- Brandon Smith: Trans Women Are Men And Pretending Otherwise Is Cultural Insanity
Brandon Smith: Trans Women Are Men And Pretending Otherwise Is Cultural Insanity
Authored by Brandon Smith via Alt-Market.us,
Let’s get a few points out of the way before anything else is said: There is ZERO scientific evidence to support the notion of gender self identification. There is ZERO scientific evidence to support the claim that gender is merely a social construct. There is more evidence that biology determines gender behaviors and manhood and womanhood are inborn psychological constructs. The vast majority of people develop gender associations directly in line with their biology. Men act like men, women act like women, and these behaviors have been established as biological fact from the beginning of recorded history.
Men and women are biologically different in many respects, even down to how our brains function. Biological sex and gender related behavior are based mostly in nature, not mostly in environment. However, the gender identity religion has deemed these concepts a form of bigotry. The situation has become so unhinged that leftists are now referring to real women as “bleeders” or “people who menstruate,” as if this is the only biological difference between them and trans women.
Regardless of how one is positioned on the topic, if you are honest you have to admit that transgenderism today is a political issue, not a scientific issue. In the past few years we have seen government funded and globalist foundation funded scientists politicized by the gender issue. But, again, they have zero evidence to support their claims that gender is changeable and malleable. Interestingly, they now argue both sides: That gender is purely a social construct, and that gender is biologically linked and hardwired. The two ideas are mutually exclusive, but hey, we’re living in clown world now, so we should just shut up and enjoy the ride…
Are there people out there who feel as though their mental acclimation is not the same as their biological acclimation? Yes, there are exceptions to the rule. In most legitimate cases these people suffer from a mental illness called “gender dysphoria.” It’s a relatively harmless psychological problem (except that it tends to cause depression and suicidal tendencies for the trans person); these people are not a threat to me or to you and their existence in our society is not really our concern, unless, that is, they make it our concern.
For some reason, the authoritarian political left has elevated the transsexual issue to the very top of their oppression Olympics. It’s hard to say why, but they have taken a “group” which represents around 0.4% of the population and determined that they are the pinnacle of the victim totem pole and that the rest of the world needs to walk on egg shells whenever dealing with them.
But let’s look at this situation objectively for a moment, shall we?
The trans community is considered a designated “oppressed minority,” but it’s one that any person can join for any reason. It’s not really a minority group so much as a club, and clubs can become trendy when they are marketed effectively. I don’t have to actually have gender dysphoria to join this club, all I have to do is CLAIM that I identify as trans and, suddenly, I am now part of an oppressed class. The problem is, trans people are not oppressed, at least not in the west.
What the political left deems “oppression” is rather confused and convoluted. In their terminology, oppressing them means not letting them do whatever the hell they please regardless of how destructive their intent. You are victimizing them by not letting them victimize you.
Let’s expand on that in trans terms: If a man claims he is a woman and is trans, that person now has the social power to demand that the rest of us identify him as a woman and use the pronouns he prefers. In other words, if tomorrow I claim I am trans (even though it’s not true) I then have the right to control your speech. And yes, it is absolutely as simple as that according to leftists.
A vivid example of this control dynamic is the reaction to the recently passed Florida Anti-Grooming Bill, which SJWs and the media dishonestly labeled the “Don’t Say Gay Bill.” Here we have a law based in logic and reason which victimizes no one, turned into a circus under accusations of bigotry and discrimination. What does the bill do? It prevents public school teachers from exposing children as young as Kindergarten to discussions on sexuality and gender identity, and requires that they talk to parents about their child’s exposure to any such lessons. In other words, Florida is telling teachers they’re not allowed to propagandize children with their cultist nonsense and groom them into the SJW/trans fold.
Public school teachers are paid by the state and the taxes that parents pay to the state. The teachers work for the parents; the parents are the boss. But leftists don’t see it that way. They say it’s about free speech, and at bottom they they aren’t school employees, they are evangelists for the social justice cause. They are widely against religious ideas being taught in schools, unless it’s their own religion.
The truth is they are zealots. They believe their ideology supersedes all other concerns and that they have the right to mold your children into that ideology without your approval because they believe you are too ignorant to understand the “greater good” that is being done.
The anti-grooming bill was designed to protect young children from sexual indoctrination, and leftists are furious about it. They claim ownership of your children, and the trans agenda is a big part of the molding process that leftist teachers say they have a right to pursue.
As you can imagine, the temptation for narcissistic and sociopathic miscreants to jump on the trans bandwagon is immense. All they have to do to gain control over the people around them is to join a gender identity group? All they have to do to get special treatment and privileges is proclaim they are discriminated against? For people without conscience this is an exciting new world where their narcissism is applauded and protected.
If people don’t comply, they are “oppressing” the trans individual and are now automatically bigots. Frankly, I will never refer to a trans person according to their preferred pronouns. Why? Because this is a lie. They are not what they claim to be. Their internal fantasies are irrelevant to the facts, and their feelings do not matter where the truth is concerned. There is no such thing as “their truth,” there is only THE TRUTH.
If the issue at hand is gender dysphoria, then we must approach it like any other mental illness. When dealing with a schizophrenic that believes he is Napoleon or Elvis Presley, we don’t demand that the whole of society agrees with him and enables his fantasies and makes laws protecting the validity of his delusions, right? We ignore his fantasies; we don’t adapt our entire culture to his whims. Why are we doing this with trans activists?
Much of what the political left does involves making their problems into your problems, and it’s mostly about control, not equality. They claim they are victims, and therefore they believe they have the right to determine what is oppression and what is bigotry. I ask, who made them the virtue police and how are they actually qualified? Most of these people are so stunted and biased they hardly measure up to the high standards that would be required to pass such objective judgments. Leftists aren’t the most virtuous, they are the most unstable, and yet they are being positioned as the arbiters of our morality.
I focus on trans women specifically in this article because while there are women who pretend they are men, these women generally aren’t trying to invade men’s spaces and take them over. There is something rather predatory and malicious about the trans woman aspect of this movement.
Most of the world is probably now familiar with the bizarre case of Lia Thomas (aka William Thomas), a biological man cosplaying as a woman so that he can compete in the women’s NCAA swimming championships and destroy all the other real women competitors. Leftists argue that keeping Lia Thomas and those like him out of women’s competitions would be oppressive, but is it really? Is acknowledging scientific fact “bigotry?”
The most glaring catalyst for the whole scenario is feminism. It’s ironic that feminists have misrepresented the male-to-female social dynamic for so long that regular women actually began to believe the leftist world view, and now it’s coming back to bite them on the ass.
For decades, feminists have been arguing that women and men are equal in every possible way, including in physicality. This delusion has become dangerously pervasive, not just in Hollywood but in the real world. We have even had the US military recently attempting to integrate women into frontline combat and ranger battalion roles, to the point that they had to rig the standards in the women’s favor just so they could pass the grueling tests. Other more honest experiments, such as those conducted by the US Marines into mixed gender units, show that this is a terrible idea. Not only are mixed units distracted by sexual concern, but male/female units perform poorly in almost every area of training compared to all male units.
Today, the trans athlete issue is proving beyond a doubt that men are physically superior to women. There is no debate. Even Lia Thomas, a man ranked in the 400s in male swimming, has dominated women’s swimming easily. The examples are becoming widespread, from women’s weightlifting to women’s MMA fighting and women’s track and field. If you want to crush the competition in women’s sports, all you have to be is a man.
If women want to save their sports, they are going to have to admit that the feminists were wrong and that men are physically superior. And, this is probably one of the primary reasons why very few women in sports have spoken up. They have been conditioned for so long to notions of equity, they can’t handle the truth of biological reality.
The other reason is that if they do speak up they face the prospect of becoming social pariahs and being ostracize. Of course, the majority of Americans think cancel culture is garbage, but the political left controls the corporate environment including Big Tech and most of government; they can make it appear as if they are the majority when they are not. Even if they were the majority that does not mean they are not crazy. It is pure madness to deny facts that are right in front of your face just to achieve political ends, but leftists have been doing this for some time now.
There are trans people that are not on board with the leftist agenda. Bruce Jenner (aka Caitlyn Jenner) has been surprisingly outspoken against woke propaganda. Blair White is another example of an anti-leftist trans figure willing to speak out. The liberty movement and conservatives have widely embraced them even though leftists claim we “hate” trans people and want to see them erased. The fact is that most of us don’t care what people do in their private lives. But, when you weaponize and politicize your sexual proclivities and declare that we owe you something, that’s when we’re going to have a problem.
Ultimately, the trans community is so minuscule it begs the question – Why are these people relevant in the grand scheme of things? Because leftists see an opportunity to use them as tools for social derailment? Why are leftists so obsessed with the idea of indoctrinating children into the trans fold? Why are they so interested in undermining biological fact? What is it with leftists and their need to turn the world upside down?
Many of them know, deep down, that the ideologies they preach are not based in truth. They know that they lie, and some of them are openly proud when their lies prove effective. They are clearly not interested in enlightenment, they are only interested in winning. But what does it mean for the political left to “win.” Well, in Marxist/communist terms, winning means destroying everything and tearing the target society down to nothing. And if that’s what winning is to them, I’m more than happy to act as a gatekeeper that shuts them down and keeps them out as much as possible. Gatekeeping in this case is good.
It’s sad that real people with real gender dysphoria are caught in the middle of this battle for the stability of our society. They should no be used as pawns in the culture war. But then again, perhaps it’s time for more of them to speak up if they are not in support of the woke agenda. I think this farce has gone on long enough, don’t you? As insane as leftists are, maybe we are more insane for letting the patients run the asylum.
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Tyler Durden
Fri, 03/25/2022 – 23:40 - Russian Superyachts 'Go Dark' To Avoid Tracking
Russian Superyachts ‘Go Dark’ To Avoid Tracking
Since the invasion of Ukraine, Russian oligarchs have been panic-moving private jets, superyachts, and other trophy assets away from Western countries to avoid sanctions.
Marine data compiled by Bloomberg show at least nine superyachts owned by Russian tycoons have switched off tracking systems. These devices, also known as automatic identification systems or AIS, are required for all passenger ships to broadcast positions for other vessels and coastal authorities.
“There’s no reason why their AIS transmissions should be off for days,” said Gur Sender, a program manager at Windward Ltd., which specializes in maritime risk and intelligence.
“Even if you’re in the middle of the ocean you have a satellite picking up your transmission once in at least eight hours. If you’re a big yacht, it’s in your interest to have it on so everyone can see the ship to prevent accidents,” Sender said.
Most of the yachts went dark on Feb. 24, the day Russia invaded Ukraine. Then more went dark after President Biden announced sanctions on Russian oligarchs on Mar. 11. The oligarchs are all part of Russian President Vladimir Putin’s inner circle.
Russian oligarchs who have been sanctioned have either had their yachts commandeered by European authorities (like Rosneft CEO’s $120mln superyacht) or have sailed to more friendly waters out of the Mediterranean and Northern Europe to the Indian Ocean and or the Middle East.
According to vessel data, at least eight ships were last seen near the United Arab Emirates, Oman, or Saudi Arabia.
Meanwhile, two superyachts owned by Russian businessman Roman Abramovich fled from Western Europe for Turkey.
Tyler Durden
Fri, 03/25/2022 – 23:20 - China's Belt-And-Road Comes To America's Heartland, Part 2: This Is Not The End
China’s Belt-And-Road Comes To America’s Heartland, Part 2: This Is Not The End
Authored by Fortis Analysis via Human Terrain,
Earlier this year, Fortis Analysis released details on the proposal by Fufeng Group, a CCP-connected company, to build a wet corn mill and amino acid production facility in Grand Forks, ND. In conducting further research, interviewing local residents, and working with recognized experts in national security and United States trade law, it is more and more clear that the Grand Forks city council and mayor Brandon Bochenski are both economically and constitutionally illiterate.
Pictured: Fufeng USA Chief Operating Officer Eric Chutorash, speaking to Grand Forks City Council A single line of inquiry into this project is impossible, so we will work to highlight a range of domains where this project falls short of both good sense and the law of the land. To that end, let’s first explore the FAQ on this project released by the Grand Forks Regional Economic Development Council. There are numerous claims so easily rebutted that making them is either knowingly spreading false information, or an inexcusable lack of attention (or ability) to performing due diligence.
A selection:
CLAIM: ”Fufeng USA is a global leading bio-fermentation company manufacturing products that serve fast-growing animal nutrition. Their headquarters is in Chicago, Ill. Fufeng USA has chosen to invest in Grand Forks to establish a wet corn mill processing plant in the United States.”
FACT: Fufeng USA Incorporated was established in the United States at the address of a private residence in Wheaton, IL. As of this writing, Fufeng USA Incorporated imports to the United States using the same Wheaton location as its official consignee address registered with US Customs and Border Protection. Another Fufeng USA corporate address noted on the Chicago Chinatown Chamber of Commerce website (under the “Manufacturers” section) is located inside a multi-tenant office building in Oak Brook, IL. This entity is wholly-owned by Fufeng USA Holdings Limited, which is domiciled in Hong Kong, and is itself wholly-owned by Trans-Asia Capital Resources Ltd., also domiciled in Hong Kong. Trans-Asia Capital Resources Ltd. is a wholly-owned subsidiary of Fufeng Group, which has its principal place of business in Junan in the Shandong Province of China. It is beyond a stretch to say that Fufeng USA is anything more than a shell company to facilitate Fufeng Group’s ability to do business in the United States. This information comes directly from Fufeng Group’s annual report for 2020, published in 2021.
