- A 70-Year War On "Propaganda" Built By The CIA
A 70-Year War On “Propaganda” Built By The CIA
Authored by Cynthia Chung via The Strategic Culture Foundation,
“Hell is empty and all the devils are here”
– William Shakespeare (The Tempest Act 1 Scene 2)
War has always depended on a reliable system to spread its propaganda. The Arthashastra written by Chankya (350-283 BCE) who was chief advisor to the Emperor Chandragupta (the first ruler of the Mauryan Empire) discusses propaganda and how to disperse and apply it in warfare. It is one of the oldest accounts of the essentialism of propaganda in warfare.
Propaganda is vital in times of war because it is absolutely imperative that the people, who often need to make the greatest sacrifices and suffer the most, believe that such a war is justified and that such a war will provide them security. To the degree that they believe this to be true, the greater the degree of sacrifice and suffering they are willing to submit themselves for said “promised security”.
It is crucial that when the people look at the “enemy” they see something sub-human, for if they recognise that said “enemy” has in fact humanity, the jig is up so to speak.
And thus we are bombarded day after day, hour after hour of reminders as to why the “enemy” is not human like us, not compassionate like us, not patient, just and wise like us.
No doubt, war has been a necessary response when tyranny has formed an army to fight for its cause, but I would put forth that most wars have been rather unnecessary and downright manipulated for the design of a small group of people.
During WWI, on Dec 25th 1914, something rather unexpected occurred and a series of widespread unofficial ceasefires along the Western Front took place between the French/British soldiers and the German soldiers. Some even ventured into “no man’s land”, given its name since none left it alive, to mingle with the “enemy” and exchange food and souvenirs. There were joint burial ceremonies and prisoner swaps. A game of football took place as well. It is said that these truces were not unique to the Christmas period but that they were much more widespread during the holiday season.
These fraternisations would understandably make it quite difficult to return to combat against one another…for no apparently good reason. Some units needed to be relocated since they had developed friendships with the opposing side and now refused to fight them.
The lesson was quickly learned and propaganda was heavily pumped down the throats of the Allied countries, and by the course of just a few years, they no longer viewed the Germans as human.
The CIA’s Family Jewels and Operation Mockingbird
For us to understand the implications of modern propaganda and how it is used in warfare today, our story starts post-WWII with Churchill’s announcement of the “Iron Curtain” which launched the Cold War and has kept the East and West divided to this day.
Quickly after the Cold War was announced by Churchill, it was necessary to create a fervor of fear and paranoia amongst the American people in order to have them quickly forget the fact that the Russians were their greatest allies during both WWI and WWII, and to replace it with the image of a ghoulish race of boogeymen.
If Americans were to remember that the Russians had fought valiantly during WWII and had paid by far the largest sacrifice to the cause, that they had in fact been their comrades in arms against the brutality of fascism, if this were remembered then the Cold War division could never occur, and that was something that could not be tolerated by Churchill and the Empire. Thus terror was unleashed on the American people and McCarthyism was given precedence over the people’s right to question and form conclusions for themselves. That sort of thing could not be tolerated when the “enemy” could be anywhere; they could be your neighbour, your child’s teacher, your co-worker…your partner.
In order to combat the “threat” of Soviet “propaganda” entering the U.S. and seducing Americans, Operation Mockingbird was created as a form of “control” over information dissemination during the period of McCarthyism. Operation Mockingbird was an “alleged” CIA program that was started in the early 1950s in order to control the narrative of the news. Though this role has never been confirmed entirely, in the CIA Family Jewels report compiled in the mid-1970s, it is confirmed that Project Mockingbird did exist as a CIA operation and that it was guilty of wire-tapping journalists in Washington.
At the helm of this project was none other than CIA Director Allen Dulles, an enemy of JFK, who by the early 1950s “allegedly” oversaw the media network and had major influence over 25 newspapers and wire agencies. Its function was to have the CIA write reports that would be used by a network of cooperating “credible” reporters. By these “credible” reporters spreading the CIA dictated narrative, it would be parroted by unwitting reporters (mockingbirds) and a successful echo chamber would be created across the world.
The Office of Policy Coordination (OPC), originally named Office of Special Projects but that was thought to conspicuous, was a covert operation wing of the CIA and was created by the United States National Security Council (NSC). For those who are unfamiliar with the origins of the NSC and its close relationship with the CIA, who was born on the same day, refer to my paper on the subject.
According to Deborah Davis’ biography of Katherine Graham (the owner of Washington Post), the OPC created Operation Mockingbird in response to addressing Soviet propaganda and included as part of its CIA contingency respected members from Washington Post, The New York Times, Newsweek, CBS and others.
The Family Jewels report was an investigation made by the CIA to investigate…the CIA, spurred in response to the Watergate Scandal and the CIA’s unconstitutional role in the whole affair. The investigation of the CIA would include any other actions that were deemed illegal or inappropriate spanning from the 1950s-mid 1970s.
We are told “most” of the report was declassified on June 25, 2007 (30 years later) hoping that people would have lost interest in the whole brouhaha. Along with the release of the redacted report was included a six-page summary with the following introduction:
“The Central Intelligence Agency violated its charter for 25 years until revelations of illegal wiretapping, domestic surveillance, assassination plots, and human experimentation led to official investigations and reforms in the 1970s.”
The most extensive investigation of the CIA relations with news media was conducted by the Church Committee, a U.S. Senate select committee in 1975 that investigated the abuses committed by the CIA, NSA, FBI, and IRS. The Church Committee report confirmed abundant CIA ties in both foreign and domestic news media.
It is very useful that there exists an official recognition that false news was not only being encouraged by the CIA under the overseeing of the NSC during the Cold War period, but that the CIA was complicit in actually detailing the specific narrative that they wanted disseminated, and often going so far as to write the narrative and have a “credible” reporter’s name stamped on it.
But the question begs, “Did the Cold War ever end?” and if not, why should we believe that the CIA’s involvement in such activities is buried in its past and that it has “reformed” its old ways?
Western Journalists for Hire: How the CIA Buys News
In order to answer this question, let us visit the sad case of Udo Ulfkotte. Udo Ulfkotte is a well-known German journalist and author of numerous books. He worked for 25 years as a journalist, 17 of which were for Frankfurter Allgemeine Zeitung (FAZ), including his role as editor. In his 2014 book “Journalists for Hire: How the CIA Buys News” Ulfkotte goes over how the CIA along with German Intelligence (BND) were guilty of bribing journalists to write articles that either spun the truth or were completely fictitious in order to promote a pro-western, pro-NATO bent, and that he was one of those bought journalists.
In an interview, Ulfkotte describes how he finally built up the nerve to publish the book, after years of it collecting dust, in response to the erupting crisis in Ukraine stating “I felt that the right time had come to finish it and publish it, because I am deeply worried about the Ukrainian crisis and the possible devastating consequences for all of Europe and all of us…I am not at all pro-Russia, but it is clear that many journalists blindly follow and publish whatever the NATO press office provides. And this type of information and reports are completely one-sided”.
In another interview Ulfkotte stated:
“it is clear as daylight that the agents of various Services were in the central offices of the FAZ, the place where I worked for 17 years. The articles appeared under my name several times, but they were not my intellectual product. I was once approached by someone from German Intelligence and the CIA, who told me that I should write about Gaddafi and report how he was trying to secretly build a chemical weapons factory in Libya. I had no information on any of this, but they showed me various documents, I just had to put my name on the article. Do you think this can be called journalism? I don’t think so.”
Ulfkotte has publicly stated: “I am ashamed of it. The people I worked for knew from the get-go everything I did. And the truth must come out. It’s not just about FAZ, this is the whole system that’s corrupt all the way.”
Udo Ulfkotte has since passed away. He died January 2017, found dead in his home, it is said by a hear t attack. His body was quickly after cremated and thus prevented any possibility of an autopsy occurring.
You Can’t Teach An Old Dog New Tricks
The Countering Foreign Propaganda and Disinformation Act is a bipartisan bill that was passed into law in December 2016, it was initially called Countering Information Warfare Act. It was included together with the National Defense Authorization Act (NDAA). This bill was brought into effect just weeks before Trump was to enter office….hmmm, foreshadowing much?
Soon after the 2016 U.S. election, the Washington Post led the charge asserting that it was due to Russian propaganda that the U.S. elections turned out the way it did, that is, that Hillary had somehow, inconceivably, lost to Donald Trump and that the American people had been turned against her like a child caught in the middle of a messy divorce case. But there is no need here to set the record straight on Hillary, when Hillary herself has done suffice damage to any illusion of credibility she once had. That ultimately not even Hillary could hide the fact that her closet full of skeletons turned out to be the size of a catacomb.
But we are told that citizens do not know what is best for one’s self. That they cannot be trusted with “sensitive” information and in accordance act in a “responsible” manner, that is, to have a strong enough stomach to do what is “best” for their country.
And therefore, fear not subjects of the land, for the Global Engagement Center (GEC) is here to make those hard decisions for you. Don’t know what to think about a complicated subject? GEC will tell you the right way!
The National Defense Authorization Act (NDAA) would allow for the Secretary of State to collaborate with the Secretary of Defense, and other Federal agencies in the year 2017 to create the Global Engagement Center (GEC). The GEC’s purpose in life is to fight propaganda from foreign governments and publicize the nature of ongoing foreign propaganda and disinformation operations against the U.S. and other countries.
Let us all take a moment to thank the GEC for such a massive task in the cause for justice all around the world.
The GEC had a very slow start in its first year, however, it has been gaining momentum in the last year under Secretary of State Mike Pompeo, who seems especially excited over the hiring of Lea Gabrielle as special envoy and coordinator of GEC.
Mike Pompeo was the CIA Director from 2017-2018. On April 15, 2019, Pompeo participated in a discussion at the Texas A&M University where he voluntarily offered the admission that though West Points’ cadet motto is “You will not lie, cheat, or steal, or tolerate those who do.”, his training under the CIA was the very opposite, stating “I was the CIA Director. We lied, we cheated, we stole. It was like we had entire training courses. (long pause) It reminds you of the glory of the American experiment”.
This is apparently the man for the job of dealing with matters of “truth” and “justice”.
Lea Gabrielle was approved for her position by Mike Pompeo, what are her “qualifications”? Well, Gabrielle is also CIA trained, and while assigned to the Defense Intelligence Agency (DIA), she “directed and conducted global clandestine strategic intelligence collection operations.” Gabrielle also “deployed in tactical anti-terrorist operations in hostile environments”. After 12 years of active duty service, Lea Gabrielle became a television news journalist, who worked at NBC and FOX News.
Noticing a pattern?
The CIA really does not have the best track record for their role in “managing” foreign wars and counter-insurgency activities. In fact, they have been caught rather red handed in fueling such crisis situations. And these are the people who are deciding what information is fit for the American public, and western public in general, and what is not fit for their ears.
Hear No Evil, Speak No Evil, See No Evil
On March 5, 2020, Lea Gabrielle testified on the role of GEC in countering state-sponsored and non-state propaganda and disinformation. Gabrielle states: “We have the full support of Secretary Pompeo who is committed to deploying a broad suite of tools to stop America’s adversaries from using disinformation, malign propaganda, and other tools to undermine free societies.” She goes on to acknowledge that the hearing is focused on countering Russian government and CCP disinformation and propaganda. She then goes on to outline her criticisms of both governments with no factual detail or evidence but rather generalised accusations and criticisms, obviously pulling from her experience as a news journalist for NBC.
Following this, Gabrielle proceeds to outline her “rules of engagement” in countering this offensive with what seems to be the beginnings of McCarthyism 2.0, amounting to a threat to anyone who dares not take a hard stance against Russia and China, that such a person will be considered complicit in essentially committing treason. Hell, if Bernie Sanders and Tulsi Gabbard (who was unconstitutionally prohibited from participating in the final democratic presidential debates) have both already been accused of being a Russian agent, what can we expect for the average Joe?
Gabrielle concludes, “Both the Russian government and the CCP view censorship, media manipulation, and propaganda as appropriate tools to control public opinion. Both exploit open, democratic societies to further their own ends while tightening controls around their own countries.”
