- Gordon Chang: Joe Biden's Taiwan Policy Is Now A Total Disaster
Gordon Chang: Joe Biden’s Taiwan Policy Is Now A Total Disaster
Authored by Gordon Chang via 19fortyfive.com,
“He is just too old and likes to bluff, doesn’t know what he is talking about,” tweeted China Daily’s Chen Weihua on Friday, referring to President Joe Biden.
On Thursday, Biden told CNN’s Anderson Cooper he would defend Taiwan.
“Yes, we have a commitment to do that,” the President said, responding to a question about what the U.S. would do if China attacked the island republic.
Chen’s dismissive comment confirms that America’s deterrence of China is eroding fast.
“Biden has been anything but clear,” ABC News wrote about the President’s intentions toward Taiwan.
On the contrary, he has been crystal clear, on a number of occasions.
Biden’s comment to Cooper was not a one-off. In August, he told ABC News’s George Stephanopoulos that the U.S. would defend NATO partners, Japan, South Korea, and Taiwan.
If there is anything unclear, it is the situation after the clarifications from Biden administration officials: Press Secretary Jen Psaki, State Department spokesperson Ned Price, and Defense Secretary Lloyd Austin. All of them walked back Biden’s statement to CNN.
“Well, there has been no shift,” Psaki told reporters on Friday.
“The President was not announcing any change in our policy nor has he made a decision to change our policy. There is no change in our policy.”
In fact, there was a change. Biden’s definitive statement was a stark departure from America’s decades-old policy of “strategic ambiguity,” the policy of telling neither Beijing nor Taipei what the U.S. would do in the case of imminent conflict.
There are now two causes for concern.
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First, Biden, as Commander-in-Chief, makes foreign policy. The Constitution does not give that power to Psaki, Price, or Austin. Beijing may wonder—as should Americans and others—if Biden is still in charge.
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Second, the instant clarifications undermine deterrence. Biden’s statement was clear and unambiguous, a warning to Beijing. The clarifications, on the other hand, tell China the United States is not committing itself to defend Taiwan.
The walk-back statements could lead Beijing to believe there are disagreements inside the Biden administration and in a crisis, some officials would try to override the President to block an American defense of Taiwan.
In short, Chen Weihua’s insulting comments look close to the mark.
Deterrence has just had a bad day. And so has the U.S. Constitution.
Tyler Durden
Sat, 10/23/2021 – 23:30 -
- You Can Now Buy A Flying Car That Looks Like A Star Wars Spacecraft
You Can Now Buy A Flying Car That Looks Like A Star Wars Spacecraft
Forget Elon Musk’s Tesla Cyberquad ATV because there’s a new form of transportation for the offroad enthusiast now available, and it looks like something out of Star Wars.
Sweden’s Jetson Aero has begun manufacturing a personal electric vertical take-off and landing (eVTOL) aircraft that will zip around the skies at 63 mph.
The Jetson One eVTOL is an octocopter with four arms that produce 88 kW (118 horsepower) at full throttle. The pilot sits in an aluminum/carbon fiber frame and controls the craft via a throttle lever on the left, a joystick on the right, and a pair of pedals, likely controlling yaw.
According to vehicle car website Autoevolution, “the company [Jetson Aero] said that you can easily climb as high as 1,500 meters (4,921 feet) with Jetson One.” So far, videos only show the eVTOL moving at high rates of speed at low altitudes.
Someone who weighs roughly 187 pounds can expect 15-20 minutes of flight time before the batteries need a recharge.
New Atlas noted the eVTOL comes 50% built, and presumably, owners will have to assemble the rest. For that reason, the craft will likely fly under “experimental” where pilots don’t need a license to fly.
As for price, a $22k deposit will give someone the right to reserve a build slot for 2023. There are only three left. Production in 2022, a total of 12, has already been secured from people worldwide, including a few in California.
Personal eVTOLs appear to be the next big trend in transportation that will revolutionize how people (rich people) travel and commute or spend their leisure time.
Tyler Durden
Sat, 10/23/2021 – 23:00 - A Tale Of Two Civilizations
A Tale Of Two Civilizations
Authored by Alasdair Macleod via GoldMoney.com,
In recent years, America’s unsuccessful attempts at containing China as a rival hegemon has only served to promote Chinese antipathy against American capitalism. China is now retreating into the comfort of her long-established moral values, best described as a mixture of Confucianism and Marxism, while despising American individualism, its careless regard for family values, and encouragement of get-rich-quick financial speculation.
After America’s defeat in Afghanistan, the geopolitical issue is now Taiwan, where things are hotting up in the wake of the AUKUS agreement. Taiwan is important because it produces two-thirds of the world’s computer chips. Meanwhile, the large US banks are complacent concerning Taiwan, preferring to salivate at the money-making prospects of China’s $45 trillion financial services market.
The outcome of the Taiwan issue is likely to be decided by the evolution of economic factors. China is protecting herself against a global credit crisis by restraining its creation, while America is going full MMT. The outcome is likely to be a combined financial market and dollar crisis for America, taking down its Western epigones as well. China has protected herself by cornering the market for physical gold and secretly accumulating as much as 20,000-30,000 tonnes in national reserves.
If the dollar fails, which without a radical change in monetary policy it is set to do, with its gold-backing China expects to not only survive but be able to consolidate Taiwan into its territory with little or no opposition.
Introduction
On the one hand we have America and on the other we have China. As civilisations, America is discarding its moral values and social structures while China is determined to stick with its Confucian and Marxist roots. America is inclined to recognise no other civilisations as being civilised, while China’s leadership has seen America’s version and is rejecting it. Both forms of civilisation are being insular with respect to the other, and their need to peacefully cooperate in a multipolar world is increasingly hampered.
Understanding another nation’s point of view is essential for peaceful harmony. This truism has been ignored by not just America, but by the Western alliance under American coercion. The Federal Government and its agencies are pursuing a propaganda effort against China’s exports and technology, while the average American appears less troubled. Perhaps we can put this down to a nation based on immigrants having a more cosmopolitan psyche than its predominantly Anglo-Saxon establishment.
In Europe, it sometimes appears to be the other way round, with the politicians more prepared to tolerate China than their US counterparts. But then geography is involved, and the silk roads do not involve America, while rail links between China and Western Europe work efficiently, delivering vital trade between them.
Economic interdependency is rarely considered. Nor are the potential consequences of diverging economic and monetary policies. While China has been squeezing domestic credit, the West has been issuing currency and credit like drunken sailors on shore leave. Being starved of extra credit, China’s economy has been deliberately stalled, and there is a real or imagined crisis developing in its property markets. Only now, it has become apparent that the West’s major economies are running into troubles of their own.
Economic destabilisation heightens the risk of conflict, and perhaps the timing of the build-up of tensions in the South China Sea and over Taiwan is not accidental. On Wall Street there is an air of complacency, with the US investment community led by the big banks ignoring the developing risks of this dysfunction. In the context of deteriorating relations between China and America and with China’s growing contempt for US political resolve, Taiwan is becoming extremely important geopolitically.
China’s plans for Taiwan
Taiwan is in the world’s geopolitical crosshairs with President Xi insisting it returns to China. The West, which has failed to protect Taiwan from China’s claims of sovereignty in the past, thereby endorsing them, is only now belatedly coming to its aid with a new Pacific strategy. But the signals already sent to the Chinese are that the Western alliance is too divided, too weak to prevent a Chinese takeover. This surely is the reasoning behind China’s attempts to provoke an attack on its air force by invading Taiwan’s airspace. And all the West can do is indulge in finger-wagging by sailing aircraft carriers through the Taiwan Strait.
Taiwan matters, being the source of two-thirds of the world supply of microchips. Faced with a pusillanimous west, this fact hands great power to China — which with Taiwan corners the market. Furthermore, the big Wall Street banks are salivating over the prospects of participating in China’s $45 trillion financial services market and are preparing for it. China has thereby ensured the US banking system has too much invested to support the US administration in any escalation of the Taiwan issue.
The actual timing of China’s escalation of the Taiwan issue appears related to the AUKUS nuclear submarine deal. That being so, the posturing between China and the Western Alliance has just begun. There are four possible outcomes: China backs off and the tension subsides, America and the Western Alliance back off and China gets Taiwan, there is a negotiated settlement, or a military war against China ensues.
In this context it is important to understand the civilisation issue, which increasingly divides China and America. There is little doubt that the hitherto normal relationship between America and China was disrupted by President Trump becoming nationalistic. His “make America great again” policy was a declaration of a trade war. That was accompanied by a political attack on Hong Kong, which provoked China into taking Hong Kong under direct mainland control. There followed a technology war, leading to the arrest of the daughter of Huawei’s founder in Canada.
There appears to be little change in President Biden’s policy against China. Now that his administration has bedded in, China is beginning to test it over Taiwan. To give it context, we should understand the Chinese culture and why the state is so defensive of it, and how the leadership views America and its weaknesses. For that is what is behind its economic divergence from the West.
China’s changing political culture
Since becoming President, Xi has reformed China’s state machinery. After assuming power in 2012, he needed to clear out the corrupt and vested interests of the previous regime. He instigated Operation Fox Hunt against corrupt officials, who, it was estimated, had salted away the equivalent of over a trillion dollars abroad. By 2015 over 180 people had been returned to China from more than 40 countries. Former security chief Zhou Yongkang and former vice security minister Sun Lijun ended up in prison and Hu Jintao’s powerful Communist Youth League faction was marginalised.
By dealing ruthlessly with corrupt officials Xi got rid of the vested interests that would have potentially undermined him. He consolidated both his public support and his iron grip on the Communist Party for the decade ahead. His public approval ratings remain extraordinarily high to this day.
On the economic front Xi faced major challenges. Having become the world’s manufacturer, a sharp wealth divide opened between China’s concentrated manufacturing centres and rural China. Some 600 million people are still subsisting on a monthly income of less than 1,000 yuan ($156) a month. A rapidly increasing urban population has been denuding the rural economy of human resources and undermining the family culture.
The wealth disparity between city and country has become an important political issue, which is why as well as refocusing resources towards agriculture Xi has clamped down on super-rich entrepreneurs and their record-breaking IPOs. In his Common Prosperity policy, Xi declared that he was not prepared to let the gap between rich and poor widen, and that common prosperity was not just an economic issue but “a major political issue related to the party’s governing foundations”.
Following decades of communism under Mao, after China’s initial recovery and development Xi is now clamping down on unfettered capitalism. He and his advisers have observed the disintegration of family values in America and the rise of individualism at the expense of family life; and with popular culture how these trends are being adopted by China’s youth. The state has now shut down western-style social media, and erased celebrity culture.
The social impact of cultural change is often overlooked, but it is at the forefront of China’s policy-makers’ consideration. For millennia, a state-controlled Chinese civilisation endured. Despite the Cultural Revolution, the post-war Mao Zedong years failed to erase it. Never sympathetic to free markets, statist thoughts have turned inwardly to Confucius and Marx to escape the obvious failings of American capitalism and its decline from familial values to individualism and rampant speculation.
