- Whose Great Reset? The Fight For Our Future – Technocracy Vs. The Republic
Whose Great Reset? The Fight For Our Future – Technocracy Vs. The Republic
Tyler Durden
Fri, 10/23/2020 – 23:40Authored by Joaquin Flores via The Strategic Culture Foundation,
People living in the western world are in the greatest fight for the future of pluralist and republican forms of governance since the rise and fall of fascism 75 years ago. As then, society had to be built up from a war. Today’s war has been an economic war of the oligarchs against the republic, and it increasingly appears that the coronavirus pandemic is being used, on the political end, as a massive coup against pluralist society. We are being confronted with this ‘great reset’, alluding to post-war construction. But for a whole generation people have already been living under an ever-increasing austerity regimen. This is a regimen that can only be explained as some toxic combination of the systemic inevitabilities of a consumer-driven society on the foundation of planned obsolescence, and the never-ending greed and lust for power which defines whole sections of the sociopathic oligarchy.
Recently we saw UK PM Boris Johnson stand in front of a ‘Build Back Better’ sign, speaking to the need for a ‘great reset’. ‘Build Back Better’ happens to be Joe Biden’s campaign slogan, which raises many other questions for another time. But, to what extent are the handlers who manage ‘Joe Biden’, and those managing ‘Boris Johnson’ working the same script?
The more pertinent question is to ask: in whose interest is this ‘great reset’ being carried out?
Certainly it cannot be left to those who have built their careers upon the theory and practice of austerity. Certainly it cannot be left to those who have built their careers as puppets of a morally decaying oligarchy.
What Johnson calls the ‘Great Reset’, Biden calls the ‘Biden Plan for a Clean Energy Revolution & Environmental Justice’. Certainly the coming economy cannot be left to Boris Johnson or Joe Biden.
How is it that now Boris Johnson speaks publicly of a ‘great reset’, whereas just months ago when those outside the ruling media paradigm used this phrase, it was censured by corporate Atlanticist media as being conspiratorial in nature? This is an excellent question posed by Neil Clark.
And so we have by now all read numerous articles in the official press talking about how economic life after coronavirus will never be the same as it was before. Atlanticist press has even run numerous opinion articles talking about how this may cut against globalization – a fair point, and one which many thinking people by and large agree with.
Yet they have set aside any substantive discussion about what exists in lieu of globalization, and what the economy looks like in various parts of the world if it is not globalized. We have consistently spoken of multipolarity, a term that in decades past was utilized frequently in western vectors, in the sphere of geopolitics and international relations. Now there is some strange ban on the term, and so we are now bereft of a language with which to have an honest discussion about the post-globalization paradigm.
Technocracy or Pluralism? A Fight Against the Newspeak
Until now, we have only been given a steady diet of distancing, of lockdown provisions, quarantining, track and trace, and we have forgotten entirely about the fact that all of this was only supposed to be a two or three-week long exercise to flatten the curve. And now the truth is emerging that what is being planned is a new proposal being disguised as a ‘great reset’.
One of the large problems in discussing the ‘great reset’ is that a false dichotomy has arisen around it. Either one wants things to be how they were before and without changes to the status quo, or they promote this ‘great reset’. Unfortunately, Clark in his RT article falls into this false dichotomy, and perhaps only for expedience sake in discussing some other point, he does not challenge the inherent problems in ‘how things were before’. In truth, we would be surprised if Clark did not appreciate what we are going to propose.
What we propose is that we must oppose their ‘new normal’ ‘great reset’, while also understanding the inherent problems of what had been normalized up until Covid.
The way things were before was also a tremendous problem, and yet now it only seems better in comparison to the police state-like provisions we’ve encountered throughout the course of politicizing the spectre of this ‘pandemic’.
Oddly this politicization is based in positive cases (and not hospitalizations) ostensibly linked to the novel coronavirus. Strangely, we are told to ‘listen to the consensus science’ even as these very institutions consist of politically arrived at appointments. Certainly science is not about consensus, but about challenging assumptions, repeatability and a lively debate between disagreeing scientists with relatively equal qualifications. As Kuhn explains in The Structure of Scientific Revolutions, science is always evolving, and by definition potentially overturns consensus paradigms. This is a debate we have not seen, and this fact by itself represents an illiberal cancer growing on an already defective pluralist society – ironically, all flying under the banner of liberalism.
Decisions that a society decides to take should be driven by reason, prudence, and justice. What is or isn’t scientific plays a role, but cannot be the deciding factor. Science clearly says that we may eliminate cross-walk injuries by banning street-crossing or by banning driving, but what policy makers must do is account for the need to have both cars and crossing the street, in deciding how – if it’s even possible – to reduce or eliminate such injuries. Science is only one part of this equation.
But isn’t economics also a science? Is sociology not a science? What about psychology and psychiatry – as in the known effects of social isolation and, say, suicide prevention? What about housing and urban planning? The great sociologist Emile Durkheim explains how these are sciences – they adopt and apply the scientific method in their work. Universities have been awarding doctoral degrees in these sciences for a century or more, do these expert opinions not count when managing a public catastrophe?
It is, and always has been, a political and politicized position to listen to some scientists, and not others.
And so what of our term ‘reset’? Indeed, it is itself misleading, and we would propose it is intentionally so if we understand Orwell’s critique of the use of language – newspeak – in technocratic oligarchies.
A ‘reset’ textually refers to going back to something once known, erasing defects or contradictions which arose along the way, which carries with it the familiar, and something we had previously all agreed to. A ‘reset’ by definition means going back to how things were before – not just recently, but before at some point farther back. Its definition is literally contrary to how Boris Johnson means it in his shocking public statement at the start of October.
The term ‘reset’ was therefore arrived with extraordinary planning and thoughtfulness, with the intent to persuade [manipulate] the public. It simultaneously straddles two unique concepts, and bundles them together at once into a single term in a manner that reduces nuance and complexity and therefore also reduces thinking. It does so while appealing to the implicit notion of the term that it relates to a past consensus agreement.
If understood as we are told to understand it, we must hold two mutually contradictory notions at the same time – we are incongruously told that this reset must effectively restore society to how it was at some point before because things can never be how they were at any time before. Only within the paradigm of this vicious newspeak could anything ever have the public thinking that such a textual construction makes any bit of sense.
What are Our Real Options? Whose Reset?
Those who understand that this ‘reset’ is not a reset but rather a whole new proposal on the entire organization of society, but being done through oligarchical methods and without the sort of mandate required in a society governed by laws and not men, are – as we have said – reluctant to admit that a great change is indeed necessary.
Rather, we must understand that the underlying catastrophic economic mechanisms which are forcing this great change exist independently of the coronavirus, and exist independently of the particular changes which the oligarchs promoting their version of a ‘reset’ (read: new proposals) would like to see.
You see, the people and the oligarchs are locked into a single system together. In the long-term, it seems as if the oligarchs are looking for solutions to change that fact, and effect a final solution that grants them an entirely break-away civilization. But at this moment, that is not the case. Yet this system cannot carry forward as it has been, and the Coronavirus presents a reason at once both mysterious in its timing and also profound in its implications, to push forward a new proposal.
We believe that technology is quickly arriving at a point where the vast majority of human beings will be considered redundant. If the technocracy wants to create a walled civilization, and leave the rest of humanity to manage their own lives along some agrarian, mediaeval mode of production, there may indeed be benefits to those who live along agrarian lines. But based in what we know about psychopathy, and the tendency of that among those who govern, such an amicable solution is likely not in the cards.
That is why the anti-lockdown protests are so critically important to endorse. This is precisely because the lockdown measures are used to ban mass public demonstrations, a critical part of pushing public policy in the direction of the interests of the general public. A whole part of the left has been compromised, and rolled out to fight imaginary fascists, by which they mean anyone with conventional social views which predate May of 1968. All the while the actual plutocrats unleash a new system of oligarchical control which, for most, has not been hitherto contemplated except by relatively obscure political scientists, futurists, and science fiction authors.
Certainly the consumerist economic system (sometimes called ‘capitalism’ by the left), which is based in both globalized supply chains but also planned obsolescence, is no longer feasible. In truth, this relied upon a third-world to be a source of both raw materials and cheaper labor. The plus here is that this ‘developing world’ has largely now developed. But that means they will be needing their own raw materials, and their own middle-classes have driven up their own cost of labor. Globalization was based in some world before development, where the real dynamic is best explained as imperialism, and so it makes sense that this system is a relic of the past, and indeed ought to be.
It increasingly appears that the ‘Coronavirus pandemic’, was secondary to the foregone economic crisis which we were told accompanied it. Rather, it seems that the former came into being to explain-away the latter.
Another world is possible, but it is one which citizens fight for. In the U.S., England, Scotland, Ireland, and Germany, there have already been rather large anti-lockdown demonstrations. These, as we have explained, are not just against lockdown but are positively pushing to assert the right to public and political association, to public and political speech, and the redressing of grievances. This is a fundamental right for citizens in any republic where there is any sort of check on the oligarchy.
We have written on the kind of world that is possible, in our piece from April 2020 titled: “Coronavirus Shutdown: The End of Globalization and Planned Obsolescence – Enter Multipolarity”. That lays out what is possible, and what the problems of pre-corona system were, in economic terms more than political. Here we discuss the problems of globalization-based supply chain security in a multipolar world, and the larger problem of planned obsolescence, especially in light of 3D printing, automation, and the internet of things.
We posed the philosophical question as to whether it is justified to have a goods-production system based upon both the guaranteed re-sale of the same type of goods due to planned obsolescence and the ‘work guarantees’ that came with it. In short, do we live to work or to we work to live? And with the 4th industrial revolution looming, we posed the question of what will happen after human workers are no longer required.
Pluralist society is the compromise outcome of a ceasefire in the class war between the oligarchy and the various other classes that compromise the people, at large. Largely idealized and romantic ideas that form the basis of the liberal-democratic ideology (as well as classical fascism) are used to explain how it is the oligarchy that is so very committed to that arrangement of pluralism, and that this very arrangement is the product of their benevolence, and not the truth: that it was the fight put up by common people to fight for a more just future. No doubt there have been benevolent oligarchs who really believed in the liberal ideology, of which fascism is one of its more radical products. But the view that the class struggle can be acculturated or legislated into non-existence is similar to believing that the law of gravity can be ruled unlawful in a court.
Perhaps we have forgotten what it takes, and perhaps things just have not gotten bad enough. Decreases in testosterone levels in the population may be leading to a dangerous moment where vigorous defiance to injustice is much less possible. Critical now is to avoid any artificial means to opiate ourselves into thinking things are better than they are, whether by way of anti-depressants or other self-medication. Only with a clear assessment of the real situation on the ground can we forge the necessary strategy.
The great political crisis now is that a pandemic is being used to justify an end-run around constitutional rights, an end-run around pluralist society, and so the vehicle – the mechanism – that the general public might use to fight for their version of a ‘reset’ is on the verge of disappearing.
In many ways this means that now is the final moment. We ask – whose great reset, ours or theirs?
- Havana Syndrome: US Still Probing Mystery "Sonic Attacks" On Diplomats 3 Years Later
Havana Syndrome: US Still Probing Mystery “Sonic Attacks” On Diplomats 3 Years Later
Tyler Durden
Fri, 10/23/2020 – 23:20The mysterious Havana “sonic attacks” are back in the media after Secretary of State Mike Pompeo on Wednesday said an investigation is still underway. He was responding to newly published allegations of a cover-up.
Recall that starting in 2016 into 2017 there were bizarre reports that nearly two dozen American diplomats – and a handful of Canadians – serving at embassies in Havana suffered hard-to-pin-down symptoms from the alleged “sonic attacks”. Personnel reported experiencing everything from vomiting to concussions to chronic headaches to minor brain injuries.
