- The Great Reset, Part III: Capitalism With Chinese Characteristics
The Great Reset, Part III: Capitalism With Chinese Characteristics
Authored by Michael Rectenwald via The Mises Institute,
Read Part I: Reduced Expectations And Bio-Techno-Feudalism here…
Read Part II: Corporate Socialism here…
The title of this essay represents a play on the Chinese Communist Party’s description of its economy. Several decades ago, when China’s growing reliance on the for-profit sectors of its economy could no longer be credibly denied by the CCP, its leadership approved the slogan “socialism with Chinese characteristics” to describe the Chinese economic system. Formulated by Deng Xiaoping, the phrase became an essential component the CCP’s attempt to rationalize Chinese capitalist development under a socialist-communist political system.
According to the party, the growing privatization of the Chinese economy was to be a temporary phase—lasting as long as a hundred years according to some party leaders—on the way to a classless society of full socialism-communism. The party leaders claimed, and still maintain, that socialism with Chinese characteristics was necessary in China’s case because China was a “backward” agrarian country when communism was introduced—too early, it was suggested. China needed a capitalist booster shot.
With the slogan, the party was able to argue that China had been an exception to the orthodox Marxist position that socialism arrives only after the development of capitalism—although Marx himself deviated from his own formula late in life. At the same time, the slogan allowed the CCP to confirm the orthodox Marxist position. China’s communist revolution had come before developed industrial capitalism—an exception to orthodox Marxism. Capitalism was thus introduced into China’s economic system later—a confirmation of orthodox Marxism.
Stripped of its socialist ideological pretensions, socialism with Chinese characteristics, or the Chinese system itself, amounts to a socialist-communist state increasingly funded by capitalist economic development. The difference between the former Soviet Union and contemporary China is that when it became obvious that a socialist-communist economy had failed, the former gave up its socialist-communist economic pretenses, while the latter did not.
Whether the CCP leaders believe their own rhetoric or not, the ideological gymnastics on display are nevertheless spectacular. On its face, the slogan embeds and glosses over a seemingly obvious contradiction in an attempt to sanctify or “recommunize” Chinese capitalist development as a precondition of full socialism-communism.
However, the Chinese slogan does capture an essential truth about communism, one that is either unrecognized or unacknowledged by the CCP and denied by Western Marxists. Contrary to the assertions of communist leaders and followers, and even contrary to the claims of many who oppose it, socialism-communism is not essentially an economic but rather a political system.
Once in power, socialist-communist leaders recognize that given their control over resources, they have effectively become the new owners of the means of production (whereas, as Ludwig von Mises suggested, consumers effectively hold the power of economic disposal in free markets). In attempting to implement a socialist-communist economy, they recognize that, in the absence of prices, large-scale industrial production requires supervisory decision-making. Likewise, decision-making is not democratic in the sense promised by socialist-communist ideologues. Decision-making must be centralized, or at least bureaucratized, to a great extent. Democratic decision-making is precluded by state-owned and controlled production and distribution.
Socialism-communism is a political system in which resource allocation is commanded by the state and thus effectively controlled by the state leaders, the real ruling class. The latter retain control through ideology and force.
As opposed to a fully implemented economic system, socialism-communism is always only a political arrangement. This is why socialism-communism can be combined with “capitalism” under such forms as “state capitalism” or corporate socialism. Its economic pretensions will be jettisoned as capitalist development is introduced and cleverly rationalized, as in China. If such pretentions are maintained for long, they will wreck society, as in the former Soviet Union. In either case, the socialist-communist leadership will learn that wealth production requires the accumulation of privately held capital—whether they understand why or not.
Enter Corporate Socialism
A socialist-communist sequel is coming to a theater near you. Some of the same old characters are reappearing, while new ones have joined the cast. While the ideology and rhetoric sound nearly the same, they are being put to slightly different ends. This time around, the old bromides and promises are in play, and a similar but not identical bait and switch is being dangled. Socialism promises the protection of the beleaguered from the economically and politically “evil,” the promotion of the economic interests of the underclass, a benign banning of “dangerous” persons from public forums and civic life, and a primary or exclusive concern for “the common good.” China’s “One Belt, One Road” initiative may hang the takers in Africa and other underdeveloped regions as if from an infrastructural noose. A different variety is on the docket in the developed world, including in the US.
The contemporary variant is corporate socialism, or a two-tiered system of “actually existing socialism” on the ground, coupled with a parallel set of corporate monopolies or would-be monopolies on top. The difference between state socialism and corporate socialism is merely that a different constituency effectively controls the means of production. But both depend on monopoly—one the state and the other the corporate monopolization of the economy. And both depend on socialist-communist ideology of democratic socialism, or, in a recent variant, “social justice” or “woke” ideology. Corporate socialism is the desired end, while democratic socialism and woke capitalism are among the means.
China is the model for the economic and political system being promoted in the West, and the Great Reset is the most forthright articulation of that system – although its articulation is anything but perfectly forthright.
The Great Reset represents the development of the Chinese system in the West, only in reverse. Whereas the Chinese political elite began with a socialist-communist political system and implemented “capitalism” later, the elite in the West began with “capitalism” and is aiming to implement a socialist-communist political system now. It’s as if the Western oligarchy looked to the “socialism” on display in China, and said, “yes, we want it.”
This explains many otherwise seeming contradictions, not the least of which is the leftist authoritarianism of Big Tech. Big Tech, and in particular Big Digital, is the ideological communications apparatus for the advancement of corporate socialism, or capitalism with Chinese characteristics.
The Chinese characteristics that the Great Reset aims to reproduce in connection with Western capitalism would resemble the totalitarianism of the CCP. It would require a great abridgement of individual rights—including property rights, free expression, freedom of movement, freedom of association, freedom of religion, and the free enterprise system as we understand it.
The Great Reset would implement the political system in much the same way as China has done—with 5G-enabled smart city surveillance, the equivalent of social credit scores, medical passports, political imprisonment, and other means of social and political repression and control.
In the end, socialism with Chinese characteristics and capitalism with Chinese characteristics would amount to the same thing.
Tyler Durden
Tue, 01/05/2021 – 00:00 - US Navy Preparing Largest Underwater Drone For Deployment
US Navy Preparing Largest Underwater Drone For Deployment
The US Navy could be a couple of years away from deploying the largest unmanned undersea vehicle called “Snakehead” to scout underwater areas and gather intelligence on enemy forces.
Called the Large Displacement Unmanned Underwater Vehicle (LDUUV), the Snakehead program will be an important electronic warfare platform for the service.
Naval Sea Systems Command (NAVSEA) published a final request for proposals (RFP) for Snakehead’s Phase 2 last week. While the actual RFP is only available to defense firms bidding on the build, the Navy could select a company to begin the build as early as Sept. 30.
“Snakehead is a long-endurance, multi-mission unmanned undersea vehicle (UUV), deployed from submarine large open interfaces, with the capability to deploy reconfigurable payloads,” NAVSEA said in a press release while referring to the RFP. “It is the largest UUV intended for hosting and deployment from submarines.”
Snakehead can be launched and recovered by littoral combat ships and nuclear-powered submarines. It will play a critical role for the Navy in conducting intelligence, surveillance, and countermeasure mine missions.
To do this, the drone will have a variety of sensors, including side-scan sonars and bathymetric sensors, to generate maps of the seabed for search and destroy missions.
Snakehead is not the first submarine the Navy is planning to launch. The service is secretly developing armed robot submarines controlled by onboard artificial intelligence that could kill the enemy without human control.
Upon completion of the build, the Navy will likely deploy these underwater drones somewhere in the Pacific as geopolitical tensions with China continue to rise. Courtesy of BofA is a map of US military bases and presence in the Pacific Ocean and, specifically, in proximity to China.
Besides the US, China and Russia are also developing or deploying underwater drones as it appears fully autonomous weapons will soon be prowling underneath the world’s oceans.
Tyler Durden
Mon, 01/04/2021 – 23:40 - The American System Is One Big Grift
The American System Is One Big Grift
Authored by Peter van Buren via TheAmericanConservative.com,
The Bidens, and even the Clintons, are small-time players. The real corruption is much bigger, much higher, and entirely unpunished.
I learned the facts of life from a drunk uncle. He was not an American, and worked in international construction in Asia. His main job was to bribe people. Over the course of many tiny glasses of some awful, clear Asian liquor I learned every yard of concrete poured required money to gangsters who controlled unions and to politicians who controlled permits. A fact of life, he said. You get used to it. He even had a joke—my hands are dirtier than the guys who dig the foundations.
You come to realize someone is pulling the strings behind everything and it usually isn’t you, he said. The odd official just doing his job for his salary is a rube. You feel embarrassed for him, saying no for moral reasons. You learn, uncle slurred, to trust nothing. That politician on TV? The company just dropped off a nice check to his “charity.” Play by the rules? Those were the rules.
The first bribe I ever paid was to an Indonesian immigration officer, who noticed some small defect on my passport. Of course, he said, it could be resolved. Between us. With a fine (so many euphemisms). Off to the side. In cash. It was all of $20 to save a vacation but I felt filthy, cheated, a chump. But I learned the rules.
In New York we use the euphemism “tip,” and it is as required as oxygen to get through the day. A restaurant table pre-COVID. A last minute anything. A friendlier handling by a doorman. Timely attention to fix-it requests. My, um, friend, used to pay a lot of money for better hotel rooms until he learned $20 at check in with a friendly “anything you can do” often got him upgraded to the same thing at a fraction of the price. What, you still paying retail, bro?
I used to think it was all small stuff, maybe with the odd mafia king bribing a judge with real money or something else Netflix-worthy.
In America we were ultimately… fair, right? But things started to add up. We have our petty corruption like anywhere, but our souls are filthy on a much larger scale. America goes big or it goes home.
Things like the Clinton Foundation accepting donations from the Saudis to help with women’s empowerment, an issue of course dear to the heart of the Kingdom. When it looked like his wife was going to be president, Bill made six-figure speeches to businesses seeking influence within the U.S. government, earning $50 million during his wife’s term as secretary of pay-for-play state. The Foundation, now mostly out of business, was at its peak a two-billion-dollar financial dangle. It spent in 2013 the same on travel expenses for Hillary and her family as it did on charitable grants. The media, forever big Clinton fans, told us we should be used to it. Hey, Nixon was so much worse.
Trump refused to be very specific about who his charity donated to. We know its offshoot, the Eric Trump charity, donated to a wine industry association, a plastic surgeon supposedly gifting nose jobs to kids, and an artist who painted a portrait of Donald. Trump-owned resorts received $880,000 for hosting Trump-sponsored charity events. Trump donated money from his foundation to conservative influencers ahead of his presidential bid.
With Joe as vice president, the Bidens made $396,000 in 2016. But in just the four years since leaving the Obama White House, Joe and Jill made more than $15 million. In fact, as his prospects for election improved, Joe and his wife made nearly twice as much in one year as they did in the previous 19 years combined. Joe scored $10 million alone for a book no one read. Jill was paid more than $3 million for her book in 2018. Joe has a tax-dodge S Corporation that donated money back to his own political PAC. Then of course there was Hunter, who scored millions in Chinese and Ukrainian money for doing nothing but being Joe’s son.
About half the nation got very twisted over Trump’s corruption and actively avoided noticing the Clintons and Bidens, and vice-versa, to the point of covering their ears NYANYANAYNYA. Yeah, politicians are corrupt, but does anyone think the donors in all three cases didn’t know what they were buying? What, you still voting retail, bro?
