Today’s News 29th April 2022

• After Secretly Pillaging Billions In Turkish Assets To Prop Up Lira, Erdogan Is Going After Foreigners' Dollars
  After Secretly Pillaging Billions In Turkish Assets To Prop Up Lira, Erdogan Is Going After Foreigners’ Dollars

  Back in December, when the crashing Turkish lira mysteriously soared higher on a government and central bank mandated short squeeze, which we later learned was funded by tens of billions in US Dollars soft confiscations, we wrote that “Erdogan Is Secretly Pillaging Billions In Turkish Assets To Prop Up The Lira, And His Rule.”

  Confirming what many have dreaded for a while – that Erdogan is literally making up healthy economic numbers for international consumption while pillaging the country out of the back door without reporting it, Bloomberg reported that while the government has said it didn’t intervene in the currency market, it lied and the fall of $5.9 billion probably signals a backdoor intervention similar to operations carried out over two years from October 2018, when state lenders sold dollars – typically those belonging to local private savers – to support the local currency.

  What was even more alarming is that Erdogan actually thinks the international community is so stupid, nobody will notice what is going on. As Bloomberg showed, net foreign assets dropped by $5.9 billion to minus $5.1 billion on in just days.

  

  Alas since, then Turkey’s reserve position has only deteriorated and gone from bad to worse, and according to Goldman, as of April 27, the TCMB’s net foreign assets were US$7.4bn, down by US$0.33bn from a week ago. TCMB bank swaps and the stock of the FX deposit facility increased by US$1bn to US$41.8bn compared with a week ago due entirely to a rise in swaps, which picked up to US$41.2bn. The stock of the FX deposit facility has again remained flat at around only US$0.6bn.

  

  According to Goldman’s estimates, net foreign assets excluding swaps with banks and other central banks continued to decrease to negative $57.4bn, down by US$1.3bn since a week ago.

  

  Of course, if and when Turkey runs out of domestic FX – read dollars – which it can confiscate and buy lira with, the domestic currency, which ended 2021 as one of the world’ performers and has gone nowhere since then thanks to non stop government intervention, will crater and resume its freefall.

  So what sis Erdogan to do? Simple: having confiscated most domestic gold and hard currencies, the Turkish president is now hoping to confiscate foreigners’ dollars.

  But how? Doesn’t he have to make it desirable and attractive to put one’s hard currencies into the kleptocrat nation?

  Bingo… and that’s precisely why Bloomberg reports that Turkey is working on a plan to attract inflows of hard currency by offering lira funding, free of interest and with a “guaranteed” 4% return in dollars, to foreign investors willing to park their money for at least two years. Needless to say, but any time Turkey “guarantees” anything, run.

  Under the plan, the central bank would provide lira liquidity to foreigners for investment in local bonds with a maturity of at least two years, according to a person with direct knowledge of the deliberations. Besides extending zero-yield swaps, the monetary authority would also guarantee a 4% return in dollar terms when the securities mature, the person said.

  Translation: please give us your dollars and we promise to take good care of them and even give you a much higher yield than you can earn (for now) in the US.

  Remarkably, nobody has dared to speak up and point out that the Turkish dictator (and currency) is naked. Instead, investors are actually buying the worthless Turkish lira, which was headed for its first gain in over two weeks, trading 0.2% stronger against the dollar. 

  Bloomberg came the closest to pointing out the sheer audacity of the plan, writing that “the outreach to investors marks a new tack for Turkey and would represent a major U-turn by the central bank, a reflection of pressure on authorities to reverse capital outflows. It’s used similar measures to shore up the currency at home by rolling out state-backed deposit accounts that shield savers from lira weakness.“

  Indeed, after a currency crisis in 2018, Turkey introduced numerous restrictions on foreign transactions to defend the lira, placing limits on swaps with local banks to deter short sellers. But as a side effect, foreign holdings of Turkish stocks and bonds have fallen to a historic low… and in the case of net assets ex swaps, are actually negative to the tune of $57 billion!