“It’s a very complicated situation and there is not yet any complete US government analysis which definitively tells us precisely how these all came to be, whether they’re part of a single cohort,” Pompeo told reporters Wednesday.
Via The Independent “There are multiple theories, and you should know there are significant US government resources… three-plus years on, devoted to getting to the bottom of this and then holding those responsible accountable should we determine that that’s required,” he said.
It was thought serious enough for the Trump administration to withdraw half the US embassy staff while expelling Cuban diplomats in September 2017, given the ‘sound waves’ were thought intentional, or “specific attacks”. Investigators had offered several theories about a high-tech attack by Cuba’s government, or perhaps a rogue faction of its security forces, or possibly a third country like – wait for it – Russia. Another theory was that an eavesdropping device may have gone awry.
The whole episode gave rise to endless theories, even that it was a natural phenomenon due to sounds produced by crickets in Havana, according to one scientific inquiry featured in The Guardian in 2019. Other scientists posited the possibility of mass hysteria among staff serving in a high stress environment.
Asked about the mysterious ‘Havana Syndrome’ among US diplomats in #Cuba, #China and elsewhere, @SecPompeo says it’s “patently false” that @StateDept didn’t protect its personnel because of larger political objectives. “We can continue to try to determine the causation of this.” pic.twitter.com/o1fGGdLxEq
— Steve Herman (@W7VOA) October 21, 2020
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But apparently it wasn’t just American personnel stationed in Cuba that were harmed, as the AFP notes this week:
Similar cases began emerging in 2018 among US personnel in the southern Chinese city of Guangzhou, with Pompeo initially linking the situation to the episodes in Havana.
But The New York Times, in an investigation published Tuesday, said that the State Department had played down the incidents in China and did not open a similar investigation.
The newspaper said that a clandestine CIA officer in Moscow also suffered debilitating headaches that forced him into retirement, raising suspicions that Russia was waging non-traditional warfare in multiple sites.
The issue is also surfacing again over allegations the Trump administration ultimately did nothing to resolve the issue. US diplomats and spies have recently accused the White House and top brass in federal agencies of intentionally downplaying it to the point of cover-up, given they don’t have answers.
“There were no politics attached to this. The suggestion somehow is that we didn’t protect our officers because of some larger political objective – that is patently false,” Pompeo hit backed when pressed.
There now appears to be consensus within the US administration that Cuba or Russia may be using James Bond villain type high-tech devices which can imperceptibly impact the health of American personnel stationed abroad without them knowing about it. At this point there’s even a name for it and lengthy entry in Wikipedia, called “Havana Syndrome”.
- A Sordid Conspiracy To Deceive The American Electorate
A Sordid Conspiracy To Deceive The American Electorate
Tyler Durden
Fri, 10/23/2020 – 23:00Authored by David Limbaugh via PJMedia.com,
Have we ever witnessed a stranger anomaly in modern presidential politics than the craven contempt the Biden campaign, the media and social media have shown for the American electorate in their disgraceful conspiracy to hide Joe Biden?
What bona fide presidential candidate would arrogantly hide in his basement during the heat of a campaign, especially in the last few weeks of an ever-tightening one?
If the liberal media weren’t providing Biden cover, he couldn’t get away with this. If they were even raising questions about his intentional invisibility, this campaign would look far different, and far less surreal.
As President Donald Trump has hopscotched the country, traveling thousands of miles to appear at vigorous, humongous campaign rallies, Biden and his running mate, Sen. Kamala Harris, are nowhere to be found. We’ve never had a presidential candidate virtually opt out of the campaign.
Please don’t use the virus as an excuse, unless you’re willing to point out that Trump has been fearlessly campaigning for reelection with a rigorous schedule that would exhaust most 30-year olds, while Biden is acting like an old man with no interest in engaging with the public or the media. And he seeks to be leader of the free world? Then again, when Biden has surfaced, he’s failed to draw a Sunday school-sized crowd.
Never has a presidential candidate taken the voters for granted like this. Hillary Clinton declined to visit the swing state of Wisconsin after April 2016, but that is nothing compared with Biden’s ghosting of the entire electorate throughout the campaign.
Even candidates who believed they were comfortably ahead have never hidden from view like this to run out the clock. They all believed enough in the superiority of their agenda that they wanted to make their case to the people.
Moreover, what other presidential candidate has refused to provide his position on key issues, including whether he would pack the Supreme Court? When has any other candidate haughtily waved off questions of debate moderators and reporters with the sophomoric dodge that, “Trump just wants you to focus on this issue (instead of what an SOB he is)”?
Adding insult to injury, when has the media ever let any candidate off the hook like this, which is a scandal of unprecedented proportions? Obviously, the media disrespects the electorate as much as the Biden campaign does.
If anything is indisputably the media’s job, it is to bring out the candidates’ positions on important issues, and packing the Supreme Court and the Biden scandals are exceedingly important — and relevant — issues. What would the media’s reaction be if Trump refused to answer such questions?
The media dutifully promoted the canard that the Russians — yes, the Russians again — were behind the emails found on Hunter Biden’s laptop. But how will these crooked conspirators explain away the bombshell revelation of Hunter’s former business partner, Tony Bobulinski, that the “big guy” referred to in Hunter’s email is Joe Biden himself? How will they handle Bobulinski’s assertion that Joe Biden was offered 10% interest in a Chinese business deal?
But for my money, even these cover-ups don’t hold a candle to the media’s scandalous concealment of Joe Biden’s declining mental acuity. In his current state, Biden clearly is not fit for office, yet the media ignores it while raising bogus questions about the uncannily vibrant Trump’s capacity. Reality has finally trumped George Orwell’s imagination.
Where is the perennial finger-wagger Bob Woodward when you need him?
The American public knows everything there is to know about Trump, as they’ve scrutinized every molecule of his being and business dealings and dug up every conceivably negative morsel about him during the last four years.
To complete the trifecta, we’ve watched the leftist social media giants conspire with the Biden campaign and the media to stack the deck in Biden’s favor. When the New York Post first reported on the Hunter Biden emails that implicated Joe Biden, Facebook and Twitter actively buried the story — preventing users from sharing it with other users, invoking the specious excuses that the story violated a hacked-materials policy and was unsubstantiated. Nice try.
So, here we are, less than two weeks from the most important election of our lifetimes — and millions of voters have been shielded from the agenda of this Democratic duo to radically transform America into a socialist hellhole with 70 genders, major tax increases on most taxpayers, a federally engineered war on law enforcement and law and order, open borders, increased regulations, the horrors of the Green New Deal (including a gutted domestic energy industry), and scores of other policies the majority of Americans would reject if the Democrats’ positions were made known to them.
Don’t fool yourselves. This liberal trio knows the American electorate is still basically conservative and would never knowingly elect someone with such a radical agenda, which is why it will continue trying to deceive voters until Nov. 3.
- Two Decades After 9/11, Pentagon Is Providing Covert Air Support To The Taliban
Two Decades After 9/11, Pentagon Is Providing Covert Air Support To The Taliban
Tyler Durden
Fri, 10/23/2020 – 22:40Nearly two decades following 9/11 and the initial invasion of Afghanistan which ostensibly had as its objective the removal and destruction of the hardline Islamist Taliban government, the United States military is providing covert support to the same “outlawed” Taliban with the latest aim of booting ISIS from the country.
A report in The Washington Post on Thursday details that this secret assistance focuses on the Pentagon providing air power to the Taliban as the group wars against against ISIS in Afghanistan’s northeastern Kunar Province.
Afghan Taliban file image That’s right, the very terrorist group that for years has waged a campaign to kill and maim large numbers of American troops in Afghanistan (not to mention many thousands of local civilians) is now being covered by US air power.
The Post’s reporting is sourced to members of the elite Joint Special Operations Command counterterrorism task force based at Bagram air base, who say the strikes are helping the Taliban gain ground against ISIS, seen as the greater and more immediate US nemesis, despite as recently as earlier this year the US being engaged in major bombing operations on the Taliban.
Here are some of the shocking details as reported in The Washington Post:
Army Sgt. 1st Class Steve Frye was stuck on base last summer in Afghanistan, bored and fiddling around on a military network, when he came across live video footage of a battle in the Korengal Valley, where he had first seen combat 13 years earlier. It was infamous terrain, where at least 40 U.S. troops had died over the years, including some of Frye’s friends. Watching the Reaper drone footage closely, he saw that no American forces were involved in the fighting, and none from the Afghan government. Instead, the Taliban and the Islamic State were duking it out…
US operations over Afghanistan, file image via US Air Force Through JSCOC sources the Post was able to learn this is part of an active policy to provide air support via drone strikes in places where Taliban commanders are battling ISIS for territory:
What Frye didn’t know was that U.S. Special Operations forces were preparing to intervene in the fighting in Konar province in eastern Afghanistan — not by attacking both sides, but by using strikes from drones and other aircraft to help the Taliban. “What we’re doing with the strikes against ISIS is helping the Taliban move,” a member of the elite Joint Special Operations Command counterterrorism task force based at Bagram air base explained to me earlier this year, speaking on the condition of anonymity because the assistance was secret. The air power would give them an advantage by keeping the enemy pinned down.
The report notes that while there’s no direct communication between the JSOC team overseeing the mission, which is shockingly enough dubbed in the report “Taliban Air Force” based on JSOC’s own internal joking nickname, they listen in on Taliban communications in order to track the anti-ISIS frontline fighting.
Good snapshot of how insane US foreign policy is.
US military—who spent 2 decades fighting the Taliban—are now acting as their Air Force. https://t.co/s21LLGcT8J
— Paul Gottinger (@PaulGottinger) October 22, 2020
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“Our secret Taliban air force. Inside the clandestine U.S. campaign to help our longtime enemy defeat ISIS,” the WaPo story emphasizes in its lead-in.
The report underscores: “Taliban units on the ground appeared willing to take the help, waiting to assault Islamic State positions until they heard and saw the explosions of bombs and Hellfires.”
Recall too that last March US Central Command chief Marine Gen. Frank McKenzie testified before the House Armed Services Committee that the Taliban had been receiving “limited” Pentagon support against ISIS given the group had proven “very effective” at missions to “compress and crush[ing]” the ISIS stronghold in the country’s Nangarhar province.
The US has been engaged in long-running peace talks with the Taliban based in Doha with the ultimate aim of leaving Afghanistan stable enough for a full American exit from the longest war in US history. However, few realized just how ‘cooperative’ this relationship is becoming on the ground.
- To Save The Stock Market, The Fed Threatens Destruction Of Trillions In Middle-Class Retirement
To Save The Stock Market, The Fed Threatens Destruction Of Trillions In Middle-Class Retirement
Tyler Durden
Fri, 10/23/2020 – 22:20Authored by Allan Sloan via ProPublica,
The Federal Reserve, which these days seems to be the only major part of the federal government capable of operating drama-free, has done a lot to help keep our economy afloat. It has cut interest rates to unprecedented low levels, bought billions of dollars of corporate IOUs, helped stabilize the debt markets and helped rescue a stock market that had begun falling sharply in mid-February when the COVID-19 recession started and that seemed headed for a crash.
In the process, the Fed has indirectly provided support to house prices and to the vital home construction business by forcing down mortgage interest rates to all-time lows of about 3%. Given that home equity is a major asset for many middle-class Americans, supporting home prices is especially important. As is supporting the home construction industry, which is a major source of blue-collar jobs.
But if you dig deeper, you’ll see that the Fed is unintentionally worsening economic inequality by providing the most help to Americans who are least in need of it. And it’s also putting stress on the middle class’ most important asset: retirement benefits.
Higher stock prices are great for people (including me) who own a lot of stocks, but those people are primarily the top 10% of the country, in terms of wealth. According to Fed statistics, more than half of stocks — 52% — are owned by the wealthiest 1% of Americans, and 88% are owned by the top 10%.
