Today’s News 4th October 2022

• Germans Panic-Buy Electric Heaters As Authorities Warn Of Winter Gas Shortage
  Germans Panic-Buy Electric Heaters As Authorities Warn Of Winter Gas Shortage

  Authored by Tom Ozimek via The Epoch Times,

  German authorities have issued another dire warning about a possible shortage of natural gas over the winter, with fears that German households might be left in the cold, driving sales of electric heaters to soar in a spree of panic shopping.

  German Economy Minister Robert Habeck told Deutschlandfunk radio on Sept. 30 that the country is in an “extremely tense situation” when it comes to energy supply.

  “If we don’t save, if households don’t reduce consumption, we still risk not having enough gas in the winter,” he said.

  Europe’s biggest economy is struggling to cope with surging gas and electricity costs caused mostly by a collapse in Russian gas supplies to Europe, which Moscow has blamed on Western sanctions.

  

  German Economy and Climate Action Minister Robert Habeck speaks during a news conference on the future use of liquefied natural gas, in Berlin, Germany, on Aug. 16, 2022. (Lisi Niesner/File Photo/Reuters)

  Germany’s network regulator Bundesnetzagentur, which would be responsible for gas rationing in case of a supply emergency, said in a statement on Sept. 29 that household consumption was too high to be sustainable.

  Bundesnetzagentur chief Klaus Mueller called for “sustained austerity efforts,” saying that gas consumption by households and businesses in the prior week were “well above” consumption levels in prior years, calling the figures “sobering.”

  “Without significant cutbacks in the private sector, too, it will be difficult to avoid a gas shortage in winter,” he said in a statement, adding that cutbacks are needed even if temperatures continue to fall and even then there’s no guarantee of a “sure-fire success.”

  Mueller said Germany will be able get through the winter under three conditions: the country has to import more gas; the gas supplies of neighboring countries must remain stable; and each individual must cut back on gas consumption, “even if it gets even colder toward winter.”

  

  Pipes at the landfall facilities of the Nord Stream 1 gas pipeline in Lubmin, Germany, on July 21, 2022. (Annegret Hilse/Reuters)

  Electric Heater Sales Soar

  Meanwhile, sales of electric heaters in Germany have soared amid gas-shortage fears as winter looms.

  Sales of electric heaters in Germany, between January and August 2022, have jumped 76 percent compared to the year-ago period, according to market research company Growth from Knowledge (GfK) data provided to German news outlet Deutsche Welle.

  It comes as German Chancellor Olaf Scholz set out a $194 billion “defensive shield” that includes a gas price brake and a cut in sales tax for the fuel in a bid to protect businesses and households from the pain of soaring energy costs.

  Under the plans, which are expected to run until spring 2024, the government will introduce an emergency price brake on gas, the details of which will be announced next month. The government also is scrapping a planned gas levy meant to help firms struggling with high spot market prices.

  A temporary electricity price brake will subsidize basic consumption for consumers and small and medium-sized companies. Sales tax on gas will fall to 7 percent from 19 percent.

  In his remarks to Deutschlandfunk radio on Friday, Habeck said Germany’s gas price brake will be limited to covering 80 percent of normal household usage in an effort to encourage consumers to save energy and avoid a shortage.

  In a bid to help Germany make it through the winter, the European Commission, on Friday, approved a measure to compensate operators of five lignite-fired power plants to be on standby and ready to be activated in case of natural gas shortages.

  Tyler Durden
  Tue, 10/04/2022 – 02:00

• The Biggest Problem China Faces Isn't Real Estate
  The Biggest Problem China Faces Isn’t Real Estate

  Authored by Christopher Balding via The Epoch Times,

  After it joined the World Trade Organization in 2000 and anchored the Chinese yuan (a.k.a. renminbi) to the U.S. dollar, China linked its economy to the United States. Enforcing a fixed exchange rate regime with strict capital controls, China benefited from large inflows and relatively low-interest rates due largely to the low-interest rate environment in the United States. What happens to the Chinese economy when interest rates increase in the United States?

  

  Sovereign currency policy faces the intractable dilemma of what economists call the “impossible trinity.” Countries can have a fixed exchange rate, free capital flow, or sovereign monetary policy but must choose only two of three. Economics textbooks give clean and clear definitions of each. Still, in reality, China tried to manipulate each and come out worse due to its attempts to manipulate the laws of economics.

  Chinese Communist Party (CCP) technocrats attempted to create a system where they could enjoy the best of the three options and leave behind the worst parts. China implemented a quasi-fixed exchange rate, which is effectively a U.S. dollar index, with tightly controlled capital flows, and a semi-sovereign monetary policy.

  What almost no one noticed with the convoluted creation of Chinese currency policy attempting to adhere to the ‘impossible trinity’ was that for the last 20 years, China benefited from business cycle synchronization with the United States. Because the yuan was tied directly to the U.S. dollar and the United States kept interest rates low, China could keep its interest rates low.

  Now that the Federal Reserve (Fed) is raising interest rates, what impact will this have on China?

  • First, the days of easy money flows to China are over. For large parts of the last 20 years, Chinese interest rates were 3-5 percent higher than the United States. With either a fixed or sem-fixed exchange rate, this gave investors in China access to easy higher returns. With portfolio returns and foreign direct investment based upon interest rate differentials between the United States and China, this drew investor capital with fixed or heavily managed exchange rates creating easy returns. Investors have soured on China as an investment destination for a range of reasons. But when baseline returns are higher in U.S. government debt without any of the China issues, the financial motivation will dry up the biggest reason to send money.

  • Second, this will place enormous upward pressure on Chinese interest rates right as China’s economy is teetering. For most of the period since 2000, the Chinese and U.S. economies have been highly correlated. This allowed Chinese interest rates to follow the United States and enjoy a sustained period of low-cost money. However, now as the Fed is seeking to tamp down inflation and overheated demand, China is suffering through its weakest economy in probably post-opening up history. Rising interest rates with a teetering banking sector, high consumer debt, and a corporate sector suffering through a wave of defaults risk hyper charging a problem into a crisis. The People’s Bank of China (PBOC) faces a trade-off of whether to keep the yuan tied to the U.S. dollar and raise interest rates or reduce the link and let the yuan sink.

  • Third, rising U.S. interest rates will exacerbate capital outflow pressures from China. When Chinese government interest rates were 3-5 percent higher than in the United States, money flowed to China, seeking higher returns. Now short duration, U.S. government debt yields more than similar Chinese government debt. Add in the weak corporate sector and real estate pressures, and Chinese investors see many reasons to move their money out of China.

  For countries like Japan or the United Kingdom, capital outflows mean declines in the currency. While China boasts $3 trillion in reserves, given the size of its economy and local financial market, that $3 trillion is actually a lot smaller than it appears. The United States now earns a higher rate of safe asset return with significantly less risk, and it becomes obvious why regulators warn banks and investors about moving capital out of China.

  China tries to square the circle of financial policy by ignoring the realities of economic policy. Even as Chinese regulators recognize that the PBOC’s daily fixing price of the yuan deviated significantly from the weighted formula based upon the price of the U.S. dollar, they attempt little more than to plead with banks not to move from the official price. If U.S. interest rates remain above Chinese rates for a sustained period, this will force a change in Beijing policy in front of a set of circumstances not witnessed in modern history. Currently, Beijing is telling markets how to behave and price assets. That can only happen before markets find ways to move money or black markets that pay better prices.

  Given the expected multi-year interest rate cycle and probable resulting U.S. dollar strength, Beijing must face some hard decisions. Does it raise interest rates to stem the fall of the yuan in the face of a teetering economy? Does it defend the yuan and clamp down on international financial flows even harder, given all the outward leaks?

  Realistically, we should expect Beijing to delay any type of real decision as long as possible, given the very negative trade-offs it faces. Clamping down further on capital flows will only drive international investment away from an already unattractive destination. Raising interest rates risks taking the Chinese economy over the edge. However, doing nothing also presents risks if markets get spooked by teetering banks, falling asset prices, and a do-nothing approach from Beijing.

