Today’s News 25th June 2021

  • These Are The Nationalities Supporting Britain's HNS The Most
    These Are The Nationalities Supporting Britain’s HNS The Most

    Like the country it serves, the strength of the NHS is closely linked to its diversity.

    Statista’s Martin Armstrong notes that the most recent figures for NHS England show large numbers of its staff are not UK/British nationals, and have their roots all around the world.

    The most common non-UK nationality is Indian, with almost 26 thousand as of 2020. Filipinos make the second largest group, with over 22 thousand, while staff from Ireland are the third most represented at more than 13 thousand.

    Infographic: The nationalities supporting the NHS the most | Statista

    You will find more infographics at Statista

    Looking at the whole picture, 13.8 percent of all staff for which the nationality is known are non-UK nationals, representing around 170,000 of the 1.28 million strong workforce. People from the EU play an important role, with 9.1 percent of doctors and 6.0 percent of nurses coming from a country in the Union.

    Tyler Durden
    Fri, 06/25/2021 – 02:45

  • UK Would Send Warships Though Crimea Waters Again, Minister Says
    UK Would Send Warships Though Crimea Waters Again, Minister Says

    Authored by Lily Zhou via The Epoch Times,

    British Warships would go through disputed waters around Crimea again, a UK cabinet minister said after Russia accused a British destroyer of breaching Russian waters.

    Russia said on June 23 that it fired shots and dropped bombs in the path of the UK’s HMS Defender near Cape Fiolent, a landmark on the southern coast of Crimea near the port of Sevastopol, headquarters of the Russian Navy’s Black Sea fleet.

    Russian media quoted the defense ministry as saying the ship ventured as much as three kilometers (two miles) inside Russian waters before leaving.

    The UK has denied Russia’s claim, saying that the Russians were undertaking a gunnery exercise and that no shots had been fired at the British Warship, which was “conducting innocent passage through Ukrainian territorial waters.”

    Russia seized and annexed the Crimea peninsula from Ukraine in 2014, and it considers areas around the peninsula’s coast to be Russian waters. Western countries consider the peninsula to be part of Ukraine and have rejected Russia’s claim to the seas around it.

    The UK’s Secretary of State for Environment, Food, and Rural Affairs George Eustice said on June 24 that the British warship was taking a “logical route.”

    “Under international law, you can take the closest, fastest route from one point to another. HMS Defender was passing through Ukrainian waters, I think on the way to Georgia, and that was the logical route for it to take,” he told Sky News.

    Eustice said the practice is “very normal” and “quite common.”

    “What was actually going on is the Russians were doing a gunnery exercise. They had given prior notice of that. They often do in that area,” he said, adding that it’s important that people don’t get carried away.

    Asked if the government would do it again, Eustice replied: “Of course, yes.

    “We never accepted the annexation of Crimea, these were Ukrainian territorial waters.”

    HMS Defender on March 20, 2020. (Ben Mitchell/PA)

    Speaking to ITV’s “Good Morning Britain” program, Eustice said that he doesn’t know if the gunnery exercise was the “official reason” given for the Russian activities.

    “Whether that was cover for them to try and make some point, we don’t know,” he said. “Perhaps it was, perhaps it wasn’t.”

    Former Royal Navy Chief Admiral Lord Alan West told the London Broadcasting Company that “there’s no doubt the Defender was asserting her right of innocent passage from one port to another.”

    He said Russian President Vladimir Putin was “an expert at disinformation,” and that his “appalling” behavior was to show his toughness to his “home audience.”

    Former head of the Army, Gen. Lord Richard Dannatt, said that Putin is “testing the will of the West.”

    “I’m a little bit surprised that the Ministry of Defence is playing it down,” he told Sky News.

    “It was unreasonable of the Russians to challenge HMS Defender in the way that they did.

    “The underlying point is that there are international laws that must be upheld by everyone, and HMS Defender had the absolute right to be where she was yesterday.”

    Earlier on June 24, the UK’s Foreign Minister Dominic Raab said that the Russian characterization of the event is “predictably inaccurate,” and Russia summoned the British ambassador in Moscow, Deborah Bronnert, over the row.

    Kremlin spokesman Dmitry Peskov said on June 24 that the incident was “a deliberate and premeditated provocation” and threatened that “no options can be ruled out.”

    Tyler Durden
    Fri, 06/25/2021 – 02:00

  • The "Conspiracy Theory" Charade
    The “Conspiracy Theory” Charade

    Authored by James Bovard via JimBovard.com,

    How government and media use the phrase to suppress opposition…

    Biden’s “National Strategy for Countering Domestic Terrorism” report last week declared that “enhancing faith in American democracy” requires “finding ways to counter the influence and impact of dangerous conspiracy theories.” In recent decades, conspiracy theories have multiplied almost as fast as government lies and cover-ups. While many allegations have been ludicrously far-fetched, the political establishment and media routinely attach the “conspiracy theory” label to any challenge to their dominance.

    According to Cass Sunstein, Harvard Law professor and Obama’s regulatory czar, a conspiracy theory is “an effort to explain some event or practice by reference to the machinations of powerful people, who have also managed to conceal their role.” Reasonable citizens are supposed to presume that government creates trillions of pages of new secrets each year for their own good, not to hide anything from the public.  

    In the early 1960s, conspiracy theories were practically a non-issue because 75 percent of Americans trusted the federal government. Such credulity did not survive the assassination of John F. Kennedy. Seven days after Kennedy was shot on November 22, 1963, President Lyndon Johnson created a commission (later known as the Warren Commission) to suppress controversy about the killing. Johnson and FBI chief J. Edgar Hoover browbeat the commission members into speedily issuing a report rubberstamping the “crazed lone gunman” version of the assassination. House Minority Leader Gerald Ford, a member of the commission, revised the final staff report to change the location of where the bullet entered Kennedy’s body, thereby salvaging Hoover’s so-called “magic bullet” theory. After the Warren Commission findings were ridiculed as a whitewash, Johnson ordered the FBI to conduct wiretaps on the report’s critics. To protect the official story, the commission sealed key records for 75 years. Truth would out only after all the people involved in any coverup had gotten their pensions and died.

    The controversy surrounding the Warren Commission spurred the CIA to formally attack the notion of conspiracy theories. In a 1967 alert to its overseas stations and bases, the CIA declared that the fact that almost half of Americans did not believe Oswald acted alone “is a matter of concern to the U.S. government, including our organization” and endangers “the whole reputation of the American government.” The memo instructed recipients to “employ propaganda assets” and exploit “friendly elite contacts (especially politicians and editors), pointing out… parts of the conspiracy talk appear to be deliberately generated by Communist propagandists.” The ultimate proof of the government’s innocence: “Conspiracy on the large scale often suggested would be impossible to conceal in the United States.”

    However, the CIA did conceal a wide range of assassinations and foreign coups it conducted until congressional investigations in the mid-1970s blew the whistle. The New York Times, which exposed the CIA memo in 1977, noted that the CIA “mustered its propaganda machinery to support an issue of far more concern to Americans, and to the C.I.A. itself, than to citizens of other countries.” According to historian Lance deHaven-Smith, author of Conspiracy Theory in America, “The CIA’s campaign to popularize the term ‘conspiracy theory’ and make conspiracy belief a target of ridicule and hostility must be credited…with being one of the most successful propaganda initiatives of all time.” (In 2014, the CIA released a heavily-redacted report admitting that it had been “complicit” in a JFK “cover-up” by withholding “incendiary” information from the Warren Commission.)

    The Johnson administration also sought to portray critics of its Vietnam War policies as conspiracy nuts, at least when they were not portraying them as communist stooges. During 1968 Senate hearings on the Gulf of Tonkin incident, Defense Secretary Robert McNamara denounced the “monstrous insinuations” that the U.S. had sought to provoke a North Vietnamese attack and declared that it is “inconceivable that anyone even remotely familiar with our society and system of government could suspect the existence of a conspiracy” to take the nation to war on false pretenses. Three years later, the disclosure of the Pentagon Papers demolished the credibility of McNamara and other top Johnson administration officials who indeed dragged America into the Vietnam War on false pretenses.

    Condemnations of conspiracy theories became a hallmark of the Clinton administration. In 1995, President Bill Clinton claimed that people who believed government threatened their constitutional right were deranged ingrates: “If you say that Government is in a conspiracy to take your freedom away, you are just plain wrong…. How dare you call yourselves patriots and heroes!” The same year, the White House compiled a fevered 331-page report entitled “Communication Stream of Conspiracy Commerce,” attacking magazines, think tanks, and others that had criticized President Clinton. In the following years, many of the organizations condemned in the White House report were targeted for IRS audits, including the Heritage Foundation and the American Spectator magazine and almost a dozen individual high-profile Clinton accusers, including Paula Jones and Gennifer Flowers. Despite Clinton’s protestations that he posed no threat to freedom, even the ACLU admitted in 1998 that the Clinton administration had “engaged in surreptitious surveillance, such as wiretapping, on a far greater scale than ever before… The Administration is using scare tactics to acquire vast new powers to spy on all Americans.”

    Some “conspiracy theory” allegations comically expose the naivete of official scorekeepers. In April 2016, Chapman University surveyed Americans and announced that “the most prevalent conspiracy theory in the United States is that the government is concealing information about the 9/11 attacks with slightly over half of Americans holding that belief.”  That survey did not ask whether people believed the World Trade Centers were blown up by an inside job or whether President George W. Bush secretly masterminded the attacks. Instead, folks were simply asked whether “government is concealing information” about the attacks. Only a village idiot, college professor, or editorial writer would presume the government had come clean. Three months after the Chapman University survey was conducted, the Obama administration finally released 28 pages of a 2003 congressional report that revealed that Saudi government officials had directly financed some of the 9/11 hijackers in America. That disclosure shattered the storyline carefully constructed by the Bush administration, the 9/11 Commission, and legions of media accomplices. (Lawsuits continue in federal court seeking to force the U.S. government to disclose more information regarding the Saudi government role in the attacks.)

    “Conspiracy theory” is often a flag of convenience for the media. In 2018, the New York Times asserted that Trump’s use of the term “Deep State” and similar rhetoric “fanned fears that he is eroding public trust in institutions, undermining the idea of objective truth and sowing widespread suspicions about the government and news media.” However, after allegations by anonymous government officials spurred Trump’s first impeachment in 2019, New York Times columnist James Stewart cheered, “There is a Deep State, there is a bureaucracy in our country who has pledged to respect the Constitution, respect the rule of law… They work for the American people.” New York Times editorial writer Michelle Cottle proclaimed, “The deep state is alive and well” and hailed it as “a collection of patriotic public servants.” Almost immediately after its existence was no longer denied, the Deep State became the incarnation of virtue in Washington.

