Today’s News 1st June 2021

• Turkey Cracks Down On Alcohol As Erdogan Pushes Islamist Agenda
  Turkey Cracks Down On Alcohol As Erdogan Pushes Islamist Agenda

  Turkey, which Ataturk’s reforms dragged kicking and screaming from the confines of medieval Islam into the modern world, is fast regressing to its original state under its despotic ruler Recep Tayyip Erdogan who is seeking to place Islam at the heart of national politics to deflect away from his catastrophic rule, and steer the overwhelmingly Muslim country toward the Middle East and away from the West. He is doing so by restricting the use of alcohol, to start.

  On April 29, the Turkish government imposed a nearly three-week nationwide lockdown and ban on alcohol sales through the end of Ramadan. Even at grocery stores allowed to operate during the period, liquor sections were sealed off with tape notifying customers that the corner has been temporarily closed by government order.

  

  As the Nikkei details, many people rushed to buy liquor before the lockdown. An employee at a midsize winery in the western region of Thrace said it had received telephone inquiries about delivery from about 30 customers. “I guess we have never sold so much alcohol during Ramadan,” she said.

  The lockdown ended May 17, but the government would keep the weekend curfews and alcohol ban through the end of the month. It may extend it beyond. Many Turks question the effectiveness of the ban on drinking at home as an antivirus measure and criticize the move as undue meddling in private lives.

  Since taking power in 2002, the Islamist ruling Justice and Development Party has clamped down on alcohol. The government has increased related taxes over the years and in 2013 passed a law banning alcohol ads and sales at liquor stores after 10 p.m. It also prohibits makers and sellers of alcohol from sponsoring sports events.

  And these are only the visible measures. Although more than 150,000 stores, including supermarkets, sell alcohol in Turkey, over the past few years it has become increasingly difficult to obtain permission to open new stores to sell liquor, said Ozgur Aybas, head of a liquor store association that opposes government restrictions. In some conservative regions, local authorities turn down stores’ applications, saying alcohol is a sin.

  Erdogan is a pious Muslim known for his dislike of alcohol. “The president may be trying to turn Turkey into a place like Dubai, United Arab Emirates, which allows alcohol consumption only among non-Muslim foreigners,” said Aybas, echoing similar views in the industry.

  Although Turkey is a Muslim-majority country, it has a rich drinking culture and produces a wide variety of alcoholic beverages, including beer, wine and raki, the country’s signature spirit. Drinking became legal soon after the Republic of Turkey was established in 1923. Mustafa Kemal Ataturk, the founder of modern Turkey and a hard drinker, helped establish a state-owned winery.

  Ataturk – who regarded Islamic politics and society as the primary obstacle – pushed for Westernization with a focus on the separation of state and religion. While some see Turkey as a Middle Eastern country, international organizations and Western media often regard it as part of Europe. Turkey is a member of NATO and was named as a candidate for EU accession in 1999.

  Erdogan has been trying to reverse the country’s secularization. Last year, the government converted Istanbul’s Hagia Sophia, a World Heritage site secularized by Ataturk in 1934, into a mosque, and this past March it announced a withdrawal from the Istanbul Convention, an international accord designed to protect women from violence.

  Diplomatically, Turkey has actively engaged in the Palestinian issue as a Muslim country, and its EU accession has been practically put on hold.

  The current move to tighten alcohol regulations is part of Erdogan’s effort to promote Islam and traditional values. When the tougher law was introduced in 2013, Erdogan implicitly criticized Ataturk and his longtime ally Ismet Inonu by saying, “Given that a law made by the two drunkards is respected, why should a law that is commanded by religion be rejected by your side?”

  

  Erdogan is trying to appeal to the country’s conservatives, who make up a majority of the population but often feel neglected by secular elites, who did not even allow women to wear headscarves in public at times.

  According to several private-sector surveys, only around 20% of Turks drink alcohol regularly, while the state-run Turkish Statistical Institute – which is more Erdogan’s personal propaganda arm than anything data-driven – reported that more than 70% of those age 15 or older have never had alcohol.

  Yet people seem weary of the government’s move to limit their freedom to choose their favorite drink. In a recent survey conducted by Istanbul Economics Research, 56% of respondents saw the recent alcohol ban as inappropriate, while 44% voiced their support. The poll shows that many in the nondrinking segment have reservations about the ban.

  Soner Cagaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy, said that Erdogan and Ataturk are very similar in that both try to transform the country based on their own vision — but their visions are completely opposite.

  Tyler Durden
  Tue, 06/01/2021 – 02:45

• On The Hunt For Gas – War Drums In The Western Mediterranean
  On The Hunt For Gas – War Drums In The Western Mediterranean

  Authored by Piero Messina via South Front,

  The waters of the eastern Mediterranean have become the scene of a low-intensity war. The goal is to control the energy resources that extend into the seabed from the coast of Greece to Israel. The maritime area of the eastern Mediterranean is one of the main areas of energy interest. In 2009, the Leviathan gas field (450 billion m3) was discovered, about 130 kilometers offshore from the Israeli city of Haifa. Subsequent explorations in this sea area have shown that large quantities of gas also exist in adjacent areas. In particular, the Tamar fields (about 318 billion m3) and some minor fields, including Dalit (55 billion m3) and Karish and Tanin (respectively about 8 and 55 billion m3), were discovered off the Israeli coast. They will allow Israel to meet domestic consumption and export part of its production. Then came, in 2011, the discoveries in the Cypriot waters of Aphrodite (about 129 billion m3) and Calypso (with a potential of 170-230 billion m3).

  

  Greek Energy and Environment Minister Kostis Hatzidakis, Minister of Energy, Commerce and Industry of the Republic of Cyprus Giorgos Lakkotrypis and Israeli Energy Minister Yuval Steinitz signed in Athens the intergovernmental agreement on the construction of the EastMed gas pipeline in December 2020

  Whose are those energy resources? How and where will that wealth be distributed?

  All the key players of that geopolitical quadrant claim their rights over those waters and the exploitation of the resources contained in the subsoil. The first move to conquer those seas is Turkey. Erdogan’s expansionist policy begins at the end of 2018, first with a series of hostile naval patrols against Cyprus, then with a series of drilling off the island shared with Greece. Turkish research activities arouse protests from the international community. So, the EU imposes sanctions on Turkey. But they are almost a caress.

  

  Then, in compliance with the neo-Ottoman project of “Blue Homeland”, Ankara signs, in November 2019, an agreement with the Libyan transitional government, then chaired by  Fayez Al Serraj, for the exclusive exploitation of the maritime EEZ and for cooperation military. A punch in the face of Greece. In fact, on that same stretch of sea, another cooperation treaty entered into force in the summer of 2020, signed between Greece and Egypt. For Ankara it is a blow to the heart. Within days, the Ankara government sends the Oruc Reic seismic research ship to inspect what it considers to be its exclusive sea area. Too bad,  even the Greeks also think the same. The incident occurred on 12 August 2020. The Oruc Reis is sailing escorted by a fleet of Turkish ships and is approached by a Greek naval patrol. Eventually the Greek frigate Limnos and the Turkish Tgc Kemalreis will clash in this absurd sea duel. Greece and Turkey are both members of NATO. But national interests come first.

  To understand the importance of that incident, it is necessary to look carefully at the map of the pipelines under construction.  That naval crash seems to be only the anticipation of a geopolitical conflict. A conflict that risks becoming more complicated: the two frigates collided exactly in the middle of Eastmed’s route.

  

  What exactly is Eastmed and what can its real geopolitical value be?

  EastMed is a pipeline that must connect the Levantine basin (in practice, Israel) with the gas distribution networks in Europe. It is a project carried out in joint ventures by Depa (the national gas company for Greece) and by Edison, an Italian-French multinational in the energy sector. The project was blessed by the European Commission which considered it strategic for the European Union. The pipeline route is over 1900 kilometers, 1300 offshore and 600 onshore. According to forecasts, the pipeline will start from the Israeli natural gas reserves of the Levant Sea basin, and then go to Cyprus, Crete and end in Greece. Subsequently, the gas from Greece will reach Italy through a further pipeline. The project, according to estimates, has a value of about 6 billion euros and, within 7 years, will meet 10% of the European Union’s natural gas needs. But in reality nothing has been decided yet. From a geopolitical point of view, that gas pipeline serves to reduce the energy dependence that Europe has on Russia.

  

  That pipeline risks transforming the eastern Mediterranean into a war scenario. For the Eastmed design, the countries interested in the construction of the pipeline came together in a permanent forum. EMGF is its name: it was established in 2018 and was ratified by the acceding countries with a meeting in Cairo in September 2020. Here is the list of adhering countries: Italy, Egypt, Jordan, Israel, Cyprus, Greece and the Palestinian National Authority . The simultaneous presence of Israel and the Palestinian National Authority makes us think. In the report explaining the reasons for the Forum, there are sufficient reasons to imagine a possible escalation of violence. Both for the exclusion of Turkey and Lebanon, which will have no intention of giving up those enormous riches, and for the geopolitical position declared hostile to the Kremlin. It is no secret that the project is against Russia.

  The anti-Moscow blockade is strengthened by the forthcoming entry of France and the blessing of the US government. Here is what the Statute of the EMGF says: “Countries such as Turkey and Lebanon do not participate in the Forum due, respectively, to persistent tensions with Greece and Cyprus and the presence of Israel. Interest in the initiative was expressed by France which intends to join the Forum in the near future. The United States views the creation of the EMFG with great interest and would like to join the Forum or at least strengthen cooperation in the Eastern Mediterranean region in the energy sector, as evidenced by the participation of the US Deputy Secretary for Energy at the launch of the Forum in January. 2020. The US, in particular, believes that the gas resources present off the coast of Israel, Cyprus and Egypt constitute an important element for the diversification of European energy supplies, with a consequent decrease in the old continent’s dependence on supplies from Moscow”.