But even all those millions, measured in Epsteins (a unit of influence buying I just made up) are petty cash. Real corruption scales. Pre-COVID America’s 614 billionaires were worth $2.95 trillion. As the Dow hit record highs this month, there are now 650 billionaires and their combined wealth is $4 trillion. The 400 richest Americans own 64 percent of the country’s wealth.
Where’d all their money come from? You.
Dan Gilbert, chair of Quicken Loans, worth $7 billion in March, is now at $43 billion (thanks for paying on time each month.) Who benefited more from COVID and everyone buying from home then Amazon and Jeff Bezos? It takes a lot of poor people to sustain that amount of wealth at the top.
Money is always good. But it is wrong to think just in dollars. That’s how small-time grifters like waiters and the Bidens think. The real rich understand wealth as power. The power to shape society and government to ensure they make more money for more power until someday they Have. It. All. You hope one day for an upgrade to business class; they own the jet.
To talk about conspiracy theories is to imply something “different” happened, that the system does not work as intended; for example, instead of an election the president was assassinated to change leaders. So let’s not call what happened this autumn to elect Joe Biden a conspiracy.
But here is what happened.
Corporate media owned by the wealthiest Americans spent four years attacking Trump. Working as a single organism fused to the Democratic party as its host, they tried to bundle Trump into a SuperMax as a literal Russian agent. When that failed they ginned up an impeachment with more holes in it than a bad joke about Stormy Daniels. The same media then pivoted to defense when it mattered most, sending information about Hunter Biden that would have changed the election down the memory hole, and policing social media to Joe’s advantage.
Corporate pharma, also owned by the same people, held back announcement of COVID vaccines until just after the election. The intel community, tightly bound with Big Tech and its super-wealthy owners, did its part leaking and concealing information as needed. They too worked to discredit the Hunter Biden story by calling it Russian disinfo. Money that actually controls information is gold.
Earlier in the contest something happened, again, in Democratic primaries which began with some of the most progressive candidates in the running since Henry Wallace. Instead a politician known as the Senator from Mastercard was pushed into the White House. It was just a coincidence two promising candidates, Buttigieg and Klobuchar, dropped out nearly simultaneously just ahead of the South Carolina vote Biden desperately needed to end Bernie, again. How many people in America are powerful enough to have made those phone calls to Pete and Amy?
Biden promptly returned the favor, filling his Cabinet with the same old thinkers corporate America liked from the Obama years. A highlight is Janet Yellen (net worth $13 million) at Treasury, who helped swizzle the corporate bailout that created the .01 percent out of the one percent after the Great Recession. Notice how crises for most of us like the Recession and COVID end up benefiting the wealthy? Biden was wrong when he told donors “nothing would fundamentally change” for the wealthy when he’s in charge—actually, things’ll get better.
A tiny percentage of Americans own, control, and benefit from most everything; some call them the one percent but a large number of even those people are just slugs and remoras (hedge fund managers, corporate lawyers) who feed off the crumbs left by the really powerful. You know a handful of the names—Bezos, Gates, Buffet—because they own public-facing companies. Most of the others prefer less public lives while they control the public.
And silly you, you worried that it was the Russians who stole the election. What, you aren’t down with using Prime points to vote in the next election, bro?
Tyler Durden
Mon, 01/04/2021 – 23:20 - China Seeks Military Base On The Moon In Next Decade: Report
China Seeks Military Base On The Moon In Next Decade: Report
A new report in Newsmax argues that “When it comes to the next phase of space exploration, China has its eyes on domination, placing the U.S. in danger of losing its superiority in technology, economics, and world power.”
Multiple foreign policy thinkers and China watchers say “The dramatic new space race includes China’s plans to establish a military base on the moon within 10 years,” according to the report. Though during the historic space race of the 20th century China was far behind the US and Soviet Union, Brandon Weichert, author of the book “Winning Space: How America Remains a Superpower,” maintains that currently “China wants to have a lunar colony by 2028 and a military base on the moon by 2030.”
The report concludes further that “NASA does have a plan to return to the moon via its Artemis program, but it is open to other nations. Experts also worry it won’t be a priority under a Joe Biden administration.”
Weichert along with other apparent China hawks cited in the report claim that Beijing is intent on militarizing space while US plans to counter this are much less defined and behind in preparation, also as US satellites could come under threat, considering further that anti-satellite weaponry is already advancing by US rivals Russia and China.
Weichert put forth the following alarming scenario:
“The biggest issue we are going to need to contend with is averting a space Pearl Harbor,” Weichert said, pointing out that the U.S. relies on satellites more than any other country in the world and has done little to defend them from a possible attack. “China and Russia have been developing counterspace strategies that are meant to deny America access to satellites.”
Adding to this, the report cites China commentator Gordon Chang, author of The Coming Collapse of China, to lay out further:
In the near term, he said China or Russia could use space as a “first strike area” by knocking out satellites as a prelude to attacking the U.S. or its allies on the ground. If the U.S. is deprived of its technology and loses communication with its allies, he said the Russians could easily carry out an invasion of the Baltics or the Chinese an attack on Taiwan in a “nightmare scenario.”
“We have an economy and military dependent on satellites,” Chang said. “We could lose the next war within the first 10 minutes of a conflict if they take down our space assets.”
They are arguing that the US urgently get back into establishing a firm presence on the moon in order to safeguard its resources and prevent something like a Chinese military colonization scenario.
Of course, it remains that the alarmism is based mostly on heavy speculation as to China’s near and long-term intent. The reality remains that when it comes to space, all others are far behind America’s proven capabilities, meaning generally that if US defense leadership senses others are closing the gap it can more easily act at any point.
Tyler Durden
Mon, 01/04/2021 – 23:00 - Queensland Cops Pay Home Visit To Author Who Bragged On Twitter About COVID-Violating Jog
Queensland Cops Pay Home Visit To Author Who Bragged On Twitter About COVID-Violating Jog
Authored by Paul Joseph Watson via Summit News,
Queensland Police in Australia responded to a man who bragged on Twitter about going on a jog that violated lockdown rules by paying him a home visit.
“Sneaky run across the border and back. Avoided the CCP virus police,” tweeted author Lyle Shelton along with some pictures of a beach.
Sneaky run across the border and back. Avoided the CCP virus 🦠 police. pic.twitter.com/rWdOd1SUfj
— Lyle Shelton (@LyleShelton) January 2, 2021
https://platform.twitter.com/widgets.js
“He was referring to his Saturday run from Coolangatta on the Gold Coast, around Point Danger on the interstate border, and into Tweed Heads in NSW, before coming back,” reports the Brisbane Times.
The next day, Queensland Police responded by commenting on Shelton’s thread, “We are aware of this tweet and making further enquiries.”
We are aware of this tweet and making further enquiries.
— Queensland Police (@QldPolice) January 3, 2021
https://platform.twitter.com/widgets.js
Under Australia’s draconian lockdown rules, people are barred from crossing state borders unless they have an “essential” reason.
However, it subsequently emerged that Shelton, who is also a conservative political activist, has a G-Pass (General declaration pass) which allows him to cross the border without having to quarantine.
Despite this, Queensland Police Commissioner Katarina Carroll blamed Shelton for wasting police resources after they investigated and cleared him of any wrongdoing.
Shelton said that his tweet was a joke and questioned why Twitter didn’t react the same way when thousands of Black Lives Matter demonstrators gathered.
“It seems strange to me there has been so much interest in one person’s jog along a beach track, but little interest when 10,000 people were on the streets of Brisbane at the height of the pandemic,” he said.
Shelton also revealed that officers came directly to his home to quiz him about his jog.
“They wanted to know if I had been in hotspot, I hadn’t … they were here for two minutes,” he said.
“I think there are people on social media who have other agendas … I think this was a case of haters on Twitter amping it up for their own purposes,” he added.
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Tyler Durden
Mon, 01/04/2021 – 22:40 - Putin Pushes Plan To Roll Out COVID "Immunity Passports" In Russia
Putin Pushes Plan To Roll Out COVID “Immunity Passports” In Russia
As Russian President Vladimir Putin ramps up his aggressive campaign to stamp out COVID-19 once and for all (as Russia races to vaccinate its most vulnerable citizens while striking deals to supply “Sputnik V” to developing markets the world), the embattled president has just raised the possibility of distributing ‘immunity passports’, an idea that has gained traction around the world since the dawn of the pandemic.
According ton an RT report, the Russian government is considering the development and distribution of documents verifying whether individuals have been vaccinated. China has already road-tested technology transmitting people’s COVID status via smartphone apps, and it’s widely suspected that Beijing will impose some version of immunity passports, if they haven’t already.
Russian PM Mikhail Mishustin has been tasked with carrying out the policy.
In a series of instructions to officials, published at the end of 2020, President Vladimir Putin ordered policymakers “to consider issuing certificates to people who have been vaccinated against Covid-19 infections using Russian vaccines…or the purpose of enabling citizens to travel across the borders of the Russian Federation and those of other countries.”
Russia’s Prime Minister, Mikhail Mishustin, has been charged with implementing the recommendations, and is set to report back on January 20.
For once, Putin and American billionaire Bill Gates will be seeing eye to eye, as support for “immunity passports” grows not just among governments (even in “liberal democracies” like Canada), but the private sector as well. As RT reminds us, the IATA has voiced support for “immunity passports” as a strategy for hastening the revival of air travel.
The International Air Transport Association, which represents 290 airlines across the world, has supported the idea of vaccine passports, and is developing its own digital system to track who has been immunized against the virus. Passengers may be expected to present equivalent documents before being allowed to board planes in the future. Immunizations with the Russian-made Sputnik V vaccine, the first to be registered for the prevention of Covid-19 anywhere in the world, have been taking place in growing numbers in the capital and across the country. More than 70 centers in Moscow are now offering jabs, and at least 800,000 people have received their first dose.
Remember, once they arrived, people might soon find “Immunity Passports” will become a permanent facet of their lives: even after the COVID-19 pandemic ends, they could be used to offer evidence that a traveler has been vaccinated – not just for COVID-19, but for any other diseases, or even perhaps mutated forms of COVID-19.
Critically, as we noted previously, if we are going to live in a world where vaccines are mandatory for travel, who is to say that every nation on Earth is going to acknowledge the validity of every other vaccine. The Mainstream Media makes it seem as though just getting any vaccine with some sort of paperwork to back it up should be good enough, but this is unlikely to be true
If push comes to shove and this concept of travel papers based on vaccination (immunization passports) comes to pass then it is very likely that non-Western versions will “not count” at border crossings. Although with enough time and money one can probably get any type of vaccine anywhere, for the overwhelming majority this could create a new invisible Iron Curtain – the Western Vaccines on one side with the Russian one (with other possible outlier versions) on the other.
Map: The “geopolitical vaccination space” of Russia’s Sputnik V. Dark green has ordered millions, light green is considering.
This may sound like a stretch of the imagination but the madness of Russophobic conspiracy theories seems to have no bounds. And most importantly governmental reactions to the Covid-19 Pandemic have been harsh, dubious in effect, and very short sighted. There is a real chance that in 2021 we will see the rise of the geopolitics of vaccination.