    The media elite can fabricate “conspiracy theory” designations almost with the flip of a headline. A week after Election Day 2020, the New York Times ran a banner headline across the top of the front page: “Election Officials Nationwide Find No Fraud.” How did the Times know? Their reporters effectively called each state and asked, “Did y’all see any fraud?” Election officials answered “no,” thus proving that anyone who subsequently questioned Biden’s victory was promoting a groundless conspiracy. While top liberal politicians denounced electronic voting companies as unaccountable and dishonest in 2019, any doubts about such companies became “conspiracies” after that headline in the Times. The Times helped spur a media cacophony drowning out anyone complaining about ballot harvesting, illegal mass mailing of absentee ballots, or widespread failures to verify voter identification.

    Actually, “conspiracy theory” accusations helped Biden win the 2020 presidential election. As Sen. Lindsey Graham (R-SC) recently noted, if Americans believed that the COVID-19 virus was created in a Chinese government lab, Trump would have likely won the election because voters would have sought a leader who could be tough on China. But the lab origin explanation was quickly labeled a pro-Trump heresy. The Washington Post denounced Sen. Tom Cotton (R-AR,) for suggesting the virus originated in the lab, which supposedly was a “conspiracy theory that was already debunked.” Twenty-seven prominent scientists signed a letter in the Lancet: “We stand together to strongly condemn conspiracy theories suggesting that COVID-19 does not have a natural origin… Conspiracy theories do nothing but create fear, rumours, and prejudice that jeopardise our global collaboration in the fight against this virus.” The Lancet did not reveal until last week that one of the signers and the person who organized the letter signing campaign ran an organization that received U.S. government subsidies for its work at the Wuhan Institute of Virology lab. President Biden has ordered U.S. intelligence agencies to take another look to seek to determine the origin of COVID-19.

    Will “conspiracy theory” charges provide a “get out of jail free” card for the FBI and other federal agencies regarding the January 6 clash at the Capitol? After Fox News’s Tucker Carlson featured allegations that FBI informants or agents may have instigated the ruckus, the Washington Post speedily denounced his “wild, baseless theory” while Huffington Post denounced his “laughable conspiracy theory.” It doesn’t matter how often the FBI instigated terrorist plots or political violence in the past 60 years (including the plot to kidnap the Michigan’s Governor Gretchen Whitmer last November). Instead, decent people must do nothing to endanger the official narrative of Jan. 6 as a horrific private terrorist event on par with the War of 1812, Pearl Harbor, and the 9/11 attacks.

    “Conspiracy theory” is a magic phrase that expunges all previous federal abuses. Many liberals who invoke the phrase also ritually quote a 1965 book by former communist Richard Hofstadter, The Paranoid Style in American Politics. Hofstadter portrayed distrust of government as a proxy for mental illness, a paradigm that makes the character of critics more important than the conduct of government agencies. For Hofstadter, it was a self-evident truth that government was trustworthy because American politics had “a kind of professional code… embodying the practical wisdom of generations of politicians.”

     Much of the establishment rage at “conspiracy theories” has been driven by the notion that rulers are entitled intellectual passive obedience. The same lese-majeste mindset has been widely adopted to make a muddle of American history. Arthur Schlesinger, Jr., the court historian for President John F. Kennedy and a revered liberal intellectual, declared in a 2004 article in Playboy, “Historians today conclude that the colonists were driven to revolt in 1776 because of a false conviction that they faced a British conspiracy to destroy their freedom.” Was the British imposition of martial law, confiscation of firearms, military blockades, suspension of habeas corpus, and censorship simply a deranged fantasy of Thomas Jefferson? The notion that the British would never conspire to destroy freedom would play poorly in Dublin. Why would anyone trust academics who were blind to British threats in the 1770s to accurately judge contemporary perils to liberty?

    How does the Biden administration intend to fight “conspiracy theories”? The Biden terrorism report called for “enhancing faith in government” by “accelerating work to contend with an information environment that challenges healthy democratic discourse.” Will Biden’s team rely on the “solution” suggested by Cass Sunstein: “cognitive infiltration of extremist groups” by government agents and informants to “undermine” them from within? A 1976 Senate report on the FBI COINTELPRO program demanded assurances that a federal agency would never again “be permitted to conduct a secret war against those citizens it considers threats to the established order.” Actually, the FBI and other agencies have continued secretly warring against “threats” and legions of informants are likely busy “cognitively infiltrating” at this moment.

    “Conspiracy theory” will remain a favorite sneer of the political-media elite. There is no substitute for Americans developing better B.S radars for government claims as well as wild-eyed private balderdash. In the meantime, there’s always the remedy a Washington Post health article touted late last year: “Try guided imagery. Visualizing positive outcomes can help clamp down on the intense emotions that might make you more vulnerable to harmful conspiracy theories.”

    Tyler Durden
    Fri, 06/25/2021 – 00:05

  • Visualizing US Droughts Over The Last 20 Years
    Visualizing US Droughts Over The Last 20 Years

    The Western U.S. is experiencing one of the worst recorded droughts in the last 20 years.

    Temperatures from California to the Dakotas are currently hovering around 9-12°F above average – but, as Visual Capitalist’s Carmen Ang asks (and answers below), how bad is the situation compared to past years?

    This animated map by reddit user /NothingAbnormalHere provides a historical look at droughts in the U.S. since 1999, using data and graphics from the U.S. Drought Monitor (USDM).

    What is the U.S. Drought Monitor?

    Over the last two decades, the USDM has been tracking, measuring, and comparing droughts across America.

    While droughts can be difficult to classify and standardize, there are various factors that can be used to gauge when a region is experiencing drought. These include measurements of snowpack levels, soil moisture, and recent precipitation.

    To track these conditions (and make sense of them), the USDM synthesizes data from a plethora of meteorological sources, including the Palmer Drought Severity Index and the Standardized Precipitation Index.

    From there, conditions are broken down into categories, ranging from D0 (abnormally dry) to D4 (Exceptional Drought). A map is released each week that shows which states are experiencing drought, and to what degree.

    Where Are The Most Drought-Prone Areas?

    According to a map created by climatologist Becky Bolinger (which is published on Drought.gov), Arizona and Nevada are the most historically drought-prone states—the two have experienced drought more than 50% of the time tracked by the USDM.

    California is high on the list as well, with the state experiencing drought at least 40% of the time.

    As the historical data shows, the West is no stranger to droughts. However, this year’s drought has become particularly worrisome because of its intensity and breadth.

    Right now, more than a quarter of the West is experiencing a D4 level drought—a new record. To help put things into perspective, here’s a look at how much overall land area in the West has been in drought, since 2000:

    When a region is experiencing a D4 drought, possible impacts include:

    • Water Scarcity
      Lower reservoirs, combined with decreased snowpack lead to water shortages.

    • Crop losses
      Water shortages mean less water for fields, which can lead to acres of fallow (unused) farmland.

    • Wildfires
      Dry conditions and lack of moisture increase the risk of wildfires.

    Is This the New Norm?

    This record-breaking drought is wreaking havoc across the West. In California, reservoirs have about half as much water as they usually do, and crop failures are happening across Colorado.

    The worst part? Some experts believe that this could be the new normal if human-driven climate change continues to increase average temperatures across the globe.

    Tyler Durden
    Thu, 06/24/2021 – 23:45

  • Footage Of Bats Kept In Wuhan Lab Fuels Scrutiny Over Its Research
    Footage Of Bats Kept In Wuhan Lab Fuels Scrutiny Over Its Research

    By Eva Fu and Frank Yue of Epoch Times

    Official Chinese state-approved footage from years ago showing bats being kept at the Wuhan Institute of Virology has further fueled scrutiny of the research being conducted at the secretive facility.

    Security personnel gather near the entrance of the Wuhan Institute of Virology during a visit by the World Health Organization team in Wuhan in China’s Hubei province, China, on Feb. 3, 2021. (Ng Han Guan/AP Photo)

    A 2017 promotional video featured on the website of the Chinese Academy of Sciences (CAS), a top Chinese state-run research institute that administers the Wuhan lab, showed live bats held in cages inside the lab. In it, a researcher who wears blue surgical gloves was holding a bat and feeding it with a worm.

    The video, made after the research institute obtained the nation’s first P4 designation—the highest bio-security classification—in spring 2017, also showed bats in a cage inside the lab. It said that the Wuhan lab researchers had collected more than 15,000 bat samples from various parts of China and Africa.

    A researcher at the Wuhan Institute of Virology in Wuhan in China’s central Hubei Province feeds a bat with a worm in a 2017 video. (Screenshot)

    While some overseas Chinese-language media had cited the video last year in reports that raised concerns about the lab, it has attracted more attention lately as the possibility that the virus may have escaped from a Chinese laboratory has gained traction.

    The WIV has filed at least two patents related to bat breeding. The first, filed in June 2018 and granted about half a year later, describes a bat rearing cage with a glass front door, hanger, feed opening, and water drinking tube, designed to enable bats “healthy growth and breeding under artificial condition.”

    Bats in a cage at the Wuhan Institute of Virology in Wuhan in China’s central Hubei Province in a 2017 video. (Screenshot)

    The second, filed last October, instructs researchers on how to raise wild bats to improve breeding and survival rate.

    A description of the WIV on a CAS-affiliated webpage said the institute has three “barrier facilities” that enclose lab animals totaling nearly 13,100 square feet, in which there are 12 bat cages.

    The evidence of live bats being raised at WIV contradicted statements made by U.S. zoologist Peter Daszak, one of the World Health Organization-led experts who went to Wuhan City to study the origin of the virus earlier this year.

    Daszak, in a tweet last December that he has since deleted, took issue with an article from The Independent that stated that “samples from the bats were sent to the Wuhan laboratory for genetic analyses of the viruses collected in the field.”

    “Important error in this piece. No BATS were ‘sent to Wuhan lab for genetic analyses of viruses collected in the field,’” he wrote. “That’s not how this science works. We collect bat samples, send them to the lab. We RELEASE bats where we catch them!”

    He further stated that the article “describes work I’m the lead on & labs I’ve collaborated w/ for 15 yrs.”

    “They DO NOT have live or dead bats in them. There is no evidence anywhere that this happened. It’s an error that I hope will be corrected,” he said.

    Daszak’s EcoHealth Alliance, a New York-based nonprofit that conducts global health-related research, helped channel more than $800,000 in U.S. federal grants to the Wuhan lab to study bat coronaviruses, according to newly released internal documents.

    Daszak admitted on June 1—a week after leaked intelligence noted that three WIV researchers were hospitalized a month before China’s reported “patient zero”—that questions of whether the WIV had bats were never raised during the WHO investigation. Changing his stance, he added: “I wouldn’t be surprised if, like many other virology labs, they were trying to set up a bat colony.”

    Safety Lapses

    A scene from the same video of a bat dangling off the hat of a researcher, who wore only a pair of glasses and a regular surgical mask while collecting bat samples in the wild, has raised further questions about the security measures at the lab.

    A bat hangs on the hat of a researcher from the Wuhan Institute of Virology in a 2017 video. (Screenshot) 

    Screenshots from a 2017 report on state-run broadcaster CCTV have also showed a WIV researcher’s arm blistering from a bat bite during their study of the SARS (severe acute respiratory syndrome) virus.

