driving, which has, to this point, delayed revenue. 

  

  GM has a majority stake in Cruise. The company said it’ll try and use a modified version of the Chevy Bolt to begin charging for rides, pending California Public Utility Commission approvals. The company will also have its Origin autonomous shuttle in production by 2023, alongside of its Hummer EV and electric Silverado. 

  All eyes will be on Ammann this week, who will show how revenue for Cruise could eventually get to $50 billion. His presentation “will include updates on the automaker’s electric vehicle plans, its SuperCruise driver-assistance feature and how the company will use its Ultify software platform to generate more revenue from app-based services in cars,” Bloomberg reported this week. 

  Chris James, founder of Engine No. 1, an activist investor, said this week: “GM’s goal to go 100% electric by 2035 signals one of the largest transformations in the history of the auto industry and creates an opportunity to re-center the battery supply chain in America. The company’s early lead on battery technology, along with Mary Barra and the board’s leadership, creates tremendous advantages.”

  Tyler Durden
  Tue, 10/05/2021 – 20:25

• Taliban Raids ISIS Hideout After Kabul Mosque Bombing As US Mulls 'Cooperation'
  Taliban Raids ISIS Hideout After Kabul Mosque Bombing As US Mulls ‘Cooperation’

  Authored by Dave DeCamp via AntiWar.com,

  Taliban spokesman Zabihullah Mujahid said Monday that the Taliban raided a hideout for the Afghan ISIS affiliate, known as ISIS-K. He hailed a “decisive and successful attack,” he said. 

  Mujahid said the Taliban killed every ISIS fighter they found at the hideout in the northern Kabul neighborhood of Khair Khana, although he did not give a specific number. A source told Afghanistan’s TOLO News that 10 members of a family affiliated with ISIS-K were killed in the operation.

  

  The raid came after a Sunday bombing at a mosque in Kabul that killed five civilians. According to The Associated Press, nobody intially took responsibility for the Mosque attack, but ISIS-K was quickly suspected since it has been active. 

  But later as The Hill reported:

  ISIS-K, ISIS’s affiliate in Afghanistan, claimed responsibility for Sunday’s bombing, during which no Taliban fighters were killed, the group told The Washington Post. 

  The Taliban have been busy fighting ISIS-K since the US completed its withdrawal. Last week, the Taliban raided an ISIS-K hideout in the Parwan province, which is north of Kabul.

  ISIS-K has taken credit for several attacks against the Taliban in Jalalabad, the capital of Nangarhar province, where the terrorist group is mainly based.

  The US has hinted at further intervention in Afghanistan under the guise of fighting ISIS-K. While the Taliban has accepted help from the US in the past against ISIS-K, since the withdrawal, the Taliban said they don’t need any foreign help to fight the terrorist group.

  Working with the Devil? The Potential for U.S.-#Taliban Cooperation Against the Islamic State in #Afghanistan, by @JJSchroden & Alexander Powell via @WarOnTheRocks https://t.co/f4zb9ck3Jk

  — Andrej Matisak (@matisaksk) September 16, 2021

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  There have been no known US airstrikes in Afghanistan since the August 29th Kabul drone strike that slaughtered 10 civilians, but the Taliban have accused the US of flying drones into Afghan airspace since then.

  Tyler Durden
  Tue, 10/05/2021 – 20:05

• Who's Running The Show? Kerry Tells French TV Biden 'Literally Not Aware' Of International Spat
  Who’s Running The Show? Kerry Tells French TV Biden ‘Literally Not Aware’ Of International Spat

  President Joe Biden was ‘literally not aware’ of the spat between the United States and France which was ignited by the Biden administration’s tri-lateral agreement with the UK and Australia over the exchange of submarine technology, according to Climate Envoy John Kerry.

  

  The spat was so bad that French President Emmanuel Macron briefly recalled his ambassador to the US.

  “[Biden] asked me. He said, ‘What’s the situation?’ And I explained- he had not been aware of that. He literally had not been aware of what had transpired,” Kerry said in an interview broadcast on French television. “And I don’t want to go into the details of it, but suffice it to say, that the president, my president is very committed to strengthening the relationship and making sure that this is a small event of the past and moving on to the much more important future.”

  John Kerry admits in interview with French TV that Joe Biden had no idea about the fallout with the French from the AUKUS sub deal.

  “He literally had not been aware of what had transpired” pic.twitter.com/EblvE05zKg

  — POLARIS (@polarisnatsec) October 5, 2021

  As Fox News notes, Kerry’s embarrassing admission caught the attention of Sen. Bill Hagerty (R-TN), who tweeted: “This could explain disastrous Afghanistan withdrawal & Biden Admin selling out Eastern European allies in NATO & Ukraine while waiving sanctions on Nord Stream 2 pipeline.“

  .@ClimateEnvoy John Kerry says @POTUS isn’t consulted on reactions of key US Allies. This could explain disastrous Afghanistan withdrawal & Biden Admin selling out Eastern European allies in NATO & Ukraine while waiving sanctions on Nord Stream 2 pipeline. https://t.co/RNaa2vsaJg

  — Senator Bill Hagerty (@SenatorHagerty) October 5, 2021

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  More:

  Generally speaking

  — Lady Liberty 1776 🇺🇸❤🇺🇸 (@kmreid007) October 5, 2021

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  John Kerry inspires confidence in the WH by revealing that Joe Biden ‘literally had not been aware of what had transpired’ with submarine deal https://t.co/Lj24B3fcW8

  — Twitchy Team (@TwitchyTeam) October 5, 2021

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  Who’s running the show?

  Tyler Durden
  Tue, 10/05/2021 – 19:45

• Greenwald: Democrats, Media Do Not Want To Weaken Facebook, Just Commandeer Its Power To Censor
  Greenwald: Democrats, Media Do Not Want To Weaken Facebook, Just Commandeer Its Power To Censor

  Authored by Glenn Greenwald via Substack,

  “Whistleblower” Frances Haugen is a vital media and political asset because she advances their quest for greater control over online political discourse…

  

  Much is revealed by who is bestowed hero status by the corporate media. This week’s anointed avatar of stunning courage is Frances Haugen, a former Facebook product manager being widely hailed as a “whistleblower” for providing internal corporate documents to the Wall Street Journal relating to the various harms which Facebook and its other platforms (Instagram and WhatsApp) are allegedly causing.

  The social media giant hurts America and the world, this narrative maintains, by permitting misinformation to spread (presumably more so than cable outlets and mainstream newspapers do virtually every week); fostering body image neurosis in young girls through Instagram (presumably more so than fashion magazines, Hollywood and the music industry do with their glorification of young and perfectly-sculpted bodies); promoting polarizing political content in order to keep the citizenry enraged, balkanized and resentful and therefore more eager to stay engaged (presumably in contrast to corporate media outlets, which would never do such a thing); and, worst of all, by failing to sufficiently censor political content that contradicts liberal orthodoxies and diverges from decreed liberal Truth. On Tuesday, Haugen’s star turn took her to Washington, where she spent the day testifying before the Senate about Facebook’s dangerous refusal to censor even more content and ban even more users than they already do.

  There is no doubt, at least to me, that Facebook and Google are both grave menaces. Through consolidation, mergers and purchases of any potential competitors, their power far exceeds what is compatible with a healthy democracy. A bipartisan consensus has emerged on the House Antitrust Committee that these two corporate giants — along with Amazon and Apple — are all classic monopolies in violation of long-standing but rarely enforced antitrust laws. Their control over multiple huge platforms that they purchased enables them to punish and even destroy competitors, as we saw when Apple, Google and Amazon united to remove Parler from the internet forty-eight hours after leading Democrats demanded that action, right as Parler became the most-downloaded app in the country, or as Google suppresses Rumble videos in its dominant search feature as punishment for competing with Google’s YouTube platform. Facebook and Twitter both suppressed reporting on the authentic documents about Joe Biden’s business activities reported by The New York Post just weeks before the 2020 election. These social media giants also united to effectively remove the sitting elected President of the United States from the internet, prompting grave warnings from leaders across the democratic world about how anti-democratic their consolidated censorship power has become.

  But none of the swooning over this new Facebook heroine nor any of the other media assaults on Facebook have anything remotely to do with a concern over those genuine dangers. Congress has taken no steps to curb the influence of these Silicon Valley giants because Facebook and Google drown the establishment wings of both parties with enormous amounts of cash and pay well-connected lobbyists who are friends and former colleagues of key lawmakers to use their D.C. influence to block reform. With the exception of a few stalwarts, neither party’s ruling wing really has any objection to this monopolistic power as long as it is exercised to advance their own interests.

  And that is Facebook’s only real political problem: not that they are too powerful but that they are not using that power to censor enough content from the internet that offends the sensibilities and beliefs of Democratic Party leaders and their liberal followers, who now control the White House, the entire executive branch and both houses of Congress. Haugen herself, now guided by long-time Obama operative Bill Burton, has made explicitly clear that her grievance with her former employer is its refusal to censor more of what she regards as “hate, violence and misinformation.” In a 60 Minutes interview on Sunday night, Haugen summarized her complaint about CEO Mark Zuckerberg this way: he “has allowed choices to be made where the side effects of those choices are that hateful and polarizing content gets more distribution and more reach.” Haugen, gushed The New York Times’ censorship-desperate tech unit as she testified on Tuesday, is “calling for regulation of the technology and business model that amplifies hate and she’s not shy about comparing Facebook to tobacco.”

  Agitating for more online censorship has been a leading priority for the Democratic Party ever since they blamed social media platforms (along with WikiLeaks, Russia, Jill Stein, James Comey, The New York Times, and Bernie Bros) for the 2016 defeat of the rightful heir to the White House throne, Hillary Clinton. And this craving for censorship has been elevated into an even more urgent priority for their corporate media allies, due to the same belief that Facebook helped elect Trump but also because free speech on social media prevents them from maintaining a stranglehold on the flow of information by allowing ordinary, uncredentialed serfs to challenge, question and dispute their decrees or build a large audience that they cannot control. Destroying alternatives to their failing platforms is thus a means of self-preservation: realizing that they cannot convince audiences to trust their work or pay attention to it, they seek instead to create captive audiences by destroying or at least controlling any competitors to their pieties.

  As I have been reporting for more than a year, Democrats do not make any secret of their intent to co-opt Silicon Valley power to police political discourse and silence their enemies. Congressional Democrats have summoned the CEO’s of Google, Facebook and Twitter four times in the last year to demand they censor more political speech. At the last Congressional inquisition in March, one Democrat after the next explicitly threatened the companies with legal and regulatory reprisals if they did not immediately start censoring more.

  A Pew survey from August shows that Democrats now overwhelmingly support internet censorship not only by tech giants but also by the government which their party now controls. In the name of “restricting misinformation,” more than 3/4 of Democrats want tech companies “to restrict false info online, even if it limits freedom of information,” and just under 2/3 of Democrats want the U.S. Government to control that flow of information over the internet:

  

  The prevailing pro-censorship mindset of the Democratic Party is reflected not only by that definitive polling data but also by the increasingly brash and explicit statements of their leaders. At the end of 2020, Sen. Ed Markey (D-MA), newly elected after young leftist activists worked tirelessly on his behalf to fend off a primary challenge from the more centrist Rep. Joseph Kennedy III (D-MA), told Facebook’s Zuckerberg exactly what the Democratic Party wanted. In sum, they demand more censorship:

  This, and this alone, is the sole reason why there is so much adoration being constructed around the cult of this new disgruntled Facebook employee. What she provides, above all else, is a telegenic and seemingly informed “insider” face to tell Americans that Facebook is destroying their country and their world by allowing too much content to go uncensored, by permitting too many conversations among ordinary people that are, in the immortal worlds of the NYT‘s tech reporter Taylor Lorenz, “unfettered.”

  When Facebook, Google, Twitter and other Silicon Valley social media companies were created, they did not set out to become the nation’s discourse police. Indeed, they affirmatively wanted not to do that. Their desire to avoid that role was due in part to the prevailing libertarian ideology of a free internet in that sub-culture. But it was also due to self-interest: the last thing social media companies wanted to be doing is looking for ways to remove and block people from using their product and, worse, inserting themselves into the middle of inflammatory political controversies. Corporations seek to avoid angering potential customers and users over political stances, not courting that anger.

  This censorship role was not one they so much sought as one that was foisted on them. It was not really until the 2016 election, when Democrats were obsessed with blaming social media giants (and pretty much everyone else except themselves) for their humiliating defeat, that pressure began escalating on these executives to start deleting content liberals deemed dangerous or false and banning their adversaries from using the platforms at all. As it always does, the censorship began by targeting widely disliked figures — Milo Yiannopoulos, Alex Jones and others deemed “dangerous” — so that few complained (and those who did could be vilified as sympathizers of the early offenders). Once entrenched, the censorship net then predictably and rapidly spread inward (as it invariably does) to encompass all sorts of anti-establishment dissidents on the right, the left, and everything in between. And no matter how much it widens, the complaints that it is not enough intensify. For those with the mentality of a censor, there can never be enough repression of dissent. And this plot to escalate censorship pressures found the perfect vessel in this stunningly brave and noble Facebook heretic who emerged this week from the shadows into the glaring spotlight. She became a cudgel that Washington politicians and their media allies could use to beat Facebook into submission to their censorship demands.

  In this dynamic we find what the tech and culture writer Curtis Yarvin calls “power leak.” This is a crucial concept for understanding how power is exercised in American oligarchy, and Yarvin’s brilliant essay illuminates this reality as well as it can be described. Hyperbolically arguing that “Mark Zuckerberg has no power at all,” Yarvin points out that it may appear that the billionaire Facebook CEO is powerful because he can decide what will and will not be heard on the largest information distribution platform in the world. But in reality, Zuckerberg is no more powerful than the low-paid content moderators whom Facebook employs to hit the “delete” or “ban” button, since it is neither the Facebook moderators nor Zuckerberg himself who is truly making these decisions. They are just censoring as they are told, in obedience to rules handed down from on high. It is the corporate press and powerful Washington elites who are coercing Facebook and Google to censor in accordance with their wishes and ideology upon pain of punishment in the form of shame, stigma and even official legal and regulatory retaliation. Yarvin puts it this way:

  However, if Zuck is subject to some kind of oligarchic power, he is in exactly the same position as his own moderators. He exercises power, but it is not his power, because it is not his will. The power does not flow from him; it flows through him. This is why we can say honestly and seriously that he has no power. It is not his, but someone else’s. . . .

