- Fly Or Drive? Audi Unveils AI-Controlled Flying Smart-Car
Considerable improvements in battery technologies and technological advances in manned electric flight have spurred established automakers to begin examining the feasibility of flying automobiles, as both Audi and Porsche have mentioned their plans to develop flying cars to avoid congested highways.
During the 87th Geneva International Motor Show, Audi and Airbus partnered with Italdesign to premiere Pop.Up Next, the first modular, fully electric, zero-emission concept vehicle system designed to alleviate traffic congestion in large populated areas.
Pop.Up Next is a modular system for multi-modal transportation that can travel on roadways and across the skies.
Audi, Airbus, and Italdesign developed the unmanned drone system that attaches itself to an electric vehicle – turning it into a flying passenger aircraft, as a joint reflection on how to address mobility challenges of large cities.
With traffic congestion projected to hugely increase by 2030, the companies decided to combine their engineering expertise to tackle how to best achieve a sustainable, modular and multimodal urban mobility system – giving rise to the Pop.Up concept.
Pop.Up Next consists of a three layers concept:
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an Artificial Intelligence platform that, based on its user knowledge, manages the travel complexity offering alternative usage scenarios and assuring a seamless travel experience;
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a vehicle shaped as a passenger capsule designed to be coupled with two different and independent electric propelled modules, the ground module and the air module. Other public means of transportation (e.g. trains or hyperloops) could also integrate the Pop.Up capsule;
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– an interface module that dialogues with users in an entirely virtual environment.
The vehicle is a two-seat pod that can quickly snap into a chassis with four wheels and autonomous driving technology for roadway travel, or easily converts to a quadcopter drone for flying. While Audi has yet to release details on speed, altitude or range, the overall progress of flying cars seems to be a reality in the not too distant future.
Dr. Bernd Martens, Audi board member and president of Italdesign, said in a statement: “Creativity is needed where new mobility concepts for cities and people’s diverse needs are concerned. Italdesign is an incubator for innovative technologies and radical prototyping.”
“Pop.Up Next is an ambitious vision that could permanently change our urban life in the future,” his statement added.
Here are a few illustrations of the vehicle concept displayed at the Geneva Auto Show:
Jörg Astalosch, CEO of Italdesign, said: “Various players will define the rules of urban mobility in the future. We are proud to collaborate with Airbus, the leading company in the aerospace industry, to investigate solutions for future mobility.”
Here is how Italdesign’s Official YouTube channel describes the flying car:
Pop.Up Next reflects the philosophy driving Italdesign’s 50th anniversary celebrations, anticipating the challenges that the next fifty years will bring. It represents a vision of the potential offered by future technologies, the new concept of transportation and the new solutions for resolving the problems linked to city planning and traffic in large urban centres that are increasingly becoming one of the priority aspects for safeguarding our planet. Next is evidence of the success achieved by Pop.Up over the past year amongst the main players in the transportation world, the municipalities and institutions worldwide.
Earlier this week, Porsche R&D chief Michael Steiner told Reuters at the Geneva show that his team of researchers are in the process of developing flying taxis for urban use. Interesting to note, Audi and Porsche, are both owned by the Volkswagen Group, which it seems, the European automobile manufacturer is pushing their brands into the flying car space.
Meanwhile, in the United States, Boeing and Uber are developing a flying taxi which could be zipping around the skies of America within the next ten years.
That is according to Boeing CEO Dennis Muilenberg, who said, “it [flying taxis] will happen faster than any of us understand,” in a Bloomberg interview.
According to the latest research by Deloitte, more than a dozen drone and flying automobile manufacturers have already passed conceptualization/design phase, and a majority of the manufacturers are currently exiting the prototype stage into the testing phase, with most manufactures targeting launch/delivery by 2020.
“If safety and regulatory hurdles are cleared, passenger drones are expected to get wings by 2018–2020, and traditional flying cars by 2020–2022, while revolutionary vehicles could be a reality only by 2025,” Deloitte reported.
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- With World Focused On North Korea, Japan Quietly Expands Its Military Might
Authored by Peter Korzun via The Strategic Culture Foundation,
Washington claims China is rapidly expanding its military might, posing a threat to the US and its allies in the Asia Pacific region. Beijing is one of the focal points of America’s national security plan that was unveiled in January, singled out along with Russia. The US military brass hats have raised the alarm over China’s recent defense budget hike, despite the fact that its per capita defense spending is lower than that of other major world powers. They say China is not transparent enough and that this further complicates the problem.
Transparency is a good thing but it may not reveal the whole picture. One may appear to be open and above-board but still be hiding one’s real plans and intentions. For instance, Japan is ranked among the world’s ten most peaceful nations. Threatened by N. Korea and China, it appears to be an innocent victim looking to the US for protection.
That’s one side of the coin. But there is also another side.
The Japanese constitution forbids offensive weapons.