  Meanwhile, deepening trade imbalances and the world’s most negative interest rates when adjusted for prices have made the $800 billion economy increasingly vulnerable at a time of intensifying global tightening led by the U.S. Federal Reserve.

  Furthermore, courtesy of the lunacy that is Erdogonmics, where the central bank “fights” near record inflation by cutting rates, instead of using higher rates to make lira assets more appealing, Turkey has introduced a series of unconventional policies to attract hard currency and boost the central bank’s reserves.

  TURKISH CENTRAL BANK GOVERNOR SAYS DEVELOPMENTS SHOW RATE CUTS WERE CORRECT DECISION pic.twitter.com/7PzWmUw6Gv

  — Newsquawk (@Newsquawk) April 28, 2022

  https://platform.twitter.com/widgets.js

  Deposits in so-called FX-protected accounts reached 782 billion liras ($52 billion) as of April 22, according to data compiled by the banking regulator. This month, the central bank revised some reserve requirement rules for banks in an effort to encourage conversion of foreign exchange into the local currency.

  Expect some gullible and extremely naive investors, those who are unaware what depth Erdogan can plumb to preserve his authoritarian status quo for just one more day, to hand over a few billion in USD assets which will promptly be “repossessed” and used by Turkey to prop up the lira for as long as possible. Then when everything crashes, and when Erodgan finally disappears into some non-extradition country, good luck to all trying to recoup their money.

  Tyler Durden
  Fri, 04/29/2022 – 02:45

• UK Wants 'Global NATO' Capable Of Defending Pacific
  UK Wants ‘Global NATO’ Capable Of Defending Pacific

  Authored by Kyle Anzalone & Will Porter via The Libertarian Institute,

  British Foreign Secretary Liz Truss said her government favors the creation of a “global NATO” that is able to guarantee the defense of Taiwan and the broader Pacific region, calling for preemptive action against would-be aggressors.

  In an address outlining UK foreign policy on Wednesday, Truss said London rejects the “false choice between Euro-Atlantic security and Indo-Pacific security,” instead arguing “we need both.”

  

  “I mean that NATO must have a global outlook, ready to tackle global threats,” she continued. “We need to preempt threats in the Indo-Pacific, working with allies like Japan and Australia to ensure that the Pacific is protected. And we must ensure that democracies like Taiwan are able to defend themselves.”

  Though the official did not elaborate on what kind of support she favors for Taipei or what she envisions for a globally-engaged military alliance, Truss’ speech mirrored remarks by UK Prime Minister Boris Johnson earlier this year, when he said NATO’s reach must be extended into the Indo-Pacific.

  Japan, South Korea, Australia and New Zealand are already global NATO partners – each designated as a “major non-NATO ally” by Washington – while other security organizations serve similar functions in the Indo-Pacific region. The Quad alliance, consisting of the US, India, Japan and Australia, is often dubbed the ‘Asian NATO’ and largely exists to counter China. It has considered allowing other regional states to join to create a ‘Quad Plus,’ among them South Korea, Vietnam and New Zealand.

  The three-way AUKUS collective, meanwhile, has seen Washington, Canberra and London join forces to bolster the defenses of the region, including through the sharing of nuclear information. Like the Quad, the grouping has also reportedly mulled whether to expand to include additional countries like Japan.

  In recent months, several members of the NATO bloc have conducted ‘freedom of navigation’ missions in the Pacific to support territorial claims recognized by the United States and its western allies, namely those of Taiwan. 

  While both Downing Street and the White House frequently bill the military activity in the disputed region as defensive, Beijing views the operations as aggressive intrusions into its territory. 

  She even goes one step further in the insanity: “NATO should protect Taiwan too”

  She says the U.K. rejects “the false choice between Euro-Atlantic security and Indo-Pacific security” and is in favor of “a global NATO” 🤦https://t.co/bHeTqQi5i3

  — Arnaud Bertrand (@RnaudBertrand) April 28, 2022

  https://platform.twitter.com/widgets.js

  US warships have carried out near monthly sail-throughs in the Taiwan Strait since President Joe Biden took office, repeatedly drawing the ire of Chinese officials. Following the latest mission earlier this week, the People’s Liberation Army again condemned the move as “a provocation that undermined peace and stability in the Taiwan Strait.” The UK had ceased such operations in 2008, but it made its first military transit through the strait in more than a decade last September. 