    The bats “could bite your hands through the glove,” WIV researcher Cui Jie told CCTV. He described the feeling as similar to “being jabbed by a needle.” In other footage, marked with the date Dec. 28 but no year, another WIV researcher was holding a bat outdoors with both hands exposed.

    A researcher at the Wuhan Institute of Virology shows the blisters after being bitten by a bat. (Screenshot via CCTV)

    In 2018, U.S. officials who who visited the research facility sent cables back to Washington warning about weak safety standards at the lab.

    Two U.S. Embassy officials said the lab had a “serious shortage of appropriately trained technicians and investigators needed to safely operate this high-containment laboratory,” according to the cable seen by The Washington Post.

    Transparency Issues

    The Wuhan lab began as a collaborative project between China and France in 2004 to study emerging infectious diseases following the SARS outbreak, which spread from China to more than two dozen countries.

    The construction of the P4 lab was finalized in 2015. In 2017, former French Prime Minister Bernard Cazeneuve made the lab his first stop in Wuhan and attended the ribbon-cutting ceremony. The plan at the time was to have 50 French researchers go to the lab over the next five years. It never happened.

    The French scientists were quickly sidelined. The Franco-Chinese Committee on Emerging Infectious Diseases, a group created for cooperation between the two sides, stopped holding meetings from 2016, according to France Bleu, part of the national public broadcasting group Radio France.

    The 2017 Wuhan lab video mentioned briefly the Sino-French collaboration, noting that the two sides had “more than a decade of intense clashes due to differences in cultural backgrounds and ideology.” It added that the P4 lab “will definitely contribute to the physical health of the public and the world peace” and serve as a “large scale world-class technology sharing hub.”

    The WIV’s raw data remains closed off to the WHO and other international experts. In September 2019, the facility made its main database of samples and viral sequences offline. The data bank was Asia’s largest as of 2018, according to a news release on the WIV website.

    Chinese virologist Shi Zhengli is seen inside the P4 laboratory in Wuhan, capital of China’s Hubei Province, on Feb. 23, 2017. (Johannes Eisele/AFP via Getty Images)

    Shi Zhengli, the director of the WIV’s research center for emerging infectious diseases who is now at the center of the virus controversy, maintained that the institute has been open to outside probes. Speaking recently with The New York Times, she called accusations of the lab withholding data “speculation rooted in utter distrust.”

    A January fact sheet from the State Department under the Trump administration said that WIV researchers had begun conducting experiments involving RaTG13, identified to have the closest genetic similarity to the COVID-19 virus, from as early as 2016.

    Besides engaging in “’gain of function’ research to engineer chimeric viruses,” the WIV has engaged in laboratory animal experiments on behalf of the Chinese military since at least 2017, according to the fact sheet. Gain-of-function research involves creating artificial viruses by adding new or enhanced capabilities for the purpose of studying what new pathogens could emerge and how to guard against them.

    Tyler Durden
    Thu, 06/24/2021 – 23:25

  • COVID Baby Bust Accelerates Nine Months After Lockdowns
    COVID Baby Bust Accelerates Nine Months After Lockdowns

    In a previous note last month, we said one of the biggest deflationary threats looms over the U.S. economy, that is, birth rates have fallen to their lowest level in a generation. Diving deeper into the baby bust, new Centers for Disease Control and Prevention data shows nine months after the virus pandemic was first declared a national emergency, U.S. births plunged 8% in December, according to Bloomberg

    CDC data showed an acceleration in birth declines for the second half of 2020. Full-year data shows that the number of babies born countrywide fell 4% to 3.6 million, the most significant decline since 1973, the start of the stagflation of the 1970s. 

    The latest CDC data disproves the mainstream media’s narrative of a “COVID Baby Boom” as much of the nation was cooped up in their homes during lockdowns. 

    The data appears to show millennials were not in the ‘mood’ to have a child during the global health catastrophe. The declines in births have been occurring for several years as the younger generation, trapped in insurmountable debts, can barely afford rent and groceries, nevertheless raise a child. 

    On a state-by-state basis, California in December led the declines, which plummeted 19%. For the second half of the year, New Mexico, New York, Hawaii, and West Virginia saw decreases ranging from 8% to 11%.

    We noted California’s population continues to drop as a mass exodus of residents escapes the liberal hell hole of high taxes, unaffordable homes, and violent crime. The younger generation in the state appears to be having fewer children, exacerbated by the pandemic. 

    Bloomberg shows a shocking chart that when factoring all the deaths in 2020 and into 1Q21, including virus-related deaths, U.S. births only exceeded deaths by 45,000 in February and March. 

    Source: Bloomberg 

    In terms of race, births in December had the most significant reduction among Asians, plunging 19% from the same period in 2019.

    What this shows are some early signs of a COVID baby bust. But most of this is a continuation of a trend that’s been happening for more than a decade. With birthrates faltering and debts soaring. We believe the primary secular economic trend is, and has been for at least a decade is deflation – as we’ve said before, Japan is a microcosm of what America is facing as the “3-D’s” of debt, deflation, and the inevitability of demographics implosion continues to widen the wealth gap. 

    Tyler Durden
    Thu, 06/24/2021 – 23:05

  • Why Are Large Numbers Of Birds Suddenly Dropping Dead In Multiple US States?
    Why Are Large Numbers Of Birds Suddenly Dropping Dead In Multiple US States?

    Authored by Michael Snyder via The Economic Collapse blog,

    As if we didn’t have enough weird things going on, now birds are suddenly dropping dead in large numbers all across the eastern half of the country.  Before they die, a lot of these birds are exhibiting very strange symptoms.  Experts are telling us that in many cases birds are developing “crusty or puffy eyes”, and often they appear to go completely blind.  In addition, quite a few of these dying birds lose their ability to stay balanced, and we are being told that some even seem to be having “seizures”.  If scientists understood what was causing this to happen, that would be one thing.  But at this point they have no idea why this is taking place, and that is quite alarming.

    So far, confirmed incidents of this strange phenomenon have been documented in Washington D.C., Virginia, West Virginia, Maryland, Kentucky, Ohio and Indiana.

    Could it be possible that we are dealing with a “mystery disease” that started in one state and that has now spread to other surrounding states?

    Or is something else going on here?

    We are being told that “blue jays, common grackles and European starlings” are the most common birds that are being affected.

    But whatever is happening is not just limited to one species of birds, and I think that should be a red flag.

    If our best experts even had a decent working theory about why so many birds are dying, I probably would not have written this article.  But at this point they are openly admitting that they have absolutely no idea why so many birds are suddenly dropping dead…

    “We’re experiencing an unusual amount of bird mortality this year,” said Kate Slankard, an avian biologist with the Kentucky Department of Fish and Wildlife Resources. “We have yet to figure out what the problem is. The condition seems to be pretty deadly.”

    In Kentucky, the bird deaths seem to have begun in late May.  The following comes directly from the official website of the Kentucky Department of Fish & Wildlife Resources…

    In late May, the Kentucky Department of Fish and Wildlife Resources began receiving reports of sick and dying birds with eye swelling and crusty discharge, as well as neurological signs. Wildlife agencies in Indiana, Maryland, Ohio, Virginia, Washington, D.C. and West Virginia have reported similar problems.

    State wildlife agencies are working with diagnostic laboratories to investigate the cause of mortality. Kentucky Fish and Wildlife has sent more than 20 samples for lab testing to the Southeastern Cooperative Wildlife Disease Study at the University of Georgia. More results are pending, but no definitive cause of death has been identified at this time.

    After testing 20 samples, they still have no idea what is going on.

    According to Slankard, “hundreds of birds” in her state have now become victims…

    “They’ll just sit still, often kind of shaking,” Slankard said. “It’s pretty safe to say that hundreds of birds in the state have had this problem.”

    But of course the truth is that we have no way of knowing how many birds have actually been affected.

    It could be thousands of birds in the state.

    It could be hundreds of thousands.

    We just don’t know, and Kentucky is just one of the states that has been hit.

    In Indiana, authorities tested for avian flu and West Nile virus, but those tests came back negative

    Indiana wildlife officials said there have been suspicious deaths of blue jays, robins, northern cardinals and brown-headed cowbirds in five counties. James Brindle, spokesman for the state’s Department of Natural Resources, said birds there have tested negative for avian influenza and West Nile virus.

    One theory that is floating around is that these birds are ingesting large amounts of pesticides because of all the cicadas that they are eating.

    Some experts are flatly dismissing that theory because “the disease has also appeared in states where cicadas are not present”.

    But how can they be so sure that it is a disease if they have absolutely no idea why this is happening?

    I don’t think that we should jump to any conclusions that are not backed up by science.

    Obviously a lot more testing needs to be done.  If it does turn out to be a disease that is causing this, is it a disease that can also spread to humans?  Moving forward, that could be one of the most important questions that needs to be answered.

    Hopefully we can get some solid answers, because this is not the first time something like this has happened.  Back in September, one expert said that it appeared that “hundreds of thousands” of birds were dropping dead in New Mexico…

    Wildlife experts in New Mexico say birds in the region are dropping dead in alarming numbers, potentially in the “hundreds of thousands.”

    “It appears to be an unprecedented and a very large number,” Martha Desmond, a professor at New Mexico State University’s department of fish, wildlife, and conservation ecology, told NBC’s Albuquerque affiliate KOB.

    But whatever was causing those deaths to happen in New Mexico seems to have stopped.

    Is there any connection between that event and the deaths that are happening in the eastern half of the country now?

    I wish that I had the answer to that question.

    We live at a time when pesticides, high technology and other forms of human activity are having a greater impact on birds and animals than ever before.  But we have also entered an era when I believe that great pestilences are going to become very common.

    Obviously something is killing all those birds, and hopefully scientists will have something solid to tell us very soon.

    With each passing day, our world is getting crazier, and so much is going wrong all around us.

    Many are hoping that 2020 and 2021 will just turn out to be anomalies, but I am entirely convinced that they are just the very small tip of a very large iceberg.

    *  *  *

    Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.

    Tyler Durden
    Thu, 06/24/2021 – 22:45

  • "Defund The Police" Movement 'Coincided' With Biggest Surge In US Violence Since The '60s, FBI Data Confirms
    “Defund The Police” Movement ‘Coincided’ With Biggest Surge In US Violence Since The ’60s, FBI Data Confirms

    Based on preliminary FBI data, America experienced one of its most murderous years in decades. Of course, let’s not forget this all happened during a socio-economic collapse thanks to the virus pandemic and resulting public officials who closed the economy, leaving tens of millions of people struggling to put food on the table. At the same time, millions of others raced to their local gun store to purchase guns and ammo as liberal-run cities were transformed into a violent mess. 

    Vox reports US’ murder rate likely increased by 25% or more in 2020, but official FBI data won’t be published until later this year. The numbers are likely to be historic. “That amounts to more than 20,000 murders in a year for the first time since 1995, up from about 16,000 in 2019,” according to crime analyst Jeff Asher. 

    John Roman, a criminal justice expert at NORC at the University of Chicago, told Vox that the 2020 murder surge “is the largest increase in violence we’ve seen since the 1960s when we started collecting formal crime statistics.” 

