Today’s News 20th March 2022

• Chris Hedges: Waltzing To Armageddon
  Chris Hedges: Waltzing To Armageddon

  Authored by Chris Hedges via ConsortiumNews.com,

  The Dr. Strangeloves, like zombies rising from the mass graves they created around the globe, are once again stoking new campaigns of industrial mass slaughter.

  

  The Cold War, from 1945 to 1989, was a wild Bacchanalia for arms manufacturers, the Pentagon, the C.I.A., the diplomats who played one country off another on the world’s chess board, and the global corporations able to loot and pillage by equating predatory capitalism with freedom. In the name of national security, the Cold Warriors, many of them self-identified liberals, demonized labor, independent media, human rights organizations, and those who opposed the permanent war economy and the militarization of American society as soft on communism. 

  That is why they have resurrected it.

  The decision to spurn the possibility of peaceful coexistence with Russia at the end of the Cold War is one of the most egregious crimes of the late 20th century. The danger of provoking Russia was universally understood with the collapse of the Soviet Union, including by political elites as diverse as Henry Kissinger and George F. Kennan, who called the expansion of NATO into Central Europe “the most fateful error of American policy in the entire post-Cold War era.” 

  This provocation, a violation of a promise not to expand NATO beyond the borders of a unified Germany, has seen Poland, Hungary, the Czech Republic, Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, Slovenia, Albania, Croatia, Montenegro and North Macedonia inducted into the Western military alliance.

  This betrayal was compounded by a decision to station NATO troops, including thousands of U.S. troops, in Eastern Europe, another violation of an agreement made by Washington with Moscow. The Russian invasion of Ukraine, perhaps a cynical goal of the Western alliance, has now solidified an expanding and resurgent NATO and a rampant, uncontrollable militarism. The masters of war may be ecstatic, but the potential consequences, including a global conflagration, are terrifying. 

  Peace has been sacrificed for U.S. global hegemony. It has been sacrificed for the billions in profits made by the arms industry. Peace could have seen state resources invested in people rather than systems of control. It could have allowed us to address the climate emergency. But we cry peace, peace, and there is no peace. Nations frantically rearm, threatening nuclear war. They prepare for the worst, ensuring that the worst will happen. 

  

  “The Butcher’s Cut,” illustration by Mr. Fish.

  So, what if the Amazon is reaching its final tipping point where trees will soon begin to die off en masse? So what if land ice and ice shelves are melting from below at a much faster rate than predicted? So what if temperatures soar, monster hurricanes, floods, droughts, and wildfires devastate the earth? In the face of the gravest existential crisis to beset the human species, and most other species, the ruling elites stoke a conflict that is driving up the price of oil and turbocharging the fossil fuel extraction industry. It is collective madness.

  The march towards protracted conflict with Russia and China will backfire. The desperate effort to counter the steady loss of economic dominance by the U.S. will not be offset by military dominance. If Russia and China can create an alternative global financial system, one that does not use the U.S. dollar as the world’s reserve currency, it will signal the collapse of the American empire. The dollar will plummet in value. Treasury bonds, used to fund America’s massive debt, will become largely worthless. The financial sanctions used to cripple Russia will be, I expect, the mechanism that slays Americans, if not immolation in thermonuclear war.

  Washington plans to turn Ukraine into Chechnya or the old Afghanistan, when the Carter administration, under the influence of the Svengali-like National Security Advisor Zbigniew Brzezinski, equipped and armed the radical jihadists that would morph into the Taliban and al Qaeda in the fight against the Soviets. It will not be good for Russia. It will not be good for the United States. It will not be good for Ukraine, as making Russia bleed will require rivers of Ukrainian blood.

  Pandora’s Box of Evils

  The decision to destroy the Russian economy, to turn the Ukrainian war into a quagmire for Russia and topple the regime of Vladimir Putin will open a Pandora’s box of evils. Massive social engineering — look at Afghanistan, Iraq, Syria, Libya or Vietnam — has its own centrifugal force. It destroys those who play God.

  The Ukrainian war has silenced the last vestiges of the Left. Nearly everyone has giddily signed on for the great crusade against the latest embodiment of evil, Vladimir Putin, who, like all our enemies, has become the new Hitler.

  The United States will give $13.6 billion in military and humanitarian assistance to Ukraine, with the Biden administration authorizing an additional $200 million in military assistance. The 5,000-strong EU rapid deployment force, the recruitment of all Eastern Europe, including Ukraine, into NATO, the reconfiguration of former Soviet bloc militaries to NATO weapons and technology have all been fast tracked.

  Germany, for the first time since World War II, is massively rearming. It has lifted its ban on exporting weapons. Its new military budget is twice the amount of the old budget, with promises to raise the budget to more than 2 percent of GDP, which would move its military from the seventh largest in the world to the third, behind China and the United States.

  

  German Chancellor Olaf Scholz, left, visits NATO Secretary General Jens Stoltenberg, on right, Dec. 11, 2021. (NATO)

  NATO battlegroups are being doubled in size in the Baltic states to more than 6,000 troops. Battlegroups will be sent to Romania and Slovakia. Washington will double the number of U.S. troops stationed in Poland to 9,000. Sweden and Finland are considering dropping their neutral status to integrate with NATO.

  This is a recipe for global war. History, as well as all the conflicts I covered as a war correspondent, have demonstrated that when military posturing begins, it often takes little to set the funeral pyre alight. One mistake. One overreach. One military gamble too many. One too many provocations. One act of desperation. 

  Russia’s threat to attack weapons convoys to Ukraine from the West; its air strike on a military base in western Ukraine, 12 miles from the Polish border, which is a staging area for foreign mercenaries; the statement by Polish President Andrzej Duda that the use of weapons of mass destruction, such as chemical weapons, by Russia against Ukraine, would be a “game-changer” that could force NATO to rethink its decision to refrain from direct military intervention — all are ominous developments pushing the alliance closer to open warfare with Russia.

  

  Polish President Andrzej Duda, left, and NATO Secretary General Jens Stoltenberg at the Lask air base in Poland on March 1. (NATO)

  Once military forces are deployed, even if they are supposedly in a defensive posture, the bear trap is set. It takes very little to trigger the spring. The vast military bureaucracy, bound to alliances and international commitments, along with detailed plans and timetables, when it starts to roll forward, becomes unstoppable. It is propelled not by logic but by action and reaction, as Europe learned in two world wars.

  Staggering Hypocrisy

  The moral hypocrisy of the United States is staggering. The crimes Russia is carrying out in Ukraine are more than matched by the crimes committed by Washington in the Middle East over the last two decades, including the act of preemptive war, which under post-Nuremberg laws is a criminal act of aggression. Only rarely is this hypocrisy exposed as when U.S. Ambassador to the United Nations Linda Thomas-Greenfield told the body: 

  “We’ve seen videos of Russian forces moving exceptionally lethal weaponry into Ukraine, which has no place on the battlefield. That includes cluster munitions and vacuum bombs which are banned under the Geneva Convention.”

  Hours later, the official transcript of her remark was amended to tack on the words “if they are directed against civilians.” This is because the U.S., which like Russia never ratified the Convention on Cluster Munitions treaty, regularly uses cluster munitions. It used them in Vietnam, Laos, Cambodia, and Iraq. It has provided them to Saudi Arabia for use in Yemen. Russia has yet to come close to the tally of civilian deaths from cluster munitions delivered by the U.S. military.

  The Dr. Strangeloves, like zombies rising from the mass graves they created around the globe, are once again stoking new campaigns of industrial mass slaughter. No diplomacy. No attempt to address the legitimate grievances of our adversaries. No check on rampant militarism. No capacity to see the world from another perspective. No ability to comprehend reality outside the confines of the binary rubric of good and evil. No understanding of the debacles they orchestrated for decades. No capacity for pity or remorse.

  

  March 24, 1986: President Ronald Reagan, right,  meeting with Elliott Abrams, center, about a trip to Central America. John Whitehead on left. (Reagan White House, Wikimedia Commons)

  Elliott Abrams worked in the Reagan administration when I was reporting from Central America. He covered up atrocities and massacres committed by the military regimes in El Salvador, Guatemala, Honduras and by the U.S.-backed Contra forces fighting the Sandinistas in Nicaragua. He viciously attacked reporters and human rights groups as communists or fifth columnists, calling us “un-American” and “unpatriotic.” He was convicted for lying to Congress about his role in the Iran-Contra affair. During the administration of George W. Bush, he lobbied for the invasion of Iraq and tried to orchestrate a U.S. coup in Venezuela to overthrow Hugo Chávez.

  

  Jan. 25, 2019: Elliott Abrams, left, with U.S. Secretary of State Mike Pompeo, addressing the media on Venezuela. (State Department)

  “There will be no substitute for military strength, and we do not have enough,” writes Abrams for the Council on Foreign Relations, where he is a senior fellow:

  “It should be crystal clear now that a larger percentage of GDP will need to be spent on defense. We will need more conventional strength in ships and planes. We will need to match the Chinese in advanced military technology, but at the other end of the spectrum, we may need many more tanks if we have to station thousands in Europe, as we did during the Cold War. (The total number of American tanks permanently stationed in Europe today is zero.) Persistent efforts to diminish even further the size of our nuclear arsenal or prevent its modernization were always bad ideas, but now, as China and Russia are modernizing their nuclear weaponry and appear to have no interest in negotiating new limits, such restraints should be completely abandoned. Our nuclear arsenal will need to be modernized and expanded so that we will never face the kinds of threats Putin is now making from a position of real nuclear inferiority.” 

  Putin played into the hands of the war industry. He gave the warmongers what they wanted. He fulfilled their wildest fantasies. There will be no impediments now on the march to Armageddon. Military budgets will soar. The oil will gush from the ground. The climate crisis will accelerate.

  China and Russia will form the new axis of evil. The poor will be abandoned. The roads across the earth will be clogged with desperate refugees. All dissent will be treason. The young will be sacrificed for the tired tropes of glory, honor and country. The vulnerable will suffer and die.

  The only true patriots will be generals, war profiteers, opportunists, courtiers in the media and demagogues braying for more and more blood. The merchants of death rule like Olympian gods.  And we, cowed by fear, intoxicated by war, swept up in the collective hysteria, clamor for our own annihilation.

  *  *  *

  Chris Hedges is a Pulitzer Prize–winning journalist who was a foreign correspondent for 15 years for The New York Times, where he served as the Middle East bureau chief and Balkan bureau chief for the paper. He previously worked overseas for The Dallas Morning News, The Christian Science Monitor and NPR. He is the host of the Emmy Award-nominated RT America show “On Contact.” 

  This column is from Scheerpost, for which Chris Hedges writes a regular column. Click here to sign up for email alerts.

  Tyler Durden
  Sat, 03/19/2022 – 23:30

• Where The World Regulates Cryptocurrency
  Where The World Regulates Cryptocurrency

  Some countries declare Bitcoin to be official legal tender while others announce outright bans on cryptocurrency. The world map below, created by Statista’s Katharina Buchholz – based on data collected by the Law Library of the U.S. Congress – shows where countries have been trying to stop the cryptocurrency hype and where crypto has been given more or less free reign.

  

  You will find more infographics at Statista

  One example of a country embracing cryptocurrency is El Salvador, where Bitcoin was declared an official currency in September of 2021 by populist president Nayib Bukele. The country also taxes and otherwise regulates cryptocurrency. El Salvador is in a special position because it does not have its own currency and instead relies on the U.S. dollar, like some other countries in the region.

  Other countries which are applying laws to regulate digital currencies probably wouldn’t go as far as El Salvador. Rather, these places – which are most typically developed countries – have been investing in projects to launch their own central bank digital currencies. This is arguably a very different approach to using blockchain technology than that of original cryptocurrencies, which are explicitly independent of any state control, but can be very volatile as a result. Among those exploring the concept are the U.S., European countries, Russia and Australia. India and Thailand, both of which are also broadly regulating cryptocurrency, already have more concrete plans to issue their own digital currencies.

