Oct 15

Today’s News 15th October 2019

  • "We Came From Fire": A Brief History Of The Syrian Kurds
    “We Came From Fire”: A Brief History Of The Syrian Kurds

    “You can say the war is like a giant game of chess…” the Syrian Kurdish ‘fixer’ and driver told photographer and author Joey Lawrence as they traveled across the Kurdish northern Syrian heartland locally dubbed Rojava.

    As perhaps confusing and chess-like the now eight-year long war might be even for the players on the ground, many in the West woke up Monday morning to a new seeming contradictory reality: US-backed Syrian Kurdish forces (SDF) have struck a deal with the Syrian government, and the national flag of President Bashar al-Assad is now flying alongside that of the Kurdish resistance movement, which had been for years backed by American forces. Currently, US special forces are in retreat from the Turkish border upon White House orders, and simultaneously the Syrian Army is moving in. 

    How did such a reunion occur seemingly overnight between the two “enemies”? Hours before the deal was struck, the Kurdish-led Syrian Democratic Force’s top commander, Mazloum Abdi, wrote a Foreign Policy op-ed in which he explained to the world: “We know we would have to make painful compromises with Moscow and Assad if we go down that road. But if we have to choose between compromises and the genocide of our people, we will surely choose life.”

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    Jîn, a YPJ fighter, with rocket-propelled grenade launcher. Credit: Joey L. Photography. All images used with permission.

    To understand this, as well as why the invading Turkish Army and its ‘rebel’ proxies now face a nightmarish resistance and insurgency, it is crucial to revisit the little-discussed role of Syria’s main Kurdish militias from the start of the war, how they’ve survived as the region’s fiercest and most experienced ground force, and further how their secular identity and pragmatism has ensured not just survival but flourishing even as they’ve faced extinction by ISIS and the invading Turkish state, and after enduring multiple historic betrayals.  

    Extracts in the below essay are taken from the book We Came From Fire, by Joey L. published by Powerhouse Books (2019), and are used with permission.

    * * *

    “For Kurds, fire is extremely important. We came from fire, and we will return to fire — it’s an ancient saying,” one Syrian Kurdish fighter explained to Joey Lawrence.

    “The recent war in Iraq and Syria had become a globalized conflict, except rather than a world war fought with state armies, it was fought by proxy, with the blood of the local people. The world had become entwined in the conflict in ways never before imaginable, and events were both amplified and distorted by propaganda from all sides…”

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    Image via Joey L.

    “After the collapse of the Ottoman Empire at the end of World War I, the great European powers divided up the former Ottoman territory. The ensuing treaty — the Treaty of Sevres — promised the Kurds their own continguous and sovereign entity for the first time in modern history. However, three years later, after a series of military victories by the former Ottoman Brigadier General Kemal Pasha (now known as Ataturk), the great powers had to relent to Turkish pressure and replace Sevres with the Treaty of Lausanne. This new treaty established the new Republic of Turkey and squashed Kurdish hopes for a state of their own. The land of the Kurds would be divided between four different countries, splitting tribal lines, villages, and even families…

    As the latest conflict in Iraq and Syria, starting in 2011, spiraled out of control, state powers that once kept the Kurdish ethnic minority down found themselves spread thin, fighting against both rebellions and jihadist insurgencies; they were forced to retreat from Kurdish areas and dedicate resources to government heartlands. However grim, the crisis and dismantling of perceived nation-state borders presented Kurds with a golden opportunity. The once-persecuted rose to secure power in the vacuum.”

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    Image via Joey L.

    “Seeing an opportunity to crush the Assad government — an old rival often at odds with the Western and Gulf sphere of influence — Qatar, Saudi Arabia, Turkey, the United States, Israel, the United Kingdom, and other NATO-aligned European powers all acted in their own way against the crumbling Syrian state. Intelligence services sent vast amounts of weapons, money, and other materials to the rebels. Western and Gulf states chose their own champions in the war…

    Turkey purposely left its border wide open… It became a gateway for tens of thousands of international jihadists to openly enter Syria and fight alongside the FSA against the Syrian government. These foreign fighters filled the ranks of al-Qaeda’s Syrian franchise, the al-Nusra Front, the Salafist group Ahrar al-Sham, and later, the Islamic State of Iraq and Syria (ISIS). A Syrian jihad was born.”

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    Image via Joey L.

    “As the largest ethnic minority in Syria — some 10 to 15 percent of the population — the Kurds are treated by the government with both deep suspicion and discrimination. While smaller minorities were given status, the Syrian Ba’ath regime viewed the Kurdish population as too large to risk empowering with representation in politics, yet small enough to keep down. The regime outlawed speaking the Kurdish language in public, as well as all related cultural activities. In the 1970s, the Syrian Ba’ath regime had enacted a forced resettlement program that changed the ethnographic makeup of predominantly Kurdish regions…

    In April 2011, the Assad government, losing control of the population following the large-scale demonstrations and riots sweeping the country, reversed some of these policies. The Syrian government vowed to issue identity cards back to a small portion of the stateless Kurds, but could never fully reconcile given the growing dissent within the population. The country was in crisis; it was too little too late.”

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    Image via Joey L.

    “In July 2012, the Syrian Arab Army abandoned Kurdish enclaves of Syria to dedicate their dwindling resources to other areas of the country at war. Kurds were now free of the repressive nature of the Assad regime, but at the same time, they were left on their own to defend themselves from the al-Qaeda-linked rebel groups ravaging the land. Even though the Syrian Kurds were predominantly of Sunni faith, the secular nature of the community in general was perceived as heretical by Sunni fundamentalists groups like ISIS, and were therefore targeted for conversion or extermination…

    Thus, the People’s Protection Units (YPG) and their all-female wing, the Women’s Protection Units (YPJ), were born. Other spectrums of Kurdish political voices either abandoned the region and fled across the border, or were forced out by the domination of the new power structure.” 

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    Image via Joey L.

    “At the same time, the Syrian Arab Army’s retreat was self-serving. As foreign fighters were flooding into Syria from Turkey, the regime left the Kurds — Turkey’s insurgent enemy — to fight jihadist groups along the border. Clashes between the YPG/J and the Syrian Arab Army happened on many occasions, but a pragmatic neutrality would always be restored. Both sides knew that opening fronts against one another would weaken themselves, and both feared the future country falling in the hands of jihadists. It seemed neither the Syrian government nor the Turkish-backed rebels could guarantee minority rights for the Kurds, and the YPG/J chose a delicate third path in the war.

    For the first time the term Rojava could be uttered in public. (Rojava, which means “the west” in the Kurdish language, refers to the part of the northeast syria that makes up west Kurdistan, and also is sued to describe the setting sun.) The newly empowered Rojava Kurds immediately began establishing popular governance, from neighborhood communes and academies to citywide councils to a regional administration spread across three different cantons: Afrin, Kobane, and Jazira. In January 2014, the three self-governing cantons declared themselves as autonomous zones.”

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    Image via Joey L.