    Many experts, or at least the ones Vox sourced or interviewed, “still don’t know why murders surged last year.” 

    For starters, perhaps liberal-run cities defunding the police and deciding not to prosecute petty crime could be some of the triggers for the increased violent crime. 

    After all, Baltimore Police Commissioner Michael Harrison this week blamed the surge in violent crime on a “number of issues,” including a shortage in staff. This comes after Baltimore City Council defunded the police last year. The new mayor, Brandon Scott, reversed the policy and increased the city’s policing budget this year to get a handle on crime. 

    Los Angeles County Sheriff Alex Villanueva has also spoken up and blamed “defund the police” and progressive policies for the spike in crime across Los Angeles County. 

    Oregon’s largest newspaper, The Oregonian, admitted not too long ago that their previous endorsement of defunding was the wrong decision as crime surged across Portland. 

    We could go on and on about linking defunding the police to surging violent crime, but we’ll stop it at that. 

    Until law and order are restored, something former President Trump used to say daily, chaos will continue across major metro areas, and 2021 could become an even more violent year than last. 

    Tyler Durden
    Thu, 06/24/2021 – 22:25

  • Does First Transgender Olympian Signal The Death Knell Of Female Sport?
    Does First Transgender Olympian Signal The Death Knell Of Female Sport?

    Authored by Robert Bridge via The Strategic Culture Foundation,

    It seems ridiculous to have to remind anyone of the obvious anatomical differences between males and females, but such is the state of the current world we live in.

    Laurel Hubbard will go down in the history books at the Tokyo Olympics as the first transgender athlete to compete at the Games.

    But the consequences of this decision for female athletes and women in general will be devastating and long-lasting.

    The day may be imminent when natural-born females are no longer represented on the Olympic medal podium as biological males start to make serious inroads into their sports.

    Laurel Hubbard, 43, is among five weightlifters chosen to represent New Zealand in the Tokyo Olympics to compete in the women’s 87-kilogram category. As an aside, he is also the progeny of Dick Hubbard, the former liberal mayor of Auckland. The criticism and controversy that has greeted the news of the first transgender athlete to participate in the Games does not seem misplaced. First, Hubbard, whose inclusion won the approval of New Zealand Prime Minister Jacinda Ardern, will enjoy a competitive advantage over his contenders that has been scientifically proven to come with inborn male attributes.

    It seems ridiculous to have to remind anyone of the obvious anatomical differences between males and females, but such is the state of the current world we live in.

    According to one study, published by the British Journal of Sports Medicine, “trans women still had a 9% faster mean run speed after the 1 year period of testosterone suppression that is recommended by World Athletics for inclusion in women’s events.”

    The developmental biologist Dr. Emma Hilton seconded this opinion.

    “Males can run faster, jump longer, throw further and lift heavier than females,” Hilton confirmed in a 2019 discussion.

    “They outperform females by 10% on the running track to 30% when throwing various balls.”

    Hilton went on to produce some sports trivia to support her claim:

    • there are 9,000 males between 100m world record holders Usain Bolt and Florence Griffith Joyner, the fastest woman of all time;

    • the current female 100m Olympic champion, Elaine Thompson, is slower than the 14 year old schoolboy record holder;

    • under-15 boys squad beat the U.S. Women’s National Team in a scrimmage.

    And so on.

    Those raw statistics are not meant to diminish, of course, the tremendous achievements made by female athletes. Rather, they are meant to demonstrate the very definite boundary that exists – or should exist – between male and female contenders. In fact, the physical differences between the sexes could actually come down to a matter of life and death. Already blood has been spilt.

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    Consider, for example, the 2014 Mixed Martial Arts contest between Fallon Fox and Tamikka Brents. Fox, the first transgender fighter in MMA history, subjected Brents to a violent beating that resulted in a fractured skull and concussion. How long before a female athlete suffers serious injury – possibly even death – at the hands of a transgender woman on the field of dreams?

    As worrisome as that possibility may be, the real issue for female athletes is that these biological males are simply seen as interlopers trespassing on their territory, disqualifying them from the right to perform. Just ask Kuinini ‘Nini’ Manumua, 21, the woman who was deprived of making the Kiwi team due to the inclusion of Hubbard, who lived 35 years as a male before transitioning. As for Manumua, it would have been her first Olympics.

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    Criticism on the decision to include Hubbard on the New Zealand team has been fierce.

    Belgian weightlifter Anna Vanbellinghen said that allowing Hubbard to compete at Tokyo was unfair to female athletes, calling it “a bad joke.”

    New Zealander Daniel Leo, a former professional rugby player turned CEO, remarked in a tweet that the decision to include Hubbard “tarnishes [New Zealand’s] reputation BIG TIME.”

    Meanwhile, the British advocacy group, Fair Play for Women, slammed the IOC’s policy as “blatantly unfair.”

    “The IOC stated in its 2015 transgender guidelines that the overriding sporting objective is, and remains, the guarantee of fair competition,” remarked Nicola Williams, FPFW director.

    “But its current rules are blatantly unfair to women, and to trans gender women, who both want to play by rules which are fair to everybody.”

    In the United States, meanwhile, resistance to the madness has taken root. A number of state legislatures are opposed to the idea of permitting transgender women to play sports alongside women. Alabama, Arkansas, Georgia, Idaho, Indiana, Iowa and Kentucky, for example, are just some of the states that have passed legislation strictly forbidding the participation of biological males in female sports unless they have undergone full reassessment surgery and taken the relative hormones.

    Louisiana law, by way of example, states that the student-athlete is eligible to compete in the reassigned gender when, among other procedures, “surgical anatomical changes have been completed, including external genitalia changes and gonadectomy.” They even demand that “legal recognition of the sex reassignment has been conferred with all the proper governmental agencies (Driver’s license, voter registration, etc.).”

    Meanwhile, in ultra-liberal states, like California, Connecticut and Colorado, public schools are prohibited from discriminating on the basis of gender identity and gender expression. Now with Biden’s executive order on gender identity and sexual orientation in effect, schools are even legally required to let transgender females use the bathroom and changing facilities that match their gender identity, thereby invading the privacy of female students both on the field and in the locker room.

    ​Clearly, what needs to happen in order to ensure fairness and safety on the playing field (and in the locker room) is for more professional athletes to speak out on this alarming trend. One such brave woman is Czech-born American tennis star, Martina Navratilova, who is among a group of female athletes that launched the Women’s Sports Policy Working Group, which operates according to the idea that “if sports were not sex-segregated, female athletes would rarely be seen in finals or on victory podiums.”

    The 18-time winner of the Grand Slam title opposed a situation where “trans men and women, just based on their self-id, would be able to compete with no mitigation … that clearly would not be a level playing field.”

    Unfortunately, it appears that the IOC, by permitting Laurel Hubbard the right to compete alongside biological females, has taken a radically different view and approach on the matter, and this decision has all the potential to set back women sports by decades, if not make it altogether redundant.

    Speak up now, ladies, or forever forfeit your rightful place on the Olympic podium.

    Tyler Durden
    Thu, 06/24/2021 – 22:05

  • How Many Cups Of Coffee Do Americans Drink Each Day?
    How Many Cups Of Coffee Do Americans Drink Each Day?

    According to the Statista Global Consumer Survey, drinking two to three cups each day is the most common coffee consumption pattern among Americans.

    44 percent of U.S. adults said that they drank this many 7 oz. cups per day on average.

    The second most common answer – which will make many coffee lovers shake their heads in disbelief – was one cup or no coffee at all. 26 percent said they fell into that category.

    In fact, as Katharina Buchholz notes in the latest installment of the Statista survey, only 65 percent of Americans listed coffee as a beverage they regularly consumed.

    Infographic: How Many Cups of Coffee Do Americans Drink Each Day? | Statista

    You will find more infographics at Statista

    The most popular type of coffee in the U.S. is good old drip coffee, with 63 percent saying they consumed it. 22 percent of Americans said they drank iced coffee, followed by instant coffee (18 percent) in third place. 50 percent of American adults agreed with the statement “coffee is pure pleasure to me”.

    Tyler Durden
    Thu, 06/24/2021 – 21:45

  • How Fiat Money Changes Culture
    How Fiat Money Changes Culture

    Authored by Stephan Livera via The Mises Institute,

    Can the type of money used change the culture of a society?

    This might seem like an absurd proposition, but it is supported by the arguments of proponents of the Austrian school of economics. 

    First, let’s contextualize the importance of sound money as opposed to fiat money. Mises notes in The Theory of Money and Credit: “It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments.“

    Fiat money has never arisen through purely voluntary market actions. It has always been coercively imposed via interventions such as legal tender laws, capital gains tax laws, central banking, laws permitting fractional reserve banking, government bailout guarantees, etc. This causes a degeneration in the quality of money used by society. But are there cultural consequences of this?

    To see the cultural consequences, we must first understand the pivotal role money and prices play in coordinating production across society. Entrepreneurs must act under uncertainty to gather the required resources to offer their goods and services. And yet money, their unit of account, for measuring profit and loss, is being manipulated by the government. Money is created as new loans are issued by commercial and retail banks, and the first recipients of that money benefit at the expense of late recipients. 

    Using money with continual inflation encourages short termism and haste. We live more like animals in the wild. Animals in the wild care mostly about their next meal, rather than thinking, planning, and building for the long term as humans can do when we’re at our best.

    Consider the counterfactual world of living under sound money, chosen by the market.

    In this world, how does the state fund large programs? It must openly tax citizens, and for this, politicians pay a high price in lost popularity, and risk losing their next election. Instead of explicit taxation, politicians inside the government will prefer to use more hidden forms of funding for their programs. In order to do this, they must first remove the check of sound money. 

    Going one step further, the creation and enforcement of fiat money enables larger and more centralized government. Large government programs become possible that were not possible or sustainable under a market-chosen, sound money standard. 

    Consider the impact of profligate spending under a market-chosen monetary standard. In the past, this meant that governments spending big and living large were subject to net gold outflows to other countries. 

    While many like to think of government programs and welfare statism as a “safety net” for society, consider that these programs fundamentally drive the wrong behaviors. Where historically, non-government-based mutual-aid societies promoted a culture of self-reliance and thrift, government welfare states promote the opposite, the end result being that government programs remove the safeguards that a market society would have. In this way, fiat money frees people from the prior “restraints” of polite society, with expectations for productive and civil behavior broken. 

    Freed of prior constraints that families, religion, and communities used to impose, people often turn to more short-term gratification. They may engage in more reckless behavior that previously would have had economic consequences, such as the cost of raising children.

    Fiat inflation forces people to invest in just about anything rather than save in fiat cash, driving more money and debt as leverage through the financial services sector than otherwise would be the case. With cheap fiat debt, governments may more cheaply engage in warfare or sustain warfare for longer than they otherwise could have. Cheap fiat debt essentially provides the government with command over more of society’s resources than it otherwise would have had. 

