- BRICS Will Change The World… Slowly
BRICS Will Change The World… Slowly
BRICS, the organization that is hardly noticed in the West, more than doubled its membership at the end of August – something is happening.
Introduction
It seems to be more a rule than an exception that the most important changes in the history of financial systems either go completely unnoticed or the vast part of the public – including financial experts and investors – does not grasp the importance of such transformations.
There are several examples for this claim: On December 23, 1913 the Senate passed and President Woodrow Wilson signed the Federal Reserve Act. The FED being as “federal” as “Federal Express”, a private bank whose shareholder register is not open to the public, rules the world since 1913. The date of December 23 was wisely chosen since the public and most politicians were too engaged in Christmas preparations to realize that this event would change the order of America and then the world forever.
When Richard Nixon, on August 15, 1971, “temporarily” closed the gold window, the Sunday afternoon TV shows got interrupted – among else the TV series “Bonanza” – to inform the American people of his decision. Although, this event was called the Nixon Shock, people did not seem to grasp the importance of this deed.
Lastly, the famously brilliant Henry Kissinger managed to make a deal with King Faisal of Saudi Arabia in 1974, which gave the US unlimited financial and, therefore, geopolitical power by creating the Petrodollar, banishing the danger stemming from a U.S. dollar that was backed by nothing, by backing it with U.S. military might in exchange for nearly unlimited investments in U.S. bonds.
Now, on August 22, BRICS, an organization, which does not gather a lot of attention in the Western media, announced that, apart from the five countries, whose initials gave it its name (Brazil, Russia, India, China, South Africa), BRICS welcomed six new members (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates) to join BRICS by January 1, 2024; therefore, BRICS becoming BRICS 11.
In this article, let us first quickly look at some facts & figures of BRICS 11. Then, we shall explore the history of the current financial system and it’s becoming in detail in order to appreciate its importance to U.S. power in the period from World War II to the present. Then we shall look at the way the U.S. abused the inherent privileges of this system, which is one reason that led to the current rise of BRICS. Finally, we shall try to answer the question whether the events of August 2023 have the potential to change the world or whether it will be one more fruitless endeavor of emerging market nations to stand-up against the Collective West.
Origin of BRICS
The term BRIC was coined by Goldman Sachs economist Jim O’Neill in a 2001 paper where he explained the future economic potential of Brazil, Russia, India and China.
In 2006, the BRIC countries met for the first time on the fringes of the UN-General Assembly in New York. A first formal meeting took place in Yekaterinburg in 2009. The aim of this initially loose community was to improve cooperation among its members. In 2010, South Africa joined, which means that this organization has since been called BRICS. This August the number of its members more than doubled and we shall call it now BRICS 11.
Figures
With regard to the most important economic indicators such as population, GDP (PPP), oil, natural gas and gold production, naked figures show that BRICS 11 is much stronger with regard to any of these indicators than G7 (Table 1).
These figures on their own should be a wake-up call to all the people, experts, politicians and investors who still seem to believe that it is sufficient to judge the financial world from a pure western perspective.
There are a few points I would like to draw the attention to of the readers regarding the way these naked figures could and should be read and interpreted. However, I am fully aware that I can only give you a glimpse at the reality and this exercise herein is of a very limited nature indeed.
Regarding GDP, I use purchase power adjusted figures. Why? – If you use the U.S. dollar as a tally to measure GDP, ask yourself the simple question: If I want to measure financial punch, does it matter whether, e.g., a Big Mac costs twice as much in U.S. dollar terms in one place than in the other? – In my opinion it does. The Big Mac Index should be reason enough to use PPP-adjusted figures when comparing GDP figures. The reason that Western outlets use the non-adjusted figures is pure marketing masking the debasement of the U.S. dollar and appearing stronger than one is – propaganda.
Regarding oil production figures, we should consider the following facts when assessing them: Firstly, although the U.S. is still the largest oil producer in the world with a share of about 18% of world production, the U.S. are also the largest oil consumer, using-up more than 20% of world consumption. Therefore, the U.S. are at this time not even able to cover their own consumption. Secondly, the large oil-producing members of BRICS 11 have a big influence – or better – control over OPEC. Therefore, BRICS 11 will also rule OPEC and, therefore, control the price and distribution of oil, which has not been given the nick name “Black Gold” without good reason. Thirdly, the production cost of U.S. oil are about 2.5 times higher than the production cost of Saudi oil.
Regarding natural gas one should note, that with the accession of Iran into BRICS, the two largest natural gas producers worldwide are joint members of BRICS: Russia and Iran. The largest non-BRICS gas producer is the (still) U.S. allied Qatar. BRICS is, therefore, also a powerhouse regarding natural gas indeed.
Regarding gold, it should shortly be mentioned that China and Russia are number 1 and 2 respectively regarding global gold production. Gold I mention in here since there is a rather good chance that – somewhere in the future – gold will again play a major role in future money systems, being the only manner to discipline central bankers who basically only did one thing since 1914 – printing money, debasing the U.S. dollar and cynically claiming to protect the currency. There are a lot of people in the West who actually claim that gold is a pet rock. These people do not understand the history of the past 4’000 years where gold was always king. The mere fact that Nixon abolished the gold standard in order to avoid bankruptcy is not a good argument against gold, but should be one in its favor.
Bretton Woods
In order to grasp the importance of the rather swift developments around BRICS and the rationale behind it, we shall look at the present system of the financial corset so imposed by the U.S. on the rest of the world. How did the U.S. achieve such dominance, how the hegemon behaved since, and finally the probability of a change of the system.
In 1944, the Americans reached the pinnacle of their power. They dominated the war effort together with the Russians, possessed 22,000 tons of gold, and the American industry produced 70% of the world’s manufactured goods. That is how complete dominance looks like: Military dominance, industrial dominance and gold – he who has the gold makes the rules.
On top of these facts, the Americans – as ever – being the undisputed masters of marketing, persuaded the Europeans to believe that it was actually the U.S. who liberated Europe from the evil Mr. Hitler. This was a diplomatic master stroke since cold facts and figures clearly showed that the Russians bore the largest chunk liberating Europe from the Nazis. The Russians decimated the German Wehrmacht in the East and – in this endeavor – killed around 5 times more German soldiers than all western allies together at the western front. This very ability of marketing and deception by the United States would serve them well until the present day.
Against such an overwhelming power, based on the three pillars of military might, industry and gold, the entire rest of the world – whether friend or foe – did not stand a chance to have any influence worth mentioning on influencing US intentions.
The Bretton Woods system was thus an emanation of absolute U.S. power and not – as portrayed in history books – a mechanism negotiated by the victorious powers of World War II in an atmosphere of friendly partnership.
Bretton Woods also sealed the demise of the British Empire by giving the Americans absolute power through pegging the currencies of 44 member states to the U.S. dollar, which in turn came out as the only currency of the world backed by gold.
The British Empire on which the sun finally set, proposed a system that involved the introduction of an international settlement currency called the Bancor. This idea by John Maynard Keynes foresaw the Bancor being used as an international unit of account to which participating currencies would have been pegged. The value of the Bancor itself was to be backed by gold. The gold-backed Bancor would have served as the unit of account. A fair system giving a chance to countries with merit, leading to a multipolar world. However, a multipolar world was the last thing the Americans intended to build – they wanted to become the hegemon and achieved their goal; the British had not a snowball’s chance in hell with their – in my opinion – great idea.
The Bretton Woods system gave all member states the contractual right to exchange the U.S. dollar they held for physical gold at a fix rate of U.S. dollar 35 per ounce of gold. Therefore, the Bretton Woods system should have forced the Americans to behave fiscally disciplined so that all member countries would keep confidence in the U.S. dollar believing that the U.S. dollar was indeed as good as gold.
The Americans, however, as the world power and hegemon, did not care one iota about the interests of their partners and, starting in the 1960s, printed more and more U.S. dollars to finance the Vietnam War and the Great Society project initiated by President Johnson. Both, the costs of the Vietnam War as well as the Great Society Project, the largest social program of the USA up to that time, whose main goal was to completely eliminate poverty and racial injustice, got completely out of hand.
The French were the first to realize that the U.S. dollar was losing value due to American money printing and began to exercise their contractual right to exchange their U.S. dollars for physical gold. Others followed suit. The Americans’ huge gold hoard melted away like butter in the sun. While the USA had more than 22,000 tons of gold at the end of the war, it was only over 8,000 tons in 1971.
On August 15, 1971, all major television stations in the U.S. interrupted their Sunday afternoon programming and President Nixon addressed the nation. He claimed that the speculators were waging an all-out war against the U.S. dollar and that he had thus ordered the U.S. dollar to be defended against these speculators. He informed the American people that he had instructed the treasury that the convertibility of the U.S. dollar into gold be temporarily suspended.
This all sounded very patriotic, but it was a complete lie. The speculators Nixon decried were actually member states of the Bretton Woods system who had realized that the Americans had ripped them off and were merely exercising their contractual right to exchange a debasing U.S. dollar for gold as stipulated in the Bretton Woods agreements. Nixon thus committed nothing less than breach of contract. The members of Bretton Woods were cheated and left sitting on their paper dollars being barred from getting their contractually stipulated gold.
Petrodollar – an exorbitant privilege
The deceived members of Bretton Woods decided not to hand over a declaration of war to the Americans, but kept silent like sheep and made a fist in their pockets. They probably believed that the Americans had dug their own grave by breaking the treaty.
However, they had not reckoned with the brilliant Henry Kissinger. The man was sent by Richard Nixon on Mission Impossible to save the Dollar. Kissinger convinced Saudi King Faisal to sell his oil exclusively in U.S. dollars and to invest the proceeds in American government securities. In return, smart Henry promised Faisal military protection. Other countries and commodities followed. Like Houdini, Kissinger freed the U.S. from a dire situation by making the impossible possible. Mission accomplished: The Petrodollar was born.
Now, if almost the entire world uses a single currency – the U.S. dollar – for almost all trading activities, all countries are obliged to hold this currency in reserve to pay their bills. These countries do not hold the reserves in cash, but invest them in American government securities to earn a return on their reserve holdings. In this way, the Americans managed to create the largest bond market in the world. It should be noted that the U.S. dollar is a product like any other, whose price is subject to the law of supply and demand. The U.S. dollar is not bought because it is a good investment in itself nor do most buyers purchase American products. No, U.S. dollars are required in order to buy nearly any product around the globe. This unjustifiably strengthens the price of the U.S. dollar. Why unjustifiably? – Other countries need to produce something worth buying that will hold up in the world market to keep their currencies valuable – the U.S. do not.
If now the whole world has to hold U.S. dollars and holds them in American government securities, the American government finances itself very cheaply because the price of American bonds does not depend on the strength of the American economy, but is based on compulsory buying due to the Petrodollar system – ingenious.
To put it bluntly, the U.S. could thus afford everything for over 50 years, because the bills were paid by others. Imagine a guy who goes shopping with a credit card that has not limit. He has a big mouth, buys everything he wants and never pays the credit card bill, but owes the money to those who sell him the goods, the latter never getting paid but receive an IOU only.
Only due to this – for the U.S. – brilliant system were the Americans able to increase their deficits to levels which can only be described as mind boggling: When Roland Reagan took office, US-debt was below 1 trillion, now it stands at over 33 trillion. Any other nation would have collapsed since nobody would dare to put money in such a black hole – but the whole world has to keep buying U.S. dollars due to the Petrodollar system. So, now we know how the U.S. could cultivate a lifestyle at the expense of others for over 50 years that in no way correlates with the performance of its economy. This great lifestyle is based only on the compulsion of the rest of the world to hold U.S. dollars. Giscard d’Estaing called this advantage an exorbitant privilege – rightly so.
Petrodollar, a geopolitical power tool abused by the U.S.
When it came to maintaining their privilege, the U.S. showed little squeamishness if anyone dared to break away from the Petrodollar regime. In recent history, two examples may be mentioned. We all remember the second Iraq war, when it was claimed that Saddam Hussein had weapons of mass destruction and that this put the USA in danger. Despite a unambiguous report from the UN that there were no weapons of mass destruction or even a single hint that they existed, the Americans attacked Iraq anyway in order to rid the world of the evil Saddam Hussein and bring peace and freedom to the Iraqis. A big lie. Weapons of mass destruction were not to be found in Iraq; half a million civilians were killed – their relatives were certainly thrilled about this kind of democratic gift that the U.S. forced upon them. The reason for the Iraq war was a different one: the Petrodollar. Saddam Hussein – we don’t need to dwell on his qualities as a human being here – wanted to sell his oil not only in U.S. dollars but also in Euros. That was his death sentence. Anyone who claims otherwise is either ill-informed, naive or lying. The facts are on the table.