Aircraft carriers are generally considered to belong to this category, and for this reason they are called “helicopter destroyers” in Japan. For instance, the Izumo-class air-capable destroyers are as big as British Invincible-class aircraft carriers. The warships can be modernized to turn them into real flat tops and that’s exactly what the Japanese government plans to do. Defense Minister Itsunori Onodera said on March 2 that the military is considering the possibility of deploying US-made F-35B short takeoff and vertical landing (STOVL) fighters on the helicopter carriers. China has already expressed its concern over the plan.
The F-35 Lightning II supersonic stealth aircraft can be easily configured to carry nukes. Arming the air-capable warships of a non-nuclear state with nuclear-capable aircraft constitutes a violation of the NPT Treaty, which prohibits nuclear states from transferring nukes to other recipients. It also bans non-nuclear states from acquiring them.
The first land-based nuclear-capable F-35A variant fighter was delivered to Japan in late February. US military instructors would train Japanese military personnel to operate this offensive weapon. South Korea also plans to follow Japan’s example and put American aircraft on its aviation-capable ships. That’s how the policy of nonproliferation slowly begins to crumble.
Japan uses Pyongyang’s nuclear ambitions to justify its plans to acquire US-made Tomahawk sea-based cruise missiles – another weapon that could potentially be nuclear tipped. The plans also include the acquisition of JASSM-ER and LRASM missiles, each of which has a range of roughly 900 km (559 mi). These are not defensive weapons.
Last year, US President Trump said at a joint press conference with Japanese PM Abe that “Japan is going to be purchasing massive amounts of military equipment.”
Tokyo is also looking into developing its own standoff cruise missile that can be launched from ships, aircraft, and land launchers to strike ground and sea targets. Any new long-range cruise missile could be integrated with Aegis Mk-41 launchers. It’s almost certain that ground-based Aegis Ashore systems will be at least partially operated by US military personnel. So, a medium-range missile with nuclear capability and operated by American servicemen will be deployed near Russia’s and China’s borders. Is this not a cause for legitimate concern?
The 2,100-member Amphibious Rapid Deployment Brigade is expected to be operational this month, enabling first-strike capability. The Japanese military already has amphibious assault ships as well unmanned aerial vehicles to support such operations.
Plans are underway to build a three-tier missile defense. The Japanese government decided to acquire US Aegis Ashore systems, in order to join the American global BMD effort. The Aegis Mk-41 launcher can fire long-range Tomahawk cruise missiles that could be nuclear tipped.
Japan is to establish a space and cyberspace command center that will also be responsible for electronic warfare. The unit is already operational and will expand by about 40%, bringing it up to 150 members, in FY 2018, which starts on April 1. That command center has confirmed Japan’s intention to extend its military operations into space. A network of radar for monitoring space is expected to be operational in FY 2022.
Japan possesses almost 47 tons of separated plutonium. That’s enough to produce 6,000 nuclear devices. The idea of going nuclear has not been abandoned and it even enjoys support from the US. Sharing nuclear capability is an option.Japan’s Epsilon rocket that is used for its civilian space program could be used as an intercontinental nuclear-delivery vehicle with a range of 12,000 km. Experts believe the conversion would take less than a year, including the acquisition of a multiple independent reentry vehicle. There are no technical obstacles.
North Korea’s nuclear program is being adroitly used by Tokyo as a pretext for militarization that will threaten Russia and China. While the global media “cry wolf” over Iran’s and N. Korea’s nuclear programs, they are surprisingly quiet when it comes to nuclear capability Japan could acquire in just one year. Tokyo is also clearly well on its way to boosting its conventional capabilities—thus changing the balance of power in the Asia Pacific. This is not a high-profile issue. But it should be.
- China Reveals Largest Defense Budget In Three Years
China’s government has been relatively vocal in transforming itself into a serious threat against the West — by modernizing its military in anticipation of future wars with Washington. It it therefore not surprising when the official Xinhua news agency reports that China will increase its defense budget by 8.1 percent in 2018, up marginally from last year’s 7 percent.
China has undoubtedly given America’s military-industrial complex and clueless politicians in Washington a stern message, by increasing its defense budget to the highest levels in more than three years, even as the country insists it does not mean harm.
According to the annual budget report, submitted to the first session of the 13th National People’s Congress Monday, the 2018 defense budget will be 1.11 trillion yuan (approximately 175 billion U.S. dollars). In 2017, the country spent roughly 1.02 trillion yuan (approximately 161.87 billion dollars) on its military budget in 2017, or about 1.3 percent of its gross domestic product (GDP).
The United States is the only country that outpaces China in defense spending, with the Pentagon’s expenditures exceeding four times Beijing’s, according to the latest report of the 2018 Military Budgets via the London-based International Institute for Strategic Studies (IISS).
In a speech at an annual Meeting of China’s National People’s Congress, Premier Li Keqiang suggested the country faced “profound changes in the national security environment,” requiring a stronger military.