    For readers interested in learning more, I highly recommend reading Jörg Guido Hülsmann’s The Ethics of Money Production, and watching his lecture here on the Mises Institute YouTube channel.

    How could this situation be rectified?

    If the world were to transition back to market-chosen money, such as gold or bitcoin, we would see the discipline of the free market reassert itself. Until then, let’s recognize the ways that society and culture have been greatly influenced by government fiat money. 

    Tyler Durden
    Thu, 06/24/2021 – 21:25

  • SEC Slows Robinhood IPO With Detailed Review Of Crypto-Trading Business
    SEC Slows Robinhood IPO With Detailed Review Of Crypto-Trading Business

    It looks like the SEC is creating some problems for Robinhood as the company seeks to side-step the fallout from January’s meme-stock trading frenzy (and its decision to shut down trading in GME, AMC and other meme stocks, supposedly to meet requirements stipulated by its clearing house) on its way to a multibillion-dollar IPO.

    Robinhood, which had hoped to go public this month, has seen its plans for a listing stymied by nosey regulators asking detailed questions about the company’s prospectus, specifically its plans regarding the expansion of its cryptocurrency-trading business.

    Over the past month, reports of an intensifying crackdown in China and fears about further ransomware attacks and other use-cases for organized criminal activity have prompted American regulators to reconsider their relatively liberal stance toward crypto.

    Already, the deluge of SPAC deals has created a backlog at the SEC which is taking longer to review prospective deals. Agency staff have warned corporate lawyers that it may take up to 30 days to review paperwork for SPACs, with an additional two weeks tacked on for any changes or amendments.

    For traditional IPOs, the wait could be even longer.

    A listing for Robinhood could still arrive this summer, Bloomberg said. The timeline has already slipped to July.

    The U.S. Securities and Exchange Commission has been asking Robinhood about its growing cryptocurrency business, one of the people said, asking not to be identified because the matter is private.

    While a listing might come this summer, the popular trading app’s plans could also slip into the fall, one of the people said. The company aims to reveal its financials as soon as possible and to go public as soon as the SEC finishes its review, they said.

    Robinhood first rolled out cryptocurrency trading in 2018, but the service has been plagued by objections from regulators and occasional crashes (not unlike its equity and equity derivatives trading). Crypto prices have been on a wild ride so far this year, with bitcoin recently rebounding above $35K after tumbling below $30K for the first time in…two weeks.

    The firm first filed its S-1 in March, with a target of going public in June, which isn’t going to happen, the company says.

    As the SEC breaks Robinhood’s stones while allowing dozens of shady SPAC deals pass with nary a peep, one can’t help but wonder whether this headline is a weak attempt at CYA for the regulator, which has become notoriously behold to the corporate interests it’s supposed to police (just look at the astounding leniency granted to Elon Musk).

    A few days ago, we reported that the retail trading boom that revolutionized markets last year shows no signs of slowing.

    At this point, it seems unlikely that some lowly regulator will come forward and try to stop Vlad Tenev from cementing his multibillionaire status.

    In other news, Robinhood said Thursday that it wants the SEC to allow sub-penny pricing on exchanges. The new rule would help create tighter spreads (marginally, to be sure) for Robinhood’s clients (and the clients of other firms), the company argued, while also helping close a gap between the exchanges and private market-makers. The firm also just rolled out its IPO Access program in the US, which it claims will allow retail traders to get in on new offerings at the listing price.

    Tyler Durden
    Thu, 06/24/2021 – 21:05

  • How Energy Transition Models Go Wrong
    How Energy Transition Models Go Wrong

    Authored by Gail Tverberg via Our Finite World blog,

    I have written many posts relating to the fact that we live in a finite world. At some point, our ability to extract resources becomes constrained. At the same time, population keeps increasing. The usual outcome when population is too high for resources is “overshoot and collapse.” But this is not a topic that the politicians or central bankers or oligarchs who attend the World Economic Forum dare to talk about.

    Instead, world leaders find a different problem, namely climate change, to emphasize above other problems. Conveniently, climate change seems to have some of the same solutions as “running out of fossil fuels.” So, a person might think that an energy transition designed to try to fix climate change would work equally well to try to fix running out of fossil fuels. Unfortunately, this isn’t really the way it works.

    In this post, I will lay out some of the issues involved.

    [1] There are many different constraints that new energy sources need to conform to.

    These are a few of the constraints I see:

    • Should be inexpensive to produce

    • Should work with the current portfolio of existing devices

    • Should be available in the quantities required, in the timeframe needed

    • Should not pollute the environment, either when created or at the end of their lifetimes

    • Should not add CO2 to the atmosphere

    • Should not distort ecosystems

    • Should be easily stored, or should be easily ramped up and down to precisely match energy timing needs

    • Cannot overuse fresh water or scarce minerals

    • Cannot require a new infrastructure of its own, unless the huge cost in terms of delayed timing and greater materials use is considered.

    If an energy type is simply a small add-on to the existing system, perhaps a little deviation from the above list can be tolerated, but if there is any intent of scaling up the new energy type, all of these requirements must be met.

    It is really the overall cost of the system that is important. Historically, the use of coal has helped keep the overall cost of the system down. Substitutes need to be developed considering the overall needs and cost of the system.

    The reason why the overall cost of the system is important is because countries with high-cost energy systems will have a difficult time competing in a world market since energy costs are an important part of the cost of producing goods and services. For example, the cost of operating a cruise ship depends, to a significant extent, on the cost of the fuel it uses.

    In theory, energy types that work with different devices (say, electric cars and trucks instead of those operated by internal combustion engines) can be used, but a long delay can be expected before a material shift in overall energy usage occurs. Furthermore, a huge ramp up in the total use of materials for production may be required. The system cannot work if the total cost is too high, or if the materials are not really available, or if the timing is too slow.

    [2] The major thing that makes an economy grow is an ever increasing supply of inexpensive-to-produce energy products.

    Food is an energy product. Let’s think of what happens when agriculture is mechanized, typically using devices that are made and operated using coal and oil. The cost of producing food drops substantially. Instead of spending, for example, 50% of a person’s wages on food, the percentage can gradually drop down to 20% of wages, and then to 10% of wages for food, and eventually even, say, to 2% of wages for food.

    As spending on food falls, opportunity for other spending arises, even with wages remaining relatively level. With lower food expenditures, a person can spend more on books (made with energy products), or personal transportation (such as a vehicle), or entertainment (also made possible by energy products). Strangely enough, in order for an economy to grow, essential items need to become an ever decreasing share of everyone’s budget, so that citizens have sufficient left-over income available for more optional items.

    It is the use of tools, made and operated with inexpensive energy products of the right types, that leverages human labor so that workers can produce more food in a given period of time. This same approach also makes many other goods and services available.

    In general, the less expensive an energy product is, the more helpful it will be to an economy. A country operating with an inexpensive mix of energy products will tend to be more competitive in the world market than one with a high-cost mix of energy products. Oil tends to be expensive; coal tends to be inexpensive. This is a major reason why, in recent years, countries using a lot of coal in their energy mix (such as China and India) have been able to grow their economies much more rapidly than those countries relying heavily on oil in their energy mixes.

    [3] If energy products are becoming more expensive to produce, or their production is not growing very rapidly, there are temporary workarounds that can hide this problem for quite a number of years.

    Back in the 1950s and 1960s, world coal and oil consumption were growing rapidly. Natural gas, hydroelectric and (a little) nuclear were added, as well. Cost of production remained low. For example, the price of oil, converted to today’s dollar value, was less than $20 per barrel.

    Once the idyllic 1950s and 1960s passed, it was necessary to hide the problems associated with the rising cost of production using several approaches:

    • Increasing use of debt – really a promise of future goods and services made with energy

    • Lower interest rates – permits increasing debt to be less of a financial burden

    • Increasing use of technology – to improve efficiency in energy usage

    • Growing use of globalization – to make use of other countries’ cheaper energy mix and lower cost of labor

    After 50+ years, we seem to be reaching limits with respect to all of these techniques:

    • Debt levels are excessive

    • Interest rates are very low, even below zero

    • Increasing use of technology as well as globalization have led to greater and greater wage disparity; many low level jobs have been eliminated completely

    • Globalization has reached its limits; China has reached a situation in which its coal supply is no longer growing

    [4] The issue that most people fail to grasp is the fact that with depletion, the cost of producing energy products tends to rise, but the selling prices of these energy products do not rise enough to keep up with the rising cost of depletion.

    As a result, production of energy products tends to fall because production becomes unprofitable.

    As we get further and further away from the ideal situation (oil less than $20 per barrel and rising in quantity each year), an increasing number of problems crop up:

    • Both oil/gas companies and coal companies become less profitable.

    • With lower energy company profits, governments can collect less taxes from these companies.

    • As old wells and mines deplete, the cost of reinvestment becomes more of a burden. Eventually, new investment is cut back to the point that production begins to fall.

    • With less growth in energy consumption, productivity growth tends to lag. This happens because energy is required to mechanize or computerize processes.

    • Wage disparity tends to grow; workers become increasingly unhappy with their governments.

    [5] Authorities with an incorrect understanding of why and how energy supplies fall have assumed that far more fossil fuels would be available than is actually the case. They have also assumed that relatively high prices for alternatives would be acceptable.

    In 2012, Jorgen Randers prepared a forecast for the next 40 years for The Club of Rome, in the form of a book, 2052, with associated data. Looking at the data, we see that Randers forecast that world coal consumption would grow by 28% between 2010 and 2020. In fact, world coal consumption grew by 0% in that period. (This latter forecast is based on BP coal consumption estimates for 2010 and 2019 from BP’s Statistical Review of World Energy 2020, adjusted for the 2019 to 2020 period change using IEA’s estimate from its Global Energy Review 2021.)

    It is very easy to assume that high estimates of coal resources in the ground will lead to high quantities of actual coal extracted and burned. The world’s experience between 2010 and 2020 shows that it doesn’t necessarily work out that way in practice. In order for coal consumption to grow, the delivered price of coal needs to stay low enough for customers to be able to afford its use in the end products it provides. Much of the supposed coal that is available is far from population centers. Some of it is even under the North Sea. The extraction and delivery costs become far too high, but this is not taken into account in resource estimates.

    Forecasts of future natural gas availability suffer from the same tendency towards over-estimation. Randers estimated that world gas consumption would grow by 40% between 2010 and 2020, when the actual increase was 22%. Other authorities make similar overestimates of future fuel use, assuming that “of course,” prices will stay high enough to enable extraction. Most energy consumption is well-buried in goods and services we buy, such as the cost of a vehicle or the cost of heating a home. If we cannot afford the vehicle, we don’t buy it; if the cost of heating a family’s home rises too high, thrifty families will turn down the thermostat.

    Oil prices, even with the recent run-up in prices, are under $75 per barrel. I have estimated that for profitable oil production (including adequate funds for high-cost reinvestment and sufficient taxes for governments), oil prices need to be over $120 per barrel. It is the lack of profitability that has caused the recent drop in production. These profitability problems can be expected to lead to more production declines in the future.