  The reality is there are no good options, and Beijing will avoid that reality for as long as possible.

  Tyler Durden
  Mon, 10/03/2022 – 23:40

• Man 3D-Prints Guns For New York Buyback Event, Makes A Whopping $21,000
  Man 3D-Prints Guns For New York Buyback Event, Makes A Whopping $21,000

  Another person outsmarted a state government trying to confiscate firearms via a gun buyback program with merely a 3D printer and PLA filament. 

  A man named “Kem” printed 110 firearms on a $200 printer he got for Christmas and turned them into a gun buyback program held at the Utica Police Department in Oneida County, New York. 

  “I 3D-printed a bunch of lower receivers and frames for different kinds of firearms,” Kem told local media WKTV. 

  He drove six hours across the state to turn in the firearms he printed in August, collecting a whopping $21,000 from the New York State Attorney General’s Office. 

  “And it ended with the guy and a lady from the budget office finally coming around with the 42 gift cards and counting them in front of me … $21,000 in $500 gift cards,” Kim added. 

  WKTV contacted the state Attorney General’s Office about 3D-printed firearms, though there was no response to that question besides it being a ‘big success and that the program, in general, keeps New York families safe.’ 

  “I’m sure handing over $21,000 in gift cards to some punk kid after getting a bunch of plastic junk was a rousing success,” laughed Kem. 

  

  Asked where he got the idea, he told the local media outlet he saw people on Twitter talking about using 3D printers to make big bucks by printing guns for buyback programs. 

  Perhaps he was referring to the story of a man who recently turned in 62 3D-printed guns to Houston’s buyback program and collected $3,100. 

  Some police departments have changed policies on accepting 3D-printed firearms as more and more people take advantage of flawed buybacks. 

  Keith Taylor, an adjunct professor at John Jay College of Criminal Justice, which is part of the City University of New York system, recently told Pew Research that buybacks are mostly ineffective at reducing homicides:

  “It’s a waste of resources if the entities that are sponsoring believe that it’s going to have a positive effect on reducing crime.“

  Kem concluded to the media outlet: “Gun buybacks are a fantastic way of showing, number one, that your policies don’t work, and, number 2, you’re creating perverse demand. You’re causing people to show up to these events, and, they don’t actually reduce crime whatsoever.”

  Tyler Durden
  Mon, 10/03/2022 – 23:20

• Conservatives Targets Of Political Violence Since Biden's "MAGA Republicans" Speech
  Conservatives Targets Of Political Violence Since Biden’s “MAGA Republicans” Speech

  Authored by Jack Phillips via The Epoch Times (emphasis ours),

  There have been reports of high-profile acts of political violence against Republicans and conservatives since President Joe Biden’s controversial “MAGA Republicans” speech last month.

  “Donald Trump and the MAGA Republicans represent an extremism that threatens the very foundations of our republic,” Biden said during a politically charged speech on Sept. 1 in Philadelphia.

  

  While speaking in front of a dimly lit red backdrop and flanked by two U.S. Marines, Biden alleged that “MAGA Republicans” also promote “authoritarian leaders” and “fan the flames of political violence” to target rights and the “very soul of this country.”

  While it isn’t clear if Biden’s speech motivated acts of vandalism or politically motivated attacks, several Republican offices across the country have been vandalized since then, including the Larimer County Republican Party in Fort Collins, Colorado; the Ottawa County Republican Party in Hudsonville, Michigan; and the Nebraska Republican Party headquarters in Lincoln, Nebraska.

  The Republican Party office in Seminole County, Florida, was vandalized after Biden claimed days before his Philadelphia speech that Republicans engaged in “semi-fascism.”

  “[Officials] came out and found that all of the signs had been hacked to pieces, our building had been vandalized, our permanent sign on the outside of the building had been torn up,” Keith den Hollander, chairman and vice chairman for Ottawa County Republican Party, told local media outlets last week. “Really disappointed to see this.”

  A pregnancy center in Oakland County, Michigan, also was targeted by vandals, who scrawled pro-abortion threats on its front door. It’s the second time that the facility was targeted in the past year, according to local media outlets.

  Other Incidents

  Also in Michigan, a pro-life canvasser was shot in Odessa Township, officials said. A 74-year-old man, Richard Harvey, was charged with felony assault and reckless discharge of a firearm, the Michigan State Police announced this past weekend.

  Joan Jacobson, 84, told MLive that she was canvassing with Right to Life, going door-to-door to ask residents to vote “no” next month on Proposal 3, a pro-abortion measure, when she was shot in the shoulder.

  Harvey came forward last week, telling WOOD-TV that he shot Jacobson accidentally as she was arguing with his wife, who he said supports abortion. Harvey said he told Jacobson to leave their property on multiple occasions.

  Also last month, 18-year-old Cayler Ellingson was killed when a 41-year-old man allegedly hit him with his vehicle and later told a 911 dispatcher that he thought Ellingson was part of an extremist Republican group, according to reports. The suspect, Shannon Brandt, was charged with murder in the teen’s death.

  

  An affidavit states that Brandt told the state first responders’ radio that he struck the pedestrian with his vehicle because the “pedestrian was threatening him,” referring to Ellingson, claiming that he was part of a “Republican extremist group.”

  However, from the moment he called 911 after allegedly hitting Ellingson, “Brandt made comments regarding the incident being intentional and not an accident,” according to the affidavit.

  An autopsy of Ellingson’s injuries indicated that he was already on the ground when he received them, and that his injuries didn’t come from being struck by Brandt’s car but from being run over. Corroborating the autopsy results, there was also little to no damage to the front of Brandt’s car, according to North Dakota Bureau of Criminal Investigation Special Agent Jeramie Quam.

  Witnesses at the scene told investigators that there was no evidence that suggested Ellingson had extremist viewpoints or that a political argument had even taken place, North Dakota Highway Patrol Capt. Bryan Niewind said.

  Read more here…

  Tyler Durden
  Mon, 10/03/2022 – 23:00

• Newsom Makes California 'Sanctuary State' For Transgender Children And Their Families
  Newsom Makes California ‘Sanctuary State’ For Transgender Children And Their Families

  California Gov. Gavin Newsom (D) last week signed into law a bill which makes the state a refuge for transgender youth and their families.

  

  Effective Jan. 1 of next year, the measure is designed to shield trans youth under the age of 18 and their families from criminal prosecution if they travel to the Golden State to obtain ‘gender-affirming health care’ – which can include puberty blockers, hormones and surgery which many critics consider to be a form of child abuse.

  “States across the country are passing laws to demonize the transgender community, especially transgender youth and their parents,” Newsom wrote in a Thursday signing statement.

  “In California we believe in equality and acceptance. We believe that no one should be prosecuted or persecuted for getting the care they need – including gender-affirming care,” the governor wrote. “Parents know what’s best for their kids, and they should be able to make decisions around the health of their children without fear.”

  The move comes after over a dozen states have introduced legislation this year to either heavily restrict or outlaw transgender medical support for children.

  In May, Alabama enacted a felony ban on gender-affirming care to a minor, while Rep. Marjorie Taylor Greene (R-GA) has introduced federal legislation which would make it a felony that carries up to 25 years in prison to providing said care to those under the age of 18, The Hill reports.

  Texas Gov. Greg Abbott directed state agencies through executive action in February to open child abuse investigations into the parents of transgender children. A state judge earlier this month expanded an existing order that had blocked the state from probing specific families, but a handful of investigations remain open.

  The Texas legislature, which meets during odd-numbered years, failed last year to pass a ban on gender-affirming medical care for transgender youth. -The Hill

  In his Thursday statement, Newsom decried “the hate demonstrated by these laws” which he says “has contributed to soaring suicide rates.”

  The law was introduced by Sen. Scott Wiener (D), who in June suggested offering “Drag Queen 101 as part of the K-12 curriculum.”

