- US Policy Paradox: How To Lose Friends And Influence Nothing
Authored by Adam Garrie via The Asia Times,
When Paul Robeson belted out the lyric “I’m tired of living, and scared of dying,” he stumbled on to a paradox of emotional dissonance that could easily define the geo-strategic cognitive dissonance that the US exhibits when dealing with its fellow superpowers Russia and China.
Time and again the United States has shown that it does not want war with either of those countries, and these feelings are of course mutual. However, the US has a strange penchant for conducting provocative measures that inexorably harm relations with both Russia and China in mind-blowingly close proximity in time to moves suggesting rapprochement or, at minimum, de-escalation of tensions.
The most recent example is the Pentagon signing an agreement to open lines of direct communication with the commanders of the People’s Liberation Army to avoid “miscalculations” in areas ranging from the Korean Peninsula to the South and East China Seas.In a rational environment, this would be seen as a US climb-down over actions China finds unacceptable in Korea and in its maritime waters. But in the current environment, while the US has signed an agreement that would ideally reduce tensions between the Chinese and US armed forces, the US president has also authorized his government to open an investigation into Chinese trade practices. While the proximate issue is US intellectual-property rights in China, the phrase “anti-Chinese sanctions” is on the tip of everyone’s lips.
Far from being out of character, the dichotomy of cooperating with China and engaging in a would-be pre-emptive trade war that the Chinese Ministry of Commerce has warned could be deeply dangerous is actually par for the course under the Trump administration.
On July 7, Donald Trump and Vladimir Putin met for the first time. The most meaningful outcome of the meeting was the agreement jointly to police a ceasefire and accompanying de-escalation zone in southwestern Syria, along with Jordan.
Less than a month later, Trump signed a sanctions bill against Russia that Moscow remains furious about. Détente 2.0 officially lasted from July 7 to August 3, 2017.
In respect of Iran, the Trump administration has quietly but officially stated that Tehran has not violated a single clause of the 2015 nuclear deal, but US officials continue to sanction Iran and continue to speak of Iran as though it has violated every agreement ever signed in history.
This has the aggregate effect of making the United States appear tired of warring but scared of cooperating.
In reality, neither Russia, China nor Iran wants war with the United States. One could also add North Korea, Mexico, Syria, Venezuela, Zimbabwe or just about every other country on the planet to that list.
Therefore, while moves to de-escalate military tensions are positive developments no matter where they happen, the mixed signals the US is sending will only serve as a demonstration that the US is not serious about proper de-escalation and cooperation and therefore it is only natural for the wider world to assume the worst about the United States, which far too often translates into “the tense status quo hasn’t changed”.
What’s more is that while pundits argue over whether this is part of a larger American geo-strategic plan to sow confusion or is simply an inexperienced Trump administration that cannot decide if it is coming or going, the wider world is more concerned with the effect than the cause.
In this sense, the US is less like the longing voice of “Old Man River” than it is like the author of a future worst-seller, “How to Lose Friends and Influence Nothing”.
- Eclipse Warning: "1000s Of People Will Damage or Entirely Lose Their Eyesight Tomorrow"
Authored by Mac Slavo via SHTFplan.com,
With a rare solar eclipse approaching and millions of people flocking to locations around the United States that are in or near the path of totality, some may not realize that the celestial event poses an extreme danger.
As noted by Karl Denninger at The Market Ticker, while the August 21st solar eclipse may be a once in a lifetime sight to see, the actual act of seeing it may cause serious damage to your eyesight:
You’ve probably seen various sites talking about safety issues. The issues are real, and what I’m sharing with you on this post is important.
Read it, understand it, do not believe for one second that any of this can be trifled with and if you have young people around you make damn sure they understand all of this as well.
There will be thousands of people who will either damage or entirely lose their eyesight tomorrow and there is exactly zero that a doc in the ER or anywhere else will be able to do for you if you wind up screwing yourself by being ignorant, stupid or both.
Please do not be one of the people that have that happen.
Because the eyes do not have pain receptors, if you are looking at the eclipse you will not know that your eyes are literally burning.
There will be no forewarning that you are about to lose your eyesight. And there will be nothing a doctor can do to restore your vision once the damage has been done.
Sun glasses will not help.
Only a commercial grade visual-rated solar filter will safely protect the eyes and as reported earlier this week, even those have been counterfeited and sold at places like Amazon.com.
We urge our readers to speak with friends and family about this very serious threat to your vision, especially if you have young children.
Map:
- Grab A Beer Philadelphia, The Soda Is Too Damn Expensive
What happened:
Turns out when soda cost the same as beer, people choose to drink beer. That is what is happening in Philadelphia.
The city’s 1.5 cent per ounce tax on soda has made beer a cheaper option. But that isn’t the only effect of the ill conceived plan to raise revenue.
The tax didn’t raise the money expected, according t o a study by the Tax Foundation.
Stores have already seen huge declines in soda sales, meaning people are either going outside the city to buy, buying beer instead, or not drinking soda.
