Oct 05

Today’s News 5th October 2021

  • Northwestern Europe Sees Mild Weather, Offers Temporary Relief From Energy Crisis
    Northwestern Europe Sees Mild Weather, Offers Temporary Relief From Energy Crisis

    Temperatures in northwest Europe are forecasted to be above average through the middle of next week, according to a new report from Maxar’s WeatherDesk. This is excellent news for the region that has been battered by below-average temperatures and soaring natural gas and power bill costs. 

    Above-average temperatures are forecasted for northwest Europe through next Wednesday. Then, in the second half of the month, temperatures will dip below trend and increase heating demand.

    Below average heating degree days for northwest Europe will be seen through Oct. 12 and then is expected to jump above trend by late next week, which signals cooler weather will take more energy to heat a building structure. 

    This week’s above-average temperatures may act as temporary relief for customers who’ve already had their wallets pummeled by European gas prices (Dutch TTF and UK NBP) hitting new highs amid lower stockpiles ahead of the winter season. 

    For the last several months, European gas prices have been soaring to new highs on a weekly basis. Reports indicated last week that a sudden drop in Russian natgas deliveries via the Yamal-Europe pipeline that runs across Belarus and Poland to Mallnow, Germany, was the spark that lifted prices even higher. 

    Warmer temperatures will be welcomed for this week into early next but gas prices could continue higher as cold weather is just ahead. 

    Tyler Durden
    Tue, 10/05/2021 – 02:45

  • US & British Surveillance Planes Circle Russia's Kaliningrad
    US & British Surveillance Planes Circle Russia’s Kaliningrad

    Authored by Jason Ditz via AntiWar.com,

    Spying activity is often driving tensions between NATO and Russia. This is the case in the Baltic right now, where US and British surveillance planes are very visibly active around the Russian exclave of Kaliningrad.

    The surveillance is being conducted by RC-135W, planes that conduct electronic surveillance, surveying the electromagnetic spectrum in the area to gather intelligence.

    Kaliningrad was historically Ostpreußen, a part of Germany, and before that Prussia. The Soviet Union took the land in 1946 after WW2. The exclave loomed large around the start of WW2, as the lack of a land connection between Ostpreußen and the rest of Germany was the source of a lot of tension with Poland. Germans were expelled by the Soviets, and Soviet citizens were moved in in the late 1940s.

    During the Cold War, Kaliningrad was physically connected to the rest of the Soviet Union through the Baltic States, but with them now independent and in NATO, the exclave is unconnected, and often a target of NATO exercises.

    From a strategic perspective Kaliningrad is used to monitor NATO operations, and Russia often threatens to deploy arms, including nuclear weapons, in Kaliningrad to counter US deployments in central Europe.

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    Very active surveillance, like the kind the US and Britain are conducting, would be considered a provocation if Russia was doing it, and probably will be considered provocation by Russia since it’s being done to them.

    NATO is almost always needling Russia in the region, building up ever-growing numbers of troops in the Baltic states and conducting growing military exercises, centered around engagements against Russia in general and Kaliningrad in particular.

    Tyler Durden
    Tue, 10/05/2021 – 02:00

  • "Covert, Corrupt, & Coercive": Report Details Beijing's Bid To Establish New Global Media Order
    “Covert, Corrupt, & Coercive”: Report Details Beijing’s Bid To Establish New Global Media Order

    Authored by Eva Fu via The Epoch Times,

    The Chinese regime has been deploying “covert, corrupt and coercive” means to weaponize Chinese-language and Western media in a campaign to impose its vision of current affairs on the rest of the world, a recent French military think tank report finds.

    Beijing’s efforts to export its narratives have lasted for decades. The first Chinese Communist Party-controlled English language newspaper, China Daily, started in 1981. But such attempts had been clumsy and yielded slow results, according to Reporters Without Borders.

    The year 2008 marked a turning point. The Olympic Games in Beijing, an event the regime had hoped to leverage to showcase its economic success, gave rise to protests in nearly a dozen cities around the world that disrupted torch relays.

    The humiliation Beijing suffered from the resulting negative coverage had stung the authorities. To better control the regime’s global image, the Chinese Communist Party (CCP) soon came up with a “10-year plan,” noted the report by the Institute for Strategic Studies of Military Schools (IRSEM), a think tank funded by the Ministry of the Armed Forces.

    A police officer communicates over his radio standing beside an anti-Chinese banner during a demonstration by pro-Tibet activists and supporters near venue of the Indonesia’s leg of 2008 Beijing Olympic torch relay in Jakarta on April 22, 2008. (Jewel Samad/AFP via Getty Images)

    The 650-page study, which drew on public information, research reports, and independent interviews, examined how Beijing has been exploiting the openness of the West to amplify its propaganda narratives, forming one component of the regime’s sprawling influence operations globally.

    The values of tolerance that characterize Western democracies have afforded Beijing “considerable freedom of movement,” allowing it to multiply its foreign offices, recruit foreign journalists to adapt its messages to different audiences, infiltrate local press with gifts and other material benefits, while dispensing billions of advertising dollars on Western media to further expand its reach, the report said.

    In China, rather than a watchdog meant to keep the government in check, the press under Beijing has become a tool to serve the Party, the report said. Such vision was made plain in a 2016 speech by Chinese leader Xi Jinping, during which he told around 180 state media representatives to align their ideology with that of the top officials, “speak for the Party’s will … and protect the Party’s authority,” according to a Xinhua readout.

    To some Xinhua reporters, Xi’s coming to power had marked the beginning of a new era, in which the Chinese media “no longer need to be ashamed of being communist media,” a Xinhua reporter told one of the report authors in 2018.

    Buying Influence

    Chinese state media are active on all social media networks, with a sizable influence on Twitter, Facebook, YouTube, and Instagram—all of which are blocked in China.

    Chinese state media set up English- and regional-language pages on Facebook in 2013. Eight years on, they have topped world’s media in term of following, with four major outlets—CGTN, China Daily, Xinhua, and People’s Daily—having between 86 million to 116 million followers each at the time of the French report’s publication, or about 2.5 to 3 times larger than that of CNN’s.

    The logo of CGTN is displayed on a computer monitor in London, England, on Feb. 4, 2021. (Leon Neal/Getty Images)

    These “spectacular scores” have been the outcome of a deliberate effort to artificially inflate subscriber numbers, the authors said, pointing to the “exceptional growth rate” and the “extremely low interaction rate” these accounts receive.