  Ukraine was also among the countries which have been regulating cryptocurrency, but the nation went one step further on Wednesday when legislating a framework for the cryptocurrency industry in the country. The nation made the move after it received donations in crypto following its invasion by Russia. Rules like having to register or acquire a license for a crypto exchange also exist in the EU, the UK, Canada, the U.S., Mexico, Chile, Japan and Korea, among others.

  China was the first major economy to start issuing its national currency on the blockchain in early 2021. The country has taken a more extreme approach to regulating cryptocurrency by issuing an absolute ban on it. According to the Law Library of Congress, nine countries had so far taken this measure, while many more were implicitly banning the use of cryptocurrency through their other laws. This practice was most common in Africa, the Middle East and Asia.

  Tyler Durden
  Sat, 03/19/2022 – 23:00

• 2020 Election Nullification, Audit Bills Dead Or Dying In State Legislatures
  2020 Election Nullification, Audit Bills Dead Or Dying In State Legislatures

  Authored by John Haughey via The Epoch Times (emphasis ours),

  Nine of 10 bills filed in six states seeking to audit 2020 election results—including three that would have nullified Joe Biden’s victory—have fallen by the wayside as legislative sessions wind down.

  

  Seven bills seeking 2020 general elec­tion audits were filed in four states, Flor­ida, New Hamp­shire, South Caro­lina, and Tennessee. Only a New Hampshire measure proposing a review of one county’s 2020 results remains on the docket.

  Lawmakers in New Hampshire, Arizona, and Wisconsin filed 2022 legislation demanding the nullification of 2020’s election results with an audit to determine the winner. Only the embattled Wisconsin effort has a heartbeat.

  New Hampshire’s House Bill 1484, sponsored by Rep. Tim Baxter (R-Seabrook) advanced, got a hearing before the House Election Law Committee but, on March 12, the panel issued an “inexpedient to legislate” verdict, essentially killing it for the session.

  Under HB 1484, New Hampshire would hire an independent third party to conduct a full statewide forensic audit of ballots cast in the 2020 election, with the multimillion-dollar cost covered by private donations.

  Failed Resolution

  While HB 1484 is dead, another bill seeking only to audit election results in Merrimack County has secured one committee approval and remains viable.

  Arizona Rep. Mark Finchem’s (R-Oro Valley) House Concurrent Resolution 2033 seeking to nullify the state’s 2020 election was buried at introduction when House Speaker Rusty Bowers (R-Mesa) assigned it for approval to all 12 House committees. It has not been heard by one.

  The resolution calls on Congress to “set aside the results of the Maricopa, Pima, and Yuma County elections as irredeemably compromised and reclaim the 2020 Presidential Electors due to the irredeemably flawed nature of these elections that prevent the declaration of a clear winner of said presidential electors.”

  He said, “They can’t see to bring themselves to consider the evidence that has been laid before them.”

  Finchem said Bowers told him he was essentially killing the resolution because “he hadn’t seen the evidence and hadn’t seen the supporting jurisprudence. Well, I found the evidence and now that’s not good enough.”

  Last year, Finchem survived two election recalls in part for his outspoken support for a failed resolution seeking to block the state’s 11 electoral college votes for Biden and instead accept “the alternate 11 electoral votes” for Trump.

  “It is a case where if you don’t like the message, even if the message is right, you kill the messenger,” he said, calling for a ”show up or shut up public debate” with those who oppose a 2020 election audit.

  “We have a great place, the Hyatt Regency downtown [Phoenix]. They have a ballroom that will accommodate 800 people,” Finchem said. “On the stage, pros and cons making their case. The problem is there are no cons who want to come, none have the spinal fortitude to show up, The pros will show. All I have to do is pick up the phone and tell them when to be there. This is who the cons are—they’re afraid they will be found out.”

  As lawmakers, he said, it is their “solemn responsibility” to “safeguard the Constitution” and the sanctity of citizens’ votes. But not everybody agrees, he said.

  No Basis in Law

  “The people who fill the institutions, they love the status quo because this protects their power,” Finchem said, adding as far as he knows, Arizona is one of only “two states that recognize the Constitution and the pertinent judicial prudence and have received evidence—formally received evidence,” that the 2020 election should be nullified.

  That other state is Wisconsin where, on March 1, the Legislature’s Office of the Special Counsel published a 136-page report that calls for decertifying the 2020 election; providing a method for private citizens to challenge the state’s voter rolls; giving the power to certify elections to a “politically accountable body” rather than the governor and the elections commission; creating a way for presidential candidates to “assemble alternative slates of electors” and allowing post-certification challenges to election results.

  Despite the report, Joint Resolution 120, filed by Rep. Timothy Ramthun (R-Campbellsport) which calls for “reclaiming the electoral ballots for President and Vice President that were certified under fraudulent intent and purpose” has not advanced since it was filed Jan. 25 and referred to the House Rules Committee.

  Ramthun maintains if the Wisconsin Legislature decertifies the 2020 results and rescinds the state’s 10 electoral votes it could begin a process that ends with Biden ousted from office. Critics, even some supporters, say the proposal has no basis in state or federal law.

  Stand Earns Punishment

  Inaction on last year’s Legislative Audit Bureau (LAB) election analysis and demands for decertification have fostered division among Wisconsin Republicans with every member of Assembly GOP leadership issuing a joint statement accusing Ramthun and a staffer of spreading misinformation among lawmakers while continuing to demand House Speaker Robin Vos (R-Rochester) do more to overturn the 2020 election result.

  As punishment, Ramthun was denied legislative aides until Feb. 20 when legislative aide Erin Yeager was assigned to his office “20 hours a week to take care of 66,000 constituents.”

  Ramthun in February announced he would challenge “establishment” Republicans Kevin Nicholson and Rebecca Kleefisch for the party’s nod in the GOP August primary to take on incumbent Democrat Tony Evers in November’s gubernatorial race.

  There is “unfinished business” in examining issues related to the 2020 presidential election and not investigating it further is “an assault on our Constitution and it’s a national security issue,” he said in announcing his candidacy.

  Decertifying the 2020 election will be a key component of his campaign, Ramthun promised.

  “I want everything to be revisited and reviewed fully and forensic because if we’re not going to get closure in 2020 and justice, we’re going to need to continue to pursue that in every election until we get it right,” he said. “I won’t stop until we have justice so I’ll keep poking. I’m all in.”

  Tyler Durden
  Sat, 03/19/2022 – 22:30

• China Warns West's "Outrageous" Sanctions Are Forcing Nuclear-Armed Russia "Into A Corner"
  China Warns West’s “Outrageous” Sanctions Are Forcing Nuclear-Armed Russia “Into A Corner”

  On Saturday a high-ranking Chinese government official lashed out at the West’s sanctions regimen against Russia in the wake of the Ukraine invasion, blasting the far-reaching punitive measures which have also served to severely isolate Moscow as increasingly “outrageous”. 

  “The sanctions against Russia are getting more and more outrageous,” Vice Foreign Minister Le Yucheng told a security forum in Beijing, according to Reuters.

  

  Strongly suggesting the sanctions would only serve to harm common Russian citizens, he described that the West depriving the people of their overseas assets were ultimately “for no reason”. 

  “History has proven time and again that sanctions cannot solve problems. Sanctions will only harm ordinary people, impact the economic and financial system… and worsen the global economy.”

  He further hinted that US and EU sanctions would in the end only escalate the situation, as Reuters continues, he…

  acknowledged Moscow’s point of view on NATO, saying the alliance should not further expand eastwards, forcing a nuclear power like Russia “into a corner”.

  The unusually blunt Chinese reaction (given Beijing has appeared somewhat reluctant to weigh in too forcefully behind either side thus far, other than calling out NATO expansion) to the ratcheting Ukraine crisis comes the same day that Ukrainian President Zelensky’s office publicly urged Beijing to come out and condemn “Russian barbarism” in a public statement. 

  In a Twitter statement presidential aide Mikhailo Podolyak asserted “China can be the global security system’s important element if it makes a right decision to support the civilized countries’ coalition and condemn Russian barbarism.”

  🇨🇳 can be the global security system’s important element if it makes a right decision to support the civilized countries’ coalition & condemn 🇷🇺 barbarism. It is a chance to sit at the table as equals. The West must explain to Beijing how $1.6 trillion differs from $150 billion

  — Михайло Подоляк (@Podolyak_M) March 19, 2022

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

  It seems the implication behind the Chinese vice foreign minister’s fresh remarks might also be that if Russia is feeling pushed into a corner …so is Beijing – given that the past week has seen the Biden administration bring China’s growing cooperation with Russian into its crosshairs, with Biden warning his counterpart Xi Jinping in a Friday call that serious “consequences” follow if Beijing is found to be supplying Moscow with military equipment to aid its operations in Ukraine. 

  As on Chinese state TV pundit has put it…

  Can you help me fight your friend so that I can concentrate on fighting you later?

  — CGTN LIU Xin 刘欣 (@LiuXininBeijing) March 19, 2022

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

  Jake Sullivan has also this week warned against any possible Chinese help given to Russia for sanctions evasion. China has notably failed thus far to even use the words “invasion”, instead opting for vaguer words like “crisis” – even as the assault on Ukraine enters its fourth week.

  Tyler Durden
  Sat, 03/19/2022 – 22:00

• 19th Anniversary Of Iraq Invasion: US Says Troops Will Be There For More Years To Come
  19th Anniversary Of Iraq Invasion: US Says Troops Will Be There For More Years To Come

  Authored by Dave DeCamp via AntiWar.com,

  On the eve of the 19th anniversary of the US invasion of Iraq, the head of Central Command told Military Times that the US troop presence in the country will likely continue for years to come.

  The US invasion of Iraq started with airstrikes on March 19, 2003, and ground troops entered the country the following day. The initial “shock and awe” phase of the invasion lasted about six weeks and killed tens of thousands. According to the Iraq Body Count, about 7,400 Iraqi civilians were killed in this period.

  

  All US troops withdrew from Iraq in 2011 but returned to the country in 2014 to fight ISIS, a group that wouldn’t exist if not for the invasion and US intervention in Syria. Today, the US currently has about 2,500 troops in Iraq. At the end of 2021, the US formally changed its presence in Iraq from a combat role to an advisory one, but no troops were withdrawn.

  “As we look into the future, any force level adjustment in Iraq is going to be made as a result of consultations with the government of Iraq,” CENTCOM chief Gen. Frank McKenzie said. “And we just finished a strategic dialogue a few months ago — we believe that will continue.”

  While the US troops are in Iraq training the current government to fight ISIS, there are many factions in the country opposed to the US presence, including Iraq’s Shia militias. Most of the militias fall under the umbrella of the Popular Mobilization Forces (PMF), a group that was formed in 2014 to fight ISIS.

  In January 2020, the US killed PMF leader Abu Mahdi al-Muhandis alongside Iranian Gen. Qasem Soleimani with a drone strike in Baghdad. The assassinations enraged many in Iraq, and the country’s parliament voted to expel the US forces, but they stayed, and rocket attacks on US bases increased.

  Formally ending the combat mission was an attempt to placate those opposed to the US presence. But at the beginning of 2022, when it became apparent the US wasn’t leaving, attacks on bases housing US troops spiked again, highlighting the danger of the continued presence.

  The Economist has finally found a war it doesn’t like. pic.twitter.com/Lmh3sQAycS

  — Alan MacLeod (@AlanRMacLeod) March 16, 2022

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

  One reason the US doesn’t want to leave Iraq is that its bases in the country support the US occupation of eastern Syria. The US currently has about 900 troops in Syria where it backs the Kurdish-led SDF. On paper, the US presence is about fighting ISIS, but it is also part of Washington’s broader campaign against Damascus.

  The US maintains crippling sanctions on Syria that aim to prevent the country from rebuilding. The US also occupies the area where most of the country’s oil fields are, keeping the vital resource out of the hands of Damascus. Last year, Biden administration officials said that they had no plans to end the troop presence in Syria.