Now if the residents did cut down on soda, some might see this as a win, despite the low tax revenue. But from the outset, the Mayor was quite clear that the aim of the tax was to raise money, not to influence health.
The city claimed the tax revenue would fund pre-kindergarten programs. But less than half of the meager revenue is actually being put into the school system.
What this means:
Looks like “for the children” was just another excuse for government greed.
Governments refuse to believe in economics. They think they can just continue to pile the taxes on. But once the costs get too high, people change their behavior.
Sometimes that means going somewhere else to buy your soda. Sometimes that means making different choices, like beer instead of soda.
But hardly ever do governments get what they predict. The mayor even originally wanted the tax to be 3 cents per ounce. Some stores are reporting a 50% drop in soda sales, so you can imagine what would have happened at double the tax rate. Yet all the greedy politicians imagine is dollar signs.
The beer companies are really the only ones who made out on the deal.
Might make a conspiracy theorist wonder…
- "The Taps Are Gushing" Hong Kong ATM Withdrawals Surge As Facial Recognition Fears Spread
Amid a crackdown on unauthorized mainland currency outflows by forcing ATM users to undertake facial recognition before cash is dispensed in Macau, Hong Kong ATMs are reportedly being hit by a massive surge in withdrawals from China's UnionPay bank cards.
As The South China Morning Post notes, the mainland has been strengthening regulations since last year when a decline in the value of the yuan led to widespread capital outflows.
Mainland people are allowed to withdraw up to 100,000 yuan (HK$117,000) in cash overseas and remit up to US$50,000 worth of foreign currency offshore annually, according to 2016 foreign exchange regulations.
Users of UnionPay cards can withdraw up to 10,000 yuan per day for each card they hold.
To skirt around the foreign exchange controls, some individuals have been using separate ATM cards to make cash withdrawals, prompting the regulators to crack down on the practice.
The most invasive of those crackdowns was the imposition of facial recognition technology in Macau ATMs.
Regulators in the world’s most lucrative gaming hub are deploying machines with “Minority Report”-style technology to keep tabs on capital outflows from China and watch for potential money laundering schemes. China UnionPay Co.’s network is the first to use the software, which will be installed in all the city’s 1,200 cash dispensers.
…
“This is aimed at illicit outflows of capital from China,” said Sean Norris, Asia Pacific managing director at Accuity in Singapore. “It’s aimed at people drawing out money in Macau, going to the casino, betting very little, getting forex from there and moving it.”
But now, as SCMP reports, one source explains…
"It seems quite clear that as the introduction of ATM facial recognition technology in Macau has put the squeeze on cash dispensing withdrawals in Macau, the pattern of withdrawals has followed the path of least resistance – and that is to Hong Kong."
Monetary chiefs in Hong Kong have declined to deny or confirm information obtained by the South China Morning Post that ATMs have seen a "staggering'' rise in withdrawals since the casino hub introduced the facial recognition technology in May as part of a bid to stem illegal capital flight from the mainland.
"The rise in ATM withdrawals in terms of volume and number has been staggering. The taps are gushing," a source with knowledge of the situation said.
The development follows a move by the Hong Kong Monetary Authority to instruct local banks to submit data on cash withdrawals by UnionPay cards throughout the ATM network as the regulator cracks down on unauthorised mainland outflows.
The Monetary Authority spokeswoman added:
"The HKMA endeavours to enhance the security level of banking systems.
"We have been studying the applications of different technologies, including the feasibility, soundness and cost efficiency of facial recognition and other types of biometric authentication technologies, having regard to the technologies used in other jurisdictions.
"However, we have no plans to require ATMs to install facial recognition technology."
Which leads to one simple question… If everything is so awesome over there, why are Chinese authorities cracking down so hard on what seems like utter panic to get cash out of the onshore market?
And do not be fooled by the "strengthening Yuan" narrative… once again China is continuing to devalue its currency against the world… while maintaining the "Shanghai Accord"-like illusion that it is strengthening again the USD…
- The Future Of The Third World
Authored by Jayant Bhandari via Acting-Man.com,
Decolonization
The British Empire was the largest in history. At the end of World War II Britain had to start pulling out from its colonies. A major part of the reason was, ironically, the economic prosperity that had come through industrialization, massive improvements in transportation, and the advent of telecommunications, ethnic and religious respect, freedom of speech, and other liberties offered by the empire.
The colors represent the colonies of various nations in 1945, and the colonial borders of that time – click to enlarge.
After the departure of the British — as well as the French, German, Belgians, and other European colonizers — most of the newly “independent” countries suffered rapid decay in their institutions, stagnant economies, massive social strife, and a fall in standards of living. An age of anti-liberalism and tyranny descended on these former colonies. They rightly became known as third-world countries.
An armchair economist would have assumed that the economies of these former colonies, still very backward and at a very low base compared to Europe, would grow at a faster rate. Quite to the contrary, as time went on, their growth rates stayed lower than those of the West.