To show you a different aspect of helping the upper class but not the working class, the Fed’s securities purchases include buying debt issued by firms that are laying off workers while paying substantial dividends to shareholders. And for some imprudent or troubled corporate borrowers, the Fed’s moves have been hugely helpful.
But those moves are hurting prudent savers of modest means by greatly reducing the income they can earn on Treasury securities and other no-risk investments such as bank certificates of deposit. That tends to drive people seeking income into the stock market, where their capital is at risk. By contrast, if you buy a Treasury security, you’re sure of getting your money back when the security comes due, even though the security’s market value will fluctuate both up and down while you hold it.
Interest rates are so low that they’ve largely erased the key benefit — income — Treasury bonds are theoretically supposed to provide over stocks. If you own a low-cost Standard & Poor’s 500 index fund, you’re getting much more income from dividends than the interest you’d earn having the same amount invested in a 10-year Treasury note. For example, the dividend yield (a year’s worth of dividends divided by the current market price) on Admiral shares of Vanguard’s S&P 500 fund is more than double the interest yield of a 10-year Treasury. It’s even higher than the yield on a 30-year Treasury bond, something that you rarely see.
The yield on the Vanguard fund was 1.65% as of Sept. 30, the most recent available date. As I write this, the yield on a 10-year Treasury, the security it generally makes the most sense for a retail investor to buy and hold to maturity, was 0.76%. The yield on the 30-year Treasury was 1.56%.
Despite its good intentions, the Fed is setting the stage for huge problems down the road for pension funds and, therefore, for potential pension recipients. There are also going to be problems for insurance companies and for other firms onto which many corporate employers have offloaded their pension obligations in order to clean up their balance sheets and minimize their future financial risks.
The firms that have assumed the responsibility for paying these pensions typically own bond-heavy portfolios. And while bond prices have risen because interest rates have fallen — I’ll explain how that works some other day — rates seem much more likely to rise from their current low levels in the future than to fall even lower. And when rates rise, it will decrease the market value of the bonds held by the firms that have assumed responsibility for paying pensions.
What it all adds up to: The Fed is trying to salvage the present by pumping trillions of dollars into the U.S. and world financial systems but in the process is putting our economic future at risk.
“We’re bailing out the present and making the future pay for it,” said Gene Steuerle, a co-founder of the Tax Policy Center.
Please note that I’m not blaming the Fed for what it’s doing. It’s trying to fulfill its mandate to keep employment high, inflation relatively low, the dollar reasonably stable and interest rates at what it considers an appropriate level. The Fed’s job, which is already difficult in strange and uncertain economic times like these, is being made much harder by the lack of new economic stimulus packages from Congress and the White House. These packages, as we saw when they were in effect earlier this year, not only help individuals but also stimulate the economy when recipients spend the money they’ve gotten.
The Fed, by contrast, can help the financial markets and the economy but can’t directly help individual people.
Now, let me show you how the Fed’s near-zero rates, the culmination of a dozen years of ultralow rates and which Fed Chair Jerome Powell says will continue indefinitely, are undermining the long-range future of the U.S. retirement system. This matters — a lot — because Fed statistics show that retirement benefits (not including Social Security) are hugely important to the middle class.
Prof. Edward Wolff of New York University, who specializes in studying income and wealth inequality, told me that Fed statistics show that pension wealth accounts for 70.3% of the net worth of the middle class, which he defines as people ranking in the 20th through 80th percentiles in terms of wealth. By contrast, he said, retirement benefits are only 2.2% of the upper class’ wealth.
This makes the middle class particularly vulnerable to rising rates in the future. Let’s take this piece by piece.
For starters, near-zero rates are making the financial problems of the already-stressed Social Security system worse than they would otherwise be by sharply reducing the interest that Social Security can earn on its $2.9 trillion trust fund. That trust fund consists entirely of Treasury securities and is legally barred from owning stocks. That means that the fund’s interest yield is falling and it’s not benefiting from the 50% rise in stock prices since the market bottomed on March 23.
The near-zero rates also affect private pensions. David Zion of Zion Research estimates that the pension funds of the Standard & Poor’s 500 companies, which he says were underfunded by a total of $279 billion at the end of 2019, were underfunded by $407 billion as of June 30. “The main driver of the increase is lower interest rates,” he said. (I’ll explain the math behind lower rates raising pensions’ underfunding in a bit.)
Large as it is, the S&P companies’ total shortfall is only a fraction of the underfunding afflicting state and local government pension funds. Keith Brainard, director of research for the National Association of State Retirement Administrators, estimates that the 5,332 retirement funds sponsored by state and local governments were $1.96 trillion underwater as of June 30, the most recent available number, up from $1.90 trillion as of year-end 2019. This has happened, he said, even though the funds’ assets totaled about $4.65 trillion, an all-time high.
What’s more, if you use dispassionate math rather than the generous accounting principles that public pension funds are allowed to use, you see that lower long-term interest rates are doing much more damage to these funds’ financial status than the numbers from Brainard’s organization suggest. For instance, Steve Church of Piscataqua Research estimates that the shortfalls of the 127 public pension funds that he follows, which have a total of about $4 trillion of assets, are about $7.44 trillion. That’s more than quadruple the funds’ reported $1.53 trillion shortfall.
This huge difference stems mostly from different assumptions about interest rates and different ways of calculating how much money a fund needs to have on hand today to meet a future obligation. A public pension fund comes up with how much it needs to have on hand today based on the income it expects to earn on its portfolio. Corporate pension funds engage in the same process, but they are required to make far less optimistic assumptions. They have to set aside enough money to meet that obligation if the money were invested at the interest rate on high quality, long-term risk-free bonds.
Let me give you one example of the difference. If a pension fund expects to pay someone $10,000 in 10 years and anticipates it will earn 7% a year, compounded, today’s cost of that benefit — what numbers crunchers call its “present value” — shows up on its books as a liability of $5,083. If, however, the fund predicts it will receive 3% per year, which is about the rate that corporate pension funds use these days, the fund would need to set aside $7,441.
All of this is leading private and public pension funds to take on more risk. “When yields are low, you go looking for income somewhere else,” Zion told me.
That means putting money into stocks and various aggressive (and high-cost) Wall Street schemes such as private equity and venture capital funds.
In addition, some public pension funds are borrowing money to try to earn what financial types call “spread income” by investing the borrowed money in assets whose returns exceed the funds’ borrowing costs. “When the risk-free rate is zero and you need seven, that’s what prompts plans to move outside their traditional comfort zones,” Steve Foresti, chief investment officer of Wilshire Consulting, said.
Foresti, who advises numerous public pension funds, says that the use of borrowed money, alternative investments and such began getting more popular about a decade ago. That’s about when the Fed knocked rates to near zero and has pretty much kept them there.
One prominent example of a fund trying to borrow its way out of trouble is the California Public Employees’ Retirement System (CalPERS), the nation’s largest government pension fund. It’s considering borrowing up to $55 billion more than it has already borrowed, hoping that its return on the assets it will buy with that borrowed money exceeds what it will pay in interest.
The fund, which says it currently has about $25 billion of borrowed money for which it’s paying an average interest rate of 0.18%, now has authority to borrow up to 20% of its assets. That’s roughly $80 billion. CalPERS says borrowing has helped it because it’s been earning more on the assets it bought with the borrowed money than the interest it’s paying.
“It’s a moderate use of leverage. We will do it opportunistically and gradually,” Marcie Frost, CalPERS’ chief executive, told me. “We can tie up our capital for a long time. …We are able to be opportunistic.” However, as Frost readily acknowledges, “Leverage can exacerbate your losses.”
Or let’s look at another big fund, the Teacher Retirement System of Texas, which last year lowered the assumed rate of return on its investment portfolio to 7.25% from the previous 8%. Among other things, that lower assumption is indirectly responsible for teachers, school districts and the state of Texas having to increase their future contributions to the pension fund to avoid the fund having to slash future benefits.
Jase Auby, TRS’ chief investment officer, says the fund has been borrowing 4% of its assets for about a year. The idea, he said, is “to diversify away from equity risk” — the danger that stock prices will fall — caused by low interest rates. “Equity risk is greater because interest rates are low,” he said.
The fund says its borrowing cost is currently about 0.25% a year. TRS says there were no specific assets financed by its borrowings, but it’s ahead so far because its total fund return has exceeded its borrowing costs. If, however, the value of the assets bought with the borrowed money goes down, the fund obviously will be worse off than if it hadn’t borrowed the money.
By forcing bond yields down sharply and helping drive up stock prices, the Fed’s low-interest rate regime has made 401(k) and 403(b) and other individual retirement accounts more valuable — for now — by boosting the market values of both stocks and bonds.
However, these low rates are now exposing those individual accounts to considerably more risk than if stock prices were lower and bond yields higher.
Why do I say this? Because high stock prices can fall — we’ve had two 50% market drops in the past 20 years — and low-yielding Treasury securities will lose value if interest rates move higher.
How can U.S. Treasury securities lose value, given that the federal government can create as many dollars as it needs in order to redeem its obligations? Let’s say that you spend $10,000 to buy a 10-year Treasury note yielding 0.76%, the current rate. You’d collect $76 in interest a year, $760 over the issue’s lifetime, before getting your $10,000 back in 2030.
But let’s say that a year from now, despite Fed Chair Powell’s predictions, the rate on such a security has risen to 1.76%, around where it was for parts of last year. The market value of your now-nine-year security would be only about $9,174, according to my handy-dandy online bond calculator. That $826 decline in value is more than the total interest you stand to collect over the Treasury note’s lifetime. You can take your loss directly by selling your security, or you can take it indirectly by collecting $76 of annual interest for 9 years rather than the $176 that holders of market-rate securities would be getting.
I’d love to be able to quote Fed people to give you the Fed’s side of all of this. Alas, none of the people I’ve talked with or approached, some of whom I’ve known for years, are willing to be quoted by name.
Privately, various Fedniks past and present readily agree that there are serious downsides to what the Fed has been doing since then-chair Ben Bernanke (who declined, through a spokeswoman, to talk with me) first cut rates to near zero in 2008 and successfully ended the stock market meltdown and financial panic.
These Fedniks are also familiar with the risks that ultralow rates pose to the retirement system and the impact these rates have on economic inequality by sharply raising the values of financial assets, which are owned disproportionately by high-net-worth people, while doing relatively little for the less well off.
But they won’t talk about it publicly.
Still, the issue needs to be recognized. If we don’t do something to offset the damage to our retirement system, today’s problems could end up looking like a rounding error compared to what the future holds.
- Watch US Navy Stealth Destroyer Conduct First Missile Test
Watch US Navy Stealth Destroyer Conduct First Missile Test
Tyler Durden
Fri, 10/23/2020 – 22:00After years of delays, the US Navy received its next-generation guided-missile stealth destroyer back in April – the only problem was that the delivery was seven years late!
Now the Navy is rushing to get the USS Zumwalt (DDG-1000) combat-ready, with the first missile test conducted last Tuesday (Oct. 13) at the Point Mugu sea test range off the coast of California, reported USNI News.
Readers may recall, the Zumwalt program has faced numerous setbacks, including significant delays with the ship’s main guns, engine troubles, and significant cost overruns.
USNI said the destroyer conducted the MK 57 Vertical Launching System’s first live test, firing a Standard Missile-2. The missile is the cornerstone of the destroyer’s layered defense, with an approximate range of 90 nautical miles.
Inside The USS Zumwalt
USS Zumwalt’s Armament
Capt. Matt Schroeder, the program manager for the Zumwalt, said in a statement that “the successful test not only demonstrates the ship’s capability to fire missiles and conduct self-defense, it is also a significant step toward more advanced combat system testing and operations for our Navy’s most technically innovative warship.”