  Zuck doesn’t want to do any of this. Nor do his users particularly want it. Rather, he is doing it because he is under pressure from the press. Duh. He cannot even admit that he is under duress—or his Vietcong guards might just snap, and shoot him like the Western running-dog capitalist he is….

  And what grants the press this terrifying power? The pure and beautiful power of the logos? What distinguishes a well-written poast, like this one, from an equally well-written Times op-ed? Nothing at all but prestige. In normal times, every sane CEO will comply unhesitatingly with the slightest whim of the legitimate press, just as they will comply unhesitatingly with a court order. That’s just how it is. To not call this power government is—just playing with words.

  As I have written before, this problem — whereby the government coerces private actors to censor for them — is not one that Yarvin was the first to recognize. The U.S. Supreme Court has held, since at least 1963, that the First Amendment’s “free speech” clause is violated when state officials issue enough threats and other forms of pressure that essentially leave the private actor with no real choice but to censor in accordance with the demands of state officials. Whether we are legally at the point where that constitutional line has been crossed by the increasingly blunt bullying tactics of Democratic lawmakers and executive branch officials is a question likely to be resolved in the courts. But whatever else is true, this pressure is very real and stark and reveals that the real goal of Democrats is not to weaken Facebook but to capture its vast power for their own nefarious ends.

  There is another issue raised by this week’s events that requires ample caution as well. The canonized Facebook whistleblower and her journalist supporters are claiming that what Facebook fears most is repeal or reform of Section 230, the legislative provision that provides immunity to social media companies for defamatory or other harmful material published by their users. That section means that if a Facebook user or YouTube host publishes legally actionable content, the social media companies themselves cannot be held liable. There may be ways to reform Section 230 that can reduce the incentive to impose censorship, such as denying that valuable protection to any platform that censors, instead making it available only to those who truly allow an unmoderated platform to thrive. But such a proposal has little support in Washington. What is far more likely is that Section 230 will be “modified” to impose greater content moderation obligations on all social media companies.

  Far from threatening Facebook and Google, such a legal change could be the greatest gift one can give them, which is why their executives are often seen calling on Congress to regulate the social media industry. Any legal scheme that requires every post and comment to be moderated would demand enormous resources — gigantic teams of paid experts and consultants to assess “misinformation” and “hate speech” and veritable armies of employees to carry out their decrees. Only the established giants such as Facebook and Google would be able to comply with such a regimen, while other competitors — including large but still-smaller ones such as Twitter — would drown in those requirements. And still-smaller challengers to the hegemony of Facebook and Google, such as Substack and Rumble, could never survive. In other words, any attempt by Congress to impose greater content moderation obligations — which is exactly what they are threatening — would destroy whatever possibility remains for competitors to arise and would, in particular, destroy any platforms seeking to protect free discourse. That would be the consequence by design, which is why one should be very wary of any attempt to pretend that Facebook and Google fear such legislative adjustments.

  There are real dangers posed by allowing companies such as Facebook and Google to amass the power they have now consolidated. But very little of the activism and anger from the media and Washington toward these companies is designed to fracture or limit that power. It is designed, instead, to transfer that power to other authorities who can then wield it for their own interests. The only thing more alarming than Facebook and Google controlling and policing our political discourse is allowing elites from one of the political parties in Washington and their corporate media outlets to assume the role of overseer, as they are absolutely committed to doing. Far from being some noble whistleblower, Frances Haugen is just their latest tool to exploit for their scheme to use the power of social media giants to control political discourse in accordance with their own views and interests.

  Correction, Oct. 5, 2021, 5:59 pm ET: This article was edited to reflect that just under 2/3 of Democrats favor U.S. Government censorship of the internet in the name of fighting misinformation, not just over.

  Tyler Durden
  Tue, 10/05/2021 – 19:25

• FBI Counterterrorism Official Admits Agency Doesn't Track Antifa Violence
  FBI Counterterrorism Official Admits Agency Doesn’t Track Antifa Violence

  Last week, the FBI’s Assistant Director of Counterterrorism, Timothy Langan, admitted that the Bureau doesn’t track ‘Antifa’ violence – as they don’t consider the leftist group to be an ‘organization.’

  

  Via TownHall:

  In a congressional hearing last week titled “Confronting Violent White Supremacy (Part VI): Examining the Biden Administration’s Counterterrorism Strategy,” FBI Assistant Director of Counterterrorism Timothy Langan said that the Bureau doesn’t consider Antifa to be an “organization,” and as such does not have specific information on the group’s activities. 

  In response to a question about how much violence or domestic terrorism Antifa committed in recent years from Rep. Nancy Mace (R-SC), Langan had nothing to offer. 

  “Under the anti-government category or subcategory of domestic terrorism — would that include groups like Antifa or Black Lives Matter, folks who commit violence or acts of domestic terrorism?” Mace asked.

  “Well, we don’t identify groups but individuals’ actions,” Langan responded. “So if individuals are committing actions that would be in furtherance of anti-government or anarchist ideals then they would fall into that category.”

  Watch:

  Yet, in 2020 – under President Trump, FBI Director Chirstopher Wray told Congress: “We have seen Antifa adherence coalescing and working together in what I would describe as small groups and nodes,” adding that the bureau was conducting multiple investigations “into some anarchist violent extremists, some of whom operate through these nodes.”

  In September 2020, Wray said ‘Antifa is a real thing.’

  “Antifa is a real thing. It’s not a group or an organization. It’s a movement, or an ideology may be one way of thinking of it … And we have quite a number — and I’ve said this quite consistently since my first time appearing before this committee — we have any number of properly predicated investigations into what we would describe as violent anarchist extremists and some of those individuals self-identify with Antifa.”

  What’s more, in 2017 the FBI and DHS classified Antifa activities as “domestic terrorist violence.”

  Federal authorities have been warning state and local officials since early 2016 that leftist extremists known as “antifa” had become increasingly confrontational and dangerous, so much so that the Department of Homeland Security formally classified their activities as “domestic terrorist violence,” according to interviews and confidential law enforcement documents obtained by POLITICO. –Politico

  Yet, Langan made clear that the FBI isn’t taking Antifa seriously.

  “The director has previously described them as a ‘movement’ and there have been individuals that have associated or identified with Antifa that have conducted violent acts that we would categorize as anarchist,” he said, after Mace asked if he would classify Antifa as an anarchist group.

  Mace pushed back, asking “How many acts of violence or domestic terrorism has Antifa committed over the last two years?” To which Langan replied: “Since we don’t categorize Antifa, nor do we calculate or collate information regarding Antifa, that movement, we don’t have that.”

  Last August, then Attorney General William Barr said that Antifa is a “revolutionary group” bent on establishing communism or socialism in the US.

  “They are a revolutionary group that is interested in some form of socialism, communism. They’re essentially Bolsheviks. Their tactics are fascistic,” Barr told Fox News.

  Related:

  Antifa Plots Acid Attack At DC Free Speech Rally

   “We Know Where You Sleep At Night”: Antifa Mob Whose Founder Loves Assassination Targets Tucker Carlson At Home

  Watch: “Street Anarchy” As Antifa Attacks Portland Drivers That Don’t Obey

  Bay Area TV Anchor: “I Experienced Hate First Hand Today In Berkeley” From Antifa

  “Let’s Kill Some Cops”: Antifa Infiltrated By Undercover Trump Supporter, Recorded Plotting Attacks

  “Still Think This Is An Idea?” – San Francisco Free-Speech Marchers, Police Violently Attacked By Antifa

  Conservative Journalist Jack Posobiec Assaulted By DC Antifa

  The FBI, however, apparently agrees with Rep. Jerry Nadler (D-NY)…

  I ran into Jerry Nadler in DC and asked him to disavow the Antifa violence/rioting in Portland.

  His response?

  “THATS A MYTH” pic.twitter.com/veImyE2rju

  — Essential Fleccas 🇺🇸 (@fleccas) July 27, 2020

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  Tyler Durden
  Tue, 10/05/2021 – 19:05

Digest powered by RSS Digest

• Northwestern Europe Sees Mild Weather, Offers Temporary Relief From Energy Crisis
  Northwestern Europe Sees Mild Weather, Offers Temporary Relief From Energy Crisis

  Temperatures in northwest Europe are forecasted to be above average through the middle of next week, according to a new report from Maxar’s WeatherDesk. This is excellent news for the region that has been battered by below-average temperatures and soaring natural gas and power bill costs. 

  Above-average temperatures are forecasted for northwest Europe through next Wednesday. Then, in the second half of the month, temperatures will dip below trend and increase heating demand.

  

  Below average heating degree days for northwest Europe will be seen through Oct. 12 and then is expected to jump above trend by late next week, which signals cooler weather will take more energy to heat a building structure. 

  

  This week’s above-average temperatures may act as temporary relief for customers who’ve already had their wallets pummeled by European gas prices (Dutch TTF and UK NBP) hitting new highs amid lower stockpiles ahead of the winter season. 

  

  For the last several months, European gas prices have been soaring to new highs on a weekly basis. Reports indicated last week that a sudden drop in Russian natgas deliveries via the Yamal-Europe pipeline that runs across Belarus and Poland to Mallnow, Germany, was the spark that lifted prices even higher. 

  Warmer temperatures will be welcomed for this week into early next but gas prices could continue higher as cold weather is just ahead. 

  Tyler Durden
  Tue, 10/05/2021 – 02:45

• US & British Surveillance Planes Circle Russia's Kaliningrad
  US & British Surveillance Planes Circle Russia’s Kaliningrad

  Authored by Jason Ditz via AntiWar.com,

  Spying activity is often driving tensions between NATO and Russia. This is the case in the Baltic right now, where US and British surveillance planes are very visibly active around the Russian exclave of Kaliningrad.

  The surveillance is being conducted by RC-135W, planes that conduct electronic surveillance, surveying the electromagnetic spectrum in the area to gather intelligence.

  

  Kaliningrad was historically Ostpreußen, a part of Germany, and before that Prussia. The Soviet Union took the land in 1946 after WW2. The exclave loomed large around the start of WW2, as the lack of a land connection between Ostpreußen and the rest of Germany was the source of a lot of tension with Poland. Germans were expelled by the Soviets, and Soviet citizens were moved in in the late 1940s.

  During the Cold War, Kaliningrad was physically connected to the rest of the Soviet Union through the Baltic States, but with them now independent and in NATO, the exclave is unconnected, and often a target of NATO exercises.

  From a strategic perspective Kaliningrad is used to monitor NATO operations, and Russia often threatens to deploy arms, including nuclear weapons, in Kaliningrad to counter US deployments in central Europe.

  RAF and USAF RC-135 around Kaliningrad oblast #JAKE11 #RRR7219 pic.twitter.com/T6EKshVzgQ

  — BDS 0,8 (@BDataS_08) September 29, 2021

  https://platform.twitter.com/widgets.js

  Very active surveillance, like the kind the US and Britain are conducting, would be considered a provocation if Russia was doing it, and probably will be considered provocation by Russia since it’s being done to them.

  NATO is almost always needling Russia in the region, building up ever-growing numbers of troops in the Baltic states and conducting growing military exercises, centered around engagements against Russia in general and Kaliningrad in particular.

  Tyler Durden
  Tue, 10/05/2021 – 02:00

• "Covert, Corrupt, & Coercive": Report Details Beijing's Bid To Establish New Global Media Order
  “Covert, Corrupt, & Coercive”: Report Details Beijing’s Bid To Establish New Global Media Order

  Authored by Eva Fu via The Epoch Times,

  The Chinese regime has been deploying “covert, corrupt and coercive” means to weaponize Chinese-language and Western media in a campaign to impose its vision of current affairs on the rest of the world, a recent French military think tank report finds.

  

  Beijing’s efforts to export its narratives have lasted for decades. The first Chinese Communist Party-controlled English language newspaper, China Daily, started in 1981. But such attempts had been clumsy and yielded slow results, according to Reporters Without Borders.

  The year 2008 marked a turning point. The Olympic Games in Beijing, an event the regime had hoped to leverage to showcase its economic success, gave rise to protests in nearly a dozen cities around the world that disrupted torch relays.

  The humiliation Beijing suffered from the resulting negative coverage had stung the authorities. To better control the regime’s global image, the Chinese Communist Party (CCP) soon came up with a “10-year plan,” noted the report by the Institute for Strategic Studies of Military Schools (IRSEM), a think tank funded by the Ministry of the Armed Forces.

  

  A police officer communicates over his radio standing beside an anti-Chinese banner during a demonstration by pro-Tibet activists and supporters near venue of the Indonesia’s leg of 2008 Beijing Olympic torch relay in Jakarta on April 22, 2008. (Jewel Samad/AFP via Getty Images)

  The 650-page study, which drew on public information, research reports, and independent interviews, examined how Beijing has been exploiting the openness of the West to amplify its propaganda narratives, forming one component of the regime’s sprawling influence operations globally.

  The values of tolerance that characterize Western democracies have afforded Beijing “considerable freedom of movement,” allowing it to multiply its foreign offices, recruit foreign journalists to adapt its messages to different audiences, infiltrate local press with gifts and other material benefits, while dispensing billions of advertising dollars on Western media to further expand its reach, the report said.

  In China, rather than a watchdog meant to keep the government in check, the press under Beijing has become a tool to serve the Party, the report said. Such vision was made plain in a 2016 speech by Chinese leader Xi Jinping, during which he told around 180 state media representatives to align their ideology with that of the top officials, “speak for the Party’s will … and protect the Party’s authority,” according to a Xinhua readout.

