Today’s News 31st May 2021

• America Still Loves The Warfare State
  America Still Loves The Warfare State

  Authored by José Niño via The Mises Institute,

  The Biden administration’s announcement in mid-April to withdraw American troops looks like a positive first step in the right direction in ending America’s longest military conflict to date. Undoubtedly, questions remain about the sincerity of such a withdrawal, and whether there will still be a residual military presence left over under the cloak of “counterterrorism” or some type of arrangement with private defense contractors to maintain order in the graveyard of empires.

  

  Looking back, it was rather amusing all the stops the corporate press pulled out to derail former president Donald Trump’s previous attempts to withdraw troops from Afghanistan. The Russian bounty program took the cake as the most significant news story used to thwart Trump’s sensible withdrawal proposal in Afghanistan. On that occasion, the media started spreading stories about Russian military intelligence paying militants connected to the Taliban bounties for killing Americans and allied armed forces in the Afghan conflict. In its predictable salvo against the Trump administration, the corporate press made a major stink about this program throughout the 2020 elections, adding another chapter to the ridiculous anti-Russia saga.

  Farcically enough, once Biden was safely installed in office, the US intelligence community began to walk back allegations regarding the bounty program by noting that there was not sufficient evidence from US military intelligence to corroborate its existence.

  Whether or not Biden’s withdrawal was motivated by politics is up for speculation.

  Beyond the partisan implications of the Afghan withdrawal, we have to wonder whether the previous Trump administration squandered a genuine opportunity to break from the liberal hegemonic order that the US government has presided over since the end of World War II.

  Naïve as some observers were about the Trump administration functioning as a wrecking ball to this international order, myself included, many underestimated the level of institutional inertia present in the foreign policy bureaucracy along with the constant media propaganda designed to foment tensions with whatever country the ruling class deems to be an adversary.

  The election of Donald Trump did offer a tantalizing illusion of hope for noninterventionists and restrainers who questioned the nation-building programs DC undertook in the last few decades. On the campaign trail, Trump made the right noises about the failures of excursions into Iraq. He even cast doubts on the continued viability of entangling alliance arrangements such as the North Atlantic Treaty Organization (NATO), of which the US has been a member of since 1949.

  In Trump’s view, the US was the main country shouldering the bulk of the defense burden under this alliance. Trump’s constant complaints did yield some changes in how countries contribute to NATO. For example, Germany ended up boosting its defense spending in order to comply with NATO requirements.

  While Trump’s attempt to get NATO member countries to pull more of their weight was solid, it still didn’t address the underlying issue of the US’s involvement in what amounts to an entangling alliance that no longer serves a useful purpose following the Soviet Union’s dissolution three decades ago. We shouldn’t forget that even Dwight Eisenhower, as he was assuming the role of supreme commander of NATO in 1951, declared that “[i]f in 10 years, all American troops stationed in Europe for national defense purposes have not been returned to the United States, then this whole project will have failed.”

  NATO was originally designed as a temporary alliance to balance the Soviet Union that would eventually be phased out, not a permanent security arrangement that policymakers could tinker with to satisfy their desires of spreading America’s universal democratic “values.” Little did the former president realize that NATO would continue in existence well into the twenty-first century and serve as a tool for the expansion of the national security state’s interests.

  Defense is not exempt from the very “ratchet effect” present in domestic policy, whereby crises provoke increased government activity that becomes difficult to roll back once bureaucratic organizations become cemented. Milton Friedman averred that “[n]othing is so permanent as a temporary government program,” a dynamic present in the modern national security state. What originally starts out as a temporary program later becomes an irreplaceable pillar of public policy. That’s the nature of government growth, and no matter the government agency, it seemingly operates in a uniform manner.

  We cannot so easily separate defense affairs from economic affairs, since the common denominator in these activities is the lumbering behemoth that is the state. The state dominates both ambits, with all its attendant flaws. For example, government waste that the average conservative typically groans about is also present in the defense sector. Indeed, there’s nothing special about the government’s defense spending efforts. They are not immune from waste and corruption.

  Most proponents of defense spending overlook one of the iron laws of any serious analysis of political economy—Frédéric Bastiat’s concept of the seen and unseen. What is seen are the fancy military toys—the fiscal boondoggle that is the F-35 fighter jet comes to mind. According to some estimates, this weapons system has a lifetime price tag of $1.5 trillion. Gargantuan costs aside, such a weapons system will assuredly make for some great air force recruitment ads. Plus, it will give politicians another program to brag about by making the case that spending vast sums of money is the key to keeping America “safe.” 

  But what’s not captured in this entire orgy of spending are the many productive goods and services that would have been created under normal economic circumstances. In a world where defense spending is restrained, taxpayer money would remain in private citizens’ hands, whereupon it would be saved and invested in productive ventures. In Human Action, Ludwig von Mises grasped how inordinate defense spending is a drag on economic development:

  All the materials needed for the conduct of a war must be provided by restriction of civilian consumption, by using up a part of the capital available and by working harder. The whole burden of warring falls upon the living generation.

  A less militaristic economic policy would improve overall living standards, whereas excessive defense spending benefits concentrated interest groups at the expense of everyday Americans. Ending the current state of perpetual warfare will be a tall order. It’s way too easy to say, “Just vote for the right people.” The question at hand is more profound. It goes deeper than whoever is occupying political office at a given time. It’s ultimately ideological in nature.

  The Trump administration, which was ostensibly against never-ending wars, had trouble in conducting even the most basic of troop withdrawals. A lot of this can be attributed to the institutional inertia present in the US regime. The rise of the deep state—an unaccountable bureaucracy that has morphed into a permanent shadow government—is no aberration, but rather an indispensable feature of the current administrative state that is buttressed by an interventionist ideology.

  The warfare state and welfare state have grown together. Many of the same social engineering precepts that domestic politics is predicated on, ultimately apply to foreign policy, in which interventionist zealots are firmly committed to maintaining the regime’s imperialist project intact.

  Although Mises was no pacifist, he understood that Western values such as free speech, free markets, could not be spread at the barrel of a gun. In fact, for Mises, constant warfare was one of the catalysts for despotism. Instead, countries could set a strong moral example to follow by practicing limited government and encouraging peaceful commerce between nations. In Human Action, Mises also observed:

   To defeat the aggressors is not enough to make peace durable. The main thing is to discard the ideology that generates war.

  A measured retrenchment from foreign affairs would obviously do a lot to reverse many of the lingering side effects of the misguided foreign adventures of the past century and allow America to focus on its internal affairs, which appear to be tearing it apart at the moment. To reach this point, however, interventionist ideologies must be thoroughly discredited.

  Too many innocent lives have perished, and trillions of dollars have been spent to continue indulging the quixotic daydreams of foreign policy wonks who will skirt any form of accountability for their misdeeds.

  Tyler Durden
  Sun, 05/30/2021 – 23:25

• Why China Could Vanquish The US In New Space Race
  Why China Could Vanquish The US In New Space Race

  Authored by Brandon Weichert via RealClearPolitics.com,

  There are now only two nations in the history of humanity that have successfully landed rovers on the surface of the Red Planet: The United States and the People’s Republic of China. You can expect this to be the dominant headline in all matters related to space for many years to come. After all, humanity is due for another round of great state competition and it seems that the two major contenders in this strategic competition will be the United States and China.

  

  For too long Western observers have downplayed China’s rapidly growing space technology industry. The Chinese Martian rover, Zhurong, is nowhere near as advanced as NASA’s Perseverance, which recently made headlines. Yet, it took NASA almost 30 years to reach the level of complexity in its rover operations that the storied American space agency now enjoys. Certainly, China can expect to stay trailing the Yanks for many years to come — or so argue the naysayers who downplay the threat that China’s ambitious, though less advanced, space program poses to the United States.

  Suppose it doesn’t take several decades for Beijing to catch up to the Americans in space. After all, there are no greater teachers than experience and competition. For the former, China learns by doing — and Beijing embraces a leap-without-looking mentality that once defined America’s storied program.

  As for competition, China truly believes it is in a new space race with the Americans whereas most American leaders do not. The new space race between these nations will determine not only who gets human beings to Mars first, but also will decide which one dominates the strategic high ground of space (and whoever controls the high ground rules the territory below).

  Right now, the Americans hold this position — but barely.

  China’s competitive and nationalistic view of space means that, unless the Americans fundamentally change the way they operate, the United States will be knocked from its perch in space — in much the same way the British denied the French access to North America in the 19th century.

  How do the Americans view space?

  Some — the naysayers — have a pessimistic outlook. They (wrongly) believe it is a vast wasteland that will do nothing other than drain our country of vital resources. Others, the utopians, believe space can be maintained as a sanctuary and that the Americans can cooperate with China to share space.

  Fat chance.

  If Washington viewed space as China’s rulers do, they’d be authorizing the $1 trillion, decade-long investment into the program and other high-technology pursuits that I’ve been advocating. American leaders from both parties would be cutting through the bureaucratic red tape to ensure that the best elements of our budding private space sector were married to nationalistic goals for dominance. We’d have astronauts on Mars by now, too.

  Look at it this way: China’s space program did not take serious flight until 2003. By that time, America had been dominating the stars for decades. In 2003, China first placed a taikonaut into orbit. During the intervening 18 years, Beijing has not only repeatedly placed its people into Earth orbit, but has successfully developed counterspace capabilities (weapons intended to deny others access to space in the event of a war). Beijing has landed the first rover on the dark side of the moon in history. Red China has also successfully placed the first of three components necessary to complete their modular space station which is meant to rival the American-built International Space Station. Now, China has its first (of many) rovers on the Martian surface.

  Where will China’s space program be in another 18 years?

  Beijing leaders have already outlined their plans for the next decade: by 2024, to have an automated base built on the south pole of the moon. In 2028, Chinese (and possibly Russian) personnel will be permanently stationed at that lunar base.