President Gaddafi ruled Libya with a strong hand for decades. He made Libya the richest country in Africa with an excellent infrastructure. Whether Colonel Gaddafi was a do-gooder or not is also not a topic of this discussion. Gaddafi also had a plan to get away from the U.S. dollar: He wanted to create the Gold Dinar to free Africa from the shackles of the Petrodollar. This, too, did not go over well with the Americans. The result was a dead Gaddafi and a completely destroyed country.
These two examples bring us to the geopolitical might the U.S. draws from the Petrodollar. It is important to know that only the U.S. Federal Reserve can actually hold U.S. dollars. Every bank in the world that offers U.S. dollar accounts ultimately only has a booking entry for a U.S. dollar amount and a contractual claim against the US central bank. This also explains that any payment made in U.S. dollars goes through the U.S. Thus, the Americans can single-handedly cut off any party – be it a country or an individual – from the U.S. dollar or freeze or seize a party’s U.S. dollars holdings.
The U.S. has been using this tool systematically since World War II with countries deemed worthy of being punished or destroyed economically, e.g., the U.S. sanction Cuba for over 60 years or Iran for over 40 years.
This use of force was justified by the USA with flimsiest arguments like communism, terrorism, war crimes etc. Whether the accusations were or are true or not, is completely irrelevant, because the judge sits in the U.S. and the legal basis is force. Depending on the decade you live in, you gets the label of communist, terrorist, drug dealer if you have the audacity to disagree with the hegemon. And the lapdogs such as the European “rulers” agree with the empire and serve as its willing assistants.
When the Americans impose such sanctions, they regularly threaten any party that does business with the sanctioned party with sanctions as well. These so-called secondary sanctions work since most international business is transacted in U.S. dollars and the respective companies – banks, commodity buyers, industrial suppliers – have no choice, but to comply.
A lot of people in the world are of the opinion that the U.S. are not behaving fairly towards the rest of the world and completely abuse their exorbitant privilege they possess with the Petrodollar.
This concludes our journey into the world of the Petrodollar and brings us to the reasons why BRICS want to say goodbye to the U.S. dollar, as the U.S. has overstepped the mark. After the start of Russia’s invasion of Ukraine, the West, led by the U.S., not only slapped Russia with a flurry of sanctions that has no equal in history, but also froze the foreign currency reserves of the Russian Central Bank. Shortly thereafter, discussions began as to what the West intended to do with the funds. After the freeze, the robbery is now being discussed.
I strongly believe that with the freezing of the reserves of the Russian Central Bank, the U.S. triggered a reaction they did not expect. Huge nations like India and China became suddenly concerned that the freezing of Russian Central Bank assets set a precedent and could also happen to them, especially in the more than tensioned geopolitical situation of today where anybody who cares can easily observe that the strategy of weakening Russia is only a pre-course of the battle the U.S. will lead against China. This is also the reason that BRICS seems to speed-up the process. Apart from the current 11 members of BRICS around 40 further nations applied to join.
The trigger for the attack on the petrodollar
This concludes our journey into the world of the Petrodollar and brings us to the reasons why BRICS want to say goodbye to the U.S. dollar, as the U.S. has overstepped the mark. After the start of Russia’s invasion of Ukraine, the West, led by the U.S., not only slapped Russia with a flurry of sanctions that has no equal in history, but also froze the foreign currency reserves of the Russian Central Bank. Shortly thereafter, discussions began as to what the West intended to do with the funds. After the freeze, the robbery is now being discussed.
I strongly believe that with the freezing of the reserves of the Russian Central Bank, the U.S. triggered a reaction they did not expect. Huge nations like India and China became suddenly concerned that the freezing of Russian Central Bank assets set a precedent and could also happen to them, especially in the more than tensioned geopolitical situation of today where anybody who cares can easily observe that the strategy of weakening Russia is only a pre-course of the battle the U.S. will lead against China. This is also the reason that BRICS seems to speed-up the process. Apart from the current 11 members of BRICS around 40 further nations applied to join.
Consequences
We have now seen that the might of the U.S. and the fate of their economic well-being very much hinges on the Petrodollar and that the American leadership is very well aware of this fact, crushing anybody who dares not to use the U.S. dollar in international trade.
In my opinion, however, the U.S. government misjudges its own leverage to put fear into other nations at this time. The Petrodollar system only works as flawlessly as it did in the past as long as the U.S. were able to control the world with mere threats, which were – once in a while – kinetically executed as it was the case with Iraq and Libya. However, the embarrassing retreat from Afghanistan did not help the U.S. to be seen as the military force they like to portray. The loss of influence over Saudi Arabia and Iran is a painful geopolitical sign for U.S. foreign policy. The peace reached between Saudi Arabia and Iran and then between Saudi Arabia and Syria is not only an economic disaster to the U.S. regarding oil, but a geopolitical catastrophe regarding U.S. influence in the Middle East. With these peace makings, the U.S. have been deprived of their ability to play out the strategy of divide et impera since the U.S. cannot manipulate these countries anymore and it seems that the U.S. are not feared anymore. As a group the middle east nations became too powerful and do sell their commodities in other currencies other than the U.S. dollar – a scenario which was completely unthinkable just a few years ago.
BRICS 11 will have one immediate consequence: Their members will not use the U.S. dollar when trading among each other. This is a huge problem for the U.S. since these countries will reduce their U.S. dollar holdings and therefore, the refinancing of the U.S. budget becomes a problem, leading to higher interest rates, which will in turn lead to higher inflation and a further debasement of the U.S. dollar because what cannot be raised in the international markets has to be printed.
The much-discussed introduction of a new settlement currency based on gold within BRICS is not a necessary element to de-dollarization. Such introduction faces substantial hurdles also due to the heterogeneity of the BRICS members. However, the consequences for the U.S. dollar will be immediate and problematic to the U.S.
We explained the vast power of the United States since World War II. It is in my opinion a myth that the U.S. hegemony is based on its military might. Far more important is their financial hegemony which – at least until now – allowed the U.S. to more or less control the world with a relatively small army and 9 aircraft carrier groups who regularly, as a show of force, bomb the hell out of small countries which do not have air forces or air defense systems to stand a chance against U.S. force. The whole U.S. power is based on the Petrodollar – that is my belief.
Conclusion
There are authors who predict a quick demise of the Petrodollar and, therefore, of the American financial hegemony, which in turn will lead to the demise of the U.S. as the undisputed geopolitical world leader. Fact is, that a substantial part of the world will avoid using the U.S. dollar in trade. This development has already started. Therefore, the trend is set. However, it is in my opinion impossible to make any prediction as to the speed and timing of this trend. The proclaimed goal of BRICS and other organizations of the Global South, such as SCO, EEU, the Arab League and OPEC is to build a multipolar world. This seems to be a realistic goal. However, one should also take into consideration, that the larger these organizations become, the more heterogeneous they become and the difficulty of implementation of a common course of action will rise in line with the number of the respective members. Lastly, I would like to draw the attention to one historical fact a lot of people are not aware of. When the U.S. were at the peak of their might and forced Bretton Woods on the rest of the world, it still took 12 years until the U.S. dollar overtook the British pound in international trade in 1956. Some trends may be irreversible – but they take time.
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This article appeared in English in the Gloom, Boom & Doom Report by Swiss financial expert Marc Faber and in abbreviated form on September 21, 2023 in the print edition of Weltwoche and on Weltwoche Online in German.
Tyler Durden
Mon, 09/25/2023 – 00:20 - Traders Brace For China's Property Slump To Drag For Years
Traders Brace For China’s Property Slump To Drag For Years
By Charlie Zhu and Helen Sun, Bloomberg Markets Live reporters and analysts
Three things we learned last week:
1. A multi-year property downturn looks increasingly likely as a raft of rescue measures have fallen flat. Disappointing home sales in China’s largest cities suggest policy supports have failed to turn around buyer sentiment. New home sales for the first two weeks of September in tier-one cities fell from August’s levels.
The fallout from the property crisis is spreading to investment-grade developers. Moody’s Investors Service put China Jinmao Holdings Group Ltd. and China Vanke Co. on review for possible downgrade, while lowering the outlook for seven other builders to negative.
Onshore investors shared the view that China’s property sector is facing a multi-year downturn and are even less optimistic on the outlook for commercial properties, Zerlina Zeng, senior analyst at Credit Sights, wrote in a note. Considering China’s aging population and slowing urbanization, a mild contraction of home construction and sales is appropriate, Zeng wrote.
Efforts to relax home-buying restrictions have continued, with 11 cities announcing such measures in September alone, according to China Index Holdings. Among the latest came from Guangzhou, which shortened the period of time non-residents need to pay tax before they’re allowed to buy homes.
2. As property woes cast a pall over the broader market, policymakers are bolstering efforts to court investors. Key Chinese stock gauges hit new 2023 lows last week, before rebounding Friday. A Bloomberg Intelligence gauge of China’s developer shares posted its biggest weekly decline since mid-August, while an index of high-yield dollar bonds, mostly developers, halted a four-week advance.
As capital flees at a pace unseen in years, the People’s Bank of China vowed to stabilize trade and improve business environment in a forum attended by top global financial institutions. China is also considering relaxing the rules that cap foreign ownership in domestic publicly traded firms, people familiar with the matter said.
Whether those efforts will bear fruit remains unclear. While onshore shares saw its biggest inflow via the trading links on Friday since the end of July, market rebounds this year have barely lasted two weeks.
3. For all the skepticism engulfing Chinese markets, investor faith in the local government financing vehicles seems intact, at least for now. Their bond issuance onshore jumped 50% in August from July to notch the third-highest monthly tally on record.
While investors are betting that LGFVs will remain relatively safe in the near term given the central government’s efforts to tackle debt problems, there’s still a risk that when the music stops, someone will need to pay the price.
In the first eight months this year, 72% of LGFVs’ bond sales were used to pay back existing debt, analysts led by Liu Yu at GF Securities Co. wrote in a report, highlighting repayment pressure.
Tyler Durden
Sun, 09/24/2023 – 23:45 - Hunter Biden Wanted To Lobby Sen. Bob Menendez On Behalf Of Foreign Client
Hunter Biden Wanted To Lobby Sen. Bob Menendez On Behalf Of Foreign Client
Hunter Biden and pals wanted to lobby indicted Democratic New Jersey Senator Bob Menendez on behalf of a Spanish rail company after regulators scrutinized the firm, according to emails found on Hunter’s infamous laptop.
According to the Daily Caller, Spanish rail company Construcciones y Auxiliar de Ferrocarriles (CAF) hired Rosemont Seneca Partners, Hunter Biden’s investment firm, to lobby the Department of Transportation (DOT) and Amtrak in order to obtain government contracts on various railway contracts, the emails reveal.
In fact, Hunter and pals spoke with Menendez’s office about CAF, and even arranged for meetings between CAF and DOT officials.
CAF hired Rosemont Seneca in June 2010 and Hunter Biden’s firm appeared to discuss potential contracts with Amtrak shortly thereafter, according to the laptop archive. Biden and his associates also appeared to work with CAF on a letter sent by the Spanish ambassador to Amtrak advocating for the firm, emails show.
Hunter Biden sat on Amtrak’s board from July 2006 to February 2009 after he was nominated by former President George W. Bush. Prior to his Amtrak position, Biden worked in former President Bill Clinton’s commerce department and at a Washington, D.C., law firm. -Daily Caller
In July 2010, the month after they hired Rosemont Seneca, Amtrak awarded CAF’s US subsidiary a $298.1 million contract to make 130 new rail cars at an Elmira, New York plant. According to the report, Hunter’s firm appeared to have negotiated a “success fee” with CAF once the contract was announced.
“We may very well be because we don’t have anything in writing, but my point has been that we be firm, have Hunter call the CEO and congratulate him, say we are looking forward to working with CAF as they implement the Amtrak contract and then follow it up with a letter to memorialize the success fee arrangement,” said Hunter business partner Eric Schwerin in a July 27, 2010 email.
“IF and only if they push back let’s not let CAF make us think we didn’t do enough work to deserve the fee, as it is a minor percentage compared to what we would normally get for working on a project like this,” he added.
Rosemont asked for a “success fee” in excess of $800,000 for their work in securing the contract.
In early August 2010, Schwerin engaged Menendez’s office – holding a call with the Senator’s Chief-of-Staff, Daniel O’Brien.
“Talked to Danny re: CAF and he is looking into it,” said Schwerin. “He was very interested in finding out more mainly because of Menendez’s chairing the U.S.-Spain Council. Also, mentioned they are doing an event in NY on Sept. 24th (when we will be up there for CGI anyway) with the Spanish President if you want to attend. I’ll hold the date.”
