- Is China Creating A New Master Race?
Is China Creating A New Master Race?
Authored by Gordon Chang via The Gatestone Institute,
Bing Su, a Chinese geneticist at the state-run Kunming Institute of Zoology, recently inserted the human MCPH1 gene, which develops the brain, into a monkey. The insertion could make that animal’s intelligence more human than that of lower primates. Su’s next experiment is inserting into monkeys the SRGAP2C gene, related to human intelligence, and the FOXP2 gene, connected to language skills.
Has nobody in China seen Planet of the Apes?
Or maybe they have. “Biotechnology development in China is heading in a truly macabre direction,” writes Brandon Weichert of The Weichert Report in an article posted on the American Greatness website.
In a communist society with unrestrained ambition, researchers are pursuing weird science. What happens when you mix pig and monkey DNA? Chinese experimenters can tell you. How about growing human-like organs in animals? Yes, they have done that as well.
Moreover, Beijing may already be engineering “super soldiers.” “U.S. intelligence shows that China has conducted human testing on members of the People’s Liberation Army in hope of developing soldiers with biologically enhanced capabilities,” wrote then Director of National Intelligence John Ratcliffe, in a December 3 Wall Street Journal op-ed titled “China Is National Security Threat No. 1.”
It is not clear how far Chinese military researchers have gone. They are, however, advocating use of the CRISPR gene-editing tool to enhance human capabilities, and the Communist Party’s Central Military Commission is “supporting research in human performance enhancement and ‘new concept’ biotechnology.”
The People’s Liberation Army has gone all-in on gene editing of humans. As leading analysts Elsa Kania and Wilson VornDick report, there are “striking parallels in themes repeated by a number of PLA scholars and scientists from influential institutions.”
All these Chinese moves are meant to obtain “biological dominance.” “There are,” as Ratcliffe noted, “no ethical boundaries to Beijing’s pursuit of power.”
It is clear that the Communist Party is thinking about more than just soldiers. A Chinese researcher is also the first — and so far only — person to gene-edit human embryos that produced live births.
He Jiankui, while at Southern University of Science and Technology in Shenzhen, used the CRISPR-Cas9 tool to remove gene CCR5 to give twin girls, born in late 2018, immunity to HIV but perhaps also to enhance intelligence. The experiment evoked the eugenics program of the Third Reich to create a “master race.”
China is in the process of creating the “perfect Communist,” Weichert, also the author of Winning Space, told Gatestone. “China is run by a regime that believes in the perfectibility of mankind, and with the advent of modern genetic and biotechnology research, China’s central planners now have the human genome itself to perfect according to their political agenda.”
Chinese scientists already are on the road of “gene-doping” to make future generations smarter and more innovative than those in countries refusing to embrace these controversial methods. “What you are witnessing in China,” Weichert has written, “is the convergence of advanced technology with cutting-edge bio-sciences, capable of fundamentally altering all life on this planet according to the capricious whims of a nominally Communist regime.”
Shenzhen’s He, after an international uproar caused by news of his dangerous and unethical work, was fined and jailed for “illegally carrying out human embryo gene-editing,” but in the Communist Party’s near-total surveillance state, he obviously had state backing for his experiments.
He’s efforts are not isolated. Nature magazine’s news team reported in April 2015 that Chinese researchers at Sun Yat-sen University in Guangzhou, in another world-first experiment, edited “non-viable” human embryos with CRISPR-Cas9. “A Chinese source familiar with developments in the field said that at least four groups in China are pursuing gene editing in human embryos,” the magazine’s website stated.
Beijing’s prosecution of He, therefore, looks like an attempt to cool down the furor and prevent the international scientific community from further inquiry into China’s activities.
Unfortunately, China’s advances in gene editing human embryos for super soldiers is persuading others they must do the same. Soon, for instance, there will be “Le Terminator.” The French government has just given approval for augmented soldiers. “We have to be clear, not everyone has the same scruples as us and we have to prepare ourselves for such a future,” declared French Minister for the Armed Forces Florence Parly.
Michael Clarke of Kings College London told the Sun, the British tabloid, there is now a biological competition fueled by China. Will we soon have, as the International Society for Military Ethics has dubbed it, a race of “homo robocopus”?
If we do, China will not be the only party to blame. “What is most disturbing about these endeavors is that China has gleaned access to CRISPR and advanced genetic and biotech research, thanks to their relationship with the United States and other advanced Western nations,” Weichert told Gatestone this month. “American research labs, biotech investors, and scientists have all striven to do research and business in China’s budding biotech arena explicitly because the ethical standards for research on this sensitive issue are so low.”
“This will prove to be a long-term strategic threat to the United States that few in Washington, on Wall Street, or in Silicon Valley understand,” Weichert says, referring to China’s rapid weaponization of biotechnology.
China’s regime does not have ethics or decency, is not bound by law, and does not have a sense of restraint. It does, however, have the technology to start a whole new species of genetically enhanced, goose-stepping humans.
Tyler Durden
Sat, 02/13/2021 – 23:30 - 'Matrix'-Style Wearable Device Turns Humans Into Battery
‘Matrix’-Style Wearable Device Turns Humans Into Battery
The race is now on to convert body heat into battery power. Just like the action/sci-fi movie The Matrix.
In The Matrix, it was revealed to Neo (Keanu Reeves) that humans are flesh batteries powering artificial intelligence machines that have taken control of Earth.
Researchers at the University of Colorado Boulder have come one step closer to harness the human bodies’ thermoelectric energy to power low-cost wearable devices.
“In the future, we want to be able to power your wearable electronics without having to include a battery,” said Jianliang Xiao, senior author of the new paper and an associate professor in the Paul M. Rady Department of Mechanical Engineering at CU Boulder.
As we noted above, the human-powered battery to power machines is straight out of The Matrix film. Xiao said the battery could generate about 1 volt of energy for every square centimeter of skin – allowing it to power wearable devices, such as fitness trackers.
In a short informational video, CU Boulder explains how the new battery works.
“Whenever you use a battery, you’re depleting that battery and will, eventually, need to replace it,” Xiao said. “The nice thing about our thermoelectric device is that you can wear it, and it provides you with constant power.”
Though the technology is still in its infancy, he said it generates less voltage per area than a conventional battery.
While more research is needed to increase the amount of power produced before it can be commercialized. He figured it would take about a decade before the new battery is introduced for the retail market.
“Just don’t tell the robots. We don’t want them getting any ideas,” Xiao concluded.
Tyler Durden
Sat, 02/13/2021 – 23:00 - Escobar: Why Russia Is Driving The West Crazy
Escobar: Why Russia Is Driving The West Crazy
Authored by Pepe Escobar via The Asia Times,
Future historians may register it as the day when usually unflappable Russian Foreign Minister Sergey Lavrov decided he had had enough:
We are getting used to the fact that the European Union is trying to impose unilateral restrictions, illegitimate restrictions and we proceed from the assumption at this stage that the European Union is an unreliable partner.
Josep Borrell, the EU foreign policy chief, on an official visit to Moscow, had to take it on the chin.
Lavrov, always the perfect gentleman, added, “I hope that the strategic review that will take place soon will focus on the key interests of the European Union and that these talks will help to make our contacts more constructive.”
He was referring to the EU summit of heads of state and government at the European Council next month, where they will discuss Russia. Lavrov harbors no illusions the “unreliable partners” will behave like adults.
Yet something immensely intriguing can be found in Lavrov’s opening remarks in his meeting with Borrell: “The main problem we all face is the lack of normalcy in relations between Russia and the European Union – the two largest players in the Eurasian space. It is an unhealthy situation, which does not benefit anyone.”
The two largest players in the Eurasian space (italics mine). Let that sink in. We’ll be back to it in a moment.
As it stands, the EU seems irretrievably addicted to worsening the “unhealthy situation”. European Commission head Ursula von der Leyen memorably botched the Brussels vaccine game. Essentially, she sent Borrell to Moscow to ask for licensing rights for European firms to produce the Sputnik V vaccine – which will soon be approved by the EU.
And yet Eurocrats prefer to dabble in hysteria, promoting the antics of NATO asset and convicted fraudster Navalny – the Russian Guaido.
Meanwhile, on the other side of the Atlantic, under the cover of “strategic deterrence”, the head of the US STRATCOM, Admiral Charles Richard, casually let it slip that “there is a real possibility that a regional crisis with Russia or China could escalate quickly to a conflict involving nuclear weapons, if they perceived a conventional loss would threaten the regime or state.”
So the blame for the next – and final – war is already apportioned to the “destabilizing” behavior of Russia and China. It’s assumed they will be “losing” – and then, in a fit of rage, will go nuclear. The Pentagon will be no more than a victim; after all, claims Mr. STRATCOM, we are not “stuck in the Cold War”.
STRATCOM planners could do worse than read crack military analyst Andrei Martyanov, who for years has been on the forefront detailing how the new hypersonic paradigm – and not nuclear weapons – has changed the nature of warfare.
After a detailed technical discussion, Martyanov shows how “the United States simply has no good options currently. None. The less bad option, however, is to talk to Russians and not in terms of geopolitical BS and wet dreams that the United States, somehow, can convince Russia “to abandon” China – US has nothing, zero, to offer Russia to do so. But at least Russians and Americans may finally settle peacefully this “hegemony” BS between themselves and then convince China to finally sit as a Big Three at the table and finally decide how to run the world. This is the only chance for the US to stay relevant in the new world.”
The Golden Horde imprint
As much as the chances are negligible of the EU getting a grip on the “unhealthy situation” with Russia, there’s no evidence what Martyanov outlined will be contemplated by the US Deep State.
The path ahead seems ineluctable: perpetual sanctions; perpetual NATO expansion alongside Russia’s borders; the build up of a ring of hostile states around Russia; perpetual US interference on Russian internal affairs – complete with an army of fifth columnists; perpetual, full spectrum information war.
Lavrov is increasingly making it crystal clear that Moscow expects nothing else. Facts on the ground, though, will keep accumulating.
Nordstream 2 will be finished – sanctions or no sanctions – and will supply much needed natural gas to Germany and the EU. Convicted fraudster Navalny – 1% of real “popularity” in Russia – will remain in jail. Citizens across the EU will get Sputnik V. The Russia-China strategic partnership will continue to solidify.
To understand how we have come to this unholy Russophobic mess, an essential road map is provided by Russian Conservatism, an exciting, new political philosophy study by Glenn Diesen, associate professor at University of Southeastern Norway, lecturer at Moscow’s Higher School of Economics, and one of my distinguished interlocutors in Moscow.
Diesen starts focusing on the essentials: geography, topography and history. Russia is a vast land power without enough access to the seas. Geography, he argues, conditions the foundations of “conservative policies defined by autocracy, an ambiguous and complex concept of nationalism, and the enduring role of the Orthodox Church” – something that implies resistance to “radical secularism”.
It’s always crucial to remember that Russia has no natural defensible borders; it has been invaded or occupied by Swedes, Poles, Lithuanians, the Mongol Golden Horde, Crimean Tatars and Napoleon. Not to mention the immensely bloody Nazi invasion.
What’s in a word? Everything: “security”, in Russian, is byezopasnost. That happens to be a negative, as byez means “without” and opasnost means “danger”.
Russia’s complex, unique historical make-up always presented serious problems. Yes, there was close affinity with the Byzantine empire. But if Russia “claimed transfer of imperial authority from Constantinople it would be forced to conquer it.” And to claim the successor, role and heritage of the Golden Horde would relegate Russia to the status of an Asiatic power only.
On the Russian path to modernization, the Mongol invasion provoked not only a geographical schism, but left its imprint on politics: “Autocracy became a necessity following the Mongol legacy and the establishment of Russia as an Eurasian empire with a vast and poorly connected geographical expanse”.
“A colossal East West”
Russia is all about East meets West. Diesen reminds us how Nikolai Berdyaev, one of the leading 20th century conservatives, already nailed it in 1947: “The inconsistency and complexity of the Russian soul may be due to the fact that in Russia two streams of world history – East and West – jostle and influence one another (…) Russia is a complete section of the world – a colossal East West.”
