Today’s News 24th July 2018

• Europe Can't Rely On The US To Maintain World Order, Merkel Warns

  Having been called a “foe” by President Trump last week, German Chancellor Angela Merkel confirmed that she was right to say a year ago that Europe could no longer rely on the United States to impose order on the world, and that it needed to take matters close to home into its own hands.

  “We can’t rely on the superpower of the United States,” Merkel told a news conference in Berlin.

  As AntiWar’s Jason Ditz notes, Merkel did not elaborate on exactly what this “order” meant, but it comes in the context of recent polls showing German voters resistant to her desire to increase military spending. This suggests Merkel is trying to sell increased armament as a way to intervene regionally.

  

  Merkel also said she intends to continue to work on improving Germany’s relationship with the United States. This appears to be an uphill battle, with the two nations at odds over a number of issues, but she insisted ties are “crucial.”

  Just last week, President Trump said he has “a big problem” with Germany, and the US was threatening to sanction German companies for investing in a Russian energy pipeline. Trump expressed particular anger at the pipeline, saying it means Germany is effective “captive” to Russia.

  Putting this accusation into context, Statista’s Sarah Feldman points out that Germany secures roughly three fifths of its energy needs from foreign sources. A fifth of its overall energy consumption comes from natural gas.

  

  You will find more infographics at Statista

  These dependency numbers have been creeping up over the past decade and are expected to steadily increase in the years to come as Nord Stream 2, a natural gas pipeline under the Baltic Sea, takes effect bringing a stream of natural gas directly into Germany.

  In practice, the pipeline issue is more about the US wanting to increase LNG exports to Europe than being worried about Russia increasing trade ties there. Where US and European interests don’t align, however, it seems to fuel tensions, and that’s liable to mean Angela Merkel faces an uphill battle in improving relations.

  

• When The US Invaded Russia

  Authored by Jeff Klein via ConsortiumNews.com,

  Amidst the backdrop of increased U.S.-Russian tensions and even talk of war, long forgotten is the time the U.S. actually invaded…

  

  Amid the bi-partisan mania over the Trump-Putin Summit in Helsinki, fevered, anti-Russian rhetoric in the United States makes conceivable what until recently seemed inconcievable: that dangerous tensions between Russia and the U.S. could lead to military conflict. It has happened before.

  In September 1959, during a brief thaw in the Cold War, Nikita Khrushchev made his famous visit to the United States. In Los Angeles, the Soviet leader was invited to a luncheon at Twentieth Century-Fox Studios in Hollywood and during a long and rambling exchange he had this to say:

  “Your armed intervention in Russia was the most unpleasant thing that ever occurred in the relations between our two countries, for we had never waged war against America until then; our troops have never set foot on American soil, while your troops have set foot on Soviet soil.”

  These remarks by Khrushchev were little noted in the U.S. press at the time – especially compared to his widely-reported complaint about not being allowed to visit Disneyland.  But even if Americans read about Khrushchev’s comments it is likely that few of them would have had any idea what the Soviet Premier was talking about.

  But Soviet – and now Russian — memory is much more persistent.  The wounds of foreign invasions, from Napoleon to the Nazis, were still fresh in Russian public consciousness in 1959 — and even in Russia today — in a way most Americans could not imagine.  Among other things, that is why the Russians reacted with so much outrage to the expansion of NATO to its borders in the 1990’s, despite U.S. promises not to do so during the negotiations for the unification of Germany.

  The U.S. invasion Khrushchev referred to took place a century ago, after the October Revolution and during the civil war that followed between Bolshevik and anti-Bolshevik forces, the Red Army against White Russians.  While the Germans and Austrians were occupying parts of Western and Southern Russia, the Allies launched their own armed interventions in the Russian North and the Far East in 1918. 

  The Allied nations, including Britain, France, Italy, Japan and the U.S., cited various justifications for sending their troops into Russia: to “rescue” the Czech Legion that had been recruited to fight against the Central Powers; to protect allied military stores and keep them out of the hands of the Germans; to preserve communications via the Trans-Siberian Railway; and possibly to re-open an Eastern Front in the war.  But the real goal – rarely admitted publicly at first—was to reverse the events of October and install a more “acceptable” Russian government. As Winston Churchill later put it, the aim was to “strangle the Bolshevik infant in its cradle.”

  

  In addition to Siberia, the U.S. joined British and French troops to invade at Archangel, in the north of Russia, on September 4, 1918.

  In July 1918, U.S. President Woodrow Wilson had personally typed the “Aide Memoire” on American military action in Russia that was hand-delivered by the Secretary of War at the beginning of August to General William Graves, the designated commander of the U.S. troops en route to Siberia. Wilson’s document was curiously ambivalent and contradictory. It began by asserting that foreign interference in Russia’s internal affairs was “impermissible,” and eventually concluded that the dispatch of U.S. troops to Siberia was not to be considered a “military intervention.”

  The Non-Intervention Intervention

  But the American intervention began when U.S. soldiers disembarked at Vladivostok on August 16, 1918.  These were the 27th and 31st infantry regiments, regular army units that had been involved in pacification of U.S.-occupied Philippines.  Eventually there were to be about 8,000 U.S. troops in Siberia.

  Judging from his memoires, General Graves was puzzled by how different things looked on the ground in Siberia than his vague instructions seemed to suggest.  For one thing, the Czechs hardly needed rescuing.  By the Summer of 1918 they had easily taken control of Vladivostok and a thousand miles of the Trans-Siberian Railway.

  For the next year and a half, General Graves, by all appearances an honest and non-political professional soldier, struggled to understand and carry out his mandate in Siberia.  He seems to have driven the U.S. State Department and his fellow allied commanders to distraction by clinging stubbornly to a literal interpretation of Wilson’s Aide Memoire as mandating strict non-intervention in Russian affairs. The general seemed incapable of noticing the broad “wink” with which everyone else understood these instructions.

