- China Is Killing The Dollar
China Is Killing The Dollar
Tyler Durden
Fri, 09/18/2020 – 23:40Authored by Alasdair Macleod via GoldMoney.com,
In the wake of the Fed’s promise of 23 March to print money without limit in order to rescue the covid-stricken US economy, China changed its policy of importing industrial materials to a more aggressive stance. In examining the rationale behind this move, this article concludes that while there are sound geopolitical reasons behind it the monetary effect will be to drive down the dollar’s purchasing power, and that this is already happening.
More recently, a veiled threat has emerged that China could dump all her US Treasury and agency bonds if the relationship with America deteriorates further. This appears to be a cover for China to reduce her dollar exposure more aggressively. The consequences are a primal threat to the Fed’s policy of escalating monetary policy while maintaining the dollar’s status in the foreign exchanges.
Introduction
On 3 September, China’s state-owned Global Times, which acts as the government’s mouthpiece, ran a front-page article warning that
“China will gradually decrease its holdings of US debt to about $800billion under normal circumstances. But of course, China might sell all of its US bonds in an extreme case, like a military conflict,” Xi Junyang, a professor at the Shanghai University of Finance and Economics told the Global Times on Thursday”.
Do not be misled by the attribution to a seemingly independent Chinese professor: it would not have been the frontpage article unless it was sanctioned by the Chinese government. While China has already taken the top off its US Treasury holdings, the announcement (for that is what it amounts to) that China is prepared to escalate the financial war against America is very serious. The message should be clear: China is prepared to collapse the US Treasury market. In the past, apologists for the US Government have said that China has no one to buy its entire holding. The most recent suggestion is that China’s Treasury holdings will be put in trust for covid victims — a suggestion if enacted would undermine foreign trust in the dollar and could bring its reserve role to a swift conclusion. For the moment these are peacetime musings. At a time of financial war, if China put her entire holding on the market Treasury yields would be driven up dramatically, unless someone like the Fed steps in to buy the lot.
If that happened China would then have almost a trillion dollars to sell, driving the dollar down against whatever the Chinese buy. And don’t think for a moment that if China was to dump its holding of US Treasuries other foreign holders would stand idly by. This action would probably end the dollar’s role as the world’s reserve currency with serious consequences for the US and global economies.
There is another possibility: China intends to sell all her US Treasuries anyway and is making American monetary policy her cover for doing so. It is this possibility we will now explore.
China’s commodity strategy: it’s also about the dollar
Most commentators agree that China has a long-term objective of promoting the renminbi for trade settlement. While China has made progress in this objective, they also agree that the renminbi will not challenge the dollar’s status as the reserve currency in the foreseeable future. Any changes in the relationship between the dollar and renminbi is therefore believed to be evolutionary rather than sudden.
Recent developments have dramatically altered this perspective. China is now aggressively stockpiling commodities and other industrial materials, as well as food and other agricultural supplies. Simon Hunt, a highly respected copper analyst and China-watcher put it as follows:
“China’s leadership started preparing further contingency plans in March/April in case relations with America deteriorated to the point that America would try shutting down key sea lanes. These plans included holding excess stocks of widgets and components within the supply chains which meant importing larger tonnages of raw materials, commodities, foods stuffs and other agricultural products. It was also an opportunity to use up some of the dollars which they have been accumulating by running down their holdings of US government paper and their enlarged trade surpluses.
Taking copper as an example, not only will they be importing enough copper to meet current consumption needs but in addition 600-800kt to meet the additional needs of their supply chains and a further 500kt for the governed owned stockpile. The result of these purchases will leave the global copper market very tight especially in the next two years.’’
Other than the spread of Covid-19 lockdowns outside China, there was no specific geopolitical development to trigger a change in policy towards commodities, though admittedly relationships with America are on a deteriorating path. Rather than indulging in state piracy on the high seas, fears that the US could blockade China’s imports would possibly be achieved by American action to prevent Western corporate commodity suppliers from supplying commodities — in the same manner as America controls with whom the global banking system transacts.
China has already agreed import targets for American soya and maize, only partially delivered, due one presumes, to waiting for this year’s harvest. She has been buying soya from other cheaper sources, such as Brazil, but it is too early to say China is holding back on American imports as part of a trade negotiation strategy. It is the timing of China’s policy to enact more aggressive purchases that is interesting: it coincided with or swiftly followed the Fed’s monetary policy change in late-March embarking on an infinitely inflationary course. Figure 1 points to this relevance.
The pecked line divides 2020 into two parts. First, we experienced the intensifying deflationary sentiment leading to the Fed’s rate cut to zero on 16 March, and then its promise of unlimited inflation in the FOMC statement which followed on 23 March. The second part is the inflationary period that commenced at that time as a consequence of those moves. The S&P 500 index then reversed its earlier fall of 33% and started its dramatic move into new high ground, and the dollar’s trade weighted index peaked, losing about 10% since then. Gold took the hint and rose 40%, while commodities turned higher as well, gaining a more moderate 20% so far. The gold/silver ratio collapsed from 125 to 72 currently, as the monetary qualities of silver resumed an importance. The S&P GCSI commodity index was initially suppressed by the WTI futures contract delivery debacle in April, but crude oil’s recovery has resumed. Both gold and commodities are clearly adjusting to a world of accelerating monetary inflation, where bad news on the economic front will accelerate it even more.
If China’s decision to increase the rate of importation for commodities and raw materials did occur at that time, it is very likely that rather than solely based on geopolitical reasons, the decision was driven by China’s reading of prospects for the dollar. When all commodity prices are rising, there can only be one answer, and that is the currency common to them all is losing purchasing power. And from its timing that is what appears to be at least partially behind China’s decision to accelerate purchases of a wide range of industrial and agricultural materials.
With a reasonable level of commodity stockpiles before 23 March, China might have taken the more relaxed view of buying additional imported commodities as and when needed. But the one stockpile she has in enormous quantities is of dollars, of which about forty per cent is invested in US Treasuries and agency debt. A short trillion or so has been loaned to trading partners, predominantly in sub-Saharan Africa and South America, as well as partners in the land and sea silk roads. The indebtedness to China of her commodity suppliers makes further protection from American interference more difficult perhaps, supporting the thesis of China dumping dollars. Furthermore, we should add it is possible that China has hedged some of her dollar exposure anyway. If so, against what is not known but important commodities such as copper would make sense.
That China owns and is owed massive amounts of dollars confirms her primary interest was in a stable dollar. In March she will have found that position no longer tenable. She has cleared the decks with the Global Times front-page article, which assumes America will continue to escalate trade and financial tensions, thereby ignoring China’s warning.
The likelihood that she has now abandoned a stable dollar policy has been missed by the mainstream commentary cited at the beginning of this article, yet the consequences for the dollar will be far-reaching. China is only the first nation using dollars for its external purchases to take the view it should get out of dollars as money and into something tangible. Others, initially perhaps other members of the Shanghai Cooperation Organisation, seem bound to follow.
The monetary consequences for America
The switch from a deflationary outlook to one of indefinite monetary inflation commits the Fed to purchase US Treasuries without limit. For this to be achieved will require the continued suppression of the cost of the government’s funding, which in turn will assume that the consequences for prices are strictly limited, and that existing holders of US Treasuries do not turn into net sellers in unmanageable quantities. If the Fed is to succeed in its monetary objectives it will be required to absorb these sales as well, which could be on a scale to ultimately defeat the Fed’s funding efforts.
According to the latest US Treasury TIC figures, out of a total foreign ownership of $7.09 trillion US Treasuries, China owns $1.073 trillion of which according to the Global Times $300bn will definitely be sold.[iv] But then there is the other matter of $227bn in agency debt, and $189bn in equities, which added to the remaining $800bn Treasuries after China’s planned sales tells us that there is a further amount of $1.2 trillion of securities that will be on the market “if China sells all of its US bonds in an extreme case, like a military conflict”. When an important holder begins to liquidate, others are sure to follow.
Until recently, the US Government’s funding has not presented a problem, because the trade deficit has not been translated into a balance of payments deficit. Foreign exporters and their governments have held onto and even added to their dollars, which is how they have ended up with $20.534 trillion in securities, together with additional cash at end-June as well as T-bills and commercial bills totalling a further $6.227 trillion.
We know the relationship between trade and deficit nations’ demand for recycled monetary capital, because the relationship between the deficits and net savings form an accounting identity, summed up by the following equation:
(Imports – Exports) ≡ (Investment – Savings) + (Government Spending – Taxes)
The trade deficit is equal to the excess of private sector investment over savings, plus the excess of government spending over tax revenue. In basic English, if expenditures in the domestic economy exceed the incomes produced in it, the excess expenditures will be met by an excess of imports over exports. This is further confirmed by Say’s law, which tells us we produce in order to consume. If we decrease our savings and the government increases its spending, there will be less domestic production available relative to enhanced consumption. The balance will be made up by imports, giving rise to a trade deficit.
It follows that a decline in the currency can only be deferred for as long as importers are prepared to increase their holdings, in this case of US dollars, instead of selling them.
So far, we have not adequately addressed the impact on monetary policy, and how it affects prices in the context of trade imbalances and capital flows. We know from the relationship of the budget deficit with the trade deficit that other things being equal the rapid increase in the US budget deficit will lead to an equally dramatic increase in the trade deficit. This is not something the US Government is prepared to tolerate, and China would become even more of a whipping boy with regard to trade.
In terms of capital flows, China is disposing of dollars and buying commodities just at the moment the US’s budget and trade deficits are spiralling out of control. At the same time, she is adjusting her economic policies away from reliance on export surpluses to enhancing living standards for its population by promoting infrastructure spending and domestic consumption. By encouraging consumers to spend rather than save, the accounting identity discussed above tells us that China’s trade surpluses will tend to diminish, and consequently exchange rate policies will move from suppressing the renminbi exchange rate to make exports artificially profitable.
We can see this effect in Figure 2. Given the time between a central government directive and its implementation, the turn in the yuan’s trend in May seems about right in the context of a change of commodity purchasing policies initiated by central government a month or two before.
In the case of the US, the accounting identity which explains how the twin deficits arise informs us that in the absence of the balance of payments surplus which America has enjoyed heretofore we must consider new territory. If foreign importers dump their dollars there are two broad outcomes. Either the quantity of dollars in circulation contracts as the exchange stabilisation fund intervenes to support the exchange rate, thereby taking them out of circulation. Or they are bought by domestic buyers, at the expense of the exchange rate but remaining in circulation. It should now be apparent that attempts to maintain the exchange rate and accelerate monetary stimulation, which is the Fed’s post-March policy, are bound to fail.