This is what Xi reflects in his presidency. His chief adviser, his éminence grise, is Wang Huning who operates in the political shadows. From all accounts, Wang is extremely clever, speaks French and English, spent a year in America and is a deep thinker who, having examined them, has rejected western values in favour of Chinese tradition. NS Lyons, an analyst and writer living in Washington, DC, has written an interesting article about Wang, published on Palladium Magazine — it is well worth reading.
As we saw with the UK’s temporary éminence grise, Dominic Cummings, the power to influence possessed by such a person is considerable, but always in a statist context. The economics of free markets are not involved, except as a source of revenue to fund statist ambitions. The result is an assumption, an ignorance of economic affairs concealed by an automatic acceptance of the status quo.
This is Wang’s weak point, and insofar as Xi relies on his advice, it is the President’s as well. Wang appears to be promoting a Confucian/Marxist hybrid civilisation which is intended to unify China’s many ethnic groups in a government-set culture, reverting to a morality of yesteryear. Comparing China’s future with that of American democracy and its moral degradation, the approach is understandable and enjoys popular support. But the consequences are that the state is drifting backwards towards its Marxist roots. The central command over the economy is exemplified in energy policy: power entities have been instructed to keep factories running without power outages, irrespective of coal and natural gas costs. In fact, the management of the economy was never relinquished by the state, which is now redoubling its efforts to retain control over economic outcomes.
All one can say is that so far, the Chinese appear to have made considerably less of a mess managing their economy and currency compared with America’s Federal Government and its central bank.
The political consequences are also important. By stemming the tide of Western moral decadence in her own territory China is insulating herself from the rest of the American-dominated world. This is being bolstered by steps to shift the emphasis from the export trade towards domestic consumption to improve living standards. In the process China will become more of an economic fortress, mainly interested in Africa and the Americas as sources of raw materials and commodities rather than as export markets to be fostered. China’s internationalism of the last four decades is increasingly redirected and confined to the Eurasian continent over which she exercises greater degrees of political and economic control. Which brings us back to the issues of Taiwan and the South China Sea, which China sees as consolidating her rightful political and cultural borders.
However, the increasing autarky of both China and America is making the Taiwan issue more difficult to resolve peacefully. And we must also consider the opposing directions of drift for their two economies, which could decide the outcome.
The US’s economic condition and outlook
There is a mistaken assumption that the US’s economic troubles relate solely to the consequences of the covid lockdowns. Certainly, the Fed timed its funds rate cut to the zero bound and its current and unprecedented rate of quantitative easing of $120bn every month to March 2020, when lockdowns in Europe and the UK commenced. And it was becoming clear, despite President Trump’s prevarication, that the US would follow.
But that ignores developments which preceded covid. Probably due to earlier tapering of QE in 2019, financial markets signalled a developing slump, with the S&P 500 falling 35% in 23 trading sessions to mid-March 2020 — eerily replicating the Wall Street Crash between end-September and late October 1929. It took the reduction of the Fed funds rate to the zero bound, and $120bn of monthly QE feeding into pension funds and insurance companies to turn markets higher. The yield on 10-year US Treasuries fell to 0.5% and equities markets soared on the back of a new basis of relative valuation.
After the repo blow-up in September 2019, it became clear that bank balance sheets were too constrained to extend additional bank credit, and conventionally, that might have marked the turn of the bank credit cycle, which was why the comparison with late-1929 was so apt. Furthermore, the banks became less interested in extending credit to Main Street than to Wall Street after financial markets stabilised.
The recovery in equities and their move into new high ground is simply asset inflation. Speculators have been quick to add to the Fed’s QE liquidity by drawing on bank and shadow bank credit to play the game. Figure 1 shows how margin loans have nearly doubled as the bull market in equities proceeded from late-March 2020. Never has so much leverage been seen in US securities markets.
During covid lockdowns, beyond pure survival few in industry made judgements about the future. It was commonly assumed that when lockdowns ceased business would return to normal. But this made no allowance for the passage of time and the evolution of consumer needs and wants. Eighteen months later, we find that supply chains are still wrongfooted, disrupted by covid shutdowns and not supplying newly needed goods. Consumer demand patterns are not where they left off — they have radically changed.
Buoyancy in the US economy is now proving short-lived. The flood of initial spending following lockdowns has receded and different factors are now at play. Supply bottlenecks due to lack of components, transport, and labour are forcing up prices at a pace not reflected in official statistics.
In effect, GDP is insufficiently deflated by price rises on the high street to give a reasonable estimate of real GDP. With prices probably rising at over 15% annualised (Shadowstats.com estimated 13.5% three months ago and pressures on rising prices have increased significantly since) the US economy is in a slump which is beginning to replicate that of ninety years ago. The difference is that in 1930-33 the dollar was on a gold coin standard increasing its purchasing power as bank credit was withdrawn, while today it is pure fiat and declining at an increasing pace.
Rising prices across the board are another way of saying that the currency’s purchasing power is declining, which given the Fed’s monetary policies of recent years is not surprising. Figure 2 shows the impact of the Fed’s monetary policy on commodity prices, which reflects the dollar’s weakness as a medium of exchange.
Given that it takes anything between a few weeks and six months for energy and commodity prices to work through to consumer prices, the recent spurt in commodity prices strongly suggests that consumer prices are going to continue to rise into next year. Yet, only now are the Fed and other central banks beginning to accept that rising prices are not going to be as temporary as they first hoped. This is because it is not prices rising, but the dollar’s purchasing power falling. When they fully realise it, foreign holders of dollars, totalling $33 trillion held in securities, short-term instruments, and bank deposits will require higher interest compensation to persuade them to continue holding dollars. And this is where a conflicting problem arises.
A rise in interest rates sufficient to compensate foreign holders of dollars for the currency’s loss of purchasing power will undermine the values of their US stock holdings, totalling $14 trillion, of which $12 trillion is held by private sector foreign investors. Furthermore, a further $12.5 trillion of foreign private sector funds are invested in long-term bonds which will also decline in value. Higher interest rates will certainly trigger private sector selling of these assets across the board.
The fate of $6.6 trillion of foreign official holdings of long-term securities will be partly political, demonstrated by the most recent Treasury TIC figures which showed China selling $21bn of US Treasuries, and Japan and the UK buying $39bn between them. This is strongly suggestive of swap lines being drawn down to support the US Treasury bond market, while presumably the US, either through the Treasury, the Exchange Stabilisation Fund, or the Fed itself has bought JGBs and gilts as the quid pro quo.
It is worth noting this point because it shows how low bond yields are perpetuated by cooperation between major central banks – along with the attendant monetary inflation. That being the case, private sector holders are misled by price stability while bonds are being wildly overvalued.
Another way of looking at it is that if John Williams at Shadowstats is right about inflation statistics, then US Treasuries should be yielding as much as 10% along the whole yield curve. Perhaps the recent rise in the 10-year US Treasury yield in Figure 2 is indicating the start of the process of this discovery for foreign and domestic investors alike.
The chart shows that once the 1.75% level is overcome, there is considerable upside in the yield, with a golden cross forming under the spot value. If yields rise from here, it will not be long before equity markets take note and enter a full-blown bear market.
The first reaction from the Fed to these events will almost certainly be to claim that falling equities are a leading economic indicator, suggesting the economy faces a post-covid recession. Interest rates cannot be eased further, but QE can be stepped up to cap bond yields and encourage pension funds and insurance corporations to increase their investments. This would be a U-turn from the projected policy of reducing QE due to inflation concerns. But at that point the neo-Keynesian argument can be expected to claim that the developing recession more than negates prospective inflation concerns.
Facing the same dynamics, the other leading central banks are certain to fall in line with the Fed’s new policy. But as John Law found in a similar situation in France in 1720, rigging a failing stock market (in his case the Mississippi venture) by currency and credit expansion ultimately fails and undermines the currency. Law destroyed the French economy, contrasting with the British South Sea Bubble, where the Bank of England was not involved and did not deploy its currency to ramp markets.
Today, it appears that Law’s experiment is about to be repeated on a grander scale by the issuer of the world’s reserve currency. The other major western central banks will follow suite. The whole fiat money system is at risk of being driven into a similar failure as that which faced the French livre. So, where would that leave China?
China’s economic and monetary outlook
As noted above, China has followed a different monetary path from that of the Fed for some time — most pointedly since March 2020. Consequently, the yuan has risen against the dollar since then, illustrated in Figure 4.
After some initial uncertainty, the yuan began to rise against the dollar and is now about 10% up on the late-March 2020 level. This is not significant yet, because the dollar’s trade-weighted index has fallen by a similar amount. But with China’s monetary policy of clamping down on shadow banking and excessive bank credit creation, compared against the Fed’s more expansionary monetary policies, we can expect the trend for a stronger yuan relative to the dollar to continue.
In neo-Keynesian language, China is in a period of deflation, leading to falling prices relative to those measured in dollars. But that misses the point: China has been careful not to encourage speculation in financial assets, reflected in relative stock market performances, shown in Figure 5.
While the Fed has been inflating stock prices through interest rate and monetary policies, the Chinese have discouraged speculation. The result is that financial assets in China should be less vulnerable to a general market downturn. It has been a deliberate policy to protect the Chinese economy from 2014 onwards, after the PLA’s chief strategist, Major-General Qiao Liang convinced Beijing that permitting unfettered speculation would leave markets vulnerable to a pump-and-dump attack by America.
To the Chinese, excessive financial speculation aided and abetted by the Fed must look like a cover for underlying economic failure. Every thread of their analysis must point to economic disintegration from which China must protect herself. Rates of credit expansion must be restricted, and the yuan be permitted to rise on the foreign exchanges. The change in policy emphasis from export markets towards increasing domestic consumption should be accelerated. In any event, China is the world’s dominant manufacturer, so she has a good degree of control over prices in international trade for consumer goods anyway. The prices of imported commodities and raw materials matter more today and rising dollar prices for commodities and energy can be countered by a higher exchange rate for the yuan.
The state’s policy of least risk is to quietly divorce the Chinese economy from the dollar’s influence. In switching some of its trade into the yuan and other currencies, it has been doing this since the Lehman failure, which was another seminal moment in Chinese thinking. The cultural analysis is that America is now destroying its own currency towards a terminal event, an outcome forecast by economics professors in China’s Marxist universities over fifty years ago. The post-Mao ride, piggybacking on American capitalistic methods, is no longer tenable.
The golden backstop
Like the Marxist professors in the universities, China’s thinkers, such as Wang Huning and President Xi himself, always believed America to be politically and morally rudderless and would destroy itself. Presumably the election of an unpredictable Trump followed by a President Biden who appears to be in a geriatric decline is seen in Beijing as evidence that American society is indeed rudderless and imploding.
It was against this likely event that in 1983 far-sighted Chinese strategists began to accumulate gold and to corner the word market for bullion. It would have been obvious to them that one day, dancing with the capitalist devils would become too dangerous and China’s future would have to be secured at the outset long before a capitalist collapse.