  Graves strove to maintain “neutrality” among the various Russian factions battling for control of Siberia and to focus on his mission to guard the railroad and protect Allied military supplies.  But he was also indiscrete enough to report “White” atrocities as well as “Red” ones, to express his distaste for the various Japanese-supported warlords in Eastern Siberia and, later, to have a skeptical (and correct) assessment of the low popular support, incompetence and poor prospects of the anti-Bolshevik forces.

  For his troubles, it was hinted, absurdly, that the General may have been a Bolshevik sympathizer, a charge that in part motivated the publication of his memoirs. 

  In the face of hectoring by State Department officials and other Allied commanders to be more active in support of the “right” people in Russia, Graves repeatedly inquired of his superiors in Washington whether his original instructions of political non-intervention were to be modified. No one, of course, was willing to put any different policy in writing and the general struggled to maintain his “neutrality.”

  

  By the Spring and Summer of 1919, however, the U.S. had joined the other Allies in providing overt military support to “Supreme Leader,” Admiral Alexander Kolchak’s White regime, based in the Western Siberian city of Omsk.  At first this was carried out discretely through the Red Cross, but later it took the form of direct shipments of military supplies, including boxcars of rifles whose safe delivery Graves was directed to oversee.

  Domestic Intervention 

  But the prospects for a victory by Kolchak soon faded and the Whites in Siberia revealed themselves to be a lost cause.  The decision to remove the US troops was made late in 1919 and General Graves, with the last of his staff, departed from Vladivostok on 1 April 1920.

  In all, 174 American soldiers were killed during the invasion of Russia. (The Soviet Union was formed on Dec. 28, 1922.)

  Interestingly, pressure to withdraw the U.S. troops from Siberia came from fed-up soldiers and home-front opinion opposing the continued deployment of military units abroad long after the conclusion of the war in Europe. It is notable that during a Congressional debate on the Russian intervention one Senator read excerpts from the letters of American soldiers to support the case for bringing them home.

  Then, as in later U.S. foreign interventions, the soldiers had a low opinion of the people they were supposed to be liberating.  One of them wrote home on July 28, 1919 from his base in Verkhne-Udinsk, now Ulan Ude, on the southern shore of Lake Baikal:

  

  Letter home for U.S. soldier during invasion of Russia

  “Life in Siberia may sound exciting but it isn’t.  It’s all right for a few months but I’m ready to go home now. . .  You want to know how I like the people?  Well I’ll tell you, one couldn’t hardly call them people but they are some kind of animal.  They are the most ignorant things I ever saw.  Oh, I can get a word of their lingo if they aren’t sore when they talk.  They sure do rattle off their lingo when they get  sore. These people have only one ambition and that is to drink more vodka than the next person.”

  Outside of the State Department and some elite opinion, U.S. intervention had never been very popular.  By now it was widely understood, as one historian noted, that there may have been “many reasons why the doughboys came to Russia, but there was only one reason why they stayed: to intervene in a civil war to see who would govern the country.”

  After 1920, the memory of “America’s Siberian Adventure,” as General Graves termed it, soon faded into obscurity.  The American public is notorious for its historic amnesia, even as similar military adventures were repeated again and again over the years since then.

  It seems that we may need to be reminded every generation or so of the perils of foreign military intervention and the simple truth asserted by General Graves: 

  “. . .there isn’t a nation on earth that would not resent foreigners sending troops into their country, for the purpose of putting this or that faction in charge.  The result is not only an injury to the prestige of the foreigner intervening, but is a great handicap to the faction the foreigner is trying to assist.”

  General Graves was writing about Siberia in 1918, but it could just as well have been Vietnam in the 1960s or Afghanistan and Syria now. Or a warning today about 30,000 NATO troops on Russia’s borders.

  

• China Announces Deadly Fleet Of "Extra Large" AI Submarines

  China is currently developing relatively low-cost “smart” unmanned submarines that can perform a wide variety of tasks, from surveillance to the placement of munitions and “suicide” attacks, reports the South China Morning Post. 

  

  The unmanned subs are part of Beijing’s ambitious plan to enhance its country’s naval power with AI technology in order to challenge Western naval superiority in regions like the South China Sea and western Pacific Ocean, while the first autonomous robotic drones expected to be deployed in the early 2020s. 

  The project is part of the government’s ambitious plan to boost the country’s naval power with AI technology. China has built the world’s largest testing facility for surface drone boats in Zhuhai, Guangdong province. Military researchers are also developing an AI-assisted support system for submarine commanders. As the South China Morning Post reported earlier this year, that system will help captains make faster, more accurate judgments in the heat of combat situations.

  The new class of unmanned submarines will join the other autonomous or manned military systems on water, land and orbit to carry out missions in coordinated efforts, according to the researchers. –SCMP

  The AI-enhanced subs will “go out, handle their assignments and return to base on their own,” reports SCMP, while establishing periodic contact with ground command as needed. 

  The subs will eventually be able to station themselves for ambushes at geographical “chockpoints” where enemy ships are likely to travel, while also being able to work with manned submarines to scout, or as decoys to draw fire and expose an adversary’s position. 

  The robotic submarines rely heavily on artificial intelligence to deal with the sea’s complex environment. They must make decisions constantly on their own: changing course and depth to avoid detection; distinguishing civilian from military vessels; choosing the best approach to reach a designated position. –SCMP

  An AI sub “can be instructed to take down a nuclear-powered submarine or other high-value targets. It can even perform a kamikaze strike,” said the researcher, in reference to Japanese WWII fighter pilots. 

  “The AI has no soul. It is perfect for this kind of job,” the researcher added.