  In seeking to create a globe-spanning military coalition able to project power across the Pacific, Truss may find a partner in South Korea’s President-elect Yoon Suk-yeol, who is now considering whether to join the Quad and AUKUS organizations. Yoon has staked out a more hawkish stance than his predecessor toward both China and North Korea, even urging Washington to re-deploy nuclear bombers and submarines to the Korean peninsula earlier this month.

  Tyler Durden
  Fri, 04/29/2022 – 02:00

• US Nuclear Strategy In "Very Bad Place" With China And Russia: Expert
  US Nuclear Strategy In “Very Bad Place” With China And Russia: Expert

  Authored by Andrew Thornebrooke and David Zhang via The Epoch Times (emphasis ours),

  The Chinese Communist Party’s (CCP) efforts to align with Russia and to build up its nuclear arsenal present a unique strategic threat to the United States, according to one expert.

  

  “China is actually building up its arsenal in ways that it wasn’t doing before,” said David Santoro, President of the Pacific Forum, a foreign policy think tank. “So, it’s becoming a much more capable nuclear-armed state.”

  Santoro made the comments during a recent interview with EpochTV’s “China Insider” program, in which he said that there was no historical precedent for how the United States should proceed strategically against two near-peer nuclear adversaries.

  “We don’t necessarily need to have a symmetric arsenal to the Russians and the Chinese,” Santoro said, “In fact, we’ve really never had that. Even during the Cold War, we did not have the exact same arsenal as the Soviets did. But what I will say is that this is the very first time that the United States is facing two very capable nuclear-armed states.”

  “The other piece that we shouldn’t forget is that Russia and China seem to be increasingly cooperating at all levels, including at the strategic level. I don’t think they are engaging in any nuclear cooperation, but we’ll have to see what happens over the next few years and decades.”

  Santoro’s comments echoed warnings made by political and military officials earlier in the year, who said that the Sino-Russian partnership presented an unprecedented strategic situation, and that the United States now faced an “epic” nuclear threat.

  Despite the rising threat, Santoro said that there was very little happening in the way of positive diplomatic developments, and that no meaningful arms control discussions were taking place between the Unites States, China, and Russia.

  “Unfortunately, right now, there is not much diplomacy going on,” Santoro said. “We had strategic stability dialogues with the Russians, and we managed to renew the so-called ‘New START’ agreement, which is the only arms control agreement that’s left between the EU and the United States and Russia. But now in the context of the Ukraine war, we don’t have those dialogues.”

  “The United States has really left the door open to to nuclear diplomacy,” Santoro added. “It’s never closed it. It’s always said, we’re ready to engage just, you know, let us know when you’re ready.”

  The strategists dominating the conversation in Beijing right now, however, did not believe in managing escalations through mediums like crisis hotlines, Santoro said. Instead, they were more focused on attributing blame for international tensions to the United States and its allies as a means of solidifying China’s own power.

  The observation followed comments made by former assistant secretary for defense Graham Allison, who said that the CCP would likely continue its support for Vladimir Putin’s regime in Russia even in the event it deployed a tactical nuclear weapon in Ukraine, as well as other warnings that China was pursuing nuclear modernization for global domination.

  Fears of CCP aggression in Japan, Korea, and Taiwan, meanwhile, have spurred regional leaders to inquire after the possibility of either developing their own nuclear weapons or hosting nuclear weapons from the United States, to protect themselves from the regime.

  “We always had our so-called ‘US nuclear umbrella’ protecting Japan and Korea from North Korea, but also, for that matter, other threats including, to some extent, China,” Santoro said. “So we’ve always offered those guarantees to Tokyo and to Seoul.”