  This guy just gave me a bill idea:

  Offering Drag Queen 101 as part of the K-12 curriculum. Attending Drag Queen Story Time will satisfy the requirement. https://t.co/Sogz2Ag8jV

  — Senator Scott Wiener (@Scott_Wiener) June 7, 2022

  https://platform.twitter.com/widgets.jsThe bill is co-sponsored by nonprofit groups Equality California, Planned Parenthood and TransFamily Support Services, as well as California Lt. Gov. Eleni Kounalakis (D), and limits the ability of out-of-state law enforcement to make an arrest or participate in the extradition of parents who travel to California so their minor child can receive gender-affirming health care.

  At least 16 states are planning to introduce similar legislation.

  Tyler Durden
  Mon, 10/03/2022 – 22:40

• Obama's Brother Endorses Republican Doug Mastriano In Pennsylvania Governor Race
  Obama’s Brother Endorses Republican Doug Mastriano In Pennsylvania Governor Race

  Authored by Katabella Roberts via The Epoch Times (emphasis ours),

  Malik Obama, the half-brother of former President Barack Obama, has endorsed the Republican candidate for governor in Pennsylvania, Doug Mastriano.

  

  Taking to Twitter on Sunday, Malik Obama responded to a post from American conservative author and podcast host Jack Posobiec in which he suggested that the older Obama may like Mastriano and should “check him out.”

  “​​If he’s with President Trump then I’m with @dougmastriano Pennsylvania Senator PA District 33,” Obama responded to the post.

  

  Former President Donald Trump endorsed Mastriano in the primary race for governor earlier this year, saying in a statement that there is “no one in Pennsylvania who has done more, or fought harder, for election integrity than state Senator Doug Mastriano.”

  The 45th president added that Mastriano is a pro-Trump, America First candidate who will fight crime, address election problems, promote pro-life policies, protect the Second Amendment, and support the U.S. military and veterans.

  Mastriano, an Afghanistan and Iraq veteran, is facing Democratic Attorney General Josh Shapiro in the Pennsylvania gubernatorial race.

  Shapiro’s campaign has promised to be pro-abortion and expand access to reproductive care, and “veto any efforts to restrict mail-in voting, expand early voting, and set up automatic voter registration.”

  Recent polls suggest Shapiro is leading.

  In a separate post on Sunday, Malik Obama also weighed in on Brazil’s presidential election race between left-wing candidate and former president Luiz Inacio Lula da Silva and Conservative incumbent President Jair Bolsonaro.

  Sunday saw neither candidate receive more than 50 percent of the ballot in the race, meaning the two now head to a second-round run-off later this month.

  Read more here…

  Tyler Durden
  Mon, 10/03/2022 – 22:20

• Pentagon Announces Targeted Killing Of Top Somali Al-Qaeda Leader
  Pentagon Announces Targeted Killing Of Top Somali Al-Qaeda Leader

  On Monday the Pentagon announced that a successful airstrike over the weekend in Somalia has killed a top leader of the al-Shabaab terror group. The airstrike happened on Saturday outside the city of Jilib, roughly 370 kilometers southwest of Mogadishu.

  “Al-Shabaab is the largest and most kinetically active al-Qaeda network in the world and has proved both its will and capability to attack U.S. forces and threaten U.S. security interests,” an Africom statement revealing the operation said.

  

  “US Africa Command, alongside its partners, continues to take action to prevent this malicious terrorist group from planning and conducting attacks on civilians,” the statement continued.

  The Pentagon claimed that there were no civilian casualties as a result of the airstrike. Interestingly, US officials did not name the particular terror commander who had been taken out.

  However, as The Hill reports, local sources did: “the Somali Ministry of Information, Culture, and Tourism on Sunday identified the militant killed as Abdullahi Nadir.” Further, the report notes: 

  Nadir, who the Somali government said had been wanted for a “long time,” had a $3 million U.S. bounty on his head.

  Abdullahi Nadir is a co-founder of al-Shabaab, which makes this strike the biggest anti-jihadist US operation since Biden’s ordered troop redeployment in the region. 

  It remains that the group, which has been active in south and central parts of Somalia – and is a notorious and feared Islamist organization due especially to a spate of major kidnappings in recent years, is Somalia’s prime target, having declared “total war” against it, which Washington has pledged to help with.

  Biden has apparently ramped up drone strikes in Somalia over the last months. As we highlighted in August, “Since 2007, the U.S. military has carried out 260 actions in Somalia. While the Pentagon only admits to killing five civilians and wounding 11 others in a campaign it claims killed as many as 3,010 militants, Airwars estimates that 78-153 civilians, including 20-23 children, have died in U.S. attacks.”

  Tyler Durden
  Mon, 10/03/2022 – 22:00

• South Korea Vow "Stern Response" After North Korea Ballistic Missile Flies 4,500km At A Speed Of Mach 17
  South Korea Vow “Stern Response” After North Korea Ballistic Missile Flies 4,500km At A Speed Of Mach 17

  Update (9:40pm): According to South Korea’s Joint Chiefs of Staff, North Korea’s intermediate-range ballistic missile flew ~4,500km with an apogee of ~970km, reaching a speed of Mach 17 before splashing in the Pacific ocean, some 2800 nautical miles east of Korea, having traveled above Japan. The JSC added that South Korea and US intelligence authorities are still analyzing more details.

  

  South Korea also said that North Korea’s consecutive missile launch provocation strengthens South Korea-US alliance’s reaction capability and intensifies North Korea’s isolation from the international community.

  South Korea slammed the North Korean ballistic missile launch, saying it deters peace and security of the Korean Peninsula and the international community, and it strongly condemns it as the launch is a clear breach of UN Security Council resolutions.

  South Korea’s president also chimed in, vowing a “stern response” to North Korea’s missile launch.

  * * *

  The Japanese government warned residents in some remote islands that are part of Tokyo as well as Hokkaido and Aomori prefectures to take shelter from a missile fired from North Korea.

  〔Live streaming〕The Japanese government is warning that North Korea appears to have launched at least one ballistic missile. There’s a possibility it’s heading toward Japan. The government is urging everyone in the country to take shelter immediately.https://t.co/QbGNxw7brV

  — NHK WORLD News (@NHKWORLD_News) October 3, 2022

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

  “…Hokkaido Oshima Town Toshima Village Niijima Village Kozushima Village Miyake Village Mikurashima Village Hachijo Town Aogashima Village Ogasawara Village”

  — Moshe Schwartz (@YWNReporter) October 3, 2022

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

  North Korea fired an unidentified ballistic missile toward the east side, according to text message from South Korean Joint Chiefs of Staff.

  According to a subsequent update from NHK, the missile appears to have flown over and past Japanese territory, and landed in the Pacific ocean.

  JUST IN – North Korea fired a ballistic missile that flew over Japan. Missile alerts have been activated.pic.twitter.com/OvnoE1TWXL

  — Disclose.tv (@disclosetv) October 3, 2022

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

  It is unclear what response, if any, Japan will pursue.

  The USDJPY dipped briefly on the news of the missile launch but has since rebounded.

  Tyler Durden
  Mon, 10/03/2022 – 21:49

• Hunter Biden Probe To Look Into 'What Happened In 2020': Jim Jordan
  Hunter Biden Probe To Look Into ‘What Happened In 2020’: Jim Jordan

  Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

  If the GOP takes a majority in the House, one of the “key elements” of its investigatory plans into Hunter Biden, the son of President Joe Biden, next year will involve looking into “what happened in 2020,” said Rep. Jim Jordan (R-Ohio).

  

  Just weeks before the 2020 presidential election, the New York Post ran a story about Hunter Biden’s overseas business dealings in Ukraine and China, which was promptly dismissed as dubious by mainstream media outlets and suppressed on social media platforms.

  At the time, 51 former intelligence officials signed a letter claiming that the New York Post’s story had “all the classic earmarks of a Russian information operation.” In an interview with Breitbart, Jordan said that he wants to know on what intelligence the 51 former officials based their letter.