O’Brien communicated with Hunter Biden on multiple occasions and the pair appeared to be friends. Hunter Biden emailed O’Brien in June 2010 about attending a Washington Nationals game during a conversation about his father, then-Vice President Joe Biden, attending a forum Menendez was holding with U.S. and Spanish officials, emails show.
Hunter Biden and O’Brien spoke again in March 2011 about the younger Biden stopping by Menendez’s office, emails on the laptop archive show.
“The Senator wants to talk to you,” O’Brien wrote March 9, 2011, and Hunter Biden proceeded to send O’Brien his new cellphone number.
“You’ll hear a message from the Senator if you haven’t already. He felt badly due to his mistaking you for Beau. You were kind to stop by,” O’Brien said later that day. -Daily Caller
In other emails, Hunter appeared frustrated that the “success fee” hadn’t materialized.
“I just tell people it’s a minimum of 250k just to talk to me– you don’t show up on a call or in a room unless we are getting 20% of the deal. No overhead- no offices no salaries,” Hunter said in an email exchange regarding CAF. “I cc’d Eric b/c he gave me A big talk on how CAF really wanted him on this and didn’t really care if I was there and how we wouldn’t have to do much work and the fact he didn’t read the contract regarding success fee.”
On September 14, 2010, Rosemont and lobbyists from the Democratic lobbying firm SKDK appeared to schedule a meeting with DOT official Peter Rogoff, after the firm was hired in early September to beef up CAF’s lobbying efforts.
“Further to Hunter’s earlier email, the meeting between CAF and Rogoff is scheduled for Friday at 3:30pm at DOT. They are working on their message to Rogoff between now and then and hope to be able to persuade him to delay implementation of the ruling,” Schwerin wrote in a Sept. 14, 2010 email.
“Mentioned Florida and Tomar said they are still focused on it and in fact he has gotten some calls from other consortia this week which he took as a good sign that CAF’s image has not been affected by this Houston issue. He wants our help on this still and asked that we talk after the Rogoff meeting on Friday to figure out a plan on Florida going forward,” he added.
Menendez on Friday resigned as chairman of the Senate Foreign Relations Committee following his felony indictment for allegedly accepting bribes and providing sensitive US government information to the Government of Egypt.
Read the rest here…
Tyler Durden
Sun, 09/24/2023 – 23:10 - Scarcity Is Not Enough
Scarcity Is Not Enough
By Marcel Kasumovich, Deputy CIO of Coinbase Asset Management
“We are not dependent on the ideas of a single person, but on the combined wisdom of thousands of people who are all thinking of the same problem, each doing their little bit to add to the great structure of knowledge that is gradually being erected.” Ernest Rutherford is recognized as the father of nuclear physics, and also for his appreciation that his contributions would be invisible over time if done right – others building on them would shine.
Perhaps this is the point of Satoshi Nakamoto’s anonymity. He doesn’t matter. For bitcoin and crypto asset technologies to work requires widespread adoption from technologists to regulators and users. We are all Satoshi if bitcoin rises to reach its full potential. Could the creators be bad operators? Yes, and transparency is the solution. Bitcoin started with a bit more than 1,000 lines of code and an open architecture for all to see. And it works, with nobody in charge.
3,847. Those are the number of consecutive days the bitcoin network has operated without interruption. It covers an eventful decade – a global recession, a collapse in commodity markets, a freezing of the US repo market, a global pandemic, the fastest US monetary tightening in four decades, country bans of bitcoin mining, and the crypto Great Depression. Over $100 trillion dollars have settled on the bitcoin protocol over its lifetime. Remarkable.
It’s also the type of data that earns bitcoin the reputation as the “gold standard” of crypto asset markets. Energy is a connective tissue between gold and bitcoin. Machines and energy are needed to produce gold. Devaluation of a currency that elevates the cost of production would be captured by the local price of gold. When central banks anchored monetary policy to gold, they were anchored to those real resource constraints.
The parallels to bitcoin mining – computers and power – are self-evident. Bitcoin’s nominal anchor, like gold, are real resources dominated by energy. Now, investors are keen to see whether the parallels of bitcoin to gold extend to the financial world. After all, the introduction of the gold exchange traded product (ETF) was coincident with a decade-long bullish trend. Even if just a coincidence, what’s clear is that the “bitcoin standard” has institutional engagement.
But there is one major difference – scarcity. When the price of gold is high relative to its cost of production, there is an incentive to hunt for new gold reserves to mine. Supply rises. It’s a law of any market. Bitcoin has no supply response. When profits are high, more computers enter the network, and the bitcoin algorithm makes mining more difficult. The energy cost of bitcoin rises, and profits fall to push weakest miners out of the network.
And difficulty has surged. It’s a sign of maturity. Bitcoin mining difficulty is up nearly 60% this year and is more than double from the 2022 highs in the price of bitcoin. The secular rise in bitcoin mining difficulty means the market is becoming more efficient, more institutional than previous cycles. Part of the surge in mining difficulty is computers entering the market in anticipation of “the halving,” collecting rewards before they are reduced by 50% next year.
Bitcoin inflation is cut by half every four years or so. There will only ever be 21 million in bitcoin supply, and 92% is already in circulation. April 16, 2024 is the approximate date of the next bitcoin halving, which will reduce the bitcoin inflation rate to less than 1%. Bitcoin miners and investors are excited by the historical precedent – the price of bitcoin rose 25% on average starting from two months before past halvings and 60% three months after the event.
Not bad. But this is only the fourth cycle – it’s a small sample. Figure 1 illustrates halving cycles for bitcoin and her “silver equivalent”, litecoin. The data are a visual reminder that scarcity isn’t enough to make prices rise. Litecoin enjoyed a sharp price spike before its most recent halving on August 2, 2023, then fizzled out. Scarcity without being useful is pointless. I produce plenty of music that is scarce…and valueless. There needs to be demand.
Where’s the demand for bitcoin? The most natural is as a payment rail. The numbers are staggering. The top 100 bitcoin transactions in the past 24 hours sum to nearly $10 billion at an average cost of less than 2 basis points. Spectacular technology. What’s built on top of the bitcoin protocol will define its user experience, like the Lightning Network that allows for virtually costless micro transactions. But similar to gold, its store of value could detract it from its utility.
Gold is a remarkable conductor of electricity – it’s not afraid of oxygen, unlike copper. But gold’s price has largely destroyed its industrial use-case. Could bitcoin see the same fate? Long-term holders of bitcoin are at record highs – reluctant sellers for all of the right reasons. But how can bitcoin become ubiquitous when the top 100 of owners control 15% of its value? It can’t. But it can play the role of gold in the crypto ecosystem – the standing benchmark. And that’s the top of the heap in crypto asset markets. Halving or not.
Tyler Durden
Sun, 09/24/2023 – 22:35 - Senator Shocked By Classified Briefing On Ukraine: Warhawks Want Blank Check With No Victory In Sight
Senator Shocked By Classified Briefing On Ukraine: Warhawks Want Blank Check With No Victory In Sight
“If there is some path to victory in Ukraine, I didn’t hear it today. I also heard that there’s going to be no end to the funding requests…”
Hawley went on to indicate that Americans will be asked to spend hundreds of billions more dollars in the region with an indefinite blank check in place to protect “US standing” on the world stage. Zelensky asked Biden and Congress for another $24 billion during his latest visit, stating that if Ukraine doesn’t get the aid, they will lose the war. The information at hand suggests that Ukraine is going to lose the war anyway.
Hawley also revealed that the public is being lied to about the war footing in the region and that Ukraine is definitely ‘not winning.’ This information confirms what many Americans already suspected, with 55% of the public now in opposition to more aid according to recent polls.
The corporate media blitzkrieg bombarding the populace with tales of imminent Ukrainian victory against Russian forces has lost its momentum and reality is starting to set in. Though, this did not stop journalists from trying to insert their list of debunked talking points into the interview as they seemed to debate Hawley more than ask him questions.
These debate points have long been a part of the media’s narrative but none of them have held water so far. Assertions of an inevitable “domino effect” leading to a Russian invasion of Europe should Ukraine fall are reminiscent of the same false claims made during the Vietnam War. There is no evidence to indicate Russia has plans to attack Poland or any other NATO member, with Putin obviously aware of the danger of nuclear conflict. As Hawley points out, the warhawks can’t have it both ways – They can’t claim that arming Ukraine has led to the degradation of Russian forces “on the cheap”, and at the same time claim that Russia is strong enough to then overrun Europe should Ukraine lose.
Another disturbing takeaway from this argument is the notion that Ukrainian citizens need to be used as cost effective human shields to prevent a wider war between Russia and NATO. It is the same claim that Zelensky has been making for the past year in order to frighten the western populace into throwing billions more dollars into Ukrainian coffers – “$100 billion and hundreds of thousands of Ukrainian lives will buy you the deaths of hundreds of thousands of Russians. A proxy war is lot cheaper than engaging in a direct war with them…”
But why entertain a war with Russia at all? A false choice has been presented – Either Americans support a proxy war against Russia, or be forced to fight a direct war.
So far, there has been no quantifiable benefits for the western public. It is clear, however, that there are elements of the establishment that desire an ongoing conflict with Russia. The anti-Russian rhetoric began in 2016 well before the war in Ukraine. Propaganda surrounding Donald Trump and “Russiagate” has been thoroughly debunked. Most of the “evidence” presented to prove that the 2016 election was manipulated by Russia was in fact fabricated by groups under the watch of Democrat operatives and some Neo-cons. Of course, the aftermath of the propaganda convinced a large portion of the public (most of them on the political left) that Russia was a predator lurking at their door waiting to strike.
Hawley also notes that while public attentions have been directed at Russia, China is a much more viable threat and any effort to prevent them from invading Taiwan would at this stage be futile. The truth is, neither war is a winnable prospect for the US or NATO given the economic instability at play; a conflagration between East and West would be disastrous for both sides, but western populations have the furthest to fall. Clearly there are people within our government that see this as a good thing as they continue to press geopolitical tensions closer and closer to WWIII.
Tyler Durden
Sun, 09/24/2023 – 22:00 - CDC Refuses To Release Updated Information On Post-COVID Vaccination Heart Inflammation
CDC Refuses To Release Updated Information On Post-COVID Vaccination Heart Inflammation
Authored by Zachary Stieber via The Epoch Times,
The U.S. Centers for Disease Control and Prevention (CDC) is refusing to release updated information on reported cases of myocarditis and pericarditis following COVID-19 vaccination.
COVID-19 vaccines can cause the inflammatory conditions, the CDC has confirmed previously.
The agency has regularly conveyed the number of post-vaccination myocarditis and pericarditis cases to the Vaccine Adverse Event Reporting System (VAERS), which it helps manage, as it has consulted with its advisers on updates to the vaccines.
But during a meeting on Sept. 12, the CDC did not mention VAERS data.
Asked for the information, a CDC spokesman pointed to a CDC study that covers data only through Oct. 23, 2022.
That study identified nine reports of myocarditis or pericarditis following vaccination with one of the bivalent COVID-19 vaccines, which were introduced in September 2022. Seven of the reports were verified by medical review.
Asked for more current data, the spokesman acknowledged the agency has it but is not making it public.
“When appropriate, the updated safety data will be published,” the spokesman told The Epoch Times in an email.
He did not answer when asked why the meeting was not an appropriate time.
“The CDC has acknowledged that heart inflammation is a complication of mRNA COVID-19 shots and, yet, the only published data released by CDC officials about that complication is a seven week study that ended on Oct. 23, 2022. Where is more specific myocarditis/pericarditis data related to bivalent COVID shots for the past 10 months?” Barbara Loe Fisher, co-founder and president of the National Vaccine Information Center, told The Epoch Times via email.
The mRNA shots are made by Pfizer and Moderna. Novavax’s updated shot, which uses different technology, has not yet been authorized by the U.S. Food and Drug Administration (FDA).
“I am tired of the CDC and FDA deciding what information the public needs and doesn’t need. This is precisely the information that parents need to have especially when there are still schools and activities mandating these shots. This is evil playing out right before our eyes,” Kim Witczak, a drug safety advocate who runs the nonprofit Woodymatters, told The Epoch Times in an email.
She added, “The CDC’s response of ‘when appropriate, the updated safety data will be published’ is unacceptable and they wonder why there is vaccine hesitancy and lack of trust in public health officials.”
Presentation
During the recent meeting, CDC officials and their partners presented data on the bivalent shots to their advisory panel, the Advisory Committee on Immunization Practices. The advisers were considering which groups should be recommended to get one of the new COVID-19 vaccines, which were cleared by regulators with scant clinical trial data.