  Tyler Durden
  Sat, 03/19/2022 – 21:30

• Where Governments Have The Tightest Grip On The Internet
  Where Governments Have The Tightest Grip On The Internet

  Perhaps not entirely surprising to many, according to the 2021 Freedom House Freedom on the Net index, China was the country with the most controlled internet out of 70 nations assessed, scoring only 10 out of 100 possible index points.

  As Statista’s Katharina Buchholz details below, some of the other least free countries on the internet are restrictive regimes like Iran, Myanmar and Cuba.

  

  You will find more infographics at Statista

  Vietnam in rank 5 has also been taking cues from its close ally China, which asserts internet control via the so-called Great Firewall, a collection of gateways that controls all internet traffic going in and out of the country, enabling the Chinese government to filter it. Iran and North Korea also employ this method.

  The idea has become popular among Southeast Asian nations, with Cambodia and Thailand recently mulling the introduction of this draconian measure of internet control.

  Tight internet controls are also common in the Middle East and North Africa, with the United Arab Emirates, Saudi Arabia, Egypt and Bahrain raking highly.

  Russia came in a shared 11th place out of the 70 countries in the ranking. The report states that the blocking of content and platforms, disinformation campaigns, cyber attacks and persecution of users as well as a tightening of some cyber laws were happening in the country.

  Tyler Durden
  Sat, 03/19/2022 – 21:00

• Five Critical Factors Why Prices Will Stay High For Years
  Five Critical Factors Why Prices Will Stay High For Years

  Authored by Simon Black via SovereignMan.com,

  At approximately 9am local time on February 21, 1972, a Boeing 707 airplane dubbed Spirit of ‘76 landed in Shanghai’s Hongqiao airport.

  The airplane’s main door opened, and out walked US President Richard Nixon.

  The trip shocked the world. There had been no formal communication or diplomatic ties between the US and China for 25 years. And Nixon’s voyage not only normalized relations between the two countries, but it kickstarted decades of worldwide economic growth.

  Back then, the US was the richest and most powerful economy in the world. But as a consequence of that prosperity, the US was also a very expensive place to produce.

  US companies were on the lookout for inexpensive, foreign manufacturing hubs where they could cheaply produce their products and sell them back to the US market.

  China became that cheap manufacturing hub.

  Eventually China was producing just about everything from T-shirts to antibiotics. And because the cost of production was so low in China, consumers around the world benefited.

  Combined with cheap oil, a functioning global supply chain, and relative peace and stability, cheap Chinese production helped keep prices low and constrain inflation for decades.

  But these trends are rapidly coming to an end.

  For starters, China is now an economic superpower; many of its largest cities, in fact, have a per-capita GDP that exceeds the United States and Western Europe.

  Want to ensure you and your loved ones can survive and thrive, no matter what happens next? Download our FREE Ultimate Plan B Guide now to discover fully actionable strategies you can start putting in place right now…

  Wages have increased dramatically in China over the years because of this increase in prosperity, which means that it’s no longer cheap to manufacture most lower-end products there.

  A lot of manufacturing has already shifted to cheaper places like Vietnam, Bangladesh, etc. But even those countries are quickly becoming more expensive places to produce. And they don’t have nearly enough capacity to keep up with global manufacturing demand.

  Some large companies are starting to bring their manufacturing back home. This is becoming more popular now as global stability wanes.

  Plus businesses learned during the COVID-19 lockdowns, and the resulting global supply chain dysfunction, that manufacturing at home is more reliable.

  That may be true. But manufacturing in a ‘rich’ country is also a LOT more expensive.

  So, regardless of whether a business chooses to manufacture at home or abroad, they’re almost guaranteed to suffer higher production costs. And that means consumers will be paying more.

  This trend is a massive reversal from decades of cheap foreign production that kept prices low. But it only scratches the surface of why inflation will likely persist for years to come.

  (British economist Charles Goodhart, a former central bank official, describes this phenomenon in his new book The Great Demographic Reversal. It’s definitely worth reading to understand this trend.)

  

  Historic shifts in the labor market will also be a major contributor to inflation.

  For example, there have never been more retirees in the history of the world than there are right now. And their numbers are growing.

  According to Federal Reserve data, an additional 1.5 million people in the United States retired early during the first year of the pandemic. There will likely be more to come.

  Plus US Labor Department statistics show that millions of other individuals, including young people, abandoned the idea of working altogether because of the pandemic.

  Traditionally there’s a steady balance between the number of jobs in the economy, and the number of workers in the labor force. Sometimes there are shocks, like during the Great Recession in 2008, when millions of jobs vanished, practically overnight.

  Now the converse has taken place: millions of workers have vanished, practically overnight.

  The end result is that there are 11.3 million unfilled jobs in the United States– a record high– because so many people simply quit the labor force.

  Of course, another key labor trend is that younger workers aren’t interested in most traditional jobs.

  Countless teenagers aspire to be Instagram starlets, or to live-steam themselves playing video games for a living. They have little interest in construction, transportation, or manufacturing jobs.

  So, in summary, we have former ‘low cost’ manufacturing hubs becoming a lot more expensive. Plus a constrained work force back home that limits production and pushes costs higher.

  This is all highly inflationary.

  And there’s absolutely nothing the government or central bank can do about it. Gen Z 20-somethings aren’t going to suddenly decide to start working traditional jobs just because the Federal Reserve raises interest rates by 0.25%.

  Most likely the politicians will make it much worse– which is another key factor in future inflation.

  Nancy Pelosi stated on Friday that inflation was solely Vladimir Putin’s fault and insisted that their multi-trillion dollar deficit spending is “reducing the national debt” and “not adding to inflation.”

  The President, meanwhile, has blamed inflation on “greed”, while the Federal Reserve insists that higher prices are a result of supply chain dysfunction.

  Not one of these institutions– Congress, the White House, or the Fed– seems capable of looking at their own actions.

  The Fed refuses to consider that inflation is due to their dizzying expansion of the US money supply– the largest since 1943.

  Congress refuses to consider that inflation is due to their insane deficit spending– the largest ever in US history.

  And the White House refuses to consider that inflation is due to its fetish for anti-competitive regulations and constant attacks on capitalism.

  So, when the three key institutions charged with keeping inflation in check refuse to understand why there’s a problem, it’s hard to imagine they’re going to fix it.

  There are plenty of other lingering inflation factors as well; geopolitical conflict is obviously inflationary. COVID-19 continues to be very inflationary. Environmental fanaticism is inflationary.

  And just like the challenge of increased manufacturing costs, and labor market demographic trends, these issues cannot be magically fixed by politicians or central bankers.

  In essence, policymakers are completely powerless to do anything about inflation.

  There’s an irrational hope that inflation will quickly reverse, and prices will return to 2019 levels– just as soon as Putin leaves Ukraine… and the global supply chain dysfunction works itself out.

  But this is wishful thinking.

  First, both of those resolutions could take a very long time.

  But more importantly, the trends I outlined are much larger and could keep prices elevated for years to come.

  So, if your “Plan A” is depending on the government for prosperity and price stability, it’s time to take a hard look at your Plan B.

  *  *  *

  Alternative residency or citizenship generally forms the backbone of any robust Plan B. But there are WAY more things to consider. That’s why we created our 31-page Ultimate Plan B report to help you get to grips with this topic, and you can download the full, unabridged report here – 100% FREE.

  Tyler Durden
  Sat, 03/19/2022 – 20:30

• Flashback: World Superpowers Pledged To Avoid Nuclear War Less Than 90 Days Ago
  Flashback: World Superpowers Pledged To Avoid Nuclear War Less Than 90 Days Ago

  As Russia began amassing troops near the Ukrainian border, five of the world’s nuclear powers pledged not to use nukes in the event of a global war.

  

  “We believe strongly that the further spread of such weapons must be prevented,” reads a ‘rare’ joint statement by China, France, Russia, the UK and US, seemingly out of left field.

  “A nuclear war cannot be won and must never be fought,” the statement continues – echoing a 1985 joint statement from former US President Ronald Reagan and former Soviet leader Mikhail Gorbachev following a summit in Geneva amid the cold war.

  

  “Nuclear weapons — for as long as they continue to exist — should serve defensive purposes, deter aggression, and prevent war.”

  The curiously-timed statement by the five permanent members of the UN Security Council (P5) commits that nations will “pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control,” according to DW.

  The joint pledge was issued ahead of what was to be the latest review of the Treaty of the Non-proliferation of Nuclear Weapons (NPT).

  The tenth review session which was scheduled to take place at UN headquarters in New York this month, was postponed to later this year.

  China’s Xinhau media agency quoted Foreign Minister Ma Zhauxu as saying that the joint agreement “will help increase mutual trust and replace competition among major powers with coordination and cooperation.”

  Russia’s Foreign Ministry said in a statement: “We hope that in the current difficult conditions of international security, the approval of such a political statement will help reduce the level of international tensions.” -DW

  The Non-Proliferation Treaty was created in the 1970s to prevent the spread of nuclear weapons and related technology, with the ultimate goal of complete nuclear disarmament – while allowing for the peaceful use of nuclear power.

  Tyler Durden
  Sat, 03/19/2022 – 20:00

• Snowden Discusses Bitcoin's Lack Of Privacy
  Snowden Discusses Bitcoin’s Lack Of Privacy

  Authored by Shawn Amick via Bitcoin Magazine,

  • “Bitcoin is not an anonymous ledger,” said Edward Snowden.

  • “You get chain analysis people and whatnot who are doing fairly devious things with it,” he added, discussing companies focused on on-chain analysis.

  • Speaking on the privacy of Bitcoin, Snowden stated that “it’s really just private to the public, but it’s public to the prominent, shall we say.”

  Edward Snowden, whistle-blower and president of the Freedom of the Press Foundation – a San Francisco-based nonprofit dedicated to protecting journalists – recently took an interview to discuss Bitcoin, other cryptocurrencies, privacy, and nation-state influence.

  “Bitcoin is not an anonymous ledger, it is a truly public ledger, and those things are always out there,” Snowden explained as he recounted his experience with Wikileaks, in which there was a seemingly insurmountable amount of pressure from the U.S government to shut the organization and his story down.

  Bitcoin allowed “time and distance,” as Snowden said, which ultimately allowed him to communicate with and meet the necessary journalists that would eventually lead to his escape to Russia, as well as the release of his leak.

  

  Time and distance is an important distinction that is separate from the idea of safety. Possessing safety would assume Bitcoin was capable of hiding identity and traceability perpetually, however, Snowden knew this was not the case, nor was he taking extensive steps to be anonymous, as he explains in the interview.

  The mark against anonymity is not necessarily a critique, but rather a statement of fact when proper steps toward anonymity are not taken. Companies have an entire business model built on tracking Bitcoin and other cryptocurrency transactions, through which Bitcoin Magazine has reported stories on the traceability of transactions for donation causes.

  Snowden explored chain analysis companies saying, “You get chain analysis people and whatnot who are doing fairly devious things with it,” including objectives like “trying to get a financial edge out of the on-chain analysis.”

  Snowden addressed the idea of privacy as it relates to one’s capacity to discern or obtain information when compared to public capability of discerning or obtaining that exact same information.

  “When you think about Bitcoin having a public ledger, well, once a dollar enters the banking system, there is a private ledger that is available to the people who are performing financial surveillance,” he explains.

  “So it’s really just private to the public, but it’s public to the prominent, shall we say.”

  When asked why cryptocurrency and financial privacy are important for whistle-blowers, Snowden responded that “there’s this question we all have to ask ourselves: What is the role of the government in a free and open society?”

  Snowden went on to explain that it is important to examine the roles nation-states actually play in our lives, as it relates to the philosophical question of what role they should be playing. Snowden then brings to bear the consideration that an open and free society, or one that wishes to be so, must also do everything in its power to achieve its idyllic state.

  Tyler Durden
  Sat, 03/19/2022 – 19:30

• NOAA Warns US Megadrought Will Persist; May Impact Food Supply Chains 
  NOAA Warns US Megadrought Will Persist; May Impact Food Supply Chains 

  Abnormally dry to exceptional drought conditions are expected to persist across 60% of the continental U.S. as spring in the Northern Hemisphere begins. Forecasters expect little to no rain for certain parts of the western U.S. through June.