The Trans-Siberian railroad, built to solidify the internal cohesion of the Russian empire and to project power in Asia, was a major game-changer: “With Russian agricultural settlements expanding to the east, Russia was increasingly replacing the ancient roads who had previously controlled and connected Eurasia.”
It’s fascinating to watch how the development of Russian economics ended up on Mackinder’s Heartland theory – according to which control of the world required control of the Eurasian supercontinent. What terrified Mackinder is that Russian railways connecting Eurasia would undermine the whole power structure of Britain as a maritime empire.
Diesen also shows how Eurasianism – emerging in the 1920s among émigrés in response to 1917 – was in fact an evolution of Russian conservatism.
Eurasianism, for a number of reasons, never became a unified political movement. The core of Eurasianism is the notion that Russia was not a mere Eastern European state. After the 13th century Mongol invasion and the 16th century conquest of Tatar kingdoms, Russia’s history and geography could not be only European. The future would require a more balanced approach – and engagement with Asia.
Dostoyevsky had brilliantly framed it ahead of anyone, in 1881:
Russians are as much Asiatics as European. The mistake of our policy for the past two centuries has been to make the people of Europe believe that we are true Europeans. We have served Europe too well, we have taken too great a part in her domestic quarrels (…) We have bowed ourselves like slaves before the Europeans and have only gained their hatred and contempt. It is time to turn away from ungrateful Europe. Our future is in Asia.
Lev Gumilev was arguably the superstar among a new generation of Eurasianists. He argued that Russia had been founded on a natural coalition between Slavs, Mongols and Turks. The Ancient Rus and the Great Steppe, published in 1989, had an immense impact in Russia after the fall of the USSR – as I learned first hand from my Russian hosts when I arrived in Moscow via the Trans-Siberian in the winter of 1992.
As Diesen frames it, Gumilev was offering a sort of third way, beyond European nationalism and utopian internationalism. A Lev Gumilev University has been established in Kazakhstan. Putin has referred to Gumilev as “the great Eurasian of our time”.
Diesen reminds us that even George Kennan, in 1994, recognized the conservative struggle for “this tragically injured and spiritually diminished country”. Putin, in 2005, was way sharper. He stressed,
the collapse of the Soviet Union was the greatest geopolitical catastrophe of the century. And for the Russian people, it was a real drama (…) The old ideals were destroyed. Many institutions were disbanded or simply hastily reformed…With unrestricted control over information flows, groups of oligarchs served exclusively their own corporate interests. Mass poverty started to be accepted as the norm. All this evolved against a background of the most severe economic recession, unstable finances and paralysis in the social sphere.
Applying “sovereign democracy”
And so we reach the crucial European question.
In the 1990s, led by Atlanticists, Russian foreign policy was focused on Greater Europe, a concept based on Gorbachev’s Common European Home.
And yet post-Cold War Europe, in practice, ended up configured as the non-stop expansion of NATO and the birth – and expansion – of the EU. All sorts of liberal contortionisms were deployed to include all of Europe while excluding Russia.
Diesen has the merit of summarizing the whole process in a single sentence: “The new liberal Europe represented a British-American continuity in terms of the rule of maritime powers, and Mackinder’s objective to organize the German-Russian relationship in a zero-sum format to prevent the alignment of interests.”
No wonder Putin, subsequently, had to be erected as the Supreme Scarecrow, or “the new Hitler”. Putin rejected outright the role for Russia of mere apprentice to Western civilization – and its corollary, (neo) liberal hegemony.
Still, he remained quite accommodating. In 2005, Putin stressed, “above all else Russia was, is and will, of course, be a major European power”. What he wanted was to decouple liberalism from power politics – by rejecting the fundamentals of liberal hegemony.
Putin was saying there’s no single democratic model. That was eventually conceptualized as “sovereign democracy”. Democracy cannot exist without sovereignty; so that discards Western “supervision” to make it work.
Diesen sharply observes that if the USSR was a “radical, left-wing Eurasianism, some of its Eurasian characteristics could be transferred to conservative Eurasianism.” Diesen notes how Sergey Karaganov, sometimes referred to as the “Russian Kissinger”, has shown “that the Soviet Union was central to decolonization and it mid-wifed the rise of Asia by depriving the West of the ability to impose its will on the world through military force, which the West had done from the 16th century until the 1940s”.
This is largely acknowledged across vast stretches of the Global South – from Latin America and Africa to Southeast Asia.
Eurasia’s western peninsula
So after the end of the Cold War and the failure of Greater Europe, Moscow’s pivot to Asia to build Greater Eurasia could not but have an air of historical inevitability.
The logic is impeccable. The two geoeconomic hubs of Eurasia are Europe and East Asia. Moscow wants to connect them economically into a supercontinent: that’s where Greater Eurasia joins China’s Belt and Road Initiative (BRI). But then there’s the extra Russian dimension, as Diesen notes: the “transition away from the usual periphery of these centers of power and towards the center of a new regional construct”.
From a conservative perspective, emphasizes Diesen, “the political economy of Greater Eurasia enables Russia to overcome its historical obsession with the West and establish an organic Russian path to modernization”.
That implies the development of strategic industries; connectivity corridors; financial instruments; infrastructure projects to connect European Russia with Siberia and Pacific Russia. All that under a new concept: an industrialized, conservative political economy.
The Russia-China strategic partnership happens to be active in all these three geoeconomic sectors: strategic industries/techno platforms, connectivity corridors and financial instruments.
That propels the discussion, once again, to the supreme categorical imperative: the confrontation between the Heartland and a maritime power.
The three great Eurasian powers, historically, were the Scythians, the Huns and the Mongols. The key reason for their fragmentation and decadence is that they were not able to reach – and control – Eurasia’s maritime borders.
The fourth great Eurasian power was the Russian empire – and its successor, the USSR. A key reason the USSR collapsed is because, once gain, it was not able to reach – and control – Eurasia’s maritime borders.
The US prevented it by applying a composite of Mackinder, Mahan and Spykman. The US strategy even became known as the Spykman-Kennan containment mechanism – all these “forward deployments” in the maritime periphery of Eurasia, in Western Europe, East Asia and the Middle East.
We all know by now how the overall US offshore strategy – as well as the primary reason for the US to enter both WWI and WWII – was to prevent the emergence of a Eurasian hegemon by all means necessary.
As for the US as hegemon, that would be crudely conceptualized – with requisite imperial arrogance – by Dr. Zbig “Grand Chessboard” Brzezinski in 1997: “To prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and keep the barbarians from coming together”. Good old Divide and Rule, applied via “system-dominance”.
It’s this system that is now tumbling down – much to the despair of the usual suspects. Diesen notes how, “in the past, pushing Russia into Asia would relegate Russia to economic obscurity and eliminate its status as a European power.” But now, with the center of geoeconomic gravity shifting to China and East Asia, it’s a whole new ball game.
The 24/7 US demonization of Russia-China, coupled with the “unhealthy situation” mentality of the EU minions, only helps to drive Russia closer and closer to China exactly at the juncture where the West’s two centuries-only world dominance, as Andre Gunder Frank conclusively proved, is coming to an end.
Diesen, perhaps too diplomatically, expects that “relations between Russia and the West will also ultimately change with the rise of Eurasia. The West’s hostile strategy to Russia is conditioned on the idea that Russia has nowhere else to go, and must accept whatever the West offers in terms of “partnership”. The rise of the East fundamentally alters Moscow’s relationship with the West by enabling Russia to diversify its partnerships”.
We may be fast approaching the point where Great Eurasia’s Russia will present Germany with a take it or leave it offer. Either we build the Heartland together, or we will build it with China – and you will be just a historical bystander. Of course there’s always the inter-galaxy distant possibility of a Berlin-Moscow-Beijing axis. Stranger things have happened.
Meanwhile, Diesen is confident that “the Eurasian land powers will eventually incorporate Europe and other states on the inner periphery of Eurasia. Political loyalties will incrementally shift as economic interests turn to the East, and Europe is gradually becoming the western peninsula of Greater Eurasia”.
Talk about food for thought for the peninsular peddlers of the “unhealthy situation”.
Tyler Durden
Sat, 02/13/2021 – 22:30 - Duterte Tells US "You Have To Pay" To Station Troops In Philippines
Duterte Tells US “You Have To Pay” To Station Troops In Philippines
In what sounds like a bit of a Trump move, Philippine President Rodrigo Duterte on Friday declared provocatively to the US that it will now “have to pay” to maintain the Visiting Forces Agreement (VFA) which allows for American forces to be stationed in the Philippines.
The remarks came during a speech given to Philippine troops where he said of allied US forces: “I’d like to put on notice if there is an American agent here, from now on, you want the Visiting Forces Agreement done? You have to pay,” he said. “It is a shared responsibility, but your share of responsibility does not come free, after all, when the war breaks out we all pay.”
Getty Images Tensions between the US and Philippines have been on edge for years as recently Duterte openly called for the government to kick out US forces and scrap the VFA altogether, however, the country’s military at this point appears to be more concerned with the growing threat from Beijing in the South China Sea.
Tensions came to a head when last year Duterte told Washington he would cancel the deal, citing the US denying top allies within his government visas over human rights abuses.
According to a Reuters summary of his remarks:
Duterte reiterated that he wanted to avoid confrontation with China over maritime claims that “would lead to something we can hardly afford”.
“(The US) is free to advance their troops in our land … We do not like it because we want to remain neutral,” the ultra-nationalist Duterte added in his speech. “But the exigency of the moment requires their presence here, I am okay with that.”
The troop agreement was recently extended as part of military-to-military talks, and it’s unclear whether the Philippine side will actually push for compensation, or whether Duterte has a specific figure in mind, which he did not specify in the remarks.
Tyler Durden
Sat, 02/13/2021 – 22:00 - Venezuelan Collapse Scam: "Damaged" US Dollar Bills Being Exchanged For Less Than Actual Value
Venezuelan Collapse Scam: “Damaged” US Dollar Bills Being Exchanged For Less Than Actual Value
Authored by J.G.Martinez via The Organic Prepper blog,
When a collapse occurs, aside from the obvious, there are plenty of things that happen. Chaos theory kicks in, and depending on the location, crazy things transpire. An example of this is Singapore and what happened that led to it being one of the world’s safest countries.
A brief history of Singapore: Singapore in the middle 50s and 60s had serious problems: unemployment, housing shortage because of over-population, racial tension, and corruption. Though hospitals were still running, if you wanted care, a bribe was necessary. Mafia and crime were a concern also.
PAP (The People’s Action Party Est 1954) became the ruling political party of Singapore in 1965. PAP took steps to increase the penalties for corruption, something that many countries take lightly. The worst punishments were for those robbing the social programs with the most impact, like health, education, or childhood/elderly care. The governing party also proceeded to pass bills regarding state employees, their positions, and their financial accounts. The reason for monitoring the accounts was to track down those who were giving or accepting bribes. As a result of the new bills, many state employees were sent to jail, thereby cutting down corruption. Some of them even received the death penalty. Drug dealing was another crime punishable by death.
It is important to note Singapore’s justice system collaborated from the beginning to make this happen. Something I believe will never happen in my country.
A new scam has started in Venezuela’s twisted economy
Something I never thought could happen, as it doesn’t have any precedents, has. And it is something that caught me entirely by surprise.
I know my countrymen. They can be so creative they indeed could deserve some award to survive (and even thrive) in harsh environments. They can twist and bend the rules to extreme degrees not seen in other parts of the world, even in South America. And I’m afraid we’re going to see more of this soon.
There is a vast exchange market somewhere – a very dark exchange market.
A deposit is made to someone of 35 Peruvian soles. In turn, they deposit roughly 12-13 million Bolivares, no questions asked. Where did they get the Bolivares? Well, that is a good question. To me, it remains a mystery. Bank fees are ridiculously low, and I doubt they are making money enough to pay the power bill.