As we stated before the conference, geopolitical strategists are concerned about President Xi Jinping aggressive military buildup and power grab, which has put Beijing on a crash course for military conflict with Washington.
“In the Asia-Pacific, the dominant role of the United States in a political and military sense will have to be readjusted,” said Cui Liru, former president of the China Institutes of Contemporary International Relations, a think tank under the Ministry of State Security that often reflects official thinking. “It doesn’t mean U.S. interests must be sacrificed. But if the U.S. insists on a dominant role forever, that’s a problem.”
Cui added that it was “not normal for China to be under U.S. dominance forever. You can’t justify dominance forever.”
“China’s military objective is to break through the first chain of islands,” said Mr. Cui, referring to the waters beyond Japan and Taiwan where the Chinese military wants to establish a presence. -NYT
According to the latest research from Stockholm International Peace Research Institute, China defense spending is around 1.9 percent of gross domestic product in 2016, when compared to 3.3 percent for the United States.
National Public Radio (NPR) signals that the increased military budget comes as the National People’s Congress scraps constitutional term limits for President Xi Jinping:
“The new military budget comes as the NPC abolishes term limits for China’s President Xi Jinping, a move that hearkens back to the era of autocratic rule under Mao Zedong and was signaled in October when Xi broke with precedent and failed to name a successor at China’s Communist Party Congress. ASIA USS Carl Vinson Will Spend The Next Few Days In Da Nang, Vietnam.
It also comes amid increased tension with the U.S., as Washington beefs up its naval presence in the South China Sea and Beijing has shown an increasing willingness to flex its muscles there, much to the chagrin of many of its maritime neighbors.”
Xinhua cites Major General Chen Zhou, a research fellow at the Academy of Military Sciences affiliated with the People’s Liberation Army (PLA) as stating:
“Steady and appropriate growth of defense spending is necessary because the Chinese armed forces have been modernizing to keep up with the country’s development. A large part of the increased spending is for upgrading equipment, supporting military reforms and improving the welfare and training conditions of servicemen and women.”
As we have noted before, China has set many goals to complete the modernization of its national defense and armed forces in the coming decades and transform its military into a world-class war machine by the mid-21st century.
In the past few years, China has been rapidly modernizing its armed forces that will enhance its equipment, tactics, technology, and combat readiness for the next conflict. Recently, the country has been vocal in its rollout of stealth jets, hypersonic aircraft and weapons, rail guns, and militarized islands.
“China’s emerging weapons developments and broader defense-technological progress mean that it has become a global defense innovator,” says Dr. John Chipman, Director-General and Chief Executive of the London-based International Institute for Strategic Studies (IISS).
“[While] a great power war is not inevitable, states are systematically preparing for the possibility of conflict,” he said, adding that China’s “land and naval forces are modernizing and progress in defense aerospace remains remarkable.”
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Following Trump’s initiation of a trade war, China is preparing to retaliate to Trump’s proposed new tariffs. Bridgewater Associates founder Ray Dalio said Monday that a trade war is avoidable, but “tit-for-tat escalations” could be harmful to the global economy.
“It seems to me that good deals are to be had for both countries, while a trade war has the risk of tit-for-tat escalations that could have very harmful trade and capital flow implications for both countries and for the world,” Dalio wrote in a LinkedIn blog titled “A US-China Trade War Would Be a Tragedy.”
Nevertheless, perhaps now we understand why China is modernizing its military, because after trade wars comes hot wars…
- Former CIA Officer Exposes Clinton Charity Fraud As Biggest Scandal In US History
Via Greg Hunter’s USAWatchdog.com,
Former CIA Officer and whistleblower Kevin Shipp says the reason for all the crime and treason at the FBI and DOJ all boils down to one thing – the Clinton’s so-called “charity.”
Shipp explains, “Hillary Clinton was running and is running a global financial criminal syndicate. She was using these secret servers to conduct Clinton financial money laundering business.”
“The shocking thing about that is all the former directors of the CIA that have come out to support her, from Clapper to Brennan to Morell to Robert Gates supporting her being elected, knew about this criminal syndicate. Comey was protecting it. Lynch was protecting it. Weissmann was protecting it. And that is the big why. What’s she got on these people? Are they financial ties? They had to be aware of this, especially the counter-intelligence units. We know it was hacked into by foreign intelligence services because it was just hanging out there. Hillary Clinton was running a secret server outside the Department of State for the purposes of laundering money through the criminal Clinton Foundation.”