Tyler Durden
Mon, 01/04/2021 – 22:20 - In Bizarre Flipflop, NYSE Ignores Trump Executive Order, Refuses To Delist China Telcos
In Bizarre Flipflop, NYSE Ignores Trump Executive Order, Refuses To Delist China Telcos
In a bizarre turn of events, NYSE has decided to reverse its previous decision (from last Thursday) to follow President Trump’s Executive Order to delist three Chinese Telecom giants (China Mobile, China Telecom, and China Unicom Hong Kong) identified as “affiliated with the Chinese military”.
The investment ban will take effect on Jan. 11, just days before President-elect Joe Biden is due to be inaugurated, and according to NYSE on Thursday, trading in the three companies was to be suspended possibly as soon as Jan. 7 or as late as Jan. 11.
Maybe not so “strong” after all…
But now, in a statement on parent ICE’s website, NYSE reversed its previous stance:
In light of further consultation with relevant regulatory authorities in connection with Office of Foreign Assets Control FAQ 857, available here, the New York Stock Exchange LLC (“NYSE”) announced today that NYSE Regulation no longer intends to move forward with the delisting action in relation to the three issuers enumerated below (the “Issuers”) which was announced on December 31, 2020.
At this time, the Issuers will continue to be listed and traded on the NYSE.
NYSE Regulation will continue to evaluate the applicability of Executive Order 13959 to these Issuers and their continued listing status.
Hong Kong-listed China Telecom shares are soaring 8% on the news…
The NYSE’s decision follows threats from Beijing:
The ministry of commerce said in a statement that China will “take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises,” according to the state-run Global Times.
The commerce ministry said that the U.S. was “abusing national security and using state power to crack down on Chinese enterprises” and said the move was “not in line with market rules and logic, which harms not only the legitimate rights of Chinese enterprises, but also the interests of investors in other countries, including the US.”
The Chinese Foreign Ministry also accused the U.S. of “viciously slandering” its military-civilian integration policies and vowed to protect the country’s companies. Chinese officials have also threatened to respond to previous Trump administration actions with their own blacklist of U.S. companies, but have so far failed to do so.
So, the question is simple – did Xi yank Biden’s leash over incriminating Hunter malarkey… and Biden promised NYSE he’ll undo Trump’s EO in three weeks anyway?
Conspiracy theory? Or is the NYSE now in the habit of simply refusing to acknowledge a presidential executive order that warns of funding firms associated with the Chinese military? Seems like a strong stance for a stock exchange to take in the middle of such a tense geopolitical situation.
Tyler Durden
Mon, 01/04/2021 – 22:14 - Taibbi: 2021 Has to Be Better Edition
Taibbi: 2021 Has to Be Better Edition
Authored by Matt Taibbi via TK News
A year ago this week, I sat in a left corner seat in a school auditorium, watching as presidential candidate Andrew Yang yukked it up with teens at Concord High in New Hampshire.
Yang was a hit. He said he wanted to give sixteen-year-olds a thousand bucks a month, the vote, and legalized weed. He also told them a generation of political leaders had left a sociopolitical “disaster” they would imminently be forced to address. “You could even call it a shit show,” he said (I noted a ripple of teacher applause).
Afterward, I asked about what at the time seemed like a small controversy. The Democratic Party was scheduled to hold a primary debate in Des Moines a few weeks later — on January 14th, 2020, to be exact — and it was beginning to look like Yang, Cory Booker, Tulsi Gabbard, and a host of other viable-ish candidates would be excluded.
The Democratic National Committee had been regularly changing qualification procedures for TV debates. At one point they allowed candidates polling as low as 1%. Now they were insisting on four “qualifying” polls showing 5% support or higher, or two polls showing 7% or more in the early battleground states of Iowa or New Hampshire. Which was fair enough, except there hadn’t been a “qualifying” poll in over a month, since November 17, 2019, in fact.
Yang’s campaign had been a success. His innovative P.R. strategy, led by a core of online #YangGang volunteers, caused the heretofore little-known business figure to become the fifth-largest fundraiser in the fourth quarter of 2019, pulling in $16.5 million. For context, this was just $6.2 million less than eventual nominee Joe Biden ($22.7 million). The late surge prompted Buzzfeed to write, “Andrew Yang Could Win This Thing.”
The Party didn’t agree. When Yang joined Booker and billionaire Tom Steyer in offering to fund new polls, they told him to suck it. It wasn’t the DNC’s problem. It was, they said, just bad luck that the 16 “qualified” polling organizations, like the New York Times, hadn’t done a survey in a while. “They should do more independent polling,” the Party suggested, in amusing deadpan.
When I asked Yang if he was disappointed, he laughed. “We’re operating on the assumption the debate doesn’t exist… Besides, all of this stuff ahead of time historically hasn’t made the determination,” he said. “You know what has? Voters.”
I liked Yang personally — he’s a rare genuinely funny politician — but was mostly agnostic about his campaign, ironically apart from his attitude about things like this. Unlike many politicians, whose aides constantly whisper off the record about the various wrongs done to their candidate, Yang embraced the long odds of his campaign, seeming to take it for granted that the institutional deck would be stacked against him.
He figured just having a fair shot with voters was reason enough to be optimistic, and why not? At that moment in time a year ago, the persuasive authority of institutional America seemed at its nadir.
An impeachment drama cooked up by the Party and relentlessly propagandized by mainstream news would prove a massive dud, both politically and from a ratings perspective. Legacy press outlets resorted to writing explainer pieces about why the public wasn’t as mesmerized as it should be, with the L.A. Times noting that “sobriety and clarity” were “a hard sell in an ecosystem where escapism and mirrored reality are the currency.” New York explained that Nielsen ratings didn’t account for people “checking in periodically on a C-SPAN stream.” There were many similar stories written to explain the impeachment drama’s lack of impact on Donald Trump’s poll numbers.
Worse, it was looking like the nominees for the general election would be two oft-denounced op-ed targets in Bernie Sanders and Donald Trump. A string of efforts by a panicking political elite to restore order failed, from the silly debate scam, to scare tales about Vladimir Putin scheming for Bernie (as well as Trump), to a half-baked smear campaign about Sanders allegedly telling Elizabeth Warren “a woman can’t win” — a story reported as fact by all the usual media suspects that the public roundly disbelieved — to a far more serious effort to buy the Democratic nomination outright through the bluntly obnoxious campaign of Mike Bloomberg.
The year 2020, in other words, looked destined to be the climax of a long-developing story about the collapse of public faith in the pronouncements of America’s most powerful institutions: the news media, the two political parties, the medical and pharmaceutical establishments, the intelligence services, Wall Street, etc.
I was skeptical that anything would change much, but it did seem the public’s snowballing alienation was moving to a new phase. Genuinely interesting ways to re-think society might now be embraced. Yang was symbolic of this. Though I didn’t necessarily buy his guaranteed income scheme, it was fascinating to hear how many people in places like New Hampshire were open to the concept. As was made clear in 2016, huge numbers of people were and are increasingly open to anything. Like Ice Cube, a lot of Americans were broke, their feet hurt, and they were “Down For Whatever”:
The clear subtext of the last half-decade of political upheaval has been rising impatience with how difficult it has become to enjoy things once considered the basics of life. Young people leave school saddled in debt, consider themselves lucky if they get health insurance, and are usually so far from being able to imagine owning their own homes or having real professional security that marriage or children seem like absurd, unattainable luxuries.
For older people further along in life, the logistical challenges of mere living have become so outrageous that many have committed to Dickensian work regimes, only to discover that in America, even working overtime costs money. You take a second job to pay for the child care necessitated by the first, and the little ancillary costs that seemed not so serious once — from DMV fees to getting a stove repaired to parking — now trigger a pucker factor just to consider. That’s without even taking into account all the various near-automatically bankrupting endgames built into the American experience that most people try as much as possible not to think about: serious illness, an elderly relative forced into care, divorce, surprise legal problems, etc.
The fact that a year ago, anyone thought it made sense to tell the millions of people forced daily to navigate all this stupidity that they needed to focus on a labyrinthine political controversy in Ukraine — and to blast them for deficits of “sobriety and clarity” when they didn’t — told you everything you needed to know about the cluelessness of the people who run this country.
Then the pandemic happened.
No conspiracy theories are necessary to point out that all of the institutions Americans were in the process of rejecting just a year ago have since increased their power and influence. Be it opportunism or coincidence, the international emergency has written a dramatic heel turn into our history.
A sweeping Fed-based rescue program resulted in enormous booms in asset values, allowing America’s wealthiest to increase their net worth by nearly a trillion dollars since the start of the pandemic (in mid-summer, American billionaires were collectively earning $42 billion per week). The disease pummeled people who actually had to travel to work, while empowering conglomerates like Amazon, which tripled its profits in the third quarter alone. Most of our lives are online now, an ironic reward to intelligence services that went unpunished after illegal surveillance programs were disclosed in the Obama years.
After all that upheaval, the White House is about to be re-occupied by a political fossil from the eighties, surrounded by a zombie cabinet of Iraq War supporters, drone assassination proponents, corporate lawyers, lobbyists, and neoliberal economists, coming from places like Amazon, DuPont, and Raytheon (the Pentagon appointment of the current Henry Kissinger Chair from the Center from Strategic and International Studies was a nice homage to the unchangingly vile character of America’s royal court). How bad any of this is in comparison with the chaotic presidency of Donald Trump is arguable, but it surely represents the triumph of Sameness, a powerful reminder that in America, you ultimately can’t beat City Hall. Or can you?
The news in recent years often reads like accounts of America before the Sixties upheavals. That was also a time when long-held myths were rapidly losing force and people were beginning to question the palate of life choices celebrated in places like the Book of the Month Club and Life magazine. Men wondered why they were being sent around the world to kill poor people, only to come home to what Paul Goodman described as a “style of life dictated by Personnel… to work to pay installments on a useless refrigerator.”
Women had it worse, consigned to tend house and give themselves nightly as a reward for men who’d completed their “covenant of murder” in places like Vietnam. Spirituality in much of Jim Crow America was a superficial weekly injunction to conformity at archaic churches and temples, while our real religion, consumerism, became a constant devotional exercise, bolstered by a thousand dazzling commercials for products that people began to realize fulfilled every conceivable need, but the most important.
We’re in such a similar place, and though America’s political leaders learned a great deal from those times — the list of absurd Woke Headlines run here a few days ago chronicles the extremely clever effort to commoditize and sell the desire for political action that had no permissible outlet in the sixties — the reality is, if you keep giving people nothing but crappy choices, they’ll eventually write their own story, even if they can’t do it through voting.
Americans are tired. The rancorous politics they’ve been sold as bread-and-circus diversions are tiring, not laughing is tiring, having too much work and too little money is tiring, being stuck inside now is tiring, even being sexually frustrated is tiring (look at the stats on that one sometime, if you want insight into why so many Americans seemed a tad touchy in recent years). The most exhausting part is the mandate to take it all seriously. Unfortunately for America’s leaders, that’s the easiest part to change, which is why 2021 feels like such a good candidate to be the year things finally begin turning in a happier direction.
Distortions on CNN or in the New York Times drive people crazy, but that’s only because they remember trusting those sources. They’ll forget soon and learn to walk right past mass media blather as if it were just amusingly terrible wallpaper, the way Soviets eventually did with Pravda and Izvestia. Student debt is crushing and college is an overpriced scam, but a reckoning of sorts is coming when people stop being ashamed of vocational school. Facebook and Instagram turbocharged the impact of fear-based “ring around the collar”-style marketing, but what happens when the pandemic recedes and going offline is possible again? Throwing off worries about likes and rediscovering real-life interaction feels destined to become a fashionable dissident statement, in the same way tuning in, turning on, and “dropping out” was an obvious response to the stultifying conformity of the fifties.