Don’t worry, the CIA will eventually admit that they are elbow deep in all of the above, it just won’t be released until 30 years from now…In the meantime, I wouldn’t believe everything you read in the newspaper to stoke the fires for another war.
Tyler Durden
Sun, 03/15/2020 – 00:20 - Covid-19 Pandemic To Crash Sex Worker Income
Covid-19 Pandemic To Crash Sex Worker Income
The world has already transitioned into panic about Covid-19. Widespread social, political, and economic disruptions have developed. Hard-hit countries, as we noted last week, have responded with a similar blueprint of shutting down their economies for virus containment purposes.
Social distancing has been one of the most widely enforced policies by governments, imposed on their citizens to mitigate the spread of the highly contagious disease. As a result, sex workers in many countries have seen their incomes crash as clients abide by the new public health policies, reported Vice News.
Let’s first start with defining social distancing. It’s a public health practice that aims to reduce disease transmission, including canceling large public gatherings, closing public spaces, working from home, and avoiding other people. The purpose is to slow down the outbreak to reduce the rate of infections and to reduce overwhelming the health care system.
Sex workers, many of which depend on the intimate physical interaction of their clients to get paid, are warning that social distancing could leave them penniless in the near term:
“A lot of sex workers are freaking out right now,” said Andrea Werhun, 30, a stripper based in Toronto.
Multiple sex workers told VICE their clientele volumes at clubs had seen a notable drop since social distancing policies have been implemented across North America.
“I feel like my career as a dancer is in jeopardy as it becomes increasingly less viable to hang out in crowds, which is kind of what I do every Friday and Saturday night in order to make money,” Werhun said.
Werhun said businessmen are a considerable part of her client book. Still, since corporations have told employees to work remotely and restrict travel – this has led to the decline in her business. She said strippers don’t have the luxury of a salary or sick days:
“It’s a big, big blow,” she said. “Locals and regulars are keeping sex workers afloat right now.”
Werhun has thought about diversifying to live streaming performances at home if a nationwide lockdown was seen.
She has yet to screen clients who could be carriers of the disease. Community spreading has already taken place in major metro areas in North America; the true extent of the spread is still unknown as test kits lack.
Americas Covid-19 Virus Map Amanda Winters, 27, a stripper based in Miami, told VICE she started stripping to pay off student loans, and now she’s struggling to make ends meet as clients avoid clubs out of fear, they might contract the virus.
“I am getting more concerned about my financial situation,” Winters said. “On a stable schedule, I often would have two to four good clients a night…the past week—going on two now—I have had one full client.”
Winters said if the business at the Miami club remains low – she might be forced to live stream at home.
Taylor Stevens, 29, a diversified stripper bouncing between Toronto and Las Vegas, has live stream shows that are doing well. She said in recent weeks, traffic volume from Italy was off the charts.
Taylor Stevens Toronto dominatrix Lady Pim told Vice she’s preparing for a Covid-19 downturn and has diversified her sex work.
“It’s kind of looking like parts of Canada could go into a time where we aren’t going to be able to leave our houses—then, your livelihood might be threatened, like, I’m not on salary, I don’t have sick days,” said Lady Pim.
“My sex work is diversified. I will still make a portion of my income doing it from home with Skype sessions, texting dominations, and phone call dominations, so a quarantine wouldn’t lead to a complete loss in income,” she said.
Lady Pim said quarantines would drive people to pay for online sex:
It’s severe up in here. pic.twitter.com/afDZrKb1oS
— Lady Pim (@TheLadyPim1) March 9, 2020
https://platform.twitter.com/widgets.js
“If we’re in lockdown—just by ourselves, don’t have a partner, and don’t have any sex or kink outlets—then I can 100 percent see people turning around to do a Skype session or phone session.”
Smart strippers are now diversifying their sex work before a “coronavirus winter” leads to mass quarantines and an economic crash.
Tyler Durden
Sat, 03/14/2020 – 23:55 - The S**t Might Actually Be Hitting The Fan But Somehow It Doesn't Feel Real
The S**t Might Actually Be Hitting The Fan But Somehow It Doesn’t Feel Real
Authored by Daisy Luther via The Organic Prepper blog,
So here we are. Right on the cusp of that SHTF event that we’ve been prepping for all these years.
A global pandemic.
A breakdown in the supply chain.
Shoppers who are already becoming agitated and even violent.
We’re watching it all unfold in our hometowns and across our nation right now.
Yet, somehow, it still doesn’t feel real to me. Is it just me who finds this hard to fathom? Am I the only one who still thinks doubtful thoughts? Like “No way. It’s going to be okay. You’re overreacting. It’s a little scare, just like Ebola and MERS and SARS.”
I’ve researched and written about this stuff for years. I always knew it could happen. I was whole-heartedly convinced of these possibilities and yet when this situation began to move irrevocably toward disaster, I find myself, somehow, shocked.
I can’t be the only one who has prepared for this yet still feels stuck in normalcy bias, thinking “this isn’t going to get as bad as you think” even as I watch the events unfold around us pretty much like we in the survival community always predicted. There’s still that doubtful voice in my head, making me wonder about spending even more money on another “last” shopping trip.
Heck, maybe this makes me a bad prepper. A fake survivalist. A fraud.
Or maybe it’s only natural to think that life will keep moving on pretty much like it always has.
Will Covid-19 really be the thing that brings us down? Will the nation devolve into chaos? I’d like to say no with firm conviction. After all, there have been close calls before. But the rational part of me won’t allow that firm conviction, despite the part that says, don’t be silly, everything will be just fine after a brief blip.
I believe it’s okay to feel this way as long as you don’t allow it to get in the way of your preparations or of your acceptance of the disaster when it actually unfolds in all its shocking reality.
Maybe I’m oversharing here and a whole bunch of folks will unsubscribe. I don’t know. But if others are feeling the same way, I want you to know that you aren’t alone.
Instincts vs. Normalcy Bias
I think people have come down on one of two sides since the Covid-19 virus first came onto our radar back in late December or early January. Some people have thought, “This is the next plague” while others have thought, “So what? The flu is more deadly.” Now that we’re down to the wire, we’ll soon find out which line of thinking was the most accurate.
A lot of this goes down to a decision. Are you going to believe your gut or are you going to believe the logical normalcy bias that tells you this isn’t how things go in the United States of America?
My gut has been telling me since mid-January that this thing is a major event. After all, would China have tanked its economy and locked down a city of 20 million people, welding their doors closed in many cases, if this novel coronavirus was no big deal? Would Italy have locked down their entire country and begun turning away patients over the age of 65 to funnel resources to those more likely to survive if this was just another common, everyday flu?
But the logical side of me says, “This is the US. We will be just fine.” Because we’ve always been just fine in my lifetime. We were bruised and shaken, but bounced back with fierce resolve on 9/11. We were fine when Ebola reached our shores back in 2014. We recovered after Hurricane Katrina and Superstorm Sandy and all the other named storms that have hit. We’re Americans. We are resilient. It’s who we are.
However, our resilience may not be enough to conquer a crisis that was badly mishandled from the get-go. It may not be enough to overcome less than a million hospital beds in a country with more than 327 million people. The enemy is a virus we know hardly anything about and we can’t even believe the numbers out there from China or our own government.
People are getting tense.
This afternoon when I heard there was a press conference in the Rose Garden at 3 pm, I had a bad feeling. I wondered if my calculations were off when I figured that we could begin to see major quarantines in about a week. I headed to the store with my 19-year-old daughter to get there ahead of the crowds that would certainly be imminent if such an announcement was made. We picked up extra cat litter, extra pet food, some hardware, and extra frozen vegetables.
When I went to the grocery store, I saw that frozen veggies were on sale 10 for $10. I grabbed 10 bags of frozen spinach and saw a rotund angry-looking woman glaring at me. I gave her a “what?” look and she said, “Aren’t you going to leave any for other people?”
I said politely, “I’m sorry. Did you want some of the spinach?” I picked up 3 bags from my cart and offered them to her.
She said, “No, I don’t want any spinach. A$$hole.”
I replied calmly, “Okay, well, have a nice day” and left with my spinach. I wasn’t about to get into an altercation at Kroger over a one-dollar bag of spinach the other woman didn’t even want. It looks like that de-escalation course I took paid off because my first instinct was not to be pleasant and disregard her insults.
I saw the tension on people’s faces as they pushed their carts quickly up and down the aisles, the tunnel vision obvious. If someone stopped in an aisle – a common thing to do at the grocery store – the folks behind them would give a loud sigh of annoyance. I even saw a couple of people bumping into others with their carts – whether it was carelessness or deliberately done, I couldn’t tell.
I left the store with my purchases, happy to get out of there and content with what I had. I know that I’m as well-stocked as I can get with the money that I have. If it’s not enough, then we’ll move through plans B, C, and the rest of the alphabet.
The official response
I can’t be the only person who finds the official response to be much too little, far too late.
To be perfectly clear, I don’t really blame the President or the Vice President. They’re in a rather impossible situation in which no matter what they do, the outcome is bad. If they shut everything down completely, there would be panic the likes of which we’ve never seen. And the economic fallout would be exponentially worse than it already is.
This also impairs their ability to be totally forthcoming. While people in the preparedness community would prefer brutal facts over soothing fiction, most people really don’t want to know how bad things are or how bad they’ll become. So the government will continue to dance around the subject until they can dance no more and we reach a point where the truth is obvious to even the most obvious clinger to normalcy.
On the other hand, the press conference at the White House left me feeling even more uneasy than I had felt before.
Parading a bunch of CEOs before us and showing that ridiculous flow chart that looked like something a 4th grader might hand in for a school project certainly did nothing to make me feel like things were “under control.” I don’t care at all what the head of CVS pharmacies thinks about the outbreak or his ability to keep stores running.
In fact, the main thing I gathered from that is that CVS, Walmart, and Target will be the distribution points that remain open during the crisis. Mom and Pop stores may not have access to warehouses or supplies. This way it will be easier for the government to ration things out and enforce rules like “one bag of rice per household” should it come to that. I actually posted an article about this topic a few months back.
I thought that President Trump looked and sounded unwell during the press conference. Whether that is the effect of stress or he’s become ill, it’s impossible to say.
All in all, I was not reassured by anything in that press conference.
What is exponential growth?
Rationally, I’m aware that with the increase in confirmed cases and the exponential spread of this virus, we’ve probably passed the point of no return. The New York Times explains exponential growth with this chart. These are the number of cases confirmed on certain dates.
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Jan. 21 — 1
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Jan. 28 — 5
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Feb. 4 — 11
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Feb. 11 — 14
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Feb. 18 — 25
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Feb. 25 — 59
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Mar. 3 — 125
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Mar. 10 — 1,004
And on the morning of March 14, we’re up to 2175 cases.
As the “drive-through” testing facilities open up with free tests, we can expect that number to grow quite a lot.
The magnitude of the outbreak creeps up on you; it doesn’t look like things are growing very much, and then suddenly they are. Today, the U.S. is up to at least 1,714 known cases and we’re only a couple of days on from when it was 1,004. It’s going to be 4,000 by Monday, and then it’s going to be 8,000 by next Wednesday, and then it’s…. Exponential growth is staggering when it takes over.
Exponential growth is a classic pattern in which numbers stay small initially, but then you end up with very large numbers very quickly. If you start with a certain number, and then multiply that number by a growth factor every day, depending on what that growth rate is, you’ll see the cumulative number doubling over a certain time period.
What really matters is how high that growth rate is. In the U.S. right now, according to Our World in Data, confirmed Covid-19 cases are increasing by about 30 to 40 percent per day and the total number is doubling about every two days. (source)
This is exactly the situation that China, Italy, Iran, and all the other countries with massive outbreaks have found themselves in and the United States is probably next.
Is the SHTF really happening?
We are still at a stage in a shell game and nobody knows which shell the SHTF is hiding under. Nobody knows if we can reel things in and gain control of the situation. Nobody knows if we’re going to go the way of Italy, where an entire nation is locked down and singing from their balconies to raise morale in a desperate situation.