Are the crimes and treason of the Clinton Foundation the anvil that is about to drop? Shipp says,
“It’s not just an anvil, I think it is a mountain and the nexus of everything. This “Clinton Global Initiative” (CGI) is worldwide, and it’s been out there for a couple of decades. It has now intertwined former Directors of the CIA and FBI. George Soros is a part of it. It’s connected to all kinds of global financial institutions…
It is at least a $100 billion…
All these people protecting and defending Hillary Clinton and knowing about her criminal syndicate, this goes into the so-called ‘Deep State’ of our government, and it is connected, involved and intertwined in the global criminal crime syndicate called the Clinton Foundation. This is probably going to be the biggest scandal in U.S. history–once it’s busted. I think they are quietly working on it now, and I think they have been for the last year. It is so huge the arrests and indictments could cause a Constitutional crisis with some people being removed. Maybe that’s why they are moving slowly. It all comes back down to the Clinton Foundation and the criminal syndicate.”
Is former President Obama involved with the Clinton crime syndicate? Shipp says,
“Yes, I am absolutely convinced of it. George Soros gave $30 million to Obama’s campaign. Then he gave $27.1 million to Hillary Clinton’s campaign. Both Obama and Clinton are tied directly into George Soros. Obama was put into office with millions of dollars that came out of nowhere.
Yes, he’s part of this cabal. Yes, he’s part of this global syndicate, and in my opinion, the subversion of our government.”
In closing, Shipp contends,“There could be a Constitutional crisis in that we could see Congressmen, Senators, former Directors of the FBI and the CIA perp walked after they receive charges.”
“Could you imagine if senior DOJ officials were arrested, some Congressmen and Senators were arrested and other government officials were arrested on charges and walked out of office? That’s the Constitutional crisis I am talking about. Those kind of high level arrests would shake up this nation. It would be huge, and that’s why it has taken so long and methodical in doing this.”
Join Greg Hunter as he goes One-on-One with CIA whistleblower Kevin Shipp…
- Aramco IPO Delayed Until 2019 As New York Listing Grows Increasingly Remote
For more than two years, investment bankers in the US and London have been salivating over the prospect that Aramco, the state-owned Saudi oil company that’s believed to be one of the most valuable companies in the world, could choose to list shares representing a 5% stake in the company on the London Stock Exchange, New York Stock Exchange, or Nasdaq.
But despite reports that the royal family had “shortlisted” New York, London and Hong Kong as possible venues for the offering – news that intensified an already escalating geopolitical “Game of Thrones” between bankers and politicians – the Kingdom is continuing with a Financial Times-assisted campaign of mixed messaging, suggesting that the IPO could either be delayed for another year or two, or possibly being shelved indefinitely in favor of a direct sale to a coterie of Asian sovereign wealth funds or possibly even directly to the Chinese government (much to the US’s chagrin).
In its latest inside-baseball report on the endlessly fraught back-and-forth, the Financial Times is saying a public offering won’t happen until 2019 at the earliest – if it happens at all. However, in an unusual twist, the paper is sourcing its story to UK officials, not the Saudis, as has often been the case in the recent past.
Saudi Aramco’s listing is unlikely to go ahead this year, according to British officials who have been warned by their Saudi counterparts that the world’s biggest flotation was expected to be delayed.
Several people briefed on the talks said London still had a good chance of securing the listing, which Riyadh said could value the state energy company at $2tn, but any foreign flotation was likely to happen in 2019 at the earliest.
Saudi Arabia wants to sell 5 per cent of the world’s largest oil-producing company as part of an economic reform programme driven by Mohammed bin Salman, the Saudi crown prince, who visited the UK this week.
As we’ve pointed out many times in the recent past, there is one overwhelming impediment to the deal, and that’s the price of oil.
Saudi Arabia has dominated world oil supply for half a century, but in recent weeks, US crude production has overtaken The Kingdonm.
With global oil prices repeatedly faltering around the $60 a barrel mark, bankers are having a hard time swallowing the $2 trillion valuation that the Saudis have ascribed to what many consider to be the Kingdom’s “crown jewel” asset.
At that valuation, a 5% stake would be worth $100 billion – but bankers in all three potential venues have raised doubts about this price, with some reportedly claiming the stake would be worth half that number.
Delays on IPO decision-making come as advisers have struggled to achieve the $2tn valuation that Prince Mohammed wants. Saudi Aramco’s finances and internal operations have been shrouded in secrecy for decades and its close relationship with the state has raised financial, legal and regulatory challenges.
MbS visited the UK last week – a visit that undoubtedly included some discussion about the IPO – and is planning to embark on his second Trump-era White House visit later this month. But despite President Trump doing everything he can to lobby on the US’s behalf (who could ever forget that indelible shot of him touching the orb?) the chances of an offering coming to the US are looking increasingly remote…as Aramco’s leaders have expressed reservations about the possibility of a legal crackdown, as OPEC price cuts and other state-sanctioned maneuvers to bolster the price of oil could be interpreted by US regulators as blatant market manipulation. Plus, there’s also the question of that pesky lawsuit brought by the families of 9/11 survivors who are seeking to hold the Kingdom accountable amid suspicions about its role in the World Trade Center attacks.
Khalid al-Falih, the energy minister, told CNN this week:
“I would say litigation and liability are a big concern in the US…
…Saudi Aramco is too big and too important to be subjected to that kind of risk.”