Watching billionaires get richer and all the discredited vultures of the War on Terror and financial crisis eras sweep back into power is a bummer, but the tighter those people grip the reins, the more inevitable a counterculture feels. Who knows what that will look like, but it’ll probably be based on friends, family, and other things you can’t buy, and surely kinder and less maddening than the stress-packed world we’ve been asked to live in. My New Year’s resolution is to start living that other life sooner rather than later, after I check Twitter one last time, of course…
In TK recently:
The Wokest News Stories of 2020. A review of the year in radical political ideas, as evangelized with surprising enthusiasm by the national corporate press. Out from behind a paywall for New Year’s week.
Meet the Censored: Mark Crispin Miller. An NYU professor is denounced by colleagues for recommending reading skeptical of mask use.
Neoliberal Champion Larry Summers Opens Mouth, Inserts Both Feet. The testudine former Harvard President articulates the view from the bubble about the desirability of bailing out the lumpenvolk.
Poll: Choice for a Book Review. Will be using TK as a forum for subscribers to read and discuss a book each month. I checked the poll mid-stream and ordered The Culture of Narcissism and The Deficit Myth, which both earned a lot of votes from subscribers, so I’ll be reading and reviewing whichever of those arrives first (will advise ASAP). I may try a review-as-I-read method using the discussion tool.
More coming this week. Hope you all had a good holiday.
Tyler Durden
Mon, 01/04/2021 – 22:00 - Trump Presents 'The Real Numbers' At Georgia Election Eve Rally
Trump Presents ‘The Real Numbers’ At Georgia Election Eve Rally
President Trump is speaking from Dalton Regional Airport in Georgia ahead of tomorrow’s special runoff election, a race that will decide the fate of who controls the United States Senate. Earlier in the day, Trump teased what he called “the real numbers” from the November general election, after he called the state’s official tally “verifiably WRONG.”
The speech comes on the heels of fresh controversy, Saturday phone call between Trump and Georgia Secretary of State Brad Raffensperger leaked to the Washington Post. In it, Trump demanded that Georgia ‘recalculate’ the November 3. election, and ‘find’ enough ballots to overcome the widespread allegations of fraud, including video evidence.
Watch Live:
Earlier in the day, Georgia official Gabriel Sterling attempted to upstage Trump’s rally going through election fraud claims point by point and ‘debunking’ them. Sterling at one point said that the president’s continuing claims of election fraud were ‘undermining Georgians’ faith in the election system.”
* * *
President Trump on Monday suggested that the election results can’t be certified due to “verifiably WRONG” numbers, and teased the release of “the real numbers” during a speech in Dalton, Georgia set for 8:30p.m. eastern time tonight.
How can you certify an election when the numbers being certified are verifiably WRONG. You will see the real numbers tonight during my speech, but especially on JANUARY 6th. @SenTomCotton Republicans have pluses & minuses, but one thing is sure, THEY NEVER FORGET!
— Donald J. Trump (@realDonaldTrump) January 4, 2021
Trump’s Monday night rally is intended to boost Republican Sens. Kelly Loeffler and David Perdue, however it’s clear that he’ll focus on his ongoing challenges to the 2020 election, which has the support of at least 140 House Republicans and nearly a dozen GOP Senators led by Sen. Ted Cruz of Texas.
“We’ve seen in the last few months, unprecedented amounts of Voter Fraud.” @SenTedCruz True!
— Donald J. Trump (@realDonaldTrump) January 4, 2021
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In a contentious phone call secretly recorded by Georgia Secretary of State Ben Raffensperger and leaked to the Washington Post, Trump warns the Republican official that “The people of Georgia are angry, and these numbers are going to be repeated on Monday night, along with others that we’re going to have by that time, which are much more substantial.“
Later Monday morning, Trump attacked the “Surrender Caucus” of Republicans who want to accept the results of the election and move on with life under a Biden administration.
The “Surrender Caucus” within the Republican Party will go down in infamy as weak and ineffective “guardians” of our Nation, who were willing to accept the certification of fraudulent presidential numbers!
— Donald J. Trump (@realDonaldTrump) January 4, 2021
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Tyler Durden
Mon, 01/04/2021 – 21:57 - Virtu Financial Becomes Latest Corporation To Ditch NYC In Favor Of Florida
Virtu Financial Becomes Latest Corporation To Ditch NYC In Favor Of Florida
Virtu Financial has become the latest in a long line of companies leaving New York for Florida.
It’s a trend that started early this year when we first reported that Citadel had set up a makeshift trading floor at the Four Seasons in Palm Beach. Back then, the thought process was to get out of crowded areas due to unknowns about the pandemic.
As the year has progressed, companies and executives have continued to leave places like California and New York (and their liberal political leaders) in favor of lower taxes and less regulation in places like Texas and Florida. Companies like Elliot Management and Goldman Sachs have also moved some offices to Florida.
Virtu is the latest to follow suit, according to Bloomberg. It’ll be moving about 30 people to Palm Beach Gardens and is closing in on signing a 10 year lease. By the end of this year the firm expects total employees in Florida to rise to 50 people, about 10% of their workforce. The Palm Beach location is set to become a “full-fledged base” for the company, the report says. Employees who transfer will effectively get an 11% bump in pay due to Florida having no income tax.
Chief Executive Officer Doug Cifu commented: “We are dramatically oversubscribed for people who want to relocate from the tri-state area. We surveyed our employees, and the No. 1 concern that people had was quality of life — but also taking mass transit to New York City any time in the foreseeable future.”
“I was always a non-work-from-home, people-gotta-be-in-the-office, trading-room kind of guy. But I don’t think it’s practical given the modern world and where people want to live their lives and where people are happiest,” he continued.
The regulatory environment will likely help bolster what has already been a record year for the company, which doubled its net trading income to $1.82 billion through the third quarter.
The company will shrink its footprint in Manhattan by 75% and will sublet its offices while looking for a “smaller, cheaper” location. Cifu says the changes were spurred by working from home, but again – the regulatory environment – and New York’s consistent promise of higher taxes – likely played into the decision making, as well. It also helps that Cifu owns part of the Florida Panthers hockey team.
He says he is fed up driving from New Jersey to Manhattan and spending 12 to 14 hours away from home each day. He says in Florida, his commute will be much shorter: “I would probably leave my house at 7:30 and I would be in the office by 7:36. On a good day, I’d probably leave at 4:30 — see the markets close. In the spring and the fall, for sure I’ll get 18 holes in.”
“Why am I forcing 400-odd people to schlep to lower Manhattan? I hate it, and I’m the CEO — I don’t have a boss, I don’t have to be there on time. Can you imagine the other 399 people? They must hate it much worse than I do,” Cifu concluded. “Doing business in Florida is more inviting and more welcoming. There are parts of the political class in New York and New Jersey that just don’t value the jobs and the industry.”
Tyler Durden
Mon, 01/04/2021 – 21:40 - World Out Of Whack: Global Market Commentary And Outlook
World Out Of Whack: Global Market Commentary And Outlook
Submitted by Ritesh Jain of World Out Of Whack
Today, much like in the past, it is not the best idea that wins, but the narrative which captures the most mindshare. Nothing rings true than this quote of 1933 made by the Propaganda Minister of Nazi Germany
“It is the absolute right of the state to supervise the formation of public opinion.” – Joseph Goebbels
As Coronavirus cases continue to increase in many parts of the world and lockdowns are put in place, the story should look grim; but there is also light at the end of the tunnel because of vaccines. After the vaccines have been administered to most of the population, there will be plenty of pent-up demand that will help the economy recover. That said, who needs vaccines when you have the central banks backstopping the markets by introducing high amounts of liquidity?
What appear to be bubbles right now, could go exponential. As J.C Parets write “News was poison in 2020. It will be worse in 2021”. The investors who often get markets right knows how to shut off the news and focus on what is important.
The vast liquidity we have today is emanating from the balance sheets of central banks. As more electronically printed dollars are pumped into financial markets, the cost of financing goes down, thereby pushing asset valuations higher. This view is further reinforced by a weakening dollar, and even by the fact that Jerome Powell has called out the explicit link between low interest rates and the high valuations in markets.
Vast amounts of liquidity can also create a lot of fragility in markets. Even if central banks continue injecting liquidity into the system, at some point markets will fully price it in. Once that happens, it can become the bigger driving force that may set up markets for a taper tantrum 2.0 of sorts as the system demands not just a continuation of liquidity provision but increasing amounts of it. Investors should no longer continue to think about how much central bank balance sheets have increased, but rather the rate at which the balance sheets are growing. The exhibit below by Morgan Stanley points to a deceleration in the rate of growth of G-4 central bank balance sheets as we approach the end of 2022.
As most readers will already know, financial markets are complex systems, which means they are highly interlinked and have feedback loops. These feedback loops lead to nonlinear effects, which means small shocks can transform into large ones due to each node in the system being interlinked to other nodes. For comparison, when too much snow accumulates, the probability that even a small snowflake can trigger an avalanche goes up significantly.
With the median correlation across asset classes reaching new highs, the probability of an avalanche goes up. Nobody could have predicted COVID-19 from appearing when it did; but what had been known for a while was that due to globalization, the world was much more prone to eventually experience a global pandemic. In a similar fashion, as markets become unhinged from their underlying fundamentals and become liquidity driven (which in turn drives correlations higher), the probability of an ‘avalanche’ occurring in the markets is becoming more and more likely.
The response to the global pandemic was to provide financing through loan guarantees and green asset financing by the government. We have had quantitative easing programs since 2008, but we have not seen inflation in goods and services because banks were not lending money. This meant that an increase in the money supply did not make it into the real economy. Today, however, after experiencing an economic shock caused by COVID-19, the government response has led to money reaching the real economy.
The pandemic has taught governments that they can now – through MMT-lite programs – lend directly to the economy through the commercial banking channel.
“You can lead a horse to water, but you can’t make him drink” is an apt quote for liquidity (M2) sloshing around in the system but refusing to multiply (M3). The M3 velocity has been stubbornly falling since March 2020 but as per Gavekal’s Velocity Indicator this money is finally looking to multiply. Said differently, the horse has finally decided to drink water.
But before you start admiring the below chart you should keep in mind that
What is good for the economy is bad for the markets and what is bad for the economy is good for the markets.
Let me explain. Liquidity is fungible. It can either go to the Financial markets or it can go the real economy. If vaccines work and business closures and layoffs subside then the money hiding in financial assets will spill over to the real economy and force Monetary policy to tighten financial conditions.
So, rising Money velocity is not good for Financial markets and on the contrary will lead to elevated volatility in financial assets.
The increase in velocity is bad for US dollar and US Dollar should continue to fall but not in a straight line. This liquidity is currently lifting all boats, but I think we will see some assets doing better than others in 2021. My bet is on Japan, Vietnam, African Continent, and commodities in general with a continuing bullish stance on precious metals, crude oil and agricultural commodities.
Central Bank digital currency.
A lot has been written in the media about central bank digital currencies (CBDC), and we might see the dawn of CBDCs with China increasingly looking like the first one to launch its version, known as CBEP.