    According to the report, around eight major Chinese state media in English have an average growth rate of 37.8 percent from the period Jan. 1, 2019 to March 31, 2020, or about 5,000 times higher than that of U.S. mainstream media, but their level of engagement is 68 times lower.

    Tender documents dated 2018 and 2019 reveal that state run outlets have been spending hundreds of thousands of dollars to acquire followers on Twitter and Facebook in what appeared to be a campaign to establish themselves as authoritative news voices.

    “When … you see tens of millions of people following, then you feel like this is pretty credible,” Sarah Cook, a China analyst at human rights watchdog Freedom House, told The Epoch Times at the time. She described it as a “new frontier,” that is, “an avenue for accessing the grassroots in society and public in other countries.”

    Facebook and Twitter logos are seen on a shop window in Malaga, Spain, on June 4, 2018. (Jon Nazca/Reuters)

    The proportion of fake accounts among their Twitter followers is hard to ignore: For an average Twitter user, from 5 to 30 percent of the accounts that follow them are bots or spam; but the fake account ratio for the four aforementioned media ranges from 34.3 percent to 38.4 percent. For their French versions, the numbers shoot up to as high as 62.8 percent, the researchers found.

    CCP-controlled China Daily at the same time is pouring millions of dollars to distribute their content through some of the most influential publications around the world. Between November 2016 and April 2020, China Daily paid nearly 19 million to U.S. newspapers to insert their free supplement called China Watch.

    The collaboration has a three-fold benefit, the authors said. Not only does it help the Chinese media reach its target audience, it makes them appear more credible, and gives them financial leverage over their partner media.

    British newspaper The Telegraph, which until April last year had been receiving roughly £750,000 (roughly $1 million) per year to distribute China Watch, also carried at least 20 signed articles by the Chinese ambassador to the U.K. between 2016 and 2018—twice the number published by the Daily Mail, The Guardian, and Financial Times combined, according to a 2019 study published on Royal United Services Institute, a British defense and security think tank.

    A New Global Media Order

    The U.S. State Department has designated a total of 15 Chinese state-run outlets’ entities based in the country as foreign missions because they are “substantially owned or effectively controlled” by a foreign government, a department spokesperson told The Epoch Times in September.

    A newspaper consumer reads a copy of China’s Africa edition of its daily newspaper in front of a news stand in the Kenyan capital on Dec. 14, 2012. (Tony Karumba/AFP via Getty Images)

    In the case of state-run news agency Xinhua, its local journalists have the “sole mission of translating dispatches previously penned by Chinese staff,” the French report said. A French journalist for Xinhua told a report author in 2018 that their Xinhua dispatches consist of 80 percent translations from English and 20 percent from Chinese. The translations and occasional original article would all be proofread by a Chinese journalist fluent in French and attuned to “Party’s expectations as well as the ‘preferred stories,’” according to the Xinhua reporter.

    Former staff members from pro-Beijing Hong Kong newspaper Sing Tao have recounted similar stories to The Epoch Times after the publication registered its five U.S. entities as foreign agents under orders from the Justice Department in August.

    David, a former senior editor for Sing Tao’s New York office, said that he was briefed on “two principles” on his first day: no reporting of news on Falun Gong, a spiritual group persecuted by Beijing, nor Taiwan independence. Another, who worked for the outlet’s San Francisco office years ago, said she was told not to use the word CCP—the acronym for the Chinese Communist Party—nor “Republic of China,” the official name for the self-ruling island of Taiwan that the regime claims as its own. Instead, she was to use the words “China” and “Taiwan Province of the People’s Republic of China” respectively, she told The Epoch Times.

    Acquiring foreign media, training journalists, donating gifts and equipment, applying diplomatic pressure, using visa blackmail, leveling threats through phone calls are among some other tactics deployed by Beijing to reshape the media landscape overseas to bend to its will, according to the report.

    In South Africa, journalist Azad Essa saw his weekly column canceled from Independent Media, the country’s second-largest media group, hours after the publication of his Sept. 2018 story condemning the persecution of Uyghurs in China’s Xinjiang region. The media group is 20 percent owned by two Chinese entities backed or controlled by Beijing.

    Damaged computers and construction debris on the floor of The Epoch Times Hong Kong edition’s printing press in Hong Kong, China, on April 12, 2021. (Adrian Yu/The Epoch Times)

    The Hong Kong edition of The Epoch Times has been subject to a string of vandalism since its establishment, in what critics said bears the hallmarks of the regime’s intimidation tactics to silence independent reporting.

    Due to fears of reprisal, Chinese-language media groups in Australia have chosen to actively self-censor, according to a September study by Sydney-based Lowy Institute.

    “Politically sensitive topics or criticisms against the Chinese government would put our staff members or their families at risk. We don’t want them or their families to get detained in China,” one media proprietor told the think tank.

    Tyler Durden
    Mon, 10/04/2021 – 23:40

  • Russia Launches Hypersonic Cruise Missile From A Nuclear Submarine In Historic First
    Russia Launches Hypersonic Cruise Missile From A Nuclear Submarine In Historic First

    In what appears to be a world-first, Russia on Monday successfully launched a hypersonic cruise missile from a submarine. Russia’s defense ministry subsequently published video of the nighttime launch from the far northern Barents Sea, saying the test was successful and that the missile hit its target.

    “The test firing of the Tsirkon missile from a nuclear submarine was deemed successful,” the ministry stated. And Reuters detailed that “Low-quality video footage released by the ministry showed the missile shooting upwards from a submarine, its glare lighting up the night sky and illuminating the water’s surface.”

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    The experimental weapon, which Putin has previously declared “unrivaled” to any missile system in the world, was launched from the Severodvinsk nuclear submarine. He’s also called them “invincible” as they are believed so fast as to be nearly impossible to shoot down.

    Putin has also touted that Russia’s hypersonic arsenal is capable of evading the US mainland’s network of defensive missiles, especially in a series of remarks going back to 2018 when Russia began publicizing its hypersonics program.

    A follow-up video issued by the Russian MoD on Monday appeared to show a second test, this time with the submarine submerged underwater at the moment the missile was fired…

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    In July of this year the Russian Navy had first successfully fired the Zircon from a warship in the White Sea. 