  From April to June, above-average temperatures are expected from Southwest to the East Coast and north through the Midwest, according to a new outlook published by the National Oceanic and Atmospheric Administration (NOAA). 

  NOAA’s map shows a greater than 50% chance of drought persistence for nearly 60% of the continental U.S. 

  

  “Severe to exceptional drought has persisted in some areas of the West since the summer of 2020, and drought has expanded to the southern Plains and Lower Mississippi Valley,” said Jon Gottschalck, chief, Operational Prediction Branch, NOAA’s Climate Prediction Center.

   “With nearly 60% of the continental U.S. experiencing minor to exceptional drought conditions, this is the largest drought coverage we’ve seen in the U.S. since 2013,” Gottschalck said. 

  The outlook also noted more than 50% of the U.S. will experience above-average temperatures this spring, with the greatest chances in the Southern Rockies and Southern Plains. 

  According to the U.S. Drought Monitor, at least 90% of nine western states are plagued with dry conditions, including all of California, Nevada, and Utah, and 99% of New Mexico. 

  

  NOAA’s latest forecast doesn’t bode well for the western U.S. farm industry as it could very well suggest the multiyear mega-drought (one of the worst in 1,200 years) could begin to impact the U.S. food supply and comes at a very inopportune time as the Russian invasion of Ukraine has choked the world of natural resources. 

  The U.S. and world are careening towards a food crisis. Perhaps it’s time to plant a garden and become independent as national and global food supply chains may begin to breakdown. 

  Tyler Durden
  Sat, 03/19/2022 – 19:00

• The Evolution Of Credit & The Growing Fiat Money Crisis
  The Evolution Of Credit & The Growing Fiat Money Crisis

  Authored by Alasdair Macleod via GoldMoney.com,

  After fifty-one years from the end of the Bretton Woods Agreement, the system of fiat currencies appears to be moving towards a crisis point for the US dollar as the international currency. The battle over global energy, commodity, and grain supplies is the continuation of an intensifying financial war between the dollar and the renminbi and rouble.

  It is becoming clear that the scale of an emerging industrial revolution in Asia is in stark contrast with Western decline, a population ratio of 87 to 13. The dollar’s role as the sole reserve currency is not suited for this reality.

  Commentators speculate that the current system’s failings require a global reset. They think in terms of it being organised by governments, when the governments’ global currency system is failing. Beholden to Keynesian macroeconomics, the common understanding of money and credit is lacking as well.

  This article puts money, currency, and credit, and their relationships in context. It points out that the credit in an economy is far greater than officially recorded by money supply figures and it explains how relatively small amounts of gold coin can stabilise an entire credit system.

  It is the only lasting solution to the growing fiat money crisis, and it is within the power of at least some central banks to implement gold coin standards by mobilising their reserves.

  

  Evolution or revolution?

  There are big changes afoot in the world’s financial and currency system. Fiat currencies have been completely detached from gold for fifty-one years from the ending of the Bretton Woods Agreement and since then they have been loosely tied to the King Rat of currencies, the dollar. Measured by money, which is and always has been only gold, King Rat has lost over 98% of its relative purchasing power in that time. From the Nixon Shock, when the Bretton Woods agreement was suspended temporarily, US Government debt has increased from $413 bn to about $30 trillion — that’s a multiple of 73 times. And given the US Government’s mandated and other commitments, it shows no signs of stabilising.

  This extraordinary debasement has so far been relatively orderly because the rest of the world has accepted the dollar’s hegemonic status. Triffin’s dilemma has allowed the US to run economically destructive policies without undermining the currency catastrophically. Naturally, that has led to the US Government’s complacent belief that not only will the dollar endure, but it can continue to be used for America’s own strategic benefits. But the emergence of rival superpowers in Asia has begun to challenge this status, and the consequence has been a financial cold war, a geopolitical jostling for position, particularly between the dollar and China’s renminbi, which has increased its influence in global financial affairs since the Lehman crisis in 2008.

  Wars are only understood by the public when they are physical in form. The financial and credit machinations between currency-issuing power blocs passes it by. But as with all wars, there ends up a winner and a loser. And since the global commodity powerhouse that is Russia got involved in recent weeks, America has continued its policy of using its currency status to penalise the Russians as if it was punishing a minor state for questioning its hegemonic status. The consequence is the financial cold war has become very hot and is now a commodity battle as well.

  Bringing commodities into the conflict is ripe with unintended consequences. Depending how the Russians respond to US-led sanctions, which they have yet to do, matters could escalate. In the West we have comforted ourselves with the belief that the Russian economy is on its uppers and Putin will have to either quickly yield to sanctions pressures, or face ejection by his own people in a coup. But that is a one-sided view. Even if it has a grain of truth, it ignores the consequences of Putin’s military failures on the ground in Ukraine so far, and his likely desperation to hit back with the one non-nuclear weapon at his disposal: Russia’s commodity exports.

  He may take the view that the West is damaging itself and little or no further action is required. And surely, the fact that China has stockpiled most of the world’s grain resources gives Russia added power as a marginal supplier. Putin can afford to not restrict food and fertiliser exports, blaming on American policy the starvation that will almost certainly be suffered by all non-combatant nations. He could cripple the West’s technology industries by banning or restricting exports of rare metals which are of little concern to headline writers in the popular press. He might exploit the one big loophole left in the sanctions regime by supplying China with whatever raw materials and energy it needs at discounted prices. And China could compound the problem for the West by restricting its exports of strategic commodities claiming they are needed for its own manufacturing requirements.

  While everyone focuses on what is seen, it is what is not seen that is ignored. Commodities are the visible manifestation of a trade war, while payments for them are not. Yet it is the flow of credit on the payment side where the battle for hegemonic status is fought. The Americans and their epigones in Europe have tried to shut down payments for Russian trade through the supposedly independent SWIFT system. And even the Bank for International Settlements, which by dealing with both Nazi Germany and the Allies retained its neutrality in the Second World War, is siding with the West today.

  But step back for a moment to look at how broadly based the West’s position is in a global context, because that will be a factor in whether the dollar’s hegemony will survive this conflict. We see America, the EU, Japan, the UK, Canada, Australia, and New Zealand on one side. In population terms that’s roughly 335, 447, 120, 65, 38, 26 and 5 million people respectively, totalling 1,036 million, only 13% of the world population. This point was made meaningfully by the Saudis who now want to talk with Putin rather than Biden. As long ago as 2014, this writer was informed by a director of a major Swiss refinery that Arab customers were sending LBMA 400-ounce bars for recasting into Chinese four-nine one kilo bars. The real money saw this coming at least eight years ago.

  Even if the US’s external policies do not end up undermining the dollar’s global status, it is becoming clear that the King Rat of currencies is under an existential threat. And the Fed, which is responsible for domestic monetary policies, in conjunction with the Biden administration is undermining it from the inside as well by trying to manage a failing US economy by accelerating its debasement.

  A betting man would therefore be unlikely to put money on a favourable dollar outcome. Whether the dollar suffers a crisis or merely an accelerated decline, just as Nixon changed the world’s monetary order in 1971 it will change again. That the current situation is unsatisfactory is widely recognised by multiple commentators, even in America, calling for a financial and currency reset. And it is assumpted that the US Government and its central bank should come up with a plan.

  There are two major problems with the notion that somehow the deck chair attendant can save the ship from sinking by rearranging the sun loungers.

  • The first error is insisting that money is the preserve of only the state and is not to be decided by those who use it. It was the underlying fallacy of Georg Knapp’s State Theory of Money published in 1905. That ended with Germany printing money to arm itself in the hope that it would win: it didn’t and Germany ended up destroying its papiermark.

  • The second error is that almost no one understands money itself, as evidenced by the whole financial establishment, from the governments down to junior fund managers, thinking that their currencies are money. Commentators calling for a reset are themselves in the dark.

  Events will deal with the fallacies behind the State Theory of Money and whether it will turn out to be an evolution or revolution. But at least we can have a stab at explaining what money is for a modern audience, so that the requirements and conditions of a new currency system to succeed can be better understood.

  What is money for?

  The pre-Keynesian classical economic explanation of money’s role was set out in Say’s Law, otherwise known as the law of markets. Jean-Baptiste Say was a French economist, who in his Treatise on Political Economy published in 1803 wrote that,

  “A product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value.”

  And

  “Each of us can only purchase the productions of others with his own productions — and so the value we can buy is equal to the value we can produce. The more men can produce the more they will purchase.”

  Money or credit is the post-barter link between production and consumption facilitating the exchange between the two. What to produce and what is needed in exchange is a matter for those involved in individual transactions. And the medium of exchange used is a decision for each of the parties. They will tend to use a medium which is convenient and widely accepted by others.

  Say’s Law was incorrectly redefined and trashed by Keynes to “…that the aggregate demand price of output as a whole is equal to the aggregate supply price for all volumes of output is equivalent to the proposition that there is no obstacle to full employment.” This has subsequently been shortened to “supply creates its own demand”. Keynes’s elision of the truth was leading to (or was it to justify?) his erroneous invention of mathematical macroeconomics. It is simply untrue.

  All Say was pointing out is we divide our labour as the most efficient means of production for driving improvements in the human condition. That cannot be argued with, even by blinkered Keynesians. Money, or more correctly credit has two roles in this division of labour. The first is as the medium for investment in production, because things must be made before they can be sold and there are expenses in the form of presale payments that must be made. And the second is to act as the commonly accepted intermediary between the sale of products to their buyers. Instead of opining that supply creates its own demand, if we say instead that people make things so they can buy the products and services they don’t make for themselves, it is so obviously true that Keynes and his self-serving theories don’t have a leg to stand on. And importantly, full employment has nothing to do with it.

  The money involved is always credit. Even the act of lending gold coins to an entrepreneur to make something is credit because it is to be repaid. If gold coins are the payment medium between production and consumption, they are the temporary storage of production before it is spent. In this very narrow sense, they represent the credit of production which will be spent. The principal quality of gold, which when it is at rest is undeniably money, is that it has no counterparty risk and is to be parted with last.

  The point is that money in circulation is a subsection of wider credit and is the very narrowest of definitions of circulating media. But even under a gold standard, it is hardly ever used in transactions and rarely circulates. This is partly due to a Gresham’s Law effect, where it is only exchanged for inferior forms of credit as a last resort, and partly because it is less convenient than transferring banknotes or making book entries across bank ledgers. By far the most common forms of circulating media are credit in the form of banknotes issued by a central bank, and transferable credit owed by banks to depositors.

  But in our estimate of a practical replacement of the current fiat currency-based system, we must also acknowledge that credit is far broader than that recorded as circulating by means of the banking system. We are increasingly aware of the term, “shadow banks” most of which are pass-through channels of credit rather than credit creators. But doubtless, there is expanded credit in circulation originating from shadow banks, the equivalent of officially recorded bank credit, which is not captured in the money supply statistics. But there are also wider forms of credit in any economy.

  Defining credit

  To further our understanding of credit, we must define the fundamental concept of credit:

  Credit is anything which is of no direct use, but which is taken in exchange for something else, in the belief or confidence that we have the right to exchange it away again.

  It is the right to a future payment, not necessarily in money or currency. It is not the transfer of something, but it is a right to a future payment. Consequently, the most common form of credit is an agreement between two parties which has nothing to do with bank credit per se.

  Bank credit is merely the most obvious and recorded subset of the entire quantity of credit in an economy. And the whole world of derivatives, futures, forwards, and options, are also credit for an action in time, additional to bank credit. Global M3 money supply is said to be $40 trillion equivalent, about 3% of investments, derivatives, and cryptocurrencies, all of which are forms of credit: rights and promises to future payments in credit or currency. And this is in addition to private credit agreements between individuals and other individuals, and between businesses and individuals, which are extremely common.