  China seeks to have taikonauts on the Martian surface by 2030.

  The same naysayers in the West who’ve laughed off China’s space ambitions for the last two decades now scoff at its achievements made in that time. These naysayers continue to belittle China’s chances of achieving its space dreams. Meanwhile, the utopians pine for joint missions — which would only serve as tech transfers from America to China. So long as American policymakers listen to these voices, China will catch up and ultimately beat America in this new competition.

  Unlike the American government, China’s regime has identified dominating space as a key tenet for their “China Dream 2049” program. By the 100-year anniversary of the rise of Communist Party in China, 2049, Beijing’s leaders envision their nation displacing the United States as the world’s hegemon. Raising the Chinese flag on Mars first is a major goal in that regard.

  In the meantime, Washington is still holding up America’s manned space program until a female-friendly space suit can be made.

  This is what losing looks like, America.

  Tyler Durden
  Sun, 05/30/2021 – 22:50

• Visualizing The World's Biggest Passenger Ships From 1831-Present
  Visualizing The World’s Biggest Passenger Ships From 1831-Present

  The Titanic lives large in our minds, but it’s probably not surprising that the world record for biggest passenger ship has been broken many times since its era. In fact, as Visual Capitalist’s Carmen Ang details below, today’s largest passenger ship can now hold over 6,000 people – more than double the Titanic’s capacity.

  This graphic by HMY Yachts looks at which vessels held the title of the world’s largest passenger ship over time, and how these vessels have evolved since the early 19th century.

  

  Different Types of Passenger Ships

  Before diving into the ranking, it’s worth explaining what constitutes a passenger ship.

  Passenger ships are vessels whose main purpose is to transport people rather than goods. In modern times, there are three types of passenger ships:

  • Cruise ships: Used for vacationing, with a priority on amenities and luxury

  • Ferries: Typically used for shorter day trips, or overnight transport

  • Ocean liners: The traditional mode of maritime transport, with a priority on speed

  Traditional ocean liners are becoming obsolete, largely because of advancements in other modes of transportation such as rail, automobile, and air travel. In other words, the main priority for passenger ships has changed over the years, shifting from transportation to recreation.

  Now, luxury is the central focus, meaning extravagance is part of the whole cruise ship experience. For example, the Navigator of the Seas (which was the largest passenger ship from 2002-2003) has $8.5 million worth of artwork displayed throughout the ship.

  A Full Breakdown: Biggest Passenger Ships By Tonnage

  Now that we’ve touched on the definition of a passenger ship and how they’ve evolved over the years, let’s take a look at some of the largest passenger ships in history.

  The first vessel on the list is the SS Royal William. Built in Eastern Canada in the early 1800s, this ship was originally built for domestic travel within Canada.

  In addition to being the largest passenger ship of its time, it’s often credited as being the first ship to travel across the Atlantic Ocean almost fully by steam engine. However, some sources claim the Dutch-owned vessel Curaçao completed a steam-powered journey in 1827—six years before the SS Royal William.

  In 1837, The SS Royal William was dethroned by the SS Great Western, only to change hands dozens of times before 1912, when the Titanic entered the scene.

  The Titanic was one of three ships in the Olympic-class line. Of the three, two of them sank—the Titanic in 1912, and the HMHS Britannic in 1916, during World War I. Some historians believe these ships sank as a result of their faulty bulkhead design.

  Fast forward to today, and the Symphony of the Seas is now the world’s largest passenger ship. While it boasts 228,081 in gross tonnage, it uses 25% less fuel than its sister ships (which are slightly smaller).

  COVID-19’s Impact on Cruise Ships

  2020 was a tough year for the cruise ship industry, as travel restrictions and onboard outbreaks halted the $150 billion industry. As a result, some operations were forced to downsize—for instance, the notable cruise operation Carnival removed 13 ships from its fleet in July 2020.

  That being said, restrictions are slowly beginning to loosen, and industry experts remain hopeful that things will look different in 2021 as more people begin to come back on board.

  “[There] is quite a bit of pent-up demand and we’re already seeing strong interest in 2021 and 2022 across the board, with Europe, the Mediterranean, and Alaska all seeing significant interest next year.”

  -JOSH LEIBOWITZ, PRESIDENT OF LUXURY CRUISE LINE SEABOURN

  Tyler Durden
  Sun, 05/30/2021 – 22:15

• Veterans Speak About Memorial Day: "It's Not About Us"
  Veterans Speak About Memorial Day: “It’s Not About Us”

  Authored by Patricia Tolson via The Epoch Times,

  On Monday, May 31, Americans from sea to shining sea will observe Memorial Day. However, veterans are quick to remind you: “It’s not about us.”

  “Monday is not about us,” Sergeant J.O. Batten, Commander of VFW Post 8713 in Brooksville, Florida told The Epoch Times.

  “It’s about the men on that wall out there. A lot of people don’t realize that.”

  Batten, a United States Marine, served in Vietnam from 1968 to 1969.

  

  “The wall” is a granite monument, which stands guard at the front door of VFW. It bears the names of a group of men known as “The Brooksville Eight,” men who were killed in action during the Vietnam War.

  They are:

  Capt. Denver Colburn, Lance Corporals Hercules Moore and Charles Keathly, Private First Class Danny Overton, and First Lieutenant Denis Vacenovsky of the United States Marine Corps; Sergeants Virgil Hamilton and Larry Kinder and Specialist Washington Langley of the United States Army.

  

  “The Brooksville Eight” monument stands guard at the front door of VFW Post 8713 in Brooksville, Florida. (Patricia Tolson/The Epoch Times)

  “Memorial Day is not about veterans who are still alive,” Ron McCombs told The Epoch Times, standing at attention before the wall as he looked at the names engraved into the stone.

  “It’s about those men, the ones who didn’t make it.”

  McCombs, now 73-years-old, was an E5 in the U.S. Army. He also served in Vietnam from 1968 to 1969.

  Batten said there aren’t many veterans left from the Vietnam war at his post, and those members who served in World War II and Korea have all passed away.

  “Ron and I are the only ones left here from the Vietnam era,” Batten said.

  Originally known as Decoration Day, Memorial Day originated in the years following the Civil War. However, it didn’t become an official federal holiday until 1971. Still, in the 50 years that have passed, veterans have observed how the sacred meaning of Memorial Day is becoming diluted and lost.

  Batten lamented how even the hallowed ritual of lowering the American flag to half-mast has been diminished by politics and political correctness. While events like school shootings are tragic, these events do not meet the guidelines for lowering the flag, as set forth by the United States Department of Veterans Affairs. According to Public Law 94-344, known as the Federal Flag Code (pdf) the American flag should be flown on Memorial Day and lowered to half-mast until noon. The code further dictates it “may be flown at half-staff to honor a newly deceased federal or state government official by order of the president or the governor, respectively.”

  Billy Butts served his country as a soldier in the U.S. Army. His tours included such places as Iraq and Afghanistan. He noted a similar lessening in the meaning of medals, such as the Bronze Star. While Butts personally received one, he believes this medal is little more than a participation trophy.

  “It doesn’t have the ‘V Device,’” Butts clarified, leaning forward as he held up two fingers in the shape of the letter. “That’s the difference.”

  As Butts explained, a regular Bronze Star can be awarded to someone for something like administrative excellence, which is little more than “doing their job.”

  However, a Bronze Star with a “V Device” is earned only for committing an act of valor during the heat of combat.

  Timothy Zarbo, who served six months in the Gulf War as a member of the United States Air Force, believes this era was the peak of America’s military prowess. While the war in Vietnam dragged on for nearly 20 years, Operation Desert Storm, was over in three days. Still, Zarbo is still humbled by those who fought in Vietnam.

  “We were part of the era of volunteer military service,” Zarbo asserted.

  “Those who served in Vietnam didn’t have a choice. They were drafted. Those who fought in the Gulf War were called heroes, and welcomed back with yellow ribbons and parades. Those who served in Vietnam were spit on and called baby killers.”

  As with the others, Zarbo made it clear that Memorial Day isn’t about him.

  “Veterans Day is for those who survived and retired,” Zarbo explained.

  “Armed Forces Day is for those who are still serving. Memorial Day is reserved for those who never got to take off their uniform.”

  Because of this, the act of stolen valor is a particular point of contention for most veterans.

  “If I could speak for all veterans, I would say: “We don’t care if you didn’t serve,” McCombs said.

  “Just don’t say you did. It’s a slap in the face to all who did, especially to those that never came home. We see it all the time.”

  Batten spoke of how many who served in war returned home with the crippling effect of Post Traumatic Stress Syndrome. Morgan Schmitz of the U.S. Air Force spoke of the deadly diseases that are slowly claiming the lives of many who served with him in the Gulf Wars because they were exposed to the smoke from burn pits.

  Burn pits were used by the United States and military contractors in Iraq and Afghanistan to dispose of metal, rubber, chemicals, paint, medical waste, munitions and unexploded ordnance, petroleum products, human waste, plastics, and various other forms of waste. Many who were exposed to the toxic fumes from these burn pits have been diagnosed with such diseases as Leukemia, Non-Ischemic Cardiomyopathy, Intestinal Cancers, and Papillary Thyroid Carcinoma.

  But even with all of the things America’s veterans suffered, the men kept returning to one important message: “Memorial day isn’t about us.”

  It’s about the ones who gave the ultimate sacrifice.