    Russian officials have described the Zircon missile as capable of traveling upwards of Mach 9, or about 6,900 mph and a distance of 1,000 kilometers (621 miles). Putin described the recent launches as a “great event not just in the life of our armed forces but for all of Russia.”

    * * *

    Here is the July test of the Zircon launched from a warship, which had also been a first for Russia:

    Tyler Durden
    Mon, 10/04/2021 – 23:20

  • Will The China Cold War Unstick America's Glue?
    Will The China Cold War Unstick America’s Glue?

    Authored by Alastair Crooke via The Strategic Culture Foundation,

    Can an America that off-shored much of its manufacturing capacity to China, for short-term profit, afford the de-coupling?

    Washington isn’t quite sure what to do after the chaotic end to America’s ‘forever’ war. Some in Washington bitterly regret exiting from Afghanistan at all, and advocate for an immediate return; some just want to move on – to the China ‘Cold War’, that is. The cries from the initial Establishment ‘melt down’ and its articulation of pain over the Kabul withdrawal débacle, however, indicates the extent to which the almost obsessive focus on ‘Hobbling China’ nevertheless seems like an humiliating retreat to U.S. hawks, habituated to more global, and unlimited interventions.

    It is a retreat. ‘Rome’ is relegating its ‘distant provinces’ to their own devices, and even its abutting loyalist inner circle is being downgraded to ‘benign’ indifference. It is a drawing-in towards the ‘hub’, a ‘circling of wagons’ – the better to muster energies for a lunge out at China.

    There are the acquiescent regions that Americans occupied after WW II (the psychologically-seared Japan and Germany), and then there is the American world empire, which exists chimerically wherever U.S. commercial and cultural power reaches, and more practically in its patchwork of client states and military installations. This third empire is regarded by many Americans as its most remarkable achievement – a triumph of the ‘City of Light’.

    The post 9/11 era’s final ‘Mad Hatter’s Tea Party’ dénouement scene at Kabul Airport did however, clearly convey a strong end-of-the-Roman Empire feel. Yes, failure in Afghanistan may have taken place far from Rome itself, yet something more profound today hangs in the air: a Change of Era.

    And defeats on distant frontiers, can entail profound consequences – closer to the imperial core – as a sense of accelerating imperial decline bleeds into domestic arguments, widening already yawning ideological rifts.

    An embedded national consensus can change very slowly, and then, under the right pressure, all at once. And in many subtle and sometimes chaotic ways, that trigger for change came from Trump. No dove or systematiser, he nonetheless made realism and anti-interventionism, quasi-respectable again.

    Elbridge Colby, who was in Trump’s Pentagon helping devise its national defence strategy, has a new book, The Strategy of Denial: American Defense in an Age of Great Power Conflict, making the case for a foreign policy that leaves the post-9/11 era clearly and decisively behind. The outer circle of the ‘periphery’ reduces to over-horizon, necro-tech management, and the ‘near provinces of empire’, such as Europe are dismissed as ‘sideshows’ to the main event – China. To focus on Iran or North Korea, he says, is simply misguided.

    It is “a realist’s book, laser-focused on China’s bid for mastery in Asia as the 21st century’s most important threat”, Ross Douthat writes in the NY Times. “All other challenges are secondary: Only China threatens American interests in a profound way, through a consolidation of economic power in Asia that imperils our prosperity and a military defeat that could shatter our alliance system. Therefore, American policy should be organized to deny Beijing regional hegemony and deter any military adventurism — first and foremost, through a stronger commitment to defending the island of Taiwan”.

    The Strategy of Denial presents a particularly unsentimental version of a rapidly consolidating Washington consensus. Biden’s speech justifying withdrawal from Afghanistan, in terms of an end to nation-building and focus on counter-terrorism – albeit more softly spoken – said the same as Colby.

    The contradictions implicit within the 9/11 era’s War on Terror, and coercive westification, may have become only too plain today with 20th anniversary hindsight, but other contradictions within the ‘Hobble China’ pivot are potentially just as fatal to its success – as were the flawed assumptions underlying the 9/11 era zeitgeist.

    Its’ most basic contradiction is that far from providing the balm around which Americans can gather and unify, the China pivot is likely only to loosen the glue binding a heterogeneous ‘nation’ increasingly turning in upon itself.

    Firstly, the ‘new consensus’ has it that the best way for America to weaken China is to make it ‘the world versus China’ – confronting it with a broad, transnational coalition, based on the value-struggle between democracy and authoritarianism. Yes, but this repeats the error underlying the 9/11 policy – namely by assuming that the rest of the world still admires and aspires to emulate American liberal democracy. Look what occurred in Afghanistan. The world has changed – deference to western values per se has evaporated.

    There once was a time when ‘pro-Europeans’ too, were confident that the world would almost inevitably be remade in the image of the West, as it endlessly expanded its rules, and exported its model. Since then, even the Europeans have lost confidence in a world vision, and have become psychotically more defensive (imagining looming ‘threats’ from everywhere and everything). And as the European model has hollowed out, becoming less credible, so too, Europe has and leant into raw mercantilism. The logic of the European situation is clear. It needs China, more than China needs Europe.

    It would be a huge ‘stretch’ therefore, for Washington to imagine that ‘the world’ might side with its democratic values against China’s ‘authoritarianism’. Just to remind, U.S. democracy was tarnished in the eyes of the world in light of the 2020 Election. And some 70–80 million Americans share that view too. We saw it nightly on our screens.

    Secondly, it assumes that America’s ‘corporate’, capitalist economic system is a tremendous asset in the Cold War against China. Well, it isn’t. China has its economic problems, certainly; but unlike most western states, it is trying to move away from raw neo-liberalism and endless liquidity – as the hammer set to every ‘nail’. China is deliberately turning away from this model’s distortions, sky-high housing and living-costs, huge inequalities, and collateral social damage. It would be an error to underestimate ‘the pull’ of this alt-vision (even for Europeans). China is, itself, a civilisational pole.

    Then thirdly, there is the basic contradiction in having a laser-like single focus on ‘Hobble China’, which is brought about only at the expense of feeding Americans’ sense of accelerating imperial decline, bleeding into domestic tensions.

    This is Pat Buchanan’s argument in a piece entitled, Who and What Is Tearing the U.S. Apart? He answers:

    “After 9/11, Bush invaded Afghanistan and Iraq. President Barack Obama attacked Libya and plunged us into the Syrian and Yemeni civil wars. Thus, over 20 years, we have been responsible for the deaths of hundreds of thousands and driven hundreds of thousands more from their homes and their countries. Are Americans really as oblivious? … Many of these peoples want us out of their countries for the same reason that 18th and 19th-century Americans wanted the French, British and Spanish out of our country and out of our hemisphere”.

