- Nine Ukrainian Jets Destroyed In 24 Hours, Russia's Military Says
Nine Ukrainian Jets Destroyed In 24 Hours, Russia’s Military Says
The Kremlin has continued to signal to the West that the dozens of US F-16 fighter jets currently being prepped to transfer to Ukraine are as good as dead on arrival. Past weeks of media reports have indicated that a handful of European countries will begin sending F-16s by some point this summer, when Ukrainian pilots complete their training on the advanced fighter.
Russia’s Defense Ministry said Tuesday it launched a major attack on an airfield in central Ukraine, which destroyed and damaged seven Ukrainian fighter jets. The location was identified as the Myrhorod airbase in the country’s Poltava region. Two more were reported shot down in a separate operation.
Illustrative image of prior jet shootdown. “As a result of the Russian army’s strike, five active Su-27 multi-purpose fighters were destroyed and two under repair were damaged,” the military announced on Telegram.
The statement was accompanied by aerial footage, and the whole attack was also confirmed by a Ukrainian official who described that the strike happened, but the extent of destruction was exaggerated by the Russian side.
“There are losses, but not at all like the enemy claims because they always do this since the beginning of the invasion,” Ukraine’s former Air Force speaker Yuriy Ihnat stated.
He additionally said to Reuters that Russian reconnaissance drones provided a key role in the attack on Myrhorod and present a “very serious threat” – as they were able to spot the Ukrainian aircraft parked on the ground. “It flies and reports everything in real-time, and then Iskander arrives in a couple of minutes. It is obvious,” Ihnat explained.
In total Russia’s defense ministry (MoD) said its forces had taken out nine Ukrainian fighter jets on Tuesday over a 24 hour period, as two had reportedly been shot down while in flight. According to statements in TASS:
Russian forces struck nine Ukrainian Su-27 and MiG-29 fighter jets over the past day in the special military operation in Ukraine, Russia’s Defense Ministry reported on Tuesday.
“Also, nine Ukrainian Air Force aircraft were hit over the past 24 hours. A combined strike by precision weapons against an airfield destroyed five and damaged two Su-27 planes of the enemy’s Air Force. Another two Ukrainian MiG-29 and Su-27 aircraft were shot down by Russian air defenses,” the ministry said in a statement.
Last Thursday the Russian military had announced that it struck airbases in Ukraine which were set up to eventually house Western-supplied jets.
Below is a reconnaissance clip of Myrhorod airfield featured by state media:
Russian missile strike has destroyed five Ukrainian military jets and damaged two more at an airfield southeast of the town of Mirgorod in Ukraine’s Poltava Region – Russian Defense Ministry
Read more: https://t.co/Ho3kahJjRf pic.twitter.com/2P8SG08pFo
— RT (@RT_com) July 2, 2024
https://platform.twitter.com/widgets.js
The MoD said it used long-range sea-based weapons to attack “airfield infrastructure of Ukraine, planned to accommodate aircraft from Western countries,” according to state media. This included the use of Kinzhal hypersonic missiles alongside drones, the statement indicated.
TASS has also issued the following battlefield data on Tuesday: “In all, the Russian Armed Forces have destroyed 625 Ukrainian warplanes, 276 helicopters, 27,121 unmanned aerial vehicles, 535 surface-to-air missile systems, 16,478 tanks and other armored combat vehicles, 1,362 multiple rocket launchers, 11,215 field artillery guns and mortars and 23,238 special military motor vehicles since the start of the special military operation, the ministry reported.” These huge losses on the Ukrainian side have resulted in Ukrainian officials essentially begging for more arms and equipment from NATO countries at a faster rate.
Tyler Durden
Wed, 07/03/2024 – 02:45 - Macron's Loss Isn't An End, It's A Beginning
Macron’s Loss Isn’t An End, It’s A Beginning
Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,
To say that I’ve been waiting on pins and needles for the past year or so is putting it mildly. I’m sure I’m not the only one.
This fake World Davos Made in which fat is beautiful, sloth is a virtue, and pedophilia the pinnacle of human love, should have you just a teensy bit anxious.
When we look up and see everything beautiful being systematically subverted, cheapened, or just plain vandalized it’s hard to maintain your compassion, even if it was warranted…. which it isn’t.
Today I come back to write my first public essay in more than a month and we’re a couple of days away from arch-Globalist Emmanuel Macron of France getting trounced by both Marine Le Pen and a fractious left-wing coalition.
Heading into this weekend’s run-offs it’s pretty obvious that Macron’s party, En Marche, will be relegated to the ashbin of history. Macron was a fake populist sold to us by Davos nearly a decade ago to blunt the rise of Le Pen then.
And it really doesn’t matter this time what political ring-fencing the various commies in France do to freeze out a National Front majority in the French Parliament. The tide has turned against them.
It’s not coming back. Just like it has in the UK, the US, the Netherlands, Italy and the rest of the so-called post-Enlightenment West.
That idea right there, “post-Enlightenment,” where we began to reject God for modernity and the supremacy of human reason over the vastness of our ignorance about how the Universe worked, is the key to what’s happening.
And the minute I began writing about Macron I was hit with the memory of Notre Dame burning.
The library was on fire. And the jackals brayed about how great it was.
This happened on Macron’s watch. And he cried crocodile tears for it, as all true Marxist scumbags like him do.
Because they can only have the facsimile of emotions since we all live in a simulation anyway.
At the time I called it a “Symbol of Failing Culture.” But it’s far more than that. Notre Dame’s burning, deliberate or otherwise, was emblematic of how careless our caretakers were about preserving our past.
So obsessed with their pathetic modernity they expropriated nearly all the wealth of France for decades to elevate sloth and neglect beauty while becoming openly hostile to their own history. Their contempt for history was on full display as their rage at religion overwhelmed their basic humanity.
What’s worse to me is descendants of those that built Notre Dame cheering this event because they’ve been inculcated to hate religion of all forms by their Marxist education.
They’ve been effectively immunized against feeling anything but contempt for themselves and their history.
History is history. It doesn’t have an agenda. It exists, for better or worse, to remind us that who we are today is the sum total of who we were then.
Marxists fundamentally believe in creating a man without a history, without connection to his past to mold him into the New Soviet Man.
Argue with me about this all you want Bernie Bros, Corbynites and Richard Wolff acolytes, this is the point of this French post-modernist “life is an absurd simulation” nonsense. It’s simply an excuse to justify the inherent envy at the core of all Marxist thought.
It meant something to millions of people, if not billions.
Its burning was truly a moment of them destroying something beautiful even if the fire was an accident.
Notre Dame was a thing to be envied, for sure. A place of stunning beauty and achievement. A thing worth preserving through the centuries. Of course it had to be destroyed.
The contempt of Macron and his history-challenged fellow travelers at anyone not down with the Commintern was on full display back then.
While they think we shouldn’t have histories, they forget that we have memories.
So, there should be zero surprise today about what has happened at the French ballot box.
Macron and Davos will do everything they can to extend and pretend that they are still in control in France. They may even succeed in saving Macron. In doing so they may even destroy what’s left of France, sacrificing it on the altar of the European Union, but for what?
A meta-stable alliance held together by the scolding of a bloodless German vampire like Ursula Von der Leyen? How long do you think the French go from Yellow Vests to the guillotine?
Because, last I checked, that’s a part of their history Macron is also trying to deny.
* * *
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Tyler Durden
Wed, 07/03/2024 – 02:00 - How Financial Surveillance Threatens Our Democracies: Part 1
How Financial Surveillance Threatens Our Democracies: Part 1
Authored by Alexandre Stachtchenko via Bitcoin Magazine,
When they descended into coal mines, miners would take a caged canary with them.
The toxic gasses, notably carbon monoxide, that accumulate in these places and pose a deadly risk to miners, would kill the canaries before the miners.
This information made them aware of the danger, enabling them to evacuate before it was too late.
On May 14, 2024, Alexey Pertsev, a software developer who built an open-source tool to preserve online privacy, was found guilty of money laundering and sentenced to more than 5 years in prison by a Dutch court.
In the court’s decision, the following can be read:
“The tool developed by the suspect and his co-authors combines maximum anonymity and optimal concealment techniques with a serious lack of identification functionalities. Therefore, the tool cannot be characterized as a legitimate tool that has been inadvertently used by criminals. By its nature and operation, the tool is specifically intended for criminals.”
Seeking to preserve one’s privacy is thus at worst proof of criminality, at best complicity in a crime. A threshold has been crossed.
Unfortunately, it is likely that this case will generate little empathy and interest, as the person involved worked in the crypto industry, and the tool developed, Tornado Cash, was intended to preserve transaction confidentiality.
However, it would be a grave mistake to consider this an isolated incident limited to a fledgling industry for which the public has little affection.
This is our canary in the coal mine.
It has stopped singing and is dying. If we do not react, all the miners will perish. Cryptos are an early and glaring revealer of an insidious phenomenon that has been eroding our liberal democracies for about thirty years and is reaching a point of no return.
Despite the lack of evidence of their effectiveness, financial surveillance measures continue to be regularly reinforced, defying all democratic rules and requirements: the primacy of secrecy, freedom as a norm, the principle of proportionality of rights limitations, technological neutrality, presumption of innocence… Preemptive control prior to any offense becomes the norm, the enforcement of law becomes selective and arbitrary, bank account closures take on the appearance of censorship and financial suffocation, and property rights are reduced to a mere shadow.
The fight against money laundering and terrorist financing has degenerated into collective hysteria worthy of authoritarian or even totalitarian regimes, to the point of criminalizing a fundamental and constitutional right: privacy. The famous American computer engineer Phil Zimmermann warned us in 1991: “if privacy is outlawed, only outlaws will have privacy.”
Far from being a “crypto” issue, this shift away from liberal democracy concerns everyone. There are numerous examples in regimes known for their democracy, spanning from India to the United Kingdom, and from Canada to France.
