- What Is The Relationship Between The Political Left And Globalism?
What Is The Relationship Between The Political Left And Globalism?
Authored by Brandon Smith via Alt-Market.us,
No one educated and sane likes the political left. This is not a shocking revelation. As I have been outlining for many years (but specifically in the past few years), leftists are the ONLY people in the country that consistently support draconian government policies and oppressive corporate monopoly.
They are the only people that support mass censorship of opposing viewpoints through Big Tech and social media. They are the only people demanding the deplatforming and “canceling” of public personalities that dare to utter any views that are contrary to the leftist narrative. They are the only group that has a vast majority in support of the authoritarian covid lockdowns and mandates. They are the only people that aggressively call for forced vaccinations of the populace. They are the only people demanding that the unvaxxed be removed from their jobs or face potential criminal charges. They are the only people that push for the indoctrination of school children with Critical Race Theory (which is essentially racism repackaged as academic activism). And, they are also the only people that are hyper-obsessive about propagating sexual politics in public schools.
These folks are exceedingly unlikable. One would think that they would remain on the very fringes of society where they can do little harm, but this has not been the case. Why? Well, it’s not because they are the majority, at least not in any traditional way. They are actually a minority on most issues with a few exceptions. However, they are highly organized, single minded (some would say hive-minded), and, they have the full support of our national power structures.
Here’s the thing – A lot of conservatives wrongly assume that the political left has become some kind of autonomous force within our culture that has the power to influence massive government and corporate interests, bending these interests to their will.
This is simply not true and these groups do not think for themselves. The reality is that it’s the opposite dynamic; it is government, corporate and decidedly GLOBALIST institutions which have direct influence and control over the political left. Leftists are tools of the globalist system, they are not some “grassroots” movement “sticking it to the patriarchy.” They are all slaves on the globalist plantation.
Where do the leftists of the social justice cult actually derive their power from? Is it the pervasive threat of mob violence?
No, it’s not. Ask yourself, when was the last time you saw an organized police presence and riot response to leftist mobs looting and burning down cities? In almost every case the police are told to stand down by city and state officials; they are told to do nothing. I have seen actual riot control used against actual peaceful protesters at events like G20. I have witnessed it personally, and it’s not pretty. When cops actually want to control and disperse a crowd, they have a lot of weapons in their arsenal to make this happen. The fact is, leftist riots continue for several days at a time exactly because they are ALLOWED to continue for several days at a time. When they do get arrested for their activities they are usually released without charge.
What about the prevalence of “cancel culture” and the use of online mobs to discredit or deplatform people that leftists don’t like? This has been working less and less because the rest of the public has been made aware of the tactic through the tireless efforts of the alternative and liberty media, but for around four years the leftists had free rein to destroy the lives and careers of anyone they pleased. Just look at Actress Gina Carano or Virginia police officer William Kelly as a prime examples of cancel culture in action.
The problem is, leftists would have no power to cancel anyone without the constant support of Big Tech, Hollywood, the mainstream media and international corporations. These companies don’t actually care what social justice warriors think, and they’re certainly not afraid of a tiny minority of lunatics with zero consumer leverage. Yet, they are the base of control that allows leftists to wield legitimate tools for deconstructing people’s lives. The corporate world aids the leftists because leftist goals serve corporate interests (for now).
And what about government overall? I remember a few years ago I warned people that the extreme end of the leftist spectrum would become the norm for the Democratic Party by the time Trump was out of office. I noted that people like AOC and Ilhan Omar were the intended future successors of the party and that cultists like them would dictate the Democrat platform. Many people said that I was crazy and that the rise of Trump indicated that the opposite would happen. Now look at them.
Biden and half of all Democratic leaders spout off about white supremacy and social justice on a regular basis. The party has become exactly what is was always intended to become – a vehicle for communist subversion. Regular democrats and moderates might not agree with this kind of extreme ideological zealotry, but most of them keep their mouths shut because they are fearful of being labeled heretics and cast out. Many say they support the cause just to avoid standing out from the herd. Being called a “bigot” or “misogynist” or “racist” only works on people that actually care and think those words still have meaning. That is to say, most social justice control mechanisms are designed to entrap other leftists, not free thinking conservatives.
Leftist activists would have no political influence at all without the avid support of leaders within the Democratic party. The politicians give leftists the teeth they use to bite the ankles of their opponents.
This brings us to the underlying center of all sociopolitical influence – The globalist foundations. Where do leftist groups get all the funding to launch organizations like Black Lives Matter? How do programs like social justice and Critical Race Theory find their way into college academia and all the way down to the public school system? What is the source for cultural Marxism and how did it become so pervasive in the first place?
Globalist foundations like Ford Foundation, Rockefeller Foundation, Tavistock Institute, George Soros’ Open Society Foundation, etc. are usually the source of the seed money and often the curriculum for most leftist movements. For example, Open Society and Ford Foundation, partnered with Borealis Philanthropy, were key in the creation of BLM, funneling hundreds of millions of dollars into the movement in its early days.
Ford Foundation, Open Society, Rockefeller Foundation and dozens of other globalist institutions are also deeply involved in the funding and proliferation of Critical Race Theory and gender studies programs. Once again pumping hundreds of millions of dollars into social justice groups as well as university indoctrination.
By extension, globalist institutions and international corporations have invested around $50 billion total in the development of social justice programs. Corporations implement indoctrination courses for their employees, but they also spread SJW propaganda to the public subconscious through commercials and popular media.
This has actually been going on a very long time by more subversive and secretive means. It was globalist institutions like the Rockefeller Foundation and the Ford Foundation that funded different elements of the feminist movement and “gender studies” movements from the late 1960’s onward. We can’t forget to include the Rockefeller Foundation’s large donations to ‘The Feminist Press’ and the Ford Foundation’s programs to groom teachers for inserting social justice talking points in their curriculum. This is openly admitted in Alison R. Bernstein’s book ‘Funding The Future: Philanthropy’s Influence On America’s Higher Education’. Bernstein is the vice president of Education at the Ford Foundation and the former Associate Dean of Faculty at Princeton.
It is no coincidence that almost every facet and goal of leftist activism is also listed within the goals of the UN’s Agenda 2030 initiative, which mixes some very nice sentiments about “equality” and ending poverty into a disturbing mission statement about “transforming the world” through global “inclusivity”, aggressive “sustainability” and racial and gender “equity.” If you are not familiar with these buzzwords you should be; they represent an Orwellian program of social engineering which the UN is seeking to spearhead.
I have been asking this question of leftists lately and I have yet to receive any concrete or meaningful answer: If you are supposed to be the underdogs and the revolutionaries, then why is it that all of the evil money elites are on your side? Why are the all the people you say you are fighting against giving you billions of dollars and enforcing your political will? Is it possible that corporatists, globalists and you leftists are all part of the same machine? Think about it…
The relationship between the agenda of globalists and the agenda of the political left is growing increasingly obvious and intertwined. The globalists want to dismantle traditional western structures, and so do leftists. Globalists want to dictate economic growth through carbon controls and climate change doom mongering, and so do leftists. Globalists promote a decidedly communistic approach to private property and economy, arguing in favor of the “Sharing Economy”, Universal Basic Income (UBI) and a world in which “we own nothing and are happy.” Leftist are embracing this concept because many of them are self serving and they prefer to take what others have worked for rather than earning it for themselves.
Of course, the money elites will continue to keep their wealth and influence while the rest of us are made “equal” through the equality of poverty, but let’s not dwell on that…
What I see moving forward is that the left is becoming the Cheka, or the political commissars of the globalist “Great Reset.” They have been molded for decades for this role and their purpose is to provide an element of social force and the illusion of consensus. The interesting thing about this strategy is that it seeks to exploit people who feel as if they are “oppressed” by the existing system, or they have been taught to feel oppressed. As with any Marxist takeover, Globalists use the “have-nots” as a shield while they grab more power.
Every time any conservative criticizes the lies and manipulation of the Black Lives Matter movement, for example, we are accused of “racism.” And this is the big trick: We all know that BLM (founded by devout Marxists and funded by globalists) has nothing to do with civil rights or racial justice, it’s just a means to destroy western society and replace it with a dystopian nightmare. That’s what we are criticizing. Black lives are not the issue, globalism and communism are the issue. Social justice and leftists movements are a smokescreen for a bigger agenda, and the leftists love to be used.