  Luo Yuesheng, professor at the College of Automation in Harbin Engineering University, a major development centre for China’s new submarines, contended that AI subs would put the human captains of other vessels under enormous pressure in battle.

  It is not just that the AI subs are fearless, Luo said, but that they could learn from the sinking of other AI vessels and adjust their strategy continuously. An unmanned submarine trained to be familiar to a specific water “will be a formidable opponent”, he said. –SCMP

  The subs do have limits – for now, so they are beginning with relatively simple tasks while final decisions are all made by human beings, according to Chinese military researchers. 

  That said, they’ll be huge compared to normal UUVs, according to the report. 

  Lin Yang, marine technology equipment director at the Shenyang Institute of Automation, Chinese Academy of Sciences, confirmed to the South China Morning Post this month that China is developing a series of extra-large unmanned underwater vehicles, or XLUUVs.

  They station in dock as conventional submarines. Their cargo bay is reconfigurable and large enough to accommodate a wide range of freight, from powerful surveillance equipment to missiles or torpedoes. Their energy supply comes from diesel-electric engines or other power sources that ensure continuous operation for months. –SCMP

  The institute is a major developer of underwater robotics for the Chinese Military – having developed Beijing’s first autonomous underwater vehicle with an operational depth beyond 3.7 miles. Yang is now the chief scientist of China’s “912 Project,” a classified program to develop the country’s underwater military robots in time for the 100-year anniversary of the Chinese Communist party in 2021. 

  Lin called China’s unmanned submarine programme a countermeasure against similar weapons now under intensive development in the United States. He declined to elaborate on technical specifications because the information was “sensitive”. –SCMP

  “It will be announced sooner or later, but not now,” he added.

  Not to be outdone in size or girth, the US military announced as major defense contract last year for two prototype XLUUVs by 2020. 

  Lockheed Martin’s Orca system would station in an area of operation with the ability to establish communication to base from time to time. It would return home after deploying payloads, according to the company’s website. –SCMP

  “A critical benefit of Orca is that Navy personnel launch, recover, operate, and communicate with the vehicle from a home base and are never placed in harm’s way,” the company said in an announcement.

  Unsurprisingly, Lockheed did not respond to the South China Morning Post‘s requests for information on Orca’s size and operational endurance. 

  Boeing, meanwhile, is developing the other prototype – its “Echo Voyager,” a 50-ton autonomous sub first developed for commercial purposes such as mapping the ocean floor. The approximately 50 foot vehicle just 8.5 feet in diameter can operate for months over a range of around 7,500 miles – enough to sail from San Francisco to Shanghai at 8 knots. 

  

  Russia has also reportedly developed a large underwater drone able to carry a 100-megaton warhead – the Status-6 autonomous torpedo. 

  China’s announcement comes seven months after US officials say China unlawfully seized an unmanned underwater US Navy vehicle in international waters in the South China Sea. According to CNN, a US oceanographic vessel had its underwater drone stolen by a Chinese warship literally right in front of the eyes of the American crew.

  

• Trump – The De-Globalizer!

  Authored by Peter Koenig via The Saker blog,

  Looks like Trump is running amok with his “trading policies”. Not only has he upset the European Union – which doesn’t deserve any better, frankly, for having been and still being submissive vassals against the will of by now 90% of Europeans; but he has also managed to get China into a fury. Well, for China it is really not that important, because China has plenty of other markets, including basically all of Asia and probably increasingly also Europe, as Europe increasingly feel the need for detaching from the US.

  What is striking, though, is that even at the outset of the G20 Summit now ongoing in Buenos Aires, Argentina, Trumps Ministers have made it clear that unless Europe cancels all subsidies – referring primarily to agricultural subsidies – and eliminates the newly imposed retaliatory import duties, new trade deals are not going to be discussed. Never mind that the US has the world’s highest farm subsidies.

  From afar this looks like the most wicked and non-sensical trade war the US via Trump, is waging against the rest of the world – à la “Make America Great Again”. Will it work? Maybe. One can never predict dynamics, especially not in a neoliberal western world that is used to live on linearism, which by definition is always wrong. Knowingly and deliberately the west and it’s financial key institutions, IMF, World Bank, FED, European Central Bank – trick the public at large into believing their statistics and predictions – which, if one goes back in history, have always been off, way off.

  All life is dynamic. But to understand this it takes independent thinking – which the west has long given up, unfortunately.

  So, in response to the latest Trump-promoted trade fiasco at the G20 in Argentina, the IMF is up in arms, saying this might lower world GDP by at least 0.5%. – Even if true, so what?

  In reality, there is a totally different scenario that nobody dares talk about.

  Namely, what renewed local production and monetary sovereignty can bring to the world economy; precisely what Mr. Trump says he wants to propagate for the US of A – local production for local markets and for trade with countries that respect mutual benefits. The latter is of course a question not easily achieved by any trade deal with the US. But the former is an enormous economic power keg. The stimulation of local economies through internal credit, is the most commanding means to boost local employment and GDP.

  Then there is the sanctions game. It’s getting ever more aggressive. New sanctions on Russia, new sanctions on Venezuela – and new heavy-heavy sanctions on Iran. And the European puppets still follow suit, although they are the ones that most suffer from US sanctions imposed on others, especially because out of ‘stupidity’ or fear, they cannot let go of the destructive empire, hobbling away on its last breath. Or is it perhaps, that those fake leaders of the Brussels construct are bought? – Yes, I mean bought with money or with favors? – It’s not out of this world, since those of the European Commission who call the shots are not elected, thus, responsible to no one.