Initially, Aramco had targeted a late-2018 offering, with shares slated to list on both the Tadawal – Saudi Arabia’s domestic exchange, which was only recently opened to foreign investors – and one of the three venues mentioned above.
The FT also broke the news about the possibility of a sale to the Chinese government, or possibly a group of private investors.
UK officials said if Riyadh decided to list abroad they expected a domestic and foreign listing to take place around the same time. One person close to the talks said this could take place in the first or second quarter of 2019.
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London, New York and Hong Kong are among foreign bourses competing for the share sale. A private sale to strategic investors has been another option under consideration.
Saudi officials have been split on where to list. Prince Mohammed, ultimate head of the kingdom’s oil affairs, has ambitions to list in New York and is hoping US officials will make regulatory concessions to pave the way for a deal there when he visits this month.
But senior ministers and Saudi Aramco executives have said privately that London might be a better fit.
Aside from low oil prices, a dispute between MbS and the officials in charge of Aramco has also contributed to the sale’s delay:
Amin Nasser, Saudi Aramco’s chief executive, said at a conference of British and Saudi business leaders on Thursday in London that all preparatory work required from the company would be completed in the latter half of 2018.
This is a shift from previous comments from the kingdom’s officials who had said that preparations had already been completed and any final decision lay with the highest authorities in Saudi Arabia.
Indecision in Riyadh about the IPO structure has caused frustration among company executives and advisers. Decision-making timelines have slipped and other options for a privatisation have emerged, as the complexities of executing the IPO have become clear — from legal risks to disclosure rules.
Of course, these details are probably a distraction; the price of oil is the paramount factor. As it climbs, Saudi officials will have more leverage to demand the coveted $2 trillion valuation. Given MbS’s strongman posturing (remember his “corruption purge”) it’s likely that Saudi Arabia will resort to increasingly desperate measures to push the price of oil higher.
…And what better way to boost the oil price than an armed conflict between KSA and its regional archrival Iran. The two powers are already engaged in a proxy war in Yemen, and Saudi has reportedly been developing an unlikely partnership with Israel to counter Iran’s growing influence in the region.
Indeed, the money gleaned from MbS’s shakedown of the country’s corporate elite (including dozens of his own family members) will quickly run out as the $100 billion he’s believed to have acquired is barely enough to plug this year’s budget shortfall.
With MbS’s US visit looming, look out for some more “developments” pertaining to this conflict in the coming weeks…
As Bloomberg notes, Aramco’s IPO will put a price tag on the future of petroleum just as Saudi Arabia is fixing its sights on the end of its own oil age.
- Japan Markets Roiled As Moritomo Scandal Returns, Abe May Be Forced To Resign
It was exactly one year ago that the previously unshakeable administration of Japanese Prime Minister Shinzo Abe was rocked by a crisis which prompted some to ask if Abe’s government was on the rocks, and with it – Abenomics: the crisis was not one of bungled economic policies, party in-fighting or any of the other calamities that have brought down Japanese leaders in the past, including Abe’s first administration as prime minister. No, Abe was struggling to shake off a scandal involving a kindergarten.
As we reported last March, Abe had been riding high in the polls and making plans to run for an unprecedented third term as head of the dominant Liberal Democratic Party, when questions first began to be asked about Moritomo Gakuen, a kindergarten operator in Osaka with what was initially described as a conservative curriculum, prompting the prime minister to declare that he shared many of the philosophies of the school’s president, Yasunori Kagoike.
It would emerge in swift succession that the premier’s wife, Akie Abe, had been named honorary principal of a new school being planned by Kagoike; that the school was being built on land purchased from the government by Moritomo Gakuen for a fraction of its estimated value; that Abe’s wife Akie allegedly donated 1 million yen to the foundation in September 2015 on behalf of her husband, and that the operator’s philosophies imposed upon his young pupils were not just conservative, but tended towards far-right pre-war nationalism.
The scandal raged for several months, resulting in Abe’s approval rate tumbling, however at the last possible moment, Kim John Un’s ICBM launches successfully distracted the Japanese population, and Abe’s militant response was sufficient for the public to forgive and forget the entire Moritomo incident.
Until now… because as the Japanese press reported over the weekend, the Moritomo scandal involving PM Abe’s connections with the operators of the right-leaning school implicated in fraud are again roiling markets in Japan.
As NHK reports, while Abe is not the focus of the current investigation and his position remains secure for now, fresh allegations that tax authorities involved may have even fabricated reports in favor of Moritomo could force the resignation of Deputy PM and Finance Minister Aso as the National Tax Bureau reports directly to him.
Specifically, Japan’s Finance Ministry will admit to the Diet on Monday that alterations were made to documents on the controversial state land deal. As we reported a yea ago, the land in Osaka Prefecture was sold to private school operator Morimoto Gakuen in 2016 for only a fraction of its market value. The transaction sparked allegations of favoritism in part because the wife of Prime Minister Shinzo Abe was acquainted with the school operator.