    With this low-price problem, fossil fuel estimates used in climate model scenarios are almost certainly overstated. This bias would be expected to lead to overstated estimates of future climate change.

    The misbelief that energy prices will always rise to cover higher costs of production also leads to the belief that relatively high-cost alternatives to fossil fuels would be acceptable.

    [6] Our need for additional energy supplies of the right kinds is extremely high right now. We cannot wait for a long transition. Even 30 years is too long.

    We saw in section [3] that the workarounds for a lack of growing energy supply, such as higher debt and lower interest rates, are reaching limits. Furthermore, prices have been unacceptably low for oil producers for several years. Not too surprisingly, oil production has started to decline:

    Figure 1 – World production of crude oil and condensate, based on data of the US Energy Information Administration

    What is really needed is sufficient energy of the right types for the world’s growing population. Thus, it is important to look at energy consumption on a per capita basis. Figure 2 shows energy production per capita for three groupings:

    • Tier 1: Oil and Coal

    • Tier 2: Natural Gas, Nuclear, and Hydroelectric

    • Tier 3: Other Renewables, including Intermittent Wind and Solar

    Figure 2 World per capita energy consumption by Tier. Amounts through 2019 based on BP Statistical Review of World Energy 2020. Changes for 2020 based on estimates provided by IEA Global Energy Review 2021.

    Figure 2 shows that the biggest drop is in Tier 1: Coal and Oil. In many ways, coal and oil are foundational types of energy for the economy because they are relatively easy to transport and store. Oil is important because it is used in operating agricultural machinery, road repair machinery, and vehicles of all types, including ships and airplanes. Coal is important partly because of its low cost, helping paychecks to stretch further for finished goods and services. Coal is used in many ways, including electricity production and making steel and concrete. We use coal and oil to keep electricity transmission lines repaired.

    Figure 2 shows that Tier 2 energy consumption per capita was growing rapidly in the 1965 to 1990 period, but its growth has slowed in recent years.

    The Green Energy sources in Tier 3 have been growing rapidly from a low base, but their output is still tiny compared to the overall output that would be required if they were to substitute for energy from both Tier 1 and Tier 2 sources. They clearly cannot by themselves power today’s economy.

    It is very difficult to imagine any of the Tier 2 and Tier 3 energy sources being able to grow without substantial assistance from coal and oil. All of today’s Tier 2 and Tier 3 energy sources depend on coal and oil at many points in the chain of their production, distribution, operation, and eventual recycling. If we ever get to Tier 4 energy sources (such as fusion or space solar), I would expect that they too will need oil and/or coal in their production, transport and distribution, unless there is an incredibly long transition, and a huge change in energy infrastructure.

    [7] It is easy for energy researchers to set their sights too low.

    [a] We need to be looking at the extremely low energy cost structure of the 1950s and 1960s as a model, not some far higher cost structure.

    We have been hiding the world’s energy problems for years behind rising debt and falling interest rates. With very high debt levels and very low interest rates, it is becoming less feasible to stimulate the economy using these approaches. We really need very inexpensive energy products. These energy products need to provide a full range of services required by the economy, not simply intermittent electricity.

    Back in the 1950s and 1960s, the ratio of Energy Earned to Energy Investment was likely in the 50:1 range for many energy products. Energy products were very profitable; they could be highly taxed. The alternative energy products we develop today need to have similar characteristics if they truly are to play an important role in the economy.

    [ b] A recent study says that greenhouse gas emissions related to the food system account for one-third of the anthropogenic global warming gas total. A way to grow sufficient food is clearly needed.

    We clearly cannot grow food using intermittent electricity. Farming is not an easily electrified endeavor. If we do not have an alternative, the coal and oil that we are using now in agriculture really needs to continue, even if it requires subsidies.

    [c] Hydroelectric electricity looks like a good energy source, but in practice it has many deficiencies.

    Some of the hydroelectric dams now in place are over 100 years old. This is nearing the lifetime of the concrete in the dams. Considerable maintenance and repair (indirectly using coal and oil) are likely to be needed if these dams are to continue to be used.

    The water available to provide hydroelectric power tends to vary greatly over time. Figure 3 shows California’s hydro electricity generation by month.

    Figure 3. California hydroelectric energy production by month, based on data of the US Energy Information Administration.

    Thus, as a practical matter, hydroelectric energy needs to be balanced with fossil fuels to provide energy which can be used to power a factory or heat a home in winter. Battery storage would never be sufficient. There are too many gaps, lasting months at a time.

    If hydroelectric energy is used in a tropical area with dry and wet seasons, the result would be even more extreme. A poor country with a new hydroelectric power plant may find the output of the plant difficult to use. The electricity can only be used for very optional activities, such as bitcoin mining, or charging up small batteries for lights and phones.

    Any new hydroelectric dam runs the risk of taking away the water someone else was depending upon for irrigation or for their own electricity generation. A war could result.

    [d] Current approaches for preventing deforestation mostly seem to be shifting deforestation from high income countries to low income countries. In total, deforestation is getting worse rather than better.

    Figure 4. Forest area percentage of land area, by income group, based on data of the World Bank.

    Figure 4 shows that deforestation is getting rapidly worse in Low Income countries with today’s policies. There is also a less pronounced trend toward deforestation in Middle Income countries. It is only in High Income countries that land areas are becoming more forested. In total (not shown), the forested area for the world as a whole falls, year after year.

    Also, even when replanting is done, the new forests do not have the same characteristics as those made by natural ecosystems. They cannot house as many different species as natural ecosystems. They are likely to be less resistant to problems like insect infestations and forest fires. They are not true substitutes for the forest ecosystems that nature creates.

    [e] The way intermittent wind and solar have been added to the electric grid vastly overpays these providers, relative to the value they add to the system. Furthermore, the subsidies for intermittent renewables tend to drive out more stable producers, degrading the overall condition of the grid.

    If wind and solar are to be used, payments for the electricity they provide need to be scaled back to reflect the true value that they add to the overall system. In general, this corresponds to the savings in fossil fuel purchases that electricity providers need to make. This will be a small amount, perhaps 2 cents per kilowatt hour. Even this small amount, in theory, might be reduced to reflect the greater electricity transmission costs associated with these intermittent sources.

    We note that China is making a major step in the direction of reducing subsidies for wind and solar. It has already dramatically cut its subsidies for wind energy; new subsidy cuts for solar energy will become effective August 1, 2021.

    A major concern is the distorting impact that current pricing approaches for wind and solar have on the overall electrical system. Often, these approaches produce very low, or negative, wholesale prices for other providers. Nuclear providers are especially harmed by such practices. Nuclear is, of course, a low CO2 electricity provider.

    It seems to me that in each part of the world, some utility-type provider needs to be analyzing what the overall funding of the electrical system needs to be. Bills to individuals and businesses need to reflect these actual expected costs. This approach might avoid the artificially low rates that the current pricing system often generates. If adequate funding can be achieved, perhaps some of the corner cutting that leads to electrical outages, such as recently encountered in California and Texas, might be avoided.

    [8] When I look at the requirements for a successful energy transition and the obstacles we are up against, it is hard for me to see that any of the current approaches can be successful.

    Unfortunately, it is hard for me to see how intermittent electricity can save the world economy, or even make a dent in our problems. We have searched for a very long time, but haven’t yet found solutions truly worth ramping up. Perhaps a new “Tier 4 approach” might be helpful, but such solutions seem likely to come too late.

    Tyler Durden
    Thu, 06/24/2021 – 20:45

  • Canadian Housing Market "Gone Berserk" As Investors Stir Bubble Fears  
    Canadian Housing Market “Gone Berserk” As Investors Stir Bubble Fears  

    Housing market activity in Canada has become a speculative bubble that is further detached from fundamentals than ever before. Investors are piling into the market, building portfolios of homes as the Central Bank of Canada (BOC) keeps interest rates pinned to the floor since the beginning of the pandemic. 

    Brady McDonald, a real investor with more than 100 homes, told Bloomberg that his “net worth has obviously gone up a lot, just based on what’s happened this year, because the market’s gone berserk.” 

    McDonald began acquiring single-family homes in a small town called Barrie, located in Ontario, in 2015. Now his net worth is “in the millions” as the country’s real estate market is overheating. 

    Bloomberg data has ranked Canada as one of the bubbliest housing markets on the planet. 

    Source: Bloomberg 

    “We have a housing crisis here,” the investor said, where prices are up 40% in just the last year. “The demand for housing is not going down. So there’s always opportunity.”

    Investors have been on a buying spree, owning approximately a fifth of new mortgages in Canada. The same rate prompted a crackdown in the UK.

    Academics have begun the debate that investors have driven housing prices into bubble territory, making affordability to new homeowners impossible. 

    “The moment we want houses to be good investments is the moment we want prices to grow faster than local economies and local earnings,” said Paul Kershaw, a professor at the University of British Columbia and founder of Generation Squeeze, a group that supports issues important to young people, including cheap housing. “That’s a recipe for unaffordability.”

    The unaffordability issue has disrupted Canadians who have been told in life that owning a home is the best way to become financially sound. Many believe that a single-family detached house is the best place to start a family. 

    One of the most common problems is that investors are outbidding first-time homebuyers. This is because investors have cheap access to capital and are willing to pay well over the list price.

    The BOC told Bloomberg in an emailed statement that “determining the precise level at which investor activity should be a cause for concern is difficult and requires further study.” 

    Perhaps that level is now as runaway home price growth is observed in Toronto, Vancouver, Ottawa, and Montreal. 

    A very similar story is playing out in the US, where institutional investors have purchased homes by the thousands. 

    Even smaller investors complain about large institutions dabbling in real estate markets who say, “it’s hard to compete” with companies who are “prepared to pay ridiculous money over asking.” 

    What ultimately needs to happen to control this speculative mania is that the BOC should transition into a tightening cycle next year. Rate increases from the zero lower bound will give the central bank more firepower to fight the next downturn. Canadians have borrowed heavily to speculate in the housing market. The next rate hike cycle could pop the bubble. 

    Tyler Durden
    Thu, 06/24/2021 – 20:25

  • Von Greyerz: The Icarus Wax Of The Everything Bubble Is Melting
    Von Greyerz: The Icarus Wax Of The Everything Bubble Is Melting

    Authored by Egon von Greyerz via GoldSwitzerland.com,

    When will the wax melt that holds up the global economy? Hubris is driving humans and markets ever higher and closer to the sun. The higher everything goes, the greater the risk that the wax melts and the wings that are supporting the global economy just fall off and everything crashes to the ground.

    Investing successfully is primarily about managing risk rather than maximising profits. As we reach the end of the biggest bull market in history, investors feel so secure that risk has become an irrelevance.

    HOCUS POCUS SYSTEM – THE SAVIOUR OF STOCKS

    The Hocus Pocus system of finance has offered total downside protection for investors for 1/2 a century. The last big crash that affected a whole generation was the 1929 crash. After a 90% fall in the Dow, it took 1/4 of a century to recover to the 1929 high.