Whether America decides to increase tariffs or ban Chinese imports altogether is immaterial to the outcome. The problem is rapidly becoming one of increasing quantities of inflationary money chasing a reducing quantity of American produced goods while imports are tariffed or blocked. And domestic production is also hampered by coronavirus lockdowns and the desire of bankers to decrease lending risk to the non-financial sector.
Anything the US Government does in an attempt to reduce the trade deficit without reducing the budget deficit is bound to lead to additional price inflation, or put another way, a reduction in the dollar’s purchasing power. We don’t know for sure, but it is reasonable to assume the planners in Beijing will have worked at least some of this out for themselves. If so, America’s exorbitant monetary privilege will no longer be at China’s expense.
It is increasingly difficult to see how a cliff-edge for the dollar can be avoided. Decades of benefiting from Part 1 of Triffin’s dilemma, whereby it is incumbent on the provider of a reserve currency to run deficits in order to ensure adequate currency is available for that role, is coming to an end. Those who cite Triffin tend to ignore the stated outcome; that Part 2 is the inevitable crisis that arises from Part 1. And with over 130% of current US GDP represented by dollars and securities in foreign hands, Triffin’s cliff-edge beckons.
China’s forward planning
If China is to prosper in a post-dollar world it must be ready to adapt its mercantile model accordingly. The evidence is that it planned a long time ago for this eventuality. Its Marxist roots from the time of Mao informed China’s economists and planners that capitalism would end inevitably with the destruction of western currencies.
Since those days, China’s economists have adapted their views towards the macroeconomic neo-Keynesianism of Western governments. While this is a natural process, the extent to which their earlier Marxian philosophy has been changed is not clear. And while this leaves a potentially dangerous lack of theoretical understanding of money and credit, we can only assume Western currencies are still viewed as inferior to metallic money.
It was Deng Xiaoping who led China following Mao’s death until 1989 and authorised monetary policy. And it was he who set China’s policy on gold and silver. On 15 June 1983 the State Council passed regulations handing the state monopoly of the management of the nation’s gold and silver and all related activities, with the exception of mining, to the Peoples Bank of China. Ownership of both metals by individuals and any other organisation remained unlawful until the establishment of the Shanghai Gold Exchange in 2002, since when it is estimated on the basis of withdrawals from the SGE’s vaults that publicly owned gold has accumulated to over 15,000 tonnes.
Since then, China has moved gradually but surely to gain control over physical gold markets and to become the world’s largest miners, both in China and through the acquisition of foreign mines. The Shanghai Gold Exchange dominates physical markets both directly and through ties with other Asian gold exchanges. Joining these dots leaves one dot concealed from us; and that is the true extent of physical gold owned by the Chinese state.
We can assume that China started from a position of some gold ownership when the 1983 regulations were enacted. The fact that precious metals other than gold and silver were excluded is in accordance with the Chinese view of gold and silver as monetary metals. And the permission for the general population to buy gold and silver on the establishment of the Shanghai Gold Exchange in 2002 suggests that in the nineteen years since 1983 the state had accumulated sufficient gold and silver for its anticipated needs.
In Deng’s time, foreign exchange activity at the Peoples’ bank was frenetic, with inward capital flows as foreign corporations established manufacturing operations in China. From the 1990s, while these flows continued, they were more than compensated by growing trade surpluses. Taking into account these flows and the contemporary bear market in gold prices, it is possible (though not provable) that the state accumulated as much as 20,000 tonnes.
Whatever the actual amount, little or none of this is declared as monetary gold. A strict policy of no gold exports has been enforced ever since — with the sole exception of limited quantities for the Hong Kong jewellery trade, which ends up being bought and reimported by day-trippers from the Mainland.
Even though state economists have increasingly used neo-Keynesian policies to artificially stimulate China’s economy, we should be in no doubt about China’s Plan B. It is not for nothing that she has deliberately taken control of physical gold and even run advertising campaigns through state media, following the Lehman crisis, urging her people to acquire it.
We cannot yet say when, how or if China will introduce gold-backing to ensure the yuan survives intact the problems faced by the dollar. But for now, with the new policy of a rising yuan illustrated in Figure 2 above, the impact on domestic costs for imported raw materials will be reduced and we can expect the yuan/dollar rate to continue to increase accordingly.
The implications
China’s threat to dump US Treasuries “in an extreme case, like a military conflict” is an important development for the dollar. It was a clear shot across America’s bows, and will have been seen in that context by the American administration. We have yet to see a response.
A firm plank of American monetary policy has been to suppress the price effects of monetary inflation. In the case of commodity prices, this has been achieved through the expansion of derivative substitutes acting as artificial supply. For the moment, the deteriorating outlook for the global economy persuades the macroeconomic establishment that demand for industrial commodities and raw materials will ameliorate, leading to lower prices. But this view does not take into account the changing purchasing power of the dollar.
At some point the threat to the dollar will be taken seriously. But before then, the political imperative in the run up to the presidential election is likely to continue and even intensify pressure on China. But China’s renewed determination to dump both dollar denominated bonds and dollars is a developing crisis for America and the Fed’s monetary policy. We can expect further threats to materialise from the Americans to China’s ownership of US Treasuries and agency bonds. It is a situation that could threaten to escalate rapidly out of control before China has disposed of the bulk of her dollar-denominated bonds.
The certain victim will be the dollar. And as the dollar sinks, China will be blamed and tensions are bound to escalate between China and her Asian partners on one side, and America and her security partners on the other. The start of this additional crisis was the turning point last March, when the Fed publicly stated its inflation credentials. With nearly $3 trillion in its reserves, it is not surprising that China is acting to protect herself.
With so much dollar debt and dollars in foreign ownership, it is hard to see how a substantial fall in the dollar’s purchasing power can be avoided and the Fed’s funding of the budget deficit badly disrupted.
- Military Confirms It Mulled Deploying Experimental 'Heat Ray' To Protect White House
Military Confirms It Mulled Deploying Experimental ‘Heat Ray’ To Protect White House
Tyler Durden
Fri, 09/18/2020 – 23:20An experimental Pentagon weapon which was intended for use in varying scenarios from deterring pirates on the high seas to riot control in city streets in cases of mass unrest is subject of fresh controversy after documents of its field trials surfaced.
Two decades ago the DoD revealed a weapon called an Active Denial System (or ADS), nicknamed the ‘pain ray’ or also ‘heat ray’ which was capable of inflicting an invisible zap of pain upon protesters failing to disperse, or alternately could deter hostile boats approaching a battleship.
It works by directing a blast of energy at a target, causing subjects brief but excruciating pain – as if skin is on fire – which leaves no lasting or permanent injury. It essentially hits a subject with a blast of intense, searing heat. A 2007 field test later leaked to Wired revealed however that an airman serving as test subject was severely burned by the device.
A mounted Active Denial System, or ADS. AFP via Getty Images. This despite Raytheon scientists who developed it attempting to assure that it is completely safe and only induces temporary discomfort.
“The nonlethal device works by emitting a microwave beam at 95 gigahertz, a specific frequency that penetrates the outermost layer of skin, creating an intense burning sensation, but not powerful enough (in theory) to cause a burn,” Yahoo News reports this week, after defense officials reportedly looked into using the pain ray to deter recent hostile rioters near the White House.
After failing to be effective in either Iraq or Afghanistan, in part reportedly because it takes so long to power up, and it must be operated from a platform no smaller than a Humvee or other large military vehicle, Pentagon officials mulled the potential for it to be used to deter increasingly violent protests such as hit American cities this summer.
Via Breaking Defense But it’s yet unknown what effects it might have on young children, the elderly, or on people with pre-existing health issues.
And this is why an NPR report this week is causing so much controversy:
A spokesperson for Joint Forces Headquarters Command in Washington, D.C., confirmed to NPR that hours before federal police officers cleared a crowded park near the White House with smoke and tear gas on June 1, a military police staff officer asked if the D.C. National Guard had a kind of “heat ray” weapon that might be deployed against demonstrators in the nation’s capital.
Col. Robert Phillips, a spokesperson for the Joint Force Headquarters-National Capital Region, or JFHQ-NCR, said the inquiry was made “as a matter of due diligence and prudent military planning.”
Via ABC News That was during the height of George Floyd and Black Lives Matter protests which inundated D.C. streets and especially areas around the White House.
A prior active demonstration of how the ADS works:
It turns out the Joint Forces Headquarters Command was informed that no heat ray weapon was available.
The revelation still outraged civil rights activists who worry federal and state law enforcement will increasingly revert to harsher methods in repelling protests and rioting.
- Pepe Escobar On The Assange Trial: The Mask Of Empire Has Fallen
Pepe Escobar On The Assange Trial: The Mask Of Empire Has Fallen
Tyler Durden
Fri, 09/18/2020 – 23:00Authored by Pepe Escobar via The Asia Times,
The concept of “History in the making” has been pushed to extremes when it comes to the extraordinary public service being performed by historian, former UK diplomat and human rights activist Craig Murray.
Murray – literally, and on a global level – is now positioned as our man in the public gallery, as he painstakingly documents in vivid detail what could be defined as the trial of the century as far as the practice of journalism is concerned: the kangaroo court judging Julian Assange in Old Bailey, London.
Let’s focus on three of Murray’s reports this week – with an emphasis on two intertwined themes: what the US is really prosecuting, and how Western corporate media is ignoring the court proceedings.
Here, Murray reports the exact moment when the mask of Empire fell, not with a bang, but a whimper:
“The gloves were off on Tuesday as the US Government explicitly argued that all journalists are liable to prosecution under the Espionage Act (1917) for publishing classified information.” (italics mine).
“All journalists” means every legitimate journalist, from every nationality, operating in any jurisdiction.
Interpreting the argument, Murray added, “the US government is now saying, completely explicitly, in court, those reporters could and should have gone to jail and that is how we will act in future. The Washington Post, the New York Times, and all the “great liberal media” of the US are not in court to hear it and do not report it (italics mine), because of their active complicity in the “othering” of Julian Assange as something sub-human whose fate can be ignored. Are they really so stupid as not to understand that they are next?
Err, yes.”