  To some Xinhua reporters, Xi’s coming to power had marked the beginning of a new era, in which the Chinese media “no longer need to be ashamed of being communist media,” a Xinhua reporter told one of the report authors in 2018.

  Buying Influence

  Chinese state media are active on all social media networks, with a sizable influence on Twitter, Facebook, YouTube, and Instagram—all of which are blocked in China.

  Chinese state media set up English- and regional-language pages on Facebook in 2013. Eight years on, they have topped world’s media in term of following, with four major outlets—CGTN, China Daily, Xinhua, and People’s Daily—having between 86 million to 116 million followers each at the time of the French report’s publication, or about 2.5 to 3 times larger than that of CNN’s.

  

  The logo of CGTN is displayed on a computer monitor in London, England, on Feb. 4, 2021. (Leon Neal/Getty Images)

  These “spectacular scores” have been the outcome of a deliberate effort to artificially inflate subscriber numbers, the authors said, pointing to the “exceptional growth rate” and the “extremely low interaction rate” these accounts receive.

  According to the report, around eight major Chinese state media in English have an average growth rate of 37.8 percent from the period Jan. 1, 2019 to March 31, 2020, or about 5,000 times higher than that of U.S. mainstream media, but their level of engagement is 68 times lower.

  Tender documents dated 2018 and 2019 reveal that state run outlets have been spending hundreds of thousands of dollars to acquire followers on Twitter and Facebook in what appeared to be a campaign to establish themselves as authoritative news voices.

  “When … you see tens of millions of people following, then you feel like this is pretty credible,” Sarah Cook, a China analyst at human rights watchdog Freedom House, told The Epoch Times at the time. She described it as a “new frontier,” that is, “an avenue for accessing the grassroots in society and public in other countries.”

  

  Facebook and Twitter logos are seen on a shop window in Malaga, Spain, on June 4, 2018. (Jon Nazca/Reuters)

  The proportion of fake accounts among their Twitter followers is hard to ignore: For an average Twitter user, from 5 to 30 percent of the accounts that follow them are bots or spam; but the fake account ratio for the four aforementioned media ranges from 34.3 percent to 38.4 percent. For their French versions, the numbers shoot up to as high as 62.8 percent, the researchers found.

  CCP-controlled China Daily at the same time is pouring millions of dollars to distribute their content through some of the most influential publications around the world. Between November 2016 and April 2020, China Daily paid nearly 19 million to U.S. newspapers to insert their free supplement called China Watch.

  The collaboration has a three-fold benefit, the authors said. Not only does it help the Chinese media reach its target audience, it makes them appear more credible, and gives them financial leverage over their partner media.

  British newspaper The Telegraph, which until April last year had been receiving roughly £750,000 (roughly $1 million) per year to distribute China Watch, also carried at least 20 signed articles by the Chinese ambassador to the U.K. between 2016 and 2018—twice the number published by the Daily Mail, The Guardian, and Financial Times combined, according to a 2019 study published on Royal United Services Institute, a British defense and security think tank.

  A New Global Media Order

  The U.S. State Department has designated a total of 15 Chinese state-run outlets’ entities based in the country as foreign missions because they are “substantially owned or effectively controlled” by a foreign government, a department spokesperson told The Epoch Times in September.

  

  A newspaper consumer reads a copy of China’s Africa edition of its daily newspaper in front of a news stand in the Kenyan capital on Dec. 14, 2012. (Tony Karumba/AFP via Getty Images)

  In the case of state-run news agency Xinhua, its local journalists have the “sole mission of translating dispatches previously penned by Chinese staff,” the French report said. A French journalist for Xinhua told a report author in 2018 that their Xinhua dispatches consist of 80 percent translations from English and 20 percent from Chinese. The translations and occasional original article would all be proofread by a Chinese journalist fluent in French and attuned to “Party’s expectations as well as the ‘preferred stories,’” according to the Xinhua reporter.

  Former staff members from pro-Beijing Hong Kong newspaper Sing Tao have recounted similar stories to The Epoch Times after the publication registered its five U.S. entities as foreign agents under orders from the Justice Department in August.

  David, a former senior editor for Sing Tao’s New York office, said that he was briefed on “two principles” on his first day: no reporting of news on Falun Gong, a spiritual group persecuted by Beijing, nor Taiwan independence. Another, who worked for the outlet’s San Francisco office years ago, said she was told not to use the word CCP—the acronym for the Chinese Communist Party—nor “Republic of China,” the official name for the self-ruling island of Taiwan that the regime claims as its own. Instead, she was to use the words “China” and “Taiwan Province of the People’s Republic of China” respectively, she told The Epoch Times.

  Acquiring foreign media, training journalists, donating gifts and equipment, applying diplomatic pressure, using visa blackmail, leveling threats through phone calls are among some other tactics deployed by Beijing to reshape the media landscape overseas to bend to its will, according to the report.

  In South Africa, journalist Azad Essa saw his weekly column canceled from Independent Media, the country’s second-largest media group, hours after the publication of his Sept. 2018 story condemning the persecution of Uyghurs in China’s Xinjiang region. The media group is 20 percent owned by two Chinese entities backed or controlled by Beijing.

  

  Damaged computers and construction debris on the floor of The Epoch Times Hong Kong edition’s printing press in Hong Kong, China, on April 12, 2021. (Adrian Yu/The Epoch Times)

  The Hong Kong edition of The Epoch Times has been subject to a string of vandalism since its establishment, in what critics said bears the hallmarks of the regime’s intimidation tactics to silence independent reporting.

  Due to fears of reprisal, Chinese-language media groups in Australia have chosen to actively self-censor, according to a September study by Sydney-based Lowy Institute.

  “Politically sensitive topics or criticisms against the Chinese government would put our staff members or their families at risk. We don’t want them or their families to get detained in China,” one media proprietor told the think tank.

  Tyler Durden
  Mon, 10/04/2021 – 23:40

• Russia Launches Hypersonic Cruise Missile From A Nuclear Submarine In Historic First
  Russia Launches Hypersonic Cruise Missile From A Nuclear Submarine In Historic First

  In what appears to be a world-first, Russia on Monday successfully launched a hypersonic cruise missile from a submarine. Russia’s defense ministry subsequently published video of the nighttime launch from the far northern Barents Sea, saying the test was successful and that the missile hit its target.

  “The test firing of the Tsirkon missile from a nuclear submarine was deemed successful,” the ministry stated. And Reuters detailed that “Low-quality video footage released by the ministry showed the missile shooting upwards from a submarine, its glare lighting up the night sky and illuminating the water’s surface.”

  #Footage #RussianNavy to perform the first test launch of a #Tsirkon hypersonic missile from a nuclear submarine https://t.co/ndA9YevUrz#CruiseMissiles #MissileLaunch #WeaponTrials #Submarines #RussianWeapons pic.twitter.com/CWZEAWfgYz

  — Минобороны России (@mod_russia) October 4, 2021

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  The experimental weapon, which Putin has previously declared “unrivaled” to any missile system in the world, was launched from the Severodvinsk nuclear submarine. He’s also called them “invincible” as they are believed so fast as to be nearly impossible to shoot down.

  Putin has also touted that Russia’s hypersonic arsenal is capable of evading the US mainland’s network of defensive missiles, especially in a series of remarks going back to 2018 when Russia began publicizing its hypersonics program.

  A follow-up video issued by the Russian MoD on Monday appeared to show a second test, this time with the submarine submerged underwater at the moment the missile was fired…

  #Footage The second test launch of a #Tsirkon-class hypersonic missile performed by the the #Severodvinsk nuclear submarine – for the first time while being submerged at a 40-meter’s deep.#CruiseMissiles #MissileLaunch #WeaponTrials #RussianWeapons pic.twitter.com/e1mYIHnmbZ

  — Минобороны России (@mod_russia) October 4, 2021

  https://platform.twitter.com/widgets.js

  In July of this year the Russian Navy had first successfully fired the Zircon from a warship in the White Sea. 

  Russian officials have described the Zircon missile as capable of traveling upwards of Mach 9, or about 6,900 mph and a distance of 1,000 kilometers (621 miles). Putin described the recent launches as a “great event not just in the life of our armed forces but for all of Russia.”

  * * *

  Here is the July test of the Zircon launched from a warship, which had also been a first for Russia:

  Tyler Durden
  Mon, 10/04/2021 – 23:20

• Will The China Cold War Unstick America's Glue?
  Will The China Cold War Unstick America’s Glue?

  Authored by Alastair Crooke via The Strategic Culture Foundation,

  Can an America that off-shored much of its manufacturing capacity to China, for short-term profit, afford the de-coupling?

  

  Washington isn’t quite sure what to do after the chaotic end to America’s ‘forever’ war. Some in Washington bitterly regret exiting from Afghanistan at all, and advocate for an immediate return; some just want to move on – to the China ‘Cold War’, that is. The cries from the initial Establishment ‘melt down’ and its articulation of pain over the Kabul withdrawal débacle, however, indicates the extent to which the almost obsessive focus on ‘Hobbling China’ nevertheless seems like an humiliating retreat to U.S. hawks, habituated to more global, and unlimited interventions.

  It is a retreat. ‘Rome’ is relegating its ‘distant provinces’ to their own devices, and even its abutting loyalist inner circle is being downgraded to ‘benign’ indifference. It is a drawing-in towards the ‘hub’, a ‘circling of wagons’ – the better to muster energies for a lunge out at China.

  There are the acquiescent regions that Americans occupied after WW II (the psychologically-seared Japan and Germany), and then there is the American world empire, which exists chimerically wherever U.S. commercial and cultural power reaches, and more practically in its patchwork of client states and military installations. This third empire is regarded by many Americans as its most remarkable achievement – a triumph of the ‘City of Light’.

  The post 9/11 era’s final ‘Mad Hatter’s Tea Party’ dénouement scene at Kabul Airport did however, clearly convey a strong end-of-the-Roman Empire feel. Yes, failure in Afghanistan may have taken place far from Rome itself, yet something more profound today hangs in the air: a Change of Era.

  And defeats on distant frontiers, can entail profound consequences – closer to the imperial core – as a sense of accelerating imperial decline bleeds into domestic arguments, widening already yawning ideological rifts.

  An embedded national consensus can change very slowly, and then, under the right pressure, all at once. And in many subtle and sometimes chaotic ways, that trigger for change came from Trump. No dove or systematiser, he nonetheless made realism and anti-interventionism, quasi-respectable again.

  Elbridge Colby, who was in Trump’s Pentagon helping devise its national defence strategy, has a new book, The Strategy of Denial: American Defense in an Age of Great Power Conflict, making the case for a foreign policy that leaves the post-9/11 era clearly and decisively behind. The outer circle of the ‘periphery’ reduces to over-horizon, necro-tech management, and the ‘near provinces of empire’, such as Europe are dismissed as ‘sideshows’ to the main event – China. To focus on Iran or North Korea, he says, is simply misguided.

  It is “a realist’s book, laser-focused on China’s bid for mastery in Asia as the 21st century’s most important threat”, Ross Douthat writes in the NY Times. “All other challenges are secondary: Only China threatens American interests in a profound way, through a consolidation of economic power in Asia that imperils our prosperity and a military defeat that could shatter our alliance system. Therefore, American policy should be organized to deny Beijing regional hegemony and deter any military adventurism — first and foremost, through a stronger commitment to defending the island of Taiwan”.

  The Strategy of Denial presents a particularly unsentimental version of a rapidly consolidating Washington consensus. Biden’s speech justifying withdrawal from Afghanistan, in terms of an end to nation-building and focus on counter-terrorism – albeit more softly spoken – said the same as Colby.

  The contradictions implicit within the 9/11 era’s War on Terror, and coercive westification, may have become only too plain today with 20th anniversary hindsight, but other contradictions within the ‘Hobble China’ pivot are potentially just as fatal to its success – as were the flawed assumptions underlying the 9/11 era zeitgeist.

  Its’ most basic contradiction is that far from providing the balm around which Americans can gather and unify, the China pivot is likely only to loosen the glue binding a heterogeneous ‘nation’ increasingly turning in upon itself.

  Firstly, the ‘new consensus’ has it that the best way for America to weaken China is to make it ‘the world versus China’ – confronting it with a broad, transnational coalition, based on the value-struggle between democracy and authoritarianism. Yes, but this repeats the error underlying the 9/11 policy – namely by assuming that the rest of the world still admires and aspires to emulate American liberal democracy. Look what occurred in Afghanistan. The world has changed – deference to western values per se has evaporated.

  There once was a time when ‘pro-Europeans’ too, were confident that the world would almost inevitably be remade in the image of the West, as it endlessly expanded its rules, and exported its model. Since then, even the Europeans have lost confidence in a world vision, and have become psychotically more defensive (imagining looming ‘threats’ from everywhere and everything). And as the European model has hollowed out, becoming less credible, so too, Europe has and leant into raw mercantilism. The logic of the European situation is clear. It needs China, more than China needs Europe.

  It would be a huge ‘stretch’ therefore, for Washington to imagine that ‘the world’ might side with its democratic values against China’s ‘authoritarianism’. Just to remind, U.S. democracy was tarnished in the eyes of the world in light of the 2020 Election. And some 70–80 million Americans share that view too. We saw it nightly on our screens.

  Secondly, it assumes that America’s ‘corporate’, capitalist economic system is a tremendous asset in the Cold War against China. Well, it isn’t. China has its economic problems, certainly; but unlike most western states, it is trying to move away from raw neo-liberalism and endless liquidity – as the hammer set to every ‘nail’. China is deliberately turning away from this model’s distortions, sky-high housing and living-costs, huge inequalities, and collateral social damage. It would be an error to underestimate ‘the pull’ of this alt-vision (even for Europeans). China is, itself, a civilisational pole.

  Then thirdly, there is the basic contradiction in having a laser-like single focus on ‘Hobble China’, which is brought about only at the expense of feeding Americans’ sense of accelerating imperial decline, bleeding into domestic tensions.