  Take the case of Iran, Trump and his peons, Bolton and Pompeo, have threatened every oil company around the globe with heavy sanctions if they keep buying hydrocarbons from Iran beyond November 2018. Particularly concerned are the European Petrol giants, like Total, ENI, Repsol and others. – As a consequence, they have canceled their literally of billions of euros worth of contracts with Iran to protect themselves – and, of course, their shareholders. Just recently I talked to a high executive from Total. He said, we have no choice, as we cannot trust our people in Brussels to shield us from Washington’s sanctions. So, we have to look elsewhere to fulfill our contractual obligations vis-à-vis our clients. But, he added, we did not buy the American fracking stuff; we are negotiating with Russia. – There you go.

  The European market for Iran’s hydrocarbon is estimated at about 20% of Iran’s total production. An amount, easily taken over by China and others which are too big (and too bold) to be sanctioned by the empire. Some may actually resell Iranian hydrocarbons through their backdoor to the otherwise sanctioned European oil corporations.

  Iran has another strong weapon which they already made clear, they will use, if the US attempts seriously to block anyone from buying Iranian oil and gas. Iran can block the Gulf of Hormuz, where daily about 30% of all hydrocarbon used by the world is being shipped, including about half to the United states. This might increase the price of petrol exponentially and ruining many countries’ economies. However, higher prices would also benefit Russia, China and Venezuela, precisely the countries that Washington wants to punish.

  Would such a move by Iran provoke a direct US aggression? – One never knows with the war profiteers of the US. What’s for sure, such an intervention would not pass without a commensurate response from China and Russia.

  *  *  *

  On the other side of the scenario – imagine – countries mired in this global mess, made in the US of A, start looking for their own internal interests again, seeking their own sovereignty, independence from the globalist dependency. They are embarking on economic policies furthering self-sufficiency, self-reliance; first foodwise, then focusing on their scientific research to build their own cutting-edge technology industrial parks. A vivid example is Russia. Since sanctions were imposed, Russia has moved from a totally import-dependent country since the collapse of the Soviet Union, to a food and industry self-sufficient nation. According to Mr. Putin, the sanctions were the best thing that happened to Russia since the fall of the Soviet Union. Russia has been the world’s largest wheat exporter for the last two years.

  Europeans have started quietly to reorient their business activities towards the east. Europeans may finally have noticed – not the elitist puppets from Brussels, but Big Business and the public at large – that the transatlantic partner cannot be trusted, nor their self-imposed EU central administration of Brussels. They are seeking their own ways, each one of these nations are seeking gradually to detach from the fangs of Washington, eventually detaching from the dollar dominion, because they notice businesswise the dollar-based economy is a losing proposition.

  There is BREXIT, the most open move away from the ‘freedom limiting’ European dictate which is nothing else but a carbon copy of the economic dictate of the dollar, as practiced in the United States and everywhere the dollar is still the main international contract and reserve currency.

  The Five Star Movement in Italy was created on similar premises – breaking out from Brussels, from the Euro-policy handcuffs. In a first attempt towards sidelining the Euro, they received a spanking from the euro-friendly Italian President, Sergio Mattarella, when he refused to accept the 5-Stars coalition partner’s, Lega Norte, proposed Eurosceptic Minister of Finance, Paolo Savona, who called Italy’s entry into the eurozone a “historic mistake”. This thrive by Italy to regain monetary sovereignty has by no means ended. To the contrary, it has taken strength and more determination. Germany moves in the same direction – quietly opening doors to Moscow and Beijing.

  Unfortunately, these moves have little to do with a new more human and peace-loving consciousness, but rather with business interests. But perhaps conscious awareness – the reconnecting with the original spark of a humanity solidified in solidarity is a step-by-step process.

  *  *  *

  What if, considering the motion towards peoples’ new self-determination – Trump’s jumping from chaos to more chaos, to the never-ending sanction game (punishing, or threatening friends and foes alike) – will lead to a genuine de-globalization of the world?

  

  If this were to happen then, we the 90% of the globe’s population, should be very grateful to Mr. Trump who has shown and created the path to enlightening – the enlightening of de-globalization.

  

• The Cryptocurrency Insurance Business Is Booming

  What is the next step when you have a speculative asset whose value may go to zero  (or $250,000 ) in the near future? Why start writing insurance policies on it, of course!  That’s the line of logic employed in the world of cryptocurrencies, as the newly formed crypto insurance business is booming.

  

  To be sure, there is ample demand and soaring interest in crypto insurance, according to Bloomberg. After all, with fat premiums and no insurer on record to date of ever paying out a claim, why wouldn’t there be?

  Furthermore, one can rarely go a few weeks without a headline about a major crypto exchange getting hacked, sometimes with hundreds of millions of dollars being lost in the process. Such was the case with the hacks of Bitfinex and Mt. Gox. Remember this stud?

  

  As a result of this “accident prone” asset class, major players in the insurance and finance industry believe that the future for crypto insurance is bright. As Bloomberg notes, a representative from Allianz said it “could be a big opportunity.” Which is why Allianz is offering the product:

  “Insurance for cryptocurrency storage will be a big opportunity,” said Christian Weishuber, a spokesman for Allianz, which began offering individual coverage for digital-coin theft in the past year and is one of the few insurers that agreed to talk about the issue. “Digital assets are becoming more relevant, important and prevalent on the real economy and we are exploring product and coverage options in this area.”

  In addition, two other major crypto-insurance shops – Marsh & McLennan and Aon – said business has been booming over the last year.

  While the cost is still beyond reach for many fledgling companies, Marsh & McLennan and Aon, the two leading insurance brokers that help companies shop for crypto policies, say business has been brisk this year. For the first time, Marsh formed a team of 10 dedicated to servicing blockchain startups.

  Aon, which claims to have over 50 percent of the market for crypto insurance, recently streamlined its standard policy form to speed up the underwriting process. It has also seen some insurers tweak general company policies to include crypto-specific protections.