They are buying USD, cash, banknotes, considered “in bad shape” or “partially damaged” by the general public. (Public meaning those who have never been outside our borders, of course.)
Not one country I have visited would say this is damaged currency.
However, the shops and supermarkets are demanding banknotes to be in excellent shape. Does this seem suspicious to you? It does to me. (Ok, maybe I have too many TV shows bouncing around in my mind. But it does remind me of a couple of competitors giving El Don, the more significant drug dealer, a bunch of cash. One of them with the banknotes rolled up, a dirty mess in a duffel bag, and the other one a neat series of blocks, wrapped in plastic. You get the point.)
Suppose you are buying groceries or clothes and the banknote has very slight “damage” (a small ink stain, for example, or too many wrinkles). In that case, they immediately try to force the customer to accept less for their money. For example, the customer is told, “This bill is not worth 20$, as it is damaged. We will take it if you accept that it is worth only $15 (or $18, $19…at the cashier’s discretion) in groceries.”
What the…? Come on. How does this work?
“Smart” people will buy “defective” banknotes from an unknowledgeable population that has hardly seen cash dollars in their lives. To them, a little ink stain is a defect. Those “smart” people take advantage of this by blatantly offering 15$ for a 20$ that is quite used or with an ink stain.
Many shops won’t accept these banknotes. Poor people are often forced to sell their damaged notes for less than the actual worth. They will offer 8$ for a 10$ note and 90$ for a 100$ with some “damage.”
Repeat this operation 100 times, and you will collect enough “damaged” cash that will be entirely acceptable across the border. People travel with this stash to buy national currency and return a few hours later to exchange them again. No matter the loss, as it has been indeed already covered with the abuse.
And this, ladies and gentlemen, is an entire commercial activity by itself
It is shameful that people are more than willing to kick their honesty through the window if there is a way to make money with less effort. And if that means they scam a few fellow citizens in the meantime, too bad.
I have to wonder where all of that exchanged money goes. The people have nearly dropped the national currency, mostly electronic, and are using other countries’ currency, such as Colombian peso, Euros, USD, and Brazilian Reals (BRL).
As there is no real exchange system of currency with the outside world, the Bolivares remain whirling endlessly inside our border as it cannot be considered a “reserve” currency. And a real problem in my country as the so-called “dollarization” process (which is NOT) occurs is a shortage of coins and small bills.
To me, this is not a real way to make money. It is part of a subculture that brings out the worst of the human species. How quickly this practice has extended throughout the country makes me realize how some past myths have remained as something forbidden and terrible. As Selco has said, there will always be new rules in a collapse and someone will enforce them.
Oh, and if you are a Venezuelan and are reading this, feel free to send me all of your “damaged” 20$ banknotes you don’t want messing up your wallet anymore. I will be happy to receive them.
Tyler Durden
Sat, 02/13/2021 – 21:30 - Meet The $4,460 EV Some Are Saying Could Dethrone Tesla In China
Meet The $4,460 EV Some Are Saying Could Dethrone Tesla In China
It’s an unlikely adversary, but SAIC-GM-Wuling’s new $4,460 EV could wind up being a Tesla-killer in China.
At least that was the take from Nikkei, who profiled the Wuling Hong Guang Mini EV and called it a car that was “quickly” winning over drivers in China. The car is marketed as a utilitarian “commuting tool”. It measures less than 3 meters long and 1.5 meters wide, yet it can still hold four people (and it’s still probably more comfortable than the third row in a Model Y).
The price starts at 28,800 yuan, or about $4,460. A model with air conditioning sells for $5,000. “If you make a 13,000 yuan down payment, the rest will be interest-free,” a salesman told Nikkei.
While it can’t meet Tesla’s range or performance, it is convenient and is priced well, making it one of China’s best selling new EVs. It has been a win for SAIC Motor, which holds a majority stake in SAIC-GM-Wuling.
The car is called “the people’s commuting tool,” and can go 120 km on a full charge, at up to 100 kph. It can be charged from a standard outlet. “Consumers give high marks to its low cost and its design,” auto analyst Alan Kang said. “It’s sold especially well in Henan and Shandong provinces.”
The EV can be operated without a license, but cannot be driven on highways. But that has just increased its embrace in third tier cities, where more than 60% of its sales take place.
Wuling also says it plans on selling its Hong Guang Mini outside of China eventually. It has already “partnered with a Latvian automaker to sell a version of the car in Europe,” according to Nikkei.
“There was a lot of support from consumers whose incomes fell due to the coronavirus,” one dealer said. “Purchases from the middle class have grown due to the pent-up urge to spend from being unable to go on vacation overseas,” an industry source said.
One thing is for certain: there is no lack of EV competition in China:
Nio has more than doubled its unit sales, putting the company eighth in new-energy vehicle sales last year, up from 13th place. Li Auto multiplied its unit sales 25 times to reach 10th place.
Altogether, China’s five largest EV startups, including WM Motor and Xpeng, expanded unit sales by 150% last year.
And while Tesla has tripled sales in China over the last year, we have documented signs that the fairy tale between Elon Musk and the Chinese government could very well be coming to an end.
Tyler Durden
Sat, 02/13/2021 – 21:00 - The US Ministry Of Woke Propaganda Wants To Cancel You, Me, Fox, & Anyone Else Who Disagrees
The US Ministry Of Woke Propaganda Wants To Cancel You, Me, Fox, & Anyone Else Who Disagrees
Authored by Daisy Luther via The Organic Prepper blog,
There’s a saying that those who do not learn from history are doomed to repeat it.
But I think that there are people who learned from history and want to repeat it.
Don’t get me wrong. If you walked up and asked someone like the little short guy from Facebook who sat on some books at his congressional hearing so he could see over the table or that dude with the dirty looking beard from Twitter or all those so-called journalists frothing at the mouth on CNN whether they wanted to turn our nation into a carbon copy of Hitler’s Germany, they’d be positively aghast at the very notion.
Yet every day on social media, people like me try to share innocuous things, like an article about taco seasoning, I kid you not, and we’re told we aren’t following “community standards.”
For the record, I had waited 15 minutes between posting that article on my personal timeline and was then trying to share it on my frugal living Facebook page. If I’m in trouble for taco seasoning, it probably won’t be long until they kick me off entirely, so if you found this post on social media and want to make sure you see all of our articles, please go here and subscribe – you’ll get a free, full-length copy of The Prepper’s Workbook when you do. You can also find me on Gab, MeWe, and Twitter (for the moment).
If you think this is only happening to conservatives, you’re wrong. I’m an anti-politician, anti-war, lower-case L libertarian who believes that gay married couples should be able protect their legally grown weed with guns.
The American Ministry of Public Enlightenment and Propaganda
The concept that they and their platforms might be the modern version of the Reich Ministry of Public Enlightenment and Propaganda has probably never even crossed their mind. In fact, these people think they’re actively fighting Nazis.
In this essay, I’m not even talking about the horrors of the Holocaust itself. I’m explaining about the very idea that media should all be government-mandated, dissent should be silenced, and those who have different opinions should be crushed was at the very heart of the Reich.
Censorship in WWII Germany was the key to controlling the populace and Propaganda Minister Joseph Goebbels eagerly took control of the news, literature, filmmaking, theatre, music, and all forms of broadcasting in order to present the illusion of a united front that eagerly and vehemently supported Adolph Hitler and all the evils that occurred under his reign.
Does this sound familiar?
The current culture of outrage and cancellation is busily trying to shut down dissenting opinions. They’re picking through social media posts from a dozen years ago and “canceling” someone for a meme they posted or an offhand remark they made way back when. It’s obvious that the goal is to silence anyone who might have some small amount of influence over others in order to show the rest of the country, “Look, everyone agrees! We must be right because all the popular people say we are!”
It’s a worrisome fact that most of the people holding the microphones right now have the influence, power, and money to set the tone for our country. They have the platforms, the money, the power, and the ability to silence the rest of us peons who simply want to be left alone with our guns, our gardens, our favorite websites, and our own religious beliefs.
The fact that the United States is even considering a position called the “reality czar” should alert you to the fact that reality will not be judged by what’s happening – you know, actual reality – but by what this “czar” is told the people should believe to be the truth. And yes, there are people who really, truly believe there should be a reality czar like this yahoo at the New York Times.
Several experts I spoke with recommended that the Biden administration put together a cross-agency task force to tackle disinformation and domestic extremism, which would be led by something like a “reality czar.”
It sounds a little dystopian, I’ll grant. But let’s hear them out.
Right now, these experts said, the federal government’s response to disinformation and domestic extremism is haphazard and spread across multiple agencies, and there’s a lot of unnecessary overlap.
Renée DiResta, a disinformation researcher at Stanford’s Internet Observatory, gave the example of two seemingly unrelated problems: misinformation about Covid-19 and misinformation about election fraud. (source)
He even admits it “sounds a little dystopian.” You THINK? Perhaps that is because it is positively and unarguably dystopian. That might be why it sounds that way. And he’s not alone.
Another dude at Wired thinks we need a literal federal Ministry of Truth to monitor deepfakes and disinformation. (Much like the Patriot Act is not patriotic, I’m pretty sure we should not expect a Ministry of Truth to be truthful.)
So, what about a new federal agency? A central body tasked with combating disinformation, parsing fact from fiction and thereby ensuring Americans’ collective sanity when the flood of fakes truly arrives: a Bureau of Information, a Department of Facts, a Ministry of … Truth!
Full circle, and we’re back at dystopia. The idea might sound absurd, unimaginable even: Washington bureaucrats regulating reality itself, dictating to Americans what’s true and what isn’t.
Is it really so crazy? The EPA protects our environment, the FDA protects our bodies, the DHS protects our borders. In the era of indistinguishability, difficult choices will need to be made in order to protect our minds. When the fakes come for you and yours—when, for example, your adolescent child is deepfaked by an internet bully—you might want a Ministry of Truth that actually lives up to the name, that doesn’t falsify but certifies the truth, that assertively stamps its authority atop fake videos: “This content is not real.” American history includes no shortage of necessary (if at first uneasy) interventions, in which citizens trade some degree of individual autonomy for collective peace of mind: “FDA-approved” food and drugs; “MoT-approved” audio and video. (source)
All these people are admitting these ideas are dystopian but they’re absolutely and totally cool with that and they want you to be cool with it too. THEY LITERALLY WANT A F*CKING DYSTOPIA.
A bunch of people think we need a “reality czar” in the United States of America.
Any person who suggests that shutting every opinion that is different from theirs is “disinformation and domestic extremism” is actually the person committing the act of domestic extremism. That’s because our founding document states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
A government-appointed reality czar would most certainly abridge the freedom of speech and the press and while it would not be a law passed by Congress, it would be an arm of the government, making such a position undeniably unconstitutional.
First of all, we aren’t a kingdom and we don’t need any czars. The term “czar” comes from Tsarist Russia (and here everyone said Trump was in bed with Russia. The irony pretty much writes itself.) A quick refresher on tsars:
Russia was ruled by Tsars who had ultimate authority on all matters of governance. The oppressive system left no room for change and brewed revolutionary ideas and aspirations…Tsars believed that they had a divine right to rule Russia, their position and power had been given to them by God. (source)
Let’s just get rid of that whole icky term, “czar,” shall we?
In fact, we already have a Ministry of Propaganda and they manipulated the election.
Many of our problems in the United States today stem from the mainstream media, which has been sh*t-disturbing and causing near-civil war for years now, and social media, which is manipulated to make us feel a certain way emotionally or to make us believe a certain way socially because “everyone else does.”
And that’s a lot more troubling than you might think. These manipulations can change something as massive as the presidential and congressional elections. There was, in fact, a joint effort to do just that and they aren’t even being coy about it.
Time magazine flat out admitted that the election was “swayed” by “steering media coverage” and “controlling the flow of information.”