  Eastmed is expected to be fully operational in 2025. But there are still many doubts.

  Tyler Durden
  Tue, 06/01/2021 – 02:00

• Eisenhower Rejected Military Chiefs' Demand For Nuclear War On China
  Eisenhower Rejected Military Chiefs’ Demand For Nuclear War On China

  Authored by Gareth Porter via TheGrayZone.com,

  A previously censored account of the 1958 Taiwan Strait crisis that was sponsored by the Pentagon has been published in full by the leaker of the Pentagon Papers, Daniel Ellsberg. The report provides a hair-raising portrait of a reckless US military leadership relentlessly pressing President Dwight Eisenhower for the authority to carry out nuclear attacks on communist China. After holding the still-classified version of the account in his possession for fifty years, Ellsberg said he decided to release it because of the growing threat of US war with China over Taiwan, and the danger that such a conflict could escalate into a nuclear exchange.

  A May 22 New York Times report on the account offered only general details of the role the US Joint Chiefs of Staff played in the run-up to the 1958 Taiwan crisis. However, it is now clear from the original highly classified documents as well as other evidence now available that from the beginning, the Joint Chiefs aimed first and foremost to exploit the tensions to carry out nuclear strikes against Chinese nuclear military targets deep in highly-populated areas.

  

  Chiang Kai-shek’s nationalist Kuomintang regime and the Joint Chiefs were allies in wanting to embroil the United States in a war with China. Deputy Secretary of State Christian Herter feared that the Nationalist regime was determined to drag the US into conflict, according to the Pentagon-sponsored account. The reason, according to the author of the account, Morton Halperin, was that involving the United States in a war with the Chinese Communists “was clearly their only hope for a return to the mainland.”

  Quemoy and Matsu, the two main offshore islands occupied by Nationalist troops, were less than five miles from the mainland and had been used by Chiang’s forces as bases to mount unsuccessful commando raids inside the mainland. And Chiang, who was still committed to reconquering the mainland China with the ostensible support of the United States, had stationed a third of his 350,000-man army on those two islands.

  In May 1958, the Joint Chiefs adopted a new plan (OPS PLAN 25-58), ostensibly for the defense of the offshore islands. In fact, the plan provided a basis for attacking China with atomic weapons. It was to begin with a brief preliminary “Phase I”, which it called “patrol and reconnaissance” and was said to be already underway. “Phase II”, which would have been triggered by a Chinese attack on the offshore islands, would involve US air forces wiping out the attacking forces.

  But the new plan envisioned a possible third phase, in which the Strategic Air Command and forces under the command of the US Pacific Command would carry out strategic attacks with 10 to 15 kiloton tactical nuclear weapons “to destroy the war-making capability” of China.

  According to the account authored by Halperin, the Chairman of the Joint Chiefs, Air Force Gen. Nathan Twining, told State Department officials in an August meeting that the third phase would require nuclear strikes on Chinese bases as far north as Shanghai. The Joint Chiefs played down the threat to civilian casualties from such tactical atomic weapons, emphasizing that an airburst of tactical atomic explosions would generate little radioactive fallout. But the account indicates that they provided no concrete information on expected civilian casualties.

  Given the fact that both the Chinese gun emplacements across the Taiwan Strait and a key airbase serving the Chinese military forces in any conflict over the offshore islands would have been located close to significant population centers, such atomic explosions would have certainly caused civilian casualties on a massive scale.

  The Joint Chiefs did not acknowledge that the bombs they planned to detonate with airbursts would have had the same potential lethality as the bomb dropped on Hiroshima. Nor would they concede that the targets of such bombings were located in the immediate vicinity of Chinese cities that were roughly the same population as Hiroshima.

  The city of Xiamen, for example, was close to military targets in the Amoy area, while Ningbo was close to the main Chinese airbase in Zhejiang province that would have been attacked by US forces. Like the Hiroshima bomb, the nuclear explosions would have been triggered in the air, where blast damage is greatest, destroying or damaging nearly everything within a radius of three miles from the blast, killing much of the population.

  The Joint Chiefs also assumed that China would respond to the US use of atomic weapons by retaliating with atomic weapons, which the Joint Chiefs presumed would be made available to the Chinese government by the Soviet Union. 

  Top Secret plans and presidential decisions (not yet declassified) to initiate nuclear war against China in defense of Taiwan in 1958 were just revealed by me to the @nytimes. https://t.co/SXS6TGEfgV

  — Daniel Ellsberg (@DanielEllsberg) May 23, 2021

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  The Halperin report recounts that Twining told State Department officials that the bombing of the intended targets with tactical nuclear weapons “almost certainly would involve nuclear retaliation against Taiwan and possibly against Okinawa….” That assumption was based on a Special National Intelligence Estimate that had been issued on July 22, 1958. The estimate had concluded that, if the U.S. “launched nuclear strikes deep into Communist China,” the Chinese would “almost certainly” respond with nuclear weapons.

  Despite the acceptance of the likelihood that it would lead to nuclear retaliation by China, JCS Chairman Twining expressed no hesitation about the plan, asserting that in order to defend the offshore islands, “the consequences had to be accepted”.

  The Joint Chiefs seek to appropriate war powers

  The Joint Chiefs’ plan betrayed the military chiefs’ hope of removing the power of decision over nuclear war from the hands of the president. It said the plan would be put into operation when “dictated by appropriate U.S. authority” – implying that it would not necessarily be decided by the president.

  In his own memoirs, Eisenhower recalled with some bitterness how, during the 1958 crisis, he was “continuously pressured — almost hounded — by Chiang [Chinese nationalist Generalissimo Chiang Kai-shek] on one side and by our own military on other requesting delegation of authority for immediate action on Formosa [Taiwan] or the offshore islands….” He did not refer, however, to the efforts by the Joint Chiefs efforts to gain advance authorization for the use nuclear weapons on the Chinese mainland.

  The wording of the JCS plan was changed to read “when authorized by the President” at Eisenhower’s insistence to provide that only conventional means could be used at least initially for defense of the islands, while leaving open the possibility of using tactical nuclear weapons if that failed.

  But the Joint Chiefs were not finished. In a paper presented to Eisenhower on September 6, the chiefs proposed that they be authorized to “oppose any major attack on Taiwan and attack mainland bases with all CINPAC force that can be brought to bear” in the event of “an emergency arising from an attack on Taiwan and the offshore islands moving so rapidly that it would not permit consultations with the President…”

  Further, they asked for the authority to respond to a “major landing attack on offshore islands,” by “[u]se of atomic weapons and U.S. air attack in support of [Chinese Nationalist] Air Force…as necessary, only as approved by the President.” Eisenhower approved the paper with those qualifiers.

  When Secretary of State John Foster Dulles warned that Japan would object strongly to using nuclear weapons against the Chinese mainland, and forbid the launching of nuclear weapons from their territory, Chief of Naval Operations Admiral Arleigh Burke suggested that the opposition to nuclear weapons in Japan was “inspired by the Communists,” and that foreign leaders would soon recognize that the use of nuclear weapons by the US “was in their interests”.

  Burke closed his argument by claiming that if the US did not maintain the threat of tactical nuclear weapons in conflicts,  it would “lose the entire world within three years.” That obviously absurd argument suggests that the intense desire among the Joint Chiefs to use nuclear weapons against China was less motivated by any threat from Communist Chinese than by their own institutional interests.

  In pre-Cold War Washington, the US Navy served as the primary bureaucratic ally of the Kuomintang regime. The relationship was forged when Chiang provided the Navy with the home base for its 7th Fleet at Tsingtao in Northern China. Navy brass in the Pacific had urged unconditional support for Chiang’s regime during the civil war with the Communists and derided as “pinkies” those State Department officials – beginning with Secretary George C. Marshall – who entertained any doubts about the Kuomintang leader.

  By 1958, the Air Force was so strongly committed to its role as an exclusively nuclear-weapons delivery organization that it insisted on being able to able to using nuclear weapons in any war it fought in the Pacific region. The account of the crisis reveals that, when the Air Force Commander in the Pacific, Gen. Lawrence S. Kuter, learned of Eisenhower’s decision to defend the offshore islands with conventional weapons, he relayed the message to Gen. John Gerhart, the Air Force Deputy Chief of Staff. Shockingly, Gerhart responded that the Air Force “could not agree in principle” to the use of SAC forces for such non-nuclear operations.

  Beyond the desire of the Navy and Air Force chiefs to ensure their long-term presence and reinforce the importance of their respective roles in the Pacific, the Joint Chiefs of Staff have always aspired to maximize their influence over US policy in any conflict where U.S might use military force.

  It turned out that the Chinese never intended full-scale war over the offshore islands. Instead they sought to mount a blockade of resupply to the islands through artillery barrages, and when the US military provided armed escorts for the ships carrying out the resupply, they were careful to avoid hitting American ships. As the Halperin report observed, once the Chinese recognized that a blockade could not prevent the resupply, they settled for symbolic artillery attacks on Quemoy, which were limited to every other day.

  It was the eagerness of the Joint Chiefs for a nuclear war against China, rather than the policy of communist China, that presented the most serious threat to American security.

  Although the circumstances surrounding the U.S.-China conflict over Taiwan have changed dramatically since that stage of the Cold War, the 1958 Taiwan crisis provides a sobering lesson as the US military gears up for a new military confrontation with China.

  Tyler Durden
  Tue, 06/01/2021 – 00:00

• Space Junk Damages Part Of International Space Station
  Space Junk Damages Part Of International Space Station

  Amid fears of increasing space junk in low Earth orbit, a robotic arm attached to the International Space Station (ISS) has been damaged by space junk. 

  In a blog post, the Canadian Space Agency (CSA) said a routine inspection on May 12 uncovered a small, untrackable piece of space junk that struck Canadarm2, which is a Canadian robotic arm on ISS used to conduct station maintenance. 