Note: If the crypto part does not interest you, you can proceed directly to part II.
I. LESSONS FROM THE CANARY
1. THE UNITED STATES INVOLVES ITSELF
Less than a year ago, the arrest of the Tornado Cash developers had already legitimately caused quite a stir. But the scope of the case, limited to the crypto world, perceived as a den of terrorists and money launderers, had quickly confined the indignation to a small group of insiders.
In April 2024, American and European public authorities, emboldened by this success, continued to move forward in a worrying direction.
Several events occurred almost simultaneously. The arrest of the developers of the Bitcoin wallet developers of Samourai Wallet, by the FBI in cooperation with the IRS (the American tax authority), with the guilty cooperation of European authorities, kicked things off. Their crime would be to have “conspired to launder money” and to have “operated an unlicensed money transfer business”. They face 20 years’ imprisonment for the first charge and 5 years for the second. By comparison, the maximum irreducible life sentence in France is 30 years.
Following this was an FBI notice urging all Americans not to use “money transmitting businesses” that do not collect their identity and are not registered. And the Federal Bureau continued by threatening to freeze all funds that had been mixed with funds obtained through illegal means.
To better understand the absurdity of such an announcement by the FBI, let us transpose the reasoning into the physical world, and highlight two major issues.
The first concerns the accusation of operating an unlicensed money transfer business.
Samourai Wallet is a company that provides Bitcoin wallets with enhanced transaction privacy. It does not operate transactions on behalf of its clients; it provides the wallet software. In the physical world, their equivalent would be a leather craftsman who crafts leather wallets enabling their users to store cash. He facilitates cash management but has no say in how the wallet owners spend their cash.
Here, the U.S. federal services conflate and lump together a large bank that operates transactions on behalf of its clients and a leather craftsman, holding the latter responsible for how his clients use their cash.
How far can we go with this line of reasoning? To ATMs? To the people at the Central Bank who print these bills? To the lumberjacks who produce the wood used for the paper of the bills?
Similarly, should we hold a carpenter responsible for what his clients decide to put in the furniture they make? Or an architect if the house they build ends up being used for drug trafficking?
It quickly becomes apparent that this conflation is completely absurd. A wallet creator is not responsible for what the wallet owner decides to do with the money stored in it. Being part of the cash or cash storage value chain should in no way imply responsibility for its final use, as there is no limit to this reasoning.
This question was actually raised 20 years ago regarding peer-to-peer exchanges, which allow multiple people to exchange information directly in a decentralized manner. This communication protocol and the software that enable it are sometimes used to commit offenses, particularly against intellectual property rights. However, despite attempts to criminalize the tool itself4, European5 and American6 courts have ruled in favor of technological neutrality, stating that the software in question allows both legal and illegal exchanges and that their providers are not responsible for the use made by third parties. The case law then focused on the responsibility of each individual involved in a potentially illegal activity, acquitting some individuals due to lack of evidence of their criminal intent7. These judicial solutions are obviously in line with the normal exercise of fundamental rights.
The second issue lies in the threat of fund blocking.
Freezing any money mixed with funds obtained through illegal means would be equivalent to arresting anyone whose bills, whether in their leather wallet or pocket, have passed through the wrong hands.
In 2009, a university study covered by CNN showed that 90% of American dollar bills carry traces of cocaine, and up to 100% in some major cities. This helps us better understand the absurdity of the FBI’s threat: almost all the cash in the world has already passed through the wrong hands. Should all cash holders be imprisoned? Of course not.
Following these absurd coercive actions, on 26 April 2024, the United States Attorney for the Southern District of New York published the government’s rationale against Roman Storm, the lead developer of the privacy software Tornado Cash. The author insists, considering Tornado Cash as a “money transmitting business.”
According to this argument, “the definition of “money transmitting” in Section 1960 does not require the money transmitter to have ‘control’ of the funds being transferred. […] For instance, a USB cable transfers data from one device to another […].”
A very broad definition of a “money transmitting business” that would even include USB cables, according to their own admission. At this rate, the question will soon become “who is not a money transmitter?”
Here, the DOJ (Department of Justice) is so ambitious that it goes against the guidelines provided by FinCen (Financial Crime Enforcement Network, a bureau of the U.S. Treasury Department). In other words, the U.S. government does not agree with itself, which indicates a certain uneasiness.
In 2013, FinCen explained that software developers were not “money transmitters” (“The production and distribution of software, in and of itself, does not constitute acceptance and transmission of value, even if the purpose of the software is to facilitate the sale of virtual currency.”).
In 2019, following an inquiry regarding certain programmable features on Bitcoin (Time-locked and multi-signature), FinCen reiterated that the partial control that could be exercised by wallet developers was not sufficient to qualify them as “money transmitters” (“the person participating in the transaction to provide additional validation at the request of the owner does not have totally independent control over the value.”).
2. EUROPE AT THE FOREFRONT OF AN ILLIBERAL SHIFT
Beyond the opportunistic qualifications of various parties and to return more simply to the way the law should be applied in a liberal democracy, let’s recall that cryptocurrency transfers are transfers of electronic communications according to the definition provided by European Union law.
Moreover, cryptocurrencies like Bitcoin or Ethereum allow for the exchange of communications that can be qualified as correspondences (the possibilities of exchange are not limited to monetary units). Electronic communications are protected by the right to privacy and personal data protection, and a limitation such as lifting confidentiality or blocking can only be justified if it is necessary for the effective pursuit of a defined objective, in a strictly proportionate manner, particularly in the case of a proven offense and personally committed by the individual whose communication is limited.
The Court of Justice of the European Union has also ruled in this sense, considering that the systematic analysis of communications, even when possible, infringes on the fundamental right to the protection of users’ personal data, in violation of the Charter of Fundamental Rights of the European Union. The Court specifies that an injunction to block communications that does not distinguish “between illegal and legal content […] could result in the blocking of communications with legal content” and thus infringe on the freedom of expression and communication. Regarding cryptocurrency transfers, we can also invoke an infringement on the right to property.
It is therefore inconceivable, in a liberal democracy, to ask a private actor to block transactions or other types of communications without being certain of their illegality.
We can note another convenient schizophrenia on the part of the American authorities, which Lyn Alden aptly summarizes by referring to “Schrödinger’s Currency”: Bitcoin is considered as a currency only when it allows for the prosecution of individuals. The rest of the time, it is a speculative tool to which this qualification is denied. Indeed, to apply the definition of “money transmitter,” it is necessary to consider that what is being transmitted (bitcoins) is indeed money. To the point that the government argues that “Bitcoin clearly qualifies as money” in order to prosecute Roman Storm.
Europe regularly engages in this distortion as well, as I had already shown in the justification invoked to include “crypto-assets” in the TFR regulation. Cryptos have indeed appeared in a text that previously targeted exclusively “banknotes and coins, scriptural money, and electronic money.” But to say that Bitcoin is a currency…
Moreover, in Europe, coincidentally, a new regulation was voted on April 25 imposing new financial constraints, still with the laudable objective of combating money laundering.
Among the constraints, we can particularly note a €10,000 cash payment limit across Europe, but also the requirement for digital asset service providers (DASPs) to collect even more information about their clients, including for transactions under €1,000, and for personal wallets, known as “self-custodial,” “self-hosted,” or “un-hosted,” i.e., not managed by a financial intermediary on behalf of third parties. The leather wallets of the digital world.
A small digression into Newspeak here: by imposing the terminology “self-hosted” or “un-hosted,” regulators and legislators are trying to enforce the view that third-party custody is the norm, and self-custody is the exception. This is obviously a dangerous and insidious view, suggesting that wanting to keep one’s own money is suspicious, even though it is part of the normal exercise of freedoms. There are no “un-hosted” or “self-hosted” wallets. There are just wallets, period. And there are third parties who hold wallets on behalf of others.
Returning to the text, let’s casually note that it is particularly precise and imposes know-your-customer (KYC) requirements for transactions under €1,000 only on DASPs, exempting banks and other financial institutions, which handle far larger volumes than DASPs. The proportionality of this amount and this discrimination is not justified.
In addition, there is a ban on supporting enhanced privacy cryptocurrencies. Let us recall here that historical commodity monies (gold, silver, copper, bones, etc.) are anonymous, as is still cash today. The ban is therefore inequitable and strikes under the pretext of its electronic nature. It is again unjustified, although it unacceptably hinders the normal exercise of a freedom since we are talking about its outright extinction (such a disproportion is not admitted by the European Court of Human Rights).
As previously mentioned, all these actions are extremely problematic in several respects.
First, because these constraints are based on no rational reasoning or relevant justification and are simply the result of paranoia related to cryptos, coupled with a KYC model (Know Your Customer, the customer identification processes imposed on financial institutions) that has been elevated to a religion despite the lack of convincing results over several decades. Second, because they disregard the requirements for the protection of fundamental freedoms on which the European Union was built and to which it is subject. Third, because they are counterproductive, meaning they create new threats, the consequences of which are increasingly severe.
3. AN UNFOUNDED PARANOIA
Nearly all texts dealing with the “necessary” regulation of “crypto-assets” have abandoned scientific and legal rigor to the point of never proving the initial assertion from which their reasoning starts: “cryptos are a good means to facilitate money laundering.”
To appreciate this, one only needs to analyze all the texts on the subject issued in recent years. This is an exercise I have already done for the TFR text. Indeed, in the “proportionality” paragraph of the proposed amendment to the regulation, there is a small phrase indicating that, according to the opinion of EU surveillance authorities, “specific” risk-increasing factors have been identified concerning cryptos.
Why is proportionality an extremely important principle in a state governed by the rule of law?