  

  Ron McCombs, Billy Butts, Robert Romance, J.O. Batten, Tim Zarbo, and Morgan Schmitz at the Brooksville Eight monument at VFW Post 8713 in Brooksville, Florida. (Patricia Tolson/The Epoch Times)

  But there was one last thing Batten wanted to share with his fellow Americans to think about on Memorial Day, particularly with the younger generation, who either don’t know or don’t seem to care about the sacrifices made by the generations who went before them in order to defend the freedoms they have today. He iterated the sacred vow they all took when they were inducted into their respective branches of the military, how they raised their right hands and swore to “support and defend the Constitution of the United States against all enemies, foreign and domestic,” and to “bear true faith and allegiance to the same… so help me God.”

  “Just because we left the military,” Batten said as his eyes glistened with emotion, “we were not relieved of that vow. I don’t care if we’ve been retired for five years, ten years or twenty, once we take that oath as a member of the military, we are forever obligated to defend the United States, and its Constitution from all enemies, foreign and domestic, with up to and including our lives. For us, that promise we made to you never ends.”

  Tyler Durden
  Sun, 05/30/2021 – 21:40

• Morgan Stanley Asks What To Do When Everything Is Expensive
  Morgan Stanley Asks What To Do When Everything Is Expensive

  By Vishwanath Tirupattur, global head of Quantitative Research at Morgan Stanley

  The title of our recently published mid-year outlook – Now the Hard Part – captures the conundrum market participants face: early-cycle timing, mid-cycle conditions and late-cycle valuations.

  

  It is unusual to see this confluence, especially because it was only a little over a year ago that global risk markets were reeling and recording cyclical lows. Thus, despite our economists’ call for strong global economic growth supported by the largest fiscal stimulus, the largest monetary easing and the highest consumer savings rates in post-war history, the investment recommendations from our strategists have a more subdued tone. Over the next 12 months, we see single-digit upside in global equities, a modest steepening of the yield curve and thus a neutral stance in government bonds. We have downgraded corporate credit to neutral and expect flat returns in emerging market fixed income.

  Our strategists’ restraint is really driven by the conviction that current valuations across risk markets already reflect a lot of positivity about economic growth. That said, our outlook also points to attractive return potential in asset classes not often in the limelight because of the perception of complexity associated with them. In today’s Sunday Start, we will highlight a few such opportunities. We argue that these are not nearly as complex as perceived and are driven by the same economic narrative that underlies broader risk markets. Equally interestingly, the opportunity set includes both long and short ideas.

  The first opportunity we want to highlight is in collateralized loan obligations (CLOs), which are first-order securitizations of corporate loans. With over US$800 billion of outstanding, CLOs are no longer a niche market. The structural leverage in CLOs makes the equity tranches well suited for current conditions as CLO liability tranche spreads have tightened at a faster rate than spreads of CLO assets, thus creating conditions for attractive returns. The strong fundamental backdrop, leading to lower loan default rates, along with upside from Libor floors and other embedded options convince our CLO strategists, Charlie Wu and Vasu Goel, to expect CLO equity tranche returns to be in the mid-to-high teens over the next 12 months.

  As we have noted on these pages before, the US housing market has been on fire in the months since the onset of the pandemic. Even though we expect the rate of growth in home prices to slow from current levels, the US housing market sits on a healthy foundation. As our securitized credit strategists, Jim Egan and Som Basu, have highlighted, the growth in home prices, and the consequent increase in the equity that borrowers have in their homes, has been a boon for the fundamental performance of the mortgage credit market in two ways – lower delinquencies and higher prepayments, both of which benefit securitized mortgage credit markets. Over the next 12 months, we see single-digit upside in global equities, a modest steepening of the yield curve and thus a neutral stance in government bonds. We have downgraded corporate credit to neutral and expect flat returns in emerging market fixed income.

  Contrary to the old adage, what’s good for the goose is sometimes not good for the gander. Strong housing fundamentals are a positive for securitized credit but not necessarily so for Agency RMBS. The elevated purchase volumes that come with a healthy housing market just mean a continuation of an endless supply of Agency RMBS. Prepayment risk, which is a negative for Agency RMBS, continues to run high. At or close to their all-time tights, valuations in Agency RMBS are notably richer than other comparable asset classes. For example, the spread on the mortgage index is 15bp through its post-GFC tights, whereas the spread on the investment grade corporate credit index is merely at its post-GFC tights. Jay Bacow and Zuri Zhao, our Agency MBS strategists, note that Agency RMBS have already priced in all the optimism that accompanies demand from a supportive Fed and deposit-rich domestic banks. Thus, they recommend a longer-term structural underweight in MBS. Not only do negative option-adjusted valuations give minimal room for further spread tightening, but the steepness of the belly of the Treasury curve means that being long five-year Treasury notes against Agency RMBS is a positive carry, positive convexity steepener. It is not often that investors can be short a risk asset at the tights and get paid to do it.

  The three ideas we discuss are not plain vanilla. There is indeed a degree of complexity associated with CLOs, CRT and Agency RMBS, and fully harvesting the risk premia embedded in these ideas does require an investment in digging into the nuances of these products. What we are arguing is that understanding the complexity is worth the effort, given the potential for returns in this opportunity set.

  Enjoy your Sunday.

  Tyler Durden
  Sun, 05/30/2021 – 21:05

• Taiwan Is A Great Country
  Taiwan Is A Great Country

  Authored by Ethan Yang via The American Institute for Economic Research,

  The internet is having a field day over a seemingly trivial mishap involving actor and wrestler John Cena, who apologized for calling the island nation of Taiwan a country. That is a massive point of issue for the Chinese Communist Party as they continue to claim that Taiwan is part of China. NBC News provides the context by reporting,

  “In an interview to Taiwanese broadcaster TVBS earlier this month, Cena sparked controversy while promoting the ninth installment of the Fast & Furious franchise when he said, “Taiwan is the first country to watch Fast and Furious 9.”

  Cena later issued an apology by stating,

  “I must say right now, it’s very, very, very, very, very, very important,” Cena said.

  “I love and respect China and Chinese people. I’m very, very sorry for my mistake.”

  China is one of the world’s largest consumers of films so it is understandable but disappointing that Cena is taking steps to appease the Chinese on this matter. A similar issue arose earlier regarding the Hong Kong protests and the NBA, which also made concessions to China, likely to maintain market access.

  NBC News writes that some Weibo users attacked Cena by writing,

  “It’s the western political correctness. he (sic) wants Chinese people to forgive him but he also doesn’t want to offend idiot Taiwan and the West.”

  It should be common knowledge at this point that the CCP maintains an iron grip on free expression and thought. Ethnic Chinese people who reside outside the influence of the party likely share no such issue with Taiwan. 

  A more forgiving comment goes as follows,

  “I think we should sit down and chat about it in a less intense way. Foreigners don’t necessarily know China’s politics, just like we don’t necessarily know their politics.”

  Of course, foreigners, like John Cena, wouldn’t understand the internal politics of China. The main problem with this statement is, of course, Taiwan is not part of China’s “internal politics.” It’s been an independently operating nation-state since its formal establishment in 1949 and has a history dating back to antiquity.

  

  What is Taiwan?

  To give the Chinese government credit, Taiwan is not recognized as a formal country by most nations around the world. The simple reason is that the Chinese government threatens any country that tries to do so. The Chinese government wishes to annex the island of Taiwan to fulfill a tired old vision of the great imperial Chinese empire of centuries past. The CCP has used this rationale to justify its invasions of Tibet and East Turkestan, more commonly known as Xinjiang. Two once independent nation-states now living under the authoritarian horrors of the CCP. 

  Regardless, Taiwan is a fully functioning and independent democracy off the coast of China. It has every single component of a country one could think of, from one of the top militaries in the world, free elections, its own currency, bureaucracy, global trade, a court system, the list goes on. Taiwan is also the first Asian country to legalize same-sex marriage. The CCP does not and has never exercised authority over Taiwan. As a result, Taiwan is one of the freest nations in the world with a bustling market economy. 

  The standard of living in Taiwan, due to its liberal democratic values and open economy, is far higher than that of China. According to My Life Elsewhere, those residing in Taiwan compared to China experience 2.8 times higher earnings and are half as likely to live below the poverty line. If anything, Taiwan, which was mainly settled by Chinese immigrants among other groups, is a model of what a free China could be, instead of the oppressive dictatorship that it currently is. Of course, at this point, calling Taiwan a free version of China would be misleading, as a survey in 2020 showed that a record 83% percent of respondents would now identify as Taiwanese and not Chinese. 

  Taiwan is a fantastic tourist destination to visit when the world opens up. Its unique culture is influenced by China and Japan as well as its aboriginal inhabitants. The tropical island features modern infrastructure and Michelin star restaurants alongside gorgeous natural wonders like its many hot springs, mountains, and its famous Sun Moon Lake. Taiwan is also well known for its night markets, which are a staple of Taiwanese culture and widely viewed as one of the top street food scenes in the world. One of the tallest buildings in the world, Taipei 101, is located in Taiwan’s capital, Taipei. 

  In short, Taiwan is not just a country that ought to be recognized, it’s a global treasure. Not just because it’s a great cultural spot or one of the United State’s top trade partners, but a global force for good. 

  Was Taiwan Ever Part of China?

  China would be correct that at certain points during its history such as during the Qing dynasty, it maintained control over the island of Taiwan. However, when viewed in a larger context, the Chinese were simply just visiting. The first inhabitants of Taiwan were actually aboriginal groups that had more in common with the civilization that settled the Pacific Islands rather than East Asia. One of the earliest and most notable colonizers of Taiwan after this point was the Dutch Empire. The Portuguese gave Taiwan its nickname Formosa sometime in the 16th Century. The Chinese formally annexed Taiwan in 1683 during the Qing Dynasty, which no longer exists of course, and if you want to get real technical, the Qing Dynasty was actually led by the Manchurians.

