Today’s News 18th May 2022

• Mapped: The State Of Global Democracy In 2022
  Mapped: The State Of Global Democracy In 2022

  The world’s (almost) eight billion people live under a wide variety of political and cultural circumstances. As Visual Capitalists’s Nick Routley, Sabrina Fortin, and Raul Amoros detail below, in broad terms, those circumstances can be measured and presented on a sliding scale between “free” and “not free” – the subtext being that democracy lies on one end, and authoritarianism on the other.

  This year’s Democracy Index report by the Economist Intelligence Unit (EIU), is one such attempt to apply a score to countries based on how closely they measure up to democratic ideals.

  According to EIU, the state of democracy is at its lowest point since the index began in 2006, blamed in part on the pandemic restrictions that saw many countries struggling to balance public health with personal freedom.

  

  In this year’s report, the EIU reported a drop of the average global score from 5.37 to 5.28, the biggest drop since 2010 after the global financial crisis. This translates into a sobering fact: only 46% of the population is living in a democracy “of some sort.”

  Let’s dive a bit deeper into what this means.

  Percentage of Population by Regime Type

  In 2021, 37% of the world’s population still lived under an authoritarian regime. Afghanistan tops this list, followed by Myanmar, North Korea, Democratic Republic of the Congo, and Syria. Of course, China has a big share of the population living under this style of regime.

  On the other side of the spectrum we have full democracies, which only account for 6.4% of the population. Norway tops this list, followed by New Zealand, Finland, Sweden, and Iceland.

  

  Let’s explore the characteristics of each of the four types of regime according to the EIU:

  Full democracies are nations where:

  • Civil liberties and fundamental political freedoms are respected

  • Valid systems of governmental checks and balances exist

  • There are limited problems in democratic functioning

  • Media is diverse and independent

  Flawed democracies are nations where:

  • Elections are fair and free

  • Basic liberties are honored but may have issues

  • There are issues in the functioning of governance

  Hybrid regimes are nations where:

  • Electoral fraud or irregularities occur regularly

  • Pressure is applied to political opposition

  • Corruption is widespread and rule of law tends to be weak

  • Media is pressured and harassed

  • There are issues in the functioning of governance

  Authoritarian regimes are nations where:

  • Political pluralism is nonexistent or limited

  • The population is ruled by absolute monarchies or dictatorships

  • Infringements and abuses of civil liberties are common

  • Elections are not fair or free (if they occur at all)

  • Media is state-owned or controlled directly or indirectly by the ruling regime

  • The judiciary system is not independent

  • Criticism of the government is censored

  Global Democracy Index by Region

  As mentioned earlier, in 2021, the global democracy score declined from 5.37 to 5.28. This was driven by a decline in the average regional score, but every region has a different reality. Let’s take a look at the democratic state of each region in the world.

  Americas

  North America (Canada and U.S.) is the top-ranked region in the Democracy Index with an average score of 8.36, but this dropped significantly from 8.58 in 2020.

  Both countries have dropped their positions in the global ranking, however, Canada still maintains the status as a full democracy.

  

  The U.S. is still classified by EIU as a flawed democracy, and has been since 2016. The report points to extreme polarization and “gerrymandering” as key issues facing the country. On the bright side, political participation in the U.S. is still very robust compared with the rest of the world.

  Latin America and the Caribbean experienced the largest decline in regional scores in the world. This region dropped from 6.09 in 2020 to 5.83 in 2021. This decline shows the general discontent of the population about how their governments have handled the pandemic.

  In this region, the only country that falls under a full democracy is Costa Rica. On the other side of the spectrum, Venezuela, Nicaragua, and Cuba fall under the authoritarian regime classification.

  Europe

  In 2021, Western Europe is the region with the most full democracies in the world.

  In fact, four out of the top five full democracies are in this region: Norway, Finland, Sweden, and Iceland. A notable downgrade in this region happened in Spain; the country is now considered a flawed democracy.

  

  Eastern Europe paints a different picture, where there is not a single full democracy. Three countries (Moldova, Montenegro, and North Macedonia) were upgraded from being considered hybrid regimes to flawed democracies.

  Ukraine’s score declined to 5.57, becoming a hybrid region. Russia’s score also declined to 3.24 keeping the authoritarian regime status. It’s important to note that this report by the EIU was published before the invasion of Ukraine began, and the conflict will almost certainly impact scores in next year’s report.

  Africa

  Sub-Saharan Africa has the most countries at the bottom of the Democracy Index rankings.

  The fact is that 23 countries are considered “authoritarian regimes”. Meanwhile, there are 14 countries that are hybrid regimes, six countries under flawed democracy, and only one country, Mauritius, is considered a full democracy.

  

  In North Africa, four countries are considered authoritarian regimes: Sudan, Egypt, Libya, and Algeria. Only Morocco and Tunisia fall into the hybrid regime classification.

  Middle East and Central Asia

  This region concentrates a substantial number of countries classified as authoritarian regimes. In fact, the region’s overall democracy score is now lower than what it was before the start of the Arab Spring in 2010.

  

  There are no countries falling under the category of full democracy in this region. Only Israel (7.97) and Cyprus (7.43) are considered flawed democracies. Turkey, Georgia, Armenia, and Pakistan fall under the category of hybrid regimes, and the rest of the countries in the region are considered authoritarian regimes.

  East Asia and Oceania

  This is broad region is full of contrasts. Aside from Western Europe, East Asia and Oceania contains the most full democracies: New Zealand, Taiwan, Australia, South Korea, and Japan. There are also a high number of countries that fall under the category of flawed democracies.

  

  It’s worth noting that some of the most contentious geopolitical relationships are between neighbors with big differences in their scores: China and Taiwan, or North and South Korea are examples of this juxtaposition.

  Decline in Global Democracy Levels

  Two years after the world got hit by the pandemic, we can see that global democracy is in a downward trend.

  Every region’s global score experienced a drop, with the exception of Western Europe, which remained flat. Out of the 167 countries, 74 (44%) experienced a decline in their democracy score.

  As pandemic restrictions continue to be lifted, will democracy make a comeback in 2022?

  Tyler Durden
  Wed, 05/18/2022 – 02:45

• Orbán Warns West Is Subjecting Itself To "Suicide Waves" Of Decline
  Orbán Warns West Is Subjecting Itself To “Suicide Waves” Of Decline

  Authored by Paul Joseph Watson via Summit News,

  In a speech to mark him taking the oath of office, Hungarian Prime Minister Viktor Orbán warned that the west is subjecting itself to “suicide waves” of decline in the form of self-inflicted economic wounds, mass migration and an obsession with identity politics.

  

  Orbán’s conservative Fidesz party swept to victory in the election last month with another two-thirds majority, despite a massive effort by globalist interests to derail his candidacy.

  During a speech in parliament, Orbán cautioned that the continent faced perilous times ahead.

  “Everything that has happened since 2020 points in one direction: Europe and the Hungarian people in it have entered an age of danger,” said Orbán.

  “The decade began with the coronavirus epidemic and continued with the war. The sanctions from the war brought an economic downturn.”

  “The war and sanctions policy caused an energy crisis, and U.S. interest rate hikes brought an age of inflation,” he added.

  The Hungarian leader went on to lament that Europe was entering an “age of economic downturn” and a worsening mass migration problem.

  Orbán said we are now witnessing the “suicide waves of the Western world” characterized by the replacement of Christianity with a vacuous cult of identity politics.

  “Such is the program of the great European population exchange, the essence of which is to replace the missing Christian children with migrants. Such an experiment is a program of gender madness and a liberal Europe that transcends nation-states and Christianity, and puts nothing in their place,” said Orbán.

  “They forget that man alone can never be free, only lonely,” he added.

  Orbán expressed hope that his own people could fight back, “because the Hungarians were carved out of hard wood, so we stubbornly resist the decline.”

  As we previously highlighted, the EU imposed sanctions on Hungary, directly afflicting the poor, because Hungarians dared to vote for a leader the globalists don’t like.

  *  *  *

  Brand new merch now available! Get it at https://www.pjwshop.com/

  In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Get early access, exclusive content and behinds the scenes stuff by following me on Locals.

  Tyler Durden
  Wed, 05/18/2022 – 02:00

• Are Putin And Xi 'Gray Champions'? Part 2
  Are Putin And Xi ‘Gray Champions’? Part 2

  Authored by Jim Quinn via The Burning Platform blog,

  In Part 1 of this article I examined previous Fourth Turnings and the Gray Champions who won and lost, but made a difference in the course of history. Now I will try to peer through the fog of disinformation, lies, and false narratives to try and determine which Gray Champions will make a difference in this Fourth Turning.

  

  The U.S. and NATO are playing with fire by poking the bear. This is no longer a limited conflict between Russia and the Ukraine. In the early days of the conflict, there were constant talks between both sides, with the possibility of a negotiated resolution. The American Empire nixed those talks. The neo-cons, representing the interests of the military industrial complex uni-party, see an opportunity to further enrich themselves, while believing they can bleed and weaken Putin. But who is really being weakened in the long run?

  

  Putin’s military operation began on February 24. Oil was $93 a barrel. It is up 13% and despite economic sanctions, Russian oil revenue is higher, and the ruble is at a two year high versus the USD and Euro. Natural gas prices are up 69%. Diesel prices are up 89%. Gasoline prices are up 29%. Wheat prices are up 31%. The stock market is down 5% and at a one year low. As an exporter of oil, natural gas, and wheat, is Russia really suffering from these price increases, or are the citizens of the EU and U.S. bearing the brunt of the pain? Russians are paying $2.80 a gallon for gasoline, while Americans are paying $4.65 per gallon. Who’s winning this proxy war?

  Russian oil exports are up 50% in 2022. The Biden administration is amateur hour on steroids. The State Department and Defense Department are led by inept woke lightweights who are stumbling and bumbling our country into World War 3. They keep pushing Putin, attempting to instigate him into an action they can use as a basis for officially declaring war against Russia.