  “We had 51 former intelligence officials tell us that this was Russian disinformation. We had the FBI sit down with Facebook and say, ‘Hey, be careful, wink wink. We think there’s Russian disinformation.’ … All that was done to suppress that story, which had an impact on how people voted in the most important election we have, the election for president of the United States,” Jordan told Breitbart.

  “Did someone from The New York Times tell them something? Did someone from the FBI leak some false—was it this Timothy Thibault, who [has] since left the FBI, who suppressed that information at the FBI? I want to know. That’s pretty important stuff, so I really want to look into that angle.”

  Most of the investigative activities related to Hunter Biden would be headquartered at the Oversight Committee, with Rep. James Comer (R-Ky.) expected to lead it. Jordan will continue to remain a member and chair of the Judiciary. Comer plans to look into Hunter Biden’s suspicious banking and business transactions, he added.

  Protecting Documents

  Jordan had recently signed a letter together with other Republicans on the House Judiciary Committee asking former FBI official Timothy Thibault not to destroy or alter documents related to the Hunter Biden investigation that are in his possession.

  “Whistleblowers have come to Congress alleging that you were part of a scheme to undermine and discredit allegations of criminal wrongdoing by members of the Biden family. Accordingly, we believe that you possess information relating to our investigation and we request your assistance with our inquiry,” the letter said.

  Prior to leaving the FBI last month, Thibault worked at the agency’s Washington Field Office. In July, he came under scrutiny after a whistleblower revealed that the former FBI agent had suppressed information the agency had about Hunter Biden’s financial activities.

  In July, whistleblowers revealed to Sen. Chuck Grassley (R-Iowa) that FBI bureau officials labeled evidence against Hunter Biden as disinformation and that there are “systemic and existential problems” within the agency as well as the Justice Department.

  Tyler Durden
  Mon, 10/03/2022 – 21:40

• OPEC Is Taking On The Fed… And Goldman Is Buying Every Barrel It Can Find
  OPEC Is Taking On The Fed… And Goldman Is Buying Every Barrel It Can Find

  Earlier today, Rabobank’s Michael Every was the latest to try his hand in defining the conflict that – according to Zoltan Pozsar- has defined not only 2022 but will define the collapse of the dollar and the birth of the Bretton Woods 3 regime, when the geopolitical strategist discussed Putin’s “vitriolic speech” on Friday in which, according to Every, “as Russia rails against “paper dollars and euros” and extolls the strength of commodities, can the West slash rates or do endless QE to bail out the tiny elite who own most financial assets, and in doing so prove Moscow right in the eyes of the rest of the world?”

  While Every disagrees with Zoltan on whether the dollar will fall and whether a new Bretton Woods regime will emerge, the two are in agreement that the only response the west has to the commodity shortage created by the Russia-China-Africa-LatAm axis would be either to cause a global dollar funding squeeze (by hiking rates) which however has an unpleasant habit of crushing “friendly” allies such as the BOJ and BOE, or by flooding the world with fiat in order to – as Every put it – “bail out the tiny elite who own most financial assets, and in doing so prove Moscow right in the eyes of the rest of the world.“

  But it’s not just the anti-western axis that is taking on the Fed: according to Goldman Sachs, so is the world’s most important cartel (where Russia is also a critical voice): OPEC+.

  In a note published by Goldman’s Damien Courvalin, Jeffrey Currie and the commodities team (available to pro subs in the usual place) titled “OPEC Takes on the Fed”, the Goldman strategists recap the latest developments that helped propel oil sharply higher today, namely the reports that in its first in-person meeting in Vienna this Wednesday, the cartel may cut oil output by as much as 1.5 mmb/d…

  Reports suggest that OPEC+ is considering a production cut at its meeting on Wednesday, October 5, potentially larger than 1 mb/d. While such a cut would occur amid one of the tightest markets in recorded history, and ahead of a potential decline in Russian exports later this year, such a decision could be justified by the recent large decline in prices, down 40% since their June peak, with mounting global growth concerns.

  And while the recent collapse in investor participation, which has driven liquidity and prices lower, is also a likely strong catalyst for such a cut – as it would increase the carry in oil and start to claw back investors who have instead turned to USD cash allocation following the aggressive Fed hikes – what Goldman is effectively saying is that by OPEC is taking the fight back to the Fed, which by hiking and pushing the dollar to record highs sent the price of oil to new 2022 lows. Well, just as the Fed can limit the supply of dollar bills, whether physical or electronic, so OPEC can throttle and cut the all too physical supply of oil in retaliation.

  But how exactly does OPEC plan on challenging the attractive yield on the US dollar? Simple: as Goldman writes, “an OPEC cut, by reinforcing this level of backwardation, would further increase the carry offered by a long passive front-month rolling position in Brent futures, which already offers an annualized carry of 24%.“

  As such, an OPEC vut – which Goldman has not assumed in its latest published bullish forecasts – would reinforce the bank’s bullish price view while significantly limiting the downside to prices should economic growth disappoint even relative to the bank’s modest global (ex China) 1% real GDP growth assumption for next year. As a result, Goldman – which has laid out the clash between OPEC and the Fed – reiterates both its bullish oil view as well as its preference for long crude timespread positions into year-end. In other words, at least in Goldman’s view, OPEC will fight the Fed, and win.

  While there is much more in the full note, below we excerpt the key highlights from the Goldman note:

  Historically, OPEC has often cut production in the face of weakening demand, yet it has never implemented a cut in such a tight market, with inventories at historically low levels, record strong seasonal crude timespreads and with demand remaining resilient despite the macro headwinds.

  

  While inventory dynamics have loosened in recent months (Exhibit 1), a portion of these builds (100mb+ by our estimates) are required due to the redirection of trade flows under embargo constraints. Adjusted for oil on water, we estimate that the global oil market has instead remained in a seasonally adjusted (2017-19 av.) deficit, which is expected to seasonally and cyclically tighten in the coming months. Very large and unsustainable draws in China have also exacerbated the ex-China surplus. Looking forward, we expect Russian production to decline into year-end with in turn demand expected to be supported by natural gas to oil switching in Europe and Asia.

  

  Beyond the decline in prices, we believe this cut can help remedy the large exodus of oil investors that has left prices under-performing both fundamentals and other cyclical asset classes, as we discussed in our latest oil update. Such an argument can be traced back to our past work our Commodities as an Asset Class. Equity and debt holders of energy companies get compensated for providing capital from which companies profitably produce via dividends and share price appreciation. A commodity investor has no such function, investing in a futures market which is a zero-sum game, simply acting as the counterpart to an offsetting future position. Key however is the liquidity that is provided by this investor position, typically helping offset that of a producer, willing to sell his future production at a discount given the corporate benefits of reducing earnings volatility. While such hedging flows have slowed materially this year, the investor exodus has been even larger owing to the surge in price volatility, exacerbating backwardation – and hence the compensation for long investors – in energy futures.

  An OPEC cut, by reinforcing this level of backwardation, would further increase the carry offered by a long passive front-month rolling position in Brent futures, which already offers an annualized carry of 24%. This would make such an allocation increasingly compelling relative to other forms of carry, with, unlike most FX crosses today, supportive fundamentals rooted in exceptionally low inventories. It would further increase the opportunity cost of being short oil futures: given the positive carry, the 12-mo breakeven price on front-month rolling short positioning is already $67/bbl. Similarly, high volatility and the outsized impact of producer hedging on deferred prices have combined to increase the cost of puts, with a Dec-23 ATM put position requiring a fall in that contract’s value to $61/bbl to become profitable at expiration.

  Ultimately, the ability for OPEC to conduct such a large cut is rooted in the lack of any supply elasticity, with shale activity showing signs of slowing, no spare capacity outside of GCC producers and with Russia’s production about to decline (leading it to support this time around a large cut by other producers). This is ultimately a return to the Old Oil Order, where core-OPEC acts under the rational behavior of a dominant producer with pricing power. In that sense, while exceptional, this cut is also logical as it maximizes the group’s revenues today with minimal sacrifice of future profits.