Dr. Nicola Klein, a Kaiser Permanente doctor who works closely with the CDC, gave a presentation (pdf) on COVID-19 vaccine safety. She presented data from the Vaccine Safety Datalink, a monitoring system that covers a much smaller population than VAERS.
Dr. Klein said that two cases of myocarditis after bivalent vaccination were detected in the Vaccine Safety Datalink (VSD) through March 11. It’s not clear why more current data were not presented. Dr. Klein did not respond to a request for comment. The cases did not trigger a safety signal among adults, Dr. Klein said.
The presented data were widely cited by doctors quoted in news outlets, including Dr. Andrew Pavia, who told a briefing that there did not appear to be a “detectable risk” of the bivalent shots causing myocarditis.
“What I was conveying is that in the era of the bivalent vaccine, the number of cases has fallen to where it no longer is giving a signal that is detectable,” Dr. Pavia, chief of the University of Utah’s Division of Pediatric Infectious Diseases, told The Epoch Times in an email. In response to how he could say that with the missing VAERS data, he said “the strongest data are from the controlled studies like the VSD where you have built in controls.”
Through Sept. 8, 98 cases of myocarditis, pericarditis, or myopericarditis were reported to VAERS following bivalent vaccination, according to a search of the system by The Epoch Times.
While anybody can lodge a report with VAERS, research has shown most reports are entered by health care providers. People who submit false information can face prosecution.
Five reports were for people aged 6 to 17 years while another 13 were for people aged 18 to 29.
When presenting to the panel, CDC official Megan Wallace said, “There are limited data to inform the myocarditis risk following an updated mRNA dose.” She did not mention the cases reported to VAERS but alleged the benefits of the vaccines outweigh the risks, even for young, healthy males. The Vaccine Safety Datalink, she acknowledged, did have a “relatively lower sample size” of recipients.
Panel members were taken by the data. Dr. Oliver Brooks said “Feel good about the fact that in the bivalent we saw no signal from myocarditis,” he said after the presentation. “Very important.” Dr. Brooks, chief medical officer at Watts Healthcare Corporation, did not respond to an inquiry.
Dr. Pablo Sanchez, the only member to recommend against a widespread recommendation, said the risk of myocarditis was a reason.
“I think we really need to level with our patients and say what is known and unknown, rather than make a complete recommendation,” he said, “especially for some groups that there are limited data.”
The labels for the new vaccines say they can cause myocarditis.
“Postmarketing data with authorized or approved mRNA COVID-19 vaccines demonstrate increased risks of myocarditis and pericarditis, particularly within the first week following vaccination,” the labels state. While some people have recovered, others have not. The labels also say, “Information is not yet available about potential long-term sequelae.”
Tyler Durden
Sun, 09/24/2023 – 21:25 - China's 300% Debt And Dilemmas
China’s 300% Debt And Dilemmas
By Teeuwe Mevissen, Senior Macro Strategist at Rabobank
Summary
- China’s combined debt (Government, corporate and household) is more than 300% of GDP
- China’s local government debt has been rising sharply for years and is seen as a key risk among investors in Asia.
- With declining income from land sales and increasing expenditures to service these high levels of debt, financial risks for local governments are increasing.
- Local government finance vehicles add to high levels of debt. We estimate that total local government debt is CNY 106.7 tn or USD 14.6 tn.
- Some local governments are scaling down government services and salaries of workers
- High levels of local government debt is likely to put a drain on economic growth for some time to come.
Introduction
Local governments have been a pillar of China’s economic growth model for decades. Land-sales for (commercial) real estate projects, infrastructure investments of all sorts and controlling the allocation of credit to State Owned Enterprises (SOE) have significantly contributed to economic growth. But recently, more and more investors and analysts alike worry about the sustainability of the high levels of local government debt. While the problems in the real estate sector have received much attention in the past two years, the high levels of local government debt have been somewhat overlooked, even as they are currently considered a key risk for economic growth and financial stability for 2023 and beyond. Indeed, the problems in the real estate sector are part and parcel of the problem that local governments are facing right now, but clearly there is a lot more to it. With local governments being responsible for the vast majority of total tax expenditures (estimated at almost 88% in 2023), this creates potential challenges for maintaining robust economic growth. Moreover, holders of local government bonds or bonds issued by local government finance vehicles (LGFV) might run significant credit risks.
This paper will specifically try to assess the financial situation of China’s local governments and tries to answer the question whether and to what extent the levels of local government debts are indeed alarming. We make an estimate of China’s total local government debt by comparing official data of local government debt (where available) with all outstanding local government bonds. We analyse over 11.000 securities to determine local debt to GDP for the relevant administrative levels and determine weighted average maturities and weighted average yields for the respective administrative levels. We also include all outstanding so called Chengtou bonds, i.e. urban construction development bonds. The next step is to look at corporate bonds which also include so called Municipal Corporate Bonds (MCB). We finalise our analysis by looking at balances from the financial sector (excluding the shadow banking sector) to estimate the amount of ‘hidden debt’. We conclude that for some regions there is cause for concern. At best, mitigating measures to deal with the high amount of debt is likely to weigh on China’s future growth potential.
China’s overall debt situation
China’s miraculous path of economic growth and development has received praise all over the world. Never in history was a country so successful in pulling hundreds of millions of people out of levels of absolute poverty. Clearly this could not have been realized without huge amounts of foreign and domestic investments. In other words, money was needed and lots of it. Money that also needed to be borrowed.
While borrowing money makes a lot of sense when the rate of return exceeds the costs including the costs of servicing this debt, this obviously is not always the case. In the case of China, some of the money that has been borrowed has ended up to be speculative borrowing. This includes the real estate sector, households (mainly real estate), poor investment projects by corporates and overambitious local governments that felt the need to simply make good on their economic growth targets by investing in real estate- and infrastructure projects.
Of course investing inevitably comes with risks attached and therefore some losses will have to be incurred. However, at certain levels of debt, the level itself can become a problem regardless of the quality of the loans that have been provided. Liquidity problems, for instance, can occur despite a high quality asset portfolio. Regardless, with a total level of debt of more than 300% of GDP it is clear that China’s fast rising levels of debt need to be brought under control. As can be seen from the graph below, in less than 20-years total debt-to-GDP more than doubled. Moreover, the metric shown in figure 1 is considerably lower both in the US and the Eurozone that -according to the BIS definition – have debt levels of respectively 265% and 255% of GDP
Local Government debt levels
No one knows the weight of another one’s burden
In April this year the total level of government debt was estimated at around USD 23 trillion or CNY 152tn. From this estimate, around 60% (CNY 91.7tn) is assigned as implicit government debt, i.e debt that doesn’t count as ‘official’ government debt. The absence of official data on borrowing by local governments via non-marketable assets has led to a broad range of estimates of what the total size of outstanding implicit debt issued by LGFVs could be.
According to the estimate above, CNY 60tn, or USD 9tn is to be assigned to LGFVs. An estimate by the Wall Street Journal amounts to USD 7tn, while the IMF estimated total LGFV debt at 50% of China’s GDP, which would also amount to approximately USD 9 tn. Wind estimated the total amount of outstanding LGFV debt at almost USD8tn at the end of 2021. The uncertainties that surround these estimates of the amount of implicit government debt plague both onshore and offshore bond markets for LGFV’s. These uncertainties also have received attention from China’s top leadership and recently it became known that China has started a nationwide effort to reveal the amount of hidden debt.
Doing the math: estimates, caveats and assumptions
Of course some of these differences between the estimates can be attributed to changes in the exchange rate, date of measurement or methodology. However, as we have flagged several times, China analysts often need to come up with proxies and estimates since fewer and fewer data is being published. So with this warning, we will explain our methodology, assumptions and estimates below.
In order to estimate the total amount of local government debt we will add up:
- the total amount of local government bonds outstanding,
- the amount of Chengtou bonds outstanding,
- an estimate of outstanding MCB’s, and
- our proxy for non-marketable local government loans (via financial sector)
To estimate the latter, we look at banking balances of depository corporations, foreign funded banks, rural credit cooperatives, and finance companies. We then select their claims on governments and claims to non-financial corporations.
While we are aware of the fact that not all non-financial corporations are state-owned, the total amount is relatively small compared to the claims on governments (figure 5 below). Furthermore, we also acknowledge that there are more ways in which local governments can finance themselves so that simply looking at the financial sector’s claims on governments likely underestimates total non-marketable local government debt. Furthermore, we assume that all claims on government are claims on local governments and that the central government doesn’t fund itself via non-marketable loans. In the following four sections we will simply provide the outcomes of our analyses. For those interested in our methodology we refer to the appendix at the end of this publication.
Local government bonds
Official local government debt is measured by simply adding up all outstanding amounts of bonds issued directly by local governments. This debt adds up to CNY 37.05tn on March 2023.
As we already mentioned above and as figure 4 shows, only CNY 17bn of central government debt is in the form of loans. Since this amount is negligible in comparison to the total we will not correct for this amount when analyzing loans to local governments. Figure 5 shows total outstanding corporate debt of which we assume that SOE’s account for 75% of outstanding corporate bonds. We further assume that 40% of these bonds can be assigned to LGFV.
Finally, figure 6 provides an overview of the financial sector’s claims on government excluding the shadow banking system which generally owns bonds which we exclude to avoid double counting since the bonds that they own are already included in our analyses. As with corporate bonds, we assume that 75% of financial claims on NFC can be assigned to SOE’s of which 40% can be assigned to LGFV. This adds up to CNY 55.6tn. When we add up all 4 separate categories the total amount of local government debt amounts to CNY 106.7tn or $14.6tn (based on a USD/CNH exchange rate of 7.3.
A double-edged budgetary sword
But for some local governments problems seem to go further than fast growing levels of debt. Local governments have consistently run budget deficits for years as can be seen from figure 7 and 8 below. With debt levels growing, so has the share of local government budgets that needs to be spent on interest payments on those debts. Moreover, with declining revenues from land sales as a result of the real estate crisis, local government budgets have become even more strained. While funding has generally become cheaper (see figure 9) it remains to be seen whether this trend will hold. Should market participants start to question the credit worthiness of local governments, this trend could quickly reverse.
Additionally, it is important to bear in mind that these lower levels of average yields have to be paid on a much larger amount of nominal debt. To be more specific, while in 2020 yields for standard bonds averaged around 3.50% and in 2023 approximately 3.35%, the total amount of outstanding debt went up from CNY 24tn to CNY 37tn.
This means that in 2020 total interest to be paid on outstanding standard government bonds amounted to CNY 840bn while in 2023 this would already be CNY 1,240bn. To summarize – total (interest rate) expenditures have gone up while (potential) revenues have gone down, creating a double-edged budgetary sword.
In some cases we now see that this leads to challenges for some local governments to continue to provide the usual level of government services. This could mean the delay of the salary payments for (local)government workers, lower pension benefits or downscaling of healthcare services. But local governments are also urging local companies to repay their (overdue) debts. More extreme incidents have also been reported, such as fining a restaurateur for $700 for serving a cucumber dish. For obvious reasons we assume that the more indebted regional governments run the highest risk of needing to cut expenditures or worse default.
Figure 10 shows the ratio of debt to GDP for local governments. It is important to consider that China distinguishes different levels of local government. While the constitution identifies three levels of government, in practice there are five. Here, we mainly focus at the provincial level which includes provinces, autonomous regions, municipalities and special administrative regions. Furthermore we have included a few prefecture level cities that have issued their own bonds, such as Beijing and Shanghai.
From the graph above it becomes clear that official local government debt to local GDP ratios differ wildly, from less than 10% in Shenzhen to almost 90% in Qinghai. Furthermore, if we look at the financially more vulnerable regions in 2020, we see that in 2023 not much has changed. Qinghai, Yunnan and Guizhou are still the most vulnerable regions with debt to fiscal revenue reaching 1087% in Yunnan in 2022 meaning that it would require almost 11 years of revenues to pay off Yunnan’s local government debt. Most vulnerable regions are located in the North- and South-West of China, while China’s economically vibrant East coast are generally characterized by significantly healthier debt ratio’s. As such, these regions look a lot more able to raise tax revenues. They also have more valuable assets to sell if that would ever be needed.
It is important to realize that according to the local government debt risk emergency response plan article 4.1 ‘Local governments are responsible for repaying debts they borrow, and the central government implements the principle of no bailout’. In general, the debt emergency response is dependent on the severity of the specific debt risk event but we will not elaborate much further on the legal technicalities here. The key point is that a central government bailout of a local government that risks falling into default, is anything but certain.