  

  Make no mistake about it, the U.S. is already at war with Russia and Putin knows it. Economic sanctions, even though they have backfired and hurt Europe and the U.S. far more than Russia, are an act of war. Providing the Ukraine with tactical information so they can target generals and naval ships is an act of war. Shipping high tech military weaponry, in addition to enriching U.S. arms makers, to the Ukraine is an act of war.

  Sending $54 billion, printed out of thin air by Powell and his cronies and exacerbating our already 40-year high inflation, to the corrupt Zelensky so he can buy U.S. arms, is an act of war. I wonder if the “Big Guy” will get his 10%. Calling for the overthrow of a world leader, who has 6,000 nuclear weapons at his disposal, is a reckless act of war. This isn’t a video game, where you get to start over if you make the wrong move. This game of Risk could end life on this planet as we know it if someone makes the wrong move.

  Fourth Turnings have a life of their own, with the generational juxtaposition driving events towards conflict rather than towards a negotiated resolution. The Prophet Generation leaders are sure of themselves, even when the facts argue against their plans. They will plunge forward, as their arrogance and self-absurdness convince them they are destined to achieve immortality in history books as the leader who changed or saved the world.

  We are in the midst of an era where events are being orchestrated by evil men whose agendas, while not totally coordinated, all coalesce around a future world of authoritarian domination by the few and passive subjugation by the many. It is clear Gates and Clinton are active conspirators in the Great Reset scheme being implemented by the billionaire global oligarchs.

  

  Trump is an enigma, as his rhetoric appears to be against these forces of evil, but his actions speak otherwise. His assessment and selection of key personnel, endorsement of candidates, and continued full throated support of the blood clot inducing Big Pharma experimental gene therapies that don’t keep you from catching or transmitting a low-risk flu, classifies him as either a clueless dupe or just controlled opposition, paid to keep half the masses distracted from their conspiracy to implement their Build Back Better New World Order.

  His actions in not doing everything in his power to free the January 6 hostages, rotting in government dungeons, passive support for Biden’s reckless Ukraine provocations, and endorsement of left wing lunatics like Oprah talk show host and Turkish citizen Mehmet Oz for Senate in a state where he doesn’t reside, prove his true colors. A Trump victory in the 2024 presidential election would ensure a chaotic whirlwind of domestic violence as a likely global conflict would already be underway.

  

  Is Putin the world’s last hope in derailing the WEF Great Reset agenda or is he just playing his part in enslaving the global population in squalor and debt within a techno-gulag dystopian surveillance federation, where you will own nothing and be happy while your overlords own everything and dole out your rations depending upon your level of subservience? Even though there have been tenuous links between Putin and the WEF globalist cabal, the reaction of these globalists to his military operation reveals he is not on their side.

  The U.S. controlled NATO has been slowly encircling Russia with missiles and the imminent admission of Sweden and Finland will put their missiles on Putin’s doorstep. Putin and his closest advisors are clear headed and understand the stakes, as stated by Dimitry Medvedev:

  “The pumping of Ukraine by NATO countries with weapons, the training of its troops to use Western equipment, the dispatch of mercenaries and the conduct of exercises by the countries of the Alliance near our borders increase the likelihood of a direct and open conflict between NATO and Russia instead of their ‘war by proxy. Such a conflict always has the risk of turning into a full-fledged nuclear war. This will be a disastrous scenario for everyone.”

  – Dimitry Medvedev – Former Russian President

  It appears this showdown between the failing and flailing American Empire and Putin will be the existential clash of this Fourth Turning. There is one certainty. Putin will not accept defeat in Ukraine. He plans to attain his objectives, whatever the cost. If the U.S. and NATO are foolish enough to directly intervene, they risk confirming Robert Oppenheimer’s lament – “Now I am become Death, the destroyer of worlds”. Putin has seen the writing on the wall since the 2014 U.S. orchestrated coup d’état and has shown tremendous restraint in his response.

  His Ukraine invasion has been targeted on military objectives, making all efforts to avoid civilian casualties. The Russian military is methodical, efficient, and boring, as opposed to the Shock & Awe U.S. military that has failed miserably at achieving their objectives for 20 years. The false flag Ukrainian attempts to create atrocity narratives have failed pathetically. But Putin’s restraint should not be mistaken for weakness. He is a man of his word, not one of Biden’s bloviating apparatchiks who got their job based on race, sex, or wokeness credentials. He means what he says and is willing to back up his words with actions.

  

  “If someone intends to intervene in the ongoing events from the outside and create strategic threats for Russia that are unacceptable to us, they should know that our retaliatory strikes will be lightning-fast. We have all the tools for this, and we will use them if necessary. And I want everyone to know that.” 

  – Vladimir Putin – April 28, 2022

  

  There is no doubt in my mind Putin will be the most impactful of the Gray Champions over the last several years of this Crisis. The other Gray Champion who has been biding his time and generally keeping a low profile is Xi Jinping. Like Putin, a dictator for life, he can play the long game, while the U.S. fiddles and burns. He has refused to condemn Putin’s invasion and is tacitly supporting Russia by purchasing their oil and wheat, sanctioned by the West.

  He is also learning the U.S. and the EU are paper tigers, bogged down by immense levels of debt, vacuous leadership, a willfully ignorant populace, and militaries focused on wokeness rather than preparation for war. He continues to rattle his sword towards Taiwan, probing and testing the U.S. reaction. Xi’s aspiration is for China to dominate the 21st Century and he is applauding the foolishness of the American Empire in its death throes as it accelerates its fall by seeing its currency and military domination degraded rapidly.

  

  Xi is a serious man, on par with Putin, when it comes to tenaciously implementing his agenda. Both Russia and China have major demographic issues and as dictators, they always have the possibility of being overthrown by an internal adversary. Human rights, gender inclusivity, and choosing preferred pronouns are not high priorities for these men. Xi has been rapidly building up his military, using the hundreds of billions the U.S. has supplied buying their cheap crap for decades.

  China’s CCP has infiltrated American universities and stolen our technological innovations, bribing corrupt politicians, greedy corporate CEOs, spineless college administrators, and our dishonest whore media, to gain control over key aspects of our economic system. They are truly the enemy within. And the Biden crime family is beholden to both China and Ukraine. Xi played Trump like a fiddle, pretending they were personal friends and making promises he never intended to keep, as shown by our trade deficit with China up 30% from 2021 and on-track to reach an all-time high over $450 billion in 2022.

  

  Both Putin and Xi see the deterioration, degradation, and unseriousness of those steering the American ship of state into a sea of icebergs. They witness the bumbling fool of a president on a daily basis and the dimwitted sycophants running his administration behind the curtain. It would be comical if these amateurs weren’t in the process of tearing the fabric of American society to shreds, while simultaneously pushing the world into a global conflict in which the likelihood of nuclear confrontation grows by the day.

  Xi most certainly plans to enact a takeover of Taiwan when he believes the U.S. is too distracted, militarily stretched and bogged down in their European misadventure. Biden has already pushed Russia and China closer, along with India, while the majority of the world supports Russia in this conflict. You will not hear that from the U.S. media, but it is a fact.

  The U.S. Empire is not loved by the rest of the world. It has been feared, because if you stepped out of line in honoring the USD for all obligations you were summarily bombed into oblivion or cut off from the billions in “foreign aid” (aka bribes) doled out by American politicians. None of the foreign aid ever aids the people of those countries. It aids corrupt foreign leaders, arms dealers, and politicians who have a portion of the funds funneled back into their pockets. It has worked like a charm for decades, but these arrogant psychopaths went too far this time with their Covid scheme, unleashing a tsunami of inflation and destroying the just in time global supply chain they created when they sold off our manufacturing to China.

  The horrific reported inflation of 8.3% is really 17%, if measured as it was during Paul Volcker’s reign as Federal Reserve Chairman. Of course, he took the courageous action of raising rates to 20% in order to crush it and succeeded. The cowardly Powell has rates under 1% and will do as he is told by his globalist overlords, destroying our economy so the Great Reset can move forward unabated.

  

  History seems to be accelerating, with major developments and sudden turns every few weeks. False narratives and engineered distractions (Ukraine war, leaked abortion ruling, covid variant of the month) are designed to divert your attention from the collapse of our economy and financial markets. No one is really in control, though there are many egomaniacal self-absorbed despots who believe they can alter the course of history in the direction they choose.

  Klaus Schwab, Bill Gates, and the rest of the World Economic Forum authoritarian evil globalist purveyors of real disinformation want to destroy our way of life so they can implement the way of life they want us to have – owning nothing, eating bugs, obeying their commands, under constant technological surveillance, and in constant fear of being turned in if they voice dissent. Essentially, they want to impose a techno-fascist global regime upon the masses.

  

  Those pulling the strings know the jig is up. They’ve played the debt card to the hilt. It began to unravel in September 2019 when the repo market cracked. Everything since has been part of their exit strategy plan. They know the house of cards is about to come crashing down and are attempting to pull off a controlled demolition in which they retain their wealth, power, and control. Of course, their hubris will ultimately lead to their downfall, as the world is too complex, has too many variables to control, and their malevolent machinations will blow up in their faces and possibly blow up the entire world.

  As we see shortages of baby formula, eggs, wheat, fertilizer, diesel fuel, high tech equipment, vehicles, along with open borders allowing hordes of illegals to pour into the country, and Democrat run urban enclaves encouraging murder and mayhem, all created by purposeful decisions made at the highest levels of government and funded by the likes of Soros and Gates, you can’t help but recognize their real goal is to destroy this country. We’ve reached the point Frank Zappa warned us about a few decades ago.

  “The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”

  – Frank Zappa

  

  I understand what they are trying to accomplish. With little food or fuel, and less than 1% of the population able to grow their own food to sustain themselves, the Build Back Better oligarchs expect the masses to beg them to be saved. This is where the WEF slogan, “You will own nothing and be happy” comes to fruition. You will be doled out a food ration, work menial jobs, live a squalid existence, use their global digital currency, and try to maintain a high social credit score so you are not ostracized and condemned to the gulag, or worse.