Accordingly, the Regulations on the Control of Gold and Silver were promulgated on 15 June that year, appointing the People’s Bank (PBOC) with sole responsibility for managing China’s gold and silver while private ownership remained banned. The PBOC then began to acquire gold from foreign markets, a task made easier by the 1980-2002 bear market. Meanwhile, the government threw substantial resources into developing gold mining, and became the largest gold producer in the world by a substantial margin, overtaking South Africa, Russia, and the United States. State owned refineries took in doré from abroad, adding to the accumulation.
It was only after the PBOC had accumulated sufficient bullion from imports and domestic production that she set up the Shanghai Gold Exchange in 2002 and permitted Chinese citizens to acquire gold. The government even ran advertising campaigns encouraging the purchase of gold, and since then, over 19,000 tonnes have been delivered into private sector ownership from the SGE’s vaults.
Together with the total ban on exports of Chinese refined gold, the pre-2002 ban on private ownership while the state acquired sufficient bullion for its purposes, coupled with the subsequent encouragement to the public to do the same, China clearly regarded gold as her most important strategic asset. It has still not shown its hand, but given the likely amounts involved, to do so would risk destabilising the dollar-centric fiat currency world. Until it happens, we should assume that the 20,000-30,000 tonnes likely to have been accumulated in various state accounts since 1983 is an insurance policy against the failure of American capitalism and the world’s reserve currency.
This brings us back to the Taiwan question. For China, the re-absorption of Taiwan may become a simpler matter when the capitalistic Americans are economically at their weakest and the dollar is collapsing. Taiwan itself might face up to this reality. A few steps to push America on its way may be tempting, such as selling down their holdings of US Treasuries (already in process) or disclosing a significantly higher level of gold reserves. The latter may wait until a dollar crisis really develops, which is now surely only a matter of a little time.
Tyler Durden
Sat, 10/23/2021 – 22:30 - Visualizing The World's Biggest Real Estate Bubbles In 2021
Visualizing The World’s Biggest Real Estate Bubbles In 2021
Identifying real estate bubbles is a tricky business. After all, as Visual Capitalist’s Nick Routley notes, even though many of us “know a bubble when we see it”, we don’t have tangible proof of a bubble until it actually bursts.
And by then, it’s too late.
The map above, based on data from the Real Estate Bubble Index by UBS, serves as an early warning system, evaluating 25 global cities and scoring them based on their bubble risk.
Reading the Signs
Bubbles are hard to distinguish in real-time as investors must judge whether a market’s pricing accurately reflects what will happen in the future. Even so, there are some signs to watch out for.
As one example, a decoupling of prices from local incomes and rents is a common red flag. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making.
With this in mind, which global markets are exhibiting the most bubble risk?
The Geography of Real Estate Bubbles
Europe is home to a number of cities that have extreme bubble risk, with Frankfurt topping the list this year. Germany’s financial hub has seen real home prices rise by 10% per year on average since 2016—the highest rate of all cities evaluated.
Two Canadian cities also find themselves in bubble territory: Toronto and Vancouver. In the former, nearly 30% of purchases in 2021 went to buyers with multiple properties, showing that real estate investment is alive and well. Despite efforts to cool down these hot urban markets, Canadian markets have rebounded and continued their march upward. In fact, over the past three decades, residential home prices in Canada grew at the fastest rates in the G7.
Despite civil unrest and unease over new policies, Hong Kong still has the second highest score in this index. Meanwhile, Dubai is listed as “undervalued” and is the only city in the index with a negative score. Residential prices have trended down for the past six years and are now down nearly 40% from 2014 levels.
Note: The Real Estate Bubble Index does not currently include cities in Mainland China.
Trending Ever Upward
Overheated markets are nothing new, though the COVID-19 pandemic has changed the dynamic of real estate markets.
For years, house price appreciation in city centers was all but guaranteed as construction boomed and people were eager to live an urban lifestyle. Remote work options and office downsizing is changing the value equation for many, and as a result, housing prices in non-urban areas increased faster than in cities for the first time since the 1990s.
Even so, these changing priorities haven’t deflated the real estate market in the world’s global cities. Below are growth rates for 2021 so far, and how that compares to the last five years.
Overall, prices have been trending upward almost everywhere. All but four of the cities above—Milan, Paris, New York, and San Francisco—have had positive growth year-on-year.
Even as real estate bubbles continue to grow, there is an element of uncertainty. Debt-to-income ratios continue to rise, and lending standards, which were relaxed during the pandemic, are tightening once again. Add in the societal shifts occurring right now, and predicting the future of these markets becomes more difficult.
In the short term, we may see what UBS calls “the era of urban outperformance” come to an end.
Tyler Durden
Sat, 10/23/2021 – 22:00 - Why Australia Could (And Should) Become A Major Nuclear Power Producer
Why Australia Could (And Should) Become A Major Nuclear Power Producer
Authored by Paul Sullivan via OilPrice.com,
Australia is a country nearly the size of the continental US with a population of about 26 million people.
It is a country with vast open spaces. Most of its population is found on its east coast in New South Wales and Queensland, some population centers in Western Australia, South Australia, the Northern Territories and on the island of Tasmania. Most of the larger populations in these areas are in a few cities and their suburbs with lots of open space between them in many places.
The largest electricity grid goes down the east coast and loops over to South Australia. There is another one in Western Australia, albeit a smaller one than on the east coast, and then an even much smaller one in the Northwest Territories. These grids are not connected.
Why is this important for nuclear power?
If we are thinking about big reactors, they can only be deployed in areas where the market can support them. If we are thinking about small modular reactors, SMRs, then there are other uses for smaller cities in less densely populated areas.
Australia is energy-rich. It is the largest coal exporter in the world. It’s one of the major gas exporters, and previously even was the largest LNG exporter in the world. It has massive wind, solar, geothermal, wind, tidal, and wave energy potential. It has significant hydroelectric resources, but recent droughts have put those into question. Given its low population and vast energy resources, about 2/3rd of its energy production is exported. It is an increasing net importer of oil and refined oil products. Oil, however, is a weak spot in Australia’s energy security and resilience.
Australia’s primary energy consumption is overwhelmingly fossil fuels. About 80 percent of its electricity is still from fossil fuels, with black and brown coal dominating, but renewables have been growing in importance, especially since 2008.
Overall electricity generation grew nicely until a flattening out also in 2008. It is still growing, but not nearly as quickly as it once was. There are considerable differences in fuels and methods used to produce electricity across its territories and states. New South Wales, Victoria, and Queensland use mostly coal. Western Australia is dominated by gas. South Australia uses mostly gas and a much larger percentage of renewables than any other area. Tasmania is mostly hydropower. The Northern Territories is almost dominated by an even mix of gas and oil. Except for South Australia, renewables are not a large part of electricity generation elsewhere in the country.
Hydropower has been part of the energy mix in Australia for a very long time. Solar and wind really started to take hold and grow only in the 2000s. Bioenergy is a small percentage, but not entirely insignificant. Overall, for the country, coal use in electricity has been in decline. Natural gas and renewables have been increasingly used in electricity generation.
In terms of energy production, Australian coal has been on a steep growth path for some time. Oil has been in decline. Natural gas has grown greatly in recent years. In the overall big picture in energy production renewable energy is a coat of paint on top of the others. Coal dominates energy production and natural gas is a far second.
The main use of nuclear power is for electricity. However, the only nuclear reactor in Australia is in Sydney. It is a tiny 20 MW reactor that makes nuclear isotopes for medical purposes. Nuclear power can be curative in a medical sense. Many know this from personal experience.
Nuclear power is controversial in Australia. Importantly, “Nuclear power production is currently not permitted under two main pieces of Commonwealth legislation—the Australian Radiation Protection and Nuclear Safety Act 1998 (the ARPANS Act), and the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act). These Acts expressly prohibit the approval, licensing, construction, or operation of a nuclear fuel fabrication plant; a nuclear power plant; an enrichment plant; or a reprocessing facility. There is also a range of other legislation, including state and territory legislation, which regulates nuclear and radiation-related activities.”
There are also state and territory laws strictly regulating it, and in some cases, such as in Victoria, it is outright banned. So, there are many legal levels with hurdles for nuclear power.
Australia has the largest known reserves of uranium on the planet. It is the third-largest exporter of uranium. Yet is has no nuclear power plants to produce electricity. There is a possibility that the new strategic cooperation deal with the UK and the USA, the AUKUS agreement, that includes Australia getting help from the UK and the US to develop and deploy nuclear submarines, could create more conversation and debate on nuclear power. These nuclear submarines will require increasing nuclear expertise in Australia. There will be a need for that nuclear expertise to maintain and develop this fleet of nuclear submarines. In the US, many of the people working in nuclear power plants are Navy nuclear experts and engineers.
Some in Australia see the nuclear submarines deal as a marker to restart the debate on having nuclear power in the country. Others are vehemently against nuclear power. Many laws and regulations are still in place to put a check on nuclear power in the country. However, as climate change concerns continue to increase, there could be an increasing drive towards nuclear power in the country.
Nuclear power plants produce no greenhouse gas emissions. The major source of greenhouse gas emissions in the nuclear fuel cycle is in uranium mining. Australia has very high per capita greenhouse gas emissions, especially if the emissions from its massive energy exports are added to the equation. Most of its domestic emissions are from the burning of coal, natural gas, oil, and oil products.
Environmentalism is growing in Australia. Recent droughts, fires, floods, and heatwaves are spurring this on. The options for lower emissions fuels do not include coal and oil, unless there are gigantic, and very expensive, programs for carbon capture and storage, CCS, and carbon capture and utilization, CCU.
The energy transition in Australia may include further moves towards natural gas, but that would cut into one of its greatest exports, LNG. The energy transition in Australia will likely include renewables, for which it has massive potential. However, renewables are intermittent and there will be a giant need for energy storage and demand management if Australia decides to take this path.
With nuclear power as part of its energy transition, Australia would have another way of reducing its carbon emissions. Nuclear power is a baseload that runs 24/7, except during refueling and maintenance.
Nuclear power can have capacity factors well into the 90s. Renewables are not even close. Nuclear power could help stabilize the electricity grids of the country. It could help with the energy security, energy reliability, and energy resilience of the country. Nuclear power is over time, and on average, contrary to many media and other reports, one of the safest and least polluting sources of energy.
Retiring coal plants, and many are scheduled for retirement and have been retired, can be repurposed as nuclear plants in some places. The transition from coal to natural gas and renewables could be complemented with a transition from coal to nuclear power. Nuclear power could increase the diversity of the energy transition.
A nuclear power option that Australia could consider is small modular reactors. These produce smaller amounts of nuclear power than the standard plants. They can be built upon as modular, like building blocks, and when an area needs more power, they can be added in. They can have passive safety features well beyond the standard nuclear power plants. Next to this, they have a much lower proliferation risk.