Socialism and the rise of dictators were typically blamed for this — at least among those on the political Right. This is not incorrect, but it is a merely proximate cause. Clarity might have been reached if people had contemplated the reason why Marxism and socialism grew like weeds in the newly independent countries.
Was There a Paradigm Shift in the 1980s?
According to conventional wisdom, the situation changed after the fall of the socialist ringleader, the USSR, in the late 1980s. Ex-colonized countries started to liberalize their economies and widely accepted democracy, leading to peace, the spread of education and equality, the establishment of liberal, independent institutions. Massive economic growth ensued and was sustained over the past three decades. The “third world” was soon renamed “emerging markets.”
Alas, this is a faulty narrative. Economic growth did pick up in these poor countries, and the rate of growth did markedly exceed that of the West, but the conventional narrative confuses correlation with causality. It tries to fit events to ideological preferences, which assume that we are all the same, that if Europeans could progress, so should everyone else, and that all that matters are correct incentives and appropriate institutions.
The beginning and end of the Soviet communist era in newspaper headlines. The overthrow of Kerensky’s interim government was the start of Bolshevik rule. To be precise, the Bolsheviks took over shortly thereafter, when they disbanded the constituent assembly in in early 1918 and subsequently gradually did the same to all non-Bolshevik Soviets that had been elected. A little more than seven decades later, the last Soviet Bolshevik leader resigned. It is worth noting that by splitting the Russian Federation from the Ukraine and Belorussia, Yeltsin effectively removed Gorbachev from power – the latter was suddenly president of a country that no longer existed and chairman of a party that was declared illegal in Russia. [PT] – click to enlarge.
The claimed liberalization in the “emerging markets” after the collapse of the USSR did not really happen. Progress was always one step forward and two steps back. In some ways, government regulations and repression of businesses in the “emerging markets” have actually gotten much worse. Financed by increased taxes, governments have grown by leaps and bounds — not for the benefit of society but for that of the ruling class — and are now addicted to their own growth.
The ultimate underpinnings of the so-called emerging markets haven’t changed. Their rapid economic progress during the past three decades — a one-off event — happened for reasons completely different from those assumed by most economists. The question is: once the effect of the one-off event has worn off, will emerging markets revert to the stagnation, institutional degradation, and tyranny that they had leaped into soon after the European colonizers left?
The One-Off Event: What Actually Changed in the 1980s
In the “emerging markets” (except for China) synchronized favorable economic changes were an anomaly. They resulted in large part from the new, extremely cheap telephony that came into existence (a result of massive cabling of the planet implemented in the 1980s) and the subsequent advent of the new technology of the internet. The internet enabled instantaneous transfer of technology from the West and as a consequence, unprecedented economic growth in “emerging markets.”
Meanwhile, a real cultural, political, and economic renaissance started in China. It was an event so momentous that it changed the economic structure not just of China, but of the whole world. Because China is seen as a communist dictatorship, it fails to be fully appreciated and respected by intellectuals who are obsessed with the institution of democracy.
But now that the low-hanging fruit from the emergence of the internet and of China (which continues to progress) have been plucked, the “emerging markets” (except, again, for China) are regressing to their normal state: decay in their institutions, stagnant economies, and social strife. They should still be called the “third world.”
There are those who hold China in contempt for copying Western technology, but they don’t understand that if copying were so easy, Africa, the Middle East, Latin America, and South Asia would have done the same. They were, after all, prepared for progress by their colonial history.
European colonizers brought in the rule of law and significantly reduced the tribal warfare that was a matter of daily routine in many of the colonies — in the Americas, Africa, the Middle East, and Asia. Britain and other European nations set up institutional structures that allowed for the accumulation of intellectual and financial capital. Western-style education and democracy were initiated. But this was helpful in a very marginal way.
What is Wrong with the Third World
For those who have not traveled and immersed themselves in formerly colonized countries, it is hard to understand that although there was piping for water and sewage in Roman days, it still isn’t available for a very large segment of the world’s population. The wheel has existed for more than 5,000 years, but a very large number of people continue to carry water in pots on their heads.
Lead piping supplying water to homes already existed in Roman days, 2000 years ago.
The Ljubljana Marshes Wheel, which is more than 5,000 years old
There are easily a billion or more people today, who have no concept of either the pipe or the wheel, even if they went to school. It is not the absence of technology or money that is stopping these people from starting to use some basic forms of technology. It is something else.
Sir Winston Churchill, the war-time Prime Minister of Britain, talking about the future of Palestine said:
“I do not admit… that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race… has come in and taken their place.”