  The commonly stated position among sound money advocates of the Austrian school is that bank credit should be replaced by custodial deposit-taking banks and separate arrangers of finance. But given the broad definition of credit in the real world, eliminating bank credit appears untenable when individuals are free to offer multiple amounts of credit and the vast bulk of credit creation is outside the banking system.

  Consider the case of a bookie accepting wagers for a horse race. Ahead of the event, he takes on obligations many times the capital in his business, in return for which he is paid in banknotes or drawings on bank credit by his betting customers. When the race is over, he keeps the losers’ stakes and is liable for payments to holders of the winning bets. He has debts to the winners which are only extinguished when the winners collect. While there are differences in procedures and of the risks involved, in principal there is little difference between a bookie’s business and that of a commercial bank; they are both dealers in credit. Arguably, the bookie has the sounder business model.

  The restriction imposed on an individual providing credit to others is his potential liability if it is called upon. The unfairness in the current system is not that bank credit is permitted, but that is permitted with limited liability. Surely, the solution is to ensure that all providers of credit are responsible for the risks involved. Licenced banks and their shareholders should face unlimited liability. It is even conceivable that listed capital in an overleveraged bank might trade at negative values if shareholders face a risk of unlimited calls on their wealth. That should promote responsibility in bank lending. It will not eliminate the cycle of bank credit expansion and contraction, but it will certainly lessen its disruptive impact.

  Variations in the purchasing power of a medium of exchange

  A proper consideration of credit, the all-embracing term for mediums of exchange to include future promises, shows that government statistics for money supply are a diminishingly small part of overall credit in an economy. We must take this fact into account when considering changes in the official quantity of money on the purchasing power of units of the medium of exchange (that is credit in the form of circulating banknotes and commercial bank credit — M1, M2, M3 etc.).

  A downturn in economic activity must be considered in the broader sense. If, for example, I say to my neighbour that if he arranges it, I will cover half the cost of fencing the boundary between our properties, I have offered him credit upon which he can proceed to contract a fencing supplier and installer. However, if in the interim my circumstances have changed and I cannot deliver on my promise, the credit agreement with my neighbour is withdrawn and the fence might not be installed.

  A father might promise his son an allowance while he attends university. That is a credit agreement with periodic drawdowns lasting the course. Later, the father might promise help in buying a property for his son to live in. These are promises, whose values are particular and precarious. And they will be valid only so long as they can be afforded. If there is a general change in economic conditions for the worse, it is almost certainly driven more by the withdrawal of unrecorded credit agreements between individuals and small businesses such as corner shops, and not directly due to bank credit contraction.

  An appreciation of these facts and of changes in human behaviour which cannot be recorded statistically explains much about the lack of correlation between measures of credit (i.e., broad money supply) and prices. The equation of exchange (MV=PQ) does not even capture a decent fraction of the relationship between the quantity of credit in an economy and prices. Our understanding of the wider credit scene goes some way to resolving a mystery that has bedevilled monetary economists ever since David Ricardo first proposed the relationship over two centuries ago. In theory, an increase in the quantity of measurable credit (that is currency in the banking system) leads to a proportionate increase in prices. Even allowing for statistical legerdemain, that is patently not true, as Figure 1 illustrates.

  

  Figure 1 shows that over the last sixty years, the broadest measure of US dollar money supply has increased by nearly seventy times, while prices have increased about nine. The equation of exchange explains it by persuading us that each unit of currency circulates less so that the increase in the money quantity somehow leads to less of an effect on prices. This interpretation is consistent with Keynes’s denial of Say’s Law. The Law tells us that we all make profits and/or earn salaries, which in the time-space of a year means we can only spend and save once. That is an unvarying velocity of unity. Instead, the mathematical economists have introduced a variable, V, which simply balances an equation which should not exist.

  That is not to say that credit expansion does not affect the purchasing power of a currency. Logic corroborates it. But an understanding of the true extent of credit in an economy confirms that the sum of currency and recorded bank credit is just a small part of the story – only one eighth as indicated by the divergence between M3 and consumer prices — all else being equal.

  It brings us to the other driving force in the credit/price relationship, which is the public acceptability of the currency. Ludwig von Mises, the Austrian economist, who lived through the Austrian inflation in the post-WW1 years and whose advice the Austrian government was reluctant to accept, observed that variations in public confidence in the currency can have a profound effect on its purchasing power. Famously, Mises described a crack-up boom as evidence that the public had finally abandoned all faith in the government’s currency and disposed of all of it in return for goods, needed or not.

  It leads to the sensible conclusion that irrespective of changes in the circulating quantity, the purchasing power is fully dependent on the public’s faith in the currency. Destroy that, and the currency becomes valueless as a medium of exchange. If confidence is maintained, it follows that the price effects of a currency debasement may be minimised.

  This brings us to gold coin. If the state backs its currency with sufficient gold which the public is free to obtain on demand from the issuer of the currency, then the currency takes on the characteristics of gold as money. We should not need to justify this established and ancient role for gold, or silver for that matter, to the current generations of Keynesians brainwashed into thinking it’s just old hat. Though they rarely admit it, central bankers fully committed to their fiat currencies still retain gold reserves in the knowledge that they are no one’s liability; that is to say, true money while their currencies are simply credit.

  Given what we now know about the extent of credit beyond the banking system and the role of public confidence in the currency when it is a credible gold substitute, we can see why a moderate expansion of the currency need not undermine its purchasing power proportionately. While the cycle of bank credit expansion and contraction leads to the boom-and-bust conditions described by Von Mises and Hayek in their Austrian business cycle theory, the effects on prices under a gold standard do not appear to have been enough to destabilise a currency’s purchasing power. Figure 2 illustrates the point.

  

  Admittedly there are several factors at work. While the increase in the quantity of currency in circulation was generally restricted by the gold coin standard, the bank credit cycle of expansion and contraction led to periodic bank failures. Then as now, the quantity of bank credit relative to bank notes was eight or ten times, and so long as the note-issuing bank remained at arm’s length from the tribulations of commercial bank credit the overall price effects were contained.

  Britain abandoned the gold standard in 1914, and just as the abandonment of the silver standard in the 1790s led to an increase in the general price level, a dramatic increase occurred during the First World War. This was due to deficit spending by the state driving up material costs at a time when imported factors of supply were limited by the destruction of merchant shipping.

  The end of the war restored the supply/demand balance and saw a reduction in military spending. Prices fell and then stabilised. A gold bullion standard at the pre-war rate of exchange was re-established in 1925, only to be abandoned in 1931. The Second World War and subsequent lack of any anchor to the currency led to an inexorable rise in prices before America abandoned the Bretton Woods Agreement in 1971. And since then, the sterling price of gold has risen even further from £14.58 when the Agreement ceased to £1,470 today. Measured in true money the currency has lost over 99% of its purchasing power over the last fifty-one years.

  Both logic and the empirical evidence point to the same conclusion: price stability can only be achieved under a working gold coin standard, whereby ordinary people can, should they so wish, exchange banknotes for coin on demand. Despite making up most of the circulating medium, fluctuations in bank credit then have less of an effect on prices, for the reasons stated above.

  Can cryptocurrencies replace gold?

  The reason gold is relatively stable in purchasing power terms is that through history, above ground stocks have expanded at similar rates to population growth. A very gradual increase in gold’s purchasing power comes from manufacturing, technological, and competitive production factors. In other words, the price stability clearly demonstrated in Figure 2 above between 1820—1914 is evolutionary.

  Whether cryptocurrencies or central bank digital currencies might have a stabilising role for prices in future is highly contentious. We can readily dismiss yet another version of state-issued currencies as being a worse form of credit than failing fiat currencies. The aim behind them is communistic, to enable the state to allocate credit resources wherever and to whomsoever its political class may desire. It is with the intention of reducing the vagaries of human action on the state’s intended outcome. Just as every replacement currency for failing fiat in the past has failed, if CBDCs are introduced they will fail as well. It is unnecessary to comment further.

  Cryptocurrencies, particularly bitcoin, are seen by a small minority of enthusiasts as the money of the future, being outside the state’s printing presses. But as observed above, in reality, sound money is augmented by fluctuating quantities of credit in far larger quantities. So long as sound money provides price stability, circulating credit inherits those characteristics.

  Bitcoin, the leading claimant to being future money, lacks both world-wide acceptance and the flexibility required for long-term stability and therefore economic calculation. Imagine an entrepreneur planning to invest in production, a project which from the drawing-board to final sales takes several years. His nineteenth century forebears had a reasonable idea of final prices, so could calculate costs, sales values, and therefore the interest cost of the capital deployed over the whole project to leave him with a profit. No such certainty exists with bitcoin because final prices cannot be assumed. Furthermore, central banks do not have bitcoin as part of their reserves, and by embarking on plans for their own CBDCs have signalled that they will not have anything to do with it. But in most cases central banks or their government treasury ministries possess gold bullion, which as a last resort they can deploy to stabilise a failing currency.

  While there will undoubtedly be future benefits from their underlying technologies, it is impossible to see how cryptocurrencies can have a practical role in backing wider credit.

  Conclusion

  The evolution of fiat dollars which dates from the abandonment of the Bretton Woods Agreement is coming to an inevitable conclusion: fiat currencies come and go and only gold goes on forever. Whoever wins the financial battle now raging with increasing intensity over commodity prices, the US dollar as the King Rat of fiat currencies is losing its assumed superiority over the renminbi, and possibly the rouble if the Russians can stabilise it. The old-world population backing the dollar is heavily outnumbered by the newly industrialising Eurasia as well as its commodity and raw material suppliers in Africa and South America.

  Not mentioned in this article is the Federal Reserve Board’s commitment to sacrifice the dollar to support financial values — that ground has been well covered in earlier Goldmoney articles. But it is a repetition of John Law’s policies in 1720 France, now underway to stop the global financial bubble from imploding. And just as the Mississippi Company continued after 1720 when the French livre collapsed entirely that year, we see the same dynamics in play for the entire fiat currency system today.

  John Law’s policies of credit stimulation for the French economy were remarkably like those of modern Keynesians. This time, the expansion of money supply on a global basis has been on an unprecedented scale, encouraged by the subdued effect on prices measured by government-compiled consumer price indices. Undoubtedly, much of the lack of price inflation is down to statistical method, but from Figure 1 we have seen that over the last sixty years the quantity of currency and credit captured by US dollar M3 has grown about seven and a half times more rapidly than prices. We have concluded that this disparity is partly due to not all credit in the economy being captured in the monetary statistics.

  Understanding the relationship between money which is only physical gold coin, currency which is bank notes and credit which includes bank credit, shadow bank credit, derivatives, and personal guarantees, is vital to understanding what is required to replace the fiat-currency system. It also explains why a relatively small base of exchangeable gold coin in relation to the overall credit in an economy is sufficient to guarantee price stability.

  Tyler Durden
  Sat, 03/19/2022 – 18:30

• Interest In NFTs Has Plummeted
  Interest In NFTs Has Plummeted

  While many of us have been forced to at least try to understand what an NFT is over the last year or so, the latest figures from Google Trends suggest that this research has not led to a sustained interest in the topic.

  For those that haven’t as yet attempted to get to grips with the phenomenon, here’s Wikipedia to the rescue:

  “A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio.”

  Still not clear? Then have fun delving down this particular rabbit hole.

  Though, as Visual Capitalist’s Martin Armstrong notes, if the trend shown by Google’s search data continues, that might turn out to be a monumental waste of your time.

  

  You will find more infographics at Statista

  One place where the demise of the NFT is by no means being predicted however, is at LimeWire.

  The popular file-sharing platform from the early 2000’s (largely facilitating illegal download of films and music) announced this week that it will be returning as a “mainstream-ready, digital collectibles marketplace for art and entertainment, initially focusing on music.”

  The service is expected to go live in May.