As per a MicroStrategy paper titled “The cost of Money being nothing”:
If money supply is created centrally, it must also be used, or directed, centrally as indeed we are seeing at the moment with the lockdowns and the enormous surge in budget deficits. Under a CBDC scheme, the central bank would become arbiter of who should and shouldn’t be granted credit. By determining the price of money, it determines what is “value” and thereby what is produced and consumed, and how it is produced. It determines what the real return on capital is and how much capital is destroyed. By printing money to buy Treasuries, it has reshaped the entire economy around greater government spending and control. Under a central bank digital currency, monetary policy will become completely political.
Bullish on Japan
Japan is the only country in the G-7 where monetary policy and fiscal policy are working seamlessly thanks to embedded Abenomics reforms. Valuations are cheap, and more importantly, it is a very unloved market from an institutional and retail investor perspective. Below is a chart of 5-year flows into the biggest Japanese ETF (EWJ).
Further, this chart from Morgan Stanley explains the Japanese story in simple terms:
Bullish on Vietnam
Vietnam will be one of the few countries in the world that will boast double-digit nominal GDP growth rates once the COVID-induced slowdown is over. The country has real rates in the range of 200-300 bps and a low fiscal deficit, which is a rarity in today’s world. Positive real rates, low and stable inflation, low unemployment, and a positive current account balance are characteristics of a strong economy. India was exhibiting all these characteristics in 2002-2003 (except a positive CA balance) right before a domestic consumption boom began. Vietnam is also going to be a big beneficiary of a “reshoring boom” out of China
Bullish on Africa
Africa is resource rich and it is going to be the next frontier of growth led by technological advancement, connectivity and more importantly the battleground of largesse for the two competing superpowers i.e., US and China. China is already increasing its influence in Africa through its Belt and Road Initiative and it plans to complement that by extending its CBDC reach over the entirety of the continent.
African countries will have much better access to credit and will be able to sidestep a boom-and-bust cycle of currency devaluation, providing them with much needed economic stability.
Bullish on Commodities
Commodities almost always rise when there is a supply side shock. The rise in commodity prices is rarely demand driven because demand can be modeled, while supply shocks are much harder to predict. If you see the chart below you will find that all peaks and troughs happen around events, and I believe that COVID-19 was such an event, which has broken supply chains across the world. The years of underinvestment in commodities and energy in general was waiting for a catalyst to start showing up in prices and I think we have that catalyst firmly in place. I also believe that soft commodities, base metals, the entire energy complex including coal and Uranium and precious metals will see more inflow of capital as they are under represented in investors portfolio.
Where can we lose the most money?
We must understand that markets are not cheap by any measure.
I would say the easiest answer is in consensus, but the most concerning thing for me is the sentiment. Now, this does not mean we will get an imminent price correction, but it does mean that the market is vulnerable to any negative catalyst. I do not recall grappling with so many of these negative catalysts at the start of a year, and especially when most assets were not cheap from a historical perspective. The resurgence of the virus, a surprise increase in inflation, policy missteps, a jump in bond yields or bond spreads, fears of stagflation, China launching its digital currency, broken supply chains, geopolitical flashpoints etc. – and the list is still not exhaustive by any imagination, in my opinion.
I believe that there is a reasonable possibility that any of these catalysts could materialize and give us a risk-off environment at various points in 2021. I expect to see a 10-20% correction in broad indices whenever a risk-off episode materializes with much larger drawdowns for individual securities. All corrections will be met with a forceful response from Monetary and/or Fiscal authorities who are left with no choice but to support the system and hope to inflate away the massive overhang of debt built in the system.
The best way to play this environment is either through having cash (at least 30%) as an asset allocation, ready to be deployed at short notice, or by buying far out of money call options on volatility whenever the markets are in a euphoria stage.
The cash deployment during these events should be in commodity producers, asset owners or Emerging Markets
Tyler Durden
Mon, 01/04/2021 – 21:20 - In Surprise To Markets, BOJ Buys Smallest Amount Of ETFs In Four Years
In Surprise To Markets, BOJ Buys Smallest Amount Of ETFs In Four Years
The Bank of Japan bought just 50.1BN yen of ETFs on Monday – the first day of 2021 – the smallest amount it has bought in more than four years on a day when it has made a purchase as part of its ETF buying program.
The reason this is notable is two-fold: i) it made headlines on Bloomberg, demonstrating that in this centrally-planned “normal” what really matters is how much risk assets central banks buy (and at least the BOJ is sincere about its intentions to prop up the stock market no matter the optics, unlike its “shy” peers at the Fed), and ii) the central bank buying “only” 50bn yen in stocks is a newsworthy event.
As a reminder, in August 2016, after increasing its annual purchase target to 6 trillion yen, the BOJ more than doubled its daily purchase amount to over 70BN yen.
Since then it has never purchased less than 70b yen on days when it buys ETFs as part of its main program, although most days it does not make purchases; the BOJ separately buys 1.2b yen in ETFs every day to support companies’ investments in “physical and human capital.”
That changed on Monday when the BOJ inexplicably bought 20BN less than it normally buys on a day ending in “y.”
As shown in the chart above, the bank raised its buying to a peak of more than 200BN yen during the market crash in March, before lowering that amount gradually back towards 70BN yen; In 2020, the BOJ bought a total of 7.14t yen.
This is concerning for two reasons: the BOJ may be telegraphing to the market that its implicit support of the stock market will now be about 20% less, which would likely hammer Japanese stocks which will now have to reprice far less support from Kuroda and co; Worse, the BOJ wouldn’t be making such an implicit shift in its equity support in a vaccum, and if it is indeed confirm that this wasn’t some one off fluke, other central banks may soon follow suit.
While we wait for the answers, keep an eye on how many ETFs the BOJ will buy today: another 51BN day and things may get interesting. And another potential concern: on Tuesday the BOJ also reduced the amount of JGBs it purchased in the 1-3 year bucket from 500bn previously to “only” 450BN: are central banks starting to phase back their support of risk assets?
Tyler Durden
Mon, 01/04/2021 – 21:10 - Iran Starts 20% Uranium Enrichment Just As US Carrier Ordered Back To Gulf Region
Iran Starts 20% Uranium Enrichment Just As US Carrier Ordered Back To Gulf Region
Iran on Monday confirmed that it has resumed 20% uranium enrichment at an underground nuclear facility at a moment of soaring tensions with the US and Israel in accord with prior threats to do so if international US-led sanctions weren’t rolled back.
“A few minutes ago, the process of producing 20% enriched uranium has started in Fordow enrichment complex,” government spokesman Ali Rabeie announced on state media.
While the continued breaching of the terms of the 2015 nuclear deal is likely aimed at gaining more leverage ahead of Biden entering the White House on January 20, it comes at a moment of a heightened state of US military alertness in the region.
Fordo nuclear facility overhead, via Maxar/AP Tehran has long maintained its nuclear program is solely for peaceful domestic energy purposes, yet there are fears this puts the Islamic Republic on a more direct and easy path to developing a bomb, as The Guardian reviews:
The latest Iranian step takes Tehran further away from the terms of the deal, and underlines its willingness to play for high stakes with Washington. Up until now, Iran was enriching uranium up to 4.5%, in violation of the accord’s limit of 3.67%. Under the agreement, Iran is also only allowed to produce up to 300kg of enriched uranium in a particular compound form (UF6), which is the equivalent of 202.8kg of uranium.
Low-enriched uranium – which has a concentration of between 3% and 5% of U-235 isotopes – can be used to produce fuel for power plants. Weapons-grade uranium is 90% enriched or more.
The question now remains whether this could trigger either US or Israeli aggression, which happened the last time Iran declared it would enrich to 20% (a decade ago). Many analysts further believe it was Israel behind a recent “sabotage” campaign targeting Iranian nuclear energy and military sites over the past year, particularly the July 2nd Natanz fire and blast which destroyed part of the complex.
In reaction to Tehran’s declaration, Israeli Prime Minister Benjamin Netanyahu said this proves the Islamic Republic is seeking the bomb. In a statement he said it’s part of Iran’s efforts to “continue to carry out its intention to develop a military nuclear program.” He vowed: “Israel will not allow Iran to produce nuclear weapons.”
Aircraft carrier USS Nimitz, via US Navy Meanwhile, just ahead of Iran’s provocative announcement, the Pentagon has changed its mind over previously ordering home the lone aircraft carrier which within past weeks was patrolling the Gulf:
Just two days after the Acting Secretary of Defense Christopher Miller had ordered the supercarrier, USS Nimitz, to head home as a “de-esclatory” gesture toward Iran, the order has been rescinded and the Nimitz Carrier Strike Group is now set to remain in the Middle East until further notice.
Acting Secretary of Defense Chris Miller said in his statement, “Due to the recent threats issued by Iranian leaders against President Trump and other U.S. government officials, I have ordered the USS Nimitz to halt its routine redeployment.”
“The USS Nimitz will now remain on station in the U.S. Central Command area of operations. No one should doubt the resolve of the United States of America,” he added.
Given that also on Monday Iran announced it will be conducting “major drone exercises” starting on Tuesday, according to Fars, all of this is a recipe for a potential new conflagration in the Persian Gulf.
Tyler Durden
Mon, 01/04/2021 – 21:00 - Cruz: Google Is The "Most Dangerous Company On The Face Of The Planet"
Cruz: Google Is The “Most Dangerous Company On The Face Of The Planet”
Authored by Steve Watson via Summit News,
Senator Ted Cruz has continued his campaign against the unregulated expansion of Big Tech by labelling Google ‘the most dangerous company’ on the planet.
Cruz made the comments to reporters Saturday at a campaign event for the Georgia Senate runoff.
“I think hands down Google is the most dangerous company on the face of the planet. Google is the most dangerous because it’s the biggest by far. It is the most powerful by far. It controls the vast majority of searches people do,” Cruz noted after describing big tech as the “single greatest threat” to “free and fair elections.”
Watch Senator Ted Cruz expose Google, Twitter and Facebook. He says, “Google is the most dangerous company on this planet’.https://t.co/TeUalLcqrn
— OmShantiOm11🇮🇳 (@OmShantiSanghi) January 4, 2021
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Cruz referred to the 2016 election where “Google, through manipulated search outcomes, shifted over 2.6 million votes in 2016 to the Democrats.”
Cruz noted that psychologist Dr. Robert Epstein, who testified before Cruz’s Judiciary Subcommittee on the Constitution “is not a Republican. He is a liberal Democrat who voted for Hillary Clinton but is outraged to see that kind of abuse of power. Google is clearly the most dangerous.”
Cruz added that while Google is the most dangerous, “Twitter is the most brazen.”
“We just recently had a hearing where Jack Dorsey testified with a beard that looked like he had crawled out from under a bridge,” Cruz noted.
During that hearing, Cruz asked Dorsey if he believes Twitter has the ability to influence election outcomes, to which Dorsey replied “no”… an answer Cruz described as “absurd.”
“If you don’t think you have the power to influence elections, why do you block anything?” Cruz countered, forcing Dorsey to admit that “more accountability is needed.”
CRUZ: “Does Twitter have the ability to influence elections?”
DORSEY: “No”
CRUZ: “If you don’t think you have the power to influence elections, why do you block anything?” pic.twitter.com/6N21uxDvjw
— Daily Caller (@DailyCaller) October 28, 2020
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Cruz then asked Dorsey “Who the hell elected you and put you in charge of what the media are allowed to report and what the American people are allowed to hear?”
“Mr. Dorsey, who the hell elected you?” Ted Cruz says.