    “Unlike previous generations, our 21st-century divisions are far broader — not just economic and political, but social, moral, cultural and racial. Abortion, same-sex marriage and transgender rights divide us. Socialism and capitalism divide us. Affirmative action, Black Lives Matter, urban crime, gun violence and critical race theory divide us. Allegations of white privilege and white supremacy, and demands that equality of opportunity give way to equity of rewards, divide us. In the COVID-19 pandemic, the wearing of masks and vaccine mandates divide us”.

    “The debate over American national identity is cursed seven times over”, Darel Paul, Professor of Political Science at Williams College, writes:

    “Does the United States even constitute a ‘nation’? In the sense of common descent (the root of “nation” is the Latin nasci, to be born) – clearly not. Widespread fear of such an ethnic sense of American identity drives considerable hostility to the very idea of nationalism. Most American elites prefer words like ‘patriotism’ … The problem with this conception of patriotism is that it is a weak glue. The recent history of the United States offers ample evidence. Rather than objects of agreement – liberty, equality, individual rights, and self-government are instead [today] the objects of discord.

    “Here we come to the real glue of America: From the founding of the country in the fires of war, the United States has been an expansionary republican empire ever incorporating new lands, new peoples, new goods, new resources, new ideas. This “empire of liberty,” as Thomas Jefferson called it, knew no limits … Continuous military, commercial, and cultural expansion since Jamestown and Plymouth cultivated the restlessness, vigour, optimism, self-confidence, and love of glory for which Americans have long been known. The glue of America has thus ever been what Niccolò Machiavelli called virtù in service of “a commonwealth for expansion.” Such a republic is always in tumult, yet a tumult that, if well-ordered, finds glory …

    “Forward motion thus becomes the lifeblood of such a polity. Without it, the purpose of the civic bonds of unity inevitably come into question. An America that is not a glorious republican empire in motion is not America, full stop. This part of the American mythos Lincoln left unsaid at Gettysburg.

    “Since the 1960s, the glory of the American empire of liberty has tarnished. Since the mid-2010s it has fallen under sustained internal attack. The failures of national purpose in Vietnam, Iraq, and Afghanistan are amplified by the failure of globalization to generate common wealth for the commonwealth. If Americans are not united for expansionary republican greatness, what then are all these fissiparous races, creeds, and cultures bound together for? While belief that self-government may perish from the earth without American unity may have been plausible in 1863 or 1941, it is a hard sell in 2021”.

    Does this struggle against China make sense? Can America, whose economic and financial system today is highly precarious, afford to bludgeon China into adverse economic straits also? Can an America that off-shored much of its manufacturing capacity to China, for short-term profit, afford the de-coupling? Do American corporate leaders truly share the view that the (inevitable) consolidation of economic power in Asia imperils American prosperity, and that its consolidation would shatter their imperial outreach, dollar-based order? Possibly they do. They do fear it.

    Tyler Durden
    Mon, 10/04/2021 – 23:00

  • Iran Demands US Unfreeze $10BN In Assets To Return To Nuclear Negotiating Table
    Iran Demands US Unfreeze $10BN In Assets To Return To Nuclear Negotiating Table

    In what looks to be yet another serious obstacle in the way of the prospect of jump starting Iran nuclear negotiations with world powers in Vienna, which have been stalled since June, and prior to Ebrahim Raisi taking office, Iran is asking the Biden administration to immediately unfreeze some $10 in Iranian assets.

    Foreign Minister Hossein Amir-Abdollahian called it a necessary “sign of good will” to show that the American side is “serious” about returning to the Vienna process. 

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    “The Americans tried to contact us through different channels (at the U.N. General Assembly) in New York, and I told the mediators if America’s intentions are serious then a serious indication was needed … by releasing at least $10 billion of blocked money,” the Iranian foreign minister said in a weekend interview. 

    Billions in its foreign-held assets have been effectively blocked for a couple years since Trump-era sanctions targeting the Islamic Republic’s international assets took effect. Amir-Abdollahian argued in his comments that at least “once” the US has to show its ready to consider “the interests of the Iranian nation.”

    “They are not willing to free $10 billion belonging to the Iranian nation so that we can say that the Americans once in the past several decades considered the interests of the Iranian nation,” he explained.

    Earlier last month the FM had vowed that Iran is ready to return to the negotiating table “very soon” but said the recently installed Raisi government is still “reviewing” the negotiation files. 

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    So far the US State Department has kept mum on the Iran FM’s weekend plea to unfreeze assets. It’s not likely to happen given Biden is already facing pressure from Republicans and would be accused of “caving” to the mullahs in Tehran if he were to unfreeze the requested billions.

    It’s also unlikely that Washington would allow the Iranians to set what appear as belated pre-conditions for deeper talks, giving possible leverage to move the goal posts further. 

    Tyler Durden
    Mon, 10/04/2021 – 22:40

  • To Save America, Durham Must Reveal The Whole Russiagate Story And Punish The Guilty
    To Save America, Durham Must Reveal The Whole Russiagate Story And Punish The Guilty

    Authored by Roger Simon, op-ed via The Epoch Times,

    A bit more information has emerged from the John Durham investigation into Russiagate (or “Spygate,”as it is known hereabouts).

    This is due to what is likely a leak from one or more of the targets to their loyal propagandists at CNN. (In the article, the reporters do their best to downgrade the scandal they fanned for years as no more than a trivial “dirty trick” that all campaigns do. There’s a well-known word for that adapted into the English language.)

    The import of these leaks is usually to soften the impact on the target(s), but it also gives us another indication Durham is still active.

    In this instance, more subpoenas have been issued, including some to Perkins Coie. That’s the Democratic National Committee’s and Hillary Clinton’s law firm that only a few weeks ago defenestrated—for reasons unspecified, but we can guess— one of Hillary’s principal lawyers, Mark Elias.

    The other Clinton campaign lawyer, Michael Sussman, has already been charged with lying to the FBI on the matter of alleged Trump links to the Russian Alpha Bank, ties that turned out to be non-existent.

    This time, however, we learned that “Tech Executive-1” in the Sussman indictment is Rodney Joffe, a rather distinguished cybersecurity expert, but not in this case because he was apparently involved with the same attempted deception.