Because the adequacy of a legislative standard or instrument to the pursued objective, i.e., the balance between the infringement on a right and the general interest, is absolutely crucial to avoid authoritarian and liberty-infringing drifts. One cannot hide behind an objective, however commendable, to impose disproportionate restrictions on rights.
For example, one might think that by installing a policeman in everyone’s home, crime would be reduced. The objective may be considered laudable, but the individual rights that would be compromised in the process represent an unacceptable reduction in freedoms. Thus, society decides to tolerate potentially higher crime rates (subject to the risks to freedoms generated by surveillance itself) in order to preserve the rule of law and fundamental freedoms, without which democracy cannot exist.
Conversely, the prohibition of alcohol while driving is a restriction that can be considered proportionate: alcohol consumption is not prohibited, but it is prohibited in situations where its consumption is systematically dangerous for oneself and others. The impacts of such legislation can be monitored by observing the number of accidents, for example. A right has been restricted, certainly, but the general interest prevails since the effectiveness of the measure in relation to an important objective (the preservation of life) can be demonstrated, and the infringement on rights is minimized by limiting the restrictions as much as possible.
In a liberal democracy, freedom is the norm and constraints the exception. It is up to the state, when it wishes to restrict a freedom, to demonstrate that it does not go further than necessary to achieve its objective and that this objective is effectively achieved. Furthermore, the state is obliged to adopt norms to ensure that all persons and institutions, both public and private, respect this rule.
In the case at hand (money laundering and terrorist financing), and despite the assertion that “supervisory authorities have identified specific risk factors,” when one plays the detective wishing to trace back to the source, one realizes that the opinion in question, dating from 2019, itself admits that the so-called “competent authorities” do not have the “knowledge and understanding of these products and assets, which prevents them from carrying out a proper impact assessment.”
It also deflects by referring to another opinion (sic) from the European Banking Authority, which dates back to… 2014. In this “original” opinion, we find a rather laconic analysis: “the phenomenon of Virtual Currencies being assessed has not existed for a sufficient amount of time for there to be quantitative evidence available of the existing risks, nor is this of the quality required for a robust ranking.”
In other words, the TFR regulation, imposing monitoring of all crypto transfers from one provider to another, was built on the basis of two reports. One report stated that there was no evidence to qualify or quantify the risks, while the other admitted that competent authorities lacked the knowledge and understanding to conduct an analysis.
Therefore, concluding the paragraph on the “proportionality” of the TFR regulation by stating that “In accordance with the principle of Proportionality as set out in Article 5 of the Treaty on European Union (TEU), this regulation does not exceed what is necessary to achieve its objectives” is questionable at best. Since the risks are not assessed, it seems difficult to characterize the restriction of rights as “proportionate.”
In his fight against FINMA, Alexis Roussel made the same observation for Switzerland. The Swiss National Risk Assessment (NRA) of 201822 regarding money laundering risks in crypto indicates, from its very first sentence, that no cases of terrorism financing related to crypto have been identified, and only rare cases of money laundering. However, the subsequent statement recommends classifying these assets as “high-risk” by their very nature. Specifically, this means that a crypto transaction, even of €10, carries the same level of risk as a €100,000 transfer to an account in Russia. This equivalence is established without democratic processes in Switzerland and without any evidence.
The 2024 NRA23 does not seem to have made much progress and still admits to lacking data to assess risks.
We can clearly see a pattern emerge: anti-money laundering regulations and increasingly stringent data collection requirements are imposed without legitimate basis or factual data to justify their implementation.
A more comprehensive overview has been provided by L0la L33tz in Bitcoin Magazine24, allowing us to supplement this inventory of breaches of the most basic rigor in Europe, as well as by sister institutions of Bretton-Woods, the IMF, and the World Bank, which are true compasses for global decision-makers.
For example, in 2023, the annual report for 2021 from the European Union’s FSRB (the European branch of the Financial Action Task Force, FATF)25, an intergovernmental group established in 1989 to combat money laundering and terrorism financing, was released.
The report begins with the following quote: “It is well known that money launderers have abused cryptocurrencies, initially to transfer and conceal profits generated from drug trafficking. Nowadays, their methods are becoming increasingly sophisticated and on a larger scale.”
Unfortunately, starting an argument with “it is well known” reads the same as an essay that begins with “Throughout history, mankind”: it does not exude the rigor of thorough research.
The report itself admits that a study will be dedicated in 2022 to analyzing money laundering trends in cryptocurrencies, suggesting that it did not exist at the time of writing the report, asserting as an obvious truth what had never been studied.
This report dedicated to the study of money laundering trends in cryptocurrencies has indeed been published26, but it focuses not on the phenomenon itself but rather on the analysis of the implementation of regulations. Regulations that, it is worth noting, are based on unproven money laundering.
Regarding the study of facts and the field, the report interestingly notes that the risk assessment “lacks depth.” It also observes that the majority of regulators lack the tools and expertise necessary to effectively analyze and investigate cases of money laundering and terrorism financing related to “virtual assets.”
The study also takes the same shortcut as the aforementioned Swiss analysis: finding very few cases of money laundering involving virtual assets, it prefers to conclude that it is because more regulation is needed, rather than considering that money laundering is not overrepresented in these assets.
As for the IMF, it’s no better: the latest report on public policies related to crypto-assets (September 2023)27 points out the lack of data on money laundering and terrorism financing risks, stating that “such impacts have not been specifically studied in relation to crypto-assets.”
The IMF’s Global Financial Stability Report for 202428 relies on Chainalysis figures and proposes the figure of $1.1 billion received in cryptocurrencies for ransomware globally, which is less than 0.07% of the crypto market capitalization.
The IMF’s twin institution, the World Bank, does not significantly differ from the aforementioned views. In a 2023 report the institution indicates that the issue of “Virtual Assets” was not addressed in the Risk Assessment and calls on public authorities and companies to provide more data regarding these assets.
In its money laundering-related publications for 2020 and 2022 the World Bank simply makes no mention of cryptocurrencies. In its articles on crypto adoption, the World Bank merely sidesteps the issue by redirecting to FATF papers.
We have come full circle: reports cite each other, asking for more clarity on the figures, but nobody ever conducts the study itself. We rely on FATF, an unelected body, not subject to the rules of a respectable democracy, especially regarding proportionality, as I mentioned earlier.
The objective is no longer to allow a proportionate fight against money laundering but to raise the standards of controls every year, forgetting the reason why these controls were implemented in the first place.
Moreover, financial institutions use the term “compliance” to emphasize the fact that they comply with the expected control standards. The objectives of efficiency and proportionality are no longer at stake. There is no doubt that if FATF recommended putting a policeman behind every computer, legislators would rush to transpose this “best practice” into law…
It’s not even hidden. In the regulation voted on April 24 by the European Union34, the justification for imposing new standards on crypto companies is absolutely not focused on combating money laundering and its effectiveness. Indeed, since MiCA has not even entered into force yet, and the adaptation of the TFR text to cryptos is very recent, how could we conduct a posteriori analysis of the effectiveness of measures that have not yet had an effect and possibly judge that they need to be strengthened?
The reasoning behind the strengthening of controls is in fact much simpler: “Due to rapid technological developments and the advancement in FATF standards, it is necessary to review that approach.”
It is not the evolution of the threat, its assessment, the means used by criminals, or the results of a study, etc., but rather the advancement in FATF standards that leads Europe to align itself.
And the next steps are already laid out: “At the same time, advances in innovation, such as the development of the metaverse, provide new avenues for the perpetration of crimes and for the laundering of their proceeds.”
While the most popular metaverses are still in the experimental stage and barely see a few hundred people connecting simultaneously, and as the hype subsides, they are already being talked about as nothing less than “avenues” for money laundering.
If you’re looking for numbers and analyses, look elsewhere. The imposition of additional surveillance standards relies more on beliefs and perceptions than on facts because no one dares to oppose as a policymaker, risking being equated with a supporter of terrorism or money laundering. It’s therefore a genuine religion, one that becomes almost impossible to question at its core.
The digital transition has been greatly beneficial for states: with the need to be banked to take advantage of financial globalization, leading to the omnipresence of banks, the number of potential targets to monitor has drastically diminished, until it ended up concerning only a handful of banks. The transition from a world in which everyone held their cash at home to one where, at least in the OECD, banking is the norm, entails an inevitable financial intermediation.
In this regard, Bitcoin was a huge wake-up call because it signifies that the entire financial regulation of the past 30 years is obsolete, as it is based on an assumption that is no longer valid, namely the need for a financial intermediary to conduct transactions in the digital world.
In tomorrow’s world where companies will make wallet-to-wallet payments, who will perform KYC? Will we only realize the absurdity of the model when half the planet is working to monitor the other half?
Bitcoin shakes the very foundations of anti-money laundering efforts. And rather than questioning the regulation and its relevance, both in terms of effectiveness and in terms of respect for fundamental freedoms, we prefer the path of blindness, which leads to restricting the use of a technologically neutral tool by arbitrarily impeding innovation, the right to property, and the protection of exchange confidentiality, the importance of which for democracy, notably through encryption of exchanges, has recently been reaffirmed by the European Court of Human Rights35.
Bitcoin is a canary in the mine. A signal that something is slipping away from us, not concerning cryptocurrencies, but concerning the fundamental freedoms of all citizens, threatened by financial surveillance.
Tyler Durden
Tue, 07/02/2024 – 23:00 - Black Americans Still Feel Systematically Held Back
Black Americans Still Feel Systematically Held Back
On July 2, 1964, Lyndon Johnson signed the Civil Rights Act into law.
To this day, the landmark bill is considered one of the most significant legislative achievements in American history, marking a key milestone in the country’s pursuit of racial equality. The bill outlawed discrimination based on race, color, religion, sex or national origin and mandated the end of racial segregation and discrimination in public accommodations, education and employment.