  This is Pat Buchanan’s argument in a piece entitled, Who and What Is Tearing the U.S. Apart? He answers:

  “After 9/11, Bush invaded Afghanistan and Iraq. President Barack Obama attacked Libya and plunged us into the Syrian and Yemeni civil wars. Thus, over 20 years, we have been responsible for the deaths of hundreds of thousands and driven hundreds of thousands more from their homes and their countries. Are Americans really as oblivious? … Many of these peoples want us out of their countries for the same reason that 18th and 19th-century Americans wanted the French, British and Spanish out of our country and out of our hemisphere”.

  “Unlike previous generations, our 21st-century divisions are far broader — not just economic and political, but social, moral, cultural and racial. Abortion, same-sex marriage and transgender rights divide us. Socialism and capitalism divide us. Affirmative action, Black Lives Matter, urban crime, gun violence and critical race theory divide us. Allegations of white privilege and white supremacy, and demands that equality of opportunity give way to equity of rewards, divide us. In the COVID-19 pandemic, the wearing of masks and vaccine mandates divide us”.

  “The debate over American national identity is cursed seven times over”, Darel Paul, Professor of Political Science at Williams College, writes:

  “Does the United States even constitute a ‘nation’? In the sense of common descent (the root of “nation” is the Latin nasci, to be born) – clearly not. Widespread fear of such an ethnic sense of American identity drives considerable hostility to the very idea of nationalism. Most American elites prefer words like ‘patriotism’ … The problem with this conception of patriotism is that it is a weak glue. The recent history of the United States offers ample evidence. Rather than objects of agreement – liberty, equality, individual rights, and self-government are instead [today] the objects of discord.

  “Here we come to the real glue of America: From the founding of the country in the fires of war, the United States has been an expansionary republican empire ever incorporating new lands, new peoples, new goods, new resources, new ideas. This “empire of liberty,” as Thomas Jefferson called it, knew no limits … Continuous military, commercial, and cultural expansion since Jamestown and Plymouth cultivated the restlessness, vigour, optimism, self-confidence, and love of glory for which Americans have long been known. The glue of America has thus ever been what Niccolò Machiavelli called virtù in service of “a commonwealth for expansion.” Such a republic is always in tumult, yet a tumult that, if well-ordered, finds glory …

  “Forward motion thus becomes the lifeblood of such a polity. Without it, the purpose of the civic bonds of unity inevitably come into question. An America that is not a glorious republican empire in motion is not America, full stop. This part of the American mythos Lincoln left unsaid at Gettysburg.

  “Since the 1960s, the glory of the American empire of liberty has tarnished. Since the mid-2010s it has fallen under sustained internal attack. The failures of national purpose in Vietnam, Iraq, and Afghanistan are amplified by the failure of globalization to generate common wealth for the commonwealth. If Americans are not united for expansionary republican greatness, what then are all these fissiparous races, creeds, and cultures bound together for? While belief that self-government may perish from the earth without American unity may have been plausible in 1863 or 1941, it is a hard sell in 2021”.

  Does this struggle against China make sense? Can America, whose economic and financial system today is highly precarious, afford to bludgeon China into adverse economic straits also? Can an America that off-shored much of its manufacturing capacity to China, for short-term profit, afford the de-coupling? Do American corporate leaders truly share the view that the (inevitable) consolidation of economic power in Asia imperils American prosperity, and that its consolidation would shatter their imperial outreach, dollar-based order? Possibly they do. They do fear it.

  Tyler Durden
  Mon, 10/04/2021 – 23:00

• Iran Demands US Unfreeze $10BN In Assets To Return To Nuclear Negotiating Table
  Iran Demands US Unfreeze $10BN In Assets To Return To Nuclear Negotiating Table

  In what looks to be yet another serious obstacle in the way of the prospect of jump starting Iran nuclear negotiations with world powers in Vienna, which have been stalled since June, and prior to Ebrahim Raisi taking office, Iran is asking the Biden administration to immediately unfreeze some $10 in Iranian assets.

  Foreign Minister Hossein Amir-Abdollahian called it a necessary “sign of good will” to show that the American side is “serious” about returning to the Vienna process. 

  

  “The Americans tried to contact us through different channels (at the U.N. General Assembly) in New York, and I told the mediators if America’s intentions are serious then a serious indication was needed … by releasing at least $10 billion of blocked money,” the Iranian foreign minister said in a weekend interview. 

  Billions in its foreign-held assets have been effectively blocked for a couple years since Trump-era sanctions targeting the Islamic Republic’s international assets took effect. Amir-Abdollahian argued in his comments that at least “once” the US has to show its ready to consider “the interests of the Iranian nation.”

  “They are not willing to free $10 billion belonging to the Iranian nation so that we can say that the Americans once in the past several decades considered the interests of the Iranian nation,” he explained.

  Earlier last month the FM had vowed that Iran is ready to return to the negotiating table “very soon” but said the recently installed Raisi government is still “reviewing” the negotiation files. 

  #Iran‘s foreign minister’s ask of US to release $10 billion in frozen funds did not go down well with #Germany‘s foreign ministry. Its spokesman is saying today “Iran cannot set any further conditions for resuming the talks.” 1/2https://t.co/CQgtdHUT7S

  — Jason Brodsky (@JasonMBrodsky) October 4, 2021

  https://platform.twitter.com/widgets.js

  So far the US State Department has kept mum on the Iran FM’s weekend plea to unfreeze assets. It’s not likely to happen given Biden is already facing pressure from Republicans and would be accused of “caving” to the mullahs in Tehran if he were to unfreeze the requested billions.

  It’s also unlikely that Washington would allow the Iranians to set what appear as belated pre-conditions for deeper talks, giving possible leverage to move the goal posts further. 

  Tyler Durden
  Mon, 10/04/2021 – 22:40

• To Save America, Durham Must Reveal The Whole Russiagate Story And Punish The Guilty
  To Save America, Durham Must Reveal The Whole Russiagate Story And Punish The Guilty

  Authored by Roger Simon, op-ed via The Epoch Times,

  A bit more information has emerged from the John Durham investigation into Russiagate (or “Spygate,”as it is known hereabouts).

  

  This is due to what is likely a leak from one or more of the targets to their loyal propagandists at CNN. (In the article, the reporters do their best to downgrade the scandal they fanned for years as no more than a trivial “dirty trick” that all campaigns do. There’s a well-known word for that adapted into the English language.)

  The import of these leaks is usually to soften the impact on the target(s), but it also gives us another indication Durham is still active.

  In this instance, more subpoenas have been issued, including some to Perkins Coie. That’s the Democratic National Committee’s and Hillary Clinton’s law firm that only a few weeks ago defenestrated—for reasons unspecified, but we can guess— one of Hillary’s principal lawyers, Mark Elias.

  The other Clinton campaign lawyer, Michael Sussman, has already been charged with lying to the FBI on the matter of alleged Trump links to the Russian Alpha Bank, ties that turned out to be non-existent.

  This time, however, we learned that “Tech Executive-1” in the Sussman indictment is Rodney Joffe, a rather distinguished cybersecurity expert, but not in this case because he was apparently involved with the same attempted deception.

  Mr. Joffe was evidently no fan of Donald Trump. How far he took his enmity we shall see as this plays out.

  Or we won’t. Therein lies the problem. Many are worried that Durham will only take the investigation so far and then peter out.

  A real Russiagate investigation has myriad possible targets with very famous names, some of the most famous, in fact. Yet negativism about the results is everywhere in conservative circles with some justification.

  When then AG William Barr gave Durham his brief, he was quoted in The Hill (March 2020) as follows:

  “Attorney General William Barr said Monday that he does not expect a criminal investigation of former President Obama or former Vice President Joe Biden to result from the probe undertaken by U.S. Attorney John Durham.

  “Based on the information I have today, I don’t expect Mr. Durham’s work will lead to a criminal investigation of either man,” Barr told reporters at the Justice Department. ‘Our concern over potential criminality is focused on others.’”

  Sounds pretty weak, doesn’t it, with some people, too big to be investigated, surrounded by a cordon sanitaire.

  Yet rumor has it already that Jake Sullivan is under suspicion in the Alpha Bank matter, at the least. That’s remarkably close to Biden as Sullivan is his National Security Advisor, one of the most powerful positions in the country (cf. Henry Kissinger), as we have seen, to our national misfortune, during the Afghanistan debacle.

  How justified is that suspicion of Sullivan? Paul Sperry wrote in Real Clear Investigations:

  “The indictment states that Sussmann, as well as the cyber experts recruited for the operation, ‘coordinated with representatives and agents of the Clinton campaign with regard to the data and written materials that Sussmann gave to the FBI and the media.’ One of those campaign agents was Sullivan, according to emails Durham obtained.”

  Biden himself was said to have recommended the ancient and hardly-used Logan Act—how he would even have known about it is worth finding out, but anyway…—in an attempt to punish Gen. Michael Flynn during an oft-discussed, but never fully revealed, Oval Office meeting at the tail end (Jan. 5, 2017) of the Obama administration.

  That meeting itself, emailed about by Susan Rice weeks after it took place seemingly to provide Obama presidential deniability, is even more worthy of exploration—or is it off limits as per William Barr? We don’t know.

  Yes, there is plenty of reason to be skeptical. The Sullivan matter has barely been discussed in the mainstream media, even though the possible miscreant is the National Security Advisor.

  Is everything being sent down the memory hole? Who exactly is to blame in all this? We don’t know that either, though we have guesses about that too.

  But it is imperative we must ultimately know. Durham must carry his investigation through to the end, because Russiagate quite clearly marked the beginning of the end of our democratic republic as we knew it.

  All the malfeasances that have occurred since from the endless COVID lockdowns to Afghanistan to the open border to the violence in our streets and the relentless propaganda and bizarre arrests surrounding Jan. 6, not to mention the 2020 election itself, point back to it, relate to it, in one way or another.

  None of these events would have happened the way they did without it. Some would not have happened at all.

  Russiagate was a crime whose extent and import dwarfed Watergate and made that supposed scandal, subject of a Hollywood movie though it is, barely as important, by comparison, as shoplifting at a 7-11.

  Yet Nixon and the others paid, badly. Hardly anyone has been punished here so far beyond what has amounted to slaps on the wrists.

  So what do we do? Do we sit back passively, maybe adding a few snipes here and there, and let Durham do his job, hoping for the best?

  I say no. We all have a role to play. Durham is a man like the rest of us. Consciously or unconsciously, if he knows we’re watching, he’s going to behave in a different manner than if he thinks we’re lulled to sleep.

  Be as active as possible in talking and lobbying about this. You don’t have to be a so-called “elite” to do this or be an anchorman on ABC. You just have to be a concerned citizen, an honest man or woman. Keep talking about it to friend and foe. Show up with a sign at an inconvenient (for them) place. Put it on the internet, text to everyone you know or can think of. Discuss it on Signal and Telegraph. Never let Russiagate be forgotten. Put it out there in the zeitgeist and keep it there.

  The mainstream/legacy media isn’t going to do it. They will obfuscate as much as possible. We have to do it. It’s up to us. If we don’t, we have no grounds for complaint when it goes down the memory hole—and with it our country.

  Two things are of paramount importance to us going forward if we want to save our republic, this full explication of what happened during the Trump-Russia affair, including everyone responsible being properly punished, so we are sure as we can be it will never happen again, and genuine integrity for our broken elections.

  Work on that too. Many already are. The two go hand in hand.

  Tyler Durden
  Mon, 10/04/2021 – 22:20

• Fed Prepares To Launch "Review" Of Central Bank Digital Currency That Could Render Cash, Privacy Obsolete
  Fed Prepares To Launch “Review” Of Central Bank Digital Currency That Could Render Cash, Privacy Obsolete

  For years now, and in response to similar projects at central banks in Europe and – more importantly – China with the PBOC, the Fed has been hemming and hawing about whether to take the possibility of creating a “FedCoin” more seriously.

  Senior officials have been pretty tetchy about carefully weighing the “pros and cons” of a system that  would, in theory, enable the Fed to deposit money directly into the ‘digital wallets’ of regular Americans, a power that could ultimately render the entire private banking system obsolete.

  

  And so, as we wait for the Fed to take the next tenuous steps toward developing a CBDC, WSJ has offered yet another leak confirming that the Fed is finally ready to release its official ‘report’ on CBDCs, which will serve as the start of a long-promised “review” of the pros and cons of CBDCs that’s supposed to allow for public feedback. The report could drop “as early as this week”.

  

  Some more compassionate proponents of a FedCoin argue it could create a kind of “parallel” system where the Fed would be able to directly and easily dispense FedCoins to the public (the ideal of “helicopter money”, finally achieved), without relying on banks or the IRS as intermediaries, which could make delivering this type of aid faster and cheaper. It could also offer a more “efficient” avenue for distributing welfare or financial aid (that is, unless the Fed chose to distribute FedCoin through financial intermediaries instead of sending them directly from the Fed to the American people.

  It could also be the greatest weapon in the war to make cash obsolete.

  But within the Fed, the drive to create a “FedCoin” is primarily rooted in the fear that not having a central bank digital currency could potentially threaten the dollar’s dominance in the global financial system. In that respect, it’s like any other technological arms race.

  Here’s more on that from Fed Governor Lael Brainard: “It’s just very hard for me to imagine that the US, given the status of the dollar as a dominant currency in international payments, wouldn’t come to the table in that circumstance with a similar kind of an offering,” she said.

  Chairman Powell has done his best to push for caution, arguing that it’s more important to “get it right” than be “first to market”. Put another way: who cares if the PBOC roles out the “e-RMB” first? The dollar’s role in the global financial system is much greater, which means the US is obligated to proceed with more trepidation.

  Powell and others have said repeatedly that the Fed’s research so far has been early and exploratory. Powell has also pointed to the fact that many Americans still use and prefer cash. Most importantly, Powell has addressed concerns that a CBDC would effectively allow the Fed to monitor the finances of every American.

  “It’s our obligation to do the work both on technology and on public policy to form a basis for making an informed decision,” he said last month.