    Mr. Joffe was evidently no fan of Donald Trump. How far he took his enmity we shall see as this plays out.

    Or we won’t. Therein lies the problem. Many are worried that Durham will only take the investigation so far and then peter out.

    A real Russiagate investigation has myriad possible targets with very famous names, some of the most famous, in fact. Yet negativism about the results is everywhere in conservative circles with some justification.

    When then AG William Barr gave Durham his brief, he was quoted in The Hill (March 2020) as follows:

    “Attorney General William Barr said Monday that he does not expect a criminal investigation of former President Obama or former Vice President Joe Biden to result from the probe undertaken by U.S. Attorney John Durham.

    “Based on the information I have today, I don’t expect Mr. Durham’s work will lead to a criminal investigation of either man,” Barr told reporters at the Justice Department. ‘Our concern over potential criminality is focused on others.’”

    Sounds pretty weak, doesn’t it, with some people, too big to be investigated, surrounded by a cordon sanitaire.

    Yet rumor has it already that Jake Sullivan is under suspicion in the Alpha Bank matter, at the least. That’s remarkably close to Biden as Sullivan is his National Security Advisor, one of the most powerful positions in the country (cf. Henry Kissinger), as we have seen, to our national misfortune, during the Afghanistan debacle.

    How justified is that suspicion of Sullivan? Paul Sperry wrote in Real Clear Investigations:

    “The indictment states that Sussmann, as well as the cyber experts recruited for the operation, ‘coordinated with representatives and agents of the Clinton campaign with regard to the data and written materials that Sussmann gave to the FBI and the media.’ One of those campaign agents was Sullivan, according to emails Durham obtained.”

    Biden himself was said to have recommended the ancient and hardly-used Logan Act—how he would even have known about it is worth finding out, but anyway…—in an attempt to punish Gen. Michael Flynn during an oft-discussed, but never fully revealed, Oval Office meeting at the tail end (Jan. 5, 2017) of the Obama administration.

    That meeting itself, emailed about by Susan Rice weeks after it took place seemingly to provide Obama presidential deniability, is even more worthy of exploration—or is it off limits as per William Barr? We don’t know.

    Yes, there is plenty of reason to be skeptical. The Sullivan matter has barely been discussed in the mainstream media, even though the possible miscreant is the National Security Advisor.

    Is everything being sent down the memory hole? Who exactly is to blame in all this? We don’t know that either, though we have guesses about that too.

    But it is imperative we must ultimately know. Durham must carry his investigation through to the end, because Russiagate quite clearly marked the beginning of the end of our democratic republic as we knew it.

    All the malfeasances that have occurred since from the endless COVID lockdowns to Afghanistan to the open border to the violence in our streets and the relentless propaganda and bizarre arrests surrounding Jan. 6, not to mention the 2020 election itself, point back to it, relate to it, in one way or another.

    None of these events would have happened the way they did without it. Some would not have happened at all.

    Russiagate was a crime whose extent and import dwarfed Watergate and made that supposed scandal, subject of a Hollywood movie though it is, barely as important, by comparison, as shoplifting at a 7-11.

    Yet Nixon and the others paid, badly. Hardly anyone has been punished here so far beyond what has amounted to slaps on the wrists.

    So what do we do? Do we sit back passively, maybe adding a few snipes here and there, and let Durham do his job, hoping for the best?

    I say no. We all have a role to play. Durham is a man like the rest of us. Consciously or unconsciously, if he knows we’re watching, he’s going to behave in a different manner than if he thinks we’re lulled to sleep.

    Be as active as possible in talking and lobbying about this. You don’t have to be a so-called “elite” to do this or be an anchorman on ABC. You just have to be a concerned citizen, an honest man or woman. Keep talking about it to friend and foe. Show up with a sign at an inconvenient (for them) place. Put it on the internet, text to everyone you know or can think of. Discuss it on Signal and Telegraph. Never let Russiagate be forgotten. Put it out there in the zeitgeist and keep it there.

    The mainstream/legacy media isn’t going to do it. They will obfuscate as much as possible. We have to do it. It’s up to us. If we don’t, we have no grounds for complaint when it goes down the memory hole—and with it our country.

    Two things are of paramount importance to us going forward if we want to save our republic, this full explication of what happened during the Trump-Russia affair, including everyone responsible being properly punished, so we are sure as we can be it will never happen again, and genuine integrity for our broken elections.

    Work on that too. Many already are. The two go hand in hand.

    Tyler Durden
    Mon, 10/04/2021 – 22:20

  • Fed Prepares To Launch "Review" Of Central Bank Digital Currency That Could Render Cash, Privacy Obsolete
    Fed Prepares To Launch “Review” Of Central Bank Digital Currency That Could Render Cash, Privacy Obsolete

    For years now, and in response to similar projects at central banks in Europe and – more importantly – China with the PBOC, the Fed has been hemming and hawing about whether to take the possibility of creating a “FedCoin” more seriously.

    Senior officials have been pretty tetchy about carefully weighing the “pros and cons” of a system that  would, in theory, enable the Fed to deposit money directly into the ‘digital wallets’ of regular Americans, a power that could ultimately render the entire private banking system obsolete.

    And so, as we wait for the Fed to take the next tenuous steps toward developing a CBDC, WSJ has offered yet another leak confirming that the Fed is finally ready to release its official ‘report’ on CBDCs, which will serve as the start of a long-promised “review” of the pros and cons of CBDCs that’s supposed to allow for public feedback. The report could drop “as early as this week”.

    Some more compassionate proponents of a FedCoin argue it could create a kind of “parallel” system where the Fed would be able to directly and easily dispense FedCoins to the public (the ideal of “helicopter money”, finally achieved), without relying on banks or the IRS as intermediaries, which could make delivering this type of aid faster and cheaper. It could also offer a more “efficient” avenue for distributing welfare or financial aid (that is, unless the Fed chose to distribute FedCoin through financial intermediaries instead of sending them directly from the Fed to the American people.

    It could also be the greatest weapon in the war to make cash obsolete.

    But within the Fed, the drive to create a “FedCoin” is primarily rooted in the fear that not having a central bank digital currency could potentially threaten the dollar’s dominance in the global financial system. In that respect, it’s like any other technological arms race.