I wonder if people who have lived through horrible situations ever imagined in their wildest dreams how bad things would get. I know that in Selco’s book, SHTF Survival Stories, he wrote about this. Nobody ever truly expected things to happen the way they did. There was a period of adjustment and all the rules changed but a lot of folks didn’t accept the changes soon enough and they did not survive.
When I silence the part of my mind that says, this can’t be happening, I’m only left with the realistic part that says, “Yes. It is.”
While we don’t 100% know how this pandemic will play out in our country, we have to be ready for things to go badly. In her book, The Covid-19 Survival Manual, Cat Ellis talked about the inability of our hospitals to handle thousands of patients. We have less than a million beds in a country of 327 million people. And most of those beds are not in places equipped to handle highly contagious sick people. And what about the people with other health issues? Our medical system won’t be able to handle exponential growth no matter how hard they try or how much they want to help.
When I look at how grocery stores and discount stores across the country look like a horde of locusts went through and decimated the inventory, I know this is a bad sign. When a friend who manages a large grocery store says to me, “Our truck was only half full today. If buying and inventory continue like this, we will be out of food by Monday,” I can only imagine the havoc that stores out of food will wreak.
It’s going to be like Black Friday times a thousand, something I’ve written about for years.
This entire thing is surreal, isn’t it?
If I’ve written about and prepared for the SHTF for years and am having trouble wrapping my head around the fact that we’re in the early stages of it, what must it feel like for someone who is brand new to the concept?
It’s one thing to watch it happen someplace far away from the screen of our laptops or televisions but entirely another to watch it unfold at home. However, we have to accept it and we have to act quickly and decisively. One of the most important things I’ve learned from Selco is about accepting the new rules.
One of the most important things he taught me is to adapt quickly (immediately) to the “new rules” that apply when the SHTF. And to do that, you need to know what it’s like so you won’t be shocked…frozen…paralyzed by the things taking place right in front of you. When there is a new set of rules, the old rules no longer apply. The rules about waiting patiently for the government to save you? The rules about how people won’t walk up and steal from you in broad daylight because they’ll be arrested? The rules that you will get paid for your work and then you can go to the store and buy what you need?
Those rules will be gone. And when you start seeing these new rules appear you will know that the sh*t has hit the oscillating device and the world as you knew it has changed.
I know this and yet I still think (hope) in one part of my mind that it won’t happen that way here. That’s the most dangerous misconception in survival.
The other part of my mind knows that it could. And that’s the part which propels me through getting prepared despite what the doubtful side whispers.
It’s not just you.
So if you’ve found yourself not quite believing what you’re seeing, not quite believing that all hell could break loose in America at any point now, you aren’t alone. If you look at everything heading to hell on a greasy slide and think it doesn’t feel real, it’s not just you. I’m feeling that way myself.
I’m sharing this because I bet a lot of people are feeling the same way. Second-guessing themselves. Doubting themselves. Feeling like they aren’t good preppers. You aren’t alone and I’ll bet a whole lot of folks who won’t admit it feel this way too.
We don’t believe it because we don’t want to believe it. We never actually wanted to be right when we stockpiled and learned skills and bought more supplies that we actually had room to house.
But the thing that puts us ahead in this situation is that we prepared anyway. We learned anyway. And when we see the more obvious signs of a societal breakdown we will be able to accept it a lot faster than those who never even considered it.
Tyler Durden
Sat, 03/14/2020 – 23:30 -
- Enterprising Opportunists Confronted At Costco For Lysol Wipe Profiteering
Enterprising Opportunists Confronted At Costco For Lysol Wipe Profiteering
A Vancouver couple has come under fire for buying up literal truck-loads of Lysol disinfecting wipes from a local Costco and reselling them for a significant markup, according to Toronto Star reporter Douglas Quan.
Yesterday I went to a Costco store, where I stumbled across this couple loading their pickup with piles of Lysol wipes. They hit up all the local Costcos daily, clearing shelves of wipes/liquid cleaner and re-selling them on Amazon. https://t.co/sYQhfxkUrG via @torontostar
— Douglas Quan (@dougquan) March 13, 2020
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Quan was on-scene to report on people stocking up on supplies when he ran into the couple, Manny Ranga and Violeta Perez, who told Quan they were buying in bulk and reselling on Amazon.
“Before I even got to the front entrance, I stumbled across this couple who were loading up the back of their Ford pick-up truck with these stacks and stacks of Lysol disinfecting wipes,” Quan said. “Naturally that piqued my curiosity, and so I approached them and started chatting with them.”
The pair explained to Quan how they hit several Costco locations every day in Vancouver, Richmond and Burnaby, buy up all the Lysol wipes and cleaning liquid on hand, then turn them around for re-sale on their Amazon store Violeta & Sons Trading Ltd.
“It’s a big opportunity with all these products,” Ranga told the Star.
Quan says they had what appeared to be hundreds of cases stacked up on Costco pallets — enough that Ranga had to take two trips to get them all home.
“They were attracting a fair amount of attention from shoppers going in and out of the store. I wasn’t the only person there that, you know, couldn’t help but stop and stare,” he said.
“One woman came up and remarked, ‘Gosh, is that all for you?‘ And another woman later on came by and said, ‘Wow, someone’s making a lot of money today.'” –CBC
A six-pack of wipes sells for around $20 at Costco, but goes for around $80 online, according to the c ouple. Ranga told Quan they’d spent around $70,000 on bulk buys and raked in around $100,000 in sales.
Amazon has since suspended the couple’s account, according to CBC.
Other profiteers have also been cut-off from online selling platforms. The New York Times is out with a Saturday piece on Tennessee brothers Matt and Noah Colvin, who set out on a 1,300 mile journey in a U-Haul truck to buy thousands of bottles of hand sanitizer and antibacterial wipes, mostly from “little hole-in-the-wall dollar stores in the backwoods,” as “The major metro areas were cleaned out.”
An Amazon merchant, Matt Colvin, with an overflow stock of cleaning and sanitizing supplies in his garage in Hixson, Tenn.Credit…Doug Strickland for The New York Times Matt Colvin stayed home near Chattanooga, preparing for pallets of even more wipes and sanitizer he had ordered, and starting to list them on Amazon. Mr. Colvin said he had posted 300 bottles of hand sanitizer and immediately sold them all for between $8 and $70 each, multiples higher than what he had bought them for. To him, “it was crazy money.” To many others, it was profiteering from a pandemic. –New York Times
Then, Amazon pulled his items along with thousands of other listings for sanitizer, wipes and face masks – suspending sellers and warning others that if they continue to price-gouge they’ll lose their accounts.
Ebay has followed suit with even stricter measures which prohibit the US sale of masks or sanitizer.
In early February, as headlines announced the coronavirus’s spread in China, Mr. Colvin spotted a chance to capitalize. A nearby liquidation firm was selling 2,000 “pandemic packs,” leftovers from a defunct company. Each came with 50 face masks, four small bottles of hand sanitizer and a thermometer. The price was $5 a pack. Mr. Colvin haggled it to $3.50 and bought them all.
He quickly sold all 2,000 of the 50-packs of masks on eBay, pricing them from $40 to $50 each, and sometimes higher. He declined to disclose his profit on the record but said it was substantial.
The success stoked his appetite. When he saw the panicked public starting to pounce on sanitizer and wipes, he and his brother set out to stock up. -NYT
Now, Colvin is sitting on 17,700 bottles of sanitizer with no idea where to sell them.
Hand sanitizer that Mr. Colvin is keeping in a storage locker.Credit…Doug Strickland for The New York Times “It’s been a huge amount of whiplash,” he said. “From being in a situation where what I’ve got coming and going could potentially put my family in a really good place financially to ‘What the heck am I going to do with all of this?'”
Buddy, I have some terrible news: the person you said this to is a reporter for the @nytimes: https://t.co/RAe4Y9VIeY pic.twitter.com/kSMZO6bFRV
— Nick Baumann (@NickBaumann) March 14, 2020
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Blowback
Massachusetts nurse Mikeala Kozlowski had some harsh words for disinfectant profiteers as she continues a fruitless search for sanitizer since before she gave birth to her first child on March 5.
“You’re being selfish, hoarding resources for your own personal gain,” she said.
Meanwhile, companies like Amazon have justified their crackdown as violating their policies.
“Price gouging is a clear violation of our policies, unethical, and in some areas, illegal,” said Amazon in a statement. “In addition to terminating these third party accounts, we welcome the opportunity to work directly with states attorneys general to prosecute bad actors.”
Read the rest of the report here.
Tyler Durden
Sat, 03/14/2020 – 23:05 - The Pandemic Stress Test
The Pandemic Stress Test
Authored by Raghuram Rajan via Project Syndicate,
The coronavirus pandemic has taken the world by surprise and will now expose underlying economic weaknesses wherever they lie. But the crisis also reminds us that we live in a deeply interconnected world. If the pandemic has any silver lining, it is the possibility of a much-needed reset in public dialogue that focuses attention on the most vulnerable in society, on the need for global cooperation, and on the importance of professional leadership and expertise.
Apart from the direct impact on public health, a crisis of this magnitude can trigger at least two direct kinds of economic shock.
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The first is a shock to production, owing to disrupted global supply chains. Suspending the production of basic pharmaceutical chemicals in China disrupts the production of generic drugs in India, which in turn reduces drug shipments to the United States.
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The second shock is to demand: as people and governments take steps to slow the spread of the coronavirus, spending in restaurants, shopping malls, and tourist destinations collapses.
But there is also the potential for indirect aftershocks, such as the recent plunge in oil prices following Russia and Saudi Arabia’s failure to agree on coordinated output cuts. As these and other shocks propagate, already stressed small- and medium-size businesses could be forced to shut down, leading to layoffs, lost consumer confidence, and further reductions in consumption and aggregate demand.
Moreover, downgrades to, or defaults by, highly leveraged entities (shale-energy producers in the US; commodity-dependent developing countries) could lead to wider losses in the global financial system. That would curtail liquidity and credit, and trigger a dramatic tightening of the financial conditions that have hitherto been so supportive of growth.
The parade of horrible possibilities could go on. The more fundamental point to remember is that the world economy never fully recovered from the 2008 global financial crisis, nor were the underlying problems that produced that disaster ever fully addressed. On the contrary, governments, businesses, and households around the world have piled on more debt, and policymakers have undermined trust in the global trading and investment system.
But even though the world started with a weak hand, our response to the COVID-19 crisis could be far better than it has been. The immediate task is to limit the spread of the virus through widespread testing, rigorous quarantines, and social distancing. Most developed countries should be well-positioned to implement such measures; yet, Italy has been overwhelmed by the epidemic, and the US response has not exactly inspired confidence.
Looking ahead, unless the coronavirus is eradicated globally, it could always return, or even become a seasonal disruption. If an effective treatment is not discovered soon (Gilead’s antiviral drug remdesivir currently shows some promise), all countries will face a choice between walling themselves off entirely and pushing for a global effort to eradicate the virus. Given that the former is an impossibility, the latter seems the natural choice. But it would require a degree of global leadership and cooperation that is sorely lacking. The presidency of the G20 is currently held by Saudi Arabia, which is mired in internal and external disputes; and US President Donald Trump’s administration has repudiated multilateral action from the outset.
Still, some key countries could accomplish much if they stepped up to lead a global response, including by persuading more countries of the value of cooperation. For example, countries that have been relatively successful in managing the epidemic, such as China and South Korea, could share best practices. And as individual countries bring the coronavirus under control within their own borders, they could dispatch spare resources to countries that need more experienced medical personnel, respirators, testing kits, masks, and the like.
Moreover, China and the US might finally be cajoled into reversing recent tariff increases and dispensing with threats of new ones (such as on cars). While a temporary reduction in tariffs would do little to enhance cross-border investment, it would at least offer a slight boost to trade. Moreover, an accord could enhance business sentiment about the post-pandemic recovery.