  Others on the Fed, including Randy Quarles, the Fed’s financial regulation guy, has slammed CBDCs as a fad, noting that the US dollar is already “highly digitized”. A report from the Philly Fed recently warned that a CBDC could also destabilize the financial system if everybody were to pull their digital dollars from markets, mutual funds and banks.

  But enough of what senior Fed officials are saying: pretty soon, it will be the “public’s” turn, as the Fed has promised to solicit public comment during its review.

  Tyler Durden
  Mon, 10/04/2021 – 22:00

• Economic Theory & Long-Wave Cycles
  Economic Theory & Long-Wave Cycles

  Authored by Alasdair Macleod via GoldMoney.com,

  Investors and others are confused by the early stages of accelerating price inflation. One misleading belief is in cycles of industrial production, such as Kondratieff’s waves. The Kondratieff cycle began to emerge in financial commentaries during the inflationary 1970s, along with other wacky theories. We should reject them as an explanation for rising prices today.

  This article explains why the only cycle that matters is of bank credit, from which all other cyclical observations should be made. But that is not enough, because on their own cycles of bank credit do not destroy currencies – that is the consequence of central bank policies and the expansion of base money.

  The relationship between base money and changes in a currency’s purchasing power is not mechanical. It merely sets the scene.

  What matters is widespread public perceptions of how much spending liquidity is personally needed. It is by altering the ratio of currency-to-hand to anticipated needs that purchasing power is radically altered, and in the earliest stages of a hyperinflation of prices it leads to imbalances between supply and demand, resulting in the panic buying for essentials becoming evident today.

  Panics over energy and other necessities are only the start of it. Unless it is checked by halting the expansion of currency and credit, current dislocations will slide rapidly into a wider flight from currency into real goods – a crack-up boom.

  

  Introduction

  For eighteen months, the world has seen a boom in commodity prices, which has inevitably led to speculation about a new Kondratieff, or K-wave. Google it, and we see it described as a long cycle of economic activity in capitalist economies lasting 40—60 years. It marks periods of evolution and correction driven by technological innovation.

  Today’s adherents to the theory describe it in terms of the seasons. Spring is recovery, leading into a boom. Summer is an increase in wealth and affluence and a deceleration of growth. Autumn is stagnating economic conditions. And winter is a debilitating depression. But these descriptions did not feature in Kondratieff’s work. Van Duijan construed it differently around life cycles: introduction, growth, maturity, and decline.

  We must discard the word growth, substituting for it progress. Growth as measured by GDP is no more than an increase in the amount of currency and bank credit in circulation and therefore meaningless. Most people who refer to growth believe they are describing progress, or a general improvement in quality of life. Instead, they are sanctioning inflationism.

  There is little doubt that economic progress is uneven, but that is down to innovation. Kondratieff’s followers argue that innovation is a cyclical phenomenon, otherwise as a cyclical theory it cannot hold water. An economic historian would argue that the root of innovation is the application of technological discoveries which by their nature must be random, as opposed to cyclical, events.

  Furthermore, a decision must be made about how to measure the K-wave. Is it of fluctuations in the price level and of what, or of output volumes? Bear in mind that GDP and GNP were not invented until the 1930s, and all prior GDP figures are guesswork. Is it driven by Walt Rostow’s contention that the K-wave is pushed by variations in the relative scarcity of food and raw materials? Or is it a monetary phenomenon, which appeared to cease after the Second World War, when currency expansion was not hampered by a gold standard?

  It was an argument consistent with that put forward by Edward Bernstein, who was a key adviser to the US delegation at Bretton Woods, when he concluded that the war need not be followed by the deep post-war depression which based on historical precedent was widely expected at the time. Kondratieff’s wave theories were buried by the lack of a post-war slump, until price inflation began to increase in the 1970s and Kondratieff became fashionable again.

  Kondratieff maintained that his wave theory is a global capitalist phenomenon, applicable to and detected in major economies, such as those of Britain, America, and Germany. But there is no statistical evidence of a long wave in Britain’s industrial production in the first half of the nineteenth century, when Britannia ruled the economic waves. And while there were financial crises from time to time, the downward phase to complete Kondratieff’s cycle never materialised.

  Today, with K-waves being fundamental to so much analysis of cyclical factors and their extrapolation, the lack of evidence and rigour in Kondratieff theory should be concerning to those who believe in it. That there are variations in the pace of human progress is unarguable, and that there is a discernible cycle of them beyond mundane seasonal influences cannot be denied. But that is a cycle of credit, a factor which was at least partially understood by Bernstein, when he correctly surmised that the way to bury a post-war depression was by expanding the quantity of money.

  Bank credit cycles and inflation

  When the inflation of money supply is mostly that of bank credit, it is cyclical in nature. Its consequences for the purchasing power of the currency conforms with the cycle, but with a time lag. Furthermore, the effect is weaker in a population which tends to save than with one which tends to spend more of its income on immediate consumption. No further comment is required on this effect, other than to state that over the whole cycle of bank credit prices are likely to be relatively stable. This was the situation in Britain, which dominated the global economy for most of the period between the introduction of the gold sovereign following the 1816 Coinage Act until the First World War.

  Figure 1 confirms that despite fluctuating levels of bank credit, from 1822—1914 the general level of prices was broadly unchanged. The price effect of the expansion of coin-backed currency between the two dates and the increase in population offset the reduction of costs in production through a combination of improvements in production methods, technological developments, and increased volumes. What cannot be reflected in the graph is the remarkable progress made in improving the standards of living for everyone over the nineteenth century.

  

  The gold standard was abandoned at the start of the First World War, and the general level of prices more than doubled. Having seen prices rise during the war, in December 1919 the Cunliffe Committee recommended a return to the gold standard and the supply of currency was restricted from 1920 with this objective in mind. A gold bullion standard instead of a coin standard was introduced in 1925, tying sterling at the pre-war rate of $4.8665, which remained in place until 1931.[iv] From thereon, the purchasing power of the currency began its long decline as central bank money supply expanded.

  There is no long-term cyclicality in these changes. Following the abandonment of the gold standard, and in line with other currencies which abandoned gold convertibility in the 1930s sterling simply sank. The key to this devaluation is not fluctuations in bank credit, but the expansion of base currency. And there is no evidence of a Kondratieff, or any other long-term cycle of production. It can only be a monetary effect.

  The role of money in long waves

  It is worth bearing in mind that the so-called evidence discovered by Kondratieff was in the mind of a Marxist convinced that capitalism would fail. The downturn of a capitalist winter, or decline in growth — whatever definition is used, was baked in the anti-capitalist cake. The Marxists and other socialists were and still are all too ready to claim supposed failings of capitalism, evidenced in their eyes by periodic recessions, slumps, and depressions.

  Kondratieff’s economic bias may or may not have coloured his analysis — only by digging deeply into his own soul could he have answered that. But in the absence of firm evidence supporting his wave theory we should discard it. After all, there is a rich history of the religious zeal with which spurious theories in the fields of economics and money arise. The consequences of sunspot cycles and the supposed importance of anniversary dates are typical of this ouija board theme.

  Non-monetary cycle themes such as that devised by Kondratieff have socialism at their core. It is assumed that capitalists, bourgeois businessmen seeking through the division of labour to manufacture and supply consumer goods for profit, in their greed are reckless about commercial risks from overinvestment. This is nonsense. Fools are quickly discovered in free markets, and they are also quickly dismissed. Successful entrepreneurs and businessmen are very much aware of risk and do not embark on projects in the expectation they will be unprofitable, and it is therefore untrue to suggest that the capitalist system fails for this reason.

  To the contrary, markets that are truly free have been entirely responsible for the rapid improvement in the human condition, while it is government intervention that leads to periodic crises by interfering in the relationships between producers and consumers and setting in motion a cycle of interest rate suppression and currency expansion.

  Markets which are truly free deliver economic progress by anticipating consumer demands and deploying capital efficiently to meet them. It is no accident that economies with minimal government intervention deliver far higher standards of living than those micro-managed by governments. Hong Kong under hands-off British administration, with no natural resources and enduring floods of impoverished refugees from Mainland China stood in sharp contrast with China under Mao. Post-war East and West Germany, populated by the same ethnic people, the former communist and the latter capitalist, provides further unarguable proof that capitalism succeeds where socialism fails.

  Marxist socialism kills cycles by the most brutal method. It cannot entertain the economic calculations necessary to link production with anticipated demand. There is no mechanism for the redistribution of capital for its more efficient use. Consumption is never satisfied, and consumers must wait interminably for inferior products to be supplied. Any pretence at a cycle is simply suppressed out of existence.

  Almost all long-wave literature assumes that prices change due to supply and demand for commodities and goods alone, and never from variations in the quantity of money and credit. But even under a gold standard, the quantities of money and credit varied all the time. In Britain, and therefore in the rest of the financially developed world which adopted its banking practices, gold was merely partial backing for currency and bank deposits, which since the days of London’s goldsmiths also lubricated the creation of debt outside the banking system. While originally gold was used as coin money, since 1914 when Britain went off the gold coin standard even this role in transactions ceased.

  Having explained the random nature of free market capitalism, the difference from capitalistic banking must be explained. It owes its origin to London’s goldsmiths, who took in deposits to use for their own benefit, paying six per cent out of the profits they made by dealing in money. This evolved into fractional reserve banking which became the banking model for the British Empire and the rest of the world.

  As well as renewing the Bank of England’s charter, the Bank Charter Act of 1844 further legitimised fractional reserve banking by giving in to the Banking School’s argument that the amount of credit in circulation is adequately controlled by the ordinary processes of competitive banking.

  If banks acted independently from one another competing for customers and business, we might reasonably conclude that there would be from time-to-time random bank failures without cyclicality, as the Banking School argued. In capitalistic commerce, it is this process of creative destruction that ensures consumers are best served and an economy progresses to their advantage. But with banks, it is different. Each bank creates deposits which are interchanged between other banks, and imbalances are centrally cleared. Therefore, every bank has financial relations with its competitors and is exposed to its competitors’ counterparty risks, which if acted upon creates losses for themselves and other banks, risking in extremis a system-wide crisis. Banking is therefore a cartel whose members acting in their own interests tend to act in unison. In the nineteenth century his led to systemic crises, the most infamous of which were the Overend Gurney and Baring failures. It was to address this systemic risk that central banking took upon itself the role of lender of last resort, so that in future these failures would be contained.

  But this mitigation of risk merely strengthened the banking cartel even further, leading to the possibility of a complete banking and currency failure. And since bankers have limited liability and personally risk little more than their salary in the knowledge that a central bank will always backstop them, reckless balance sheet expansion is richly rewarded — until it fails. Fred “the shred” Goodwin, who grew a staid Royal Bank of Scotland to become the largest bank in Europe before it collapsed into government ownership was a recent example of the genre.

  It is these differences between banking and other commercial activities that drive a cycle of bank credit expansion and contraction while non-financial business activities cannot originate cycles. The state-sponsored structure of the banking system attempts to control it. Governments through their central banks also trigger a boom in business activity by suppressing interest rates as the principal means of encouraging the growth of currency and credit. The distortions created by these interventions and their continuence inevitably lead to a terminating crisis. As Ludwig von Mises put it:

  “The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

  A long period of credit expansion with relatively minor hiccups ending in such a crisis could easily be confused with a Kondratieff 40—60-year cycle. But the error is to mistake its origins. Kondratieff tried to persuade us that the boom and bust was a feature of capitalist business failings when it is a currency and credit problem. The irony is that Stalin refused to admit even to an expansionary phase in capitalism, condemning Kondratieff to the gulags, and then a firing squad in 1938. He lived as a Marxist-Leninist and was executed by the system he venerated.

  Having identified the source of cycles as being a combination of state action and fluctuations in currency and credit in a state-sponsored banking system and not capitalistic production for profit, we can admit that there are further cyclical consequences. Whether they exist or not is usually a matter of conjecture. Purely financial cycles, such as Elliott Wave Theory, will also owe their motive forces to cycles of credit and not business activity.

  The effect on commodity and consumer prices

  Kondratieff wave followers claim that commodity bull and bear markets are the consequence of a K-wave spring and summer followed by autumn, when it tops out, and winter when it collapses before rising into the next K-wave cycle. But we have demonstrated that the K-wave is not supported by the evidence. Instead, changes in the general level of commodity prices are a function of changes in the quantity of money. And as we have seen, there is a base component and a cyclical component of bank credit.

  We must now refocus our attention from the long-run UK statistics shown in Figure 1 to the contemporary situation for the US dollar, in which commodities have been priced almost exclusively since the early 1970s. The chart from the St Louis Fed below is of an index of industrial materials from 1992.

  

  We can see why the Kondratieff myth might be perpetuated, with industrial material prices more than halving between 2011 and 2016. But these swings came substantially from the dollar side of prices, whose trade-weighted index rose strongly between these dates. Between 2016—2018 the dollar weakened, before strengthening into 2020. Clearly, it was the purchasing power of the dollar driving speculative as well as commercial flows in international commodity markets.

  In March 2020, the Fed reduced its fund rate to the zero bound and announced QE (money-printing) of an unprecedented $120bn every month. Figure 2 below shows the consequences for the general level of commodity prices.

  

  Since late-March, the components of this ETF have almost doubled in price, and after a period of consolidation appear to be increasing again. K-wave followers might conclude that it is evidence of a new Kondratieff spring or summer, with the global economy set for a new spurt of economic “growth”. But this ignores the expansion of the Fed’s balance sheet reflected in base money, which is the next FRED chart.

  

  The monetary base has approximately doubled since the Fed’s March 2020 stimulus, additional to the post-Lehman crisis expansion. The last expansion undermined the purchasing power of the dollar to a similar extent in terms of the commodity prices shown in Figure 2.