  In 1895, China ceded Taiwan to Japan after the Treaty of Shimonoseki, to which Taiwan would become a Japanese colony until 1945. After Japan lost World War II the United States gave Taiwan to the Kuomintang, which was the nationalist faction in the still ongoing Chinese Civil War. After being defeated by the Communist faction that went on to control China, the Kuomintang set up a military dictatorship in Taiwan in 1949 where it would use the name Republic of China as its official name but also be referred to as Taiwan. At the time, its leaders had ambitions of retaking the mainland. After this dream faded from reality, and after decades of activism, Taiwan eventually held its first elections and liberalized into the free country it is today. While all this was happening the people of Taiwan began to form their own national identity, to the point that the overwhelming majority of its residents, as well as members of its diaspora, identify themselves as Taiwanese. 

  In short, Taiwan can certainly be considered part of the Chinese civilization, much like Canada and the United States are part of the Anglosphere, if not less connected than that, but such affiliations warrant no political obligations. It has also never been controlled by the current Chinese regime: the People’s Republic of China. Taiwan is a beautiful island country with an interesting history, it’s really not that complicated.

  What Can The US Do to Help Taiwan?

  The incident with John Cena was the most recent of a long campaign that involves pressuring Western companies and individuals to erase Taiwan’s identity. Organizations like the World Health Organization and the International Monetary Fund do not keep information on Taiwan at all. In particular, the WHO has consistently rejected requests for Taiwan even though it had an excellent performance with containing the virus. On top of that, the WHO Facebook Messenger app that gives updates on a country’s Covid statistics when asked displays an error message when Taiwan is inputted. American companies have also been pressured to stop calling Taiwan a country for years. 

  What the United States can do is first continue normalizing relations with Taiwan diplomatically and continue bringing up Taiwan in international conversations. Furthermore, trade relations should be expanded with a free trade agreement, which will not only allow Taiwan to reduce its dependence on Chinese trade but is also mutually beneficial. Finally, the United States should continue to maintain, if not expand, its military support of Taiwan. This includes approving bigger and more comprehensive arms deals as well as strengthening strategic ties with other key players in the Asia Pacific to ensure the Chinese military can be contained. 

  Taiwan is a country full of rich culture and a model of freedom not just in Asia but the world. Taiwan and the United States share a lot in common; the most important aspects being our commitment to human liberty, the rule of law, and shared prosperity. These are in striking contrast to Taiwan’s rowdy neighbor, the People’s Republic of China. If the CCP is looking for a country to question the legitimacy of, perhaps it should stop looking at Taiwan and look in a mirror.

  Tyler Durden
  Sun, 05/30/2021 – 20:30

• Upper Limit Of Human Mortality Is 150 Years Old, Scientists Say
  Upper Limit Of Human Mortality Is 150 Years Old, Scientists Say

  Silicon Valley elites are obsessed with immortality. They’re pouring investments into biohacking technologies on their quest for living forever. We don’t want to spoil their fun, but sometimes we have to, as a new study suggests the upper limit of human mortality is 150 years old. 

  Researchers of Gero, a Singapore-based biotech company in collaboration with Roswell Park Comprehensive Cancer Center in Buffalo, New York, published new research in the journal of Nature portfolio, showing results between aging and the loss of the ability to recover from stresses. They gathered iPhone and medical data from volunteers in the US and UK to calculate the maximum age of humans. 

  

  Using artificial intelligence, researchers analyzed the health data of the volunteers. The study found two crucial data points for human lifespan — biological age and resilience. The former is connected with stress, lifestyle, and chronic diseases and the latter are related to how fast a person reverts to normal conditions following stressor response.

  Heather Whitson, director of the Duke University Center for the Study of Aging, who was not involved in the study, told Scientific American that the researchers “asked the question of ‘What’s the longest life that a human complex system could live if everything else went really well, and it’s in a stress-free environment?'”

  In doing so, the researchers were able to establish the “pace of aging,” which found human bodies aren’t immortal but have an “absolute limit” of 120 to 150 years old. 

  

  “Aging in humans exhibits universal features common to complex systems operating on the brink of disintegration. This work is a demonstration of how concepts borrowed from physical sciences can be used in biology to probe different aspects of senescence and frailty to produce strong interventions against aging,” said Peter Fedichev, co-founder and CEO of Gero.

  “This work, in my opinion, is a conceptual breakthrough because it determines and separates the roles of fundamental factors in human longevity – the aging, defined as progressive loss of resilience, and age-related diseases, as “executors of death” following the loss of resilience. It explains why even most effective prevention and treatment of age-related diseases could only improve the average but not the maximal lifespan unless true antiaging therapies have been developed,” said prof. Andrei Gudkov, PhD, Sr. Vice President and Chair of Department of Cell Stress Biology at Roswell Park Comprehensive Cancer Center. 

  David Sinclair, Harvard Medical School professor of genetics, commented on the study by saying it “shows that recovery rate is an important signature of aging that can guide the development of drugs to slow the process and extend healthspan.” 

  … and possibly the quest for immortality has been shattered by this new research as elites resort to biobacking in their quest to live forever. 

  Tyler Durden
  Sun, 05/30/2021 – 19:55

• Homeland Security Walks Back Director's Claim US Taking "Close Look" At Vaccine Passports
  Homeland Security Walks Back Director’s Claim US Taking “Close Look” At Vaccine Passports

  Authored by Zachary Stieber via The Epoch Times,

  The Department of Homeland Security (DHS) on Friday walked back comments made by the agency’s chief, who suggested earlier in the day that the federal government was “taking a very close look” at the idea of requiring vaccine passports to enter or leave the United States.

  “Looking ahead to summer, Europe and other countries are going to open up. Could we see vaccine passports to travel internationally either into or out of the U.S.?” an ABC “Good Morning America” host asked Alejandro Mayorkas, head of the DHS.

  “We’re taking a very close look at that,” Mayorkas responded.

  

  This illustration photo taken in Los Angeles on April 6, 2021 shows a person looking at the app for the New York State Excelsior Pass, which provides digital proof of a COVID-19 vaccination, in front of a screen showing the New York skyline. (Chris Delmas/AFP via Getty Images)

  But DHS said Mayorkas was only talking about how Americans will need to use such passports to enter other countries.

  “We’ve always said we’re looking at how we can ensure Americans traveling abroad have a quick and easy way to enter other countries. That’s what the secretary was referring to; ensuring that all U.S. travelers will be able to easily meet any anticipated foreign country entry requirements,” an agency spokesperson told news outlets.

  “There will be no federal vaccinations database and no federal mandate requiring everyone to obtain a single vaccination credential,” the department also said.

  The White House had responded to Mayorkas’ statement by saying the same thing.

  Asked to explain his comments, spokeswoman Karine Jean-Pierre told reporters on Air Force One:

  “Again, the U.S. government recognizes that other countries have or may have foreign-entry requirements. We will be monitoring these and helping all U.S. travelers meet those, but we will not be—there will be no federal mandate requiring anyone to obtain a single vaccination credential.”

  

  Homeland Security Secretary Alejandro Mayorkas testifies before a Senate panel in Washington on May 26, 2021. (Chip Somodevilla/Getty Images)

  The Biden administration has previously said multiple times that it will not require vaccine passports, or proof of vaccination, on the federal level.

  However, the administration is working with private companies to set guidelines for passport systems.

  A variety of groups have raised concerns about vaccine passports, arguing it would be an overreach of government authority to require vaccination proof. A number of states have banned requiring of passports, such as Georgia, and Sens. Ted Cruz (R-Texas), Mike Braun (R-Ind.), and Cynthia Lummis (R-Wyo.) announced Friday they were introducing a bill that would ban them.

  “Americans shouldn’t be discriminated against because of COVID-19 vaccine status—whether that is at work or in everyday life. Americans have a well-established right to privacy that any mandated vaccine passport would destroy. A vaccine passport would be discriminatory against people who, for whatever reason, do not get the COVID-19 vaccine. We should be encouraging individuals to receive the vaccine through increased patient protections, not mandating it,” Cruz said in a statement.

  “The truth is not everyone can receive the COVID-19 vaccine—for legitimate reasons. I got the vaccine because it was the right decision for me, but people should be free to make the decision that is right for them and consult with their doctor if they have concerns. Individuals who are unable to receive the vaccine should not be denied access to aspects of everyday life or the opportunity to participate in society. Mandating the vaccine or requiring all individuals to be fully vaccinated before returning to normal life could prevent America from fully reopening,” he added.

  The United States earlier in the week hit the milestone of 50 percent of adults being fully vaccinated against the CCP (Chinese Communist Party) virus, which causes COVID-19.

  As of May 28, that percentage was up to nearly 51 percent, or 131.3 million Americans 18 or older. Another 29 million have gotten one dose and are waiting for their second one.

  Tyler Durden
  Sun, 05/30/2021 – 19:20

• Ship Carrying Auto Parts Sinks Off Japan Coast
  Ship Carrying Auto Parts Sinks Off Japan Coast

  By Kim Link-Wills of American Shipper

  A search is ongoing for three crew members reported missing from a roll-on/roll-off (ro/ro) vessel that sank off the coast of Japan early Friday morning.  The MV Byakko sank at about 2:40 a.m. local time after colliding with the chemical tanker Ulsan Pioneer just before midnight in the Seto Inland Sea, Reuters reported. The Byakko reportedly sank about 2.5 miles off the coast of Imabari.

  Nine of the Byakko’s 12 crew members were said to have been rescued by the Japanese coast guard and nearby ships. 

  

  Kyodo News reported that the ship’s captain, 66-year-old Tamotsu Sato, was among the missing. Responders also are searching for two of the Byakko’s engineers, Japanese men in their 20s. 

  The 557-foot-long Byakko is operated by Kobe, Japan-based Prince Kaiun Co. According to Kyodo News, the Byakko was carrying auto parts and left Kobe at 4:30 p.m. Thursday bound for Kanda, Japan. The Ulsan Pioneer reportedly departed a port in China on Tuesday and was scheduled to arrive in Osaka, Japan, on Friday afternoon. 