The point is not that self-described paladins of “great liberal media” are stupid. They are not covering the charade in Old Bailey because they are cowards. They must keep their fabled “access” to the bowels of Empire – the kind of “access” that allowed Judith Miller to “sell” the illegal war on Iraq in countless front pages, and allows CIA asset and uber-opportunist Bob Woodward to write his “insider” books.
Nothing to see here
Previously, Murray had already detailed how “the mainstream media are turning a blind eye. There were three reporters in the press gallery, one of them an intern and one representing the NUJ. Public access continues to be restricted and major NGOs, including Amnesty, PEN and Reporters Without Borders, continue to be excluded both physically and from watching online.”
Murray also detailed how “the six of us allowed in the public gallery, incidentally, have to climb 132 steps to get there, several times a day. As you know, I have a very dodgy ticker; I am with Julian’s dad John who is 78; and another of us has a pacemaker.”
So why is he “the man in the public gallery”?
“I do not in the least discount the gallant efforts of others when I explain that I feel obliged to write this up, and in this detail, because otherwise the vital basic facts of the most important trial this century, and how it is being conducted, would pass almost completely unknown to the public. If it were a genuine process, they would want people to see it, not completely minimize attendance both physically and online.”
Unless people around the world are reading Murray’s reports – and very few others with much less detail – they will ignore immensely important aspects plus the overall appalling context of what’s really happening in the heart of London. The main fact, as far as journalism is concerned, is that Western corporate media is completely ignoring it.
Let’s check the UK coverage on Day 9, for instance.
There was no article in The Guardian – which cannot possibly cover the trial because the paper, for years, was deep into no holds barred smearing and total demonization of Julian Assange.
There was nothing on The Telegraph – very close to MI6 – and only a brief AP story on the Daily Mail.
There was a brief article in The Independent only because one of the witnesses, Eric Lewis, is one of the directors of the Independent Digital News and Media Ltd which publishes the paper.
For years, the process of degrading Julian Assange to sub-human level was based on repeating a bunch of lies so often they become truth. Now, the conspiracy of silence about the trial does wonders to expose the true face of Western liberal “values” and liberal “democracy”.
Daniel Ellsberg speaks
Murray provided absolutely essential context for what Daniel “Pentagon Papers” Ellsberg made it very clear in the witness stand.
The Afghan War logs published by WikiLeaks were quite similar to low-level reports Ellsberg himself had written about Vietnam. The geopolitical framework is the same: invasion and occupation, against the interests of the absolute majority of the invaded and occupied.
Murray, illustrating Ellsberg, writes that “the war logs had exposed a pattern of war crimes: torture, assassination and death squads. The one thing that had changed since Vietnam was that these things were now so normalized they were classified below Top Secret.”
This is a very important point. All the Pentagon Papers were in fact Top Secret. But crucially, the WikiLeaks papers were not Top Secret: in fact they were below Top Secret, not subject to restricted distribution. So they were not really sensitive – as the United States government now alleges.
On the by now legendary Collateral Murder video, Murray details Ellsberg’s argument:
“Ellsberg stated that it definitely showed murder, including the deliberate machine gunning of a wounded and unarmed civilian. That it was murder was undoubted. The dubious word was “collateral”, which implies accidental. What was truly shocking about it was the Pentagon reaction that these war crimes were within the Rules of Engagement. Which permitted murder.”
The prosecution cannot explain why Julian Assange withheld no less than 15,000 files; how he took a lot of time to redact the ones that were published; and why both the Pentagon and the State Dept. refused to collaborate with WikiLeaks. Murray:
“Ten years later, the US Government has still not been able to name one single individual who was actually harmed by the WikiLeaks releases.”
Prometheus Bound 2.0
President Trump has made two notorious references to WikiLeaks on the record: “I love WikiLeaks” and “I know nothing about WikiLeaks”. That may reveal nothing on how a hypothetical Trump 2.0 administration would act if Julian Assange was extradited to the US. What we do now is that the most powerful Deep State factions want him “neutralized”. Forever.
I felt compelled to portray Julian Assange’s plight as Prometheus Bound 2.0. In this poignant post-modern tragedy, the key subplot centers on a deadly blow to true journalism, in the sense of speaking truth to power.
Julian Assange continues to be treated as an extremely dangerous criminal, as his partner Stella Moris describes it in a tweet.
Craig Murray will arguably enter History as the central character in a very small chorus warning us all about the tragedy’s ramifications.
It’s also quite fitting that the tragedy is also a commentary on a previous era that featured, unlike Blake’s poem, a Marriage of Hell and Hell: GWOT and OCO (Global War on Terror, under George W. Bush, and Overseas Contingency Operations under Barack Obama).
Julian Assange is being condemned for revealing imperial war crimes in Iraq and Afghanistan. Yet in the end all that post-9/11 sound and fury signified nothing.
It actually metastasized into the worst imperial nightmare: the emergence of a prime, compounded peer competitor, the Russia-China strategic partnership.
“Not here the darkness, in this twittering world” (T.S. Eliot, Burnt Norton).
An army of future Assanges awaits.
- NASA To Spark "Lunar Gold Rush" In Move To Break China's Monopoly On Rare Earth Metals
NASA To Spark “Lunar Gold Rush” In Move To Break China’s Monopoly On Rare Earth Metals
Tyler Durden
Fri, 09/18/2020 – 22:40NASA wants to spark a “lunar gold rush” by paying companies to extract rare earth metals (REM) from the moon.
NASA Administrator Jim Bridenstine recently tweeted that the space agency “is buying lunar soil from a commercial provider! It’s time to establish the regulatory certainty to extract and trade space resources.”
The moon holds hundreds of billions, if not trillions, of dollars of untapped resources, including fifteen lanthanides, as well as scandium and yttrium – used in modern electronics. There’s also an abundance of Helium-3, a very rare gas, with the potential to fuel clean nuclear fusion power plants. This infographic from 911Metallurgist.com explains why NASA has set its eyes on the moon:
“Across history, human development has relied upon the finite resources available on Earth. But the moon – a seemingly barren rock – may actually be a treasure trove of rare resources vital to Earth’s future. And now, nations are looking upwards to a potential lunar gold rush,” 911Metallurgist.com states in the infographic’s intro.
In a blog post, Bridenstine said NASA’s Artemis project “will lay the foundation for a sustained long-term presence on the lunar surface and use the Moon to validate deep space systems and operations before embarking on the much farther voyage to Mars.” He said the push to mine moon rocks would fully comply with the Outer Space Treaty of 1967, which outlines no country has a sovereign claim to the moon or other celestial bodies.
Bridenstine said, “we’re taking a critical step forward by releasing a solicitation for commercial companies to provide proposals for the collection of space resources.”
Adding that “when considering such proposals, we will require that all actions be taken in a transparent fashion, in full compliance with the Registration Convention, Article II and other provisions of the Outer Space Treaty, and all of our other international obligations. We are putting our policies into practice to fuel a new era of exploration and discovery that will benefit all of humanity.”
“This is one small step for space resources, but a giant leap for policy and precedent,” Mike Gold, NASA’s chief of international relations, told Reuters.
“They are paying the company to sell them a rock that the company owns. That’s the product,” Joanne Gabrynowicz, former editor-in-chief of the Journal of Space Law, said. “A company has to decide for itself if it’s worth taking the financial and technological risk to do this to sell a rock.”
NASA’s attempt to begin mining the moon in 2025 could be an attempt to break China’s monopoly on REMs.
- Dershowitz: Why I Am Suing CNN
Dershowitz: Why I Am Suing CNN
Tyler Durden
Fri, 09/18/2020 – 22:20Authored by Alan Dershowitz via The Gatestone Institute,
I love the First Amendment, I support the First Amendment, I have litigated cases defending the First Amendment. I have written and taught about the First Amendment. And I was a law clerk for the Supreme Court when it rendered its landmark 1964 decision in New York Times v. Sullivan, which “protects media even when they print false statements about public figures, as long as the media did not act with ‘actual malice.'”
But I also understand the limitations of the First Amendment. Freedom of speech is designed to promote the marketplace of ideas. It is not a license for giant media companies to deliberately and maliciously defame citizens, even public figures. So when CNN made a decision to doctor a recording so as to deceive its viewers into believing that I said exactly the opposite of what I actually said, that action was not protected by the First Amendment. Here is what CNN did.
I was asked to present the Constitutional argument against President Trump’s impeachment and removal to the United States Senate this past January. For an hour and seven minutes, I argued that if a president does anything illegal, unlawful, or criminal-like — if he commits treason, bribery or other high crimes and misdemeanors — he satisfies the criteria for impeachment under the Constitution. But if a president engages in entirely lawful conduct motivated in part by the desire to be reelected, which he believes is in the public interest, that would not constitute grounds for impeachment. Everybody seemed to understand the distinction I was drawing. Some agreed, others disagreed. But the distinction was clear between illegal conduct on the one hand, and lawful conduct on the other hand.
Two days later I returned to the Senate to answer questions put to the lawyers by the senators. The first question to me came from Senator Ted Cruz. He asked whether a quid pro quo constituted an impeachable offense. My response was consistent with my argument two days earlier: I said that what “would make a quid pro quo unlawful is if the quo were in some way illegal.” If it was, it could constitute an impeachable offense. But if it wasn’t illegal or unlawful, the president’s political motives could not turn it into an impeachable offense. That was quite clear. Indeed, the next question from the senators was directed to the Democratic House Manager who was asked to respond to my answer. Congressman Adam Schiff, disagreed with my answer, but understood the distinction between lawful and unlawful. So did CNN. When they first showed my answer, they showed it in full, including my statement that a quid pro quo would not be impeachable so long as it was not “in some way illegal.” I then went on to say that if a president was motivated in part by his desire to be reelected, which he believes was in the public interest, that motive would not turn a lawful act into an impeachable offense.
But then CNN made a decision to doctor and edit my recorded remarks so as to eliminate all references to “unlawful” or “illegal” conduct. They wanted their viewers to believe that I had told the Senate that a president could do anything — even commit such crimes as “bribery” and “extortion” — as long as he was motivated by a desire to be reelected. That, of course, was precisely the opposite of what I said. And that is precisely the reason by CNN edited and doctored the tape the way they did: namely to deliberately create the false impression that I had said the president could commit any crimes in order to be reelected, without fear of impeachment.