Cigar-puffing British war-time PM Winston Churchill was as politically incorrect as they come. If he were alive today, he would probably be labeled the newest Hitler by the press and spend 90% of his time apologizing. Perhaps we shouldn’t mention this, but there are many Churchill monuments dotted across Europe and one can be found in Washington DC as well (alert readers will notice that a decidedly non-triggered Washington Post fondly remembered Churchill as an “elder statesman” a mere 10 months ago; rest assured that won’t stop the social justice warrior brigade if they decide to airbrush him out of history). Just to make this clear, your editor is not exactly the biggest fan of the man who traded away half of Europe to Stalin because he felt he could “trust the Soviet communist government” and who was clearly a tad too enamored of war, a characteristic Robert Kaplan described in his strident, amoral pro-war screed Warrior Politics: Why Leadership Demands a Pagan Ethos as follows: “Churchill’s unapologetic warmongering arose not from a preference for war, but from a breast-beating Victorian sense of imperial destiny…” Neither the breast-beating nor the sense of imperial destiny are really our thing, but we tip our hat to the man’s utter lack of political correctness and his associated willingness to offend all and sundry with a nigh Trumpian alacrity and determination. [PT]
On Islam, he said:
“How dreadful are the curses which Mohammedanism lays on its votaries! Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia in a dog, there is this fearful fatalistic apathy. The effects are apparent in many countries. Improvident habits, slovenly systems of agriculture, sluggish methods of commerce, and insecurity of property exist…”
Talking about India he famously said:
“I hate Indians. They are a beastly people with a beastly religion.”
A remark often attributed to Churchill, although this remains unverified, has certainly stood the test of time so far:
“If independence is granted to India, power will go to the hands of rascals, rogues, freebooters; all Indian leaders will be of low caliber and men of straw. They will have sweet tongues and silly hearts. They will fight amongst themselves for power and India will be lost in political squabbles. A day will come when even air and water will be taxed in India.”
Europeans of that time clearly knew that there was something fundamentally different between the West and the rest, and that the colonies would not survive without the pillars and the cement European management provided.
With the rise of political correctness this wisdom was erased from our common understanding – but it is something that may well return to haunt us in the near future, as the third world fails to fulfill expectations, while people who immigrate to Europe, Canada, Australia and the US from there fail to assimilate.
The Missing Underpinnings: Reason And All That Depends On It
Until now, the hope among people in the World Bank, the IMF, and other armchair intellectuals was that once the correct incentives were in place and institutions were organized, these structures imposed from on high would put the third world on a path to perpetual growth. They couldn’t have been more wrong.
The cart has been put in front of the horse. It is institutions that emerge from the underlying culture, not the other way around. And cultural change is a process taking millennia, perhaps even longer. As soon as Europeans quit their colonies, the institutional structures they left started to crumble.
Alas, it takes a Ph.D. from an Ivy League college and a quarter of a million dollar salary at the World Bank or the IMF to not understand what the key issue with development economics and institutional failures is: the missing ingredient in the third world was and is the concept of objective, impartial reason – the basis of laws and institutions that protect individual rights.
This concept of reason took 2,500 years to develop and get infused into the culture, memes, and genes of Europeans — a difficult process that, even in Europe, was never fully completed. European institutions were at their root products of this concept.
A justly famous quote by Thomas Paine (a prolific writer with a side job as a founding father and revolutionary). Paine was deeply suspicious of self-anointed authorities, both of the secular and clerical variety, who in turn regarded him as dangerous. His writings inter alia provoked a so-called “pamphlet war” in Britain (it would be best if all wars were conducted via pamphlets). [PT]
Despite massive efforts by missionaries, religious and secular, and of institutions imposed on poor countries, reason failed to get transmitted. Whatever marginal improvement was achieved over 200 to 300 years of colonization is therefore slowly but surely undone.
Without reason, subsidiary concepts such as equality before the law, compassion and empathy won’t operate. Irrational societies simply cannot maintain institutions representing the rule of law and fairness. The consequence is that they cannot evolve or even maintain institutions the European colonizers left behind.
Any institutions imposed on them — schools, armies, elections, national executives, banking and taxation systems — must mutate to cater to the underlying irrationality and tribalism of the third world.
Western Institutions Have Mutated
Education has become a dogma in “emerging markets”, not a tool; it floats non-assimilated in the minds of people lacking objective reason. Instead of leading to creativity and critical thinking, it is used for propaganda by demagogues.
Without impartial reason, democracy is a mere tribal, geographical concept, steeped in arrogance. All popular and “educated” rhetoric to the contrary, I can think of no country in the non-western world that did well after it adopted “democracy.”
The spread of nationalism (which to a rational mind is about the commonality of values) has created crises by unifying people along tribal lines. The most visible example is provided by events in the Middle East, but the basic problem is the same in every South Asian and African country and in most of South America.
India, the geographical entity I grew up in, was rapidly collectivized under the flag and the national anthem. It has the potential to become the Middle East on steroids, once Hindutava (Hindu nationalism) has become deeply rooted in society.
Assessing the Current Predicament
In Burma, a whiff of democracy does not seem to have inhibited a genocide perpetrated by Buddhists against the Muslim Rohingya. Thailand (which was not colonized in a strictly political sense) has gone silent, but its crisis continues.