Why do they do this? It’s a mistake to assume they are merely “useful idiots.” Yes, some of them are, however, I think the people that fall into the leftist cult are people that are naturally inclined to do so. They are narcissists, psychopaths, degenerates, lazy, spoiled, and weak. They are people that are generally not capable of surviving independently and they know it, so they seek out collectivist frameworks to join and feed off of.
Question: How does a mob of BLM leftists attack Kyle Rittenhouse in Kenosha and EVERY SINGLE PERSON he shoots or tries to shoot ends up having an extensive and violent criminal record? It is because leftist movements attract such people in droves (look are what a BLM advocate and career criminal just did in Waukesha, Wisconsin). They are not innocent in all of this. They don’t care if they are being exploited by the elites because they think it’s a trade for power and control they would not have otherwise. They are partners with globalism, and globalism breeds and encourages evil.
It is important to understand this dynamic going forward because I see the argument often that the globalists are trying to “divide and conquer” America. In truth, we are ALREADY divided and have been for some time. Trying to talk with and educate moderates on the facts is one thing, but there is very little point in trying to engage in diplomacy with leftists. They have already chosen a side, and it’s not the side of reason or freedom.
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Tyler Durden
Sat, 11/27/2021 – 00:00 - Are We Already Living In A Brave New World? – Huxley's Warning To The World
Are We Already Living In A Brave New World? – Huxley’s Warning To The World
In the 21st century, how far away are we from Huxley’s dystopian vision of the future?
“It seems to me that the nature of the ultimate revolution with which we are now faced is precisely this: That we are in the process of developing a whole series of techniques which will enable the controlling oligarchy who have always existed and will always exist to get people to love their servitude.”
– Aldous Huxley, interview at University of California Berkeley (1962)
Is it too late to turn back the forces of technocracy and the scientific dictatorship?
The answer to this question is becoming more murky by the hour.
The following video presentation was produced by the Academy of Ideas, entitled, “Do We Live in a Brave New World? – Aldous Huxley’s Warning to the World.”
Watch:
Tyler Durden
Fri, 11/26/2021 – 23:30 - Ethiopia Warns US: Stop "Spreading False Info" About War
Ethiopia Warns US: Stop “Spreading False Info” About War
Authored by Dave DeCamp via AntiWar.com,
On Thursday, Ethiopia warned the US against “spreading false information” after the US Embassy in Addis Ababa warned of a potential terrorist attack in the city and urged Americans to leave.
Ethiopian government spokesman Kebede Desisa said there was no terror threat to the capital and accused the US of supporting the forces from the northern Tigray region, known as the Tigray’s People’s Liberation Front (TPLF).
Via AFP/Getty Images Desisa said Ethiopia is not only fighting the TPLF, “but also with colonialism of the powerful states of the West.” He also rebuked Western media reports that said the TPLF is closing in on Addis Ababa as an attempt to create chaos in the city.
Since the war broke out last year, the US has sanctioned Ethiopia and its northern neighbor Eritrea and is threatening more action. Ethiopians regularly protest against Western intervention in the war. On November 7th, tens of thousands of Ethiopians marched in Addis Ababa in support of Prime Minister Abiy Ahmed and denounced the US.
The US claims to be neutral in the conflict, but a group of former US and other Western diplomats met with a TPLF official via Zoom on Sunday to express support for the group, and a video of the conference was obtained by investigative journalist Jeff Pearce.
As far as I can tell this bombshell report showing Western officials backing a TPLF military coup to overthrow Ethiopia’s democratically elected leader has been ignored by the mainstream media. https://t.co/5kY0PkG2Zp
— Rania Khalek (@RaniaKhalek) November 25, 2021
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During the meeting, the Western diplomats made clear they supported the ousting of Ahmed to make way for a “transitional government.” The TPLF was the ruling political party in Ethiopia from 1991 to 2018.
Tyler Durden
Fri, 11/26/2021 – 23:00 - Rare Earth Elements: Where In The World Are They?
Rare Earth Elements: Where In The World Are They?
Rare earth elements are a group of metals that are critical ingredients for a greener economy, and, as Visual Capitalist’s Nicholas LePan details below, the location of the reserves for mining are increasingly important and valuable.
This infographic features data from the United States Geological Society (USGS) which reveals the countries with the largest known reserves of rare earth elements (REEs).
What are Rare Earth Metals?
REEs, also called rare earth metals or rare earth oxides, or lanthanides, are a set of 17 silvery-white soft heavy metals.
The 17 rare earth elements are: lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), promethium (Pm), samarium (Sm), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb), lutetium (Lu), scandium (Sc), and yttrium (Y).
Scandium and yttrium are not part of the lanthanide family, but end users include them because they occur in the same mineral deposits as the lanthanides and have similar chemical properties.
The term “rare earth” is a misnomer as rare earth metals are actually abundant in the Earth’s crust. However, they are rarely found in large, concentrated deposits on their own, but rather among other elements instead.
Rare Earth Elements, How Do They Work?
Most rare earth elements find their uses as catalysts and magnets in traditional and low-carbon technologies. Other important uses of rare earth elements are in the production of special metal alloys, glass, and high-performance electronics.
Alloys of neodymium (Nd) and samarium (Sm) can be used to create strong magnets that withstand high temperatures, making them ideal for a wide variety of mission critical electronics and defense applications.
The strongest known magnet is an alloy of neodymium with iron and boron. Adding other REEs such as dysprosium and praseodymium can change the performance and properties of magnets.
Hybrid and electric vehicle engines, generators in wind turbines, hard disks, portable electronics and cell phones require these magnets and elements. This role in technology makes their mining and refinement a point of concern for many nations.
For example, one megawatt of wind energy capacity requires 171 kg of rare earths, a single U.S. F-35 fighter jet requires about 427 kg of rare earths, and a Virginia-class nuclear submarine uses nearly 4.2 tonnes.
Global Reserves of Rare Earth Minerals
China tops the list for mine production and reserves of rare earth elements, with 44 million tons in reserves and 140,000 tons of annual mine production.
While Vietnam and Brazil have the second and third most reserves of rare earth metals with 22 million tons in reserves and 21 million tons, respectively, their mine production is among the lowest of all the countries at only 1,000 tons per year each.
While the United States has 1.5 million tons in reserves, it is largely dependent on imports from China for refined rare earths.
Ensuring a Global Supply
In the rare earth industry, China’s dominance has been no accident. Years of research and industrial policy helped the nation develop a superior position in the market, and now the country has the ability to control production and the global availability of these valuable metals.
This tight control of the supply of these important metals has the world searching for their own supplies. With the start of mining operations in other countries, China’s share of global production has fallen from 92% in 2010 to 58%< in 2020. However, China has a strong foothold in the supply chain and produced 85% of the world’s refined rare earths in 2020.
China awards production quotas to only six state-run companies:
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China Minmetals Rare Earth Co
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Chinalco Rare Earth & Metals Co
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Guangdong Rising Nonferrous
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China Northern Rare Earth Group
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China Southern Rare Earth Group
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Xiamen Tungsten
As the demand for REEs increases, the world will need tap these reserves. This graphic could provide clues as to the next source of rare earth elements.
Tyler Durden
Fri, 11/26/2021 – 22:30 -
- How To Escape Google
How To Escape Google
Do you belong to the 94% of Internet users who have no clue?
Google Search has a US online search market share of about 70%, or even 94% if Google Images, Google Maps and Google-owned YouTube are added (see chart above).
If you belong to these 94%, there is some bad news for you.
As a well-known US podcaster recently discovered, Google is indeed “hiding information” from its users. This has actually been known for many years, but it has become especially obvious and serious during the coronavirus pandemic.
In fact, censorship by Google has become so bad that nowadays, advanced Internet users are using Google primarily to monitor the current extent of censorship, not to actually search for anything. US researcher Dr. Robert Epstein termed it the Search Engine Manipulation Effect (SEME).
Of note, Google censorship affects not just search results, but even search suggestions. In other words, Google is first manipulating what you search for, only to then additionally manipulate what results you will get. It is well worth trying this out yourself to appreciate the effect (see below).
What is Google hiding from you? In short, they are hiding “non-authoritative sources”. In other words, they are hiding stuff those in power don’t want you to know or to even think of.