CNN then got its paid commentators to go on the air, broadcast the doctored recording and rail against me for saying that a president could commit crimes with impunity. Joe Lockhart, former White House Press Secretary under President Clinton, said that I had given the president “license to commit crimes” and that:
“This is what you hear from Stalin. This is what you hear from Mussolini, what you hear from authoritarians, from Hitler, from all the authoritarian people who rationalize, in some cases genocide, based what was in the public interest.”
No one corrected him by pointing out that I said exactly the opposite in the sentence that CNN had edited out. Nor did anyone correct Paul Begala when he wrote:
“The Dershowitz Doctrine would make presidents immune from every criminal act, so long as they could plausibly claim they did it to boost their re-election effort. Campaign finance laws: out the window. Bribery statutes: gone. Extortion: no more. This is Donald Trump’s fondest figurative dream: to be able to shoot someone on Fifth Avenue and get away with it.” (Emphasis added)
CNN is, of course, responsible for the decision to edit and doctor the recording to reverse its meaning and they are also responsible for how their paid commentators mischaracterized what I said.
So I am suing them for a lot of money, not in order to enrich myself, but to deter CNN and other media from maliciously misinforming their viewers at the expense of innocent people. I intend to donate funds I receive from CNN to worthy charities, including those that defend the First Amendment. Every American will benefit from a judicial decision that holds giant media accountable for turning truth on its head and for placing partisanship above the public interest. So I will continue to defend the First Amendment as I have for the last 55 years (I am now consulting with Julian Assange’s legal team). But I will insist that giant media not abuse their First Amendment rights in the way that CNN did.
- The New Normal In 'Virtual Classrooms': Porn, Guns, & Racism?
The New Normal In ‘Virtual Classrooms’: Porn, Guns, & Racism?
Tyler Durden
Fri, 09/18/2020 – 22:00While classrooms across the Chicago Public School (CPS) district are empty, due to the virus pandemic, remote learning between teachers and their students has been met with challenges, especially with virtual classes, some of which have been interrupted by hackers, pranksters, and or disorderly students, reported Chicago Tribune.
“The kids were in the class and all of a sudden you see porn, you see things that they shouldn’t see,” said Valerie Carroll, a parent whose child attends Chicago’s Nicholson Elementary.
Carroll said on the first day of virtual class, her daughter was exposed to porn and guns via the live feed.
“They learned about porn, guns and threats, when they should have been learning about science, math, literacy,” she said.
Carroll said someone with access to the Google Meets link commandeered the virtual classroom from the teacher. Similar incidents have been reported in the last few weeks across the school district.
“They’re supposed to have this stuff on lockdown,” Carroll said of CPS. “That is something that kids are not supposed to be seeing. … What are you doing about it? How are you protecting your students?”
Besides hackers, prankers, and or even unauthorized people disrupting virtual classes, not just at Nicholson Elementary but at several other CPS schools, there was one incident of a higher schooler brandishing a firearm during a virtual class.
CPS spokesman James Gherardi told The Tribune “a number of disruptive incidents” have occurred “in virtual classrooms” during this “unprecedented school year.”
Gherardi added, “the district has provided school staff with guidelines on how to prevent disruptions and is working with Google to expand functionality to allow for additional controls during class time.”
CPS noted that “hacking” into virtual classes wasn’t the issue; it resulted from “improperly shared links to virtual classrooms.”
Similar breaches have been reported at suburban schools in Chicago and all over the country.
Take, for, example, KIRO-TV Seattle reported hackers broke into a virtual Zoom classroom at a school in the Edmonds School District, located in Lynnwood, Washington State, messaged students the “n-word” during one virtual class.
Another incident was at a New York City school, where one parent tweeted graphic scenes of porn her child saw the first day of classes:
“Day one of remote learning. 5 minutes into my daughter’s Google meet with her first class, and several “students” have hijacked the meeting, the first posting Trump pics, and then someone streamed PORN!!”
In New Jersey, according to ABC7 New York, hackers hijacked online classes with pornography and waged threats against teachers.
The malicious hack attacks, bombing virtual classes with mostly porn, appears to be widespread, even happening on a university level.
John Whitehead, president of The Rutherford Institute, outlines a whole list of other dangers virtual classes posses on America’s youth.
- A DARPA-Funded Implantable Biochip To Detect COVID-19 Could Hit Markets By 2021
A DARPA-Funded Implantable Biochip To Detect COVID-19 Could Hit Markets By 2021
Tyler Durden
Fri, 09/18/2020 – 21:40Authored by Raul Diego via MintPressNews.com,
The most significant scientific discovery since gravity has been hiding in plain sight for nearly a decade and its destructive potential to humanity is so enormous that the biggest war machine on the planet immediately deployed its vast resources to possess and control it, financing its research and development through agencies like the National Institutes of Health (NIH), the Defense Advanced Research Projects Agency (DARPA) and HHS’ BARDA.
The revolutionary breakthrough came to a Canadian scientist named Derek Rossi in 2010 purely by accident. The now-retired Harvard professor claimed in an interview with the National Post that he found a way to “reprogram” the molecules that carry the genetic instructions for cell development in the human body, not to mention all biological lifeforms.
These molecules are called ‘messenger ribonucleic acid’ or mRNA and the newfound ability to rewrite those instructions to produce any kind of cell within a biological organism has radically changed the course of Western medicine and science, even if no one has really noticed yet. As Rossi, himself, puts it: “The real important discovery here was you could now use mRNA, and if you got it into the cells, then you could get the mRNA to express any protein in the cells, and this was the big thing.”
It was so big that by 2014, Rossi was able to retire after the company he co-founded with Flagship Pioneering private equity firm to exploit his innovation, – Moderna Inc., attracted almost a half billion dollars in federal award monies to begin developing vaccines using the technology. No longer affiliated with Moderna beyond his stock holdings, Rossi is just “watching for what happens next” and if he’s anything like the doting “hockey dad” he is portrayed to be, he must be horrified.
Remote control biology
As early as 2006, DARPA was already researching how to identify viral, upper respiratory pathogens through its Predicting Health and Disease (PHD) program, which led to the creation of the agency’s Biological Technologies Office (BTO), as reported by Whitney Webb in a May article for The Last American Vagabond. In 2014, DARPA’s BTO launched its “In Vivo Nanoplatforms” (IVN) program, which researches implantable nanotechnologies, leading to the development of ‘hydrogel’.
Hydrogel is a nanotechnology whose inventor early on boasted that “If [it] pans out, with approval from FDA, then consumers could get the sensors implanted in their core to measure their levels of glucose, oxygen, and lactate.” This contact lens-like material requires a special injector to be introduced under the skin where it can transmit light-based digital signals through a wireless network like 5G.
A penny aside a 3D printed hydrogel model of a lung-mimicking air sac in Rice University’s Houston BRC lab. Melissa Phillip | Houston Chronicle via AP
Once firmly implanted inside the body, human cells are at the mercy of any mRNA program delivered via this substrate, unleashing a nightmare of possibilities. It is, perhaps, the first true step towards full-on transhumanism; a “philosophy” that is in vogue with many powerful and influential people, such as Google’s Ray Kurzweil and Eric Schmidt and whose proponents see the fusion of technology and biology as an inevitable consequence of human progress.
The private company created to market this technology, that allows for biological processes to be controlled remotely and opens the door to the potential manipulation of our biological responses and, ultimately, our entire existence, is called Profusa Inc and its operations are funded with millions from NIH and DARPA. In March, the company was quietly inserted into the crowded COVID-19 bazaar in March 2020, when it announced an injectable biochip for the detection of viral respiratory diseases, including COVID-19.
A wholly-owned subsidiary
In July, a preliminary report funded by Fauci’s NIAID and the NIH on an mRNA Vaccine against SARS-CoV-2 was published in The New England Journal of Medicine, concluding that mRNA-1273 vaccine. provided by Moderna for the study, “induced anti–SARS-CoV-2 immune responses in all participants, and no trial-limiting safety concerns were identified,” and supported “further development of this vaccine.”
A month earlier, the NIH had claimed a joint stake in Moderna’s mRNA COVID-19 vaccine, citing a contract signed in December, 2019, stipulating that the “mRNA coronavirus vaccine candidates [are] developed and jointly owned” by both parties. Moderna disputes the federal government’s position, stating that the company “has a broad owned and licensed IP estate” and is “not aware of any IP that would prevent us from commercializing our product candidates, including mRNA-1273.”
A poster seeking volunteers to take part in a COVID-19 vaccine study by the NIH and Moderna Inc., July 27, 2020, in Binghamton, N.Y. Hans Pennink | AP
The only obstacle is a delivery system, which though Moderna claims to be developing separately, is unlikely to get FDA approval before the federal government’s own DARPA-developed hydrogel technology, in tandem with Profusa’s DARPA-funded light sensor technology, which is expected to receive fast track authorization from the Food and Drug Administration by early 2021 and, more than likely, used to deploy a coronavirus vaccine with the capacity to literally change our DNA.
In addition, the Department of Health and Human Services (HHS), is currently investigating Moderna’s patent filings, claiming it failed to disclose “federal government support” in its COVID vaccine candidate patent applications, as required by law. The technicality could result in the federal government owning a 100 percent stake in mRNA-1273.
- Trump 'Approved' Assange Pardon In Exchange For Source Of DNC Leaks: Court Testimony
Trump ‘Approved’ Assange Pardon In Exchange For Source Of DNC Leaks: Court Testimony
Tyler Durden
Fri, 09/18/2020 – 21:20A new bombshell came out of the seventh day of WikiLeaks founder Julian Assange’s extradition hearing in London: President Trump was “aware of and had approved of” a controversial plan that would offer Assange full pardon in exchange for revealing the source of the famous DNC leaks, according to his legal team on Friday.
This contradicts prior claims of then US Congressman Dana Rochbacher who controversially met with Assange in 2017 to discuss the issue of his pardon. It also puts in doubt longtime Democratic claims that the hack was the work of Russian intelligence, and not a Democratic National Committee insider with access to the emails, as many believe.
Defense witness @suigenerisjen #AssangeCase: ‘Rohrabacher proposed a ‘win-win’ situation, Assange can get ‘get on with his life’ – a pardon in exchange for information about the source’ ‘Information from Mr Assange about the source of the DNC leaks would be of value to Mr Trump’. pic.twitter.com/6yjSow50XU
— WikiLeaks (@wikileaks) September 18, 2020
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UK journalist Mohamed Elmaazi was present during Friday proceedings and detailed the following:
US President Donald Trump was “aware of and had approved of” US Congressman Dana Rochbacher and Mr Charles Johnson meeting with Julian Assange in order to secure the source of the DNC Leaks, in exchange for some form of “pardon, assurance or agreement” which would “both benefit President Trump politically” and prevent a US indictment against and extradition of Mr Assange, the Old Bailey heard on Friday.
