- Pope Calls On Russian & Ukraine Leaders To Observe Easter Truce
Pope Calls On Russian & Ukraine Leaders To Observe Easter Truce
Pope Francis in a Palm Sunday address from the Vatican called on Russia and Ukraine to observe an Easter truce following six weeks since the Russian invasion. The Roman Catholic leader has been increasingly vocal in condemning the war.
He said that leaders on both sides must “make some sacrifices for the good of the people” in the message which kicked off Roman Catholic Holy Week, which is the seven days leading up to Easter.
Pope during Palm Sunday mass in Rome, image via the Vatican. The mass he served in St. Peter’s Square is said to be the first such he’s led amid crowds since the start of the pandemic two years ago. During the sermon, he called for …”weapons to be laid down to begin an Easter truce, not to reload weapons and resume fighting, no! A truce to reach peace through real negotiations.”
While not saying the names Russia or Ukraine directly, he denounced “the folly of war” and “senseless acts of cruelty,” further questioning, “In fact, what a victory would that be, who plants a flag under a pile of rubble?”
However, it was very clear the words were in referencing to the ongoing war. “When we resort to violence … we lose sight of why we are in the world and even end up committing senseless acts of cruelty. We see this in the folly of war, where Christ is crucified yet another time,” he said.
He also decried “the unjust death of husbands and sons” … “refugees fleeing bombs” … “young people deprived of a future” … and “soldiers sent to kill their brothers and sisters” – as the Associated Press quoted.
While Ukraine-Russia talks are still ongoing, with President Zelensky recently signaling he’s ready for neutrality regarding the NATO question, there’s been little progress given that anytime a potential ‘breakthrough’ is reported, what immediately follows are accusations and denials from both sides. Each side is seeking leverage through battlefield victories, with Russian forces concentrating operations in the east and south.
The pope blessed the flag of 2014 Euromaidan coup. The message couldn’t be worse. https://t.co/Be8K4jSun8
— Alex (Sasha) Krainer (@NakedHedgie) April 8, 2022
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In the scenario that an Easter truce does take hold, it would likely come on April 24 – which is the Eastern Orthodox date this year for Pascha – instead of the Western observation of April 17.
During a trip to the island nation of Malta over a week ago, the Pope had for the first time denounced Putin’s decision to go to war, yet characteristically without naming the Russian leader directly. The Pope had said, “Once again, some potentate, sadly caught up in anachronistic claims of nationalist interest, is provoking and fomenting conflicts, whereas ordinary people sense the need to build a future that will either be shared or not be at all.”
Tyler Durden
Mon, 04/11/2022 – 02:45 - Hudson: The Dollar Devours The Euro
Hudson: The Dollar Devours The Euro
It is now clear that today’s escalation of the New Cold War was planned over a year ago, with serious strategy associated with America’s plan to block Nord Stream 2 as part of its aim of blocking Western Europe (“NATO”) from seeking prosperity by mutual trade and investment with China and Russia.
As President Biden and U.S. national-security reports announced, China was seen as the major enemy. Despite China’s helpful role in enabling corporate America to drive down labor’s wage rates by de-industrializing the U.S. economy in favor of Chinese industrialization, China’s growth was recognized as posing the Ultimate Terror: prosperity through socialism. Socialist industrialization always has been perceived to be the great enemy of the rentier economy that has taken over most nations in the century since World War I ended, and especially since the 1980s. The result today is a clash of economic systems – socialist industrialization vs. neoliberal finance capitalism.
That makes the New Cold War against China an implicit opening act of what threatens to be a long-drawn-out World War III. The U.S. strategy is to pry away China’s most likely economic allies, especially Russia, Central Asia, South Asia and East Asia. The question was, where to start the carve-up and isolation.
Russia was seen as presenting the greatest opportunity to begin isolating, both from China and from the NATO Eurozone. A sequence of increasingly severe – and hopefully fatal – sanctions against Russia was drawn up to block NATO from trading with it. All that was needed to ignite the geopolitical earthquake was a casus belli.
That was arranged easily enough. The escalating New Cold War could have been launched in the Near East – over resistance to America’s grabbing of Iraqi oil fields, or against Iran and countries helping it survive economically, or in East Africa. Plans for coups, color revolutions and regime change have been drawn up for all these areas, and America’s African army has been built up especially fast over the past year or two. But Ukraine has been subjected to a U.S.-backed civil war for eight years, since the 2014 Maidan coup, and offered the chance for the greatest first victory in this confrontation against China, Russia and their allies.
So the Russian-speaking Donetsk and Luhansk regions were shelled with increasing intensity, and when Russia still refrained from responding, plans reportedly were drawn up for a great showdown to commence in late February – beginning with a blitzkrieg Western Ukrainian attack organized by U.S. advisors and armed by NATO.
Russia’s preemptive defense of the two Eastern Ukrainian provinces and its subsequent military destruction of the Ukrainian army, navy and air force over the past two months has been used as the excuse to start imposing the U.S.-designed sanctions program that we are seeing unfolding today. Western Europe has dutifully gone along whole-hog. Instead of buying Russian gas, oil and food grains, it will buy these from the United States, along with sharply increased arms imports.
The prospective fall in the Euro/Dollar exchange rate
It therefore is appropriate to look at how this is likely to affect Western Europe’s balance of payments and hence the euro’s exchange rate against the dollar.
European trade and investment prior to the War to Impose Sanctions had promised a rising mutual prosperity between Germany, France and other NATO countries vis-à-vis Russia and China. Russia was providing abundant energy at a competitive price, and this energy was to make a quantum leap with Nord Stream 2. Europe was to earn the foreign exchange to pay for this rising import trade by a combination of exporting more industrial manufactures to Russia and capital investment in developing the Russian economy, e.g. by German auto companies and financial investment. This bilateral trade and investment is now stopped – and will remain stopped for many, many years, given NATO’s confiscation of Russia’s foreign reserves kept in euros and British sterling, and the European Russophobia being fanned by U.S. propaganda media.
In its place, NATO countries will purchase U.S. LNG – but they will need to spend billions of dollars building sufficient port capacity, which may take until perhaps 2024. (Good luck until then.) The energy shortage will sharply raise the world price of gas and oil. NATO countries also will step up their purchases of arms from the U.S. military-industrial complex. The near-panic buying will also raise the price for arms. And food prices also will rise as a result of the desperate grain shortfalls resulting from a cessation of imports from Russia and Ukraine on the one hand, and the shortage of ammonia fertilizer made from gas.
All three of these trade dynamics will strengthen the dollar vis-à-vis the euro. The question is, how will Europe balance its international payments with the United States? What does it have to export that the U.S. economy will accept as its own protectionist interests gain influence, now that global free trade is dying quickly?
The answer is, not much. So what will Europe do?
I could make a modest proposal. Now that Europe has pretty much ceased to be a politically independent state, it is beginning to look more like Panama and Liberia – “flag of convenience” offshore banking centers that are not real “states” because they don’t issue their own currency, but use the U.S. dollar. Since the eurozone has been created with monetary handcuffs limiting its ability to create money to spend into the economy beyond the limit of 3 percent of GDP, why not simply throw in the financial towel and adopt the U.S. dollar, like Ecuador, Somalia and the Turks and Caicos Islands? That would give foreign investors security against currency depreciation in their rising trade with Europe and its export financing.
For Europe, the alternative is that the dollar-cost of its foreign debt taken on to finance its widening trade deficit with the United States for oil, arms and food will explode. The cost in euros will be even greater as the currency falls against the dollar. Interest rates will rise, slowing investment and making Europe even more dependent on imports. The eurozone will turn into an economic dead zone.
For the United States, this is Dollar Hegemony on steroids – at least vis-à-vis Europe. The continent would become a somewhat larger version of Puerto Rico.
The dollar vis-à-vis Global South currencies
The full-blown version of the New Cold War triggered by the “Ukraine War” risks turning into the opening salvo of World War III, and is likely to last at least a decade, perhaps two, as the U.S. extends the fight between neoliberalism and socialism to encompass a worldwide conflict. Apart from the U.S. economic conquest of Europe, its strategists are seeking to lock in African, South American and Asian countries along similar lines to what has been planned for Europe.
The sharp rise in energy and food prices will hit food-deficit and oil-deficit economies hard – at the same time that their foreign dollar-denominated debts to bondholders and banks are falling due and the dollar’s exchange rate is rising against their own currency. Many African and Latin American countries – especially North Africa – face a choice between going hungry, cutting back their gasoline and electricity use, or borrowing the dollars to cover their dependency on U.S.-shaped trade.
There has been talk of IMF issues of new SDRs to finance the rising trade and payments deficits. But such credit always comes with strings attached. The IMF has its own policy of sanctioning countries that do not obey U.S. policy. The first U.S. demand will be that these countries boycott Russia, China and their emerging trade and currency self-help alliance. “Why should we give you SDRs or extend new dollar loans to you, if you are simply going to spend these in Russia, China and other countries that we have declared to be enemies,” the U.S. officials will ask.
At least, this is the plan. I would not be surprised to see some African country become the “next Ukraine,” with U.S. proxy troops (there are still plenty of Wahabi advocates and mercenaries) fighting against the armies and populations of countries seeking to feed themselves with grain from Russian farms, and power their economies with oil or gas from Russian wells – not to speak of participating in China’s Belt and Road Initiative that was, after all, the trigger to America’s launching of its new war for global neoliberal hegemony.
The world economy is being enflamed, and the United States has prepared for a military response and weaponization of its own oil and agricultural export trade, arms trade and demands for countries to choose which side of the New Iron Curtain they wish to join.
But what is in this for Europe? Greek labor unions already are demonstrating against the sanctions being imposed. And in Hungary, Prime Minister Viktor Orban has just won an election on what is basically an anti-EU and anti-U.S. worldview, starting with paying for Russian gas in roubles. How many other countries will break ranks – and how long will it take?
What is in this for the Global South countries being squeezed – not merely as “collateral damage” to the deep shortages and soaring prices for energy and food, but as the very objective of U.S. strategy as it inaugurates the great splitting of the world economy in two? India has already told U.S. diplomats that its economy is naturally connected with those of Russia and China. Pakistan finds the same calculus at work.
From the U.S. vantage point, all that needs to be answered is, “What’s in it for the local politicians and client oligarchies that we reward for delivering their countries?”
From its planning stages, U.S. diplomatic strategists viewed the looming World War III as a war of economic systems. What side will countries choose: their own economic interest and social cohesion, or submission to local political leaders installed by U.S. meddling like the $5 billion that Assistant Secretary of State Victoria Nuland bragged of having invested in Ukraine’s neo-Nazi parties eight years ago to initiate the fighting that has erupted into today’s war?