After the scandal came to light last year, the Finance Ministry submitted to the Diet settlement documents for the deal. But, earlier this month, a newspaper alleged that the papers had been altered before being submitted to the Diet. The ministry has since questioned its employees involved in the matter and concluded that changes were made to some wording in the documents.
In reaction to the Morimoto scandal coming back from the dead, six of Japan’s opposition parties will demand Finance Minister Taro Aso step down to take responsibility for the matter, NHK reports. They also plan to demand the government release all related documents and that Nobuhisa Sagawa, who resigned last week as head of the National Tax Agency, be summoned to give testimony at the Diet. He was the ministry’s Financial Bureau chief when the land deal was made.
Meanwhile, the ruling parties are urging the opposition parties, which have been boycotting Diet sessions since last week, to make facts clear through the debate in the Diet.
Meanwhile, analysts have already warned that a resignation by Aso would take the legs out of the current Abe administration, perhaps even forcing the PM to eventually resign as well, and forcing changes at the BOJ.
Furthermore, hitting much closer to home, Kyodo reported that Abe’s wife Akie was among names deleted from altered Finance Ministry documents pertaining to the sale of public land to Moritomo, putting Abe himself in jeopardy.
And one look at Japanese markets shows that investors are starting to get spooked with the USDJPY suddenly sliding taking a hit from concern that deepening of a scandal over alleged favors to a school with connections to Japanese Prime Minister Shinzo Abe may prompt a retreat of Abenomics, said David Lu, director at NBC Financial Markets Asia in Hong Kong…
… while Japanese stocks are paring some of their strong early gains; while the implications of any Aso resignation are hard to fathom at this point, many believe the Nikkei would plunge, and risk-off sentiment could return fast, sending the JPY higher once again.
This, according to Reuters, would be especially the case now, with investors already nervous over possible trade wars and recent stock market volatility.
- Paul Craig Roberts Explores "Make-Believe America"
Authored by Paul Craig Roberts,
Americans live a never-never-land existence. The politicians and presstitutes make sure of that.
Consider something as simple as the unemployment rate. The US is said to have full employment with a January 2018 unemployment rate of 4.1 percent, down from 9.8 percent in January 2010.
However, the low rate of unemployment is contradicted by the long-term decline in the labor force participation rate. After a long rise during the Reagan 1980s, the labor force participation rate peaked in January 1990 at 66.8 percent, more or less holding to that rate for another decade until 2001 when decline set in accelerating in September 2008.
Today the labor force participation rate is the lowest since February 1978, reversing all of the gains of the Reagan years.
Allegedly, the current unemployment rate of 4.1 percent is the result of the long recovery that allegedly began in June 2009. However, normally, employment opportunities created by economic recovery cause an increase in the labor force participation rate as people join the work force to take advantage of employment opportunities. A fall in the participation rate is associated with recession or stagnation, not with economic recovery.
How can this contradiction be reconciled? The answer lies in the measurement of unemployment. If you have not looked for a job in the last four weeks, you are not counted as being unemployed, because you are not counted as being part of the work force. When there are no jobs to be found, job seekers become discouraged and cease looking for jobs. In other words, the 4.1 percent unemployment rate does not count discouraged workers who cannot find jobs.
The US Bureau of Labor Statistics has a second measure of unemployment that includes workers who have been discouraged and out of the labor force for less than one year. This rate of unemployment is 8.2 percent, double the 4.1 percent reported rate.
The US government no longer tracks unemployment among discouraged workers who have been out of the work force for more than one year. However, John Williams of shadowstats.com continues to estimate this rate and places it at 22 or 23 percent, a far cry from 4.1 percent.
In other words, the 4.1 percent unemployment rate does not count the unemployed who do show up in the declining labor force participation rate.
If the US had a print and TV media instead of the propaganda ministry that it has, the financial press would not tolerate the deception of the public about employment in America.
Junk economists, of which the US has an over-supply, claim that the decline in the labor force participation rate merely reflects people who prefer to live on welfare than to work for a living and the current generation of young people who prefer life at home with parents paying the bills. This explanation from junk economists does not explain why suddenly Americans discovered welfare and became lazy in 2001 and turned their back on job opportunities. The junk economists also do not explain why, if the economy is at full employment, competition for workers is not driving up wages.
The reason Americans cannot find jobs and have left the labor force is that US corporations have offshored millions of American jobs in order to raise profits, share prices, and executive bonuses by lowering labor costs. Many American industrial and manufacturing cities have been devastated by the relocation abroad of production for the American consumer market, by the movement abroad of IT and software engineering jobs, and by importing lower paid foreign workers on H1-B and other work visas to take the jobs of Americans. In my book, The Failure of Laissez Faire Capitalism, I give examples and document the devastating impact jobs offshoring has had on communities, cities, pension funds, and consumer purchasing power.