  “Canadarm2 is continuing to conduct its planned operations,” said the CSA. “The damage is limited to a small section of the arm boom and thermal blanket.” 

  

  The statement also explained that NASA and CSA would work together to find out more about the impact. CSA said near-term robotic operations will continue as plan. 

  Over decades, debris from satellites, rockets, and other space devices has been locked in orbit. A lot of the junk is building up and could cause significant damage to the ISS and functioning satellites.

  According to the CSA, “over 23,000 objects the size of a softball or larger are tracked 24/7 to detect potential collisions with satellites and the ISS.” Yet as these items deteriorate and break apart, they produce smaller debris that can’t be tracked, posing additional risk to space-based operations. 

  The European Space Agency (ESA) said many of these objects are accumulating rocket boosters, defunct satellites, and spaceborne shrapnel. It estimates up to 160 million objects measuring upwards of a millimeter are clogging up low Earth orbit. 

  In its annual 2020 report, ESA showed that the number of “fragmentation events” has soared over the last three decades. 

  

  Though these fragments may be small, they travel at thousands of miles per hour and can easily pierce satellites and other spacecraft, resulting in ESA and NASA calling for action against space debris. 

  Planned for 2025, the ESA recently awarded the Swiss startup company Clearpace, a $117 million contract, to remove space debris from orbit. 

  

  If readers are curious about just how much space junk is floating above, ESA’s animation shows an incredible view of all the debris:  

  

  Meanwhile, Elon Musk is expected to launch thousands of Starlink satellites into space which could cause further traffic jams in orbit. 

  Tyler Durden
  Mon, 05/31/2021 – 23:30

• "Let Me Be Very Clear": Michael Flynn Sets Record Straight On 'Coup' Comment
  “Let Me Be Very Clear”: Michael Flynn Sets Record Straight On ‘Coup’ Comment

  Update (2300ET): Following today’s outrage over comments made at this weekend’s “For God & Country Patriot Roundup,” Retired Lt. Gen. Michael Flynn denied that he wants a coup in the United States.

  “For all the fake news ‘journalists’: Let me be VERY CLEAR — There is NO reason whatsoever for any coup in America, and I do not and have not at any time called for any action of that sort. Any reporting of any other belief by me is a boldface fabrication based on twisted reporting at a lively panel at a conference of Patriotic Americans who love this country, just as I do. I am no stranger to media manipulating my words and therefore let me repeat my response to a question asked at the conference: There is no reason it (a coup) should happen here (in America),” said Flynn in a Monday statement on Parler.

  Flynn attorney Sidney Powell backed him, saying that Flynn does not endorse “any act of violence or any military insurrection,” and that his comments had been “grossly distorted,” per CNN.

  *  *  *

  Former Trump National Security Adviser Micheal Flynn made an off-the-cuff statement over the weekend that a Myanmar-like military coup not only could happen, but “should happen” in the US.

  

  Speaking at the Dallas “For God & Country Patriot Roundup,” branded by Business Insider and MarketWatch as a “QAnon conference” (because a quilt with a “Q” on it was auctioned off at the event), Flynn was asked during a Q&A session “I want to know why what happened in Myanmar can’t happen here?“

  To which Flynn – who spent 33 years as an Army intelligence officer – replied: “No reason. I mean, it should happen.“

  Here is the video of former national security advisor Michael Flynn saying that he thinks a coup like the coup in Myanmar should happen in the US. pic.twitter.com/7mGYjfXg18

  — Mamie 😌 (@MC_Hyperbole) May 30, 2021

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  After it was revealed that the FBI pressured Flynn into pleading guilty amid threat of going after his son, leading the DOJ to drop its case against him (which a judge finally closed eight months later), Flynn has become an icon among former President Trump’s most ardent supporters.

  According to the New York Times, “He was one of the most extreme voices in Mr. Trump’s 77-day push to overturn the election,” and suggested using the military to rerun the vote in key battleground states – which then-President Trump could have imposed martial law to enact.

  “People out there talk about martial law like it’s something that we’ve never done,” Flynn told Newsmax several months ago, noting that the military had taken over for civilian authorities dozens of times in US history.

  Tyler Durden
  Mon, 05/31/2021 – 23:01

• Trump: Biden Is "Destroying" Our Country With "Failed Border Policies"
  Trump: Biden Is “Destroying” Our Country With “Failed Border Policies”

  Authored by Isabel van Brugen via The Epoch Times,

  Former President Donald Trump on Saturday accused Joe Biden of “destroying” the United States with his administration’s “failed border policies,” in a wide-ranging interview that also saw him criticize the president for his handling of issues in the Middle East and China.

  “If he would have done nothing, we would have had right now the strongest border in history,” Trump said in an interview with Dick Morris on Newsmax’s “Dick Morris Democracy.” 

  “All he had to do is nothing.”

  Since assuming office on Jan. 20, President Joe Biden’s has rescinded a number of his predecessor’s immigration and border policies.

  

  Republican lawmakers have long argued that the burgeoning crisis is a result of Biden’s move to overturn several Trump-era immigration policies that helped curbed the flow of illegal border crossings. This includes his predecessor’s cornerstone Migrant Protection Protocol, which effectively ended the problematic “catch and release” policy, significantly stemming the number of illegal immigrants at the southern border in 2019.

  In a return to Obama-era policies, the Biden administration is again releasing unaccompanied illegal immigrant minors into the country. Lawmakers argue that Biden’s act sent a signal to prospective migrants to once again travel to the United States.

  

  Illegal immigrants just released from detention through “catch and release” immigration policy stand at a bus station before being taken to the Catholic Charities relief center in McAllen, Texas, on April 11, 2018. (Loren Elliott/Reuters)

  The Biden administration, meanwhile, has sought to shift the blame onto the previous administration, with Homeland Security Secretary Alejandro Mayorkas saying that the previous government had “dismantled the orderly, humane, and efficient way of allowing children to make their claims under United States law in their own country.”

  “I had everything worked out with the other countries, whether it’s Guatemala, Honduras, El Salvador, Mexico,” Trump said Saturday. “And even Mexico, stay in Mexico. In other words, these people ought to stay in Mexico, and they couldn’t get into our country. And he ended that. It’s just crazy what they did.”

  Trump also claimed in his interview with Newsmax that the Northern Triangle countries are “opening their prisons.”

  “Their prisoners are coming in, their murderers, their drug addicts, and drug dealers, by the way. And the human traffickers are coming in. And we’re accepting them, because they’ve opened up the borders,” Trump said.

  “The question is do they do it out of incompetence, which I happen to think, or they do it because they really believe open borders are good for this country? Which they are not.”

  He added:

  “We won’t have a country. They are destroying our country.”

  According to U.S. Customs and Border Protection (CBP) data published on May 11, arrests and detentions at the U.S.–Mexico border hit record levels last month.

  

  Illegal immigrants, mostly from Central America, are dropped off by Customs and Border Protection at a bus station in the border city of Brownsville, Texas, on March 15, 2021. (Chandan Khanna/AFP via Getty Images)

  Immigration arrests and detentions at the southern border last month rose by 3 percent from March, to 178,622—the highest one-month total in 20 years, CBP data show.

  [ZH: Additionally, the number of people attempting to cross the US-Mexico border from countries beyond Mexico and Central America’s Northern Triangle – including residents of Haiti, Cuba, Romania and India – has spiked during recent months.]

  

  Last month’s figures, however, marked the first month since Biden took office that the CBP didn’t record a major month-on-month jump in the number of border arrests and detentions, despite reaching record levels.

  While the Biden administration has called the unprecedented surge in numbers a “challenge,” neither the president nor the vice president has visited the border.

  White House press secretary Jen Psaki said on May 4, “After coming into office, our administration immediately jumped into action to address the influx of migrants at the border—something that began during and was exacerbated by the Trump administration.”

  

  Press Secretary Jen Psaki holds a press briefing at the White House in Washington, U.S. May 24, 2021. (Evelyn Hockstein/Reuters)

  The former president also mentioned the violence between Hamas—a designated terrorist group since 1997—and Israel this month, saying “what’s happened to Israel is one of the great injustices.”

  “If you look back 10 or 12 years ago, Israel was so protected by Congress. Congress loved Israel. Now, especially if you looked at the House, the House doesn’t like Israel. The House is protective of anything other than Israel,” Trump said.

  Members of the progressive group that has come to be known as the “Squad”—Reps. Alexandria Ocasio-Cortez (D-N.Y.), Ilhan Omar (D-Minn.), Ayanna Pressley (D-Mass.), and Rashida Tlaib D-Mich.)—have come under fire in recent days for their controversial anti-Israel comments on Twitter as violence intensified, before a ceasefire agreement was eventually reached on May 20. The 11-day conflict started when Hamas launched rockets into Israel over a court case to evict several Palestinian families in East Jerusalem that triggered riots.

  “What’s gone on with the House with AOC and Omar and all of these people and Pelosi, they are not in favor of Israel, and yet the Jewish vote goes to the Democrats,” Trump added.

  The White House and “Squad” members didn’t immediately respond to requests for comment by The Epoch Times.

  Tyler Durden
  Mon, 05/31/2021 – 23:00

• For Second Time, Canadian MP "Accidently" Caught Naked During Parliament Call 
  For Second Time, Canadian MP “Accidently” Caught Naked During Parliament Call 

  Screenshots of a virtual meeting, which have gone viral, show a Canadian politician urinating on camera during a work meeting. 

  William Amos, a Liberal MP for Pontiac, Quebec, released a statement Thursday about the incident:

  Last night, while attending House of Commons proceedings virtually, in a non-public setting, I urinated without realizing I was on camera. I am deeply embarrassed by my actions and the distress they may have caused anybody who witnessed them. 

  While accidental and not visible to the public, this was completely unacceptable, and I apologize unreservedly. I will be stepping aside temporarily from my role as Parliamentary Secretary and from my committee duties so that I can seek assistance. 