    “The YPG/J would prove themselves to be one of the first forces capable of stopping the ISIS advance in Syria… Most of these battles were unreported in the Western press, and the war between the Syrian Kurds and the radical Islamists was generally viewed as a sideshow to the greater war between Assad and the rebellion…

    ISIS — seemingly the world’s most terrifying boogeyman — was collapsing under every offensive. It was purely a military alliance [the US and YPG/J/SDF forces], and the Americans rejected recognizing any political project of Kurdish autonomy in Syria. The US-led coalition support was extremely limited to the occasional delivery of light weapons and airstrikes, which were called in covertly by a small number of special operations forces embedded among the fighters. The US was wary to give the YPG/J heavy weapons such as the anti-tank TOW missile, perhaps fearing that one day they could fall into the hands of the PKK against their NATO partner, Turkey.”

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    PKK sniper in Makhmour, Iraq. Image via Joey L.

    “After the fall of Idlib Governate and its provincial capital to a controversial coalition of al-Qaeda-affiliated armed groups and CIA-backed FSA rebels, the Syrian conflict took a dramatic turn. Russia entered the war… Although the YPG/J had openly fought Assad’s forces in the beginning of the war, the fragile neutrality that later formed was only seldom broken by odd skirmishes over checkpoints and access to roads. While they were opposed to everything the Assad regime represented, the YPG/J’s reluctance to join the rebels in the beginning of the war had benefited them greatly.”

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    Image via Joey L.

    “They were not yet targets of Russian airpower. After all, the Syrian Arab Army was severely lacking in manpower, and the YPG/J mostly had the same enemies. They say it’s wise to fight your enemy’s enemy last.”

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    Via The New York Times/Conflict Monitor/IHS Markit

    * * *

    See Joey L.’s full account and photos in We Came From Fire: Photographs of Kurdistan’s Armed Struggle Against ISIS.


    Tyler Durden

    Tue, 10/15/2019 – 02:45

    Tags
    Politics
    War Conflict

  • Weep For Catalonia – Separatist Leaders Handed Vicious Prison Terms
    Weep For Catalonia – Separatist Leaders Handed Vicious Prison Terms

    Authored by Craig Murray,

    The vicious jail sentences handed down today by the fascists (I used the word with care and correctly) of the Spanish Supreme Court to the Catalan political prisoners represent a stark symbol of the nadir of liberalism within the EU.

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    As The BBC reports, Spain’s Supreme Court has sentenced nine Catalan separatist leaders to between nine and 13 years in prison for sedition over their role in an independence referendum in 2017.

    The prosecution had sought up to 25 years in prison for Oriol Junqueras, the former vice-president of Catalonia and the highest-ranking pro-independence leader on trial.

    Junqueras was handed the longest sentence of 13 years for sedition and misuse of public funds.

    Others to receive prison sentences for sedition were:

    • Dolors Bassa, former Catalan labour minister (12 years)

    • Jordi Turull, former Catalan government spokesman (12 years)

    • Raül Romeva, former Catalan external relations minister (12 years)

    • Carme Forcadell, ex-speaker of the Catalan parliament (11.5 years)

    • Joaquim Forn, former Catalan interior minister (10.5 years)

    • Josep Rull, former Catalan territorial minister (10.5 years)

    • Jordi Sànchez, activist and ex-president of the Catalan National Assembly (9 years)

    • Jordi Cuixart, president of Catalan language and culture organisation Òmnium Cultural (9 years)

    The nine leaders, who had already spent months in pre-trial detention, were acquitted of a more serious charge of rebellion.

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    That an attempt to organise a democratic vote for the Catalan people in pursuit of the right of self determination guaranteed in the UN Charter, can lead to such lengthy imprisonment, is a plain abuse of the most basic of human rights.

    I was forced to withdraw my lifelong personal support for the EU when, in response to the vicious crushing of the Catalan referendum by Francoist paramilitary forces, when the whole world saw grandmothers hit on the head and thrown down stairs as they attempted to vote, all the institutions of the EU – Council, Commission and Parliament – lined up one after the other to stress their strong support for the Madrid paramilitary action in maintaining “law and order”.

    Today we see the same thing. As the Catalans are imprisoned for efforts at democracy, the EU Commission stated that it “respects the position of the Spanish judiciary” and “this is, and remains, an internal matter for Spain, which has to be dealt with in line with its constitutional order.” The Commission here is simply ignoring what is very obviously a fundamental breach of basic human rights. This is far worse than anything Poland or Hungary have done in recent years, and the Commission is also showing a quite blatant hypocrisy in its relative treatment of its Western and Eastern members.

    There was a time when the EU was a shining example of economic and environmental regulation and of regional wealth redistribution. My fondness for the institution dates from it being one of our few defences from economic Thatcherism. But it has evolved into something very different, a mutual support club for neoliberal political leaders.

    I do not much blog about Brexit because I am less concerned about it than the majority of the population. I neither think remaining inside is essential nor that leaving it is a political panacea. I do desperately wish to retain freedom of movement, and believe leaving the customs union would be economic self-harm on a large scale. A Norway style relationship would suit me fine, but by and large I prefer to stay out of the argument. I do believe that, as a matter of democratic legitimacy, having had the 2016 referendum the result should be respected; England should leave and Scotland and Northern Ireland remain.

    But I also say this. A million people are expected to march on Saturday in support of the EU. That is the EU which has just expressed its active support for the jailing of Catalans for holding a vote. They join Julian Assange as political prisoners in the EU held for non-violent thought crime.

    I say this to anyone thinking of marching on Saturday.

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    It is morally wrong, at this time, to show public support for the EU, unless you balance it by showing your disgust at the fascist repression of the Catalans and the EU’s support for that repression.

    Every single person going on Saturday’s march has a moral obligation to balance it by sending a message to the EU Commission that their support for this repression is utterly out of order, and carrying a flag or sign on the march indicating support for the Catalan political prisoners. Otherwise you are just a smug person marching for personal self interest. Alongside the progenitors of the Iraq War, who doubtless will again dominate the platform speeches.

    *  *  *

    Unlike his adversaries including the Integrity Initiative, the 77th Brigade, Bellingcat, the Atlantic Council and hundreds of other warmongering propaganda operations, Craig’s blog has no source of state, corporate or institutional finance whatsoever. It runs entirely on voluntary subscriptions from its readers – many of whom do not necessarily agree with the every article, but welcome the alternative voice, insider information and debate. Subscriptions to keep Craig’s blog going are gratefully received.


    Tyler Durden

    Tue, 10/15/2019 – 02:00

    Tags
    Politics

  • Ecuador… And The IMF's Killing Spree
    Ecuador… And The IMF’s Killing Spree

    Authored by Peter Koenig via GlobalResearch.ca,

    For close to 40 years the IMF has weaponized its handle on the western economy through the dollar-based western monetary system, and brutally destroyed nation after nation, thereby killed hundreds of thousands of people. Indirectly, of course, as the IMF would not use traditional guns and bombs, but financial instruments that kill – they kill by famine, by economic strangulation, preventing indispensable medical equipment and medication entering a country, even preventing food from being imported, or being imported at horrendous prices only the rich can pay.

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    The latest victim of this horrifying IMF scheme is Ecuador.