And if you don’t like it? You’d better be quiet about it or you’ll get “canceled” too. Just look at what happened to Parler and what’s happening right now to Gab. Parler got kicked off their server and Gab has lost access to nearly every way they can take payments.
If you dissent, the Woke Folks will make an example of you. You lose your job. You lose your business. You get starved out. You get publicly humiliated. You get doxxed.
Now even the press is trying to silence the press.
Also, I have a news flash: “the press” is not just CNN and other left-leaning media outlets. Legally, “the press” is defined as follows:
All men have a right to print and publish whatever they may deem proper, unless by doing so they infringe the rights of another, as in the case of copyrights, (q.v.) when they may be enjoined. For any injury they may commit against
the public or individuals they may be punished, either by indictment, or by a civil action at the suit of the party
injured, when the injury has been committed against a private individual. Vide Const. of the U. S. Amend. art. 1, and Liberty of the Press. (source)With the advent of the internet, “the press” became much, much bigger. Alternative news outlets are the press. Citizen journalists are the press. YouTubers, bloggers, and authors. We are all the press, every single one of us, and we are free human beings who have a constitutional right to dissent.
And it isn’t just the little people they want to silence. The Woke Folks want to “take down” Fox News. I’m not saying Fox is perfect – I rarely ever watch mainstream news – but they are the only mainstream holdout that isn’t far left and ready to cancel everybody.
Loads of pundits are unironically accusing Fox of doing precisely what they do – brainwashing the masses. It’s utter madness, even if they weren’t also sharing their own opinions like they are the Gospel, to believe that opinions should be punished, outlawed, and disappeared like a terrorist getting black-bagged to Guantanomo.
A guy at The Daily Beast is rubbing his hands together in glee at the very idea of people refusing to pay for Fox on basic cable, taking away a couple of bucks per person because he believes that a report from The Lancet about the spread of Covid “put the cherry on top of the “this was basically Trump’s fault” sundae.”
Some fellow on the Washington Post doesn’t think boycotting Fox’s advertisers is extreme enough. He isn’t happy about the financial impact of defamation suits. He’s bitterly disappointed that “cable giants like AT&T, Comcast and Charter Spectrum” have failed to removed Fox and Newsmax from the airways, stating sadly, “But the cable systems have shown little willingness to police their offerings.” He fervently wishes Fox could be “impeached.”
And he’s not alone.
On the program “Morning Joe,” Anand Giridharadas of MSNBC questioned whether Fox News “is a thing that should exist in America.”
…
Nicholas Kristof from the Times wrote, “We must clear an ecosystem of mass delusion spread by Fox News and many Republicans” in a recent opinion piece.
And Oliver Darcy from CNN again pointed fingers at AT&T, Verizon, Comcast, Charter, and Dish—which host channels like Fox News—and said, “it is time TV carriers face questions for lending their platforms to dishonest companies that profit off of disinformation and conspiracy theories.” (source)
Journalists who should be the people fighting the hardest for a free press are going to the mat to shut down those who they believe are engaged in Wrongthink. It’s like we woke up and instead of 2021, we’ve been transported straight into Orwell’s version of 1984.
And here’s how a real Ministry of Propaganda and Public Enlightenment works.
Once the opposition has been crushed and silenced, all that will be left is state-run media.
Like the Xinhua News Agency in communist China, everything that is published will be government approved. Let’s take a look at that news agency (emphasis mine):
Xinhua News Agency or New China News Agency is the official state-run press agency of the People’s Republic of China. Xinhua is the biggest and most influential media organization in China, as well as the largest news agency in the world in terms of correspondents worldwide. Xinhua is a ministry-level institution subordinate to the State Council and is the highest ranking state media organ in the country alongside the People’s Daily. Its president is a member of the Central Committee of the Chinese Communist Party…
…The news agency has faced criticism of spreading propaganda and criticising people or movements critical of the CCP.
Xinhua is a publisher as well as a news agency—it owns more than 20 newspapers and a dozen magazines and it publishes in several languages, besides Chinese, including English, French, German, Spanish, Portuguese, Russian, Arabic, Japanese and Korean. Scholars have noted that Xinhua tailors its pro-CCP message to the nuances of each audience. (source)
The United States of America is behaving like Communist China and Americans are not just watching, they’re cheering it on. The major mainstream networks are all vying to don the cloak of being the state-approved media outlet and they’ll probably all get a kick at it to make us believe we have a choice about the “news” we consume.
Today it might be libertarians and conservatives in the domestic terrorist crosshairs. But I assure you, if these people have their way, the target will be ever-moving until nothing is left but a shell of our great country, picked clean by the elite who planned the ultimate coup.
Tyler Durden
Sat, 02/13/2021 – 20:30 - "Embarrassed & Disgusted" Biden Spox "Resigns" After Threatening To "Destroy" Reporter
“Embarrassed & Disgusted” Biden Spox “Resigns” After Threatening To “Destroy” Reporter
Update (Sat 2/13, 2000ET): Facing a torrent of shockingly unsupportive headlines over the hypocrisy of the treatment of a Biden spokesperson’s threats to “destroy” a female reporter, it appears TJ Ducklo is no longer working at The White House.
After being merely suspended for just one week, White House deputy press secretary TJ Ducklo has “resigned”
“We accepted the resignation of TJ Ducklo after a discussion with him this evening,” White House press secretaryPsaki said in a statement.
She added that “This conversation occurred with the support of the White House Chief of Staff.”
And ended with some good old-fashioned virtue-signaling:
“We are committed to striving every day to meet the standard set by the President in treating others with dignity and respect, with civility and with a value for others through our words and our actions.”
And in an effort that is surely meant to be the beginning of an effort to ever get another job in Washington, Ducklo also issued a statement on Twitter:
“No words can express my regret, my embarrassment, and my disgust for my behavior. I used language that no woman should ever have to hear from anyone, especially in a situation where she was just trying to do her job. It was language that was abhorrent, disrespectful and unacceptable,” he said.
“I am devastated to have embarrassed and disappointed my White House colleagues and President Biden, and after discussion with White House communications leadership tonight, I resigned and will not be returning from administrative leave.”
“I know this was terrible. I know I can’t take it back. But I also know that I can learn from it and do better. This incident is not representative of who I am as a person, and I will be determined to earn back the trust from everyone I have let down because of my intolerable actions.”
We wonder how long before CNN or MSNBC hire him?
* * *
Biden Deputy press secretary TJ Ducklo, famous for having an on-air meltdown during the election over a teleprompter question, has been placed on a one-week suspension without pay after he threatened to “destroy” a Politico reporter working on a story about Ducklo’s previously undisclosed relationship with Axios political reporter, Alexi McCammond – who covered the Biden campaign.
As Vanity Fair reported on Friday, Ducklo lashed out at a Politico reporter who was working on a story about his relationship with McCammond – except, instead of contacting the male reporter who reached out to him for comment, Ducklo instead called and threatened a female co-author – Politico‘s Tara Palmieri, in what Vanity Fair describes as sexual harassment.
“I will destroy you,” said Ducklo, according to the report – adding that he would ruin her reputation if she published it.
During the off-the-record call, Ducklo made derogatory and misogynistic comments, accusing Palmeri of only reporting on his relationship—which, due to the ethics questions that factor into the relationship between a journalist and White House official, falls under the purview of her reporting beat—because she was “jealous” that an unidentified man in the past had “wanted to fuck” McCammond “and not you.” Ducklo also accused Palmeri of being “jealous” of his relationship with McCammond. (Palmeri had no prior relationship or communication with McCammond before calling her to report on the Playbook item, which was a story that she was assigned and had not independently pursued.) –Vanity Fair
As an aside, this is exactly the type of behavior President Biden promised to fire people “on the spot” for.
“I’m not joking when I say this, if you ever work with me and I hear you treat another colleague with disrespect, talk down to someone, I promise I will fire you on the spot.
On the spot.” pic.twitter.com/LvEsY94gS4
— Washington Examiner (@dcexaminer) February 12, 2021
Apparently threatening to ‘destroy’ a journalist doesn’t ‘meet their standard’ for firing.
WH Press Sec. Jen Psaki when asked about Biden’s “fire you on the spot” promise with regards to the TJ Ducklo situation: “It doesn’t meet our standard. It doesn’t meet the president’s standard.” pic.twitter.com/oztJCHXn4o
— Julio Rosas (@Julio_Rosas11) February 12, 2021
Of course, the White House issued an apology and all is better now. Ducklo won’t be “assigned to work with any reporters at Politico” when he’s back from his one-week slap on the wrist.
Instead @PressSec tried to cover up her deputy sexually harassing a female reporter https://t.co/GGOHWYRs66
— Jack Posobiec 🇺🇸 (@JackPosobiec) February 12, 2021
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Following the incident, an editor at Politico reached out to the White House about the threats – which led to multiple conversations with White House officials on January 21, “including White House Press Secretary Jen Psaki, White House Communications director Kate Bedingfield, and Anita Dunn, director of West Wing operations.”
In one of those calls, senior White House officials acknowledged that Ducklo’s handling of the call with Palmeri was inappropriate and said he would send a note to her apologizing for the comments. In another conversation, the same White House officials took aim at Palmeri by accusing her of breaking an off the record agreement with Ducklo and pressing Politico as to why the contents of the call had been revealed. Palmeri had only informed her editors of the contents of the call, which she had transcribed into her notes as it was happening, after they asked her about it. –Vanity Fair
Imagine the two-week news cycle this would have created if it had been a Trump spox…
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Tyler Durden
Sat, 02/13/2021 – 20:05 - Incoming SEC Chair Gary Gensler Could Be Worth Up To $119 Million
Incoming SEC Chair Gary Gensler Could Be Worth Up To $119 Million
President Joe Biden’s nominee to be chairman of the Securities & Exchange Commission, Gary Gensler, who we profiled here and is referred to as “the sheriff”, could have a net worth between $41 million and $119 million.
Gensler was previously the chairman of the CFTC and a partner at Goldman Sachs. He disclosed his net worth as part of disclosures he had to file with the Office of Government Ethics, Bloomberg noted on Friday. A majority of his money was made at Goldman, where he joined in the late 1970’s after graduating from the University of Pennsylvania. He became one of the youngest partners in Goldman Sachs history.
Gensler’s largest holding is a stake worth $25 million and $50 million in the Vanguard Total Stock Market ETF. He also disclosed that he had between $50,000 and $100,000 in capital gains from holding shares of Tesla, the only stock that is listed individually on his disclosures. He has since sold the position.
He also disclosed that he will participate in a benefit plan from Goldman Sachs which is expected to pay out $977 per month starting at age 71.
Recall, we wrote about Gensler’s nomination in mid-January.
His arrival will likely be a stark difference from the last 4 years of Jay Clayton, as Gensler’s resume includes going to war with major financial titans when he was head of the Commodity Futures Trading Commission – and winning. Financial lobbyists sometimes simply called him “the enemy” during the 2010 Dodd-Frank Act battle.
Justin Slaughter, a consultant at Mercury Strategies, said: “The sheriff is coming to the preeminent financial regulator in the world. It means regulation and enforcement are about to get much tougher.”
When he arrives at his post, Gensler will not only have to deal with a Fed-induced stock market mania, but also tensions with China and the growth of private equity.
Graham Steele, who served as an aide to Senator Sherrod Brown of Ohio, said: “He developed a reputation for being adversarial to Wall Street because he came from the industry and understood the business so he could push back against their arguments when they were hollow.”
Ian Katz, an analyst at Capital Alpha Partners in Washington, commented: “What’s really unnerving to a lot of people is that it’s pretty clear that he doesn’t need them. He doesn’t need to go back there for a job, he’s made his money. He’s not terribly interested in who he ticks off or not and that’s very powerful.”
Tyler Durden
Sat, 02/13/2021 – 20:00 - Socialism Never Works
Socialism Never Works
Authored by John Stossel, op-ed via Townhall.com,
Last week, I reported on two myths about socialism. My new video covers three more.