It could be years before SMRs can be deployed anywhere in the world in large numbers, but many of the questions about standard reactors can be answered with SMRs. They are not the perfect answer, but in a world increasingly concerned about the effects of greenhouse gases like CO2 and methane, for many countries, nuclear will be close to a requirement in their energy transitions. Australia has lots of renewable energy potential, but it may be worth it to bring up nuclear once again.
Australia needs energy security, energy reliability, and energy resiliency. It also needs environmental security, environmental reliability, and environmental resilience. Australia has had some very rough times with fires, floods, droughts, storms, and more. Climate change is happening. Australia can be part of the problem or part of the solution.
Tyler Durden
Sat, 10/23/2021 – 21:30 - Tech Salaries Fall In High Cost Cities Like San Fran And New York As Remote Work Drives Employees Elsewhere
Tech Salaries Fall In High Cost Cities Like San Fran And New York As Remote Work Drives Employees Elsewhere
Salaries for tech workers in cities like New York and San Francisco are slipping, marking the first fall in 5 years.
The drop in pay comes as a result of a push toward remote work, according to Bloomberg, citing a report by Hired. The report looked at more than 525,000 interview requests and 10,000 job offers via Hired’s workplace from January 2019 to June 2021.
Tech workers in San Francisco are still set to earn the highest rate in the country, but it has fallen 0.3% from last year to $165,000.
In the U.S., salaries in the industry fell by 1.11% to an average of $152,000.
However, in cities like Seattle, home to Amazon, pay rose to $158,000. Austin, Texas also saw a bump higher in salary since attracting companies like Facebook and Google. San Diego saw salaries move higher by 9.1% to $144,000.
Hired Chief Executive Officer Josh Brenner told Bloomberg: “We’re seeing movement to some of these smaller markets driven by the actual lifestyle there. People are realizing San Diego has a nice way of living, good weather and it’s by the beach.”
80% of tech workers are still working remotely, the report says. “A majority” would like it to stay that way.
In addition to remote work, people are moving out of areas like San Francisco and New York due to the high cost of living, which offsets the higher salaries in those cities.
For example, a salary of $243,000 in San Francisco is the same spending power as a $165,000 salary in Dallas or Atlanta, the report noted.
Brenner concluded: “Austin has a lot to offer people and there are obviously tech companies moving there. But also a lot of remote workers are saying ‘I’m going to leave my very expensive big city and move to Austin.’”
Tyler Durden
Sat, 10/23/2021 – 21:00 - Israel Says Russia Will Allow Continued Attacks On Syria After Bennett-Putin Talks
Israel Says Russia Will Allow Continued Attacks On Syria After Bennett-Putin Talks
Authored by Jason Ditz via AntiWar.com,
Israel likes to attack Syria, and while officials will mostly claim it’s about Iran, such strikes continue with alarming regularity, the only pause being when Israel is unsure if Russia is still comfortable with them.
This summer Russia suggested they wanted to slow down Israel’s attacks, but on Friday Israel’s Housing Minister reported that they’ve come to an understanding whereby Putin will keep a deconfliction mechanism in place, and allow Israel to strike Syria with no response.
The two leaders met in Sochi on Friday, Oct. 22, 2021, Kremlin Pool Photo via AP. Details are not offered, as Israel tries to spin this as them getting everything they wanted at no cost. Russia has long had conditions on Israel’s attacks, however, and its unlikely that those aren’t still in place.
In particular, Russia has long warned Israel to keep its warplanes away from Russian bases, and that’s likely still part of the understanding. Russia has also been bolstering Syrian air defenses, a process which may be ongoing.
The Israeli official who described the aftermath of the Friday talks between PM Naftali Bennett and President Vladimir Putin was quoted in The Times of Israel as follows:
There were “very wide” talks regarding the situation in Syria aimed at “safeguarding the coordination mechanism,” Elkin said.
“The prime minister presented his world view on ways to stop Iran’s nuclear drive and Iran’s entrenchment in Syria,” he said in a statement. “It was decided to keep policies vis-à-vis Russia in place (regarding airstrikes in Syrian territory.)”
Israel has attacked Syria hundreds of times in recent years. With a public imprimatur, Israel will probably increase strikes once again, though as in the past this is likely to mostly involve targeting Shi’ite militias.
Tyler Durden
Sat, 10/23/2021 – 20:30 - 40 Shipping Containers Adrift Off US Pacific Coast After Vessel Hit By Rough Seas
40 Shipping Containers Adrift Off US Pacific Coast After Vessel Hit By Rough Seas
The global supply chain is more snarled than ever, forcing container ships to stack truck-size intermodal containers to the brim in a technique called containerization. The more shipping containers loaded up on a vessel, the more prone it becomes to an accident at sea in adverse weather conditions.
That’s precisely what happened last night, off the Pacific Coast, when stormy seas knocked 40 shipping containers off a vessel. The incident occurred when an inbound container ship about 43 miles west of the Strait of Juan de Fuca entrance was listed to its side due to a storm.
#BreakingNews Coast Guard crews are monitoring several adrift shipping containers 43 miles west of the Straits of Juan de Fuca entrance. An inbound vessel lost approx. 40 containers when the ship listed to its side due to rough seas. Check back for updates. pic.twitter.com/GInKf8M0sB
— USCGPacificNorthwest (@USCGPacificNW) October 22, 2021
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The Coast Guard dispatched a helicopter from Port Angeles, Washington, to investigate the incident. What they found were 35 containers floating and unable to find the rest.
This weekend, a powerful storm is on the Pacific Coast and is responsible for heavy seas and high winds that put container ships at risk of losing cargo.
The next significant storm system for Sunday into Monday is taking shape about 1900 miles to our west this evening. The fast moving clouds to its south is the location of the jet stream which will interact with the system as it develops and strengthens over the weekend. #wawx pic.twitter.com/klh9AUw9kJ
— NWS Seattle (@NWSSeattle) October 23, 2021
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In April, reports surged of containers being lost as sea as vessels were being stacked to full capacity amid strained supply chains. The unintended consequence of packing ships full of cargo is that they become more accident-prone in rough waters. Add this potential risk to an already fragile supply chain that is experiencing record congestion at ports.
Tyler Durden
Sat, 10/23/2021 – 20:00 - "Corners Were Being Cut": Baldwin Shooting Already Has The Makings Of A Blockbuster Tort Action
“Corners Were Being Cut”: Baldwin Shooting Already Has The Makings Of A Blockbuster Tort Action
The fatal shooting at Bonanza Creek Ranch already has the makings of a blockbuster tort action. Within 24 hours of actor Alec Baldwin fatally shooting cinematographer Halyna Hutchins and wounding the director, witnesses have raised serious questions of negligent and unsafe practice on the site for the low-budget film, “Rust.”
The question is not whether but when the first torts lawsuit will be filed. There has already been speculation on the civil and criminal liability in the case, so it may be useful to explore what we know and what it might mean for the likely litigation ahead.
We now know from accounts that the movie set was the source of long-standing complaints over safety and working conditions. The production company allegedly required workers to drive 50 miles a day rather than pay for hotels, according to witnesses. Workers complained that this left them exhausted on the set. The site turns out to be the same location used in past Westerns because of its remote and rugged terrain. (As a Western movie buff, one of the movies stood out as a favorite: The Man From Laramie).
There were as many as three prior accidental discharges of weapons on the set. The conflicts over conditions on the set reportedly led to a demand that union members leave the set at one point.It does not appear that Baldwin knew that a live round or a projectile was in the gun. There are no reports to indicate that this was anything more than an accident, but police cannot operate under that assumption. Given the labor issues on the set, the possibility of an intentional act cannot be discounted. There is also possible criminal exposure for criminal negligence.It is also important to note that a “live weapon” can refer not to only to an actual bullet being put into the gun but some projectile being present. There could have been material in the gun that a blank round then turned into a lethal projectile like a bullet.
There is a question where the lawsuit would be filed. Many of the crew were from California but the set is in New Mexico. The California code contains an ample criminal negligence or manslaughter provision:
PART 1. OF CRIMES AND PUNISHMENTS [25 – 680.4]
( Part 1 enacted 1872. )
TITLE 8. OF CRIMES AGAINST THE PERSON [187 – 248]
Section 192.
Manslaughter is the unlawful killing of a human being without malice. It is of three kinds:
(a) Voluntary—upon a sudden quarrel or heat of passion.
(b) Involuntary—in the commission of an unlawful act, not amounting to a felony; or in the commission of a lawful act which might produce death, in an unlawful manner, or without due caution and circumspection. This subdivision shall not apply to acts committed in the driving of a vehicle.
(c) Vehicular—…
New Mexico has a similar provision that allows “involuntary manslaughter” charges for “the commission of a lawful act which might produce death in an unlawful manner or without due caution and circumspection.”
These conditions could be charged as actions taken “without due caution and circumspection.” In one recorded call, a witness refers to an assistant director who was supposed to check the gun for safety. The producers on the set, including Baldwin, could face such exposure.
What is clear is that there is an abundance of evidence to support a tort action even at this early stage. Most sets strictly ban or limit live ammunition on the premises and have strict protocols for the use of prop guns. Even blanks have been known to kill actors like Brandon Lee in the movie “The Crow.”
The low-budget description of this production could add to questions of whether precautions or protocols were shorted or ignored on the set.
The use of a live round (or the presence of a projectile) is itself circumstantial proof of negligence. The family of Hutchins could seek to prove negligence in a wrongful death case through res ipsa loquitur. As Dean Prosser explained, the doctrine is used when “(1) the accident must be of a kind which ordinarily does not occur in the absence of someone’s negligence; (2) it must be caused by an agency or instrumentality within the exclusive control of the defendant; (3) it must not have been due to any voluntary action or contribution on the part of the plaintiff.”
A live round in a prop gun does not ordinarily occur absent negligence. The question of the exclusive control of the instrumentality can be challenged but the plaintiff could argue that the production company continued to have such control. The gun was reportedly handed over by an assistant director to Baldwin, who was also a producer.
Even without the use of res ipsa loquitur, the negligence of the act seems abundantly clear. This incident could well prove a violation of a statute or regulation making the act “negligent per se.” The violation of a statutory or regulatory standard of care in the use of prop weapons would allow a jury to assume negligence and proceed to questions of causation and defenses.
Indeed, even if someone intentionally added the round for nefarious purposes, there was negligence in failing to properly check the prop before use on the set.
There are already witness statements that would fill out such a negligence narrative for trial. One crew member is quoted as saying “There were no safety meetings. There was no assurance that it wouldn’t happen again. All they wanted to do was rush, rush, rush.”
Another said that there were three accidental discharges and the set was “super unsafe.”
Yet another witness said “Corners were being cut — and they brought in nonunion people so they could continue shooting.”
Labor trouble at the site could serve to document such complaints. Labor disputes are often written up by a shop steward or labor representative at a work site.
In addition to negligence, there could be claims for the intentional or negligent infliction of emotional distress. Anyone who was injured or impacted by the accident could easily make such a claim. It can be more difficult for a bystander like the other members of the crew.