    For starters, you should know that since January 2000, Ecuador’s economy is 100% dollarized, compliments of the IMF (entirely controlled by the US Treasury, by force of an absolute veto). The other two fully dollarized Latin American countries are El Salvador and Panama.

    The Wall Street Journal recently stated that Ecuador “has the misfortune to be an oil producer with a ‘dollarized’ economy that uses the U.S. currency as legal tender.” The Journal added,

    “the appreciation of the U.S. dollar against other currencies has decreased the net exports of non-oil commodities from Ecuador, which, coupled with the volatility of oil prices, is constraining the country’s potential for economic growth.”

    Starting in the mid 1990’s, culminating around 1998, Ecuador suffered a severe economic crisis, resulting from climatic calamities, and US corporate and banking oil price manipulations (petrol is Ecuador’s main export product), resulting in massive bank failures and hyper-inflation. Ecuador’s economy at that time had been semi-dollarized, like that of most Latin American countries, i.e. Peru, Colombia, Chile, Brazil – and so on.

    The ‘crisis’ was a great opportunity for the US via the IMF to take full control of the Ecuadorian (petrol) economy, by a 100% dollarizing it. The IMF propagated the same recipe for Ecuador as it did ten years earlier for Argentina, namely full dollarization of the economy in order to combat inflation and to bring about economic stability and growth. In January 2000, then President Jorge Jamil Mahuad Witt, from the “Popular Democracy Party”, or the Ecuadorian Christian Democratic Union (equivalent to the German CDU), declared the US dollar as the official currency of Ecuador, replacing their own currency, the Sucre.

    Adopting another country’s currency is an absurdity and can only bring failure. And that it did, almost to the day, 10 years after Argentina was forced by the same US-led villains to revalue her peso to parity with the US-dollar, no fluctuations allowed. Same reason (“economic crisis”, hyper-inflation), same purpose: controlling the riches of the country – absolute failure was preprogrammed. Did Ecuador not learn from the Argentinian experience and converted her currency at the very moment the Argentinian economy collapsed due to dollarization, into the US dollar? – That is not only a fraud, but a planned fraud.

    Ecuadorian goods and services quoted in dollars, became unaffordable for locals and uncompetitive for exports. This led to social unrests, resulting in a popular ‘golpe’. President Mahuad was disposed, had to flee the country, and was replaced by Gustavo Noboa, from the same CDU party (2000 – 2003). Ever since the dollar remained controversial among the Ecuadorian population. President Rafael Correa’s quiet attempt to return to the Sucre, was answered by a CIA-inspired police coup attempt on 30 September 2010.

    In 2017, the CIA / NED (National Endowment for Democracy) and the US State Department have brought about a so-called “soft” regime change. They urged (very likely coerced) Rafael Correa to abstain from running again for President, as the vast majority of Ecuadorians requested him to do. This would have required a Constitutional amendment which probably would have been easily accepted by Parliament. Instead they had Correa endorse his former Vice-President (2007-2013) Lenin Moreno, who run on Correa’s platform, the socialist PAIS Alliance. Therefore, expected to continue in Correa’s line with same socioeconomic policies.

    Less than a year later, Moreno turned tables, became an outright traitor to his country and the people who voted for him. He converted Ecuador’s economy to the neoliberal doctrine – privatization of everything, stealing the money from the social sectors, depriving people of work, drastically reducing social services and converting a surplus economy of tremendous social gains into one of poverty and misery.

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    President Correa left the country a modest debt of about 40% to GDP at the end of his Presidency in 2017. A debt-GDP ratio that would be no problem anywhere in the world. Compare this to the US debt vs. GDP – 105% in current terms and about 700% in terms of unmet obligations (net present value of total outstanding obligations). There was absolutely no reason to call the IMF for help. The IMF, the long arm of the US Treasury – ‘bought’ its way into Moreno’s neoliberal Ecuador, coinciding with Moreno evicting Julian Assange from the Ecuadorian Embassy in London.

    The IMF loan of US$ 4,2 billion increases the debt / GDP ratio by 4% and brings social misery and upheaval in return, and that as usual, at an unimaginable cost, by neoliberal economists called “externalities”. It was practically a US “present” for Moreno’s treason, bringing Assange closer into US custody. What most people are unaware of, is that at the same time, Moreno forgave US$ 4.5 billion in fines, interest and other dues to large corporations and oligarchs, hence decapitalizing the country’s treasury. The amount of canceled corporate fiscal obligations is about equivalent to the IMF loan, plunging large sectors of the Ecuadorian population into more misery.

    Besides, under wrong pretexts it allowed Moreno to apply neoliberal policies, all those that usually come as draconian conditions with IMF loans and that eventually benefit only a small elite in the country – but allows western banking and corporations to further milk the countries social system.

    According to a 2017 report of the Center for Economic and Policy Research (CEPR), an economic thinktank in Washington, Ecuador’s economy has done rather well under Rafael Correa’s 10-year leadership (2007 – 2017). The country has improved her key indicators significantly: Average annual GDP growth was 1.5% (0.6% past 26 years average); the poverty rate declined by 38%, extreme poverty by 47%, a multiple of poverty reduction of that in the previous ten years, thanks to a horizontally distributive growth; inequality (Gini coefficient) fell substantially, from 0.55 to 0.47; the government doubled social spending from 4.3% in 2006 to 8.6% in 2016; tripled education spending from 0.7% to 2.1% with a corresponding increase in school enrollments; increased public investments from 4% of GDP in 2006 to 10% in 2016.

    Now, Moreno is in the process of reversing these gains. Only six months after contracting the IMF loans, he has already largely succeeded. The public outcry can be heard internationally. Quito is besieged by tens of thousands of demonstrators, steadily increasing as large numbers, in the tens of thousands, of indigenous people are coming from Ecuador’s Amazon region and the Andes to Quito to voice their discontent with their traitor president. Government tyranny is rampant. Moreno declared a 60-day state of emergency – with curfew and a militarized country. As a consequence, Moreno moved the Government Administration to Guayaquil and ordered one of the most severe police and military repressions, Ecuador has ever known, resulting within ten days to at least 7 people killed, about 600 injured and about 1,000 people arrested.

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    Source: Workers’ Voice

    The protests are directed against the infamous Government Decree 883, that dictates major social reforms, including an increase in fuel prices by more than 100%, reflecting directly on public transportation, as well as on food prices; privatization of public services, bringing about untold layoffs, including some 23,000 government employees; an increase in Aggregated Value Taxes – all part of the so-called “paquetazo”, imposed by the IMF. Protesters called on Moreno, “Fuera asesino, fuera” – Get out, murderer, get out! – Will they succeed?

    The IMF’s guns are needlessly imposed debt, forced privatization of social services and public assets as railways, roads, and worst of all, health, education, water supply and sewerage services. Unemployment rises, extreme poverty skyrockets, public service tariffs – water, electricity, transportation – increase, often exponentially, depriving people from moving to work or look for new employment elsewhere. Diseases that otherwise may have been curable, like cancers, under the new regime lack medication. Patients die prematurely. Depression brings about rapidly rising suicide rates, as the British medical journal Lancet has observed in many IMF oppressed countries, but especially in Greece.