John Williams of shadowstats.com questions whether there has been any real growth in the US economy since the 2008 crisis that resulted from the repeal of the Glass-Steagall Act. Williams believes that the GDP growth rate is an illusion resulting from the understatement of inflation. Just as unemployment is under-counted, so is inflation.
Two “reforms” were introduced that result in the under-measurement of inflation.
One is the substitution principle. When the price of an item in the basket of goods used to measure inflation goes up, that item is thrown out and a cheaper substitute is put in its place. The “reformers” argue that consumers themselves behave in this way. Thus, they claim this practice is reasonable. However, the old way of measuring inflation measured the cost of a constant standard of living. The new way measures the cost of a falling standard of living.
The other reform is to classify some price rises as quality improvements rather than as inflation. The consumer has to pay the higher price, but he is said to be getting a better product, and so it is not inflation. There is some truth to this, but it appears it is over-used in order to report low inflation rates. Both of these reforms are suspected of being motivated by holding down Social Security costs by denying cost-of-living (COLA) adjustments to Social Security recipients.
If inflation is under-measured, the use of the measure to deflate nominal GDP in order to arrive at real GDP leaves some price rises in the GDP measure. Therefore, price rises or inflation are counted as increases in real goods and services. John Williams suspects that most of the GDP growth reported since the alleged recovery is simply price rises, not increases in real goods and services.
The historically high stock averages are another feature of make-believe America. The high price/earnings ratios do not reflect strong fundamentals, such as high rates of business investment, strong growth in real retail sales fueled by strong growth in consumer incomes. The Federal Reserve has used an increase in consumer debt to fill in for the missing growth in consumer income for so long that consumers have no more room to take on more debt. Without growth in wages and salaries or in consumer debt, consumer demand cannot drive the economy and business profits.
What explains the high stock prices? The answer is the trillions of dollars the Federal Reserve has created in order to stabilize the large “banks too big to fail” and bail out their extremely poor investment decisions. All of this liquidity found its way into the financial sector where it drove up the prices of stocks and bonds, enriching equity owners and denying retirees any interest income on their savings. The values of financial instruments are supported by money creation, not by underlying fundamentals. Yet, the stock averages are treated as proof of economic recovery and America’s first place in the world.
As I said, it is never-never-land in which we live.
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- California High-Speed Rail Is A Budgetary Trainwreck As Cost Soars 20% To $77 Billion
California’s bullet train will be coming in over budget and behind schedule, after its estimated cost was revised from $64 billion to $77 billion – a 20% increase, and an estimated completion date of 2033, four years later than originally projected. The new estimates, contained in a 114-page business plan, was issued in draft form on Friday by the rail authority ahead of public hearings and a formal legislative review in approximately two months.
The rail authority previously argued that it had just enough money to build the grade-separated tracks for its route between San Francisco and Los Angeles at speeds of up to 220 mph.
The new estimates will force California’s leadership to double down on its political and financial commitments if it wants to see the system completed, against a backdrop of rising costs, years of delays, strident litigation and backlashes in communities where homes, businesses, farms and environmental preserves will have to give up land to the rail’s right-of-way. –LA Times
The revised plan will leave California legislators scrambling to grapple with higher costs amid an uncertain economic future in the state with the nation’s worst poverty rate and already strained balance sheet.
statedatalab.org While the endgame will be to connect Northern and Southern California, from upper San Francisco to San Diego – the new plan is to focus on the track between San Francisco and the Central Valley – the primarily agricultural and less populated region of California, which is set to be completed in 2029.
One of the current hurdles is how to content with traveling through California’s mountainous regions – which designers are still trying to figure out.
The $77 billion cost, a 20 per cent increase, is a baseline estimate, but Kelly also included high and low ranges in the plan based on potential risks.
It says 119 miles (192 kilometres) of track in the Central Valley is scheduled to open by 2022, which would make it the first operational segment. That’s 14 years after voters approved a $10 billion bond for high-speed rail in November 2008.
A summary of the plan reviewed by The Associated Press offers limited details on the portion from Central Valley to Los Angeles. The agency hopes to complete all necessary environmental reviews for the entire line by 2022, a delay from initial timelines that planned for environmental clearance by 2017 for most parts of the track.
…
The state has spent $2.5 billion in federal stimulus money and has an additional $930 million in federal money on the table. That’s on top of the $10 billion bond from voters. –CNBC
So – they’ll basically make it up as they go along.
The largest near-term driver of the cost increase has been the Central Valley section, where 119 miles of track between Wasco and Madera will cost $10.6 billion, up from an original estimate of around $6 billion. Senior consultant Roy Hill told the rail authority board, “The worst-case scenario has happened.”
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Some legislators aren’t so excited at this point.
“Let’s cut our losses and use the billions not yet wasted on (high-speed rail) to instead improve freeways, highways and roads and perhaps improve existing rail systems throughout California,” Said state Sen. Andy Vidak (R).