Turkey and Malaysia, among the better of these backward societies, have embarked on a path of rapid regression to their medieval pasts. South Africa, which not too long ago was considered a first-world country, got rid of apartheid only to end up with something even worse.
The same happened with Venezuela, which was among the richer countries of the world in the not-too-distant past. It is ready to implode, a fate that may befall Brazil as well one day. Pakistan, Bangladesh, Nepal, and East Timor are widely acknowledged to be in a mess, and are getting worse by the day.
Indonesia took a breather for a few years and is now once again in the thrall of fanaticism. India is the biggest democracy, so its problems are actively ignored by the Western press, but they won’t be for long, as India continues to evolve toward a police state.
Botswana was seen as one of the countries with the fastest and longest-lasting economic growth. What was ignored was the fact that this rather large country has a very small population, which benefited hugely from diamonds and other natural resources. The top political layer of Botswana is still a leftover from the British. The local culture continues to corrode what was left by them, and there are clear signs that Botswana is past its peak.
Part of the central business district in Gaborone, Botswana. Long time readers may recall an article we posted about 2.5 years ago: “Botswana – Getting it Right in Africa”. We are not sure if much has changed since then, but it is worth recalling that Botswana started out as the third-poorest country in Africa when it became independent in 1966 and is today one the richest. The very small population (by African standards) combined with the large income the country obtains from diamond mining no doubt played a role in this, but being rich in natural resources means very little per se. Botswana never fell for Marxism. When the country gained independence, its political leadership adopted democracy and free markets and never looked back. Botswana is a very homogenous society in terms of religious and tribal affiliations, which differentiates the country from most other former colonial territories in Africa. From our personal – admittedly by now a bit dated – experience, we can state that Botswana is the only African country in which one is unlikely to encounter any corruption – not even the lowliest government minion will ask for bribes as far as we could tell (in many African countries, officials begin demanding bribes the moment one wants to cross the border). Considering all that, we are slightly more hopeful about Botswana, but it is not an island. Deteriorating conditions in neighboring countries may well prove contagious at some point. [PT]
Papua New Guinea was another country that was doing reasonably well before the Australians left. It is now rapidly regressing to its tribal, irrational, and extremely violent norms, where for all practical purposes rape is not even considered a crime.
Conclusion: A Vain Hope
The world may recognize most of the above, but it sees these countries’ problems as isolated events that can be corrected by further impositions of Western institutions, under the guidance of the UN or some such international (and therefore “non-colonialist”) organization.
Amusingly, our intellectual climate — a product of political correctness — is such that the third world is nowadays seen as the backbone of humanity’s future economic growth. Unfortunately, so-called emerging markets are probably headed for a chaotic future. The likeliest prospect is that these countries will continue to cater to irrational forces, particularly tribalism, and that they will consequently cease to exist, disintegrating into much smaller entities.
As the tide of economic growth goes out with the final phase of plucking the free gift of internet technology nearing its end, their problems will resurface rapidly – precisely when the last of those who were trained under the colonial system are sent to the “dustbin of history”.
- 10 Missing, 5 Injured After USS John S. McCain Collides With Oil Tanker Near Straits Of Malacca
Update: according to the latest US Navy 7th Fleet update, ten sailors are missing and five have been injured after the guided-missile destroyer USS John S. McCain collided with a merchant vessel, U.S. 7th Fleet Commander says in emailed statement Monday.
The collision was reported at 6:24 a.m. Japan Standard Time, while the ship was transiting to a routine port visit in Singapore.
The ship is currently sailing under its own power and heading to port.
* * *
Two months after seven US sailors died after the US Navy Destroyer USS Fitzgerald collided with a merchant vessel off the coast of Japan, moments ago the US Navy said that in an near replica of that incident, the guided-missile destroyer USS John S. McCain was involved in a collision with another merchant vessel, the Alnic MC, an oil/chemical tanker east of Singapore and the Strait of Malacca on August 21.
#USSJohnSMcCain involved in collision with a merchant vessel while east of the Strait of Malacca. Updates to follow. https://t.co/6bHUovT8eI pic.twitter.com/EVcYjHwXah
— 7th Fleet (@US7thFleet) August 20, 2017
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The collision was reported at 6:24 a.m. Japan Standard Time, while the ship was transiting to a routine port visit in Singapore. Initial reports indicate the warship sustained damage to its port side aft. No immediate word on any casualties. Search and rescue efforts are under way in coordination with local authorities, the Navy said.
Here is the latest update from the US 7th Fleet:
The guided-missile destroyer USS John S. McCain (DDG 56) was involved in a collision with the merchant vessel Alnic MC while underway east of the Straits of Malacca and Singapore on Aug. 21. The collision was reported at 6:24 a.m. Japan Standard Time, while the ship was transiting to a routine port visit in Singapore.
The ship is currently sailing under its own power and heading to port.