    Targeted are primarily those nations that do not want to bend to the dictate of Washington, and even more so those with natural resources the west covets, or countries that are in strategic geographic locations, where NATO wants to establish itself or get a stronger foothold, i.e. Greece. The IMF is often helped by the World Bank. The former providing, or rather coercing, a ‘debt-strapped’ country into accepting so-called rescue packages, billions of dollars of loans, at exorbitant “high-risk” interest rates, with deadly strings attached.

    The latter, the WB, would usually come in with loans – also euphemistically called “blank checks” – to be disbursed against a matrix of fulfilled conditions, of economic reforms, privatizations. Again, all usually resulting in massive government layoffs, unemployment, poverty. In fact, both the IMF and the WB approaches are similar and often overlapping – imposing “structural adjustment” (now in disguise given different names), to steal a countries resources, and sovereignty, by making them dependent on the very financial institutions that pretend to ‘help’ them.

    The three most recent and flagrant cases of IMF interference were Greece, Ukraine and Argentina.

    Greece was doubly destroyed, once by her brothers and sisters of the European non-Union that blackmailed them into staying with the euro, instead of exiting it and converting to their local currency and regaining financial sovereignty.

    Ukraine, possibly the richest country in terms of national resources and with an enormous agricultural potential due to her fertile soil, was “regime changed” by a bloody coup, The Maidan massacre in February 2014, instigated and planned by the CIA, the EU and NATO and carried out through the very US Embassy in Kiev. This was all long-term planning. Remember Victoria Nuland boasting that the US has spent more than 5 billion dollars over the past five year to bring about regime change and to convert Ukraine into a fully democratic country and making it ready to enter the European Union?

    The western allies put a Nazi Government into Kiev, created a “civil war” with the eastern Russia-aligned part of Ukraine, the Donbass. Thousands of people were killed, millions fled the country, mostly to Russia – the country’s debt went through the roof, and – in comes the IMF, approving in December 2018a 14-month Stand-By Arrangement for Ukraine, with an immediate disbursement of US$ 1.4 billion. This is totally against the IMF’s own Constitution, because it does not allow lending to a country at war or conflict. Ukraine was an “exception”, dictated by the US. Blamed for the ever-changing and escalating Ukraine fiasco was Russia.

    Another IMF victim is Argentina. In December 2015 through fraudulent election, Washington put a neoliberal henchman into the Presidency, Mauricio Macri. He carried out economic and labor reforms by decree and within the first 12 months in office, increased unemployment and poverty from about 12% he inherited from his predecessor, Christine Kirchner, to over 30%.

    Within 15 years of Kirchner Governments, Argentina largely recovered from the collapse of 2000 / 2001 / 2002, accumulating a healthy reserve. There was no need to call the IMF to the rescue, except if it was a pre-condition for Macri to become president. In September 2018, Argentina contracted from the IMF the largest ever IMF loan of 57.1 billion dollars, to be disbursed over a three-year period, plunging Argentina in an almost irrecoverable debt situation.

    The Bretton Woods Organizations – World Bank and IMF, were created in 1944 precisely for that reason, to enslave the world, particularly the resources-rich countries. The purpose of these so-called international financial institutions, foresaw an absolute veto power of the United States, meaning they are doing the bidding of the US Treasury. They were created under the UN Charter for good disguise, and are to work hand-in-glove with the fiat monetary system created in 1913 by the Federal Reserve Act. The pretext was to monitor western “convertible” currencies that subscribed to the also newly modified gold standard (1 Troy ounce [31.1 grams] of gold = US$ 35) , also established during the Bretton Woods Conference in 1944.

    Both organizations started lending money – the Marshall Fund, managed by the world Bank in the 1950s – to war devastated Europe, moving gradually into economic development of “Third World” countries – and, eventually, in the 1980s showing their evil heads by introducing the neoliberal doctrines of the Washington Consensus worldwide. It is a miracle how they get away with spewing so much misery – literally unopposed for the last 30 – 40 years – throughout the world. Why are they not be stopped and dismantled? – The UN has 193 members; only a small proportion of them benefit from the IMF-WB financial crimes. Why does the vast majority – also potential victims, remain silent?


    Tyler Durden

    Mon, 10/14/2019 – 23:50

    Tags
    Business Finance
    Politics

  • The People's Republic Of China: Visualizing 70 Years Of Economic History
    The People’s Republic Of China: Visualizing 70 Years Of Economic History

    From agrarian economy to global superpower in half a century – China’s transformation has been an economic success story unlike any other.

    Today, China is the world’s second largest economy, making up 16% of $86 trillion global GDP in nominal terms. Furthermore, as Visual Capitalist’s Imam Ghosh points out, if you adjust numbers for purchasing power parity (PPP), the Chinese economy has already been the world’s largest since 2014.

    The upward trajectory over the last 70 years has been filled with watershed moments, strategic directives, and shocking tragedies — and all of this can be traced back to the founding of the People’s Republic of China (PRC) on October 1st, 1949.

    How the PRC Came to Be

    The Chinese Civil War (1927–1949) between the Republic of China (ROC) and the Communist Party of China (CPC) caused a fractal split in the nation’s leadership. The CPC emerged victorious, and mainland China was established as the PRC.

    Communist leader Mao Zedong set out a few chief goals for the PRC: to overhaul land ownership, to reduce social inequality, and to restore the economy after decades of war. The first State Planning Commission and China’s first 5-year plan were introduced to achieve these goals.

    Today’s timely chart looks back on seven decades of notable events and policies that helped shape the country China has become. The base data draws from a graphic by Bert Hofman, the World Bank’s Country Director for China and other Asia-Pacific regions.

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    The Mao Era: 1949–1977

    Mao Zedong’s tenure as Chairman of the PRC triggered sweeping changes for the country.

    1953–1957: First 5-Year Plan
    The program’s aim was to boost China’s industrialization. Steel production grew four-fold in four years, from 1.3 million tonnes to 5.2 million tonnes. Agricultural output also rose, but it couldn’t keep pace with industrial production.

    1958–1962: Great Leap Forward
    The campaign emphasized China’s agrarian-to-industrial transformation, via a communal farming system. However, the plan failed—causing an economic breakdown and the deaths of tens of millions in the Great Chinese Famine.

    1959–1962: Lushan Conference and 7,000 Cadres meeting
    Top leaders in the Chinese Communist Party (CCP) met to create detailed policy frameworks for the PRC’s future.

    1966–1976: Great Proletarian Cultural Revolution
    Mao Zedong attempted to regain power and support after the failures of the Great Leap Forward. However, this was another plan that backfired, causing millions more deaths by violence and again crippling the Chinese economy.

    1971: Joined the United Nations
    The PRC replaced the ROC (Taiwan) as a permanent member of the United Nations. This addition also made it one of only five members of the UN Security Council—including the UK, the U.S., France, and Russia.

    1972: President Nixon’s visit
    After 25 years of radio silence, Richard Nixon was the first sitting U.S. President to step foot into the PRC. This helped re-establish diplomatic relations between the two nations.