  “Our Japanese and Korean friends want to know more and have a greater sense of nuclear enfranchisement given the fact that the environment is changing and not for the better.”

  To that end, Santoro said that the United States would likely need to increase its information and technology sharing with partners in the Indo-Pacific in order to adequately curb CCP aggression.

  “We are now at a point where we’ll we’ll need to share a lot more of our nuclear planning and nuclear operations and how we would resort to nuclear weapons, not just conventional deterrence, but the roles that U.S. nuclear weapons would play in a crisis,” Santoro said.

  “Unfortunately, you know, we sometimes talk about strategic stability as the organizing principle between U.S.-Russia and U.S.-China relations,” Santoro added. “I don’t think that we are able to reach stability right now. We’re in a very, very bad place with both of them.”

  “In the foreseeable future, I see a lot more competition than stability. The best we can get to is what what I call stabilization, which is [where] we are still in a very competitive mode with both of them, but we’re able to do a number of things, possibly by engaging in crisis management work, assuming we can, to reduce the most dangerous aspects of that competition.”

  Tyler Durden
  Fri, 04/29/2022 – 00:20

• Musk Sold $4 Billion Of Tesla Stock Following Twitter Deal
  Musk Sold $4 Billion Of Tesla Stock Following Twitter Deal

  In the days following the Twitter board’s decision to accept his $44bn all-cash takeover bid, Elon Musk has sold 4.4 million shares of Tesla stock (worth roughly $4 billion).

  

  Musk reported the sale in a filing with the Securities and Exchange Commission on Thursday.

  The shares were sold over the past few days, at prices ranging from $872.02 to $999.13, were the first by the Tesla chief since a burst of selling late last year that raised more than $16bn (which were offsetting tax payments on vesting options).

  

  Amid lots of chatter around force Tesla sales and margin calls, it appears Musk’s sales were aimed at silencing fears that the deal would not go through – and would spark a spate of ‘fire-sales’ – as he tweeted late Thursday that: “No further TSLA sales planned after today.”

  No further TSLA sales planned after today

  — Elon Musk (@elonmusk) April 29, 2022

  https://platform.twitter.com/widgets.js

  The terms of the Twitter deal require him to come up with about $21bn in cash, though it is not expected to close for another six months.

  As a reminder, Musk is paying for Twitter partly with his own cash, and the rest with a mix of a buyout loan and a loan against his Tesla stock.

  

  Source: WSJ

  Mr. Musk has a net worth of $252 billion, according to the Bloomberg Billionaires Index, making him the world’s richest person.

  Tyler Durden
  Fri, 04/29/2022 – 00:01

• NASA Slams Chinese Opacity As Beijing And Russia Plan To "Undercut" US Space Dominance 
  NASA Slams Chinese Opacity As Beijing And Russia Plan To “Undercut” US Space Dominance 

  NASA Administrator Bill Nelson criticized China for lacking transparency and willingness to cooperate with the US. Beijing has pushed for closer ties with Russia to displace US’ global leadership in space. 

  “We want cooperation that has not been forthcoming from the Chinese government (but) it takes two to tango,” Nelson told reporters. “We simply haven’t had any transparency from the Chinese.”

  

  Nelson’s said after China launched its space station in 2021, one of the boosters careened back toward Earth. He said Chinese space officials shared no tracking data of where the booster was projected to land.  

  “When they put up their space station they did not reserve enough fuel to control where it came down and thank the Good Lord it came down in the Indian Ocean. (But) it could have come down in Europe, it could have come down in Saudi Arabia. It could have come down in Greece,” he said. 

  Nelson added there’s a lack of transparency regarding Chinese activity in space. He noted NASA is restricted from working with the Chinese government or any China-affiliated organizations unless approved by Congress. 

  There’s been hostility and shadiness between both countries in space. NASA banned China from being a member of the International Space Station (ISS) program. 

  Nelson then pivoted to Russia and said NASA had “the Good Housekeeping seal of approval from the White House” to extend a space partnership with Russia “despite the horrors that we are seeing with our eyes daily on television of what’s happening in Ukraine.” The good news, he said:

  “I see that professional relationship with astronauts and cosmonauts and the ground teams in the two respective mission controls, I see that continuing.” 