This is not all that surprising, given that Google initially was a research and startup project funded and supported by US intelligence and the military to “retain information superiority”.
Essentially, Google Search has become an online prison library.
Fortunately, there are a few alternatives to Google Search, although not as many as one might think. In fact, there are currently only two real alternatives to Google Search.
These two alternatives are Microsoft Bing and Russian Yandex.
The fact that Microsoft as a monopolistic corporation and Yandex as a Russian provider are offering more or less uncensored search results is somewhat ironic, and both of them may have their own reasons for doing so. But these are currently the only real alternatives to Google.
What about the many other, independent search engines, though? The truth is, most of them are neither independent, nor even actual search engines, as most of them simply rely on results provided by Google or Bing.
For instance, Startpage is simply providing Google search results.
DuckDuckGo, Yahoo, Qwant, Ecosia, Swisscows, MetaGer and other search engines are primarily relying on Microsoft Bing, although some of them may be adding a few other contextual sources or important privacy features. But with most searches, you will simply get Bing results.
If Microsoft Bing, one day, should decide to apply Google-style censorship (or get forced to do so), sophisticated Western Internet users will either have to rely on Russian Yandex, or will finally have to create an independent, real and uncensored search engine.
Otherwise, the Internet is going to become a pretty dark place, literally.
One more thing: YouTube. YouTube belongs to Google, too (since 2006).
This is why it has become increasingly difficult to find YouTube videos on “controversial topics”. In many cases, what you are looking for may already have been deleted by YouTube, but even if not, it may not be displayed in the highly censored YouTube search results and recommendations.
Instead, one has to use an alternative search engine based on Bing – which is indexing YouTube videos independently – and then search for the topic by adding “site:youtube.com”.
Or, better still, use an alternative video platform from the outset, like Odysee, Bitchute, Rumble, Brighteon, DTube, or even Archive.org.
Independent video producers, too, increasingly have to switch to these alternative platforms, as creating videos on YouTube nowadays is like building a sandcastle too close to the water.
To learn more about online media sources, search engines, ad blockers, bypassing paywalls and censorship, see Advanced Online Media Use: Seven Recommendations.
Google vs. Yandex
Russian Yandex seems to be manipulating search suggestions in the opposite way of Google. For instance, when searching for “Pfizer vaccine”, the first two search suggestions currently are “Pfizer vaccine deaths” and “Pfizer vaccine side effects”. Meanwhile, on Google, “Pfizer vaccine” is being auto-completed to “near me”, “booster”, “FDA approval”, “for kids”, or “efficacy”.
“Pfizer vaccine”: Yandex vs. Google
Google vs. Bing
Coronavirus: a “planned pandemic” (Bing) or “planning tools” (Google)?
Coronavirus: Google vs. Bing
Literature
- The new mind control (Dr. Robert Epstein, Aeon, 2016)
- How the CIA made Google (Nafeez Ahmed, Medium, 2015)
- Google is not what it seems (Julian Assange, Wikileaks, 2014)
- The Military Origins of Facebook (Whitney Webb, Unlimited Hangout, 2021)
- Surveillance Valley: The Secret Military History of the Internet (Yasha Levine, 2018)
Video: Google vs. Bing
A “meme compilation” on differences between Google and Bing. (2019)
Tyler Durden
Fri, 11/26/2021 – 22:00 - Colombians Are The World's Most Pessimistic People, Chinese The Most Optimistic
Colombians Are The World’s Most Pessimistic People, Chinese The Most Optimistic
Around the globe, the feeling that the world became more dangerous in the last year is widespread. According to a new survey by Ipsos, 82 percent of respondents from 28 countries said they somewhat or strongly agree with this sentiment.
However, as Statista’s Martin Armstrong shows in the following infographic, this general feeling of pessimism not universal.
You will find more infographics at Statista
While 91 percent of those in Colombia think the world is now a more dangerous place, 68 percent of respondents in China said the same.
Asked a different way, China also represented the most optimistic world view, with 86 percent saying they think more things are getting better globally than they are getting worse.
The international average here sits at just 49 percent. China is joined by India, and Saudi Arabia at the top of this scale, with 79 and 73 percent, respectively.
Tyler Durden
Fri, 11/26/2021 – 21:30 - Congressional Hawks Seek To Give Biden A Blank Check To Declare War On China
Congressional Hawks Seek To Give Biden A Blank Check To Declare War On China
Authored by Walt Zlotow via AntiWar.com,
Two weeks ago marked 80 years since the Congress last issued a declaration of war as required by Article 1, Section 8, Clause 11 of the Constitution: The Congress shall have power to declare war. Invoked to launch or defend against wars 3 times in the 19th and twice in the 20th century, that Constitutional requirement has become as outdated as a dial telephone used to spread the news of the last one, December 8, 1941.
Once established as the world’s supreme superpower, American presidents, beginning with Harry Truman in 1950, decided to abandon the need to ask Congress to declare war. Incredibly, Congress went along with this enormous transfer of the war power to the president. When Truman decided to intervene in the Korean conflict, he simply called it a police action and began a military campaign that took several million Korean lives as well inflicting 128,000 U.S. casualties, of which 36,500 died. That’s some ‘police action’.
Getty Images In the 71 years since, the US has engaged in dozens of wars, some so secret most Americans are oblivious to their occurrence. But in all that time Congress has never explicitly granted the 13 presidents succeeding Truman the power to unilaterally wage war. Congress pays lip service to Article 1, Section 8, Clause 11, occasionally even making efforts to take it back.
But a troubling new law proposed by a couple of Congressional hawks may explicitly authorize the president to wage war with China at any point in the future should China move to bring the island nation of Taiwan back under control of mainland China.
It’s called the Taiwan Invasion Prevention Act, introduced by Senator Rick Scott (R-FL) and Representative Guy Reschenthaler (R-PA). Besides pre-authorizing war upon China, the bill contains 10 other provisions that strengthen US ties to Taiwan in direct conflict with 5 decades of honoring the ‘One China’ policy. Called ‘strategic ambiguity’, that policy largely ignored escalating tension with China over Taiwan.
Scott and Reschenthaler use extreme rhetoric to promote their blank check for the president to declare war on China…
“It is no secret that General Secretary Xi is bent on world domination. The United States cannot sit back and let this happen” (Scott).
“The Taiwan Invasion Prevention Act empowers and strengthens Taiwan by authorizing the president to use military force to defend Taiwan against a direct attack” (Reschenthaler).
I view Biden as a very weak president who could easily be manipulated by dimwitted hawks telling him that without American escalation against Russia over Ukraine China will be emboldened to take Taiwan. I can’t tell you how many hawks I’ve seen making this empirics-less claim.
— Max Abrahms (@MaxAbrahms) November 25, 2021
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Apparently, Scott and Reschenthaler are attempting to update Article 1, Section 8, Clause 11 to read, The Congress shall have power to declare war…in advance.
Tyler Durden
Fri, 11/26/2021 – 21:00 - DoD Creates New Group To Investigate Unexplained Aerial Sightings Due To "National Security Risk"
DoD Creates New Group To Investigate Unexplained Aerial Sightings Due To “National Security Risk”
There have been almost 150 reportings of unidentified aerial phenomena (UAP) over restricted US military areas. The Pentagon announced it would create a new group to search for answers to identify these mysterious objects.
Deputy Secretary of Defense Kathleen Hicks announced Tuesday that the new group would be called the Airborne Object Identification and Management Synchronization Group (AOIMSG) and would lead an effort to “detect, identify and attribute objects” in restricted airspace.
“Incursions by any airborne object into our Special Use Airspace (SUA) pose safety of flight and operations security concerns, and may pose national security challenges. DOD takes reports of incursions – by any airborne object, identified or unidentified – very seriously, and investigates each one,” the Pentagon said in a statement.
The creation of the group comes in the wake of an Office of the Director of National Intelligence (ODNI) report. Since 2004, the report revealed there had been 143 UAP sightings over sensitive areas. The ODNI wasn’t able to explain the sightings. About 21 of the sightings demonstrated advanced propulsion systems unknown to the US.
Some have said these UAPs are from another world, while others claim they could be advanced technology from China and Russia.