Myth No. 3: Socialism works if it’s “democratic.”
As the Democratic Socialists of America put it, “Society should be run democratically — to meet public needs, not to make profits for a few.”
Sounds nice. If socialists are elected, then we’ll have a more just society.
But Venezuela’s socialists were elected.
“They can start off democratically elected,” says economist Ben Powell, director of the Free Market Institute at Texas Tech, but “once they centralize control over the economy, it becomes impossible to ‘un-elect’ them.”
Hugo Chavez was elected but became an authoritarian who chose his successor, Nicolas Maduro. Maduro now gets “elected,” by having opponents arrested and “ordering state employees to vote for him or they lose their job,” says Powell.
“Socialism always becomes authoritarian?” I ask.
“Everywhere you try socialism, that’s what you get,” he replies. “It’s hard to exercise political freedom if you don’t have economic freedoms. If you’re dependent upon the state for your livelihood, you lose your ability to use your voice to oppose (the state) because you can be punished.
And if the state directs the economy, some government department must manage millions of production decisions and prices. That never works. No bureaucrat can anticipate the needs and wants of millions of people in different places. No politician can match the wisdom of decentralized entrepreneurs making subtle adjustments constantly.
Celebrities like Rosario Dawson, Susan Sarandon and Danny DeVito star in videos selling “democratic” socialism as “public schools” and “interstate highways.”
They are not wrong. “Some industries are government-owned,” replies Powell, but “when you look at things that are inefficiently done — public education, our congested streets — (it’s clear) socialized industries don’t work well.”
“They do in Scandinavian countries!” say socialism’s promoters.
That’s myth No. 4.
Scandinavia does have big welfare programs, but capitalism pays for them.
The socialists call Sweden socialist, but that’s just wrong. “Volvo is a private company,” says Powell. “Restaurants and hotels are privately owned. Markets organize the vast majority of Swedish economic activity.”
Sweden did once try socialism. The result was high taxes, inflation and economic decline. It’s an example of how people in prosperous places often don’t know what made their lives better.
In 1950, Sweden was the world’s fourth-richest country. Then Sweden tried socialism. Suddenly, once industrious Swedes started taking sick days. Wealth creation stopped.
“Talent and capital stormed out of Sweden to escape taxes and red tape,” writes Swedish historian Johan Norberg. “Businesses moved headquarters and investments to more hospitable places. IKEA left for the Netherlands… Bjorn Borg and other sports stars fled to Monaco.”
Sweden recovered only when it ended its socialist experiment. They cut taxes, government spending, and sold state-owned businesses.
After economically ignorant politicians like Bernie Sanders called Scandinavia “socialist,” Denmark’s prime minister even came to America to say: “Denmark is far from a socialist planned economy. Denmark is a market economy.”
In fact, in rankings of economic freedom, Denmark ranks as more free market than the United States.
Myth No. 5: Socialism is completely different from fascism.
In Congress, Rep. Louie Gohmert called Hitler a “socialist.” Rep. Steve Cohen took offense, shouting, “It’s the Nazis that were terrible, not the socialists!”
But Nazis were “national socialists.” There are differences between fascism and socialism, but “both replace market decision-making with command and control,” says Powell. Fascism “leaves private ownership in nominal terms” but neither system allows individual freedom. “You lose… control over your own future. Only under capitalism do you have the freedom to say, ‘No.'”
Socialism appeals to people today because it promises “equality and social justice,” but look at its track record. In Russia, Cuba, North Korea, Nicaragua, Vietnam and China, socialism has meant a loss of freedom.
Socialist experiments also failed in Israel, India, Great Britain, Afghanistan, Syria, Algeria, Cambodia, Somalia, etc. There are no socialist success stories.
Only capitalist countries create real wealth.
“The history of humanity is poverty, starvation, early death,” Powell points out. “In the last 20 years, we’ve seen more humans escape extreme poverty than any other time in human history. That’s because of markets!”
Yet, millions vote for socialism.
Tyler Durden
Sat, 02/13/2021 – 19:30 - Top US Nuclear Lab At Risk Of Major Wildfire, Warns Audit
Top US Nuclear Lab At Risk Of Major Wildfire, Warns Audit
An audit by the US Department of Energy, Office of Inspector General (DOE-OIG) found that the nation’s top nuclear laboratory is not taking the necessary precautions to safeguard the facility from wildfires.
The audit, titled “The Department of Energy’s Wildland Fire Prevention Efforts at the Los Alamos National Laboratory,” raised concerns about fire management plans have not properly been followed and may pose a significant risk to the facility if a wildfire were to materialize in the area.
DOE-OIG’s audit comes as the West Coast experienced one of the worst years for wildfires. Presently, the US Drought Monitor, prepared by the U.S. Department of Agriculture (USDA), shows LANL and the surrounding region are experiencing severe drought conditions.
The audit found LANL’s plan to mitigate wildfire risks have lacked in recent years:
Specifically, mitigation measures such as tree thinning identified in the 2014 LANL Forest Management Plan (Forest Plan) and 2016 LANL Five-Year Wildland Fire Management Plan (Wildland Fire Plan), which are necessary to reduce the risk of crown fires, were not always performed, increasing the potential for a devastating wildland fire to spread
In addition, not all fire roads were maintained in a state to ensure safe passage for firefighters and equipment responding to wildland fires in undeveloped areas of LANL, which could create dangerous conditions for emergency responders and delay response times
Further, we could not obtain evidence demonstrating that annual planning and preparedness activities were completed as required. Without documenting planning and preparedness activities, there was no assurance that all prevention and mitigation options were considered and that the site was fully prepared for wildland fire events.
These issues occurred, in part, because a comprehensive, risk-based approach to wildland fire management had not been developed at LANL in accordance with the Federal Wildland Fire Management Policy (Federal Policy).
The National Nuclear Security Administration’s LANL is the home to the atomic bomb, and development continues today in nuclear technology research. The facility is also home to the world’s largest science and technology research labs.
The audit included one picture that depicted an overgrown fire road. In this area, DOE-OIG said, “there were approximately 400–500 trees per acre in this canyon; however, the ideal number should be 40–50 trees per acre.”
Here’s another example of a poorly maintained fire road.
It was not immediately clear what LANL’s 2021 fire management plans are to mitigate the emerging threat of wildfires that could cripple the nation’s top nuclear lab.
Tyler Durden
Sat, 02/13/2021 – 19:00 - Indoor Dining At 25% Capacity Is Not Enough To Stay Alive, NYC Restaurateurs Say
Indoor Dining At 25% Capacity Is Not Enough To Stay Alive, NYC Restaurateurs Say
Authored by Erika Abrams via NY.Eater.com,
Even if NYC returns to indoor dining at 25 percent capacity this winter, some restaurant owners say the allowance is still not enough to make a meaningful impact on business during the pandemic.
According to a New York Post report, some owners are aghast that Gov. Andrew Cuomo is once again considering limiting NYC to 25 percent capacity indoors while neighboring areas including Long Island can operate at 50 percent capacity indoors.
Syed Hossain, the owner of Tikka Indian Grill in Williamsburg, tells the Post that the allowance is “stupid” and the restaurant would be “losing money” at 25 percent capacity.
Staten Island restaurateur Vincent Malerba added that the capacity limit was a “joke” and then speculated to the Post that maybe Cuomo hated the industry because his former girlfriend, Sandra Lee, was a celebrity chef.
“The restaurants are packed in Nassau and I feel like I’m going to f—ing shoot myself! Are you f—ing kidding me?!” fumed Rocco Sacramento, the owner of Trattoria L’Incontro in Astoria, Queens.
NYC restaurants were previously allowed to reopen at 25 percent capacity indoors last fall following an initial ban in March. A little over two months later, in December, indoor dining was banned for a second time following a rise in positive COVID-19 case counts in the city.
Cuomo said on Wednesday that the state will unveil a plan detailing how NYC restaurants may return to indoor dining – at 25 percent capacity – by the end of this week.
Tyler Durden
Sat, 02/13/2021 – 18:30 - Third Of Americans Skeptical Of COVID Vaccine, Says Poll
Third Of Americans Skeptical Of COVID Vaccine, Says Poll
Good news (and bad news) America!
The great news is that on Wednesday, approximately 33.8 million people have received at least one COVID-19 shot, including 10.5 million people who have been fully vaccinated, according to the Centers for Disease Control and Prevention (CDC). Now for the bad news. A new study shows about 1 in 3 of respondents won’t get the vaccine.
The poll, commissioned by The Associated Press-NORC Center for Public Affairs Research, found 67% of respondents are willing to get vaccinated, are in the process of waiting for a shot, or have already done so. The poll uncovered a surprisingly large part of respondents who are vaccine skeptics.
About 15% of the respondents said they wouldn’t take the vaccine, and 17% said probably not. Many of these people were concerned about their health since there was no extensive vaccine testing. They questioned the vaccine’s safety and effectiveness.
About a month and a half into the vaccine rollout, the poll suggests vaccine skeptics continue to increase.
“Resistance was found to run higher among younger people, people without college degrees, Black Americans and Republicans,” AP said.
Dr. Anthony Fauci, the White House pandemic adviser, has said between 70% and 85% of the US population needs to be vaccinated to achieve herd immunity and defeat the outbreak.
… and at 67% of Americans planning to get vaccinated – that may not be enough.
A similar survey via the Kaiser Family Foundation recently found that 31% of Americans said they want to see more results about the vaccine’s effectiveness and side effects before committing to the shot.
Additionally, 13% of respondents completely refused to take it, and another 7% claim they only will if forced, bringing the total of respondents reluctant to take or hesitant of the vaccine to 51%.
The latest numbers reflect American’s growing distrust in the governmental effort to distribute and have the vaccine administered.
One health expert was concerned with AP’s poll results.
“No. No, no, no, no,” said William Hanage, a Harvard University expert on disease dynamics.
Hanage added: “You’re going to need to get quite large proportions of the population vaccinated before you see a real effect.”
AP’s poll was conducted among 1,055 adults between Jan. 28 through Feb. 1, which provides further insight into the growing skepticism behind the federal government and mega-corporations pushing the population to get vaccinated.
After all, Johnson & Johnson CEO Alex Gorsky told CNBC on Tuesday that Americans may need to be vaccinated yearly against COVID-19.
Vaccine skepticism has been growing beyond the US and, according to Katie Jones of VisualCapitalist, has become an international phenomenon, with at least a third of the global population having some concerns.
View the high-resolution of the infographic by clicking here. To vaccinate, or not to vaccinate? That is the question.
Tyler Durden
Sat, 02/13/2021 – 18:00 - Two Hedge Fund Billionaires Spend Over $200 Million On Palm Beach Mansions
Two Hedge Fund Billionaires Spend Over $200 Million On Palm Beach Mansions
They made the money, now it’s time to spend it.
Just days after we learned that the rich got much richer in 2020 as the top 15 hedge fund billionaires added a cool $23 billion to their net worth, we now find out how they are spending it.
Back in 2016, when David Tepper announced he was moving his home and business to Florida, he set off alarms with the tax accountants at his prior home state of New Jersey: He and his hedge fund Appalloosa paid so much in state tax that his departure put New Jersey’s budget at risk. Four year later however, in 2020, New Jersey lawmakers breathed a sigh of relief when Tepper returned, shoring up the state’s finances.
But for the perpetually fiscally-challenged Garden State it may be time to freak out again. As the WSJ reports, Tepper has rekindled his love affair with the Sunshine State and has planted a new flag in Florida soil. The billionaire “balls to the wall” hedge-fund manager and owner of the Carolina Panthers football team is reportedly in contract to buy a $73 million mansion in Palm Beach.
Amid the exodus of hedge funders from the tri-state area who are fleeing New York’s soaring taxes and piling into the tax-free state, it wasn’t immediately clear whether Tepper and his family will make Florida their primary residence again; a WSJ call to New Jersey Senate President Steve Sweeney’s office was not immediately returned.