“The USS Zumwalt crew and Surface Development Squadron One are working hand-in-hand with the acquisition community to advance this ship’s operational capability,” Schroeder added.
There was some recent talk the Zumwalt could be outfitted with hypersonic missiles. The vessel is expected to join the US Pacific fleet, where it could soon be sent to challenge the Chinese in the South China Sea.
- How 'Expert' Worship Is Ruining Science
How ‘Expert’ Worship Is Ruining Science
Tyler Durden
Fri, 10/23/2020 – 21:40Authored by Pasha Kamyshev via The American Mind,
What is science? Has it changed from past to present? Is it still working? The coronavirus pandemic has put a spotlight on the question of science as a whole and biology and drug research in particular.
Now, the popular narrative is that if only we listened to the scientists, we would have prevented this, presumably contrasting scientists against “politicians” and perhaps some un-specified “non-expert” others. The pandemic is happening against a completely unprecedented backdrop of censorship of what seems to me like normal-people discussion about the effects of different drugs and therapies.
The CEO of YouTube has specifically said that the platform would block people suggesting vitamin C has beneficial effects on helping one recover from coronavirus. This is, of course, done “in the name of” science, because everything ought to be done in the name of science in the West.
My current view is that large numbers of fields which are considered “scientific” in the West are a complete mess and lack the essential feature of what it means to be a science in the first place.
So, let’s go back to first principles here. What is a science? If we look at the field of science as a mechanistic process that takes some inputs and produces outputs, what are those inputs and outputs? Let’s take one the of the most classic examples of this: Newton’s theory of gravity.
The theory of gravity, as we learn in middle school, is on its surface a simple formula:
Where the force of gravity is F, m1 and m2 are masses of two objects, r is the distance between them (more specifically their centers of gravity), and G is a gravitational constant. Now this formula needs a few key variables to be known: you need to know the mass of the objects, the center of mass, and the distance between them. Underlying these measurements you may want to know many more things, such as what mass is exactly, what is distance, can gravity be blocked, etc.
Some interesting questions arise: why is the gravitational constant that particular number? Could it be smaller or higher in, say, another universe? But even if all those things are somewhat undetermined, you still have a functional mathematical instrument. Taken together, the notions of mass, distance and a formula, even if somewhat imprecise, comprise a model of reality. This model may not be perfectly accurate, but it does well enough for middle school physics problems.
Why do we care, or why do we need models of reality at all? There is a stock answer that “science helps engineering” and that improves our standard of living. This is true—but how, specifically, does science help engineering? By allowing us to compress parts of the world into a model, it allows reasoning over a model that hopefully translates into reasoning over the world.
Notably, this process is not automatic. It relies on certain assumptions, such as:
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There is, in fact, a model being produced, which is able to create falsifiable predictions about the future.
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The model doesn’t wildly vary over time (it embodies actual compression of universal laws).
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Reasoning over a model is simpler than reasoning over the real world and accessible to many people or algorithms.
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There are clear agreements about what the inputs to the model are and how to measure them.
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The model is over something that we are deliberately engineering, whether social or biological.
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Though some inaccuracies in models are somewhat inevitable and form the basis for new models, wildly contradictory data indicates a problem in either the model or the data.
Clearly the theory of gravity, whether that of Newton or of Einstein, passes the test. Indeed, many things we learn pass the test: most physics, chemical equations, models of the cell, some economic theories. Not every model is strictly mathematical, although the boundary between chemical equations and math may be somewhat artificial. Regardless of that particular distinction, the models are there to help make reasoning easier for people.
It’s worth emphasizing these basic requirements for scientific advancement to be useful in order to highlight a stark contrast between the ideal notion of science and what we have today. The models that scientists produce are meant to simplify and de-mystify reality for other people, including and especially non-scientists. “De-mystify” here does not mean “remove the sense of awe,” as is often the case, but rather remove the mystery of how things work. A good model is one that is both accurate and simple enough that it can be applied by nearly anyone.
Now, given how specialized all the disciplines are, not every person employed in science is able to produce models. There is a lot of work gathering raw data, coming up with theories, writing up grants, teaching existing material, etc., etc. The specialization means a lot of people work in science, but not that many look at the big picture: what is the output we are producing, especially in the realm of health and human sciences?
Stating the Obvious
What we are producing instead of models are statements. Statements such as: a particular drug (e.g., Vitamin C/Vitamin D/HCQ) helps or does not help against the flu/coronavirus/scurvy. Now these statements are not useless, despite not being full models of reality. If they are true and we have good consensus on them, even without necessarily understanding the mechanism or models of actions behind them, they can still form useful guidelines for action on a deadly disease.
However, the question is: do they? What exactly does the science say and, just as importantly, when does it say it? This is a tricky question, often replaced in popular media by “what do the journalists say the science says?”—which is yet another link further removed from the truth.
Let me give a hypothetical example. Let’s say that I create an experiment with a control group and treatment group, each containing one person. I give the treatment group (one person) a drug and watch how both groups develop. Let’s say they both get better around the same time. What can we conclude?
If you are a follower of the scientific method, you might say that the sample size is too small to conclude anything. If you know statistical terminology, you might say that the experiment lacks “statistical power” for a negative proof of drug efficacy, which is a more precise way of saying the sample size is too small. Regardless, you might say that more data is needed.
However, according to modern journalistic “standards” in America, this study is definitive proof that the drug does not work, especially if to say so accomplishes some political goal. Of course, nobody does experiments of 2 people, but sometimes journalists do report on experiments of 30 people, which still lack power.
Even in the space of COVID and HCQ, there are plenty of other issues. One famous study of veterans features a whole gamut of issues, such as strange subgroup selection, observational studies passed off as control-based ones in media, bizarre hazard ratios that supposedly indicate that AZ + HCQ is much better than HCQ, but without further discussion of conclusions. Another Lancet study features a lot of those same problems, along with potentially being completely made up.
Our media and state epistemics—drug either=good (perfect cure) or bad (extremely harmful)—are completely incapable of handling issues as complex as “dosage” or “network effects” or person-dependent treatment.
This brings us to a philosophical question of what “evidence” is, what “evidence” should be, and how the term is used in practice. If you are a detective in a case, literally everything is likely evidence: how the person died, what the weapon was, where the people who knew him were on the night of the murder, what drugs they were normally taking. Now some of this, though it can be construed as evidence during the investigation, ends up not mattering at the end. However, until the judgement is done, it’s best not to dismiss particular things as not “evidence.”
In the view of a real scientist, everything is evidence—it is just very unclear how to interpret it. Science is about trying to explain reality. So, if we have two conflicting studies on a drug efficacy, there are many possible explanations here.
One we implicitly adopt, as a polarized society, is that one of the studies was done badly. While the general quality of studies done under the pressure of a pandemic can be assumed to be low, we also need to consider obvious other hypotheses, such as the drug working better for different people. For example, it’s a very plausible situation that the drug works better if we give it to people earlier in the disease. However, combining our desire to “help the worst off” with studies that follow the worst-infected people due to an easier time getting the drugs for them, makes us study efficacy on the people who are already really sick and might not be helped.
Now sometimes, these might be less strong “evidence” than a well-done RCT (even that is not guaranteed due to plausible network effects). But the issue here is that instead of considering “stronger” and “weaker” evidence, we consider one to be absolute truth and the other heresy. Instead of calling these things “evidence,” we have laid a claim on the term “evidence” as what journalists say are “studies,” which may or may not be RCTs, which may or may not be done or interpreted correctly.
“Evidence,” however important it is, is not the full story of science, which once again needs to produce models. How does the drug operate? Where does it operate? If one is doing an observational study, it’s worth asking what exact factors influence doctors to prescribe one vs. not, instead of simply throwing controls at the data until the desired outcome occurs.
Statements such as “the drug has a 20% chance of helping the disease” are seen as an “endpoint,” rather than a description of something we don’t know: what distinguishes those 20% from the 80%. The probability is not an “inherent” thing, but rather a pointer to missing puzzles in the causal graph. What we actually need is to work toward these causal graphs.
“Silence, Layman!”
Tech censorship of large amounts of info relating to the virus, including early videos from Wuhan, has been downright criminal. Big Tech has fully bought into the frame of “experts” vs “laypeople” as if experts are always “correct” and laypeople are “wrong,” (unless they are repeating a statement by the experts).
If the laypeople are “wrong,” then there has been a massive failure of education to produce correct models for people to use for home reasoning. Obviously, the default answer for many people is to simply pour more money into education. But we lack understanding of what science and science education even are. Science is meant to produce world models, and education is supposed to impart them to everyone else. Neither is doing this, really, and what we have in place of those instructions is one large uncanny valley of ever-changing statement production (how dangerous are public gatherings, really?).
Now, more abstract statements such as “Vitamin D/C helps with respiratory diseases” are what we would ideally have produced before the pandemic. Those can be operated on by laypeople and form a reasonable set of priors to be further refined when something new shows up. The original purpose of science is to produce functional information that can be operated on by both policy makers and laypeople. Said information can be shared by people who are themselves not scientists.
However, in our backwards society the idea of people coming to conclusions using previously available evidence is becoming taboo. This makes just about as much sense as tech companies censoring the correct calculation of gravity between two planets because the calculation wasn’t done by a scientist.
That’s not to say that all science needs to be public. There are good reasons for secrecy, such as scientific research into advanced weapons. However, all science that is public is there to empower people, not put them down. Not all science models need to be understandable by every person—sometimes models are too hard to understand and are thus more suited for use in a public open-source algorithm.
Again, that’s not to say that all censorship is unjustified. There can be harmful misinformation, but one key role of any future academy must be to define a formal Overton Window for the set of hypotheses that are “within” the realm of scientific discourse. If it’s a plausible hypothesis for an experiment, it’s likely plausible to be discussed in public.
What we have instead is a “debate” over HCQ, where academics are publishing papers conflicting with each other and doctors are giving people the drugs and reporting the results, before promptly being blocked by Big Tech on the grounds of being “unscientific.”
The debate over HCQ has both sides thinking the other is killing people. One side happens to be right. History will not judge those who were wrong on this very kindly. The American ideal of a citizen informed enough to make decisions in the voting booth is in direct contrast with a citizen who needs to be disciplined for making obvious logical conclusions about vitamins and virus relationships.
There is even an ironic, 1984-esque doublethink in the usage of statistics. You see, when society needs to make intelligent mathematical analysis happen, it will happen. Some teams at Microsoft, my previous employer, are masters of statistical analysis of both the Bayesian and the frequentist variety. If our society needs the truth about important things, such as how to make people click on ads, good honest statistics will be allowed to happen sometimes. But if we want to figure out whether a drug has a positive cost benefit for one’s health—forget about it.
Other sciences suffer from major problems as well. You can tell a particular field has issues by asking, “has society gotten better or worse on the factors studied by the science? And have we done so by looking at official advice or ignoring it?” The obvious example is nutrition. Obesity, as well as a host of other nutrition-related problems, has increased in America. If the entire nation is failing, then how good can the scientific establishment of nutrition be?
Of course, one could go paper by paper and see where individual publications make errors of judgment, but they are likely to fall into predictable categories: absence of actual models, lack of causal graphs, inappropriate controlling for variables. The problem here is that the science is failing as a whole, or we would not be having the health problems we are having. Understanding nutrition as a flawed science is perhaps one of the hallmarks of someone who is an intellectual versus someone who’s just pretending.
None of this is truly groundbreaking or new. I have heard stories of professors at Yale in one department being mad about professors in another department teaching p-hacking to students. Inter- and intra-discipline fights are common, which isn’t necessarily a bad thing as long as the overall combined output of the field is correlated with reality. However, the journalistic tendency to signal boost any paper that can have political impact amplifies some fights over others, further screwing up an already shaky system.