  The world is highly complex, and the best laid plans of these psychopaths are likely to go awry. I don’t believe they can pull off this controlled demolition without unleashing a myriad of unintended consequences. There is a pugnacious, heavily armed minority who will refuse to bend the knee to the arrogant, soft, egg head billionaires like Gates. His man boobs and pot belly don’t inspire admiration from average hard working blue collar man. A motivated minority of skilled freedom minded patriots can cause a multitude of problems for globalist totalitarians.

  

  I also believe Putin and Xi are roadblocks to the WEF agenda, explaining the fawning over failed comedic actor Zelensky and his invitation to speak at Schwab’s annual World Economic Forum. The course of this Fourth Turning now hinges upon the actions of Putin and Xi in response to the threats and warlike actions being taken by an American Empire desperately clinging to the mantle as the dominant world power.

  

  In theory I understood this Fourth Turning would ultimately lead to a bloody global conflict, but a few years into this Crisis I didn’t visualize a scenario which would lead to such an outcome. Each Fourth Turning has seen an exponential increase in deaths, as the killing technology has improved. There were approximately 65 million deaths during World War II, with Russia incurring 27 million of those deaths. That means approximately 3% of the global population were killed during the last Fourth Turning.

  Over 4% of the U.S. male population was killed during the Civil War. A similar death toll percentage today would exceed 250 million people. With the killing technology available today to men of dubious intellect and malicious motives, the potential loss of life could exceed our worst nightmares. I hoped for a less dismal route for this inevitable Crisis, but we are now careening towards our own rendezvous with destiny. On the current trajectory, we are running out of time on the Doomsday Clock.

  

  Strauss and Howe laid out four potential outcomes, which I have presented many times before in previous articles. Three of the four are not positive. If you asked me a few years ago, I would have selected outcome three as the most likely, as the American Empire died with a whimper, much like the British Empire after World War II. Now I realize outcomes three and four are highly unlikely.

  I believe outcome two is inevitable, as the dominant nation (America) has chosen to take a course which will engulf the planet in a war with an unknowable outcome. Once war starts on a grand scale, it could spin out of control and result in outcome number one. We can only hope cooler heads will prevail, but observing what is considered leadership in this day and age, I’m not optimistic.

  1. This Fourth Turning could mark the end of man. It could be an omnicidal Armageddon, destroying everything, leaving nothing. If mankind ever extinguishes itself, this will probably happen when its dominant civilization triggers a Fourth Turning that ends horribly. For this Fourth Turning to put an end to all this would require an extremely unlikely blend of social disaster, human malevolence, technological perfection, and bad luck.

  2. The Fourth Turning could mark the end of modernity. The Western saecular rhythm – which began in the mid-fifteenth century with the Renaissance – could come to an abrupt terminus. The seventh modern saeculum would be the last. This too could come from total war, terrible but not final. There could be a complete collapse of science, culture, politics, and society. Such a dire result would probably happen only when a dominant nation (like today’s America) lets a Fourth Turning ekpyrosis engulf the planet. But this outcome is well within the reach of foreseeable technology and malevolence.

  3. The Fourth Turning could spare modernity but mark the end of our nation. It could close the book on the political constitution, popular culture, and moral standing that the word America has come to signify. The nation has endured for three saecula; Rome lasted twelve, the Soviet Union only one. Fourth Turnings are critical thresholds for national survival. Each of the last three American Crises produced moments of extreme danger: In the Revolution, the very birth of the republic hung by a thread in more than one battle. In the Civil War, the union barely survived a four-year slaughter that in its own time was regarded as the most lethal war in history. In World War II, the nation destroyed an enemy of democracy that for a time was winning; had the enemy won, America might have itself been destroyed. In all likelihood, the next Crisis will present the nation with a threat and a consequence on a similar scale.

  4. Or the Fourth Turning could simply mark the end of the Millennial Saeculum. Mankind, modernity, and America would all persevere. Afterward, there would be a new mood, a new High, and a new saeculum. America would be reborn. But, reborn, it would not be the same.

  

  I’ve always preached preparedness and combining forces with like-minded people, but can you really prepare for a world where outcome one or two is the climax of this Fourth Turning? I know many bloggers make money off of doom, but I simply cannot conceive of a positive outcome based on the current dynamics driving the world towards war.

  I’d love to give a Knute Rockne speech to inspire the team to rally around someone who can lead us to victory. But all I see are monkeys with matches in a room full of dynamite. It’s only a matter of time until it explodes. The decline of an empire is awful to watch and even worse to live through. I wish you Godspeed and thank you for reading my ramblings. I hope I’m wrong.

  *  *  *

  The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation.

  Tyler Durden
  Tue, 05/17/2022 – 23:45

• Kim Mobilizes Military To Tackle "Explosive" North Korean COVID Outbreak, Infected Told To 'Gargle Saltwater'
  Kim Mobilizes Military To Tackle “Explosive” North Korean COVID Outbreak, Infected Told To ‘Gargle Saltwater’

  North Korea first acknowledged an “explosive” outbreak of COVID-19 last week, with health officials instructing residents to ‘gargle’ saltwater to treat the virus as medical supplies remain limited and a non-existent vaccine program, Reuters reports. 

  Leader Kim Jong Un blasted health officials over the slow response to counter the virus and the lack of medication for not reaching people quickly. Kim had to mobilize the army’s medical corps to “stabilize the supply of medicines in Pyongyang City,” according to the state news agency KCNA. 

  On Monday, North Korean health authorities reported more than 1.2 million have been fever-stricken, with 50 deaths.

  With very few COVID treatments, state media have instructed people to use antibiotics, painkillers, and other remedies, such as gargling saltwater and drinking willow leaf tea.

  Kim has placed himself in the spotlight of the country’s infectious disease response team, overseeing daily meetings on the outbreak, which he already said has caused “great upheaval.” 

  

  North Korea has rejected international help and vaccines for the last 2.5 years. Without immediate help, fatality and infection rates could soar in a country with one of the world’s worst hospital systems. 

  Most people in the country remain unvaccinated and don’t have strong immune systems because of poor appetite and depressed living standards. 

  Kim has taken a page out of China’s book and issued a nationwide lockdown to stop the spread. 

  Some suspect North Korea is significantly underestimating infections and fatalities. 

  “When people die, North Korean authorities will say they’ve died of overwork or from natural deaths, not because of COVID-19,” Nam Sung-wook, a professor at Korea University in South Korea, told ABC News. He said Kim is likely understating the outbreak to protect his “dignity.” 

  South Korea’s unification ministry has offered to send masks, test kits, and vaccines, but the North hasn’t acknowledged its neighbor to the south. 

  Considering the lack of medical treatment, malnourishment and chronic poverty of the vast majority of the population, and lack of a credible hospital system, North Korea could be entering COVID hell. 

  Tyler Durden
  Tue, 05/17/2022 – 23:25

• China’s Protracted Lockdowns Cause Critical Shortages In West
  China’s Protracted Lockdowns Cause Critical Shortages In West

  Authored by Dorothy Li via The Epoch Times (emphasis ours),

  Hospitals in the United States are on high alert, with some doctors prioritizing patients in critical condition as the prolonged lockdown in China’s Shanghai has caused a global shortage of chemicals used in medical imaging.

  

  Some of the largest U.S. hospitals said earlier this month they were facing significant shortages of iodinated contrast media products, which are dyes given to patients so that their internal organs and vessels can be picked up by CT scans, X-rays, and radiography.

  The dwindling supply was due to the temporary closure of the production facility of General Electric’s health care unit in Shanghai, a trade hub that has been locked down for nearly two months. Though the factory has been allowed to resume operation gradually, the Greater New York Hospital Association warned that an 80 percent reduction in supply might last through the end of June, according to a May 5 statement.

  Some hospitals have started to conserve use of the medical dye. For example, the University of Alabama at Birmingham Health System said they activated a response to aggressively ration the supply of intravenous contrast to address the shortage, according to a May 7 statement. The efforts mean doctors are prioritizing urgent scans and postponing elective tests.

  

  U.S. health care facilities are not alone in feeling the economic consequences. From Apple, Microsoft, and Tesla, to Adidas, Estée Lauder, and Starbucks, global companies have warned of the spillover effects of China’s protracted COVID-19 lockdowns.

  As the fast-moving Omicron variant spread across the country, Chinese cities, from large to small, have imposed various degrees of restrictions under the regime’s “zero-COVID” playbook. The biggest lockdown in Shanghai led to many of the city’s 25 million residents enduring a food shortage. Officials on May 15 signaled that the city started reopening, but residents said they still could not step out of their homes.

  As of May 10, some 41 cities across the country are under partial or full lockdown, according to estimates by Japanese bank Nomura, accounting for almost 30 percent of China’s economic output.

  

  Production Disrupted

  With factory workers and consumers stuck at home and many businesses forced to suspend operations, China’s export growth last month was at a 2-year low. Exports in dollar terms decelerated to 3.9 percent in April from a year earlier, tumbling from the 14.7 percent growth in March, China’s customs reported on May 9.

  The sluggish figures from the trade sector, which accounts for about a third of gross domestic product (GDP), added to a string of signs that the world’s second-largest economy is slowing down. Factory activity had already contracted at a sharper pace in April, industry surveys showed.

  Chinese authorities promised to allow some businesses to resume operations within a so-called “closed loop” system where workers live where they work. But only 19 percent of 460 German companies have permits to operate under such conditions, according to a survey by the German Chamber of Commerce in China published on May 12. Of those allowed to produce under lockdown, facilities are running at less than half of their capacity on average.

  “Closed loop productions are inacceptable as a long-term solution for German companies to operate in China,” said Maximilian Butek, the executive director of the chamber, in a statement.

  The flash survey, echoing the results of recent findings by the U.S. and European business groups in China, underscored signs that foreign employees are increasingly planning to leave the country due to the regime’s strict COVID-19 strategy.