“We realize we need to earn trust more. We realize more accountability is needed,” Jack Dorsey responds.
Twitter shares taking a hit after that round of questioning 📉https://t.co/YVXYzGhOZo pic.twitter.com/4TLDsgHZ8U
— Bloomberg Technology (@technology) October 28, 2020
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Speaking Saturday, Cruz urged “Look, Twitter brazenly censored the New York Post when it ran stories about Hunter Biden and Joe Biden’s corruption concerning China, concerning Ukraine and Russia, and they just silenced it. Not only did they prevent you and I from circulating those stories, for two weeks, they banned the New York Post.”
Indeed, the company did more than that, they even blocked users from tweeting out the link to the Post story.
“The New York Post is not some fly-by-night organization. It is the newspaper with the fourth-highest circulation in the country. It was founded by Alexander freakin’ Hamilton,” Cruz urged.
Cruz added that Facebook CEO Mark Zuckerberg has “benefited because Twitter and Google are so rotten that even though Facebook’s pretty bad, just saying free speech is important makes him appear markedly better than his rivals, but all three are very serious concerns.”
The Senate voted last week to pass the National Defense Authorization Act without the repeal of Section 230 that President Trump had requested:
Our Republican Senate just missed the opportunity to get rid of Section 230, which gives unlimited power to Big Tech companies. Pathetic!!! Now they want to give people ravaged by the China Virus $600, rather than the $2000 which they so desperately need. Not fair, or smart!
— Donald J. Trump (@realDonaldTrump) January 1, 2021
Tyler Durden
Mon, 01/04/2021 – 20:40 - Two Decades Of Airline Passenger Traffic Wiped Out In 2020
Two Decades Of Airline Passenger Traffic Wiped Out In 2020
In a world plagued with a now-quickly-mutating virus pandemic running rampant in several countries sparking continued flight restrictions, airline passenger traffic worldwide plunged to two-decade lows in 2020, according to global aviation data firm Cirium.
Cirium found that 21 years of global passenger traffic growth was wiped out in a matter of months last year because of flight restrictions to mitigate the spread of the virus, reducing traffic to levels not seen since 1999. “In comparison to last year, passenger traffic is estimated to be down 67% in 2020,” the firm said.
April was the height of the air travel collapse. In that month, flights plunged to just 13,600 globally on Apr. 25, compared with 95,000 tracked by Cirium on Jan. 3. This represents a stunning collapse in global flights over the period, down by more than 86%.
Cirium’s data showed airlines operated 16.8 million flights from Jan. 1 to Dec. 20, down from 33.2 million in the same period the prior year. US travel was down 40% over the same period, from 21.5 million flights in 2019, while international flights were 68% below the 11.7 million flights tracked the year before.
Cirium said at least 40 airlines altogether ceased or suspended operations during 2020, with more failures expected for 2021. This has resulted in a tsunami of defaults, bankruptcies, and bailouts.
To view the list of the most prominent airline bankruptcies and bailouts of the past year, courtesy of Bank of America, read our most recent report titled “Mapping The Global Lockdown: Where Air Travel Is Partially Open And Where It’s Fully Closed.”
“This severe setback shows the true extent of the challenge faced by the struggling aviation sector as it has sought to reset itself in the new post-COVID-19 era,” Jeremy Bowen, CEO of Cirium, said.
Bowen said, “airlines have a way before returning to 2019 levels particularly as international travel is significantly down.”
Tyler Durden
Mon, 01/04/2021 – 20:20 - JPMorgan Flip-Flops Again, Says Bitcoin May Hit $100,000 "But Such Price Levels Would Be Unsustainable"
JPMorgan Flip-Flops Again, Says Bitcoin May Hit $100,000 “But Such Price Levels Would Be Unsustainable”
Back at the start of November, JPMorgan quant NIck Panigirtzoglou – perhaps tasked with being the skeptic in-house bitcoin strategist – predicted that based on position indicators and technicals, “bitcoin’s overbought positions by momentum traders such as CTAs could trigger profit taking or mean reversion flows over the near term.” Bitcoin, which was then trading around $14,000 not only did not mean-revert or “profit-take”, but absolutely exploded over the next few weeks and by the end of November it rose to just why of its previous, 2017 highs, trading just below $20,000.
Of course, anyone who had shorted bitcoin on the back of Panigirtzoglou’s trade reco was not happy, which may explain why less than three weeks later the JPM quant admitted that he was wrong and scrambling to goalseek a bullish narrative to placate the bank’s institutional clients who were now clearly (mostly) long bitcoin, proposed a gold-parity thesis, according to which there is some $42 trillion in cash sloshing around, the value of above ground gold at $12 trillion is about 27x greater than the market cap of bitcoin today, which at its all time high is still just $443 billion. In short, if the value of bitcoin were to reach parity with gold, the price of one bitcoin would have to increase to $$650,000 from its current price of $24,000.
This time Panigirtzoglou – who gave up trying to justify the relentless move higher with fundamentals, technicals, or any conventional methodology – was right directionally, and bitcoin proceeded to nearly double from its price of $18,000 at the end of November to a new all time high of $33,600 hit on Sunday.
Which brings us to today, when seemingly eager to repeat his mistake from two months ago when he prematurely called an end to the record bitcoin run, Panigirtzoglou has published a new report asking in “Has bitcoin equalised with gold already?” (spoiler alert: not by a long, long short… but as usual JPM has its own theory).
What is the latest JPM thesis? Well, having failed to spot the inflection point in bitcoin’s price using “technicals and momentum”, Panigirtzoglou has now flipped and instead is relying on valuation to tell him whether the price of the crypto is too high. Yes, a banking quant is using “valuation” of an intangible fiat-alternative monetary unit as a basis for a trading reco. And one wonders why almost nobody reads sellside research anymore.
In any case, in JPM’s latest attempt at
flip-floppingcalling what may be the most important price inflection point in the world today, the JPM quant writes that after bitcoin’s tremendous run in recent weeks – on the backs of both rapid institutional adoption and continued retail buying – the “valuation and position backdrop has become a lot more challenging for bitcoin at the beginning of the New Year.” Which, of course, is obvious: the higher something goes, the more likely it is to go down as well as up. If only JPM was as accurate in calling the first leg of the rally higher it may even have credibility in calling such inflection points, whether it uses technicals or – as in this case – valuations methods to come up with its conclusion.What is even more amusing is that having been already burned once, Panigirtzoglou is especially cautions and begins by caveating that he “cannot exclude the possibility that the current speculative mania will propagate further, pushing the bitcoin price up towards the consensus region of between $50k-$100k, we believe that such price levels would prove unsustainable.”
In other words, bitcoin can triple from here… but then it will reverse. That is clearly profound insight, and we hope that anyone who trades on such a reco has a balance sheet at least as big as that of JPM should they decide to short bitcoin here and then suffer billions in margin calls if the crypto currency were to first hit $100,000 per bitcoin.
Which brings us back to the question of just what “valuation” methods does JPM use to conclude that bitcoin’s run is coming to end? As Panigirtzoglou explains, “we had previously used two valuation metrics for bitcoin, one based on its comparison to gold and one based on its mining cost or intrinsic value.“
Because when “valuing” bitcoin the first thing that comes to mind is how much cheaper is it relative to another asset which can’t be valued, and the other “valuation” matric is to ascribe the cryptocurrency’s “value” to its cost of extraction… as if it were some commodity that is dug out of the ground and used for various industrial applications.
This is where you know Wall Street is reeeeeally starting to stretch in trying to ascribe a “fundamental” value to a price which reflects just two things: the trillions in excess liquidity chasing after non-fiat monetary units (which will survive after central banks destroy fiat with their pathological money printing), and expectations that inflation is about to explode which unfortunately markets can no longer represent using conventional means such as 10Y yields (more on that in a follow up post).
To give the JPM quant the benefit of the doubt, we lay out his reasoning which somehow can be summarized in this bi-axial chart which is supposed to show that bitcoin is now more popular than gold… if only one ignores the units of the left and right axis, although judging by the IQ of JPM clients that may not be a very far-fetched assumption, to wit:
Bitcoin’s competition with gold has already started in our mind as evidenced by the more than $3bn of inflows into the Grayscale Bitcoin Trust and the more than $7bn of outflows from Gold ETFs since mid-October.
There is little doubt that this competition with gold as an “alternative” currency will continue over the coming years given that millennials will become over time a more important component of investors’ universe and given their preference for “digital gold” over traditional gold. Considering how big the financial investment into gold is, a crowding out of gold as an “alternative” currency implies big upside for bitcoin over the long term. As we had mentioned previously in the Oct 23rd F&L, “Bitcoin’s competition with gold,” private gold wealth is mostly stored via gold bars and coins the stock of which, excluding those held by central banks, amounts to 42,600 tonnes or $2.7tr including gold ETFs.
So using this simplistic “valuation” of claiming that the market cap of bitcoin should reach parity with gold, Panigirtzoglou “explains” that “mechanically, the market cap of bitcoin at $575bn currently would have to rise by x4.6 from here, implying a theoretical bitcoin price of $146k, to match the total private sector investment in gold via ETFs or bars and coins.”
So even JPMorgan admits bitcoin can rather easily rise about 5x higher from here. But short it, please. Anyway, the JPM quant continues:
But this long term upside based on an equalization of the market cap of bitcoin to that of gold for investment purposes is conditional on the volatility of bitcoin converging to that of gold over the long term. The reason is that, for most institutional investors, the volatility of each class matters in terms of portfolio risk management and the higher the volatility of an asset class, the higher the risk capital consumed by this asset class. It is thus unrealistic to expect that the allocations to bitcoin by institutional investors will match those of gold without a convergence in volatilities. A convergence in volatilities between bitcoin and gold is unlikely to happen quickly and is in our mind a multi-year process. This implies that the above $146k theoretical bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.
Pay attention kids because this is called both thesis creep and “goal-seeking” – or how to hit a conclusion based on variable that you yourself have introduced into the equation and which you then use to validate your own thesis. Because here’s a counter argument: how many buyers of bitcoin are buying it because i) they say it has to hit parity with the value of gold and ii) it has to have the same vol-adjusted return profile or else they won’t buy any more?
None, you say? Why you are correct, of course, but more importantly what this little experiment has taught us is how to read between the lines of a forced conclusion that is only there because someone got a tap on the shoulder. Most likely from their trading desk. The question then is how is JPM’s trading deks axed, and the logical response is that JPM merely wants to buy whatever the bank’s clients have to sell.
Translation: JPM is now buying bitcoin.
But going back to JPM’s “bearish” thesis – at least on its client-facing side – the next part is even more laughable: you see, the price of bitcoin is too high compared to its mining cost!
Our second valuation metric is based on the mining cost or intrinsic value of bitcoin. The ratio of the bitcoin market price to its intrinsic value is shown in Figure 2.
The current ratio is higher than its previous mid-2019 peak and matches its end-2017 peak, again raising concerns about valuations.
Actually no, it doesn’t but please go on, because here the goalseeked thesis gets really amusing: .
This is not say that the mining cost is driving the market value. The opposite is likely true. In the early years, bitcoin’s production cost had naturally stronger influence on the price because new coin generation was a higher percentage of existing stock or supply. Now that more than 18m bitcoins have been mined already (vs. max supply of 21m) and new coin generation is a smaller percentage of the existing supply, the influence of the production cost on the price has likely diminished. Thus, in the current conjuncture, the market price is likely driving the production cost rather than the other way round.