New Mexico has an intentional infliction of emotional distress claim that can be based on “reckless” conduct. Here is the jury instruction:
To recover for intentional infliction of emotional distress, __________ (name of plaintiff) must prove that:
(1) the conduct of __________ (name of defendant) was extreme and outrageous under the circumstances; and
(2) __________ (defendant) acted intentionally or recklessly; and
(3) as a result of the conduct of __________ (defendant), __________ (plaintiff) experienced severe emotional distress.
Extreme and outrageous conduct is that which goes beyond bounds of common decency and is atrocious and intolerable to the ordinary person. Emotional distress is “severe” if it is of such an intensity and duration that no ordinary person would be expected to tolerate it.
NMRA, Rule 13-1628
In New Mexico, a claim for NIED is more limited when it comes to bystanders. As shown in cases like Fernandez v. Walgreen Hastings Co., 126 N.M. 263,968 P.2d 774 (1998), bystanders can recover for emotional distress damages only when the injury is caused by a sudden, traumatic event and the plaintiff was aware that the event was causing injury to the victim.
In 1968, the California Supreme Court expanded NIED claims in Dillon v. Legg, 441 P.2d 912 (Cal. 1968), to include those bystanders who suffered emotional distress as a result of merely witnessing an accident that caused serious injury to a loved one, despite being outside the zone of danger. However, absent an injury to the witness, it required that the victim be a close family member.
New Mexico is considered a “modified Dillon” jurisdiction. New Mexico applies four limitations on bystander recovery:
1) There must be a marital or intimate family relationship between the victim and the plaintiff, limited to relationships between husband and wife, parent and child, grandparent and grandchild, brother and sister, and to those persons who occupy a legitimate position in loco parentis;
2) The shock to the plaintiff must be severe and result from a direct emotional impact upon the plaintiff caused by the contemporaneous sensory perception of the accident as contrasted with learning of the accident by means other than contemporaneous sensory perception, or by learning of the accident after its occurrence;
3) There must be some physical manifestation of, or physical injury to, the plaintiff, resulting from the emotional injury;
4) The accident must result in physical injury or death to the victim.
The crew could sue for a reckless act on the set under these rules though members could face serious pre-trial litigation under the elements of these rules.
Obviously, the clearest case could be brought by the family of Hutchins as a wrongful death action. They could also seek punitive damages in such a case. Compensatory damages cover both economic and non-economic damages. That includes pain and suffering and loss of enjoyment of life. While rare, New Mexico does not limit punitive damages, which can be sought for torts that are malicious, willful, reckless, wanton, or fraudulent.
This case would seem a compelling application of punitive damages. It would have cost little to check the gun before it was used on the set.
In my torts class, we often discuss the Learned Hand formula (B = PL), an algebraic formula developed by a famous judge to weigh negligence. (B = PL). The formula allows a comparison of the burden of avoiding an accident (B) against the probability (P) and magnitude (L) of loss resulting from the accident. When PL exceeds B, then the defendant should be liable.
Under the Hand formula, this represented a “small B” or burden case. Conversely, it is also a “high L” case given the risk to life. Moreover, given that any material in the gun can be turned into a lethal projective, the probability factor could be treated as significant. When you have a small B and a high PL, punitive damages become stronger possibility.
If there is a criminal charge, a court could opt to delay any tort action until after the prosecution. However, the statute of limitations is three years for personal injury cases. They need only to file to toll that statute so they have considerable time and any delay due to a prosecution will not undermine their case. Indeed, it could strengthen the case by benefitting from evidence acquired by police and produced by the prosecution.
The attorneys for the production company are likely to move quickly to seek settlements of civil claims, particularly with the family. They would be wise to make those numbers as high as possible given the strength of any civil case even at this early stage.
In the end, the liability may be delayed but will likely be considerable. What is clear is that personal injury lawyers will view the Bonanza Ranch as aptly named for civil litigation.
Tyler Durden
Sat, 10/23/2021 – 19:30 - JPMorgan Turns Positive On Crypto, Sees "A Bullish Outlook For Bitcoin Into Year-End"
JPMorgan Turns Positive On Crypto, Sees “A Bullish Outlook For Bitcoin Into Year-End”
The launch of the first Bitcoin ETF, BITO, even if based on futures, was the culmination of seven years of anticipation for bitcoin bulls and it certainly did not disappoint: the leaks and the actual news propelled the cryptocurrency to a new all time high above $66,000 (with some profit-taking to follow).
Yet despite the clear impact on the price of bitcoin, which has more than doubled from its July lows, not everyone is uniformly bullish on the impact of the first bitcoin ETF. As JPM’s Nick Panigirtzoglou writes in his latest widely-read Flows and Liquidity note, “the bulls are seeing this ETF as a new investment vehicle that would open the avenue for fresh capital to enter bitcoin markets” while the bears “are seeing the new ETF as only incremental addition to an already crowded space of bitcoin investment vehicles including GBTC in the US, ETFs listed in Canada since last February which have been already accessible to US investors, regulated (CME) and unregulated (offshore) futures, and plenty of direct investment options using digital wallets via Coinbase, Square, Paypal, Robinhood etc.”
For its part, JPM – not surprisingly – falls into the skeptics’ camp (we say not surprisingly because for much of 2021, the largest US bank has been publishing bearish note after note, as we have repeatedly detailed, urging clients to ignore the largest cryptocurrency and if anything, to take profits. In retrospect, this has been a catastrophic recommendation for anyone who followed it).
According to the JPMorgan quant, the launch of BITO by itself will not bring significantly more fresh capital into bitcoin due to “the multitude of investment choices bitcoin investors already have. If the launch of the Purpose Bitcoin ETF (BTCC) last February is a guide, as seen in Figure 1, the initial hype with BITO could fade after a week.”
Here, once again, JPM’s superficial “analytical” approach shines through and we are confident that Panigirtzoglou, who has been dead wrong about bitcoin for the past year, will once again be wrong in his take on BITO. Instead, for a much more nuanced – and accurate – view of the daily happenings in bitcoin ETF land we recommend Bloomberg’s inhouse ETF expert, Eric Balchunas who points to what is clearly an unprecedented, and rising demand for crypto ETF exposure (one can only imagine what will happen when Gensler greenlights an ETF based on the actual product not spread-draining and self-cannibalizing futures). Indeed, as Balchunas pointed out on Thursday, BITO – which is “maybe too popular for its own good”, has already “used up 2/3 of its total bitcoin futures position limits, only about 1,700 contracts ($600m) left bf it hits 5k total. Could hit in next day or two.”
$BITO has already used up 2/3 of its total bitcoin futures position limits, only about 1,700 contracts ($600m) left bf it hits 5k total. Could hit in next day or two. Great story on this from @kgreifeld https://t.co/xcVkw7Nbyl
— Eric Balchunas (@EricBalchunas) October 21, 2021
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But what about the ramp in bitcoin prices in recent weeks? Surely the anticipation of the ETF launch was the main catalyst? Well, according to JPM the answer is again no, and instead the JPM strategist writes that “while we accept that bitcoin momentum has shifted steeply upwards since the end of September, we are not convinced the anticipation of BITO’s launch was the main reason.”
Instead, as the Greek quant explained before (see “JPMorgan: Institutions Are Rotating Out Of Gold Into Bitcoin As A Better Inflation Hedge“) he believes that rising inflation concerns among investors “has renewed interest in inflation hedges in general, including the use of bitcoin as such a hedge.”
As he further explains, “Bitcoin’s allure as an inflation hedge has been strengthened by the failure of gold to respond in recent weeks to heightened concerns over inflation, behaving more as a real rate proxy rather than inflation hedge.” This is actually correct, and as we have shown previously gold indeed correlates much more closely to real rates that nominals, although in recent months, even real rates suggest that gold prices should be notably higher, perhaps confirming ongoing precious metal price suppression of the kind we have previously documented to be emanating from the BIS.
In any case, JPM also updates a chart we showed previously, the shift away from gold ETFs into bitcoin funds, which was very intense uring most of Q4 2020 and the beginning of 2021, has gathered pace in recent weeks.
In turn, by putting upward pressure on bitcoin prices, JPM argues that this shift away from gold ETFs into bitcoin funds likely triggered mean reversion across bitcoin futures investors which had reached very oversold conditions by the end of September. This is shown in Figure 3 via the bank’s position proxy based on CME ethereum futures. Looking at Figure 3, JPMorgan now claims that “there had been a steep decline in our bitcoin futures position proxy” which pointed to oversold conditions towards the end of September triggering a bitcoin rebound. This rebound appears to have accelerated over the past days ahead of BITO’s launch with the blue line in Figure 1 fully recapturing all the previous months’ unwinding. In other words, the price ramp into the bitcoin ETF launch was just a coincidence. Yeah right, whatever.
Where JPM is however right, is in its assumption that a significant component of bitcoin futures positioning encompasses momentum traders such as CTAs and quantitative crypto funds. Previously, the bank had argued that the failure of bitcoin to break above the $60k threshold would see momentum signals turn mechanically more bearish and induce further position unwinds; it also claims this has likely been a significant factor in the correction last May in pushing CTAs and other momentum-based investors towards cutting positions. At the end of July, these momentum signals approached oversold territory at the end of July and have been rising since then in reversal to last May-July dynamics. The shor-tterm momentum signal has exceeded 1.5x stdevs, a z-score that we would typically characterize as overbought for other asset classes but still below the exuberant momentum levels of January 2021.
So with both With Figure 3 and Figure 4 pointing to exhaustion of short covering and more crowded bitcoin positioning in futures, Panigirtzoglou sees bitcoin relying more on other flows outside futures to sustain its upswing. To him, this elevates the importance of monitoring Figure 2, i.e. the importance for the current shift away from gold ETFs into bitcoin funds to continue for the current bitcoin upswing to be sustained.
In our opinion, the main problem for bitcoin over the previous two quarters had been the absence of significantly more fresh capital as shown in Figure 5 and Figure 6. Figure 5 shows our estimate of retail and institutional flows into bitcoin with an overall downshift in Q2 and Q3 of this year. Similarly, Figure 6 shows that the previous steepening in the pace of unique bitcoin wallet creation has largely normalized returning to pre-Q4 2020 norms, again implying an absence of significantly more fresh capital entering bitcoin.
And yet, despite this latest (erroneous) attempt to downplay the impact of the bitcoin ETF, which JPMorgan says “is unlikely to trigger a new phase of significantly more fresh capital entering bitcoin”, by now too many JPM clients are invested in the crypto asset as Jamie Dimon (whose opinions on bitcoin have been an absolute disaster for anyone who traded on them) recently admitted, and so while tactically staying bearish on the impact of BITO, not even JPM’s house crypto “expert” can objective stay bearish in general, and as he concludes, “istead, we believe the perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into bitcoin funds since September.”
So with Bitcoin now perceived as the best inflation hedge among non-traditional assets, Pnaigirtzoglou concludes that this gold to bitcoin flow shift “remains intact supporting a bullish outlook for bitcoin into year-end.”