The Pentagon said it would issue “implementing guidance,” which will include further details about AOIMSG’s organizational structure. Whoever will lead this group will have the power to standardize incident reporting and examine sighting data — this will help the military recognize shortfalls in detection capabilities.
Tyler Durden
Fri, 11/26/2021 – 20:30 - Soros, Druckenmiller, & The Mundell-Fleming Trilemma
Soros, Druckenmiller, & The Mundell-Fleming Trilemma
It had all the markings of a “perfect setup”; the kind that only come around once every decade or so…
Most of you are probably familiar with the story of how Soros and Druckenmiller “broke the Bank of England” in 92’.
The two bet against the pound believing that it couldn’t maintain its peg to the Deutsche Mark in the European Exchange Rate Mechanism (ERM). They were right. The Bank of England was forced to stop defending the peg and the pound plummeted. The Quantum Fund (Soros and Druckenmiller) netted over a billion dollars over the course of a few days. The rest is history.
It was an amazing trade. It had all the markings of a “perfect setup”; the kind that only come around once every decade or so. It was extremely asymmetric in that the risk was clearly defined by the upper-band of the ERM peg. And if the lower bound broke, like they expected, they knew the pound would collapse due to all the investors on the wrong side forced to liquidate.
It was also a fundamentally compelling trade. The thesis was based on an economic law derived from the Mundell-Fleming model. It states that in a world of high capital mobility, a central bank can target the exchange rate or the interest rate but not both. This economic reality is also known as the policy trilemma (depicted in the pyramid above). Here’s the following explanation from The Economist.
The policy trilemma, also known as the impossible or inconsistent trinity, says a country must choose between free capital mobility, exchange-rate management and monetary autonomy. Only two of the three are possible. A country that wants to fix the value of its currency and have an interest-rate policy that is free from outside influence cannot allow capital to flow freely across its borders. If the exchange rate is fixed but the country is open to cross-border capital flows, it cannot have an independent monetary policy. And if a country chooses free capital mobility and wants monetary autonomy, it has to allow its currency to float .
To understand the trilemma, imagine a country that fixes its exchange rate against the US dollar and is also open to foreign capital. If its central bank sets interest rates above those set by the Federal Reserve, foreign capital in search of higher returns would flood in. These inflows would raise demand for the local currency; eventually the peg with the dollar would break. If interest rates are kept below those in America, capital would leave the country and the currency would fall.
Where barriers to capital flow are undesirable or futile, the trilemma boils down to a choice: between a floating exchange rate and control of monetary policy; or a fixed exchange rate and monetary bondage.
In the Bank of England’s case in 92’, England was in a recession, but the BOE was forced to run constrictive monetary policy (high interest rates) in alignment with Germany in order to maintain the peg. This exacerbated the recession which led to more downward pressure on the pound (which was overvalued when the peg was set).
The BOE was confronted with the choice of (1) try to maintain the peg and as a result, deepen the recession or (2) stop defending the pound, move to more accommodative monetary policy, and benefit from a more competitively priced pound.
The BOE went with the latter and Britain’s economy ended up better off for it.
Had the BOE not made that decision, it’s likely that the market would have made it for them. Since England did not have capital controls and allowed money to flow freely across its borders, the BOE had to actively engage in the currency market to counteract the downward pressure from pounds being converted into other currencies. They had limited FX reserves and eventually would have run out of their ability to defend the peg anyway.
The policy trilemma is one of those things in economics that’s so logical it’s self-evident. Yet it’s still somehow forgotten or ignored by the very people who pull the financial and monetary levers of our world.
China is a prime example. The People’s Bank of China (PBoC) is fighting tooth and nail to maintain its crawling peg to the dollar. Their goal is to carry out a slow coordinated devaluation.
China has chosen exchange rate management and monetary autonomy. This means they can’t have capital mobility.
This is why the CCP has been strengthening its capital controls and cracking down on money fleeing the country. The problem is… when your country is the number one trading partner with over 100 other countries, there’s a lot of capital holes to try and plug. It’s nearly an impossible task.
Simply put, if money wants to leave China, it’ll find a way.
And if fighting the economic laws of the policy trilemma weren’t enough, China is facing another unsolvable problem that’ll eventually drag down its currency like a 100-ton anvil.
I once saw a Bloomberg interview with Hedge Fund manager Kyle Bass. Bass is a smart dude and one of the few managers I have a lot of respect for.
One of his higher conviction themes over the last year has been the implosion of the Chinese banking system and the subsequent devaluation of the yuan — a theme I agree with and have written extensively about.
The premise is simple; Chinese banks are sitting on trillions of bad debt. Exactly how much bad debt nobody quite knows. The data coming out of the country is iffy but we at least we know it’s in the trillions… which is a lot.
These banks have been rolling over bad loans by adding new debt. They’re playing the old game of “a rolling loan gathers no loss”. But we all know that game can only go on for so long.
China has been forced to go to greater and greater lengths to paper over this problem and keep the dam from breaking.
Over the last 18 months alone, credit in China has grown by $6.5 trillion while deposits have increased by less than half that. As Bass notes in the interview, “China has to fund enormous moves in credit growth just to keep in roughly the same place. We call it running to stand still.”
All it’ll take is a catalyst and these banks will go bust and will need to be recapitalized. This means printing a lot more money which will result in a much depreciated yuan.
Tyler Durden
Fri, 11/26/2021 – 20:00 - Inflation Stretching Budgets Thin For Americans As They Rethink Holiday Buying
Inflation Stretching Budgets Thin For Americans As They Rethink Holiday Buying
What looked like a win for workers earlier in the year, as wages increased, has turned out to be another blow after accounting for inflation. Real wages are negative on the year, and that is impacting how consumers spend this holiday season. \
Consumer confidence has been sliding as real wages are negative on the year as consumer prices in October spiked 6.2% YoY, far higher than the +5.9% YoY expected and accelerating from September’s 5.4% YoY; that was the highest print since 1990…
Inflation this holiday season will undoubtedly be a topic at the dinner table. Retailers are pushing costs onto consumers as they attempt to preserve margins. Soaring commodity costs (including decade high in food prices), snarled supply chains, higher transportation costs, labor shortages have allowed shallower discounts.
Buying attitudes for big purchases has utterly collapsed (due to price concerns)
Despite consumer sentiment waterfalling to COVID lows, a new Deloitte survey shows holiday shoppers are now planning to spend more than they anticipated in September.
Deloitte projects holiday sales could increase by 7% to 9% this year.
We do note that Deloitte’s projection is nominal and so may simply reflect higher prices of the same goods, as opposed to a more positive sentiment reflective of confidence driving Americans to ‘buy more’.
Sure enough:
Of the 1,200 respondents (polled between Oct. 21 to Oct. 25), 41% said the reason for expanding their holiday budgets was higher prices. That’s up from 27% who said the same last year.
So far, consumers are stomaching price increases as BofA forecast a bigger-than-consensus jump in spending in October.
The survey showed about 63% of consumers experienced a stockout situation, meaning that particular gifts they were looking to buy were not in stock due to supply chain woes.
How will Americans afford this increase in buying? Simple – the way they always have – credit cards. And that spending is already ramping up as inflation eats away at actual incomes and savings. And sure enough, after shrinking for 2 consecutive months, credit card debt soared by just shy of $10 billion – the second highest this year- and pushed the total revolving credit outstanding back over $1 trillion for the first time since April 2020.
So the Federal Reserve finds itself in a situation where it must stomp out soaring inflation by adjusting monetary policy accordingly (but is deathly afraid of the economic and market consequences of such an action). Failure to taper and lift interest rates to combat inflation will cause even more discontent among consumers who may go on a buying strike because they can barely afford shelter, food, and energy.
Tyler Durden
Fri, 11/26/2021 – 19:30 - New York Taxpayers Paid $9.5M In Cuomo Legal Fees So Far
New York Taxpayers Paid $9.5M In Cuomo Legal Fees So Far
Authored by Adam Andrzejewski via RealClearPolicy.com,
Andrew Cuomo, disgraced former governor of New York, has cost the Empire State’s taxpayers $9.5 million and will continue to reap the benefits of a law that makes taxpayers pay legal fees for elected officials.
Cuomo resigned in August over sexual harassment allegations, while various scandals have followed him, from allegedly using state staff to help him earn $5.1 million from a book deal while the state lost 56,000 people to Covid-19, to requiring nursing homes to take in Covid-positive patients and allegedly undercounting the number of people who died there.