    1976–1977: Mao Zedong Death, and “Two Whatevers”
    After Mao Zedong’s passing, the interim government promised to “resolutely uphold whatever policy decisions Chairman Mao made, and unswervingly follow whatever instructions Chairman Mao gave.”

    1979: “One-Child Policy”
    The government enacted an aggressive birth-planning program to control the size of the country’s population, which it viewed as growing too fast.

    A Wave of Socio-Economic Reforms: 1980-1999

    From 1980 onward, China worked on opening up its markets to the outside world, and closing the inequality gap.

    1980–1984: Special Economic Zones (SEZs) established
    Several cities were designated SEZs, and provided with measures such as tax incentives to attract foreign investment. Today, the economies of cities like Shenzhen have grown to rival the GDPs of entire countries.

    1981: National Household Responsibility System implemented
    In the Mao era, quotas were set on how many goods farmers could produce, shifting the responsibility of profits to local managers instead. This rapidly increased the standard of living, and the quota system spread from agriculture into other sectors.

    1989: Coastal Development Strategy
    Post-Mao leadership saw the coastal region as the potential “catalyst” for the entire country’s modernization.

    1989–1991: Post-Tiananmen retrenchment
    Early 1980s economic reforms had mixed results, and the growing anxiety eventually culminated in a series of protests. After tanks rolled into Tiananmen Square in 1989, the government “retrenched” itself by initially attempting to roll back economic reforms and liberalization. The country’s annual growth plunged from 8.6% between 1979-1989 to 6.5% between 1989-1991.

    1990–1991: Shanghai and Shenzhen stock exchanges open
    Combined, the Shanghai (SSE) and Shenzhen (SZSE) stock exchanges are worth over $8.5 trillion in total market capitalization today.

    1994: Shandong Huaneng lists on the NYSE
    The power company was the first PRC enterprise to list on the NYSE. This added a new N-shares group to the existing Chinese capital market options of A-shares, B-shares, and H-shares.

    1994–1996: National “8-7” Poverty Reduction Plan
    China successfully lifted over 400 million poor people out of poverty between 1981 and 2002 through this endeavor.

    1996: “Grasp the Large, Let Go of the Small”
    Efforts were made to downsize the state sector. Policy makers were urged to maintain control over state-owned enterprises to “grasp the large”. Meanwhile, the central government was encouraged to relinquish control over smaller SOEs, or “let go of the small”.

    1997: Urban Dibao (低保)
    China’s social safety net went through restructuring from 1993, and became a nationwide program after strong success in Shanghai.

    1997-1999: Hong Kong and Macao handover, Asian Financial Crisis
    China was largely unscathed by the regional financial crisis, thanks to the RMB (¥) currency’s non-convertibility. Meanwhile, the PRC regained sovereignty of Hong Kong and Macau back from the UK and Portugal, respectively.

    1999: Western Development Strategy
    The “Open Up the West” program built out 6 provinces, 5 autonomous regions, and 1 municipality—each becoming integral to the Chinese economy.

    Turn of the Century: 2000-present

    China’s entry to the World Trade Organization, and the Qualified Foreign Institutional Investor (QFII) program – which let foreign investors participate in the PRC’s stock exchanges – contributed to the country’s economic growth.

     

    https://www.zerohedge.com/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.jshttps://public.flourish.studio/resources/embed.js

    2006: Medium-term Plan for Scientific Development
    The PRC State Council’s 15-year plan outlines that 2.5% or more of national GDP should be devoted to research and development by 2020.

    2008-2009: Global Financial Crisis
    The PRC experienced only a mild economic slowdown during the crisis. The country’s GDP growth in 2007 was a staggering 14.2%, but this dropped to 9.7% and 9.5% respectively in the two years following.

    2013: Belt and Road Initiative
    China’s ambitious plans to develop road, rail, and sea routes across 152 countries is scheduled for completion by 2049—in time for the PRC’s 100th anniversary. More than $900 billion is budgeted for these infrastructure projects.

    2015: Made in China 2025
    The PRC refuses to be the world’s “factory” any longer. In response, it will invest nearly $300 billion to boost its manufacturing capabilities in high-tech fields like pharmaceuticals, aerospace, and robotics.

    Despite the recent ongoing trade dispute with the U.S. and an increasingly aging population, the Chinese growth story seems destined to continue on.

    China Paving the Way?

    The 70th anniversary of the PRC offers a moment to reflect on the country’s journey from humble beginnings to a powerhouse on the world stage.

    Because of China’s economic success, more and more countries see China as an example to emulate, a model of development that could mean moving from rags to riches within a generation

    – Bert Hofman, World Bank

     


    Tyler Durden

    Mon, 10/14/2019 – 23:30

    Tags
    Business Finance

  • Solar Storms Can Devastate Entire Civilizations
    Solar Storms Can Devastate Entire Civilizations

    Authored by Irina Slave via OilPrice.com,

    Climate has inarguably become a hot topic of discussion in developed economies over the last decade, and it is getting hotter by the day as study after study warn we are close to doomed if we don’t change our ways urgently. Yet climate on Earth is not the only problem that humankind faces. There is another climate we need to pay attention to, and there is nothing we can do to change that.

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    Solar storms, whose more scientific name is coronal mass ejections, were until recently believed to be a rare occurrence—only happening once every couple of centuries or so. However, there is reason to believe they may be a lot more frequent than that. In a world increasingly dependent on electricity, this is, to put it mildly, a problem.

    In 1859 the Sun spewed concentrated plasma that broke through its magnetic fields in the direction of the Earth. Commonly referred to as the Carrington Event, that coronal mass ejection hit the Earth’s magnetic field, which warped it and caused telegraphs around the world to fail. For a long time, the scientific consensus was that solar storms of this magnitude were a rarity.

    That was in the 19th century where telegraphs were cutting-edge tech. Now, we have power grids, airplanes, satellites, and computers, and all of them are potentially susceptible to the effects of another solar storm. We also know that solar storms of the magnitude of the Carrington Event or even worse occur more frequently.

    “The Carrington Event was considered to be the worst-case scenario for space weather events against the modern civilization… but if it comes several times a century, we have to reconsider how to prepare against and mitigate that kind of space weather hazard,” the lead research in a study that reached that conclusion, Hisashi Hayakawa, said after the release of the study earlier this month.

    The question of how to prepare is a tricky one. According to astrophysicist and aerospace engineer Robert Coker, the fallout from a severe solar storm could cost up to a trillion dollars. And that was in 2017, when he wrote “The trillion-dollar solar storm” for The Space Review. In it he discussed a 1921 solar storm with a magnitude similar to that of the Carrington Event. If that storm occurred today, he wrote, it would cost $1 trillion. It is certainly worth to be prepared, but how?

    For starters, by predicting solar storms, writes atmospheric sciences professor Marshall Shepherd in an article for Forbes. The National Oceanic and Atmospheric Administration, together with the U.S. Geological Survey, recently presented a Geoelectric Field Model. This model, according to them, “calculates regional electric field levels in the U.S. caused by disturbances in Earth’s magnetic field from geomagnetic storms.”