    But since Nixon caused the Hocus Pocus system to thrive from 1971, all major crashes have quickly retraced to new highs. The Dow has fallen 40-60% in 1973, 1987, 2000, 2008 and 2020. But instead of taking 25 years to recover like after the 1929 crash, no retracement since 1971 has taken more than 2 years.

    This is the beauty of Hocus Pocus finance. Through printing and credit expansion you create unlimited access to liquidity for the big investors. Virtually no funds reach ordinary people who need it but instead the Hocus Focus system rewards the Croesus investors which means the haves get more and the have nots become relatively much poorer.

    As the graphs below show, the bottom 50% hold 0.6% of corporate equities and Mutual Funds whilst the top 1% hold over 52%.

    Income inequality is also expanding with the top 10% of earners getting just below 50% of income. As the graph shows, Europe is more egalitarian.

    REVOLUTION, WIPEOUT OR BOTH

    The inequality of wealth and income can correct itself in two distinct ways.

    Either a revolution like in France in the late 1700s or Russia in the early 1900s. This would lead to a general fall in economic activity and redistribution of wealth in a new Marxist system. Asset markets would crash leading to everyone being worse off until Marxism is rejected by the people. In Russia that process took around 70 years last time.

    The other way is a collapse of asset markets leading to a massive wipeout of the wealth of the rich. The poor would also be worse off due to the general deterioration in the economy.

    THE WAX OF THE EVERYTHING BUBBLE IS MELTING

    So coming back to when the wax holding the world economy precariously together actually melts, let’s return to the Greek mythology.

    Daedalus and his son Icarus were imprisoned by King Minos in the Labyrinth that Daedalus had built. The only way out was to fly and Daedalus came up with the idea to make bird wings that were attached to their bodies with wax. They managed to flee from the labyrinth using their wings. Icarus had been warned by his father not to fly too close to the sun as the wax would melt and he would crash. But carelessness and hubris couldn’t stop Icarus from reaching ever higher until the wax melted and he crashed to his death.

    As the Everything Bubble is flying closer to the sun, the risk of the wax melting is growing exponentially.

    The wax holding it all together needs a number of ingredients, to stick such as:

    • Confidence – even if false,

    • Hubris

    • Propaganda

    • Fake promises,

    • Zero or negative interest rates

    • Fake news

    • Manipulation

    • Corrupt financial system

    • Debasement of money and purchasing power

    • Fiscal deficits

    • Ever increasing debt & credit

    •  Unlimited money printing

    Take away one or two of these ingredients and the wax will start melting and the whole global economy crash to the ground.

    But who really cares about the wax that holds the world economy together. I and a few others have written about the problems we see and the risks we perceive. Also we discuss the consequences that will affect most people.

    But whilst some of us believe that our message is of vital importance to everyone, we are sadly only reaching a minuscule minority of people.  As the  income and wealth graphs show above, even in the Western world, most people have no assets to protect and an income that barely covers their daily outgoings.

    HOCUS POCUS SYSTEM CANNOT STOP MELTING OF WAX

    As I often stress normal people without major savings can still buy gold and silver for wealth preservation. With 1 gram of gold costing $60 and an ounce of silver $30 virtually everyone can put some savings into precious metals. If the Venezuelans had done that 20 years ago with very small money, that would have saved them from total destitution.

    I sometimes hear from people who are poor investors and even worse traders. These are people who are victims and never take responsibility for their own actions.

    Even worse, they buy at the top and sell at the bottom. And then they are experts in the most exact of all sciences, namely HINDSIGHT!

    “I should have bought Bitcoin at $10 or $100 instead of buying gold in 2011”.

    Sadly these are people who will never make money consistently on anything since they can’t take responsibility for their own actions.

    Also, they don’t comprehend that the primary purpose of holding gold or silver is to protect your wealth against the wax melting i.e. the massive risks of the everything bubble crashing to the ground

    Precious metals principal role is wealth preservation or insurance against a rotten financial system and a constant debasement of currencies until they reach ZERO as the table below shows.

    GOLD AND SILVER UPTREND IN TACT

    Technically, the precious metals are going through a minor correction which probably will not last much longer. The next move will be to $1,950 for gold on the way to $3,000 initially. Silver is likely to soon reach $30 on the way to $50 and beyond.

    These prices are probable medium term targets on the way to much higher levels as the currency system collapses.

    Holding gold and silver is imperative to protect against the next currency debasement which will be ruinous.

    Long term, gold looks extremely strong technically as the chart in this article shows. But I must stress again that investors should not focus on price but on long term insurance and wealth protection.

    INSTITUTIONAL GOLD DEMAND WILL DRIVE THE GOLD PRICE

    Another factor which will drive the gold price is institutional gold investing for primarily inflation protection purposes. The latest pension fund to buy physical gold and store it in private vaults outside the banking system is CPEV for the canton of Vaud. They have switched out of hedge funds and into $600 million of physical gold.

    Swiss institutions understand the importance of holding gold in physical form  outside the banking system rather than holding futures or gold ETFs.

    I have explained the dangers of holding gold ETFs in this article from last year.

    We are also advising clients not to hold gold in any bank, not even a Swiss Bank.

    GOLD OFFERS INSTANT LIQUIDITY

    What institutions appreciate with physical gold is that it represents instant liquidity.

    Over $180 billion of gold (mostly paper gold) is traded every day. Gold can be bought and sold around the clock at the quoted spot price plus a small margin for physical delivery.

    SWITZERLAND – A STRATEGIC GOLD HUB

    Switzerland is the primary gold hub of the world. Over 70% of all the gold bars in the world are refined in Switzerland. Gold is 29% 0f Swiss exports and thus strategically important.

    It is critical that investors have direct access to their own gold bars in the vault without passing through an intermediary as this would represent an undesirable counterparty risk.

    Also, any intermediary organising the purchase and storage of the gold should be a Swiss company. Holding gold in Switzerland organised by for example a US or UK company adds a layer of jurisdictional risk.

    All gold held in Swiss private vaults are subject to Swiss regulatory control and compliance. Gold which does not comply with the fiscal laws of the beneficial holder is not accepted by any vault.

    Swiss private gold vaults have no reporting requirements to any country. This protects the confidentiality of the holder.

    WORLD’S BIGGEST PRIVATE GOLD VAULT IN SWISS ALPS

    The vault in the video below is a Swiss owned private vault in the Swiss Alps. It is the biggest private gold vault in the world and the safest.

    Tyler Durden
    Thu, 06/24/2021 – 20:05

  • Natgas Futures Hit 29-Month High Amid Heat Wave
    Natgas Futures Hit 29-Month High Amid Heat Wave

    Natural gas futures climbed higher Thursday on track for a 29-month high as warmer weather and a rise in exports continue to drive demand. 

    Front-month gas futures NGc1 rose 9.9 cents, or 2.97%, to $3.432 per million British thermal units (mmBtu) by late afternoon Thursday, its highest level since January 2019. 

    The U.S. Energy Information Administration released its report on the state of the natgas inventories and said utilities added 55 billion cubic feet (bcf) of gas into storage last week. This is a much lower figure than the 66-bcf build analysts forecasted on Reuters polls. The primary reason for the low storage build among utilities is that power generators burned a tremendous amount of gas to keep Americans air conditioners on as a heat wave and megadrought transformed the western half of the U.S. into a furnace. 

    Last week, U.S. liquefied natural gas exports fell 9.9 billion cubic feet per day (bcfd) primarily due to short-term maintenance outages at Gulf Coast ports. However, exports have been soaring in the last couple of months, with averages of 10.8 bcfd in May and a record 11.5 bcfd in April. 

    Data provider Refinitiv projected gas demand, including exports would increase from 88.2 bcfd this week to 93.1 bcfd next week

    Turning to our note on Jan. 13, titled “Goldman Flips On NatGas, Warns Of Bullish “Perfect Storm,”” it seems as Goldman Sachs’ Samantha Dart was right about “significant upside to NYMEX gas prices this summer” as prices hit 29-month highs. 

    Tyler Durden
    Thu, 06/24/2021 – 19:45

  • The Forgotten History Of Banking (And What Happens Next)
    The Forgotten History Of Banking (And What Happens Next)

    Authored by Tuomas Malinen via GnSEconomics.com,

    Banking is at the heart of modern economic systems. The history of banking is also very long. The first banks appeared around 2,500 years ago, according to the latest historical research.

    As we have explained previously, banks generate most of the new money in circulation. They have also enabled major economic and societal upheavals, including the Industrial Revolution. Now, banks are central to the approaching change, or ‘battle’, within our economic systems.

    In this second blog of our financial history series, we go through the development of banking from that of early money exchangers to the rise of the ‘shadow banking’ sector, and we explain how the modern banking system operates.

    Photo by Brock Wegner on Unsplash

    The origins

    As we explained in the previous blog, banking practices developed in Ancient Greece, more precisely in the harbor city of Piraeus, where the local bankers, or trapezitai, took deposits and provided loans at the end of the fifth century BCE.

    Still, the first known banks that truly resembled modern banks operated in Imperial Rome. The argentarii, who appear in the Roman history in mid-fourth century BCE, took deposits, advanced money to clients, lent to bidders at auction and transferred money via bills of exchange. Due to the sophistication of this banking system, it is no surprise that Rome also experienced the first banking crises. More on this later.

    Simple merchant banks, usually in the service of the rulers, appeared to Europe in the 14th century. They were concentrated in financing the production of and trade in commodities. While the Chinese had invented bookkeeping, it only appeared at the center of western development and civilization through Italian banks and the scholastic work of Lucca Pacioli in 1494.  The first modern banks and payment systems arose from merchant fairs where commodity trades were settled.

    At the merchant fairs of Lyons, in the mid-1500s, merchants realized that the trustworthiness of well-known international merchants made it possible to pass their promissory notes (a promise to reimburse at a later date) to lesser-known local merchants to create a credit system, where bilateral promises between local and international merchants were paid out as liquid liabilities. These could then easily be assigned from creditor to creditor and, in essence, create money and credit.

    There, basically, the fractional reserve banking system was born.

    Fractional reserve banking

    In a fractional banking system only a small portion—or “fraction”—of the liabilities, like deposits, and assets, like loans, are covered by the reserves or the capital of a bank.

    A bank is an exceptional entity in the sense that while, for example, the output of a tractor company is tractors, the output of a bank is debt. This debt is given out as an IOU or, more precisely, as a bank deposit. Basically, the bank promises that whatever sum you may deposit there, you can get it back whenever you want; a contractual warranty of a sort.  

    The problem in fractional reserve banking system is that only a fractional share of this bank debt is covered at any point in time. So, a banking crisis will develop when the holders of bank debt—also known as “depositors”—demand to convert their claims to cash or other liquid forms of assets in excess of the reserves of the bank. In addition to deposits, this bank debt can be bonds, derivatives or interbank funding obtained from interbank markets.