  I will continue to represent my constituents and I’m grateful to be their voice in Parliament. I am deeply appreciative for the support of my staff and the love of my family.

  

  This is not the first time Amos, 46, was captured in the nude during a virtual meeting. In April, he was accidentally caught on video changing into work clothes after a workout. 

  “Obviously, it was an honest mistake, and it won’t happen again,” Amos said at the time. 

  “You’re either laughing at someone who’s having the worst experience of their life or you’re laughing at people who were subjected to nudity without their consent at work. I just can’t find an angle where that would be funny to me,” Ottawa-based sexual violence prevention instructor Julie Lalonde told Vice at the time.

  Conservative Deputy House Leader Karen Vecchio was suspicious that the on-camera urination was “accidental.” 

  “This is the second time Mr. Amos has been caught exposing himself to his colleagues in the House, and the House of Commons, virtual or otherwise, must be free of this type of unacceptable behavior,” Vecchio said.

  From professional meetings to online classes to online educational classrooms, virtual conference calls have had their fair share of embarrassing episodes for people who didn’t understand how to turn off the session. 

  Tyler Durden
  Mon, 05/31/2021 – 22:30

• Steven Seagal Is Now A Russian Politician
  Steven Seagal Is Now A Russian Politician

  On May 29th, Hollywood “legend” Steven Seagal has opted into a career change.

  

  He joined a Russian political party.

  As South Front reports, Seagal received a party membership card of an alliance named Just Russia – Patriots – For Truth.

  It was formed earlier in 2021, when three leftist parties, all of which support Putin, merged into one.

  In November 2016, Segal was granted Russian citizenship. In August of 2018, Moscow’s Foreign Ministry appointed him to the unpaid position of “special representative for Russian-US humanitarian ties.”

  He lamented the lack of ability, even in Russia, to arrest people for no apparent reason, just fining them for breaking the laws.

  “Without being able to arrest people, when we just fine them, they are probably making more money of the production of the things that are defiling the environment,” said in his welcome speech at a party event.

  The party controls a faction in the lower house of the Russian parliament and plans to take part in a parliamentary election in September.

  The US-born Seagal is known for his action movies of questionable quality, and his alleged martial arts prowess. Russian President Vladimir Putin seems fond of him and martials art, and as such they, apparently, have become “best friends.”

  In 2018, Russia tasked Seagal with improving humanitarian ties with the United States at a time when relations between the two countries have deteriorated to their worst level since the Cold War.

  As a Russian representative, Seagal visited Venezuela earlier in May and presented a samurai sword to Venezuelan President Nicolas Maduro.

  Previously, he was a member of the For Truth party (on February 22 it merged with Fair Russia and Patriots of Russia).

  According to the actor, his priorities will be the fight against environmental crimes and the protection of Lake Baikal. Seagal also called for the demilitarization of outer space, stressing that he is extremely concerned about this problem.

  Answering the TASS question whether he considers himself a socialist, Sеаgal noted that A Just Russia – For Truth is not a socialist party “in the Soviet sense of the word.”

  “This is a different party, it is different. Because people have quite open views on what is good, what is good for the country, for the people. And this does not correspond at all with the outdated Soviet concepts,” he is sure.

  He likely will not run for a seat in Russian parliament due to his American citizenship.

  Tyler Durden
  Mon, 05/31/2021 – 22:00

• Iran Warns Against "Miscalculations" As US Military Monitors Pair Of Venezuela-Bound Warships
  Iran Warns Against “Miscalculations” As US Military Monitors Pair Of Venezuela-Bound Warships

  In a seeming repeat of the Trump admin attempt to impose a full naval blockade on Venezuela to prevent fuel and oil imports and exports, especially involving Iranian tankers, the US military is said to be actively monitoring two Iranian naval vessels which are believed headed toward Venezuela.

  Washington has reportedly warned the Maduro government against receiving the warships, which likely have elite Islamic Revolutionary Guard Corps’ Quds Force members aboard. The two “rogue states” (as the US sees them) have become increasingly close especially under the prior four Trump years as they cooperated in circumventing US sanctions, and have grown militarily more cooperative. 

  

  Days ago Politico was the first to report on their movements – but whether they are intent on entering Venezuelan waters is still largely subject of speculation. “An Iranian frigate and the Makran, a former oil tanker that was converted to a floating forward staging base, have been heading south along the east coast of Africa, said the people, who spoke on condition of anonymity to discuss a sensitive subject,” the report said.

  Politico continued: “Senior officials in President Nicolás Maduro’s government in Caracas have been advised that welcoming the Iranian warships would be a mistake, according to a person familiar with the discussions. But it’s not clear whether Maduro has heeded that warning: At one point on Thursday, U.S. military officials understood the ships had turned around, but as of Friday morning they were still steaming south, one of the people said.”

  On Monday Iran’s foreign ministry responded to the reports, asserting the country’s right to freely navigate international waters, but stopped short of confirming or denying any operation involving Venezuela. “Iran has constant presence in international waters, is entitled to this right on the basis of international law, and can be present in international waters. No country can violate such a right”, an Iranian spokesman said. The spokesman then warned:

  “I warn that nobody should make a miscalculation. Those who live in glass houses must be cautious.”

  #Iran has warned the US against “any miscalculations” after reports emerged that the US was monitoring two Iranian warships said to be en route to Venezuela.

  “Those in glass houses should be careful,” Foreign Ministry spox Khatibzadeh said today.https://t.co/VdlKfKwI4s

  — Kian Sharifi (@KianSharifi) May 31, 2021

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

  Last year on multiple occasions Venezuela’s military escorted Iranian fuel tankers through its coastal waters after Trump vowed to send a military blockade to the Caribbean.

  Despite the threats, multiple tankers made it to the Venezuelan coast; however in some other instances US authorities were able to seize Iranian fuel on the high seas much earlier before ships made it near South America’s coast.

  Tyler Durden
  Mon, 05/31/2021 – 21:30

• Mexican Cartels Respond To AMLO's "Hugs, Not Bullets" By Hunting Down, Torturing, And Executing Cops At Their Homes
  Mexican Cartels Respond To AMLO’s “Hugs, Not Bullets” By Hunting Down, Torturing, And Executing Cops At Their Homes

  After Mexican President Andrés Manuel López Obrador (AMLO) attempted to combat cartels through peaceful means – namely his “hugs, not bullets” campaign to appease criminal organizations, the notoriously violent Jalisco cartel responded by kidnapping several members of an elite police force in the state of Guanajuato, torturing them to obtain the names and addresses of other cops, and is now hunting them down and killing them at their own homes, “on their days off, in front of their families,” according to the Associated Press.

  

  This type of direct attack on the police is rarely seen outside of Central America, and stands to become the  most direct challenge to AMLO’s attempt to peacefully ‘manage’ the country’s competing cartels. The cartels, meanwhile, have already declared war on the government – focusing their efforts on eradicating every member of an elite state force known as the Tactical Group, which the cartel accuses of treating its members unfairly.

  “If you want war, you’ll get a war. We have already shown that we know where you are. We are coming for all of you,” reads a banner signed by the cartel and hung on a Guanajuato building in May.

  “For each member of our firm (CJNG) that you arrest, we are going to kill two of your Tacticals, wherever they are, at their homes, in their patrol vehicles,” the banner continues.

  Officials in Guanajuato — Mexico’s most violent state, where Jalisco is fighting local gangs backed by the rival Sinaloa cartel — refused to comment on how many members of the elite group have been murdered so far.

  But state police publicly acknowledged the latest case, an officer who was kidnapped from his home on Thursday, killed and his body dumped on a highway.

  Guanajuato-based security analyst David Saucedo said there have been many cases.

  “A lot of them (officers) have decided to desert. They took their families, abandoned their homes and they are fleeing and in hiding,” Saucedo said. “The CJNG is hunting the elite police force of Guanajuato.” -AP

  According to one Guanajuato news outlet, Poplab, at least seven police officers have been killed on their days off so far this year. In January, a female state police officer was tortured and killed, after gunmen went to her home and murdered her husband first. Her bullet-ridden body was then dumped. Poplab adds that Guanajuato has had the highest number of cops killed of any Mexican state for at least three years – with at least 262 police officers having been killed.

  “Unfortunately, organized crime groups have shown up at the homes of police officers, which poses a threat and a greater risk of loss of life, not just for them, but for members of their families,” reads a May 17 decree by the Guanajuato state government, which promises to provide an unspecified amount of funding for protecting the police and prison officials.

  “They have been forced to quickly leave their homes and move, so that organized crimes groups cannot find them,” the decree continues.

  According to Saucedo, the security analyst, “This is an open war against the security forces of the state government.”

  Tyler Durden
  Mon, 05/31/2021 – 21:00

• Melbourne Lockdown May Be Extended As Latest COVID Cluster Rises To 51
  Melbourne Lockdown May Be Extended As Latest COVID Cluster Rises To 51

  Australia and New Zealand have managed to keep COVID cases and deaths at a minimum thanks largely to their isolated status, which has enabled both countries to “raise the drawbridge”, so to speak, keeping out most foreigners since the start of the crisis.

  

  But even with Australia’s notoriously stringent COVID-19 restrictions, a few cases have managed to slip by. In the face of the biggest cluster uncovered in months, Melbourne and the surrounding Victoria State entered their 4th lockdown last week. Though it was only supposed to last a week, that could soon change as more cases are confirmed.

  

  Source: Worldometer

  Reuters reports that 5 new cases were discovered over the last 24 hours, bringing the total number in the Melbourne cluster to 51.

  Australia’s second-most populous state of Victoria, the epicentre of the country’s latest coronavirus hotspot, reported 11 new cases of community transmission on Monday and authorities warned the situation could worsen in coming days.

  The state officially reported five new cases in the 24 hours to midnight. At a press conference on Monday, authorities announced a further six cases were recorded after the late night cut-off which will reflect in Tuesday’s data, taking the current cluster to 51.