    This, according to Shepherd, will provide relevant government agencies with near real-time information about upcoming storms, a kind of a heads-up before a storm hits the Earth’s magnetic field. Yet it seems this heads-up cannot prevent the consequences of a geomagnetic storm. In fact, according to Shepherd, it is mainly useful as an impact assessment tool rather than a tool of prevention:

    “Such near-real time information on geomagnetic storms like a CME is valuable for assessing impacts on the infrastructure associated with the electrical power grid,” he wrote, adding, “Take a moment and think about how you would function for weeks without electrical power, GPS, or air travel.”


    Tyler Durden

    Mon, 10/14/2019 – 23:10

    Tags
    Environment
    Disaster Accident

  • "This Did Not Go Well" – PG&E's Rolling Blackout Sparked Chaos In Bay Area
    “This Did Not Go Well” – PG&E’s Rolling Blackout Sparked Chaos In Bay Area

    Pacific Gas and Electric’s (PG&E) historic blackout plunging hundreds of thousands of customers into darkness last week was a massive communication breakdown that sparked criticism over the two-day blackout that was designed to avoid wildfires, reported The New York Times.

    PG&E officials said over the weekend that most of the power had been restored to everyone except for 2,500 customers across several Bay Area counties and promised to fix communication channels with customers.

    “We’ll get better in the next month and better in the next year,” PG&E CEO Bill Johnson said Saturday.

    “Communication to customers, coordination with state agencies, website availability, call center staff, that’s where you will see short-term improvements.”

    Last Wednesday, PG&E triggered rolling blackouts for nearly 735,000 homes and or businesses in the San Francisco Bay Area amid the threat of strong winds and dry conditions that would’ve damaged transmission wires and sparked dangerous wildfires, similar to what was seen last year. Most of the residents were restored by Friday afternoon, but 99.5% of its customers saw full power by Saturday. 

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    The shutdown caused widespread confusion about the planned power outage, and according to some experts, billions of dollars in economic losses were sustained by local businesses during the two-day blackout.

    PG&E’s website and communication network that relayed essential data about the blackouts crashed, leaving many without details about what was happening. 

    “There were definitely missteps,” said Elizaveta Malashenko, a spokesperson for the state Public Utilities Commission who was in the PG&E control center. “It’s pretty much safe in saying, this did not go well.”

    PG&E’s approach to shutdown various grids during a powerful windstorm that hit the Bay Area was never tried before, nor such failure in attempting to manage a controlled blackout and effectively communicate what was happening customers.

    “Today marks an unprecedented turn in the history of electricity in California,” State Senator Jerry Hill, chairman of the Subcommittee on Energy, Utilities and Communications, said in a letter on Wednesday to the utilities commission. “This situation is not acceptable nor sustainable.”

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    Johnson said crews inspected 25,000 miles of line across the state after the windstorm passed. PG&E confirmed that at least 50 poles and power lines were damaged during the storm, which could have triggered wildfires considering the dry conditions.

    “Had that line not be de-energized,” he said, it could have led to a “catastrophic outcome.”

    Bay Area customers are furious with PG&E for its rolling blackout that plunged hundreds of thousands into darkness, along with crashed communication networks that left many ill-informed. 

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    And judging by PG&E’s latest defensive tactic to thwart wildfires during windstorms, it appears Bay Area customers could expect more rolling blackouts in the future. Maybe next time, PG&E can communicate more effectively before the next outage. Nevertheless, Bay Area residents should seriously consider diesel generators. 


    Tyler Durden

    Mon, 10/14/2019 – 22:50

    Tags
    Disaster Accident
    Environment

  • Escobar: Behind Hong Kong's Black Terror
    Escobar: Behind Hong Kong’s Black Terror

    Authored by Pepe Escobar via The Saker blog,

    Deciphering who’s behind the violence leads to a long list of possibilities…

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    “If we burn, you burn with us.” “Self-destruct together.” (Lam chao.)

    The new slogans of Hong Kong’s black bloc – a mob on a rampage connected to the black shirt protestors – made their first appearance on a rainy Sunday afternoon, scrawled on walls in Kowloon.

    Decoding the slogans is essential to understand the mindless street violence that was unleashed even before the anti-mask law passed by the government of the Special Administrative Region (SAR) went into effect at midnight on Friday, October 4.

    By the way, the anti-mask law is the sort of measure that was authorized by the 1922 British colonial Emergency Regulations Ordnance, which granted the city government the authority to “make any regulations whatsoever which he [or she] may consider desirable in the public interest” in case of “emergency or public danger”.

    Perhaps the Honorable Nancy Pelosi, Speaker of the US House of Representatives, was unaware of this fine lineage when she commented that the law “only intensifies concern over freedom of expression.” And it is probably safe to assume that neither she nor other virulent opponents of the law know that a very similar anti-mask law was enacted in Canada on June 19, 2013.

    More likely to be informed is Hong Kong garment and media tycoon Jimmy Lai, billionaire publisher of the pro-democracy Apple Daily, the city’s Chinese Communist Party critic-in-chief and highly visible interlocutor of official Washington, DC, notables such as US Vice President Mike Pence, Secretary of State Mike Pompeo, and ex-National Security Council head John Bolton.

    On September 6, before the onset of the deranged vandalism and violence that have defined Hong Kong “pro-democracy protests” over the past several weeks, Lai spoke with Bloomberg TV’s Stephen Engle from his Kowloon home.

    He pronounced himself convinced that – if protests turned violent China would have no choice but to send People’s Armed Police units from Shenzen into Hong Kong to put down unrest.

    “That,” he said on Bloomberg TV, “will be a repeat of the Tiananmen Square massacre and that will bring in the whole world against China… Hong Kong will be done, and … China will be done, too.”

    Still, before the violence broke out, hundreds of thousands of Hong Kong people had gathered in peaceful protests in June, illustrating the depth of feeling that exists in Hong Kong. These are the working-class Hongkongers that Lai supports through the pages of Apple Daily.

    But the situation has changed dramatically from the early summer of non-violent demonstrations. The black blocs see such intervention as the only way to accomplish their goal.

    For the black blocs, the burning is all about them – not Hong Kong, the city and its hard-working people. Those are all subjected to the will of this fringe minority that, according to the understaffed and overstretched Hong Kong police force, numbers 12,000 people at the most.

    Cognitive rigidity is a euphemism when applied to mob rule, which is essentially a religious cult. Even attempting the rudiments of a civilized discussion with these people is hopeless. The supremely incompetent, paralyzed Hong Kong government at least managed to define them precisely as “rioters” who have plunged one of the wealthiest and so far safest cities on the planet “into fear and chaos” and committed “atrocities” that are “far beyond the bottom line of any civilized society.”

    “Revolution in Hong Kong”, the previous preferred slogan, at face value a utopian millennial cause, has been in effect drowned by the heroic vandalizing of metro stations, i.e., the public commons; throwing petrol bombs at police officers; and beating up citizens who don’t follow the script. To follow these gangs running amok, live, in Central and Kowloon, and also on RTHK, which broadcasts the rampage in real-time, is a mind-numbing experience.