A New Birth of Reason
So right now science is losing its status among the general population. It is also losing status among those who can actually read statistics. This is both horrifying and encouraging. Without a structured way to sift actual reality into social reality, the social reality will diverge from reality, with further and further breakdown of health and sanity for society.
This is true both for academics and non-academics. The anti-science polarization does not necessarily arrive at the truth, as it is subject to its own signaling spirals. But it at least provides some counterpoint to the bizarre hegemony of ideas such as “if the disease doesn’t have a cure, then all attempts to establish helpful drugs must be banned”—the implicit philosophy of the tech sensors.
There are deeper problems than just the type signature of what is being produced or false assumptions about what is “evidence,” “information,” or “misinformation.” Each discipline of science generally has an incentive to ensure that their discipline grows and doesn’t get incorporated into other disciplines. If, for example, it is found that large aspects of mental illness are based on particular known social or nutritional problems, then the mental illness industry could become dissolved into a social science or some biological science. This is disadvantageous to the industry, and thus the industry is disincentivized to uncover causality of the concepts underlying itself.
True foundational research in a scientific discipline does not look to expand said discipline, but rather collapse it, just like a good engineer automates himself out of a particular task. However, our general epistemic foundation keeps coming up with a large number of conceptual ideas as “things-in-and-of-themselves” with independent identity disconnected from causality.
These “things-in-and-of-themselves” then find their way into identity, Twitter bios, and politics, closing the feedback loop of establishing social reality, complete with the social prohibition: “do not ask what causes this, that’s unscientific!” This is a key problem of social order that eventually leads to the destruction of social order and civilization as a whole, all under the name of “science.” It has been noted by many philosophers, yet no society has ever come up with a lasting solution.
For example, even something like “climate” is now a “thing-in-and-of-itself”, which means it can only be either “good” or “bad” along with an established set of possible actions that are allowed to affect it. Of course, one could ask a more precise question, such as “if we cut down more trees on the west coast, would we have less intense forest fires there?” without trying to invoke the “climate” as a whole. However, this is taboo, since “climate” is sacred and asking questions about parts of the sacred is taboo.
Is there still hope that we can convince the current “scientific establishment” to get back to the roots? I don’t have much. Reform will more likely be driven by a cadre of people who don’t think of themselves as “scientists,” unless in jest, but who have rapid enough feedback cycles from reality to begin to notice previously hidden patterns in it.
The future of science, as the Russian proverb goes, is its well-forgotten past: something that is produced by experts, but either understood by the common man or precise enough to be understood by a computer, as long as all the steps are verified. The future of science is models, not statements, and causal diagrams rather than frequentist nonsense of chasing p-values and correlations. Whether or not this will come under the banner of “science” remains to be seen.
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- Americans Are Panic-Buying Military & Survivalist Gear Two Weeks Before Election
Americans Are Panic-Buying Military & Survivalist Gear Two Weeks Before Election
Tyler Durden
Fri, 10/23/2020 – 21:20It’s an alarming trend we’ve observed before throughout the anxiety-ridden summer of rolling COVID-lockdowns and pandemic ‘uncertainty’ as well as the chaos of race protests and riots: Americans are stockpiling weapons and combat gear like there’s no tomorrow, or rather looking toward the near-term extreme unknowns coming post-election.
Surveying gun and tactical gear stores in cites especially across the south, for example Austin, a new report in Bloomberg finds that “Less than two weeks before Election Day, orders are rolling in. Since last year, online purchases have driven a 20-fold jump in sales of goods like the $220 CM-6M gas mask — resistant to bean-bag rounds — for Mira Safety of Austin, Texas.”
Via Reddit “It doesn’t matter who gets elected,” the tactical gear outlet’s founder Roman Zrazhevskiy told Bloomberg as he sees products fly off the shelves. “They think that no matter who wins, Biden or Trump, there are going to be people who are upset about the result.”
However, the Bloomberg report especially zeros in on “right wing extremism” and a new form of patriotism which sees the “survivalist look” as part of a lifestyle centering on preparation for coming political unrest. Hot sellers include high end body-armor plates costing hundreds of dollars, military grade gas masks, tactical clothing, and gun accessories like laser sights and scopes.
Noting that all across the US gun and ammo sales are surging, with record prices as well as shortages – for example some bullets for assault rifles selling for a whopping $.50 per single round – the report underscores that business is booming for these stores like never before:
A retail chain called 5.11 Tactical, which traces its roots to a friend of President Donald Trump’s adult sons, is even trying to turn the survivalist look into a fashionable national brand. It’s racking up annual sales of almost $400 million with stores in places including Tulsa, Oklahoma, and the U.S. Army’s Fort Bliss in El Paso, Texas.
But the report still acknowledges the trend transcends political affiliation, or either extremes on the right or the left.
5.11 Tactical Store One top DHS official who served as former assistant secretary for threat prevention at the Department of Homeland said, “It’s evidence of what many people have been expressing concern about for the last six months — the stress associated with the pandemic, a frustration or anger about various government mitigation efforts and a belief that those efforts are infringing on their individual liberties.”
Gun sales have soared throughout the summer, going back to the early weeks of pandemic-related lockdowns in the Spring:
“’We are up about 45 percent on first time firearm buyers and we are probably at least that on female purchasers,’ Jim Clark, the owner of Big Shots said.” https://t.co/Ej9brceeot
— Rob (@2Aupdates) October 23, 2020
https://platform.twitter.com/widgets.js
And the potential for a contested election could bring this “perfect storm” of frustrations and anxieties to the fore in some level of civil war type violence and clashes in urban settings.
Via Etsy While such a prospect as little as a year ago seemed far-fetched and overly conspiratorial, the experience of life in 2020 has left many more people seeing this as an actual possibility.
- US Signs Commitment With Israel To Uphold Military Edge Over Gulf States
US Signs Commitment With Israel To Uphold Military Edge Over Gulf States
Tyler Durden
Fri, 10/23/2020 – 21:00Authored by Dave DeCamp via AntiWar.com,
Potential F-35 sales to Gulf states have driven US officials to take extra steps to guarantee Israel’s military superiority over its neighbors, known as the Qualitative Military Edge (QME).
On Thursday, Secretary of Defense Mark Esper and Israeli Defense Minister Benny Gantz met at the Pentagon and signed a joint declaration affirming Washington’s commitment to ensure Israel’s QME.
Prime Minister Benjamin Netanyahu stands in front of an F-35 fighter jet at the Israeli Air Force’s Nevatim base, via The Times of Israel. “I want to state, again, how committed we are to Israel’s Qualitative Military Edge when it comes to defense sales, and our commitment to Israel’s security, which has been longstanding and it’s guaranteed and ironclad,” Esper said.
Details of the declaration are not clear, and it may be largely symbolic since maintaining Israel’s QME is already mandated by US law. A source from the meeting told The Jerusalem Post that an agreement was formulated to further Israeli acquisitions of US weapons.
The US sale of F-35 fighter jets to the UAE that is rumored to be part of Abu Dhabi’s normalization agreement with Israel was initially objected to by Israeli officials. But now, Israel could be angling to get some new weapons out of the deal. In September, Israeli Prime Minister Benjamin Netanyahu submitted a wishlist of advanced weaponry to President Trump worth $8 billion.
The F-35 sale has met resistance in Congress, with upholding Israel’s QME being a top priority on both sides of the aisle. A group of bipartisan lawmakers introduced a bill in the House that would effectively give Israel veto powers over US arms sales to the Middle East.
- WeWork Default Looms As COVID DOwnturn Sparks Fitch Downgrade
WeWork Default Looms As COVID DOwnturn Sparks Fitch Downgrade
Tyler Durden
Fri, 10/23/2020 – 20:40Even though Global Head of Real Estate at WeWork, Peter Greenspan, recently told Ken Biberaj, US Managing Director at real estate services firm Savills, in an interview that the firm’s balance sheet is “strong,” Fitch Ratings downgraded the struggling co-working company on Thursday evening, warning about the increased default risk because the virus pandemic has resulted in a permanent shift in lower office space demand.
The rating agency slashed WeWork’s long-term issuer default rating to CCC from CCC+. The CCC tier, essentially the lowest level in the junk bond market, implies the once high-flying startup has a significant chance of defaulting on its obligations.
Fitch’s downgrade is due to the “viability of WeWork’s business model in light of a potential lasting shift by companies to a hybrid office model that leads to permanently lower office space demand.”
Fitch said, “WeWork has made material progress to reduce its cash burn rate, in a scenario where demand is structurally lower, Fitch sees WeWork as potentially requiring additional liquidity sources inclusive of and beyond the full $3.3 billion SoftBank financing commitment.”
Maybe that’s why SoftBank’s Masayoshi Son plowed $1.1 billion into the sinking ship, known as WeWork, in August to help it weather the coronavirus pandemic.
Fitch said WeWork’s cash burn rate had been cut by nearly 40% from $4 billion in 2019 to $2.5 billion in 2020. Under one scenario, absent of a second coronavirus wave and structurally lower office demand, Fitch sees WeWork’s burn rate decreasing to about $900 million, with much of the funding coming from SoftBank unsecured notes.
As for the scenario with a second wave and structurally lower office demand, which at the moment, appears to be in play, Fitch sees WeWork with a cash burn of about $1.5 billion in 2021 and 2022. Fitch questions if the struggling co-working company can receive funding in this scenario.
The virus pandemic forces a new era of remote working, and a permanent demand shift lower for office space. Fitch warns:
“WeWork’s business model is potentially compromised due to the coronavirus pandemic…”
Fitch believes the company will have to “negotiate exits” rather than “walk away from committed leases,” so it can preserve its “reputation” without “destabilize its business model.”
And rather than negotiating exits, WeWork, at some of its buildings, just stopped paying rent.
A previous concern held by the rating agency is that a reduction in leasing demand by WeWork in top cities could result in lower rents for other commercial spaces that would reduce the relative attractiveness of WeWork spaces.
WeWork’s bonds maturing in 2025 trade around 63 cents on the dollar as more downside is possible.
As for SoftBank’s Vision Fund’s upcoming SPAC, well, it remains to be seen if it will be the vehicle to take struggling WeWork public.
We give the last word to Fitch: “WeWork would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated.”
- To 'Save' People From COVID, Puerto Rico Shuts Down 911 Call-Centers
To ‘Save’ People From COVID, Puerto Rico Shuts Down 911 Call-Centers
Tyler Durden
Fri, 10/23/2020 – 20:20Authored by Simon Black via SovereignMan.com,
Are you ready for this week’s absurdity? Here’s our Friday roll-up of the most ridiculous stories from around the world that are threats to your liberty, risks to your prosperity… and on occasion, inspiring poetic justice.
Puerto Rico Shuts Down 911 Over COVID
Puerto Rico has two centers which field 911 emergency calls for the island.
This week, BOTH of those call centers were shut down because employees tested positive for COVID.
The government instead instructed residents of Puerto Rico to call an alternative 10 digit number if they need emergency assistance.
Puerto Rico is not known for having the most efficient government… but seriously, this was the best solution they could think of? They couldn’t find replacement workers, a temporary facility, or simply reroute 911 calls to the emergency number they now advise calling?
That’s the COVID craze for you– if shutting down 911 saves just one life, it’s worth it.
Surely there won’t be any unintended consequences from SHUTTING OFF THE EMERGENCY PHONE NUMBER DRILLED INTO OUR HEADS SINCE CHILDHOOD!
Click here to read the full story.
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Coronavirus Funds End Up in Brazilian Senator’s Butt
The President of Brazil recently celebrated the end of corruption in the country.
But one of his allies must not have received the memo.
Police raided a Brazillian Senator’s home over evidence that he diverted Coronavirus response funds from the government to criminal enterprises.