  Victoria went into a strict seven-day lockdown on Friday after new COVID-19 infections in the state capital Melbourne ended its three-month run of zero community cases. Authorities identified several Melbourne schools, supermarkets, department stores and gyms among hundreds of exposure sites.

  The rising tally has raised questions about whether the current lockdown might be extended, since several cases have been connected to a nursing home, and another deadly nursing home outbreak is exactly what Australia’s public health authorities are trying to avoid.

  Authorities are concerned about the virus taking hold in aged care homes after two workers and one resident at the Arcare facility in Melbourne tested positive, the home operator said in a statement.

  Another resident is being re-tested for COVID-19.

  Victoria endured one of the world’s strictest and longest lockdowns last year to suppress a second wave of COVID-19 that killed more than 800 people in the state, accounting for 90% of Australia’s total deaths since the pandemic began. Hundreds of elderly Victorians in residential aged care facilities were among the fatalities.

  The Australian government has faced criticism for the country’s relatively slow vaccine rollout, as well as for its citizens’ reluctance to take the AstraZeneca jab following cases of extremely rare blood clots. Overall, Australia has been among the most successful globally in curbing the pandemic thanks to swift contact tracing, snap lockdowns and strict social distancing rules, with 22,275 local cases and 910 deaths.

  Tyler Durden
  Mon, 05/31/2021 – 20:30

• Here Is The Most Important Number In The Biden Budget
  Here Is The Most Important Number In The Biden Budget

  While there was far more than met the eye in Biden’s $6 trillion budget (released late on Friday ahead of the “long weekend” as if Joe desperately hoped nobody would read it as it pissed off both conservatives as well as socialists) as discussed last week his budget proposal to Congress did reveal what Goldman has called the “most important number” in the budget – it calls for an increase in the deficit of $800BN over 10 years (0.3% of GDP over that period) to accommodate his “American Jobs Plan” (AJP) and “American Families Plan”(AFP). While the amount is not surprising, according to Goldman this is the first time the White House has formally shown the net effect of their proposals over the ten-year period Congress will use when it considers them.

  Why is this important?

  As Goldman explains, this figure will be relevant to the congressional debate, as Democratic leaders will need to choose a dollar figure to include in a forthcoming budget resolution that directs the committees that will craft the fiscal package. Whatever figure they choose figure will set a limit on the reconciliation legislation that follows. In most recent budget resolutions, the directive has come in the form of a directive to increase the budget deficit by a certain amount. However, congressional leaders could also specify separate spending directives and tax directives. In either case, once the amount is set, the legislation that follows may not increase the deficit by more than directed.  While congressional Democrats are free to choose a different amount, the Biden budget is the first  formal indication from any of the key decisionmakers regarding how much they propose to increase the deficit to fund their proposals.

  Besides the formalized deficit number, most of the details in the budget were already previewed in White House releases over the last several weeks. The White House already announced the two major proposals, the AJP and AFP (American Jobs and Families Plans), several weeks ago, and there were few other policy proposals in the budget outside of those plans. For the most part, the specific figures in the budget match fairly closely with what the White House had already laid out. These plans are summarized in the table below.

  

  As for the “6 trillion proposal”, Goldman expects Congress to scale back the proposal, “with a risk that it is scaled back more than we have been expecting.” Goldman’s forecast assumes that Congress enacts a package of slightly more than $3 trillion, with tax increases of around half this much. However, for the first time since the start of the pandemic, the risks to Goldman’s fiscal assumptions appear skewed to the downside.

  Why? Because if congressional leaders adopt the White House position that the total deficit impact of the forthcoming fiscal package should be kept to around $800bn over ten years (i.e., the “most important number”), this would mean that Congress would need to raise taxes much more than expected (which is unlikely as even centrist democrats have balked), or increase spending far less than expected.

  And with regard to taxes, Goldman expects less than half of the Biden proposals to become law:

  Specifically, we assume Congress will pass a 25% corporate rate, rather than the 28% the White House proposes, and that congress will substantially scale back the corporate tax increases on international income. We expect the top marginal individual rate to increase as proposed, but the capital gains rate is more likely to settle around 28% and that the increase is unlikely to take effect retroactively, as there appears to be tepid support for a capital gains rate increase among some centrist Democrats and making the tax hike retroactive could reduce support further.

  Meanwhile, as noted above, the budget highlights the smaller scale of any additional fiscal boost. The budget proposes to increase the deficit by $118bn (0.5% of GDP) in FY2022, and $224bn (0.9%of GDP) in FY2023. Spending would increase by more than this—$265bn (1.1%) and$530bn (2.2%)—but around half of this would be offset with tax increases. These are big numbers in a normal policy and economic environment, but this amounts to only a fraction, on an annual basis, of the fiscal support Congress has provided over the last year. The chart below shows the Biden Administration’s estimate of the proposals effect on the budget deficit over the next ten years.

  

  What happens next? We expect Congress to begin moving forward on these proposals next month.

  Although bipartisan discussions on an infrastructure package are continuing, the already low odds of success appear to be dwindling further. With a nearly $1.5 trillion gap between the White House’s proposal and the Senate Republican offer, and even less overlap in how to finance the new spending, it is hard to see how a bipartisan agreement will come together. Instead, congressional Democrats are likely to move forward with one large reconciliation bill, requiring only 51 votes in the Senate, that encompasses both of President Biden’s major proposals (the AJP and AFP).

  Here, Goldman assumes that the House and Senate Budget Committees will begin to move forward with the irrespective budget resolutions by mid-June, which will lay the procedural groundwork for the reconciliation bill and, as described above, set a limit on the deficit impact. It is possible that the House will begin to pass legislation in committee in June, but full House passage of the actual reconciliation bill will likely take until July.  The Senate could start on the bill in July, but passage in September or October looks more likely than July at this point.

  Tyler Durden
  Mon, 05/31/2021 – 19:54

• 61-Year-Old Woman Living Near Wuhan Lab May Have Been 'Patient Zero' – Three Weeks Before CCP Claims First Case
  61-Year-Old Woman Living Near Wuhan Lab May Have Been ‘Patient Zero’ – Three Weeks Before CCP Claims First Case

  Three weeks before China admitted that a mysterious virus was circulating in the city of Wuhan, a 61-year-old woman who lived about a mile from several bat research facility was known as “Patient Su” at a local hospital, according to the Daily Mail.

  Her identity was accidentally revealed after a leading Chinese official sent a screen-grab to a medical journal which partially revealed personal information, including the fact that she was admitted to the Rongjun Hospital in Wuhan, and “almost certainly lived in the Kaile Guiyan community on Zhuodaoquan Street, about 600 metres from the medical centre.”

  

  What’s more, “Patient Su” became ill three weeks before China claimed anyone had been stricken with the novel virus.

  The academic then detailed two more suspected cases reported to Wuhan doctors on November 14 and 21, along with several others before December 8 – the date that China gave to the World Health Organisation for the ‘earliest onset case’.

  The Health Times article included a screenshot of the two November cases on the professor’s database. Although personal details were blurred out, some were visible, including the hospital name and home district.

  They show Patient Su was treated at Rongjun Hospital in Wuhan and, given the building and street numbers, almost certainly lived in the Kaile Guiyan community on Zhuodaoquan Street, about 600 metres from the medical centre. -Daily Mail

  Patient Su also lived close to a stop for the high-speed rail line believed to have played a key role in spreading the virus around the city of 11 million people, according to the report. 

  Both the hospital and Su’s presumed residence are in the Hongshan district, where both China’s CDC and a downtown site run by the Wuhan Institute of Virology were located less than a mile away. According to former lead US State Department investigator David Asher, three researchers became ill with a mysterious respiratory condition in November 2019 – with the wife of one scientist dying.

  

  One Washington source told The Mail on Sunday that US intelligence on the Wuhan researchers was collected in late 2019 in data-scraping from routine surveillance. It is thought to include tapped phone conversations, texts and emails.

  He said it was not discovered until efforts were intensified last year to investigate the pandemic’s origins and any possible links with Wuhan laboratories – and that it is backed by testimony from a source with access to one of the units. -Daily Mail

  The Wall Street Journal last week reported on the three ill lab workers who ended up in the hospital – claims which Beijing furiously disputes. Meanwhile, US President Joe Biden has ordered a 90-day intelligence review after it was revealed that US intelligence agencies have been sitting on a ‘raft’ of un-analyzed intelligence gathered during the course of their investigation – largely because establishment minions wrote it off as a partisan witch hunt.

  

  “The time has come for China to open up all its files so the world can find the truth about the origins of this pandemic,” said Tom Tugendhat MP, Chairman of UK’s foreign affairs committee. “We cannot protect against future risks if there is not recognition that we all need to share knowledge and learn from any mistakes.”

  Covering up the report

  Professor Yu Chuanhua, professor of biostatistics at Wuhan University, was the one who revealed that Patient Su fell ill three weeks before the official disclosure date. According to the Daily Mail, however, China is hard at work performing yet more damage control.

  Professor’s Yu’s interview with Health Times took place on the day China’s health authorities issued a silencing gag on the novel coronavirus as President Xi Jinping tried to regain control of the situation.

  Yu rang the journalist within two days to retract this information, claiming the dates had been entered incorrectly and all the other suspected cases before December 8 needed verification.

  The details were discovered by Gilles Demaneuf, a member of the ‘Drastic’ group of online digital activists who have uncovered many of the facts seen as contradicting the official Chinese narrative that Covid-19 was a disease that crossed over naturally from animals. -Daily Mail

  “We were able to pinpoint the exact name, age and address of a very early suspected case nearly one month before the official first case,” said Demaneuf, a French data scientist who works for a New Zealand bank. “That address is right next to the subway line No 2 and also not far from a People’s Liberation Army hospital that treated some of the other earliest cases.”