CLAIM: “The North Dakota Trade Office has done a search for illegal import/export activity for Fufeng USA and its principles. No red flags or areas of concern were found. NDTO resources include access to 30 federal databases.
Fufeng USA has been operating in the United States since 2020. Also, First Biotech, Inc., a Fufeng USA subsidiary, has been doing business in the US for over 10 years. Both have filed federal taxes in the US and have established international banking accounts with large financial institutions that have significant federal oversight. The company will be subject to all the same US laws, regulations, and oversight and any US company.
Fufeng USA Group is publicly traded on the Hong Kong Stock Exchange. The US Securities and Exchange Commission has a supervisory oversight relationship with the Exchange. Fufeng USA Group has many US and European institutional investors including TreeTop Management, Vanguard, Fidelity, Mellon, and Blackrock, all heavily regulated.”
FACT: This is, quite simply, a word salad intended to obscure the real issue at stake here – the absence of correct and proper due diligence. The United States has multiple layers of regulatory oversight beyond basic financial oversight, few if any of which have been notified by GFREDC, the city, or Fufeng, let alone conducted formal inquiries. One other point that must be noted is that “Fufeng USA Group” is not a real entity, nor is any Fufeng USA entity “publicly traded on the Hong Kong Stock Exchange”. The publicly-traded entity is the ultimate parent company, Fufeng Group Limited. More detailed explorations of these points follow further in this analysis. In short, the absurd and incorrect statement that a cursory review of trade databases and some correctly-filed taxes is sufficient proof of Fufeng’s safety to national security should embarrass all involved in this process.
CLAIM: “The development of the Fufeng USA plant will create a local market for corn and improve pricing. Regional farmers will have the option to sell to elevators or Fufeng USA.
The North Dakota Corn Growers Association, a farmer led membership organization focused on policy that impacts North Dakota corn producers, were pleased with the announcement that Fufeng USA will establish a wet corn mill in Grand Forks. They issued a press release indicating the project will have tremendous value to regional farmers.”
FACT: The claim made elsewhere by the city about the economic impact to farmers betrays a startling ignorance about the mechanisms of grain production and sales. The estimate of $.20 to $.40 per bushel of corn in premium versus current market conditions was not derived from careful analysis conducted by third-party experts. When pressed on the matter by Shaun Beauclair, himself a farmer and former board member of a regional corn processing facility, the GFREDC admitted that the premium assumption was given by a single farmer. In a February interview with AgWeek about the Fufeng project, Dr. Frayne Olson of North Dakota State University said that he believes the $.40 per bushel claim is only realistic for the first year or two to incentivize sales to the corn mill. Once the market settles back in future years, the realistic premium is closer to $.10 to $.20 per bushel. In practice, the grain elevators in the area who do not have direct interest in a value-added market for their purchased corn will quickly be faced with the choice of becoming a de facto origination and storage facility for Fufeng, or closing their doors.
As one can see from this selection of “facts”, the Grand Forks Regional Economic Development Council has not done its best work to provide complete or accurate information to its stakeholders. Now, if this was the only vector of misinformation and all others involved were honest brokers, one might understand how an economic development group would choose to shade the truth a bit in order to bring a splashy, high-revenue project to town. Unfortunately, this is not the case. Multiple other individuals in positions of city leadership have also willingly promoted dishonest talking points, or chosen unscrupulous partners for the city, all in the interest of pushing the project forward. Let’s examine a few of these.
Fufeng Group Has No Financial Connection to the Chinese Government
On November 17, 2021, in a publicly-posted comment on his official Facebook account, Grand Forks mayor Brandon Bochenski stated that:
“…the company is an American subsidiary of a publicly traded company that has zero govt. ownership. They are investing in an American facility built by American contractors, using American corn stock to produce products sold in America and manufactured by American workers. The company is more American than Apple, Nike and Amazon quite frankly in the global economy of today.”
Members of the city council have used similar talking points in publicly-available council discussions.
Now, this particular formulation of the zero-affiliation claim is intended to reassure listeners that as Fufeng Group Limited is a publicly-traded company on the Hong Kong Stock Exchange (a subsidiary of HKEx, or Hong Kong Exchanges and Clearing), it is not reasonable to believe that the firm or any of its subsidiaries would choose (or be forced) to act in any way outside the direct fiduciary interests of its global shareholders. A complete overview of the complicated (and compromised) relationship between the HKEx and the Chinese Communist Party is beyond the scope of this piece, but for now, the following data will more than suffice to rebut this talking point.
HKEx’s largest single shareholder is the Hong Kong Government, which also has the right to appoint six of thirteen directors to HKEx’s board. This matters for a number of reasons, but perhaps the most important is the Hong Kong national security law unanimously passed by China’s Standing Committee of the National People’s Congress on 30 June 2020 in the wake of widespread pro-democracy protests throughout Hong Kong. Among the various deeply anti-democratic provisions of the law are the requirement that companies listed on the Hong Kong Stock Exchange act in accordance with the security directives of a secret body called the Committee for Safeguarding National Security.
This entity has the ability to at any time investigate, indict, prosecute, or ruin any non-compliant company who has any business interest in Hong Kong – and extend these enforcement protocols anywhere in the world in violation of sovereign law and international norms. It is impossible to believe that HKEx will push back in any way if the Chinese Communist Party directs Fufeng Group to perform certain actions or disclose confidential business, community, or employee information in any of its subsidiaries – including Fufeng USA Incorporated. In simplified form, if the secret national security entity in mainland China or Hong Kong creates any pretext whatsoever, it will be able to force Fufeng USA to reveal all personal details of any employee, contractor, or even guests of the corn mill, regardless of the laws of the United States. This is an extremely important detail that as of yet, has not been properly addressed by Fufeng or city officials.
Moreover, it is not even accurate to say that Fufeng Group does not have a financial connection to the Chinese government. In the same annual report referenced earlier, Fufeng Group Limited lists an interesting disclosure: a 30% ownership stake in Jilin COFCO Biomaterial Co Ltd. This joint venture between Fufeng Group and China Oil and Foodstuffs Corporation (COFCO) is notable because COFCO is the largest agribusiness in China, and is a 100% state-owned enterprise under the management of the hyperpowerful State-owned Assets Supervision and Administration Commission of the State Council (SASAC). Note that SASAC manages numerous entities that are currently sanctioned by the United States for espionage activities, use of forced labor in Xinjiang and elsewhere, and violation of international treaties or laws. Though COFCO has as yet not been similarly sanctioned, it is important to note that its sister companies under SASAC were penalized for carrying out the will of the Chinese Communist Party, and that COFCO can at any time be similarly leveraged by the CCP to perform illegal activities against the United States.
As with numerous other claims made by the North Dakota Trade Office, Mayor Bochenski, GFREDC, and the Grand Forks city council, one cannot help but wonder how much due diligence has actually been put into this project.
The City Is Taking All Appropriate Steps to Examine the Impact on U.S. National Security Interests
This omnibus talking point, used repeatedly by city officials, is also completely inaccurate. There are numerous checks and balances that exist at the federal level concerning real estate acquisitions and foreign investments into the U.S. economy.
The most well-known of these, the Committee on Foreign Investment in the United States (CFIUS), is a multi-agency group under the Executive Branch that has the mandate of reviewing transactions by foreign entities into companies or technologies designated as “critical” to national security, and/or real estate transactions located within 100 miles of designated military installations. An examination of the facts shows that the Fufeng project may fall into the category of a “covered real estate transaction”, which means CFIUS expects voluntary disclosure of the project’s details. The risk is that if stakeholders do not disclose and CFIUS chooses to open an inquiry at some point, then an adverse finding from CFIUS will result in significant penalties for all involved, up to and including the forced sale of the property and assets to an approved third party. That the city and county have been courting Fufeng Group since mid-2020 and as of yet have not sought out independent legal review for compliance with FIRRMA (the law governing CFIUS’ activities), or submitted for a free voluntary review with CFIUS since the public reveal of this project in November 2021, does not argue well for the city council’s competence or motives in continuing to ignore public outcry and push the process forward at a breakneck pace.
Another talking point used by the city and GFREDC is that the county and city’s “base retention” consultant, retired USAF General David Deptula, has reviewed the proposal and discussed it with the leadership at Grand Forks Air Force Base. The claim is that no one has issued an objection to the Fufeng proposal. There are a few things about this, however, that raise red flags. First, Deptula was the subject of a multi-year investigation by Department of Defense into illicit contracting activities and fraud while he was in uniform. In February 2015, Deptula agreed with the Department of Justice to pay a fine of $125,000, and was barred by the Air Force from conducting business with the federal government from November 2014 to February 2016.
Despite this, the Grand Forks city council continues to authorize a $5,000 per month direct payment to The Deptula Group (Deptula’s lobbying and consulting firm) for base retention activities. When questioned about this, city council president Dana Sande initially insisted that Grand Forks County employs Deptula, not the city. After being reminded of the monthly expense approved by Sande and the rest of the city council, Sande admitted that the city pays a portion of the funding for base retention activities, but the county is in charge of selecting and coordinating with Deptula. However, a review of the county’s 2021 budget does not show a request or approval for funding to be allocated under the Base Retention line item, nor do county minutes throughout 2021 show approvals to remit any funds to Deptula, his company, or for base retention activities.
It is possible that the county has allocated funding under a different line item to pay for Deptula’s services, but such is not noted. However, if the county is indeed not contributing to paying Deptula, then the city of Grand Forks appears to be willingly carrying the cost of Mr. Deptula for “base retention” activities, even as the Air Force already publicly committed in 2021 to expanding the base’s role and increasing its footprint in Grand Forks. Regardless, the ongoing payment of Deptula for at least $5,000 per month from city funds reflects the council’s comfort with employing fixers who have a questionable at best code of ethics when it comes to personal enrichment at the expense of taxpayers.
Moreover, it is not for the leadership of the local military installation to make a determination on if a particular project is compliant with national security regulations. Thus, the constant talking points by city officials that Grand Forks Air Force Base has reviewed the project and not issued a complaint is misleading and wholly incorrect. The base leadership cannot review and rule on the Fufeng project, or any other potential commercial investment by foreign entities in the area of the base. The fact that city officials have continuously asserted that the Grand Forks Air Force Base commander has done so is incorrect, and jeopardizes the careers of both the commanding officer and any active duty personnel so connected to the claim. It also opens the door to civilian law enforcement involvement, as active duty military personnel allegedly issuing inappropriate and unauthorized statements in support of foreign investment may also entangle the civilians making such claims into criminal or civil charges. This is a tightrope for city officials to publicly walk, and it would seem from the outside that they have created a fiasco in the making in their haste to justify a lack of responsible and legal due diligence.
There Are No Other Conflicts of Interest on the City Council with This Project
Before each City Council vote on this project, the council brings up councilmember Jeannie Mock’s conflict of interest in the project and votes to force her to abstain. Mock’s company, AE2S, was involved in the preparation of land-use and infrastructure data before the project was publicly revealed, as can be seen on Slide 12 of the city’s pitch deck for the project. It is not known for certain how Mock would vote on the project, but it is proper for her to abstain on the basis of conflicts of interests and good ethics. However, there are other potential future conflicts of interest on the council not discussed or considered as exclusionary by the council.
Kyle Kvamme is employed by ICON Architectural Group, a regional commercial project design firm headquartered in Grand Forks. Kvamme is the Director of Community Engagement and Project Development. He also recently became an owner in the firm. ICON is an obvious potential beneficiary of such a massive development as Fufeng’s, being a prominent local firm specializing in the design of buildings and layouts for large-scope projects.
Bret Weber, who has been one of the most supportive voices on the council for the Fufeng project, is employed by the University of North Dakota as Department Chair and Professor of Social Work. Also employed by UND is Danny Weigel, who is the Investigations Commander and Public Information Officer for the UND Police force. Both have disclaimed any conflicts of interest. However, neither has disclosed that Fufeng USA is a tenant of the UND Center for Innovation, the university’s on-campus “entrepreneurial incubator”. Nor has Weigel shared if he has conducted any background checks on Fufeng Group or its representatives prior to them establishing occupancy in campus facilities. It is currently unknown if Fufeng USA is simply paying rent for part of the Center’s co-working office space in order to have a local presence, or if the company is a more integrated user of Center resources, such as the wet lab. The Center touts the wet lab as such: “High tech, bioscience, and scientific companies are all welcome at the UND Center for Innovation. Our state of the art wet lab makes innovations happen.”
Given that Fufeng USA is, fundamentally, a biotech company that must cultivate and maintain various strains of bacteria to manufacture amino acids, it is not unreasonable to assume that the company has been, or will be, a major stakeholder in the Center. As the university already financially benefits from Fufeng’s presence in Grand Forks, the full scope of UND’s interest in current and future projects involving Fufeng should be disclosed. So, too, should it be considered a potential conflict of interest for university employees to vote as city council members on favorable considerations for a company that is an active revenue stream for the entity that cuts their paychecks.
The obvious rebuttal of “it’s a drop in the bucket in the university’s overall revenue stream” is beside the point, and frankly, is an inappropriate attitude for a public official to hold. Just as with the city utilizing a disgraced former general to help gain Department of Defense approval for the project, or Weber indicating in the March 7th city council meeting that he feels public concerns about the project’s impact to national security are overblown, it seems that a number of city officials involved with this project are willing to excuse impropriety and ethical lapses as the cost of doing business with Chinese companies.