Within countries, the immediate task – after implementing measures to contain the virus – is to support those in the informal or gig economy whose livelihoods will be disrupted by quarantines and social distancing. Those who are most vulnerable economically also tend to be those who lack access to medical care. Hence, at a minimum, governments should offer cash transfers to these individuals – or to everyone, if vulnerable populations are hard to identify – as well as coverage for virus-related medical expenses. Similarly, a moratorium on some tax payments may be necessary to help small- and medium-sized businesses, as would partial loan guarantees and other measures to keep credit flowing.
In developed countries, in particular, the pandemic will soon reveal just how many people have joined the ranks of the precariat in recent years. This cohort skews young and includes many of those living in “left-behind” places. By definition, the precariat’s members lack the skills or education needed to secure stable jobs with benefits, and thus have little stake in “the system.” Cash transfers would send a message that the system still cares. But, of course, far more will need to be done to expand the social safety net and extend new opportunities to the economically marginalized.
Populist parties and leaders have capitalized politically on the plight of the precariat, but they have failed to live up to their promises – even where they actually hold power. The pandemic may have a silver lining here, too. Governments that have undermined established disaster-preparedness agencies and early-warning protocols are now finding that they need the professionals and experts after all. COVID-19 has been quick to expose amateurism and incompetence. If the professionals are allowed to do their jobs, they can restore some of the public’s lost trust in the establishment.
In the political arena, a more credible professional establishment will have an opportunity to advance sensible policies that address the problems facing the precariat without ushering in class warfare. But these openings won’t last forever. If the professionals fail to capitalize on them, the pandemic will offer no silver linings – only more dread, division, chaos, and misery.
Tyler Durden
Sat, 03/14/2020 – 22:40 -
- California Governor Issues Executive Order Allowing State To Commandeer Hotels, Motels For Coronavirus Patients
California Governor Issues Executive Order Allowing State To Commandeer Hotels, Motels For Coronavirus Patients
California Governor Gavin Newsom (D) issued an executive order on Thursday that allows the state to take over hotels and motels in order to convert them into medical housing for coronavirus patients, according to the Palm Springs Desert Sun.
According to the report, patients from the Grand Princess cruise ship have already been moved to such facilities, such as a 120-room hotel in San Carlos located near San Francisco. Officials are also looking for potential patient housing in “mothballed” facilities that could be cleaned up and repurposed.
“As you can imagine, under our pandemic planning, we’re also looking to secure additional assets,” said Newsom.
Under the executive order, the state’s Health and Human Services Agency and the Office of Emergency Services can commandeer private property for coronavirus treatment, as well as offer economic relief for residents, Fox News reports.
BREAKING: CA has waived the 1 week waiting period for those unemployed or disabled as a result of COVID-19.
If a medical professional says you’re unable to work, if your hours have been reduced, or your employer has shut down — you can file a claim.
—> https://t.co/EHzOdKgoV3— Gavin Newsom (@GavinNewsom) March 12, 2020
“This is where we need to go next, and to make sure we fully implement those procedures and protocols to slow down the spread to get through a peak and to get through the next few months, so we don’t overwhelm our healthcare delivery system,” Newsom said, according to the LA Times.
The executive order also eliminates a one-week waiting period for unemployment benefits. In Sacramento, meanwhile, the City Council approved a $1 million economic relief package in a Friday night vote which will provide zero-interest loans of up to $25,000 to restaurants, retail, daycare and other businesses which are being affected by coronavirus precautions.
Meanwhile in Los Angeles, Mayor Eric Garcetti closed City Hall to the public along with banning all events or conferences on city-owned property which will have over 50 people. Meetings will be conducted via teleconference.
“We are entering a critical period,” said Garcetti, adding “These are common-sense measures.”
There are currently 282 known cases of COVID-19 in California, which is home to around 40 million people.
Tyler Durden
Sat, 03/14/2020 – 22:15 - The Good Luck Ran Out Because The Dollars Did
The Good Luck Ran Out Because The Dollars Did
Authored by Jeffrey Snider via Alhambra Investments,
Jay Powell has a lot of catching up to do, and very little time to do it. He’s squandered so much already. First his emergency rate cut blew up in his face and now his dud of a bazooka. Before the market got going, officials had already added a 25-day allotment (of bank reserves, of course) on top of the usual overnight and 14-day terms.
Obviously, it wasn’t enough; or, more accurately, it wasn’t the right thing. Undeterred, Powell’s Fed decided at some point during the disastrous morning to just say, screw it, and raise the roof. In a matter of hours, a 3-month (84-day) “repo” auction was announced, conducted, and closed.
The scale of the thing was supposed to wow you and all the suddenly impatient sellers on the NYSE (not intended as much for the repo market, as you’ll see). Half a trillion, baby! That’s the amount of “liquidity” authorities put up for bidding on this day of days.
Dealers ended up taking in all of $78.4 billion, or about 16% of what was possible. Either things aren’t nearly as bad as they seem (literally no one is buying that scenario), or something is wrong in bank reserve-land. Perhaps dealers just don’t want them, or maybe they don’t have the spare collateral to post for them.
Even the stock market (THE STOCK MARKET!!!) wasn’t impressed. It is maybe starting to dawn on folks the central truth in all this – the central bank just isn’t central. The monetary world is so much more complicated than the simple model employed by both classroom Economics and the technically deficient policymakers these days struggling just to get by on a daily basis.
The theoretical issue, much of it, stems from a misreading of the Great “Moderation.” The pre-crisis era had been written down as the product of several factors, including Greenspan’s allegedly maestro-like performance.
The Economists who coined the term Great “Moderation” weren’t actually so sure. In their groundbreaking 2002 paper, James Stock and Mark Watson pointed to one unknown factor. Unable to determine what it was, they gave up trying and just declared it random good luck.
Seriously, that’s what they concluded. That, among other factors, had for several decades kept the US system (because that’s what they studied, not the global system) fortunate enough to have been spared the plague of financial crises that used to be regular features of the economic landscape.
What these two concluded should have made monetary officials’ blood run cold:
But because most of the reduction seems to be due to good luck in the form of smaller economic disturbances, we are left with the unsettling conclusion that the quiescence of the past fifteen years could well be a hiatus before a return to more turbulent economic times.
Ben Bernanke read the piece and immediately went on a determined road-show to hog all the credit. Nonsense, he declared, it was the brand-new (the eighties) monetary policy regime (interest rate targeting, meaning expectations) that was responsible. No good luck, just Economists. Geniuses, every one.
Looking back at it now, it is much easier to see for those who honestly seek some answers. Stepping outside the central bank cult, we find that Bernanke was right – it wasn’t good luck, after all – but desperately wrong in assigning the Fed its celebratory parade. A premature parade, obviously, as he would find out, but not figure out, just a few years later.
Even 2007 had been forewarned. Though the US had been steered clear of financial crisis, the world hadn’t during this period. Smaller crises were still relatively common, and then a much bigger one in 1998. The Asian financial crisis was a regional dollar shortage, and contained, largely, within a region that wasn’t so enormous and important at the time, a test of the system that had developed from the seventies forward.
It was this new global monetary arrangement that had kept the world within narrow tolerances, the US most of all. Not Greenspan and his ridiculous show of quarter-point fed funds adjustments, instead the supremacy of global eurodollar banks that had stapled LIBOR to fed funds and policed the entire hierarchy.
The banks did the heavy money lifting for which central bankers like Greenspan and Bernanke were only too happy to take credit – while they could. So long as that hidden shadow money system in the world’s vast offshore spaces kept expanding it kept the forces of domestic and global monetary crashes at bay; not good luck but blindness.
But the Asian flu had also been a key warning for what could happen. It showed the downside of a globalized economy dependent upon the quick and easy accessibility of (euro)dollars. So long as they are available, meaning banks not central banks, everything was hunky dory; Great Moderation and whatnot.
Once they started to disappear in sufficient numbers, look the hell out!
The warning, of course, went completely unheeded; Greenspan then Bernanke more interested in the vanity of interest rate targeting and all the media and academic adulation that came with it – one pattern, at least, unbroken all the way to Jay Powell, a curious trait of incuriosity about how nothing seems to work as planned ever since, oh, 2008 or so. No one bothered to check the assumptions, even after 1998 as well as Japan’s failures with QE in the early 2000’s.
The world’s luck didn’t run out on August 9, 2007, the eurodollars did. Global dollar shortage. Ever since, it has been one global headache after another, some worse, some relatively mild. But scarcely a year has been put into the books without the words “global” “dollar” “shortage” and it hasn’t mattered one bit what the level of bank reserves were or had become during any of them.
Rising dollar means dollar shortage (see below; particularly Norway’s currency).
As Europe’s ill-fated LTRO’s (which were exactly alike these Fed “repo” operations), the Fed doesn’t plug in to this system. They don’t even speak the right language.
As I wrote back in 2017, amidst the hysteria and hype of the inflation globally synchronized growth was going to bring and the apparent return of good luck for that one year:
It was never monetary policy that created the Great “Moderation”, and outside of the narrow confines of orthodox definitions that period was never so moderate to begin with. As the eurodollar system built up, it only appeared that way because output was stable so long as what was hidden far out of view remained drastically immoderate. Now that is no longer the case, where the eurodollar system reverses, decays, and acts as an anchor upon global output, there is no stability anywhere. Suddenly exogenous shocks (like “global turmoil”) are the rule rather than the exception where even the US economy is concerned.
That about sums up 2020 so far, including the hapless Fed’s increasingly absurd flailing. Did the puppet show finally disappoint the last of its audience?
Tyler Durden
Sat, 03/14/2020 – 21:50 - Attention NHTSA: Second Tesla In A Week Has Plowed Through Storefront In Coachella Valley
Attention NHTSA: Second Tesla In A Week Has Plowed Through Storefront In Coachella Valley
We’re not sure what it’s going to take the NHTSA to establish some sort of pattern, but sadly, if they haven’t “gotten it” by now we’re not sure that they’re ever going to. And when people start dying from these types of accidents, there’s going to be a lot of blame to go around.
Yet another Tesla has somehow wound up buried in yet another storefront.
In Palm Springs late last week a driver suffered minor injuries after “crashing a Tesla into a building”, according to the Palm Spring Desert Sun. Stop us if you’ve seen a photograph like this one before:
The car plowed through the front of Desert Vision Optometry, also causing minor injuries to an employee. The cause of the crash remains under investigation. The car crashed through the “front of the building” and “stopped in the lobby” according to reports. Workers in the building said that no one else was injured.
But even more noteworthy is the fact that this is the second time in a week that a Tesla has crashed through the front of the building in the Coachella Valley.
On March 4, another driver, an elderly woman, plowed her Tesla through the front of Mastro’s Steakhouse in Palm Desert.
The Palm Springs Fire Department Tweeted out video of the latest incident, showing the Tesla lodged in the storefront:
Alert- units are currently on scene of the 500 block of South Sunrise, vehicle into a commercial structure, at this time 2 possible patients. pic.twitter.com/8KDa5fEJyc
— Palm Springs Fire Department (@PalmSpringsFire) March 12, 2020
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While the cause of the first accident is still under investigation, what exactly is it going to take for regulators to start to notice this pattern, which is becoming egregious, and begin to ask pointed questions about why, every time we see a vehicle crash through a storefront in the United States, it just happens to be a Tesla.
We won’t hold our breath waiting for that to happen.
Tyler Durden
Sat, 03/14/2020 – 21:25 - Price Of Physical Gold Decouples From Paper Gold
Price Of Physical Gold Decouples From Paper Gold
Submitted by BullionStar.com
In the last month, from 14 February 2020 to 14 March 2020, we have seen a record number of orders, record order revenue and a record number of visits to our newly renovated and extended bullion centre at 45 New Bridge Road in Singapore.
For the above-mentioned period, we have served 2,626 customers with a sales revenue of more than SGD 50 M, which is 477% higher compared to the same period last year.
The last few days have been our busiest days of all time. Our staff members have been doing a fantastic job in going out of their way to serve as many customers as possible.
With order volume increasing to this magnitude, it’s difficult for us to timely answer all phone and support requests but we are doing our very best to keep response times down.