Search and rescue efforts are underway in coordination with local authorities. In addition to tug boats out of Singapore, the Republic of Singapore Navy ship RSS Gallant (97), RSN helicopters and Police Coast Guard vessel Basking Shark (55) are currently in the area to render assistance.
MV-22s and SH-60s from USS America are also responding.
Initial reports indicate John S. McCain sustained damage to her port side aft. The extent of damage and personnel injuries is being determined. The incident will be investigated.
CNN reports that according to preliminary information there have been minor injuries from the collision, although a full accounting of the crew is still underway.
Ryan Browne says preliminary information is minor injuries from USS John McCain collision. A full accounting of the crew is still underway
— Steve Brusk (@stevebruskCNN) August 21, 2017
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The Straits of Malacca, located between Malaysia and Singapore, is one of the world’s most important naval chokepoints; it sees the transit of over 15 million barrels of oil per day, mostly headed toward China and Japan. As we reported back in 2014, “if one were so inclined, halting seaborne trade routes at the Strait of Malacca would hobble the entire Chinese economy overnight, something the Chinese leadership is surely aware of, and is certainly considering alternatives to, such as land pipelines into Iran (via India), as well as Kazakhstan and Russia.”
The warship is named after John S. McCain, Sr., and John S. McCain, Jr., both Admirals in the U.S. Navy, and the grandfather and father, respectively, of the neocon Arizona senator. This crash comes days after the top three leaders aboard the USS Fitzgerald were relieved of command. That warship was damaged badly in a collision off the coast of Japan that killed seven sailors in June.
According to MarineTraffic data, the merchant ship Alnic MC with which the guided US missile destroyer collided, is an oil/chemical tanker…
Alnic MC oil/chemical tanker pic.twitter.com/F3LNHVB5iu
— Nicky Two Scoops (@SDgolferinMN) August 21, 2017
… which was built in 2008, and has a dead weight of 50,760 tons.
#AlnicMC statistics:
* Grosse Tons: 30040
* Year Built: 2008
* Deadweight: 50760 tons pic.twitter.com/MtTsjdlIDH
— Intel Crab (@IntelCrab) August 20, 2017
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- Surprise! Sharp Racial Divide Found Over Robert E. Lee Statue
News headlines in the United States have been dominated by the fallout from the Charlottesville protests throughout the last week. YouGov have polled Americans to gauge their thoughts on a whole range of issues surrounding the violence.
Notably, respondents were asked about the decision that led to the protests in the first place – the decision to remove the statue of Confederate General Robert E. Lee.
In perhaps the least surprising finding of the week – and most clear-cut – Statista’s Niall McCarthy points out that the research uncovered sharp racial and partisan divides over the decision.
You will find more statistics at Statista
As can be seen from the infographic above, only 4 percent of blacks strongly disapprove of the decision to remove the statue compared to 40 percent of whites.
- FX Week Ahead: Jackson Hole, And A Chance For Yellen To Fend Off Some USD Bashing
By Shant Movsesian and Rajan Dhall MSTA
Coming off a mixed week for the USD, traders focus their attention on the Jackson Hole symposium which starts on Thursday, running through to Saturday. Within this, Friday's address by the Fed chair will take centre stage, and for all the 'will she, won't she' talk about monetary policy, the market will be hanging on Janet Yellen's words, as the third rate hike for 2017 remains in the balance. As it stands, ECB sources (always an interesting one that) report that president Draghi will refrain from covering policy matters when he takes to the stand, and we saw this hit the EUR, helping to stabilise the USD index in the process.
Since then, political shenanigans at the White House have again undermined the greenback, with the past week see the manufacturing council disbanded by Donald Trump after a series of resignations prompted by his public address in response to the Charlottesville attack. We then saw rumours hitting social media that Gary Cohn had resigned, but despite being dismissed, cast doubt over the chief economic adviser's advocacy of the current administration.
Ending the week we saw chief strategist Stephen Bannon removed (in whatever manner this entailed), and through all the above, risk sentiment wobbled (at best) again, and the funding currencies and safe havens led by the JPY and CHF regaining ground. Gold also pushed above $1300, but failed to maintain this key level into the weekend.
Consequently, there will be little focus on the data this week, and to that end we see little on the schedule of note anyway. Markit release their version of manufacturing and services PMIs (Wednesday) which have been at odds with the ISM data lately, and the Jul readings for existing home sales are released on Thursday. Friday's volatile Durable goods orders will naturally be overshadowed by Yellen's address, but through the week, economic activity indices from Chicago, Richmond and Kansas are also out.
In Europe, we get the national and composite PMI numbers midweek. On Monday, the German ZEW release their survey results, for comparison with the IFO institute who report on Friday along with the Q2 German GDP data early on in the European session. In all cases, the data will have to be pretty underwhelming to dent the bullish sentiment in the EUR. We saw 1.1700 giving way when the ECB minutes divulged the governing council's concern over the FX overshoot, and while this may have been addressed vs the CHF and JPY, both the spot and GBP rates continue to find strong demand on dips.