If it closes, the WSJ notes that the deal would be the latest in a string of ultra-pricey transactions in Palm Beach where billionaires are running out of houses to buy.
The sellers of the Tepper home are longtime Palm Beach residents Patrick and Lillian Carney. The property, which wasn’t publicly listed for sale, sits directly on the ocean and on the edge of the Palm Beach Country Club. The Carneys had approval to build a roughly 12,000-square-foot Bermuda-style house on the site, records show.
Tepper’s new house sits directly on the ocean and on the edge of the Palm Beach Country Club. Records show Tepper still owns a condominium at the Ocean House condominium complex in Miami Beach, which he bought for $10.7 million in 2017.
At the same time, in another transaction involving land formerly owned by Donald Trump, Tiger Global Management executive Scott Shleifer who is co-founder of the firm’s private-equity unit which oversees $40 billion, bought a nine-bedroom, 21,000-square-foot house which was listed for $140 million a few weeks ago, Bloomberg reported.
The purchase price set a new price record, not only in Palm Beach but likely for Florida, according to Palm Beach Daily News.
Scott Shleifer is the owner of a $140 million house at 535 N. County Road which has an oceanfront pool. The transaction price broke all previous records. The never-lived-in house was developed on speculation and listed for sale in early January with a record-setting price tag for Palm Beach of $140 million, completely furnished.
A separate guesthouse at 535 N. County Road has its own pool. The estate was developed on land once owned by Donald Trump. The house and its separate guest house have a total of nine bedrooms and 21,066 square feet of living space, inside and out, of which 15,350 is under air conditioning, the sales listing shows. Just south of the estate owned by billionaire Nelson Peltz, the property lies on a stretch of beachfront sometimes called the North End’s Billionaires Row.
A trust associated with Russian billionaire Dmitry Rybolovlev bought the investment estate in the 500 block of North County Road from Trump in July 2008 and eight years later razed a mansion there to subdivide the land. In October 2017, Rybolovlev sold the lot at No. 535 to the developers of the house that changed hands this week.
Naturally the mansion comes with its own local watering hole. As noted earlier this week, Tiger Global earned its investors $10.4 billion in 2020 “the most of any hedge fund that made the annual list of the top 20 managers compiled by London fund-of-funds firm LCH Investments,” InstitutionalInvestor.com reported in late January.
The property faces 150 feet of oceanfront on a 2 acre lot. The transaction smashed a previous price record set in June 2019 by Ken Griffin who bought an oceanfront house at 60 Blossom Way adjacent to his massive South End estate for $99.13 million from investor Frank McCour.
For their sake, and also for the sake of other billionaires, one can only hope that the rioters du jour never figure out that instead of burning down pastry shops and looting Nike stores, if they want to achieve tangible change they should focus all their attention on Palm Beach which has more billionaires per square mile than any other place in the world.
Tyler Durden
Sat, 02/13/2021 – 17:55 - Where Energy Modeling Goes Wrong
Where Energy Modeling Goes Wrong
Authored by Gail Tverberg via Our Finite World blog,
There are a huge number of people doing energy modeling. In my opinion, nearly all of them are going astray in their modeling because they don’t understand how the economy really operates.
The modeling that comes closest to being correct is that which underlies the 1972 book, The Limits to Growth by Donella Meadows and others. This modeling was based on physical quantities of resources, with no financial system whatsoever. The base model, shown here, indicates that limits would be reached a few years later than we actually seem to be reaching them. The dotted black line in Figure 1 indicates where I saw the world economy to be in January 2019, based on the limits we already seemed to be reaching at that time.
Figure 1. Base scenario from 1972 Limits to Growth, printed using today’s graphics by Charles Hall and John Day in “Revisiting Limits to Growth After Peak Oil,” with dotted line added corresponding to where I saw the world economy to be in January 2019, based on how the economy was operating at that time.
The authors of The Limits to Growth have said that their model cannot be expected to be correct after limits hit (which is about now), so even this model is less than perfect. Thus, this model cannot be relied upon to show that population will continue to rise until after 2050.
Many readers are familiar with Energy Return on Energy Invested (EROEI) calculations. These are favorites of many people following the Peak Oil problem. A high ratio of Energy Returned to Energy Invested is considered favorable, while a low ratio is considered unfavorable. Energy sources with similar EROEIs are supposedly equivalent. Even these similarities can be misleading. They make intermittent wind and solar appear far more helpful than they really are.
Other modeling, such as that by oil companies, is equally wrong. Their modeling tends to make future fossil fuel supplies look far more available than they really are.
This is all related to a talk I plan to give to energy researchers later in February. So far, all that is pinned down is the Summary, which I reproduce here as Section [1], below.
[1] Summary: The economy is approaching near-term collapse, not peak oil. The result is quite different.
The way a person views the world economy makes a huge difference in how one models it. A big issue is how connected the various parts of the economy are. Early researchers assumed that oil was the key energy product; if it were possible to find suitable substitutes for oil, the danger of exhaustion of oil resources could be delayed almost indefinitely.
In fact, the operation of the world economy is controlled by the laws of physics. All parts are tightly linked. The problem of diminishing returns affects far more than oil supply; it affects coal, natural gas, mineral extraction in general, fresh water production and food production. Based on the work of Joseph Tainter, we also know that added complexity is also subject to diminishing returns.
When a person models how the system works, it becomes apparent that as increasing complexity is added to the system, the portion of the economic output that can be returned to non-elite workers as goods and services drops dramatically. This leads to rising wage disparity as increasing complexity is added to the economy. As the economy approaches limits, rising wage disparity indirectly leads to a tendency toward low prices for oil and other commodities because a growing number of non-elite workers are unable to afford homes, cars and even proper nutrition.
A second effect of added complexity is growing use of long-lasting goods available through technology. Many of these long-lasting goods are only affordable with financial time-shifting devices such as loans or the sale of shares of stock. As non-elite workers become increasingly unable to afford the output of the economy, these time-shifting devices provide a way to raise demand (and thus prices) for commodities of all types, including oil. These time-shifting devices are subject to manipulation by central banks, within limits.
Standard calculations of Energy Returned on Energy Invested (EROEI) ignore the fact that added complexity tends to have a very detrimental impact on the economy because of the diminishing returns it produces. To correct for this, today’s EROEI calculations should only be used to compare energy systems with similar complexity. The least complex energy systems are based on burned biomass and power from animals. Fossil fuels represent a step upward in complexity, but they still can be stored until their use is required. Intermittent renewables are far ahead of fossil fuels in terms complexity: they require sophisticated systems of storage and distribution and therefore cannot be considered equivalent to oil or dispatchable electricity.
The lack of understanding of how the economy really works has led to the failure to understand several important points:
(i) Low oil prices rather than high are to be expected as the economy reaches limits,
(ii) Most fossil fuel reserves will be left in the ground because of low prices,
(iii) The economy is experiencing the historical phenomenon of collapse, rather than peak oil, and
(iv) If the economy is not to collapse, we need energy sources providing a larger quantity of net energy per capita to offset diminishing returns.
[2] The world’s energy problem, as commonly understood by researchers today
It is my observation that many researchers believe that we humans are in charge of what happens with future fossil fuel extraction, or with choosing to substitute intermittent renewables for fossil fuels. They generally do not see any problem with “running out” in the near future. If running out were imminent, the problem would likely be announced by spiking prices.
In the predominant view, the amount of future fossil fuels available depends upon the quantity of energy resources that can be extracted with available technology. Thus, a proper estimate of the resources that can be extracted is needed. Oil seems to be in shortest supply based on its reserve estimates and the vast benefits it provides to society. Thus, it is commonly believed that oil production will “peak” and begin to decline first, before coal and natural gas.
In this view, demand is something that we never need to worry about because energy, and especially oil, is a necessity. People will choose energy over other products because they will pay whatever is necessary to have adequate energy supplies. As a result, oil and other energy prices will rise almost endlessly, allowing much more to be extracted. These higher prices will also enable higher cost intermittent electricity to be substituted for today’s fossil fuels.
A huge amount of additional fossil fuels can be extracted, according to those who are primarily concerned about loss of biodiversity and climate change. Those who analyze EROEI tend to believe that falling EROEI will limit the quantity of future fossil fuels extracted to a smaller total extracted amount. Because of this, energy from additional sources, such as intermittent wind and solar, will be required to meet the total energy demand of society.
The focus of EROEI studies is on whether the EROEI of a given proposed substitution is, in some sense, high enough to add energy to the economy. The calculation of EROEI makes no distinction made between energy available only through highly complex systems and energy available from less complex systems.
EROEI researchers, or perhaps those who rely on the indications of EROEI researchers, seem to believe that the energy needs of economies are flexible within a very wide range. Thus, an economy can shrink its energy consumption without a particularly dire impact.
[3] The real story seems to be that the adverse outcome we are reaching is collapse, not peak oil. The economy is a self-organizing system powered by energy. This makes it behave in very unexpected ways.
[3a] The economy is tightly connected by the laws of physics.
Energy consumption (dissipation) is necessary for every aspect of the economy. People often understand that making goods and services requires energy dissipation. What they don’t realize is that almost all of today’s jobs require energy dissipation, as well. Without supplemental energy, humans could only gather wild fruits and vegetables and hunt using the simplest of tools. Or, they could attempt simple horticulture by using a stick to dig a place in the ground to plant a seed.
In physics terms, the economy is a dissipative structure, which is a self-organizing structure that grows over time. Other examples of dissipative structures include hurricanes, plants and animals of all types, ecosystems, and star systems. Without a supply of energy to dissipate (that is, food to eat, in the case of humans), these dissipative structures would collapse.
We know that the human body has many different systems, such as a cardiovascular system, digestive system and nervous system. The economy has many different systems, too, and is just as tightly connected. For example, the economy cannot get along without a transportation system any more than a human can get along without a cardiovascular system.
This self-organizing system acts without our direction, just as our brain or circulatory system acts without our direction. In fact, we have very little control over these systems.
The self-organizing economy allows common belief systems to arise that seem to be right but are really based on models with many incorrect assumptions. People desperately need and want a “happily ever after” solution. The strong need for a desirable outcome favors the selection of models that lead to the conclusion that if there is a problem, it is many years away. Conflicting political views seem to be based on different, equally wrong, models of how world leaders can solve the energy predicament that the world is facing.
The real story is that the world’s self-organizing economy will determine for us what is ahead, and there is virtually nothing we can do to change the result. Strangely enough, if we look at the long term pattern, there almost seems to be a guiding hand behind the result. According to Peter Ward and Donald Brownlee in Rare Earth, there have been a huge number of seeming coincidences that have allowed life on earth to take hold and flourish for four billion years. Perhaps this “luck” will continue.
[3b] As the economy reaches limits, commodities of many types reach diminishing returns simultaneously.
It is indeed true that the economy reaches diminishing returns in oil supply as it reaches limits. Oil is very valuable because it is energy dense and easily transported. The oil that can be extracted, refined, and delivered to needed markets using the least amount of resources (including human labor) tends to be extracted first. It is later that deeper wells are built that are farther from markets. Because of these issues, oil extraction does tend to reach diminishing returns, as more is extracted.
If this were the only aspect of the economy that was experiencing diminishing returns, then the models coming from a peak oil perspective would make sense. We could move away from oil, simply by transferring oil use to appropriately chosen substitutes.
It becomes clear when a person looks at the situation that commodities of all kinds reach diminishing returns. Fresh water reaches diminishing returns. We can add more by using desalination and pumping water to where it is required, but this approach is hugely expensive. As population and industrialization grows, the need for fresh water grows, making diminishing returns for fresh water a real issue.
Minerals of all kinds reach diminishing returns, including uranium, lithium, copper and phosphate rock (used for fertilizer). The reason this occurs is because we tend to extract these minerals faster than they are replaced by the weathering of rocks, including bedrock. In fact, useable topsoil tends to reach diminishing returns because of erosion. Also, with increasing population, the amount of food required keeps increasing, putting further pressure on farmland and making it harder to retain an acceptable level of topsoil.