    Here’s more on that from Fed Governor Lael Brainard: “It’s just very hard for me to imagine that the US, given the status of the dollar as a dominant currency in international payments, wouldn’t come to the table in that circumstance with a similar kind of an offering,” she said.

    Chairman Powell has done his best to push for caution, arguing that it’s more important to “get it right” than be “first to market”. Put another way: who cares if the PBOC roles out the “e-RMB” first? The dollar’s role in the global financial system is much greater, which means the US is obligated to proceed with more trepidation.

    Powell and others have said repeatedly that the Fed’s research so far has been early and exploratory. Powell has also pointed to the fact that many Americans still use and prefer cash. Most importantly, Powell has addressed concerns that a CBDC would effectively allow the Fed to monitor the finances of every American.

    “It’s our obligation to do the work both on technology and on public policy to form a basis for making an informed decision,” he said last month.

    Others on the Fed, including Randy Quarles, the Fed’s financial regulation guy, has slammed CBDCs as a fad, noting that the US dollar is already “highly digitized”. A report from the Philly Fed recently warned that a CBDC could also destabilize the financial system if everybody were to pull their digital dollars from markets, mutual funds and banks.

    But enough of what senior Fed officials are saying: pretty soon, it will be the “public’s” turn, as the Fed has promised to solicit public comment during its review.

    Tyler Durden
    Mon, 10/04/2021 – 22:00

  • Economic Theory & Long-Wave Cycles
    Economic Theory & Long-Wave Cycles

    Authored by Alasdair Macleod via GoldMoney.com,

    Investors and others are confused by the early stages of accelerating price inflation. One misleading belief is in cycles of industrial production, such as Kondratieff’s waves. The Kondratieff cycle began to emerge in financial commentaries during the inflationary 1970s, along with other wacky theories. We should reject them as an explanation for rising prices today.

    This article explains why the only cycle that matters is of bank credit, from which all other cyclical observations should be made. But that is not enough, because on their own cycles of bank credit do not destroy currencies – that is the consequence of central bank policies and the expansion of base money.

    The relationship between base money and changes in a currency’s purchasing power is not mechanical. It merely sets the scene.

    What matters is widespread public perceptions of how much spending liquidity is personally needed. It is by altering the ratio of currency-to-hand to anticipated needs that purchasing power is radically altered, and in the earliest stages of a hyperinflation of prices it leads to imbalances between supply and demand, resulting in the panic buying for essentials becoming evident today.

    Panics over energy and other necessities are only the start of it. Unless it is checked by halting the expansion of currency and credit, current dislocations will slide rapidly into a wider flight from currency into real goods – a crack-up boom.

    Introduction

    For eighteen months, the world has seen a boom in commodity prices, which has inevitably led to speculation about a new Kondratieff, or K-wave. Google it, and we see it described as a long cycle of economic activity in capitalist economies lasting 40—60 years. It marks periods of evolution and correction driven by technological innovation.

    Today’s adherents to the theory describe it in terms of the seasons. Spring is recovery, leading into a boom. Summer is an increase in wealth and affluence and a deceleration of growth. Autumn is stagnating economic conditions. And winter is a debilitating depression. But these descriptions did not feature in Kondratieff’s work. Van Duijan construed it differently around life cycles: introduction, growth, maturity, and decline.

    We must discard the word growth, substituting for it progress. Growth as measured by GDP is no more than an increase in the amount of currency and bank credit in circulation and therefore meaningless. Most people who refer to growth believe they are describing progress, or a general improvement in quality of life. Instead, they are sanctioning inflationism.

    There is little doubt that economic progress is uneven, but that is down to innovation. Kondratieff’s followers argue that innovation is a cyclical phenomenon, otherwise as a cyclical theory it cannot hold water. An economic historian would argue that the root of innovation is the application of technological discoveries which by their nature must be random, as opposed to cyclical, events.

    Furthermore, a decision must be made about how to measure the K-wave. Is it of fluctuations in the price level and of what, or of output volumes? Bear in mind that GDP and GNP were not invented until the 1930s, and all prior GDP figures are guesswork. Is it driven by Walt Rostow’s contention that the K-wave is pushed by variations in the relative scarcity of food and raw materials? Or is it a monetary phenomenon, which appeared to cease after the Second World War, when currency expansion was not hampered by a gold standard?

    It was an argument consistent with that put forward by Edward Bernstein, who was a key adviser to the US delegation at Bretton Woods, when he concluded that the war need not be followed by the deep post-war depression which based on historical precedent was widely expected at the time. Kondratieff’s wave theories were buried by the lack of a post-war slump, until price inflation began to increase in the 1970s and Kondratieff became fashionable again.

    Kondratieff maintained that his wave theory is a global capitalist phenomenon, applicable to and detected in major economies, such as those of Britain, America, and Germany. But there is no statistical evidence of a long wave in Britain’s industrial production in the first half of the nineteenth century, when Britannia ruled the economic waves. And while there were financial crises from time to time, the downward phase to complete Kondratieff’s cycle never materialised.

    Today, with K-waves being fundamental to so much analysis of cyclical factors and their extrapolation, the lack of evidence and rigour in Kondratieff theory should be concerning to those who believe in it. That there are variations in the pace of human progress is unarguable, and that there is a discernible cycle of them beyond mundane seasonal influences cannot be denied. But that is a cycle of credit, a factor which was at least partially understood by Bernstein, when he correctly surmised that the way to bury a post-war depression was by expanding the quantity of money.

    Bank credit cycles and inflation

    When the inflation of money supply is mostly that of bank credit, it is cyclical in nature. Its consequences for the purchasing power of the currency conforms with the cycle, but with a time lag. Furthermore, the effect is weaker in a population which tends to save than with one which tends to spend more of its income on immediate consumption. No further comment is required on this effect, other than to state that over the whole cycle of bank credit prices are likely to be relatively stable. This was the situation in Britain, which dominated the global economy for most of the period between the introduction of the gold sovereign following the 1816 Coinage Act until the First World War.

    Figure 1 confirms that despite fluctuating levels of bank credit, from 1822—1914 the general level of prices was broadly unchanged. The price effect of the expansion of coin-backed currency between the two dates and the increase in population offset the reduction of costs in production through a combination of improvements in production methods, technological developments, and increased volumes. What cannot be reflected in the graph is the remarkable progress made in improving the standards of living for everyone over the nineteenth century.