  While we take no explicit assumption on the meeting outcome for now, given our already bullish forecasts, we highlight three headline scenarios with cuts of 0.5, 1, and 1.5 mb/d respectively – and assess what they imply for prices and timespreads. Due to widespread capacity limits within OPEC+, a headline (“paper”) cut is likely to overstate significantly the effective (“physical”) curtailment of production. We show in Exhibit 4, across these three scenarios, that the effective cut is likely to be only c.50% of the headline quota figures compared to our Nov-22 supply expectations, and closer to c.2/3 of the headline when translated into balances through Dec-23 as we had assumed gradually higher production next year.

  

  As we discussed in our latest oil note, we believe the market is oscillating between its historical pricing framework (based on inventories and convenience yields) and a scarcity pricing regime (predicated on demand destruction as the only balancing mechanism). In the case of a 1 mb/d headline cut, the former regime would lead us to expect a c.$13/bbl positive impact on Brent prices over 12 months, albeit mostly front-loaded, while the latter regime suggests a distinct possibility of a c.$20/bbl spike higher when inventories deplete again and demand destruction remains the balancing mechanism of last resort.

  In Exhibit 5, we consider the effect of these potential cuts assuming prices remain near current levels (consistent with our ‘Pre-price’ balance published here). In this scenario, these OPEC+ cuts would tighten inventories to historically unparalleled lows; an unsustainable outcome in our view but one that would initially offer historically elevated roll returns of 25-40% for rolling the prompt Brent contract (Exhibit 6 and Exhibit 7) even at $85/bbl price levels. As a result, we reiterate both our bullish oil view as well as our preference into year-end front long crude timespread positions.

  

  More in the full note available to pro subs.

  Tyler Durden
  Mon, 10/03/2022 – 21:23

• Buchanan: Is 'Our Democracy' Failing Our Country?
  Buchanan: Is ‘Our Democracy’ Failing Our Country?

  Authored by Pat Buchanan,

  Asked, “What is an American?” many would answer, “An American is a citizen of the United States.”

  Yet, at the First Continental Congress in 1774, 15 years before the U.S. became a nation of 13 states, Patrick Henry rose to proclaim that, “British oppression has effaced the boundaries of the several colonies; the distinctions between Virginians, Pennsylvanians, New Yorkers, and New Englanders are no more. I am not a Virginian, but an American.”

  Henry was saying — more than a dozen years before our constitutional republic was established — that America already existed as a nation, and he was her loyal son.

  In an 1815 letter to Thomas Jefferson, long after both men had served as president, John Adams wrote:

  “As to the history of the Revolution, my Ideas may be peculiar, perhaps Singular. What do We mean by the Revolution? The War? That was no part of the Revolution. It was only an Effect and Consequence of it. The Revolution was in the Minds of the People, and this was effected, from 1760 to 1775, in the course of fifteen Years before a drop of blood was drawn at Lexington.”

  Adams was saying that America was conceived and, as an embryonic nation, grew within the hearts of the peoples of the 13 colonies, two to three decades before the Constitutional Convention in Philadelphia.

  In short, our country came to be before our republic came to be, and long before what we today call “our democracy” came to be. A country is different from, and more than, the political system that it adopts.

  France was France all through the Bourbon dynasty, the Revolution of 1789, the creation of the First Republic, the Reign of Terror, Napoleon’s First Empire and the restoration of the Bourbon monarchy — all the way to the creation of the Fifth Republic by President Charles de Gaulle.

  And beneath the carapace of the USSR, the heart of Mother Russia continued to beat. Rightly, during the Cold War, we regarded Lithuania, Latvia, Estonia, Poland, Czechoslovakia, Hungary, Romania and Bulgaria as “captive nations” and captive peoples.

  The point: Neither the regime nor the political system imposed, nor some abstract idea, is the country that predates them and has first claim upon the loyalty of its sons and daughters.

  In his famous toast, American naval hero Stephen Decatur declared: “Our country! … May she always be in the right; but our country, right or wrong!”

  The crisis today for those who incessantly proclaim, “Our democracy is in danger,” is that millions of patriots are coming to see our incumbent regime, “our democracy,” as faithless and failing in its foremost duty — to protect and defend our country and countrymen from enemies foreign and domestic.

  Forced constantly by the establishment to choose between them, patriotic Americans may one day come to choose, as did their fathers, the country they love over the crown that rules them.

  

  Consider.

  The Biden regime that currently rules us has allowed 3 million migrants to invade our country in two years. These illegals continue to break our laws and cross our border at a rate of 250,000 a month.

  Among them are terrorists, robbers, rapists, murderers, cartelists and child molesters. The Biden regime has abdicated its duty to halt the invasion that is changing the ethnic, racial, religious, social and political character and composition of our American family without the consent of the American people, into whose national home these intruders are breaking with impunity.

  President Joe Biden is assuring that the future of the nation will be determined by millions of people who have in common only that they broke our laws to get into our country. Vice President Kamala Harris smugly dismisses demands to address the crisis by saying America’s southern border is “secure.”

  With this invasion has come a flood of the narcotic fentanyl, which last year took the lives of 100,000 Americans, a number equal to all the U.S. war dead in years of fighting in Korea, Vietnam, Afghanistan and Iraq.

  Under the Biden party’s policy of softness on crime and indulgence of the criminal class, assaults, robberies, carjackings and “mass shootings,” where four victims are killed or wounded in each episode, have surged in U.S. cities.

  With America’s currency and economy in his custody, Biden has, in 18 months, run up inflation, that cancer of America’s currency, to 8%, run up the national debt to where it far exceeds the gross national product, and crashed the stock market, wiping out trillions in wealth.

  “The pandemic is over,” Biden told “60 Minutes” in September, a month when more than 400 Americans were dying of COVID-19 every day, a death rate higher than World War II and equal to the bloodiest war in U.S. history, the Civil War of 1861-1865.

  The custodians of “our democracy” are failing in the most fundamental of duties of any political system — to protect and defend the people. No failed regime can justify its permanence by claiming some inherent superiority.

  Tyler Durden
  Mon, 10/03/2022 – 21:00

• US Coal Prices Soar Above $200 Amid Energy Crunch
  US Coal Prices Soar Above $200 Amid Energy Crunch

  US natural gas production will need to increase to maintain soaring liquefied natural gas (LNG) exports while ensuring adequate domestic supplies for households and businesses this winter. If not, then electricity generators at power plants will find NatGas uneconomical to run turbines and switch to coal-fired generators. That’s precisely what could be happening as US coal prices soar over the $200 per ton mark for the first time.  

  *US COAL PRICES RISE PAST $200 FOR FIRST TIME AMID SUPPLY CRUNCH

  — zerohedge (@zerohedge) October 3, 2022

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

  Bloomberg said spot coal prices for the week ending Sept. 30 increased to $204.95 per ton. Data was sourced from US Energy Information Administration, which said this was the highest price in records dating back to 2005. 

  

  The energy-market shockwaves from Russia’s invasion of Ukraine and rejiggering of Europe’s energy supply chain have dramatically increased US LNG exports to the EU this summer and fall. Domestic supplies have significantly tightened the availability for large users, which has pressured prices higher.  

  As a result, the once-mighty coal industry is returning as the global (in China and Europe) NatGas-to-coal switching could be set to intensify. The rise in coal prices may suggest stockpiling by utilities ahead of a cold winter. 

  Rising spot coal prices have been favorable for big coal companies: Peabody Energy Corp shares rose 6% to $26.25, and Arch Resources Inc. jumped 7.5% to $127.49. Both coal stocks have been in a lateral formation for much of this year and could break out to the upside if coal prices continue to rise. 