[3c] Increased complexity leads to diminishing returns as well.
In his book, The Collapse of Complex Societies, Joseph Tainter points out that complexity reaches diminishing returns, just as commodities do.
As an example, it is easy to see that added spending on healthcare reaches diminishing returns. The discovery of antibiotics clearly had a huge impact on healthcare, at relatively little cost. Now, a recent article is entitled, The hunt for antibiotics grows harder as resistance builds. The dollar payback on other drugs tends to fall as well, as solutions to the most common diseases are found, and researchers must turn their attention to diseases affecting only, perhaps, 500 people globally.
Similarly, spending on advanced education reaches diminishing returns. Continuing the medical example above, educating an increasing number of researchers, all looking for new antibiotics, may eventually lead to success in discovering more antibiotics. But the payback with respect to the education of these researchers will not be nearly as great as the payback for educating the early researchers who found the first antibiotics.
[3d] Wages do not rise sufficiently so that all of the higher costs associated with the many types of diminishing returns can be recouped simultaneously.
The health care system (at least in the United States) tends to let its higher costs flow through to consumers. We can see this by looking at how much higher the Medical Care Consumer Price Index (CPI) rises compared to the All Items CPI in Figure 2.
Figure 2. Consumer price index for Medical Care versus for All Items, in chart made by the Federal Reserve of St. Louis.
The high (and rapidly rising) cost of advanced education is another cost that is being passed on to consumers–the students and their parents. In this case, loans are used to make the high cost look less problematic.
Of course, if consumers are burdened with higher medical and educational costs, it makes it difficult to afford the higher cost of energy products, as well. With these higher costs, young people tend to live with their parents longer, saving on the energy products needed to have their own homes and vehicles. Needless to say, the lower net income for many people, after health care costs and student loan repayments are deducted, acts to reduce the demand for oil and energy products, and thus contributes to the problem of continued low oil prices.
[3e] Added complexity tends to increase wage disparities. The reduced spending by lower income workers tends to hold down fossil fuel prices, similar to the impact identified in Section [3d].
As the economy becomes more complex, companies tend to become larger and more hierarchical. Elite workers (ones with more training or with more supervisory responsibility) earn more than non-elite workers. Globalization adds to this effect, as workers in high wage countries increasingly compete with workers in lower wage countries. Even computer programmers can encounter this difficulty, as programming is increasingly moved to China and India.
Figure 3. Figure by Pew Research Center in Trends in Income and Wealth Inequality, published January 9, 2020. https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/
Individuals with low incomes spend a disproportionately large share of their incomes on commodities because everyone needs to eat approximately 2,000 calories of food per day. In addition, everyone needs some kind of shelter, clothing and basic transportation. All of these types of consumption are commodity intensive. People with very high incomes tend to buy disproportionately more goods and services that are not very resource intensive, such as education for their children at elite universities. They may also use part of their income to buy shares of stock, hoping their value will rise.
With a shift in the distribution of incomes toward those with high earnings, the demand for commodities of all types tends to stagnate or even fall. Fewer people are able to buy new cars, and fewer people can afford vacations involving travel. Thus, as more complexity is added, there tends to be downward pressure on the price of oil and other energy products.
[4] Oil prices have been falling behind those needed by oil producers since 2012.
Figure 4. Figure created by Gail Tverberg using EIA average monthly Brent oil price data, adjusted for inflation using the CPI Index for All Items for Urban Consumers.
Back in February 2014, Steven Kopits gave a presentation at Columbia University explaining the state of the oil industry. I wrote a post describing this presentation called, Beginning of the End? Oil Companies Cut Back on Spending. Oil companies were reporting that prices had been too low for them to make an adequate profit for reinvestment, back as early as 2012. In inflation-adjusted terms, this was when oil prices were about $120 per barrel.
Even Middle Eastern oil exporting countries need surprisingly high oil prices because their economies depend on the profits of oil companies to provide the vast majority of their tax revenue. If oil prices are too low, adequate taxes cannot be collected. Without funds for jobs programs and food subsidies, there are likely to be uprisings by unhappy citizens who cannot maintain an adequate standard of living.
Looking at Figure 4, we see that there has been very little time that Brent oil prices have been above $120 per barrel. Even with all of the recent central bank stimulus and deficit spending by economies around the world, Brent oil prices remain below $60 per barrel.
[5] Interest rates and the amount of debt make a huge difference in oil prices, too.
Based on Figure 4, oil prices are highly irregular. Much of this irregularity seems to be associated with interest rate and debt level changes. In fact, in July 2008, what I would call the debt bubble associated with the subprime housing and credit cards collapsed, bringing oil prices down from their peak abruptly. In late 2008, Quantitative Easing (QE), (aimed at bringing interest rates down) was added just prior to an upturn on prices in 2009 and 2010. Prices fell again, when the United States discontinued QE in late 2014.
If we think about it, increased debt makes purchases such as cars, homes and new factories more affordable. In fact, the lower the interest rate, the more affordable these items become. The number of purchases of any of these items can be expected to rise with more debt and lower interest rates. Thus, we would expect oil prices to rise as debt is added and fall as it is taken away. Now, there are many questions: Why haven’t oil prices risen more, with all of the stimulus that has been added? Are we reaching the limits of stimulus? Are interest rates as low as they can go, and the amount of debt outstanding as high as it can go?
[6] The growing complexity of the economy is contributing to the huge amount of debt outstanding.
In a very complex economy, a huge number of durable goods and services are produced. Examples of durable goods would include machines used in factories and pipelines of all kinds. Durable goods would also include vehicles of all types, including both vehicles used for businesses and vehicles used by consumers for their own benefit. As broadly defined here, durable goods would include buildings of all types, including factories, schools, offices and homes. It would also include wind turbines and solar panels.
There would also be durable services produced. For example, a college degree would have lasting benefit, it is hoped. A computer program would have value after it is completed. Thus, a consulting service is able to sell its programs to prospective buyers.
Somehow, there is a need to pay for all of these durable goods. We can see this most easily for the consumer. A loan that allows durable goods to be paid for over their expected life will make these goods more affordable.
Similarly, a manufacturer needs to pay the many workers making all of the durable goods. Their labor is adding value to the finished products, but this value will not be realized until the finished products are put into operation.
Other financing approaches can also be used, including the sale of bonds or shares of stock. The underlying intent is to provide financial time-shifting services. Interest rates associated with these financial time-shifting services are now being manipulated downward by central banks to make these services more affordable. This is part of what keeps stock prices high and commodity prices from falling lower than their current levels.
These loans, bonds and shares of stock are providing a promise of future value. This value will exist only if there are enough fossil fuels and other resources to create physical goods and services to fulfill these promises. Central banks can print money, but they cannot print actual goods and services. If I am right about collapse being ahead, the whole debt system seems certain to collapse. Shares of stock seem certain to lose their value. This is concerning. The end point of all of the added complexity seems to be financial collapse, unless the system can truly add the promised goods and services.
[7] Intermittent electricity fits very poorly into just-in-time supply lines.
A complex economy requires long supply lines. Usually, these supply lines are operated on a just-in-time basis. If one part of a supply line encounters problems, then manufacturing needs to stop. For example, automobile manufacturers in many parts of the world are finding that they need to suspend production because it is impossible to source the necessary semiconductor chips. If electricity is temporarily unavailable, this is another way of disrupting the supply chain.
The standard way to work around temporary breaks in supply chains is to build greater inventory, but this is expensive. Additional inventory needs to be stored and watched over. It likely needs financing, as well.
[8] The world economy today seems to be near collapse.
The self-organizing economy is now pushing the economy in many strange ways that indirectly lead to less energy consumption and eventually collapse. Even prior to COVID-19, the world economy appeared to be reaching growth limits, as indicated in Figure 1, which was published in January 2019. For example, recycling of many renewables was no longer profitable at lower oil prices after 2014. This led China to discontinue most of its recycling efforts, effective January 1, 2018, even though this change resulted in the loss of jobs. China’s car sales fell in 2018, 2019, and 2020, a strange pattern for a supposedly rapidly growing country.
The response of world leaders to COVID-19 has pushed the world economy further in the direction of contraction. Businesses that were already weak are the ones having the most difficulty in being able to operate profitably.
Furthermore, debt problems are growing around the world. For example, it is unclear whether the world will require as many shopping malls or office buildings in the future. A person would logically expect the value of the unneeded buildings to drop, reducing the value of many of these properties below their outstanding debt level.
When these issues are combined, it looks likely that the world economy may not be far from collapse, which is one of my contentions from Section [1]. It also looks like my other contentions from Section [1] are true:
(i) Low oil prices rather than high are to be expected as the economy reaches limits,
(ii) Most fossil fuel reserves will be left in the ground because of low prices, and
(iv) If the economy is not to collapse, we need energy sources providing a larger quantity of net energy per capita to offset diminishing returns.
Regarding (iv), the available energy supply from wind and solar (net or otherwise) is tiny relative to the total energy required to operate the world economy. This issue, alone, would disqualify a Great Reset using wind and solar from truly being a solution for today’s problems. Instead, plans for a Great Reset tend to act as a temporary cover-up for collapse.
Tyler Durden
Sat, 02/13/2021 – 17:30 - This Is Why Hospitals Can Charge $6,000 Or $60,000 For The Exact Same Procedure
This Is Why Hospitals Can Charge $6,000 Or $60,000 For The Exact Same Procedure
Several months back, we pointed out how new disclosure laws would be forcing hospitals to disclose the cost of services and rates negotiated by insurers. Now, the numbers are starting to trickle in – and they’re ugly.
Roughly 6,000 hospitals across the nation are starting to reveal the rates they negotiate with insurers for a number of procedures. The figures show how widely prices vary for the same procedure depending on who is paying, as highlighted by a new Wall Street Journal report.
For example, the report found that a C-section can cost between $6,241 and $60.584 – all depending on which insurer covers it. Niall Brennan, chief executive of the Health Care Cost Institute said: “It is shining a light on the insanity of U.S. healthcare pricing. It’s at the center of the affordability crisis in American healthcare.”
The rates are a key driver of the massive healthcare costs in the U.S., some of the highest in the world. It was a Trump administration rule that shed light on the differences in procedure pricing – some of the widest gaps in pricing of any U.S. industry. Gerard Anderson, a healthcare economist at Johns Hopkins University, commented: “These price differentials are unique to the healthcare and hospital industry.”
The prices have a direct effect on consumers, as they push up premiums and deductibles. And, in a stunning revelation, “total U.S. expenditures on private health insurance have increased 50% in the past decade through 2019, according to federal figures,” the Journal wrote.
The report found that a Northern California system of 24 hospitals had sometimes “extreme” pricing ranges for procedures. One cardiac procedure varied between $89,752 to $515,697, depending on insurer. For those paying out of pocket, the procedure cost $325,703. The system, called Sutter Health, did $13 billion in 2019 revenue is is known for drawing an antitrust suit from the California state AG in 2018. The system paid $575 million to settle the claims.
Sutter Chief Financial Officer Brian Dean commented: “We enter into negotiations with every health-insurance company or payer in good faith and with the end goal of providing access to quality, affordable care for patients.”
“The variation in the data reflects robust competition in the markets for commercial insurance,” he argued.
One former insurance executive told the Journal that they could expect the same types of wide ranges for pricing across the country:
“The California system’s pricing spread for the procedures reviewed by the Journal are likely at the upper end, but similar patterns will be found at many hospitals around the country, said Alan Muney, a former Cigna Corp. executive. “This is probably typical of what you’re going to see across big delivery systems,” he said.
Prices paid by private insurers in the nation’s $1.2 trillion hospital sector are often far higher than the amounts paid to hospitals by the Medicare program, which are set by the government. Plans offered by insurers under Medicare or Medicaid often get rates tied to those mandated prices.”