Taxpayers have footed the bill for his legal fees, so far costing $9.5 million, and rising ever upward.
According to Politico, that figure breaks down and includes up to $5 million for lawyers who have represented Cuomo’s office, up to $3.5 million for lawyers hired by the state attorney general to investigate sexual harassment allegations against the Democrat, and at least $1 million in bills for lawyers hired by the legislature as part of an impeachment investigation.
It doesn’t include the legal fees of Cuomo’s private attorney, Rita Glavin, whose bills are being paid by his campaign committee.
While Cuomo has been charged criminally for allegedly forcibly groping a former staff member, those charges appear not to be sticking because a sheriff in upstate New York went rogue and filed charges without the knowledge of the district attorney, who was still investigating, and without a sworn statement from the alleged victim.
So, there’s another potential significant cost in play.
That’s because state law says it will reimburse public employees for their legal fees when they are acquitted of criminal charges, or those charges are dismissed.
Cuomo has used his campaign committees to pay for his legal defense, so the reimbursement goes to his campaign account.
“It’s a crazy law,” said state Sen. Mike Gianaris (D-Queens), who for years has sponsored a bill to repeal it.
Crazy indeed. Taxpayers shouldn’t be on the hook for legal fees, especially for someone like Cuomo, who as of July had more than $18 million in his campaign accounts.
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The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.
Tyler Durden
Fri, 11/26/2021 – 19:00 - After Today's "Crazy" Meltdown, What Is Oil's Fair Value? Goldman Has The Answer
After Today’s “Crazy” Meltdown, What Is Oil’s Fair Value? Goldman Has The Answer
Black gold suffered a very red day today: the fall in Brent prices to below $74/bbl (-10%) – fears that a new Covid variant would lead to a freeze in oil demand – was the largest daily decline since oil prices collapsed to negative levels last April, exacerbated by usually low trading activity on Black Friday (with similar moves in 2014, 2016 and 2018), the breach of key support levels (50, 100 and 200-day moving averages) as well as likely negative gamma effects.
At the worst point of the crash, WTI futures slumped 14% from their pre-Thanksgiving close and Brent collapsed more than 12%. By the close they’d both recovered slightly, but for Brent futures it was still the seventh worst one-day drop in history!
“It’s been a crazy day in the markets that feels very reminiscent of last March,” said Craig Erlam, senior market analyst at Oanda Europe.
While the initial overnight plunge was driven by revived fears of widespread lockdowns and travel bans, a host of technical factors, including muted post-holiday volumes and (downward) momentum-chasing algos exacerbated the sell-off. The panic spread to every corner of the market from European diesel trades and time-spreads, the relative value of oil today to oil tomorrow, through to opaque options markets.
“Factors such as the break of technical support levels and an environment with lower liquidity post the Thanksgiving holiday have intensified the price drop,” said UBS commodity analyst Giovanni Staunovo.
While one can blame algos, trendlines and the lack of carbon-based traders for today’s plunge, one thing is certain: there was nothing fundamental about today’s move.
As Goldman’s commodity strategist Damien Courvalin, who has emerged as Goldman’s designated oil cheerleader and who in the past 4 months has been quite vocal about his $90+ oil price target in the coming months, writes today at $74/bbl Brent, the market is pricing a roughly 4 million b/d negative demand hit over the next three months, with no offsetting OPEC+ response.
To put this into its stunning context, global oil demand fell “only” 2 million b/d peak to trough during last winter’s Covid wave, meaning that today the market priced in a twice as severe wave as last winter!
The parallel nature of the sell-off, with back-end prices down $5/bbl could also be interpreted as the market pricing in a shallower but longer demand hit. Specifically, the change in the entire curve is pricing in a 2.5 mb/d hit over 3 months with a more permanent impact on demand of c. 1.5 mb/d.
Needless to say, in Goldman’s view both seem an excessive repricing: current jet demand levels are just 1 mb/d above last winter, when cases and hospitalizations were far higher and before any widespread vaccinations. While a worst case outcome could be a return to last winter’s levels, 0.5 mb/d downside to Goldman’s current base-case until 2Q 22 would be a conservative assumption given what we know at present.
Separately, some limited mobility restrictions could feasibly be expected to subtract an additional 0.5 mb/d from global demand outside of jet on the return of mobility restriction. This would be a similar impact to half of last winter’s wave in Europe given the ever weakening link between restrictions and economic activity/oil demand.
In such a scenario, Goldman agrees with what we said earlier today, that should demand collapse OPEC+ would pause its ramp-up at least for one month vs. consensus estimates of increase through April 2022.
In other words, adding all of the above, the impact of a new large Covid wave would be c.0.7 mb/d over 3 months, and up to at most $2 downside versus Goldman’s current modal price forecast path. Instead Brent collapsed to $12 below it, an arb of some $10/barrel.
Admittedly, to this negative Covid impact, one could also add the added bearish element of this week’s bearish SPR announcement which Goldman calculates is worth a net 47 million barrels to its 1H 2022 balances, and an additional $2/bbl downside to our forecasts. Taken together, these represent at most $5/bbl downside to Goldman’s $85/bbl 4Q21-1Q22 oil price forecasts.
Said otherwise, a worst-case outcome means oil is fairly priced at $80. At its closing price below $73 it’s a steal.
On the other hand, there is substantial potential for offsetting bullish developments via the lack of progress in Iranian negotiations (where things are going nowhere fast and where Goldman had expected a supply ramp up beginning in 2Q 22), as well as OPEC+ freezing its production hike for three months (instead of one) which would completely offset the combined negative hits of both another large Covid wave and SPR releases.
Alas, none of this mattered to the algos, robots and CTAs who led the charge of today’s meltdown: as Bloomberg notes, the market spiraled ever lower as oil broke through key technical levels, with futures dropping 100-day and 200-day moving averages. That gave algorithmic computer-driven trades the upper hand on a day when many participants were away from the market.
“The sell-off has no doubt been driven exacerbated by algo-driven trading as key technical levels broke down,” said Fawad Razaqzada, an analyst at ThinkMarkets.
Then we got the added kicker of negative gamma once the options market kicked in. When prices fall heavily, banks often sell futures contracts in order to hedge themselves against losses from put options. Banks often sell puts to producers who want to protect against a bear market. This feedback loop, known as negative gamma to options traders, was seen as a factor on Friday.
“Dealers just took down hedges and they are shorter put options than normal, so must sell futures to hedge,” said Ilia Bouchouev, a partner at Pentathlon Investments and former head of oil derivatives at Koch Supply and Trading.
Of course, for banks like Goldman, what happens next is clear: once the humans return, there will be an epic buying frenzy as today’s drop was at least twice as big as it should have been. Others agree: even if the Omicron variant is as scary as described – and that is by no means decided – they expect prices to recover quickly when the U.S. market returns fully after the holiday and volumes return to normal. The longer-term outlook remains robust.
“This is a huge overreaction in terms of the market,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said in a Bloomberg Television interview. “This is the market pricing in the worst possible scenarios.”
Of course, it would be most ironic if in a week or two, once the Omicron panic has subsided, oil trades well above Wednesday’s closing price and is approaching triple digits. In fact, the wheels on such an outcome are already in motion and as Bloomberg confirms our earlier speculation, OPEC+ is “increasingly inclined to ditch their plan to raise output next week”, as a new virus variant triggered oil’s worst crash in over a year.
The 23-nation alliance led by Saudi Arabia is leaning toward abandoning a plan for a modest production hike scheduled for January when it meets on Dec. 1 to 2, according to delegates who declined to be identified. The group was already considering a pause after the U.S. and other consumers announced the release of emergency oil stockpiles on Monday.
“The emergence of a new Covid variant that could spawn renewed shutdowns and travel restrictions is precisely the type of change in market conditions that could cause ministers to deviate from their plan” to add barrels, said Bob McNally, president of consultant Rapidan Energy Group and a former White House official.
Saudi Energy Minister Prince Abdulaziz bin Salman has warned that global crude markets are poised to return to surplus next month, and that demand is at risk from new infections. OPEC’s internal research shows a substantial excess forming early next year, that will only balloon if the U.S. and its associates tap their strategic reserves.