When we zoom in further on the amount of outstanding official local government debt, we see that, whilst there is a positive relationship between the average maturities and yields, the relative financial vulnerability of a region or province is not necessarily reflected in weighted average yields. An important reason for this is the assumption by investors that official local government debt has an implicit guarantee from the central government. But as we have concluded above, it remains to be seen whether and, if so, to what extent, the central government will bail out local governments.
Having calculated the weighted average yield we can also obtain an estimate of the amount of interest that is needed to service these outstanding official local government debts. Since we also know the total level of local government expenditures – which amounts to CNY 23.67tn – we can obtain the average percentage of debt servicing expenditures compared to total expenditures.
Our calculations show that almost exactly 4% of total official local government expenditures is spent on interest of outstanding official local government debt. Needless to say that there are significant differences between regions. Since we do not have data about individual local government budgets we calculate our estimation of debt servicing costs per region by assuming that local government budgets are divided equally based on the weight that a certain region has in total GDP. This gives us the following estimates.
While it is clear that the assumptions that we made only lead to an approximation of the true financial situation for local governments, the most fragile local governments are the usual suspects. In a previous publication that investigated the link between higher rates and government finances we assumed that if a (local) government has to spend more than 10% of the total expenditure budget to service existing levels of debt, this starts to put (local) government finances under pressure. We apply this threshold on our analyses as well. As can be observed from our estimates this includes 7 of the 36 regions. Based on an average level of debt servicing of 7.2% which is the average level of bonds rated BB by Fitch, 19 regions would face financial challenges. However it is important to realize that we included redemptions for the whole of 2024. This means that if we had used a 12 month window the outcomes would be slightly lower.
Recent developments
Looking at the most recent developments, China appears to have decided to double down on the same path that we have become so accustomed to; i.e. let local governments borrow more money to spend more on infrastructure. Indeed, as recently as 31 August it became clear that local governments are accelerating the pace of borrowing (which is not visible in figure 3 above since these are the special bonds/Chengtou bonds discussed previously). Local governments are accelerating issuance to meet their 2023 targets and are expected to raise the remainder of the 2023 target of CNY 3.8tn before the end of this month according to minister of finance Liu Kun. This would mean that local governments still have to issue approximately CNY 800bn to meet this target.
Furthermore, local governments that have not used their quota in previous years are allowed to issuance additional bonds. It is estimated that this could free up an additional amount of CNY 1tn which would then be used for debt swaps, i.e. issuing a bond to pay of bank loans or other forms of non-standard/non marketable loans. However, as we have discussed in previous publications, new infrastructure projects increasingly provide diminishing marginal returns on investments made. Additionally, while refinancing can put further pressure on average yields (figure 8), the total amount of debt is likely to increase by another 1.8tn regardless.
So what is next?
Now that we have obtained an overview of the ins and outs of China’s local government debt situation it is time to reflect on what this means for China’s economy. First, we conclude that -based on our benchmark assumption that a (local) government that spends more than 10% of the total budget on debt servicing is financially fragile – a significant share of China’s local governments have or are approaching risky levels of debt.
If the current trend of increasing debt levels continues, we believe it is a matter of time before a significant share of local governments will run into financial difficulties. At this moment it is mainly the fragile liquidity position that local governments are struggling with. While the PBOC can provide for extra liquidity in the financial system by lowering the 7-day RRR for example, it should be clear that this will not offer a structural solution.
Although higher taxes would increase local government revenues, it could also put further downward pressure on consumer demand. Currently, total consumption is already at low levels contributing only 38% to total GDP growth. If Beijing would be serious about reforming their economic model from a purely export-based economy to an economy of dual circulation – i.e. remaining open for trade and investments (external circulation) while prioritizing domestic demand (internal circulation) – raising taxes is not a policy that would help achieving that goal. Remember that China also postponed the imposition of a real estate tax in order not to aggravate the real estate crisis. Increased revenues from land sales are also not to be expected in the foreseeable future. So, with limited possibilities to raise local government revenues we are left with a number of other options. In no particular order, these options are:
- cut local government spending
- blend and extend operations of the current outstanding debt
- a bail-out of highly indebted local governments by the central government
- defaulting on debt by local governments
To date, no bond defaults have yet occurred, but local governments have already defaulted on nonstandard debt in several cases. As long as there is no risk to the broader financial system we do not expect that Beijing will come to the rescue when a local government would not be able to service its debt obligations anymore.
While some local governments have reigned in spending as we discussed above, they are also pressed to issue more debt and prop up spending. So cutting local government spending does not seem to be Beijing’s preferred strategy. Indeed, we think that blend and extend operations will turn out to be the preferred and most likely policy.
In this case, major state banks will be asked to be lenient towards local governments and the PBOC will support those state banks. This could be done by adjusting interest rate policies and/or lowering the required reserve ratio – currently at 7.6% for relevant banks (not all banks have the same RRR as this depends on the size of the balance sheet). Indeed we do see an high chance of the PBOC lowering the RRR this month.
No crisis, but weighing on growth all the same
In other words, those who are waiting for a big bazooka will likely be disappointed. However, we also do not expect an uncontrolled crisis that would put the financial system as a whole in danger. First of all because it can simply be avoided. China still has considerable amounts of foreign reserves and also has the means to increase tax revenue if necessary. Although this would go at the cost of domestic consumption. Additionally, an uncontrolled collapse would come with socioeconomic instability which is something that Beijing wants to prohibit at all costs.
In the end the current local government debt situation is an example of “choose your poison”. Losses are likely to be divided between bond holders and banks. While the amount of offshore bonds is limited, the holders of those bonds are likely to be the first ones to get hit with a haircut as we have seen in the real estate sector already. So in the end we expect a combination of different measures. The tool of preference is likely to be blend and extent operations. Still, a blend and extent approach would mean that the fragile financial position of local governments will continue to weigh on economic growth for a long time to come.
We also expect some defaults to occur and here the hybrid bonds, which invest in multiple (commercial) projects, seem to be the most risky bonds given the fact that the government is less likely to save SOE’s. Indeed the bonds that are most likely to be eligible for a bail out are bonds that are officially regarded as local government debt. Regardless, China’s economy is likely to be at the start of a long process of deleveraging that will suppress economic growth for years to come.
Appendix
Methodology
Official local government debt (issued bonds)
Starting with the official total amount of debt for local governments we see that this stood at CNY 37.05tn (USD 5.17tn) in March this year. Again, this figure excludes so-called Chengtou bonds and non-standard/non-marketable products which are generally bank loans or private placements to local governments made by (local) banks.
When looking at the development of this narrow definition of outstanding local government debt we still see that the absolute level of debt has almost doubled over the last four years. While it is understandable that government debt has risen given the huge health care costs and the government stimulus that had to be provided during the Covid Pandemic, the current pace of increasing levels of debt is unlikely to be sustainable in the future.
Chengtou Bonds
When including Chengtou bonds, which unlike ‘normal’ local government bonds are often issued for specific urban construction development purposes, we obtain a more accurate picture of local government’s total amount of outstanding debt. Chengtou bonds can be separated in two different classes: quintessential and hybrid bonds. In both cases the ownership is in the hands of local government entities, but hybrid bonds hold more diversified assets and as such are more similar to SOEs. This means that a hybrid bond can invest in both public as well as in private projects.
The idea of issuing hybrid bonds was initially stimulated by the central government to raise revenues in order to decrease reliance on local government finances. However this also led to excessive risk taking. Furthermore, from the central governments point of view, hybrids are deemed less important than the quintessential bonds that solely finance collective projects. This heightens the credit risk on hybrid bonds. Until recently, there was a tendency to attract more capital from abroad via offshore Chengtou bonds, but the Fed rate hiking cycle has made this form of funding increasingly less interesting.
Bloomberg data suggest that at the moment of writing there are 11,517 outstanding onshore securities which amount to CNY 8,818bn. When we include offshore bonds this amounts to 12,047 securities, adding up to CNY 8,887bn. Together with the amount of official outstanding government debt this totals approximately CNY 46tn of debt or about USD6.5tn. This still falls way short of the estimates by other institutions.
Municipal Corporate Bonds (MCB)
This is largely because we have not included non-standard/non-marketable government debt and MCB. We will first outline our assumptions behind our estimation of the more hidden part of local government debt. First, when we look at how the central government funds itself, we see that the vast majority of central government’s cash intake comes from issuing bonds.
In figure 4 one can observe that, indeed, only a bit more than CNY 17bn is funded through (bank) loans. We therefore assume, for simplicity, that all net claims on government are bank loans to local governments. We also include all claims on non-financial corporations since many SOEs are qualified as non-financial corporations. Indeed the bonds that are issued via LGFV’s are also known as MCB’s.
While these bonds are initially traded via the interbank market, the majority are held by wealth managers and the shadow banking system. We exclude the shadow banking sector since we have already included all bonds that have been issued by local governments (see figure 3) and we are not focusing on credit exposure in this special. Moreover, we have no means to analyse this sector because (reliable) data is absent. Finally we also exclude debt secured by stocks given that it is not considered government debt for domestic creditors according to article 3.3.3 subsection 1 which says: … “Stock secured debt is not government debt. According to the Guarantee Law of the People’s Republic of China and its judicial interpretations, except for loans from foreign governments and international economic organizations, the guarantee contracts issued by local governments and their departments are invalid, and the local government and its departments shall not bear the liability for debt repayment”…
This leaves us with estimating which share of corporate bonds should be considered as local government debt. Many estimate that as much as 40%-50% of outstanding corporate bonds are related to local government debt. The total amount of outstanding corporate bonds in China is about CNY 60tn (based on Bloomberg data). However these outstanding corporate bonds also include many Chinese banks. The Asian Development Bank reports an outstanding amount of local currency bonds for the corporate sector at CNY 44.4tn so we use this amount for our analysis. According to a IMF paper from 2019, SOE’s account for 75% of non-financial corporate debt. This would imply that 75% of CNY 44.4tn is in scope. Staying on the conservative side, and in line with other approximations, we estimate that 40% of this debt is related to LGFV’s. This amounts to CNY 13.3tn of outstanding local government debt. However we have to subtract the outstanding amount of Chengtou bonds since these are incorporated in the total amount of outstanding corporate bonds. This leaves us with CNY 4.3tn of additional outstanding debt.
Non-marketable debt (loans by financial sector)
We can now come up with our estimate/proxy of the banking sector’s exposure to local government debt. In figure 5 it can be seen that depository corporations by far hold most claims on government. The total amount is CNY 51.1tn. We keep the claims on NFC constant since data is only available until 2022. Similar to the assumption that we made earlier, we include 75% of this debt (6tn) as exposure to SOE’s. This amounts to CNY 4.5tn in additional exposure. We estimate that the financial sector’s total exposure to local governments amounts to roughly CNY 55.25tn which is close to USD 7.6tn. This is actually very comparable with other estimates that we referred to above.
If we add this up to the numbers in our previous findings this would amount to a total amount of local government debt of CNY 106.7tn or close to USD 14.6tn. This is higher than the CNY 95tn (or USD 13.2tn) estimate based on an analysis by Goldman Sachs.
Breakdown of China government debt, all 152TN yuan of it. pic.twitter.com/H5C2Jw5U71
— zerohedge (@zerohedge) June 5, 2023
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Clearly these changes can be explained by differences in methodology and a different time of measurement. As the graph below shows, the claims that depository corporations have on the government rose from CNY 47.6tn in December 2022 to 51.14tn in July 2023; an increase of almost 7.5%. This already explains almost CNY 4tn difference.
(Also available in pdf format to pro subs here)
Tyler Durden
Sun, 09/24/2023 – 20:50 - "Don't Be Intimidated" By The Censors – Tucker Carlson Urges Americans To Fight Back By 'Telling The Truth'
“Don’t Be Intimidated” By The Censors – Tucker Carlson Urges Americans To Fight Back By ‘Telling The Truth’
In a brief clip of him speaking in Utica, MI, Tucker Carlson expresses his deep concern over widespread acceptance of dishonesty in public life, lamenting, “what’s true? The true things are the things that you can’t say.”
The former Fox News man rages at the lack of penalties for public figures who lie or display incompetence; contrasting this with the societal backlash against those who aim to speak their own truths, suggesting that in today’s society, “the only penalty is for noting what’s true.”
“Every society penalizes something…” In America, “it’s telling the truth.”
Drawing a parallel with foreign (banana republic) governments, Carlson recounts a recent experience in Buenos Aires that exposed the government’s dishonesty about the Argentine peso’s exchange rate. He emphasizes, “so the government lies about the value of its own currencies,” reflecting on the economic lies and falsehoods and manipulations (think non-farm payrolls jobs data revised lower every month this year for instance) of the US government.
Further into the speech, he points out the pattern of backlash he believes truth-tellers face, noting, “first they’ll tell you you’re hurting someone’s feelings… then they call you insane… the third thing they do is just criminalize telling the truth.”