WikiLeaks subsequently tweeted that this was indeed the hugely revelatory assertion presented in open court on behalf of barrister Jennifer Robinson, eyewitness to the alleged Aug.15, 2017 meeting while Assange was still confined to the Ecuadorian Embassy.
“Rohrabacher explained that he wanted to resolve the ongoing speculation about Russian involvement in the Democratic National Committee (DNC) leaks to WikiLeaks,” Robinson said.
“He said that he regarded the ongoing speculation as damaging to U.S.-Russian relations, that it was reviving old Cold War politics, and that it would be in the best interests of the U.S. if the matter could be resolved,” she said.
However this wasn’t the first time Assange’s defense team has made the allegation, as Reuters recounts:
Assange’s legal team first said at hearings in February that Rohrabacher had conveyed a pardon offer to Assange. At the time, the White House called the assertion that Trump had tried to reach a deal with Assange “a complete fabrication and a total lie”.
Rohrabacher also emphasized amid the controversy that he was acting on his own and was not sent on behalf of the White House, but merely offered to ask Trump for an Assange pardon.
“#JulianAssange‘s lawyer @suigenerisjen‘s statement was read to the court & it shows the political nature of this indictment saying how a representative of #Trump was sent to the Ecuadorian Embassy to offer #Assange a deal of a presidential pardon in exchange for the DNC Source.” pic.twitter.com/ujqWMk7VgS
— Don’t Extradite Assange (@DEAcampaign) September 18, 2020
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Assange’s lawyers are offering it as proof to the court that fundamentally the American extradition request is political in nature and not a matter of violating US laws.
If true, Assange obviously didn’t go for it, likely in line with the firmly established WikiLeaks policy of never revealing any source no matter the level of pressure the leaks organization comes under.
- Are The COVID-Lockdowns An Election 2020 Ransom Note?
Are The COVID-Lockdowns An Election 2020 Ransom Note?
Tyler Durden
Fri, 09/18/2020 – 21:00Authored by John Tamny via RealClearMarkets.com,
“We don’t realistically anticipate that we would be moving to either tier 2 or reopening K-12 schools at least until after the election, in early November.”
Those are the words of a west coast health director. No in-person schooling until after the election? Hmmm.
Please think about what was said. It reads as kind of a ransom note. Vote for science-reverent candidate Joe Biden, or else…
Really, what else could the utterance mean? What does November 3rd have to do with re-opening schools? Why would it be safer to open on the 4th of November versus the present?
Unless the implicit point is that corona-reverence is far more political than the believers have previously felt comfortable admitting. If so, what’s happening borders on child abuse. Kids will be held hostage by an election?
Think about what this means.
For one, not every parent can afford a babysitter. More than some want to acknowledge, there’s a “day care” quality to schooling. And when school isn’t in person, parents without the means to hire babysitters either must reduce work hours, leave their kids without supervision, or quit work altogether.
Day care aside, what about the kids? While there’s an argument that the learning aspect of education is a tad overstated, does anyone think virtual learning will be very effective? With kids? For the adult readers done with school, think back to how attentive you were on substitute teacher days. Does anyone think a lot of learning is happening remotely?
What about kids with disabilities? How can they be instructed effectively via Zoom?
On a Frontline episode from last week titled “Growing Up Poor In America,” one of the impoverished kids had an ADHD problem. She was expected to learn virtually. Anyone want to guess how this will turn out? Some may respond that ADHD says much more about young people than it does a specific affliction, which is precisely the point. Young people need the structure of a classroom. They need to know they could be called on in class only to face the stares of fellow students if they lack an answer. Pressure concentrates the distracted mind.
The girl with attentiveness problems has an older sister. Understand that the Frontline episode followed three poor families during the spring. Her older sister was supposed to attend the prom. It was going to be her first date. Compassionate politicians and teachers took this exciting first from her.
Is the point that public school teachers don’t feel safe? If so, isn’t the right answer to give those uncomfortable returning to work an out, as opposed to discontinuing in-person schooling altogether?
Of course, if teachers don’t feel safe, a not unreasonable question is why they don’t? It’s not unreasonable to ask simply because retailer Target recently reported its strongest quarterly sales growth in decades. Target was “allowed” to remain open during the lockdowns, and while the political picking of winners and losers brings new meaning to reprehensible, the fact remains that Target has done very well amid the economic contraction forced on us by witless politicians. Translated more clearly, Target stores have at times been very crowded. So have Walmarts, Safeways, Ralph’s, Whole Foods, etc. etc. etc.
That they have raises an obvious question: have workers at those stores been falling ill or dying with any kind of frequency? Half-awake readers know the answer to this question, as should teachers reluctant to return to the workplace. Those employed at the major retailers have largely avoided illness and death. If they hadn’t, media members and politicians desperate to promote a blood-in-the-streets narrative would be letting us know the horrid stories in detail.
Who knows why, but it probably goes back to the statistics reported by the New York Times deep within articles that are proceeded by alarmist headlines, but those who pass with the virus tend to be quite a bit older. Or in nursing homes. According to the Times, over 40 percent of U.S. coronavirus deaths have been associated with nursing homes. The latter isn’t meant to minimize the cruelty of a virus as much as at least as of now, virus deaths skew toward the much older who also have pre-existing conditions. In short, just as retail workers have largely been spared illness and death, so logically would teachers who would be exposed to exponentially fewer people each day than retail workers. There’s also the distance thing. Instructors tend to be at the front of a classroom. Get it?
One more thing about businesses that have remained open: another impoverished child profiled in the aforementioned Frontline episode talked of missing being with his friends. Missing playing sports with them. It’s not allowed. There’s that distance thing. One bright spot in his day is McDonald’s. The one near his family’s home in The Plains, OH offers free lunches for school-age kids. Hopefully readers have this truth internalized the next time some know-nothing decries big business, or “excessive profits,” or calls for increased taxation on the big and successful.
They somewhat uniquely have the means to help those who can’t always help themselves.
Back to the quote that begins this piece, some with the ability to keep schools closed are literally tying their re-opening to the presidential elections. This is shameful on too many levels to list; the most obvious being that kids shouldn’t be the victims of political brawls. It’s really very sickening.
And it yet again raises a question about the why behind the continued limits placed on people, schools and businesses. They’ve never made sense in consideration of how thankfully rare death (or even serious illness) has been as a consequence of the virus, especially in recent weeks.
Unless it’s always been political; as in, the most actively corona-reverent have been stoking ongoing virus fear as a veiled ransom note. If so, those who would mess with people, schools and businesses for political reasons are truly the sick ones.
- Minneapolis Voters Line Up To Cast Ballots As Early Voting Begins In Several States
Minneapolis Voters Line Up To Cast Ballots As Early Voting Begins In Several States
Tyler Durden
Fri, 09/18/2020 – 20:40Minneapolis voters lined up on Friday to cast their ballots ahead of the first presidential debate, as early voting began in several states including Minnesota.
In the first 30 minutes alone, some 44 people cast ballots in Minneapolis’ lone polling center, according to Reuters.
Meanwhile, voters in Wyoming, South Dakota and Virginia cast in-person ballots on Friday. Virginia elections officials in Fairfax and Arlington counties reported heavy turnout and lines out the door, while voters in Minnesota said they wanted to avoid Election Day crowds and get an early jump on the process.
“I just wanted to come get it done,” said 33-year-old painter Jason Miller, who lined up to cast a vote for Biden, according to Reuters – who didn’t interview any Trump supporters.
“I was a little inspired to come here the first day,” Miller added. “In fact, probably 3-1/2 years ago I thought I would be here the first day I could.”
All of the voters lined up in Minneapolis wore masks to help protect against the spread of the coronavirus.
Margie Rukavina, 72, said she was “revved up” to vote for Biden but also was concerned about voting on Election Day given health concerns.
“We want to come early to avoid a super-spreader event, like our president is so happy to do,” she said. Trump has been criticized for holding crowded campaign rallies, often with people not wearing masks. –Reuters
If one is inclined to believe the polls, Trump trails Biden in both national polls, as well as in Minnesota, which he lost to Hillary Clinton in 2016 by just 1.5 percentage points.
On Friday evening, Trump will hold a rally at an airport in Bemidji, MN, while Biden will tour a union training center in Duluth before delivering a speech.
- Riots Only Help Fuel Urban Impoverishment
Riots Only Help Fuel Urban Impoverishment
Tyler Durden
Fri, 09/18/2020 – 20:20Authored by Lipton Matthews via The Mises Institute,
In a recent interview Black Lives Matter (BLM) organizer Ariel Atkins argued that lootings are reparations for African Americans.
Atkins denounced the suggestion that anything can be gained from peaceful protests.
“Winning has come through revolts, winning has come through riots,”she said.
Unfortunately, the belligerence of people like Atkins has been nurtured by mainstream intellectuals, who originally downplayed the malevolent intentions of dangerous activists. Therefore, as adults, we have no alternative but to remind these youngsters that sparking riots is an ineffective strategy to advance the cause of African Americans.
A striking case against riots is clearly expressed in the findings of Professor Mary C. King, whose research demonstrates “little relationship between regional progress for African Americans and relatively proximate race riots.”
Riotous behavior often results in businesses fleeing minority communities, thus depriving residents of employment and income. Racism is an extremely sensitive matter; however, sensitivity must be tempered by logic.
African Americans have experienced substantial progress over the past century. Eroding these gains is a possibility if rational adults refrain from correcting misguided activists. Such was the impact of the race riots of the 1960s. Examining the effects of civil disorder on small businesses in inner cities, sociologists Howard Aldrich and Albert Reiss found that riots not only inflicted serious property damages but in the long term they made it prohibitive to operate in inner cities, driving up insurance costs. As a result, businesses migrated to more nurturing environments. Low-income residents are the major beneficiaries of entrepreneurship in the inner city, so when emotions trump logic and businesses exit these communities, the losers are poor black people.