Fufeng USA and Its Parent Companies Have No Known Connection to Forced Labor or Human Rights Crimes In China
This is the murkiest and most troubling of all the accusations Fortis Analysis and other groups have leveled against Fufeng, yet has been hand-waived away by project proponents as unfounded innuendo because the firm has not been sanctioned specifically by U.S. authorities. But like most of the complex issues involved with this project, such casual dismissals betray a malignant ignorance of how and why sanctions law functions as it does in our nation. Fortunately for the Grand Forks city officials, we are here to provide accurate and detailed information that can help those officials make informed decisions in line with their sworn duty to their offices.
The United States takes very seriously the issue of China’s human rights abuses, particularly in the Xinjiang Uyghur Autonomous Region of western China. In fact, the devastating suppression of non-Han ethnic groups in Xinjiang has been so intense that on 13 July 2021, the U.S. State Department issued its “Xinjiang Supply Chain Business Advisory”, with the summary reading as such:
The People’s Republic of China (PRC) government continues to carry out genocide and crimes against humanity against Uyghurs and members of other ethnic and religious minority groups in the Xinjiang Uyghur Autonomous Region (Xinjiang), China.
The PRC’s crimes against humanity include imprisonment, torture, rape, forced sterilization, and persecution, including through forced labor and the imposition of draconian restrictions on freedom of religion or belief, freedom of expression, and freedom of movement.
Businesses, individuals, and other persons, including but not limited to investors, consultants, labor brokers, academic institutions, and research service providers (hereafter “businesses and individuals”) with potential exposure to or connection with operations, supply chains, or laborers from the Xinjiang-region, should be aware of the significant reputational, economic, and legal risks of involvement with entities or individuals in or linked to Xinjiang that engage in human rights abuses, including but not limited to forced labor and intrusive surveillance.
Given the severity and extent of these abuses, including widespread, state-sponsored forced labor and intrusive surveillance taking place amid ongoing genocide and crimes against humanity in Xinjiang, businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law.
Potential legal risks include: violation of statutes criminalizing forced labor including knowingly benefitting from participation in a venture, while knowing or in reckless disregard of the fact that the venture has engaged in forced labor; sanctions violations if dealing with designated persons; export control violations; and violation of the prohibition of importations of goods produced in whole or in part with forced labor or convict labor.
Now, given how adept Chinese companies are at masking their participation in, or benefit derived in part from, these evil activities, the U.S. will utilize a standard called “rebuttable presumption” when investigating abuses and issuing sanctions under the Uyghur Forced Labor Prevention Act and future similar laws. What this means is that a company accused of connection to human rights abuses in Xinjiang (or other provinces) in China are treated by U.S. authorities as essentially being guilty until proven innocent. Importantly, this does not just mean that the company in question is directly employing forced laborers. Any company that uses raw materials, goods, or labor at any point in its supply chain where forced labor is involved is considered just as guilty of the abuse – a presumption of illegal benefit that extends to every single subsidiary, wherever it may be located.
As just one example of the new risk to American stakeholders from this expanded enforcement against China’s human rights abuse, Fufeng Group lists in its annual report that coal is the primary energy feedstock for its corn mills in China. Coal is one of the sectors most heavily targeted for enforcement and sanctions due to Chinese coal mining companies making extensive use of forced labor to keep production costs low. Fufeng Group specifically notes that it strategically locates its facilities close to coal-fired power plants, and that such practice is “instrumental in strengthening the Group’s pricing power.”
Even more so than coal, Fufeng consumes corn at enormous rates. Thus, it makes sense that Fufeng tends to locate its operations not only close to coal power production, but also major agriculture regions. Here, too, Fufeng should be assumed to benefit substantially from lower raw material prices derived from the involvement of forced labor.
In Heilongjiang province, Fufeng’s subsidiary Qiqihar Fufeng is located less than 50 miles from the sprawling Liusan Prison farm, managed by the Communist Party Committee Deputy Secretary of Liusan. Only a few miles further southwest from Liusan inside Inner Mongolia, there are numerous other farms at Wutaqi, Ulan, and the notorious Bao’anzhao Prison.
Hulunbeier Northeast Fufeng Biotechnologies is located approximately 200 miles from the large prison farm at “Genghis Kahn Ranch” in Zalantun City. One of Fufeng’s largest plants, Neimenggu Fufeng Biotechnologies, is located in Hohhot City in Inner Mongolia. The entire administrative apparatus for the corporation that sells forced prison labor goods to Chinese and international consumers is called Inner Mongolia Hengzheng Industrial Group Co., Ltd., and also happens to be located in Hohhot City. As of October 2019, the company was run by Xu Hongguang, a CCP member and the Deputy Director of the Ministry of Justice of the Inner Mongolia Autonomous Region. Among the company’s primary goods produced in the prisons and sold to companies in China are grains, processed agriculture commodities, and food ingredients. Notably, the company was sanctioned by the United States in October of 2020 for use of forced labor in manufacturing stevia sweetener, which like Fufeng’s products, are a derivative of biological processing. [Edit, 21 March 2022 – The original comment that stevia sweetener is a derivative of corn processing is not correct. The author has corrected the article.]
It would require an absurd leap of faith to state that Fufeng has no plausible connections to, or benefit from, the expansive use of forced labor in agriculture production so logistically close to Fufeng’s major corn- and coal-consuming plants in Xingang, Heilongjiang, and Inner Mongolia. Should an investigation be raised by Commerce, State, or Treasury into the activities of any Fufeng Group subsidiary in connection to forced labor, it is highly likely that Fufeng would be unable to satisfy the rebuttable presumption of participation in the forced labor and abusive regimes in place in China.
This would trigger automatic sanctions not only against Fufeng Group in China, but also their international subsidiaries such as First Biotech and Fufeng USA. Such sanctions would make it impossible for banks to lend to any of the affected entities in the United States or conduct normal business operations, shutting down the entire project in Grand Forks and invalidating the letter of credit the city proclaims as providing a no-risk guarantee to local taxpayers the city has not wasted money chasing a pot of gold at the end of the CCP’s genocidal rainbow.
This Is Not the End
As one can see, there is not much more that needs to be said about the Fufeng Group’s bid to purchase 370 acres of land in Grand Forks and build its wet corn mill. Nearly every single major talking point used by city officials and Fufeng USA is provably false or shaded with just enough truth to pass scrutiny of low-information voters. This is how it works when one chooses to do business with CCP-aligned entities who deliberately target local and state officials to circumvent the United States’ federal national security countermeasures. The officials, craving a big win to build their next campaign on, or perhaps finding some compelling self-interest in the economic aspects of the project, suspend all good sense and dive headfirst into extreme legal and moral hazard at the expense of their communities, their state, and their nation.
Grand Forks Mayor Brandon Bochenski, City Council president Dana Sande, and their grasping enablers have (to this point) made the choice to do just that.
And at least for now, we know that the most powerful weapon in the CCP’s gray zone war against the United States is not hypersonic missiles, cyberespionage, or theft of intellectual property.
It’s 30 pieces of silver wrapped in a box of false promises to our elected officials.
Addendum
A number of Grand Forks residents and concerned stakeholders around the nation have expressed to this author their alarm and despair at the ease with which the Chinese Communist Party continues to corrupt and undermine the United States. That it all feels hopeless, and that our collapse as a nation is both certain and imminent.
I will share this, then – Winston Churchill’s words to the Harrow School on 29 October 1941, in the midst of the darkest hours of Great Britain’s seemingly hopeless defense against the mighty Nazi war machine.
“…Never give in, never give in, never, never, never, never – in nothing, great or small, large or petty – never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy…
Do not let us speak of darker days: let us speak rather of sterner days. These are not dark days; these are great days – the greatest days our country has ever lived; and we must all thank God that we have been allowed, each of us according to our stations, to play a part in making these days memorable in the history of our race.”
Dum spiro spero.
Subscribe to Human Terrain
Tyler Durden
Fri, 03/25/2022 – 23:00 - Mapped: Gas Prices Across America Reach All-Time Highs
Mapped: Gas Prices Across America Reach All-Time Highs
In recent days, gas prices have skyrocketed to all-time highs.
According to the American Automobile Association (AAA), the national average price of regular unleaded gas has reached $4.25 per gallon as of March 21st, 2022. This is the first time since 2008 that gas prices had exceeded the $4 per gallon mark.
The price of gas was already rising two weeks before the Russian invasion of Ukraine, owing to the increased demand due to the lifting of COVID restrictions. But, as Visual Capitalist’s Raul Amoros details below, when the war broke out, the price of regular gas jumped 41¢ during the first week. This surge in prices could add up to $2,000 in annual cost to the average American household.
While the price at the pump sits at $4.25 per gallon on average, it’s worth mentioning that prices range quite substantially depending on the state. California has the highest average price at $5.86 per gallon. On the other extreme, Kansas has an average price of $3.77 per gallon.
Where is Gas the Most Expensive in America?
There are eight states where gas prices are above $4.50 per gallon, and three states where the price is above $5: California, Hawaii, and Nevada.
Here are the 10 states or districts with the highest gas prices:
Where is Gas the Least Expensive in America?
There are 16 states where gas prices are under $4 per gallon. Here are the 10 states with the lowest gas prices:
There are a few reasons why gas prices can vary from state to state. State taxes play a big role in the final price at the pump, and they can range from 57.6¢ per gallon in Pennsylvania to 8¢ per gallon in Alaska.
Proximity to refineries is another contributing factor for cheaper gas. States like Texas, Louisiana, Mississippi, and Alabama often have lower prices than other regions.
When Will Gas Prices Go Down?
Gas prices were on the rise due to an oil supply shortage. When war broke out, there was an additional price surge due to sanctions or bans on Russian oil exports by the West.
It’s also worth noting that even as the price of oil begins to fall once again, there is typically a lag before prices at the pump begin to ease for consumers.
The Energy Information Administration projects that average spot price of Brent crude oil will be $105.22 per barrel this year, a $22 difference compared to its original February forecast. As a result, many experts are expecting that gas prices could stay near or above $4 per gallon for the rest of the year.
Tyler Durden
Fri, 03/25/2022 – 22:40 - ATF Declares Some FRT-15 Triggers "Prohibited Machineguns"
ATF Declares Some FRT-15 Triggers “Prohibited Machineguns”
Submitted by The Machine Gun Nest (TMGN).,
The ATF has sent out an open letter to all Federal Firearms Licensees stating that they are now classifying “some“ FRTs or Forced Reset Triggers as machine guns. The letter also mentions that the ATF intends to take “appropriate remedial action with respect to sellers and possessors of these devices.”
This letter is a culmination of events that we’ve covered since the last year, starting with the ATF contacting Rare Breed (the manufacturer of the most popular FRT) and informing them that they were considering the FRT to be a machine gun. In response, Rare Breed challenged the ATF’s decision in court.
ATF issued an Open Letter on Forced Reset Triggers. Marketed as replacement triggers, some FRTs allow a firearm to automatically expel more than one shot w/ a single, continuous pull of the trigger, making them prohibited machineguns per the GCA & NFA. https://t.co/1w8wueebz3 pic.twitter.com/N3MCSFDpcj
— ATF HQ (@ATFHQ) March 24, 2022
More recently, Gun Owners of America reported evidence of a leaked email from ATF documenting plans to give Field Agents the green light to start demanding forfeiture of Forced Reset Triggers and documents relating to the sale/transfer of these devices.
ATF has finally announced that FRT owners violate the NFA and GCA. In their open letter, ATF states that “Current possessors of these devices are encouraged to contact ATF for further guidance on how they may divest possession.” So, ATF asks that gun owners call them and make them aware that they own what ATF has determined is an illegal machine gun.
But as always, with the ATF and gun control, there’s a larger story here.
Forced Reset Triggers or FRTs are not machine guns or machine gun parts. They’re semiautomatic triggers. Interestingly enough, in ATF’s letter, they say that what determined that FRT devices are machine guns was that “some FRT devices allow a firearm to automatically expel more than one shot with a single, continuous pull of the trigger.” Keep in mind the use of the word “continuous.”
“Unless the ATF doesn’t understand the difference between resetting and pulling a trigger, the statement is further evidence of the agency’s underhandedness,” said Firearms Policy Coalition.
Let’s compare this finding with the definition of “machine gun” as defined in 26 USC § 5845(b)
“The term ‘machinegun‘ means any weapon which shoots, is designed to shoot or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger.”
Notice how the word “continuous” is missing from the legal definition?
While it is true that FRT devices do increase a shooter’s rate of semiautomatic fire, the FRT does not convert a semiautomatic firearm into a machine gun. Like the name “Forced Reset” implies, the trigger is reset after firing via spring tension and a mechanical assist.
Nowhere in the definition of “machine gun” is the rate of fire mentioned. By this logic, match triggers, belt loops, and Jerry Miculek’s fingers should be considered machine guns.
If this situation sounds familiar, that’s because it is—the ATF in 2019 classified bump stock devices in a similar fashion.
The ATF did this by considering bump stock devices to be machine guns. Companies made no bump stock devices before 1986, so all bump stocks were effectively banned using the NFA, GCA & FOPA. The ATF uses this same process to ban and criminalize possession of Forced Reset Triggers.
This overreach is a tactic straight out of the David Chipman Playbook. Chipman was Biden’s nominee to lead the ATF, and a Senior Policy Advisor at Giffords, one of the largest anti-gun organizations. While Chipman proved to be too divisive of a nominee for ATF and had to withdraw his nomination, his thought process and policies still significantly influence the federal government.
In 2018, Chipman wrote an article called “Legal & Lethal: 9 Products That Could Be The Next Bump Stock,” and while Forced Reset Triggers did not exist at the time, they surely would have made the list.
So, what’s so important about a four-year-old article, and how does this relate to FRTs?