In the face of all this political meddling and media propaganda, how long will it take the rest of the world to realize that there’s a global war underway, with World War III on the horizon? The real problem is that by the time the world understands what is going on, the global fracture will already have enabled Russia, China and Eurasia to create a real non-neoliberal New World Order that does not need NATO countries and which has lost trust and hope for mutual economic gains with them. The military battlefield will be littered with economic corpses.
Tyler Durden
Mon, 04/11/2022 – 02:00 - Elon Musk Will No Longer Join Twitter Board Of Directors
Elon Musk Will No Longer Join Twitter Board Of Directors
Following Elon Musk’s recent acquisition of 9.2% of Twitter and last Tuesday’s formal announcement that he would be joining the Board of Directors, Musk has declined the board seat.
“Elon Musk has decided not to join our board,” wrote CEO Parag Agrawal, adding “We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward.”
“Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not.”
Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here. pic.twitter.com/lfrXACavvk
— Parag Agrawal (@paraga) April 11, 2022
Word of Musk’s appointment to the board sent liberals into fits – as the inclusion of the free-speech advocate was seen as a threat to left-wing heterodoxy that underpins Twitter’s culture.
Of course, for those paying attention, this means that Musk can now own more than 14.9% of the company – a limit that board members must adhere to.
As the Wall Street Journal notes, “It was unclear why Musk refused the board seat. Adding Musk would have restricted how big a stake in the company he could own. Musk could now do anything from selling his stake to potentially pursuing a hostile takeover of the company.”
We await the next Musk tweet with bated breath…
Tyler Durden
Mon, 04/11/2022 – 00:07 - China Undercuts Sanctions On Russia: Where Are The "Consequences"?
China Undercuts Sanctions On Russia: Where Are The “Consequences”?
Authored by Judith Bergman via The Gatestone Institute,
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“For China… the Ukrainian crisis provided a unique opportunity to increase its access to Russia’s natural resources, particularly gas, gain contracts for infrastructure projects and new markets for Chinese technology, and turn Russia into a junior partner in the relationship between the two countries.” — Report by the European Council on Foreign Relations, February 2015.
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In addition to undermining sanctions through the commodities trade, China is possibly also helping Russia hide its money.
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Despite all of the above, the Biden administration continues to talk about China as if proof were still needed that it is undercutting sanctions on Russia.
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China has clearly been giving material help to Russia. So where are the “consequences”?
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The closest that the U.S. has come to going beyond words is the announcement, along with other G7 leaders, of an “enforcement initiative” to prevent Russia from evading sanctions, but it is — presumably deliberately — unclear what that initiative actually entails.
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“The trade and the purchase of long-term energy supplies undercut the sanctions, because it shows Putin he has got somebody in his corner for the next five years or more.” — Michael Pillsbury, author of The Hundred-Year Marathon, Fox News, March 21, 2022.
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The Biden administration, by repeatedly threatening “consequences” and issuing “warnings” to China, “if” it helps Russia undercut sanctions, merely continues to project indecision, weakness and lack of leadership …[and] will only result in the additional loss of credibility and the further degradation of U.S. deterrence to the detriment of the West.
Despite tough Western sanctions on Russia, President Vladimir Putin’s war on Ukraine has now lasted for more than a month and Putin is showing no signs of backing down. The power helping him to withstand the effects of the sanctions and continue the war is Russia’s most powerful ally — China. Pictured: Putin meets with Chinese President Xi Jinping in Moscow on June 5, 2019. (Image source: kremlin.ru)
Despite tough Western sanctions on Russia, President Vladimir Putin’s war on Ukraine has now lasted for more than a month and Putin is showing no signs of backing down. The power helping him to withstand the effects of the sanctions and continue the war is Russia’s most powerful ally — China.
Shortly before Russia’s invasion of Ukraine on February 24, Russia and China entered into contracts worth hundreds of billions of dollars. On February 4, Putin announced new Russian oil and gas deals with China worth an estimated $117.5 billion. On February 18, six days before the invasion, Russia announced a $20 billion deal to sell 100 million tons of coal to China. On the day of the invasion, China, lifting restrictions that had been in place previously due to concerns about plant diseases, agreed to buy Russian wheat.
All of these deals, by undermining Western sanctions on Russia, are lifelines to Putin and his war on Ukraine. “China could emerge as a major buyer for Russian wheat and sunflower oil as wide-ranging financial sanctions threaten Russia’s agriculture trade flows to its traditional markets in Europe,” S&P Global Commodity Insights wrote.
China, perhaps with a covetous eye toward Taiwan, has not condemned Russia’s invasion of Ukraine and has repeatedly stated that it is against sanctioning Russia. Chinese Vice Foreign Minister Le Yucheng called Western sanctions “outrageous.” China has not even tried to conceal that it continues to do business with Russia. As Chinese Foreign Ministry Spokesman Wang Wenbin said in his press briefing, “China and Russia will continue to conduct normal trade cooperation in the spirit of mutual respect, equality and mutual benefit.”
There is nothing new or surprising in China’s decision to supply the lifeline that enables Putin to stay afloat. After Russia annexed the Crimean Peninsula in March 2014 and was met with Western sanctions, Russia turned to China. In May 2014, Russia and China signed a gas supply deal worth $400 billion, making China Russia’s second-largest gas market after Germany. A February 2015 report by the European Council on Foreign Relations stated:
“After the European Union and the United States imposed sanctions on Russia [in 2014], President Vladimir Putin made a dramatic turn to China and signed a series of deals, including a $400 billion deal to export gas to China last May. Moscow is now attempting to reorient its entire economy towards Asia as a way to mitigate the negative impact of Western sanctions. For China, meanwhile, the Ukrainian crisis provided a unique opportunity to increase its access to Russia’s natural resources, particularly gas, gain contracts for infrastructure projects and new markets for Chinese technology, and turn Russia into a junior partner in the relationship between the two countries.”
In addition to undermining sanctions through the commodities trade, China is possibly also helping Russia hide its money. According to Foreign Affairs:
“Russia may have stashed tens of billions of dollars in reserve assets in opaque offshore accounts, where it holds dollar-denominated securities beyond the reach of international sanctions and asset freezes…there are signs, too, that Russia may have moved some of its dollars with help from a foreign government… It is not yet clear which intermediaries Russia would have used to stash Treasuries offshore. One strong possibility, however, is China, with which Putin now appears allied.”
Despite all of the above, the Biden administration continues to talk about China as if proof were still needed that it is undercutting sanctions on Russia. US National Security Advisor Jake Sullivan said on March 13:
“We are communicating directly, privately to Beijing, that there will absolutely be consequences for large-scale sanctions evasion efforts or support to Russia to backfill them. We will not allow that to go forward and allow there to be a lifeline to Russia from these economic sanctions from any country, anywhere in the world.”
After Sullivan held a seven hour long meeting with Chinese diplomat Yang Jiechi on March 14, a senior Biden administration official told reporters:
“I’m just going to reiterate that we do have deep concerns about China’s alignment with Russia at this time, and the national security adviser was direct about those concerns and the potential implications and consequences of certain actions,”
On March 18, in a video call with Chinese President Xi Jinping, U.S. President Joe Biden warned that there would be “implications and consequences if China provides material support to Russia,” but without being specific. One unnamed senior U.S. official even said, “The president really wasn’t making specific requests of China. I think our view is that China will make its own decisions.”
China has clearly been giving material help to Russia. So where are the “consequences”?
The closest that the U.S. has come to going beyond words is the announcement, along with other G7 leaders, of an “enforcement initiative” to prevent Russia from evading sanctions, but it is — presumably deliberately — unclear what that initiative actually entails. prior to Biden’s trip to Europe, Sullivan told reporters on March 23:
“[T]he G7 leaders tomorrow will agree on an initiative to coordinate on sanctions enforcement so that Russian efforts to evade the sanctions or other countries’ effort to help Russia evade the sanctions can be dealt with effectively and in a coordinated fashion.”
After the G7 meeting, the White House released a statement by the G7, which merely said:
“We will continue to cooperate closely, including by engaging other governments on adopting similar restrictive measures to those already imposed by G7 members and on refraining from evasion, circumvention and backfilling that seek to undercut or mitigate the effects of our sanctions.”
There was no mention of China; again, it all seemed too little, too late.
“They’re [China] the invisible hand behind Putin,” said Michael Pillsbury, author of The Hundred-Year Marathon.
“They are the ones who are funding the war. Roughly half of Russia’s gold and currency reserves are controlled now by the U.S. and by the West, he [Putin] can’t get access to them. But the other half the Chinese can provide access to and they’ve been doing it… The trade and the purchase of long-term energy supplies undercut the sanctions, because it shows Putin he has got somebody in his corner for the next five years or more. There’s a number of ways that China’s support is just crucial for Putin. I believe the Chinese could stop the war with one phone call to him. It would be like the banker calling you… so far it’s not happening… Probably the only way to get ahead is going to be American sanctions on China… the war will go on because the banker is not going to make that call.”
The Biden administration, by repeatedly threatening “consequences” and issuing “warnings” to China, “if” it helps Russia undercut sanctions, merely continues to project indecision, weakness and lack of leadership. The constant repetition of these warnings without follow-up actions by the Biden administration will only result in the additional loss of credibility and the further degradation of U.S. deterrence to the detriment of the West.
Tyler Durden
Sun, 04/10/2022 – 23:30 -
- Visualizing The History Of Energy Transitions
Visualizing The History Of Energy Transitions
Over the last 200 years, how we’ve gotten our energy has changed drastically.
As Visual Capitalist’s Govind Bhutada details below, these changes were driven by innovations like the steam engine, oil lamps, internal combustion engines, and the wide-scale use of electricity. The shift from a primarily agrarian global economy to an industrial one called for new sources to provide more efficient energy inputs.
The current energy transition is powered by the realization that avoiding the catastrophic effects of climate change requires a reduction in greenhouse gas emissions. This infographic provides historical context for the ongoing shift away from fossil fuels using data from Our World in Data and scientist Vaclav Smil.
Coal and the First Energy Transition
Before the Industrial Revolution, people burned wood and dried manure to heat homes and cook food, while relying on muscle power, wind, and water mills to grind grains. Transportation was aided by using carts driven by horses or other animals.
In the 16th and 17th centuries, the prices of firewood and charcoal skyrocketed due to shortages. These were driven by increased consumption from both households and industries as economies grew and became more sophisticated.
Consequently, industrializing economies like the UK needed a new, cheaper source of energy. They turned to coal, marking the beginning of the first major energy transition.