  There was no word on what types of auto parts the Byakko was carrying. Denso is the largest automotive parts manufacturer in Japan and specializes in electronic systems and powertrain control modules, according to Japan Industry News, which lists the other major suppliers in the country as Aisin Seiki, Yazaki, JTEKT and Hitachi Automotive Systems.  

  Sebastian Blanco, who follows the automotive industry for FreightWaves, said Toyota has a plant in Kanda and Nissan has one in the region. 

  On its website, Prince Kaiun lists its primary clients as Nissan Motor Co., Mitsubishi Logistics, Vantec Corp., Sea Link, Tatsumi Shokai, Zero Co. and Koshin Shoun.

  The website says the 11,454-ton Byakko was built just last year and that it can carry “809 commercial vehicles, 113 trailer chassis.” Byakko is the Japanese word for white tiger.The Ulsan Pioneer, which flies under the flag of the Marshall Islands, was built in 2016.

  A cause of the collision has not been reported. According to FreightWaves meteorologist Nick Austin, there were no indications of unusual weather at the time of the accident. 

  Tyler Durden
  Sun, 05/30/2021 – 18:45

• "We Are Going To Expose You": Crenshaw, Cotton Create Military Whistleblower Site To Combat 'Woke Ideology'
  “We Are Going To Expose You”: Crenshaw, Cotton Create Military Whistleblower Site To Combat ‘Woke Ideology’

  Authored by Jack Phillips via The Epoch Times,

  Two GOP lawmakers this week launched a campaign calling on whistleblowers in the military to come forward with their experiences in training programs that promote critical race theory or “diversity, equity, and inclusion.”

  “We won’t let our military fall to woke ideology,” Rep. Dan Crenshaw (R-Texas), a former Navy SEAL, wrote in a tweet on Friday while linking to a website where informants can submit their accounts.

  “With written permission, we will anonymously publish egregious complaints on social media and tell the country what’s happening in our military.”

  “For too long, progressive Pentagon staffers have been calling the shots for our warfighters,” said Crenshaw about the web page posted in conjunction with Sen. Tom Cotton (R-Ark.), a former Army captain.

  

  House Homeland Security Committee member Rep. Dan Crenshaw (R-Texas) speaks during a hearing in the Rayburn House Office Building on Capitol Hill in Washington, on Sept. 17, 2020. (Chip Somodevilla/Getty Images)

  They hope that service members “will anonymously publish egregious complaints on social media” in order to “tell the country what’s happening in our military,” according to Crenshaw.

  “Progressive Pentagon staffers have been calling the shots for our warfighters,” the lawmaker added, “and spineless military commanders have let it happen. Now we are going to expose you.”

  Earlier this month, the U.S. Space Force confirmed it relieved Lt. Col. Matthew Lohmeier of his duties after he alleged that Marxism and critical race theory—which draws heavy inspiration from Marxist critical theory—are both being spread in the military via training courses that are required by Department of Defense Secretary Lloyd Austin and other high-level officials.

  “Lt. Gen. Stephen Whiting, Space Operations Command commander, relieved Lt. Col. Matthew Lohmeier of command of the 11th Space Warning Squadron, Buckley Air Force Base, Colorado, May 14, due to loss of trust and confidence in his ability to lead,” the Space Force said in mid-May, adding that Lohmeier’s remarks in a podcast and in his self-published book “constituted prohibited partisan political activity.” The Space Force’s statement didn’t provide an example.

  

  Sen. Tom Cotton (R-Ark.) speaks during a hearing to examine United States Special Operations Command and United States Cyber Command, on Capitol Hill in Washington on March 25, 2021. (Andrew Harnik-Pool/Getty Images)

  Last week, Lohmeier met with Cotton, who tweeted after their meeting that he’s concerned “by what I heard” and promised to press “senior military leaders for answers.”

  Critical race theory denounces U.S. and Western culture as a systematic form of oppression that negatively impacts minority groups. Critics of the ideology—which is sometimes referred to as being “woke”—have said its proponents apply the Marxist tactic of “class struggle” to divide people along lines of race, gender, and ethnicity to label them “oppressors” and the “oppressed.”

  At the state level, legislatures and governors have taken action against critical race theory as well as The New York Times’ “1619 Project,” by barring them from being promoted in schools and in government institutions.

  The governors of Tennessee, Idaho, Arkansas, and Oklahoma have already signed anti-critical race theory bills. In Texas, Arizona, and Iowa, similar measures have been proposed, according to an analysis.

  Tyler Durden
  Sun, 05/30/2021 – 18:10

• Netanyahu Faces Shocking Ouster After Israeli Opposition Reaches Deal To Form Government
  Netanyahu Faces Shocking Ouster After Israeli Opposition Reaches Deal To Form Government

  It’s the end of an era for Israeli politics as embattled prime minister Benjamin Netanyahu, the country’s longest serving leader, is facing a shocking ouster after the head of a small hard-line party on Sunday said he would try to form a unity government with Prime Minister Benjamin Netanyahu’s opponents, effectively ending Bibi’s 12-year rule.

  In a nationwide address, Yamina party leader and Netanyahu’s former defense minister, Naftali Bennett said he had decided to join forces with the country’s opposition leader, Yair Lapid in a “unity government” whose “unified” goal has long been removing Netanyahu from office. The pair have until Wednesday to complete a deal in which they are expected to each serve two years as prime minister in a rotation deal.

  “It’s my intention to do my utmost in order to form a national unity government along with my friend Yair Lapid, so that, God willing, together we can save the country from a tailspin and return Israel to its course,” Bennett said adding that “we could go to fifth elections, sixth elections, until our home falls upon us, or we could stop the madness and take responsibility.”

  

  This coalition will have one week to finalize deals and then will face a vote in the Knesset. Lapid will inform President Reuven Rivlin of his ability to form a new government with his partners on Monday, according to reports.

  A unity government would end the cycle of deadlock that has plunged the country into four inconclusive elections over the past two years. It also would end, at least for the time being, the record-setting tenure of Netanyahu, the most dominant figure in Israeli politics over the past three decades.

  In his own televised statement, Netanyahu accused Bennett of betraying the Israeli right wing. He urged nationalist politicians who have joined the coalition talks not to establish what he called a “leftist government.”

  “A government like this is a danger to the security of Israel, and is also a danger to the future of the state,” he said.  Netanyahu also took to twitter where he blasted his rivals and the coalition deal as the “scam of the century,” adding that recent conflicts with Hamas prove that Israel can not function with a “left-wing government.”`

  “We just got out of a war, from a military operation, and it was clear, amid the battle, that it’s not possible to fight with Hamas from a left-wing government,” he said, proposing that they form a functioning “right-wing government for Israel” instead, although there is zero chance of that happening.

  אין אדם אחד בארץ שהיה מצביע לנפתלי בנט אם היה יודע מה הוא הולך לעשות. זו הונאת המאה!

  במקום להקים ממשלת שמאל מסוכנת, מיד עם סיום המנדט של לפיד אפשר להקים ממשלת ימין טובה לישראל.

  צפו בדבריי הערב. pic.twitter.com/o8qLSWxToG

  — Benjamin Netanyahu (@netanyahu) May 30, 2021

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

  Bennett, a former Netanyahu aide turned rival, said he was taking the dramatic step to prevent yet another election. While sharing Netanyahu’s nationalist ideology, Bennett said there was no feasible way for the hard-line right wing to form a governing majority in parliament.

  “A government like this will succeed only if we work together as a group,” he said, adding that everyone “will need to postpone fulfilling all their dreams. We will focus on what can be done, instead of fighting all day on what’s impossible.”

  Each of the past four elections was seen as a referendum on Netanyahu — who has become a polarizing figure as he stands trial on corruption charges — with each ending in deadlock.

  For Netanyahu the motive to remain Prime Minister is simpler: avoiding prison, and he is desperate to stay in power while he is on trial. He has used his office as a stage to rally support and lash out against police, prosecutors and the media. According to the AP, if his opponents fail to form a government and new elections are triggered, it would give him another chance at seeing the election of a parliament that is in favor of granting him immunity from prosecution. But if they succeed, he would find himself in the much weaker position of opposition leader and potentially find himself facing unrest in his Likud party, not to mention prison time.

  In order to form a government, a party leader must secure the support of a 61-seat majority in parliament. Because no single party controls a majority on its own, coalitions are usually built with smaller partners. As leader of the largest party, Netanyahu was given the first opportunity by the country’s figurehead president to form a coalition. But he was unable to secure a majority with his traditional religious and nationalist allies.

  Netanyahu even attempted to court a small Islamist Arab party but was thwarted by a small ultranationalist party with a racist anti-Arab agenda. Although Arabs make up some 20% of Israel’s population, an Arab party has never before sat in an Israeli coalition government.
  After Netanyahu’s failure to form a government, Lapid was then given four weeks to cobble together a coalition. He has until Wednesday to complete the task.

  Lapid already faced a difficult challenge, given the broad range of parties in the anti-Netanyahu bloc that have little in common. They include dovish left-wing parties, a pair of right-wing nationalist parties, including Bennett’s Yamina, and most likely the Islamist United Arab List.

  Lapid’s task was made even more difficult after war broke out with Hamas militants in the Gaza Strip on May 10. His coalition talks were put on hold  during the 11 days of fighting. But with Wednesday’s deadline looming, negotiations have kicked into high gear. Lapid has reached coalition deals with three other parties so far. If he finalizes a deal with Bennett, the remaining partners are expected to quickly fall into place.