Some of that money allegedly ended up in the Senator’s pocket– or more accurately, his butt.
During the raid the Senator was caught hiding over 30,000 reais (over $5,000) in his underpants, between his butt cheeks.
Click here to read the full story.
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Facebook Fights Fake News: An Obviously Satirical Newspaper
The Babylon Bee is a gem of a satirical news website, with headlines such as, “Nation Longs For More Civilized Age When Politicians Settled Disputes With Pistols,” and “To Improve Next Debate Both Candidates’ Mics Will Be Muted The Entire Time.”
Last week we talked about how the Twitter mob– and dictionary– decided the phrase “sexual preference” was offensive after Amy Coney Barrett used it during her Supreme Court Senate hearings.
Commenting on this Senate witch hunt to find something wrong with the judge, The Babylon Bee ran a headline that said, “Senator Hirono Demands ACB [Amy Coney Barret] Be Weighed Against A Duck To See If She Is A Witch.”
It’s a reference to a joke from the 1970s film The Monty Python and the Holy Grail.
But Facebook said it was incitement to violence, insinuating the article could make people want to burn witches…
Facebook demonetized The Babylon Bee until it edits the article.
But The Babylon Bee has refused to edit the satirical article.
Looks like the fake news is speaking a little too much truth for Facebook.
Click here to read the full story.
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Now It’s Offensive to Work Hard
This summer the tax-funded KIPP Charter Schools decided to retire the slogan “Work hard. Be nice,” because it “supports the illusion of meritocracy.”
KIPP leadership thinks it is wrong to tell kids that hard work is all it will take to be successful, because there is something else standing in their way.
“Working hard and being nice is not going to dismantle systemic racism,” reads the KIPP website, explaining the decision to nix the old motto.
The new religion of wokeness preaches that everyone is a helpless victim. No amount of hard work will get you ahead.
KIPP hasn’t released a new slogan yet but maybe they’ll try, “Seize the means of production. Execute the Bourgeoisie.”
Click here to read the full story.
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San Diego School District Abolishes Grades to ‘Combat Racism’
Students in San Diego schools will no longer have to do homework, turn in assignments, or take tests, because none of it will count toward a grade anyway.
Instead teachers will decide if a student has mastered the material.
How will teachers make this determination without some kind of test? Well, there aren’t any details on that yet.
But surely it will be less systemically racist than an A, B, or C letter grade.
Click here to read the full story.
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Pennsylvania Restaurant that Opened in Violation of Lockdown “Not Guilty”
A Pennsylvania restaurant opened to full capacity in May in defiance of Pennsylvania’s lockdown orders and safety procedures.
The restaurant was cited and fined, but they went to court and pleaded not guilty.
Last week, a judge found in the restaurant’s favor, saying the Department of Agriculture fined the restaurant for violations it could not lawfully cite them for.
Click here to read the full story.
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Twitter Mob Angry that a white Israeli actress will play a Macedonian Greek
The Twitter mob erupted over the decision to cast a white Israeli to play Cleopatra in an upcoming film.
The mob says the movie is white-washing history since clearly the Egyptian princess should be played by a Black actress, right?
Well actually, Cleopatra was of Macedonian Greek heritage. And she ruled Egypt before the Arab conquest.
So that means Cleopatra was neither Arab nor Black. But why should facts get in the way of wokeness? Once again, ignorance prevails!
Click here to read the full story.
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On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.
- Kremlin Says US Elections Have Become "Competition In Russophobia"
Kremlin Says US Elections Have Become “Competition In Russophobia”
Tyler Durden
Fri, 10/23/2020 – 20:00This week’s perhaps overly dramatic announcement Wednesday night by the heads of multiple federal agencies – foremost among them Director of National Intelligence John Ratcliffe – alleging new major efforts by Russia and Iran to interfere in the US presidential election formed a key question and talking point by debate moderator Kristen Welker Thursday night.
Welker even referenced as somehow undisputed and settled “truth” the now debunked “Russian bounties” story. Over a month ago the Pentagon and other intelligence heads concluded after an exhaustive investigation that there’s simply no evidence to suggest Russian military intelligence paid Afghan fighters to target Americans.
Final 2020 US presidential campaign debate in Nashville Russia was certainly paying attention to the debate and was not amused. The Kremlin on Friday blasted what it said was “Russophobia” at the center of the debate.
Kremlin Spokesman Dmitry Peskov told journalists Friday that “competition in Russophobia has become a constant in all US electoral processes, regrettably.”
“We are fully aware of this and can only express regret,” he added as quoted in TASS.
“After all, probably, it is the American electorate who is the target audience of these debates, that is, common Americans. It is up to them to decide who won the debate, not us,” the spokesman said.
Indeed the American public is by and large likely growing tired of the endless Russia scapegoating too.
Corporate droid Kristin Welker says the laughable claim that Iran emailed threats to US lawmakers was “confirmed” by the same intel officials who made it up. Biden then spouts the discredited tale about Russian bounties, leading Trump to brag of arming Ukraine. National dementia.
— Max Blumenthal (@MaxBlumenthal) October 23, 2020
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National security pundit and research fellow at Columbia University’s Saltzman Institute of War and Peace Studies Richard Hanania had this to say about just how vapid foreign policy questions have become in this election (when they are offered at all):
Notice how the entire debate on foreign policy was about who was “nicer” to China, Russia, or some other “enemy,” not say whether we should go to war more or less often. There’s a primitiveness and stupidity surrounding discussions of foreign policy that we don’t accept elsewhere, he pointed out.
Over the years Putin himself has increasingly mocked and laughed about the degree to which he personally gets blamed for almost all ills of American society – from election meddling to “weaponizing” race relations to supposedly seeking to take out the national power grid.
- YouTube Is Selling So Many Political Ads It Has Run Out Of Videos To Place Them On
YouTube Is Selling So Many Political Ads It Has Run Out Of Videos To Place Them On
Tyler Durden
Fri, 10/23/2020 – 19:20While social media makes its best attempt at trying to get Joe Biden elected by censoring stories about his son, YouTube is facing another dilemma: the platform is so inundated with political ads it has nowhere to put them.
As advertising campaigns flood the platform, YouTube has “struggled” to place the ads in front of the desired audience for each, according to Bloomberg.
Interestingly enough, YouTube is experiencing the shortage most in “critical swing states”, where ad prices have doubled as a result. This, obviously, makes political advertising far more lucrative for Google, who saw ad revenue fall this year and will announcing its earnings next week.
Cat Stern, media director for Lockwood Strategy Lab, a digital campaign agency focused on Democratic candidates and progressive advocacy organizations, told Bloomberg: “There’s a crunch. All political advertisers are buying in the same states, to similar audiences.”
YouTube viewers have risen during the pandemic and while commercial ads have been “anemic”, political ads have spiked heading into November 3. In highest demand are the ads that users aren’t allowed to skip through. There are also ad “reservations” for YouTube’s most popular videos that are in high demand.
Reid Vineis, vice president of digital at Majority Strategies, a Republican political ad firm, said: “The reserves tend to be gobbled up by well-funded campaigns.”
While this occurs, other less-well-funded campaigns have turned to platforms like Hulu and Roku to run their ads.
Some states, like Iowa, are usually entirely sold out on YouTube. Tim Cameron, co-founder of FlexPoint Media, said: “A lot of late money that’s coming on board — it’s difficult to find anywhere to put it.”
At some points, YouTube has been unable to place up to 75% of the amounts that people are willing to spend. YouTube didn’t comment for Bloomberg’s article, but the article notes that a “code yellow” was assigned to Google’s staff regarding the inability to place ads, meaning Google was increasing the resources it was deploying to try and solve the issue.
Google has sole more than $139 million in political ads over the last month alone.
- Saudi Arabia Is Suffering The Consequences Of Its Failed Oil Price War
Saudi Arabia Is Suffering The Consequences Of Its Failed Oil Price War
Tyler Durden
Fri, 10/23/2020 – 19:20Authored by Simon Watkins via OilPrice.com,
Nine months on from Saudi Arabia’s second major oil price war in the last five years, more negative consequences are manifesting themselves. Aside from the irrevocably damaged core relationship with the U.S., the permanent distrust of international investors, and the further alienation of many of its fellow OPEC members, Saudi Arabia is now beginning to discover the true depth and breadth of damage that it has done to its own economy, which will endure for many years to come.
Figures released at the end of September show that Saudi Arabia’s economy contracted 7 per cent year-on-year (y-o-y) in the second quarter of 2020, with the Kingdom’s private sector showing a negative growth rate of 10.1 per cent, while the public sector recorded negative growth of 3.5 per cent. Saudi’s oil revenue in the first half of the year was 35 per cent lower than a year earlier, while non-oil revenue fell by 37 per cent. Moreover, in the second quarter of 2020 alone, the Kingdom’s petroleum refining activities recorded a 14 per cent y-o-y drop. All of this resulted in a current account deficit of SAR67.4 billion (US$18 billion), or 12 per cent of GDP, in Q220 compared with a surplus of SAR42.9 billion, or 5.8 per cent of GDP, a year earlier, according to Saudi Arabia’s General Authority for Statistics.
The official line being peddled by various Saudi agencies to explain these appalling numbers is that they are the result of the COVID-19 pandemic outbreak that destroyed demand for oil around the globe. That, of course, is only partly true, as the key element that made this factor exponentially worse was that Saudi Arabia decided to launch yet another oil price war at the same time, the key feature of which was to crash oil prices by ramping up oil production from itself and other OPEC members, plus Russia. For a market already saturated with oil as demand continued to fall away, the price effect on the supply side of the oil price equation was catastrophic and led to unprecedented negative pricing on WTI futures contracts for May. The additional factor that has been overlooked by market commentators is that by the beginning of March, when Saudi launched the last oil price war, it was becoming clear that the COVID-19 outbreak would not be as containable as many had thought even a month or so before. It would have been entirely understandable to the senior Saudis with whom Saudi Crown Prince Mohammed bin Salman (MbS) had shared his plan to try to destroy and/or disable the U.S. shale oil sector again (albeit with exactly the same strategy that had failed so disastrously just four years earlier) that the new oil price war would be put on hold.
This, though, would have required self-control, introspection, and intelligent analysis, the lack of which in MbS was noted by, among many others, the German intelligence service, the Bundesnachrichtendienst (BND), as long ago as 2015. As highlighted in a leaked intelligence dossier from the BND in 2015 entitled ‘Saudi Arabia – Sunni regional power torn between foreign policy paradigm change and domestic policy consolidation’ the then-Saudi Arabian defence minister, then-Deputy Crown Prince Mohammed bin Salman, was “trying to strengthen his own position in the royal succession [regardless] of whether this put Saudi Arabia’s relationship with erstwhile regional allies in jeopardy.”
The intelligence agency added that: “The careful diplomatic stance of older members of the Saudi royal family has been replaced by an impulsive policy of intervention.” MbS’ impulsive nature had also clearly not taken into account the prescient warning from Saudi Arabia’s deputy economic minister, Mohamed Al Tuwaijri, back in 2016 which stated unequivocally – and completely unprecedented criticism of government policy from a Saudi minister – that:
“If we [Saudi Arabia] don’t take any reform measures, and if the global economy stays the same, then we’re doomed to bankruptcy in three to four years.”
The consequences of the oil price war that prompted this outburst from a Saudi minister were also apparently not taken into account by MbS either who now, as then, appeared more concerned with his own personal position in the royal succession (given the ill-health of King Salman) than with the economic and social health of his country or his OPEC brothers. Between 2014 and 2016 alone, the Saudi-instigated oil price war cost OPEC member states lost a collective US$450 billion in oil revenues from the lower price environment, according to the IEA. Saudi Arabia itself moved from a budget surplus to a then-record high deficit in 2015 of US$98 billion and spent at least US$250 billion of its foreign exchange reserves over that have gone forever. Even before the 2020 oil price war was launched, Saudi Arabia was facing sizeable budget deficits every year until at least 2028.