He raises concerns about the role of significant U.S. institutions like the FBI and CIA, alleging they are partisan, and mentions, “when federal employees… take an aggressive position on the side of one political party, you can’t have a fair election.”
Lastly, he touches upon the 2020 U.S. presidential election, suggesting potential irregularities and fraud, blasting tech oligarchs’ influence in silencing the truth-sayers.
“If some oligarchs… spent nearly half a billion dollars to control the mechanics of the Bolivian election in 2020, we would say it’s not a legitimate election.”
Tucker closes by encouraging Americans to stand up against the censors: “don’t let them,” he exclaims, urging listeners “don’t be intimidated, your children’s future depends on your bravery.”
Watch the full speech below:
Question their lies and they’ll call you a liar. Ignore it and keep going. pic.twitter.com/THURI2ddkN
— Tucker Carlson (@TuckerCarlson) September 22, 2023
Tyler Durden
Sun, 09/24/2023 – 20:15 - 25 Years Ago Today, Two Nobel Laureates Received A $3.6 Billion Bailout, Launching Too Big To Fail
25 Years Ago Today, Two Nobel Laureates Received A $3.6 Billion Bailout, Launching Too Big To Fail
By Eric Peters, CIO of One River Asset Management
Twenty-five years ago today, two Nobel laureate economists and a famous bond trader received a $3.65bln bailout from fourteen financial institutions at the behest of the Federal Reserve.
LTCM had delivered a 21% net return in its first year. 43% in the second. 41% in the third. Greed, hubris, leverage, illiquidity, and lack of imagination led to the inevitable.
A year later, Japan cut rates to zero, started QE in 2001. This sparked the introduction of ever more powerful policy tools to address crises, which manifested regularly, with growing intensity. Decades passed. There appeared no limit to what could be achieved using such exciting new tools.
But of course, that was simply the start of the latest chapter. In the oldest story ever told.
* * *
I would say you know ‘sufficiently restrictive’ only when you see it,” said the Fed Chairman at Wednesday’s press conference, echoing Supreme Court Justice Goldberg, who in 1964 drew a blurred line between art and obscenity in motion pictures.
“It’s not something you can arrive at with confidence in a model or in various estimates, you know,” continued Powell, a big fat crayon in his breast pocket. “I think confidence comes from seeing, you know, enough data that you feel like, yes, okay, this feels like we can for now decide that this is the right level and just agree to stay here,” explained Jay, terrified to admit how the discussion amongst his twelve governors had gone.
Unable to quite articulate their definition of ‘sufficiently restrictive,’ the committee members drew pictures instead.
“Nonetheless, you know, we need to get to a place where we’re confident that we have a stance that will bring inflation down to 2 percent over time,” said Powell to the room of reporters, still haunted by the drawings of his fellow board members, images that could not be unseen.
Naturally, many of them included depictions of the years spent with policy tied to the zero lower bound, printing presses burring, purring, moaning under the strain of lifting consumer prices by a few tenths of a percent to achieve an utterly arbitrary target.
The resulting wild economic distortions, inhuman contortions, crept in the shadows, suppressed for years. Then came the virus, masks, debt fueled consumption, gluttony, global conflict.
The twelve drawings were at once beautiful, grotesque, enigmatic, an insult to the senses. But not a single image helped the Chairman put his finger on what exactly it meant to be sufficiently restrictive.
And this left Jay grasping, uncertain how he’d ever return us to a state of normality, prudence.
But no matter, a Fed Chairman’s job is to convey confidence, pretend. “As we’ve gotten closer to it, we’ve slowed the pace at which we’ve moved. I think that was appropriate. And now that we’re getting closer, again, we have the ability to proceed carefully.”
Tyler Durden
Sun, 09/24/2023 – 19:40 - Washington Is Fighting Against Emergence Of "Genuine Multipolar World Order": Lavrov Tells UN
Washington Is Fighting Against Emergence Of “Genuine Multipolar World Order”: Lavrov Tells UN
In his speech before the UN General Assembly on Saturday which broadly presented Moscow’s viewpoint on the state of global affairs, Foreign Minister Sergei Lavrov frequently lambasted the West while actually mentioning Ukraine very little.
These are familiar themes, sounded by Putin himself on many occasions recently, seen in the following statement of Lavrov’s: “The US and its subordinate Western collective are continuing to fuel conflicts which artificially divide humanity into hostile blocks and hamper the achievement of overall aims,” he said. “They’re doing everything they can to prevent the formation of a genuine multipolar world order.”
via United Nations, file image The top Russian diplomat added: “They are trying to force the world to play according to their own self-centered rules.”
Another key emphasis was that the West and NATO’s role in Ukraine has gone well beyond just a hybrid or proxy war, but it’s actually become a “direct” war – given the heavy weapons being provided, targeting assistance given to Kiev, intelligence-sharing, and the fact that Russian soil is now being frequently hit, often by foreign weapons.
Below is a further sampling of key moments and quotes from Lavrov’s speech before the assembly…
Direct War
US is “effectively engaged in hostilities with us, using the Ukrainians as fodder.”
“You can call this whatever you want to call this, but they are directly at war with us,” he said. “We call this a hybrid war. But that doesn’t change the reality.”
“Empire of Lies”
Americans and Europeans are engaged in “quasi-colonial methods of subjugation.”
“Our future is being shaped by a struggle, a struggle between the global majority, in favor of a fair distribution of global benefits… and the few who wield near-colonial methods of subjugation in order to maintain their dominance, which is slipping through their fingers.”
“The collective West has … long rejected the principle of equality, looking down to the rest of the world.”
“As [Russian President Vladimir] Putin pointed out, the West is the one who is truly an empire of lies.”
Provoking Food & Energy Crises
“Unilateral coercive measures” – or sanctions – on weaker nations have provoked a global food and energy crisis.
“We continue to insist on a swift and full cessation of the US’s unprecedented and inhumane blockade of Cuba and the lifting of the absurd decision to declare Cuba a state sponsor of terrorism,” he said, while also mentioning the same for Venezuela and Syria.
Sanctions are used to “punish those they don’t like.”
#Breaking 🚨 Russian Foreign Minister Sergey Lavrov on Saturday – as the U.N.’s General Assembly gathering wound down – said that there are few prospects for peace in the war against Ukraine ~ called Zelenskyy’s 10-point peace plan “completely not feasible.” 👇
Lavrov denied… pic.twitter.com/IbyEtqTyoL
— Pamela Falk CBS News Correspondent United Nations (@PamelaFalk) September 23, 2023
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Fighting Against Genuine Multipolar Order
Washington and its allies are “doing everything they can to prevent the formation of a genuine multipolar world order.”
“The US and its subordinated collective continue to fuel conflicts which artificially divide humanity into hostile blocks and hamper the achievement of overall aims.”
“They are trying to force the world to play according to their own self-centred rules.” But the UN Charter seeks to ensure “sovereign equality of states large and small irrespective of their form of government.”
Russian media has produced a full transcript of Lavrov’s speech here.
Tyler Durden
Sun, 09/24/2023 – 19:05 - Now We Fear The Fed?
Now We Fear The Fed?
By Peter Tchir of Academy Securities
If the Fed’s wish was to push risk assets lower, then they got their wish!
This market faces a lot of problems, but I don’t think that the Fed is one of them.
Yes, we got a Fed meeting this week.
The statement at 2pm ET initially sounded quite hawkish. The SEP showed 50 bps more next year and the year after (“confirming” for many the higher for longer trade). However, I thought that the Powell presser was actually tilted towards the dovish side (he usually has to say hawkish things, but he barely accomplished that).
I remain convinced that we are in a position where the Fed wants to do NOTHING.
The 2-year yield closed Tuesday at 5.09% and ended at 5.11% – hardly alarming.
The 10-year was a bit worse, moving 10 bps on the week. Bad, but was it worth 3.6% on the week for the Nasdaq 100 (and 5% since last Thursday)?
Stocks seemed to fear the Fed more than the bond market did (at least by the end of the week). There is very little evidence of a “recession trade” as bond yields did inch higher and oil barely gave up any of its recent gains.
As discussed last weekend in 99 Problems, the economy and markets face several headwinds, but I do not believe that the Fed is one of them. If anything, I’m the most bullish that I have been on risk and rates since earlier this year when we were looking for a short squeeze.
Jinx
I’ve heard that markets don’t like how Powell answered questions about the likelihood of achieving a “soft landing”. I grew up playing sports and learned two things:
- You are not allowed to create your own nickname. Others have to do it for you (even Greenspan didn’t wake up one morning and start calling himself “the Maestro”).
- The minute you say good things about your performance is the moment that your performance starts to deteriorate. Who hasn’t said, “I’ve finally fixed my drive” only to shank one on your very next tee shot. Or “I might never miss an extra point again”, right before having one blocked. Okay, maybe only a few people have experienced that “jinx”, but trust me, it’s real.
So, what was Powell supposed to say?
- What he wanted to say? Which was probably something along the lines of: “Listen, for two years I said that I thought we could get a soft landing and you ignored me and made the idea seem silly, but now, suddenly, you want me to say that it is not just likely but it is also the base case?”
- What he had to say? “Yes, risks still exist and there are a lot of things that could prevent a soft landing. No, I cannot take a victory lap, nor can I say with certainly that we won’t have a recession.”
He had to go with the latter. He would be torn to shreds by the media if we hit a recession in a few months after claiming victory.
For those who say that he exhibited fear of a recession, it seems like they are taking his comments out of context and not considering that he cannot jinx himself or give his critics fodder if the recession hits. Recession remains a risk, which (paradoxically) is part of my bull thesis for now.
AI
We continue to focus on AI and discussed General (ret.) Groen’s take on the meetings in DC the prior week (he had an interesting seat at the table). We also discuss why we are searching for AI “success stories.” Not just stories about AI companies, but companies that have managed to harness/incorporate AI (or cutting-edge tech) into their products or processes to show outsized gains. Please see Thursday’s X Report – Intelligent Life in DC for more on these topics.
Bottom Line
I liked buying the post FOMC dip in stocks and rise in yields, and I am comfortable being almost max- long Treasuries, credit, and stocks here. I am also overweight risk and duration.
One of the best parts of my job is speaking with clients. While Zoom meetings are great, the travel schedule has been busy and gets hectic for the next 6 weeks. I cannot wait to sit down and speak with our clients! From corporations, to municipal entities, to asset managers of all stripes, it will be a great opportunity to exchange ideas and learn!
More people are asking if we can explain our “made by China” view in more detail as snippet after snippet of information comes out supporting that path for China (see TIC data & Merc). They want to discuss how they should be thinking about this for their businesses and investments.
India. I’m increasingly concerned that in 3 to 5 years, many of us will wonder why we weren’t discussing India in 2023 as much as we should have been. We are doing everything we can to rectify that as India’s potential (and figuring out how to profit/benefit from this) is high on my agenda!
Deion Sanders and Colorado are fun to watch! Please see last weekend’s piece and think about the “jinx” section from earlier in this report (and then don’t worry about Powell not sounding overly optimistic about a soft landing ).
Tyler Durden
Sun, 09/24/2023 – 18:30 - Elon Musk's Starlink Exceeds 2 Million Users, Doubling In Just Nine Months
Elon Musk’s Starlink Exceeds 2 Million Users, Doubling In Just Nine Months
Democrats are probably even more furious with Elon Musk’s huge success with SpaceX-owned space internet company Starlink now boasting over 2 million active users worldwide.
“Starlink is available on all 7 continents, in over 60 countries and many more markets, connecting 2M+ active customers and counting with high-speed internet!” Starlink posted on X.
Starlink is available on all 7 continents, in over 60 countries and many more markets, connecting 2M+ active customers and counting with high-speed internet!
Thank you to all of our customers around the world 🛰️🌎❤️ → https://t.co/D6L8BSisQq pic.twitter.com/jVfWTEfHkz
— Starlink (@Starlink) September 23, 2023
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Tesla blogger Sawyer Merritt posted a graph on X that shows Starlink’s onboarding of new customers has been parabolic since June 2022.
BREAKING: @SpaceX has announced that there are now over 2 million active Starlink customers, up 500k from 4 month ago🛰️
It’s now available on 7 continents and in over 60 countries. pic.twitter.com/3DvUzwH1vp
— Sawyer Merritt (@SawyerMerritt) September 23, 2023
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Starlink has doubled the number of active users from 1 million to more than 2 million in only nine months.
This comes as SpaceX has been launching countless rockets with Starlink satellites to build its massive satellite contestation in low Earth orbit.