  Tyler Durden
  Sun, 05/30/2021 – 17:36

• Fraudsters Go Where The (COVID-19) Money Is
  Fraudsters Go Where The (COVID-19) Money Is

  Authored by Diane Diamond, op-ed via The Epoch Times,

  Last June, eight guys in Brooklyn put their heads together, according to the U.S. Department of Justice, and came up with a scheme to steal strangers’ identities and take what didn’t belong to them.

  Just a couple months before that—in the earliest days of the COVID-19 scare—Congress passed a $2.2 trillion bill called the Coronavirus Aid, Relief and Economic Security Act. The money was supposed to go to the millions of isolated Americans who had their paychecks interrupted during the pandemic.

  The mooks in Brooklyn had other plans.

  This gang of eight, ranging in age from 18 to 25, submitted some $2 million worth of fake unemployment claims for CARES Act assistance. And they got away with it for nearly a year, according to the feds. Several of these criminals stupidly posted online photos of themselves flashing stacks of money. Others were caught on ATM cameras withdrawing their free cash. Busted!

  

  The more Uncle Sam giveth, the more criminals taketh away.

  And it wasn’t just the Brooklyn gang. Besides extra money for bigger unemployment checks, Congress allocated nearly $350 billion for Small Business Administration loans to be doled out by vendors at some 3,800 financial institutions.

  Now we find out that just one of those lenders, an online firm called Kabbage, OK’d more than $7 million to go to fake companies, mostly nonexistent farms. Speed in disbursement was the name of the game, and apparently, vetting applications was lax. Many entities seeking loans from Kabbage seemed fishy. Farms and cattle ranches on a New Jersey sandbar? An orange grove in Minnesota? A potato field in ritzy Palm Beach, Florida? All were phony-baloney.

  The SBA’s inspector general now estimates that close to 100,000 loans went to businesses that were ineligible or got more cash than they should have. By late March 2021, the DOJ had brought criminal fraud charges against 474 people who sought to rake in a collective $570 million.

  It’s great that the feds caught up with these cheaters, but there must have been a better way to administer this program from the get-go, right? Simply relying on after-the-fact prosecution is like trying to chase the horse after it bolts through the open barn door.

  An acquaintance tells me he was expecting a small relief payment on a debit card but it never arrived. His wife called to trace it, but the automated system required her to punch in the number on the card—which, again, they never received. A typical government Catch-22. They ultimately gave up and are still wondering who got their $318 debit card.

  The point is there has been so much money flowing out of the U.S. Treasury over the last year that the task of keeping track of all of it seems futile.

  Trillions of dollars in aid have already been approved by Congress; trillions more are under consideration.

  This isn’t monopoly money, folks. And according to The Wall Street Journal, billions of dollars already pumped into the U.S. economy are still sitting there. Between the CARES Act and the companion American Rescue Plan Act, more than $32 billion earmarked just for pandemic-ravaged hospitals remains unspent. They can’t spend their money fast enough to make the June 30 deadline, so hospitals are seeking an extension.

  The Rescue Plan also allocated a windfall $350 billion for states to help spur a post-pandemic recovery. Some states will be swimming in surplus dough, but who in Washington will be checking to see if the lengthy spending rules for that money are actually being followed? Let’s hope the supervision is better than what occurred with the Kabbage loans.

  It’s time to remember the reported words of notorious criminal Willie Sutton. When asked why he robbed banks, he is said to have answered, “Because that’s where the money is!”

  Whether Sutton actually uttered those words is in dispute, but this is a certainty: The criminal element will flock to wherever there is an abundance of cash and lax oversight. Today, money is being printed and is flowing out of the U.S. Treasury at a ferocious pace. Calculating criminals are making plans.

  When the U.S. government isn’t diligent, taxpayers lose. It is abundantly clear that conscientious oversight is not being practiced. I say, no more money bills until that changes.

  Tyler Durden
  Sun, 05/30/2021 – 17:00

• ​​​​​​​China Millionaires To Double By 2025 As America Fades Into Darkness 
  ​​​​​​​China Millionaires To Double By 2025 As America Fades Into Darkness 

  Rising wealth in China and the number of millionaires and the middle class is set to increase through the midpoint of this decade as the country grows more affluent and smarter. 

  HSBC Holdings Plc’s new report “The rising wealth of China; Millionaires and the middle class lead the way” predicts a world where millionaires in the country are set to double in the next five years, and the middle class will increase by nearly half. 

  From an asset manager’s point of view, China could be the next hot spot for new clients mainly because the report shows 2 million high-net-worth individuals (HNWIs), those with the equivalent of at least $1.55 million in investable assets, are set to more than double to at least 5 million by 2025. 

  

  The bank also estimated the middle-class number (currently at 340 million) would increase by more than 45% to over 500 million in the period. 

  “The middle class is expanding rapidly too, and the urban homeownership rate is the highest in the world, a remarkable 96%.1 We estimate that total household wealth will grow by more than 50% in the next five years, putting China on a very sound financial footing,” HSBC said.” 

  

  For asset managers overseeing their client’s portfolios, the goal is to grow business, and China could be the best region to do so in the period. 

  “An expanding middle class will underpin medium to long-term economic growth, and stronger consumer spending boosts domestic demand, business confidence, and capital expenditure,” wrote HSBC chief economist Qu Hongbin. 

  Hongbin said, “A rising middle class will also increase imports of goods and services, and attract foreign companies to invest in China.” 

  An increasing middle class is the backbone of the country that will help it avoid the “middle-income trap,” and the government will also support a new order to transition the economy to more of a consumption-led one. “It’s not an exaggeration to say that the middle class can be the backbone of China’s dual circulation strategy,” they said.

  HSBC’s report examines the structure of the three parts of the country’s wealth, the asset portfolios of households, the government, and the external sector and how they’re all changing. Here are the reports top findings: 

  • China’s household wealth is set to grow by around 8.5% annually in the next five years, with household investable assets topping RMB300trn in 2025, equivalent to 300% of China’s GDP in 2020.
  • HNWIs have investable assets of around RMB70trn (USD10.8trn) – that’s approaching the combined market cap of the Shanghai and Shenzhen stock exchanges at the end of 2020 (RMB79trn). Based on our conservative forecasts, this number will increase by 60% to RMB111trn by 2025.
  • The middle class already numbers 340m people – bigger than the population of the U.S. – and is on track to grow over 45% by 2025 to more than 500m. A USD20 increase in daily spending by the newly made middle class would increase consumption by cUSD1.1trn per year, surpassing all but seven countries in terms of total middle class expenditure in 2020 (Kharas and Dooley, 2020).

  China is growing more prosperous, and simultaneously it’s recovering faster from the virus pandemic than any other country. The middle class is becoming more financially sophisticated and has a broader range of investment opportunities.

  A larger middle class with higher income levels will increase demand for quality goods, supporting the transition to a consumption-led economy throughout this decade. 

  Perhaps the Centre for Economics and Business Research (CEBR), a UK-based consultancy group, is correct: China is set to overtake the U.S. by 2028 that could usher in the dollar’s demise. 

  JPMorgan’s latest “Long-Term Capital Market Assumptions” report highlights an extended period of U.S. “exceptionalism” – in growth, interest rates and equity market performance – may be coming to an end. “As a result, we expect the dollar to weaken in most crosses over this cycle, with notable falls coming against EUR, JPY, and CNY.”

  

  Americans must wake up to the uncomfortable fact that China is ahead of schedule at displacing the West as the world’s greatest economic superpower. 

  Tyler Durden
  Sun, 05/30/2021 – 16:30

• Over 200 Republicans Press Pelosi To Back COVID-19 Origin Probe, "Hold The CCP Accountable"
  Over 200 Republicans Press Pelosi To Back COVID-19 Origin Probe, “Hold The CCP Accountable”

  Authored by Eva Fu via The Epoch Times,

  More than 200 House Republicans are putting pressure on their Democrat counterparts to get down to the COVID-19 origins and hold the Chinese regime accountable for the pandemic coverup.

  “We request that you instruct the appropriate Democrat committee chairs to immediately join Republican calls to hold the Chinese Communist Party (CCP) accountable for its role in causing the global COVID-19 pandemic,” stated a May 28 letter to Speaker Nancy Pelosi (D-Calif.).

  The effort was led by House Minority Leader Kevin McCarthy (R-Calif), Minority Whip Reps. Steve Scalise (R-La.), and Rep. Elise Stefanik, the chair of the House Republican Conference and joined by 209 House Republicans.

  

  Security personnel keep watch outside the Wuhan Institute of Virology during the visit by the World Health Organization (WHO) team tasked with investigating the origins of the coronavirus disease (COVID-19), in Wuhan, Hubei province, China, on Feb. 3, 2021. (Thomas Peter/Reuters)

  The lawmakers said Pelosi had “falsely claimed” that “questions about the CCP’s liability” were a “diversion” – likely referring to Pelosi’s remarks from last May describing then-President Donald Trump’s blame on China as an “interesting diversion.”

  “There is mounting evidence the pandemic started in a Chinese lab, and the CCP covered it up. If that is the case, the CCP is responsible for the deaths of almost 600,000 Americans and millions more worldwide,” they stated in the letter.

  “[E]very American family that lost someone deserves answers about the origin of this terrible virus,” they continued, adding that “House Democrats’ ongoing refusal to allocate investigative resources to get those answers is an affront to them.”

  “China can’t get away with this. Americans deserve answers,” Scalise wrote in a May 28 tweet.

  The Epoch Times has reached out to Pelosi’s office for comments.

  The lawmakers cited a growing pile of evidence that the virus may have escaped from a Wuhan lab, an idea that many media outlets and scientists had initially dismissed as a conspiracy theory.

  A State Department fact sheet, released during the final days of the Trump administration, suggested researchers with the Wuhan Institute of Virology (WIV), located in the vicinity of the seafood market initially thought to be the outbreak’s origin, fell ill with COVID-19 like symptoms in autumn 2019. Recently, an undisclosed intelligence report also surfaced saying three WIV staff were sick enough to seek hospital care that November.