Moreover, there is no sign whatsoever of any change any time soon to the massive supply overhang that began in earnest with the Saudi-led crude oil overproduction at the same time as the faster spread of COVID-19. According to figures from the end of September from various data analytics companies, Saudi Arabia’s domestic crude oil stockpiles have climbed to the highest since the effects of the COVID-19 outbreak were most deeply felt on the oil market’s supply-demand balance in April. Specifically, according to data analytics firm Kpler, Saudi Arabia’s crude stockpiles were 78 million barrels as of 23 September, the highest since the end of April, with an uncertain demand outlook from Saudi’s key target market of Asia still weighing on pricing. This is not likely to improve in the coming weeks as, despite the reduction in Saudi’s official selling prices (OSPs) for Asia for September and October deliveries, refiners continue to struggle with suppressed oil products’ margins. To add to this negative factor, a large proportion of refineries in Asia have term contracts for up to 80 per cent (or even higher) of the oil they take in and local traders report that many of them are not even using this volume on their current run rates.
With very little new money added into Saudi Arabia’s finances from the internationally-shunned Aramco IPO, oil demand still low due to COVID-19 but supply still high after the latest oil price war, and foreign exchange reserves drawing closer to the minimum level needed to ensure the survival of the economically-crucial SAR-US$ currency peg, Saudi has little choice but to start contemplating ‘selling the family silver’, metaphorically speaking. According to various news reports, Saudi Aramco is currently in talks with global fund manager, BlackRock, and other international investment firms, to sell a stake in a core part of its oil infrastructure – its pipeline business – for around US$10 billion. To put the sheer scale of Saudi Arabia’s MbS-inflicted economic disaster into perspective, though, the entire proceeds from the sale of this core part of the Kingdom’s core industry will only cover 48 days of the guaranteed dividend payments due to shareholders of Aramco. This extraordinary guarantee was, again, a product of the fact that MbS did not want to lose face and cancel the Aramco offering when it had become clear that no serious international investors wanted to touch it due to its multiple toxic elements.
This comes on top of the slew of announcements since the end of the 2020 oil price war of Saudi projects either delayed or cancelled, including the once much-vaunted flagship US$20 billion crude-to-chemicals plant at Yanbu on Saudi’s Red Sea coast. The similarly high-profile purchase of a 25 per cent multi-billion dollar stake in Sempra Energy’s liquefied natural gas (LNG) terminal in Texas is also apparently under threat, although Sempra for its part has said that it continued to work with Aramco and others “to move our project at Port Arthur LNG forward.” In the same vein, according to various news sources, Aramco has suspended its key US$10 billion deal to expand into mainland China’s refining and petrochemicals sector, via a complex in the Northeastern province of Liaoning that would have seen Saudi supply up to 70 per cent of the crude oil for the planned 300,000 barrels per day refinery. In sum, it appears that all of Aramco’s principal projects aimed at diversifying Saudi Arabia away from the relatively zero added-value pursuit of just pumping and selling crude oil are now subject to review and/or outright suspension.
- Inflationism Has Overturned Society
Inflationism Has Overturned Society
Tyler Durden
Fri, 10/23/2020 – 19:00Authored by MN Gordon via EconomicPrism.com,
Every now and again, when a sense of doom falls suddenly upon them, the bulls turn to bears. That is to say, they turn from buying stocks to selling. What is it that prompts them to panic? What turns emotions so quickly from greed to fear?
The answers to these questions come a dime a dozen. You can certainly dream up answers that are at least as good as anything professional analysts put forward. The most convincing answers, whether true or not, are often those tied to current events.
For example, on Monday stocks sold off. The Dow Jones Industrial Average (DJIA) dropped 410 points. The popular rationale was that stocks sold off because of gridlock in Congress over passing a new stimulus bill. On Tuesday the DJIA was up 113 points. Apparently, this was because stimulus talks were back on.
But that was before Wednesday, when the DJIA dropped 97 points because the imminent stimulus agreement was still imminent. Then, on Thursday, the DJIA jumped 152 points because stimulus talks were getting warmer.
Do you see the connection? Do you see the correlation? Does it imply causation? Or is it all a great game of chasing the wild goose?
Moreover, what if the new coronavirus bailout bill passes, but it’s only $1.9 trillion? Is that less bullish for stocks than a $2.2 trillion handout package? These are the sorts of inane questions one must ask in a world where the stock market’s been corrupted by government intervention.
How It Works
Government intervention can take many forms. At the moment, one of the more popular forms of government intervention involves printing up trillions upon trillions of fake dollars. The Treasury then hands these fake dollars out like they’re handing out breath savers.
The Treasury, of course, borrows the fake money from the Fed. The Fed gets the fake dollars to loan to the Treasury by creating new credit from thin air. The symbiotic disharmony of fiscal and monetary stimulus is doomed to fail. But, in there interim, the stock market loves it.
Yet as more and more fake dollars are doled out to somehow stimulate the economy, the existing stock of dollars is diluted. The dollar’s value becomes worth less and less. John Maynard Keynes, in his 1919 work, The Economic Consequences of the Peace, elaborated how it works:
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.”
You see, something both strange and awful is taking place. The new fake dollars look and feel like real dollars. They still show up in your bi-weekly paycheck. You can count them up. You can see them in your bank account.
But when you go to spend them. When you use them to buy your family a week’s worth of food at the supermarket, or to pay your monthly utility bill…the dollars no longer work the way they used to. They’ve been corrupted. Their value has been confiscated by Washington’s inflationism.
Inflationism Has Overturned Society
The debasement of money by governments has been going on for thousands of years. The current corruption of your dollars has been going on since the passing of the Federal Reserve Act in 1913. And it has been going on in earnest since 1971, when Nixon terminated the convertibility of the dollar into gold by foreign governments.
The dollar has lost over 96 percent of its value since 1913. That means, today’s dollar would be worth less than 4 cents back in 1913. How much longer this dollar corruption can continue is uncertain. But there are limits, even if they cannot be strictly defined.
For example, how much bread can be added to a meatloaf before it’s fully corrupted? How many printing press dollars can be added to the economy before they’re rejected as payment by foreign trade partners?
We may soon find out…
The U.S. national debt’s over $27 trillion. Yet gross domestic product is only $19.5 trillion. The budget deficit for 2020 alone was $3.1 trillion. The forthcoming coronavirus bailout bill ensures that at least $2 trillion more will be added to the debt in 2021.
This debt will never honestly be paid. But it will be dishonestly paid. And you’ll get to pay it. In fact, you already are. You’re paying it through inflationism.
The dollars you hold. The dollars you earn. The dollars you use to buy the things you want and need. They’ve been corrupted.
Here Keynes, in agreement with Lenin, explains what’s going on:
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
As goes the money, so goes society. When money’s corrupted, society soon follows. No doubt, with each passing day, this natural axiom is being clarified with exacting rigor.
- Ron Perelman's Asset Firesale Continues As He Lists $106 Million Superyacht For Sale
Ron Perelman’s Asset Firesale Continues As He Lists $106 Million Superyacht For Sale
Tyler Durden
Fri, 10/23/2020 – 18:40Ron Perelman, who we reported months ago definitely, certainly, almost positively wasn’t selling all of his assets because he was in a cash crunch is now in the process of selling his $106 million superyacht.
The yacht, called C2, has been listed by broker Burgess for 90 million euros, according to Bloomberg. It was built in 2009, sports 15 cabins, can accommodate 31 guests and and a crew of 27, and also has a swimming pool. If that wasn’t enough, it includes a retractable movie screen and “fold out balconies” that flank both sides of a “beach club”.
As they did last month, his spokespeople declined to comment on the listing.
Recall, we wrote last month that Perelman was in the process of selling his Gulfstream 650 and “crates” of his artwork. We noted he had already sold his stake in AM General, sold a flavorings company he has owned for decades and had hired banks to sell stock he owns in other companies.
Among the art he was selling was Jasper Johns’s “0 Through 9,” worth about $70 million, Gerhard Richter’s “Zwei Kerzen (Two Candles),” worth about $50 million and Cy Twombly’s “Leaving Paphos Ringed with Waves,” which is worth about $20 million.
Art adviser Wendy Goldsmith said back in September: “What he’s selling is as blue chip as it gets.”
Perelman has been under pressure due to his crashing stake in Revlon. He has seen his fortune drop from $19 billion to just $4.2 billion over the last two years, according to the Bloomberg Billionaire’s Index. His investment company, MacAndrews & Forbes, said it needed to “rework its holdings” back in July due to the pandemic.
As we noted in September, that “reworking” looked more like a fire sale of – well – everything.
Perelman said publicly: “We quickly took significant steps to react to the unprecedented economic environment that we were facing. I have been very public about my intention to reduce leverage, streamline operations, sell some assets and convert those assets to cash in order to seek new investment opportunities and that is exactly what we are doing.”
He continued: “I realized that for far too long, I have been holding onto too many things that I don’t use or even want. I concluded that it’s time for me to clean house, simplify and give others the chance to enjoy some of the beautiful things that I’ve acquired just as I have for decades.”
A friend of Perelman’s, Graydon Carter, told Bloomberg in September: “Often when people say this sort of thing, it’s masking something else. In Ronald’s case, it’s true. He has learned to love and appreciate the bourgeois comforts of family and home.” He described Perelman as “crazy about spending time at home”.
Some of his sales will go to pay down loans from Citigroup, though Perelman’s spokesman says they are not “forced sales”. She also denied Perelman is selling his 57 acre estate in the Hamptons.
Perelman is best known being a fearless financial engineer in the 1980’s and 1990’s. Ken Moelis said of Perelman’s track record: “He was imaginative, aggressive and innovative in ways that changed the financial landscape.”
But the $1.74 billion valuation Revlon had back in the 1980’s when he purchased it has plunged to $279 million. It was $365 million when we wrote about Perelman in September.
Perelman loved the business and said it “defined him”. He had offered it several loans and had catalyzed several executive changes to try and keep the business afloat. Revlon is now losing to smaller cosmetic shops that advertise through social media – while dealing with the effects of Covid.
Some Revlon bonds trade were trading around 14 cents on the dollar in September and the company has $3.73 billion in debt.
All told, “at least nine banks” have claims against Perelman’s assets, including his art collection, house in the Hamptons and “various aircraft”. There are $267 million in mortgages linked to his Upper East Side headquarters for MacAndrews & Forbes.
Currently, Perelman’s art collection makes up about a third of his fortune. And that can be tricky, for assets that have an illiquid market. Recently, one painting he tried to sell was pulled from auction at the last minute due to lack of interest.
MacAndrews & Forbes saw its general counsel, spokesman, head of capital markets and CFO all depart over the last few months.
And despite the spin on Perelman’s fire sales as being a way to spend more time with family, Perelman has his skeptics, including Richard Hack, who wrote a book about him in 1996.
Hack concluded: “If you want a simpler life, you go buy a farm in Oklahoma, not sell a painting out of your townhouse in Manhattan. If he’s selling his art, it’s because he needs cash.”
We can imagine the same is true about his yacht.
- US Reports Record 80k+ Daily COVID-19 Cases: Live Updates
US Reports Record 80k+ Daily COVID-19 Cases: Live Updates
Tyler Durden
Fri, 10/23/2020 – 18:36Summary:
- US suffers another COVID-19 record on Friday
- Spain total infections around 3 million, 3x higher than official number
- NJ ICU admissions highest since July 4
- Italy reports new record
- Luxembourg imposes curfew
- US sees 2nd highest jump in new cases
- Europe’s hospitals overwhelmed amid surge in COVID patients
- Cases in India slow
- Blood plasma treatment proven ineffective
- 8 states reported records
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Update (1830ET): For the first time, the US confirmed more than 80k new coronavirus cases in a single day, surpassing the previous record set on July 29 Friday’s tally — the first above 80,000 — comes as many states break their records for new infections. According to WaPo, hospitalizations in 38 states have surged over the last week to a degree that can’t be explained by the surge in testing.