Gold & Silver Shortages – Supply Squeeze
The enormous increase in demand is straining our supply chains. BullionStar has supplier relations with most of the major refineries, mints and wholesalers around the world. Most of our suppliers don’t have any stock of precious metals and are not taking orders currently. The U.S. Mint for example announced just this Thursday that American Silver Eagle coins are sold out. The large wholesalers in the U.S. are completely sold out of ALL gold and ALL silver and are not able to replenish.
We are already sold out of several products and will sell out of additional products shortly if this supply squeeze continues. All products listed as “In Stock” on our website are available for immediate delivery. For items listed as “Pre-Sale”, the items have been ordered and paid by us with incoming shipments on the way to us.
Paper Gold vs. Physical Gold
As we have repeated frequently over the years, only physical gold is a safe haven.
It’s noteworthy that the paper price of gold, although up 5.7% Year-to-Date denominated in SGD, has been trading downward in the last few days.
Paper gold is traded on the unallocated OTC gold spot market in London and on the COMEX futures market in New York. Both of these markets are derivative markets and neither is connected to the physical gold market.
This means that the physical gold market is a price taker, inheriting the price from the paper market, and that the derivative markets are the exclusive and dominant price makers. The entire market structure of this financialized gold trading is flawed. So while there is unprecedented demand for physical gold, this is not reflected in the gold price as derived by COMEX and the London unallocated spot market.
By now it is abundantly clear that the physical gold market and paper gold market will disconnect.
If the paper market does not correct this imbalance, widespread physical shortages of precious metals will be prolonged and may lead to the entire monetary system imploding.
And with progressive central banks in Eastern Europe and Asia having stocked up on gold in the last three years, gold will likely be the anchor of the new monetary system arising out of the ashes.
Mainstream media assertions that “Gold has been stripped of its Safe Haven Status” are utterly ridiculous and distorted beyond belief, when in fact the complete opposite is true. Unbacked paper gold and silver may be stripped of safe haven status, but certainly not real physical gold bullion.
Physical Premiums & Spreads
The current supply squeeze and physical bullion shortage has caused and is causing an increase in price premiums. It’s currently difficult and expensive for us to acquire any inventory. We have therefore had to increase premiums on products to compensate for the constraints. We have endeavoured to also raise our prices offered to customers selling to us, but with the extreme volatility and wild price fluctuations, the spread between the buy and sell price may temporarily be larger than normal. It is regrettable that premiums and spreads are larger than normal but it is outside our control that the paper market is not reflecting the demand and supply of the physical market. As many of you know, we are one of the largest critical voices of the LBMA run paper market and its bullion bank members in London.
Please note that premiums are likely to be higher on weekends when the markets are closed compared to weekdays.
We do not take lightly the decision to alter premiums but feel that it is a better alternative than to stop accepting orders altogether during weekends. Likewise it is a better alternative than to stop accepting orders when the paper gold market is in turmoil and failing to reflect the demand and supply realities of the physical bullion market.
Currently, we are completely sold out on BullionStar Gold Bars, BullionStar Silver Bars and are running low on several other products which we are not able to replenish for now. Several stock items will therefore likely go out of stock shortly. This is despite us having been aggressively buying bullion to create a buffer reserve inventory.
Tyler Durden
Sat, 03/14/2020 – 21:00 - Mexico Mulls Shutting Northern Border Over Virus Spread Threat
Mexico Mulls Shutting Northern Border Over Virus Spread Threat
Mexican Deputy Health Secretary Hugo Lopez-Gatell has considered shutting down its northern border with the US to limit the spread of Covid-19, reported Reuters.
“The possible flow of coronavirus would come from the north to the south. If it were technically necessary, we would consider mechanisms of restriction or stronger surveillance,” Lopez-Gatell told reporters on Thursday.
The lack of test kits in Mexico and the US have made it difficult to get an accurate reading of community spreading in both countries. So far, Mexico has confirmed 16 cases and no deaths. The US has 2,174 cases and 47 deaths.
Americas Covid-19 Virus Map The World Health Organization declared Covid-19 a global pandemic last week, which has rapidly spread to more than 147,000 people from Asia to the Middle East, Europe, and now to the Americas. The virus has transformed the usual US-Mexico border dispute into another crisis, not because of migrants and drugs, but rather the fear of virus transmission.
Mexican health officials pointed out the fast-spreading virus in California could make its way through several land port of entries south of San Diego. In particular, the San Ysidro Land Port of Entry, the busiest land port in the Western Hemisphere.
San Ysidro Port of Entry President Trump tweeted last week, “We need the Wall more than ever!” Trump made similar comments during a political rally in South Carolina last month:
“One of the reasons the numbers are so good: We will do everything in our power to keep the infection and those carrying the infection from entering our country,” he said. “You’ve all seen the wall has gone up like magic.”
Last week, Trump tweeted, “because we have had a very strong border policy, we have had 40 deaths related to CoronaVirus. If we had weak or open borders, that number would be many times higher!”
US ambassador to Mexico Christopher Landau said Thursday the virus outbreak is another reason for stricter border controls.
“For both countries, it doesn’t benefit us to have completely open borders,” Landau said. “We see it now with the virus, and hopefully we can work closely together because in health issues, political parties and borders aren’t important.”
As virus cases and deaths rise in the US, the probabilities increase of a border shutdown or at least reduced travel through major land ports between both countries.
Tyler Durden
Sat, 03/14/2020 – 20:35 - Doug Casey: The "Greater Depression" Is Coming
Doug Casey: The “Greater Depression” Is Coming
You’ve no doubt seen the headlines on CNN and Bloomberg.
“Coronavirus Pandemic Could Spark a Global Depression.”
“Will China Virus Trigger New Great Depression?”
There’s plenty of concern that the coronavirus outbreak is pushing us toward a crash. And after the market’s recent dive, the panic is only growing.
Regular readers know Casey Research founder Doug Casey sees the next depression around the corner. But as he explains below, “government coercion” planted the seeds for a downturn long before the coronavirus appeared.
And Doug’s predicting this “Greater Depression” will break records…
Authored by Doug Casey via CaseyResearch.com,
Just because society experiences turmoil doesn’t mean your personal life has to. And a depression doesn’t have to be depressing. Most of the real wealth in the world will still exist – it will just change ownership.
What is a depression?
We’re now at the tail end of a very long, but in many ways a very weak and artificial, economic expansion. At the same time, we’ve had one of the strongest securities bull markets in history. Both are the result of trillions of new dollars created over the last decade. Right now, very few people are willing to consider the possibility of tough times – let alone The Greater Depression.
But, perverse though it may seem, this is the very best time to think about it. The U.S. economy is a house of cards, built on quicksand, with a tsunami on the way. I urge everyone to read up on the topic. For now, I’ll only briefly touch on the nature of depressions. There are at least three good definitions of the term:
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A period of time when most people’s standard of living drops significantly.
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A period of time when distortions and misallocations of capital are liquidated.
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A period of time when the business cycle climaxes.
Using the first definition, any natural disaster can cause a depression. So can living above your means for long enough. But the worst kind of depression has not just economic effects, but economic causes. That’s where definitions two and three come in.
What can cause distortions in the way the market operates, causing people to do things they’d otherwise consider unreasonable or uneconomic? Only government action, i.e., coercion. This takes the form of regulation, taxes, and currency inflation.
Always under noble pretexts, government is constantly directly and indirectly inducing people to buy and sell things they otherwise wouldn’t, to do things they’d prefer not to, and to invest in things that make no sense.
These misallocations of capital subtly reduce a society’s general standard of living, but the serious trouble happens when such misallocations build up to an unsustainable degree and reality forces them into liquidation. The result is bankrupted companies, defaulted debt, and unemployed workers.
The business cycle is caused mainly by currency inflation, which is accomplished today by the monetization of government debt through the banking system; essentially, when the government runs a deficit, the Federal Reserve buys its debt, and credits the government’s account at a commercial bank with dollars. Using the printing press to create new money is largely passé in today’s electronic world.
Either way, inflation sends false signals to businessmen (especially those who get the money early on, as it filters through the economy), making them overestimate demand for their products. That causes them to hire more workers and make capital investments – often with borrowed money. This is called “stimulating the economy.”
Inflating the currency can actually drive down interest rates for a while, because the price of money (interest) is lowered by the increased supply of money. This causes people to save less and borrow more, just as Americans have been doing for years. A lot of that newly created money goes into the stock market, driving it higher.
It all looks pretty good, until retail prices start rising as a delayed consequence of the increased money supply, and interest rates skyrocket to reflect the depreciation of the currency.
That’s when businesses start failing. Stocks fall. Bond prices collapse. Large numbers of workers lose employment.
Rather than let the market adjust itself, government typically starts the process all over again with a new and larger “stimulus package.” The more often this happens, the more ingrained become the distortions in the way people consume and invest, and the nastier the eventual depression.
This is why I predict the Greater Depression will be… well… greater. This is going to be one for the record books. Much different, much longer lasting, and much worse than the unpleasantness of 1929-1946.
* * *
As Doug said, the Greater Depression is on the horizon. Smart investors should start preparing now… and gold offers one of the best ways to protect your portfolio. That’s why you need to watch this short video, where Doug lays out exactly what’s happening in the gold market right now. And a shocking new rule – the first of its kind in 45 years – that’s putting gold back in international headlines. It’s already setting off a buying frenzy… a “gold panic” unlike anything we’ve seen since the early 1970s. Go here for the full story… including details on the five explosive gold stocks that are the best way to play this boom.
Tyler Durden
Sat, 03/14/2020 – 20:10 -
- "More Violent, More Persistent": Market Fear Worse Now Than In 2008, Man Who Inspired VIX Says
“More Violent, More Persistent”: Market Fear Worse Now Than In 2008, Man Who Inspired VIX Says
The academic best known for coming up with the idea of the VIX – also know as Wall Street’s fear gauge – says that the fear looming over the markets now is far greater than the fear we faced in 2008.
Dan Galai, a professor at the Hebrew University of Jerusalem told Bloomberg:
“The level of uncertainty is even beyond what we saw in 2008 immediately after Lehman Brothers collapsed.”
Galai continued:
“If you look at 2008, it spiked and then within a day or two, it was going down very fast. Here, it’s been steadily going up instead of going down. It’s more violent, and it’s more persistent.”
The VIX is an indicator of expected near-term swings in the S&P 500 and has closed above 45 for four days in a row, which is the longest streak of this kind since 2009. It closed on Friday at 63, despite stocks spiking during the last half hour of trading. The VIX spiked up to 76 on Thursday, as stocks experienced the largest one day drop since October 1987.
Galai notes that monetary response likely won’t do much to stave off the problem.
“I don’t think interest rates have any effect right now. Monetary steps, in my view, are completely redundant,” he said.
Galai had proposed using gauges to measure volatility in 1989 and his proposal led to the CBOE VIX. Galai likens strategies that short volatility – including one that buried a Credit Suisse short-volatility note in 2018, as a “substitute for Las Vegas”.
Now you tell us…
Tyler Durden
Sat, 03/14/2020 – 19:45 - Tverberg: It Is Easy To Overdo Covid-19 Quarantines
Tverberg: It Is Easy To Overdo Covid-19 Quarantines
Authored by Gail Tverberg via Our Finite World blog,
We have learned historically that if we can isolate sick people, we can often keep a communicable disease from spreading.
Unfortunately, the situation with the new coronavirus causing COVID-19 is different: We can’t reliability determine which people are spreading the disease. Furthermore, the disease seems to transmit in many different ways simultaneously.
Politicians and health organizations like to show that they are “doing something.” Because of the strange nature of COVID-19, however, doing something is mostly a time-shifting exercise: With quarantines and other containment efforts, there will be fewer cases now, but this will be mostly or entirely offset by more cases later. Whether time-shifting reduces deaths and eases hospital care depends upon whether medical advances are sufficiently great during the time gained to improve outcomes.
We tend to lose sight of the fact that an economy cannot simply be shut down for a period and then start up again at close to its former level of production. China seems to have seriously overdone its use of quarantines. It seems likely that its economy can never fully recover. The permanent loss of a significant part of China’s productive output seems likely to send the world economy into a tailspin, regardless of what other economies do.
Before undertaking containment efforts of any kind, decision-makers need to look carefully at several issues:
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Laying-off workers, even for a short time, severely adversely affects the economy.