Current agitators also seem oblivious to the impact of riots on black property owners. Eminent economists Robert Margo and William Collins in their assessment of the effects of the riots following the assassination of Martin Luther King Jr. argue that “the riots depressed the median value of black-owned property between 1960 and 1970, with little or no rebound in the 1970s. Analysis of household-level data suggests that the racial gap in the value of property widened in the riot inflicted cities during the 1970s.”
Housing is a contributor to the racial wealth gap, therefore if properties depreciate due to the risk of riots, how can African Americans make headway in closing the wealth gap? The long-term implication of riots is that they stigmatize African American communities as hotbeds of social unrest. Homes in such neighborhoods will not be purchased by progressive people interested in building wealth. What this means is that African Americans are deprived of the social capital and networks required to succeed in a competitive environment.
In another study, the authors indicate that riots reduced earnings for black employees in impacted cities; they write:
“the findings suggest that the riots had negative effects on blacks’ income and employment that were economically significant and that may have been larger in the long run (1960–1980) than in the short run (1960–1970).”
Their results are unsurprising. Inner-city businesses provide poor blacks with an opportunity to obtain employment and build relevant skills. Employment in a small business is a stepping stone to greater opportunities. When low-skilled citizens are robbed of these options, it becomes harder for them to establish themselves in a dynamic environment.
Another negative effect of riots is that they move public opinion to favor oppressive social control measures as a crime-fighting strategy, thereby establishing Republican hardliners as attractive candidates. As Princeton’s Omar Wasow notes in a recent study:
Evaluating black-led protests between 1960 and 1972, I find that nonviolent activism, particularly when met with a state of vigilante repression, drove media coverage, framing, Congressional speech, and public opinion on civil rights. Counties proximate to nonviolent protests saw presidential Democratic vote share among whites increase 1.3–1.6%. Protester-initiated violence, by contrast, helped move news agenda, frames, elite discourse, and public concern toward social control….In 1968, I find that violent protests likely caused a 1.6–7.9% shift among whites towards Republicans and tipped the election.
Kelly Anne Conway beautifully illustrated this point when she told Fox News that “the more chaos and anarchy and vandalism and violence reigns, the better it is for the very clear choice on who’s best on public safety and order.”
Evidently, the effects of riots on African Americans are destructive. Therefore, adults in the room must speak the truth—riots never redound to their benefit and neither does it make sense to enable the unrealistic demands of the BLM movement and its naïve supporters. It would be irresponsible for the American people to nurture the desires of activists seeking to destroy the fabric of their republic. We must reject not only vandalism, but also the radicalism of the BLM movement
- Chicago Logs Whopping 52% Jump In Homicides From 2019: 'Five Times Any Prior Year'
Chicago Logs Whopping 52% Jump In Homicides From 2019: ‘Five Times Any Prior Year’
Tyler Durden
Fri, 09/18/2020 – 20:00A new disturbing investigation by USA Today this week found that Cook County in Chicago has seen homicides spike by a whopping 52% compared to the same time frame last year.
What’s more is that this second largest county in the country has seen more homicides already this year than in all of 2019, and still with months to go. Alarmingly this includes dozens of children under 10 who were gunned down, often in gang-related cross fire incidents, according to police records.
USA Today wrote that among the jump in 2020 homicides, the majority, as much as “95% – were people of color, the Cook County Medical Examiner’s Office announced this week.”
Image source: Chicago Sun-Times Chicago witnessed also the single largest mass shooting in recent history this summer — though one might not have noticed by major media network coverage, or lack thereof — when 15 people were shot at a funeral.
One community anti-crime activists cited in USA Today, Katya Nuques, said that COVID-19 combined with rampant unemployment is taking its toll: “Facing illnesses, facing deaths, facing also the higher rates of unemployment and loss of income in our communities has also, unfortunately, played a role in the levels of violence we’ve seen throughout the year,” she said.
Simultaneously new FBI figures also confirm a significant jump in murders in Chicago, but interestingly a drop in other violent crimes:
According to the FBI crime report, 335 murders reported in Chicago from January to June 2020, a huge increase from the 244 murders tallied during that time period a year ago. Arson in Chicago is up even more: a 52.9% increase from 2019. Aggravated assault and burglary in Chicago are also up over last year.
Other crime categories tracked by the FBI were actually down: including rape and robbery, enough so that the overall violent crime number in Chicago is down 1.4%.
Commentators cited in the USA Today report not only chalk up the increase in homicides to unemployment and harsher conditions brought on by pandemic lockdowns and restrictions, which literally means more people loitering around what are known as high crime streets and caught up in crossfire, but that repeat felons are being released to the streets.
Police Superintendent David Brown told a press conference Monday:
“There’s not a comparable year. That’s five times any previous year anyone can recall,” he said. “We’re risking everything.”
Analysts have tracked a noticeable uptick in re-arrests of repeat offenders let out of jail early. Brown confirmed this during his prior statements: “Violent offenders need to spend more time in jail in this city,” he said. “They need to be held more accountable.”
Ironically and disturbingly, this also comes as months of George Floyd and Black Lives Matter protests and unrest have sought to put front and central the unjust deaths of people of color. Yet the grim trend out of Chicago of black on black shootings seems to have gone unnoticed by the movement.
- Justice Ruth Bader Ginsburg Dead At 87
Justice Ruth Bader Ginsburg Dead At 87
Tyler Durden
Fri, 09/18/2020 – 19:45Justice Ruth Bader Gisnburg is dead at the age of 87, the Supreme Court announced on Friday, which added that she died of “complications of metastatic pancreas cancer.”
The court said in a statement:
Associate Justice Ruth Bader Ginsburg died this evening surrounded by her family at her home in Washington, D.C., due to complications of metastatic pancreas cancer. She was 87 years old. Justice Ginsburg was appointed to the Supreme Court by President Clinton in 1993. She was the second woman appointed to the Court and served more than 27 years. She is survived by her two children: Jane Carol Ginsburg (George Spera) and James Steven Ginsburg (Patrice Michaels), four grandchildren: Paul Spera (Francesca Toich), Clara Spera (Rory Boyd), Miranda Ginsburg, Abigail Ginsburg, two step-grandchildren: Harjinder Bedi, Satinder Bedi, and one great-grandchild: Lucrezia Spera. Her husband, Martin David Ginsburg, died in 2010.
Chief Justice John G. Roberts, Jr. said of Justice Ginsburg: “Our Nation has lost a jurist of historic stature. We at the Supreme Court have lost a cherished colleague. Today we mourn, but with confidence that future generations will remember Ruth Bader Ginsburg as we knew her — a tireless and resolute champion of justice.”
Justice Ginsburg was born in Brooklyn, New York, March 15,1933. She married Martin D. Ginsburg in 1954. She received her B.A. from Cornell University, attended Harvard Law School, and received her LL.B. from Columbia Law School. She served as a law clerk to the Honorable Edmund L. Palmieri, Judge of the United States District Court for the Southern District of New York, from 1959-1961. From 1961-1963, she was a research associate and then associate director of the Columbia Law School Project on International Procedure. She was a Professor of Law at Rutgers University School of Law from 1963-1972, and Columbia Law School from 1972-1980, and a fellow at the Center for Advanced Study in the Behavioral Sciences in Stanford, California from 1977-1978. In 1971, she was instrumental in launching the Women’s Rights Project of the American Civil Liberties Union, and served as the ACLU’s General Counsel from 1973-1980, and on the National Board of Directors from 1974-1980. She was appointed a Judge of the United States Court of Appeals for the District of Columbia Circuit in 1980. During her more than 40 years as a Judge and a Justice, she was served by 159 law clerks.
While on the Court, the Justice authored My Own Words (2016), a compilation of her speeches and writings.
A private interment service will be held at Arlington National Cemetery.
* * *
As a reminder to our regular readers, President Trump unveiled his list of potential Supreme Court picks less than two weeks ago:
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Bridget Bade, a judge on 9th Circuit Court of Appeals
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Daniel Cameron, the attorney general of Kentucky
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Paul Clement, former solicitor general of the United States
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Sen. Tom Cotton (R-Ark.)
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Sen. Ted Cruz (R-Texas)
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Stuart Kyle Duncan, a judge on the 5th Circuit Court of Appeals
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Stephen Engel, assistant attorney general for the office of legal counsel in the Trump administration
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Noel Francisco, former solicitor general of the United States
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Sen. Josh Hawley (R-Mo.)
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James Ho, a judge on the 5th Circuit Court of Appeals
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Gregory Katsas, a judge on the District of Columbia Court of Appeals
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Barbara Lagoa, a judge on the 11th Circuit Court of Appeals
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Christopher Landau, U.S. Ambassador to Mexico
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Carlos Muniz, a justice on the Florida Supreme Court
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Martha Pacold, a judge on the District Court for the Northern District of Illinois
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Peter Phipps, a judge on the 3rd Circuit Court of Appeals
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Sarah Pitlyk, a judge on the District Court for the Eastern District of Missouri
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Alison Jones Rushing, a judge on the 4th Circuit Court of Appeals
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Kate Todd, a deputy assistant a deputy counsel to the president
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Lawrence VanDyke, a judge on the 9th Circuit Court of Appeals
“Every one of these individuals will ensure equal justice, equal treatment, and equal rights for citizens of every race, color, religion, and creed,” Trump promised.
“Together we will defend our righteous heritage and preserve our magnificent American way of life.”
The most serious nominee, however, is believed to be Judge Amy Coney Barrett – who Trump nominated to the US Court of Appeals for the 7th Circuit.
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- When Government Incompetence And Overreach Turns Deadly
When Government Incompetence And Overreach Turns Deadly
Tyler Durden
Fri, 09/18/2020 – 19:40Authored by Simon Black via SovereignMan.com,
Are you ready for this week’s absurdity? Here’s our Friday roll-up of the most ridiculous stories from around the world that are threats to your liberty and risks to your prosperity.
Today, we are starting with some stories that are not amusing, but simply tragic.
Unborn baby dies due to absurd Covid lockdown rules
This one highlights the sad reality of crushing people’s basic rights.
An Australian woman was in childbirth a few weeks ago when it became clear she needed highly specialized medical care.
Unfortunately her small town of Ballina, located in the Australian state of New South Wales, did not have sufficient medical care options to treat her pregnancy complications.
Ballina is very close to the border of the neighboring state of Queensland, where two much larger cities– Gold Coast, and Brisbane– are fairly close by.
And prior to Covid, the woman would have simply been quickly transported to one of those two cities in the neighboring state for a multitude of top quality medical options.
But now Australians are no longer able to travel across their own state lines without special permission from the government.