  Demaneuf argues that the new findings highlight how many more clues might be accessible if people continue to pursue the lab leak theory, rather than “wishful acceptance at face value of statements from China.”

  Tyler Durden
  Mon, 05/31/2021 – 19:30

• Who Watches The Border In Mexico?
  Who Watches The Border In Mexico?

  By Noi Mahoney of FreightWaves,

  Transporting goods in and out of Mexico can be a challenge for both experienced and new shippers or logistics professionals.

  

  U.S. Customs and Border Protection (CBP) is tasked with assessing all commercial or pedestrian traffic entering the United States by airplane, overland vehicle, ship or on foot. However, in Mexico, about 10 different organizations are tasked with implementing customs clearance, issuing permits and certificates of imports/exports and protecting the border, including the Mexican army, the Guardia Nacional and the federal Tax Administration Service (SAT). 

  In July 2020, Mexican President Andrés Manuel López Obrador put the army in charge of customs at border crossings and seaports across the country. The move was aimed at fighting corruption and drug smuggling. The SAT was previously in charge of customs but has a long history of corruption, according to Obrador and media reports.

  “We have taken this decision about management of the port because of the mismanagement, the poor administration of the seaports, the corruption, the smuggling of drugs into the country through these ports,” Obrador said during a July 19 press conference. “Ports, and especially customs, have long been enclaves of corruption. It is not just a matter of capacity, of professionalism, it is of honesty.”

  SAT, under the army’s supervision, still operates the day-to-day customs transactions across Mexico’s ports, collecting customs taxes as goods cross the border, as well as applying fiscal and customs laws. 

  Mexico has 49 customs offices or districts around the country overseen by SAT. They include the border cities of Nuevo Laredo, Ciudad Juárez, Tijuana, Reynosa, Matamoros and Nogales, Arizona. 

  SAT has three bureaus involved in the country’s foreign trade. These are General Administration of Customs, General Administration of Foreign Trade Audit and the General Legal Administration.

  Depending on the type of goods, other federal authorities could also intervene in the transport operations of goods to and from Mexico. Other Mexican agencies that are involved in customs clearance include:

  • Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food issues certificates of import and export and inspects goods for human consumption.

  • Ministry of National Defense grants import and export permits and inspects goods (weapons, cartridges and explosives) during customs clearance in Mexico.

  • Secretary of Health issues the sanitary import and export authorizations and verifies and inspects certain goods in accordance with regulations on health supplies.

  • Secretariat of Environment and Natural Resources issues import and export authorizations and inspects goods in regard to the protection of the environment.

  • Secretary of Energy issues the permits for the import and export in Mexico of hydrocarbons, nuclear, radioactive materials and fuels.

  In 2020, Mexico’s annual customs revenue from foreign trade was $49.4 billion, according to SAT.

  Tyler Durden
  Mon, 05/31/2021 – 19:00

• Intel CEO Pat Gelsinger Says Semi Shortage Could Last "A Couple Years"
  Intel CEO Pat Gelsinger Says Semi Shortage Could Last “A Couple Years”

  Brace for more pessimistic news about the global semiconductor shortage…

  Intel is now going on the record and doubling down on statements that its CEO made on 60 Minutes earlier this year, stating that it could take “several years” for the current supply shortage of semiconductors to be resolved. 

  CEO Pat Gelsinger said that the pandemic-inspired “work from home” trend caused a “cycle of explosive growth in semiconductors”, according to Reuters. 

  “But while the industry has taken steps to address near term constraints it could still take a couple of years for the ecosystem to address shortages of foundry capacity, substrates and components,” Gelsinger commented. 

  Gelsinger also reiterated Intel’s plans to expand: “We plan to expand to other locations in the U.S. and Europe, ensuring a sustainable and secure semiconductor supply chain for the world.”

  Intel is trying to keep pace with Samsung and Taiwan Semiconductor – both of which also have plans to expand, including into the U.S. – to increase semi production. 

  We noted in mid-May that TSMC had plans of “doubling down” and vastly increasing its investment for production in Arizona. The chipmaking giant said at the time it was “weighing plans to pump tens of billions of dollars more into cutting-edge chip factories in the U.S. state of Arizona than it had previously disclosed”.

  The company had already said it was going to invest $10 billion to $12 billion in Arizona. It now appears to be mulling a more advanced 3 nanometer plant that could cost between $23 billion and $25 billion. The changes would come over the next 10 to 15 years, as the company builds out its Phoenix campus.

  

  The move would put TSMC in direct competition with Intel and Samsung for subsidies from the U.S. government. President Joe Biden has proposed $50 billion in funding for domestic chip manufacturing. 

  Commerce Secretary Gina Raimondo, in early May, called for a “major increase” in U.S. production capacity of semiconductors. She commented: “Right now we make 0% of leading-edge chips in the United States. That’s a problem. We ought to be making 30%, because that matches our demand. So, we will promise to work hard every day, and in the short term also see if we can have more chips available so the automakers can reopen their factories.”

  Tyler Durden
  Mon, 05/31/2021 – 18:30

• Rep. McCaul Calls COVID Virus Origin "Worst Cover-Up In Human History"
  Rep. McCaul Calls COVID Virus Origin “Worst Cover-Up In Human History”

  Authored by Isabel van Brugen via The Epoch Times,

  Rep. Michael McCaul (R-Texas), the lead Republican on the House Foreign Affairs Committee, on Sunday said it was “more likely than not” that COVID-19 originated from a lab accident, calling it the “worst cover-up in human history.”

  “I do think it’s more likely than not it emerged out of the lab, most likely accidentally,” McCaul said during an appearance on CNN’s “State of the Union.”

  “Let me say, this is the worst cover-up in human history that we’ve seen resulting in 3.5 million deaths, creating economic devastation around the globe.”

  His remarks come amid calls for a deeper probe into the origins of the CCP (Chinese Communist Party) virus following widespread concerns that the pandemic may have been sparked by a laboratory accident in China’s central city of Wuhan. President Joe Biden has ordered the U.S. Intelligence Community (IC) to ramp up efforts to investigate the virus’s origins.

  

  Infectious disease expert Dr. Anthony Fauci admitted last week that he’s now “not convinced” that COVID-19 developed naturally, and called for a deeper investigation into its origins.

  Early reports about an outbreak of the CCP virus first appeared in Wuhan in late 2019, when a cluster of cases was reported by state-controlled media to be linked to a local wet market. More than a year later, the origins of the virus remain unknown, although the possibility that the virus leaked from a laboratory at China’s Wuhan Institute of Virology (WIV) is now receiving wider recognition.

  The Wall Street Journal reported on May 23 that three researchers at the WIV were hospitalized in November 2019 with symptoms consistent with seasonal flu and COVID-19. The newspaper cited unnamed U.S. government sources familiar with a previously undisclosed U.S. intelligence report.

  “That was suppressed by the Chinese Communist Party,” McCaul said, referring to the hospitalizations of the three researchers.

  McCaul said Biden’s calls for a deeper probe into the origins of the CCP virus were “long overdue,” and called on the United States to “pull our supply chain” out of China as a “punitive” response.

  “My response to this whole thing is supply chain. We need to pull our supply chain out of the region, that being medical supply, rare earth mineral supply,” the lawmaker said.

  He also warned that the president’s investigation could be inconclusive because “they [Beijing] have destroyed everything at the lab.”

  White House press secretary Jen Psaki, said on May 24 that the Biden administration has “repeatedly called for the WHO to support an expert-driven evaluation of the pandemic’s origins that is free from interference or politicization.”

  “Now, there were phase one results that came through. We were not—during that first phase of the investigation, there was not access to data, there was not information provided. And now, we’re hopeful that WHO can move into a more transparent, independent phase two investigation,” Psaki said.

  Tyler Durden
  Mon, 05/31/2021 – 18:00

• Florida Rock Concert Sells $18 Tickets For Vaxxed Fans; $1,000 For Non-Vaxxed
  Florida Rock Concert Sells $18 Tickets For Vaxxed Fans; $1,000 For Non-Vaxxed

  It’s not like we didn’t tell you so… 

  The introduction of COVID status certificates is creating a two-tier society whereby vaxxed people enjoy their full rights and other perks, and non-vaxxed are heavily penalized.  

  The latest example is in Florida, where a concert promoter for a future rock show this summer in Tampa Bay charges $18 per ticket for vaxxed fans and $999.99 for non-vaxxed fans, according to Tampa ABC affiliate WFTS. 

  “To be eligible for the DISCOUNT, you will need to bring a government-issued photo ID and your PHYSICAL COVID-19 Vaccination Record Card (if you have lost it keep reading, we got you). You will need to have had your second shot of Pfizer or Moderna, or your single shot of Johnson and Johnson COVID-19 vaccine on or before 6/12/2021,” Paul Williams of Leadfoot Promotions wrote on his website where tickets can be bought. 

  “If you do not care about the discount, tickets are available for a flat rate of $999.99,” continued Williams . 

  

  The concert is set to take place on June 26 at the VFW Post 39 venue in St. Petersburg. It will feature appearances from three rock bands: Teenage Bottlerocket, MakeWar, and Rutterkin.

  “We’re all vaccinated. We encourage everyone to get vaccinated so we can see you in the pit,” Ray Carlisle, singer from Teenage Bottlerocket, told WFTS.

  This is just another example of COVID creating vast inequalities among society. Vaccine status certificates could worsen social divisions wherever they are used. Those who are vaxxed can return to everyday life, while those who aren’t vaxxed will be left out in the cold. 

  So what about the people who have recovered from the virus and have developed antibodies and have opted out of vaccines? 

  They are also left out, despite a new study from the University in Melbourne, Australia, which provides evidence that immunity triggered by the infection will be extraordinarily long-lasting. 

  Why can’t people who have the antibodies achieve the same status as those who have been vaxxed? 