  

  The P4 laboratory of Wuhan Institute of Virology is seen behind a fence during the visit by the World Health Organization (WHO) team tasked with investigating the origins of the coronavirus disease (COVID-19), in Wuhan, Hubei province, China, on Feb. 3, 2021. (Thomas Peter/Reuters)

  Dr. Anthony Fauci, President Joe Biden’s chief medical adviser, recently backed a deeper virus probe and said that a lab leak possibility “certainly exists,” reversing comments he made in May 2020.

  U.S. Health and Human Services Secretary Xavier Becerra, while not mentioning China or Wuhan directly, has called for the World Health Organization (WHO) to launch a “transparent, science-based” phase 2 COVID origins study “to fully assess the source of the virus and the early days of the outbreak.”

  “To hold the CCP accountable,” the lawmakers said they need “access to the full range of tools available to congressional investigators, including subpoenas for documents and the power to compel key witnesses to give testimony.”

  “To date, Democrat committee chairs throughout the House are refusing to allocate those resources for questioning about the origin of the COVID-19 virus,” the letter stated.

  They also pointed to Beijing’s consistent refusal to share raw data and WIV lab records, which they said fit into the CCP’s pattern of deception that includes expelling journalists to COVID-19 disinformation and silencing of whistleblowers.

  While the WHO-led mission in Wuhan ruled the lab accident theory as “extremely unlikely,” experts and world leaders alike have criticized the findings for lacking independence. Foreign experts on the panel requested original data and samples but were only supplied a summary from their Chinese counterparts.

  On Tuesday, a Chinese representative told the WHO’s assembly that the “China part” of the origin-tracing “has been completed,” and suggested investigators look elsewhere.

  Pressure to find out how the pandemic began has nonetheless continued to mount despite the Chinese denial.

  Biden, in a rare statement on Wednesday, said he has ordered an intelligence inquiry regarding the virus’ origins and expected a report within 90 days. The U.S. Intelligence has “‘coalesced around two likely scenarios’ but has not reached a definitive conclusion on this question,” he said.

  The Senate on Friday passed a bipartisan resolution calling for the WHO to act with “extreme urgency” and “get to the bottom” of the pandemic origin.

  The House Republican lawmakers, in their letter, said the Congress should take virus hunt effort into their own hands.

  “It is clear that WHO failed to produce the final word on the origins of the COVID-19 pandemic and the CCP’s liability. That task falls to us in Congress,” the lawmakers wrote in the letter.

  Tyler Durden
  Sun, 05/30/2021 – 16:00

• Kamikaze AI Drone "Hunted Down" Human Targets 
  Kamikaze AI Drone “Hunted Down” Human Targets 

  A recent report by the United Nations Security Council found that a Turkish-made autonomous drone may have “hunted down and remotely engaged” enemy soldiers loyal to the Libyan General Khalifa Haftar. This bombshell report could be one of the first recorded instances where a terminator-style AI drone engaged and destroyed human targets on its own initiative. 

  “Logistics convoys and retreating Haftar Affiliated Forces (HAF) were subsequently hunted down and remotely engaged by the unmanned combat aerial vehicles or the lethal autonomous weapons systems such as the STM Kargu-2 and other loitering munitions,” the UN report reveals. 

  “The lethal autonomous weapons systems were programmed to attack targets without requiring data connectivity between the operator and the munition: in effect, a true “fire, forget and find” capability,” the report went on to say.

  An image from the report provides a detailed infographic of the STM Kargu-2, calling it a loitering munition (also known as a suicide drone or kamikaze drone). This drone is outfitted with an explosive charge and uses AI and sensors to target enemy forces in a kamikaze attack. 

  

  It’s unclear in the report if any soldiers were killed in the attack, but one would assume the loitering munition completed its mission. 

  Zachary Kallenborn, a research affiliate with the Unconventional Weapons and Technology Division of the National Consortium for the Study of Terrorism and Responses to Terrorism, said, “the Kargu-2 signifies something perhaps even more globally significant: a new chapter in autonomous weapons, one in which they are used to fight and kill human beings based on artificial intelligence.” 

  Kallenborn published a report last year for the US Air Force that argues a large-scale adversarial drone swarm attack could be classified as a “weapon of mass destruction” (WMD), a term commonly used to describe chemical, biological, or radioactive weapon capable of causing widespread death and destruction.

  He is not the only one warning about killer AI robots. A group of the world’s leading AI researchers and humanitarian organizations are warning about the day when lethal autonomous weapons systems. 

  Future of Life Institute released this video several years ago titled: “Slaughterbots.”

  Futuristic robots that conduct war without human intervention have already been deployed to modern battlefields. The warnings are too late as the Pentagon takes aim with AI bots taking the kill shot. 

  Tyler Durden
  Sun, 05/30/2021 – 15:30

• COT Primer: The Gold Trend Is Still Very Favorable
  COT Primer: The Gold Trend Is Still Very Favorable

  Authored by Mike Shedlock via MishTalk.com,

  The gold commitment of traders report is bullish. Let’s start with a primer of what the COT report shows.

  

  What is the COT Report?

  COT reports show the positioning of commodity futures. There is a COT report for every commodity (gold, silver, lean hogs, live cattle, sugar, corn, the S&P 500, US Treasuries, etc.).

  The reports are released every Friday but reflect futures positions as of the previous Tuesday.

  In the futures world, the net position is always zero. For every long there is a short.

  The Commodity Futures Trading Commission CTFC produces two sets of reports described below.

  Legacy Reports

  The legacy reports show large specs, small specs, and commercials. 

  • Large specs are hedge funds, pension plans, and individuals trading in sizes deemed to matter. (Top Green Line) 

  • Commercials (Top Red Line) consist of three groups. Producers who sell the the gold they produce, merchants who use gold (e.g. jewelry makers), and market maker hedgers who take the other side of trade. The producers are  net short and the merchants are net long. 

  • Small specs are small traders. (Top Blue Line) 

  Disaggregated Reports

  Starting September 4, 2009, the CTFC produced a second set of reports called the disaggregated reports. 

  • Commercials – Producers and Merchant/Processor/Users (Bottom Red Line)

  • Swap Dealers (Bottom Green Line), the commercial hedger market makers

  • Managed Money (Bottom Blue Line), in general represents the large specs.

  • Other Reportables (Bottom Orange Line), in general represents the   the small specs.

  Market Makers Have No Say in the Matter

  The commercial market makers have no say in what they do.

  Q: How So?

  A: By definition there is a short for every long. Speculators place their bets, producers sell what they produce, merchants buy gold and take delivery. The market makers net the entire position to zero. They have no say.

  I have not heard it phrased that way but that is the mathematical truism. 

  Curiously, many gold bulls blame the market makers for being short and suppressing price although they have no say in what they do. 

  You frequently hear statements such as “The market makers increased their shorts and will get blown out of the water if the price rises.”

  They will not get blown out of the water because they are hedged, and they had no say in being short. 

  It’s more accurate to state speculator long accumulation or liquidation as the driving force. 

  What About Manipulation?

  Theoretically, the commercial hedger market makers do not care which way the market goes because they are hedged. If they were not hedged, they would have blown up long ago. 

  Gold rose from $250 to $2000 with the hedgers short nearly the entire way.

  However, the commercial hedgers can and do manipulate the market when their hedges get out of whack or they see an opportunity for a quick gain. 

  They have admitted to manipulation and have been fined for that manipulation. 

  Cot Report Bullish or Bearish? 

  1. In general, when the speculators are building their positions, the price of the commodity is rising. 
  2. In general, when speculators are unwinding their positions the price of the commodity is falling. 

  The lead chart shows the last two years with a couple of arrows that spotlight the generalities. 

  But generalities can get you in trouble as the lead chart also shows. Here is a 20-year look. 

  Gold Commitment of Traders 20 Years 

  

  Notes On Generalities

  • Don’t count on generalities. 

  • The green arrows show periods of long liquidations in which the price of gold rose anyway. These are very bullish setups.

  • The red arrows show periods when gold fell where long liquidation did not take place. 

  • The blue boxes show wipeouts where speculators threw in the towel. That’s when commercial hedgers are likely to be net long. In general, those are excellent time to buy with the least risk. Yet, one must be patient as the red arrows show. 

  Current Setup is Bullish

  Q: How so?
  A: Speculator position is building, but nowhere near extreme and the price is rising. 

  Take another look at the lead chart.

  Managed money started unwinding contracts (long liquidation) in February 2020 yet the price of gold, albeit with one dip, exploded higher. 

  That was a very bullish setup.

  Current speculator positioning is nowhere near extreme. Their position is building and the price is rising. 

  This is a bullish setup. Those who expecting another washout (blue box) and waited for it missed much of the move.

  Gold vs the Dollar

  In related generalities, we hear things like “The dollar is rising and that is bad for gold“.

  On a day to day basis the conventional wisdom is generally true. Long-term and even intermediate-term such statements are laughable.

  Charts of gold vs the dollar highlight the silliness of conventional wisdom.

  For discussion, please see Nonsense from the WSJ on Gold vs the Dollar

  In the above post I also discuss conventional wisdom on jewelry demand and the real driver for the price of gold. 

  The US dollar may be poised for a rally, but don’t presume gold is destined to sink in response. 

  Tyler Durden
  Sun, 05/30/2021 – 14:59

• Tesla Facing "Further Fallout" In China As Local Governments Mull "Security Risks" Of Vehicles
  Tesla Facing “Further Fallout” In China As Local Governments Mull “Security Risks” Of Vehicles

  The rocky road between Tesla and the Chinese Communist Party looks like it is continuing.