    Reserves and central banks

    Before the creation of the Federal Reserve in 1914, banks in the U.S. established reserves by themselves through clearinghouses. Because banks wanted to earn interest on their reserves, they lent reserves to other banks. Reserves were re-lent and re-lent between banks until they eventually were lent out to earn enough to cover the interest promised on the reserves. These became known as “fictitious reserves”.  The Banking Act of 1933 prohibited interest payments on all demand deposits in the U.S.

    The inputs used to create bank debt include the capital of the bank, assets, and the regulatory environment, which dictates, for instance, what “reserve ratio” banks must meet.  Due to technological and financial innovations, the proportion of bank capital required as a factor for determining bank debt levels has declined, basically, ever since the creation of modern banks. So, the capital banks are required to hold against liabilities has declined similarly throughout the development of modern banking.

    As banking officials often consider strong capital levels as a source of stability, boosting the trustworthiness of a bank, it has been regulated since the 1980s. However, because banking crises are essentially about capital flight—either in physical or digital form—against bank liabilities, they cannot be stopped by high capital or reserve requirements.  This is something history shows very clearly.

    ‘Shadow banking

    Since the birth of banking, banks have been at the forefront of risk distribution through diversification and hedging. In the U.S., banks started to sell mortgage-backed debt obligations to investors in the 1960s.  The idea was to distribute risk outside the balance sheet of banks, which would make more funds available for lending. This is essentially the point, when ‘shadow banking’ was born.

    In the 1990s, diversification and hedging took a big leap forward when the credit default swap, CDS, was developed. In it, the risk of a loan is offset by a third party to which the bank—or, more generally, the issuer of a loan—pays a fee for the insurance.

    This new system of risk distribution through diversification and hedging was elevated to a new level after the derivatives team at J.P. Morgan invented a sort of shell-company, or SPV (“Special Purpose Vehicle”), to carry certain bank loans off the bank’s balance sheet. An SPV bundled risky loans and sold them on to investors according to calculated risk tranches, which investors then received interest income based on the riskiness of each tranche in their possession. The construct was called Bistro (“Broad index secured trust offering”).

    Further innovations included the synthetic collateralized debt obligation, or CDO. It was standardized, a more general version of the Bistro, and it could be constructed from not just CDS and other derivatives, but also from different debt securities, such as mortgages.

    The shadow banking sector can be said to consist of all financial entities that provide loans, but are not regulated under the standard banking regulatory framework.

    These include investment banks, SPVs, structured investment vehicles (SIVs), hedge funds, conduits and money market funds.

    The Global Financial Crisis of 2008 was caused by the cascading failures of ‘shadow banks’.

    Banks and liberty

    So, banks and banking have been around since the early days of human civilization.  

    Athenian banks decoupled finance from other enterprises making it easier to support distant maritime trade. Egypt set up state banks as early as the third century BCE, under Macedonian rule.  The Roman Empire developed the principles of modern banking, which were finalized in Europe in the Middle-Ages.

    Central banks, fairly new creations, started to dominate the banking system in the 1920s. Since then, their grip on the banking and financial systems has intensified. Through the issuance of central bank digital currencies, CBDCs, they could rise to rule the whole banking system and thus the economy. Alas, CBDCs are likely to become the single biggest threat to banking industry since its inception.

    Those who champion centralized control over the economy naturally applaud the idea of CBDCs. They may even see the banking industry as “evil” and welcome the “relief” brought by such centralized control. However, they also should acknowledge that modern commercial banks, and their ancestors, have been crucial in building our current standards of living. They should also remember the historical lessons, the horrors and the poverty of centrally-controlled economic systems, such as under communism.

    Thus, everyone should also ask themselves what the world would look like if a government entity, like a central bank, dictates who gets funding for what project? This is the road we are heading down with the issuance of CBDCs—and we fear the answer.

    Historical accounts are based on: William Goetzmann: Money Changes Everything: How Finance Made Civilization Possible; Gary B. Gorton: Misunderstanding Financial Crises: Why We Don’t See Them Coming; and Felix Martin: Money: The Unauthorized Biography. Gillian Tett: Fool’s Gold.

    *  *  *

    We provide in-depth analysis and forecasts on the risks haunting the global economy and the financial markets in our Q-Review reports and Deprcon Service. They are are available at our Store. See our Crisis Preparation -reports for guidelines how to prepare for the coming financial crash.

    Tyler Durden
    Thu, 06/24/2021 – 19:25

  • State Of Emergency Declared After Miami Condo Building Collapse; 99 Still Missing
    State Of Emergency Declared After Miami Condo Building Collapse; 99 Still Missing

    Update (1910ET): Search and rescue teams comb through tons of rubble of a collapsed condo building in Surfside, Florida, according to the NYTimes

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    The hunt for survivors has been ongoing for more than 12 hours since the Champlain Towers, a 12-story condo building, collapsed in the early morning hours. 

    “This process is slow and methodical,” Ray Jadallah, a Miami-Dade Fire Rescue assistant fire chief, said Thursday afternoon. “Anytime we started breaching parts of the structure, we get rubble falling on us.”

    Mayor Daniella Levine Cava of Miami-Dade County said officials accounted for 102 people who lived in the building, but 99 people remained missing. 

    So far, at least one person was killed in the collapse. Officials warned there could be more fatalities. 

    “Fire and rescue are in there with their search team, with their dogs. It’s a very dangerous site right now. Very unstable,” Miami-Dade Police Director Freddy Ramirez told reporters. “They’re in search-and-rescue mode, and they will be in that mode for a while. They are not quitting. They’re going to work through the night. They are not stopping.”

    Ramirez said the number of casualties and people missing is still not entirely known at the moment. 

    “I don’t want to set false expectations,” he said. “This is a very tragic situation for those families and for the community.”

    The Champlain Towers South had 130 units, approximately 80 of which were occupied. The building, which was constructed in 1981, was in the process of being recertified, with several repairs being done. Every forty years, a recertification process for condo buildings in the area is performed to see if it satisfies structural standards. 

    When news broke of the collapse, Shimon Wdowinski, a professor in the Department of Earth and Environment at Florida International University, remembered a study he completed on the condo building in the 1990s. He found the tower was sinking 2 millimeters a year in the 1990s. 

    “I looked at it this morning and said, ‘Oh my god.’ We did detect that,” he said.

    Wdowinski said his research is more than two decades old, and the sinking may have decreased or accelerated. 

    By late Thursday evening, Florida Gov. Ron DeSantis declared a state emergency declaration after the building collapse. 

    Earlier, DeSantis said, “brace for some bad news.” 

    Meanwhile, former President Trump has released a statement:

    My thoughts and prayers are with all of those impacted by the building collapse in Surfside, Florida. Thank you to the incredible First Responders and Law Enforcement for arriving so quickly on the job, as always. We wish Governor Ron DeSantis, and all of those representing the Great State of Florida concerning this tragic event, Good Luck and God Speed. I am with you all the way!

    With a third or more of the condo building completely pancaked, search and rescue teams will work through the night. 

    * * * 

    Update (1448ET): NBC6 Miami’s Ari Odzer said, “Director of @MiamiDadePD says 53 people have been accounted for, 99 are missing.” 

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    * * * 

    Update (1424ET): Reporters on the ground of the collapsed condo building in Surfside say a fire has broken out. 

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    * * * 

    Update (1321ET): Even after the partial collapse of Champlain Towers, where dozens of people are unaccounted for, some condo listings remain available. 

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    “This was built way back in 1981. Wonder what the shelf-life will be for all the recent “new urbanist” high rise constructions will be, with their cheap, flimsy materials and quirky designs,” Twitter account “Brandon Adamson” said. 

    On another note, we wonder if condo listings around the collapsed building will flood the market? 

    * * * 

    Update (1035ET): Bad news is beginning to trickle out from this morning’s condo building collapse in Surfside. Earlier, Florida Gov. Ron DeSantis said, “brace for some bad news.” 

    Now Miami-Dade County Commissioner Sally Heyman told CNN that at least 50 people are unaccounted for in the building collapse. 

    Axios reports 51 people are unaccounted for. Still, the numbers remain loose. 

    * * * 

    Update (1010ET):  Florida Gov. Ron DeSantis has told the press to “brace for some bad news” following the condo building collapse in Surfside early Thursday morning. 

    * * * 

    Update (0950ET): Absolutely stunning video of the condo collapse in Surfside, Florida, has been posted on Twitter via “Andy Slater.” 

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    Here’s a GIF of the video, just in case the post is taken down. 

    * * * 

    Update (0810ET): Mayor of Surfside, Florida, the location of the condo collapse, spoke with CBS News, he said: 

    “We’re all just scratching our heads trying to imagine what in the world could have happened… It looks like an earthquake.”

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    Twitter user “John Cardillo,” says he spoke with “one of the first responders at the building collapse on Miami Beach/Surfside and initial working theory is a sinkhole.”

    Cardillo added: “Having lived down here 17 years I’ve heard more than a few architects and engineers express concern about this exact thing.”

    * * * 

    Update (0714ET): An update on the beachfront condo tower collapse in the Miami-area town of Surfside via AP News says there is no word on “casualties or details of how many people lived in the building.”

    Authorities have said, “the entire backside of the building has collapsed.” 

    * * * 

    A shocking report from Miami, Florida, early Thursday, of a condo building collapse, where at least nine people were taken to various local hospitals, according to CBS Miami

    Miami-Dade Rescue Fire tweeted that an 80 unit condo building in a 12-story tower in the town of Surfside, part of Champlain Towers, experienced a “partial collapse.” 

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    Reasons for the building’s collapse are not yet known. 

    Here’s a skycam footage of the collapse. 

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    Scenes on the ground are stunning. 

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    Here’s the video from within the building. 

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    … and this all plays into aging private and public buildings and infrastructure across the country are in need of serious repair. 

    Tyler Durden
    Thu, 06/24/2021 – 19:08

  • Gun Sanctuary Movement Erupts, 61% of US Counties Now Protect Second Amendment
    Gun Sanctuary Movement Erupts, 61% of US Counties Now Protect Second Amendment

    One of the most important stories of the year, so far, is the massive surge in Second Amendment sanctuaries at the state, county, and local levels, entirely ignored by liberal media. 

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    According to Noah Davis of sanctuarycounties.com“1,930 counties that are protected by Second Amendment Sanctuary legislation at either the state or county level… this represents 61.39% of all of the counties in the United States of America.” 

    The mainstream media seems to be ignoring the Second Amendment Sanctuary movement because they’re only focused on Biden’s administration war on the National Rifle Association and the eventual banning or at least limitations of certain types of weapons. 

    As the movement grows and more and more counties become Second Amendment sanctuaries, President Biden’s war on guns might have hit a roadblock. 

    Days ago, we reported all 29 sheriffs in Utah have “pledged to do everything within their power to steadfastly protect the Second Amendment and all other individual rights guaranteed by the Constitution.” 

    White House press secretary Jen Psaki said in April that Biden might issue executive orders concerning gun control. 

    If Biden moves forward with his gun control dreams, people who are gun owners on both sides of the political aisle will be frustrated with the administration at a time when the country is descending into socio-economic chaos.  

    Tyler Durden
    Thu, 06/24/2021 – 19:05

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