  Whil Marsh and Aon declined to identify their partners, people familiar with the matter say over a dozen underwriters, including Chubb and XL, currently provide coverage to crypto-related businesses. And here is a blast from the past: none other than AIG has also been adding crypto coverage into standard policy forms, and said it’s met with cryptocurrency custodians and trading platforms about coverage, however, the firm “declined to say how much in crypto-related premiums it’s taken in.”

  There may be a simple explanation for the enthusiasm to sell insurance: Marsh and Aon said that, so far, they are not aware of any insurance companies that have had to actually pay out on any claims, even as 2018 is supposed to be the “busiest year for hacks on record”. It’s probably safe to say that it won’t be long before claims are paid out. Big ones.

  With 2018 on track to be the busiest year for hacks on record, the potential for a reputational black eye is perhaps one reason many insurers have declined to speak publicly about crypto. Lloyd’s of London, the world’s oldest insurance market, published a bulletin this month with guidance on crypto coverage and asked its agents to “proceed with a level of caution that recognizes the risks.”

  Meanwhile, demand for insurance will only grow as it gives start-ups an air of credibility when try to raise capital, providing some modest cover for a business that has generally been speculative and regarded as somewhat dangerous.

  It’s no small irony that the crypto industry, which originally sprung out of a techno-utopian desire to liberate its users from the traditional financial system, is embracing insurance as a way to go mainstream.

  “I see it is a required step,” said Lucas Nuzzi, director of technology research at Digital Asset Research. Coverage can reduce investor concerns and make it easier to work with banks. “It definitely helps legitimize the industry.”

  For example, Trustology, a London-based startup focused on crypto custody services, is in talks to obtain coverage that would insure its customer accounts up to 85,000 pounds — the same standard as a U.K. bank account — to help attract more clients. It’s also looking at self-insuring client funds.

  And while even major crypto exchanges like Coinbase are starting to buy this type of insurance, in the case of the most popular US crypto exchange, it is only on a “fraction” of their holdings.

  Coinbase, one of the most widely used crypto exchanges, buys insurance for a fraction of the digital coins it holds. Funds stored in so-called hot wallets, which may contain up to 2 percent of client assets and are used in active trading, are covered. Coinbase’s disclosures don’t provide details on how much coverage is provided for its remaining coin deposits, which are stored offline as a security measure.

  Finally, selling crpto insurance for now remains a goldmine, with insurance companies able to charge a significant premiums, as underwriters can charge a crypto-related company upwards of five times or more than your average business for coverage against loss or theft, according to Bloomberg.

  That said, like with any other other financial security boom, where derivatives of derivatives wind up in bloom during the first stage, many are skeptical about how long of a runway the field of crypto insurance will have, especially given the fact that the underlying asset value would will likely be for the determined by regulators in the future – and the decision will likely prove to be extremely volatile, leading to a painful bust for the insurance industry.

  

• Paul Craig Roberts Rages "The Arrest Of Maria Butina Is Another Hoax"

  Authored by Paul Craig Roberts,

  The Guardian Neswspaper, which once was an honest newspaper that spoke for the British working class has now been suborned, in my opinion, by the CIA and British Intelligence (sic).

  Perhaps you remember a few years ago that The Guardian complied with illegal orders from the corrupt UK government to destroy the Wikileak files that revealed US felonies and deceptions of so-called “allies,” who are nothing but Washington’s vassals.

  What disturbs me about The Guardian is that it no longer guards truth and the working class. Instead The Guardian guards the extraordinary lies that serve the agenda of the US hegemonic state.

  I cannot understand why any of The Guardian’s original subscribers read apologies for Washington’s crimes and misdeeds or why The Guardian prefers conflict instead of peace with Russia. Why does The Guardian work to increase hostility between nuclear powers that can easily result in the termination of life on earth? Are The Guardian’s editors paid by the CIA and UK “intelligence,” as the German newspaper editor Udo Ulfkotte said in his book, Bought Journalism, or are The Guardian’s editiors threatened with arrest and prison unless they serve the interests of the UK’s overlord in Washington?

  Whatever The Guardian is, just like The New York Times, The Washington Post, CNN, MSNBC, NPR, and the rest of the Western presstitutes, journalism is not present on its pages. What the West has is a Ministry of Propaganda. The public is lied to and brainwashed, not informed.

  

  We can see the total failure of The Guardian, and all the rest as well, in the reporting on the arrest of the alleged Russian spy, Maria Butina by the utterly corrupt US Department of Justice (sic). The principal evidence against Maria is that she met with a former Russian ambassador to the US, Sergey Kislyak. According to the utterly corrput US Department of Justice (sic), an assistant US attorney, Erik Kenerson, “cited Butina’s encounter with Kislyak as proof that she was in touch with diplomatic or consular officials and must be detained while awaiting trial.”

  So, in America if you get your photo taken with a former Russian ambassador to the US it is evidence that you are a spy.

  I have read the indictment of Maria Butina. She is not accused of any crime recognizable by Anglo-American law. She is indicted under Jeremy Bentham’s 18th century totalitarian argument that she is guilty of the “crime” of possibly intending to commit one in the future. (See The Tyranny of Good intentions by PCR and Lawrence Stratton.)

  Maria, who has long red hair but otherwise is unremarkable, especially in contrast to the women that the interest groups, such as the military/security complex, Wall Street, and the Israel lobby are believed to provide to the executive and legislative branches of the US government, is certainly not the seductive Russian spy that Americans know from James Bond films.

  The woman has not done a thing. She is indicted for a non-crime. She is indicted because she is Russian and living, according to the presstitute media, with a congressional staffer. Maria has no way whatsoever to spy on the US through the low level congressional staffer with whom she was allegedly livingl

  Her arrest is just another hoax perpetrated on the American people in order to fan the distrust and hatred of Russia, distrust that protects the totally unnecessary $1,000 billion annual budget of the US military/security complex.