  Wary Investors

  Strict COVID-19 curbs and the resulting supply chain chaos have rattled foreign business confidence, according to several surveys by foreign lobby groups.

  A recent survey by the American Chamber of Commerce in China found that over half of its 121 members have already delayed or reduced investments as a result of the lockdown. Some 51 percent have already decreased their revenue projections for the year, according to the poll conducted from late April to early May.

  “Revenue forecasts for this year are down, but, more worryingly, members don’t see any light at the end of the tunnel,” said AmCham China Chairman Colm Rafferty in the statement.

  A gloomier picture was painted by European businesses in the country. The number of companies weighing a shift of investments out of China reached its highest proportion in a decade, according to a survey by the European Chamber of Commerce in China published on May 5.

  The survey, conducted in late April, found nearly a quarter of the 372 respondents were considering moving current or planned investments out of China, more than double the number at the beginning of the year. About 60 percent of businesses have cut their business revenue projections this year, while 92 percent stated that they had been affected by recent port closures, a decline in road freight, and rising sea freight costs.

  

  China’s zero-COVID policy is the last straw for foreign investors, who have already been dealing with headwinds like trade conflicts and a deteriorating business environment, said Frank Tian Xie, an associate professor of marketing at the University of South Carolina Aiken.

  Stronger Reverberations

  At a May 5 meeting of the Chinese Communist Party’s most powerful body, the Politburo Standing Committee, Chinese leader Xi Jinping issued warnings against anyone who criticized, questioned, or distorted the regime’s zero-COVID policy.

  “We have won the battle to defend Wuhan,” Xi said, according to the official news outlet Xinhua. “We can certainly win the battle to defend greater Shanghai.”

  Economists have repeatedly warned of the consequences of the strict COVID-10 curbs. A top Chinese economist Xu Jianguo warned at a May 8 webinar that the economic impact of the latest outbreak is ten times more severe than in early 2020, when the regime initially locked down Wuhan, South China Morning Post reported. He estimated the curbs, including lockdown and travel restrictions, have cost the country $2.68 trillion this year, said the report.

  Tyler Durden
  Tue, 05/17/2022 – 23:05

• Ransomware Gang Threatens To "Overthrow" Costa Rica's Government As Attack Deepens
  Ransomware Gang Threatens To “Overthrow” Costa Rica’s Government As Attack Deepens

  Last week, Costa Rica declared a state of emergency after a Conti Group ransomware attack infected government computer networks. Now, the ransomware gang responsible for the attack said its objective is to overthrow the government, according to AP News. 

  On Monday, newly elected President Rodrigo Chaves told reporters that the Russian-speaking cyber gang had increased ransom payment to $20 million. He said the ransomware had impacted 27 government institutions, including federal agencies, state-run utilities, and municipalities. 

  “We are at war, and that’s not an exaggeration,” Chaves said, adding officials believe they’re dealing with a national terrorist group with collaborators inside Costa Rica. 

  

  Also, on Monday, Conti said: “We have our insiders in your government … are also working on gaining access to your other systems, you have no other options but to pay us. We know that you have hired a data recovery specialist, don’t try to find workarounds.”

  The ransomware attack was first discovered in April, infecting the Finance Ministry, including customs and tax collection networks. AP notes other government networks have been infected and have not worked properly in a month. 

  Conti has also said: “We are determined to overthrow the government by means of a cyber attack, we have already shown you all the strength and power, you have introduced an emergency.”

  If the ransomware is not paid promptly, the cyber gang said they would delete the decryption keys, effectively paralyzing critical networks that run certain government agencies. 

  Brett Callow, a ransomware analyst at Emsisoft, said, “the threat to overthrow the government is simply them making noise and not to be taken too seriously.” 

  However, Callow did say, “We haven’t seen anything even close to this before, and it’s quite a unique situation.” 

  Could this be the first instance a cyber gang attempts to overthrow a government with ransomware? 

  Tyler Durden
  Tue, 05/17/2022 – 22:45

• Chinese Investors Remove Hedges For Downside Risks
  Chinese Investors Remove Hedges For Downside Risks

  By Ye Xie, Bloomberg markets live commentator and reporter

  While the news flow in China and Hong Kong has been grim, there have been some positive developments, most notably on the policy front for real estate and tech companies. So far, it’s more piecemeal than a complete policy U-turn.

  By the same token, a lot of bad news seems to be reflected in the markets. In fact, bearish options in Hong Kong stocks are dwindling to the lowest level in two decades, suggesting investors see limited downside.  

  Tuesday saw some new data and news developments. Let’s start with bonds and the currency. Chinabond’s data showed foreign outflow from Chinese government bonds slowed to 42 billion yuan ($6.2 billion) in April, from a record 52 billion yuan in March. Noticeably, foreign holdings of policy banks’ notes, which offer higher yields with limited credit risk, tumbled by a record 41 billion yuan. So sentiment toward Chinese bonds remains poor.

  Yet the currency settlement data showed that the portfolio outflow was more than offset by China’s trade surplus. That resulted in a net currency inflow of around $9 billion in April, according to Goldman Sachs’ estimate. The yuan’s record 4% decline in April, therefore, seems to have been driven more by sentiment than faster deterioration in balance of payments. Some currency depreciation may be welcome and tolerated by Beijing, but a repeat of the depreciation at a similar speed and magnitude is less likely.

  

  Shifting gears to the tech front, Vice Premier Liu He gave an unusual public show of support for digital-platform companies on Tuesday. At a symposium with the heads of some of the nation’s largest private firms, Liu said that the government will support the development of digital-economy companies and their public listings. Platform companies are encouraged to participate in major national scientific and technological innovation projects.

  The show of support after a yearlong crackdown is more symbolic. After all, some actions – such as anti-monopoly measures, the delisting of Didi and the crackdown of after-school tutoring companies – are irreversible. Indeed, the nearly 5% gain in the Nasdaq Golden Dragon Index of Chinese ADRs in the U.S. on Tuesday is in-line with its normal relationship with the Nasdaq Composite, suggesting the rally is more about the global sentiment than China specific.

  What it does show is that a lot of bad news seems to be priced in and the stocks are susceptible to marginal good news. Indeed, the implied volatility of China’s stocks has been lower than realized volatility, suggesting traders don’t see markets becoming even more volatile. In Hong Kong, the put/call open-interest ratio for the Hang Seng Index has dropped to the lowest level in two decades. That shows downside hedges have been steadily removed as the market cratered. Historically, that tends to mark the bottoming process.

  

  Where we go from here depends on what happens next with Covid in China. But the soaring unemployment rate may alarm Beijing enough that more substantial policy counterattacks are in the making, giving beaten-down assets such as tech stocks and real estate some reprieve.

  Tyler Durden
  Tue, 05/17/2022 – 22:25

• Vancouver Arby's Manager Accused Of Urinating In Store's Milkshake Mix For "Sexual Gratification"
  Vancouver Arby’s Manager Accused Of Urinating In Store’s Milkshake Mix For “Sexual Gratification”

  Police have accused an Arby’s manager in Vancouver of urinating in his store’s milkshake mix for “sexual gratification” on at least two occasions.

  We know what you’re thinking…but hey, at least it’s not more terrible news about inflation though, right?

  The manager, Stephen Sharp, was already being investigated for child pornography, according to a new report by the NY Post. He made the admission to police while being questioned, the report says. 

  Sharp was arrested by Vancouver police and confessed to downloading and distributing child pornography on May 10, the Post reported.

  

  When officers executed a search warrant on Sharp, they uncovered “dozens of photos and videos depicting the sexual exploitation of children as well as the urine video on his digital devices”. 

  They say Sharp downloaded the images “at least once” while he was working. 

  And now, the search for the urine drinkers has commenced. The Post writes that authorities are “looking for any unlucky customers” who “purchased a milkshake from the Arby’s at 221 Northeast 104th Ave. on Oct. 30 or Oct. 31 and has a receipt.”

  Tyler Durden
  Tue, 05/17/2022 – 22:05

• Day 1 Rundown Of The Michael Sussmann Trial
  Day 1 Rundown Of The Michael Sussmann Trial

  Authored by Techno Fog via The Reactionary,

  Day 1 of the Michael Sussmann trial is a wrap.

  It started with disclosure by Special Counsel DeFilippis informing the Court that government witness Dr. Manos Antonakakis (identified as Researcher-1 in the Sussmann indictment) “has decided to invoke his Fifth Amendment right.” He would not be called to the stand. More background on Manos here.

  

  From there it was time for opening statements.

  Special Counsel Brittain Shaw made clear that this case is “about privilege: the privilege of a well-connected D.C. lawyer with access to the highest levels of the FBI; the privilege of a lawyer who thought that he could lie to the FBI without consequences.” Using that privilege, Sussmann:

  “went straight to the FBI general counsel’s office, the FBI’s top lawyer. He then sat across from that lawyer and lied to him. He told a lie that was designed to achieve a political end, a lie that was designed to inject the FBI into a presidential election.”

  Circumventing the political leanings of the jury, the Special Counsel explained that “we are here because the FBI is our institution that should not be used as a political tool for anyone.” She elaborated that Joffe, on behalf of his clients – the Hillary Clinton Campaign and Rodney Joffe – planned to manipulate the FBI, and trigger negative news stories, “to create an October surprise on the even of the presidential election.” As to the evidence:

  You’re going to see emails and phone records that show that beginning in the summer of 2016 the defendant worked with Fusion GPS to develop the Trump/Alfa story and plant it in the press.

  She also gave us this preview:

  

  The attorney for Sussmann, in their opening, argued there was no lie. Instead, Sussmann “went to the FBI to help the FBI” – so they wouldn’t be “caught flat-footed” by a New York Times story discussing the purported Alfa Bank/Trump connections. Of course, they admitted as a result of the Sussmann/Baker meeting, the FBI decided it wanted “to investigate.” To condense Sussmann’s defense: no lie and no reason to lie.

  FBI Supervisory Special Agent David Martin.