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The expected length of delay in cases made possible by quarantines is likely to be very short, sometimes lasting not much longer than the quarantines themselves.
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We seem to need a very rapid improvement in our ability to treat COVID-19 cases for containment efforts to make sense, if we cannot stamp out the disease completely.
Because of these issues, it is very easy to overdo quarantines and other containment efforts.
In the sections below, I explain some parts of this problem.
[1] The aim of coronavirus quarantines is mostly to slow down the spread of the virus, not to stop its spread.
As a practical matter, it is virtually impossible to stop the spread of the new coronavirus.
In order to completely stop its spread, we would need to separate each person from every other person, as well as from possible animal carriers, for something like a month. In this way, people who are carriers for the disease or actually have the disease would hopefully have time to get over their illnesses. Perhaps airborne viruses would dissipate and viruses on solid surfaces would have time to deteriorate.
This clearly could not work. People would need to be separated from their children and pets. All businesses, including food sales, would have to stop. Electricity would likely stop, especially in areas where storms bring down power lines. No fuel would be available for vehicles of any kind. If a home catches fire, the fire would need to burn until a lack of material to burn stops it. If a baby needs to be delivered, there would be no midwife or hospital services available. If a person happened to have an appendicitis, it would simply need to resolve itself at home, however that worked out.
Bigger groups could in theory be quarantined together, but then the length of time for the quarantine would need to be greatly lengthened, to account for the possibility that one person might catch the disease from someone else in the group. The bigger the group; the longer the chain might continue. A group might be a single family sharing a home; it could also be a group of people in an apartment building that shares a common ventilating system.
[2] An economy is in many ways like a human being or other animal. Its operation cannot be stopped for a month or more, without bringing the economy to an end.
I sometimes write about the economy being a self-organizing networked system that is powered by energy. In physics terms, the name for such a system is a dissipative structure. Human beings are dissipative structures, as are hurricanes and stars, such as the sun.
Human beings cannot stop eating and breathing for a month. They cannot have sleep apnea for an hour at a time, and function afterward.
Economies cannot stop functioning for a month and afterward resume operations at their previous level. Too many people will have lost their jobs; too many businesses will have failed in the meantime. If the closures continue for two or three months, the problem becomes very serious. We are probably kidding ourselves if we think that China can come back to the same level that it was at before the new coronavirus hit.
In a way, keeping an economy operating is as important as preventing deaths from COVID-19. Without food, water and wage-producing jobs (which allow people to buy necessary goods and services), the deaths from the loss of the economy would be far greater than the direct deaths from the coronavirus.
[3] A reasonable guess is that nearly all of us will face multiple exposures to the new coronavirus.
Many people are hoping that this wave of the coronavirus will be stopped by warmer weather, perhaps in May or June. We don’t know whether this will happen or not. If the coronavirus does stop, there is a good chance the same virus, or a close variation of it, will be back again this fall. It is likely to come back in waves later, for at least one more year. In fact, if no vaccine is found, it is possible that it could come back, in various variations, indefinitely. There are many things we simply don’t know with certainty at this time.
Epidemiologists talk about the spread of a virus being stopped at the community immunity level. Harvard epidemiologist Marc Lipsitch originally estimated that 40% to 70% of the world’s population would come down with COVID-19 within the first year. He has revised this and now states that it is plausible that 20% to 60% of the world’s population will catch the disease in that timeframe. He also indicates that if the virus cannot be contained, the only way to get it under control is for 50% of the world’s population to become immune to it.
The big issue with containing the coronavirus is that we cannot really tell who has it and who does not. The tests available for COVID-19 are expensive, so giving the test to everyone, frequently, makes no sense. The tests tend to give a many false negatives, so even when they are given, they don’t necessarily detect people with the disease. There are also many people who seem to spread the disease without symptoms. Without testing everyone, these people will never be found.
We hear limited statements such as “The United States surgeon general said Sunday that he thinks the coronavirus outbreak is being contained in certain areas of the country as cases of the virus rise across the United States.” Unfortunately, containment of the virus in a few parts of the world does not solve the general problem. There are lots and lots of uncontained cases around the world. These uncontained cases will continue to spread, regardless of the steps taken elsewhere.
Furthermore, even when we think the virus is contained, there are likely to be missed cases, especially among people who seem to be well, but who really are carriers. Getting rid of the virus is likely to be a major challenge.
[4] There is an advantage to delaying citizens from catching COVID-19. The delay allows doctors to learn which existing medications can be used to help treat the symptoms of the disease.
There seem to be multiple drugs and multiple therapies that work to some limited extent.
For example, plasma containing antibodies from a person who has already had the illness can be injected into a person with the disease, helping to fight the disease. It is not clear, however, whether such a treatment will protect against future attacks of the virus since the patient is being cured without his own immune system producing adequate antibodies.
Some HIV drugs are being examined to see whether they work well enough for it to make sense to ramp up production of them. The antiviral drug remdesivir by Gilead Sciences also seems to have promise. For these drugs to be useful in fighting COVID-19, production would need to be ramped up greatly.
In theory, there is also a possibility that a vaccine can be brought to market that will get rid of the virus. Our past experience with vaccine-making has not been very good, however. Out of 200+ virus-caused diseases that affect humans, only about 20 have vaccines. These vaccines generally need to be updated frequently, because viruses tend to mutate over time.
With some viruses, such as Dengue Fever, people don’t ever build up adequate immunity to the many disease variations that exist. Instead a person who catches Dengue Fever a second time is likely to be sicker than the first time. Finding a vaccine for such diseases seems to be almost impossible.
Even if we can actually succeed in making a vaccine that works, the expectation seems to be that this will take at least 12 to 18 months. By this time, the world may have experienced multiple waves of COVID-19.
[5] There are multiple questions regarding how well European Countries, Japan and the United States will really be able to treat coronavirus.
There are several issues involved:
(a) Even if medicines are identified, can they be ramped up adequately in the short time available?
(b) China’s exports have dropped significantly. Required medical goods that we normally import from China may not be available. The missing items could be as simple as rubbing alcohol, masks and other protective wear. The missing items could also be antibiotics, antidepressants, and blood pressure medications that are needed for both COVID-19 patients and other patients.
(c) Based on my calculations, the number of hospital beds and ICU beds needed will likely exceed those available (without kicking out other patients) by at least a factor of 10, if the size of the epidemic grows. There will also be a need for more medical staff. Medical staff may be fewer, rather than more, because many of them will be out sick with the virus. Because of these issues, the amount of hospital-based care that can actually be provided to COVID-19 patients is likely to be fairly limited.
(d) One reason for time-shifting of illnesses has been to try to better match illnesses with medical care available. The main benefit I can see is the fact that many health care workers will have contracted the illness in the first wave of the disease, so will be more available to give care in later waves of the disease. Apart from this difference, the system will be badly overwhelmed, regardless of when COVID-19 cases occur.
[6] A major issue, both with COVID-19 illnesses and with quarantines arising out of fear of illness, is wage loss.
If schools and day care centers are closed because of COVID-19 fears, many of the parents will have to take off time from work to care for the children. These parent will likely lose wages.
Wage loss will also be a problem if quarantines are required for people returning from an area that might be affected. For example, immigrant workers in China wanting to return to work in major cities after the New Year’s holiday have been quarantined for 14 days after they return.
Clearly, expenses (such as rent, food and auto payments) will continue, both for the mother of the child who is at home because a child’s school is closed and for the migrant worker who wants to return to a job in the city. Their lack of wages will mean that these people will make fewer discretionary purchases, such as visiting restaurants and making trips to visit relatives. In fact, migrant workers, when faced with a 14 day quarantine, may decide to stay in the countryside. If they don’t earn very much in the best of times, and they are required to go 14 days without pay after they return, there may not be much incentive to return to work.
If I am correct that the illness COVID-19 will strike in several waves, these same people participating in quarantines will have another “opportunity” for wage loss when they actually contract the disease, during one of these later rounds. Unless there is a real reduction in the number of people who ultimately get COVID-19 because of quarantines, a person would expect that the total wage loss would be greater with quarantines than without, because the wage loss occurs twice instead of once.
Furthermore, businesses will suffer financially when their workers are out. With fewer working employees, businesses will likely be able to produce fewer finished goods and services than in the past. At the same time, their fixed expenses (such as mortgage payments, insurance payments, and the cost of heating buildings) will continue. This mismatch is likely to lead to lower profits at two different times: (a) when workers are out because of quarantines and (b) when they are out because they are ill.
[7] We likely can expect a great deal more COVID-19 around the world, including in China and in Italy, in the next two years.
The number of reported COVID-19 cases to date is tiny, compared to the number that is expected based on estimates by epidemiologists. China reports about 81,000 COVID-19 cases to date, while its population is roughly 1.4 billion. If epidemiologists tell us to expect 20% to 60% of a country’s population to be affected by the end of the first year of the epidemic, this would correspond to a range of 280 million to 840 million cases. The difference between reported cases and expected cases is huge. Reported cases to date are less than 0.01% of the population.
We know that China’s reported number of cases is an optimistically low number, but we don’t know how low. Many, many more cases are expected in the year ahead if workers go back to work. In fact, there have been recent reports of a COVID-19 outbreak in Shenzhen and Guangzhou, near Hong Kong. Such an outbreak would adversely affect China’s manufactured exports.
Italy has a similar situation. It is currently reported to have somewhat more than 10,000 cases. Its total population is about 60 million. Thus, its number of cases amounts to about 0.02% of the population. If Epidemiologist Lipsitch is correct regarding the percentage of the population that is ultimately likely to be affected, the number of cases in Italy, too, can be expected to be much higher within the next year. Twenty percent of a population of 60 million would amount to 12 million cases; 60% of the population would amount to 36 million cases.
[8] When decisions about quarantines are made, the expected wage loss when workers lose their jobs needs to be considered as well.
Let’s calculate the amount of wage loss from actually having COVID-19. If workers generally work for 50 weeks a year and are out sick for an average of 2 weeks because of COVID-19, the average worker would lose 4% (=2/50) of his annual wages. If workers are out sick for an average of three weeks, this would increase the loss to 6% (3/50) of the worker’s annual wages.
Of course, not all workers will be affected by the new coronavirus. If we are expecting 20% to 60% of the workers to be out sick during the first year of the that the epidemic cycles through the economy, the expected overall wage loss for the population as a whole would amount to 0.8% (=20% times 4%) to 3.6% (=60% times 6%) of total wages.
Let’s now calculate the wage loss from a quarantine. A week of wage loss during a quarantine of the entire population, while nearly everyone is well, would lead to a wage loss equal to 2% of the population’s total wages. Two weeks of wage loss during quarantine would lead to wage loss equal to 4% of the population’s total wages.
Is it possible to reduce overall wage loss and deaths by using quarantines? This approach works for diseases which can actually be stopped through isolating sick members, but I don’t think it works well at all for COVID-19. Mostly, it provides a time-shifting feature. There are fewer illnesses earlier, but to a very significant extent, this is offset by more illnesses later. This time-shifting feature might be helpful if there really is a substantial improvement in prevention or treatment that is quickly available. For example, if a vaccine that really works can be found quickly, such a vaccine might help prevent some of the illnesses and deaths in 2021 and following years.
If there really isn’t an improvement in preventing the disease, then we get back to the situation where the virus needs to be stopped based on community immunity. According to Lipsitch, to stop the virus based on community immunity, at least 50% of the population would need to become immune. This implies that somewhat more than 50% of the population would need to catch the new coronavirus, because some people would catch the new virus and die, either of COVID-19 or of another diseases.
Let’s suppose that 55% would need to catch the COVID-19 to allow the population immunity to rise to 50%. The virus would likely need to keep cycling around until at least this percentage of the population has caught the disease. This is not much of a decrease from the upper limit of 60% during the first year. This suggests that moving illnesses to a later year may not help much at all with respect to the expected number of illnesses and deaths. Hospitals will be practically equally overwhelmed regardless, unless we can somehow change the typical seasonality of viruses and move some of the winter illnesses to summertime.