Well, this article reveals the process in which the anti-gun lobby and their allies in the ATF seek to erode American gun rights.
In Section 9 of Legal & Lethal, Chipman details his idea that semiautomatic firearms with “large-capacity magazines” in his mind are the same as machine guns. He does this by arguing the definition of “manual reloading,” saying that; “semiautomatic firearms with large capacity magazines rarely require manual reloading, but they can expel a lot of ammunition in a brief period of time. They do so by allowing a trigger to be pulled many times very easily and ensuring that there is almost always another bullet ready to go. Despite this, large-capacity magazines and semiautomatic firearms equipped with them (sometimes called “assault weapons”) are not regulated under the NFA, even though they pose incredible danger to our communities.”
If the definition of machine gun can be co-opted to include semiautomatic rifles, it would be disastrous for the firearms community, yet this is precisely where we’re headed with the disastrous bump stock decision, and now one step closer with the FRT situation.
Watch: Here’s a complete breakdown of the ATF’s open letter on FRTs and what it means for you.
Tyler Durden
Fri, 03/25/2022 – 22:20 - This Three Bedroom North Toronto Home Just Sold For $613,000 Over Its Asking Price
This Three Bedroom North Toronto Home Just Sold For $613,000 Over Its Asking Price
Today in “the housing market definitely isn’t in an inflationary bubble” news, an extensively remodeled 3 bedroom North Toronto home, located at 174 Cranbrooke Ave., sold for more than $600,000 over its asking price this week.
The home sold after being on the market for just 6 days, according to The Globe and Mail.
It had previously sold in August 2014 for $1,065,000 and sold in February 2022 – less than 8 years later – for almost triple what it went for in 2014. The seller was asking $1.995 million and the home sold for $2.608 million.
The house was “extensively remodeled in 2017”, the report notes. The remodel – which included “a modern bathroom upstairs and downstairs a new open dining area and kitchen with stainless steel appliances, Caesarstone countertops and a massive island” – attracted about 80 potential buyers when the home went on the market, the report noted.
Brayden Irwin, one of the agents who listed the home, said: “We did not do any open houses because we feel serious buyers want to see the house in a private setting and walk through on their own with their agents.”
He continued: “It gets a better response from the market when they’re able to do that and not being disturbed by other people.”
Seven serious offers had come in by the house’s offer date. Irwin told The Globe and Mail: “Three offers were really above the rest, so it shows that there are a lot of serious buyers in the market.”
“It seemed like almost every property coming to market was either selling in multiple offer [scenarios] or were selling pre-emptively,” he continued. “It’s a classic North Toronto detached house on a 25-foot lot, but these sellers opened up the main floor and did a really beautiful renovation.”
He concluded: “A lot of people were looking at this house because of its proximity to John Wanless, which is a popular elementary school, and its proximity to Yonge Street.”
Tyler Durden
Fri, 03/25/2022 – 22:00 - Ukrainian Refugees Welcomed In Latin America, Though Few Are Staying
Ukrainian Refugees Welcomed In Latin America, Though Few Are Staying
By Autumn Spredemann of the Epoch Times
Nations outside Europe are now seeing Ukrainians fleeing Russia’s war turn up at their borders. In Latin America, countries like Brazil, Argentina, Mexico, Guatemala, and Bolivia, have made immigration policy adjustments and are taking on refugees amid the region’s latest crisis of displaced people arriving from conflict zones.
Though even in the early stages of this humanitarian dilemma a trend has begun to emerge: Ukrainians are arriving in Latin America, but many aren’t staying.
A Ukrainian family chat as they seek a humanitarian visa at the San Ysidro Port of Entry of the U.S.-Mexico border in Tijuana, on March 15, 2022 Nearly 900 asylum seekers have arrived in Brazil from Feb. 24 to March 17 after President Jair Bolsonaro announced a humanitarian visa for Ukrainian refugees on Feb. 28.
“We will do everything possible to welcome the Ukrainian people,” the Brazilian head of state said.
Brazil’s President Jair Bolsonaro speaks, during a joint press conference with Paraguay’s president at the Planalto Palace in Brasilia, Brazil, on Nov. 24, 2021 Brazil offers a unique attraction for the refugees, as it boasts the largest number of Ukrainian residents in the region.
The majority of resettled and Ukrainian expatriates live in Parana, which is the sixth most populated state in Brazil and home to upwards of 400,000 Ukrainians. The South American giant also has a strong economy and a diverse language profile, including many English and other Western language speakers.
The Brazilian humanitarian visa allows Ukrainians arriving from the war in their home country to work and study as normal. The initial paperwork is valid for 180 days, however, refugees will be able to live in the country for up to two years after the initial visa expires.
A volunteer welcome wagon bearing kits filled with clothes, hygiene products, and food greeted 29 Ukrainian refugees who arrived Curitiba, Parana, on March 18.
Welcome committee coordinator Natalia Waszcynskie, who is the daughter of Ukrainian immigrants, said, “I feel obliged and happy to be able to help refugees. It doesn’t hurt to help, it’s a humanitarian issue.”
Though despite the warm welcome from government officials and residents, few of the 894 refugees have seized the opportunity for longer-term resettlement.
As of March 18, the federal police in Brazil reported there were only 21 requests for temporary visas, five for residency, and two inquiries for other visa classifications.
In Mexico, a similar pattern has evolved with Ukrainian refugees are arriving but not lingering. Like so many, asylum seekers are approaching the U.S. southern border.
A person from Ukraine (L) holds their passport while waiting near a U.S. Customs and Border Protection officer before being allowed to cross the San Ysidro Port of Entry into the United States to seek asylum in Tijuana, Mexico, on March 22, 2022. President Andres Manuel Lopez Obrador said on March 2 that Mexico will offer asylum to all people who request it regardless of their nationality. Immigration officials are offering tourist visas good for up to six months for those seeking refuge from the conflict in Ukraine.
“We would like to shelter everyone, embrace everyone, that there were no borders. We are from the party of universal fraternity,” Obrador said.
Hundreds of Ukrainians have been arriving in Mexico, many through Tijuana’s international airport, and traveling north to the U.S. border crossing near San Diego. The surge of newly displaced people began with rumors of war and a Russian military build-up last year.
From October 2021 to February of this year alone, U.S. Border Patrol agents encountered more than 1,300 Ukrainians.
A federal delegate representing the state of Baja California, Jesus Alejandro Ruiz Uribe, noted that since the beginning of Russia’s attack on Ukraine on Feb. 24, 487 refugees have arrived in the state, with 310 of those making the journey in March alone.
The push for Ukrainians to enter the United States through the besieged southern land border began in earnest after a mother and her three children, who arrived in Latin America via Mexico City, were granted special entry by the White House after initially being denied entry at San Ysidro due to Title 42 pandemic health restrictions.
Center for Immigration Studies analyst Todd Bensman believes this sets the wrong tone for Ukrainians seeking asylum in America, especially since more than 3 million refugees have already fled the embattled European nation and are looking for resettlement.
Bensman said exceptions made at the border for Ukrainian refugees will “undoubtedly draw even more to the southern border and into an asylum system that helps neither Ukrainians nor the American national interest.”
Meanwhile, Latin American countries are rolling out the welcome mat for their displaced European neighbors.
Argentina is offering a humanitarian visa to those fleeing the conflict. The National Directorate of Migration authorized the entry of Ukrainian citizens and their direct relatives for up to three years as part of the crisis response effort.
The South American nation is also home to the second-largest population of Ukrainian immigrants in the region.
In Central America, Guatemala began accepting refugees from Ukraine on March 11, when two families arrived at the La Aurora International Airport in Guatemala City.
The director for the Institute of Migration, Stuard Rodriguez, met the families in person and said the country “receives them with open arms and is at their complete disposal to help in whatever is pertinent.”
Bolivia’s general director of migration Katherine Calderon addresses reporters while standing beside Ukrainian refugees Mykhailo Karpenko and Oksana Karpenko in Santa Cruz on March 13, 2022. Bolivia’s national director of migration Katherine Calderon reinforced the country’s open visa policy for refugees fleeing war on March 13. This arrived on the heels of a debacle with a Ukrainian refugee couple that was illegally detained and deported by immigration officials on March 12, despite having the correct paperwork to enter the country.
Further, Calderon invited Ukrainian citizens to come to Bolivia, offering immediate refugee status as the conflict in Europe enters its second month.
Tyler Durden
Fri, 03/25/2022 – 21:40 - Chinese Factories Set Up Self-Contained "Bubbles" To Keep Production Rolling Despite Lockdowns
Chinese Factories Set Up Self-Contained “Bubbles” To Keep Production Rolling Despite Lockdowns
Anybody who has seen the video (censored in China but freely available in the West) of frustrated Shanghaiers and others protesting China’s draconian anti-COVID lockdowns probably understands that, after more than two years of China’s “Zero COVID” policy, the country’s workers have nearly reached their breaking point.
China is in a tough spot 😬 pic.twitter.com/HqzepoBapi
— Gabriel Hébert-Mild™ ⓥ (@Gab_H_R) March 24, 2022
https://platform.twitter.com/widgets.js
Unfortunately for them, the CCP’s best efforts have failed to subdue to daily COVID case numbers, which continued to climb late this week, with yesterday’s daily tally nearing 5K once again.
Fearful of the economic chaos that more lockdowns could unleash, President Xi recently instructed local authorities to shift to a more “targeted” approach to COVID restrictions, with the goal being to find a healthy medium that balances the CCP’s stated priority to protect the lives of its citizens without sacrificing economic growth.
Most recently, this has led Chinese authorities to try a new approach. According to the FT, manufacturers across China are preparing to transform their factories into isolated “bubbles” that can continue to operate for weeks, even during government-ordered lockdowns, by forcing workers to quarantine at work instead of at home.
The practice reportedly began in southern Guangdong Province, and is presently spreading throughout China. In some cases, hundreds of workers have essentially been forced to live in on-site dormitories – all to keep the production lines rolling.
Bosch Unipoint, one of the world’s biggest car part manufacturers, was able to maintain production at its factory in Longgang District in Shenzhen because about 200 workers agreed to live at dormitories on site during a week-long lockdown this month. “Their commitment to help the business survive this week was amazing,” said Marco Morea, Bosch Unipoint general manager in China, adding that the plant had co-operated with its most critical suppliers to put in place stocks of essential materials before the lockdown began.
“People called to ask how we were still producing,” Morea said. Bosch Unipoint has now launched similar preparations at plants in other cities to cope with potential future lockdowns. Morea said the company aimed to ensure that its brake pad factory in eastern Nanjing city, which has 500 employees, would be able to operate for four weeks even in a lockdown as strict as Shenzhen’s. “We have already start getting raw materials and organising beds for staff in order to be prepared,” he said.
When no dormitories were available, some workers were simply forced to sleep on the factory floor…
In Shanghai, where there have been localised movement restrictions on individual residential compounds, some workers have opted to sleep on factory floors in order to make sure they can get to work and so continue to get paid.
…with only a thin piece of cardboard as a mattress.
One female Dongguan Fuqiang worker who chose to stay at the factory said that instead of a tent she found space on the factory floor for six days. “We all slept over at the plant with cardboard serving as a mattress,” she told the Financial Times.
As a team of Goldman analysts explained earlier this week, the alternative could be the loss of an entire percentage point of annual GDP growth – or worse.
Tyler Durden
Fri, 03/25/2022 – 21:20 - If Bitcoin Dies, Freedom Dies With It
If Bitcoin Dies, Freedom Dies With It
Authored by Andrew Throuvalas via BitcoinMagazine.com,
This article was inspired by Max Gagliardi’s thread on Twitter.
Bitcoin’s prolonged stability and global adoption are not only beneficial, but necessary for free societies to thrive…
The Bitcoin community is one of the most passionate, idealistic and driven groups of people on the internet. Besides a love for Bitcoin’s capabilities and ethics, most Bitcoiners are overwhelmingly optimistic that it will eventually bloom to total fruition.
The enthusiasm is hardly unwarranted. Bitcoin’s price has roughly doubled every year since 2013. Major corporations are adding the asset to their balance sheets in droves. Twitter founder Jack Dorsey has seemingly dedicated his life to it, and one country has even made it an official national currency.
Yet Bitcoin doesn’t exist in a vacuum. There are a host of global forces at play that would stand to see the protocol fail.
And while “failure” for Bitcoin can be defined in a range of ways, it’s only because there are a plethora of issues that humanity desperately needs Bitcoin to address. If it doesn’t successfully address the many issues plaguing humanity, there will likely never be a better technology for guaranteeing global rights and freedoms in our lifetime.
The best way to appreciate something is to know what we’d lose without it. In that respect, there are five crises we can expect the world to face in a future without Bitcoin.
WHAT HAPPENS IF BITCOIN DIES?
1. PRIVACY FAILS
Bitcoin is an open and neutral monetary network. Anybody can join, set up a public address and take advantage of its functionality — without permission and free of charge. As such, the network need not know nor store any information about its users. It does not discriminate between good and bad participants on the network. It simply executes.
Compare that to legacy social and financial networks on the internet. From YouTube to Facebook to Twitter, even those networks that are “free to access” require users to create personal profiles linking to various forms of user info. Then, the user effectively “pays” the platforms by providing them more valuable data about their consumer behavior, including every action they take on site. Facebook’s data scandal is a premier example of this.
Financial networks are even worse culprits, as they are legally bound to collect private data from their users due to anti-money-laundering (AML) and know your customer (KYC) data from their users. These companies source sensitive and personally identifiable information from everyone accessing their services, in the name of fighting money laundering and terrorist financing.