  Agent Martin was the first government witness to testify. He explained the technicalities of the DNS data which alleged to have shown a secret back channel between Alfa Bank and the Trump Organization.

  Sussmann’s attorney asked Martin if he knew Rodney Joffe a “confidential human source for the FBI.”

  Martin replied “I was told that after the fact.”

  On redirect, the Special Counsel offered this interesting bit of information relating to Joffe: “Are you aware that Mr. Joffe was closed for cause as a source?”

  FBI Special Agent Scott Hellman

  Hellman was involved in investigating the Alfa Bank allegations. He testified that the evidence (data and white papers explaining the data) provided to then-FBI general counsel James Baker from Sussmann was passed off to none other than the infamous Peter Strzok. One of these white papers stated:

  “The only plausible explanation for this server configuration is that it shows the Trump Organization and Alfa Bank to be using multiple sophisticated layers of protection in order to obfuscate their considerable recent email traffic.”

  Hellman disagreed with that finding, and the general Trump/Alfa allegations presented by Joffe/Sussmann, stating they “were not supported by the technical data.” Their methodology was “questionable” and the purported secret communications “just didn’t ring true at all.” He further questioned the timing of the data, stating he found it suspicious that these researchers “started looking, and they found that the activity had just started three weeks prior.”

  This gets us to the issue of materiality. Sussmann’s attorneys argue that even if there were lies, they weren’t material to the investigation. The Special Counsel asked why sources matter. The key exchange:

  

  We’ll be updating this page once we get the afternoon transcript, which includes additional witness testimony. Stay tuned…

  Tyler Durden
  Tue, 05/17/2022 – 21:45

• Feds Begin 'Major Radiological Incident' Drill In Austin 
  Feds Begin ‘Major Radiological Incident’ Drill In Austin 

  Dozens of local, state, and federal agencies have begun conducting “a major radiological incident exercise” in Austin, Texas. 

  The Cobalt Magnet 22 exercise is led by the U.S. Department of Energy’s National Nuclear Security Administration in partnership with the Austin Homeland Security and Emergency Management Office, bringing 30 agencies together in a field training exercise to combat threats of radiological attacks

  Reminder: This week, @NNSANews radiological incident response personnel, with Austin HSEM and other federal, state and local partners, will participate in Cobalt Magnet, a large consequence management field training exercise. (1/2) pic.twitter.com/P3BD8Ei1UN

  — Austin Emergency Management (@AustinHSEM) May 16, 2022

  https://platform.twitter.com/widgets.js

  Austin Emergency Management tweeted the exercise will take place in various locations around the metro area this week. “You may see people in protective clothing using equipment and/or low-flying aircraft,” the local agency said, adding “It’s just an exercise.” 

  Cobalt Magnet 22 will take place at various locations around Austin this week. You may see people in protective clothing using equipment and/or low-flying aircraft. Remember: It’s just an exercise! (2/2)

  — Austin Emergency Management (@AustinHSEM) May 16, 2022

  https://platform.twitter.com/widgets.js

  The exercise is considered regular training and will help scientists and technical experts with radiological monitoring and assessment. It began on Monday and will last through Friday. 

  “The City of Austin is pleased to welcome NNSA and the numerous local, state and federal agencies participating in Cobalt Magnet.

  “Our goal in this exercise is to test our procedures and make improvements to ensure we’re keeping the Austin/Travis County community protected,” Juan Ortiz, Director of Austin’s Homeland Security and Emergency Management Office, told Austonia. 

  So the bigger question … WHY is the government preparing for a dirty bomb or radiological dispersal device attack on a city now? 

  Tyler Durden
  Tue, 05/17/2022 – 21:25

• Commerce Cronyism: Inside Deals, Conflicts Of Interest And Chinese Connections
  Commerce Cronyism: Inside Deals, Conflicts Of Interest And Chinese Connections

  By Peter Schweizer of the Gatestone Institute

  • The Commerce Department is the fourth most lobbied federal office, behind only the Treasury Department, Health & Human Services, and the White House itself. It is more lobbied than the bigger budgeted Department of Defense and Department of Transportation, despite managing a far smaller budget. This is no accident, because Commerce makes what can be life-and-death decisions for particular industries and businesses.

  • Yet the mission of this “hodgepodge” of administrative agencies, bureaus, and offices could not be more important. The Commerce Department’s broad purpose is “to create the conditions for economic growth and opportunity.”

  • Through its Bureau of Industry and Security, Commerce regulates what are known as “dual use” technologies, which have potential military applications for foreign powers, another sore spot in the US-China relationship.

  The US Department of Commerce seldom grabs headlines or congressional scrutiny. It does not become “weaponized” against political opponents of the incumbent party. After the 2016 election, an article on Vox about incoming power-players of the Trump administration dismissed the department as a “hodgepodge of agencies,” and a “Cabinet backwater.”

  

  Yet the mission of this “hodgepodge” of administrative agencies, bureaus, and offices could not be more important. The Commerce Department’s broad purpose is “to create the conditions for economic growth and opportunity.” The department has an important role in setting and executing US domestic and international trade policy. It administers tariffs and even arms control, through its regulatory oversight of military exports. These functions receive quite a bit more attention than the activities of such workaday agencies as the National Weather Service, the Bureau of the Census, and the US Patent and Trademark Office.

  The Government Accountability Institute (GAI), (full disclosure: of which I am president) just released an investigative report called “Commerce Cronyism: Inside Deals, Conflicts of Interest & Chinese Connections,” that takes a close look at this rarely scrutinized “backwater.” We found that, as in most backwaters, a lot of strange things happen there.

  The Commerce Department is the fourth most lobbied federal office, behind only the Treasury Department, Health & Human Services, and the White House itself. It is more lobbied than the bigger budgeted Department of Defense and Department of Transportation, despite managing a far smaller budget. This is no accident, because Commerce makes what can be life-and-death decisions for particular industries and businesses.

  The trade war with China gave the Commerce Department tremendous influence over this critical policy area. The Trade Expansion Act of 1962 gave the Commerce Department authority to investigate the effect of imports on US national security. Effectively, the department creates the groundwork for tariffs. Through its Bureau of Industry and Security, Commerce regulates what are known as “dual use” technologies, which have potential military applications for foreign powers, another sore spot in the US-China relationship.

  As one aspect of its report, GAI investigated the personal financial benefits that accrued to the past several Secretaries of Commerce — how they benefited their own interests through department decisions. GAI also found that China has learned how to tap into the Commerce Department for its own benefit. They have been doing it for years, across several different administrations, among Democrats and Republicans alike.

  Let’s start with the current Secretary of Commerce, Gina Raimondo. A previous governor of Rhode Island, Raimondo comes with a background in finance. She founded the venture capital firm Point Judith Capital in 2000. She is worth roughly $10 million, based on her financial disclosure and as reported by Forbes magazine. Raimondo’s husband, Andrew Moffit, spent 20 years at the consulting firm McKinsey & Co, leaving in 2020 to become “Chief People Officer” of a software company called PathAI. This company applies artificial intelligence and machine learning technology to the field of medical diagnostics.

  In February of this year, Moffit exercised his PathAI stock options and purchased at least $50,000 worth of its stock. He left his full-time job with the company and became instead its “strategic adviser,” thus deepening his financial ties to the firm while creating an appearance of greater distance between his role with the company and his wife’s duties as Commerce secretary.

  Artificial intelligence is the focus of the Commerce Department’s Bureau of Industry and Security because it often has direct military applications, making it sensitive for US national security. Possible restrictions include the sharing of AI technology with foreign employees, an area in which Moffit could well be responsible as “Chief People Officer.” In 2019, US-based venture capital firm Danhua Capital Management (doing business as DHVC) participated in a $60 million fundraising round for PathAI. DHVC not only has holdings in sensitive technology sectors, but also has ties to a Chinese state-owned entity. Therefore, DHVC’s relationship with PathAI “could raise conflict-of-interest and/or national security concerns,” according to GAI’s report. Danhua is part of a pattern of companies established by the Chinese government in order to “penetrate” Silicon Valley, a Reuters report noted.

  In addition, Raimondo’s department has loosened restrictions on Huawei, the Chinese telecom giant that Trump administration regulators had sanctioned, because of the company’s ties to the Chinese government and particularly its military. Huawei’s founder, Ren Zhengfei, is a party loyalist who urged his workers to “surge forward, killing as you go, to blaze us a trail of blood,” in their efforts to sell Huawei products to the West. Huawei has been identified as a security threat by the governments of Japan, Taiwan, France, Great Britain, the US, Australia, and Germany, among others.

  Then there was Wilbur Ross, Secretary of Commerce under President Trump. Ross was a successful businessman with huge commercial ties to China. He had shipping companies that had major Chinese investment. In fact, Trump criticized him for being too soft on China while Ross ran the department.

  Wilbur Ross kept investments in companies directly affected by tariff policy, even as the Commerce Department handed out tariff exemptions and negotiated new trade agreements. Wendy Teramoto, his chief of staff, simultaneously served on the boards of some of these companies, GAI’s report notes.

  According to our own 2018 analysis, 62 percent of the cargo carried into the US by one of Ross’s shipping firms was South Korean steel for which Ross had helped to negotiate a tariff exemption.

  Before joining Commerce, Ross founded and chaired an auto parts company with operations around the world, including Mexico and China. Ross helped renegotiate the US’s trade deal with Mexico and Canada, which lowered import duties on the automotive industry, and later refused to release the results of the Department’s investigation into the effects of foreign imports on the domestic automotive industry.

  Before Ross, President Obama’s Commerce Secretary was Penny Pritzker, part of the prominent Illinois family that is heir to the Hyatt Hotel fortune. In the years immediately before she was tapped by her fellow Chicagoan, Obama, Pritzker had focused on her own business ventures, launching PSP Capital Partners and Artemis Real Estate Partners, two investment firms.