“We have talked long enough in this country about equal rights. We have talked for one hundred years or more. It is time now to write the next chapter, and to write it in the books of law,” President Lyndon B. Johnson said to members of Congress at the time, urging them to take action and pass the civil rights bill proposed by his predecessor John F. Kennedy, who had been assassinated the year before.
60 years later, Black Americans face a situation that is vastly improved compared to the systematic discrimination of the past, and yet, many racial disparities persist to this day.
As Statista’s Felix Richter reports, whether it’s in terms of income, wealth, education, imprisonment or health outcomes – statistically, Black Americans fare significantly worse than Americans of other races and ethnicities. And while a recent Pew Research survey showed that 52 percent of U.S. adults think that the country has made a great deal or a fair amount of progress in ensuring equal rights for all people over the past 60 years, an equally high share of Americans agree that these efforts haven’t gone far enough.
You will find more infographics at Statista
Among Black Americans, the view on progress is much more negative with just 30 percent of respondents saying that significant progress has been made and 83 percent thinking that efforts to ensure equal rights have been insufficient.
Further highlighting the degree to which Black Americans feel discriminated against until this day, another Pew survey shows that the majority of Black adults don’t just feel treated unfairly out of negligence, they feel held back systematically across various U.S. institutions.
According to the September 2023 survey of 4,736 Black U.S. adults, 74 percent of respondents think that the U.S. prison system was designed to hold Black people back.
70 percent of respondents think the same of U.S. courts and the judicial system, while more than 60 percent think that policing, the political system and the economic system were designed to disadvantage Black Americans.
“Black Americans’ mistrust of U.S. institutions is informed by history, from slavery to the implementation of Jim Crow laws in the South, to the rise of mass incarceration and more,” the Pew Research Center writes, but it is also informed by personal experience. 75 percent of Black adults say that they’ve personally experienced discrimination or unfair treatment because of their race or ethnicity, and among the victims of discrimination 73 percent say that it made them feel like the system was designed to keep them down.
Tyler Durden
Tue, 07/02/2024 – 22:40 - US Marshals Find 200 Missing Children In Nationwide Operation
US Marshals Find 200 Missing Children In Nationwide Operation
Authored by Mary Lou Lang via The Epoch Times,
The U.S. Marshals Service (USMS) found 200 missing children, including sex trafficking victims, abused children and runaways in a six-week nationwide operation, the Department of Justice announced July 1.
“One of the most sacred missions of U.S. Marshals Service is locating and recovering our nation’s critically missing children,” said USMS Director Ronald Davis.
“This is one of our top priorities as there remain thousands of children still missing and at risk.”
Of the children found, 173 were endangered runaways, one was a family abduction, another was a non-family abduction and 25 were considered otherwise missing. The youngest was a 5-month-old baby.
The USMS carried out Operation We Will Find You 2 along with federal, state and local agencies from May 20 to June 24.
The National Center for Missing and Exploited Children (NCMEC) offered technical assistance in the operation.
Operation We Will Find You 2, the second such nationwide missing child operation, focused on geographical areas with large clusters of critically missing children, according to the DOJ.
It was conducted in the District of Arizona, the Eastern District of California, the Southern District of Florida, the Western District of Michigan, the Eastern District of North Carolina, the Southern and Eastern Districts of New York, and the District of Oregon.
One case in the Eastern District of North Carolina involved a one-year-old who was reported missing in Raleigh after the child’s mother failed to surrender her to the Department of Social Services, according to the release. The mother, who had been convicted of strangling her four-year-old son to death, was arrested and U.S. Marshals safely recovered the child.
Another case involved a 12-year-old girl who went missing from her family home in Portland, Oregon, on May 21 after she reported being sexually abused by family members.
Police officers contacted the child on her cell phone and she agreed to meet them at a grocery store. The child and a friend then called the police back, telling them her father was trying to force her into his car. USMC was able to intervene.
The child told law enforcement she had been raped by two males and that her father had touched her inappropriately. She was placed in a foster home then in a state-run shelter after the foster home placement did not work out.
Another case involved a 16-year-old girl reported missing after she ran away from a group home in Phoenix. The girl had been a victim of sex trafficking.
An investigation showed the child was possibly being sex trafficked in Los Angeles, and her suspected trafficker was murdered on May 25. The girl had told a family member she was going on vacation to Miami, and when she arrived a new sex trafficker took her to the beach and told her to make money.
Marshals found the girl in Flint, Michigan, on June 11, and she was taken into custody for a probation violation. A man she was found with was arrested for driving without a license and insurance. The Homeland Security Investigations is investigating the suspected trafficking case.
In New York, a 16-year-old girl who was a prior victim of human trafficking was reported missing in November of last year. The NYC Police Department’s Missing Persons Unit requested the USMS’s assistance in the case.
Two arrest warrants were executed for a 27-year-old man who was the prime subject in the case. On June 3, the girl was found in the man’s bedroom and evidence of sexual exploitation was discovered. The girl was placed in the care of the Administration for Children’s Services.
“Operation We Will Find You is a shining example of the results we can achieve when we unite in our mission to find missing children,” said President and CEO Michelle DeLaune of NCMEC in a press release.
“We are grateful that vulnerable children have been recovered as part of this operation, and we commend the U.S. Marshals Service and all the agencies involved for their commitment to protect youth and ensure these children are not forgotten.
“Behind every statistic, there is a child who deserves to grow up safe from harm.”
Tyler Durden
Tue, 07/02/2024 – 22:20 - When Bitcoin $100,000? It Depends On Biden's Next Move
When Bitcoin $100,000? It Depends On Biden’s Next Move
For much of the past year, Standard Chartered’s Geoffrey Kendrick has had a nice, round number in mind for his 2024 year-end price target: after (somewhat accurately) predicting in late 2022 that Bitcoin could tumble as low as $5000 in the aftermath of the FTX collapse, Kendrick flipped in mid-2023 at which point – and ever since – he has argued that due to the “seismic changes in the institutional approach to Bitcoin in the United States”, the cryptocurrency would hit all time highs in 2024 (it did) and rise as high as $100,000 (it has yet to do that).
Then, at the start of 2024 and after the SEC approved bitcoin ETFs, Kendrick doubled down on the nice round numbers, and said that based on his ETF inflow assumptions, while he still thinks that an end-2024 Bitcoin price target of $100,000 is realistic, looking further out, the Standard Chartered strategist predicted that an end-2025 level closer to $200,000 is possible. This assumes that between 437,000 and 1.32 million new bitcoins will be held in spot US ETFs by end-2024. In USD terms, this should be roughly USD 50-100Bn.
Then, at the start of May, once it became increasingly realistic that not only did Trump have a fighting chance of defeating Biden but that Gary Gensler’s days are likely numbered – with the SEC’s relentless pushback against Ethereum ETFs unexpectedly collapsing – Kendrick made a follow up observation in which he once again returned to his nice, round number prediction, forecasting that bitcoin will surge above $100,000 “when we get closer to Trump election victory we can rally hard from say Sept. to year-end.”
Standard Chartered analyst Geoffrey Kendrick predicts that bitcoin will surge above $100,000 once Trump fires @GaryGensler: “when we get closer to Trump election victory we can rally hard from say Sept. to year-end”
— zerohedge (@zerohedge) May 6, 2024
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So here we are, two months later and not only is bitcoin not anywhere closer to the nice, round number but it has in fact dropped somewhat notably from where it traded in late May.
What gives?
As Kendrick explains in his latest note published this morning, “frustrated BTC bulls have come up with a number of theories as to why we are stuck in a range. The most popular (the one I have heard the most which also makes sense) is that longer term holders continue to sell to nearer term buyers. Hence rallies are sold into and dips are bought.”
The question then is what macro driver will be enough to make this stop? Kendrick thinks there will be a combination of Treasury yield movement which coalesces with a constructive US political backdrop, both of which he believes “will happen soon.”
Starting with the first, on Treasury yields the strategist previously identified 3 drivers that should be constructive BTC in the attached note:
- A steeper nominal 2Y/10Y curve
- A greater increase in breakevens than real yields
- An increase in term premium
And while far from perfect, Kendrick believes that there is a “reasonable correlation” between each of these and BTC prices, shown here as 3 month changes. Interestingly, in recent weeks the UST movements have started to improve for BTC direction (or have at least started to go sideways) whereas BTC prices have been weak, which suggests that there is something else holding back the prices.
But if the increasingly favorable moves in rates are not having an impact on bitcoin prices, then what is it: “why have BTC prices been weaker than the UST drivers would suggest?”
Here, Kendrick thinks it has to do with the current state of the US Presidential election.
Recall the previously discussed positive relationship between Trump’s electoral odds (shown here as the % probability of victory as reflected in betting markets) and BTC prices. The logic here is that both regulation and mining would be looked at more favorably under Trump:
Looking at the above chart, it is safe to say that BTC prices got ahead of Trump probabilities on ETF inflows, but BTC prices are now lagging. Why the lag?
Kendrick believes that this time BTC prices are lagging Trump probabilities because the probability of Biden stepping down/being replaced has been increasing. Specifically, the combined odds of Trump and Biden have now fallen to as low as 90% this week, the lowest level since March. That is, betting markets are saying there is a 10% chance someone other that Trump or Biden will win the Whitehouse.
Indeed, today’s story sources by the CIA’s favorite mouthpiece that Democrats are now in disarray and that Hunter Biden is effectively in charge of the country…
Hunter Biden has joined meetings with President Biden and his top aides this week at the White House, four people familiar with the matter tell my colleagues, who are told the reaction from some senior White House staff has been, “What the hell is happening?”
— Ken Dilanian (@KenDilanianNBC) July 2, 2024
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… has sent Kamala Harris’ odds of becoming the Democrat nominee soaring.
this is pretty terrifying pic.twitter.com/wy2k464YE6
— zerohedge (@zerohedge) July 2, 2024
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In a probability sense, this means the market is now saying Trump is most likely to win (BTC positive), followed by Biden (BTC negative) but with a reasonable non-zero chance Biden is replaced and someone else – Michelle Obama, Kamala Harris or Gavin Newsom – wins (BTC negative). From a bell-curve perspective this is the equivalent of a fat left tail event.