  Tyler Durden
  Sat, 03/19/2022 – 18:00

• Teachers' Union Teams Up With Steven Brill's NewsGuard To Flag "Misinformation" For Children
  Teachers’ Union Teams Up With Steven Brill’s NewsGuard To Flag “Misinformation” For Children

  Authored by Jonathan Turley,

  Under the leadership of Randi Weingarten, the American Federation of Teachers (AFT) has long been criticized by conservatives for its support of far left policies and support for Democratic candidates. Nevertheless, as a union, it is entitled to be political and most unions favor the Democrats due to their pro-union policies.

  However, the concern over the AFT’s agenda become far greater when it announced that it would team up with NewsGuard to start to flag news sources deemed “misinformation.”

  NewsGuard is co-founded by Steve Brill who has been accused of bias against Republicans and conservatives. Conservative sites have previously tagged NewGuard as “heavily skewed” in favor of the left. The “misinformation” label has been used extensively by liberal media to kill stories like the Hunter Biden laptop stories as unreliable.

  Indeed, Brill is under fire for being one of the voices falsely claiming that the Hunter Biden laptop was likely false Russian disinformation. His company will now put “traffic lights” on information for children on what sources they rely upon.

  

  The ratings of NewsGuard have long been criticized by conservative sites as favoring liberal sites like The Nation (with a 93 percent rating) over more conservative sites like Fox News (at 66 percent).

  The timing of the announcement could not be worse after the New York Times finally recognized that the Hunter Biden laptop story was legitimate and the controversial emails authentic.

  For two years, some of us have been hammered as spreading “Russian disinformation” and false allegations in raising concerns over the raw influence peddling by the Biden family. Steven Brill was one of those voices flagging the story as likely “disinformation.”

  Brill assured viewers on CNBC that this was likely all untrue:

  “My personal opinion is there’s a high likelihood this story is a hoax, maybe even a hoax perpetrated by the Russians again.”

  The media campaign to bury or block the story worked. The Biden family had long been accused of special dealing and influence peddling. The emails were potentially devastating with references to millions from foreign sources, including shady Chinese, Russian, and Ukrainian interests while Joe Biden was Vice President. The media actively participated in shielding the Bidens from the scandal.

  In fairness to Brill, he opposed efforts to block the story and did not support moves like Twitter to bar references to the story before the election. (After Biden was elected, Twitter admitted it was a mistake by Democrats then demanded more censorship). I agree with him entirely that the solution is to allow readers to decide by comparing news sources.

  However, the interview had an interesting element. Brill’s objections to Twitter and FaceBook killing the story was that they are not qualified to make that decision on what, in his words, is likely a Russian “hoax.”

  That is what NewsGuard does in flagging unreliable sources. He is clearly referring to himself as one of those qualified to make that decision. Yet, he was entirely wrong. At the time, many of us were noting that Biden did not deny that this was his laptop, that it was seized by the FBI in an ongoing criminal investigation, and some recipients of the emails had confirmed their authenticity.  Nevertheless, Brill still thought it was all a hoax.

  Weingarten has declared using Brill’s NewsGuard will be a “game changer” in preventing students from being “misled” by news sources. It may well be. It would allow the AFT and school districts to teach students to distrust certain news sources like Fox News, which is given a lower rating by NewsGuard. (For full disclosure, I appear on Fox as a legal analyst).

  Conservative and independent sites continue to bedevil many on the left. The laptop story shows how advocacy journalism is now the norm in many newsrooms. Viewers and readers were told by most media figures, including Brill, that the story was likely Russian propaganda and untrue.

  The unsupported hoax claim (which contradicted readily available authenticating evidence at the time) raises the specter of a type of de facto state media. The problem is that such an echo chamber is only fully successful if there is no alternative source of information. Yet, Fox and New York Post continued to cover the story as did some of us as columnists.

  The most extreme effort was a letter from Democratic members to pressure companies like AT&T to reconsider whether viewers should be allowed to watch Fox News and other networks. It does not matter that Fox News is the most popular news cable station and even has a greater percentage of Democratic viewers than CNN. The members insisted that “not all TV news sources are the same” and called on these companies to protect viewers from “dissemination” of false viewpoints.

  Other members have sought to create algorithmic interventions to steer people away from certain stories or books, including the current NUDGE Act being proposed by Sen. Amy Klobuchar (D., Minn.).

  The AFT is now seeking a much earlier intervention with children by getting Brill’s NewsGuard to rate reliable and unreliable sources of news. Weingarten has declared that, with Brill’s help, children and families will no longer be “drowning in an ocean of online dishonesty.”

  It is unlikely to be reassuring for many that the children instead will be swimming in a pool carefully maintained by the AFT and NewsGuard.

  Tyler Durden
  Sat, 03/19/2022 – 17:30

• Bill Gross Warns Fed Rate Hikes Will "Crack" US Economy And Housing Market
  Bill Gross Warns Fed Rate Hikes Will “Crack” US Economy And Housing Market

  Bill Gross, the PIMCO founder and longtime “Bond King” of Wall Street, has likely grown accustomed to critical portrayals in the press, following his widely publicized dispute with a Laguna Beach neighbor (Gross published his own account of the aftermath which is definitely worth a read for the entertainment value alone), and after the recent publication of a book called “The Bond King” – which prompted him to pen his own memoirs to counteract what he feared would be a negative portrayal. Now comfortably ensconced in retirement, the PIMCO founder has taken a break from managing his own portfolio (which has recently included winning options bets against GME and AMC) to share his concerns about the Fed’s rate-hike plans with the FT‘s top business editor.

  

  Gross fears that if the Fed follows throuogh with its plans to hike rates by 25 basis points at each successive meeting this year, it will “crack” the US economy and the housing market, sending the US careening into a recession.

  As we shared on Wednesday, the Fed’s median projection as expressed in the latest “dot plot” shows 7 rate hikes in 2022, which would leave the Fed funds rate, the central bank’s benchmark interest rate, at a peak of 2.75%.

  Raising the benchmark rate to this terminal level would cause the US economy to “crack”, Gross said, causing a recession and “breaking” the housing market (which has been caught in a torrid buying frenzy).

  “I suspect you can’t get above 2.5 to 3 per cent before you crack the economy again,” he said. “We’ve just gotten used to lower and lower rates and anything much higher will break the housing market.”

  Gross’s commentary isn’t that far-fetched, considering that the Fed expects it will need to cut rates later in 2024 to accommodate the slowing economy.

  

  before the central bank later starts cutting rates to accommodate an economic slowdown later in 2024.

  Of course, Gross’s commentary stands in stark contrast to that of St. Louis Fed President James Bullard, who has called for the Fed to hike rates by 50bp per meeting to reach the 2.75 percentage point terminal rate before the end of 2023. Otherwise, the central bank would risk “losing credibility”.

  Gross’s commentary is interesting considering that he has railed against low interest rates for years.

  “It destroys the savings function,” he said. “Meme stocks and NFTs [non fungible tokens], all of this nonsense in my mind has developed from the inability to earn a decent return in your 401k” retirement plan.

  After initially taking losses, Gross said that his bets against GME and AMC have yielded some profits.

  In the past 18 months, he has been putting his personal money where his mouth is, by using options to bet against GameStop and AMC, the most prominent meme stocks to have seen their share prices driven up by retail enthusiasts. Although he initially took enough losses that he stopped sleeping and closed some of his positions, he says he has been vindicated by rapid tumbles in both company’s shares. “Maybe I’m an old fart…but in total, I’m up maybe $15mn to $20mn.”

  Gross has also profited from investments in partnerships that in turn have invested in natural gas pipelines.

  Gross has also profited handsomely from a decision to buy partnerships that invest in natural gas pipelines. He freely admits his interest was piqued by their tax structure — dividends are reinvested and not taxed until the holding is sold. Now the position is benefiting from sharply higher energy prices owing to the emergence from the pandemic and the war in Ukraine.

  The scrutiny he has faced in the press has led Gross to reflect on his insecurities and the combative temperament that led to his ouster from PIMCO.

  The process has forced him to recognise his own shortcomings and insecurities. In his last days at Pimco, when he famously feuded with other top executives, “I was too sensitive and that was disruptive,” he said. “It’s probably the best thing that I left. At 72, you do start to lose it, and at 77 you lose it even more.”

  He also said he misses the PIMCO investment committee, which met daily.

  “I missed the Pimco investment committee” which met daily, he said. “This was a company of bond kings and queens. I had some responsibility for hiring and keeping them at the firm. But these people are good.”

  The interview seems to mark the start of a new, more reflective period for Gross. Being nearly 80, Gross joked that living in what he calls “the death zone” has led him to live more “in the moment”.

  Although he remains estranged from the child he had with his second wife, Gross has remarried and he is close to his two older children. “When you get to your late 70s and early 80s, it’s like the death zone,” he said. “You just wait for the prostate cancer. But it also allows you to be more happy in the moment.”

  Although he is now retired (following what was by all accounts a disastrous stint at fund manager Janus) Gross said he still wakes up early (around 0500PT) to spend 5 hours a day at his Bloomberg terminal (he was gifted a lifetime subscription by Michael Bloomberg himself).

  Tyler Durden
  Sat, 03/19/2022 – 17:00

• Soaring LNG Demand Creates Traffic Jam At Gulf Of Mexico Ports
  Soaring LNG Demand Creates Traffic Jam At Gulf Of Mexico Ports

  Authored by Charles Kennedy via OilPrice.com,

  • Gulf Coast liquefaction facilities are operating near capacity thanks to strong demand.

  • Europe is rushing to replenish its exhausted gas reserves.

  • Eikon: 27 LNG tankers were either on their way to Gulf Coast export terminals or already there.

  

  Close to a record number of liquefied natural gas tankers are crowding Gulf Coast export terminals as U.S. exports of the superchilled fuels run at record rates.

  Reuters reported that Gulf Coast liquefaction facilities are operating near capacity thanks to strong demand, especially from Europe, which is currently trying to replenish its exhausted gas reserves.

  Citing data from Refinitiv Eikon, Reuters wrote that some 27 LNG tankers were either on their way to Gulf Coast export terminals or already there. As a result, liquefied natural gas exports could reach 6.47 million tons this month, according to Kpler, beating the previous monthly record of 6.3 million tons set in January.

  Europe has morphed into the biggest market for U.S. liquefied natural gas over the past three months, as concern about the geopolitical tensions around Ukraine prompted the EU to seek alternatives to Russian gas in case Moscow turned off the taps, even though Moscow has repeatedly said that it has no such plans.

  As a result of the surge in demand for U.S. LNG, the country overtook Qatar to become the world’s largest exporter of the commodity. U.S. LNG is one of the European Union’s preferred alternatives to Russian pipeline gas, whose consumption the union is trying to cut by two-thirds within a year.

  Last week, the chief executive of the largest U.S. natural gas producer, EQT, said the United States could easily replace Russian gas, which last year accounted for 45 percent of total EU gas imports.

  “We’ve got the ability to do more, the desire to do more,” EQT’s Toby Rice told the BBC, estimating that the United States had enough gas to quadruple current output by 2030.

  However, environmentalists have been quick to protest the increase in LNG exports, with a coalition of more than a hundred organizations calling on banks to stop financing LNG export terminal projects. Environmentalist protests, according to a Reuters report, have led to the shelving of an interagency review on ways to boost LNG exports to Europe.

  Tyler Durden
  Sat, 03/19/2022 – 16:30

• Another Lost Decade Ahead? 60/40 'Balanced' Books Suffer Worst Streak Since 2008
  Another Lost Decade Ahead? 60/40 ‘Balanced’ Books Suffer Worst Streak Since 2008

  Since the “Powell Pivot” was unleashed on global markets, precious metals have strongly outperformed so-called safe-haven portfolios…

  

  Source: Bloomberg

  …and in fact, as Bloomberg reports, the classic 60/40 portfolio – a strategy named for the share allocated to equities and high-grade debt, respectively – is down more than 10% this year, leaving it on pace for the worst drubbing since the financial crisis of 2008.