  Evidential consequences of price inflation

  Sudden increases in the money quantity have disruptive effects on markets for goods and services and the behaviour of individuals. As well as undermining a currency’s purchasing power, supplies of essential goods become disordered by unexpected shifts in demand. Throughout history there has been evidence of these inflationary consequences, often exacerbated by statist attempts to impose price controls. The Roman emperor Diocletian with his edict on maximum prices caused starvation for citizens, who were forced to leave Rome to forage for food in the surrounding countryside. The edict made the provision of food uneconomic, leading to extreme scarcity. During the reign of Henry I in England there was a monetary crisis in 1124 from the debasement of silver coins, which combined with a poor harvest drove up the prices of staples, causing widespread famine. The French revolution has been attributed to the insensitivity of royalty and the aristocracy to the masses; but it occurred at the time of the assignat inflation, which led to aggravated discontent among the lower orders and the storming of the Bastille. And today, we have widespread disruption of essential supplies, ranging from energy to carbonated foodstuffs. The lesson from history is it has only just started.

  Why today’s logistics and energy disruptions have only just started

  The problems arise because individuals’ knowledge of the relationship between money and goods comes from the immediate past. They use that knowledge to decide what to buy for future consumption, and if they are in business, for production. In the latter case, they might change inventory policies from today’s just-in-time practices to ensure an adequate stock of components is available, driving up demand for them and creating shortages of vital factors of production.

  Consumers faced with shortages will alter the balance between their money liquidity and goods for which they may not have an immediate need but expect to consume at a future date. Bank account balances and credit available on credit cards will be drawn down, for example, to fill their car tanks with fuel, even though no journey is planned. And as we see in the UK today, it rapidly leads to fuel shortages and rationing at the petrol pumps.

  While the authorities try to calm things down, either by denying there is a supply problem or by imposing price controls, consumers are likely to see these moves as propaganda and justification for reducing money liquidity even further by purchasing yet more goods. The flight out of currency liquidity has a disproportionate effect on prices, particularly for essentials. They will simply drive prices higher until no further price rises are expected. Or put more accurately, the value of the currency continues to fall.

  It is worth illustrating the problem for its true context. If on the one hand everyone decides they would rather have as much cash in hand money as possible rather than goods, prices will collapse. It is, as a matter of fact, a situation which cannot occur. If alternatively, everyone decides to dispose of all their liquidity by buying everything just to get rid of the currency, then the purchasing power of the currency sinks to zero. Unlike the former case, this can and does happen, when it becomes widely recognised that the currency might become worthless. In other words, a state-issued unbacked currency then collapses.

  Almost no one, so far, attributes today’s logistical and economic dislocations to monetary inflation, yet as pointed out above, empirical evidence points to a clear connection. Governments and central banks also seem unaware. But they appear to sense that there is an undefinable risk of consumer panic, making fuel and other shortages even worse. So far, the blame lies with logistic failures, which seem to be getting worse.

  Comments from leading central bankers, currently meeting in Portugal and organised by the ECB, confirm the official position of playing popular tunes while the ship goes down. The heads of the Fed, the ECB, the Bank of England, and the Bank of Japan are quoted in the Daily Telegraph as agreeing that staff shortages, shipping chaos and surging fuel costs are likely to cause further disruption as winter draws near. Andrew Bailey, Governor of the Bank of England, warned “…that the UK’s GDP will not recover to pre-pandemic levels until early next year”. But besides the Bank keeping a close watch on inflation, he commented that monetary policy can’t solve supply side shocks. Jay Powell admitted that at the margin apparently bottleneck and supply chain problems are getting marginally worse. But all the central bankers agreed that price pressures will be temporary.

  We can see from these comments a desire not to rock the boat and cause further panic among consumers. More worrying is the insistence that inflation remains a temporary problem. Unless there is a move to stop the monetary printing presses, they must believe it. It is confirmation that there is no intention to change monetary policy. But these problems are not restricted to the West.

  This week we learn that even China, which has followed a policy of restricting monetary growth, faces an energy crisis with coal at power plants critically low, and coal prices up fourfold. Energy is being rationed with production of everything from food and animal feedstuffs to steel and aluminium plants supplying other factories, which in turn face power outages.

  China is the world’s manufacturing hub. The United States relies on China’s exports. There were some seventy container ships at anchor or at drift areas off San Pedro earlier this week, but after dropping slightly the numbers are expected to rise again. And in China, there are delays at ports of more than three days in Busan, Shanghai, Ningbo and Yantian. Ship charter rates have rocketed from $10,000 a day to as much as $200,000.[ix] There can be no doubt as the northern hemisphere enters its winter that the consuming nations in America and Europe will see yet more product shortages, more price rises, and continuing logistics disruption.

  Central banks will become increasingly desperate to discourage consumers’ from hoarding items by claiming that shortages and price increases are transitory. What they fail to realise is that the consequences of currency debasement have led to consumption goods being wrongly priced, fuelling the shortages. These shortages can only be addressed by yet higher prices, even in the absence of further monetary debasement — until no further price increases are expected by consumers.

  But with massive and increasing government deficits to finance, central banks have no mandate to restrict the expansion of currency. An acceleration of monetary debasement as each unit of it buys less is therefore inevitable because consumers and businesses alike will begin to understand there is no limit to prices increasing.

  Left to its logical conclusion, the purchasing power of a currency falls exponentially until it has no value left. The speed at which it happens depends on the time taken for acting humans to realise what is happening. Unless it is stopped, an economy experiences what in the 1920s was described as a flight into real goods, or a crack-up boom.

  Economists today seem unable to comprehend the instability caused by monetary inflation. They adopt their models to ignore it. As von Mises put it, “The mathematical economists are at a loss to comprehend the causal relation between the increase in the quantity of money and what they call ‘velocity of circulation’”. The confusion in the minds of central bank economists renders it unlikely that they will take the actions necessary to stop their currencies sliding towards worthlessness sooner rather than later.

  Central to resolving the problem is maintaining confidence that the currency will retain its purchasing power. But with the advent of cryptocurrencies, there is a growing proportion of the public who understand in advance of inflationary consequences that fiat currencies are being debauched at an accelerating rate. This represents a major change from the past, when, as Keynes put it supposedly quoting Lenin,

  “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in one million is able to diagnose”.

  The fact that millions now do understand the currency is being debauched is likely to make it more difficult for the state to maintain confidence in the currency in these troubled times.

  We should know that what is happening to commodity prices is not some long-term Kondratieff wave, or any other wave with origins in production beyond purely seasonal factors. We can say unequivocally that the cause is in changing quantities of currency and bank credit. We can also see that there are yet further effects driving prices higher from the expansion of currency so far. We can expect currency expansion to continue, so prices of commodities and consumer goods will continue to rise. Or put in a way in which it is likely to become more widely understood as the current hiatus continues, the purchasing power of the currencies in which prices are measured will continue to fall.

  Tyler Durden
  Mon, 10/04/2021 – 21:40

• Manchin Breaks With Biden, Party Leaders: Says Dems Should Use Reconciliation To Raise Debt Limit
  Manchin Breaks With Biden, Party Leaders: Says Dems Should Use Reconciliation To Raise Debt Limit

  Update (2130ET): Hours after Schumer and McConnell exchanged blame for who will bring about the end of the world as we know it by not raising the debt ceiling, outspoken moderate Sen. Joe Manchin (D-W. Va.) went against party leadership and suggested that Democrats should use the reconciliation process to raise the debt limit as Republicans double down on their commitment to vote against any increase to government spending.

  

  As The Epoch Times’ Joseph Lord reports, Manchin broke with party leaders, emphasizing the importance of raising the debt ceiling by any means necessary. The West Virginia Democrat told reporters:

  “We shouldn’t rule out anything [including reconciliation]. We just can’t let the debt ceiling lapse, we just can’t.”

  Manchin, who has long promised that he supports the filibuster and will vote to defend it, was asked by reporters whether he would consider getting rid of the rule to allow Democrats to push through a debt ceiling increase.

  “The filibuster has nothing to do with the debt ceiling,” Manchin snapped back.

  “We have other tools that we can use,” he explained, ruling, “If we have to use them, we should use them.”

  And in a rather shocking turn of events, shortly after Manchin’s brief statement to reporters emphasizing the importance of raising the debt ceiling by any means necessary, party leaders have also shown signs they may be rallying behind this view despite their long opposition to using reconciliation.

  In a Monday letter to Senate Democrats, Schumer wrote:

   “Let me be clear about the task ahead of us: we must get a bill to the President’s desk dealing with the debt limit by the end of the week. Period.”

  Despite his previous opposition to using reconciliation, Schumer here indicates that leadership may be open to the option.

  Sen. Dick Durbin said of using reconciliation to raise the debt ceiling:

  “I’m not going to say anything’s impossible.”

  We can only presume that Chuck and Nancy finally read what Nancy said 3 years ago and faced reality as the ‘majority’.

  

  The market won’t wait too much longer…

  

  *  *  *

  Senate GOP Leader Mitch McConnell (R-KY) has urged President Joe Biden to work with Congressional Democrats to raise the debt ceiling on their own and avoid an October 18th (or so) default.

  In a Monday letter, McConnell said he’s concerned “our nation is sleepwalking toward significant and avoidable danger because of confusion and inaction from the Speaker of the House and the Senate Democratic Leader concerning basic governing duties.”

  

  McConnell then reminds Biden that Republicans have spent nearly three months stating that Democrats will need to raise the debt limit by themselves – via a budgetary process known as reconciliation, as “your party has chosen to pursue staggering, “transformational” spending through unprecedented use of the party-line reconciliation process.”

  “Republicans’ position is simple. We have no list of demands. For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”

  Stating the obvious, McConnell points out that “Senate Democrats do not need Republican cooperation in any shape or form to o their job,” adding “Democrats do not need our consent to set a vote at 51 [via reconciliation] instead of 60.”

  At the end of the letter, McConnell ‘respectfully’ asks Biden to “engage directly with Congressional Democrats on this matter.”

  My letter to President Biden this morning on congressional Democrats’ duty to handle the debt limit: pic.twitter.com/U3G9QMPJwY

  — Leader McConnell (@LeaderMcConnell) October 4, 2021

  https://platform.twitter.com/widgets.js

  President Biden on Monday ignored McConnell’s plea – saying in Monday remarks that he can’t guarantee that the US won’t breach the debt ceiling, and that it’s ‘up to McConnell’ at this point.

  REPORTER: “Can you guarantee that the U.S. will not reach the debt ceiling?”

  BIDEN: “No, I can’t. That’s up to Mitch McConnell.” pic.twitter.com/rYK6fF0f2B

  — Insider Paper (@TheInsiderPaper) October 4, 2021

  https://platform.twitter.com/widgets.js

  Biden pleaded with McConnell and the GOP leadership to give it a rest and just pass the bill, doing everything in his power to try and tag the GOP with responsibility for the holdup.

  “If you don’t want to help save the country, get out of the way,” Biden said.

  But the message that markets heard, loud and clear, was Biden confirming that, as of Monday, there’s no guarantee that the debt ceiling will be raised in time to prevent a breach or even a default.

  Hammering again on the GOP’s alleged obstructionism, Biden insisted that they  “need to stop playing Russian roulette with the American economy” and hold a vote on the Senate bill as quickly as possible this week. He also warned that these debt-ceiling standoffs hurt ordinary Americans.

  “Let the Democrats vote to raise the debt ceiling this week…the House has already done it…it’s sitting in the Senate, waiting [for them] to pass it. Let us vote and end the mess, we have got to get this done,” Biden said.

  “We can do it this week, just get out of the way and let us pass it”.

  In the Q&A, Biden was asked about the McConnell letter, which he said he saw just before walking out to speak. He said he plans to meet with McConnell on the matter: “I plan on talking to Mitch about it, he and I have been down this road before…and I hope we can have some honest conversation about what he’s proposing.”

  When asked by one reporter if Biden would agree to reconciliation if talks with McConnell go south, he stood firm and insisted that he couldn’t commit to using it, even if it were the only option.

  Put another way: the game of political chicken between Dems and the GOP continues.

  Democrats have been unwilling to pursue reconciliation to raise the debt ceiling – a staggering position to take three years after Speaker Nancy Pelosi (D-CA) chided Republicans for refusing to use reconciliation to avoid a government shutdown.

  This is the first time in recent memory that a government shutdown has been possible when one party — one party — has controlled the White House, House, & Senate. The Republicans own that. #DoYourJob

  — Nancy Pelosi (@SpeakerPelosi) January 18, 2018

  Let’s be very clear: the reason Congress is facing another stop-gap spending bill is because of @HouseGOP & @SenateGOP incompetence. They must stop governing from manufactured crisis to crisis, & work with Dems to pass the many urgent priorities of the American people. #DoYourJob

  — Nancy Pelosi (@SpeakerPelosi) February 6, 2018

  Yet now that the shoe is on the other foot, Democrats are taking reconciliation off the table. 

  https://platform.twitter.com/widgets.js

  Tyler Durden
  Mon, 10/04/2021 – 21:34

• Veritas Records Pfizer Scientists: "Your Antibodies Probably Better Than Vax" After Infection
  Veritas Records Pfizer Scientists: “Your Antibodies Probably Better Than Vax” After Infection

  Three Pfizer scientists were recorded on undercover video by Project Veritas in the latest installment of their “Covid-19 Vaccine Exposed” series.

  In a 10-minute video released Monday night, all three scientists agreed separately conveyed that natural antibodies produced following a Covid-19 infection are superior to the vaccine.

  

  “When somebody is naturally immune — like they got COVID — they probably have more antibodies against the virus…When you actually get the virus, you’re going to start producing antibodies against multiple pieces of the virus…So, your antibodies are probably better at that point than the [COVID] vaccination,” said scientist Nick Karl. “The city [of New York] needs like vax cards and everything. It’s just about making it so inconvenient for unvaccinated people to the point where they’re just like, ‘F*ck it. I’ll get it.’ You know?” he added.

  Watch:

  Of note, an Israeli preprint study reported by Science Magazine in late August found that natural immunity after recovering from Covid-19 offers a much better shield against the delta variant than vaccines.

  A second Pfizer employee, Senior Associate Scientist Chris Croce echoed Karl – saying that those who have naturally acquired immunity are “probably more” protected vs. the vaccine.