“Heavy sigh” tweeted Elon Musk following Friday’s announcement. Musk pitched
Heavy sigh
— Elon Musk (@elonmusk) March 9, 2018
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Of note, Musk pitched a “Hyperloop” – an sealed tube with a “pod” traveling from San Francisco to Los Angeles at 760 MOH, allowing for a 35 minute commute.
Of course he can pic.twitter.com/pDSJUxqnse
— Adryan (@adryantjs) March 9, 2018
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If only there was another way… pic.twitter.com/xcTTLLfnbH
— David Gamboa (@DaveedGamboa) March 9, 2018
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Musk says it would cost around $7.5 billion for a passenger version of the Hyperloop, however critics argue there’s no way that’s reasonable considering that part of the California high-speed rail’s enormous budget is approximately 1,100 pieces of land they have to acquire.
The Hyperloop concept has been “open-sourced” by Musk and SpaceX in the hopes that the technology will be further developed by companies and interdisciplinary student-led teams.
- Lawrence Solomon: The Real Reason For Trump's Steel Tariffs? He's Preparing For War
Authored by Lawrence Solomon via Financial Post,
Those who see Trump as threatening a free market in steel should see the world as it really is and welcome, rather than berate Trump’s initiative…
President Trump’s decision to apply steep tariffs to steel imports on grounds of national security met with a loud chorus of protests at home and abroad, by many trying to divine what could possibly be going through Trump’s mind. Trump is an economic illiterate, he’s a protectionist, some reasoned; he’s targeting Canada to get concessions on NAFTA, he’s playing to his base, others pronounced.
These explanations miss the mark. Though Trump doubtless sees taunting Canada on NAFTA and playing to his political base as furthering his agenda, these are but freebies, sideshows to the main event. Trump is acting sincerely, and legitimately, in the national security interests of the United States. Canada isn’t his target; China is.
Trump is old enough to know that during the Korean War, president Harry Truman seized the U.S. steel industry to maintain production for America’s then-vulnerable wartime economy. During the Second World War, when the U.S. dominated the world’s steel production, rationing was nevertheless needed – the public was even exhorted to donate their automobile bumpers to the war effort as scrap steel.
Today, the U.S. has not only lost much of its steel capacity, it’s at risk of losing the balance, making it dependent on a host of countries: Canada, its largest and most reliable foreign supplier, meets just five per cent of U.S. needs. According to the U.S. Commerce Department, the United States is now at risk of finding itself “in a position where it is unable to be certain it could meet demands for national defense and critical industries in a national emergency.” If dependent on a foreign country, the department warns, the U.S. would not have the legal authority to commandeer supplies as it could within the U.S.
“Our steel industry is in bad shape,” Trump tweeted. “IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!”
Those who believe war is for the history books, never to inconvenience us in our daily comforts, naturally view Trump as some kind of madman, senselessly protecting a few steelworkers in an economically irrelevant industry at a great cost to the rest of the labour force and economy. But those with a longer time frame and a sense of history — and especially those who can sense the gathering storm of war — make different calculations.
Trump, like president Ronald Reagan before him, believes in peace through strength. He wants a military so dominant, and an economy so robust, that no adversary would ever dare challenge it. At the same time, Trump wants to take on today’s Evil Empire, the country that represents a future existential threat to the U.S. — China. An uncompromising ally in this project to neuter China — a man Trump calls a visionary — is Peter Navarro, his chief trade adviser, formerly a professor of economic and public policy at University of California and the author of Death by China, a 2011 book that warns, “China’s perverse form of capitalism combines illegal mercantilist and protectionist weapons to pick off American industries, job by job. China’s emboldened military is racing towards head-on confrontation with the U.S.” Navarro’s other China book, The Coming China Wars published in 2006, described China as a ruthless emerging power likely to succeed in its ambitions of dominance.
The Trump-Navarro policy of confronting China through tariffs on grounds of national security is not a cynical excuse to justify protectionism. It reflects profound alarm over America’s preparedness in confronting a China that through government subsidies has acquired a stranglehold over the global steel industry: China now accounts for half of the world’s entire steel production. Without countering foreign steel subsidies in general and those from China in particular, the U.S. steel industry will be unable to survive.
The world’s steel exporters will doubtless challenge Trump’s claim that he’s acting in the interest of national security before the WTO. They will need to wait in line: The U.S. currently has 169 antidumping and countervailing duty orders in place on steel, 29 of them against China, along with 25 ongoing investigations. And the world’s steel exporters should also be prepared to lose. Under WTO rules, national security is a valid ground for levying tariffs and both the U.S. Commerce Department and the U.S. Department of Defence agree that national security is at stake.
Those who see Trump as threatening a free market in steel should see the world as it really is and welcome, rather than berate Trump’s initiative. He is now the world’s best hope — perhaps only hope — for bringing a semblance of free-market discipline to the global steel industry.
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