Weeks ago, Musk posted on X that SpaceX has launched 61 Falcon rockets this year. He said, “SpaceX has delivered ~80% of all Earth payload mass to orbit in 2023. China is ~10% & rest of world other ~10%.”
Great work by the @SpaceX team successfully launching 61 Falcon rocket missions this year!
If tomorrow’s mission goes well, we will exceed last year’s flight count.
SpaceX has delivered ~80% of all Earth payload mass to orbit in 2023. China is ~10% & rest of world other ~10%.
— Elon Musk (@elonmusk) September 2, 2023
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Data from the website Starlink Satellite Tracker shows that 5,039 satellites have been launched into low Earth orbit over the last several years. Of that, 4,207 are active, 591 have burned up, and 241 are inactive.
Meanwhile, Democrats, the current party that spends taxpayers’ funds like a drunken sailor on the unpopular Ukrainian war, have blasted Musk for allegedly turning off the space internet service on Ukraine’s military last year.
A former Obama administration official recently declared: “The US government needs to end its relationship with Musk immediately.”
Good luck with that one. Then there are no Starlinks for Ukraine.
Tyler Durden
Sun, 09/24/2023 – 17:55 - "Spam Strike" Looms After Hormel Minnesota Workers Reject Contract Offer
“Spam Strike” Looms After Hormel Minnesota Workers Reject Contract Offer
By Nathan Owens of Agricultural Dive
Summary:
-
Meatpacking workers at Hormel Foods’ plant in Austin, Minnesota, voted to reject a “final offer” contract last week in a push for stronger wages, setting the stage for a potential strike at the processor’s largest facility.
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“It’s simply not good enough,” said the United Food and Commercial Workers Local 663 bargaining committee, which represents close to 95% of workers at Hormel’s hometown plant. “Hormel’s record profits are just wages not shared fairly with the rest of us.”
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A Hormel spokesperson said that the parties have agreed on a contract extension through Oct. 8 as negotiations continue. The Austin plant is the largest of Hormel’s manufacturing locations, employing 1,800 people and producing more than 1 billion pounds of Spam, pepperoni and other food items each year.
Meatpacking workers “overwhelmingly” voted down Hormel’s contract offer, according to UCFW, with the rejection coming as thousands around the U.S. mobilize to demand big businesses provide better working conditions and distribute record profits.
Detroit auto workers for Ford, GM and Stellantis — known as the Big Three — are on day six of a walk-out strike, pressuring automakers for better benefits and pay as they see record high profits. The Writers Guild of America is expected to resume talks today with major Hollywood studios to improve worker compensation and protections around the use of artificial intelligence, Reuters reported. Nurses, teachers, truck drivers and other essential workers are also in the fight against stagnant wages amid inflation.
“The reality is that we keep Hormel running,” the UFCW Local 633 committee said.
“We demand that Hormel does better and comes to the table for a fair agreement quickly.”
Voting took place Sept. 13 and 14 at the plant and UFCW union hall in Austin. Workers are pushing for higher wages in light of Hormel’s high earnings results, which soared as food companies adjusted their sales prices to compensate for absorbed costs.
Hormel’s gross profits totaled $2.05 billion over the past 12 months, though the company is currently grappling with financial headwinds. The pork processor warned investors of lower than expected earnings this year as it navigated through a period of volatile commodity markets.
“We are disappointed in the vote, especially given the significant contract package offered, however we remain optimistic that we will reach agreement,” the Hormel spokesperson said.
Tyler Durden
Sun, 09/24/2023 – 17:20 -
- Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help 'Rebuild Schools'
Zelenskyy Asks Spirit Cooker Marina Abramovic To Be Ambassador For Ukraine, Help ‘Rebuild Schools’
Authored by Chris Menahan via Information Liberation (emphasis ours),
Ukrainian president Volodymyr Zelensky is recruiting spirit cooker Marina Abramovic to serve as an ambassador for Ukraine and help “rebuild schools.”
— The_Real_Fly (@The_Real_Fly) September 22, 2023
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From The Telegraph, “Zelensky asks Marina Abramovic to be ambassador for Ukraine”:
Volodymyr Zelensky has asked Marina Abramovic, the performance artist, to be an ambassador for Ukraine.
Ms Abramovic, a fierce critic of Vladimir Putin’s illegal invasion, said the Ukrainian president had asked for her help in rebuilding schools.
[…] ”I have been invited by Zelensky to be an ambassador of Ukraine, to help the children affected by rebuilding schools and such.”
She added: “I have also been invited to be a board member of the Babyn Yar organisation to continue to protect the memorial.”
The Holocaust memorial centre to Jews murdered by Nazis in Ukraine was damaged by Russian missile attacks in March last year.
The “bombing” of the Babyn Yar memorial was confirmed to be a lie last year.
Ms Abramovic installed her work Crystal Wall of Crying at the memorial centre in Kyiv four months before Russia invaded Ukraine in February 2022.
The wall, 40 metres long and three metres high, is made of coal and has large quartz crystals sticking out of it. Visitors can touch the installation, which mirrors the western wall in Jerusalem.
Zelensky said last year his goal is to turn Ukraine into a “Greater Israel.”
Zelensky has asked Marina Abramovic to be the “ambassador of Ukraine” which is an interesting choice to say the least.
Here’s Marina Abramovic posing with Jacob Rothschild in-front of the painting, “Satan summoning his legions” (1796) by Sir Thomas Lawrence. pic.twitter.com/IIa9RAS1vu
— Lewis Brackpool (@Lewis_Brackpool) September 23, 2023
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— The_Real_Fly (@The_Real_Fly) September 22, 2023
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In Dec 2022, Zelensky made a deal with BlackRock’s Larry Fink to help “rebuild” Ukraine after the war and just last week the Biden regime announced Penny Pritzker would become their Special Representative for “rebuilding” Ukraine.
The billionaire heiress Biden appointed to empower US banks to profiteer off Ukraine’s “re-building” is Penny Pritzker: sister of the Illinois Governor, Obama’s key mega-donor, with a history of labor abuse and shady S&L’s that required govt bailouts:
So perfect for this job.👍 pic.twitter.com/5s0LixJici
— Glenn Greenwald (@ggreenwald) September 16, 2023
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.@POTUS has appointed Penny Pritzker as the U.S. Special Representative for Ukraine’s Economic Recovery. She will work with Ukraine’s government, international partners, and the private sector to accelerate Ukraine’s economic transformation. pic.twitter.com/uhTC8jgeZL
— Secretary Antony Blinken (@SecBlinken) September 14, 2023
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Meanwhile, Abramovic’s pals, the Clintons, are also salivating over helping to ‘rebuild’ Ukraine.
Tyler Durden
Sun, 09/24/2023 – 16:10 - WaPo Scrambles After Own Poll Accidentally Shows Trump Crushing Biden
WaPo Scrambles After Own Poll Accidentally Shows Trump Crushing Biden
A new poll from the Washington Post and ABC News accidentally revealed that former President Trump would crush Joe Biden in a hypothetical 2024 matchup, so they cast doubt on their own polling.
Illustration via the Pittsburgh Post-Gazette The poll shows Trump leading Biden by 10 percentage points (52% vs. 42%), which the Post immediately noted “does not match other recent polling” and may be “an outlier.”
Screenshot via MxM News Via the Washington Post:
Biden and former president Donald Trump appear headed for a rematch of their 2020 contest, although more than 3 in 5 Democrats and Democratic-leaning independents say they would prefer a nominee other than the president. But Biden’s advisers have argued that he is the strongest Democrat for 2024 and those who wish for someone else share no consensus on who that should be, with 8 percent naming Vice President Harris, 8 percent naming Sen. Bernie Sanders (I-Vt.) and 20 percent saying they prefer “just someone else.”
The Post-ABC poll shows Biden trailing Trump by 10 percentage points at this early stage in the election cycle, although the sizable margin of Trump’s lead in this survey is significantly at odds with other public polls that show the general election contest a virtual dead heat. The difference between this poll and others, as well as the unusual makeup of Trump’s and Biden’s coalitions in this survey, suggest it is probably an outlier.
According to Trump adviser Jason Miller, “Heads are EXPLODING” over the WaPo poll.
1/ Heads are EXPLODING at the Jeff Bezos Amazon Washington Post, as President Trump now leads Joe Biden nationally by 10 points (52%-42%) after having led by 6 points (49%-43%) in May! 🤯🤯🤯
How bad are they melting down? The Post shits 💩 all over their own poll throughout the…
— Jason Miller (@JasonMillerinDC) September 24, 2023
The NY Post further breaks down the poll, noting that 44% of those surveyed say their financial picture has deteriorated under Biden, while just 30% have favorable views on Biden’s handling of the economy.
37% approve of Biden’s overall performance, while 56% disapprove.
On immigration, Biden’s approval clocks in at 23%, with 45% strongly disapproving.
Then, a considerable 74% of voters feel that he’s too old for another term, wile about 50% say the same about Trump. -NY Post
It’s not just WaPo’s poll either…
The Post also doesn’t want you to believe your lying eyes, claiming that “the Post-ABC poll is an outlier in finding Trump with a lead,” then proceeds to post a picture of Trump leading in 3 out of 5 polls with a fourth being a tie.
Poll below:
Tyler Durden
Sun, 09/24/2023 – 15:35 - Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City
Kerry Acknowledges Need For Nuclear Power As Climate Diplomacy Dominates New York City
Authored by Nathan Worcester via The Epoch Times,
While addressing an Atlantic Council meeting on nuclear energy, U.S. Climate Envoy John Kerry made it clear he doesn’t think wind and solar alone will be sufficient to meet global energy needs while achieving policy plans to rapidly scale back the use of hydrocarbons in the name of addressing climate change risks as outlined by the United Nations.
“You will have to have some component of nuclear—yet to be determined how big or where it’ll go. That’s going to be a market-based reaction,” said Mr. Kerry, who served as a Democratic senator from Massachusetts before serving as Secretary of State under former President Barack Obama.
The 2004 Democratic candidate for president said that “most scientists will tell you” the goal of Net Zero 2050 cannot be achieved “unless we have a pot, a mixture of energy approaches.”
“Clearly, we’re going to need nuclear to be a part of that,” he said on Monday.
Mr. Kerry’s pro-nuclear remarks come as climate-related diplomacy and other climate-themed events overtake New York City.
Over the weekend, protesters demonstrated against fossil fuels in the streets of New York City, with Rep. Alexandria Ocasio Cortez (D-N.Y.) among the participants.
Mr. Kerry voiced support for those demonstrators in his speech to the Atlantic Council.
In addition, the U.N. will hold its inaugural Climate Ambition Summit on Sept. 20.
A U.N. statement on the event states it “will showcase leaders who are ‘first movers and doers’ from government, business, finance, local authorities, and civil society who have credible actions, policies and plans to keep the 1.5°C degree goal of the Paris Agreement alive and deliver climate justice to those on the front lines of the climate crisis.”
The Climate Ambition Summit comes ahead of the next annual United Nations Climate Change Conference, which will begin in late November. It’s taking place in Dubai, United Arab Emirates.
Even as he praised climate protesters, Mr. Kerry noted that a previous generation of environmental activists had fought hard against nuclear power, now seen as a pragmatic solution by many climate hawks.
“In my state of Massachusetts, where there was a huge fight over Seabrook Nuclear Plant in New Hampshire, we now happily get about 20 percent of all our energy from Seabrook, and nobody’s complaining—maybe about the prices a little bit, because that’s normal in today’s world,” he said.
A view of the Seabrook Nuclear Power Plant in Seabrook, N.H., on March 21, 2011. (Emmanuel Dunand/AFP via Getty Images)
“The United States is now therefore committed, based on experience and based on reality, to trying to accelerate the deployment of nuclear energy, as part of the Biden program,” he added.
The diplomat, who came under fire from Republicans earlier this summer for his unwillingness to share details of his staff at a Congressional hearing, commented positively on Bill Gates’ TerraPower, which plans to build the next-generation Natrium nuclear reactor in Wyoming.
He also drew attention to his recent trip to Romania, where he visited a control room simulator for a small modular reactor developed by the American firm NuScale.
Mr. Kerry took issue with the continued construction of unabated coal-fired power plants and with the existence of subsidies for fossil fuels.
An International Monetary Fund (IMF) study identified $1.3 trillion in “explicit” subsidies for fossil fuels in 2022, a stark increase from $500 billion in 2020. Such subsidies are ascribed to fossil fuel prices when they are lower than they would otherwise be if producers fully bore supply costs. The IMF authors attributed a substantial proportion of the increase to “temporary price support measures,” in line with surging fossil fuel prices during that period.
Whitehouse Touts ADVANCE Act
Mr. Kerry wasn’t the only high-level Democratic politician who addressed the Atlanticist forum on Monday.