    I’ve sketched before the basic profile of thousands of young protestors in the streets fully supported by a silent mass of teachers, lawyers, bewigged judges, civil servants and other liberal professionals who gloss over any outrageous act – as long as they are anti-government.

    But the key question has to focus on the black blocs, their mob rule on rampage tactics, and who’s financing them. Very few people in Hong Kong are willing to discuss it openly. And as I’ve noted in conversations with informed members of the Hong Kong Football Club, businessmen, art collectors, and social media groups, very few people in Hong Kong – or across Asia for that matter – even know what black blocs are all about.

    The black bloc matrix

    Black blocs are not exactly a global movement; they are a tactic deployed by a group of protesters – even though intellectuals springing up from different European strands of anarchism mostly in Spain, Italy, France and Germany since the mid-19th century may also raise it from the level of a tactic to a strategy that is part of a larger movement.

    The tactic is simple enough. You dress in black, with lots of padding, ski masks or balaclavas, sunglasses, and motorcycle helmets. As much as you protect yourself from police pepper spray and/or tear gas, you conceal your identity and melt into the crowd. You act as a block, usually a few dozen, sometimes a few hundred. You move fast, you search and destroy, then you disperse, regroup and attack again.

    From the inception, throughout the 1980s, especially in Germany, this was a sort of anarchist-infused urban guerrilla tactic employed against the excesses of globalization and also against the rise of crypto-fascism.

    Yet the global media explosion of black blocs only happened over a decade later, at the notorious Battle of Seattle in 1999, during the WTO ministerial conference, when the city was shut down. The WTO summit collapsed and a  state of emergency was in effect for nearly a week. Crucially, there were no casualties, even as black blocs made themselves known as part of a mass riot organized by radical anarchists.

    The difference in Hong Kong is that black blocs have been instrumentalized for a blatantly search-and-destroy agenda. The debate is open on whether black bloc tactics, deployed randomly, only serve to legitimize the police state even more. What’s clear is that smashing a subway station used by average working people is absolutely irreconcilable with advancing a better, more responsible, local government.

    My interlocutor shows up impeccably dressed for dim sum on Saturday at a deserted Victoria City outlet in CITIC tower, with a spectacular view of the harbor. He’s Shanghai aristocracy, the family having migrated to Hong Kong in 1949, and he’s a uniquely informed insider on all aspects of the Hong Kong-China-US triangle. Via mutual Chinese diaspora connections that hark back to the handover era, he agreed to talk on background. Let’s call him Mr. E.

    In the aftermath of dark Friday, Mr. E is still appalled:

    “Not only you’re harming the people making their living in businesses, companies, shopping malls. You’re destroying subway stations. You’re destroying our streets. You’re destroying our hard-earned reputation as a safe, international business center. You’re destroying our economy.”

    He cannot explain why there was not a single police officer in sight, for hours, as the rampage continued.

    Cutting to the chase, Mr. E attributes the whole drama to a pathological hatred of China by a “significant majority” of Hong Kong’s population. Significantly, the day after our conversation, a small black bloc contingent circled around the PLA’s Kowloon East Barracks in Kowloon Tong in the early evening. Chinese soldiers in camouflage filmed them from the rooftop.

    There’s no way black blocs would take their gas masks, steel rods and petrol bombs to fight the PLA. That’s an entirely new ball game compared with thrashing metro stations. And color-coded “revolution” manuals don’t teach you how to do it.

    Mr. E points out there is nothing “leaderless” about the Hong Kong black blocs. Mob rule is strictly regimented. One of the black shirt slogans  – “Occupy, disrupt, disperse, repeat” – has in effect mutated into “Swarm, destroy, disperse, repeat.”

    Mr. E asks me about black blocs in France. Western mainstream media, for months, have ignored solid, peaceful protests by the Gilets Jaunes/Yellow Vests across France, against corruption, inequality and the Macron administration’s neoliberal push to turn France into a start-up benefitting the 1%.

    Charges that French intel has manipulated black blocs and inserted undercover agents and casseurs (persons vandalizing property, specifically during protests) to discredit and demonize the Yellow Vests are widespread. As I’ve witnessed in Paris first hand, the feared CRS have been absolutely ruthless in their RAND-conceptualized militarized operations in urban terrain – repression tactics – without excluding the odd beating up of elderly citizens.

    In contrast, mob rule in Hong Kong is excused as protest against “totalitarian” China.

    Most of the conversation with Mr. E centers on possible sources of financing for the initial nonviolent protest and, particularly, for the mob rule that the black blocs have brought in its place.

    Motivation and opportunity will get you on the list, which is not terribly long – but is long enough to include names of people and organizations diametrically opposed to one another and thus unlikely to be working together.

    Among governments, we can start with the still (if not, probably, for much longer) number one superpower.

    Trump administration officials, locked in a trade war with Beijing, would have no trouble imagining some advantage coming from a weakening of the People’s Republic’s rule over Hong Kong, and could perhaps see good in positively destabilizing China, starting with fomenting a violent revolution in the former British colony.

    The United Kingdom, contemplating a lonely post-Brexit old age, could have pondered how nice it would be to get closer to its favorite former colony, still an island of Britishness in a less and less British world.

    Taiwan, of course, would have had interest in provoking a test run of how One Country, Two Systems – the formula that the PRC and the UK used with Hong Kong in 1997 and that Beijing has offered to Taiwan, as well – might work out under stress. And after the stress of peaceful protest had exposed weak underpinnings, the temptation may well have arisen to go farther and make such a hash of Chinese-ruled Hong Kong that no Taiwanese would ever again fall for the merger propaganda.

    The People’s Republic seems an unlikely protagonist for the initial, nonviolent phase, but there are plenty of Hong Kongers who believe it is now encouraging provocations that would justify a major crackdown. And we can’t completely rule out the possibility that a mainland CCP faction – opposed to the breach of recent tradition with which Xi Jinping extended his time in the presidency, say – is trying to discredit him.

    OK, enough about governments. Now we need some on-the-ground agents, Chinese with plausible deniability who can blend in as they receive and disburse the necessary funding and handle organizational and training matters.

    Here the possibilities are far too numerous to list, but one popular name would be Guo Wengui, aka Miles Kwok. The billionaire fell out with the CCP and, in 2014, fled to the United States to pursue a career as a long-distance political operative.

    Even more popular would be name of Jimmy Lai, mentioned above. Confirming another of my key meetings, when Mr. E points to the usual funding suspects, the name of Jimmy Lai inevitably comes up. In fact, a US-Taiwan-Jimmy Lai combination may be number one on the hit parade when it comes to the common wisdom.

    But when I tried that combination on for size I encountered problems. For one big thing, Jimmy Lai has made no effort to hide his aid to pro-democracy groups but in his public remarks has invariably encouraged nonviolent agendas.

    As South China Morning Post columnist Alex Lo wrote not long ago, “What’s wrong with making massive donations to political parties and anti-government groups? Nothing! So I am puzzled by the media brouhaha over Apple Daily boss Jimmy Lai Chee-ying’s alleged donations worth more than HK$40 million to his pals in the pan-democratic camp over a two-year period.”

    Let’s not give up so easily, though. I believe that some things are best hidden right out in the open in bright daylight.