  Veritas Journalist: “So, I am well-protected [with antibodies]?”

  Chris Croce, Pfizer Senior Associate Scientist: “Yeah.”

  Veritas Journalist: “Like as much as the vaccine?”

  Croce: “Probably more.”

  Veritas Journalist: “How so? Like, how much more?”

  Croce: “You’re protected most likely for longer since there was a natural response.”

  Croce then advises the undercover Veritas journalist to “wait” to get the vaccine until her natural immunity wanes because she’s already had Covid-19.

  A third Pfizer scientist, Rahul Khandke, said that Pfizer pressures employees to conceal negative information from the public.

  “We’re bred and taught to be like, ‘vaccine is safer than actually getting COVID.’ Honestly, we had to do so many seminars on this. You have no idea. Like, we have to sit there for hours and hours and listen to like — be like, ‘you cannot talk about this in public,” said Khandke, who also agreed on the antibodies.

  “If you have [COVID] antibodies built up, you should be able to prove that you have those built up,” he said.

  Croce, meanwhile, acknowledged that Pfizer is conducting tests to determine whether their vaccine causes myocarditis in younger individuals.

  “So, yeah, we’re doing, we just sent, like, 3,000 patients’ samples to get tested for like, elevated troponin levels (to detect heart attack) to see if it’s vaccine based – or so…”

  What will happen to these truth-tellers who decided to be extremely candid with a Project Veritas journalist?

  Tyler Durden
  Mon, 10/04/2021 – 21:16

• Detained Marine Who Criticized Afghan Chaos May Get Secret Pretrial Hearing
  Detained Marine Who Criticized Afghan Chaos May Get Secret Pretrial Hearing

  Authored by Ken Silva via The Epoch Times (emphasis ours),

  The pretrial confinement initial review hearing for Lt. Col. Stuart Scheller—the U.S. Marine Corps officer jailed for criticizing senior military officials over the U.S. evacuation from Afghanistan—could be held in secret, The Epoch Times has learned.

  

  Members of Congress and Scheller’s family are seeking to attend the hearing, but the military’s position is that such matters should be held behind closed doors, according to a source familiar with the situation. The person, who spoke on the condition of anonymity to avoid backlash from the military, provided The Epoch Times with documentation supporting these claims.

  The public affairs office for Marine Corps Base Camp Lejeune in North Carolina—where Scheller is confined at the regional brig—didn’t respond to media inquiries by press time. USMC spokesperson Samuel Stephenson also didn’t respond to requests for comment by press time, nor did government counsel Troy Campbell.

  Scheller’s attorney, Brian Ferguson, declined to speak publicly about the case.

  When Scheller was initially jailed, a Marine Corps spokesman said he would be “afforded all due process.”

  The hearing, set for Oct. 5, will decide only whether Scheller is to remain in confinement. Either way, military officials must still decide whether to bring charges against him.

  Scheller captured headlines in late August for criticizing senior military leadership on the handling of the U.S. troop withdrawal from Afghanistan. His initial video was posted on the same day that 13 U.S. troops and more than 100 Afghans were killed in an attack outside of the international airport in Kabul, Afghanistan.

  He published another video on Sept. 16, saying that he was calling for “accountability of my senior leaders” over “obvious mistakes that were made.” In that video, Scheller also said he was “submitting charges” against Central Command (CENTCOM) Commander Gen. Kenneth “Frank” McKenzie for his role in the disastrous withdrawal.

  Scheller was reportedly thrown in the brig on Sept. 27, sparking outrage from some lawmakers and members of the public.

  In a Sept. 29 letter to Marine Corps Gen. David Berger and Gen. David Bligh, 35 members of Congress called for Scheller’s release.

  “In fact, this confinement appears to be simply for messaging, retribution, and convenience in flagrant violation of R.C.M. [Rule for Court Martial]: ‘a person should not be confined as a mere matter of convenience,’” says the letter, whose signers include Reps. Marjorie Taylor Greene (R-Ga.), Matt Gaetz (R-Fla.), Louie Gohmert (R-Texas), and Paul Gosar (R-Ariz.).

  “Furthermore, R.C.M. 305(h)(2)(B) also states that LTC Scheller should be accommodated in the ‘less serious forms of restraint.’ For the above reasons, we urge you to use your considerable authority to correct this misapplication of law and immediately remove LTC Scheller from his confinement.”

  In a separate letter, Sen. Roger Wicker (R-Miss.) questioned Berger about why Scheller is being detained.

  “Requirements for pretrial confinement are very specific. Restraint is not every case and should be no more rigorous than required to ensure the person’s trial or to prevent foreseeable serious criminal misconduct,” Wicker said. “Please provide the rationale, including any associated administrative or judicial records, used by Lt. Col. Scheller’s chain of command to justify and document the decision to place him in pretrial confinement.

  “Regardless of the accusations, he deserves the same rights as any other service member.”

  According to online publication Task and Purpose, the pretrial confinement hearing was initially scheduled for Sept. 30, but was delayed until Oct. 5 so that the defense and prosecution could “seek a joint resolution of the matter.” Scheller has agreed to stay in the brig in the meantime as a show of solidarity with fellow Marines in far worse conditions around the world, according to a person familiar with the matter.

  During a Sept. 29 hearing on the Afghanistan withdrawal—the same hearing at which McKenzie provided false information about the Aug. 29 drone attack that killed Afghan citizens—Gaetz lamented the fact that senior military officials are still in positions of power while Scheller sits in the brig.

  “When people in the military like Lt. Col. Scheller stand up and demand accountability, when they say you all screwed up, when they point out General Milley’s statement that Afghanistan’s not going to be defeated by the Taliban—well, he ends up in a brig, and you all end up in front of us,” Gaetz said.

  “And your [Defense Secretary Lloyd Austin’s] former employer Raytheon ends up with a lot of money, and we have poured cash and blood and credibility into a Ghani government that was a mirage.”

  Tyler Durden
  Mon, 10/04/2021 – 21:00

• Homeownership Is The Least Affordable Since 2008 With Shelter Inflation About To Explode
  Homeownership Is The Least Affordable Since 2008 With Shelter Inflation About To Explode

  Yesterday we asked a rhetorical question: how can (record high) home prices be rising so fast that housing is both unaffordable and booming at the same time? While a rational answer has yet to emerge, today the WSJ picks up on the former and writes that the record growth in home prices has made owning a home less affordable than at any point since the financial crisis.

  Citing data from the Atlanta Fed, the Journal writes that the median American household would need just under a third, or 32.1% of its income, to cover mortgage payments on a median-priced home. Even though mortgage rates are at all time lows, that’s the most since November 2008, when the same outlays would eat up 34.2% of income. One can only imagine what will happen when prices continue to rise or when mortgage rates spike.

  

  The advent of the latest housing bubble means that supercharged home prices in markets across the country, which in August rose by a record 20% across the top 20 MSA, are canceling the impact of modestly higher incomes and historically low interest rates, two factors that typically make owning a home more affordable. Higher prices require buyers to take out larger loans, essentially signing them up to make larger mortgage payments each month for years.

  

  The Atlanta Fed calculates affordability using a three-month average of median home prices from CoreLogic and median household incomes based on census data. In July, the latest month in the Atlanta Fed’s calculations, median home prices were $342,350, up 23% from the year before. Median incomes were $67,031, up a tiny 3%, less than the current rate of inflation.

  Citing economists, the WSJ said that declining affordability will have the biggest impact on buyers shopping for their first homes, who will have to sign up for larger monthly payments, buy less desirable homes or step back from the market altogether. It’s also why Democrats recently proposed a subsidized 20-year mortgage for first-gen homebuyers, a gimmick that will only lead to even more taxpayer-funded market imbalances and an even greater bubble.

  “It’s a lot more difficult for people to get their foot in the door of the housing market,” said Ralph McLaughlin, chief economist at Haus, a home-finance startup. “The question is whether it is an insurmountable hurdle or is it just that these households have to spend more of their monthly income on the mortgage.”

  The current situation is unique: in 2008 the dynamics were different, even if the effect — complete disarray in the housing market — was the same. Home prices were falling, and many Americans owed more on their homes than the homes were worth. Furthermore, widespread job losses weighed on household income for years.

  Christopher Ferreris and his wife, Danielle Ferreris, have been hoping to purchase a home in the Tampa, Fla., area for close to two years. They can afford about $1,600 in monthly payments, but every house they have seen requires monthly payments about 25% bigger than that. As a result, they are stuck renting, where the double whammy of soaring rent prices is also hammering their disposable income.

  “It’s almost like we’ve gotten into a holding pattern because of how difficult it is,” Mr. Ferreris said.

  The typical value of a home in Tampa was $331,000 in August, up from $265,000 at the same time last year, according to Zillow.

  The Ferreris are doing everything they can think of to save money, and Christopher started a side business last year buying and selling sports cards. He now counts on it for about $500 each month.

  Of course, during the early months of the pandemic, homes became more affordable while interest rates fell. However, following trillions in fiscal and monetary stimulus, the dynamic reversed rapidly as many families, after sitting on the sidelines for a few months, raced to buy homes, eager for more space or to move out of crowded cities. The fierce competition sent home prices soaring. Affordability began to decline.

  According to the Atlanta Fed, at the start of 2021, Americans needed about 29% of their income to cover a mortgage. That has since risen to about 32% by July. The Atlanta Fed includes principal, interest, taxes, insurance and related costs in mortgage payments.

  “Any affordability that mortgage rates lended has pretty much been erased at this point,” said Daryl Fairweather, chief economist at real-estate brokerage Redfin.

  Home buyers have noticed. About 63% of consumers surveyed in August believed it was a bad time to buy a house, according to Fannie Mae. That was up from 35% at the same time last year.

  The punchline: while the Fed pretends none of this is happening, Goldman’s shelter inflation tracker just surged to the highest level on record, rising 4.6% Y/Y, a print which suggests that PCE Shelter Index, which lags by about 6 months, is about to go through the roof.

  

  How and whether the Fed responds to a surge in housing inflation it will no longer be able to ignore remains to be seen.

  Tyler Durden
  Mon, 10/04/2021 – 20:40

• Biden's Red Queen Justice: How He Shatters Both The Investigation & Reputations Of Border Agents
  Biden’s Red Queen Justice: How He Shatters Both The Investigation & Reputations Of Border Agents

  Authored by Jonathan Turley,

  Below is my column in the Hill on the controversy over U.S. Customs and Border Protection agents allegedly whipping undocumented immigrants on the southern border.

  The false accounts given by members of Congress and the media were alarming and likely defamatory. However, it was the comments of President Joe Biden that were the most damaging to both the investigation and the reputation of these agents.

  He seemed to finally find his “dog-faced lying pony soldiers” in the mounted border unit. Ironically, he is the most legally protected person in making defamatory comments.

  

  Here is the column:

  “Those people will pay.” With that promise, President Biden vowed to punish Customs and Border Protection agents accused of whipping undocumented immigrants on the southern border. Despite the announcement of an investigation into the allegation just the day before, Biden did not stop for the pretense of process in declaring the agents guilty.

  This “sentence first — verdict afterwards” approach may amuse the Red Queen of Alice in Wonderland, but it should be anathema to an American president. Not only did Biden shatter his own administration’s investigation but he joined other leading Democratic figures in defaming the agents.

  Biden told the American people that these easily identifiable officers would be punished after they allegedly “strapped” the Haitian migrants. Other Democratic politicians like Rep. Maxine Waters (D-Calif.) declared that the whipping was “worse than what we witnessed in slavery” and described “the cowboys who were running down Haitians and using their reins to whip them.”  Rep. Ayanna Pressley (D-Mass.) called it simply “white supremacist behavior.” Many in the media went into high gear, too, denouncing what one outlet described as the “Whipping (of) Haitian Asylum Seekers.”

  However, Biden’s behavior was the worst, due to his position as head of the Executive Branch: “It was horrible what — to see, as you saw — to see people treated like they did: horses nearly running them over and people being strapped. It’s outrageous. I promise you, those people will pay.”

  By announcing that the agents were guilty and needed to be punished, Biden destroyed the credibility of the Department of Homeland Security’s ongoing investigation. It is akin to what is called “command influence” in the military, when comments or actions of a superior officer influence an investigation or prosecution. Investigators and department officials could well be worried about their own careers if they do not find a basis to punish one or more of the border agents. The failure to do so would be an embarrassment to the president and risk the wrath of powerful figures in Washington. Conversely, any action taken against these agents can now be challenged due to Biden’s preemptive declaration.

  The biggest problem is that the whipping story was entirely untrue.

  Indeed, it was obviously untrue from the start. We were all watching the same video, and the officer was clearly using his strap to control his skittish horse. Even the photographer expressed astonishment at the coverage and said he did not see a single person strapped or whipped by agents.

  The profile of this scandal is familiar. The media repeatedly has worked people into a frenzy over stories that eventually were proven false, but with little later coverage when the truth contradicted earlier accounts. One such example is the Lafayette Park incident in 2020, in which the media declared that then-Attorney General Bill Barr cleared the area with tear gas to enable a photo op for President Trump. From the outset, there was ample evidence undermining that claim, but it was uniformly ignored. Later, the Justice Department’s inspector general disproved the claim — but few reporters or commentators corrected the earlier false claims.

  Biden and other figures ran with this false claim because it was popular — and they did not have to bear the costs. They simply declared the border agents to be modern-day Bull Connors, whipping helpless migrants.

  Legally, however, this has all of the makings of a defamation case.

  The most important element is that all of the whipping stories were based on the same videotape; there were no added sources for most of these accounts. Even if these officers were treated as “public officials” under the more difficult standard of New York Times v. Sullivan, they could still make a compelling argument that the comments were made with the “actual knowledge” of the falsity or “reckless disregard of the truth.” Moreover, these claims would be recognized in many states as per se defamation. While some can legitimately argue that the use of the horses was still abusive or dangerous, horses are routinely used for crowd control and these border agents were ordered to the river for that purpose.