It appears the Saudis were correct.
But while until now, withholding additional barrels while the U.S. and others called out for them would have been a politically fraught move, fraying an already-fragile relationship between Riyadh and Washington the emergence of the new virus off-shoot, with its obvious risks to fuel consumption, makes an output freeze much easier to defend. UBS even joined this website in suggesting that the group could consider an output cut.
As such, today’s stunning kneejerk crash in oil, which priced in a horrifying pandemic outcome twice as bad as that of last winter when the world was blanketed in covid and nobody had vaccines, will prove to be a career-making buying opportunity for a commodity which one way or another is headed far, far higher.
Tyler Durden
Fri, 11/26/2021 – 18:30 - Watch: California Town Declares Independence From "Dictatorship Powers" Of State, Federal COVID Mandates
Watch: California Town Declares Independence From “Dictatorship Powers” Of State, Federal COVID Mandates
Authored by Steve Watson via Summit News,
A town in California has declared itself a “constitutional republic,” independent of executive orders issued by the federal or state governments, in protest of lockdowns, mask mandates and compulsory vaccinations.
Appearing on Fox News, Oroville California’s vice-mayor Scott Thomson outlined the move, noting “I was sitting at City Hall, and the mandates continue to come. As you know it started with ‘two weeks to stop the—slow the curve,’ and it just seems like a carrot keeps being dangled in front of our faces of just a little more… and it seems like every mandate that comes down, it is a loss of freedom.”
Thomson compared Oroville’s move to that of San Francisco declaring itself a ‘sanctuary city’.
“We’re a constitutional republic, and wanna declare that,” Thompson urged, clarifying “We’re not separating from California, but we’re just reminding the higher-ups in other cities we need to stand up for our rights. We still are a constitutional republic, which means we have rights endowed by our ‘creator,’ and our founders created a republic, which was genius, to separate powers.”
The vice-mayor further explained, “I believe that worldwide, but especially in California, that the very fabric of our nation is at a crossroads of how much authority we’ll let the government have,” comparing the struggle to a war.
“I don’t believe that anybody wins when the government has more authority,” Thompson emphasised, adding and “every time that you lose freedom, usually it takes bloodshed to get it back.”
“We’re getting threats of loss of money for our city, but for us, and especially for me, they can have their money; we want freedom in California, we want freedom in Oroville, and so that’s what we’re standing up for,” Thompson further urged.
Watch:
Scott Thomson, vice mayor of Oroville, California, explains why his town has become a “sanctuary city” against tyrannical COVID mandates imposed by Gavin Newsom.
‘Lesser magistrates’ protecting citizens from government overreach is a key way to fight back. More of this, please! pic.twitter.com/jOhg8p0YGf
— Scott Morefield (@SKMorefield) November 25, 2021
Mirrored at Rumble:
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Tyler Durden
Fri, 11/26/2021 – 18:00 - 26 More Cases Of Heart Inflammation Linked To Pfizer Jab
26 More Cases Of Heart Inflammation Linked To Pfizer Jab
Pfizer is already quietly scrambling Friday as the COVID “variant of the moment” raises new questions about the efficacy of its vaccine (while the latest “data” shows Merck may have oversold its mulnupiravir drug as a “miracle cure” for the virus), it appears 26 new cases of the rare side effect known as myocarditis have been reported during the week ending Nov. 21.
There is also one new case of blood clots case linked to the AstraZeneca jab following receipt of the first dose.
The new case increased the total Thrombosis with thrombocytopenia syndrome (TTS) or blood clots cases to 164 out of 13.4 million doses. Of these 148 (81 confirmed, 62 probable) related to a first dose of and 21 to a second dose (six confirmed, 15 probable). Eight people have died as a result of blood clots – six of these were women.
Put another way, myocarditis is reported in one to two in every 100,000 people who receive Pfizer.
There have also been a total of 150 reports of suspected Guillain-Barre Syndrome (GBS) occurring after vaccination with AstraZeneca, a rare but sometimes serious immune disorder affecting the nerves.
Pfizer noted earlier that it’s expecting a genetic breakdown of the “Nu” variant within 2 weeks.
Baum said the next few weeks of testing would be essential to determine whether Nu is more aggressive than delta. Lab tests could conclude BioNTech, Pfizer would have to reformulate their vaccine.
He noted one Hongkonger who was double Pfizer vaccinated experienced a breakthrough infection with Nu. The breakthrough cases are concerning as waning immunity from the COVID-19 vaccine continues as governments offer booster shots.
Baum spoke with Pfizer’s CEO, Albert Bourla, who said it could take scientists 100 days to develop a novel variant vaccine to combat Nu.
Tyler Durden
Fri, 11/26/2021 – 17:30 - The Pilgrims Did Socialism And Died Trying
The Pilgrims Did Socialism And Died Trying
Authored by Michael Maharrey via SchiffGold.com,
When I was a kid, we used to say some things only “sound good on paper.” In other words, they seem like good plans, but there is no way they’re going to work in the real world.
That’s socialism in a nutshell.
The Pilgrims found this out the hard way during their first couple of years in North America.
Socialism really does sound good on paper though, right? We’re all going to own everything together and take care of each other. “From each according to his ability, to each according to his needs.“
It sounds so nice. And we all want to be nice, right? People are emotionally drawn to socialism because it sounds nice. It sounds fair. It sounds good.
Except when people start dying.
Do you know what’s not nice?
Corpses.
That’s exactly what happened when the Pilgrims took a stab at socialism.
Most Americans don’t know that the Plymouth colony was originally an experiment in socialist utopianism and were it not for a complete 180 a couple of years in, we probably wouldn’t have enjoyed the bountiful feasts most of us will indulge in today. There would have been no Thanksgiving because there would have been nobody left to give thanks.
When the Pilgrims arrived in Massachusetts on November 11, 1620, they placed all their food and provisions in a “common store.” These folks were forward thinkers. They didn’t even have Marx’s scribblings to appeal to. They set things up on the socialist principle of, “From each according to his ability, to each according to his need.”
Well, things got off to a bad start. Conditions were miserable, as William Bradford described them.
That which was most sad and lamentable was, that in two or three months time half of their company died, especially in January and February, being the depth of winter, and wanting houses and other comforts; being infected with the scurvy and other diseases, so as there died sometimes two or three of a day, in the aforesaid time; that of 100 and odd persons, scarce 50 remained.”
Now, the Pilgrim’s initial struggles didn’t have anything to do with socialism. They just had the misfortune of landing in Massachusetts at the onset of winter.
Anyway, the following fall, the Pilgrims harvested their first crops and they all went into the common store.
Now, wasn’t that nice? No greed. Nobody getting any more than they should. Of course, nobody was getting much of anything at all – but still – they had to feel good about themselves, right?
So, in November the ship Fortune arrived with more than 30 new settlers, mostly young men. More manpower was welcome, but according to accounts, they brought “not so much as a bisket-cake” with them. The future looked bleak as food supplies ran out and the “planned socialist” community faced starvation yet again.
The following year, the harvest was poor in spite of the added manpower. Nevertheless, the pilgrims again put the meager harvest in the common store. Because, you know, it’s going to work this time!
It didn’t.
That winter, they starved.
The colonists were learning economics the hard way.
Richard Grant in The Incredible Bread Machine wrote:
“For two years the Pilgrims faithfully practiced communal ownership of the means of production. And for two years nearly starved to death, rationed at times to “but a quarter of a pound of bread a day to each person.” Governor Bradford wrote that “famine must still ensue the next year also if not some way prevented.” He described how the colonists finally decided to introduce private property:
[The colonists] began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. [In 1623] after much debate of things, the Gov. (with the advice of the chiefest amongst them) gave way that they should set down every man for his own … and to trust themselves … so assigned to every family a parcel of land. This had very good success; for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Gov. or any other could use, … and gave far better content. The women now went willingly into the field, and took their little-ones with them to set corn, which before would allege weakness, and inability; whom to have compelled would have been thought great tyranny and oppression.”