    The gold standard was abandoned at the start of the First World War, and the general level of prices more than doubled. Having seen prices rise during the war, in December 1919 the Cunliffe Committee recommended a return to the gold standard and the supply of currency was restricted from 1920 with this objective in mind. A gold bullion standard instead of a coin standard was introduced in 1925, tying sterling at the pre-war rate of $4.8665, which remained in place until 1931.[iv] From thereon, the purchasing power of the currency began its long decline as central bank money supply expanded.

    There is no long-term cyclicality in these changes. Following the abandonment of the gold standard, and in line with other currencies which abandoned gold convertibility in the 1930s sterling simply sank. The key to this devaluation is not fluctuations in bank credit, but the expansion of base currency. And there is no evidence of a Kondratieff, or any other long-term cycle of production. It can only be a monetary effect.

    The role of money in long waves

    It is worth bearing in mind that the so-called evidence discovered by Kondratieff was in the mind of a Marxist convinced that capitalism would fail. The downturn of a capitalist winter, or decline in growth — whatever definition is used, was baked in the anti-capitalist cake. The Marxists and other socialists were and still are all too ready to claim supposed failings of capitalism, evidenced in their eyes by periodic recessions, slumps, and depressions.

    Kondratieff’s economic bias may or may not have coloured his analysis — only by digging deeply into his own soul could he have answered that. But in the absence of firm evidence supporting his wave theory we should discard it. After all, there is a rich history of the religious zeal with which spurious theories in the fields of economics and money arise. The consequences of sunspot cycles and the supposed importance of anniversary dates are typical of this ouija board theme.

    Non-monetary cycle themes such as that devised by Kondratieff have socialism at their core. It is assumed that capitalists, bourgeois businessmen seeking through the division of labour to manufacture and supply consumer goods for profit, in their greed are reckless about commercial risks from overinvestment. This is nonsense. Fools are quickly discovered in free markets, and they are also quickly dismissed. Successful entrepreneurs and businessmen are very much aware of risk and do not embark on projects in the expectation they will be unprofitable, and it is therefore untrue to suggest that the capitalist system fails for this reason.

    To the contrary, markets that are truly free have been entirely responsible for the rapid improvement in the human condition, while it is government intervention that leads to periodic crises by interfering in the relationships between producers and consumers and setting in motion a cycle of interest rate suppression and currency expansion.

    Markets which are truly free deliver economic progress by anticipating consumer demands and deploying capital efficiently to meet them. It is no accident that economies with minimal government intervention deliver far higher standards of living than those micro-managed by governments. Hong Kong under hands-off British administration, with no natural resources and enduring floods of impoverished refugees from Mainland China stood in sharp contrast with China under Mao. Post-war East and West Germany, populated by the same ethnic people, the former communist and the latter capitalist, provides further unarguable proof that capitalism succeeds where socialism fails.

    Marxist socialism kills cycles by the most brutal method. It cannot entertain the economic calculations necessary to link production with anticipated demand. There is no mechanism for the redistribution of capital for its more efficient use. Consumption is never satisfied, and consumers must wait interminably for inferior products to be supplied. Any pretence at a cycle is simply suppressed out of existence.

    Almost all long-wave literature assumes that prices change due to supply and demand for commodities and goods alone, and never from variations in the quantity of money and credit. But even under a gold standard, the quantities of money and credit varied all the time. In Britain, and therefore in the rest of the financially developed world which adopted its banking practices, gold was merely partial backing for currency and bank deposits, which since the days of London’s goldsmiths also lubricated the creation of debt outside the banking system. While originally gold was used as coin money, since 1914 when Britain went off the gold coin standard even this role in transactions ceased.

    Having explained the random nature of free market capitalism, the difference from capitalistic banking must be explained. It owes its origin to London’s goldsmiths, who took in deposits to use for their own benefit, paying six per cent out of the profits they made by dealing in money. This evolved into fractional reserve banking which became the banking model for the British Empire and the rest of the world.

    As well as renewing the Bank of England’s charter, the Bank Charter Act of 1844 further legitimised fractional reserve banking by giving in to the Banking School’s argument that the amount of credit in circulation is adequately controlled by the ordinary processes of competitive banking.

    If banks acted independently from one another competing for customers and business, we might reasonably conclude that there would be from time-to-time random bank failures without cyclicality, as the Banking School argued. In capitalistic commerce, it is this process of creative destruction that ensures consumers are best served and an economy progresses to their advantage. But with banks, it is different. Each bank creates deposits which are interchanged between other banks, and imbalances are centrally cleared. Therefore, every bank has financial relations with its competitors and is exposed to its competitors’ counterparty risks, which if acted upon creates losses for themselves and other banks, risking in extremis a system-wide crisis. Banking is therefore a cartel whose members acting in their own interests tend to act in unison. In the nineteenth century his led to systemic crises, the most infamous of which were the Overend Gurney and Baring failures. It was to address this systemic risk that central banking took upon itself the role of lender of last resort, so that in future these failures would be contained.

    But this mitigation of risk merely strengthened the banking cartel even further, leading to the possibility of a complete banking and currency failure. And since bankers have limited liability and personally risk little more than their salary in the knowledge that a central bank will always backstop them, reckless balance sheet expansion is richly rewarded — until it fails. Fred “the shred” Goodwin, who grew a staid Royal Bank of Scotland to become the largest bank in Europe before it collapsed into government ownership was a recent example of the genre.

    It is these differences between banking and other commercial activities that drive a cycle of bank credit expansion and contraction while non-financial business activities cannot originate cycles. The state-sponsored structure of the banking system attempts to control it. Governments through their central banks also trigger a boom in business activity by suppressing interest rates as the principal means of encouraging the growth of currency and credit. The distortions created by these interventions and their continuence inevitably lead to a terminating crisis. As Ludwig von Mises put it:

    “The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

    A long period of credit expansion with relatively minor hiccups ending in such a crisis could easily be confused with a Kondratieff 40—60-year cycle. But the error is to mistake its origins. Kondratieff tried to persuade us that the boom and bust was a feature of capitalist business failings when it is a currency and credit problem. The irony is that Stalin refused to admit even to an expansionary phase in capitalism, condemning Kondratieff to the gulags, and then a firing squad in 1938. He lived as a Marxist-Leninist and was executed by the system he venerated.