  While she was Secretary of Commerce , buildings owned by Pritzker’s companies were leased to Commerce Department agencies, such as the US Patent and Trademark Office, and to Commerce Department contractors. In 2015, the Clean Energy Trust, a Chicago-based not-for-profit supporting clean energy start-ups through business development, received $10 million of funding through a grant program administered by the Department of Commerce. It was the only Chicago-area group to receive such funding. Its board of directors was co-chaired at the time by Penny Pritzker’s cousin, Nick Pritzker.

  GAI’s report, which is available here, discusses a number of other issues, personalities, and programs that are of questionable merit but generate high interest from Washington insiders who see their potential. The cronyism of past and present Secretaries of Commerce is but one part of the story the report tells. It is worth your attention.

  *  *  *

  Peter Schweizer, President of the Governmental Accountability Institute, is a Gatestone Institute Distinguished Senior Fellow and author of the new book, Red Handed: How American Elites are Helping China Win.

  Tyler Durden
  Tue, 05/17/2022 – 21:05

• Border Patrol Migrant Encounters Hit All-Time Record In April
  Border Patrol Migrant Encounters Hit All-Time Record In April

  Illegal migration into the United States hit an all-time high in April, with US Customs and Border Protection logging more than 234,000 migrant encounters, topping March’s previous high of more than 221,000 migrants, according to the Department of Homeland Security.

  

  The April 2022 figure is 30% higher than April 2021, with more than 7,800 migrants encountered on average per day.

  Imagine how many more they didn’t encounter.

  One should also note that this absolute flood of migrants comes before the Biden administration drops the Trump-era pandemic measure, Title 42, which allowed for the rapid deportation of migrants to waiting camps in northern Mexico, will be lifted on May 23, when even more migrants are expected.

  “While we will likely see an increase in encounters after the CDC’s Title 42 public health Order ends, I have a great degree of confidence that the dedicated men and women of CBP and our multiple agency partners will meet this challenge,” said CBP Commissioner Chris Magnus in a press release.

  As the Post Millennial notes:

  Last month, members of the Texas National Guard were seen running training exercises involving riot gear in preparation for an anticipated significant jump in illegal border crossings if Title 42 is repealed.

  Judges in Louisiana and Texas may issue orders this month that would temporarily keep Title 42 in place.

  In April, 117,989 migrants were released into the United States and 113,248 were removed. 96,908 migrants were deported under Title 42.

  Last week, a massive amount of illegal migrants were reportedly gathering at the port of entrey in Nuevo Laredo, Mexico. As of Monday, it is estimated that there are at least 5,000 people gathered there. They are expecting a greater chance of being able to get legal permission to stay and work in US territory due to the Biden administration’s policy changes if Title 42 is repealed.

  Tyler Durden
  Tue, 05/17/2022 – 20:45

• OPEC Ministers Warn No Increase In Supply Is Coming Online
  OPEC Ministers Warn No Increase In Supply Is Coming Online

  According to OPEC, the oil markets are so askew at the moment that adding capacity would fail to materially stave off high prices.

  Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has said there are “physical impediments that no producer can solve” at work right now in the oil market, according to the Financial Post/Bloomberg.

  The move shows OPEC posturing up at a time when U.S. lawmakers have been rushing to try and solve the problem of exploding gas prices. Bin Salman’s comments come at a time when exports out of Russia, a major player on the global oil and gas stage, have been disrupted. 

  “There is no refining capacity commensurate with the current demand and the expectation of the demand in the summer,” Bin Salman said this week.

  

  His thoughts were echoed by Bahrain’s Oil Minister Sheikh Mohammed Bin Khalifa Bin Ahmed, the report said.

  As a result, OPEC is expected to continue to raise output by 432,000 barrels a month. 

  Bahrain’s oil minister commented this week: “There’s no new capacity coming. Even if you produce more crude, there isn’t demand for it, there aren’t any more refineries.”

  And OPEC seems to be happy with the job they are doing – which means Sleepy Joe is going to have to turn to another page in his “big book of micromanaging the oil market to try and manipulate prices”.

  Iraqi Oil Minister Ihsan Abdul Jabbar even commented that OPEC was putting in its “best performance in maybe more than 50 years” in achieving balance in the oil market.

  Tyler Durden
  Tue, 05/17/2022 – 20:05

• Tonga Volcanic Eruption Was Largest Ever Documented, Say Scientists
  Tonga Volcanic Eruption Was Largest Ever Documented, Say Scientists

  Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

  The Tonga volcanic eruption in January was the largest atmospheric explosion documented since the 1883 Krakatoa eruption in Indonesia, according to scientists.

  

  Tonga was hit by an underwater eruption of the Hunga Tonga-Hunga-Ha’apai volcano and subsequent tsunami on Jan. 15, which wiped out an entire village on one of Tonga’s small outer islands and killed at least three people.

  Robin Matoza, an associate professor at the University of California, Santa Barbara, led 76 scientists in a study on the volcanic eruption in Tonga, which was published on May 12 in Science Journals.

  The study described the volcanic eruption as an “unusually energetic explosion” that generated “a broad range of atmospheric waves observed globally by various ground-based and spaceborne instrumentation networks.”

  Scientists observed that the low-frequency atmospheric pressure waves, known as Lamb waves, had circled the Earth at least four times in one direction and three times in the opposite direction over six days following the eruption.

  “Lamb wave peak-to-peak pressure amplitudes as a function of distance indicate that the atmospheric pressure pulse generated by the Hunga event is comparable to that of the 1883 Krakatau eruption,” they stated.

  The Tonga volcanic eruption generated ionospheric perturbations and long-range audible sound that could be heard 10,000 kilometers (6,200 miles) away in Alaska, where a sequence of booms could be heard.

  “Atmospheric waves from the main Hunga eruption had far more extensive impacts. Unusual sea-level changes or tsunamis were observed in the Pacific earlier than predicted, and in the Caribbean and Mediterranean without direct ocean routes,” the research reads.

  Meanwhile, data from NASA’s Ionospheric Connection Explorer mission and the European Space Agency’s Swarm satellites suggest that the eruption generated “hurricane-speed winds” and “unusual electric currents” in the ionosphere hours after it happened.

  

  NASA stated on May 10 that the volcano eruption sent “a giant plume of gases, water vapor, and dust into the sky,” causing large pressure disturbances in the atmosphere that led to the formation of strong winds.

  A group of scientists led by Brian Harding, a physicist at the University of California, Berkeley, revealed the findings in a study published in Geophysical Research Letters.

  “The volcano created one of the largest disturbances in space we’ve seen in the modern era,” Harding said in a statement. “It is allowing us to test the poorly understood connection between the lower atmosphere and space.”

  The eruption also severed Tonga’s sole fiber-optic communication cable connecting the country to the outside world. NASA said in April that the undersea volcano eruption was “hundreds of times” stronger than the Hiroshima nuclear explosion.

  “For comparison, scientists estimate Mount St. Helens exploded in 1980 with 24 megatons and Krakatoa burst in 1883 with 200 megatons of energy,” NASA said in a statement.

  Tyler Durden
  Tue, 05/17/2022 – 19:45

• Yuan Surges On Speculation China's Covid Lockdowns Will End Soon
  Yuan Surges On Speculation China’s Covid Lockdowns Will End Soon

  Three weeks ago, when looking at the pattern in China’s covid data, we said that China’s covid panic is almost over…

  China’s covid panic is almost over pic.twitter.com/H4jOSqXApM

  — zerohedge (@zerohedge) April 29, 2022

  https://platform.twitter.com/widgets.js

  … a view we repeated a week ago when we warned all those who were short oil – on the “thesis” that China’s lockdowns would last indefinitely – to cover.

  Still short oil? China covid cases almost back to 0 pic.twitter.com/GHPDIh9Bqa

  — zerohedge (@zerohedge) May 11, 2022

  https://platform.twitter.com/widgets.js

  Fast forward to today when after more than a month of growing lockdown (and mangled supply chain) fears, there was finally a glimmer of hope at the end of China’s covid tunnel and possibly for Chinese markets.

  As Bloomberg notes, Chinese lockdown conditions have improved over May 1-11, versus the April average, with the Goldman Effective Lockdown Index declining to 33.1 points for data so far in May, versus an average of 37.3 over April 1-25. The index is on a declining trend, and bits and pieces of news are mildly encouraging.

  Most recently, Shanghai reported no new Covid-19 infections in the broader community for a third consecutive day, a long-awaited milestone which authorities have said will allow them to start unwinding the lockdown (even though most residents will have to put up with confinement for a while longer before resuming more normal life).

  The commercial hub of 25 million set out on Monday its clearest timetable yet for exiting a lockdown now in its seventh week, but the plan was met with scepticism by many residents who have seen isolation extended time and again. “Normality is very far away,” said one Shanghai resident still stuck at home.

  Still, Shanghai plans to resume outdoor activities in stages, with some shops reopening this week, but with most restrictions on movement remaining in place until May 21, after which public transport and other services will resume gradually.

  By June, the lockdown should be lifted, but residents will still be asked to get tested frequently. More people were allowed out of their homes this week, with some joggers and dog walkers spotted. One man was seen fishing in a Shanghai creek. But tall fences remained around many residential compounds and there were almost no private cars on the streets, with most people still confined to their homes.

  For other cities in China that have been under lockdown, three days with no new cases in the community usually means “zero COVID” status and the beginning of the lifting of restrictions. This suggests that activity will improve in May, albeit at a depressed level.  The correlation in levels terms between the official PMIs and the lockdown index since 2021 have been -67% and -95% for manufacturing and non-manufacturing respectively. In changes terms, correlations are -47% and -93%.

  Beijing’s latest daily case count was 52, with authorities discovering a few dozen new infections on an almost daily basis despite gradually tightening restrictions over the past three weeks or so. Dine-in services are banned in the capital, some malls and other businesses are shut, public transport is curtailed and many residents have been advised to work from home. Residents in some COVID-affected parts of Beijing’s Fengtai district were ordered not to leave their neighbourhoods, state television reported on Tuesday. In Beijing’s largest district, Chaoyang, some compounds have closed side exits while main gates are manned by volunteers checking health credentials on the mobile app authorities use to track COVID.