Tyler Durden
Sat, 10/23/2021 – 19:10 - Supply Chain Disruptions Curtail Union Pacific's Intermodal Volumes
Supply Chain Disruptions Curtail Union Pacific’s Intermodal Volumes
By Joanna Marsh of Freightwaves,
Extended chassis dwell times and a lack of dray drivers dampened Union Pacific’s intermodal traffic in the third quarter, but the railroad hopes volumes will rebound once the disruptions clear and consumer activity picks up post-pandemic, executives said during UP’s third-quarter earnings call.
“There are some really good-looking markers that tell us the economy is in a pretty strong place. And maybe we’ll stay there for a while,” President and CEO Lance Fritz said on the Thursday call.
“There’s a lot of cash on deposit accounts that people are sitting on. And that is dry powder yet to be deployed in spending. As long as consumers continue to spend on things, that’s really good for the goods economy, which of course is the part of the economy that we participate in.”
Fritz continued:
“[Once] the COVID pandemic gets under control and [we] get continued signs of normalcy … consumers will spend that money and the low inventory-to-sales ratio is going to drive a need for continued stocking. … Certainly as we head into 2022, it looks like a strong environment.”
Easing supply chain disruptions means putting more attention on ensuring adequate workforce numbers among dray drivers, at warehouse and distribution centers, and at the ports, according to Fritz.
“I believe the Biden administration has identified basically increasing the throughput capability and the capacity capability, and understands the need to help put labor that’s available into those jobs and make more labor available for the jobs. … If we could snap our fingers on the back end, we would love to see more dray and warehouse distribution capacity. That’s the first thing that we would love to see. I think that would fundamentally change the street time for chassis and boxes,” Fritz said.
UP’s intermodal volumes in the third quarter slipped 6% year-over-year to 809,000 units, although intermodal revenue rose 8% to $1.15 billion. UP attributed the volume decline to the tight dray market and not having enough dray capacity to support the overall supply chain.
To ease supply chain disruptions inland, the railroad has been utilizing its previously idled Global III facility near Chicago, and it has placed 5,000 cars strategically throughout the network, according to Eric Gehringer, executive vice president of operations. UP has also extended hours at selected ramps, and it has changed the hours of operation at the ICTF in Los Angeles to run 24 hours a day, Gehringer said.
“We can take the volume. We can handle the volume efficiently, [but] we need the back end of the supply chain with warehouse capacity, warehouse labor, dray capacity and dray labor to be there to answer that call,” he said.
As supply chain issues subside, opportunities to provide customers with visibility on network flows should be a focus for UP and the broader industry, Fritz said.
The railroad should “keep our eyes open on opportunities to basically be better for customers. Step one in that has a lot to do with transparency and visibility in the existing supply chain across partners,” Fritz said. “We’re working very hard in that space with each of the supply chain partners that we have, whether it’s a technology platform that we can all use to see everybody’s KPIs and current status, or something more.”
Third-quarter financial results
Despite supply chain challenges globally and domestically, UP achieved an operating ratio (OR) of 56.3%, a third-quarter record and up from an OR of 55.1% in the second quarter of 2021.
Investors sometimes use OR to gauge the financial health of a company, with a lower OR implying improved health. UP’s third-quarter net profit was $1.7 billion, or $2.57 per diluted share, compared with net profit of $1.4 billion, or $2.01 per diluted share, in the third quarter of 2020.
“The Union Pacific team successfully navigated global supply chain disruptions, a major bridge outage and additional weather events to produce strong quarterly revenue growth and financial results,” Fritz said in a release. “In the quarter, the team delivered solid core pricing gains, leveraged business development to produce a positive business mix, and generated productivity to offset flat volume. We also set a quarterly record for fuel consumption rate as we continue to make strides towards our goal to reduce our absolute greenhouse gas emissions.”
Although third-quarter volumes were flat year-over-year, freight revenue rose 12% to $5.17 million on “higher fuel surcharges, strong pricing gains and a positive mix,” said Kenny Rocker, executive vice president for marketing and sales.
“Gains in our bulk and industrial segments were driven by market strength and our business development efforts. Those gains were offset by declines in our premium business group, as our served markets continue to be impacted by semiconductor chip shortages and global supply chain disruptions,” Rocker said.
Operating expenses rose 9%, to $3.13 million, on an 81% increase in fuel expenses.
Meanwhile, wildfires and other weather events challenged UP’s network operations, with quarterly freight car velocity down 13% to 195 daily miles per car, UP said.
UP maintained its 55% OR target for 2022, although it now expects volume growth closer to 5% for 2021, down from a previous guidance of 7%.
“Industrial volumes remain consistent and strong across many sectors like forest products, metals and plastics. So we are bullish on several fronts,” CFO Jennifer Hamann said. “But as you are also well aware, headwinds in autos and intermodal persist. Global supply chain disruptions, semiconductor shortages and the additional pressure with international intermodal volumes … continue to constrain our premium volumes.”
Tyler Durden
Sat, 10/23/2021 – 18:30 - Juror In Elizabeth Holmes Trial Dismissed For Playing Sudoku During Testimony
Juror In Elizabeth Holmes Trial Dismissed For Playing Sudoku During Testimony
A juror in the Elizabeth Holmes trial who was found playing Sudoku during the trial has been dismissed from duty, marking the third juror in the trial to be dismissed.
The juror admitted to playing the game during testimony to “help keep focused”, according to CNBC. Her Sudoku game was kept in her court-issued notebook, the report says. She played the game for “about seven to ten days of testimony”.
U.S. District Court Judge Edward Davila asked the juror: “Were you playing this Sudoku?”
The juror responded: “I do have Sudoku, but it doesn’t interfere with me listening. I’m very fidgety, so I need to do something with my hands. So at home I’ll crochet while I’m watching or listening to T.V.”
The excuse didn’t cut it with the court, and the juror was subsequently dismissed.
That leaves only two alternate jurors in a trial that is expected to last until December, according to the report.
The judge found out about the game when a juror emailed him. He then told the courtroom: “The court had found good cause to excuse a juror.”
“So has this distracted you from listening?” the judge asked the Sudoku playing juror in chambers. The juror replied: “No”.
When asked if they were able to “follow and retain everything that is going on in the courtroom,” the juror responded: “Oh, yeah, definitely”.
NBC News legal analyst Danny Cevallos said: “This may have been a case of one juror telling on another juror who was perceived to be not taking the trial seriously.”
He added: “As crazy as it sounds, as trials drag on jurors get fatigued. They sometimes turn to something like Sudoku or even fall asleep and that can disqualify them as jurors.”
Two other jurors have already been removed from the trial: one for revealing they couldn’t return a verdict that would send Holmes to prison due to their Buddhist reliiefs and another for financial hardships.
A loss of too many jurors risks a mistrial, though a jury of 11 may be permitted by a judge to return a verdict.
Tyler Durden
Sat, 10/23/2021 – 18:00 - State Department Privately Admits 'Nearly 400' Americans Still Stuck In Afghanistan
State Department Privately Admits ‘Nearly 400’ Americans Still Stuck In Afghanistan
Authored by Nick Monroe via The Post Millennial,
One of the questions that dominated the public’s attention over the Biden administration’s botched withdrawal from Afghanistan was how many Americans were left in the country. The White House gave varying answers at the time.
The Biden White House told the public they didn’t know.
However, months later, according to the Washington Free Beacon, we have a more exact amount — nearly 400 — far beyond the vague estimates given by officials.
The outlet describes 363 Americans overall who are “stuck” in the Taliban-controlled country, whereas 176 of them want out of Afghanistan “immediately.”
“I think it’s irresponsible to say Americans are stranded. They are not,” Jen Psaki said back in August.
White House Press Secretary Jen Psaki rejected the label of it being a “hostage situation” despite the fact the Biden administration left Americans behind in Afghanistan after leaving on August 30th, ahead of the scheduled deadline, at the behest of the Taliban.
California Republican Representative Darrell Issa shared his feelings with the outlet: “We now know this administration repeatedly lied to the world about the citizens of our country it abandoned in Afghanistan. But it did something even worse: It broke a sacred bond of trust between Americans and their government. This isn’t close to over.”
The source of this new intel was a non-public briefing on Thursday by the Biden administration’s State Department. The same group of people who took credit for the rescues of Americans by private military groups that stepped in when President Biden couldn’t deliver the manpower to rescue Americans.
The same State Department that had promised American lives were a “top priority” and then airlifted out mostly Afghans instead.
“The White House has said on the record that they’re turning the page and it becomes clearer all the time why: Every new detail that we find out about the reckless Biden policy in Afghanistan produces only more proof that they lied from day one,” an anonymous Congressional source told the Free Beacon.
The desire to avoid public backlash was said to remain the Biden administration’s top priority. Something also seen in their recent negotiations with the Taliban earlier this month.
Tyler Durden
Sat, 10/23/2021 – 17:30 - India Deploys Advanced Anti-Aircraft Guns In High Altitude Border Standoff With China
India Deploys Advanced Anti-Aircraft Guns In High Altitude Border Standoff With China
Two weeks ago the Chinese and Indian militaries announced that the latest round of peace talks amid the 17-month standoff along the Line of Actual Control (LAC) separating India from China have failed. The 13th round of talks collapsed after China accused the India side with issuing “unrealistic and unreasonable” demands.
The Indian Army has within the past days announced the fresh deployment of batteries of upgraded anti-aircraft guns along the contested border. The region has witnessed a build-up of many thousands of troops on either side especially since the Ladakh Galwan Valley clash which occurred in June 15-16, 2020 – and resulted in the deaths of 20 Indian soldiers, and an unknown number of Chinese PLA casualties.
Indian Army artillery unit Identified in military statements as L-70 anti-aircraft guns, it appears in response to China operating jet fight fighters out of multiple high-altitude airbases in the region, including deploying from small civilian airports and developing airstrips in the Tibet Autonomous Region. The legacy guns were specifically outfitted and upgraded for that purpose, and have an estimated range of 3.5km, firing at 300 rounds per minute.
The Independent detailed that “New Delhi has deployed modern Ultra Light Howitzer M777 artillery guns along with its vintage, but now-upgraded L-70 Bofors artillery guns at its eastern border along the Line of Actual Control (LAC).” It’s rare to be able to deploy an artillery unit to at least 15,000 feet above sea level, given especially the extreme logistics required.
According to Indian Army Air Defense spokesperson Capt. Sarya Abbasi of the Army Air Defense, the new guns will integrate with ground forces to provide high-tech advanced targeting of any inbound aerial threat. “The guns can bring down all unmanned aerial vehicles, unmanned combat aerial vehicles, attack helicopters and modern aircraft,” the captain said.
Chinese still deployed at 3 air bases facing Ladakh, building infra: IAF chief https://t.co/Bw01escJMQ via @IndianExpress
— satyendra ranjan (@sranjan19) October 6, 2021
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“The gun has enhanced target acquisition and automatic target tracking capability under all weather conditions with high-resolution electro-optical sensors comprising a daylight television camera, a thermal imaging camera and a laser-range finder,” the statement noted.