  The automaker is facing “further fallout” in China as some local governments are reviewing Tesla vehicle ownership among their staff, citing the vehicles posing potential security risks, according to Bloomberg. 

  Government bodies have been asked to check and report on employees who own Teslas in Zhejiang and Guangxi. Employees are being “forbidden” from driving into certain official areas, due to supposed security risks, the report notes. 

  Other official Chinese bodies are following suit. The China Meteorological Administration, for example, has already told its employees not to buy Tesla EVs and, if they have already, to transfer ownership of the vehicles. The Propaganda Department of the Chinese Communist Party (yes, this is actually what it is called) is also “checking whether any employees or their family own Teslas.”

  Any continued major hiccups in Tesla’s relationship with China could be devastating for the automaker, who relies on the world’s largest auto market to help it redline production to meet Wall Street’s increasingly optimistic expectations. 

  Recall, we noted in mid May that Teslas had been banned from some Chinese government compounds due to concerns about their cameras. 

  

  Staff at some Chinese government officers were told not to park their Tesla cars inside of government compounds “because of security concerns over cameras installed on the vehicles,” Reuters reported in May.

  “At least two government agencies” in Beijing and Shanghai have been told the same, according to the same report. It’s unclear how many employees and vehicles this had a direct impact on. 

  Despite the fact that cameras and sensors are found in many vehicles, the restriction “only applies to Tesla cars”, the report noted. 

  This isn’t the first time China has cited security concerns as a reason to ban Tesla vehicles. Back in March, China banned Tesla vehicles from military bases over similar concerns about the vehicles’ cameras. The ban was due to “concerns about sensitive data being collected by cameras built into the vehicles.”

  Recall, before making somewhat of an about face on their recent attitude on Tesla (after Musk’s odd rebuke of bitcoin), Chinese state media had been anything but friendly to the U.S. auto manufacturer. 

  We have been documenting the ongoing spat between Tesla and the CCP over the last few months, apparently (at least publicly) catalyzed by a protestor at the Shanghai Auto Show alleging faulty breaks on Tesla vehicles. This led to intense shaming by Chinese media, who called Tesla’s handling of the situation a “blunder” and suggested it could “inflict serious damage” on Tesla with the Chinese market. 

  Tyler Durden
  Sun, 05/30/2021 – 14:30

• Increasingly Chaotic Volatility Ahead – The New Normal Few Think Possible
  Increasingly Chaotic Volatility Ahead – The New Normal Few Think Possible

  Authored by Charles Hugh Smith via OfTwoMinds blog,

  That the era of stability has ended and a new era of increasingly chaotic volatility has begun is not on anyone’s radar as a possibility.

  The standard debate about the future of the economy is: which will we get, high inflation or a deflationary collapse of defaults and asset bubbles popping?

  The debate goes round and round in widening circles of complexity as analysts delve into every nuance of the debate.

  A recent conversation with my friend A.T. raised a third possibility few seem to consider: increasingly chaotic volatility will be the new normal, as wild swings between inflation and deflation will increase in amplitude and ferocity as the system destabilizes.

  Increasingly chaotic volatility is a classic sign of a system that has lost equilibrium and is attempting to regain its dynamic stability by going into overdrive.

  The amplitude and violence of these fluctuations increase as each attempt to restore stability fails.

  This loss of stability is not what people expect. The experience of the past 60 years has been that any hiccup in financial stability–a recession or market crash–is temporary, as the system responds with monetary and fiscal stimulus which quickly restores the system’s stability.

  That the era of stability has ended and a new era of increasingly chaotic volatility has begun is not on anyone’s radar as a possibility.

  Human physiology offers a useful analogy: blood glucose homeostasis, which is the system of insulin production and sensitivity that maintains the dynamic stability of glucose in our bloodstream for use as energy.

  Insulin is produced as needed after a meal to regulate the level of glucose within the ideal bandwidth of homeostasis, i.e. the range of dynamic stability that optimizes insulin production and glucose levels. (3.5 to 5.5 mmol/L or 70 to 130 mg/dL)

  In metabolic disorders, the body’s sensitivity to insulin declines, and in response the body increases the production of insulin to compensate for the decline in sensitivity.

  As the disease progresses, sensitivity drops further, forcing the production of insulin into overdrive. Eventually this overdrive degrades the body’s ability to produce insulin and the regulatory system managing glucose levels crashes.

  In the economic analogy, the system is responding to the decline of surpluses and efficiencies by pumping ever larger sums of new money into the system as quantitative easing (financial stimulus) and fiscal stimulus (more federal spending funded by borrowing).

  Lower interest rates are intended to stimulate more private borrowing, another form of stimulus.

  The initial massive dose of financial insulin has created enormous asset bubbles and a frenzied rush to restock inventories depleted during the pandemic.

  The conventional media is echoing the Federal Reserve and other authorities who claim the resulting spike of inflation is temporary and will soon fade. Other analysts fear the scarcities are not transitory, as they reflect depletion of real-world resources that cannot be overcome by injecting more insulin (money) into the system.

  Meanwhile, other analysts are looking at the skyrocketing leverage in the system, where million-dollar speculative bets are leveraged into billion-dollar bets that cascade into crashes and defaults when the bets go bad.

  Leverage is difficult to assess as much of it is in the shadow / off-balance-sheet banking system, where exotic financial instruments are buried deep in footnotes and even experts have trouble unraveling the complex bets embedded in CDOs and various multi-party swaps.

  So we have all the necessary ingredient for both inflation and asset-debt deflation, and this is the backdrop for the binary debate of inflation or deflation.

  But perhaps the future is not one or the other, but a rapidly destabilizing system that will become increasingly prone to semi-chaotic swings of ever greater amplitude as regulatory agencies (central banks and Treasuries) attempt to flood the system with enough insulin to restabilize debt / leverage / asset prices that are increasingly desensitized to conventional stimulus.

  As each new flood of stimulus pushes debt, leverage and assets higher, it further desensitizes the system, setting the stage for yet another collapse of speculative leverage, which then prompts an even larger flood of monetary insulin, which then triggers an even more dramatic crash when then causes an even large dose of monetary insulin, and so on until the system crashes.

  Eventually the monetary insulin has none of the desired effects, and the mechanisms for producing more insulin (money) break down as well.

  In other words, both critical mechanisms break down: the economy no longer responds to new injections of stimulus and the issuance of money no longer functions as desired.

  As the financial system loses stability, injecting more monetary insulin only pushes the system further into chaotic volatility.

  For three generations, the Warren Buffett investment strategy worked wonderfully: just buy Coca-Cola etc. and never sell. We see this same mindset in the never sell crypto, diamond hands of the current speculative mania.

  

  If the financial system loses stability, this buy-and-hold strategy will fail. The winners in increasingly chaotic volatility will be those who no longer see any value in the inflation-deflation debate and no longer expect one or the other–or a return to stability. It won’t be that simple or that easy.

  *  *  *

  If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

  *  *  *

  My recent books:

  A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

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  The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

  Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

  Tyler Durden
  Sun, 05/30/2021 – 14:00

• Gas Is Going To $5 Per Gallon: First In California, Then Across The Country
  Gas Is Going To $5 Per Gallon: First In California, Then Across The Country

  Get ready for $5 per gallon gasoline – especially if you live in California.

  At least, that was the contention of a new WSJ op-ed that claims higher taxes and environmental regulations are both driving up the price of gas. 

  Author Allysia Finley notes that the average cost at the pump in California is now $4.18 a gallon, pointing out that in 2017, Democrats in the state’s legislature raised a tax on each gallon by 20.8 cents over three years. 

  California drivers are now paying an astonishing average of 63 cents a gallon in state and local taxes, compared an average of 36.8 cents elsewhere in the country. 

  The reasoning for the price hike was to repair the state’s infrastructure, but instead the proceeds have been “directed toward projects aimed at reducing greenhouse gas emissions, such as bike lanes and mass transit,” the op-ed notes.

  The California Air Resources Board is also responsible for imposing a tax through its cap and trade program, which has added about 14 cents per gallon to the state’s average gas price. 

  CARB requires that retailers sell “a special extra-clean-burning gasoline blend” which raises the price about another 10 cents per gallon. The Board “assigns carbon-intensity scores to hundreds of fuels” and requires refiners to meet a low score to blend lower-carbon fuels. If they can’t meet the threshold, they are forced to buy carbon credits, which also drives up the price of fuel.

  

  The board awards these credits to utilities when their customers charge EVs at home. Utilities then turn around and sell the credits to refiners. Gas powered vehicle drivers are subsidizing thousands in incentives to EV buyers, the op-ed notes:  

  So Californians can get a $1,500 rebate from their local utility on top of $2,000 from the state and $7,500 from the feds for buying an electric vehicle. Sweet.

  Yet drivers of gasoline-powered cars are subsidizing the utility rebates through higher fuel prices. As the state’s carbon-intensity benchmark has fallen, prices for regulatory credit prices have soared—from $17 on average in 2012 to $198 in the first quarter of this year. An analysis last fall by Stillwater Associates estimated that the program would add 24 cents a gallon to the price of gasoline this year and 63 cents by 2030.

  Refiners, as a result of the rules in the state, are switching to producing renewable fuels, which are now “much more profitable” due to regulatory and tax credits. But the infrastructure conversion that refineries will have to undertake to produce this fuel – such as Marathon Petroleum recent planning to convert a refinery in California – will once again wind up in rising prices for California drivers. 

  In fact, many refineries have simply closed due to the burdensome regulations. This means that when the remaining refineries experience outages, price spikes are more severe. 

  “Californian drivers can soon look forward to paying more than $5 a gallon at the pump as the state’s green mandates ratchet up and gasoline refineries shut down or convert to renewable fuels,” the op-ed concludes. 

  Tyler Durden
  Sun, 05/30/2021 – 13:30

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