The result? According to one study, less than 0.1% of all criminal finances are actually impacted by such laws, which successfully recover fewer funds than the cost of implementing the laws themselves. Meanwhile, users of companies who require AML and KYC data must forfeit all semblance of financial privacy. Prior to Bitcoin, there was no reliable alternative for long-term money transfer in existence.
This doesn’t mean that Bitcoin is a perfect solution. After all, its blockchain is literally a public ledger tracking every transaction that’s ever taken place on the network. Even Bitcoin supporters understand this as a bane for user privacy and sovereignty, not least of whom is Edward Snowden.
The blockchain is at least pseudonymous because addresses do not directly link to individuals or groups. Furthermore, upgrades like Taproot alongside Layer 2 payment solutions like the Lightning Network help make the tracing of funds more difficult.
2. CENSORSHIP WINS
The same social media and financial networks that infringe on users’ privacy are now notorious for violating users’ free speech and financial sovereignty.
Those who espouse views disapproved by the establishment media class can be banned from every social platform in lockstep. Similarly, those that wish to support causes deemed immoral or illegal by governments may find that these governments can simply order payment platforms to block or seize their funds.
Bitcoin fixes this. As a truly peer-to-peer payment network, no third-party intermediary can choose to prevent one’s bitcoin from reaching its destination, nor can they be pressured by governments to do so.
This isn’t just an issue in developing nations. This month, police in Ottawa, Canada, cooperated with popular crowdsourcing platform GoFundMe to block donations from the Freedom Convoy protestors. In a similar fashion, an Ontario Supreme Court justice recently ordered Christian fundraising site GiveSendGo to not distribute funds to the movement either. Across both platforms, that’s over $19 million in donations that governments have attempted to block against the senders’ wishes.
Bitcoin fixes this and a host of Canadian Bitcoiners already know this. A new Bitcoin-native crowdsourcing platform called Tallycoin has been used to raise almost $1 million for the convoy.
Unlike other sites, Tallycoin is only used to connect donors and causes, but not to intermediate payments. As a peer-to-peer and global network, Bitcoin itself handles that, sending money directly to truckers on the ground without the threat of seizure or censorship.
Whether or not one supports the specific movement is beside the point. Protection of property means protection of property for all, and Bitcoin guarantees it cryptographically in an indiscriminate manner.
3. BIG GOVERNMENT WINS
For those who have been paying attention to the regulatory conversation surrounding Bitcoin, it’s clear that it’s become a partisan issue. While Republican lawmakers like Wendy Rogers and Cynthia Lummis are fanatical about the asset, Democrats fear it for its use in illicit finance and as a threat to the U.S. dollar.
The divide makes sense. Republicans are typically for smaller government and freer markets. Democrats are often for relatively larger government, market restrictions and wealth redistribution. Bitcoin fundamentally enables the Republican vision, and limits the Democratic one, as described.
If adopted as currency, bitcoin’s hard supply cap of 21 million coins firmly restricts government largesse produced by irresponsible money printing. It would force governments to source funds for various programs through taxes only.
In a money-printing paradigm, citizens effectively “pay” for the cost of money printing through inflation. With more money chasing the same products in an economy, prices of those products naturally start to rise.
However, this effect often takes a few months to appear after quantitative easing begins. As such, average citizens are often unable to link the responsibility for inflation costs directly to government and central bank decision-making. Because of this, authorities are then given room to obfuscate, blaming supply chain issues and labor shortages for inflation once it arrives, rather than their own incompetence.
By contrast, when citizens incur taxes, they know the cost came from their government, and they know the exact amount. It is a far more transparent form of payment that they can concretely oppose and hold their politicians accountable for.
Dr. Saifedean Ammous, independent economist and author of “The Bitcoin Standard,” thoroughly explains how government largesse from money printing hurts economic productivity. He argues that capital is regularly misallocated to the industries that the market has no interest in trading with or sustaining. The war industry is offered as a powerful example in the American context.
“As it stands, a large number of firms in all advanced economies specialize in warfare as a business, and are thus reliant on perpetuating war to continue being in business. They live off government spending exclusively, and have their entire existence reliant on there being perpetual wars necessitating ever-larger arms spending.
“This, more than any strategic, cultural, ideological, or security operations, explains why the United States has been involved in so many conflicts in parts of the world that cannot possibly have any bearing on the life of the average American. Only with unsound money can these firms grow to such enormous magnitude that they can influence the press, academia, and think tanks to continuously beat the drums of more war.” – Dr. Saifedean Ammous
To summarize: Political decisions would become far more transparent and consequential on a Bitcoin standard. The market would allocate resources far more efficiently and without big-government interference.
4. CENTRAL BANKS WIN
Central banks have existed since the 17th century as a type of “bank for bankers” and as buyers of government debt. Many even held monopolies on the issuance of their nation’s currency, which they still hold today.
However, it was only in 1913 that the establishment of the Federal Reserve System redefined the mandate for central banks across the world. These authorities are now responsible for not only stabilizing a nation’s currency but also its entire economy. The latter objective theoretically requires a more “elastic” (inflationary) money, and thus comes at the expense of currency stability.
The results haven’t been pretty. Following this transition, the first half of the 20th century featured the greatest two wars humanity has ever known. It also featured an ever-failing commitment to the gold standard, which required that dollars only be printed if redeemable for hard gold.
In fact, when faced with this restriction, the U.S. government has proven that it need not play fair with its own citizens. In 1933, President Franklin D. Roosevelt signed Executive Order 6102, forbidding citizens’ private ownership of gold. He forced them to redeem their holdings at a rate of $20.67 per ounce to the Federal Reserve, only to see their holdings revalued to $35 per ounce with the passage of the Gold Reserve Act in the following year.
In effect, citizens’ wealth was forcibly stolen from them so that their government could fund whichever programs they desired to “stimulate” the economy. Meanwhile, those citizens’ ability to resist inflationary pressures by holding hard gold was stripped from them up until 1974, when Order 6102 was repealed. The same gold worth $20 per ounce, when confiscated from citizens, is now worth over $1,800 per ounce.
Bitcoin solves this problem by not only being non-inflationary but also non-confiscatable. As long as one knows his private key, a government cannot seize it, even by force. In return, Bitcoin “forces” central bank money to compete against a harder form of money on the free market, rather than forcibly subjecting people to its devaluation.
5. THE ENERGY TRANSITION FAILS
Bitcoin is often criticized for being wasteful, planet searing, and abusive to the environment. Its energy-intensive mining process has caused people otherwise enthusiastic about the asset to distance themselves from it over ESG (environmental, social and governance) concerns. These include Tesla CEO Elon Musk and New York City Mayor Eric Adams, among others.
In the long term, the opposite will likely prove to be true. Bitcoin’s proof of work, which now consumes more power annually than Finland, will help transition the world to a greener, more renewable energy standard.
How can this be? As bitcoin’s price appreciates, the demand for newly-minted units grows stronger. With a $700 billion-plus market cap today, mining isn’t just a game, but an entire industry. And with industry comes innovation.
A study conducted collaboratively by Square and Ark Invest last year argued that Bitcoin mining can incentivize renewable energy production. By acting as an energy buyer of first and last resort, it can stabilize electricity grids with varying supply and demand for energy through an all-new, economically productive use case.
This is especially important for renewable power sources. Solar, for example, produces highly excessive demand during the day, while producing nothing at night. Wind power is even less predictable. Mining can absorb the excess energy these technologies produce at certain times, thus making them more profitable.
Ultimately, this will also help address energy shortages around the world. Developers will be willing to build more energy sources in areas of unstable demand, knowing they can subsidize their excess energy through Bitcoin mining when demand is low. That way, they’ll always be there to deliver when demand is high.
Texas Governor Greg Abbott recognizes this. Last year, his state’s grid was overwhelmed with demand, leading to blackouts that left hundreds dead. As such, he is currently inviting Bitcoin mining as fast as he can in a counterintuitive attempt to help stabilize his grid long term. In the short term, Bitcoin miners get paid to cease operations when asked during times of peak demand.
Bitcoin presents a free-market solution to renewable energy development and adoption. It is distinct from coercive government attempts to enforce the use of renewables, tax non-renewables and hurt the economy to achieve cleaner energy. With Bitcoin, a green future can be realized without putting more money and power in government hands.
CONCLUSION
Bitcoin must not fail. More than just an avenue for making money, the network promises freedom, privacy and property protection like no technology or government before it.
The forces that serve to lose from Bitcoin’s success will undoubtedly try to stop it. However, if the network is so powerful and secure as we believe, then their attempts should prove futile. The network was built to last: durable amid stress, a threat to authoritarian regimes and an economic boon to free societies.
Tyler Durden
Fri, 03/25/2022 – 21:00 - Deutsche Bank Fires Senior Bankers For Expensing Trip To Strip Club
Deutsche Bank Fires Senior Bankers For Expensing Trip To Strip Club
If expensing your strip club receipts is a fireable offense, then maybe every executive on Wall Street should be terminated.
*DEUTSCHE BANK FIRED TOP BANKERS OVER EXPENSED STRIP CLUB BILL
if that’s a fireable offense, on Monday all of Wall Street should be laid off
— zerohedge (@zerohedge) March 25, 2022
https://platform.twitter.com/widgets.js
Several senior New York-based Deutsche Bank executives were recently fired by the German banking powerhouse after they expensed their strip club tab as a legitimate cost of doing business, according to several inside sources quoted by Bloomberg.
According to the report, the unlucky executives included Ben Darsney, former Americas head of equity capital markets, Ravi Raghunathan, Brandon Sun and Daniel Gaona. Once the bank discovered the issue, it decided to terminate all the executives involved.
“Deutsche Bank thoroughly investigates allegations of possible misconduct comprehensively and without bias,” a spokesperson for the Frankfurt-based bank said in an emailed statement. “We do not condone violations of our code of conduct or company policy and take remedial action as appropriate based on the severity of circumstances.” The bank declined to comment further on the circumstances of the matter.
Darsney, Raghunathan, Sun and Gaona didn’t respond to requests for comment. Darsney and Raghunathan were managing directors while Sun was a director and Gaona an associate.
The firings come as DB CEO Christian Sewing struggles to improve the bank’s internal controls after a string of mishaps, including an incident where the bank breached a deferred prosecution agreement with the US DoJ after it was slow in reporting allegations by a whistleblower, leading to a slap on the wrist.
As we noted earlier this week, 2021 was a banner year for Wall Street banks and bankers. According to the latest compensation report from the New York State Comptroller’s office, the average bonus on the Street rose more than 20% to a new record high $257,500.
They better hope their former employer doesn’t try to claw that money back.
Tyler Durden
Fri, 03/25/2022 – 20:40 - NATO And Russia – Whistling Past Each Other's Graveyards
NATO And Russia – Whistling Past Each Other’s Graveyards
Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,
“What we have here, is a failure to communicate.”
– Cool Hand Luke
There are so many angles from which to view the war in Ukraine. I’ve tried my best to cover them to get a sense of why we are where we are… which is headed towards a much larger conflict.
Despite my deep cynicism, I am essentially an optimist. I tend to see opportunities for end games that result in humanity walking away from any kind of final solution. And sometimes that means having to look beyond the boundary conditions of the current conflict and see it in the grander context of what humanity is trying to achieve.
So remember, this is my bias. There’s a solution even if things look bleak because humanity has always recoiled from the worst of its excesses when personally confronted with them, at least for a few generations until the memories fade.
In WWII the nominal good guys, the Allies, defeated the nominal bad guys, the Axis, but mainly the Nazis. I’m not one to subscribe to that caricature of events. I know the issues are far deeper than that.
During war both sides’ propaganda becomes the height of reductionist. The other side is bad.
Putin, for his part, is calling Ukrainians both brothers of Russia and Nazis at the same time, overplaying the genocide of Russians in the Donbass. While in the US we’re just calling the Russians by names we would normally reserve for ants invading our kitchen.
This conflict between West and East is a civilizational one where each side uses words in very specific ways which creates the opportunity for this type of reductionist propaganda. Joaquin Flores in my podcast with him tried to elucidate this idea from the Russians’ perspective.
There he talked about what Russian Foreign Minister Sergei Lavrov means by the word ‘neutral’ as it regards Ukraine. Neutral to Lavrov and Russia means part of the greater Russian Union State, making Ukraine a partner to Russia similar to Belarus and soon to be Kazakhstan.
The US and those angry ants at British Intelligence who craft the talking points for this war, define neutral like the Swiss: not aligned, a buffer state. And that mismatch in definition is used cynically to promote this idea by NATO and the West that the Russians are not fulfilling their international obligations and justify their helping Ukraine’s heroic defense of itself from a hostile invader.
And Russia is now a hostile invader. That much is true, certainly.
To promote the simplistic narrative is to ignore the last eight years in Ukraine as well as NATO’s advance across Europe over the last 30.
But this is where the unbridgeable gap between East and West lies.
The fault for this gap lies wholly with NATO and the West who have steadily advanced until they reached the Russian border at the Donbass. To discuss this in any other terms is pathetic and just an excuse to exercise one’s inherent racism and bloodlust against Russians.
That is what everyone putting a Ukrainian flag on their Twitter feed is doing whether they realize it or not.
You are not supporting the right to self-determination by a people acting freely here. Ukraine is a puppet state crucial to an aggressive war of conquest by the very people who brought you two years of privation and humiliation over COVID and now want to farm you as tax cattle while living in an unescapable Orwellian Panopticon.