As coal use and production increased, the cost of producing it fell due to economies of scale. Simultaneously, technological advances and adaptations brought about new ways to use coal.
The steam engine—one of the major technologies behind the Industrial Revolution—was heavily reliant on coal, and homeowners used coal to heat their homes and cook food. This is evident in the growth of coal’s share of the global energy mix, up from 1.7% in 1800 to 47.2% in 1900.
The Rise of Oil and Gas
In 1859, Edwin L. Drake built the first commercial oil well in Pennsylvania, but it was nearly a century later that oil became a major energy source.
Before the mass production of automobiles, oil was mainly used for lamps. Oil demand from internal combustion engine vehicles started climbing after the introduction of assembly lines, and it took off after World War II as vehicle purchases soared.
Similarly, the invention of the Bunsen burner opened up new opportunities to use natural gas in households. As pipelines came into place, gas became a major source of energy for home heating, cooking, water heaters, and other appliances.
Coal lost the home heating market to gas and electricity, and the transportation market to oil.
Despite this, it became the world’s most important source of electricity generation and still accounts for over one-third of global electricity production today.
The Transition to Renewable Energy
Renewable energy sources are at the center of the ongoing energy transition. As countries ramp up their efforts to curb emissions, solar and wind energy capacities are expanding globally.
Here’s how the share of renewables in the global energy mix changed over the last two decades:
In the decade between 2000 and 2010, the share of renewables increased by just 1.1%. But the growth is speeding up—between 2010 and 2020, this figure stood at 3.5%.
Furthermore, the current energy transition is unprecedented in both scale and speed, with climate goals requiring net-zero emissions by 2050. That essentially means a complete fade-out of fossil fuels in less than 30 years and an inevitable rapid increase in renewable energy generation.
Renewable energy capacity additions were on track to set an annual record in 2021, following a record year in 2020. Additionally, global energy transition investment hit a record of $755 billion in 2021.
However, history shows that simply adding generation capacity is not enough to facilitate an energy transition. Coal required mines, canals, and railroads; oil required wells, pipelines, and refineries; electricity required generators and an intricate grid.
Similarly, a complete shift to low-carbon sources requires massive investments in natural resources, infrastructure, and grid storage, along with changes in our energy consumption habits.
Tyler Durden
Sun, 04/10/2022 – 23:00 - Three Million Years To Become The Next Elon Musk
Three Million Years To Become The Next Elon Musk
Elon Musk is the billionaire with the highest net worth in the world according to Forbes’ annual billionaires list, pushing Amazon chairman Jeff Bezos off his throne. The Tesla founder accumulated $219 billion to-date, while Bezos actually lost $6 billion over the course of one year and now stands at $171 billion. As Statista’s Florian Zandt shows in the chart below, based on average annual national wages shows, no normal person could ever hope to amass the wealth of their country’s richest billionaire by working a regular job.
You will find more infographics at Statista
To reach Musk levels of wealth, for example, the average U.S. resident would need to work three million years at the average annual wage of $69,392 given by the OECD for the year 2020.
Germans, on the other hand, would have to spend 900,000 years working for $53,475 per year to match Dieter Schwarz’ fortune of $47 billion. Schwarz is the owner of Schwarz-Gruppe, the conglomerate behind the supermarket chains Kaufland and Lidl, among others. When looking at the median income, the data for which was not available for every country at the time of this article’s publication, the numbers get even more unfathomable. According to the St. Louis Federal Reserve, the median personal income stood at $35,805 in the U.S. in 2020, which would ramp up the time needed to match Elon Musk to 6.1 million years.
While the owners behind brands like Louis Vuitton, Moët Hennessy or Zara are expected to feature prominently on this kind of list, the richest Canadian billionaire is emblematic for a new breed of the super rich: Changpeng Zhao is the CEO of the world’s biggest cryptocurrency exchange Binance and has amassed a fortune of $55 billion to-date, a number his fellow Canadians would, on average, have to work 1.2 million years for.
While these numbers are already astronomical in affluent Western states, the wealth and income disparity is even bigger in nations with a lower average income and higher wealth disparity like India and China.
For example, the wealth of Mukesh Ambani, managing director of multinational conglomerate Reliance Industries Limited, was estimated at around $91 billion at the time of the billionaires list‘s publication. With an average annual wage of roughly $5,000, residents of India would have to work more than 17 million years to match Ambani’s fortune.
Tyler Durden
Sun, 04/10/2022 – 22:00 - "Hate Speech": Linkedin Disables Air-Force Vet's Account After Criticizing Loan-Forgiveness
“Hate Speech”: Linkedin Disables Air-Force Vet’s Account After Criticizing Loan-Forgiveness
We have discussed the expanding censorship programs at Twitter, Facebook, and other social media. These programs have notably targeted conservative viewpoints on contemporary controversies.
Now, LinkedIn has added its company name to this ignoble effort, according to An Air Force veteran whose account was disabled after criticizing the calls for loan forgiveness.
The site declared opposing to the Democratic plan for loan forgiveness to be “hate speech.”
Smith is the founder of the non-profit organization Code of Vets, a group created in honor of her father who died at 57 after years of struggling with post-traumatic stress disorder. Like many Americans, she opposed the loan forgiveness calls from Democratic members and has shared her own use of military service to help pay for college.
Smith posted her take on student loan forgiveness on various social media platforms.
“I am not responsible for your student debt. I grew up in poverty in NC. Ate from a garden, name was on community Angel tree for Christmas, bought clothes from yard sales & if I was lucky, on a rare occasion Sky City. I joined the Air Force then went to college. I made it happen.”
LinkedIn then disabled or restricted her account as well as her Code of Vets account. LinkedIn told Smith in an email that the Code of Vets post “goes against our policy on hate speech,” according to a screenshot she shared on Twitter.
I was locked out of @LinkedIn just now for this exact post below. It went viral. This is the second time this platform has targeted me. I am frustrated and disappointed. Freedom of Speech has been secured by our blood, sweat and lives. This has got to stop.
Will @LinkedInHelp https://t.co/sd5yqvKtz3 pic.twitter.com/0vL6Fj64vP
— Code of Vets ™ (@codeofvets) April 7, 2022
https://platform.twitter.com/widgets.js
LinkedIn has not responded to media inquiries, which is typical of social media companies. The company simply said that she can appeal.
If this is the entirety of the posting, it is hard to imagine a more glaring example of bias and censorship.
Some in the company simply support loan forgiveness and declared opposition to the Democratic plan to be “hate speech.”
Both public and private censorship leads to an insatiable appetite for silencing those with opposing views.
This is why I have described myself as an Internet Originalist:
The alternative is “internet originalism” — no censorship. If social media companies returned to their original roles, there would be no slippery slope of political bias or opportunism; they would assume the same status as telephone companies. We do not need companies to protect us from harmful or “misleading” thoughts. The solution to bad speech is more speech, not approved speech.
If Pelosi demanded that Verizon or Sprint interrupt calls to stop people saying false or misleading things, the public would be outraged. Twitter serves the same communicative function between consenting parties; it simply allows thousands of people to participate in such digital exchanges. Those people do not sign up to exchange thoughts only to have Dorsey or some other internet overlord monitor their conversations and “protect” them from errant or harmful thoughts.
Social media companies seem to have written off conservatives and others with dissenting views. They have also readily embraced censorship as a noble task. Indeed, after the old Twitter CEO Jack Dorsey was criticized for his massive censorship efforts, Twitter replaced him with CEO Parag Agrawal who has expressed chilling anti-free speech sentiments. In an interview with Technology Review editor-in-chief Gideon Lichfield, he was asked how Twitter would balance its efforts to combat misinformation with wanting to “protect free speech as a core value” and to respect the First Amendment. Agrawal responded;
“Our role is not to be bound by the First Amendment, but our role is to serve a healthy public conversation and our moves are reflective of things that we believe lead to a healthier public conversation. The kinds of things that we do about this is, focus less on thinking about free speech, but thinking about how the times have changed.
One of the changes today that we see is speech is easy on the internet. Most people can speak. Where our role is particularly emphasized is who can be heard. The scarce commodity today is attention. There’s a lot of content out there. A lot of tweets out there, not all of it gets attention, some subset of it gets attention.”
He added that Twitter would be “moving towards how we recommend content and … how we direct people’s attention is leading to a healthy public conversation that is most participatory.”
Tyler Durden
Sun, 04/10/2022 – 21:30 - China's "Breathtaking" Nuclear Expansion Confirmed – Beijing Officials Cite Fear Of US-Led Regime Change
China’s “Breathtaking” Nuclear Expansion Confirmed – Beijing Officials Cite Fear Of US-Led Regime Change
The Chinese government has greatly “accelerated” its nuclear weapons program due to a revised threat assessment of risk posed by the United States, according to a new in-depth Wall Street Journal report that cites both Chinese and US officials. It follows a Pentagon assessment from last year which laid out Beijing’s drive to “modernize, diversify and expand” its nuclear arsenal.
The fresh WSJ investigative report appears to confirm the prior US military assessment that China seeks to expanding “land, sea and air-based nuclear delivery platforms” while establishing more necessary infrastructure to support it.
While its nuclear goals predate Russia’s invasion of Ukraine, the war which kicked off on Feb.24 is believed to have given greater impetus to the belief China needs a stronger deterrent arsenal. Specifically, the report underscores that “Chinese leaders see a stronger nuclear arsenal as a way to deter the U.S. from getting directly involved in a potential conflict over Taiwan.”
Image source: Global Times Satellite imagery cited in the report additionally appears to confirm accelerating work on over 100 suspected new missile silos in remote desert regions of Western China. While some of this has been subject of much Western reporting and speculation over the past number of months, based also on open source satellite analysis, the weekend WSJ report has some bombshell and alarming lines such as the following, which says Chinese Communist government leadership fears covert Washington regime change efforts down the road:
The people close to the Chinese leadership said China’s increased focus on nuclear weapons is also driven by fears Washington might seek to topple Beijing’s Communist government following a more hawkish turn in U.S. policy toward China under the Trump and Biden administrations.
American military officials and security analysts are concerned China’s nuclear acceleration could mean it would be willing to make a surprise nuclear strike. The people close to the Chinese leadership said Beijing is committed to not using nuclear weapons first.
However, while China does have an official ‘no first use’ nuclear policy doctrine, the United States does not and has even been long resistant to it over years of activist lobbying of both Democrat and Republican administrations.
The precise numbers of China’s nuclear warheads are not known, but it’s generally understood to be far behind that of the United States, likely by a magnitude of multiple thousands. One official cited in the report, described as “close to the leadership” in Beijing, said: “China’s inferior nuclear capability could only lead to growing US pressure on China.”