  

  Source: Bloomberg

  In fact, for the first time on record, Bonds (TLT) and Stocks (SPY) are both down over 10% in Q1 together…

  

  Source: Bloomberg

  And on a 50-50 Bonds/Stocks basis, Q1 looks set to be the worst quarter on record…

  

  Source: Bloomberg

  Why? Why the sudden shift for a portfolio mix that is – by name – defined as ‘balancing’ risk, rather than aggregating it.

  The answer is both simple and terrifying for the world’s central planners (and commission-takers) – Stagflation is back.

  Unlike the last major crisis of faith in 60/40 books in 2008, though, the current environment is not driven by just a growth scare. Assets are being hammered by the double whammy of the risk that a stagnant economic expansion and fears of out-of-control ‘non-transitory’ inflation (a combination that could cause poor returns, or even losses, to extend for some time to come).

  With rising stagflation risks, Goldman warns that investors face lower real returns and higher risks from 60/40 portfolios. There is pressure for higher equity allocations given the prospect of poor returns and less diversification potential from bonds. But while higher equity allocations increase the potential for attractive real returns in the long run, they increase the risk of large and fast drawdowns in the near term.

  “You cannot count on the sort of investment returns seen over history for a period of time,” said Chris Brightman, chief investment officer at Research Affiliates.

  “Bond yields, dividend and earnings yields are at a low starting point and it means future returns will be low when compared to history.”

  During the the so-called “lost decade” of the 2000s, the “60/40 portfolio generated a meager 2.3% annual return and investors would have lost value on an inflation-adjusted basis,” Goldman Sachs Asset Management’s Nick Cunningham, the vice president of strategic advisory solutions, wrote in October.

  “The very good returns of the past decade mean that is important for investors to establish more realistic return expectations,” said Izabella Goldenberg, U.S. head of portfolio strategy at Goldman Sachs Asset Management. She said that may involve seeking returns in global equities and “in principle being diversified for the long term.”

  Andrew Patterson, senior economist at Vanguard Group Inc., said markets are verging on a period of low gains for the 60/40 portfolio.

  He estimated that annual returns over the next 10 years will be “south of 5% and our estimates have been grinding down in recent years, mainly driven by equities.”

  Equity and bond prices falling together may be a feature of the inflation shock. In past eras of supply-driven inflation, government bonds failed to offset equity losses, as prices in both markets moved together, said Jean Boivin, head of the BlackRock Investment Institute.

  “Investors will have to live with higher inflation and that will challenge the role of government bonds in a portfolio,” he said.

  “Central banks will find it harder to contain inflation and also harder to ease if economic growth slows materially.”

  Markets have further repriced risk of stagflation, boosted by the commodities rally due to the Russia/Ukraine crisis – US 10-year breakeven inflation has reached the highest level since the 1990s, while real yields remain near all-time lows, resulting in a similar gap to that in the 1970s.

  

  This points to little optimism on long-term real growth and material concerns on inflation risk.

  

  For those looking for alternatives, Goldman suggests a combination of allocations to commodities, real estate, infrastructure, more international diversification as well as value, high dividend yield stocks and convertibles could help to reduce the risk of another 60/40 ‘lost decade’. Private markets might offer more opportunities to gain exposure to these themes.

  During the 1970s stagflation there were material benefits from broader diversification…

  

  PIMCO recently recommended shifting a portion of 60/40 portfolios into in commodities to hedge against elevated inflation.

  “When inflation increases, asset values generally fall,” and “even a small allocation to commodities may materially improve the inflation protection of a traditional 60/40 stock/bond portfolio,” it said.

  We already saw that Gold has outperformed dramatically as the stagflation fears rise.

  And finally, Goldman has a lower conviction suggestion for those struggling with ‘balanced’ bond-stock portfolios… add some Bitcoin…

  Our analysis suggests that just a small allocation to Bitcoin in a standard US 60/40 portfolio would have enhanced risk-adjusted returns materially since 2014 (while Bitcoin prices are available from mid-2010, we use prices since 2014 as Bitcoin was not easily accessible to investors before then), even as balanced portfolios performed strongly on their own. The strong risk-adjusted performance of Bitcoin was due to strong returns rather than to low risk.

  

  But Goldman warns that Bitcoin’s history is too short to cover several business cycles or a period of high inflationary pressures, so it is unclear how Bitcoin would behave during a period of stagflation. Additionally, Bictoin’s high relative volatility can quickly come to dominate the diversified book’s performance.

  Given its limited and known supply, the price of Bitcoin should primarily depend on investor demand and its perceived value. But investor demand so far seems to be linked to the asset itself rather than macro factors; adoption by retail investors – and recently some institutions – has boosted prices while regulatory and tax concerns, as well as positioning, have driven sharp setbacks. Without more clarity on these idiosyncratic drivers, assessing Bitcoin’s future risk/reward and role in balanced portfolios remains difficult.

  Since the GFC, many of these alternative strategies have had mixed success due to low and anchored inflation, but Goldman believes that in the Post-Pandemic Cycle they are likely to enhance risk-adjusted returns for a balanced portfolio.

  Tyler Durden
  Sat, 03/19/2022 – 16:00

• Putin: Destined To Hang Or Drown?
  Putin: Destined To Hang Or Drown?

  Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

  As we end this third week of World War III it’s becoming clear that the West’s end-game strategy is now regime change in Russia. As the money and weapons pour into Ukraine the Ukrainian Flag further morphs into the 21st century’s version of ‘Old Shoe,’ all around the Twittersphere.

  

  Zelenskyy’s even been invited to the Oscar’s for pity’s sake.

  If you were ever in doubt about this, just watch Senator Lindsey Graham (Neocon – SC) triple-down on assassinating a world leader.

  Speaking at a press conference, Graham said “I hope he will be taken out, one way or the other,” adding “I don’t care how they take him out. I don’t care if we send him to The Hague and try him. I just want him to go.”

  “It’s time for him to go,” Graham further said of Putin, echoing Joe Biden’s blurted remarks that “He’s a war criminal.”

  “I wish somebody had taken Hitler out in the ’30s. So yes, Vladimir Putin is not a legitimate leader. He is a war criminal.” Graham declared.

  Graham further proclaimed that Russia is “going to have zero future” under Putin, adding “I think the world is better off without Putin – the sooner the better, and I don’t care how we do it.”

  This is called Saying the Quiet Parts Out Loud.

  Even Paul Craig Roberts is trying to figure out why Putin isn’t treating his enemies more ruthlessly. We awake Americans have a real sense of the depravity that our leaders carry and at times I think we get carried away with our own insights here.

  As I said would happen, Russia’s go-slow war has played 100% into their enemies’ hands. Russia needed a quick victory to forestall a devastating psyops campaign against her and to intimidate further NATO expansion. What the Kremlin achieved by  believing that the West would respect  humanitarian intentions is infamy.  Instead of discouraging provocations of Russia that will eventually lead to nuclear war, the Kremlin’s liberal goody-goodly war policy, which the West sees as  irresolution, has encouraged more provocations 

  Dr. Roberts’ thesis is one I’ve heard from multiple people, including from my friend Dexter White on two recent podcasts we did (here and here). Putin’s slow rolling the Ukraine operation has further emboldened Neocon crazies whose whole being is focused on interpreting every action by their enemies as a weakness to exploit.

  This analysis further solidifies my conclusion that they are left-brain possessed, betraying all the attributes of someone psychologically unbalanced to the point of madness. They become paranoid psychotics seeing everything in terms of their enemy.

  It’s the most popular refrain of desperate globalists, “Putin did it.”

  It doesn’t matter if it’s true or not. What matters is keeping people in that suggestible state. It’s easy to do since they, themselves, are there too.

  Lindsey Graham likes to play tough guy. So does Biden. Neither of these men have ever been in a real fight with their bodies on the line in their life. They’ve never really been in a life-threatening situation. For them their fear is far worse, it’s reputational which means fear of exposure.

  They hide behind cameras, their positions, and their egos.

  They live in fear of being shamed.

  It’s easy to dismiss Graham as a buffoon, because he is. But he’s also a very important cog in the machine. So, when he speaks it’s important. Don’t be flip about these statements, they absolutely mean something.

  If you look around D.C. you see the same psychological projection of inner rot every time one of these war mongers gets in front of a camera to manufacture consent. They are also fearful of the shame of exposure which drives them to madness like Lindsey displays now on a nearly daily basis.

  This push for regime change in Russia, however, begs a very important question: “Why have they gone this far? Why do they think they can get regime change when Putin has 70+% support?”

  Is it because they really are scared of the emerging facts on the ground, that Russia is grinding out, inevitably and inexorably, a victory in Ukraine on Russian terms that isn’t a reflection of bad military strategy and/or poor intelligence and logistics?

  Or is it something deeper.

  Something Darker

  Alistair Crooke and I talked about this in our latest podcast. Russia’s collective psyche is a reflection of Putin’s. You’ll see that their anger and frustration is now real and complete. The West hates Russia and Russians with a burning passion that is irrational.

  The fear of loss of potency has made war-mongers out of way too many folks because they refuse to blame themselves for this mess:

  • That they allowed Biden to take the White House

  • That they believed all the crude propaganda about Trump and Putin

  • That they still wear their masks, now with Ukrainian Flags on them, to show their wisdom over those who are now clearly traitors.

  • That their paychecks are getting smaller by the day.

  When you see a push poll by Pew that states more than one-third of Americans are willing to risk nuclear war to stop Putin in Ukraine, you know something has gone way off the rails, and it ain’t the Russians.

  It’s not fear that makes the Russian people and Putin angry, it’s disappointment at having their hand of friendship consistently slapped away so thoroughly in the post-Soviet era.

  What goodwill that existed in the West towards Russia in the 1990’s, seeing them as victims of a terrible evil to be pitied, has morphed into disgust for following a man into war for threatening their comfortable existence behind their iPhones.

  When Putin speaks now he is visibly, viscerally angry. He’s been systematically, for years, cutting Russia off from the influences of the ill-liberalism of the West.

  Putin knows he’s been pushed into this by people who are powerful but psychologically small. And the Russian people have been deeply disrespected to the point of war. That’s why his poll numbers rise while Bidens’ barely budge.

  That all leads to regime change as the end-game because it may be the only option, which implies continued escalation to the point of something unthinkable.

  And it makes perfect sense that’s what they are planning, not just regime change, but a wider war (see the buildup of NATO troops) to grind Russia into a paste and atomize it, Russian culture and the Russian people.

  

  That said, Davos has very little human intelligence on the ground to actually make that happen. All the sanctions and expelling diplomats helped Russia’s and Putin’s security.

  The U.S. Embassy in Moscow has less than 50 people in it.

  While that is a sad state of affairs and means there is little to no hope of diplomacy, it also means there isn’t any infrastructure to do what Lindsey is so desperately saying… Someone take him out, anyone!

  That’s a sign of creating the new narrative while simultaneously betraying helplessness, in my view.

  Now, unfortunately that leads me into an ever darker place. They don’t just want regime change and some kind of negotiated settlement for Ukraine. That’s actually way off the table now.

  They see the writing on the wall for their financial system which has failed. The only option they see now is making open preparations for WWIII thinking they still have the materiel and the manpower to enforce their Great Reset, which was always leading to war.

  Lindsey Graham’s job is to build up the propaganda war to justify NATO’s entrance into Ukraine in the next few weeks.

  The program now is WWIII, possibly with nukes and the abject humiliation of Russia and its eventual destruction.

  And ours.

  I begged off ‘working’ yesterday because of this realization. I was drained to the point of exhaustion and planned on sleeping my depression off. I re-watched part I of Oliver Stone’s The Putin Interviews from 2016.

  I recommend everyone watch these films, they are an enlightenment.

  If you want to know your enemy, you should study him. Demonizing him may win you friends at the water cooler, but it will cost you your soul. About 20 minutes in, during their first conversation, Stone brings up the multiple assassination attempts on Putin.

  If you watch nothing else, watch this segment (click here) to get a better understanding of Russia and Putin. The punchline is simple:

  “Do you know what they say among the Russian people? Those who are destined to hang, do not drown.”