  Many uninformed people think that President Trump is in charge of the US government. He is not. And he would be assassinated if he were. As President Dwight Eisenhower warned us to no avail in 1961, the military/security complex is a threat to democracy and accountable government. The military/security complex is most definitely not going to permit any diminuition in its income and power by permitting normalization of relations with Russia.

  Having ignored President Eisenhower’s warning, the warning from a two-term US president and a 5-star general who commanded US, British, and French forces against Hitler in World War 2, the insouciant Americans have lost their democracy to the Deep State.

  Consequently, the passive and insouciant Americans are now getting nearer to losing their lives, along with the lives of many other peoples, to the greed of the American military/security complex.

  

• 'Ghosting' On The Rise As Workers Blow Off Interviews

  In a clear but perhaps unwelcome, for companies, sign that the US job market is at its hottest in decades, applicants are increasingly “ghosting” interviews, resulting in employers getting more creative in their hiring and retention efforts after frustration in attracting ideal candidates is on the rise, according to a new report.

  “Ghosting” is a term coined by millennials denoting cutting off all communication with friends or a date, with zero warning or notice before hand, including blocking social media communications and avoiding them in public. Job candidates and employees are now “ghosting” their jobs by way of ditching scheduled job interviews, or even not showing up on the first day of work, or disappearing from existing positions without notice or reason.  

  

  That this is taking place at the same time as the quits rate hit an all time high, is probably not a surprise: we detailed the so-called “take this job and shove it” indicator from the latest JOLTS report earlier this month – it shows worker confidence that they can leave their current job and find a better paying job elsewhere. Well, according to the BLS, as of May, this number hit an all time high, rising from 3.349MM in April to 3.561MM in May, an increase of 212K in the month, the biggest monthly increase since December 2015.

  

  Meanwhile, unemployment has reached an 18-year low of nearly 3.8%, with more job openings than unemployed people in May of this year — only the second month in the past two decades this has happened.

  

  As a result, employees increasingly find themselves holding all the cards as 2.4% of all those employed quitting their jobs, usually to take another preferred position, the largest share in 17 years.

  

  One president of a major staffing firm in the New York City area, Dawn Fay, told USA Today that “up to 20 percent of white-collar workers” are no-shows at scheduled interviews as they find themselves with more options, and explained further:

  To some extent, employees are giving employers a taste of their own medicine. During and after the Great Recession of 2007 to 2009, when unemployment reached 10 percent, many firms ignored job applicants and never followed up after interviews. “Candidates were very frustrated because they felt employers were ghosting on them,” Fay says.

  Now it’s payback time as other staffing agencies recently profiled report that they see upwards of 60% of candidates with multiple offers in a market that’s now pit companies in a cut-throat race to attract talent. Some companies report experimenting with group interviews of 20 or 30 applicants or more, with the expectation that up to half may never show up. 

  USA Today notes that “While no one formally tracks such antics, many businesses report that 20 to 50 percent of job applicants and workers are pulling no-shows in some form, forcing many firms to modify their hiring practices.”

  

  In one prominent online journal geared towards HR professionals and employers, company owners and headhunters rant over recent hiring frustrations: 

  “Downright rude and unprofessional,” says Carl Schussler, managing principal of Mitigate Partners. “What happened to handwritten thank you notes and treating people with respect?”

  Kathleen Downs, senior vice president with staffing and recruiting company Robert Half Finance & Accounting agrees with Bieler that candidates’ having multiple choices in today’s job market feeds into this new trend of professional ghosting. She explains that during the Great Recession, companies would receive 100 applications and choose to interview 15 of them. “Now they receive five or six resumes, and if they are fortunate enough to interview all, each of them would have had three or four previous interviews,” she says.

  Leylek agrees. “We are now working with a candidate-driven market,” he says. “Candidates are in a position where they hold all the cards.”

  For businesses all of this of course spells lost money, time, and wasted expenses as difficult to fill and skill set specific jobs stay vacant event longer. 

  Some staffing firms speculate in recent reports that it could simply be a decline in manners among a younger generation more at home in a social media world of impersonal relations and the ease of “blocking” contact.

  Employee Benefit News cites the reasons behind “ghosting” in the work world as that while “social media made reaching out to people easier, it also made it easier for candidates to just not reply back,” and that “the uncomfortable situation of delivering the rejection personally that plays into this.”

  But more obviously, it’s not social media induced shyness that’s the culprit, but a natural confidence that comes with a robust and growing job market — so perhaps ghosting is but the latest positive phenomenon in a resurgent economy. 

  

• Chinese Gold Market: Still In The Driving Seat

  Submitted by Ronan Manly, BullionStar.com,

  With the first half of 2018 now behind us, it’s an opportune time to look at whats been happening in the Chinese Gold Market. As a reminder, China is the largest gold producer in the world, the largest gold importer in the world, and China’s Shanghai Gold Exchange is the largest physical gold exchange in the world.

  For various reasons such as cross-border trade rules, VAT rules and deep liquidity, nearly all physical gold supply in China passes through the Shanghai Gold Exchange (SGE) vaulting network. These flows include imported gold, domestically mined gold, and recycled gold. Therefore, nearly all Chinese gold demand has to be met by physical gold withdrawals from the SGE, and SGE gold withdrawals are a suitable proxy for Chinese wholesale gold demand. Therefore, at a high level:

  Physical Gold Supply to the SGE = SGE Withdrawals = Chinese Wholesale Gold Demand

  Gold supply includes gold imports, mine supply, gold scrap / recycling and disinvestment. Disinvestment on the SGE is the reverse process of investment. Investment is when any institutional entity or individual purchases gold directly on the SGE. Disinvestment involves selling gold bullion which then goes to a refinery and re-enters the SGE vaulting network.