If there is no improvement in COVID-19 prevention/treatment during the time-shift of cases created by the quarantine, any quarantine wage loss can be thought of as being simply in addition to wage loss from having the virus itself. Thus, a country that opts for a two week quarantine of all workers (costing 4% of workers’ wages) may be more than doubling the direct wage loss from COVID-19 (equivalent to 0.8% to 3.6% of workers’ wages).
[9] China’s shutdown in response to COVID-19 doesn’t seem to make much rational sense.
It is hard to understand exactly how much China has shut down, but the shutdown has gone on for about six weeks. At this point, it is not clear that China can ever come back to the level it was at previously. Clearly, the combination of wage loss for individuals and profit loss for companies is very high. The long shutdown is likely to lead to widespread debt defaults. With less wages, there is likely to be less demand for goods such as cars and cell phones during 2020.
China was having difficulty before the new coronavirus was discovered to be a problem. Its energy production has slowed greatly, starting about 2012-2013, making it necessary for China to start shifting from a goods-producing nation to a country that is more of a services-producer (Figure 1).
Figure 1. China energy production by fuel, based on 2019 BP Statistical Review of World Energy data. “Other Ren” stands for “Renewables other than hydroelectric.” This category includes wind, solar, and other miscellaneous types, such as sawdust burned for electricity.
For example, China’s workers now put together iPhones using parts made in other countries, rather than making iPhones from start to finish. This part of the production chain requires relatively little fuel, so it is in some sense more like a service than the manufacturing of parts for the phone.
The rest of the world has been depending upon China to be a major supplier within its supply lines. Perhaps many of these supply lines will be broken indefinitely. Instead of China helping pull the world economy along faster, we may be faced with a situation in which China’s reduced output leads to worldwide economic contraction rather than economic growth.
Without medicines from China, our ability to fight COVID-19 may get worse over time, rather than better. In such a case, it would be better to get the illness now, rather than later.
[10] We need to be examining proposed solutions closely, in the light of the particulars of the new coronavirus, rather than simply assuming that fighting COVID-19 to the death is appropriate.
The instructions we hear today seem to suggest using disinfectants everywhere, to try to prevent COVID-19. This is yet another way to try to push off infections caused by the coronavirus into the future. We know, however, that there are good microbes as well as bad ones. The ecosystem requires a balance of microbes. Dumping disinfectants everywhere has its downside, as well as the possibility of an upside of killing the current round of coronaviruses. In fact, to the extent that the virus is airborne, the disinfectants may not really be very helpful in wiping out COVID-19.
It is very easy to believe that if some diseases can be subdued by quarantines, the same approach will work everywhere. This really isn’t true. We need to be examining the current situation closely, based on whatever information is available, before decisions are made regarding how to deal with the COVID-19 outbreak. Perhaps any quarantines used need to be small and targeted.
We also need to be looking for new approaches for fighting COVID-19. One approach that is not being used significantly to date is trying to strengthen people’s own immune systems. Such an approach might help people’s own immune system to fight off the disease, thereby lowering death rates. Nutrition experts recommend supplementing diets with Vitamins A, C, E, antioxidants and selenium. Other experts say zinc, Vitamin D and elderberry may be helpful. Staying away from cold temperatures also seems to be important. Drinking plenty of water after coming down with the disease may be beneficial as well. If we can help people’s own bodies fight the disease, the burden on the medical system will be lower.
Tyler Durden
Sat, 03/14/2020 – 19:20 -
- Brawls Erupt As Americans Panic Hoard Supplies Amid Pandemic
Brawls Erupt As Americans Panic Hoard Supplies Amid Pandemic
So, this week, panic hoarding at Costco stores and other big-box retailers got a little more serious when it started on Thursday. Mostly because confirmed Covid-19 cases and deaths are surging across the country, as many fear, increasing coronavirus test kits made available to the public would reveal the true extent of the outbreak. Mass gatherings in many states are starting to be limited, education systems are closing down, and the federal government is now starting to enforce social distancing policies for all citizens, this all suggests, that an Italy-style lockdown could be on the horizon.
Anxieties are increasing this week as brawls have been reported at several big-box retailers. It was unclear what customers were fighting about.
Here’s footage on Thursday of a fight between two customers at a Brooklyn Costco.
#costco #brookly #newyork #CoronavirusPandemic I don’t suggest going to Costco right now pic.twitter.com/7lzJCVhXx3
— William Pei Yuan (@iamwillyuan) March 12, 2020
A Sam’s Club customer on Thursday was stabbed with a wine bottle over a pack of water in Hiram, Georgia.
BREAKING: A man was stabbed with a wine bottle over a pack of water at a Sam’s Club in Hiram. 😳😳😳😳pic.twitter.com/KV5X7MiKpO
— Everything Georgia (@GAFollowers) March 13, 2020
Local police at a Costco in Lynnwood, Washington, were keeping order on Saturday as hundreds of customers wrapped around the building, due to new social distancing policies that only allowed a certain amount of people in the store at one given time.
Went to my local @Costco in Lynnwood, WA and saw this. Local police are present and crowd control policies in place. Long line of people and limiting entry to make sure social distancing is followed. Apparently yesterday was a nightmare. pic.twitter.com/D44ZpChdQy
— Karam Dana كرم دعنا (@KaramDana) March 14, 2020
A longline developed outside the Ann Arbor, Michigan Costco on Saturday.
Ann Arbor Costco this morning at opening. pic.twitter.com/0YKaIvZuf5
— Joseph Johnson (@bigfootballet) March 14, 2020
Now, this is crazy, a huge line extending down a street of people trying to get into La Habra, California Costco.
I have to go to the restroom someone please hold my place in line #costco #lahabra #coronavirus video by lawdog_430 ig pic.twitter.com/bxFqmv3Xq5
— Izzy Money (@izzymoneymane) March 14, 2020
At an undisclosed Costco, apparently all the chicken is gone.
Scenes from a @costco #coronavirus #panic2020 #whycantijustfindchicken pic.twitter.com/lHSjVGmC1u
— Best Effing Mom (@Caroline_315) March 14, 2020
Shelves are bare at a Walmart.
Seriously people, slow down and think.
This is not like a hurricane in a 3rd world country where delivery routes are cut off for months.
The longest you’d be quarantined would be 2 weeks — you don’t need to buy out Walmart & Costco to survive in your home for two weeks pic.twitter.com/6AEizbJYhC
— DrJanesDC™️ 4️⃣5️⃣ (@DrJaneRuby) March 14, 2020
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A Target in Cincinnati, Ohio, limited customers to products on Saturday morning.
Toilet paper supply at a Cincinnati, Ohio was out on Friday evening.
All the fruit is gone at a supermarket in New Jersey around 5 pm Saturday.
Customers clearing shelves at another Costco in California.
This was at Costco yesterday. pic.twitter.com/3wTN0CQjpS
— Edwin Chen (@SinoVoices) March 14, 2020
Once the food runs out at grocery stores, consumers will start panic hoarding guns – oh wait, that’s already happening…
If you thought the lines at the grocery store are long… good morning from Los Angeles 🌴 pic.twitter.com/NudGqwW4I2
— CJ Johnson (@cjjohnsonjr) March 14, 2020
Tyler Durden
Sat, 03/14/2020 – 18:55 - Covid-19 Impacting US Defense Readiness As Pentagon Announces "Minimal Staffing"
Covid-19 Impacting US Defense Readiness As Pentagon Announces “Minimal Staffing”
The Pentagon on Saturday afternoon said it has moved toward “minimal staffing” over coronavirus fears a day after President Trump formally declared a national emergency. CBS national security correspondent Cami McCormick broke the news, describing:
Defense Dept. officials have raised alert level at the Pentagon to Bravo. There will now be “minimal staffing” at the Pentagon due to coronavirus.
Crucially this alert level refers to staffing levels and virus precautionary measures only and is not a reference to DEFCON, which is the national defense readiness condition used to gauge military threats.
AFP via Getty However, as we reported earlier there’s growing concern that the Covid-19 pandemic could significantly impact US defense readiness.
Indeed it appears this is already occurring. Pentagon correspondent for Al Monitor Jack Detsch reports there’s growing confirmed cases among the military and DoD ranks:
JUST IN – 10 service members have tested positive for Coronavirus as of this morning, per sr defense officials, including 1 who has been hospitalized.
1 civilian, 8 DoD dependents, 2 DoD contractors have also tested positive for COVID-19.
— Jack Detsch (@JackDetsch_ALM) March 14, 2020
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CBS’ McCormick additionally reported based on Pentagon officials that “in the next couple of days, the Pentagon may limit the exposure to take out food…tables, buffet lines, etc. inside the Pentagon” over virus outbreak fears.
Approximately 23,000 military and civilian DoD employees work at the Pentagon daily, which includes offices of the top generals among combined branches and the Secretary of Defense. The building famously has five ring corridors per floor which make for a total of 17.5 miles of hallways with endless offices lining each side.
How the Corona virus is going to effect military readiness:
▪️Not enough beds, not enough mil hospitals
▪️Good news, ave soldier is young and in good health
▪️Virus could hit us multiple times like Spanish flu
▪️Could knock units out of commission for wkshttps://t.co/U6Q8NBIHWo— Jack Murphy (@JackMurphyRGR) March 13, 2020
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This comes on the heels of late Friday the Department of Defense restricting all US troop movement in the United States to the “local area” of their assigned bases effective Monday.
“This restriction will halt all domestic travel, including Permanent Change of Station, and Temporary Duty,” said a press statement released with the memo as reported by Defense One. “Additionally, service members will be authorized local leave only.”
The new directives come among broader national efforts to slow the spread of Covid-19 which included Trump’s national ‘State of Emergency’ declared Friday, but at a moment of concern that the virus could devastate densely-packed military barracks and severely impact US defense readiness.
The novel virus “could knock units out of commission for weeks,” writes Army Special Forces veteran and national security journalist Jack Murphy. However, he also adds: “The military is unlikely to be hit by COVID-19 as hard as the general population because the virus particularly affects the sick and elderly according to the Center for Disease Control.”
Currently, some National Guard units have begun deploying in ‘hot zones’ like a community in New Rochelle, in order to assist with quarantines and food and medical supplies delivery.
Tyler Durden
Sat, 03/14/2020 – 18:30 - "No State Is Prepared" – Mapping Where Hospitals Will Run Out Of Beds First If Virus Cases Spike
“No State Is Prepared” – Mapping Where Hospitals Will Run Out Of Beds First If Virus Cases Spike
A USA Today analysis of American Hospital Association (AHA) hospital bed data shows that if confirmed Covid-19 cases and deaths follow similar growth curves as in China, Italy, and Iran, there could be six patients for every existing hospital bed. This means that no hospital system in the US is prepared for a pandemic.
“Unless we are able to implement dramatic isolation measures like some places in China, we’ll be presented with overwhelming numbers of coronavirus patients – two to 10 times as we see at peak influenza times,” said Dr. James Lawler, an infectious disease researcher at the University of Nebraska Medical Center.
Lawler warned that “no hospital has the current capacity to absorb” a massive surge of Covid-19 infections.
USA Today estimates that 23.8 million Americans could be infected. That number is based on an infection rate of 7.4%, similar to the common flu. Some experts say the infection rate could be much higher.
The Johns Hopkins Center for Health Security says infections could hit 38 million, including 9.6 million who will need to be hospitalized, and about 33% of whom would need ICU-level care.
With an infection rate unclear, USA Today’s analysis used that of a mild flu season. It said if everyone in the US who gets infected is hospitalized, that would be 4.7 million patients, which is about 6 per every hospital bed.
The fast-spreading virus could overwhelm the US’ healthcare system if confirmed cases and deaths surge in a 2-3-week period, as it did in China, Italy, and Iran. Currently, Italy’s health care system has been crippled with the lack of hospital beds and respirators. The result of not providing ICU-level treatment to the most critical patients has resulted in the country’s extraordinarily high 6.8% mortality rate.
The doomsday scenario that could play out in the US is an overburden healthcare system, where the most vulnerable cannot get ICU-level treatment, leading to a mortality rate comparable to Italy.