From here Kendrick sees 2 possible outcomes:
- Biden stays in the race and, given market pricing, will be expected to lose to Trump (BTC positive)
- Biden exits the race and the newcomer will be perceived to have more chance to beat Trump than Biden had (BTC negative)
The good news is that we won’t have long to wait to find out the answer: the key date is 4 August, that’s when Ohio law requires Presidential candidates to be registered. So, if Biden is still the Democratic nominee on 4 August he will still be so in the first week of November.
Going forward what the Standard Chartered analysts expects to see is the following:
- Most likely (90%) – in late July we conclude that Biden will run, Trump probabilities increase further, the fat left tail is removed. BTC moves higher, vol and skew moves higher. A fresh all-time in August is likely, then $100k by US election day
- Least likely (10%) – in late July Biden steps aside, BTC prices dip to $50-55k. If the new Democratic candidate is very credible (Michelle Obama) BTC prices stay soft. If not, it is a fantastic buying opportunity. BTC prices bounce back to $100k by US election day
Watch this space for early moves in BTC vol and skew.
More in the full note from Kendrick available to pro subscribers.
Tyler Durden
Tue, 07/02/2024 – 22:03 - US Completes Hypersonic Missile Flight Test In Bid To Keep Up With China
US Completes Hypersonic Missile Flight Test In Bid To Keep Up With China
Authored by Aldgra Fredly via The Epoch Times,
The U.S. Army and Navy have recently completed a flight test of a hypersonic missile as the United States seeks to keep pace with its geopolitical rivals—China and Russia—in developing hypersonic capabilities.
The military performed the flight test from the Pacific Missile Range Facility in Kauai, Hawaii, to gather data on the overall performance of the long-range hypersonic weapon (LRHW), the Pentagon said on June 28.
The LRHW is equipped with the Navy’s Conventional Prompt Strike (CPS) All-Up-Round missile—which consists of a two-stage solid rocket motor booster and a hypersonic glide body—and the Army’s canister.
CPS is a hypersonic missile development and test program that “provides longer range, shorter flight times, and high survivability against enemy defenses,” according to Lockheed Martin.
Lt. Gen. Robert Rasch Jr., director of the U.S. Army’s Rapid Capabilities and Critical Technologies Office, said that the missile development was intended to help the U.S. military “maintain superiority over any potential adversaries.”
The Pentagon did not elaborate on the data obtained from the flight test or provide additional details about the hypersonic missile.
The test comes about a month after the U.S. Army awarded Lockheed Martin a $756 million contract to supply the additional equipment and support for the nation’s ground-based hypersonic weapon system, the LRHW.
Under the contract, the aerospace and defense company will provide the U.S. Army with LRHW battery equipment, systems, and software engineering support, as well as logistics solutions.
Dark Eagle
A recent report by the Congressional Research Service stated that the U.S. Army’s LRHW, dubbed the Dark Eagle, can travel at more than 3,800 miles per hour and is capable of reaching “the top of the Earth’s atmosphere.”
The weapon system can maintain a position “just beyond the range of air and missile defense systems” until it is ready to strike, according to the report.
It provides the U.S. Army with a weapon system for strategic attacks to counter anti-access/area denial capabilities—weapons used to keep an enemy out of a certain area— suppress adversary long-range fire, and engage other important targets.
Lockheed Martin delivered the first LRHW battery to the U.S. military in 2021. The U.S. Army has been collaborating with the U.S. Navy to develop the weapon system, according to the report.
The United States has been testing its hypersonic missile capabilities amid growing concern that Russia and China have been more successful in developing such weapons.
Rick Fisher, a senior fellow at the International Assessment and Strategy Center, a security-focused think tank, said last year that the United States trails China in the development of hypersonic weapons.
“China has effectively taken the lead in the hypersonic weapons race due to the breadth and depth of its technology investments,” Mr. Fisher said.
“We are only seeing the beginning of their weapons developments in this field.”
The Pentagon, in its annual report to Congress last year, warned that China already “has the world’s leading hypersonic arsenal,” which includes the DF-17 medium-range ballistic missiles that can be armed with hypersonic glide vehicles (HGVs). An HGV, fitted to a ballistic missile, enables it to maneuver and glide at hypersonic speeds and alter trajectories after launch.
According to the report, the DF-17 HGV-armed medium-range ballistic missile system is “possibly intended to replace some older SRBM [short-range ballistic missile] units and is intended to strike foreign military bases and fleets in the Western Pacific, according to a PRC-based military expert.” PRC is the acronym for China’s official name, the People’s Republic of China.
Tyler Durden
Tue, 07/02/2024 – 21:40 - These Are The Most Expensive States To Maintain A Home
These Are The Most Expensive States To Maintain A Home
Buying a house is the American dream, but maintaining that property in good shape can be challenging for homeowners.
This map, via Visual Capitalist, shows the 15 most expensive states in the U.S. to maintain a single-family home.
Methodology: Bankrate aggregated the average costs of property taxes, homeowners insurance, and home maintenance costs (estimated at 2% per year of the value of a single-family home). Calculations also included energy, internet, and cable bills. All figures adjusted for inflation as of June 2024.
Hawaii is the Most Expensive State to Maintain a Home
The average annual cost of owning and maintaining a single-family home in the U.S. is more than $18,000 yearly, a 26% increase compared to 2020.
With an average annual cost of $29,015, Hawaii is the most expensive state to maintain a home.
California comes in second with an average annual ownership cost of $28,790, followed by Massachusetts with $26,313.
Property taxes in New Jersey average $10,026 annually, the highest in the nation.
States with the Least Expensive Homeownership Costs
Kentucky is the least expensive place to own a home, with an average annual cost of $11,559, followed by Arkansas ($11,692) and Mississippi ($11,881).
If you enjoyed this post, be sure to check out this graphic, which shows what you need to earn to own a home in 50 American cities.
Tyler Durden
Tue, 07/02/2024 – 21:20 - Jury Awards $687,000 To BlueCross BlueShield Scientist Fired For Refusing COVID-19 Vaccine
Jury Awards $687,000 To BlueCross BlueShield Scientist Fired For Refusing COVID-19 Vaccine
Authored by Zachary Stieber via The Epoch Times,
A federal jury has awarded $687,000 to a research scientist who was fired from BlueCross BlueShield in Tennessee for refusing to comply with the company’s COVID-19 vaccine mandate.
Tanja Benton, who had worked 16 years at the firm when she was fired, was awarded $177,240 in back pay, $10,000 in compensation, and $500,000 in punitive damages, according to a document made public by the federal court in eastern Tennessee on June 30.
Company officials told Ms. Benton in August of 2021 that she would need to be “fully vaccinated” to keep her position, according to her lawsuit. Ms. Benton refused, saying aborted fetal cell lines were involved in the development of the COVID-19 vaccines and she could not “in good conscience consume the vaccine, which would not only defile her body but also anger and dishonor God.”
BlueCross BlueShield said her position involved “regular external public-facing interactions” so she couldn’t keep it. Ms. Benton said her position became fully remote in 2020 but BlueCross BlueShield said it would have involved some in-person interaction with clients.
Ms. Benton was told to pursue other positions within the company and applied for two. But she was fired on Nov. 4, 2021, and told five days later that, “Unfortunately, all positions require the vax now,” according to an email entered in the case.
Her lawsuit charged that BlueCross BlueShield violated Title VII of the Civil Rights Act of 1964, which says an employer may not “discharge any individual, or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment” because of that person’s religion. Employers can disregard religious exemption requests if they can prove accommodating them would create undue hardship.
BlueCross BlueShield “cannot prove that allowing Plaintiff to continue her employment as a Bio Statistical Research Scientist without being vaccinated for COVID-19 constitutes an undue hardship,” the suit stated. The company “also cannot show that it made any good-faith efforts to accommodate plaintiff’s sincerely held religious beliefs.”
BlueCross BlueShield was also accused of violating the Tennessee Human Rights Act, which bars discrimination by employers at the state level.
“We’re disappointed by the decision,” Dalya Qualls White, chief communications officer for BlueCross BlueShield of Tennessee, told The Epoch Times in an email.
“We believe our vaccine requirement was the best decision for our employees and members, and we believe our accommodation to the requirement complied with the law. We appreciate our former employees’ service to our members and communities throughout their time with our company.”
A lawyer representing Ms. Benton did not respond to a request for comment.
The U.S. Equal Employment Opportunity Commission, presented with the case, cleared Ms. Benton to sue her former employer.
Company lawyers had argued the firm would be unduly burdened by providing Ms. Benton an indefinite exception despite her role as a “public-facing employee.” The lawyers said she could not have continued working remotely indefinitely.
The company also asserted that Ms. Benton did not hold a sincerely held religious belief and “denies that the COVID-19 vaccine was derived from aborted fetus cell lines, which is verifiably false,” according to the company’s filing.
Johnson & Johnson used cells derived from an aborted fetus in the design, production, and testing of its COVID-19 vaccine. The Pfizer and Moderna vaccines also utilized the cells in early testing. The companies have said the final products do not contain aborted fetal cells.
Tyler Durden
Tue, 07/02/2024 – 21:00 - US Airports Are Busier Than Ever This Year
US Airports Are Busier Than Ever This Year
As the summer holiday travel season is in full swing, U.S. airports are getting quite busy these days.
In fact, as Statista’s Felix Richter reports, according to figures released by the Transport Security Administration (TSA), they’re busier than ever.