In pre-recorded remarks, Sen. Sheldon Whitehouse (D-R.I.) touted the bipartisan, nuclear power-related ADVANCE Act, which passed the Senate as part of the National Defense Authorization Act (NDAA) in July. The bill has not moved ahead in the House.
“Our legislation would strengthen the Nuclear Regulatory Commission’s ability to safely and efficiently review the expected influx of applications and prepare them to license HALEU [high-assay low-enriched uranium] fuels,” the lawmaker said.
Russia currently dominates the production of HALEU fuels, which are key for most next-generation nuclear reactors. Uncertainty about Russian supplies of HALEU has been a worry for TerraPower and a central motivation for the Nuclear Fuel Security Act, another successful NDAA amendment.
“We spend nearly $1 billion each year on Russian uranium. Russia uses these revenues to fund its invasion of Ukraine,” Sen. John Barrasso (R-Wyo.) said in the Senate as the measure was under consideration.
Sen. John Barrasso (R-Wyo.) in Washington on Dec. 1, 2020. (Bill O’Leary-Pool/Getty Images)
‘Decarbonize Beyond Electricity’
Other speakers at the event expanded on how nuclear energy could be used to cut carbon emissions.
“We need to decarbonize beyond electricity,” said John Wagner, director of the Idaho National Laboratory. He cited industrial heating and hydrogen production as examples of such applications for nuclear energy.
Sama Bilbao y León, director general of the World Nuclear Association, concurred.
“Yes, we need to electrify as much as we can of our economy, but it is not going to be possible to electrify everything,” she said.
Ben Pickett of Nucor Corporation, which operates mills that recycle scrap steel using electric arc furnaces, explained that his company’s operations require “billions and billions of kilowatt hours per year.”
Earlier this year, Nucor signed a memorandum of understanding with NuScale Power. The latter could potentially develop small modular reactors for use in conjunction with Nucor’s steel production facilities.
“We’ve got customers now that are demanding much cleaner steels,” Mr. Pickett said.
He conceded that the idea of running steel production on advanced nuclear has met with a “mixed” reaction in his industry.
Tyler Durden
Sun, 09/24/2023 – 15:00 - Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation
Zelenskyy, Trudeau Honor Actual 3rd Reich Nazi With Standing Ovation
Canadian Prime Minister Justin Trudeau and Ukrainian President Volodomyr Zelenskyy – who commands a battalion of neo-Nazis – honored an actual WWII Nazi with a standing ovation on Friday.
Yaroslav Hunka, 98, fought in a Third Reich military formation accused of war crimes.
On Friday, he was honored during a session of Canadian parliament in which Zelenskyy addressed the lawmakers to thank them for their support since Russia invaded Ukraine, saying that Canada has always been on “the bright side of history.”
Hunka stood for standing ovation and saluted, according to Canadian television.
A 98-year old was given standing ovation by the Canadian parliament during Zelensky’s speech.
He was hailed as a hero for fighting against the Russians.
Yaroslav Hunk fought for the 14th division of the Waffen SS. pic.twitter.com/1J2lNywBM5
— UNN (@UnityNewsNet) September 24, 2023
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According to the Associated Press, Hunka “fought with the First Ukrainian Division in World War II before later immigrating to Canada,” another name for the 14th Waffen Grenadier Division of the SS, the Nazi party’s military wing, also known as the SS Galichina.
Related:
- Meta Welcomes Neo-Nazi Azov Regiment Back On Facebook, Removes “Dangerous Organization” Listing
- Mainstream Media Praises Ukraine’s Azov Battalion For Dropping Nazi Patches From Uniform
- The RCAF Officer Who Brought Hitler’s Waffen SS to Canada
Formed in 1943, SS Galichina was comprised of Ukrainians from the Galicia region in the western part of the country. It was armed and trained by Hitler’s Nazis and commanded by German officers. The next year, the division received a visit from SS head Heinrich Himmler, who had high praise for the unit’s effectiveness at slaughtering Poles.
The SS Galichina subunits were responsible for the Huta Pieniacka massacre, in which they burned 500 to 1,000 Polish villagers alive.
One of several photos on a blog by an SS Galichina veterans’ group that shows Yaroslav Hunka, the Ukrainian immigrant honored by the Canadian Parliament during a visit by Ukrainian President Volodymyr Zelenskyy. Hunka is in the front row, middle. In fact, during the Nuremberg Trials, the Waffen-SS was declared to be a criminal organization responsible for mass atrocities.
Here’s the Ottawa-approved 14th division of the Waffen SS in the field https://t.co/gsMEEiqKNo pic.twitter.com/qVHClZrI7J
— Max Blumenthal (@MaxBlumenthal) September 24, 2023
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Following the war, thousands of SS Galichina veterans were allowed to leave Germany and resettle in the West – with around 2,000 moving to Canada. By that time, they were known as the First Ukrainian Division.
A blog by an association of its veterans, called “Combatant News” in Ukrainian, includes an autobiographical entry by a Yaroslav Hunka that says he volunteered to join the division in 1943 and several photographs of him during the war. The captions say the pictures show Hunka during SS artillery training in Munich in December 1943 and in Neuhammer (now Świętoszów), Poland, the site of Himmler’s visit.
In posts to the blog dated 2011 and 2010, Hunka describes 1941 to 1943 as the happiest years of his life and compares the veterans of his unit, who were scattered across the world, to Jews. –Forward
So, the same leftists who called Trump supporters Nazis for years are now honoring an actual Nazi – while Germany has notably locked up several concentration camp guards in their 90s for their involvement in Nazi activities.
University of Ottawa Political Scientist Ivan Katchanovski lays it out…
He wrote that he volunteered to join SS Galicia Division in 1943 in Ternopil region in Western Ukraine https://t.co/QAKG9hZOjo
— Ivan Katchanovski (@I_Katchanovski) September 24, 2023
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AP/CBC: “A top commander of a Nazi SS-led unit accused of burning villages filled with women and children lied to American immigration officials to get into the United States and has been living in Minnesota since shortly after the Second World War, according to evidence… pic.twitter.com/SAgjh0HCgy
— Ivan Katchanovski (@I_Katchanovski) September 24, 2023
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“Zelenskyy joins Canadian Parliament’s ovation to 98-year-old veteran who fought with Nazis. The man was part of SS Galichina, a unit whose history has been whitewashed by veterans groups in the West. The Canadian Parliament gave a standing ovation on Friday to a 98-year-old… pic.twitter.com/tB8RQ4fXmS
— Ivan Katchanovski (@I_Katchanovski) September 24, 2023
Meanwhile, here’s Ukraine’s Azov Battalion of neo-Nazis that everyone with a Ukraine flag in their bio is supporting…
Odd, they don’t look like Trump supporters.
Maybe these Nazis can shed some light? Careful, “X” thinks this is sensitive material (that might redpill people?).
As @RealAlexRubi reported, “Boneface” McLellan has boasted of taking photographs of Ukrainian fighters “posing with the corpses of a lynched pregnant woman and a man they said was her husband.”
Boneface also insists Ukraine’s military is filled with Nazis like himself: “There… pic.twitter.com/AyzuO89xvL
— Max Blumenthal (@MaxBlumenthal) September 3, 2023
Meanwhile…
Google has put up it’s obligatory admonishment about using “trusted” sources on the Nazi collaborator story. What’s particularly egregious in this instance is that not only is the Hunka story demonstrably true but the corporate media is enforcing a blackout on any mention of it. pic.twitter.com/3YUCIuoQ8N
— Hans Mahncke (@HansMahncke) September 24, 2023
Extra meanwhile…
Is there anything else, uh, more important to comment on right now maybe? https://t.co/YxOGrzYvi4
— zerohedge (@zerohedge) September 25, 2023
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Tyler Durden
Sun, 09/24/2023 – 14:25 - Bitcoin Mining Can Reduce Up To 8% Of Global Emissions: Report
Bitcoin Mining Can Reduce Up To 8% Of Global Emissions: Report
Authored by Ezra Reguerra via CoinTelegraph.com,
A paper published by the Institute of Risk Management (IRM) concluded that Bitcoin has the potential to be a catalyst for a global energy transition.
IRM Energy and Renewables Group members Dylan Campbell and Alexander Larsen published a report titled “Bitcoin and the Energy Transition: From Risk to Opportunity.”
The paper argued that while BTC was perceived as a risk because of its energy consumption, it can also catalyze energy transition and lead to new solutions for energy challenges worldwide.
Within the report, the authors also highlighted the important function of energy and the increasing need for reliable, clean and more affordable energy sources.
Despite the criticisms of Bitcoin’s energy intensity, the study provided a more balanced view of Bitcoin by showing the potential benefits BTC can bring to the energy industry.
Amount of vented methane that can be used in Bitcoin mining. Source: IRM
According to the report, Bitcoin mining can reduce global emissions by up to 8% by 2030. This can be done by converting the world’s wasted methane emissions into less harmful emissions. The report cited a theoretical case saying that using captured methane to power Bitcoin mining operations can reduce the amount of methane vented into the atmosphere.
The paper also presented other opportunities for Bitcoin to contribute to the energy sector.
“We have shown that while Bitcoin is a consumer of electricity, this does not translate to it being a high emitter of carbon dioxide and other atmospheric pollutants. Bitcoin can be the catalyst to a cleaner, more energy-abundant future for all,” the authors wrote.
According to the report, Bitcoin can contribute to energy efficiency through electricity grid management by using Bitcoin miners and transferring heat from miners to greenhouses.
Tyler Durden
Sun, 09/24/2023 – 13:50 - Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima
Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima
Von der Leyen just said what?…
This past Wednesday, President of the European Commission Ursula von der Leyen delivered a speech before the 2023 Atlantic Council Awards in New York, where she sounded the alarm over the specter of nuclear war centered on the Russia-Ukraine conflict. But while invoking remembrance of the some 78,000 civilians killed instantly by the atomic bomb dropped on Hiroshima at the end of WWII, she said her warning comes “especially at a time when Russia threatens to use nuclear weapons once again“. She actually framed the atomic atrocity in a way that made it sound like the Russians did it. Watch:
Shameful words by the President of the European Commission, Ursula von der Leyen.
What do you mean with “once again”?
Treacherous words used on her speech delivered at the 2023 Atlantic Council Awards to suggest that Russia used nuclear weapons in Hiroshima and Nagasaki,… pic.twitter.com/nJFd8acJbq
— Alexandre Guerreiro (@ATGuerreiro) September 22, 2023
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There was not one single acknowledgement in Von der Leyen’s speech that it was in fact the United States which incinerated and maimed hundreds of thousands when it dropped no less that two atomic bombs on Japanese cities.
Here were her precise words, according to an Atlantic Council transcript…
You, dear Prime Minister, showed me the meaning of this proverb during the G7 summit in Japan last year. You brought us to your hometown of Hiroshima, the place where you have your roots and which has deeply shaped your life and leadership. Many of your relatives lost their life when the atomic bomb razed Hiroshima to the ground. You have grown up with the stories of the survivors. And you wanted us to listen to the same stories, to face the past, and learn something about the future.
It was a sobering start to the G7, and one that I will not forget, especially at a time when Russia threatens to use nuclear weapons once again. It is heinous. It is dangerous. And in the shadow of Hiroshima, it is unforgivable.
The above video of that segment of the speech gives a better idea of the subtle way she closely associated in her rhetoric the words “once again” with the phrase “shadow of Hiroshima” while focusing on what Russia is doing, to make it sound like it was Moscow behind the past atrocities.
Via dpa Russian media not only picked up on the woefully misleading comments, but the Kremlin issued a formal rebuke of Von der Leyen’s speech as well:
In response to von der Leynen’s remarks, Russian Foreign Ministry spokeswoman Maria Zakharova accused the European Commission president of making “no mention whatsoever of the US and its executioners who dropped the bombs on populated Japanese cities.”
Zakharova responded on social media, arguing that von der Leyen’s assertions on Moscow’s supposed intentions to employ nuclear weapons “is despicable and dangerous” and “lies.”
Empire of lies and its lords
Nuclear weapons were used only twice in history. But at the Atlantic Council Awards, EU’s Von der Leyen, without mentioning that both times US did it, falsely claimed that “Russia threatens to use nuclear weapons once again”. Shame. pic.twitter.com/wRY2sntxl0
— Russian Embassy in Kenya/Посольство России в Кении (@russembkenya) September 23, 2023
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Some Russian embassies in various parts of the globe also highlighted the speech on social media, denouncing the “empire of lies” and those Western leaders issuing ‘shameful’ propaganda and historical revisionism.
Tyler Durden
Sun, 09/24/2023 – 13:15
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