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Update (1200ET): Italy just reported its latest daily record jump in COVID-19 cases, with a 19% increase in daily virus cases Friday to a record of 19,143. The country registered 91 deaths, down from 136 Thursday. Meanwhile, the number of patients in intensive care has surpassed 1,000 to 1,049, which is still well below the early April peak of more than 4,000. In Milan, Italy’s hardest hit city, officials have imposed a local curfew, national figures are reportedly preparing to impose a nationwide curfew as early as 2100.
Poland, meanwhile could face what its PM called a “deep lockdown” if the virus doesn’t start to slow. The Polish PM issued the stern warning on Friday as he announced new limits on gatherings, closures of bars and restaurants, mandatory online classes for some elementary school students and movement restrictions.
Finally, in New Jersey, ICU cases have topped 200 for the first time since July 4.
* * *
Update (1020ET): Tiny Luxembourg just became the latest European state to enact a curfew, from 2300 to 0600, following in the footsteps of France.
* * *
Record numbers of new COVID-19 cases were reported across Europe on Thursday, which, combined with a surge in US cases, along with Russia, Turkey and a handful of other countries, helped to send global cases to a new daily record: 468,499.
Global cases have reached 41,705,699, while the death toll has reached 1,137,333 as of Friday morning in New York.
(Source: JHU)
Meanwhile in the US, the NYTimes reported that more than 75,000 new cases were reported yesterday, making Thursday’s tally the second-highest since July 29, when the US recorded 75,723 new cases. Europe also posted a new record, driven largely by the 40k+ new cases reported in France, along with record numbers in Germany, Italy and a number of countries in Central Europe.
According to Johns Hopkins, the US total is now 8,411,262.
At least 8 states reported record numbers of new cases yesterday, while 13 have added more cases in the past week than during any other stretch of the pandemic, according to the NYT.
Record numbers were reported in Ohio, in Colorado and Kentucky, as the Midwest and Rocky Mountain states are hit particularly hard by this third wave. In Chicago, the unofficial capital of the Midwest, officials are seeing 645 new cases a day this week. In response, the mayor is imposing a nighttime business curfew will be imposed starting on Friday.
Record daily highs were recorded in at least half a dozens US states, including Ohio and Tennessee, where last night’s presidential debate was held.
Nationally, deaths were little-changed, though some Midwestern states saw deaths tick higher late this week. But nationwide, the US saw just 856 new deaths, even as more COVID-19 patients are crowding American hospitals than at any point since the middle of the summer. To be sure, a spike in deaths on Wednesday briefly pushed the 7-day average to the highest level in a month.
A regional breakdown shows that most COVID-19 deaths are coming from populous southern states like Texas and Florida.
Source: Bloomberg
In Turkey, which has seen new case numbers rebound to the highest levels since May, warned on Friday about a nationwide increase in the virus, which has been centered around Istanbul, the country’s biggest city.
“The pandemic is on the rise again across the country,” Fahrettin Koca said on Friday in the northwestern city of Bursa before heading to the country’s largest city at the weekend, where the government-led coronavirus science board will also meet. Istanbul has “40% of nationwide cases,” the minister said, without elaborating. “I invite Istanbulites to observe measures, by making sacrifices if necessary,” Koca said.
Turkey has reported more than 2,000 new patients for the past two days, near levels last seen in early May. The number of severely ill people rose to 1,599 on Thursday, the highest since the government started providing the figure in July, according to Bloomberg.
In the Czech Republic, which has been the worst hit European country during the second wave, the number of new cases eased to 14,151, down from the record 14,968 from the prior day. The country has seen a total of 223,065. In neighboring Poland, officials are planning to close restaurants and bars for two weeks and limit public gatherings to five people. Older schoolchildren will return to distanced virtual learning, said Prime Minister Mateusz Moraweicki. Back in the Czech Republic, Prime Minister Andrej Babis has ordered Health Minister Roman Prymula to quit, and has promised to fire him if he doesn’t. The scandal stems from a meeting the health minister had at a restaurant closed under his national order.
Across Europe, hospitals are filling up with the second wave of patients. In response, Poland has turned its largest stadium into an emergency field hospital. In Belgium and the UK, the number of hospitalized COVID-19 patients has doubled in the past 2 weeks. The Czech Republic, meanwhile, is struggling with a shortage of doctors and nurses as health-care workers fall ill at an alarming rate.
Source: NYT
Here’s some more COVID-19 news from overnight and Friday morning:
Infusing hospitalized COVID-19 patients with blood plasma from people who recovered from the disease had no effect on whether patients got sicker or died, according to the first completed randomized trial of the treatments, according to Stats News. (Source: Stat News)
Malaysia reports 710 new cases, down from Thursday’s 847. The country has seen its total cases double in the past month, reaching 24,514, with 214 deaths (Source: Nikkei).
Indonesia reports 4,369 cases, down from 4,432 a day earlier, bringing the country total to 381,910. There were 118 deaths, pushing the total to 13,077 (Source: Nikkei).
India reports 54,366 cases in the last 24 hours, down from 55,839 the previous day, bringing the country total to over 7.76 million. Deaths jumped 690 to 117,306. Of the country’s total cases, about 9% are active patients and over 89% have recovered. India’s mortality rate stands at 1.51%, according to health ministry data (Source: Nikkei).
About 433,300 people in England had coronavirus in the week to October 16, equating to 1 in 130 people, according to the latest analysis by the Office for National Statistics. This is up from 1 in 160 people the week before (Source: FT)
- Will Democracy's Myths Doom Liberty?
Will Democracy’s Myths Doom Liberty?
Tyler Durden
Fri, 10/23/2020 – 18:20Authored by James Bovard via The Mises Institute,
The Supreme Court declared in 1943, “There is no mysticism in the American concept of the State or of the nature or origin of its authority.” In reality, the cardinal doctrines of contemporary democracy are layer upon layer of mystical claptrap. The phrases which consecrate democracy seep into many Americans’ minds like buried hazardous waste.
If Joe Biden wins the presidential election, voters will be told that our political system is redeemed: the “will of the people” is now clear, Biden will rule with “the consent of the governed,” and Americans are obliged to again trust and obey the federal government. If Donald Trump is reelected, much of the same media will continue howling about imaginary Russian plots. But these notions remain dangerous delusions regardless of who is declared the winner on Election Day.
The notion that election results represent the “will of the people” is one of the most shameless triumphs of democratic propaganda. Rather than revealing the “will of the people,” election results are often a one-day snapshot of transient mass delusions. Votes which only reveal comparative contempt for competing professional politicians are transmogrified into approvals for blueprints to forcibly remake humanity.
Americans are encouraged to believe that their vote on Election Day somehow miraculously guarantees that the subsequent ten thousand actions by the president, Congress, and federal agencies embody “the will of the people.” In reality, the more edicts a president issues, the less likely that his decrees will have any connection to popular preferences. It is even more doubtful that all the provisions of hefty legislative packages reflect majority support, considering the wheeling, dealing, and conniving prior to final passage. Or maybe the Holy Ghost of Democracy hovers over Capitol Hill to assure that average Americans truly want every provision on every page of bills that most representatives and senators do not even bother reading?
A bastard cousin of the “will of the people” flimflam is the notion that citizens and government are one and the same. President Franklin Roosevelt, after five years of expanding federal power as rapidly as possible, declared in 1938, “Let us never forget that government is ourselves and not an alien power over us.” President Johnson declared in 1964: “Government is not an enemy of the people. Government is the people themselves,” though it wasn’t “the people” whose lies sent tens of thousands of American conscripts to pointless deaths in Vietnam. President Bill Clinton declared in 1996, “The Government is just the people, acting together—just the people acting together.” But it wasn’t “the people acting together” that bombed Serbia, invaded Haiti, blockaded Iraq, or sent the tanks in at Waco.
President Barack Obama hit the theme at a 2015 Democratic fundraiser:
“Our system only works when we realize that government is not some alien thing; government is not some conspiracy or plot; it’s not something to oppress you. Government is us in a democracy.”
But it was not private citizens who, during Obama’s reign, issued more than half a million pages of proposed and final new regulations and notices in the Federal Register; made more than 10 million administrative rulings; tacitly took control of more than 500 million acres by designating them “national monuments”; and bombed seven foreign nations. The “government is the people” doctrine makes sense only if we assume citizens are masochists who secretly wish to have their lives blighted.
Presidents perennially echo the Declaration of Independence’s appeal to “the consent of the governed.” But political consent is gauged very differently than consent in other areas of life. The primary proof that Americans are not oppressed is that citizens cast more votes for one of the candidates who finagled his name onto the ballot. A politician can say or do almost anything to snare votes; after Election Day, citizens can do almost nothing to restrain winning politicians.
A 2017 survey by Rasmussen Reports found that only 23 percent of Americans believe that the federal government has “the consent of the governed.” Political consent is defined these days as rape was defined a generation or two ago: people consent to anything which they do not forcibly resist. Voters cannot complain about getting screwed after being enticed into a voting booth. Anyone who does not attempt to burn down city hall presumably consented to everything the mayor did. Anyone who does not jump the White House fence and try to storm into the Oval Office consents to all executive orders. Anyone who doesn’t firebomb the nearest federal office building consents to the latest edicts in the Federal Register. And if people do attack government facilities, then they are terrorists who can be justifiably killed or imprisoned forever.
In the short term, the most dangerous democratic delusion is that conducting an election makes government trustworthy again. Only 20 percent of Americans trust the government to “do the right thing” most of the time, according to a survey last month by the Pew Research Center. Americans are being encouraged to believe that merely changing the name of the occupant of the White House should restore faith in government.
If Biden is elected, we will hear the same “redemption” storyline that was trumpeted when Obama replaced (temporarily) disgraced George W. Bush. The same media that ignored Biden’s corruption during the presidential campaign will insist that his inauguration purifies Uncle Sam. With Biden in charge, pundits and pooh-bahs will swear that it is safe to expand federal control over healthcare, education, housing, the economy, the environment, and anything else that moves.
But the benevolence of government rarely transcends the perfidy of politics. Washington will remain as venal as ever, regardless of the hallelujah chorus of PBS NewsHour panelists. When scandals erupt, citizens will be told to trust politically approved fixes to the system—even though most Washington reforms are like fighting crime by hiding the corpses of victims.
It is time to demystify democracy. The surest effect of exalting democracy is to make it easier for politicians to drag everyone else down. Until presidents and members of Congress begin to honor their oath to uphold and defend the Constitution, they deserve all the distrust and disdain they receive. Americans need less faith in democracy and more faith in their own liberty.
- Raoul Pal: The Biggest Trade in the World
Raoul Pal: The Biggest Trade in the World
Tyler Durden
Fri, 10/23/2020 – 18:10Real Vision CEO, Raoul Pal, arrives to the Daily Briefing frothing at the mouth with Bitcoin bullishness. Senior editor, Ash Bennington, tries in vain to contain Raoul’s enthusiasm, but with Bitcoin up over 20% this month, Raoul’s zeal simply cannot be restrained, and he proceeds to go at length about how this asset will become a global reserve asset as the world moves along an adoption curve of trust. Raoul and Ash proceed to discuss the ongoing progress to make crypto-assets easier to own for RIAs and institutional investors, and Raoul reflects on the relative risk/reward profile of bitcoin at a time with record low bond yields and a stock market at all-time highs. In the intro, editor Jack Farley breaks down the new Frankenstein of the fixed income world: the CLO ETF.
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