  

  The rally in spot coal and coal mining stocks comes under the most progressive White House ever that attempts to kill the fossil fuel industry to decarbonize the power grid with unreliable renewable power sources that have backfired. Worse, US-led sanctions against Russia have further sparked global energy market chaos. 

  Coal’s comeback is a remarkable turnaround for an industry that was on the brink of disaster as banks halted financing and investment firms divested from mines and coal-fired power plants, though some of this has been reversed ahead of what’s expected to be a cold and expensive winter.

  Increasing coal generation could be a move to help offset some of the power bill pains millions of Americans are facing as NatGas prices send electricity prices higher. 

  There’s one shocking figure by the National Energy Assistance Directors Association that shows about 20 million households across the country have already fallen behind on their utility bills. 

  Perhaps it’s time to suspend Biden’s decarbonization efforts to protect American families that could be financially slaughtered by energy hyperinflation if NatGas prices were to soar even more. 

  We don’t believe coal will be a long-term solution for grid stability. Instead, we’ve reminded readers that nuclear could be a big winner in the years ahead.  

  Tyler Durden
  Mon, 10/03/2022 – 20:40

• Investigation Into FBI 'Corruption' Impeded By Durham Investigation: Senator
  Investigation Into FBI ‘Corruption’ Impeded By Durham Investigation: Senator

  Authored by Jack Phillips via The Epoch Times (emphasis ours),

  Special counsel John Durham’s investigation into the origins of the Trump–Russia collusion claims has prevented lawmakers from obtaining more information about possible misconduct at the FBI and the Department of Justice (DOJ), according to Sen. Ron Johnson (R-Wis.).

  “Our efforts in terms of investigating Hunter Biden and corruption within the FBI was certainly hampered because we had an active criminal investigation under John Durham,” he told Newsmax on Sept. 30, noting that Durham so far has successfully prosecuted few individuals in connection to his investigation.

  

  Overall, Johnson said he’s “not particularly satisfied” with Durham’s probe and the lack of convictions, including what he described as a failure to secure a conviction for lawyer Michael Sussmann. Sussmann was accused by Durham of lying to the FBI while he was working for a law firm representing the Hillary Clinton campaign in 2016 but was acquitted in May.

  Durham was appointed in 2019 by then-Attorney General William Barr to investigate government misconduct in the FBI Crossfire Hurricane investigation. So far, the investigation has netted the conviction and sentencing of former FBI lawyer Kevin Clinesmith, who received probation last year.

  “And at a minimum, I certainly hope that whatever report [Durham] turns in to Attorney General Merrick Garland that that report be made public,” Johnson said. “The American public deserves to know the truth of the corruption that was occurring within the Department of Justice in the FBI.”

  Igor Danchenko, a Russian-born national who was the alleged primary source for the controversial dossier concocted by former UK spy Christopher Steele, is slated to go to trial later this month. Danchenko, who has pleaded not guilty, could face up to 25 years in prison if he’s convicted.

  Last week, U.S. District Judge Anthony Trenga declined to throw out any of the five charges filed against Danchenko after hearing arguments from Durham’s team and lawyers representing Danchenko.

  Danchenko’s lawyers argued on Sept. 29 that all the charges should be dismissed because Danchenko’s answers to the FBI were technically true, if not necessarily illuminating. But Durham said Danchenko’s statements, if examined in context rather than in isolation, will show that he knowingly lied.

  “He knows exactly what the FBI is looking for, the context of those questions,” Durham said in a hearing last week.

  Read more here…

  Tyler Durden
  Mon, 10/03/2022 – 20:20

• Trump Seeks $475 Million In Defamation Suit Against CNN
  Trump Seeks $475 Million In Defamation Suit Against CNN

  Former President Donald Trump filed a lawsuit against CNN tonight, claiming the so-called news outlet defamed him in an effort to reduce his chances of running for president again in 2024.

  The suit, which was filed Monday in U.S. District Court in Fort Lauderdale, Florida, alleges Trump has been a “long-time critic” of CNN, “not because CNN does a bad job of reporting the news, but because CNN seeks to create the news.”

  “CNN’s campaign of dissuasion in the form of libel and slander against the Plaintiff has only escalated in recent months as CNN fears the Plaintiff will run for president in 2024,” the suit reads.

  “As a part of its concerted effort to tilt the political balance to the Left, CNN has tried to taint the Plaintiff with a series of ever-more scandalous, false, and defamatory labels of ‘racist,’ ‘Russian lackey,’ ‘insurrectionist,’ and ultimately ‘Hitler.’”

  

  Trump seeks $475 million in punitive damages, alleging that CNN “has sought to use its massive influence – purportedly as a ‘trusted’ news source – to defame the Plaintiff in the minds of its viewers and readers for the purpose of defeating him politically, culminating in CNN claiming credit for ‘[getting] Trump out’ in the 2020 presidential election.”

  The former president notified the outlet in July of his intention to sue for “repeated defamatory statements.”

  Trump also warned he would sue other outlets he alleges have “defamed and defrauded the public” about the 2020 presidential election results.

  As a reminder, Trump had a lawsuit against 2016 Democratic rival Hillary Clinton and former top FBI officials tossed in early September by U.S. District Judge Donald Middlebrooks, who said Trump was “seeking to flaunt a two-hundred-page political manifesto outlining his grievances against those that have opposed him, and this Court is not the appropriate forum.”

  That is “a high legal bar to clear given First Amendment protections granted to the free press under the Constitution,” according to The Hill.

  “The New York Times, for example, has not lost a defamation case in more than 50 years.”

  However, as JustTheNews reports, winning such a case is not impossible, however.

  Covington Catholic High School student Nick Sandmann successfully secured considerable financial settlements from both CNN and the Washington Post for their coverage of a controversy that suggested the high schooler instigated a confrontation with an Indian activist.

  Read the full suit below:

  Tyler Durden
  Mon, 10/03/2022 – 20:00

• Devil's Advocates Are Investors' Best Friends
  Devil’s Advocates Are Investors’ Best Friends

  Authored by Charles Hugh Smith via OfTwoMinds blog,

  If those on the opposite side of the trade are viewed as threats rather than friends, it’s time to revise the analysis.

  

  Of the many self-generated dangers investors face, few are more dangerous than confirmation bias, the comfort we experience seeking out views that confirm our own positions and our resistance to studying opposing views.

  Confirmation bias is both self-evident and complex. We all understand the psychologically soothing feeling when others heartily agree with us, and the frustration, anxiety and sense of being threatened we experience when our core positions are challenged.

  But there’s more to it than just that. Taking a position with conviction empowers us, for by publicly espousing a forecast, prediction or position, we’re implicitly saying, “When events show I’m right, that will show I’m smarter than the average bear.”

  If we push our position and conviction to an extreme and shout it out loudly enough, we’ll attract those seeking to confirm their own biases. Confirmation bias thus generates a self-reinforcing feedback loop, as those shouting the loudest attract those who agree with them, rewarding their conviction with “likes.”

  We all know the danger of marrying your position, that is, taking not just a financial stake but also an emotional stake that eventually becomes entwined with our identity. What may have started out as a calculated risk morphs into an all-or-nothing reflection of our identity. Any challenge becomes a threat to our selfhood.

  Conviction is good, but a hedge and a Plan B are even better. Hedges and Plan Bs arise from a simple question: what if I’m wrong?

  If we want to avoid the dangers of confirmation bias and marrying our positions, Devil’s Advocates become our best friends. Devil’s Advocates delight in probing the consensus or popular view for weaknesses, and exploring how and why the consensus or popular view might be riskier than advertised, or even completely, catastrophically wrong.

  The grizzled investor who’s ridden conviction trades all the way to zero suppresses the desire to confirm biases in favor of seeking out informed Devil’s Advocates, skeptics and proponents of the opposite side of the trade.

  This is especially important in unstable, volatile eras like the present. Since every forecast and prediction (and thus every investment position) is based on previous analogs playing out, what happens when none of those analogs map to the present? Very simply, nobody knows what’s going to happen, and the appropriate level of confidence in any prediction or forecast is near-zero.