Insurers have a better chance of winning better rates if they can drive more patients to a certain hospital, another former insurance executive said. Hospitals, meanwhile, sometimes set their prices with “little bearing on the actual cost or value of a service”, the report says. Rather, hospitals set prices based on their own targets for margins and according to what the market will pay.
Privately insured patients drive margins typically – and hospitals that boosted margins generally didn’t cut costs, but rather raised revenue by increasing rates billed to commercial insurers, one study found. Economists have found that quality is generally no better at more expensive hospitals. Michael Chernew, the Leonard D. Schaeffer Professor of Health Care Policy at Harvard Medical School, said: “We have not found evidence that price is a great signal for quality.”
The new data will draw the eyes of insurers and hospitals, moreso than consumers. Elizabeth Mitchell, chief executive of the Purchaser Business Group on Health, which represents major employers, said they will use the data to help choose which hospitals to use and how to negotiate with insurers.
The Journal examined one cardiac code for cardiac-valve procedures involving catheterization performed on patients with risk factors. It confirmed that the largest spreads on pricing were in procedures that cost the most:
Seven insurers pay the lowest negotiated rate, $89,752, for their Medicare plans. The lowest price for a commercial-insurance plan, the type offered to employers, is $197,900. At the top end, the charge is $515,697 for patients whose health plans don’t have the hospital in-network.
For hip- and knee replacements, Medicaid and Medicare plans paid the lowest prices at the Modesto hospital, $3,264 and $16,349, respectively. The lowest price paid by a commercial insurer totaled $51,895. The highest rate reached $81,617, again for patients whose insurance didn’t include the Modesto hospital in-network.
Recall, we first brought up President Trump’s plans to institute these transparency plans back in January.
The $1.2 trillion industry comprising some 6% of the country’s economy is now subjected to more transparency than it has seen in decades. The point of instituting the disclosures, according to the Trump administration, was the hope that good ol’ fashioned market dynamics will kick in, and help lower prices across the board.
Previously, hospital pricing was negotiated confidentially between hospitals and the employer groups and insurance companies that pay for care.
Many criticized this system for obscuring market rates and helping drive up the cost of health insurance premiums paid by employers and workers. Rising hospital prices accounted for about one-fifth of the nation’s health spending growth over the last 50 years.
Now, we will see first hand if a free and open market can help solve some of the industry’s problems. At least, until President Biden reverses the new rules.
Tyler Durden
Sat, 02/13/2021 – 17:00 - "It Would Be A Great Honor To Speak To You": Musk Seeks To Speak To Putin
“It Would Be A Great Honor To Speak To You”: Musk Seeks To Speak To Putin
In the latest surprising development from the world’s richest man, moments ago Elon Musk tweeted the official English twitter account of the Kremlin, i.e., Vladimir Putin, saying “would you like join me for a conversation” on the popular (and so far invite-only) new audio social network Clubhouse.
.@KremlinRussia_E would you like join me for a conversation on Clubhouse?
— Elon Musk (@elonmusk) February 13, 2021
https://platform.twitter.com/widgets.js
He then followed up in google-translated Russian “it would be a great honor to speak with you.”
было бы большой честью поговорить с вами
— Elon Musk (@elonmusk) February 13, 2021
https://platform.twitter.com/widgets.js
While we await for more context on this rather startling development, and the Kremlin’s response to this startling invitation, we fear that Tesla may have just lost all future neocon orders. We also wonder if there will soon be a nice, little – or not so little – dachia on the Black Sea coast with Musk’s name on it.
Tyler Durden
Sat, 02/13/2021 – 16:33 - The Foundation For Potential Price Hyperinflation Is Being Laid
The Foundation For Potential Price Hyperinflation Is Being Laid
The Federal Reserve sure seems to have a tough time finding and reporting signs of rising inflation – especially when it’s hidden in other sectors like a lack of demand for energy.
A recent example of the Fed’s “inflation blindness” comes from a speech Chairman Jerome Powell gave to the Economic Club of New York. According to a MarketWatch piece that reported on that speech:
Powell said he doesn’t expect “a large nor sustained” increase in inflation right now. Price rises from the “burst of spending” as the economy reopens are not likely to be sustained.
It’s odd that Powell would say he doesn’t expect a sustained increase in inflation, because food price inflation has consistently run 3.5 to 4.5 percent since April last year. That sure seems like a sustained increase in food prices.
What Powell seems to have “forgotten” is that some of the overall inflation includes negative energy price inflation (as low as negative 9 percent at one point). But now that the demand for fuel is returning, the official gasoline index rose 7.4 percent in January.
It will be much more challenging for Powell to keep downplaying the risk of hyperinflation once energy price inflation rises back to “pre-pandemic” levels.
In fact, Robert Wenzel thinks the main inflation event is “just about to hit.” If it does, and inflation does rise past Powell’s two percent target, it isn’t likely to stop there. Jim Rickards thinks that’s when hyperinflation can gain momentum:
If inflation does hit 3%, it is more likely to go to 6% or higher, rather than back down to 2%. The process will feed on itself and be difficult to stop. Sadly, there are no Volckers or Reagans on the horizon today. There are only weak political leaders and misguided central bankers.
Keep in mind that Rickards is talking about overall inflation. Food price inflation has already been consistently high for almost a year. In a hyperinflation scenario, those prices could skyrocket, and possibly even faster.
Not too many people like the idea of suddenly paying $8 (or more) for a gallon of milk. If $7 per gallon gasoline suddenly becomes the norm, a lot more retirement savers would struggle to make ends meet.
Even worse, it appears the foundation is already being laid for the “process to feed on itself” — just as Rickards mentioned.
Inflation Pressures are Building Up Fast
Wolf Richter wrote on the economic impacts from pandemic mitigation efforts in 2020, and said: “The story is that prices are rising because components and commodities are in short supply, and supply chains are dogged by production issues, and are facing transportation constraints, as demand for those goods has suddenly surged.”
When supply chain, production and transportation issues combine with surging demand, it creates price inflation. That certainly seems like one explanation for the long period of rising food prices.
But add in direct manufacturer price pressures and things can go haywire in a hurry. According to the same WolfStreet article, that’s exactly what is happening:
The Prices Index “surged dramatically in January” to a level of 82.1%, after an eight-month upward trajectory, the highest since April 2011, “indicating continued supplier pricing power.”
He added that “manufacturers were able to pass these higher costs on to their customers via higher prices, ‘with selling prices rising at the fastest pace since July 2008.’”
Couple these rapidly increasing price pressures with Federal debt reaching 107 percent of GDP in 2020, and the potential for runaway inflation exists, especially since the Fed is “monetizing most of the new spending,” according to Wenzel.
Who knows how high inflation will rise this year? With pent-up demand about to be unleashed, it will probably be higher than last year. Just a little inflation, you might think, that doesn’t sound so bad. Here’s why that’s simply not the case.
Don’t worry about hyperinflation; by then it’s too late
Jim Rickards explains that, while “hyperinflation” works its way into headlines and draws attention, it’s really sub-hyper inflation that does the damage:
Hyperinflation doesn’t emerge instantaneously. It begins slowly with normal inflation and then accelerates violently at an increasing rate until it becomes hyperinflation. This is critical for investors to understand because much of the damage to your wealth actually occurs at the inflationary stage, not the hyperinflationary stage.
Using one of the most well-known and well-researched cases of hyperinflation in the last century, Weimar Germany, Rickards demonstrates how pernicious “regular” inflation can be.
From January 1919 to January 1922, the reichsmark’s value slowly dropped from $0.13 to $0.005 ‑ a loss of 96% value in just three years. This doesn’t meet the definition of hyperinflation because the decay of purchasing power happened over three years and never exceeded the hyperinflation threshold in any single month.
One year later, hyperinflation kicked in and the reichsmark was debased 58 billion percent. That’s the period most interesting to economists and historians. That’s when we see pictures of hollow-eyed laborers pushing wheelbarrows full of currency, or malnourished children playing with bundles of worthless money.
The lesson here? Hyperinflation only destroyed the final 4% of the reichsmark’s value. By the time the word “hyperinflation” hit headlines, it was too late to do anything about it.
Rickards explains the winners and losers in a hyperinflationary scenario:
Hyperinflation doesn’t affect everyone in a society equally. There are distinct sets of winners and losers. The winners are those with gold, foreign currency, land and other hard assets. The losers are those with fixed income claims such as savings, pensions, insurance policies and annuities.
All this means it’s a really good idea to make sure your portfolio is positioned to survive regular, non-hyperinflation.
Success Happens When Preparation Meets Opportunity
Jim Rickards finished his letter with a wise bit of advice when it comes to potential hyperinflation:
You can’t wait until serious inflation arrives. By then it’ll be too late. Make sure you have your gold and other hard assets beforehand. There’s no time like the present.
It makes sense that if you want to maximize your chances of riding out the coming inflation storm, you need to prepare for it, rather than react to it. As we’ve seen from the historical example, inflation doesn’t need to be newsworthy in order to eat away your savings.
Hard assets including precious metals, especially gold and silver, can strengthen your savings against inflation. Owners of physical precious metals enjoy the benefits of diversified savings. Furthermore, gold and silver preserve your purchasing power by acting as an internationally-recognized store of value.
Tyler Durden
Sat, 02/13/2021 – 16:30 - "I'm A Normal Working Person": Dogecoin Creator Sold His Coins In 2015 To Buy A Used Honda
“I’m A Normal Working Person”: Dogecoin Creator Sold His Coins In 2015 To Buy A Used Honda
Even Dogecoin’s creator can’t understand why the price has run up so much.
Billy Markus, who created the cryptocurrency, cashed in all of his Dogecoin in 2015 to buy a Honda Civic. Since then, Dogecoin has reached a market cap of $9.1 billion, up 1400% so far in 2021. Markus, who is 38 years old, works as a software engineer in the Bay Area.
Markus wants people to know he is no longer involved in the project and “can’t limit the coin’s supply to help make them rich,” according to Bloomberg.
He wrote in an open letter on the r/Dogecoin subreddit this week: “I’m no longer part of the Dogecoin project, I left around 2015 as the community started to strongly shift from one that I was comfortable with. I don’t currently own any Dogecoin except what has been tipped to me recently, I gave away and/or sold all the crypto I had back in 2015 after being laid off and scared about my dwindling savings at the time, for about enough in total to buy a used Honda Civic.”
He told Bloomberg: “I see this random crap on the internet saying I have all this money. That’s cool, but where is it? I’m a normal working person. I’m not in trouble or anything, but I’m not rich.”
“I’m half detached, but it’s weird that something I made in a few hours is now part of internet culture. It’s amusing to see Elon Musk talk about it. It feels silly, but there’s this huge upwelling behind it,” he continued.
One explanation for the coin’s longevity is that it has been around almost for as long as cryptocurrencies themselves. Bloomberg attributes the coin’s “success” to the Lindy effect:
The Lindy effect is a rule of thumb that says the remaining lifespan for a non-perishable item, like say how long a book will remain in print, is equal to how long it has been in existence. The idea boils down to this: the older something is, the more likely it is to continue to survive the tests of time.
Dogecoin was created in 2013, making it downright elderly in crypto-terms. According to the Lindy effect, its more than seven years of survival, with much of that coming through the so-called crypto-winter when prices plunged in 2018, is a sign of resilience and evidence that it’s more than just a fad.
Markus concluded his thoughts by channeling some of the objective reality that doesn’t seem to exist in the altcoin-sphere.
“If this is my contribution to the world, it’d be nice to offset all the burning of fossil fuel used to mine the currency,” he said, raising a serious issue that many crypto bears, including bitcoin bears, continue to bring up. “Maybe it’s that Dogecoin can be a good barometer for how far from reality things can get,” Markus concluded.
We couldn’t have said it better, Markus. We’ll tip you in Doge.
Tyler Durden
Sat, 02/13/2021 – 16:00
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