Well thanks for at least admitting that your entire “second valuation” approach is complete garbage.
However, this causality does not mean that the bitcoin price would be diverging from its mining cost on a sustained basis. Similar to gold, when the bitcoin market price is well above the production cost, mining activity and mining difficulty should increase pushing the cost of production up towards the market price, thus inducing some convergence. But similar to previous episodes, some of that convergence could happen with an adjustment in the market price also. We thus view the acute divergence of Figure 2 as another valuation challenge for bitcoin.
No, you don’t: you yourself admitted the two are not linked. You are merely trying to create a mental model in investor minds that bitcoin is too expensive and that may well be achieved since bitcoin has exploded higher and it just needs some remotely credible catalyst to force some profit taking… such as this note. But to argue that anything more than a brief drop will be triggered by such a goalseeked analysis is almost as naive as believing that the cost of “mining” bitcoin has anything to do with its price, which is entirely driven by how many trillions central banks are printing at any given moment and nothing else! But, again, this is all a useful model of how to spot and avoid garbage goalseeked narratives.
Oh, and speaking of intrinsic value of bitcoin, let’s recall what none other than Panigirtzoglou’s own boss said back in Sept 2017:
“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” Dimon said at a banking industry conference organized by Barclays. “Currencies have legal support. It will blow up.”
Alas, while Panigirtzoglou could have stopped here and saved himself some jeers and snickers, he decided to continues and boldly go in “analyzing” bitcoin using the same failed approach he applied in November when anyone who followed his trade reco would have blown up almost instantly. Instead, he goes on to not only “value” bitcoin, but to appraise its upside potential in terms of positioning and momentum.
On the first, he refutes his own argument from a month ago that the Grayscale Bitcoin Trust represents mostly institutional investors and instead now argues, that “it is wrong to view all these institutional flows of last year as entirely driven by long-term investors.”
We believe that a significant component of last year’s institutional flows into bitcoin reflect speculative investors seeking to front run other more real-money institutional investors. The frothy positioning in CME bitcoin futures is one manifestation of this speculative institutional flow which encompasses momentum traders such as CTAs and quantitative crypto funds. Indeed, bitcoin futures, the preferred vehicle of speculative investors, saw a sharp increase in open interest in recent weeks (Figure 3), pointing to intense buildup of futures positions. This is also true with our more carefully calculated bitcoin futures position proxy shown in Figure 4, which experienced a similarly steep ascent in recent weeks to unprecedented territory.
So… when it suited JPM to extrapolate “deep value”, “long-term” institutional bias and positioning from Grayscale flows that’s all it was, but now that Panigirtzoglou has a mandate to hammer crypto, Grayscale can be whatever he decides it should be. Got it.
Same thing for the other “risk”, namely of momentum traders reversing, which incidentally is what Panigirtzoglou got dead wrong in early November before admitting as much. Alas, it appears he hasn’t learned that particular lesson and is once again betting that CTAs will start selling soon even though bitcoin continues to be the one security with the most tangible trend in the entire investing universe.
Figure 5 shows that the short look-back period momentum signal rose this week to 3.0 stdevs, and the long look-back period to 2.3 stdevs, i.e. to even higher levels than the previous peaks of mid-2019. Both are well above our 1.5stdev threshold typically associated with overbought conditions and a high risk of mean reversion.
The JPM quant then makes similar argument about retail investors saying “Unfortunately, there are some signs that retail interest has also increased sharply.” Why unfortunately? Because as he then explains, “The speculative mania by retail investors characterized the bitcoin surge during 2017.” Perhaps, but the mania by institutional investors is what characterizes the current surge and has far greater impact on the overall direction. Furthermore, as the following far less conflicted and much more objective analysis from Skew shows, institutional participation in the current phase higher dwarfs retail interest by orders of magnitude, no matter how hard JPMorgan would like to get its clients to sell to its prop traders.
and institutions are embracing #bitcoin pic.twitter.com/v9jN3iYClY
— skew (@skewdotcom) December 27, 2020
There is some more self-serving and unjustified arguments in JPM’s report, but the goalseeked conclusion is clear:
we believe that the valuation and position backdrop has become a lot more challenging for bitcoin at the beginning of the New Year. While we cannot exclude the possibility that the current speculative mania will propagate further pushing the bitcoin price up towards the consensus region of between $50k-$100k, we believe that such price levels would prove unsustainable.
In other words, bitcoin may well triple from here, but it could also drop. Which, of course, is why JPM’s quants are paid the big bucks…. especially when they are tasked with sparking a mini high net worth selloff just so either JPM’s own prop desk or a preferred institutional client can get in cheaper. Which, incidentally, is the whole purpose of JPM’s report.
And while the reasons behind Panigirtzoglou’s report are clear and transparent, our question is whether the following statement from JPM CEO Jamie Dimon in Sept 2017 is still valid:
Dimon also said he’d “fire in a second” any JPMorgan trader who was trading bitcoin, noting two reasons: “It’s against our rules and they are stupid.”
To this all we can add is that anyone tho bought bitcoin in Sept 2017 may well be stupid… but they are now retired. Which is also why those same “stupid” JPM traders – who clearly trade bitcoin now – are now so desperate to shake out the weak hands who believe their self-serving, goalseeked “research.”
Tyler Durden
Mon, 01/04/2021 – 20:00 - Snyder: The United States Has Become A Banana Republic
Snyder: The United States Has Become A Banana Republic
Authored by Michael Snyder via TheMostImportantNews.com,
If we continue destroying the U.S. dollar at our current pace, toilet paper will eventually be more valuable than U.S. dollars.
I know that sounds absolutely crazy, but it is true. Once the COVID pandemic hit the United States, those that control the levers of power in this country decided to go “full Weimar” and they never looked back. As a result, the size of our money supply is rising at a rate that would have been unimaginable just a few short years ago. To illustrate what I am talking about, I would like for you to check out this chart that was posted on Twitter by James Turk. As you can see, M1 was up by more than 50 percent in 2020.
This chart is not from a 3rd world banana republic. It’s #USD M1 money supply. Prices are already rising in soybeans, stock indices, crude oil, copper #BTC & many more items. Money printing by the #federalreserve means #inflation in 2021 is baked into the cake. Own physical #gold pic.twitter.com/OhhlnDx8tN
— James Turk (@FGMR) December 30, 2020
https://platform.twitter.com/widgets.js
We’ve never had a year like that in all of U.S. history. What we are doing is literally insane, but most Americans aren’t even aware of what is happening because the mainstream media isn’t talking about it.
If you are not familiar with “M1”, here is a definition that comes from Investopedia…
M1 is the money supply that is composed of physical currency and coin, demand deposits, travelers’ checks, other checkable deposits, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to cash. However, “near money” and “near, near money,” which fall under M2 and M3, cannot be converted to currency as quickly.
When new money enters the system, every dollar that you are currently holding becomes less valuable.
And if your paycheck does not rise at the same rate that the money supply is rising, that means that your paycheck becomes less valuable as well.
It is helpful to think of our money system as a pie. When more dollars are added to the pie, your share of the pie steadily becomes smaller.
So who does benefit when the pie is expanded?
The ultra-wealthy do, and I will discuss that more below.
But first, I wanted to share another chart with you. The first chart from James Turk showed how M1 has been rising on a percentage basis, and this next chart which comes directly from the Federal Reserve shows how M1 has been rising on an absolute basis…
Just look at that for a moment.
It truly is breathtaking. M1 has literally been rising at almost a vertical rate, and it makes all of the inflation that has come before look almost meaningless.
This is why the stock market keeps hitting record high after record high. Stocks started to crash when COVID first started to spread in the United States, and the Federal Reserve decided to do whatever was necessary to rescue the markets. The “unprecedented” response that we witnessed ended up being “a key driver of billionaire wealth” in 2020…
A key driver of billionaire wealth concentration was the unprecedented monetary policy response to stabilize financial markets in the early days of the pandemic, which spurred the stock market’s gravity-defying rise. When Wall Street was on the verge of panic in March, the Federal Reserve intervened with the promise of low rates and an open-ended liquidity spigot.
In addition, Congress just kept passing “stimulus package” after “stimulus package” in a desperate attempt to “rescue” the economy.
But in the process they borrowed and spent trillions of dollars that we did not have, and that also helped to fuel our transition into hyperinflation.
The good news is that hyperinflation is not showing up at the grocery store or at Walmart yet. Eventually it will happen, but so far consumer prices are just rising at a pace that is quite a bit brisker than usual. Where we are seeing hyperinflation is in stock prices, high end real estate in rural and suburban areas, and in other areas of the economy that the ultra-wealthy have been pouring their money into.
Despite the fact that we just endured one of the worst economic years in U.S. history, 2020 was actually a banner year for billionaires…
Between roughly mid-March and Dec. 22, the United States gained 56 new billionaires, according to the Institute for Policy Studies, bringing the total to 659. The wealth held by that small cadre of Americans has jumped by more than $1 trillion in the months since the pandemic began.
According to a December report issued jointly by Americans for Tax Fairness and the Institute for Policy Studies using data compiled by Forbes, America’s billionaires hold roughly $4 trillion in wealth — a figure roughly double what the 165 million poorest Americans are collectively worth. The 10 richest billionaires have a combined net worth of more than $1 trillion.
Last year the rich got a whole lot richer, and the poor got a whole lot poorer.
As I discussed the other day, 2020 was a “personal financial disaster” for 55 percent of all Americans. The year ended with close to 20 million Americans still receiving government unemployment benefits, and poverty and homelessness have been exploding all around us.
In some cases, people were waiting in lines that were up to 12 hours long just to get a couple of bags of groceries at food banks around the nation. We haven’t seen anything like this since the Great Depression of the 1930s, and many are expecting things to get even worse in 2021.
And with each passing day, more businesses are closing and more Americans are being laid off.
The retail sector has been hit particularly hard. The following comes from Axios…
Malls are going belly up. Familiar names like J.C. Penney, Neiman Marcus and J. Crew have filed for bankruptcy. Increasingly, Americans’ shopping choices will boil down to a handful of internet Everything Stores and survival-of-the-fittest national chains.
And what we have experienced so far is just the tip of the iceberg. One recent report projected that “100,000 brick-and-mortar U.S. retail stores will close by 2025”…
A research report from UBS predicts that 100,000 brick-and-mortar U.S. retail stores will close by 2025, in a trend that started before the pandemic and has accelerated amid coronavirus-related shutdowns.
Our national landscape is already littered with abandoned stores and restaurants, and they are telling us that it is only going to get worse.
What is our country going to look like as this process plays out?
Of course our authorities will just respond to every new crisis by printing even more money.
That is what they did down in Venezuela, and now just about everyone in Venezuela is a millionaire.
But most of those “millionaires” are living in crushing poverty because the money is absolutely worthless.
Sadly, many other countries are doing the same thing that the U.S. is doing, and so this hyperinflationary spiral is not likely to end any time soon.
But let there be no doubt that we are also in a global economic depression. Global GDP is about 8 percent lower than it was before the pandemic started, and the outlook for 2021 does not look promising at all.
If you think that there is a way for this economic story to end well, just go back and look at the M1 chart from the Federal Reserve one more time.
Every other time this has been tried in human history, the story has ended badly.
Our story is going to end badly too, and every American needs to get prepared to survive in a very painful hyperinflationary environment.
* * *
Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.