  Security personnel patrolled the banks of the Liangma canal, which has become a picnic spot in recent weeks for residents not allowed to go elsewhere. Signs had been put up asking people to “avoid crowds, gatherings and eating together”.

  * * *

  China’s uncompromising “zero-COVID” policy has placed hundreds of millions of consumers and workers under various restrictions at a time when the rest of the world is lifting them to “live with the virus” even as infections spread. Data this week showed the havoc wreaked on the economy by Shanghai’s lockdown and the curbs in dozens of other major cities, with retail sales and industrial output plunging at their fastest pace in more than two years in April.

  The capital Beijing saw a 16% plunge in retail sales in April, the beginning of its current outbreak, according to Reuters calculations based on January-April data released on Tuesday. Property sales dropped 26%.  The American Chamber of Commerce warned that COVID controls would hamper foreign investment in China for years to come as travel curbs disrupt due diligence on projects. Big firms are also exploring alternatives for supply chains, it said.

  News that China “finally” appeared to be getting over its second covid crisis sent the onshore yuan sharply higher, with the USDCNY falling as much as 0.7% to 6.7377, its biggest decline since October.

  

  It followed the 9th consecutive stronger-than-expected yuan fixing by the PBOC, at 6.7854 per dollar, stronger than the 6.7872 average estimate in a Bloomberg survey where forecasts ranged from 6.7830 to 6.7911.

  

  Market sentiment was also boosted by optimism that a meeting Tuesday between the Chinese regulators and tech giants would result in Beijing dialing back its yearlong clampdown of the industry.

  “The easing restrictions is a driver for yuan gains, but just as important is the general USD retreat,” says Alvin Tan, head of Asia currency strategy at RBC Capital Markets

  In light of the bullish reversal in sentiment, it is not surprising why Bloomberg’s Simon Flint echoed what we have been saying for much of the past few weeks: “to the extent that markets should be focused on the second derivative of activity, there is some hope that the worst is over.”

  Tyler Durden
  Tue, 05/17/2022 – 19:25

• Over 120,000 Hunter Biden Emails Uploaded To Searchable Database
  Over 120,000 Hunter Biden Emails Uploaded To Searchable Database

  A former Trump White House staffer has uploaded more than 120,000 emails found on Hunter Biden’s abandoned laptop to a searchable database this week, which can be found at the (slowly loading) website: BidenLaptopEmails.com. In addition to searching, visitors can download the emails as well.

  

  Set up by former Peter Navarro aide Garrett Ziegler, who worked in the Trump administration Office of Trade and Manufacturing Policy, the emails contain infamous hits such as the “10 for the big guy,” in which Hunter Biden’s business partner James Gillar suggested he should hold 10% of a multi-million-dollar deal with the Chinese. Ziegler posted the emails through his organization, Marco Polo.

  Another email in the database, previously published by DailyMail.com, shows Hunter describing an extraordinary apparent quid pro quo with a Mexican billionaire’s son, outlining how he got him into the White House and inauguration, and thanking him for visits to his villa.

  Some messages did not appear to be included in the database. One email published by DailyMail.com shows Hunter inviting his foreign business partners and associates to a 2015 dinner at Washington DC restaurant Café Milano.

  In the email he reveals that his father will secretly be joining – and says that the dinner is ‘ostensibly to discuss food security’. The White House at first denied the then-vice president was there, but eventually admitted it when photographs emerged from the event.-Daily Mail

  That said, the Daily Mail notes that the above email is not included in Ziegler’s database, which contains 14,603 fewer emails than a batch of 142,838 analyzed by cyber forensic firm Maryman & Associates last year for the Mail.

  “Here are the 128k emails from the Biden Laptop, which is a modern Rosetta Stone of white and blue collar crime under the patina of “the Delaware Way,”” reads the website, referring to a term frequently used by Joe Biden. “Prior to the discovery of the Rosetta Stone, a number of ancient languages were mere gibberish and hash marks. Similarly, the emails on the Biden Laptop illuminated previously convoluted webs of the people you see leading the charge for global governance; truly, the emails can be considered a translation tool for Open-Source Intelligence (OSINT) gathering.”

  

  The “legalese” section at the bottom of the website reads: “Having seen the lengths that the FBI and other entities in the apparatus have gone to harass citizens who expose corruption, and pursuant to 18 USC § 119, Marco Polo testifies that the contents of the Biden Laptop were abandoned property. Furthermore, Marco Polo unequivocally disclaims any intention to cause any threat, intimidating action, or incitement of harm to any person covered by 18 USC § 119 and we do not condone, encourage, intend, or have any knowledge that any other person will or may use the information herein for any unlawful purpose. Marco Polo’s motive is to see justice delivered—to all criminals—by those whose responsibility it is to carry out that duty.

  Tyler Durden
  Tue, 05/17/2022 – 19:05

• Biden Will Ease Sanctions On Venezuela's Maduro Amid Scramble For Alternative Oil
  Biden Will Ease Sanctions On Venezuela’s Maduro Amid Scramble For Alternative Oil

  The Biden administration will ease sanctions on Venezuela and its strongman President Nicolás Maduro, senior admin officials have told several media outlets, in yet another reversal of a key Trump policy. The Miami Herald is reporting that in exchange for a softening of sanctions, which have included blocking the government’s access to US debt and equity markets – and have particularly targeted state-run oil company PDVSA in an oil embargo – Caracas has committed to a formal dialogue with the Venezuelan opposition in Mexico City.

  During the middle of Trump’s term in office, especially by 2019, it was widely reported and understood that the US had an unofficial policy of aiming at regime change in the socialist Latin American country. It’s been no less than three years since the US ceased formal diplomatic relations with Caracas. 

  

  Significantly prior to Biden taking office, opposition leader Juan Guaidó was recognized by Washington and a handful of allies as ‘interim president’. This status has ironically continued even as Guaidó’s visibility and influence with the media has waned. Once a ‘superstar’ in the West, he’s become increasingly irrelevant as as a real contender for power in Caracas.

  A Biden admin official sought to stress in Tuesday statements that this doesn’t mean Guaidó has been ditched in favor of normalizing Maduro. “It is very important to stress that this was done in coordination with the interim president, Juan Guaidó, to move the talks forward,” the official said.

  But this of course has less to do with Maduro changing any domestic policies or also its posture vis-a-vis Washington, and much more to do with the scramble to free up alternative supplies of oil at a moment the White House is urging Europe to block Russian oil imports as a means of inflicting maximum punishment on Moscow for its war in Ukraine. 

  Meanwhile, the ironies haven’t been lost on many…

  Though the State Department denies it, the U.S. may be seeking a deal with Venezuela’s dictator to increase the world’s oil supply, writes ⁦@WSJ⁩ If this is true, Biden would be leaving a dictator for another dictator. Unbelievable https://t.co/N3NcUBXTty

  — Luis Carlos Vélez 🌎 (@lcvelez) May 17, 2022

  https://platform.twitter.com/widgets.js

  The other irony is that Maduro has only continued seeking deeper ties with Russia, and the Biden admin is likely content to look the other way:

  News of sanctions relief comes just three weeks before the United States hosts the Summit of the Americas for the first time since the inaugural summit in 1994. Several leaders in the region are encouraging the administration to invite a representative from the Maduro government to participate.

  Meanwhile, there are few indications that Caracas will turn away from Russia as it engages with the United States. Maduro announced on Monday that his ambassador to Moscow, Carlos Faría, would become Venezuela’s new foreign minister.

  In March, the White House first dispatched a team to Caracas where they engaged in “cordial” dialogue with Maduro officials. “We have agreed to work on an agenda going forward, issues of interest,” Maduro said at the time. “It seemed to me very important to be able, face to face, discuss issues of maximum interest to Venezuela and the world. And I ratify, as I said to the delegation, all our will to advance in an agenda of well-being and peace through diplomacy, respect and the highest hope for a better world.”

  Additionally NBC noted at the time that the socialist ‘anti-imperialist’ strongman “seemed to indicate he was willing to accede to U.S. demands that he resume negotiations with his opponents as a first building block for any relief from U.S. sanctions that have been punishing the OPEC nation for years.”

  All of this primes the administration for a political fight with GOP Venezuela hawks in Congress. Over the last two months Sen. Bob Menendez, chairman of the Senate Foreign Relations Committee, and Florida’s Marco Rubio have blasted any level of rapprochement with Maduro.

  Biden continues his effort to appease anti-American communist dictators

  Yesterday it was #Cuba, now today Biden will announce removing sanctions on #MaduroRegime in #Venezuela

  — Marco Rubio (@marcorubio) May 17, 2022

  https://platform.twitter.com/widgets.js

  “If the reports are true that the Biden administration is brokering the purchase of Venezuelan oil, I fear that it risks perpetuating a humanitarian crisis that has destabilized Latin America and the Caribbean for an entire generation,” Menendez said in a March statement. “… As such, I would strongly oppose any action that fills the pockets of regime oligarchs with oil profits while Maduro continues to deprive Venezuelans of basic human rights, freedoms, and even food.”

  Tyler Durden
  Tue, 05/17/2022 – 18:45

• Mood On Wall Street Has Never Been More Apocalyptic; Tech Short Is Biggest Since 2006
  Mood On Wall Street Has Never Been More Apocalyptic; Tech Short Is Biggest Since 2006

  One month after the April Fund Manager Survey was downright “apocalyptic” with the majority seeing a bear market and stagflation – yet nobody rushing to sell – and with optimism plunging to levels right before Lehman, today Bank of America published the latest, May FMS (available to pro subscribers in the usual place) in which the bank’s doom-and-gloomy Chief Investment Strategist Michael Hartnett (who most recently warned that the bear market will end when the S&P hits 3,000 in October) found that his view is shared by a growing number of even more apocalyptic Wall Street professionals, because the survey which polled 331 panelists managing $986 billion in AUM, revealed global growth expectations plunged even more compared to last month, and dropped to fresh all-time lows (net -72%) …

  

  … with profit expectations slumping past the COVID lows to net -66% (from 63%), the weakest since Oct’08, smack in the middle of the Global Financial Crisis. (note lows in global profit expectations consistent with other crisis moments such as LTCM, Dotcom bubble burst, Lehman bankruptcy, and COVID)…

  

  … and stagflation fears soaring to 77% (from 66%) the highest since August 2008.