EUR/USD managed to push down to 1.1660, but was swiftly back above 1.1700 again. Liquidity in the summer markets overemphasise the larger orders, with more buying interest noted here down to 1.1610. For EUR/CHF, 1.1225 is the first major support point to note, with much of the latest weakness down to broader risk factors which have naturally pulled USD/CHF back to 0.9600 (and lower) again. 0.9770-75 still the level to overcome for those looking for a more meaningful correction and/or recovery in the USD.
We saw EUR/JPY also giving back early week gains, which saw the 128.00 handle briefly surrendered, but as noted above, the JPY is quick to react to negative risk factors these days, and this is down to the net short positioning in the market. According to the representative CFTC data however, this has been trimmed by some 20% this past week. EUR longs have also contracted, but as above, there are plenty waiting to get back in at lower levels, and impulsively so.
USD/JPY remains well placed to push lower again and retest the new August base at 108.60, through which lie the 2017 lows around 108.15. Fresh demand seen all the way into the low 107.00's if we do break lower, with the constant stream of surprises coming out of Capital Hill more than capable of seeing this achieved. This should be a broader JPY move however, with the likes of GBP/JPY also showing signs that the upturn has run its course. The commodity Dollars also looked to have topped out vs JPY, with the weekly charts on AUD, NZD and CAD near identical.
Out of Japan, we get the latest CPI stats out on Thursday, and a continuation of a slow pick up will add to some of the more encouraging domestic growth signals we have been receiving of late. Manufacturing PMIs here are out on Tuesday.
The China data slate is empty next week, as is that of Australia, so the AUD will be at the mercy of external factors which are split between the USD and general risk appetite. Hitting the low 0.7800's this week, we expect the market will be looking for a deeper retrace based on the technical breach of 0.7835-50, but closing well above here on the weekly charts puts this in the balance for now.
Trade data in NZ offers a chance of some differentiation among the 'Antipodeans', with NZD tracking the AUD spot for the most part, and keeping AUD/NZD inside a 1.0650-1.0850 range; the upside does look more likely to give way. The recent NZ numbers have not been great, namely jobs growth in Q2. The fiscal clout from the budget surpluses has faded into the background also, though many anticipated this as much of this was fed back into social investment more than business. Gains above 0.7300 look tenuous for now, but demand ahead of 0.7200 sets up a near term stalemate.
One of the more positive developments this week was the cordial start to the NAFTA talks, and although this may sound naive, did give the CAD some relief – as it did the MXN, which both ended the week up on both the USD and the JPY. As noted before, the greater risks lie at Mexico's door, but for the US, a positive outcome – for all – would temper some of the negative factors hitting USD sentiment at the moment. Nb, Mexican Q2 GDP on Tuesday for those who monitor levels in the current tri party accord.
Canadian inflation on Friday drew an odd response from the CAD as yoy CPI up from 1.0% to 1.2% is little cause for excitement. Given pricing for another BoC rate hike this year is up around 80%, we see the risk to the downside on this basis alone, with some of the more recent domestic readings (trade and manufacturing sales) perhaps reflective of the aggressive CAD appreciation seen in the last few months. We still look for an eventual test of 1.2200-1.2000 lower down, but not 'all in one go'! 1.2750-1.2800 as expected has contained the upside, and next week will see whether the support just under 1.2600 will hold up for a more significant correction. Wholesale sales, retail sales (both for Jun) and corporate profits due for consideration next week.
GDP for Q2 is the major event in the UK ahead; this released on Thursday along with the business investment levels as the CBI distributive trades survey. Last week, the focus was on the jobs report where we saw wage growth improving, but with the bears gaining the upper hand, GBP relief was short lived, with a deeper probe into the numbers showing real earnings down – as you would expect given the exchange rate fed rise in inflation. Jul PSNB and CBI industrial trends orders are out on the Tuesday.
It took the BoE's highlighting of their concerns over the Brexit process ahead to curtail Cable strength towards the 1.3300 level, and now the market has been 'directed' towards this key and ever-present (!) factor, rebounds see the market jumping in to sell quickly and 1.2900+ being given short shrift. There is no disputing the fact that we tread cautiously from here, and especially so given the EU talks have stalled, with the UK keen to press ahead with transitional agreements, but Europe equally keen to resolve withdrawal terms first.
The low 1.2800's are providing some strong support in the meantime, but we should all now be familiar with current market persistence in maintaining well established themes. We still expect GBP to push lower, and it is now all about how much breathing space we get between down-legs. Expect very little of this against the EUR as we continue to grind up towards the resistance zone in the 0.9150-0.9250 area.
We also get Q2 growth in Norway on the Thursday, which is the stand out release in Scandinavia. Just as we see in AUD/NZD, there is little to differentiate between the NOK and SEK at the present time, with steadfast parameters in NOK/SEK at 1.0120 and 1.0360 having noticeably contained trade in the past 5 weeks. Parity was momentarily breached at the start of Jul, but strong GDP numbers in Sweden could not generate a fresh move to test these levels. NOK – and CAD – correlations with Oil price have faded at these generally more comfortable levels.