  If we cannot justify a conviction trade, then it becomes appropriate to pair every position with a hedge (to protect the position if we’re wrong) or a Plan B (escape with most of our capital intact, limit our risk in any one position or sector, stay in cash until the weather clears, etc.).

  If we listen with some detachment to informed Devil’s Advocates, we might even change our minds (gasp). No crystal ball is unclouded, but being flexible enough to change our minds when presented with evidence is a positive trait.

  In other words, the most fervent Bulls would be well-served by seeking out the most fervent Bears–and vice versa. There’s a spectrum of Devil’s Advocates, of course; some delight in puncturing everyone’s balloons, others are probing their own conviction trade for potentially fatal weaknesses, and so on.

  If those on the opposite side of the trade are viewed as threats rather than friends, it’s time to revise the analysis. It’s never comfortable to be told “you’re wrong,” but the possibility of being wrong should be uppermost in every investor’s mind, as that possibility informs calculated risk: yes, we understand this position is risky, but we’re taking it anyway because we judge the potential upside to be worth the risk.

  Anyone who helps me re-think a position and hedge risk is a friend, not a threat.

  What are some current Devil’s Advocates’ provocations? Here are a few guaranteed to make blood boil in many veins: (Remember, the key question is: what if I’m wrong?)

  1. The US dollar will only continue strengthening, crushing the euro to .80, the yen to 250, the yuan to the depths of Heck, etc. It will not crash or die, not now and not in five years or ten years.

  2. The 10-year yield is heading toward 5% and TLT toward 85. Rates are not going back to zero.

  3. Not all fiat currencies will die.

  4. Not all markets will crash.

  5. Liquidity isn’t all that matters.

  6. Burning all the deadwood (non-performing debt, phantom wealth, etc.) is necessary to re-seed the forest.

  7. Every prediction and forecast will be wrong because the past doesn’t map the present. Correct forecasts will be so rare that they will be statistically insignificant.

  8. Take control of your life, take ownership of everything you generate. Everything else–opinions, forecasts, predictions– is signal noise.

  *  *  *

  My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

  Read the first chapter for free (PDF)

  Read excerpts of all three chapters

  Become a $1/month patron of my work via patreon.com.

  Tyler Durden
  Mon, 10/03/2022 – 19:40

• Bitcoin-Gold Correlation Hits Highest Level In Over A Year
  Bitcoin-Gold Correlation Hits Highest Level In Over A Year

  Bitcoin’s correlation with gold hit its highest level in more than a year last week according to Kaiko Research. After benefiting heavily from the Russia-Ukraine conflict in the first quarter of the year, gold has lost all its gains and is currently down 10% YTD.

  

  Bitcoin has also declined double-digits this year dragged down by global monetary policy tightening. Despite core inflation remaining persistently high, gold has failed to act as a safe-haven asset i.e. an asset that is expected to retain or gain in value during periods of economic downturn.

  Over the past year bitcoin has been mostly uncorrelated with gold, with its correlation oscillating between negative 0.2 and positive 0.2. However, as the U.S. Dollar continues strengthening, negatively impacting both crypto and gold, the correlation between the two assets has shifted.

  Despite heavy volatility, and persistent risk weakness, most crypto sectors outperformed other traditional assets in Q3, recovering from double-digits losses in Q2. We constructed several equally-weighted baskets of assets to compute sector returns, and throughout the quarter our DeFi token basket gained 60%, bolstered by the LIDO token. Despite a sharp post-Merge pullback, ETH managed to close the quarter up more than 20%, outperforming our Layer 1 and Layer 2 baskets.

  

  One potential reason why the two alternative assets moved in the same direction is that last week, is because the Bank of England (BoE) announced a new round of bond buying, effectively re-starting quantitative easing. The BoE is the second central bank after the Bank of Japan to intervene in currency markets in September. While the move appears to have calmed markets, fears of a global contagion and further de-risking are mounting. Both U.S. and German Treasury yields increased, though at a slower pace.

  And despite the Fed’s persistence to the contrary, traders are growing increasingly confident that it is only a matter of time before the Fed joins the rest of the developed world and is forced to unleash the liquidity firehose again, in the process sending the USD crashing and its non-fiat alternatives, including gold and bitcoin, soaring to new all time highs.

  Tyler Durden
  Mon, 10/03/2022 – 19:20

• Supreme Court Won't Hear Challenge To Gun Bump Stock Ban
  Supreme Court Won’t Hear Challenge To Gun Bump Stock Ban

  Authored by Jack Phillips via The Epoch Times,

  The U.S. Supreme Court on Monday rejected two challenges to the federal government’s ban on gun bump stocks that was handed down in the wake of the Las Vegas mass shooting in 2017.

  

  Bump stocks are devices that allow semi-automatic weapons to increase their rate of fire. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) reversed a previous conclusion and classified bump stocks as forbidden under a 1934 U.S. law called the National Firearms Act.

  Gun rights groups, including Gun Owners of America, and a Utah-based gun rights advocate brought several cases to the nine Supreme Court justices to reverse the ban. They made no comments in declining to hear them (pdf), which were among several that the court declined to hear on Monday—the first day of the high court’s term.

  Clark Aposhian, the Utah gun-rights advocate, sued to halt the ban in 2019, challenging the ATF’s authority in reclassifying bump stocks as forbidden machine guns. After a federal judge refused to grant him an injunction early in the case, Aposhian surrendered his bump stock, pending the outcome of the litigation.

  Separately, gun owner advocacy groups including Gun Owners of America and three of its individual members, sued in federal court in Michigan to block the bump stock ban from taking effect. The Cincinnati-based 6th U.S. Circuit Court of Appeals in 2021 upheld the ban.

  After the Supreme Court’s ruling on Monday, Gun Owners of America issued a statement saying it will set a “dangerous precedent” that will give the federal government broader powers to regulate firearms.

  “This decision sets a horrible and dangerous precedent, one that will allow the ATF to further arbitrarily regulate various firearms,” the group wrote on Twitter.

  “This very same precedent is already being abused by Joe Biden to ban millions of lawfully purchased pistols even without an ACT of Congress!”

  Earlier this year, lawyers for the Biden administration urged the Supreme Court to stay out of the dispute over the ATF’s rule.

  The ATF had “determined that bump stocks are machine guns under the statue, not that the agency had discretionary authority under the statute to classify them as machine guns,” Solicitor General Elizabeth Prelogar argued in a court filing. “ATF’s interpretation reflects the best understanding of the statutory language,” she also wrote.

  Ban

  Bump stocks use a gun’s recoil to bump its trigger, enabling a semiautomatic weapon to fire more quickly.

  In 2017, the ATF rule banning bump stocks stipulated “that [bump stocks] are ‘machineguns’ as defined by the National Firearms Act of 1934 and the Gun Control Act of 1968” as these devices “allow a shooter of a semiautomatic firearm to initiate a continuous firing cycle with a single pull of the trigger.”

  When the rule was proposed about five years ago, the agency estimated that Americans possessed about 520,000 bump stocks. The ban required them to either be relinquished or destroyed.

  

  This undated photo provided by Eric Paddock shows his brother, Las Vegas gunman Stephen Paddock. (Courtesy of Eric Paddock via AP)

  The ban on bump stocks came into effect in 2019 as a result of the October 2017 mass shooting that left 58 dead in Las Vegas. Stephen Paddock, a high-stakes gambler, allegedly used rifles—some of which law enforcement officials say had bump stocks—to fire at a crowd of country music concertgoers.

  No motive for the mass shooting has ever been established. Investigators with the FBI later said that Paddock, who had virtually no online presence and is believed to have killed himself after the rampage, may have been inspired by his criminal father’s reputation.

  Other Cases

  In June, the Supreme Court court declared for the first time that the U.S. Constitution protects an individual’s right to carry a handgun in public for self-defense. The decision handed a victory to gun rights advocates in a nation deeply divided over how to address firearms violence.