  Congressional members like Waters and Pressley can often rely on the protections of the Speech or Debate Clause of the Constitution (Article I, Section 6, Clause 1). However, their remarks in this case were made outside of protected congressional areas.

  Those in the media might limit their legal liability with corrections posted or published within a few days of the initial reports — but they can still be sued. It could be argued that some apparently did not care if the border agents did or did not whip migrants because “it was a fact too good to check.” Moreover, the use of the still photos was uniformly misleading and could be used as the basis for “false light” charges, in which pictures are used to present a false or misleading image.

  The greatest irony, however, is that the person most at fault here — President Biden — may be the most protected from lawsuit, despite defaming federal employees. In Nixon v. Fitzgerald, the Supreme Court held that a president “is entitled to absolute immunity from damages liability predicated on his official acts.” The court recognized that “a President must concern himself with matters likely to ‘arouse the most intense feelings’” and thus would be subject to endless lawsuits. Later, in Clinton v. Jones, the court denied such immunity in private matters involving “unofficial conduct.”

  Biden can argue that these were statements issued in his official capacity. Of course, that makes it worse, since he is not supposed to proclaim the guilt of those who are being investigated or who remain unadjudicated.

  The danger is that defamation actions often chill speech on issues of public importance. The Supreme Court has struggled to find a balance in such cases in order to limit defamation actions to guarantee free, robust public debates. It is important for people to be able to allege abuses by law enforcement. Conversely, responsible presidents and members of Congress are expected to reaffirm the need for investigations and due process.

  What is notable here is that the truth could have been confirmed easily before any political or media figures portrayed the border agents as white supremacists in a race-fueled whipping frenzy.

  In the end, we might all agree with President Biden that “it was horrible what you see, what you saw — to see people treated like they did.” But that should include federal agents who were sentenced to officials’ public condemnation before any verdicts were reached.

  Tyler Durden
  Mon, 10/04/2021 – 20:20

• Panic-Buying Over? US Gun Demand Tumbles Near 2 Year Lows, FBI Data Suggests
  Panic-Buying Over? US Gun Demand Tumbles Near 2 Year Lows, FBI Data Suggests

  September background checks for firearms conducted by the FBI were at the lowest in 22 months, suggesting the year and a half of panic buying guns has lost momentum. 

  

  FBI’s National Instant Criminal Background Check System (NICS) data shows background checks slumped 9.2% in September from a year ago. Unadjusted checks dropped to 2.63 million when compared with last September. 

  

  Gun sales aren’t tracked by NICS data. Background checks only serve as a proxy for sales by the firearms industry. 

  For more color on the firearms industry and how panic-buying guns, sparked by the virus pandemic and social unrest of 2020, along with President Biden’s gun control push in 2021, has likely peaked is Baltimore-based gunshop and gun policy advocacy group The Machine Gun Nest, who said: 

  “Considering that has been a solid year and a half of panic buying, it had to end sometime. If you walk into your local gun shop, you’ll see the shelves are much more stocked than they were this time last year. The fact that we’ve been able to keep 9mm on our shelves for longer than a day has been a clear indicator for us that the panic buying has died down.

  “We are continuing to see strong sales numbers, and even though the panic buy is dying down, it seems that more and more people are exercising their 2nd amendment rights and participating in shooting sports.” 

  So if panic buying guns has run its course – this means inflated prices should undergo a mean reversion of some sort. As for ammo, we suspect prices will remain elevated as there are millions of new gun owners in the last two years. 

  Tyler Durden
  Mon, 10/04/2021 – 20:00

• North Carolina County To Discipline, Fire Teachers Who Say America And Founders Are Racist
  North Carolina County To Discipline, Fire Teachers Who Say America And Founders Are Racist

  Authored by GQ Pan via The Epoch Times (emphasis ours),

  A North Carolina school board has adopted a policy that would discipline or dismiss teachers if they incorporate critical race theory (CRT) into their teaching of the history of the United States.

  

  The Johnston County school board on Oct. 1 unanimously approved an amended code of ethics policy after the county’s Republican-run board of commissioners said it would withhold $7.9 million in school funding until the policy was passed, The News & Observer of Raleigh reported.

  While CRT wasn’t specifically mentioned in the changes, the new policy did target key ideas aligning with the quasi-Marxist ideology, including claims that U.S. laws and institutions are built upon racial oppression, and that racism is so deeply embedded in the nation that racist views are considered normal throughout all aspects of society.

  “Racism causes damage to individuals and the community. When racism is present, it creates a lack of trust and respect,” the document reads. “No student or staff member shall be subjected to the notion that racism is a permanent component of American life.”

  When it comes to U.S. history, the policy states that “all people deserve full credit and recognition for their struggles and accomplishments throughout United States history,” and that the nation’s founding documents “shall not be undermined.” It banned any Johnston County Schools employee from “making any attempt to discredit the efforts made by all people using foundational documents for reform.”

  “No fictional accounts or narratives shall be used to invalidate actual objective historical events. All people who contributed to American Society will be recognized and presented as reformists, innovators, and heroes to our culture,” it added. “Failure to comply with this policy will result in disciplinary action up to and including dismissal.”

  The vote was welcomed by Citizen Advocates for Accountable Government, an advocacy group founded by two Johnston residents. They said the policy would “prohibit the implementing of divisive principles of Critical Race Theory in the classroom.”

  “The approach used stands as an example of how diverse voices can work together for the betterment of the Students in our Public Schools,” Dale Lands, the group’s founder, said in a statement to The Observer.

  The idea that American society is inherently racist has been popularized by proponents of CRT, notably Nikole Hannah-Jones, the leading author of The New York Times’ highly controversial “1619 Project,” an essay collection arguing that the Revolutionary War was fought to preserve slavery; and Ibram X. Kendi, a professor at Boston University who advocates for active discrimination against white people, whom he deems privileged, as a remedy for historical racism.

  Tyler Durden
  Mon, 10/04/2021 – 19:40

• NYC's Abandoned Outdoor Restaurant Sheds Being Used As Garbage Dumps Or Homeless Shelters
  NYC’s Abandoned Outdoor Restaurant Sheds Being Used As Garbage Dumps Or Homeless Shelters

  The benefits of a draconian set of Covid lockdowns are continuing in New York City – if you’re homeless or looking for a place to dump garbage, that is.

  That’s because homeless people are now using outdoor dining sheds, erected during lockdowns for restaurants to move their businesses outdoors, for housing. 

  Heading into the winter months, outdoor dining areas are being used as “hovels for the homeless, giant garbage dumps, and traffic-blocking storage sheds,” according to a new report by the NY Post.

  The report says that many of the structures have shuttered as businesses refocus on indoor dining. The Post pointed out abandoned structures outside of restaurants like Boise, Le Sou and the former GMT Tavern. 

  

  Michelin-starred Jua uses its outdoor shed for cardboard boxes, the report says, despite the fact that restaurants are not allowed to use the areas as storage, per the Department of Transportation. 

  One July complaint to the Department of Buildings said: “These sheds are an eyesore — people are now depositing garbage in them. Why are they up months after restaurants have shut down?” 

  Another referred to the sheds as a “breeding ground” for rats, stating: “It’s not economically feasible for the landlords or (former) tenants to take them down, and the city doesn’t have the political will to get it done.” 

  Leif Arntzen says he sees homeless people sleeping in the sheds “all the time” and told the Post: “I think they pick it because they’ve got this sort of AstroTurf on the pavement that they can just kind of lay down on.”

  And while those on the ground are getting fed up with the structures, politicians have been lacking in action.  Assemblywoman Deborah Glick complained about one such structure this week:

  Restaurant Never opened but huge structure remains from JUNE with various violations- cease & desist ⁦@NYC_DOT⁩ & still no action pic.twitter.com/XTILJnPuc7

  — (((Deborah Glick))) (@DeborahJGlick) September 28, 2021

  https://platform.twitter.com/widgets.js

  According to the DOT, there are about 12,000 outdoor sheds, with 1,202 of those located directly on roadway. It has only instructed the sanitation department to remove 21 of these structures citywide. 

  A City Council survey of 418 restaurants downtown found that 93% were not complying with “at least one” DOT guideline, the Post reported.

  136 complaints about abandoned setups had been placed between May 6 and September 23 of this year. 

  Tyler Durden
  Mon, 10/04/2021 – 19:20

• World's Largest Commodity Traders Face Massive Margin Calls As Global NatGas Arb Explodes
  World’s Largest Commodity Traders Face Massive Margin Calls As Global NatGas Arb Explodes

  Just one week ago, we highlighted the first victim of the latest “rogue wave” in global natural gas markets.

  As Miami-based Statar Capital gave up its “hefty gains” from earlier in the year, tumbling into the red amid the NatGas market turbulence, we warned that it would not be the last fund to admit major losses through this period of chaos.

  It appears we were right, and three years after James Cordier – head trader at OptionsSellers.com – became infamous after a “catastrophic loss event” thanks to a “rogue wave” in NatGas options markets, Reuters reports on what could be the next escalation in energy markets,

  

  Seven sources with direct knowledge of the matter told Reuters that the world’s top commodity trading houses are being told by brokers and exchanges to deposit hundreds of millions of dollars in extra funds to cover their exposure to soaring gas prices.

  Glencore, Gunvor, Trafigura and Vitol are among the commodity merchants facing massive margin calls on their positions in natural gas markets across Europe and US.

  According to reports, it appears the trading shops have all been hammered by a spread (or arbitrage trade) gone wrong.

  For years, the prices of European (red) and US natural gas (green) have traded within a well-defined range. When the spread between the two reaches one extreme or the other, you buy one and sell the other – easy, right?

  

  Source: Bloomberg

  So as European NatGas prices surged in Q2, it reached a notable extreme relative to US NatGas, prompting traders to instigate the strategy of selling European Gas and Buying US Gas in the hopes the spread compresses.

  The strategy backfired last month when European gas prices soared due to a variety of factors including low inventories, high demand for gas in Asia, low Russian and LNG supply to Europe, and outages.

  

  Source: Bloomberg

  As the chart above makes clear, this is not just a modest break of the strategy, it’s a multiple-sigma collapse of what was – for 12 years – a relatively low risk, slow reversion strategy.

  Officials are of course playing down this report:

  “While there have been margin calls associated with the European natural gas price rally, Gunvor maintains a healthy liquidity position and instruments to manage any further volatility,” a company spokesperson said.

  Glencore, Trafigura and Vitol declined to comment.

  The situation is particularly difficult for small-to-mid-sized trading firms, the sources said, who described the margin calls as on a scale not seen before.

  One wonders if these shops have been buying options protection to try and manage this position’s massive wrong way bet. NatGas implied vols have never been higher…

  

  Source: Bloomberg

  “Nothing to see here, move along” is the message but we wonder just how bad this could be as Reuters reports that two of the sources said trading houses and other players had together accumulated $30 billion worth of short positions in the TTF market, with European utilities taking the opposite long side of the play.

  Tyler Durden
  Mon, 10/04/2021 – 19:06

• What's The Driving Force In China?
  What’s The Driving Force In China?

  Authored by Bill Blain via MorningPorridge.com,

  “Some day, and that day may never come, I will call upon you to do a service for me..”

  Understanding what is going on in China means understanding the politics – which should be very familiar to students of 1970’s and 80’s US films.

  

  I was up in London yesterday and spent some time with colleagues and visiting clients. Some fascinating conversations – and lots of them revolved around WTF is happening in China. The situation looks increasingly unclear. The Evergrande bailout/rescue is confusing and unclear. Now the Energy companies have been told to secure power at any price. It’s possible to smell wobble in the air – something is happening, but we are not sure what it is.

  China has been the big story in markets this year. We are all trying to fathom what successive government crackdown means. The purge of Jack Ma and other entrepreneurs, the regulatory assault against big tech and a host of other “reforms” have wrong footed markets. Now it’s clear the Government is struggling with energy security. Maybe the Middle Kingdom is in more trouble that we perceive?

  Or, do we just need to think about China in a different way? To understand China today, you need a sense of its history. Imperial China ran from 221 BC till 1912. Empire, courts, bureaucracy and plots. I wonder how much has really changed?

  Since the foundation of Communist China the Chinese Communist Party (CCP) has been highly factionalised – broadly divided into the Chinese Commmunist Youth League (CCYL) faction of “populists” and the Shanghai Gang of “elitists”.

  There isn’t a simple way to characterise each side due to the links of patronage than characterise who-knows-who in China, but broadly the elitists tended to comprise the princelings (from families of party veterans and officials) and many of the richer entrepreneurial figures. The populists typically worked their way up the system. For many decades there was a form of “collective” balance between the factions at the top of the party with a rotation between the two as the tides of power balanced each other out.

  Now there is a new faction in charge.

  President Xi Jinping rose through the ranks of the princelings in the Shanghai gang, but has now consolidated own power around himself in the Xi Gang. His Gang now controls all the significant leadership posts in the CCP – eroding the power and significance of the Shanghai and CCYL gangs. He is de-facto Emperor.

  If all the above reads a bit like a Mario Puzo “Godfather” Novel… spot on. Xi is now enforcing his power over the other families by removing their leaders in time-honoured style. To read it all in detail – let me suggest this primer: The Rise of the Xi Gang

  Evergrande is an example of how it hits the economy and investment decisions: Evergrande’s founder Hui Ka Yan is a princeling from the Shanghai gang. He owes his connections and support as a client of former vice-President Zeng Qinghong, who in turn was the right-hand man of President Jiang Zemin. Xi came up through the Shanghai gang, but has now founded his own family/gang, thus the Zemin faction is his enemy.

  Now that Hui Ka Yan is neutralised and broken, then the Government/Xi Clan can move on to protecting its clients across other property companies. You are with or against him. Simples.. Eh?

  Much of the current unrest in China is about which side of the Jiang Zemim / Xi Jinping divide players stand on. At the moment, Emperor Xi is winning. When placing new bets on China one would be well advised to check who the patron is.

  Tyler Durden
  Mon, 10/04/2021 – 19:00