  

  And while the mood has rarely been more pessimistic, with the FMS signaling the highest cash levels in 20 years, since Sept 11, indicative of major risk aversion…

  

  … as Wall Street finds itself most short tech – everyone’s darling sector as recently as 2021 – since Aug 2006…

  

  … as a big rotation out of tech drives the relative investor overweight in tech vs staples (really underweight) to Oct 2008 lows…

  

  …. sparked by the biggest equity underweight since May 2020 (at net 13% UW vs net 6% OW in Apr)….

  

  … and a BofA Bull & Bear Indicator at 2.0, just on the verge of the ‘contrarian buy” level, which would give a brief all-clear window to buy, we are still missing what Hartnett calls the “full capitulation” piece. 

  As such, while stocks are prone to imminent bear rallies – like today for example- but as Hartnett writes echoing what he said in his latest Flow Show note last Friday, “the ultimate lows have not yet been reached” as investors expect rate hikes not cuts.

  

  Digging deeper into the FMS survey, we first find that even Wall Street is urging corporations to ease back on the buybacks (and CapEx spending, but nobody really spends on CapEx) and investors want CEOs to improve balance sheet not spend capex or buybacks for 1st time since Jan’21.

  

  The next part came as a surprise to us, because it confirms that peak inflation is now consensus: that’s because 68% expect inflation rates to drop coming quarters…

  

  … with fewer and fewer (net 34%, down from 53% in April) expect bond yields to rise from here (but big difference with prior “big lows” Is 78% expect short rates to rise)…

  

  … as investors still expect a total of 7.9 Fed hikes this cycle (up from 7.4 in April).

  

  There was less surprise in the latest monthly estimate of where the Fed “put” is: it slid again (along with the market), dropping to 3529 on S&P500 (-12% from current levels).

  

  Turning to risk, the survey said that the #1 tail risk in May are hawkish central banks, followed closely by #2 recession; with risks from inflation and Russia/Ukraine dropping surprisingly to third.

  

  Overall, monetary (i.e, central bank) risk has overtaken geopolitical as the biggest risk to market stability, at net 52%, a record high…

  

  … while geopolitical risk moves to the second biggest risk to financial market stability at net 87% (from 92%) followed by business cycle risk (75%) and EM risk (57%).

  

  Broken down on a monthly basis, the chart of the global FMS biggest tail risk shows more of the same: fears that central banks will blow it all up.

  

  Hartnett next turns to his trademark Financial Market Stability Risk indicator, which continues to rise as stocks slide. According to the BofA CIO, “our FMS Financial Market Stability Risks Indicator is currently at 7.5, a record high. Elevated levels of risk aversion comparable to prior crisis moments (GFC, COVID shock). The high perceived risk to financial market stability also points to a further decline in equity prices This chart is the sum of the z-scores (from Chart 12) to create our FMS Financial Market Stability Risks Index.”

  

  And speaking of what could spark a crash, the May FMS founds that speculative tech and zombie corporations are tied at 18% for the most likely source of a future credit event or default.

  

  Some other notable questions in the FMS suggest that peak oil may be coming and that it is again time to rotate into bitcoin. Why? Because 56% of FMS investors think oil will produce the best returns in 2022 but only 2% think bitcoin will outperform. Expect the opposite.

  

  … especially since Long oil/commodities remains the most crowded trade.

  

  Looking at consensus positioning, Hartnett finds that investors are very long cash, commodities, healthcare, staples…

  

  … and very short tech, equities, Europe, EM.

  

  How to trade this? Go long what is underinvested and short what everyone is long, or do the opposite of the latest rotation where investors have gotten more defensive (i.e. staples, cash, healthcare) while at the same time cut exposure to tech, US, equities and
  EM. To wit, since in May, FMS investors rotated out of tech, banks, and energy…

  

  …while getting slightly less negative on EU. Investors also got more negative on US, UK, and EM equities, and are currently still underweight EM equities on a historical basis but want to increase their exposure as well in the next 12 months.

  

  Ironically, that means going long tech since the allocation to tech is the lowest since Aug’06, and to defensives on par with GFC, Euro-crisis, COVID-crisis levels, while the allocation to stocks is lowest since May’20 (but not as low as prior crisis levels).

  Finally, here are the contrarian trades recommended by Hartnett:

  • to express H2 recession…long bonds-short commodities, long utilities-short energy;
  • to express H2 soft landing…long EM/Europe-short cash, long tech- short healthcare, long discretionary-short staples

  There is much more in the full fund manager survey available to professional subscribers at the usual place.

  Tyler Durden
  Tue, 05/17/2022 – 18:35

• A Drinking Man's Guide To Monetary Policy
  A Drinking Man’s Guide To Monetary Policy

  Authored by Gary Galles via The American Institute for Economic Research,

  There is an old expression—to drive someone to drink—which means to annoy them to distraction. My favorite version of it is George Thorogood and the Destroyers’, “Son, you’re gonna drive me to drinkin’ if you don’t stop drivin’ that Hot Rod Lincoln” (which, now that I have thought of it, I can’t seem to get out of my head). That expression birthed multiple books entitled A Drinking Man’s Guide to topics from Scotland to Cambridge, women to marriage.

  

  As far as Google tells me, however, there has never been such a guide to monetary policy. Given that recent monetary policy issues have been vexing enough to qualify—from a long period of near-zero interest rates (often negative in real terms), flaps over “transitory” inflation that wasn’t so transitory but seems to have been a massive surprise to monetary authorities, to only semi-scrutable Federal Reserve plans, modifications and messaging—perhaps it is worth considering a few connections that might appear in a drinking man’s guide to monetary policy.

  Just like drinking, expansionary monetary policy can provide a temporary (or transitory) high at first (faster real output growth and reduced unemployment). However, the ill effects come later (in an inflation “hangover”). 

  If you continue expansionary monetary policy long enough, you can do serious, lasting damage to yourself (cirrhosis of the economy). Just as imbibers build up a tolerance for alcohol, people build up a tolerance for expansionary monetary policy via adapting expectations, requiring ever increasing amounts of monetary expansion to keep people fooled enough to stay “high” for a bit longer, with compounding damage and greater difficulty in undoing those consequences later.

  Once a tolerance to drink or expansionary monetary policy is established, withdrawal symptoms worse than any hangover can result if you stop (as in a stagflation scenario that haunts the dreams of all those making fearful references to the 1970s), especially if it is unexpected. Further, that hangover is likely to persist awhile (to decelerate inflation) before you feel better again and can get back to a “normal” life.

  Such withdrawal symptoms also mean efforts to stop either expansionary monetary policy or drinking are often short-lived, as the adverse effects tend to come first, while the positive effects come later. That may tempt decision-makers to yield to short-run pressures to feel better now (drink again, possibly excused as taking a “hair of the dog” cure) or by returning to inflationary policies, despite the adverse long-run consequences.

  As with some alcoholics who don’t deliver on their promises to quit, if monetary authorities fail to fulfill promises to restrain inflation (i.e., they continue to deliver excessive monetary growth or restart it, after slowing monetary growth for a while, when political pressures on them build), observers learn not to believe such promises, or even come to see them as harbingers of the opposite (we become very hard to convince that monetary restraint will persist long enough to do much good about inflation before a reflation scenario occurs). Ask Paul Volcker how costly it is to slow inflation once such expectations have been deeply ingrained into the American psyche. 

  Some alcoholism counselors have suggested that drinking is hard to quit despite its known adverse effects because the hangovers come enough later that your subconscious doesn’t connect cause and effect. Consequently, when the decision to drink or not is made, the subconscious takes over and often results in the decision to drink. Similarly, expansionary monetary policy may be hard to quit because the long and variable lags between policy changes and their impacts, not to mention all the other variables that can also alter what happens, make it hard to definitively connect a specific policy decision to a particular result, especially when so many discussants in the conversation are political partisans fighting tooth and nail to deny any responsibility on their part.

  Just as it may be hard for a drunken sailor to precisely determine where he is going (or for an observer to accurately predict where he is going) because of indecisiveness or imperfect control over his movements, it may be hard for the Fed to precisely determine (or Fed-watchers to accurately guess) the future path of monetary policy. That can be because of disagreements or indecisiveness, made worse by the Fed’s dual mandate for real output growth and low unemployment, when there are often unavoidable tradeoffs between them in the short run. Unless we know what the Fed is aiming at today and will be aiming at in the future, we will be hard-pressed to predict its policy intentions and actions.

  Just as alcoholics hope their affliction will not need to be dealt with, which can make them suckers for promises of a painless “cure,” policy makers and their supporters can assert that there is no problem that needs solving, or that they can deliver an almost painless “cure” for inflation (a promised “soft or softish landing”) if people just elect, appoint or follow the right person or prescription (a promised change that will magically rejigger the necessary tradeoffs).

  Because there is a lag before all the effects of alcohol intake register, it adds to the difficulty of a drinker’s knowing when to stop. Similarly, the lag before the effects of monetary policy are fully felt always seems to provide some policy makers and commentators sufficient ammunition to assert that now is never the time to stop.

  There may well be more analogies between drinking and monetary policy worth noting, but my relative lack of drinking experience keeps me from recognizing them. The ones we have seen, however, provide us with plenty of reasons for monetary caution, and for suspicion of “experts” whose analyses are highly inexpert and whose “cures” aren’t. Unfortunately, such knowledge that current monetary policy may be far from ideal might drive many of us to drink when we wouldn’t otherwise.

  Tyler Durden
  Tue, 05/17/2022 – 18:25

Digest powered by RSS Digest