- NASA Unveils Plan To Stop Yellowstone "Supervolcano" Eruption, There's Just One Catch
A NASA plan to stop the Yellowstone supervolcano from erupting, could actually cause it to blow… triggering a nuclear winter that would wipe out humanity.
As we have detailed recently, government officials have been closely monitoring the activity in the Yellowstone caldera.
However, as SHTFplan.com's Mac Slavo details, scientists at NASA have now come up with an incredibly risky plan to save the United States from the super volcano.
A NASA scientist has spoken out about the true threat of super volcanoes and the risky methods that could be used to prevent a devastating eruption. Lying beneath the tranquil and beautiful settings of Yellowstone National Park in the US lies an enormous magma chamber, called a caldera. It’s responsible for the geysers and hot springs that define the area, but for scientists at NASA, it’s also one of the greatest natural threats to human civilization as we know it.
Brian Wilcox, a former member of the NASA Advisory Council on Planetary Defense, shared a report on the natural hazard that hadn’t been seen outside of the agency until now. Following an article published by BBC about super volcanoes last month, a group of NASA researchers got in touch with the media to share a report previously unseen outside the space agency about the threat Yellowstone poses, and what they hypothesize could possibly be done about it.
“I was a member of the NASA Advisory Council on Planetary Defense which studied ways for NASA to defend the planet from asteroids and comets,” explains Brian Wilcox of Nasa’s Jet Propulsion Laboratory (JPL) at the California Institute of Technology.
“I came to the conclusion during that study that the supervolcano threat is substantially greater than the asteroid or comet threat.”
Yellowstone currently leaks about 60 to 70 percent of its heat into the atmosphere through stream water which seeps into the magma chamber through cracks, while the rest of the heat builds up as magma and dissolves into volatile gasses. The heat and pressure will reach the threshold, meaning an explosion is inevitable. When NASA scientists considered the fact that a super volcano’s eruption would plunge the earth into a volcanic winter, destroying most sources of food, starvation would then become a real possibility. Food reserves would only last about 74 days, according to the UN, after an eruption of a super volcano, like that under Yellowstone. And they have devised a risky plan that could end up blowing up in their faces. Literally.
Wilcox hypothesized that if enough heat was removed, and the temperature of the super volcano dropped, it would never erupt. But he wants to see a 35% decrease in temperature, and how to achieve that, is incredibly risky. One possibility is to simply increase the amount of water in the supervolcano. As it turns to steam. the water would release the heat into the atmosphere, making global warming alarmists tremble.
“Building a big aqueduct uphill into a mountainous region would be both costly and difficult, and people don’t want their water spent that way,” Wilcox says. “People are desperate for water all over the world and so a major infrastructure project, where the only way the water is used is to cool down a supervolcano, would be very controversial.”
So, NASA came up with an alternative plan. They believe the most viable solution could be to drill up to 10km down into the super volcano and pump down water at high pressure. The circulating water would return at a temperature of around 350C (662F), thus slowly day by day extracting heat from the volcano. And while such a project would come at an estimated cost of around $3.46 billion, it comes with an enticing catch which could convince politicians (taxpayers) to make the investment.
“Yellowstone currently leaks around 6GW in heat,” Wilcox says. “Through drilling in this way, it could be used to create a geothermal plant, which generates electric power at extremely competitive prices of around $0.10/kWh. You would have to give the geothermal companies incentives to drill somewhat deeper and use hotter water than they usually would, but you would pay back your initial investment, and get electricity which can power the surrounding area for a period of potentially tens of thousands of years. And the long-term benefit is that you prevent a future supervolcano eruption which would devastate humanity.”
Of course, drilling into a super volcano comes with its own risks, like the eruption that scientists are desperate to prevent. Triggering an eruption by drilling would be disastrous.
“The most important thing with this is to do no harm,” Wilcox says.
“If you drill into the top of the magma chamber and try and cool it from there, this would be very risky. This could make the cap over the magma chamber more brittle and prone to fracture. And you might trigger the release of harmful volatile gases in the magma at the top of the chamber which would otherwise not be released.”
The cooling of Yellowstone in this manner would also take tens of thousands of years, but it is a plan that scientists at NASA are considering for every super volcano on earth.
“When people first considered the idea of defending the Earth from an asteroid impact, they reacted in a similar way to the supervolcano threat,” Wilcox says.
“People thought, ‘As puny as we are, how can humans possibly prevent an asteroid from hitting the Earth.’ Well, it turns out if you engineer something which pushes very slightly for a very long time, you can make the asteroid miss the Earth. So the problem turns out to be easier than people think. In both cases it requires the scientific community to invest brain power and you have to start early. But Yellowstone explodes roughly every 600,000 years, and it is about 600,000 years since it last exploded, which should cause us to sit up and take notice.”
So what would happen?
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