L-70, Image source Indian Defence Research Wing Further, “The gun is also equipped with a Muzzle Velocity Radar for enhancing the accuracy of fire. The gun has the ability to be integrated with tactical and fire control radars which give it more flexibility in its deployment.”
Military analysis news sources have indicated recent tests of the antiaircraft gun in September, wherein the upgraded L-70 intercepted a half-meter wide small drone.
Tyler Durden
Sat, 10/23/2021 – 17:00 - With A Record 79 Container Ships Waiting Off The SoCal Coast, A Scary Supply-Chain Solution Emerges
With A Record 79 Container Ships Waiting Off The SoCal Coast, A Scary Supply-Chain Solution Emerges
As we discussed yesterday, when looking at the recent dip in sky high container shipping rates, there was some fleeting hope that Southern California port congestion had turned the corner. The number of container ships waiting offshore dipped to the low 60s and high 50s from a record high of 73 on Sept. 19, trans-Pacific spot rates plateaued, the Biden administration unveiled aspirations for 24/7 port ops, and electricity shortages curbed Chinese factory output.
Alas, it was not meant to be, and despite the very serious jawboning coming out of the White House, the time ships are stuck waiting offshore continues to lengthen. There are simply too many vessels arriving with too much cargo for terminals, trucks, trains and warehouses to handle, and according to the Marine Exchange of Southern California, 79 container ships were waiting off Los Angeles and Long Beach on Thursday, yet another all-time record.
In light of this record parking lot that has formed outside of LA…
Container ships off LA/LB on Friday morning. Map: MarineTraffic … it is hardly a surprise that container dwell times have steadily increased over the summer and now into the Fall, increasing to an average of 5.9 days in September – up nearly 2.5 days since the April low of 3.6 days, according to Goldman Sachs.
Goldman also notes that the proportion of containers that have been dwelling for longer than five days were 32.8% of total containers in September – up from 13.1% in the spring and 21.2% in September 2020 when dwell time began to accelerate as consumer demand returned.
While it is obvious, it is important to note that higher dwell times at the ports and terminals lead to less overall supply chain efficiency and can impact volume throughput. For example, JBHT recently reported during their 3Q21 earnings call that congestion led to lower container turn efficiency to 1.62 from the end of 2Q21.
Chassis also saw accelerated street dwell times in the most recent week (week 40) in the Port of L.A. and Long Beach. August (Weeks 37-39) averaged a street dwell time of 7 days before increasing to 9.0 days in Week 40 for 20 ft. chassis. 40/45 ft. chassis similarly jumped in mid-October to 10 days from the 8.5 day average over the previous three weeks.
It’s not all bad news: in recent weeks, rails have seen an opposite trend as fluidity has continued to improve in their networks starting at the ports, decreasing their average dwell time to 5.5 days in September from 11.8 day high in June.
As a result of the surge in client interest in supply chain issues on the West Coast, Goldman recently introduced the PMI Manufacturing Suppliers’ delivery times index from IHS Markit to its supply chain congestion tracker. Purchasing managers respond to IHS Markit’s PMI surveys indicating if it is taking their suppliers more or less time to provide inputs to their manufacturing. Above 50 indicates that supply delivery times are faster and below indicates that delivery is slower. Manufacturers have reported significant increases in delivery times, with the current index level in September at 16.6 – down significantly from July 2020 of 47.2.
On an inverted basis, the index has increased 62% YoY in September reflecting the large increase in supplier delays
On a roll, Goldman then makes another patently obvious observation, noting that congestion at the ports ultimately leads to higher rates in ocean freight, and it can also have an impact to air and truck rates as well.
To be sure, as noted above, while prices have started to abate from record levels in mid-September in ocean freight (don’t get your hopes up – this is entirely due to another temporary lockdown in Chinese supply chains, a result of the reduction in manufacturing due to China’s ongoing power crunch and energy crisis), they still increased +350% YoY in the week ending October 15. Prices will remain elevated until congestion abates or demand normalizes; it is unclear when either of these will happen.
More ominously, as of October 18, airfreight from Hong Kong to North America was $10.45 per Kg, up +97% YoY from $5.31.
Goldman’s bottom line is that the data the bank tracks for supply chain congestion lines up with company commentaries during conferences in August and at the start of this current 3Q21 earnings season. In the short term, the bank continues to expect the increase in congestion to benefit asset light and freight forwarders from increased rates and the need to facilitate moves that asset based providers do not have the capacity to handle (translation: it will negatively impact everyone else who is reliant on Just In Time supply chains). Moreover, overall supply chain tightness should help keep truckload rates elevated, and the parcel sector could see ongoing benefit from shippers forced to use air capacity if unable to gain ocean container capacity.
Of course, this being Goldman, the bank has to end on a positive note, and in its forecast writes that while ports reflect congestion in the short term, “we do expect some slight easing as we pass peak season shipping in late October for the holiday season and more abatement as we pass Chinese New Year in early 2022.” The bank also expects the abatement in congestion to positively benefit the rails as well as intermodal participants (such as JB Hunt) as fluidity improves and congestion related costs and service issues begin to abate.
Alas, unlike Goldman, we don’t see any easing in the short- to medium-term, for several reasons. First, there is no catalyst on the horizon that will lead to both a reduction in demand for goods (over services) over the next 6 months especially with winter coming. Second, the downstream chaos in the supply chain alone means that everything has to align perfectly for the blockages to be resolved. However, that won’t happen because between the continued labor shortages, the lack of infrastructure to resume smooth operations, and a supply pipeline that it snarled on both ends (Chinese energy crisis, US labor crisis), the chaos will continue indefinitely. This is a key point made recently by Citi’s Matt King in his latest must read presentation (available to pro subs), asking if the economy is like a “double pendulum” where a “slightly harder push changes the system behavior entirely.”
It gets worse though: so far the supply chain bottlenecks have not materialized in any tangible shortages at the retail level where rising prices have successfully offset rising demand (with a few notable exceptions). However, if and when the supply crisis hits a tipping point and photos of empty shelves once again flood the media, there will be a surge to hoard similar to what we saw in March 2020 as the panicked population buys first and asks questions later, at which point the chaos in the system will once again spill over. Or, as King puts it, “the desire to buy is inversely proportional to the stock available.“
Which leaves us with the painful conclusion: if we want a return to the previous supply-chain equilibrium, the system needs to do more than just ramp up supply: it also needs to squash demand or the wild gyrations will continue.
That means inducing another artificial recession to cripple demand, something which we doubt the Democrats controlling the 78-year-old in the White House will be able to stomach.
Tyler Durden
Sat, 10/23/2021 – 16:30 - Chinese & Russian Warships Still Circling Japan As 'Counterweight' To US "Destabilization" In Region
Chinese & Russian Warships Still Circling Japan As ‘Counterweight’ To US “Destabilization” In Region
After their provocative sail through of the Tsugaru Strait on Monday, a narrow chokepoint waterway through Japan, a large group of Chinese PLA and Russian warships have continued encircling Japan during an Indo-Pacific patrol mission that’s gone into the weekend.
Russian media cited the country’s defense ministry as follows on Saturday: “Russian and Chinese navy vessels have completed their first joint patrol mission in the Pacific Ocean, covering a distance of over 1,700 nautical miles (around 3,100km) in a week.” It included at least ten warships, with Russia’s military releasing some stunning footage of the large naval group.
Though irking and alarming Tokyo, also given this is the closest that such a joint Russia-China naval patrol has come to Japan’s coast (though Tsugaru is considered an international waters transit point), the Japanese Navy after closely monitoring their movements later said there’s as yet been no violation of Japan’s territorial waters.
Chinese state media hailed the joint patrol mission as a crucial counterweight to the US presence and Washington’s “destabilization” of the region.
For example, in state-run Global Times:
The Chinese-Russian joint naval flotilla that transited the Tsugaru Strait days ago has since sailed along the east side of Japan’s main island to its south, almost making a circle around the island country, in a move Chinese experts said on Friday can bring balance to regional stability at a time when the US, Japan and other Western forces have been colluding to destabilize the Asia-Pacific region.
Joint China Russian fleet currently conducting Freedom of Navigation Patrol around Japanese Islands after military drills in Sea of Japan pic.twitter.com/zZyhfvTdYF
— Carl Zha (@CarlZha) October 22, 2021
Here’s more from GT, suggesting Beijing and Moscow are sending a loud and clear message to the continued heightened presence of the US in the region:
Encircling Japan, particularly sailing to the east side of Japan, is of significance because many key military installations are located on that side, including the US Navy base in Yokosuka, a Chinese military expert who requested for anonymity told the Global Times on Friday.
Many US military provocations on China in places like the Taiwan Straits and the South China Sea were launched from these bases, the expert said, noting that the joint patrol by Chinese and Russian vessels could be seen as a warning to the US and Japan, which have been rallying up to confront China and Russia, serve the goals of US hegemony and undermine regional peace and stability.
Indeed it appears this exercise was designed to show the “reach” of these two military superpowers’ navies in cooperation, at a moment the two countries are growing increasingly close in terms of strategically coordinating to oppose Washington aims, particularly in the East.
Tyler Durden
Sat, 10/23/2021 – 16:00 - CDC Director Admits "We May Need To Update Our Definition Of 'Fully Vaccinated'"
CDC Director Admits “We May Need To Update Our Definition Of ‘Fully Vaccinated'”
Authored by Kit Knightly via Off-Guardian.org,
Yesterday, in a press conference, the director of the CDC warned that they may have to “update” the definition of “fully vaccinated”.
At the virtual presser accompanying the approval of “mix-and-match” booster jabs, Dr Rochelle Walensky told reporters that:
We will continue to look at this. We may need to update our definition of ‘fully vaccinated’ in the future,
Today: CDC Director Walensky confirms that boosters may soon be mandatory to be considered “fully vaccinated.”
“We have not yet changed the definition of fully vaccinated. We will continue to look at this. We may need to update our definition of fully vaccinated in the future.” pic.twitter.com/mVgfSteYxp
— Michael P Senger (@MichaelPSenger) October 22, 2021
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The “updated” definition would potentially mean only people who have had the third “booster” shot would be considered “fully vaccinated”, while people who have had the two original shots are no longer “fully vaccinated”.
Whilst the warning might just be a ploy to scare people into getting their “booster” without forcing them to, it should be noted a revised definition of “fully vaccinated” has already been adopted in other countries.
For example, it is already policy in Israel where, in early September they “updated what it means to be vaccinated,”. You now need a third shot, or else you are no longer considered vaccinated.
We wrote about it at the time, and predicted it would likely spread to the rest of the world.
In fact, figures in the alternate media have been predicting this for a while. See this clip from YouTuber WhatsHerFace back in August:
“Time For A Little Prediction”#WhatsHerFace pic.twitter.com/WopfeEJtBU
— 🇨🇦Tina Gee🇨🇦 (@TinaGeeeez1984) August 27, 2021
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As for the potential purpose of any “updated definition”, well it would be twofold.
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Firstly, it would allow them to maintain control. Forcing people to jump through hoops just to “get back” rights they once took for granted creates an atmosphere that normalises state tyranny.