Sunday, June 23 even broke the all-time record for most people screened at U.S. airports, with 2.99 million people passing through TSA safety checks. That’s only the tip of the iceberg, tough. According the TSA, 8 of the 10 busiest travel days ever at U.S. airports have occurred in the past month and more records are expected for the Independence Day travel period.
“We expect this summer to be our busiest ever and summer travel usually peaks over the Independence Day holiday,” TSA administrator David Pekoske said in a statement.
As Felix shows in the chart below, daily passenger throughput at U.S. airports has consistently exceeded pre-pandemic levels this year after roughly matching 2019 traffic in 2023. With an average of 2.73 million passengers per day passing through TSA checkpoints, June 2024 was the busiest month ever at U.S. airports and there are no signs of Americans’ appetite for air travel waning in July.
You will find more infographics at Statista
Following an abysmal 2020, when airport throughput fell below one million passengers per day, flight traffic picked up noticeably in the second quarter of 2021, as the vaccine rollout proceeded rapidly.
Passenger throughput started climbing steadily, with TSA safety checks exceeding two million in a single day for the first time in the Covid era on June 11, 2021. Throughout the busy summer season, the daily average hovered around the two million mark, trailing 2019 passenger numbers by roughly 500,000 a day on average. By the end of 2021, the gap had narrowed to 350,000-400,000 before gradually climbing closer to pre-pandemic levels throughout 2022.
Prior to the pandemic, daily passenger volumes of 2+ million were the norm rather than the exception. At the onset of the pandemic, daily passenger throughput fell as low as 100,000 in April 2020, before slowly climbing back to its current level. In 2023, the TSA performed an average of 2.35 million safety checks per day, compared to 925,000 in 2020 and 2.32 million in 2019. Through June 29 of this year, average daily passenger traffic stands at 2.43 million for this year.
Tyler Durden
Tue, 07/02/2024 – 20:40 - Biden Announces Five Actions To Address Extreme Weather In US
Biden Announces Five Actions To Address Extreme Weather In US
Authored by T J Muscaro via The Epoch Times,
President Joe Biden spoke to the nation from the Emergency Operations Center in Washington, on July 2, and announced five new actions to “address extreme weather, including heat and other hazards.”
“Extreme weather events don’t just affect people’s lives, they also cost money,” he said. “They hurt the economy, and they have a significant negative psychological effect on people.
“Last year, the largest weather related disasters cost over—get this—$90 billion in damages in America.”
Calling attention to the “nearly 2.5 million people” displaced in 2023 due to weather-related disasters, the president emphasized the threat extreme weather poses to transportation systems, power grids, farms, fisheries, and forests.
Extreme Heat
President Biden said the Department of Labor is proposing a new rule that, once finalized, will “establish the nation’s first-ever federal safety standard for excessive heat in the workplace.”
He said it would reduce heat injuries, illnesses, and deaths for more than 36 million in the workforce, including workers in the construction, postal, and manufacturing sectors.
The proposed rule would require employers to identify heat hazards, develop emergency response plans related to conditions affecting the head, and provide training to employees and supervisors on the signs and symptoms of heat-related illnesses. Employers would also be required to create rest breaks, provide shade and water, and allow new workers to acclimatize themselves to the heat.
According to the Occupational Safety and Health Administration (OSHA), “serious occupational heat-related illnesses and injuries become more frequent, especially in workplaces where unacclimatized workers are performing strenuous work” when the heat index is as low as 80°F. According to the NWS heat index calculator, that heat index could be when the air temperature is as low as 78.6°F with 60 percent relative humidity.
The Department of Health and Human Services and the Center for Disease Control and Prevention reported that approximately 2,302 heat-related deaths occurred in the United States in 2023.
“Already, tens of millions of Americans are under heat warnings from record shattering temperatures,” President Biden said.
“Last month here in DC, the temperature went to 100 degrees; In Phoenix, Arizona, 112 degrees; In Las Vegas, 111 degrees. Above normal temperatures also are expected for much of the country in July, especially in central and eastern United States.”
He said his administration would convene the first ever “White House Summer on extreme heat” to bring together state, local, tribal, and territorial leaders, as well as international partners in an effort to protect communities and workers from extreme weather.
New FEMA, EPA Actions
Aside from the heat, the president called out other types of extreme weather, such as Hurricane Beryl, currently in the southern Caribbean, saying it was “the earliest time ever a dangerous category five hurricane has been recorded in American history.”
He announced two new actions involving FEMA.
Once finalized, a new rule will require FEMA to factor the effects of future flooding into every federally funded construction project.
FEMA is also announcing nearly $1 billion in grants for more than 650 projects nationwide intended to help communities protect against natural disasters such as extreme heat, storms, and flooding.
President Biden emphasized these grants would advance his “Justice 40 Initiative,” which aims to deliver 40 percent of overall benefits, such as clean transit, clean energy, and climate investments, to “the poor communities always left behind.”
In addition, he announced that the Environmental Protection Agency (EPA) would be releasing a new report showing continued impacts of climate change on the environment and the health of the American people.
Tyler Durden
Tue, 07/02/2024 – 20:20 - Apple's 'Sell-Through' Market Share Erodes, UBS says
Apple’s ‘Sell-Through’ Market Share Erodes, UBS says
The world’s most valuable company saw its smartphone market share in China shrink in May, even after “deep” discounting, according to UBS analysts citing Counterpoint Research. Apple is also struggling in the US market.
UBS analyst David Vogt wrote that Apple’s iPhone sales have lost market share despite heavy discounting in China. In May, iPhone “sell-through” declined by 2% year-over-year (YoY), marking the fifth consecutive monthly decline.
The sell-through market share in China fell to 15.3% from 16.9% YoY.
The sell-through market share in the US also fell.
Europe was unchanged.
“Importantly, heavy discounting by Apple in China tied to the “618” e-commerce festival was not enough to mitigate share loss in the region,” Vogt said.
He estimated that “iPhone sell-through in China was largely flat YoY during May-24 in a market that grew 11% YoY.”
“While Apple bulls may note the data is backward-looking and is not likely indicative of Apple’s AI smartphone opportunity next year, we note that iPhone share loss to Huawei and other Chinese OEMs acts as a material governor on iPhone unit growth,” the analyst continued.
Vogt warned: “Given Huawei’s refreshed product line-up, this tailwind for Apple is unlikely going forward.”
What’s troubling for Apple is that iPhone market share across major markets is sliding, except for India.
Vogt noted that he had a Neutral rating and a $190 price target on Apple:
Our Apple $190 price target is 27x our CY25/CY26e EPS reflecting a challenging growth backdrop, higher rates, and undefined AI strategy. At 27x, Apple would be trading at a 30% premium to the market, roughly in-line with the trailing 5 year average.
In the markets, Apple shares soared to new highs of $220 per share, pushing its market cap to nearly $3.34 trillion, making it the most valuable company in the world, surpassing even Nvidia. Stock buybacks have played a significant role in driving equity prices to these new heights.
Meanwhile, Jefferies analysts said iPhone discounts have helped the company reverse its underperformance in the Chinese smartphone market. The bank, which raised its price target to $215 from $200, said that Apple recorded robust numbers during 618.
Apple shares trade at a slight premium to the 12-month average price target of Wall Street analysts tracked by Bloomberg.
Apple’s recent introduction of Apple Intelligence “will position the company as the leader in the consumer AI experience,” Oppenheimer analyst Martin Yang wrote in a note.
However, Goldman’s chief equity strategist David Kostin warned in a note this week that AI companies face a brutal earnings day of reckoning in this upcoming earnings season.
Tyler Durden
Tue, 07/02/2024 – 20:00 - Robert Reich's Blind Spots: The Elephant In The Progressive Left's Room
Robert Reich’s Blind Spots: The Elephant In The Progressive Left’s Room
Authored by Jonathan Newman via The Mises Institute,
Robert Reich is on his fifth myth, but so far, he has just been recycling the same progressive talking points in each one. The overall message is that big corporations and the super wealthy wield too much political power and that they shape the law in their own favor, contributing to terrible economic inequality. For Reich, the U.S. economy is a zero-sum game and the people at the top have rigged it so they win and everybody else loses.
His solution is strong labor unions, high taxes on the rich, a high minimum wage, more trust-busting, and government wealth redistribution. He sees the economy through the lens of political power, and so the only solutions he can think of are ones that exploit the power of government to channel more of the fixed pie of wealth to a different group of people. Of course, many of his policy proposals would not even do that but would instead backfire and have unintended consequences that outweigh and confound the intended consequences.
Instead of going through all that, I just want to point out two blind spots.
Reich, along with other progressives like Elizabeth Warren, Bernie Sanders, and Alexandria Ocasio-Cortez, never address the root cause of what they correctly diagnose as excessive corporate power over politics. They also don’t see the elephant in the room: the Federal Reserve.
As I mentioned in my response to his second myth, the only reason big businesses reach for state power is because they know that state power can help them. If the government were constrained in such a way that no economic benefit could be gained by some special interest, then businesses wouldn’t seek it. The fact that businesses put millions of dollars into political candidates’ campaigns and into lobbying is explained by the fact that there are billions of dollars to be gained by having a politician in your pocket and laws crafted in your favor.
In Economic Policy: Thoughts for Today and Tomorrow, Ludwig von Mises explained what these “pressure groups” seek:
A pressure group is a group of people who want to attain for themselves a special privilege at the expense of the rest of the nation. This privilege may consist in a tariff on competing imports, it may consist in a subsidy, it may consist in laws that prevent other people from competing with the members of the pressure group. At any rate, it gives to the members of the pressure group a special position.
According to Mises, what gave rise to these special interest groups and their successes was interventionism. Interventionism is the idea that the government can and should control the market economy. It is the rejection of liberty and limited government.