    Yes, Lai’s public voice happens to be Mark Simon, who worked for four years as a US naval intelligence analyst.

    Yes, Lai has been good friends with neo-con guru Paul Wolfowitz since the latter became chairman of the US Taiwan Business Council in 2008, according to a Lai aide.

    Wolfowitz served as deputy secretary of defense from 2001 to 2005 under Donald Rumsfeld, sort of by accident: He was supposed to become George W Bush’s head of CIA. But, alas, that didn’t work out because his wife got wind of an affair Paul, a member of the board of the National Endowment for Democracy (NED, had with a staffer, who was married at the time … and so it goes.

    And, yes, according to Wikileaks documentation, in 2013 Lai paid US$75,000 to Wolfowitz for an introduction to Myanmar government bigwigs.

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    A document suggesting a transaction between Lai and Wolfowitz.
    Photo: Wikileaks via SCMP

    But none of that really proves anything, does it now? Innocent until proven guilty. Colluding with arguably the most important US policy and intelligence operative of the past two decades, apparently yes – but can we establish active involvement by either the Pauls or the Jimmys of this world in black bloc provocations to achieve the bloody Chinese intervention that Lai forecast? Innocent until proven guilty.

    This is going to take some further work. Back to the old drawing board with Asia Times.

    There will be blowback

    “We in Hong Kong are few in number. But we know that the world will never know genuine peace until the people of China are free.” – Wall Street Journal op-ed by Jimmy Lai,  Sept 30

    As much as there have been frantic efforts by the usual suspects to obliterate them, the images of black bloc mob rule and rampage across Hong Kong are now imprinted all over the Global South, not to mention in the unconscious of hundreds of millions of Chinese netizens.

    Even the black blocs’ invisible financial backers may have been stunned by the counter-productive effects of the rampage, to the point of essentially declaring victory and ordering a retreat. In any case, Jimmy Lai continues to blame the Hong Kong police for “excessive and brutal violence” and to demonize the “dictatorial, cold-blooded and violent beast.”

    Yet there’s no guarantee the black terror mob will back down – especially with Hong Kong fire officials now alarmed by the proliferation of online instructions for making petrol bombs using lethal white phosphorous. Once again – remember al-Qaeda’s “freedom fighters” – history will teach us: Beware of the Frankenstein terrors you create.


    Tyler Durden

    Mon, 10/14/2019 – 22:30

  • Pork-Panic Sends China CPI To 6 Year Highs As Factory Deflation Deepens
    Pork-Panic Sends China CPI To 6 Year Highs As Factory Deflation Deepens

    China’s producer prices deflated for the 3rd straight month, slumping 1.2% YoY – the biggest deflationary impulse since July 2016 – but, thanks to the explosion in pork prices (as ‘pig ebola’ spreads), Chinese consumers are facing the worst inflation since 2013.

    • China Sept CPI +3.0% YoY (2.9% exp and 2.9% prior)

    • China Sept PPI -1.2% YoY (-1.2% exp and -0.8% prior)

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    Source: Bloomberg

    “The return to PPI deflation since July is not only acting as a drag on manufacturing investment, already under stress from U.S.-China trade tensions and supply-chain relocation, but also poses a major risk for onshore corporate debt refinancing,” Bo Zhuang, chief China economist at research firm TS Lombard, said before the data.

    “Sustained PPI deflation, where the monthly rate remained below -2% for more than three to six months, would be a likely catalyst for the reversion to old-style credit stimulus.”

    The biggest driver of China’s consumer price inflation was food prices, which rose 11.2% (highest since Oct 2011), thanks to pork prices surging 69.3% YoY – the biggest spike since 2007.

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    Source: Bloomberg

    The divergence between CPI and PPI is boxing Chinese officials into a corner, fearful of broad-based rate-cuts to rescue PPI from deflationary hell sending CPI even higher, but analysts are hopeful this is ‘transitory’…

    “Surging pork prices as a result of the African swine fever outbreak could cause headline consumer price inflation to increase beyond the 3% official target in the coming months,” Tommy Wu, senior economist at Oxford Economics Hong Kong Ltd, wrote in a report before the data. “But we don’t think that CPI inflation will rise substantially beyond the target and create a major constraint on Chinese monetary policy.”

    Yuan showed little to no reaction to these mixed signals.

    As we detailed previously, African swine fever, which has been raging across China, and Asia, has decimated pork supplies. 

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    Pork prices are likely to remain elevated for some time, said Betty Wang, a senior economist at ANZ. She said farmers had culled so many pigs that it would take a while for supplies to build up again. “If people feel that food inflation is going up, it may spur policy actions,” she added, although it wasn’t clear just how Beijing can find a quick and easy substitute to domestic farms.

    An apparent trade truce between China and the US reached last Friday could be what China needs to stabilize its pork supplies. 

    China has said it could import as much as 400,000 tons of pork as domestic supplies shrink. The country is likely to boost purchases of pork from the US in the coming weeks. 


    Tyler Durden

    Mon, 10/14/2019 – 22:10

    Tags
    Business Finance

  • "Saving Ammunition" Is Not A Reason To Avoid Rate Cuts
    “Saving Ammunition” Is Not A Reason To Avoid Rate Cuts

    Submitted by Eric Hickman, president of Kessler Investment Advisors, Inc., an advisory firm located in Denver, Colorado specializing in U.S. Treasury bonds.

    It isn’t just how much the Fed cuts rates that matters; it is how soon they do it.

    You don’t have to go far to hear calls for the Federal Reserve to not cut rates because they need to, “save ammunition” for when things are really bad. This imagines that the rate cut itself is the countervailing force against economic weakness

    But it doesn’t work that way.

    Outside of a questionable psychological effect, the change in rate isn’t important, it is the level of the rate and for how long it persists. In fact, the Fed’s stimulative effect is more potent the sooner it is used, because lowering interest rates sooner will cost borrowers less than lowering them later.

    In order to illustrate this, consider two scenarios. In the first scenario, “fire the ammunition,” the Fed cuts 0.25% at each of the next seven meetings to get down to the prior Fed low – a range of 0-0.25%. In the second scenario, “save the ammunition,” the Fed doesn’t cut rates again until March of next year and subsequently lowers 50 basis points three times, then 25 basis points once.

    In both scenarios, the Fed has lowered to 0.125% by July of next year. These scenarios shouldn’t be construed as predictions, but rather were arranged to illustrate the concept. See the chart below for a graphical representation. For simplicity, I considered the Fed Funds target rate to be the mid-point of the target range.

    If you compare the average interest rate over the next year between the two, it doesn’t take much imagination to guess that the, “fire the ammunition” scenario costs a borrower less than the, “save the ammunition” scenario. And it isn’t a trivial amount. It would cost 0.28% less on average for the whole year.

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    And so, lowering earlier could generate more than a full rate cut worth of stimulus. The stimulating effect of rate cuts is not just how much the Fed cuts, but also how soon they do them. There are reasons left to be cautious in cutting rates, but saving ammunition isn’t one of them.


    Tyler Durden

    Mon, 10/14/2019 – 21:50

    Tags
    Business Finance

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