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Secondly, and more cynically, it would allow them to artificially manipulate statistics to flatter the vaccines’ effectiveness whilst hiding any damage they might do.
We already know that, in the US and others, you’re not considered “vaccinated” if you’re only single-jabbed, or double-jabbed for less than two weeks. So any patient infected with “Covid” in that time is considered “unvaccinated”, NOT a “breakthrough infection”.
By redefining “fully vaccinated”, they can turn millions of double-jabbed people back into “unvaccinated” people and stop them from becoming potential “breakthrough infections” and hurting the vaccine effectiveness stats.
This will, in turn, camouflage any excess mortality in those who have had the vaccine, for example due to antibody-dependent enhancement, because all those who die will officially be “not fully vaccinated”.
They’ll likely push it through soon, before this winter’s flu season hits, so any flu deaths can be “unvaccinated covid deaths”.
And for anybody out there who got double-jabbed thinking they were buying their life back, we’re sorry, but we did warn you this would happen.
Tyler Durden
Sat, 10/23/2021 – 15:30 -
- Fauci Funded 'Cruel' Puppy Experiments Where Sand Flies 'Eat Them Alive'; Vocal Cords Severed
Fauci Funded ‘Cruel’ Puppy Experiments Where Sand Flies ‘Eat Them Alive’; Vocal Cords Severed
While recent attention has been focused on Dr. Anthony Fauci’s National Institutes of Health (NIH) funding the genetic manipulation of bat coronaviruses in the same town as the bat coronavirus pandemic emerged, a bipartisan group of lawmakers have demanded answers over ‘sick’ experiments on drugged puppies, according to The Hill.
“Our investigators show that Fauci’s NIH division shipped part of a $375,800 grant to a lab in Tunisia to drug beagles and lock their heads in mesh cages filled with hungry sand flies so that the insects could eat them alive,” writes nonprofit organization the White Coat Waste Project. “They also locked beagles alone in cages in the desert overnight for nine consecutive nights to use them as bait to attract infectious sand flies.”
As The Hill‘s Christian Spencer writes:
The White Coat Waste Project, the nonprofit organization that first pointed out that U.S. taxpayers were being used to fund the controversial Wuhan Institute of Virology, have now turned its sights on Anthony Fauci on another animal-testing-related matter — infecting dozens of beagles with disease-causing parasites to test an experimental drug on them.
House members, most of whom are Republicans, want Fauci to explain himself in response to allegations brought on by the White Coat Waste Project that involve drugging puppies.
According to the White Coat Waste Project, the Food and Drug Administration does not require drugs to be tested on dogs, so the group is asking why the need for such testing.
White Coat Waste claims that 44 beagle puppies were used in a Tunisia, North Africa, laboratory, and some of the dogs had their vocal cords removed, allegedly so scientists could work without incessant barking. -The Hill
The concerned lawmakers are led by Rep. Nancy Mace (R-SC), who said in a letter to the NIH that cordectomies are “cruel” and a “reprehensible misuse of taxpayer funds.” Mace is joined by reps Cindy Axne (D-Iowa), Cliff Bentz (R-Ore.), Steve Cohen (D-Tenn.), Rick Crawford (R-Ark.), Brian Fitzpatrick (R-Pa.), Scott Franklin (R-Fla.), Andrew Garbarino (R-N.Y.), Carlos Gimenez (R-Fla.), Jimmy Gomez (D-Calif.), Josh Gottheimer (D-N.J.), Fred Keller (R-Pa.), Ted Lieu (D-Calif.), Lisa McClain (R-Mich.), Nicole Malliotakis (R-N.Y.), Brian Mast (R-Fla.), Scott Perry (R-Pa.), Bill Posey (R-Fla.), Mike Quigley (D-Ill.), Lucille Roybal-Allard (D-Calif.), Maria E. Salazar (R-Fla.), Terri Sewell (D-Ala.), Daniel Webster (R-Fla.) and Del. Eleanor Holmes Norton (D-D.C.) via The Hill.
Hilariously, Snopes lists this story as “mixture” because “it is unclear whether Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID) at NIH, personally approved the project.”
So the buck stops wherever…
How will Fauci spin this?
Fauci Says Attacking Puppy Torture Is An Attack On Science https://t.co/MQkgmwciu8
— The Babylon Bee (@TheBabylonBee) October 23, 2021
Tyler Durden
Sat, 10/23/2021 – 15:00 - Von Greyerz: Shortages & Hyperinflation Lead To Total Misery
Von Greyerz: Shortages & Hyperinflation Lead To Total Misery
Authored by Egon von Greyerz via GoldSwitzerland.com,
At the end of major economic cycles, shortages develop in all areas of the economy. And this is what the world is experiencing today on a global basis. There is a general lack of labour, whether it is restaurant staff, truck drivers or medical personnel.
There are also shortages of raw materials, lithium (electric car batteries), semi-conductors, food, a great deal of consumer products, cardboard boxes, energy and etc, etc. The list is endless.
SHORTAGES EVERYWHERE
Everything is of course blamed on Covid but most of these shortages are due to structural problems. We have today a global system which cannot cope with the tiniest imbalances in the supply chain.
Just one small component missing could change history as the nursery rhyme below explains:
For want of a nail, the shoe was lost.
For want of a shoe, the horse was lost.
For want of a horse, the rider was lost.
For want of a rider, the battle was lost.
For want of a battle, the kingdom was lost.
And all for the want of a horseshoe nail.
The world is not just vulnerable to shortages of goods and services.
BOMBSHELLS
Bombshells could appear from anywhere. Let’s just list a few like:
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Dollar collapse (and other currencies)
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Stock market crash
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Debt defaults, bond collapse (e.g. Evergrande)
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Liquidity crisis (if money printing stops or has no effect)
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Inflation leading to hyperinflation
There is a high likelihood that not just one of the above will happen in the next few years but all of them.
Because this is how empires and economic bubbles end.
The Roman Empire needed 500,000 troops to control its vast empire.
Emperor Septimius Severus (200 AD) advised his sons to “Enrich the troops with gold but no one else”.
As costs and taxes soared, Rome resorted to the same trick that every single government resorts to when they overextend and money runs out – Currency Debasement.
So between 180 and 280 AD the Roman coin, the Denarius, went form 100% silver content to ZERO.
And in those days, the soldiers were shrewd and demanded payment in gold coins and not debased silver coins.
Although the US is not officially in military conflict with any country, there are still 173,000 US troops in 159 countries with 750 bases in 80 countries. The US spends 11% of the budget or $730 billion on military costs.
Since the start of the US involvement in Afghanistan, Pentagon has spent a total of $14 trillion, 35-50% of which going to defence contractors.
Throughout history, wars have mostly started out as profitable ventures, “stealing” natural resources (like gold or grains) and other goods–often due to shortages. But the Afghan war can hardly be regarded as economically successful and the US would have needed a more profitable venture than the Afghan war to balance its budget.
US HOPELESSLY BANKRUPT – NEEDS TO BORROW 46% OF BUDGET
The US annual Federal Spending is $7 trillion and the revenues are $3.8 trillion.
So the US spends $3.2 trillion more every year than it earns in tax revenues. Thus, in order to “balance” the budget, the declining US empire must borrow or print 46% of its total spending.
Not even the Roman Empire, with its military might, would have got away with borrowing or printing half of its expenditure.
TOTAL MISERY AS MR MICAWBER SAID:
As Mr Micawber in Charles Dickens’ David Copperfield said:
‘Annual income 20 pounds, annual expenditure 19 [pounds] 19 [shillings] and six [pence], result happiness. Annual income 20 pounds, annual expenditure 20 pounds ought and six, result misery.’
And when, like in the case of the US, you spend almost twice as much as you earn that is TOTAL MISERY.
Neither an individual, nor a country can spend 100% more than their earnings without serious consequences. I have written many articles about these consequences and how to survive the Everything Bubble
INFLATION IS HERE
The most obvious course of events is continuous shortages combined with prices of goods and services going up rapidly. I remember it well in the 1970s how for example oil prices trebled between 1974 and 1975 from $3 to $10 and by 1980 had gone up 10x to $40.
The same is happening now all over the world.
That puts Central banks between a Rock and a Hard place as inflation is coming from all parts of the economy and is NOT TRANSITORY!
Real inflation is today 13.5% as the chart below shows, based on how inflation was calculated in the 1980s
IMPLOSION OR EXPLOSION
The central bankers can either squash the chronic inflation by tapering and at the same time create a liquidity squeeze that will totally kill an economy in constant need of stimulus. Or they can continue to print unlimited amounts of worthless fiat money whether it is paper or digital dollars.
If central banks starve the economy of liquidity or flood it, the result will be disastrous. Whether the financial system dies from an implosion or an explosion is really irrelevant. Both will lead to total misery.
Their choice is obvious since they would never dare to starve an economy craving for poisonous potions of stimulus.
History tells us that central banks will do the only thing they know in these circumstances which is to push the inflation accelerator pedal to the bottom.
Based of the Austrian economics definition, we have had chronic inflation for years as increases in money supply is what creates inflation. Still, it has not been the normal consumer inflation but asset inflation which has benefitted a small elite greatly and starved the masses of an increase standard of living.
As the elite amassed incredible wealth, the masses just had more debts.
So what we are now seeing is the beginning of a chronic consumer inflation that most of the world hasn’t experienced for decades.
THE INEVITABLE CONSEQUENCES OF CURRENCY DESTRUCTION
This is the inevitable consequence of the destruction of money through unlimited printing until it reaches its the intrinsic value of Zero. Since the dollar has already lost 98% of its purchasing power since 1971, there is a mere 2% fall before it reaches zero. But we must remember that the fall will be 100% from the current level.
As the value of money is likely to be destroyed in the next 5-10 years, wealth preservation is critical. For individuals who want to protect themselves from total loss as fiat money dies, one or several gold coins are needed.
So back to the nursery rhyme:
For want of a
nailgold coin, the shoe was lost.
For want of a shoe, the horse was lost.
For want of a horse, the rider was lost.
For want of a rider, the battle was lost.
For want of a battle, the kingdom was lost.
And all for the want of ahorseshoe nailgold coin.Gold is not the only solution to the coming problems in the world economy. Still, it will protect you from the coming economic crisis like it has done every time in history
And remember that if you don’t hold properly stored gold you don’t understand:
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What happens when bubbles burst
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You are living in a fake world with fake money and fake valuations
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Your fake money will be revalued to its intrinsic value of ZERO
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Assets that were bought with this fake money will lose over 90% of their value
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Stocks will go down by over 90% in real terms
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Bonds will go down by 90% to 100% as borrowers default
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You lack regard for your stakeholders whether they are family or investors
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You don’t understand history
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You don’t understand risk
The 1980 gold price high of $850 would today be $21,900, adjusted for real inflation
So gold at $1,800 today is grossly undervalued and unloved and likely to soon reflect the true value of the dollar.
Tyler Durden
Sat, 10/23/2021 – 14:30 -
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