Testimony by the head of the U.S. Strategic Command showed for the first time that China’s ICBM-launched hypersonic glide vehicle tested in July flew 40,000 km for more than 100 minutes. https://t.co/0M7Bl364uQ
— The Japan Times (@japantimes) April 5, 2022
https://platform.twitter.com/widgets.js
And further on the way the Ukraine crisis has impacted China’s thinking – remembering too that Washington has of late piled on the pressure warning Beijing to cease any and all support to Moscow – the WSJ describes the following:
Nervous international reaction to Russian leader Vladimir Putin’s call for his nuclear forces to be put on alert following his invasion of Ukraine has offered Chinese officials a real-world lesson about the strategic value of nuclear weapons. So did Ukraine’s decision in 1994 to turn over the nuclear weapons left in the country after the breakup of the Soviet Union in return for security assurances from the U.S. and Russia.
Watching the tense situation continue to unfold, one former Chinese military officer was cited in the report as saying, “Ukraine lost its nuclear deterrence in the past and that’s why it got into a situation like this” – again which has only served to reinforce China’s worries over its nuclear preparedness.
Last week the head of U.S. Strategic Command, Adm. Charles Richard, warned US lawmakers over the “breathtaking expansion of strategic and nuclear capabilities” which he said translates to the PLA military being able to “execute any possible nuclear employment strategy.”
Tyler Durden
Sun, 04/10/2022 – 21:00 - Yuan Trading Dries Up As Shanghai Lockdown Drags On
Yuan Trading Dries Up As Shanghai Lockdown Drags On
By Ye Xie, Bloomberg Markets Live commentator and analyst
Three things we learned last week:
1. Yuan trading has evaporated since Shanghai went into lockdown. Onshore yuan trading volume declined to $16 billion on Friday, the lowest since March 2020 and down from the daily average of $30 billion last month. The interbank market is dominated by banks buying and selling currencies on behalf of their clients. These transactions are backed by import and export contracts or investment activities. So the dwindling trading reflects a significant slowdown in economic activity. Shanghai accounted for 29% of yuan trading by banks for their clients in February, more than any other region in China.
2. Bad news is perceived to be good news for Chinese markets now. Real-estate and construction stocks rallied last week because investors expect Beijing to take action to shore up the economy, including boosting infrastructure spending and relaxing housing restrictions. Premier Li Keqiang vowed to stabilize foreign trade and investment after a meeting with businesses and economists, state media reported Friday. Economists expect the PBOC to cut the one-year medium-term lending facility rate to 2.75% from 2.85% this week.
3. U.S.-China policy divergence has led to capital outflows. Overseas investors dumped a record 51.8 billion yuan ($8 billion) of Chinese government debt in March, according to Bloomberg calculations based on data from Chinabond. While Beijing is poised to ease, Fed officials have turned more hawkish. The minutes of the Fed’s March meeting showed officials are likely to shrink the central bank balance sheet by more than $1 trillion a year while raising interest rates “expeditiously” to cool inflation. Three-year and five-year Treasury yields are already higher than their Chinese counterparts, reducing the allure of China’s debt. Another hot CPI report this week is likely to widen the interest-rate differential further.
Tyler Durden
Sun, 04/10/2022 – 20:30 - Where The Super Rich Reside
Where The Super Rich Reside
According to the Forbes Billionaires List of 2022, most of the world’s richest people are at home in the United States. As Statista’s Katharina Buchholz details below, the country counted 867 billionaires per the list’s last release Tuesday. This is several more than the second-ranked country, China, with 607 and many more than in third-placed India with 165.
You will find more infographics at Statista
According to Forbes, 236 new billionaire were minted in the last year, translating into an average of 4.5 new billionaires every week.
This included the first billionaires from Estonia, Bulgaria, Uruguay and Barbados. The newcomer from the latter country, you guessed it, is singer Rihanna, who build her fortune through her music career and cosmetics line Fenty.
Tyler Durden
Sun, 04/10/2022 – 20:00 - Morgan Stanley: This Yield Curve Inversion Is Different
Morgan Stanley: This Yield Curve Inversion Is Different
By Guneet Dhingra, strategist at Morgan Stanley
“The only thing we have to fear…is fear itself” – Franklin D Roosevelt (March 4, 1933)
An economic recession in the US is on the minds of all investors today – in no small part due to the inversion of the 2s10s Treasury curve. Observations over the last 70 years suggest that almost every time the 2s10s yield curve has inverted,a recession has followed close behind (it’s correlation, not causality though). We think that this time is different.We think that an inverted yield curve is here to stay, without necessarily being a signal fora recession ahead. To borrow FDR’s famous words, the only thing investors have to fear about an inverted yield curve today…is fear itself.
Believers in the predictive power of the yield curve posit that inverted curves reflect rate cuts in the future, which in turn must be a sign of a growth slowdown ahead,and ultimately a recession. Unless one believes that the curve inversion in 2019 predicted the 2020 Covid recession, it is likely that the predictive power of the yield curve inversion would have been debunked in 2020 itself
The signal from the yield curve inversion worked better a couple of decades ago, when yield levels were closely tied to inflation, GDP and, ultimately, Fed policy. However, the yield curve today is uniquely affected by two factors which limit the macro signal in the curve.
First, a number of technical distortions mean that the yield curve is artificially flatter than comparable points in the past. A combination of:
- a significant amount of Fed QE,
- significant demand from defined benefit US pension funds, and
- sporadic flight-to-quality demand for Treasuries
… has depressed 10-year and 30-year yields well below the levels consistent with inflation and growth. We estimate that these distortions have kept the curve up to 50-100bp flatter than its true level. Arguably, a 2s10s curve below -75bp should be the new recession signal, instead of 2s10s below 0bp.
Second, the Fed’s intention to deliver restrictive policy fits with inverted curves. The March FOMC dot plot shows that the Fed expects to see a terminal fed funds rate close to 3% in 2023, about 50bp higher than the Fed’s perception of the neutral rate at around 2.5%. In essence, the Fed is telegraphing an inverted curve, and the rates market is reflecting the Fed’s policy path. Importantly, the inversion priced into markets doesn’t reflect rate cuts back to zero in 2024, but rate cuts back to a neutral rate of 2.5% (Exhibit 1) – hardly a signal for a recession down the line.
Our view that the yield curve inversion is different this time found resonance across various research teams at Morgan Stanley. In our collaborative note on yield curve inversion, our economics team highlighted strong economic fundamentals and alternative recession models signalling a low probability of recession. Our US bank analysts highlighted the case for continued loan growth for banks in the coming years even with some inversion. Our credit strategy team highlighted continued improvement in balance sheet leverage, strong liquidity and low defaults – not the hallmarks of late-cycle. Our REITs team notes the strong fundamentals for commercial real estate as well.
Can the curve keep inverting deeper without signalling a recession? The answer depends on how high markets can price the terminal rate. From a historical perspective many investors see 1994 as a template for this hiking cycle. In 1994, the terminal rate ended up 100-150bp above the Laubach-Williams estimate of the then neutral rate in that cycle. Investors currently see the long-run dot as the neutral rate – around 2.5% – and therefore markets could price a terminal rate100-150bp above neutral, at around 3.5-4.0%, and yet hope for a soft landing like in 1994.
Finally, could the Fed’s plans for its balance sheet limit curve inversion? The yield curve can steepen if the Fed considers selling Treasuries (not our base case), but the curve should not steepen due to quantitative tightening, where the Fed is merely allowing Treasuries to mature off its balance sheet. Contrary to popular perception, quantitative tightening (QT) is not the opposite of quantitative easing (QE). The ultimate impact of QT on the rates market depends on the US Treasury, not the Fed. And we think that the US Treasury will respond to QT by increasing short-term Treasury supply – more likely to flatten the curve than steepen it.
Tyler Durden
Sun, 04/10/2022 – 19:30 - Baby Formula Shortage Hits Walgreens As Rationing Begins
Baby Formula Shortage Hits Walgreens As Rationing Begins
Infant formula is in short supply as US retailers begin rationing. A combination of COVID-19-related snarled supply chains and a major baby formula recall earlier this year exacerbated shortages.
At least 29% of the top-selling baby formula products were out of stock by mid-March, according to an analysis by Datasembly, which tracked baby formula stock at 11,000 retailers.
“This is a shocking number that you don’t see for other categories,” Ben Reich, CEO of Datasembly, told CBS News.
“We’ve been tracking it over time and it’s going up dramatically. We see this category is being affected by economic conditions more dramatically than others,” Reich added.
Now America’s second-largest pharmacy, Walgreens, with over 9,000 locations, announced it would ration baby formula. A spokesman for the company confirmed consumers are only limited to three baby formula products per transaction due to “increased demand and various supplier issues.”
Besides COVID-related shortage of formula and other vital ingredients, packaging woes, soaring freight costs, and labor shortages, a major baby formula recall in January exacerbated shortages.
Consumers have noticed shortages at retailers as internet searches for “baby formula shortage” rocket to the highest level ever.
This is just more evidence America is on its way to becoming Venezuela as shortages of items persist, and the highest inflation in four decades is crushing households.
Tyler Durden
Sun, 04/10/2022 – 19:00 - Hedge Fund CIO: "We Have Never Experienced An Economic Cycle That Looks Anything Like This"
Hedge Fund CIO: “We Have Never Experienced An Economic Cycle That Looks Anything Like This”
By Eric Peters, CIO of One River ASset Management
“My massive bias is to believe things always work out okay,” said Simplicity, walking Occam’s Razor. “But today somehow feels unique, and when I look at supply and demand in oil, grains, base metals too, there’s an undeniable tail risk here,” he said, having analyzed the fundamentals of such things over a long career.
“Without a perfect North American growing season, there will be shortages, perhaps we’ll have them even with perfection, it’s too early to be sure.” And Simplicity paused, sharpened by decades of trading markets that oscillate wildly in times of great uncertainty as producers, consumers and speculators struggle to balance supply and demand. “It’s critical to size your positions small enough so that you don’t discover you’re trading a 3-year perspective with a 3-day stop-loss.”
Overall:
“One thing is certain: To be effective, the Fed will have to inflict more losses on stock and bond investors than it has so far,” said Bill Dudley, former Fed President, saying bluntly what his active-duty central bankers barely dare whisper.
“Market participants expect higher short-term rates to undermine economic growth and force the Fed to reverse course in 2024 and 2025 – but these very expectations are preventing the tightening of financial conditions that would make such an outcome more likely,” explained Dudley, scratching the surface of the disquieting predicament the Federal Reserve now finds itself in.