The woman was told that she would have to undergo a 14-day quarantine, simply for crossing the state line, before she could access medical care in Queensland. Incredible.
This was obviously unacceptable. So her next best option was to fly to Syndey (which is at the opposite end of New South Wales, a state that’s bigger than Texas). Except that the next flight was SIXTEEN HOURS later.
Needless to say, she didn’t receive the care she needed in time, and one of her twin babies died as a result of the travel restrictions.
They say all the lockdowns are worth it if it saves just one life.
What about the lives the lockdowns take?
Click here to read the full story.
American facing $569,000 fine and six months jail for sightseeing in Canada
Canada is currently closed to most Americans due to COVID.
But an exemption allows Americans to drive through Canada to reach Alaska.
The rules state that the traveler must take the most direct route to their destination, and only stop for essentials like food and gas.
But one criminal mastermind did not take the most direct route, and instead decided to check out a national park along the way
He was arrested after his car with Ohio plates was reported to police at a sightseeing gondola at Sulphur Mountain.
So clearly some brave hero spotted this nefarious terrorist, and saved his fellow Canadians by ratting the man out to authorities.
And now he is facing a $569,000 fine, plus six months in jail. Because he stopped at a park.
Click here to read the full story.
University professor cancelled for watching a pro-police rally
Students at Skidmore College are boycotting an art professor, David Peterson, and demanding he be fired.
His crime? Watching a “back the blue” pro-police protest for about 20 minutes.
Peterson was not actually attending the rally, holding signs, or wearing a pro-police shirt. He simply listened to the pro-police protesters (AND the counter protesters) in his own community for a bit, and then went out to dinner with his wife.
So, simply just listening to an unwoke opinion is now a thoughtcrime. And that is all it takes these days to lose a career.
Click here to read the full story.
Court awards unmarried woman $50,000/month in alimony
An Ontario court granted a woman $50,000 per month for the next decade in spousal support.
The strangest part though, is that she didn’t have a spouse. There was no divorce, because she was never married to the man who must now pay her alimony.
This woman and the wealthy businessman she fleeced dated for years, but they were never married.
They never lived together, and have no kids together.
But the court said they were “common law married” anyway.
Ironically, the court used the fact that he had spent so much money on her during their time as a couple as proof that he should be forced to continue his support.
Click here to read the full story.
US Customs & Border Patrol seizes ‘counterfeit’ Apple earbuds
Relax and breathe easy, your government is on the case protecting you from evil dangers lurking around the world.
According to an official press release from US Customs and Border Patrol, “officers seized 2,000 counterfeit Apple Airpod Earbuds from Hong Kong destined for Nevada at an air cargo facility located at John F. Kennedy International Airport [in New York City].”
CBP went on to brag via their Twitter account that these ‘counterfeit’ earbuds would have been worth nearly USD $400,000.
But it turns out that the earbuds are, in fact, NOT counterfeit. In fact they’re not even Apple earbuds.
These earbuds are specific to another mobile phone manufacturer called OnePlus. You’d think that the CBP officers would have been able to figure that out given that the earbuds actually have “OnePlus” Buds” printed on the freaking boxes!
It’s unclear whether the officers who seized these earbuds are completely illiterate, or cannot imagine a world where there are other mobile phone companies besides Apple.
(OnePlus is actually a pretty good sized company and generated $1.4 billion in revenue last year…)
But rather humorously, OnePlus responded to CBP’s Tweet earlier this week saying “Hey, give those back!”
You’d think the story would end there, and CBP would admit its mistake. But no.
Now CBP is saying, in its sole discretion, that the earbuds violate Apple’s trademark, so they’re keeping the seized product.
This is completely ridiculous, and I’m not sure if this agency even understands what a trademark actually is. And if ‘trademark’ was even the issue here, then the agency’s initial press release would have stated so. But instead they called the earbuds counterfeit.
It’s also rather interesting that there has been no court injunction against OnePlus, no warrants, and not even a lawsuit.
Yes, not even Apple (whose ‘trademark’ has supposedly been violated) thinks this is a problem. Apple has earbuds. OnePlus has earbuds. Big deal.
Click here to read the full story.
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On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.
- California Crackdown On Benefits Fraud Sparks 72% Plunge In Pandemic Jobless Claims
California Crackdown On Benefits Fraud Sparks 72% Plunge In Pandemic Jobless Claims
Tyler Durden
Fri, 09/18/2020 – 19:20The last few weeks have seen improvements in jobless claims data stall at extremely high levels, gravely disappointing those expecting a continued v-shaped recovery back to the old normal…
The leading ‘culprit’ for these elevated levels of unemployment benefits seekers has been California.
The last two weeks have seen Cali claims far above other states…
And at an aggregate level, the biggest driver of composite jobless claims levels across America has been the Pandemic Unemployment Assistance (PUA) – a federal relief program intended for self-employed workers and independent contractors…
So, what is going on?
The answer is simple:
It’s fraud!
As Bloomberg reports, between mid-August and the first week of September, applications for PUA doubled in California to more than 524,000, far above claim levels when the federal program first launched in April, the state’s Employment Development Department said Thursday.
But, EDD admitted rather stunningly that after taking action to deter suspected scammers from filing false applications in hopes of getting payments, PUA applications dropped sharply to 145,790, a decline of more than 72%.
In addition, Bloomberg reports that California’s figures show a wide discrepancy with nationally-reported data on continuing PUA claims in California. While the federal Department of Labor reports that more than 6 million Californians are claiming PUA benefits each week…
…the state’s labor department shows that figure below 2 million, pointing to further data-reporting issues.
Some have suggested that the national figures may reflect states catching up with backlogs rather than representing the most recent levels of actual job losses.
No matter what – or who – is to blame, the fraud issue in California underscores the widespread unemployment data challenges – including clerical errors and double counting – that state employment departments have faced since the pandemic began in March.
“Aggressive efforts to fight fraud are yielding results in curbing the recent uptick in suspicious Pandemic Unemployment Assistance (PUA) claims in California,” the state’s employment department said.
Fed Chair Powell even admitted on Wednesday that all this data was full of noise and little signal when he cast doubt on the reliability of the national PUA figures, saying during a press briefing that the “actual counting of the claims is volatile” and it’s difficult to “take much signal about the particular level.”
Or put another way – hold your nose and buy stocks, ignore the terrible data, ignore the fraud!!
- "Inflation" And America's Accelerating Class War
“Inflation” And America’s Accelerating Class War
Tyler Durden
Fri, 09/18/2020 – 19:00Authored by Charles Hugh Smith via OfTwoMinds blog,
Those who don’t see the fragmentation, the scarcities and the battlelines being drawn will be surprised by the acceleration of the unraveling.
I recently came across the idea that inflation is a two-factor optimization problem: inflation is necessary for the macro-economy (or so we’re told) and so the trick for policy makers (and their statisticians who measure the economy) is to maximize inflation in the economy but only to the point that it doesn’t snuff out businesses and starve workers to death.
From this perspective, households have to grin and bear the negative consequences of inflation for the good of the whole economy.
This narrative, so typical of economics, ignores the core reality of “inflation” in America: it’s a battleground for the class war that’s accelerating. Allow me to explain.
“Inflation” affects different classes very differently. I put “inflation” in italics because it’s not one phenomenon, it’s numerous phenomena crammed into one deceptively simple word.
When “inflation” boosts the value of homes, stocks, bonds, diamonds, quatloos etc. to the moon, those who own these assets are cheering. When “inflation” reduces the purchasing power of wages, those whose only income is earned from their labor suffer a decline in their lifestyles as their wages buy fewer goods and services.
They are suffering while the wealthy owners of soaring assets are cheering.
The Federal Reserve and federal authorities are not neutral observers in this war. The Fed only cares about two things: enriching the banking sector and further enriching the already-rich.
The banking sector makes money by lending newly created currency to borrowers. No borrowers or new loans–banks go broke. So the Fed must generate the right kind of “inflation”: it must lower the cost of borrowing money (deflating the cost of borrowing) by reducing the rate of interest borrowers pay, and it must “inflate” the market value of the collateral banks and Wall Street need to support more debt: commercial buildings, homes, stocks, bonds, etc.
This “inflation” of asset valuations makes those who already own these assets richer, while impoverishing those who must buy them with wages that are losing purchasing power. The Fed doesn’t care if small businesses go broke or households slide into poverty; the Fed’s only concerns are maintaining “inflation” in asset valuations and “deflation” in the cost of borrowing, so that debt-serfs, zombie corporations, local and federal government–everyone–can borrow more money, further enriching banks and Wall Street.
This is the sole goal of the Fed. Everything else is distracting PR.
There are downsides to this, of course, but they fall on “the little people” so economists, the Fed and federal officials don’t bother to even track the downsides. Thus we have the nonsensical games government statisticians play to keep official measurements of “inflation” low. This serves to obscure the reality that real-world “inflation” in the cost of education, childcare, health insurance, rent, and so on–all the big-ticket household costs–is soaring, stripping away the purchasing power of wages.
Here’s an example of how wages and purchasing power can be understood. Back in the day, I could rent my own studio apartment for half a week’s pay. I was young and not well-paid, but I could still rent a crummy apartment for half a week’s pay: 2.5 day’s wages.
Try finding an apartment for half a week’s pay in a major city. Young workers are paying two week’s pay just to rent a room. This is a massive loss in the purchasing power of labor.
Meanwhile, those with the right kind of assets are experiencing fantasic increases in their unearned income. These increases in income (and wealth) far exceed the modest impacts of real-world inflation on these owners of the right kind of assets.
Let’s start with the the wrong kind of asset: a savings account. Where savers earned 5.25% on their savings as a regulatory requirement in the 1960s, now they earn less than nothing: even the bogus “official inflation” is 2%, while savers get 0.1% or less on savings. So savers lose money every day.
Those who bought bonds and stocks and real estate–the right kind of assets–have scored enormous gains in wealth and income. There’s just one little tiny problem with the right kind of assets: the vast majority are owned by the top 5% of households, with the top 1% owning 40% and the top 0.1% owning 20%–more than the bottom 80% own.
There aren’t just wealth-income classes –those who own these assets and those who don’t– there are demographic and age classes, too. Young wage earners are mostly priced out of buying these assets with wages, unless they borrow staggering sums of money and devote most of their income to servicing their debts (student loans, auto loans, mortgage, etc.).