“When hospitals become much more crowded, literally stretched beyond capacity, if I have a heart attack, will I be able to get care? If I have an auto accident, will I get care? How do we triage that?” said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. “We can’t approach this like I approach a game of checkers with my 10-year-old grandson,” he added. “We have to approach this like a chess master thinking 10 to 15 moves down the board.”
Many hospital systems across the US aren’t designed to handle a mass influx of patients from a viral outbreak, indicating that no state is ready for a pandemic.
During the next outbreak, USA Today notes that many West Coast states would experience 20-24 seriously ill patients per available hospital bed. The odds of getting a bed are significantly higher in Rocky Mountain and Plains states. As for the East Coast, sick patients in Maryland and Connecticut would have the most difficulty in obtaining a bed.
When it comes to the rest of the world, the US ranks very low in the number of hospital beds per 1000.
As for ICU beds per 100,000, the US ranks the highest among the global community.
USA Today’s analysis assumes confirmed cases would happen over time, but if observing data from China, Italy, and Iran, Covid-19 outbreaks tend to strike hard and quick. Considering confirmed cases in the US are a little over 2,500 on Saturday afternoon, containment measures for all major metro areas have been missed by over a month. It’s only now preventive strategies to mitigate community spreading are being implemented, and even then, most people are ignoring the warnings to conduct social distancing, which all means cases are likely to increase in the coming weeks.
“Whenever you have an outbreak that you can start seeing community spread … when you have enough of that, then it becomes a situation where you’re not going to be able to effectively and efficiently contain it,” Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told a House committee Wednesday. “Bottom line, it’s going to get worse,” Fauci said.
How much worse is the billion-dollar question. As far as what we can see, the peak crisis has yet to arrive. Containment windows have been missed across major metros, implying that hospital systems could begin experiencing an influx of cases in the weeks ahead. If hospitals get overwhelmed, the US could be the next Italy with high mortality rates.
Tyler Durden
Sat, 03/14/2020 – 18:05 - Governments Fast Reverting To Wartime Tactics & Rhetoric For Coronavirus
Governments Fast Reverting To Wartime Tactics & Rhetoric For Coronavirus
Authored by Jason Ditz via AntiWar.com,
A global pandemic of the coronavirus is hitting nations the world over, and facing a challenge unprecedented in recent history, officials are falling back on wartime tactics, and particularly rhetoric, with promises of grand emergency measures to try to keep things under control.
Emergency measures are mostly in the form of travel control, banning flights to and from certain places. There have been talks of mobilizing militaries, in practice efforts are centered on enforcing quarantines that were already declared. Deeper measures as yet don’t seem to be happening.
Via ABC News France’s President Macron typified the rhetoric of the hour, saying that national greatness meant “women and men able to put the collective interest above all,” while encouraging solidarity and fraternity.
In the US too this state of emergency is mostly just travel bans, though the Pentagon has halted domestic travel beyond local areas for both troops and their dependents. The US is also scaling back involvement in European operations to come.
Today, National Guard soldiers deployed inside New Rochelle’s coronavirus containment zone will receive their operations order, issuing further instructors on how to proceed in the coming days.
Currently, National Guard Military Police and other support units are inside the containment zone providing food and assisting with cleaning public areas inside the zone.
On Tuesday Gov. Andrew Cuomo of New York announced a one-mile containment zone around the Young Israel of New Rochelle synagogue in New Rochelle where there has been a cluster of COVID-19 cases. — Connecting Vets
The National Guard joined forces with Feeding Westchester to help prepare food for quarantined residents in #NewRochelle, NY #coronavirus #COVID2019 #CoronaVirusUpdates #covid19 pic.twitter.com/1iu2RzNeKW
— Reality Index (@Reality_Index) March 14, 2020
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Those operations, a multinational exercise, was meant to be the biggest US involvement there in decades. Officials are now citing “health protection” as a reason to dial back involvement.
For the US, the military isn’t exactly in a position to lead by example. In Afghanistan, the Pentagon is conceding that there are US troops with symptoms, but none have been tested. The reason why is simple: the Pentagon doesn’t have tests to administer.
Tyler Durden
Sat, 03/14/2020 – 17:40 - Ed Snowden: "Social Distancing Is Underrated"
Ed Snowden: “Social Distancing Is Underrated”
In light of the World Health Organization (WHO) finally designating the Covid-19 outbreak seen in 113 countries and territories around the world as a pandemic, the debate this week of “social distancing” has erupted across social media and on Western mainstream media outlets..
The idea is that by canceling schools and large public gatherings, coupled with workers working online from home, there will be a reduction of coronavirus community spread, reducing the peak in the number of cases and put less stress on the limited resources of the medical community. This is illustrated by the figures below. You notice the number of cases doesn’t change (the area under the curve).
But, it has another issue: it greatly extends the period in which society is affected by the disease.
However, NSA whistleblower Edward Snowden tweeted Wednesday that “Social distancing is underrated,” as it appears this life-saving measure could be implemented across the US as confirmed virus cases and deaths soar.
Social distancing is underrated.
— Edward Snowden (@Snowden) March 11, 2020
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Experts at the Centers for Disease Control and Prevention (CDC) have suggested social distancing could be a very effective way to limit exposure to the fast-spreading virus.
The CDC’s recommendation for what social distancing involves is to avoid mass gatherings, stay out of heavily-trafficked areas, and maintain a safe distance from one another to limit transmission. This is different than quarantine or isolation that completely bans people from public places. Social distancing is more of a behavioral practice to limit transmission probabilities while out in public, rather than a location constraint seen under a quarantine.
“Social distancing is a very general term, so there are a bunch of different types of measures that can fall under it,” Dr. Susy Hota, an Infectious Diseases Specialist and Hospital Epidemiologist at the University of Toronto’s research hospital University Health Network told the Time.
Hota said people choosing to work at home instead of the office would be considered social distancing. “All of these measures are trying to achieve the same thing… but [with] slightly different tactics and slightly different nuances.”
She said social distancing does have its problems, including when traveling on public transportation, accessing public services like post offices, going to the grocery store, and even attending worship service. Though even then, if social distancing and good hygiene practices are implemented, they can easily cut down their probabilities of contracting the airborne virus without too much disruption in life.
“Those are behaviors we all have to start practicing now in parts [of the world] where we don’t have to enact additional measures,” she said.
As government officials urge Americans this week to exercise social distancing measures to mitigate virus spread. The search interest on the internet for “social distancing” has erupted:
Max Brooks, the author of a zombie apocalypse book, argued in The New York Times that the “best way to prevent ‘community spread’ is to spread out the community. That means keeping people apart.”
In Opinion
Max Brooks writes, “The best way to prevent ‘community spread’ is to spread out the community. That means keeping people apart.”https://t.co/wsOyrCLniC
— The New York Times (@nytimes) March 11, 2020
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KING 5 News Seattle’s Michelle Li tweeted that the best way to avoid spreading is to keep the distance from everyone.
Introverts are finally getting their moment. It’s called #socialdistancing … and here’s what it is in a nutshell.
– Reduce face-to-face contact
– Wave instead of shake hands
– Give 6 feet of space from others
– Don’t go out in public
– Avoid medical settings pic.twitter.com/GlwdiDy39s— Michelle Li (@MichelleLiTV) March 11, 2020
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Snowden’s support for social distancing is strongly supported by evidence from the Spanish Flu Epidemic. A little over one hundred years ago, during the Spanish flu, Philadelphia held a massive parade across the city – ignoring warnings from health officials of a virus outbreak. Three days later, thousands were infected, and in a few short days, 4,500 were dead. It was a different story in St. Louis, just 900 miles away, where local officials listened to health experts and told people to keep their distance from one another and avoid public places.
Which looks eerily similar to the current virus spread with China limited (full social distancing) vs the Rest of the World (which has been slow to enact such authoritarian measures).
However, there’s a problem developing with today’s coronavirus outbreak in the US – as per Dr. Michael Osterholm, the director of the Center for Infectious Disease Research and Policy (CIDRAP) at the University of Minnesota, who warned on CNBC earlier this week, that the window of suppressing the virus in hardest-hit areas, such as King County, Washington; Santa Clara, California; Los Angeles; and the Tri-state area, has likely passed, suggesting that maybe social distancing isn’t going to be enough – but rather lockdowns are imminent.
Tyler Durden
Sat, 03/14/2020 – 17:15 - "The Damage Is Not Theoretical" – It's Deep, Global, & Pervasive
“The Damage Is Not Theoretical” – It’s Deep, Global, & Pervasive
Authored by Sven Henrich via NorthmanTrader.com,
We just witnessed a global collapse in asset prices the likes we haven’t seen before. Not even in 2008 or 2000. All these prior beginnings of bear markets happened over time, relatively slowly at first, then accelerating to the downside.
This collapse here has come from some of the historically most stretched valuations ever setting the stage for the biggest bull trap ever. The coronavirus that no one could have predicted is brutally punishing investors that complacently bought into the multiple expansion story that was sold to them by Wall Street. Technical signals that outlined trouble way in advance were ignored while the Big Short 2 was already calling for a massive explosion in $VIX way before anybody ever heard of corona virus.
Worse, there is zero visibility going forward as nobody knows how to price in collapsing revenues and earnings amid entire countries shutting down virtually all public gatherings and activities. Denmark just shut down all of its borders on Friday, flight cancellations everywhere, the planet is literally shutting down in unprecedented fashion.
The message is clear:
The global recession has begun.
— Sven Henrich (@NorthmanTrader) March 13, 2020
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The question is not if, but how long and deep:
“We have to get used to the fact that we are going into a global recession. Hopefully it will be short lived, but I can’t see how we will avoid a global recession,” says @elerianm. pic.twitter.com/O1rttbx331
— Squawk Box (@SquawkCNBC) March 13, 2020
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The damage is not theoretical, it’s real as we just saw the fasted collapse in asset prices in history:
And it’s global, deep and pervasive.
$FTSE collapse to lows from 8 years ago:
$DAX collapsed from all time highs to the lows from 2016:
The US broader $NYSE dropped to below the US election lows of 2016:
Absolute carnage to investor portfolios who can only be assumed to have caught by total surprise by the severity of the 2020 market crash. The buy the dip mentality so pervasive over the last 11 years have come to a sudden end: Death by impact.
The damage is pervasive and structurally impacting. Trapped longs looking for rescue and salvation with confidence taking a major hit. And the only hope now are technically massive oversold readings, a Fed desperate trying to regain control and a desperate search for signs that the coronavirus situation can be brought under control.
Central bank efforts over the past 2 weeks have been a miserable failure and emergency rate cuts have not been able to stem the tide of system selling and liquidations. Until Friday that is perhaps. The Fed resorted to unprecedented and some may say pathetically desperate efforts to stem the bleeding by announcing $500B repos including a $1 trillion repo on Friday.
To put these numbers in perspective:
Today’s Fed liquidity injections: The same size as the annual US military budget.
Tomorrow’s Fed liquidity injections: The same size as the annual US military budget.Let it sink in.
— Sven Henrich (@NorthmanTrader) March 12, 2020
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There is no precedence for the situation we are facing now. An epic battle of humanity trying to combat a new virus for which there is no cure and still no all clear signal, a global asset price collapse at the end of an aging and highly indebted business cycle and central banks with limited ammunition desperately trying to regain and maintain control.
And this week the Fed is on tap to prove it can still reassert control. Already now expected to cut rates to zero large scale asset purchases and a relaunch of full QE is perhaps only a question of when and not if. Given the current state of markets perhaps the Fed can’t afford to wait. So this coming week is key for markets and a Fed whose credibility is already on the ropes.
It’s a very difficult environment for investors and traders as the action is whipsawing more intensely than we’ve ever seen before.
But technicals help us to guide us through the challenge. Even Friday’s record bounce rally was in the technical picture.
What are the risks of a major bear market yet to come and what are the rally opportunities?
For our analysis please see this weekend’s market review video:
* * *
Please be sure to watch it in HD for clarity. To get notified of future videos feel free to subscribe to our YouTube Channel. For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.
Tyler Durden
Sat, 03/14/2020 – 16:50
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