  Meanwhile, a new Defense Intelligence Agency report indicated that China and Russia are aligning forces and plan to “undercut the US and allied global leadership in the space domain.” 

  So China ignores NASA, and Moscow and Beijing move closer together in an emerging space race against the West. It’s a sign the world’s old economic order is fracturing as a new bipolar world appears from the ashes. 

  Tyler Durden
  Thu, 04/28/2022 – 23:40

• China Reports 1st Ever Human Case Of H3N8 Bird Flu
  China Reports 1st Ever Human Case Of H3N8 Bird Flu

  Authored by Dorothy Li via The Epoch Times (emphasis ours),

  A boy in China has contracted the H3N8 strain of bird flu, which appears to be the first known human case in the world, said the Chinese regime’s health authorities.

  

  The case involved is a 4-year-old boy who had been hospitalized on April 10 in Zhumadian city in the central province of Henan, China’s health commission said in an April 26 statement.

  No human (to human) infection of this strain has been reported, the agency added.

  H3N8 is known to infect horses, seals, and dogs. It is one of the two strains that cause dog flu in the United States, according to the U.S. Centers for Disease Control and Prevention (CDC). It has been detected in dogs across much of the United States, CDC said on its website, adding it hasn’t infected a human.

  The commission said that the chances of it spreading among people were low.

  “This infection is an accidental cross-species transmission,” read the statement. “There is a low risk of large-scale transmission.”

  Though rare, infections in humans can lead to adaptive mutations that potentially allow these viruses to more easily spread in mammals, said Erik Karlsson, deputy head of the virology unit at the Institut Pasteur in Cambodia.

  Karlsson said the virus warranted expanded surveillance. He added its implication in the 1889 influenza pandemic, known as the Russian flu, was “a major concern for the risk of the virus.”

  China’s commission said an initial assessment determined the variant is of avian origin. It noted there were chickens and crows raised in the boy’s home and that wild ducks were populated in the area.

  His close contacts did not show any abnormalities during the medical surveillance period, it added.

  The boy developed symptoms including a fever on April 5 and was diagnosed with H3N8 about two weeks later on April 24, according to the statement.

  He is in critical condition, according to Hong Kong’s health department, citing a notification from Beijing. The National Health Commission did not mention this detail in the statement.

  Last year, China reported a 41-year-old man contracted H10N3, which is also believed to be the first human infection of the type of avian influenza.

  In 2021, China has reported 21 human infections with the H5N6 subtype of avian influenza to the World Health Organization (WHO). Though the numbers are much lower than the hundreds infected with H7N9 in 2017, infections leave many critically ill and have resulted in at least six deaths, raising concerns among experts.

  “We need to be concerned about all spillover events,” Karlsson said.

  Reuters contributed to this report.

  Tyler Durden
  Thu, 04/28/2022 – 23:20

• Trump Jr. Launches Gun-Rights Group To Ensure Left "Never Disarms Americans" 
  Trump Jr. Launches Gun-Rights Group To Ensure Left “Never Disarms Americans” 

  Donald Trump Jr. told Fox News he is launching a new gun-rights group to combat the Biden administration and Democratic gun control groups. 

  Called the “Second Amendment Task Force,” Trump Jr. will serve as the group chairman. The mission is clear: Protect Americans’ right to bear arms. 

  “The Second Amendment is the whole ballgame; it’s the freedom that protects all of our other freedoms. Unfortunately, the Biden Administration and Democrats in Congress are hellbent on eroding our Constitutional right to keep and bear arms, whether it’s nominating radical gun-grabbers to senior positions in the executive branch or pushing anti-gun legislation,” Trump Jr. said. 

  He explained more about his new gun-rights group: “The Second Amendment Task Force is entirely devoted to ensuring the Left is never successful in disarming American citizens.”

  

  The group will also fight against Biden administration nominees for the ATF and Democrat legislative initiatives that could jeopardize Americans’ Second Amendment rights.