Retirees have been forced into gambling their retirement funds in the Fed-rigged casinos, which just so happen to crash every decade or so, wiping out the naive punters who believed “the Fed has our backs.”
“Inflation” isn’t an abstract debate –it’s class war. And it’s not just between two classes, those who depend on wages/earned income and those reaping the trillions in unearned income and wealth; there are warring classes fractured by age, demographics, political loyalties and issues of who’s hoarding what: every one of these fractured classes is competing for scarce resources, scarce income and scarce security.
Those who don’t see the fragmentation, the scarcities and the battlelines being drawn will be surprised by the acceleration of the unraveling. As noted here previously, The banquet of consequences is being laid out, and there won’t be much choice in the seating.
* * *
My recent books:
A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).
The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).
* * *
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- Schumer, Warren Introduce Resolution To Cancel $50,000 In Student Loans To "Close Racial Wealth Gaps"
Schumer, Warren Introduce Resolution To Cancel $50,000 In Student Loans To “Close Racial Wealth Gaps”
Tyler Durden
Fri, 09/18/2020 – 18:40Senators Elizabeth Warren (D-MA) and Chuck Schumer (D-NY) rolled out a proposal on Thursday which calls for the next president of the Untied States to cancel up to $50,000 in student debt in 2021.
The plan would call on the next president to “take executive action to administratively cancel up to $50,000 in Federal student loan debt for Federal student loan borrowers using existing legal authorities…”
The plan would also call on the next president to ensure “no tax liability for Federal student loan borrowers resulting from administrative debt cancellation.” Moreover, it asks the next president to pause student loan payments and interest accumulation “for the entire duration of the COVID-19 pandemic.”
Doing so, according to the plan, would “ensure that administrative debt cancellation helps close racial wealth gaps.“
Whoa. @SenSchumer and @SenWarren just dropped a resolution calling for executive action on federal student loan debt. Up to $50k cancelled by proclamation! https://t.co/DQzCF40hAb pic.twitter.com/betfvqA6Hd
— Stephanie Kelton ステファニー・ケルトン (@StephanieKelton) September 17, 2020
According to The Hill, the Democrats are essentially handing Joe Biden a talking point – as President Trump and Senate Majority Leader Mitch McConnell (R-KY) have flatly opposed earlier attempts to forgive student debt.
“We know that President Trump and [Education] Secretary [Betsy] DeVos have been totally against things like this. We understand that. But the next president could easily do this,” said Schumer, adding “We want to start getting people focused on this issue as a major issue that could be dealt with early next year.”
The $3.4 trillion HEROES Act passed in May included a provision to cancel up to $10,000 of student debt for a limited number of people.
The measure introduced by Warren and Schumer Thursday calls on the president to take executive action to cancel up to $50,000 in federal student debt for every borrower in the United States, which would wipe out the student debt obligations for more than three-quarters of Americans who owe them.
An estimated 44 million Americans owe about $1.6 trillion in student loans.
Schumer said the plan would protect student loan borrowers from having to pay taxes on forgiven loans.
“The president can use the IRS code to ensure federal student loan borrowers won’t have tax liabilities resulting from administrative debt cancellation,” he said. –The Hill
Warren raised the issue last Thursday during a Senate Health, Education, Labor and Pensions Committee hearing, noting that the committee had yet to hold any discussions on “the student debt crisis.”
“I think we ought to focus on how to deal with the $1.6 trillion dollars in debt that is crushing millions of people,” she said.
As Jonathan Turley also warns, the proposals may be a foreshadowing of a greater push to use unilateral executive powers under Joe Biden if he wins the election.
The senators insisted that the Secretary of Education has “broad administrative authority” granted by Congress to cancel federal student loan debt under section 432(a) of the Higher Education Act of 1965. Thus, they are arguing for the president to simply wipe out the debt by taking “executive action to broadly cancel up to $50,000 in federal student loan debt.”
I have long been critical of such unilateral executive actions to order massive increases in debt or the negation of federal laws. We need a serious debate over the leveraging of the future on the mounting debt for this rising generation. I am worried about this college debt but I am also worried about these students facing decades of debt that must be paid off by the government. We need a comprehensive debt plan.
Politicians are casually referring to trillion dollar increases in a variety of different packages. Many long-standing goals are being refashioned as “stimulus measures” but they would pile more debt on an economic recovery that could already be difficult after the pandemic.
- 1920: The Crash That Cured Itself
1920: The Crash That Cured Itself
Tyler Durden
Fri, 09/18/2020 – 18:20Authored by Pedro Almeida Jorge via AustrianCenter.com,
The Spanish flu of 1918 is an event that, unsurprisingly, is being revisited by many observers today. And yet, at the same time, another major event occurred a century ago which we would also do well to remember: namely the largely forgotten economic depression of 1920.
We all hear, from time to time, about the ghost of the 1929 crash, of the dreadful decade of the thirties, of the Great Depression from which the world (supposedly) only recovered at the cost of a new world war. In the covid-19 context of today, it is even likely that many people believe that unless all national and international governments and organizations move ahead with drastic measures, we are condemned to a similar fate. Nonetheless, the depression of 1920 can provide us with a starkly different picture.
The end of World War I was followed by some months of high profits and renewed expectations. Unfortunately, due to the gigantic inflation and government controls introduced during the war, as well as the deaths caused by that same war and the pandemic that followed, a great economic readjustment was unavoidable, which eventually came along in 1920.
Renowned financial analyst James Grant, author of the book The Forgotten Depression: 1921: The Crash That Cured Itself, provides shocking data for the United States. Grant tells us that the Federal Reserve index of industrial production fell by 31.6 percent from 1920–21. In comparison, in the crisis years 2007–09, it “only” fell by 16.9 percent. Grant estimates that the unemployment rate may have reached as high as 15.3 percent.
Meanwhile, “over the course of 12 months, wholesale prices plunged by 36.8 percent, consumer prices by 10.8 percent and farm prices by 41.3 percent (for speed of decline, not even the Great Depression would match the break of 1920–21). The Dow Jones Industrial Average, then comprising 20 stocks rather than today’s 30, crested in November 1919 at 119.62 and bottomed in August 1921 at 63.9, for a peak-to-trough decline of 46.6 percent.”
It seems abundantly clear that the situation was dire. Profits drastically fell, companies were liquidated and taken over in a wave of bankruptcy procedures until…it all reverted. As professor, banker and “Austrian” fellow traveler Benjamin M. Anderson (1886–1949) described it in his memoirs,
“in 1920–1921 we took our losses, we readjusted our financial structure, we endured our depression, and in the month of August, 1921, we started up again. By the spring of 1923 we had reached new highs in industrial production and we had labour shortages in many lines.”
Historian Thomas E. Woods Jr. concurs:
“by the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and was only 2.4 percent by 1923.”
The economy was ready for the Roaring Twenties.
What had happened? What did the government do to push the economy out of the ground? The answer is: nothing. Or better still: it cut spending to balance the budget and reduce public debt. There were no massive liquidity “bazookas” shot by central banks, no giant stimulus programs from the Ministry of Economy, no price or profit margin controls. President Wilson had suffered a severe stroke at the end of 1919, which left him practically disabled for the rest of his presidency, while his successor, Warren G. Harding, declared the following in his 1920 acceptance speech for the Republican presidential nomination:
Let us call to all the people for thrift and economy, for denial and sacrifice if need be, for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic. There hasn’t been a recovery from the waste and abnormalities of war since the story of mankind was first written, except through work and saving, through industry and denial, while needless spending and heedless extravagance have marked every decay in the history of nations.
Thus, the federal budget was reduced from $18.5 billion in 1919 to $3.7 billion dollars in 1922, and public debt fell from $26 billion at the end of 1919 to $22.3 billion dollars in June 1923. One can easily see why Grant described this depression as “the crash that cured itself.” As he ironically notes, “by the lights of Keynesian and monetarist doctrine alike, no more primitive or counterproductive policies could be imagined.”
But wouldn’t it have been better if the government had “softened” things a little bit? That would probably have been achieved at the cost of stagnation, as in the case of the thirties, and of greater problems in the future, as in the case of Japan, described by Anderson:
early in 1920, the great banks, the concentrated industries, and the government got together, destroyed the freedom of the markets, arrested the decline in commodity prices, and held the Japanese price level high above the receding world level for seven years. During these years Japan endured chronic industrial stagnation and at the end, in 1927, she had a banking crisis of such severity that many great branch bank systems went down, as well as many industries. It was a stupid policy. In the effort to avert losses on inventory representing one year’s production, Japan lost seven years, only to incur greatly exaggerated losses at the end. The New Deal began in Japan in early 1920.
The First World War was seen by the state bureaucracies of the West as definitive proof of how tasteful an extensive state control of the capitalist engine could be. On the other hand, the disintegration of the classical gold standard and the return to a blatant use of central banks to finance war debts at the cost of inflation had marked the end of the classical liberal world order based on international commerce and financial discipline. Still, some traces of the cultural values and traits that had led to its extraordinary ascension could still be found, especially in the American population. One need only remember that both the Federal Reserve and the income tax as we know it today had only been established in the United States a few years before, in 1913.
Since then, much has changed, including, of course, the legal, institutional, and even cultural context of our economies. Economy means people—and modern society does not seem to have the cultural and institutional “anchors” that would allow it to endure, like in the 2020–21 shock, so drastic a recipe as that circumstantially applied a century ago. And yet the “forgotten depression” can still teach us important lessons: that there was once a time when individuals and communities used to overcome even the worst depressions, by making use of their freedoms, and that the interventionist and spendthrift state is often more part of the problem than it is of the solution. These are important insights we need to keep in mind especially today.
- Daily Briefing – September 18, 2020
Daily Briefing – September 18, 2020
Tyler Durden
Fri, 09/18/2020 – 18:10Real Vision CEO and co-founder, Raoul Pal, is joined by senior editor, Ash Bennington, to look forward to the future of markets as well as Real Vision. After they evaluate how the market interpreted the Fed’s latest FOMC meeting, Raoul broadens the conversation beyond equities to make sense of the flatness in bond yields and credit spreads. Raoul and Ash then discuss the upcoming two-week exploration on Real Vision, “Has Everything Changed,” as well as discuss how Real Vision’s new platform, “The Exchange,” is allowing Real Vision members to connect with each other and form a “hive mind.” In the intro, Jack reviews market price action and gives a sneak peak of “Has Everything Changed.”
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