  Tyler Durden
  Mon, 05/31/2021 – 17:30

• Memorial Day: Remember Political Lies That Caused Soldiers To Die
  Memorial Day: Remember Political Lies That Caused Soldiers To Die

  Authored by James Bovard via JimBovard.com,

  On Memorial Day, the media do their usual sacralizing of war. Instead, it should be a day for the ritualized scourging of politicians.

  During the last 70 years, their lies have resulted in the unnecessary deaths of almost 100,000 American soldiers and millions of foreigners. And yet, people still get teary-eyed when politicians take the stage to talk about their devotion to the troops.

  

  On Memorial Day 2011, for instance, the Washington Post included numerous touching photographs of graves, recent widows or fatherless kids by the headstones, and stories of the troops’ sacrifices. The Post buried a short article in the middle of the A-Section (squeezed onto a nearly full-page ad for Mattress Discounters) about the U.S. military killing dozens of Afghan civilians and police in a wayward bombing in some irrelevant Afghan province. The story’s length and placement reflected the usual tacit assumption that any foreigner killed by the U.S. military doesn’t deserve to be treated as fully human.

  The Washington Post celebrations of Memorial Day never include any reference to that paper’s culpability in helping the Bush administration deceive America into going to war against Iraq. When Post reporters dug up the facts that exposed the Bush administration’s false claims on the Iraqi peril, editors sometimes ignored or buried their revelations. Washington Post Pentagon correspondent Thomas Ricks complained that in the lead-up to the U.S. invasion of Iraq, “There was an attitude among editors: ‘Look, we’re going to war, why do we even worry about all this contrary stuff?’”

  The Post continued aiding the war party by minimizing its sordidness. When the Bush administration’s claims on Iraq’s nuclear-weapons program had collapsed, the Washington Post article on the brazen deceits was headlined, “Depiction of Threat Outgrew Supporting Evidence.” According to Post media columnist Howard Kurtz, the press are obliged to portray politicians as if they are honest. He commented in 2007, “From August 2002 until the war was launched in March of 2003 there were about 140 front-page pieces in the Washington Post making the administration’s case for war. It was, ‘The President said yesterday.’ ‘The Vice President said yesterday.’ ‘The Pentagon said yesterday.’ Well, that’s part of our job. Those people want to speak. We have to provide them a platform. I don’t have [sic] anything wrong with that.”

  

  World War I: Transport of the Wounded. Oil painting by Ugo Matania. https://wellcomeimages.org/indexplus/image/V0018185.html [Wikimedia]

  The Post was not alone in its groveling to war. Major television networks behaved like government-owned subsidiaries for much of the period before and during the Iraq War. CNN chief news executive Eason Jordan explained a month after the United States attacked Iraq, “I went to the Pentagon myself several times before the war started and met with important people there and said, for instance, at CNN, ‘Here are the generals we’re thinking of retaining to advise us on the air and off about the war,’ and we got a big thumbs-up on all of them. That was important.” Jessica Yellin, a CNN correspondent who formerly worked for MSNBC, commented in 2008, “When the lead-up to the war began, the press corps was under enormous pressure from corporate executives, frankly, to make sure that this was a war that was presented in a way that was consistent with the patriotic fever in the nation and the president’s high approval ratings.” NBC news anchor Katie Couric stated that there was pressure from “the corporations who own where we work and from the government itself to really squash any kind of dissent or any kind of questioning of it.”

  Before the war, almost all the broadcast news stories on Iraq originated with the federal government. PBS’ Bill Moyers noted that “of the 414 Iraq stories broadcast on NBC, ABC, and CBS nightly news, from September 2002 until February 2003, almost all the stories could be traced back to sources from the White House, the Pentagon, and the State Department.”

  But this record of servility and deceit has not slackened the media’s enthusiasm to drench Memorial Day with sanctimony.

  In reality, Memorial Day should be a time to remember the government’s crimes against the people. Politicians have perennially sent young Americans to die for false causes or on wild-goose chases.

  Over the past century, war memorials have become increasingly popular. However, most of the memorials do little or nothing to inform people of the chicaneries or deceits that paved the way to or perpetuated the war. It would be a vast improvement if each war memorial also had an adjacent monument of major lies—such as an engraved plaque listing the major deceits by which the American public were swayed to support sending American boys off to die for some grand cause.

  

  UH-1D Operation MacArthur Vietnam 1967 [Wikimedia]

  The Vietnam War memorial in Washington, for instance, lists the names of each American killed in that conflict. If that memorial could be complemented by excerpts from the Pentagon Papers—or from some of the major admissions of deceit by some of that war’s policymakers—the effect on the public would be far more uplifting.General Patton said that an ounce of sweat can save a pint of blood. Similarly, a few hours studying the lessons of history can prevent heaps of grave-digging in the coming years. President Trump has saber-rattled against Iran, North Korea, Syria, and other nations. His bellicose rhetoric should spur Americans to review the follies and frauds of past wars before it is too late to stop the next pointless bloodbath.Memorial Day can benefit from the creativity of free spirits across the board. Tom Blanton, the mastermind of the website Project for a New American Revolution, proposed in an exchange on my website changing Memorial Day to make it far more realistic:

  It used to be that Memorial Day was to honor dead soldiers. In recent years, we are asked to also honor veterans (who already have a day) and active duty members of the armed services. This may be an indication that the politicians feel there aren’t enough dead soldiers…

  I think Memorial Day should simply be renamed Tombstone Day and people should decorate their yards with styrofoam tombstones like they do for Halloween. True-believers might even consider a few flag-draped coffins made of cardboard and maybe hanging dismembered arms and legs made of rubber from their trees.

  Blanton’s proposal would provide a shot in the arm for party stores during the slow period between Valentine’s Day and Halloween. And it would be a spark for conversations that were far more substantive than the usual flag waving.

  I would favor celebrating Memorial Day the way the British used to celebrate Guy Fawkes Day. Fawkes was the leader of a conspiracy in 1604 to blow up the Parliament building in London. Until recently, the British celebrated the anniversary of that day by burning Guy Fawkes in effigy. (Government officials have recently banned such burnings on the grounds that something bad might happen because of the fires. The movie V for Vendetta probably made some bureaucrats nervous.)

  It would be appropriate to celebrate Memorial Day by burning in effigy the politicians whose lies led to the deaths of so many Americans (and innocent foreigners). Those whose images deserve to be torched run the gamut from Lyndon Johnson to Defense Secretary Robert McNamara to Richard Nixon to Bill Clinton (Kosovo) to George W. Bush (Iraq, et cetera), to Barack Obama (Afghanistan, Libya, et cetera). Donald Trump’s warring has primarily resulted in the killing of foreigners, but they are also worthy of remembrance and lamentation. The burnings could be accompanied by recitations of the major offenses against the truth and liberty that each politician committed.

  The best way to honor American war dead is to cancel politicians’ prerogative to send troops abroad to fight on any and every pretext. And one of the best steps towards that goal is to remember the lies for which soldiers died.

  Tyler Durden
  Mon, 05/31/2021 – 17:00

• IceCap Asset Management: The Story Of The Year
  IceCap Asset Management: The Story Of The Year

  Submitted by Keirh Dicker of IceCap Asset Management, as excerpted from the May 2021 report: “Californication”

  The Elephant in the Room

  Since we now know the extreme monetary policy implemented by the Americans is actually less extreme when compared to the Japanese, the Europeans, the Chinese, the Canadians and others, then there must be something else happening to create all of this (nonsensical) drama about the US Dollar being on the verge of collapsing.

  And this is where the reflation trade comes into play. Monetary theorists have always proclaimed that if you produce excessive stimulus via interest rate cuts, balance sheet expansion and especially when combined with excessive stimulus, then inflation is going to storm back with vengeance.

  And since it has been over 40 years since inflation was a problem for the developed world, most have become either dismissive about the potential for inflation, or have simply become ignorant towards this monetary demon.

  Here is the long-term showing core inflation in the USA.

  

  Inflation isn’t everywhere.

  It’s true how every picture tells a story, and this picture of American core inflation tells so many stories, that like many stories, they tend to become distorted over time.

  For starters, economic purists will forever proclaim that inflation is a phenomenon created by monetary policies. In other words, if a central bank prints money or does other excessive things, then inflation is right around the corner. And since no one wants to run into anything around any corner – this must be bad.

  Yet, a casual view of this US inflation chart clearly shows how from the late 1980s to present day, inflation has never been a challenge. And perhaps more importantly (or embarrassing for the inflation purists), inflation has not once jumped out from around any corner.

  Absolutely there were times when inflation was maybe about to become a concern – but those concerns were quickly swished away, not by the magical, deep thinking, parlor smoking, cognac drinking central bank economists – but instead simply by the explosion of the global economy.

  Yes, the great equalizer to any inflation concerns was globalization. The inclusion of increasing more emerging market economies into the manufacturing supply chains of the developed world did wonders for keeping prices lower.

  Have a gander at the chart next column.

  

  Inflation can be complicated.

  While the prices of some items have exploded upwards, the prices for other items haven’t budged. While some people dedicate their entire lives to studying inflation, and can support or refute any discussion about inflation – one incredibly important fact will always remain about inflation. The vast majority of people fall asleep at the mere mention of the word.

  And since IceCap Global Outlooks are not in the business of putting people to sleep, we’ll cut straight to the chase.

  To start with, and in our opinion, runaway inflation across the education and healthcare industries in the USA (and other countries) is a function of union powers for compensation and retirement packages across universities and colleges, and a function of the American approach to providing both private sector and public sector offerings across the healthcare sector.

  Put another way – these two very large and vitally important economic services are structured to GENERATE strong inflation. Price increases in these sectors have little to do with low interest rates and quantitative easing. The remaining items in the chart clearly show a lack of inflation over time. While computer costs have mostly remained the same over the years, and this would be thought of as a positive contributor to inflation, the productivity powers within these computers have expanded exponentially. In other words, consumers are absolutely getting more bangs for their bucks.