  Trump Jr. tweeted up a storm in the summer of 2021 against the Biden administration’s ATF nominee David Chipman. The nomination was eventually withdrawn because of Chipman’s radical views. Biden’s attempt to get gun-grabbing Chipman as ATF head inspired him to launch the group. 

  “The idea for the group came from our successful effort to stop a radical anti-gun lobbyist from becoming the head of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). 

  “We had to make sure that the American people knew what was going on, especially with Red State Democrats. If they’re considering casting an anti-Second Amendment vote, we’re going to make sure they feel the pain. This new group will help us put more structure and resources around those efforts to make sure we’re as successful as we can be.,” Trump Jr. said. 

  What remains a question is why Trump Jr. is starting his own gun-rights group when there’s the NRA, Gun Owners of America, Firearm Policy Coalition, and the Second Amendment Foundation. 

  A new gun-rights organization with Trump Jr. at the helm could undoubtedly increase in popularity among law-abiding, gun-loving citizens and become a powerful voice that gun-grabbing Democrats fear.

  Tyler Durden
  Thu, 04/28/2022 – 23:00

• Chinese Regime Seeks To Control Global EV Supply Chain, Leaving US Vulnerable: Experts
  Chinese Regime Seeks To Control Global EV Supply Chain, Leaving US Vulnerable: Experts

  Authored by Andrew Thornebrooke via The Epoch Times (emphasis ours),

  Competition between the United States and China in the realms of electric and autonomous vehicles could determine the future control of global supply chains in an unprecedented way, according to a lawmaker and several experts.

  “Our competitors, particularly in China, are not holding back,” said Sen. Gary Peters (D-Mich.) during an April 27 event hosted by the Center for Strategic and International Studies, a security-focused think tank.

  “We cannot fall behind on the global stage.”

  

  Peters said that the future of the automotive industry was in electric vehicles (EVs) and autonomous vehicles (AVs), and that the nation to best develop those industries would win a great advantage in the global marketplace.

  To that end, former Director of National Intelligence Adm. Dennis Blair noted that both EVs and AVs were singled out in Beijing’s “Made in China 2025” industrial plan as part of its top 10 high-tech areas to seize leadership in. This, he said, demonstrated a clear effort to displace the United States as the lead controller of global supply chains and the international industrial ecosystem.

  “If the United States loses full spectrum industrial capacity in the automotive industry, and this means designing the cars, testing them, building them, fixing them, the whole ecosystem, then we are hollowing out the industrial sector that we counted on to become the arsenal of democracy in the second world war,” Blair said.

  “The big picture is China’s all-of-government push and the importance of the automotive sector to American industrial capability.”

  Blair added that the ongoing technological decoupling of China from the rest of the world in terms of its data and systems standards would prove a vital component of how Sino-American competition in the sector unfolded.

  “This sort of decoupling of the Chinese economy from the rest of the world is something you need to watch in this space,” Blair said.

  “It may be that separate AI [artificial intelligence] industries and AV technologies grow up in China and the rest of the world.”

  John Bozzella, President of the Alliance for Automotive Innovation, agreed that China could effectively seize control of vital supply chains by seizing industrial prominence in EV and AV technologies, thus pushing the United States out of access to vital technologies.

  “The countries that really take the lead in developing cutting edge innovative technologies in the auto sector are going to control the supply chains, set the standards, set the running rules, and really own global markets,” Bozzella said.

  “With regard to EVs, you see the U.S. industry already behind China because we’re competing with a national effort,” Bozzella added.

  With that in mind, Bozzella suggested that the United States would need to better unite the powers of its private industry with a national strategy, and work to develop the utilities and infrastructure needed to transition its industrial base to produce EV and AV technologies.

  “The China story does suggest that this private sector leadership ought to be supported by a national strategy,” Bozzella said.

  “We are competing with the Chinese government, not the Chinese auto manufacturers.”

  Tyler Durden
  Thu, 04/28/2022 – 22:40

Digest powered by RSS Digest