Tyler Durden
Mon, 01/04/2021 – 19:40 - FDA Admits PCR Tests Give False Results, Prepares Ground For Biden To "Crush" Casedemic
FDA Admits PCR Tests Give False Results, Prepares Ground For Biden To “Crush” Casedemic
The FDA today joined The WHO and Dr.Fauci in admitting there is a notable risk of false results from the standard PCR-Test used to define whether an individual is a COVID “Case” or not.
This matters significantly as it fits perfectly with the ‘fake rescue’ plan we have previously described would occur once the Biden admin took office. But before we get to that ‘conspiracy’, we need a little background on how the world got here…
We have detailed the controversy surrounding America’s COVID “casedemic” and the misleading results of the PCR test and its amplification procedure in great detail over the past few months.
As a reminder, “cycle thresholds” (Ct) are the level at which widely used polymerase chain reaction (PCR) test can detect a sample of the COVID-19 virus. The higher the number of cycles, the lower the amount of viral load in the sample; the lower the cycles, the more prevalent the virus was in the original sample.
Numerous epidemiological experts have argued that cycle thresholds are an important metric by which patients, the public, and policymakers can make more informed decisions about how infectious and/or sick an individual with a positive COVID-19 test might be. However, as JustTheNews reports, health departments across the country are failing to collect that data.
Here are a few headlines from those experts and scientific studies:
2. The Wadworth Center, a New York State laboratory, analyzed the results of its July tests at the request of the NYT: 794 positive tests with a Ct of 40: “With a Ct threshold of 35, approximately half of these PCR tests would no longer be considered positive,” said the NYT. “And about 70% would no longer be considered positive with a Ct of 30! “
3. An appeals court in Portugal has ruled that the PCR process is not a reliable test for Sars-Cov-2, and therefore any enforced quarantine based on those test results is unlawful.
4. A new study from the Infectious Diseases Society of America, found that at 25 cycles of amplification, 70% of PCR test “positives” are not “cases” since the virus cannot be cultured, it’s dead. And by 35: 97% of the positives are non-clinical.
5. PCR is not testing for disease, it’s testing for a specific RNA pattern and this is the key pivot. When you crank it up to 25, 70% of the positive results are not really “positives” in any clinical sense, since it cannot make you or anyone else sick
So, in summary, with regard to our current “casedemic”, positive tests as they are counted today do not indicate a “case” of anything. They indicate that viral RNA was found in a nasal swab. It may be enough to make you sick, but according to the New York Times and their experts, probably won’t. And certainly not sufficient replication of the virus to make anyone else sick. But you will be sent home for ten days anyway, even if you never have a sniffle. And this is the number the media breathlessly reports… and is used to fearmonger mask mandates and lockdowns nationwide…
In October we first exposed how PCR Tests have misled officials worldwide into insanely authoritative reactions.
As PJMedia’s Stacey Lennox wrote, the “casedemic” is the elevated number of cases we see nationwide because of a flaw in the PCR test. The number of times the sample is amplified, also called the cycle threshold (Ct), is too high.
It identifies people who do not have a viral load capable of making them ill or transmitting the disease to someone else as positive for COVID-19.
The New York Times reported this flaw on August 29 and said that in the samples they reviewed from three states where labs use a Ct of 37-40, up to 90% of tests are essentially false positives. The experts in that article said a Ct of around 30 would be more appropriate for indicating that someone could be contagious – those for whom contact tracing would make sense.
Just a few days earlier, the CDC had updated its guidelines to discourage testing for asymptomatic individuals. It can only be assumed that the rationale for this was that some honest bureaucrat figured out the testing was needlessly sensitive. He or she has probably been demoted.
This change was preceded by a July update that discouraged retesting for recovered patients. The rationale for the update was that viral debris could be detected using the PCR test for 90 days after recovery. The same would be true for some period of time if an individual had an effective immune response and never got sick. Existing immunity from exposure to other coronaviruses has been well documented. These are many of your “asymptomatic” cases.
However, due to political pressure and corporate media tantrums, the new guidance on testing was scrapped, and testing for asymptomatic individuals is now recommended again. Doctors do not receive the Ct information from the labs to make a diagnostic judgment. Neither the CDC nor the FDA has put out guidelines for an accurate Ct to diagnose a contagious illness accurately.
Hence, our current “casedemic.” Positive tests as they are counted today do not indicate a “case” of anything. They indicate that viral RNA was found in a nasal swab. It may be enough to make you sick, but according to the New York Times and their experts, probably won’t. And certainly not sufficient replication of the virus to make anyone else sick. But you will be sent home for ten days anyway, even if you never have a sniffle. And this is the number the media breathlessly reports.
A month later, Dr. Pascal Sacré, explained in great detail how all current propaganda on the COVID-19 pandemic is based on an assumption that is considered obvious, true and no longer questioned: Positive RT-PCR test means being sick with COVID.
This assumption is misleading. Very few people, including doctors, understand how a PCR test works.
In mid-November, none other than he who should not be questioned – Dr. Anthony Fauci – admitted that the PCR Test’s high Ct is misleading:
“What is now sort of evolving into a bit of a standard,” Fauci said, is that “if you get a cycle threshold of 35 or more … the chances of it being replication-confident are minuscule.”
“It’s very frustrating for the patients as well as for the physicians,” he continued, when “somebody comes in, and they repeat their PCR, and it’s like [a] 37 cycle threshold, but you almost never can culture virus from a 37 threshold cycle.”
So, I think if somebody does come in with 37, 38, even 36, you got to say, you know, it’s just dead nucleotides, period.”
So, if anyone raises this discussion as a “conspiracy”, refer them to Dr.Fauci.
In response to this and the actual “science”, Florida’s Department of Health (and signed off on by Florida’s Republican Governor Ron deSantis), decided that for the first time in the history of the pandemic, a state will require that all labs in the state report the critical “cycle threshold” level of every COVID-19 test they perform.
All of which leads us to today’s announcement from The FDA…
The U.S. Food and Drug Administration (FDA) is alerting patients and health care providers of the risk of false results… with the Curative SARS-Cov-2 test.
And why does this matter?
Well it’s simple – this is how the establishment can show Joe Biden’s plan is miraculously rescue the world.
We explained the “fake rescue” plan in October.
The Fake Rescue
Biden will issue national standards, like the plexiglass barriers in restaurants he spoke about during the debate, and pressure governors to implement mask mandates using the federal government’s financial leverage (NOTE: his 100-day mask-wearing ‘mandate’ is already in play).
Some hack at the CDC or FDA will issue new guidance lowering the Ct the labs use, and cases will magically start to fall.
In reality, the change will only eliminate false positives, but most Americans won’t know that.
Good old Uncle Joe will be the hero, even though it is Deep-State actors in the health bureaucracies who won’t solve a problem with testing they have been aware of for months. TDS is a heck of a drug.
So, there you have it folks… First Fauci, then WHO, now FDA all admit there is malarkey in the PCR Tests, but have – until now, done nothing about it… allowing the daily fearmongering of soaring “cases” to enable their most twisted 1984-esque controls.
All that’s needed now is for one of these estemeed groups to decide to cut the Ct for a “positive” PCR Test to say 15x or 20x and suddenly, we are rescued from the “Dark Winter” as Biden’s plan slashes the positive case count dramatically… we are saved.
As an aside, this also clearly explains the disappearance of the “flu” during this season as the plethora of high Ct PCR Tests supposedly pointing to a surge in COVID are nothing of the sort.
As Stephen Lendman noted previously, claiming “lockdowns stopped flu in its tracks, (outbreaks) plummet(ting) by 98% in the United States” ignored that what’s called COVID is merely seasonal influenza combined with false positives (extremely high Ct) from PCR-Tests.
And for that reason, the great 2020 disappearing flu passes largely under the mass media’s radar. Media proliferated mass deception and power of repetition get most people to believe and having successfully “killed the flu”, they will now do the same with COVID… and, if allowed by our betters, we will all return to the new normal they desire.
Tyler Durden
Mon, 01/04/2021 – 19:20 - Over 70% Of Republican Voters Want Their Lawmakers To Be More Like Trump
Over 70% Of Republican Voters Want Their Lawmakers To Be More Like Trump
Authored by Rusty Weiss via The Mental Recession blog,
A new Rasmussen survey indicates 72 percent of Republican voters want their legislators to be more like President Trump.
In fact, in their view, Trump is an extraordinarily better role model than most members of Congress.
The national telephone and online survey “finds that 72% of Likely Republican Voters think their party should be more like Trump than like the average GOP member of Congress,” Rasmussen reports.
By contrast, 24 percent see the average Republican in Congress as a better example for their party.
Overall, voters gave the “average member of Congress” 45 percent to just 40 percent for the President.
72 Percent of Republicans See Trump as Model for Future of GOPhttps://t.co/P1eJFOxOjJ pic.twitter.com/00Pf9rNgTw
— HYVE (@HYVEE7) December 29, 2020
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Republican Voters Want Congress to be More Like Trump
It’s really no surprise that Republican voters want to see their congressional representatives emulate Trump, a political outsider who actually fights for the people.
As bad as his approval ratings are thanks to Democrat-controlled media, President Trump is easily more admired by Republicans than members of Congress.
In fact, in 2020, he was even more admired than Barack Obama.
“Trump tied former President Barack Obama for the honor last year but edged out his predecessor this year,” Gallup reports.
They add, “Trump’s first-place finish ends a 12-year run as most admired man for Obama, tied with Dwight Eisenhower for the most ever.”
Gallup: President Trump is most admired man of 2020. Ends Barack Obama’s 12-year most-admired run. https://t.co/k1E8VufMMe pic.twitter.com/XoXx6OaO9f
— Byron York (@ByronYork) December 29, 2020
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Congress meanwhile, fared much worse in a recent survey asking Americans to rank professions by their honesty and ethics.
Congressional members actually tied car salespeople with a mere 8 percent rating them highly, while advertising practitioners came in slightly better at 10 percent.
Rounding out low-ranking groups were business executives at 17 percent, lawyers at 21 percent, and journalists at 28 percent.
Nurses, medical doctors, grade-school teachers and pharmacists top Gallup’s annual Honesty and Ethics of Professions poll. https://t.co/iLaJiqqX6D
— GallupNews (@GallupNews) December 22, 2020
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Trump in 2024?
Still, Rasmussen notes that 52 percent of Republican voters think their party should put a new candidate on the presidential ticket in 2024, while 33 percent say the GOP should promote a candidate who has already run.
At a Christmas party in December, the President hinted that he would be back in the White House in 2024.
“It’s been an amazing four years,” Trump is heard saying in a live stream of the party by former Oklahoma Republican Party Chair Pam Pollard.
“We’re trying to get another four years,” the President continued, “but otherwise I’ll see you in four years.”
Trump at the White House Christmas party: “It’s been an amazing four years. We’re trying to do another four years, otherwise I’ll see you in four years.”
h/t @ZekeJMiller, @colvinj pic.twitter.com/72Q3bVY3jP
— Andrew Solender (@AndrewSolender) December 2, 2020
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A similar Rasmussen survey six years ago saw Republican voters clamoring for a new face to run for President.
That new face turned out to be Donald Trump, as he easily dispatched with establishment politicians during the Republican primaries, and eventually defeated another entrenched swamp creature in Hillary Clinton.
Is there anyone who might surprise in a similar manner and emerge in 2024?
Read more at the Political Insider…
Tyler Durden
Mon, 01/04/2021 – 19:00
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