Even without special interests, interventionism spirals into ever larger governments. For example, one price control is implemented, and not only does it not accomplish the intended goal, but it also brings about many unintended consequences. The government, acting under the framework of interventionism, then seeks to regulate and control those side effects. Those measures similarly fail, and before long the government has committed itself to a host of interventions and all the bureaucratic mess required to enforce them.
When interventionism is combined with pressure group politics, it inevitably leads to inflationism. Special interests vie for ever increasing government expenditures, but they also understand the unpopularity of taxation:
This system leads also to a constant increase of public expenditures, on the one hand, and makes it more difficult, on the other, to levy taxes. These pressure group representatives want many special privileges for their pressure groups, but they do not want to burden their supporters with a too-heavy tax load. …
Pressure group politics explains why it is almost impossible for all governments to stop inflation. (Mises, Economic Policy: Thoughts for Today and Tomorrow)
Enter the Federal Reserve. The government cannot fund all the special projects with taxes alone, but inflation is a subtle way to spread the costs around.
The unevenness of the effects of monetary expansion (called “Cantillon effects”) explains why it is such a successful tool for a system based on interventionism and pressure group politics. Newly created dollars are spent on some special interest program, and this pulls resources away from where they would have been used in an undistorted market economy. The new money ripples out from its origin, from buyer to seller, causing prices to rise with each step. This process results in a permanent change in wealth and incomes, rewarding those closest to the money spigot.
Thus, instead of getting a tax bill for all the things special interest groups acquire from the government, ordinary citizens just see higher prices at the grocery store, the gas pump, and everywhere else. As we have seen, it’s easy for politicians to blame “corporate greed” or supply-chain factors for these higher prices. Not only does the blame-shifting parry citizens’ anger, but it also lays a foundation for future government interventions to address those “problems.”
The Fed, then, is a progressive blind spot for two reasons:
(1) it enables the government to give big corporations what they want, and
(2) it exacerbates the very economic inequality progressives claim they hate.
If the progressive left really wanted to curtail corporate influence over politics, ending the Fed would starve the corporate lobbyists out.
No corporation would spend millions of dollars lobbying for a subsidy or government contract that the government couldn’t afford. If you don’t like evil corporations eating at the government trough, then take away the trough.
And if the progressive left really wanted to moderate income and wealth inequality, the answer is the same: end the Fed.
The Cantillon effects of inflation may be summarized in progressive terms as “the rich get richer while the poor get poorer.”
The fact that progressives turn a blind eye to the Fed reveals either economic ignorance or political deceit. Maybe they don’t understand the economic effects of inflation.
If they do, then their whole program is an evil scheme to help themselves and their cronies get rich at the expense of the classes they purport to champion.
Tyler Durden
Tue, 07/02/2024 – 19:40 - "Major Victory For American Energy": Judge Blocks Biden's Pause On LNG Export Licenses
“Major Victory For American Energy”: Judge Blocks Biden’s Pause On LNG Export Licenses
A federal court halted President Biden’s war on America’s energy independence by reversing a temporary moratorium on permitting new licenses for liquified natural gas (LNG) exports. This is a major blow to radical climate warriors in the White House ahead of the November presidential elections.
Late Monday, US District Judge James D. Cain Jr. in Louisiana ruled in favor of Louisiana and 15 other red states that had challenged the “temporary pause” on new LNG export licenses. Donald Trump appointed Judge Cain, who wrote that the pause “is completely without reason or logic and is perhaps the epiphany of ideocracy.”
The White House announced in January that the Energy Department would temporarily stop approving new LNG export licenses to assess the impact of shipments on global warming.
Patrick Morrisey, the attorney general of West Virginia, called Cain’s ruling “a big win for the country’s energy industry and the millions of jobs it supports.”
Louisiana Attorney General Liz Murrill said the DoE’s halt on new licenses sparked a lot of uncertainty in her state, with tens of billions of dollars in infrastructure in question. She called yesterday’s decision “a major victory for American energy.”
The ruling means DoE must restart its permit approval process soon. However, it’s unclear when this will happen.
In a note in early February, Matt Egan and Brent Bennett of RealClear Wire wrote that the president’s politically motivated actions mainly targeted “Texas and Louisiana, red states that account for the bulk of US LNG exports.” Some have speculated that Biden’s action could have been a move to retaliate against red states that opposed open southern borders.
A separate report from the Washington Free Beacon said Biden’s Climate Czar, John Podesta, ultimately pushed the decision.
Here’s more from RealClear Wire’s Larry Behrens about Podesta’s LNG attack:
As a well-known climate warrior, it makes sense Podesta would be pushing for policies against American energy interests. Yet at the same time, Podesta’s brother, Tony, one of DC’s most well-connected mega lobbyists, has financial connections to foreign LNG companies, including one with links to a Russian oligarch. It is concerning to see the Podesta family standing to profit from a policy priority of the White House who employs another Podesta. Foreign companies, including Russia, are clear beneficiaries Biden’s LNG attack. It should be raising questions about potential conflicts of interest and profit motives at the White House.
Meanwhile, Angelo Fernández Hernández, a White House spokesman, told the Washington Post, “We are disappointed in today’s ruling. We remain committed to informing our decisions with the best available economic and environmental analysis, underpinned by sound science.”
The move by radical climate warriors in the White House to dent America’s energy independence comes as US LNG exports have doubled over the last four years.
Tyler Durden
Tue, 07/02/2024 – 19:20 - Scammers Are Impersonating Water, Electric, And Gas Companies; BBB Warns
Scammers Are Impersonating Water, Electric, And Gas Companies; BBB Warns
Authored by Naveen Athrappully via The Epoch Times (emphasis ours),
Scammers are impersonating utility company representatives to defraud people by threatening the deactivation of service, the nonprofit Better Business Bureau (BBB) is warning.
Utility workers make repairs to electrical wires in Guerneville, Calif., on Jan. 9, 2023. (Justin Sullivan/Getty Images) In utility scams, the criminals “may impersonate water, electric, and gas company representatives, threatening residents and business owners with deactivation of service if they don’t pay up immediately,” an alert issued on June 20 reads.
Typically, the scammers create an environment of false urgency by claiming that customers need to make an overdue payment within the hour or risk having their essential utilities shut down. The frequency of scams increases during certain times of the year, however, according to the nonprofit.
“Utility scams happen any time of year, but will typically pop up during extreme cold or heat events when many people are more likely to need their heat or air conditioning,” the BBB website states.
In some instances, a fake representative may visit a home wearing a lookalike uniform and claim that the electric meter isn’t working properly and should immediately be replaced, according to the BBB’s alert.
Scammers seek entry to homes to perform repairs or energy audits, but with the intent to steal valuables and siphon off “personally identifiable information that just happens to be out in plain sight,” according to the website.
Offering energy discounts is another tactic.
In certain cases, the criminals may attempt to access the homeowner’s electricity account information to switch the service to another utility provider without consent in an illegal practice called “slamming.”
The BBB report detailed an incident in the report: “A lady claimed to be from [company name redacted] and told us our power would be shut off in 45 minutes and we were to call the billing department. [My] husband called the number and they asked for a credit card. He didn’t feel right about it and called [company name redacted] and they said it was a scam.”
The U.S. Federal Trade Commission (FTC) advises people who have been defrauded in a utility scam to report the matter to the utility company, the state attorney general, and the agency via reportfraud.ftc.gov.
Red Flags and Recovery
If a person has already made payments to the scammer through a debit or credit card, they can contact the card-issuing company, notify it of the fraudulent charge, and request a payment reversal, according to the FTC.
The same process can be repeated in the case of a bank transfer, wire transfer, or money transfer; contact the relevant firm and seek a reversal of the transaction.
If the customer paid via cash, the individual must get in touch with the U.S. Postal Inspection Service at 877-876-2455 to have the package intercepted.
Any payments made via cryptocurrency are irreversible, the FTC warns.
“Once you pay with cryptocurrency, you can only get your money back if the person you paid sends it back. But contact the company you used to send the money and tell them it was a fraudulent transaction. Ask them to reverse the transaction, if possible.”
Fraudsters can conduct the utility scam in person, via text, or through a call. The BBB warned that if a caller specifically asks someone to make payment via a prepaid debit card, gift card, wire transfer, or a digital wallet app, this is considered a “huge warning sign.” Legitimate utility firms typically accept a check or a credit card, it said.
Another red flag is if the so-called utility representative puts pressure to make immediate payments, typically within the hour, and engages in intimidation tactics to gain personal and banking information.
In March, Monica Martinez, executive director of Utilities United Against Scams, warned about a new scam trend targeting customers.
“A more recent scam uses fraudulent websites that are identical to a utility payment page and that are promoted on search engines to trick customers into clicking the page and making a payment,” she said.
In April, the FTC charged bill payment company Doxo for allegedly impersonating billers such as utility companies and misleading consumers, while collecting millions of dollars in junk fees.
Tyler Durden
Tue, 07/02/2024 – 19:00 - Major Brands Push 'Upflation' Gimmick To Drive Up Sales
Major Brands Push ‘Upflation’ Gimmick To Drive Up Sales
US consumers have been well aware of the ‘shrinkflation’ phenomenon in recent years, but now there’s a new emerging trend: Some of the world’s largest packaged goods makers are getting very creative by rebranding existing products for expanding uses, then marked up substantially, and marketed in a way to trick consumers about some new blockbuster innovation. This is happening at a time when consumers are pulling back spending, and the goal of the new sales tactic is to drive more revenue with less.
Bloomberg’s Leslie Patton and Deena Shanker penned a note explaining how packaged goods giants are quickly adopting a new strategy after years of ‘shrinkflation’ – called ‘upflation’ – an attempt to create new applications with existing products.
What’s clear is that while the consumer in aggregate appears healthy, under the surface, low/mid-tier consumers are struggling and have entered an ultra-thrift phase. This means working poor consumers are pulling back on essential items that P&G, Unilever, and Edgewell sell. These companies have recorded declining sales volumes in recent quarters.