  This is also true for many other items within our shopping baskets.

  At the same time, we are not oblivious to the obvious concerns with the exclusion of house prices from most inflation calculations.
  For those who are not aware, the rapidly rising price of homes in your neighbourhood is excluded from inflation calculations.

  Yes, you heard us right.

  Economists have instead decided to use Owner Equivalent Rent (OER) as the factor to represent housing within inflation calculations. Let’s just say this metric kinda understates the true impact of housing on the average Joe’s wallet.

  Another interesting inflation phenomenon is the central bankers’ keen focus on trying to foster an economy that produces inflation at an average annual rate of 2%. What we find so incredibly ironic about this 2% target is how it was calculated, or deemed to be appropriate. Despite extraordinary volumes of publications, millions of hours of lectures, armies of PhDs, and lifetimes of tobacco filled pipes and bourbon enjoyed near gentle simmering fires; the 2% target is simply a number magically created out of thin air.

  The other interesting thing about our central bank power brokers, none of them can answer why inflation hasn’t been booming over the last 20 years.

  Central banks have failed.

  Since the 1999-2000 tech bubble burst, we’ve lived through nearly 15 out of 20 years with interest rates near 0%, while also having central banks implement quantitative easing.

  Yet, during these same 20 years, core inflation has been greater than the magical 2% target rate a grand total of 3 years.

  • Alan Greenspan failed.
  • Ben Bernanke failed.
  • Janet Yellen failed.
  • Wim Duisenberg failed.
  • Jean-Claude Trichet failed.
  • Mario Draghi failed.
  • David Dodge failed.
  • Mark Carney failed (twice).
  • Yasuo Matsushita failed.
  • Masaru Hayami failed.
  • Toshihiko Fukui failed.
  • Masaaki Shirakawa failed.
  • Sir Mervyn King failed.
  • Mark Carney (again) failed.

  Yes, all of these highly respected leaders of the central banks for USA, Japan, Eurozone, Canada, and Britain all failed to produce the 2% target rate of inflation. And just as these past central bankers failed with their primary objectives, it is highly likely their successors will also face an F on grading day.

  The reason for our confidence is rather simple – in the eyes of these past (and now current) central bankers, the reason for this complete lack of monetary success was due to one thing – our central bankers simply didn’t cut enough rates or print enough money.

  Yes, this is the point where Einstein would make a casual observation. In our minds, the IceCap observation is rather obvious – the reason inflation hasn’t soared to the moon is due to all of this central stimulus actually creating the opposite effect than what was intended.

  Instead of historic stimulus resulting in companies and households going on historical spending and buying sprees, it has had the opposite effect – larger amounts of private capital has decided to not participate in the economy. The irony of central banks inability to generate inflation lies in their solutions to generate inflation.

  For starters, central banks believe lower interest rates are good for everyone. Even suggesting otherwise will earn you scowls from those in charge. Yet, consistent and continuous low interest rates has absolutely massacred the risk-adverse saver’s ability to receive basic income levels to sustain their living standards.

  Remember, there are two sides to every interest rate story.

  One side is borrowing to either make a long-term investment, or to fund short-term needs – note that both actions are simply borrowing from future income streams.

  Quantitative Easing explained.

  The other side is receiving interest for lending to the borrower. For this individual, this represents cumulative past savings being used to fund current consumption. When these two sides are in equilibrium – it is adding value to the global economy. When these two sides are in disequilibrium – value is detracted from the global economy.

  By stacking the interest rate deck in favor of borrowers over savers, central banks today have created a period of disequilibrium. In other words, it shouldn’t be a surprise that our economies and financial systems are acting in unusual ways. In addition to the zero % interest rates, there’s another elephant in the central bank room. And while most people are now aware of this large, slow moving and space eating animal, most do not understand just how destructive it has been on the global economy.

  This elephant of course, is quantitative easing, or QE as the central banks like to say. In its very simple form, QE is an indirect attempt by central banks to suppress interest rates and keep them low everywhere for as long as possible. To achieve this non-capitalistic outcome, the following occurs:

  1. Government spends more than it collects in taxes
  2. Government must now borrow to make up the difference
  3. Government issues bonds which are bought immediately by the country’s largest commercial banks
  4. These large commercial banks, then immediately sell these very same bonds to the central bank.

  This process achieves two immediate outcomes:

  1. Central banks are in effect (in)directly funding governments budget deficits (and debt rollovers)
  2. These central bank purchases are so large, that they influence the price of these bonds, as well as all other bonds in the world. The net effect is lower interest rates.

  That’s not the whole story. There’s much more.

  To start with, in order for central banks to “buy” government bonds from the commercial banks, it needs money.

  Exactly where do they get this money? They simply create it out of thin air – they print it, using their keyboard. Now, this is the point where QE and money printing gets a bit confusing.

  Many refer to them as being the same. This isn’t true, there is a difference. It is true the central bank “prints” money” out of thin air. Yet, it is untrue that this printed money is unleashed into the economy and intentionally create inflation.

  Instead the following happens:

  1. Commercial bank buys new bonds from the government
  2. Central bank buys these same bonds from the commercial banks
  3. Central bank pays for these bonds by crediting the commercial banks’ RESERVE account at the central bank

  Credit Creation Remains Weak

  Note that these new reserves cannot be withdrawn by the commercial bank. In effect, QE (or money printing) actually remains clogged in the banking system and can only be released by the commercial bank via new loans or credit creation.

  

  It is this “clogged-up” portion of the entire QE process that makes us question whether the surging inflation story is really occurring due to QE.

  If QE was working as intended, bank loans should be surging in line with QE. Instead, the opposite is happening. Of course, if QE is not being directly injected into the economy – what else is the reason for surging prices across housing, commodity and stock markets?

  To begin with, one needs to look at the other side of the Keynesian Economic Theory gambit. By this of course, we are referring to the fiscal stimulus, or “stimmy” as it is now so un-eloquently known.

  Yes, seemingly everyone around the world has either directly or indirectly received their stimmy from the government.

  Initially, these checks were intended to act as income replacements due to the pandemic shutdowns. Yet, today it is now widely known that stimmy checks are  actually for amounts greater than what people were receiving as wages for pre-pandemic  work.

  As a result, many stimmy checks have been spent (or invested) on housing, renovations, DoorDash food, stock markets and crypto currencies.

  Supply chains have been greatly affected by pandemic shutdowns.

  Make no mistake, this fiscal flood has been the driver of the rapid recovery. At the same time, pandemic shutdowns have also had the effect of stopping manufacturing and production of many items and goods needed for a normal economic cycle.

  Here’s an example of price increases resulting from supply constraints. This table from Tyson Foods shows significant price increases, yet volumes are down across the board.

  

  When the shutdowns are combined with the stimmy checks, the final outcome is lower supplies smacking directly into higher demand for goods and services. The result is increasing inflation.

  The question of course is whether this is a temporary or permanent increase in inflation.

  Currently, practically every investment house and market pundit is warning that inflation is about to sustain itself, not inline with the 1970s experience, but rather inline with the German Weimar experience from the 1920s.

  And they claim it is all because of the US Federal Reserve printing money.

  As markets always move in extremes, the question to ask is “what happens if higher or hyper inflation isn’t around the corner?”

  The answer “a sharp reversal of the reflation trade.” Of course, another way to quickly offset all this talk and forecasts of inflation is a quick and sustained correction in equity markets.

  A 20% decline would very quickly take the oomph out of the inflation expectations game. Any sudden loss in paper wealth can very quickly change all of those house purchases, renovations, and big ticket purchases.

  The point we make is whenever the vast majority of the market is in agreement with any market movement, theme or future expected event – the probability of an unexpected event can very quickly create a scene where everyone is suddenly running towards the other side of the boat.

  The story of the year

  We acknowledge this whole inflation story is a bit unusual for many investors, yet it is absolutely THE story facing markets today. Let’s finish by squaring the inflation peg and how we believe this story will play out:

  1. central bank monetary policy is not creating inflation.
  2. Fiscal policy and especially stimmies, is creating inflation.
  3. Global shutdowns during 2020 April May June created disinflation and these data points will cause a base effect producing higher year over year inflation for these same months in 2021.
  4. Shutdowns and other pandemic responses has created supply disruptions. Unless these disruptions turn permanent, these effects will wane as supply comes back online.
  5. Any severe (-20% or more) equity market correction will have a negative wealth effect and will also reduce inflation expectations.
  6. Longer term Inflation will likely be driven by commodity prices and supply effects driven by non-pandemic factors.

  Imagine a year ago, you were told there would be a pandemic so severe that the entire global economy would be completely shuttered for several months, and then not returning to normal capacity 12 months later. Also imagine, you were told that the social and political reaction to the pandemic was so severe that all travel for business, vacations and education would be effectively halted. As well, imagine you were told that all central banks reduced interest rates to 0% or negative %, printed unlimited amounts of money (quantitative easing) and bailed out federal, state, and provincial governments. And finally, take a few minutes to imagine you were told that governments would mandate temporary deferment of debt, rental and lease payments, while also paying workers who lost their jobs and businesses who closed their doors.

  Considering the above, imagine you were then asked how would financial markets perform 1 full year out.

  Most objective people would disbelieve how a pandemic could have this effect on the world. And these same objective people would believe global financial markets would be a rather unpleasant experience.

  Instead, we have the opposite.

  We have a non-financial world where many of the day-day changes in our lifestyles are slowly becoming the new (and expected) norm.

  In addition, we have a financial-world where practically every market has gone parabolic.

  Whereas many people refer to the year 2020 as the year from hell, 2021 may eventually be referred to as the year from disbelief. Maybe Dionysus, the Red Hot Chilli Peppers and Hank Moody actually did infiltrate our global economic and financial systems. Or maybe, we are all simply experiencing a cognitive dissonance.

  More in the full May 2021 note below

  Tyler Durden
  Mon, 05/31/2021 – 16:00

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