  – VLADIMIR PUTIN

  Putin is well aware, hyper-aware of his situation. A person in his position who has been fighting this way for more than 20 years, a project he has dedicated the 2nd half of his life to, is not so stupid as to be the willing dupe of Davos nor is he blind to the capabilities or the ruthlessness of his enemies.

  This is why I hold to the positions about Putin that I do. He may fail here. War is hell and nothing ever goes according to the plan on the white board.

  But, if you are going to be led into war who would your bet on? People like Lindsey Graham could never stand in front of a camera and say what Putin said to Stone. Why?

  Because there is no there there. He’s just a shadow projector with a hand puppet up its ass.

  But if you turn the camera away from Graham and Biden and look at Putin, he’s speaking to the world now. That’s what his latest speech was about.

  It wasn’t aimed at his enemies.

  He’s done talking to them. They aren’t listening.

  That speech was aimed at everyone else including Americans and Europeans, “This is what they think of you. This is what they are willing to do to demand your obedience,” They will steal your money, take your children, burn your life to the ground.

  And it isn’t like he doesn’t have a very sound point, folks.

  If anyone was calling for regime change now, it’s Putin.

  It may have zero effect or play here in the West. In fact, I predict it will have almost zero effect. But it will resonate around the world in those places now very scared of the conflict that Biden and Davos are forcing on everyone.

  Under those circumstances clarity comes quickly. Big decisions happen fast.

  I think a global memetic collapse is in process as I type this. We can’t see it here in the West because we aren’t allowed to. But in parliaments and politburos around the that part that Davos just sees as ‘the help,’ it’s happening. The headlines are coming in almost too fast for anyone to keep up with.

  This is what happens when fearful men become cornered. Davos is cornered. The drowning man will do everything to keep from drowning, including drowning his rescuer.

  The hanged man has already accepted his fate. He is free.

  What happens next is not in his hands, it’s in ours.

  *  *  *

  Join my Patreon if you don’t want to drown

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  Tyler Durden
  Sat, 03/19/2022 – 15:30

• Clip Of Biden Boasting He Proposed NATO's 78-Day Airstrikes On Belgrade Goes Viral In China
  Clip Of Biden Boasting He Proposed NATO’s 78-Day Airstrikes On Belgrade Goes Viral In China

  Both Russian and Chinese media and state officials have in the last days been widely circulating a resurfaced video from 1999 wherein then senator Joe Biden bragged about being the first US official to propose bombing Belgrade and destroying the city’s infrastructure.

  State media in Russia wrote this week while featuring the footage: “The head of Roscosmos, Dmitry Rogozin, reposted the footage on his social media account, reminding the current US President of the NATO bombing of Yugoslavia that is estimated to have killed about 2,500 people, including 89 children.” Russian officials used the clip to blast Biden over his latest description of Vladimir Putin as a “war criminal” and “thug” due to the invasion of Ukraine. It’s also getting wide circulation on Chinese social media.

  “I was the one who suggested the bombing of Belgrade. I was who suggested to send American pilots and blow up all the bridges over the Danube”..
  Joe Biden, 1999 pic.twitter.com/NrkvmTqN33

  — Geo_monitor (@colonelhomsi) March 16, 2022

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

  “I suggested bombing of Belgrade. I suggested that American pilots go there and destroy all bridges on the Drina,” Biden had said at the time.

  The 78 days of air strikes lasted from 24 March 1999 to 10 June 1999. The bombs kept falling even on Serbia’s Easter – called Pascha – which is the holiest day of the Orthodox Christian year.

  “I was suggesting very specific action,” Biden said while seeming to praise his own ‘muscular’ proposals which helped lead to the NATO war against the Serbs.

  China’s mission to the EU also called out prior US action over what was Yugoslavia, condemning the outrageous May NATO bombing of the Chinese embassy – which killed and injured multiple Chinese nationals and journalists.

  China to NATO: “[W]e will never forget who had bombed our embassy in the Federal Republic of Yugoslavia. We need no lecture on justice from the abuser of international law…”

  Wow.https://t.co/bMYHiEAPDo pic.twitter.com/FxK5e9GA1j

  — Nina 🐙 Byzantina (@NinaByzantina) March 18, 2022

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  According to a summary of the incident in The National Review, “Despite the seemingly extensive target vetting, on May 7 the Chinese embassy in Belgrade was struck by five Joint Directed Attack Munition satellite-guided bombs, delivered by U.S. Air Force B-2 Spirit bombers. Three Chinese journalists—Shao Yunhuan of Xinhua, and Xu Xinghu and his wife Zhu Ying of the Guangming Daily—were killed in the attack. Twenty other Chinese nationals were injured, five seriously.”

  On Thursday China’s foreign ministry said in a statement “we will never forget” – and related it to Washington’s outrage over ongoing Russian military action in Ukraine:

  The Chinese diplomatic mission in the European Union said on Thursday that Chinese people could fully relate to the suffering of other countries because “we will never forget who bombed our embassy in the Federal Republic of Yugoslavia”.

  “We need no lecture on justice from the abuser of international law,” it said. “As a Cold War remnant and the world’s largest military alliance, Nato continues to expand its geographical scope and range of operations. What kind of role has it played in world peace and stability? Nato needs to have good reflection.”

  

  While the US downplayed it as an “accidental targeting” incident, evidence later emerged that it was likely done deliberately amid accusations that Yugoslav army communications were being transmitted from the embassy.

  Biden had actually gone on to boast about his role in the NATO attack on Belgrade in multiple different venues…

  In the above archived clip, for example, he said in a fiery speech, “I will continue with every fiber in my being to keep America involved with troops that can shoot and kill….”

  “I believe it is absolutely essential for American troops to be on the ground with loaded rifles and drawn bayonets.”

  Tyler Durden
  Sat, 03/19/2022 – 15:00

• Rickards: The Last Straw
  Rickards: The Last Straw

  Authored by James Rickards via DailyReckoning.com,

  The U.S. and its allies in the EU and others around the world have imposed the harshest economic sanctions on Russia that have ever been used. In the past, even nations directly at war with each other would continue to pay the debts they owed each other.

  Since this war is in Ukraine, let’s look at another war that took place in present Ukraine from 1854–56, during the Crimean War.

  Britain (and France) was at war with Russia. Yet throughout the war, the Russian government kept paying interest to British holders of its debt. The British government also kept paying its debts to the Russian government.

  One British minister said that civilized nations should pay their debts, even to an enemy during wartime.

  But that was then and this is now. The U.S. and its European allies outside of Ukraine aren’t even directly at war with Russia (not yet anyway), but they’ve still imposed the most punitive economic sanctions in history.

  To a great extent, the Russian economy has been cut out of the global economy.

  The Effects Will Last for Decades

  Russia has been kicked out of the SWIFT global financial telecommunications system. A long list of Russian banks, oligarchs and major companies have been listed among those who cannot transact with Western parties. These include Gazprom (the major Russian natural gas company), among others.

  Biden has also prohibited exports of semiconductors, high-tech equipment and other technology to Russia. When you add it all up, we should expect a decline on the order of 25% in Russian GDP in the first half of 2022. That’s massive.

  Even when the kinetic war is over, probably in a month or so, the economic war will continue and the effects on the global economy (not just Russia) will last for decades. Still, Russia is not a punching bag that takes hits without hitting back.

  They’ll fight the sanctions both with retaliatory measures of their own and with inventive workarounds designed to defeat the sanctions.

  For example, Russia will be teaming up with China to roll out the Chinese credit card system (UnionPay) for Russian consumers. This comes after Visa and Mastercard ended all business with Russia. Their efforts won’t end there.

  Good Luck Sanctioning Russian Gold

  Russia is working with banks in China and India to reestablish hard currency payment channels.

  There’s now proposed legislation in the U.S. Senate to freeze gold reserves held by the Central Bank of Russia.

  Well, here’s the problem: The gold is physical, about 2,300 metric tonnes worth about $150 billion, and is stored inside Russia. It can’t actually be frozen or seized at all.

  The legislation would impose secondary boycott sanctions on any party that assists Russia in transporting or transacting in gold. But this presumed sanction would be easy to evade.

  For example, if Russia puts 100 metric tonnes of gold on a plane and flies it to Beijing in exchange for manufactured goods, they’re not exactly going to issue a press release about it. That’s the kind of transaction that will go undetected by U.S. intelligence.

  Gold is an element, atomic number 79, and is easily melted down and re-refined into new gold bars with Chinese markings that are untraceable. The Central Bank of Russia can buy more gold from Russian miners for rubles to make up for the shipment.

  Again, that gold is untraceable (Russia and China both have numerous gold refineries). If this is the best the U.S. can do then Putin is not only on his way to winning the shooting war, but he may win the financial war as well.

  Unintended Consequences

  Russia has also implemented capital controls that will shift the pain of sanctions from Russian borrowers to Western lenders who will now suffer defaults on the Russian bonds they own. And Russia has announced that it will cut off exports of important chemicals, metals and processed gasses to any nation that has sanctioned Russia.

  These exports are indispensable to manufacturing processes including semiconductors, automobiles and agriculture. In the end, most of the economic pain will fall on Western manufacturing and farming.

  This is where the law of unintended consequences comes into play. Over 65% of the processed neon gas used to power lasers that make semiconductors comes from Ukraine. Between 35% and 50% of strategic metals, such as titanium and aluminum, used in aircraft manufacture by Boeing and Airbus come from Russia. Much of the grain that feeds the Middle East and Africa comes either from Ukraine or Russia.

  Russia also exports metals used in battery production for EVs including lithium, cobalt and nickel. The list goes on topped by oil, natural gas and coal, where Russia is the leading supplier to Europe.

  If Russia follows through, we could be looking at a shutdown of major industries around the world from semiconductors (essential for automobiles, appliances, electronics, etc.) to heavy equipment and transportation.

  The Biden administration will find out the hard way that in a globalized, densely connected world, what happens in Russia doesn’t stay in Russia. Russia may be the first victim of U.S. sanctions. But the entire world will pay the final price.

  So will the dollar…

  My Vision Is Coming to Pass

  In 2009, I facilitated and participated in the first-ever financial war game hosted by the Pentagon. This war game was conducted at the top-secret Warfare Analysis Laboratory of the United States (code name: WALRUS) located in the Applied Physics Laboratory, about halfway between Washington, D.C., and Baltimore.

  I wrote about this in 2011 in Chapters 1 and 2 of my book Currency Wars. The scenario I presented at the time was that Russia and China would accumulate large gold reserves, pool their gold and launch a new digital currency backed by gold in place of the U.S. dollar.

  Russia and China would then insist that any purchases of Russian energy or Chinese manufactured goods be paid for in the new currency. It would be a clear-cut effort to get out from under U.S. dollar hegemony and to protect themselves from U.S. dollar-based economic sanctions.

  Of course, that’s exactly what’s playing out today.

  The Last Straw for Russia and the World

  It took the U.S. dollar 33 years (1914–1944) to achieve its status as the leading global reserve currency. The dollar lost its gold link in 1971 but remained the leading reserve currency due in part to the petrodollar deal that was worked out by Nixon and Kissinger in 1974.

  The world was flooded with dollars through a combination of Fed money printing and U.S. trade deficits.

  The difficulties began in the 1990s and early 2000s when the U.S. used financial sanctions to punish enemies such as Iran, North Korea, Venezuela and, to a limited extent, Russia. The U.S. kept going back to sanctions over and over.

  Now that the U.S. has frozen the reserves of the Central Bank of Russia, this is the last straw for Russia and the world.

  

  After all, if dollar reserves are no longer a safe haven, then who needs dollar reserves? The world will demand something more dependable that can’t be frozen on U.S. whims.

  The U.S. is destroying the value of the dollar by abusing sanctions. In the future, the dollar will not be that important. It won’t happen overnight, but the unprecedented sanctions against Russia will only accelerate the process.

  Investors can prepare for the coming collapse of the dollar by increasing their allocations to physical gold. That’s the one form of money you cannot freeze or seize.

  Tyler Durden
  Sat, 03/19/2022 – 14:30

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