  Wholesale gold demand includes consumer demand and institutional demand (direct gold purchases at the SGE). For a fuller explanation of this gold supply – demand equation as it applies to the Chinese gold market, see ‘Mechanics of the Chinese Domestic Gold Market’ on the BullionStar website.

  

  Chinese Gold Market: Still Buoyant

  SGE Gold Withdrawals in 2018

  For the 6 months to the end of June 2018, physical gold withdrawals from the Shanghai Gold Exchange totaled 1038.4 tonnes. These flows represent gold which has actually been physically withdrawn from the network of SGE vaults across China. The monthly SGE gold withdrawal figures from January to June 2018 are as follows:

  • January 223.6 tonnes

  • February 118.4 tonnes

  • March 192.6 tonnes

  • April 212.6 tonnes

  • May 150.6 tonnes

  • June 140.6 tonnes

  This withdrawal total, 1038 tonnes, is the third highest SGE withdrawal total on record for the first six months of any year of the SGE’s existence, only lower than the 1098 tonnes and 1178 tonnes recorded at the end of June 2013 and June 2015, respectively. The following chart highlights the cumulative Month 6 gold withdrawals from the SGE vaults, comparing all years from 2008 to 2018.

  

  SGE Gold Withdrawals at Month 6 (YTD 2018 June): 2008 – 2018. Source: www.GoldChartsRUs.com

  This year’s gold withdrawals to end of June, if annualized, would be 2076 tonnes, which would represent the fourth highest SGE gold withdrawals year on record after 2015, 2013 and 2014, in that order. All in all, SGE gold withdrawal figures year-to-date point to a very buoyant and healthy gold market in China and very strong wholesale gold demand, with volumes in line with the last 5 years.

  

  SGE Annual Physical Gold Withdrawals, 2008 – 2017, including YTD 2018. Source: www.GoldChartsRUs.com

  Imports of Gold into China

  Around the world, monetary gold (i.e. central bank gold) is exempt from customs and trade reporting when it moves across borders. Given this exemption, it is difficult to really know how much gold central banks (including the Chinese central bank, the PBoC) actually have at any given time.

  Non-monetary gold is any gold that is not classified as monetary gold. Normally, non-monetary gold flows are estimable since there is no general exemption from customs and trade reporting. However, China is the exception, as it does not publish its gold import or export statistics. Therefore cross-border non-monetary gold trade flows involving China are more difficult to gauge than most. But it is still possible to gauge gold imports into China by looking at other countries’ gold exports to China.

  During the year to date, Hong Kong and Switzerland, as expected, remained the two primary suppliers of non-monetary gold to China. Smaller direct suppliers of gold to China include the UK, Australia and the US. While Hong Kong remains the largest supplier of gold into China, China has been for a few years now, sourcing more gold directly from other countries and less gold via Hong Kong,

  Looking first at Switzerland, for the first six months of 2018 from January to  June, the Swiss supplied 274.7 tonnes of non-monetary gold into China. Specifically, 41.2 tonnes in January, a very large 67.2 tonnes in February, 39.6 tonnes in March, 26.6 tonnes in April, 38 tonnes in May and 62.1 tonnes in June. In fact, China topped the table as the largest single destination for Swiss non-monetary gold imports in every month from January to June 2018, ahead of India and Hong Kong.

  

  China imported 62.1 tonnes of gold from Switzerland in June 2018, Source: www.GoldChartsRUs.com

  If extrapolated on an annual basis, the 6 month flows would suggest Swiss gold exports to China of 274.7 tonnes from January to June would be roughly 550 tonnes for the full year. Comparing this to the full year 2017 when China imported 299.8 tonnes of non-monetary gold directly from Switzerland would suggest that a major change has occurred this year in the way the Chinese are sourcing their gold imports, with far more direct gold imports and less indirect imports from the interpot of Hong Kong.

  

  Swiss Gold Exports by Country Destination, 2017, Source: www.GoldChartsRUs.com

  According to Hong Kong’s Census and Statistics Department (HKCSD), Hong Kong net-exported 144.2 tonnes of gold to mainland China during the first 3 months of 2018. Extrapolating this on a 6 months basis would be about 290 tonnes, and 580 tonnes on an annualized basis. This would be a 7.5% drop compared to 2017 full year net gold exports from Hong Kong to China, but such a drop is to be expected as there is a trend of China is now engaged in more direct gold imports from destinations other than Hong Kong.

  

  Chinese Gold Imports from Hong Kong, Source: www.GoldChartsRUs.com

  China sources gold directly from a number of other countries such as the UK, Australia, US and Canada. Together these other sources are still relatively insignificant as gold exporters to China compared to Hong Kong and Switzerland, but based on 2017 figures, together they may have sent about 30-40 tonnes of gold to mainland China during H1 2018.

  Gold Production in China: 2018

  Beyond gold imports, gold sourced from mining remains a critically important source of gold supply in China. According to the China Gold Association (CGA), China produced 98.22 tonnes of gold from mining in the first quarter of 2018, which was down 3 tonnes on Q1 2017. This comprised 80.8 tonnes from direct gold mining and 17.4 tonnes from extracting gold as a byproduct of other mining.

  While the CGA has not yet published a gold mining output total for the second quarter of 2018 and its website has not yet been updated with such a news release, extrapolating the first quarter figure would suggest a Chinese domestic mining output figure of just less than 200 tonnes of gold for the first half of 2018 and about 400 tonnes for the full year.

  Given that China produced 426.14 tonnes of gold during 2017, and the 2017 gold output total of 426.14 tonnes was itself 27.3 tonnes, or 6%, less than in 2016, it looks like 2018 will see another year of reduced gold production from the world’s number one gold producer. With continued buoyant demand from the Chinese gold market, these relative production shortfalls will have to be made up by larger gold imports or increased volumes of gold recycling.