Russia’s list of grievances are as long as any bill that passes through a Congressional committee these days. But the big ones have been the attempts on flipping Belarus and Kazakhstan. These two pivotal countries were victims of failed revolutions to overthrow the governments there and install NATO-controlled puppets, trying to replicate the ‘victory’ in Ukraine in 2014.
Not only did they fail miserably, if anything they furthered Russia’s aims to bring the former Soviet republics back into their orbit and end their flirtations with the West. The only one of these left, really, is Ukraine, the Baltics simply do not matter in any strategic sense.
To discuss this war in anything other than these terms is to purposefully miss the point. And our Neoconservatives in the State Dept. and the White House have absolutely prosecuted foreign policy in that way, showing a level of disingenuousness and willful obtuseness that frankly beggars description without resorting to swearing like a sailor.
That can only lead to the conclusion I have made multiple times. This war was chosen by the West. It was designed this way. All “attempts” at diplomacy by NATO, the UK, France and the US were simply nothing more than time-buying exercises to build up Ukraine’s strength to launch a blitz of the Donbass and sanction Russia for even responding.
Why? Well, frankly, to win and subjugate Russia to our oligarchic system of control, c.f. that Orwellian Panopticon I just mentioned. So, we purposefully use the term ‘Ukraine’ to mean something completely different than what the Russians mean by the name. Ukraine to the West is the pre-2014 border. That hasn’t been reality for eight years.
To the Russians Crimea is Russia, not Ukraine. The Donbass could have been negotiated down but that was refused by the West completely, rejecting the implementation of the Minsk Agreements.
Make no mistake, Minsk II was nothing more than another time-buying exercise by NATO and former German Chancellor Angela Merkel to get Nordstream 2 completed and allow NATO to build up the Ukrainian military to the point where it could credibly blitz the Donbass.
When Putin ordered a massive multi-front invasion he was simply pre-empting an attack that was coming.
The sanctions packages implemented since then were already prepared. They were happening no matter what move Putin made. There was no different outcome here, only the dates on which these events were going to take place.
NATO chose the place. Putin chose the time. Everything else is chatter and noise.
So where are we today?
Both sides believe just enough of their own propaganda as to dig in on their strategies.
Putin and Russia are methodically turning Ukraine into a meat grinder with a 1000 mile front the UAF cannot possibly keep supplied. The initial attack by Russia was designed to knock out logistics behind UAF lines and make it all but impossible for the cells of Ukrainian forces to support each other without ceding large amounts of territory, if they could even get out from under Russian fire control.
LiveEUMap.com Map of Ukraine 25 March 2022
The US and NATO think they can now fight a proxy war turning Ukraine into Afghanistan in the 1980’s by sending in billions in weapons and doing everything short of sending in official troops to turn this into an official NATO v. Russia war.
The losses on both sides will be horrific and high. The chaos unleashed on Ukrainian civilians is terrible. The scenes in recently ‘liberated’ Mariupol are heart breaking.
Ukraine should have surrendered early on but Davos and NATO do not want that, because that would end their legal justification to send aid in and the dreams of bleeding Russia white through sanctions and outright theft of their foreign assets.
But the evolution of this war is proceeding exactly as I told you early on. Opening salvos have been fired, now the real war for the future of humanity begins at the legal and financial level.
Russia has made many smart moves in shoring up its financial position. It kept the gas flowing to Europe to leave the communications lines open there. But since the EU are not reliable actors Russia put them on the published ‘unfriendly list’ of countries that now are allowed to pay for their Russian exports in either rubles (announced by Putin earlier this week) or gold (announced yesterday).
The response to this move by the Twitterati today has been hilarious. It’s clear the talking point went out of PR central that Russia is ‘violating its contracts’ by demanding payment in something other than the contracted currency.
In a post-sanctions environment where the currency of the contract is useless to one party of the contract that contract is no longer valid. This is a basic contract of adhesion issue where one party has forced another into a subordinate position vis a vis the contract.
And when that’s the case, the contract as written is invalid. Period.
This lesson can be applied all across this conflict to see where NATO, the US and Europe have abrogated their responsibilities towards Russia over and over again — START, INF, Budapest, Minsk, etc. — and yet still feel they have the justification under international law to call Russia the aggressor and escalate the conflict.
It’s childish and irresponsible but it’s also so endemically Davos. When you’re the superior power you can enforce contract rules or break them and leave the other person twisting. Contracts only matter when people abide by them.
As everyone with some working gray matter has pointed out, Russia has the real power here because it produces what the world needs while the people pushing this war are doing so from an increasingly shaky foundation of paper assets.
So, contracts be damned, it’s gold or rubles for natural gas, unfriendly Europe.
It’s bitcoin or local currencies for everyone else.
Ukraine will be neutral. China will remain friendly. Words matter when a person wants them to matter.
And from where I’ve sat these past ten years the Russians have honored their words while the West has used them as weapons.
If we live in a world where agreements are simply a tactical extension of war then Russia tearing off the band-aid in Ukraine ended that illusion.
Both sides here aren’t listening to the other until one side is forced to, by facts on the ground or in the plumbing of the financial system. The end result will be a world with a new Iron Curtain. The sanctions will stay in place until there is a full political revolution on either side.
My bet is on that happening in the West since it is psychologically and culturally far weaker.
The West and NATO believe they can effect regime change in Russia by costing some oligarchs their yachts. The Russians feel they can grind out a victory on the ground in Ukraine while running out the clock on the petrodollar-and-paper-gold-inflated monetary system of the West.
Neither side has yet taken enough damage to back off from their positions. Biden stood up at NATO in Brussels and told the world food shortages are coming and we must endure them because Russia.
Davos is intentionally, through Biden, Blinken and NATO, trying to destroy the world economy so no one needs Russian energy while killing off millions more useless eaters.
The Russians responded with: We take gold or rubles for wheat and gas, just not useless euros or dollars. At the same time they finished cleaning the Azov battalion animals out of the important port city of Mariupol, key to the chip industry.
Then I read on Zerohedge that the Russians are so thoroughly tired of listening to lying US officials that they aren’t even taking calls on their ‘deconfliction hot lines’ between senior military staff. Only the low-level operators are talking.
But Pentagon spokesman John Kirby said in a statement that the Russian officials “have so far declined to engage.”
…“We must avoid a scenario of NATO and Russia sleepwalking into war because senior leaders can’t pick up a phone and explain to each other what is happening,” he added.
The only ones sleepwalking into a NATO/Russia war will be the Neocons who still think some logistics failures around Kharkov and Kiev equal a Russian military weak enough to force into submission. Very soon, Davos will come to the realization they can’t win a war against a united Global South intent on de-dollarizing and repricing their trade in real gold, not their paper, and real barrels of oil.
Then they’ll want to talk.
At that point, unfortunately, the graveyards all across Ukraine, Russia and the West will be overflowing.
* * *
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Fri, 03/25/2022 – 20:20 - Demand Destruction Has Begun
Demand Destruction Has Begun
One month ago, Brent jumped above $100/bbl for the first time in eight years as Russia executed a full-scale invasion of Ukraine, and it became clear that western governments would impose sanctions. The oil market has been in triple digits for practically the entire time since.
And, after a month of oil prices we have not seen in nearly a decade and weeks of record-high fuel prices, JPMorgan has published a research report (available to pro subs) which finds that high-frequency data suggest that consumers are beginning to react resulting in what the Fed has desperately wanted to achieve all along: commodity demand destruction.
That said, high prices are clearly not the only demand-destructive force in the world at the moment, however. The crisis in Ukraine, crippling financial sanctions in Russia, and the continued spread of the highly infectious Omicron variant in China have an even more direct impact on regional fuel consumption than high prices.
As a result, JPMorgan has cut 1.1 mpd off its 2Q22 demand forecasts, followed by about 0.5 mbd cuts to both 3Q and 4Q. On net, this trims 420 kbd on average from the bank’s expectations for 2022 global oil demand as high prices, COVID restrictions, and geopolitical conflict drive demand destruction in Russia, China, India, and Europe.
While the US has been relatively isolated so far (despite the highest gasoline prices on record), JPM’s demand revisions are heavily concentrated in Europe, which remains the epicenter of the geopolitical shock. Since the start of the Russia-Ukraine war, the bank’s economists have downgraded the growth in the region by over 2%-pts and have raised inflation forecasts by nearly 3%-pts.
Moreover, after sliding sharply in February and bottoming in early March, COVID infections are up over 40% in the past two weeks across Europe with large increases across the UK, Germany, France, and Italy. Zero-tolerance COVID policy, combined with less effective vaccines and lack of natural immunity, presents a challenge to China’s growth outlook.
As a result, JPM now sees activity contracting in March and April, prompting a 1.1%-pts cut to China’s 2Q GDP growth. With the downward revisions to the Euro area and China, the largest US commercial bank now projects 1H22 global growth dipping below potential. Displaying limited sensitivity to near-term downside growth risks, major central banks continue to tilt hawkish. Chair Powell reiterated prospects for an accelerated pace of hikes and reinforced the notion that the Fed could soon start moving in 50bp increments. EM central banks also remain on the move.
The clearest example of demand destruction can be seen in Eurasia, a region which includes both Russia and Ukraine, where mobility has fallen to its lowest level since early 2021.
And in Europe, while mobility trends have reversed after a recovery from Omicron-driven lows earlier this year, they are now once again declining.
Consequently, JPM has cut its expectations for 2022 Eurasia oil demand by 270 kbd due to sanctions imposed on Russia. Eurasia demand for jet fuel will come in 130 kbd lower than the previous estimate as roughly half of Russian civil aircraft will end up grounded as a result of airspace bans and shortages of parts. JPM also revised Europe oil demand down by 160 kbd on average for 2022 due to sensitivity to high prices and lower expectations for economic growth in the region
The good news is that for now, US mobility has been relatively resilient in spite of higher oil prices, but here too we are seeing the first signs of hampered driving demand recovery in California, where on-road fuel prices are more than $1.50 above the national average. California vehicle miles traveled (VMT) has been tracking closely to 2018-19 levels since late last year, but has deviated from the 2019 trend twice so far this year: once, as Omicron cases spread through the state, and again starting at the end of February.
This flattening in VMT growth is likely due to the increase in gasoline prices following the Russian invasion and, while if this trend persists or spreads to other regions in the US, JPM said that it will likely revisit its assumptions for US fuel demand for 2022 as well.
JPM then does a similar exercise for China and India, and likewise cuts its forecasts for Q2 2022 oil demand there too (by 520kb/d and 120lb/s, respectively), and turns its attention to the mounting concerns over stability of Russian supplies.
Here, as reported previously, JPM finds that large quantities of Russian oil continue to be boycotted by Western refiners. Meanwhile, logistical issues are becoming entrenched as transport remains a significant challenge for Russian sales, with UK and European ports banning vessels flagged, operated or owned by Russia from docking at their ports. Reports of Saudi Arabia actively discussing pricing some of its oil sales to China in Yuan further point to difficulties facing Russia in shifting large volumes from Western consumers to China, where Saudi Arabia is a main supplier of crude. Given that Russia has very limited onshore storage capacity, a halt in exports would trigger production shut-ins within weeks, perhaps on an even larger scale than seen in April 2020.
Equally important are the developments in Kazakhstan— a country that ships around 1 mbd of its crude oil production through the CPC pipeline to the Russia’s Black Sea port of Novorossiysk. The pipeline was “damaged” on Tuesday, impacting around 1 mbd of export volumes for up to two months. The supply interruption was timed to coincide with the EU’s meeting on Thursday, prompting speculation that Moscow was prepared to retaliate against western sanctions by curbing both its own and Kazakh energy supplies, possibly leading to significantly larger disruptions than the current consensus base case assumes. Needless to say, finding alternative routes for all CPC volumes would be difficult, likely forcing the shut-in of fields in Kazakhstan. For now, JPM has removed 1 mbd from Kazakhstan’s April production.
Despite the nascent demand destruction, JPM writes that its baseline still assumes that the market’s current extreme aversion to Russian oil will subside. Volumetrically, this means that stranded Russian oil barrels will decline from 3.0-3.5 mbd in March to 2 mbd
in April and a perpetual 1 mbd thereafter, leading to Brent oil price averaging $114/bbl in 2Q22 and $101/bbl in 2H22, with prices rising over $120 in the interim.That said, the bank’s commodity strategist recognize that the European consumer could force the governments’ hand as the human toll from Russia’s invasion mounts. Ominously, JPM cautions that as the single largest buyer of Russian oil, “the more rapidly Europe seeks to cut Russia’s imports, the higher global oil prices will rise” and in the event of a full 3.8 mbd drop in Russian exports, crude oil prices could soar to $185/bbl.
Of course, all of the above is predicated upon an “all else equal” framework, however as we have reported recently, it now appears that developed government such as the US, UK and Europe are planning to offset demand destruction with what gas stimmies or cutting gas taxes, what some have called “demand construction” which will achieve just the opposite of what it hopes to achieve as Bloomberg’s Kavier Blas noted two days ago: “Exactly the opposite that the current market requires. Rather than support poorer families, it goes for a blanket, regressive tax policy.“
OIL DEMAND ‘CONSTRUCTION’⛽️🚗🚛💶
Germany will cut tax on fuel for 3months by **30 cents of euro for gasoline** and **14 cents for diesel**, Finance Minister Christian Lindner said. Taxpayers will also receive a **one-off subsidy of €300** to help with energy costs | #OOTT
— Javier Blas (@JavierBlas) March 24, 2022
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The UK government joins some European countries in “demand construction” for the oil market, lowering fuel taxes. Exactly the opposite that the current market requires. Rather than support poorer families, it goes for a blanket, regressive tax policy | #OOTT
— Javier Blas (@JavierBlas) March 23, 2022
Tyler Durden
Fri, 03/25/2022 – 20:00 - Beijing Tells Chinese Business-People To Fill Void In Russian Market Amid Ukraine Crisis
Beijing Tells Chinese Business-People To Fill Void In Russian Market Amid Ukraine Crisis
By Rita Li of the Epoch Times
China’s ambassador to Russia has called on Chinese business-people in Moscow to expand their enterprises by leveraging the Ukraine crisis as severe international sanctions have crippled Russia’s economy in the wake of the invasion.