  Previously, the Supreme Court declined to take up a separate legal effort by other gun rights groups in 2020 to overturn the ATF ban on bump stocks.

  In a court brief (pdf) filed on Aug. 1 with the U.S. Court of Appeals for the 5th Circuit, the Firearms Policy Coalition wrote that the ATF’s redefinition of a bump stock “defies any recognizable public meaning of the language of the statute and leads to absurd results.” The group further argued that the ATF’s classification of a bump-fired rifle as a machine gun suggests that “nearly every semiautomatic firearm in existence” could fall into the new category.

  The cases that the Supreme Court rejected Monday are W. Clark Aposhian v. Merrick B. Garland, 21-159, and Gun Owners of America v. Merrick B. Garland, 21-1215.

  Tyler Durden
  Mon, 10/03/2022 – 19:00

• US Would Lead NATO To 'Take Out Every Russian Conventional Force' If Putin Uses Nukes In Ukraine: Petraeus
  US Would Lead NATO To ‘Take Out Every Russian Conventional Force’ If Putin Uses Nukes In Ukraine: Petraeus

  Retired General and former Director of the CIA David Petraeus says it’s his belief that if Russian President Vladimir Putin used nuclear weapons against Ukraine, the United States would quickly intervene to “take out” Russian forces. He emphasized too that Washington would lead the way among a collective NATO response.

  The well-known retired Army general issued the prediction of such a major US intervention in that scenario during a Sunday interview on ABC’s “This Week,” explaining that the West must take the Kremlin’s latest nuclear rhetoric seriously, and that this is what the White House’s latest warnings of “catastrophic consequences” for Moscow is all about.

  

  “And what would happen?” show co-anchor Jonathan Karl questioned for former CIA chief. “Well, again, I have deliberately not talked to Jake about this. I mean, just to give you a hypothetical, we would respond by leading a NATO, a collective effort, that would take out every Russian conventional force that we can see and identify on the battlefield in Ukraine and also in Crimea and every ship in the Black Sea,” Petraeus responded.

  But that’s when Karl brought up the likely scenario of radiation fallout from such a Russian nuclear engagement directly impacting much of Eastern Europe, reaching nearby NATO countries. 

  “Yes. And perhaps you can make that case. The other case is that this is so horrific that there has to be a response, it cannot go unanswered. But it doesn’t expand, it doesn’t — it’s not nuclear for nuclear,” Petraeus explained. That’s when he expressly laid out that Washington has to be ready nuclear escalation if the situation demands: 

  “You don’t want to, again, get into a nuclear escalation here. But you have to show that this cannot be accepted in any way,” Petraeus said.

  While the former top Army general is of course not speaking from within the administration or in the capacity of an active government official at this point, his perspective certainly generally reflects that of the foreign policy and military establishment. 

  Petraeus went on to explain his view that Putin has no qualms about surrounding European countries and Western backers of Ukraine suffering too. “Well, he’s trying to cast this in any way that he can in a way to appear threatening, to be threatening, to try to get Europe to crack. He thinks he can out suffer Europe, if you will,” he continued.

  Watch the full interview below:

  “And, you know, the Russians have out suffered Napoleon and the Nazis and so forth. But I don’t think he’s going to out suffer Europe. Europe’s going to have a tough winter, there’s going to be very reduced flow of natural gas, but they’ll get through it and I don’t think they’ll crack on the issue of support for Ukraine.” He explained of the battlefield situation in the east that if Russian forces continue to be backed into a corner this makes Putin more unpredictable and dangerous…

  “He is losing, and the battlefield reality he faces is, I think, irreversible,” Petraeus said, adding that there is “no amount of shambolic mobilization, which is the only way to describe it, no amount of annexation, no amount of even veiled nuclear threats, can actually get him out of this particular situation.”

  Recent weeks have witnessed a flurry of ‘doom and gloom’ apocalyptic sounding headlines based on increased threatening rhetoric from Kremlin officials, including Putin himself, suggesting or implying the future possibility of resorting to tactical nukes in Ukraine if red lines are crossed. However, there’s also been no observed change in posture or movement among Russia’s nuclear forces. US intelligence says it is stepped up its surveillance and monitoring, but this has not led to any changes in the United States’ nuclear posture either.

  Tyler Durden
  Mon, 10/03/2022 – 18:40

• Ross 'Silk Road' Ulbricht: Facing Life In Prison, Bitcoin's Resilience Inspires Me
  Ross ‘Silk Road’ Ulbricht: Facing Life In Prison, Bitcoin’s Resilience Inspires Me

  Authored by Ross Ulbricht via BitcoinMagazine.com,

  This is an opinion editorial by Ross Ulbricht, the founder of pioneering Bitcoin marketplace Silk Road, who is currently serving a double life sentence plus 40 years in federal prison.

  

  Much more is being said about Bitcoin these days than when I was put in prison. On October 1, 2022, I started my tenth year locked in this cage. Right now, as I put pen to page, the afternoon sun beams through the bars of my window and the murmur of the other prisoners snakes under my cell door.

  Over the years I have heard people say all kinds of things about Bitcoin. I have heard that “Bitcoin is dead” and that “Bitcoin is the future.” I have heard that “Bitcoin is bad for the environment” and that “Bitcoin will set us free.” But I’ve noticed that Bitcoin doesn’t seem to care what we say about it. Not the exchange, of course — that’s driven by the whims of people like all financial markets. I’m talking about Bitcoin itself.

  Bitcoin doesn’t have ears. What we say doesn’t change it. Barring a society-level catastrophe, Bitcoin will keep adding a block every ten minutes, forever. That’s the whole point. Through all the ups and downs since Bitcoin’s birth more than 13 years ago, despite the hype, despite the naysayers, despite everything, Bitcoin has never faltered.

  I can’t say the same for myself, but then again, I am merely human. A couple of years after Bitcoin got started, I made the biggest mistake of my life: I made Silk Road (an anonymous online market). Of course, at the time, I didn’t know it was a mistake. I thought it was a great idea. I thought I was putting Bitcoin to good use and giving people privacy and freedom. When illegal drugs were listed, I thought that was OK too, because I believed drugs should be legalized. Nevermind that they were outlawed and I was risking everything I held dear.

  A couple of years later, I was thrown in prison for drug trafficking and given two life sentences without parole, plus 40 years.

  I was falsely portrayed in the media as a violent drug kingpin. The story of Silk Road was reduced to a cops and robbers cliché. I more than faltered, I hit rock bottom. I’ve been here ever since.

  Bitcoin never faltered. Through the rise and fall of Silk Road, through the relentless years of my incarceration, through competition and catastrophe, Bitcoin keeps going, one block at a time, like clockwork.

  As Bitcoin has marched on, I have struggled to rejoin the world outside of my cage. Year after year, my family, friends, supporters and I have been working toward my freedom, so I can have a second chance at life. But I am tired. I am burned out, I want this nightmare to end, and I don’t know if it ever will, no matter how hard we work at it.

  Before I came to prison, I knew nothing of hard drugs. Since then, I have been locked in 8-by-10-foot cells with lifelong addicts for months on end. I’ve heard their stories and seen what’s become of them. I have faced the fact that, by making Silk Road, I played a role in damaging many lives. I don’t even think about drug war politics anymore. I just know I could never promote drug use again, whether legal or illegal. How could I, if I would never touch them myself? How could I, if I’d be horrified to learn that someone I loved became addicted? All I would think of is the men I’ve come to know whose lives have been ruined.

  I’ve been through many phases during my imprisonment: hopelessness, fear, guilt, acceptance, boredom, feverish desperation, and all the while Bitcoin keeps going. Today, I take inspiration from Bitcoin. I will keep going, day by day, just taking the next step over and over. I will keep adding the next block. Either I’ll regain my freedom or, at the end of my life, I can look back and say, “At least I tried.”

  Tyler Durden
  Mon, 10/03/2022 – 18:20

Digest powered by RSS Digest