  SGE Premiums

  Premiums of the Shanghai gold price to the international gold price have remained positive and steady throughout 2018, and generally low, except for a short period at the end of March. In price terms, SGE premiums during the year-to-date period have been recorded at between 1-2 Yuan per gram , or in percentage terms between 0.3% and 0.8%.

  The positive premiums point to the attraction of sending gold from West to East, while the generally sedate levels of these premiums during 2018 indicate that there are currently no major supply constraints, such as tighter gold import rules, that could send the premiums higher into positive territory. Contrast this to late 2016, when the SGE gold price traded 2-3% higher than the international gold price, on the back of rumored PBoC restrictions on gold import quotas and consignments that were said to be an attempt to control capital outflows.

  

  SGE Premiums on Gold 2018. Source: www.GoldChartsRUs.com

  With Chinese wholesale gold demand running at over 1000 tonnes for the first six months of 2018 as indicated by SGE gold withdrawals, China’s gold market has to principally meet this gold demand from the key supply sources of domestic mine production, gold imports and gold recycling and disinvestment.

  For the year to date to end of June, we can assume that Chinese gold mining contributed about 200 tonnes to Chinese gold supply. Non-monetary gold imports, principally from Switzerland and Hong Kong, contributed another 560-580 tonnes. This would leave about 250 – 300 tonnes to be sourced from gold recycling and scrap through the SGE system and from disinvestment.

  

• Trump To Revoke California's Power To Fight Smog

  In a move that will infuriate environmentalists everywhere, but especially in California, the Trump administration is seeking to repeal California’s authority to regulate automobile emissions in a proposed revision of Obama-era standards, according to Bloomberg citing three people familiar with the plan.

  The proposal which will be released later this week represents a “frontal assault” on one of Barack Obama’s signature regulatory programs to curb greenhouse gas emissions that contribute to climate change.

  It also sets up a high-stakes battle over California’s unique ability to combat air pollution and, if finalized, is sure to set off a protracted courtroom battle.

  And since the revamp also includes California’s mandate for electric car sales, it represents a gut punch to the likes of Elon Musk, who recently announced (yet again) a deal to begin work on a factory in China.

  The proposed overhaul would also put the brakes on federal rules to boost fuel efficiency into the next decade, instead it will cap federal fuel economy requirements at the 2020 level, which under federal law must be at least a 35-mile-per-gallon fleet average, rather than letting them rise to roughly 50 mpg by 2025 as envisioned in the plan left behind by Obama.

  As Bloomberg details, as part of the stunning proposal, the U.S. Environmental Protection Agency will propose revoking the Clean Air Act waiver granted to California that has allowed the state to regulate carbon emissions from vehicle tailpipes and force carmakers to sell electric vehicles in the state in higher numbers.

  Separately, the U.S. National Highway Traffic Safety Administration will assert that California is barred from regulating greenhouse gas emissions from autos under the 1975 law that established the first federal fuel-efficiency requirements, the people said.

  Agencies are expected to claim it will reduce traffic fatalities by making it cheaper for drivers to replace older, less-safe cars, while paring sticker prices for new vehicles even if motorists have to spend more for gasoline.

  In other words, in what amounts to a full-blown war between the White House and California, the administration will put its weight behind the dramatic overhaul, including the revocation of California’s cherished authority.

  The state’s 2009 waiver of federal preemption under the Clean Air Act has allowed the California state to set emissions rules for cars and trucks that are more stringent than the federal government’s, but the state has aligned its rules with those set by the EPA and NHTSA in a so-called national program of clean-car rules.

  Needless to say, if Trump’s plan sticks it would represent his biggest regulatory rollback yet.

  Predictably, California was furious and rejects the idea that its 48-year ability to write its own tailpipe emission rules should end: “We have the law on our side, as well as the people of the country and the people of the world,” said Dan Sperling, a member of the state’s Air Resources Board said.

  On May 2, California and 16 others plus the District of Columbia filed a lawsuit seeking to block the Trump administration’s effort to unravel the Obama-era emissions targets. Sperling said that number will grow as more and more people come to realize how fundamentally Trump is attacking the idea of states’ rights.

  A key, and still unanswered question is what happens to automakers who are caught somewhere in the middle of this fight between the president and most populous US state. According to Bloomberg, in recent months they have stressed they would not support freezing the federal targets and want Washington and Sacramento to continue linking their vehicle efficiency goals. While they spent the first year of the Trump administration attacking Obama’s rules as too costly, they fear the regulatory uncertainty that a years-long court battle over a rollback would create. In addition, other major auto markets such as China and Europe are pressing forward with tougher mandates of their own for cleaner cars.

  Trump’s action will not make him any friends in the Golden State:

  “This is nothing less than an outrageous attack on public health and states’ rights,” said Frank O’Donnell, president of Clean Air Watch. “It’s a dumb move for an administration that claims it wants peace, because this will lead to an emissions war: progressive states versus a reactionary federal government. The big question: who will the car companies back?”

  Meanwhile, others are secretly pleased: some conservatives have long chafed at the rare authority granted California and welcome the effort to revoke.

  “Congress didn’t intend for California to set national fuel economy standards,” said Steve Milloy, a policy adviser for the Heartland Institute, a group critical of climate science. “It’s nutty it’s been allowed to develop. National fuel economy standards are set by the federal government so that’s what we are going to do.”

  Meanwhile, as the pollution fight over California cars heats up, one wonders are its cows next? As a reminder, the meat and dairy industry will soon surpass big oil as the world’s biggest polluters. The silver lining for them is that by the time this happens, Trump will be long gone.

  

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