And because the world’s developed-market central banks adopted US policy in recent decades, the Fed’s quandary is now a global phenomenon. “This would mean hiking the federal funds rate considerably higher than currently anticipated. One way or another, to get inflation under control, the Fed will need to push bond yields high and stock prices lower,” Dudley said.
Cooling an over-heated, capacity-constrained, hyper-financialized economy, in a time of deglobalization and war, without first tightening financial conditions is proving rather difficult. Like all complex problems, this one took decades to create.
Back when the US economy had less debt and leverage, when financial assets had lower valuations, and when wealth was less concentrated, the ups and downs of the real economy drove financial markets. In such a world, the Fed quite easily used conventional rate policies to influence our behaviors to achieve their objectives.
When those became less effective, they introduced unconventional policies, and forward guided their intentions to become highly predictable. The effect was the hyper-financialization of our economy.
Now, with such high levels of debt, leverage, valuations, and wealth-concentration, it is financial markets that drive the real economy, not the other way around. We have never experienced a modern economic cycle that looks anything like this. And Dudley may be right in his prescription. But if it is one thing, it is certainly not certain.
* * *
Rate of Change: “Looking back on the 1970s, you find 3 distinct inflationary cycles,” said the CIO. “Inflation first peaked in 1970 at just over 6%, then backed off,” he continued. “It peaked again in 1975 at around 12%, declined, then made a final push to nearly 15% in 1980.” That was it. “In the first two cycles, equities fell when inflation rose, and rose when inflation fell,” he said. “Then in the third cycle, inflation went up and for some reason equities did too. I don’t know why. But maybe it’s not only about inflation, but also the rate of change of inflation.”
Autarky: “What’s the really fancy word for it?” asked the CIO, annoyed that he couldn’t recall it. I simply shrugged, quite happy to keep it simple. “Anyhow, screw it, it’s some word that refers to nations which strive to become self-sufficient, economically independent,” he said. “There will be a move toward that for the years, decades probably. What the hell is that word?” he asked, sighed. “But the thing is, not every country can become self-sufficient so as much as everyone will want to if they need to, hardly anyone can, and that’ll slow the whole process.”
“This is really driving me nuts,” said the CIO. “But I’m not going to Google it, I’ll remember the word, it’s right there, I can just about touch it,” he said. I had already found it but didn’t want to rob him of the pleasure. “What’s more likely to happen will be a shift toward trade blocks, unions of like-minded nations, partners, allies.” I was tempted to suggest such a world would be bifurcated, but that word is a bit much for me, and besides, I was pretty sure that meant two-worlds, when in fact there could be three or more. “This word is driving me crazy.”
Domo Arigato: “The age of optimization and maximization is over,” said the CIO. “It will be replaced by a resurgence of manufacturing, and Japan is filled with such companies,” he said. “Japanese equities have been penalized for years because they employed inadequate financial engineering.” Now they’re comparatively cheap. “With the weakening Yen, Japan’s minimum wage priced in US dollars is the cheapest in the G-7,” he said. “The percent of Japan’s workforce near the minimum wage is high. And the real exchange rate is back to where it was in 1975.”
Tyler Durden
Sun, 04/10/2022 – 18:30 - California's High Power Prices Could Derail Liberal EV Dream
California’s High Power Prices Could Derail Liberal EV Dream
California electricity rates are increasing far faster than the rest of the country. Last year, electricity prices rose 1.7 times faster than the rest of the county, and residential prices jumped 2.7 faster.
These increases are terrible news for residents who want to swap their combustion engine vehicles for electric ones.
Pacific Gas & Electric Co. (PG&E), Southern California Edison Co. (SCE), and San Diego Gas & Electric’s (SDG&E) exceptionally high power rates make charging an electric vehicle very costly and could soon be as expensive as filling up a combustion engine vehicle at the gas station, according to Environment & Energy Publishing.
“It’s a huge problem,” said Severin Borenstein, director of the Energy Institute at the University of California, Berkeley’s graduate business school. He said if people who embraced EVs begin to “tell their neighbors about their catastrophic electric bills” after charging up at home, “that’s gonna be a huge problem.”
“Or we’re gonna mandate electrification and then there’s just going to be huge political blowback.”
“Mandating electrification when you’re charging people 30 or 40 cents a kilowatt-hour is going to be immensely expensive,” Borenstein said.
Mark Toney, executive director of the Utility Reform Network, recently told attendees at a conference that “if you want people to make big investments in electrification, there needs to be some kind of a payoff for them.”
“And the payoff has got to be that we make electricity rates look very affordable by comparison to the alternatives,” Toney said.
The bad news is that energy prices aren’t coming down any time soon as consumers are grappling with the highest inflation rate since the early 1980s. The even worse news is the entry cost of owning a new EV, such as a Tesla, is out of reach for most Americans and continues to increase as industrial metal prices for batteries increase.
Suppose there are limited cost savings benefits to buying an EV because power prices are the most expensive in the country. There could be a substantial political blowback as progressives in the Golden State have already mandated that gas car sales will be banned in 13 years (or by 2035).
If California wants to live out its liberal electrified utopia, it may want to consider increasing nuclear power generation on the grid to lower power prices.
Tyler Durden
Sun, 04/10/2022 – 18:00 - The Fed Can't Fix The Economy, But It Can Break It
The Fed Can’t Fix The Economy, But It Can Break It
Authored by John Wolfenbarger via The Mises Institute,
The Federal Reserve states that it “conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy.” However, let’s look at how well the Fed has done that job since its founding in 1913.
Economy and Long-Term Interest Rates
Since 1913, the US unemployment rate has ranged from 2.5 percent in the early 1950s to 25.0 percent during the Great Depression. Inflation has ranged from positive 24 percent to negative 16 percent. Inflation is currently 7.9 percent, well above the Fed’s 2 percent target. While the Fed has some influence over money supply, they have no control over money demand or how money is spent, which has a significant impact on employment and inflation.
The Fed’s goal to “moderate long-term interest rates” below free market levels is a form of price fixing. Since price fixing never works for long, it is no wonder the Fed has been unsuccessful in this goal. Since 1913, ten-year Treasury rates have ranged from 0.5 percent in 2020 to 16 percent in 1981. Interest rates have been much more volatile than before the Fed, as shown below.
Source: Chart courtesy of multpl.com, with annotations by BullAndBearProfits.com.
Money Supply and Short-Term Interest Rates
Maybe the Fed can’t control the economy, but at least they can control the money supply and short-term interest rates, right? Think again.
The Fed controls the monetary base, which is currency plus bank deposits at the Fed. But the popular M2 money supply measure is 3.6 times larger than the monetary base, and the broader money supply is driven by the desire of commercial banks to lend and of people to borrow from them. The Fed has no control over that.
The Fed also controls the federal funds rate, which is the interest rate at which commercial banks borrow and lend to each other overnight. But as shown below, the Fed follows market-driven interest rates, such as the two-year Treasury rate (red line), when setting the federal funds rate (black line), since they have no way of knowing where rates should be.
Source: Chart courtesy of FRED, with annotations by BullAndBearProfits.com.
The Fed’s Real Purpose
The Fed’s real purpose is to enable banks to make loans by creating money out of thin air and then to bail them out when their loans go bad. It has been successful in that goal, as we saw with the bank bailouts during the Great Recession.
As Murray N. Rothbard explained:
Banks can only expand comfortably in unison when a central bank exists, essentially a governmental bank, enjoying a monopoly of government business, and a privileged position imposed by government over the entire banking system.
The Fed’s other main purpose is to help the US government borrow. They have been very successful at this, as the government debt-to-GDP (gross domestic product) ratio has more than tripled in the past forty years to over 120 percent.
The Fed Succeeds in Lowering Living Standards
Two of the main negative consequences of Fed money creation are inflation and the boom-and-bust business cycle, both of which lower living standards significantly. Inflation raises living costs and erodes savings, while the business cycle wastes scarce resources by encouraging their allocation to bad investments.
Since the Fed’s founding in 1913, the US dollar has lost 97 percent of its purchasing power. Furthermore, Fed policies helped engineer the Great Depression of the 1930s and the Great Recession of 2008–09.
Austrian business cycle theory explains how the business cycle is caused by banks creating money out of thin air, which leads to an unsustainable boom that eventually turns into a bust. The bust happens because the newly created money does not generate the scarce resources (land, labor, and capital) needed to complete all the projects businesses have undertaken with the newly created money.
As Ludwig von Mises explained:
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.
Fed Predictions
After reviewing the Fed’s failures, let’s see how successful Fed leaders have been at predicting the economy.
Alan Greenspan was Fed chairman from 1987 to 2006. He presided over the 1987 stock market crash, the S&L (savings and loan) crisis, the early 1990s recession, the late 1990s tech bubble, the early 2000s recession, and the early to mid-2000s housing bubble. Naturally, the press called him “maestro” for his work at the Fed.
Near the peak of the tech bubble in January 2000, Greenspan bragged about engineering a long economic expansion that he saw no signs of ending. As he said shortly before the NASDAQ stock index collapsed 80 percent and the early 2000s recession started: “There remain few evident signs of geriatric strain that typically presage an imminent economic downturn.”
In response to the recession he did not see coming, Greenspan slashed the federal funds rate from 6.50 percent in 2000 to 1.00 percent in 2003, which helped fuel the housing bubble. Then Greenspan encouraged homeowners to take out adjustable-rate mortgages in early 2004, just before he raised the fed funds rate to 5.25 percent over the next two years, which triggered the housing bust.
In 2007, Greenspan said this about banks lending to subprime borrowers: “While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late … I really didn’t get it until very late in 2005 and 2006.”
At least Greenspan has been honest about the Fed’s inability to forecast the economy:
“People don’t realize that we cannot forecast the future. The number of mistakes I have made are just awesome.”
Greenspan also admitted that the market is much larger and more powerful than the Fed:
“The market value of global long-term securities is approaching $100 trillion [so these markets] now swamp the resources of central banks.”
Ben Bernanke was Fed chairman from 2006 to 2014, so he presided over the Great Recession, the worst economic downturn since the 1930s up to that time.
In 2002, in a speech titled “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” Bernanke bragged that the Fed’s legal right to create money out of thin air would prevent deflation: “The US government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost … under a paper-money system, a determined government can always generate higher spending and, hence, positive inflation.” Naturally, given the Fed’s ability to control the economy, “it” did happen in 2009, with prices falling 2 percent in the wake of the Great Recession.