Source: Bloomberg In many cases, consumers are trading down products for more affordable private-label brands. Even more wealthy consumers are trading down high-end retailers for Walmart. Now, top brands are attempting to convince consumers to ditch private-label brands for their new innovative products.
Companies have pointed out that upflation is working, and these existing products with expanded use are performing much better than previous forecasts.
“P&G’s most recent earnings report highlighted an almost two-year trend where revenue growth came from people buying fewer things at higher prices. The consumer-goods giant did, however, post higher than expected sales in its grooming division, which it partly attributed to its total body shaving and intimate hair removal products. In an interview, the company said the total body deodorants are growing, too,” the journalists noted.
However, not everyone is convinced about upflation.
Maia James, who runs a product review site Gimme the Good Stuff, told Bloomberg, “Is this really something new or are they just marketing this as something different?”
One example of upflation is grooming startup Manscaped, which describes its shavers like a toothbrush: “Everyone needs it, no one wants to share it.”
Another is all-over-body deodorants, who Aleta Simmons, a dermatologist in Nashville, said, “I don’t think most people need them.” She added that anyone with severe body odor should seek a doctor.
With expanded use and new marketing, these all-over-body deodorants are sold for double the price by major brands.
Source: Bloomberg The emergence of upflation appears to be only a North American phenomenon at the moment. It comes as companies attempt to boost sliding sales.
“I think a lot of people are craving simplicity,” said Kathryn Kellogg, who runs a lifestyle brand called Going Zero Waste. She said more consumers are shifting towards a low-consumption lifestyle.
And we wonder why…
Andrea Wilkerson, vice president of P&G’s skin and personal care analytics and insights, said consumers are willing to pay for innovation.
The question remains whether upflation—or essentially just rebranding an existing item for new applications—is enough to spur consumer demand for top brands amid sliding sales.
A slew of companies have warned about a challenging macroeconomic backdrop, including General Mills Chairman and Chief Executive Officer Jeff Harmening last week, who said the current operating environment is becoming more complex.
Godman told clients in recent weeks that it’s time to short the ‘middle-income consumer‘…
Earlier this year, “volume” cast a dark cloud over the annual Consumer Analyst Group of New York conference, where the major packaged food makers gathered to discuss industry trends.
According to General Mills CEO Harmening, ice cream isn’t just a dessert anymore—it’s a snack for between meals with Haagen-Dazs Bites. Food companies are also getting creative to take old products and excite consumers about new applications.
However, the outlook for upflation in the medium term remains uncertain, as consumers are grappling with elevated inflation, depleted personal savings, and insurmountable credit card debt. People will likely see through the upflation gimmick, opting instead to purchase cheaper private label brands and use them for multiple purposes.
Tyler Durden
Tue, 07/02/2024 – 18:40 - Biden Admin Deliberately Flying Previously-Deported Illegal Aliens Back Into The US
Biden Admin Deliberately Flying Previously-Deported Illegal Aliens Back Into The US
Authored by Eric Lundrum via American Greatness,
A new report claims that the Biden Administration has deliberately been flying illegal aliens into the United States after they had already been deported during the Trump Administration.
According to the Washington Free Beacon, internal memos and interviews with staff at Immigration and Customs Enforcement (ICE) suggest that the Biden Administration has been running a secret program to fly previously-deported Cameroonians back into the country, after their asylum claims were previously denied.
The Cameroonian program was initiated in response to a report by Human Rights Watch in February of 2022, complaining about roughly 80 to 90 Cameroonians who had been deported between 2019 and 2021, when Donald Trump was President.
Despite their asylum claims all being rejected as invalid, many of them have since been transported back into the country in an unprecedented effort to purposefully bring more illegals onto American soil.
“Gutting deportations isn’t enough for the Biden administration, so now they’re apparently bringing back previously deported illegal aliens,” said Jon Feere, a former ICE official and director of investigations at the Center for Immigration Studies.
“These are people who have already had their cases closed, one way or another, and they’ve been returned home.”
The agency memos reveal that ICE officials have been working with nonprofit organizations to locate the deported Cameroonians so they can be brought back to the U.S. One example includes an email correspondence from Fatma Marouf, director of the Immigrant Rights Clinic at Texas A&M University, who informed ICE officials of the impending arrival of one such illegal, who flew into Dulles Airport in Virginia, near Washington D.C
“These individuals were deported by the order of a court after they were afforded all due process rights,” said Tom Blank, former chief of staff for ICE.
“For DHS to arbitrarily reverse court orders to satisfy complaints from an activist group makes a joke out of the entire legal immigration process. It looks like outside activist groups now run the DHS immigration process instead of the courts.”
These revelations further prove the extent to which the Biden Administration is willing to go in order to completely reverse the immigration policies of the Trump Administration. From his first day in office, Biden rescinded numerous immigration policies that secured the border, including a halt to construction of the border wall and ending Title 42 and the “Remain in Mexico” policy. Biden pledged on the campaign trail in 2020 that he would open the border and give free, taxpayer-funded benefits to illegals, including health care, housing, and education. New concerns have arisen over illegals being registered to vote shortly after arriving, which will most likely lead to an increase in voter fraud in key swing states in the upcoming presidential election.
Tyler Durden
Tue, 07/02/2024 – 18:20 - Post-Roe V. Wade: Where Americans Stand On Abortion
Post-Roe V. Wade: Where Americans Stand On Abortion
Last week saw the second anniversary of the U.S. Supreme Court’s decision to overturn Roe v. Wade, ending the constitutional right to abortion that had been established by the original ruling in 1973.
Having always been a controversial topic, the reversal of Roe v. Wade has reignited and intensified the debate around abortion in the United States, as it shifted the battleground to the state level, highlighting stark contrasts in public opinion across different regions.
As Statista’s Katharina Buchholz shows in the map below, the abortion access map has been dramatically redrawn since the landmark decision was announced on June 24, 2022, creating a patchwork of different rules across the United States.
You will find more infographics at Statista
While many view abortion as a fundamental issue of women’s rights and bodily autonomy, others consider it moral issue concerning the sanctity of life.
This clash of seemingly irreconcilable values has made abortion a contentious and polarizing issue for decades but even more so in today’s political landscape.
Statista’s Felix Richter highlights this division in the chart below, based on a June 2024 survey conducted by YouGov on behalf of The Economist.
You will find more infographics at Statista
While 59 percent of respondents think that abortion should be legal, either with or without restrictions on gestational age, 31 percent of respondents think it should only be legal in special circumstances, for example when the life of the mother is in danger.
Another 10 percent even oppose such exceptions, saying that abortions should never be allowed.
Tyler Durden
Tue, 07/02/2024 – 18:00 - What In The World Happened In 1971?
What In The World Happened In 1971?
Authored by Mike Maharrey via Money Metals,
A colleague recently discovered a website called “WTF Happened in 1971?”
The entire main page is filled with charts and graphs. All of them show some kind of significant shift beginning in 1971. There are over 75 of them!
Here are just a few examples:
Here is some more data from graphs on the website:
- African-American incomes virtually stopped catching up to white incomes in 1971.
- Median male income has flatlined compared to real GDP per capita since 1971.
- The number of 2-income families has surged since 1971.
- Price inflation has surged since 1971.
- A can of Campbell’s tomato soup has undergone significant shrinkflation since 1971.
- Housing prices have skyrocketed since 1971.
What in the World Happened in 1971?
Clearly, something significant happened in 1971 causing a tremendous economic shift.
What was it?
President Richard Nixon severed the dollar’s last connection with the gold standard, making it a purely free-floating fiat currency.
Nixon ordered Treasury Secretary John Connally to uncouple gold from its fixed $35 price and suspended the ability of foreign banks to directly exchange dollars for gold. During a national television address, Nixon promised the action would be temporary to “defend the dollar against the speculators.”
Nixon’s order was the end of a path off the gold standard that started during President Franklin D. Roosevelt’s administration. June 5, 1933, marked the beginning of a slow death of the dollar when Congress enacted a joint resolution erasing the right of private creditors in the United States to demand payment in gold. The move was the culmination of other actions taken by Roosevelt that year, including his infamous “gold confiscation” order.
While American citizens were legally prohibited from redeeming dollars for gold after Roosevelt’s policy changes, foreign governments maintained that privilege. In the 1960s, the Federal Reserve initiated an inflationary monetary policy to help monetize massive government spending for the Vietnam War and Pres. Lyndon Johnson’s “Great Society.” With the dollar losing value due to these inflationary policies, foreign governments began to redeem dollars for gold.
This is exactly how a gold standard is supposed to work. It puts limits on the amount the money supply can grow and constrains the government’s ability to spend. If the government “prints” too much money, other countries will begin to redeem the devaluing currency for gold. This is what was happening in the 1960s. As gold flowed out of the U.S. Treasury, concern grew that the country’s gold holdings could be completely depleted.
Instead of insisting on fiscal and monetary discipline, Nixon simply severed the dollar from its last ties to gold, allowing the central bank to inflate the money supply without restraint.
When he announced the closing of the gold window, Nixon said, “Let me lay to rest the bugaboo of what is called devaluation,” and promised, “Your dollar will be worth just as much as it is today.”
This was clearly a lie. That’s what all the charts on WTF Happened in 1971 reveal.
According to the Consumer Price Index data released by the Bureau Labor of Statistics, the dollar has lost well over 80 percent of its value since Nixon’s fateful decision. Meanwhile, the dollar value of gold has gone from $35 an ounce to about $2,300.
And it decimated the middle class, creating significant socio-economic shifts.
You’ll only find one blurb of text on the WTF Happened in 1971 website. It’s a quote by economist F.A. Hayek.
“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.”
Check out the work of the Sound Money Defense League to see what’s happening at the state level to do just that.
Tyler Durden
Tue, 07/02/2024 – 17:40
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