Ambassador Zhang Hanhui urged Chinese businessmen in Moscow to make good use of the current Russia–Ukraine war as he met with representatives earlier this week. According to a March 21 social media post by the Russian Confucius Culture Promotion Association, the ambassador told business heads to waste no time and “fill the void” in the Russian economy.
“The current international situation is complex. Big enterprises are facing great challenges or even disruptions in payment and supply chains,” he said at the meeting, according to the post.
The conference summary made no mention of the Western sanctions, yet Zhang said it was the right time for the private, small-, and medium-sized enterprises to make a difference.
In response to a question about the ambassador’s remarks, Chinese Foreign Ministry spokesman Wang Wenbin said during a daily briefing in Beijing on March 22 that the two sides have long been in “normal economic and trade cooperation,” without mentioning the meeting in Moscow.
In a bid to force an end to the Ukraine crisis, the West has pushed to isolate Russia from the global economic and financial system, including cutting off a number of Russian banks from SWIFT, the main international payment system. Yet concerns remain that China would aid the sanction-slammed Russian economy.
Despite seeking to portray a neutral stance amid the conflict between Russia and the West, Beijing is widely viewed as tacitly supporting Moscow and has vowed to trade with Russia as normal. Russian banks have switched to China’s state-owned UnionPay as an alternative to Visa and Mastercard, which announced their suspension of credit card services to Russian banks in early March.
However, analysts at research firm Gavekal Dragonomics said earlier this month that China won’t ride to Russia’s rescue.
“Even though China’s government probably wishes to assist Russia, it cannot shield its companies from the potentially crippling punishments for violating sanctions,” the analysts wrote.
“Most large institutions in China are not willing to take the risk of falling afoul of U.S. sanctions,” Martin Chorzempa, a research fellow at the Washington-based think tank Peterson Institute for International Economics, told The Washington Post. “And so any sanction busting is likely to be done by smaller institutions that have less to lose.”
Officials at the Chinese Embassy in Moscow and the Russia Confucius Culture Promotion Association didn’t respond by press time to a request by The Epoch Times for comment.
The United States and many European Union countries have imposed unprecedented sanctions on Russia, including a ban on Russian oil and gas by Washington, which could further boost Russian energy giants’ presence in China. Beijing also announced a lifting of import restrictions on Russian wheat, just hours after Moscow launched the war in Ukraine on Feb. 24.
In a two-hour video call with Chinese leader Xi Jinping on March 18, U.S. President Joe Biden warned Beijing of unspecified “implications and consequences” if it were to provide material support to Russia.
White House press secretary Jen Psaki said in a March 7 press briefing that Moscow can’t backfill the effect of Western sanctions by relying on China.
“It’s just not possible,” she said. “We’ve also seen China abide by the sanctions that have been put in place.”
Tyler Durden
Fri, 03/25/2022 – 19:40 - US & G7 Allies Go After Russia's Ability To Sell Its Gold As Sanctions Evasion 'Lifeline'
US & G7 Allies Go After Russia’s Ability To Sell Its Gold As Sanctions Evasion ‘Lifeline’
G7 leaders by week’s end following Thursday’s trio of Ukraine-related summits, for which Biden was present in Brussels, agreed to launch new measures seeking to crack down on Russia’s ability to evade US and EU led financial sanctions. As a Thursday White House statement announced, “G7 and EU announce sanctions evasion initiative to prevent circumvention and backfilling of our unprecedented sanctions; continue to blunt Central Bank of the Russian Federation’s ability to deploy international reserves including gold.”
The statement additionally detailed that the US and its allies will “continue to work jointly to blunt Russia’s ability to deploy its international reserves to prop up Russia’s economy and fund Putin’s war, including by making clear that any transaction involving gold related to the Central Bank of the Russian Federation is covered by existing sanctions.”
It’s part of what Prime Minister Boris Johnson at Thursday’s G7 meeting dubbed tightening “the economic vice” around Putin, ensuring that he can’t sell the country’s gold elsewhere – and to thwart this perhaps vital final lifeline (the possible crypto lifeline notwithstanding) for the Russian economy and to prop up the rouble.
After years of building up its reserves – perhaps in anticipation for just such a showdown with the West as is happening now – Russia currently ranks fifth among countries with the largest gold stockpiles, commonly estimated at 2,300 tons, at a worth of just under $140 billion.
And on Friday, a day after Biden and his pals in Brussels discussed ways to stop Russia utilizing its gold reserves to maintain some stability in an increasingly chaotic economy, the Bank of Russia announced plans to begin buying gold from its banks at a fixed price. This could serve two purposes: 1) provide a path to liquidity for SWIFT-constrained banks, and 2) centralize more of the nation’s gold as Putin accelerates his de-dollarization plans.
It bears recalling that chairman of the Russia’s Congressional energy committee, Pavel Zavalny, said in a press conference on Thursday – as we detailed earlier – that Russia is open to accepting different currencies for its exports, beginning with natural gas, depending on the buyer’s preferred method of payment, and also “hard money” like gold. However, the chairman said terms will depend on the importing country’s foreign relations status with Russia.
“When it comes to our ‘friendly’ countries, like China or Turkey, which don’t pressure us, then we have been offering them for a while to switch payments to national currencies, like rubles and yuan,” Zavalny said during the press conference.
“With Turkey, it can be lira and rubles. So there can be a variety of currencies, and that’s a standard practice. If they want bitcoin, we will trade in bitcoin.”
Zavalny’s statement comes on the heels of President Vladimir Putin’s comments on Wednesday demanding that ‘unfriendly’ countries pay for Russian gas in rubles. Putin’s message was clear, but it is unclear whether Russia can unilaterally change existing contracts agreed upon in euros.
#G7 and the #EU are working together to stop #Russia from accessing its $132 billion worth of gold reserves to evade Western sanctions.https://t.co/hmVyyLtQbk pic.twitter.com/pJIAoPuP4y
— Forbes Middle East (@Forbes_MENA_) March 24, 2022
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The State Duma’s energy committee chair echoed Putin’s decision while adding that the country should also accept gold.
“When we exchange with Western countries…they should pay in hard money,” Zavalny said.
“And hard money is gold, or they must pay in currencies which are convenient for us, and that is the national currency – ruble. That relates to our ‘unfriendly’ countries.”
Russia also being open to ‘alternatives’ like accepting bitcoin shifts the tide as Putin last year had dismissed the possibility in an interview at the Russian Energy Week event in Moscow.
Tyler Durden
Fri, 03/25/2022 – 19:20 - Return Of "Go-Stop" Fed Will Lead To Sky High Rates
Return Of “Go-Stop” Fed Will Lead To Sky High Rates
By Simon White, Bloomberg Markets Live Commentator and reporter
The Federal Reserve in the 1960s and 1970s vacillated between responding to inflation and employment, leading to volatile business cycles, rampant inflation, and weak growth. This so-called “go-stop” approach is akin to today’s environment, and led in the 1970s to the Fed initially underdelivering on rate rises, which then forced it to over-compensate with the eye-watering 20%-rates of the Volcker era in the early 1980s.
The 70s have several differences to today’s environment, but there are a number of key similarities that make the lessons worth heeding. For a start, the late 1960s — when the seeds were sown for the Great Inflation of the 70s — resemble today’s backdrop.
Back then, the Fed underestimated the so-called NAIRU (non-accelerating inflation rate of unemployment) meaning it thought it had more room to ease than it really did. Real-time estimates of the NAIRU were over a percentage point lower than retrospective estimates.
Political pressure from the LBJ and Nixon administrations to pay for social programs and the Vietnam War kept Fed policy easy while the budget deficit was allowed to swell to the widest since the WWII. That combination was highly conducive to the genesis of runaway inflation in the 1970s.
That inflation is blamed on many things — Nixon closing the Gold Window in 1971, the Arab oil embargo in 1973, the ending of the Nixon price-wage controls in 1971-74, among others — but in reality those were just kerosene on a fire that had already been lit due to excessively loose monetary and fiscal policy.
The Fed has made the same mistake under a different guise in the current cycle. Over the last two years, the Fed moved to average inflation targeting and a commitment to maximum employment. Rather than underestimating NAIRU, the Fed jettisoned the concept altogether! It openly stated it would “over-loosen” if necessary to achieve full employment.
That’s reminiscent of the “go-stop” central banking of the 60s and 70s. The Fed would keep policy loose in the “go” stage of the cycle, until the public became concerned about inflation. Then it would move to the “stop” phase of tightening policy until rising unemployment became a concern.
Today we have already had the “go” phase, and now we are entering the “stop” phase as political concern grows about the “cost of living crisis”.
However, the Fed is likely to lose its nerve in the face of slowing growth and financial-market volatility, the same way it lost its nerve when it said inflation was transitory, only to see it accelerate to almost 8%. Unemployment will begin to rise, and the political pressure will be on the Fed to revert to “go” mode again.
This we saw in the 1970s when then Fed Chair Arthur Burns began to re-loosen policy in 1974 in response to rising unemployment, even though the embers of inflation were still glowing. Inflation came back with a vengeance in the second half of the decade, and was not finally tamed until the sky-high rates of the Volcker era in the early 1980s.
There is a similar risk in this cycle of seemingly tamed inflation re-rearing its head, and rates having to be jacked significantly higher — causing a deep recession — as political pressure to temper prices eases, the mid-term elections pass and unemployment begins to rise.
Arthur Burns oversaw the Great Inflation of the 1970s, but it required a Paul Volcker to crush it. Like a general fighting the last war, Jay Powell is unlikely to be the man who finally slays today’s inflation demon.
Tyler Durden
Fri, 03/25/2022 – 19:00 - Arizona Legislature Passes Bill Requiring Proof Of US Citizenship To Vote
Arizona Legislature Passes Bill Requiring Proof Of US Citizenship To Vote
Authored by Isabel van Brugen via The Epoch Times (emphasis ours),
The Arizona Legislature passed a bill this week that would ensure only U.S. citizens with proof of identification are eligible to register to vote in the state.
Arizona Republican Gov. Doug Ducey gives his state of the state address at the Arizona Capitol on Monday, Jan. 10, 2022. (Ross D. Franklin/AP Photo). Under House Bill 2492, Arizona voters would be required to provide proof of citizenship on voter registration forms.
The state Senate passed the bill March 23 in a 16–12 vote, with 12 Democrats voting against the bill and two others—Democratic Sens. Lela Alston and Juan Mendez—opting not to vote. The state House already passed the bill, which now heads to Republican Gov. Doug Ducey’s desk to be signed into state law.
The bill requires that every voter is a citizen of the United States and is able to provide satisfactory evidence as such. The legislation states that the county recorder or other officer in charge of elections must reject any application for registration that is not accompanied by satisfactory evidence of citizenship.
“The Attorney General shall prosecute individuals who are found to not be United States citizens,” the bill states, referring to non-citizens who attempt to register to vote.
Democrats say the measure is part of an effort to suppress voting in the battleground state.
Arizona’s Secretary of State Katie Hobbs called on Ducey to veto the bill, saying in a Twitter post that it “creates new, unnecessary barriers for people registering to vote.”
Testifying March 23 on why House Bill 2492 should become state law, Republican Sen. Warren Petersen, chairman of the state Senate’s Judiciary Committee, said it would bolster election integrity.
“The issue is making sure the citizens of our country are voting … and if you’re not a citizen of this country, you’re not allowed to vote,” he said.
Republican Rep. Jake Hoffman, who sponsored the bill, told the Arizona Daily Independent in February 2022 that the bill is to ensure that only U.S. citizens are able to vote in U.S. elections.
“Non-citizens should never be allowed to vote in American elections, yet shockingly nearly 12,000 people voted in the 2020 general election for federal office without any proof of U.S. citizenship,” he said.
“Republicans at the Capitol are fighting like hell to protect the integrity of Arizona’s elections with bills like HB2492, so that voters can have confidence that every legally cast ballot matters,” added Hoffman.
Hoffman also said that the number of people using the federal form without providing proof of citizenship had jumped between 2018 and 2020.
“So clearly this is a trend that is increasing,” Hoffman said. “This bill ensures that there is maximum flexibility to provide documentary proof of citizenship, but we don’t want foreign interference in our elections.”
The Epoch Times has reached out to Ducey’s office for comment.
The Associated Press contributed to this report.
Tyler Durden
Fri, 03/25/2022 – 18:20 - "I Was Stunned And Disgusted" – Kansas Applebee's Forced To Close As Workers Revolt Over Wage-Cut Plans
“I Was Stunned And Disgusted” – Kansas Applebee’s Forced To Close As Workers Revolt Over Wage-Cut Plans
As American workers and businesses struggle with the fallout from the most vicious bout of inflation in 40 years, workers across the US are struggling as wage growth lags behind inflation. For example, federal jobs data released last month showed that wage growth was disappointingly slow, as the YoY growth rate actually declined from January, coming in at just 5.1% (and missing the Wall Street consensus forecast of 5.8%).