In 2006, Bernanke dismissed the inverted yield curve, which is known by virtually all economists to be one of the best predictors of a recession: “I would not interpret the currently very flat yield curve as indicating a significant economic slowdown to come.” In June 2008, seven months into the Great Recession, Bernanke said: “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”
Janet Yellen was Fed chair from 2014 to 2018, so she had less time to cause major damage. But true to form, she stated she had no idea the housing bust would lead to a major recession: “I didn’t see any of that coming until it happened.”
Jerome “Jay” Powell has been Fed chairman since 2018. He helped invert the yield curve in 2019 and has presided over the covid crash and recession, as well as the highest inflation rates in forty years.
In early November 2021, when inflation was over 6.0 percent, Powell and the Fed were still calling inflation “transitory” and caused by covid and not the 40 percent increase in the money supply. By March 2022, with inflation rising 7.9 percent, Powell finally raised the fed funds rate by 0.25 percent, with plans to raise rates up to 2.75 percent by the end of 2023. Ominously, given his forecasting track record, Powell thinks he can raise rates that aggressively and achieve the elusive “soft landing” of slowing inflation without driving the economy into a recession, despite the already flattening yield curve.
Conclusion
The Federal Reserve cannot control the economy or even the money supply and interest rates. And Fed leaders clearly cannot predict the economy, even though the media and Wall Street hang on their every word. But the Fed can lower living standards by destroying the value of the dollar and causing the boom and bust cycle. Economic theory and economic history have proven that government central planning does not work in creating stability or prosperity. That includes centrally planned monetary policy.
Tyler Durden
Sun, 04/10/2022 – 17:30 - The Commodity-Currency Revolution Begins…
The Commodity-Currency Revolution Begins…
Authored by Alasdair Macleod via GoldMoney.com,
We will look back at current events and realise that they marked the change from a dollar-based global economy underwritten by financial assets to commodity-backed currencies. We face a change from collateral being purely financial in nature to becoming commodity based. It is collateral that underwrites the whole financial system.
The ending of the financially based system is being hastened by geopolitical developments. The West is desperately trying to sanction Russia into economic submission, but is only succeeding in driving up energy, commodity, and food prices against itself. Central banks will have no option but to inflate their currencies to pay for it all. Russia is linking the rouble to commodity prices through a moving gold peg instead, and China has already demonstrated an understanding of the West’s inflationary game by having stockpiled commodities and essential grains for the last two years and allowed her currency to rise against the dollar.
China and Russia are not going down the path of the West’s inflating currencies. Instead, they are moving towards a sounder money strategy with the prospect of stable interest rates and prices while the West accelerates in the opposite direction.
The Credit Suisse analyst, Zoltan Pozsar, calls it Bretton Woods III. This article looks at how it is likely to play out, concluding that the dollar and Western currencies, not the rouble, will have the greatest difficulty dealing with the end of fifty years of economic financialisation.
Pure finance is being replaced with commodity finance
It hasn’t hit the main-stream media yet, which is still reporting yesterday’s battle. But in March, the US Administration passed a death sentence on its own hegemony in a last desperate throw of the dollar dice. Not only did it misread the Russian situation with respect to its economy, but America mistakenly believed in its own power by sanctioning Russia and Putin’s oligarchs.
It may have achieved a partial blockade on Russia’s export volumes, but compensation has come from higher unit prices, benefiting Russia, and costing the Western alliance.
The consequence is a final battle in the financial war which has been brewing for decades. You do not sanction the world’s most important source of energy exports and the marginal supplier of a wide range of commodities and raw materials, including grains and fertilisers, without damaging everyone but the intended target. Worse still, the intended target has in China an extremely powerful friend, with which Russia is a partner in the world’s largest economic bloc — the Shanghai Cooperation Organisation — commanding a developing market of over 40% of the world’s population. That is the future, not the past: the past is Western wokery, punitive taxation, economies dominated by the state and its bureaucracy, anti-capitalistic socialism, and magic money trees to help pay for it all.
Despite this enormous hole in the sanctions net, the West has given itself no political option but to attempt to tighten sanctions even more. But Russia’s response is devastating for the western financial system. In two simple announcements, tying the rouble to gold for domestic credit institutions and insisting that payments for energy will only be accepted in roubles, it is calling an end to the fiat dollar era that has ruled the world from the suspension of Bretton Woods in 1971 to today.
Just over five decades ago, the dollar took over the role for itself as the global reserve asset from gold. After the seventies, which was a decade of currency, interest rate, and financial asset volatility, we all settled down into a world of increasing financialisation. London’s big bang in the early 1980s paved the way for regulated derivatives and the 1990s saw the rise of hedge funds and dotcoms. That was followed by an explosion in over-the-counter unregulated derivatives into the hundreds of trillions and securitisations which hit the speed-bump of the Lehman failure. Since then, the expansion of global credit for purely financial activities has been remarkable creating a financial asset bubble to rival anything seen in the history of financial excesses. And together with statistical suppression of the effect on consumer prices the switch of economic resources from Main Street to Wall Street has hidden the inflationary evidence of credit expansion from the public’s gaze.
All that is coming to an end with a new commoditisation — what respected flows analyst Zoltan Pozsar at Credit Suisse calls Bretton Woods III. In his enumeration the first was suspended by President Nixon in 1971, and the second ran from then until now when the dollar has ruled indisputably. That brings us to Bretton Woods III.
Russia’s insistence that importers of its energy pay in roubles and not in dollars or euros is a significant development, a direct challenge to the dollar’s role. There are no options for Russia’s “unfriendlies”, Russia’s description for the alliance united against it. The EU, which is the largest importer of Russian natural gas, either bites the bullet or scrambles for insufficient alternatives. The option is to buy natural gas and oil at reasonable rouble prices or drive prices up in euros and still not get enough to keep their economies going and the citizens warm and mobile. Either way, it seems Russia wins, and one way the EU loses.
As to Pozsar’s belief that we are on the verge of Bretton Woods III, one can see the logic of his argument. The highly inflated financial bubble marks the end of an era, fifty years in the making. Negative interest rates in the EU and Japan are not just an anomaly, but the last throw of the dice for the yen and the euro. The ECB and the Bank of Japan have bond portfolios which have wiped out their equity, and then some. All Western central banks which have indulged in QE have the same problem. Contrastingly, the Russian central bank and the Peoples Bank of China have not conducted any QE and have clean balance sheets. Rising interest rates in Western currencies are made more certain and their height even greater by Russia’s aggressive response to Western sanctions. It hastens the bankruptcy of the entire Western banking system and by bursting the highly inflated financial bubble will leave little more than hollowed-out economies.
Putin has taken as his model the 1973 Nixon/Kissinger agreement with the Saudis to only accept US dollars in payment for oil, and to use its dominant role in OPEC to force other members to follow suit. As the World’s largest energy exporter Russia now says she will only accept roubles, repeating for the rouble the petrodollar strategy. And even Saudi Arabia is now bending with the wind and accepting China’s renminbi for its oil, calling symbolic time on the Nixon/Kissinger petrodollar agreement.
The West, by which we mean America, the EU, Britain, Japan, South Korea, and a few others have set themselves up to be the fall guys. That statement barely describes the strategic stupidity — an Ignoble Award is closer to the truth. By phasing out fossil fuels before they could be replaced entirely with green energy sources, an enormous shortfall in energy supplies has arisen. With an almost religious zeal, Germany has been cutting out nuclear generation. And even as recently as last month it still ruled out extending the lifespan of its nuclear facilities. The entire G7 membership were not only unprepared for Russia turning the tables on its members, but so far, they have yet to come up with an adequate response.
Russia has effectively commoditised its currency, particularly for energy, gold, and food. It is following China down a similar path. In doing so it has undermined the dollar’s hegemony, perhaps fatally. As the driving force behind currency values, commodities will be the collateral replacing financial assets. It is interesting to observe the strength in the Mexican peso against the dollar (up 9.7% since November 2021) and the Brazilian real (up 21% over a year) And even the South African rand has risen by 11% in the last five months. That these flaky currencies are rising tells us that resource backing for currencies has its attractions beyond the rouble and renminbi.
But having turned their backs on gold, the Americans and their Western epigones lack an adequate response. If anything, they are likely to continue the fight for dollar hegemony rather than accept reality. And the more America struggles to assert its authority, the greater the likelihood of a split in the Western partnership. Europe needs Russian energy desperately, and America does not. Europe cannot afford to support American policy unconditionally.
That, of course, is Russia’s bet.
Russia’s point of view
For the second time in eight years, Russia has seen its currency undermined by Western action over Ukraine. Having experienced it in 2014, this time the Russian central bank was better prepared. It had diversified out of dollars adding official gold reserves. The commercial banking system was overhauled, and the Governor of the RCB, Elvira Nabiullina, by following classical monetary policies instead of the Keynesianism of her Western contempories, has contained the fall-out from the war in Ukraine. As Figure 1 shows, the rouble halved against the dollar in a knee-jerk reaction before recovering to pre-war levels.
The link to commodities is gold, and the RCB announced that until end-June it stands ready to buy gold from Russian banks at 5,000 roubles per gramme. The stated purpose was to allow banks to lend against mine production, given that Russian-sourced gold is included in the sanctions. But the move has encouraged speculation that the rouble is going on a quasi- gold standard; never mind that a gold standard works the other way round with users of the currency able to exchange it for gold.
Besides being with silver the international legal definition of money (the rest being currency and credit), gold is a good proxy for commodities, as shown in Figure 2 below. Priced in goldgrams, crude oil today is 30% below where it was in the 1950, long before Nixon suspended the Bretton Woods Agreement. Meanwhile, measured in depreciating fiat currencies the price has soared and been extremely volatile along the way.
It is a similar story for other commodity prices, whereby maximum stability is to be found in prices measured in goldgrams. Taking up Pozsar’s point about currencies being increasingly linked to commodities in Bretton Woods III, it appears that Russia intends to use gold as proxy for commodities to stabilise the rouble. Instead of a fixed gold exchange rate, the RCB has wisely left itself the option to periodically revise the price it will pay for gold after 1 July.
Table 1 shows how the RCB’s current fixed rouble gold exchange rate translates into US dollars.
While non-Russian credit institutions do not have access to the facility, it appears that there is nothing to stop a Russian bank buying gold in another centre, such as Dubai, to sell to the Russian central bank for roubles. All that is needed is for the dollar/rouble rate to be favourable for the arbitrage and the ability to settle in a non-sanctioned currency, such as renminbi, or to have access to Eurodollars which it can exchange for Euroroubles (see below) from a bank outside the “unfriendlies” jurisdictions.
The dollar/rouble rate can now easily be controlled by the RCB, because how demand for roubles in short supply is handled becomes a matter of policy. Gazprom’s payment arm (Gazprombank) is currently excused the West’s sanctions and EU gas and oil payments will be channelled through it.