Reflecting on the experience of the previous two years, Bradford goes on to describe the folly of communal ownership:
“The experience that was had in this common course and condition, tried sundry years, and that amongst godly and sober men, may well evince the vanity of that conceit of Platosand other ancients, applauded by some of later times; — that the taking away of property, and bringing in community into a common wealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For the young-men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without any recompense. The strong, or man of parts, had no more indivision of victuals and cloths, than he that was weak and not able to do a quarter the other could; this was thought injustice…”
Woah! Some people resented doing all the work? They didn’t work as hard when they knew they weren’t going to directly benefit? Shocking.
Actually, it’s not shocking at all. It’s human nature. And we all know it.
Now, we can lament the fact. We can say it shouldn’t be that way. We can finger-point and talk about greed. We can get all holier-than-thou and say we wouldn’t act that way (in other words lie). But people will still be people.
Here’s a harsh truth: good intentions and feel-good policies can’t trump basic economics. You can dream unicorns and lollipops all day, but it won’t change reality.
Scarcity. Human behavior. Incentives. The experience of the Pilgrims vividly demonstrates basic economic principles. Their good intentions could not overpower the cold hard realities of economic principles. They never have. They never will.
Tyler Durden
Fri, 11/26/2021 – 17:00 - Vaccine Mandates Pressure Businesses, Stoke Division Amongst Employees, Executives Say
Vaccine Mandates Pressure Businesses, Stoke Division Amongst Employees, Executives Say
As if you already didn’t know, business owners are making it clear: President Biden’s vaccine mandates are making it difficult to hire and are “stoking tensions” among workers.
Employers with 100 or more workers now have to make sure employees are fully vaccinated, according to new federal rules outlined by the Wall Street Journal. Those without vaccination need to test negative for Covid-19 “at least weekly”, the report says.
While the mandate continues to play out in the courts and OSHA has temporarily agreed not to enforce it, many business owners continue to prepare for it.
For some, it’s not all good news. Business owner Pete Yohe told the WSJ he supports vaccines: “But I hate the 100-plus mandate, which forces some of our employees to quit and go to smaller companies.”
40 of his roughly 140 employees haven’t been vaccinated, he said. He expects that two would quit before following the mandate.
Jason Hitch, chairman of Hitch Enterprises Inc., told the Journal he is hoping the courts strike down the mandate. He says while he is encouraging staff to vaccinate, he “doesn’t want to be the police officer of the government’s mandate.”
He is considering staying below the 100 employee threshold simply to avoid the mandate.
When he asked his employees about their vaccination status for the first time, “the response was so negative that they were reluctant to broach it again”, he said.
He predicts 60% of his workers are vaccinated, but that there’s a “vocal minority” who are strongly opposed to it.
Employees at Dyco (Photo: WSJ) “They understand it’s the government, but we are the implementers. It directs the vitriol towards us,” Hitch said.
Steven Davis, area manager for Huntsville, Ala.-based Inline Electric Supply Co., says that mask mandates among unvaccinated workers would only cause division amongst employees. He said: “We are not acting as a team. It is frustrating to me.”
He guesses that about 40% of his company’s 255 employees have been vaccinated, telling the Journal: “We have absolutely tried to educate people. It’s just right now, we have hit a wall. People have dug in.”
48 year old Christian Cook, who is a saw operator at Dyco, had Covid land him in the hospital for five days. He says he is still “on the fence” about being vaccinated. “I don’t need to have somebody tell me what I am going to do and not do,” he said.
Allen Hurlburt, co-owner of H&M Gopher Control in Tulelake, Calif., implemented a vaccine mandate for his 7 employees. Five of his unvaccinated employees quit.
“Ignoring the problem and [deciding to] continue operations was not an option,” Hurlburt said after replacing his staff. “We do not have the skilled personnel we had, but all are vaccinated. We are filling orders. We are getting the job done.”
Reid Tileston, who owns Giddings Hawkins Maintenance Service, said he didn’t want to take chances with the future of his business.
“For me as a business owner, it was vaccinate the workforce or face chapter 11 [bankruptcy],” he concluded. One employee refused to get vaccinated and was terminated.
“His position is no longer available to him,” Tileston concluded.
Tyler Durden
Fri, 11/26/2021 – 16:30 - Joe Weisenthal Thinks Debasing The Dollar Is The Moral Thing To Do
Joe Weisenthal Thinks Debasing The Dollar Is The Moral Thing To Do
Authored by Robert Murphy via The Mises Institute,
Joe Weisenthal is an editor and host at Bloomberg who has recently been using his large Twitter platform to cast stones at the inflation hawks. In one recent thread, Weisenthal mocked the people worried about the falling purchasing power of the US dollar, and claimed in fact that it would be immoral for currency to maintain its value over time.
As we’ll see, although Weisenthal’s thought experiment of a time traveler is a bit whimsical, it provides a good opportunity for us to explore the underlying economics. The whole episode underscores, once again, why the Austrian school provides the public with a beacon of light amid the confusion of our financial punditry.
Weisenthal’s Time Traveler
Below is the original tweet, which is largely self-explanatory, though interested readers can see me grappling with Weisenthal by clicking here.
In context, Weisenthal (and Adam Singer) are poking fun at the Ron Paul–types who are upset at the steady decline in the dollar’s purchasing power since the Fed was formed in late 1913. Weisenthal thinks it is absurd to expect that actual currency would maintain its market value over the course of a century. Why, what would such a “hoarder” have done to benefit society all that while?
Shrinking the Time Scale
To cut to the chase, Weisenthal is completely mistaken: there was nothing immoral about the classical gold standard and its maintenance of the dollar’s purchasing power over long stretches. But it will be easier to pinpoint the flaw in Weisenthal’s thinking if we first consider a simple story.
Suppose Joey is a teenager who cuts lawns for extra income and he typically makes $25 a weekend. Joey wants to buy a $300 Xbox, so he saves his weekly lawn-mowing money under his mattress. After three months, Joey takes the saved $300 in cash to the mall and buys the coveted electronics.
Does Joe Weisenthal have a problem with this scenario? Did the market economy function immorally by allowing Joey to transfer his purchasing power from the start of the summer to the end of the summer? Was Joey supposed to have done something in addition to cutting lawns to earn the ability to defer his potential consumption through time?
I trust Weisenthal would not object to Joey saving up his currency over the summer. But then, what is the principled difference between Joey’s three-month deferral and Weisenthal’s time traveler who executed a hundred-year consumption deferral?
Present Goods Trade at a Premium for Future Goods
In fact, not only should a time traveler not be penalized for deferring consumption a century, he should be actively rewarded. This is because present goods are more valuable than future goods. (Note that we are here getting into some very technical issues. The interested reader can check out my three-part podcast series—one, two, and three—to hear the intricate details of interest theory in the Austrian tradition.)
So to go back to the original tweets, if a guy in 1921 has two quarters in his pocket, and that would be enough for him to buy a delicious hamburger, then for his willingness to effectively trade away his 1921 hamburger for a burger to be delivered in 2021, the guy should at least get to trade at par. And in fact, he would (normally) be able to obtain a promise for more than one burger in the future, since the former are more valued. (This is no more mysterious than one present burger trading for more than one present hot dog.)
It’s easy to understand why, subjectively, people would need to be promised a greater number of goods in the future to give up potentially consuming their goods today. But how, mechanically, can the borrowers deliver on these promises? How is it possible, technologically speaking, to transform 100 units of present goods into (say) 150 units of future goods?
The answer is that the longer we are willing to wait, generally speaking, the greater physical output we can obtain for a given amount of today’s inputs. Eugen von Böhm-Bawerk famously referred to the superior physical productivity of wisely chosen, more roundabout processes. For example, if a man is in the woods and wants to get water from a stream into his nearby cabin, he has different techniques he could use.
A very fast and direct method is to cup his hands and run back and forth from the stream to his cabin. This delivers some water to his cabin very quickly, but the yield—measured in gallons of water per hour of his labor—is also very low.
An intermediate method would be to hollow out two coconuts to make little buckets, and then go back and forth armed with the newly created capital goods. This would take longer to get the initial water to his cabin, but once the process is underway, it would deliver far more gallons per hour of invested labor—even including the time spent constructing the buckets.
Finally, the man might take several months digging a small path from the stream to his cabin, so that the water flowed directly to him. Once completed, his renovations would be extremely productive if we measure in terms of water volume per hour of his labor time.