Since the start of the pandemic, most economists expected near-record numbers of open jobs would force employers to hike wages significantly. And while wages did indeed climb for public-facing workers during the pandemic, that once-torrid growth has since leveled off.
While businesses with large numbers of white-collar workers have the option of saving on office rents by shifting to a permanent all-remote or hybrid model, restaurants, brick-and-mortar retail businesses, restaurants and other businesses that rely on a permanent in-person workforce simply don’t have that luxury.
This has created new tensions between management and labor that is, in some cases, leading to conflict. And one particularly interesting example of this tension played out at an Applebees in Lawrence, Kansas, when workers quit en masse in protest of a suggestion by management to try and hire new workers at a lower wage, based on the notion that higher gas prices would force more of the millions of Americans currently on the sidelines of the labor market to seek employment.
Here’s what happened, according to a report in the Lawrence Journal-World.
The restaurant on south Iowa Street was closed for large parts of Tuesday because of high gasoline prices, but perhaps not for the reasons you would think. Multiple employees of the chain quit after seeing an email from a regional manager urging the restaurant to begin hiring employees at lower wages, under the theory that people are becoming more desperate to take a job as fuel prices increase.
“Everyone has heard that gas prices continue to rise,” read an email that came from the account of Wayne Pankratz, executive director of operations for Applebee’s franchisee Apple Central LLC. “The advantage this has for us is that it will increase application flow and has the potential to lower our average wage. How you ask?
“Most of our employee base and potential employee base live paycheck to paycheck. Any increase in gas price cuts into their disposable income. As inflation continues to climb and gas prices continue to go up, that means more hours employees will need to work to maintain their current level of living.”
The workers’ revolt started when one of the managers at the restaurant saw the email, and was so enraged, he made copies and distributed them to other employees. By the time the restaurant was set to open on Tuesday, the staff refused to work, and a walkout began.
When Jake Holcomb, one of several managers at the Lawrence restaurant, ended up seeing the email on Monday, it upset him enough that he made copies of the email and distributed them to several employees of the restaurant.
When opening time arrived on Tuesday, the manager who was scheduled to open the restaurant at 2520 Iowa St. declined to open the restaurant after reading the emails. She has since quit over the email. Holcomb has too. In total, Holcomb said three of the six managers at the restaurant quit in protest of the email.
“I was just stunned and disgusted,” said Holcomb, who had worked at Applebee’s in Lawrence and elsewhere since 2020.
By Wednesday, the Lawrence restaurant had reopened. A spokesman for Apple Central LLC confirmed the Lawrence location was closed for a time on Tuesday, but he couldn’t confirm how many employees had quit or what role a lack of employees played in Tuesday’s closing.
The restaurant reopened on Wednesday, but word was out, and now Applebee’s corporate has stepped in to do damage control.
But the spokesman said he agreed that the email was stunning.
“It is embarrassing. It really is,” said Scott Fischer, director of communications for Apple Central, which is based in Kansas City and has 47 Applebee’s restaurants in the Midwest.
As the cost of everything from housing to gas to food continues to surge, America’s hourly workers are indeed feeling the pinch far worse than their white collar peers. Let this be a warning to any other businesses looking for savings by lowering wages: America’s wage laborers are officially stretched to the breaking point.
Tyler Durden
Fri, 03/25/2022 – 18:00 - Rickards: The Newest Case For Gold
Rickards: The Newest Case For Gold
Authored by James Rickards via DailyReckoning.com,
The stars are aligning for gold. A combination of geopolitical tumult, supply chain problems and inflation all point to much higher gold prices.
Today, I’ll break it all down.
If you believe that the war in Ukraine will end soon, that global supply chains will heal quickly and that inflation is transitory, then you’re probably in for a rude awakening. In fact, none of those things is likely.
Even if the shooting stops in Ukraine soon, something that is not at all assured, the geopolitical consequences will dominate events for years or decades.
Putin will have asserted Russian de facto control over eastern Ukraine, if not outright annexation. Ukraine’s hope of NATO and EU membership will be permanently denied.
And the divisions in the West between the U.S. and the U.K. on the one hand and France and Germany on the other with respect to energy and trade with Russia will be on full display.
The Western alliance will lie in ruins. But Ukraine isn’t the only international security crisis underway.
Simmering Tensions
China has been rattling sabers in the Taiwan Strait and the South China Sea.
Iran is in the late stages of renegotiating the Joint Comprehensive Plan of Action (JCPOA) that deals with Iran’s uranium enrichment plans and efforts to build a nuclear warhead that can be fitted on a missile.
North Korea is again testing intermediate-range missiles and may be preparing to test an intercontinental ballistic missile (ICBM) capable of reaching Guam, Hawaii, Alaska and the West Coast of the United States.
Furthermore, there are ongoing crises in Syria, Lebanon, Venezuela, Sudan, Ethiopia and elsewhere around the world. The bottom line is there are plenty of geopolitical tensions to go around.
Besides the geopolitics, there’s the geoeconomics…
“The War Is Already Damaging Global Supply Chains”
Supply chains will be in even worse shape. The global supply chain crisis was underway well before the war in Ukraine. The pandemic particularly hurt supply chains as buyer and seller facilities in plants, ports, shipping, trucking, warehouses and distribution centers were all closed temporarily (and at different times depending on the location of the outbreaks).
This created tremendous bottlenecks and backlogs. Now comes the war in Ukraine with extensive sanctions, retaliation and physical disruption from the war itself. The war is already damaging global supply chains.
For example, BMW and Volkswagen have both shut down automobile production lines because of their inability to obtain a simple cable wiring harness part that is supplied by production facilities in Ukraine.
In some cases, you can assemble most of the automobile and then install a delayed part near the end of the process. That’s not true for wiring harnesses. They are installed almost at the beginning of the manufacturing process. This means that the assembly line is halted at an early stage of production and nothing else can be done in the meantime.
This is a pointed example but far from the only one. The manufacture of many products all over the world is suffering disruption due to supply chain delays with their origin in Ukraine. Agriculture and wheat exports may be the worst affected.
The Breadbasket Is Empty
The planting season begins soon and Ukraine cannot obtain the fertilizer it needs to plant crops. Those crop shortages will impact global supplies next fall when the harvest season begins.
Ukraine’s nickname is the Breadbasket of Europe. It along with Russia supply about 25% of the global wheat supply and 20% of the global corn supply. What do you think will happen when that supply dries up?
The problem is actually worse than that because most of the grain in the world is not raised for human consumption. It’s raised to feed the animals that we eat. If you want a nice hamburger, for example, it’s going to come from a cow that ate wheat probably produced in Ukraine. And now that’s offline.
Then there’s the impact on semiconductors and strategic metals. Airbus gets 50% of its titanium from Russia and Boeing gets 35% of its titanium from Russia. Russia and Ukraine together control 30% of the global output of titanium, so they’re not going to be getting any new airplanes for a while.
“Good Luck Making Semiconductors”
Meanwhile, we’ve cut off semiconductor shipments to Russia. If you cut off semiconductors to Russia, yes, that will damage their economy. But how do you make semiconductors? You take silicon chips and etch them with lasers.
How do you power a laser? With a processed neon gas. Sixty-five percent of all the processed neon gas in the world comes from one company in Odessa, Ukraine. So Putin says, oh, you’re cutting off my semiconductors? Fine. I’m going to cut off your neon gas. Good luck making semiconductors.
Basically, you’re talking about shutting down much of the world’s semiconductor industry. Think about that for a second. There are over 1,400 semiconductors in your car alone.
Supply chains take decades to build but can be fractured in a matter of weeks when extreme sanctions are imposed, as they have been on Russia.
Pick Your Poison
Meanwhile, Russia’s exports will not stop, but they will be rerouted to China, India and the Middle East instead of Europe and the U.S. The result will be higher costs, longer lead times and persistent shortages.
Inflation is also not temporary or “transitory.” Once prices of oil, natural gas, strategic metals and agricultural exports spike, they do not retreat unless there is something like a global depression.
So, your choices are permanently higher prices or a new great depression. Take your pick. All of these scenarios are bad for the global economy but good for gold. The stars are aligning for gold.
Inflation is obviously also good for gold because inflation generally runs ahead of interest rate hikes. The interest rates do catch up eventually, but for the first year or two, higher inflation with lagging rate hikes means real rates are going negative.
That’s the ideal condition for gold price increases.
A Golden Anchor
Contrary to most investors’ expectations, a serious recession or even depression is also good for gold. Gold prices rose almost 75% during the Great Depression (from $20.67 per ounce to $35.00 per ounce) as the government engineered a dollar devaluation to cause inflation in all commodities as a way to defeat the prevalent deflation.
With this as the investment backdrop, gold investors should get ready for what I call $100 days.
At current price levels, making large profits in gold gets easier by the day. Here’s why: If you own gold and it goes up $100 per ounce, you make $100 per ounce. But each $100 per ounce gain is easier than the one before because it’s a smaller percentage gain from a higher denominator.
If gold is $1000 per ounce and it goes up $100 per ounce, that’s a 10% gain. But, if gold is $2,000 per ounce and it goes up $100 per ounce, that’s a 5% gain.
The Sooner You Buy Gold, the Better
Carrying that logic forward, if gold is $3,000 per ounce and it goes up $100 per ounce, that’s a 3.3% gain. Each increase is easier because it represents a smaller percentage of the new base price.
But you still make $100 per ounce.
That’s why it’s important to buy gold now because this process is just beginning. We’ll see $100 per ounce gains on a weekly basis. Soon, we’ll see those gains on a daily basis. At $5,000 per ounce, a $100 per ounce gain is a 2% gain, which is almost normal daily volatility.
The sooner you buy gold, the sooner you can start to enjoy those $100 days … or maybe $10,000 days if you own 100 ounces.
Tyler Durden
Fri, 03/25/2022 – 17:40 - Pacific Fleet Commander Says US Must Be "Prepared" For China To Retake Taiwan
Pacific Fleet Commander Says US Must Be “Prepared” For China To Retake Taiwan
Earlier today, Treasury Secretary Janet Yellen told CNBC that the US presently has no plans to sanction China for tacitly aiding Russia in the Ukrainian war effort. Of course, that will likely change when Beijing finally makes its move on Taiwan.
Following yesterday’s report about a landmark new security deal between the PRC and the Solomon Islands, the commander of the US Pacific Fleet – who has repeatedly warned about China’s increasingly aggressive military “boldness” that has been on display over the past year – told the FT in an interview that the US must be “prepared” for China to move on Taiwan (which Washington would be treaty-bound to defend).
Admiral John Aquilino, head of Indo-Pacific Command, said China had displayed a “boldness” over the past year that ranged from its increasingly assertive military activity near Taiwan and other parts of the South China Sea to its rapid nuclear expansion and a hypersonic weapon test in July.
While many Americans remain ignorant of the possibility of an imminent invasion, Aquilino noted that a lot can change in the span of just a few months. Take the situation in Ukraine, for example. Five months ago, few expected that Russia would launch such a “special military operation.”
“I don’t think anyone five months ago would have predicted an invasion of the Ukraine. So I think the number one lesson is: ‘Hey, this could really happen.'”
Aquilino told the Financial Times during his first visit to Australia as head of US forces in the Indo-Pacific. “Number two, don’t be complacent…We have to be prepared at all times.”
One indication of China’s increasingly aggressive military posture: it’s increasingly aggressive military drills, as it sends warplanes to intimidate Taiwan by flying through the island’s airspace.
“Their operations have certainly changed specifically as it applies to their operations around Taiwan – increased maritime and air operations that are designed as a pressure campaign against the people of Taiwan,” Aquilino said in his first wide-ranging interview since assuming command at Indo-Pacom last April.
“I wouldn’t say I’m more concerned, but I do see increased pressure, and we have to make sure we are prepared should any actions get taken,” added Aquilino, who commanded the US Pacific Fleet before Indo-Pacom.
Aquilino also discussed China’s development of Hypersonic weapons: missiles that fly faster than the speed of sound. The weapons have recently been employed by the Russian military in targeted strikes on Ukrainian targets.
Asked whether the hypersonic weapon was designed to target the US or facilitate an attack on Taiwan, Aquilino said it was an “offensive capability” – not a defensive weapon – that had “many applications”.
“I don’t think it was built for a specific one, but it certainly destabilises the region,” he said. “That capability that could be applied against any partner in the region.”
The “very steep increase” in China’s nuclear arsenal is another cause for alarm, Aquilino said. The Pentagon projects the PRC’s nuclear arsenal will surpass 1,000 warheads this decade. He added that Indo-Pacom was working with Strategic Command, which overseas US nuclear forces, to provide an “integrated deterrence” against the growing nuclear threat.
In the face of an increasingly aggressive China, the US is relying more and more on security cooperation with its allies, particularly its partners in “the Quad”, the security-oriented cooperation between the US, Australia, Japan and India that Beijing has obliquely criticized as a “Pacific NATO”.
“We’re synchronising more and more with our allies and partners,” said Aquilino, pointing to a recent military exercise that involved seven countries and four aircraft carriers. “Bringing that credible combat deterrent force and operating forward with our allies and partners is one of the key focus areas.” Asked what role Australia and Japan would play in any Taiwan conflict, he said they would have to decide for themselves but said the US wanted to be ready to operate with its allies. “What we want to continue to do is to operate together, train together…so that whatever decisions those policymakers choose, we’re ready to be able to respond as tasked.”
Cooperation in peacetime is one thing. But the big question is: can these partners be relied upon to assist the US in helping the Taiwanese repel an invasion? That, of course, remains to be seen.
Tyler Durden
Fri, 03/25/2022 – 17:20
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