Broadly, there are four ways in which a Western consumer can acquire roubles:
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By buying roubles on the foreign exchanges.
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By depositing euros, dollars, or sterling with Gazprombank and have them do the conversion as agents.
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By Gazprombank increasing its balance sheet to provide credit, but collateral which is not sanctioned would be required.
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By foreign banks creating rouble credits which can be paid to Gazprombank against delivery of energy supplies.
The last of these four is certainly possible, because that is the basis of Eurodollars, which circulate outside New York’s monetary system and have become central to international liquidity. To understand the creation of Eurodollars, and therefore the possibility of a developing Eurorouble market we must delve into the world of credit creation.
There are two ways in which foreigners can hold dollar balances. The way commonly understood is through the correspondent banking system. Your bank, say in Europe, will run deposit accounts with their correspondent banks in New York (JPMorgan, Citi etc.). So, if you make a deposit in dollars, the credit to your account will reconcile with the change in your bank’s correspondent account in New York.
Now let us assume that you approach your European bank for a dollar loan. If the loan is agreed, it appears as a dollar asset on your bank’s balance sheet, which through double-entry bookkeeping is matched by a dollar liability in favour of you, the borrower. It cannot be otherwise and is the basis of all bank credit creation. But note that in the creation of these balances the American banking system is not involved in any way, which is how and why Eurodollars circulate, being fungible with but separate in origin from dollars in the US.
By the same method, we could see the birth and rapid expansion of a Eurorouble market. All that’s required is for a bank to create a loan in roubles, matched under double-entry bookkeeping with a deposit which can be used for payments. It doesn’t matter which currency the bank runs its balance sheet in, only that it has balance sheet space, access to rouble liquidity and is a credible counterparty.
This suggests that Eurozone and Japanese banks can only have limited participation because they are already very highly leveraged. The banks best able to run Eurorouble balances are the Americans and Chinese because they have more conservative asset to equity ratios. Furthermore, the large Chinese banks are majority state-owned, and already have business and currency interests with Russia giving them a head start with respect to rouble liquidity.
We have noticed that the large American banks are not shy of dealing with the Chinese despite the politics, so presumably would like the opportunity to participate in Euroroubles. But only this week, the US Government prohibited them from paying holders of Russia’s sovereign debt more than $600 million. So, we should assume the US banks cannot participate which leaves the field open to the Chinese mega-banks. And any attempt to increase sanctions on Russia, perhaps by adding Gazprombank to the sanctioned list, achieves nothing, definitely cuts out American banks from the action, and enhances the financial integration between Russia and China. The gulf between commodity-backed currencies and yesteryear’s financial fiat simply widens.
For now, further sanctions are a matter for speculation. But Gazprombank with the assistance of the Russian central bank will have a key role in providing the international market for roubles with wholesale liquidity, at least until the market acquires depth in liquidity. In return, Gazprombank can act as a recycler of dollars and euros gained through trade surpluses without them entering the official reserves. Dollars, euros yen and sterling are the unfriendlies’ currencies, so the only retentions are likely to be renminbi and gold.
In this manner we might expect roubles, gold and commodities to tend to rise in tandem. We can see the process by which, as Zoltan Pozsar put it, Bretton Woods III, a global currency regime based on commodities, can take over from Bretton Woods II, which has been characterised by the financialisation of currencies. And it’s not just Russia and her roubles. It’s a direction of travel shared by China.
The economic effects of a strong currency backed by commodities defy monetary and economic beliefs prevalent in the West. But the consequences that flow from a stronger currency are desirable: falling interest rates, wealth remaining in the private sector and an escape route from the inevitable failure of Western currencies and their capital markets. The arguments in favour of decoupling from the dollar-dominated monetary system have suddenly become compelling.
The consequences for the West
Most Western commentary is gung-ho for further sanctions against Russia. Relatively few independent commentators have pointed out that by sanctioning Russia and freezing her foreign exchange reserves, America is destroying her own hegemony. The benefits of gold reserves have also been pointedly made to those that have them. Furthermore, central banks leaving their gold reserves vaulted at Western central banks exposes them to sanctions, should a nation fall foul of America. Doubtless, the issue is being discussed around the world and some requests for repatriation of bullion are bound to follow.
There is also the problem of gold leases and swaps, vital for providing liquidity in bullion markets, but leads to false counting of reserves. This is because under the IMF’s accounting procedures, leased and swapped gold balances are recorded as if they were still under a central bank’s ownership and control, despite bullion being transferred to another party in unallocated accounts.
No one knows the extent of swaps and leases, but it is likely to be significant, given the evidence of gold price interventions over the last fifty years. Countries which have been happy to earn fees and interest to cover storage costs and turn gold bullion storage into a profitable activity (measured in fiat) are at the margin now likely to not renew swap and lease agreements and demand reallocation of bullion into earmarked accounts, which would drain liquidity from bullion markets. A rising gold price will then be bound to ensue.
Ever since the suspension of Bretton Woods in 1971, the US Government has tried to suppress gold relative to the dollar, encouraging the growth of gold derivatives to absorb demand. That gold has moved from $35 to $1920 today demonstrates the futility of these policies. But emotionally at least, the US establishment is still virulently anti-gold.
As Figure 2 above clearly shows, the link between commodity prices and gold has endured through it all. It is this factor that completely escapes popular analysis with every commodity analyst assuming in their calculations a constant objective value for the dollar and other currencies, with price subjectivity confined to the commodity alone. The use of charts and other methods of forecasting commodity prices assume as an iron rule that price changes in transactions come only from fluctuations in commodity values.
The truth behind prices measured in unbacked currencies is demonstrated by the cost of oil priced in gold having declined about 30% since the 1960s. That is reasonable given new extraction technologies and is consistent with prices tending to ease over time under a gold standard. It is only in fiat currencies that prices have soared. Clearly, gold is considerably more objective for transaction purposes than fiat currencies, which are definitely not.
Therefore, if, as the chart in the tweet below suggests, the dollar price of oil doubles from here, it will only be because at the margin people prefer oil to dollars — not because they want oil beyond their immediate needs, but because they want dollars less.
China recognised these dynamics following the Fed’s monetary policies of March 2020, when it reduced its funds rate to the zero bound and instituted QE at $120bn every month. The signal concerning the dollar’s future debasement was clear, and China began to stockpile oil, commodities, and food — just to get rid of dollars. This contributed to the rise in dollar commodity prices, which commenced from that moment, despite falling demand due to covid and supply chain problems. The effect of dollar debasement is reflected in Figure 3, which is of a popular commodity tracking ETF.
A better understanding would be to regard the increase in the value of this commodity basket not as a near doubling since March 2020, but as a near halving of the dollar’s purchasing power with respect to it.
Furthermore, the Chinese have been prescient enough to accumulate stocks of grains. The result is that 20% of the world’s population has access to 70% of the word’s maize stocks, 60% of rice, 50% of wheat and 35% of soybeans. The other 80% of the world’s population will almost certainly face acute shortages this year as exports of grain and fertiliser from Ukraine/Russia effectively cease.
China’s actions show that she has to a degree already tied her currency to commodities, recognising the dollar would lose purchasing power. And this is partially reflected in the yuan’s exchange rate against the US dollar, which since May 2020 has gained over 11%.
Implications for the dollar, euro and yen
In this article the close relationship between gold, oil, and wider commodities has been shown. It appears that Russia has found a way of tying her currency not to the dollar, but to commodities through gold, and that China has effectively been doing the same thing for two years without the gold link. The logic is to escape the consequences of currency and credit expansion for the dollar and other Western currencies as their purchasing power is undermined. And the use of a gold peg is an interesting development in this context.
We should bear in mind that according to the US Treasury TIC system foreigners own $33.24 trillion of financial securities and short-term assets including bank deposits. That is in addition to a few trillion, perhaps, in Eurodollars not recorded in the TIC statistics. These funds are only there in such quantities because of the financialisation of Western currencies, a situation we now expect to end. A change in the world’s currency order towards Pozsar’s Bretton Woods III can be expected to a substantial impact on these funds.
To prevent foreign selling of the $6.97 trillion of short-term securities and cash, interest rates would have to be raised not just to tackle rising consumer prices (a Keynesian misunderstanding about the economic role of interest rates, disproved by Gibson’s paradox) but to protect the currency on the foreign exchanges, particularly relative to the rouble and the yuan. Unfortunately, sufficiently high interest rates to encourage short-term money and deposits to stay would destabilise the values of the foreign owned $26.27 trillion in long-term securities — bonds and equities.
As the manager of US dollar interest rates, the dilemma for the Fed is made more acute by sanctions against Russia exposing the weakness of the dollar’s position. The fall in its purchasing power is magnified by soaring dollar prices for commodities, and the rise in consumer prices will be greater and sooner as a result. It is becoming possible to argue convincingly that interest rates for one-year dollar deposits should soon be in double figures, rather than the three per cent or so argued by monetary policy hawks. Whatever the numbers turn out to be, the consequences are bound to be catastrophic for financial assets and for the future of financially oriented currencies where financial assets are the principal form of collateral.
It appears that Bretton Woods II is indeed over. That being the case, America will find it virtually impossible to retain the international capital flows which have allowed it to finance the twin deficits — the budget and trade gaps. And as securities’ values fall with rising interest rates, unless the US Government takes a very sharp knife to its spending at a time of stagnating or falling economic activity, the Fed will have to step up with enhanced QE.
The excuse that QE stimulates the economy will have been worn out and exposed for what it is: the debasement of the currency as a means of hidden taxation. And the foreign capital that manages to escape from a dollar crisis is likely to seek a home elsewhere. But the other two major currencies in the dollar’s camp, the euro and yen, start from an even worse position. These are shown in Figure 4. With their purchasing power visibly collapsing the ECB and the Bank of Japan still have negative interest rates, seemingly trapped under the zero bound. Policy makers find themselves torn between the Scylla of consumer price inflation and the Charybdis of declining economic activity. A further problem is that these central banks have become substantial investors in government and other bonds (the BOJ even has equity ETFs on board) and rising bond yields are playing havoc with their balance sheets, wiping out their equity requiring a systemic recapitalisation.
Not only are the ECB and BOJ technically bankrupt without massive capital injections, but their commercial banking networks are hugely overleveraged with their global systemically important banks — their G-SIBs — having assets relative to equity averaging over twenty times. And unlike the Brazilian real, the Mexican peso and even the South African rand, the yen and the euro are sliding against the dollar.
The response from the BOJ is one of desperately hanging on to current policies. It is rigging the market by capping the yield on the 10-year JGB at 0.25%, which is where it is now.