And so we see society would be willing and able to reward Weisenthal’s hypothetical time traveler for earning $100 in 1921 and then postponing his consumption for a century. The real resources that would have gone into satisfying him in 1921 would be freed up to be invested in longer processes, which had a higher physical yield. To put it simply, it makes perfect sense that a 1921 hamburger would trade on the forward market for several 2021 hamburgers.
Bonds versus Cash
We can really see the weakness in Weisenthal’s analysis if we suppose the time traveler took his original cash and deposited it into a savings account at the bank. Would it be immoral for a bank account to have $100 in 1921, and to grow to more than that amount by 2021?
Or for another example, what if the time traveler from 1921 initially bought a very long-term bond that would come due in 2021? The time traveler jams the bond into his pocket, activates the time machine, and shows up at Weisenthal’s doorstep. He asks Joe to help him cash his matured bond (and working at Bloomberg, Weisenthal is just the guy). The time traveler is pleased to discover that the nominal interest he earned on the hundred-year bond is just enough to have maintained his purchasing power, since goods are much more expensive than the traveler is used to seeing. Has the market economy behaved immorally by allowing such a transaction to occur?
In principle, the same type of intertemporal trade occurs if people invest their savings not in bank account balances or bonds, but instead in the accumulation of actual cash. Even here, the initial drop in consumption frees up real resources that can be channeled into the production of a greater amount of future goods. As Ludwig von Mises explains in Human Action:
If an individual employs a sum of money not for consumption but for the purchase of factors of production, saving is directly turned into capital accumulation. If the individual saver employs his additional savings for increasing his cash holding because this is in his eyes the most advantageous mode of using them, he brings about a tendency toward a fall in commodity prices and a rise in the monetary unit’s purchasing power. If we assume that the supply of money in the market system does not change, this conduct on the part of the saver will not directly influence the accumulation of capital and its employment for an expansion of production. The effect of our saver’s saving, i.e., the surplus of goods produced over goods consumed, does not disappear on account of his hoarding. The prices of capital goods do not rise to the height they would have attained in the absence of such hoarding. But the fact that more capital goods are available is not affected by the striving of a number of people to increase their cash holdings. If nobody employs the goods—the nonconsumption of which brought about the additional saving—for an expansion of his consumptive spending, they remain as an increment in the amount of capital goods available, whatever their prices may be. Those two processes—increased cash holding of some people and increased capital accumulation—take place side by side.
It is a fascinating topic to ponder the ideal money (if such a concept makes sense) and whether its purchasing power would fall, rise, or remain steady over long periods. What we can say for certain is that rapid and unpredictable changes are undesirable, because a wildly fluctuating money defeats the effectiveness of monetary calculation, which is one of the underpinnings of civilization itself. To wit, double-entry bookkeeping only works when the money units of revenues and costs are comparable.
Conclusion
Contrary to Joe Weisenthal’s musings, there is nothing immoral if a money retains its purchasing power over long stretches. In general, when people channel their savings into conventional vehicles (such as bank accounts or bonds), this frees up real resources that can be used to yield a greater physical amount of output down the road. In principle, holding currency could be merely a different financial asset for achieving the same purpose.
Tyler Durden
Fri, 11/26/2021 – 16:00 - China Launches "Combat Readiness" Drill Near Taiwan As US Delegation Arrives To Island For 2nd Time This Month
China Launches “Combat Readiness” Drill Near Taiwan As US Delegation Arrives To Island For 2nd Time This Month
Five members of the US House of Representatives arrived in Taiwan Thursday night for a two-day high level visit with Taipei officials – the second such previously unannounced Congressional delegation to visit the island in less than a month.
China responded to the “surprise” visit by conducting “combat readiness” exercises in the direction of the Taiwan Strait on Friday. According to Chinese state sources, the People’s Liberation Army’s (PLA) Eastern Theatre Command announced it “organized naval and air forces to continue combat readiness police patrols in direction of the Taiwan Strait.”
Image: AFP/Getty “The relevant actions are necessary to deal with the current situation in the Taiwan Strait. Taiwan is part of China’s territory, and defending national sovereignty and territorial integrity is our military’s sacred mission,” the PLA Eastern Command added.
China’s defense ministry separately confirmed it sent eight aircraft toward Taiwan, including a pair of nuclear-capable H-6 bombers close to the Taiwan-controlled Pratas Islands and through Taiwan’s national defense identification zone. Days ago the US sent a warship through the contested Taiwan Strait for the 11th time this year, in what’s become a monthly “freedom of navigation” exercise, which Beijing fiercely condemned as a destabilizing “provocation”.
The US delegation which arrived Thursday included Reps Elissa Slotkin (D-MI), Mark Takano (D-CA), Colin Allred (D-TX), Sara Jacobs (D-CA), and Nancy Mace (R-SC). They touched down in Taipei on a US military C40-C transport plane, the second such American high level unannounced arrival since Nov.9.
“Madame President, I want to commend and praise your leadership. Under your administration, the bonds between us are more positive and productive than they have been for decades,” said Mark Takano, chairman of the House Committee on Veterans’ Affairs.
The delegation told Taiwan President Tsai Ing-wen during a Friday meeting that the democratic-run island is a “force for good” in the world. “Our commitment to Taiwan is rock solid and has remained steadfast as the ties between us have deepened. Taiwan is a democratic success story, a reliable partner and a force for good in the world,” the statement added.
Meanwhile, despite tensions remaining high surrounding Taiwan and other issues such as Washington’s repeat condemnation of China’s human rights abuses including crackdowns in Hong Kong and Xinjiang, the PLA military is calling for opening up “good relations” with the US military, in order for communications to be frequent enough so as to avoid stumbling toward war.
Ministry spokesman Wu Qian in statements late this week stressed that positive dialogue would be conditioned on China’s sovereignty being respected (which of course means China’s claims over Taiwan must also be “respected). “As we have said many times, China has principles for the development of relations between the two militaries, which is that China’s sovereignty, dignity and core interests cannot be violated,” Gen. Wu Qian stated.
Tyler Durden
Fri, 11/26/2021 – 15:30 - Professor Who Defended Pedophiles Announces Resignation
Professor Who Defended Pedophiles Announces Resignation
By Zach Stieber of The Epoch Times
A college professor in Virginia has announced plans to resign after defending pedophiles.
Allyn Walker, a professor at Old Dominion University (ODU), wrote a book that referred to pedophiles as “minor-attracted people” and detailed their “pursuit of dignity.”
Walker, who identifies as nonbinary, told the Protasia Foundation earlier this month that there are “a lot of misconceptions about attractions toward minors” and claimed that it’s not immoral to be attracted to children, provided people don’t carry out sexual abuse against them. The professor has also said the descriptor of “minor-attracted people” is “a less stigmatizing term” than pedophiles.
Walker’s remarks drew widespread criticism but the university initially opted to defend the professor.
“An academic community plays a valuable role in the quest for knowledge. A vital part of this is being willing to consider scientific and other empirical data that may involve controversial issues and perspectives,” the school said on Nov. 13.
Following increased pressure to act, though, the university put the professor on leave last week.
“I want to state in the strongest terms possible that child sexual abuse is morally wrong and has no place in our society,” ODU President Brian Hemphill said in a statement at the time. “This is a challenging time for our university, but I am confident that we will come together and move forward as a Monarch family.”
A new statement on Nov. 24 said Walker decided to resign when the professor’s contract runs out in May 2022.
Walker will remain on leave until that time, according to the university.
“We have concluded that this outcome is the best way to move forward,” Hemphill said. “We hope today’s action helps bring closure for our Monarch family. As we move forward, I encourage all members of the Monarch family to continue our efforts toward healing and civil discourse.”
Walker said in a statement released by the school that the work on pedophiles is aimed at preventing child sexual abuse and alleged it was twisted by outside parties.
“That research was mischaracterized by some in the media and online, partly on the basis of my trans identity. As a result, multiple threats were made against me and the campus community generally,” Walker said.
Students had told media outlets they were shocked by what they described as sympathizing with pedophiles.
“I am baffled and disappointed that an individual with those beliefs would even be allowed to have a job on our campus where children interact frequently,” Grant Rimmer, a junior, told the Daily Mail.
“It is okay to research, it is okay to find out this information. It is not okay to sympathize and create a term to blanket what pedophilia is,” Geni Piatowski, another student, told WAVY.
Tyler Durden
Fri, 11/26/2021 – 15:05
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