These currency developments are indicative of great upheavals and an approaching crisis. Financial bubbles are undoubtedly about to burst sinking fiat financial values and all that sail with them. Government bonds will be yesterday’s story because neither China nor Russia, whose currencies can be expected to survive the transition from financial to commodity orientation, run large budget deficits. That, indeed, will be part of their strength.
The financial war, so long predicted and described in my essays for Goldmoney, appears to be reaching its climax. At the end it has boiled down to who understands money and currencies best. Led by America, the West has ignored the legal definition of money, substituting fiat dollars for it instead. Monetary policy lost its anchor in realism, drifting on a sea of crackpot inflationary beliefs instead.
But Russia and China have not made the same mistake. China played along with the Keynesian game while it suited them. Consequently, while Russia may be struggling militarily, unless a miracle occurs the West seems bound to lose the financial war and we are, indeed, transiting into Pozsar’s Bretton Woods III.
Tyler Durden
Sun, 04/10/2022 – 17:25 -
- More Than 100 Russian Jets Stranded In Dubai After Being Flown There To Escape Sanctions
More Than 100 Russian Jets Stranded In Dubai After Being Flown There To Escape Sanctions
Now that Switzerland has violated its centuries-old status as a neutral power to take sides against Russia in Europe’s ‘first war since WWII’ (or at least the first since NATO bombed the bejesus out of Belgrade back in the 1990s), Dubai and a handful of other eastern locales have been jockeying to supplant the alpine nation to become the ‘Switzerland of the East’.
Chief among these, as we recently reported, is Dubai, which has attracted so many Russians as of late that its grocery stores have even started stocking Russian ice cream.
But as a few members of the Russian uber-rich have recently learned, even Dubai isn’t safe from the grasping hands of Western sanctions – be they European, American or British.
The WSJ reports that roughly 100 Russian planes have been stuck in Dubai, effectively prevented from moving due to Western sanctions that bar them from all other airspace.
According to WINGX, a website that tracks aerospace, the Russia-UAE connection is 3x busier than pre-pandemic levels during the first 3 weeks of March (as the chart below shows).
Satellite images shot by Earth-imaging company Planet Labs also show an accumulation of private jets from mid-February to the start of April.
Source: WingX
As we mentioned above, many Russian oligarchs and billionaires had some of their most luxurious assets seized as a result of the sanctions. Last month, for instance, Gibraltar seized a $75 million superyacht owned by Russian billionaire Dmitry Pumpyansky. Many of these seized yachts have created serious headaches…but not for their owner, for the marinas where they have been stranded.
But there might be a bright side for the Russians: if they can’t fly the jet, they can always sell them and use the proceeds to invest in the booming UAE property market.
Tyler Durden
Sun, 04/10/2022 – 17:00 - Robert Malone Says He Will Sue New York Times Unless It Corrects 'Defamatory' Article
Robert Malone Says He Will Sue New York Times Unless It Corrects ‘Defamatory’ Article
Authored by Zachary Stieber via The Epoch Times (emphasis ours),
The New York Times will face a lawsuit unless it corrects an article claiming Dr. Robert Malone has spread “unfounded claims about the [COVID-19] vaccines and the virus” and misrepresents his role in creating messenger RNA technology, the doctor and his lawyer say.
Dr. Robert Malone in Washington on June 29, 2021. (Zhen Wang/The Epoch Times) The New York Times recently published a piece calling Malone the “latest COVID misinformation star,” written by a reporter who the paper hired to cover “disinformation,” or the purposeful spread of false information.
Davey Alba, the reporter, acknowledges Malone performed some of the earliest experiments on messenger RNA (mRNA) technology, which was used to build the Pfizer and Moderna COVID-19 vaccines. But the article questions Malone’s assertion that he invented the mRNA vaccines.
In addition, Malone is accused of “spreading misinformation about the virus and vaccines on conservative programs,” with examples of the alleged actions including how Malone “questions the severity of the coronavirus” and has championed the use of hydroxychloroquine and ivermectin, two drugs that U.S. regulators say should not be used to treat COVID-19.
Steven Biss, representing Malone, gave notice to the New York Times on April 6, informing lawyers for the paper that the article contains “false and defamatory statements of fact of or concerning Dr. Malone,” including the thinly supported headline.
Biss and Malone say Alba, who now works for Bloomberg, declined an offer from Malone to show her evidence regarding his research and invention of the mRNA technology.
“She refused to view the information that we offered to provide to her,” Malone told The Epoch Times.
A review of the New York Times article found no mention of the patents on which Malone is named. Instead, it says Malone alleges to have invented the technology because he performed experiments on human cells at the Salk Institute for Biological Studies in San Diego, and links to a study Malone co-authored about injecting RNA into mouse skeletal muscle.
One of the study’s co-authors, Dr. Gyula Acsadi, chief of pediatric Neurology at Connecticut Children’s Medical Center, was quoted as saying it was a “totally false claim” for Malone to say he invented mRNA vaccines. Malone says on his websites that he is “the inventor of mRNA vaccines” and “the original inventor of mRNA vaccination as a technology” but also says he did not invent the COVID-19 vaccines. “In fact, I have very actively distanced myself from them,” he wrote in a blog post.
“The facts are that I am a named inventor on the original nine issued U.S. patents, which describe the mRNA vaccine platform technology,” Malone told The Epoch Times.
The patents cover delivery mechanisms used in mRNA vaccines, among other things.
“Those patents were used aggressively to keep other companies from entering the technology area until they expired,” Malone said.
While Acsadi co-authored the paper, he is not listed on any of the patents.
The New York Times building in New York City on Aug. 31, 2021. (Samira Bouaou/The Epoch Times) Dr. Jon Wolff, named in the paper and the patents, is deceased. Dr. Philip Felgner, also named in the paper and the patents, didn’t respond to a request for comment.
Alba, the reporter, is also accused of searching for sources to quote on Twitter, as two of the three critics had previously criticized Malone on the social media website.
Dr. Angela Rasmussen, for instance, called Malone in August 2021 a “grifter” and “just another scammer.”
She was quoted in the New York Times article as saying guidance from health agencies changes over time because the guidance is “only as reliable as the evidence behind it, and thus it should change when new evidence is obtained.”
The Centers for Disease Control and Prevention (CDC), among other health agencies, has repeatedly changed guidance during the pandemic, drawing growing distrust from Americans, according to surveys.
Some leading health officials have admitted to misleading Americans on key pandemic-related matters. Dr. Anthony Fauci, for instance, has acknowledged he lied about the effectiveness of masks early in the pandemic because of concerns there would be a mask shortage if he was truthful.
Malone has criticized Fauci and the CDC, telling The Epoch Times earlier this year, for instance, that the CDC’s withholding of data on COVID-19 was an example of “scientific fraud.”
“Robert Malone is exploiting the fact that data-driven course correction is inherent to the scientific process to peddle disinformation,” Rasmussen told the New York Times, referring to how Malone makes money from his blog. “It’s extraordinarily dishonest and morally bankrupt.”
Dr. Alastair McAlpine, another source critical of Malone, promoted the article on Twitter, alleging he “and many others,” presented with the “false claim” that Malone “‘invented mRNA technology,” had “debunk[ed]” the idea.
Alba “appears to have sought her sources by looking through Twitter to find detractors, which suggests intent to defame because she was biasing her sources to individuals that she knew were already defaming,” Malone told The Epoch Times.
The New York Times was told to publicly retract the statements alleged to be false and defamatory, issue a written apology, and provide compensation for the “presumed and actual damages” Malone has suffered.
If the requested actions are not taken within 30 days within receipt of the notice, or if actions are taken but are deemed insufficient, Malone intends to take legal action, Biss told the paper.
Alba did not respond to requests for comment. She has shielded her Twitter page from view from all users except for those who follow her.
A spokesperson for the New York Times told The Epoch Times in an email that the story “was thoroughly researched and edited, and we are confident in the diligence of our reporting.”
The paper’s legal department is reviewing the legal notice “and will respond to counsel after that review,” the spokesperson added.
Tyler Durden
Sun, 04/10/2022 – 16:30 - Canada Will Soon Be Offering Doctor-Assisted Death For People Who Are Mentally Ill
Canada Will Soon Be Offering Doctor-Assisted Death For People Who Are Mentally Ill
Canada is working to determine who, if anyone, should be offered doctor-assisted death as a result of mental illness. In other words, it’s doctor assisted suicide.
Doctor assisted death is mostly prominent in people who have terminal illnesses like cancer, The National Post reported last week. Moving into doctor assisted death for mental illness raises a whole new host of questions.
Dutch psychiatrist Dr. Sisco van Veen notes that with cancer, something inside the body can be seen, but “in psychiatry, really all you have is the patient’s story, and what you see with your eyes and what you hear and what the family tells you.”
Mental disorders lack “prognostic predictability”, which can make determining suffering near impossible.
As Canada moves closer to legalizing doctor-assisted deaths for people with mental illness whose psychological pain has become unbearable to them, “difficult conversations” are ahead, Veen told the National Post.
In March 2023, Canada will become one of just a few nations that allow medical aid in dying, or MAID, for mental illness like depression, bipolar disorder, personality disorders, schizophrenia, PTSD.
Dr. Grainne Neilson, past president of the Canadian Psychiatric Association and a Halifax forensic psychiatrist said: “I think there’s going to be lots of uncertainty about how to apply this in March 2023. My hope is that psychiatrists will move cautiously and carefully to make sure MAID is not being used as something instead of equitable access to good care.”
The argument developing over MAID for mental illness is robust. Many in the mental health field think that mental illness is never irremediable and there’s always hope for a cure. Others say “there still exists a profound lack of understanding about, and fear of, mental illness, and that the resistance reflects a long history of paternalism and unwillingness to accept that the suffering that can come from mental illness can be as equally tormenting as the suffering from physical pain.”
The Canadian Parliament has moved past whether MAID should be offered to those who are eligible, and is now studying how it should be assessed.
The National Post described how the idea has made its way through Parliament:
That decision formed the impetus for Canada’s MAID law, Bill C-14, which allowed for assisted dying in cases where natural death was “reasonably foreseeable.”
In 2019, a Quebec Superior Court justice ruled the reasonably foreseeable death restriction unconstitutional, and that people who were intolerably suffering but not imminently dying still had a constitutional right to be eligible for euthanasia.
In March 2021, Bill C-7 was passed that made changes to the eligibility criteria. Gone is the “reasonably foreseeable” criterion and, as of March 17, 2023, when a two-year sunset clause expires, MAID will be expanded to competent adults whose sole underlying condition is a mental illness.
Tyler Durden
Sun, 04/10/2022 – 16:00
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