    Having identified the source of cycles as being a combination of state action and fluctuations in currency and credit in a state-sponsored banking system and not capitalistic production for profit, we can admit that there are further cyclical consequences. Whether they exist or not is usually a matter of conjecture. Purely financial cycles, such as Elliott Wave Theory, will also owe their motive forces to cycles of credit and not business activity.

    The effect on commodity and consumer prices

    Kondratieff wave followers claim that commodity bull and bear markets are the consequence of a K-wave spring and summer followed by autumn, when it tops out, and winter when it collapses before rising into the next K-wave cycle. But we have demonstrated that the K-wave is not supported by the evidence. Instead, changes in the general level of commodity prices are a function of changes in the quantity of money. And as we have seen, there is a base component and a cyclical component of bank credit.

    We must now refocus our attention from the long-run UK statistics shown in Figure 1 to the contemporary situation for the US dollar, in which commodities have been priced almost exclusively since the early 1970s. The chart from the St Louis Fed below is of an index of industrial materials from 1992.

    We can see why the Kondratieff myth might be perpetuated, with industrial material prices more than halving between 2011 and 2016. But these swings came substantially from the dollar side of prices, whose trade-weighted index rose strongly between these dates. Between 2016—2018 the dollar weakened, before strengthening into 2020. Clearly, it was the purchasing power of the dollar driving speculative as well as commercial flows in international commodity markets.

    In March 2020, the Fed reduced its fund rate to the zero bound and announced QE (money-printing) of an unprecedented $120bn every month. Figure 2 below shows the consequences for the general level of commodity prices.

    Since late-March, the components of this ETF have almost doubled in price, and after a period of consolidation appear to be increasing again. K-wave followers might conclude that it is evidence of a new Kondratieff spring or summer, with the global economy set for a new spurt of economic “growth”. But this ignores the expansion of the Fed’s balance sheet reflected in base money, which is the next FRED chart.

    The monetary base has approximately doubled since the Fed’s March 2020 stimulus, additional to the post-Lehman crisis expansion. The last expansion undermined the purchasing power of the dollar to a similar extent in terms of the commodity prices shown in Figure 2.

    Evidential consequences of price inflation

    Sudden increases in the money quantity have disruptive effects on markets for goods and services and the behaviour of individuals. As well as undermining a currency’s purchasing power, supplies of essential goods become disordered by unexpected shifts in demand. Throughout history there has been evidence of these inflationary consequences, often exacerbated by statist attempts to impose price controls. The Roman emperor Diocletian with his edict on maximum prices caused starvation for citizens, who were forced to leave Rome to forage for food in the surrounding countryside. The edict made the provision of food uneconomic, leading to extreme scarcity. During the reign of Henry I in England there was a monetary crisis in 1124 from the debasement of silver coins, which combined with a poor harvest drove up the prices of staples, causing widespread famine. The French revolution has been attributed to the insensitivity of royalty and the aristocracy to the masses; but it occurred at the time of the assignat inflation, which led to aggravated discontent among the lower orders and the storming of the Bastille. And today, we have widespread disruption of essential supplies, ranging from energy to carbonated foodstuffs. The lesson from history is it has only just started.

    Why today’s logistics and energy disruptions have only just started

    The problems arise because individuals’ knowledge of the relationship between money and goods comes from the immediate past. They use that knowledge to decide what to buy for future consumption, and if they are in business, for production. In the latter case, they might change inventory policies from today’s just-in-time practices to ensure an adequate stock of components is available, driving up demand for them and creating shortages of vital factors of production.

    Consumers faced with shortages will alter the balance between their money liquidity and goods for which they may not have an immediate need but expect to consume at a future date. Bank account balances and credit available on credit cards will be drawn down, for example, to fill their car tanks with fuel, even though no journey is planned. And as we see in the UK today, it rapidly leads to fuel shortages and rationing at the petrol pumps.

    While the authorities try to calm things down, either by denying there is a supply problem or by imposing price controls, consumers are likely to see these moves as propaganda and justification for reducing money liquidity even further by purchasing yet more goods. The flight out of currency liquidity has a disproportionate effect on prices, particularly for essentials. They will simply drive prices higher until no further price rises are expected. Or put more accurately, the value of the currency continues to fall.

    It is worth illustrating the problem for its true context. If on the one hand everyone decides they would rather have as much cash in hand money as possible rather than goods, prices will collapse. It is, as a matter of fact, a situation which cannot occur. If alternatively, everyone decides to dispose of all their liquidity by buying everything just to get rid of the currency, then the purchasing power of the currency sinks to zero. Unlike the former case, this can and does happen, when it becomes widely recognised that the currency might become worthless. In other words, a state-issued unbacked currency then collapses.

    Almost no one, so far, attributes today’s logistical and economic dislocations to monetary inflation, yet as pointed out above, empirical evidence points to a clear connection. Governments and central banks also seem unaware. But they appear to sense that there is an undefinable risk of consumer panic, making fuel and other shortages even worse. So far, the blame lies with logistic failures, which seem to be getting worse.

    Comments from leading central bankers, currently meeting in Portugal and organised by the ECB, confirm the official position of playing popular tunes while the ship goes down. The heads of the Fed, the ECB, the Bank of England, and the Bank of Japan are quoted in the Daily Telegraph as agreeing that staff shortages, shipping chaos and surging fuel costs are likely to cause further disruption as winter draws near. Andrew Bailey, Governor of the Bank of England, warned “…that the UK’s GDP will not recover to pre-pandemic levels until early next year”. But besides the Bank keeping a close watch on inflation, he commented that monetary policy can’t solve supply side shocks. Jay Powell admitted that at the margin apparently bottleneck and supply chain problems are getting marginally worse. But all the central bankers agreed that price pressures will be temporary.

    We can see from these comments a desire not to rock the boat and cause further panic among consumers. More worrying is the insistence that inflation remains a temporary problem. Unless there is a move to stop the monetary printing presses, they must believe it. It is confirmation that there is no intention to change monetary policy. But these problems are not restricted to the West.

    This week we learn that even China, which has followed a policy of restricting monetary growth, faces an energy crisis with coal at power plants critically low, and coal prices up fourfold. Energy is being rationed with production of everything from food and animal feedstuffs to steel and aluminium plants supplying other factories, which in turn face power outages.

    China is the world’s manufacturing hub. The United States relies on China’s exports. There were some seventy container ships at anchor or at drift areas off San Pedro earlier this week, but after dropping slightly the numbers are expected to rise again. And in China, there are delays at ports of more than three days in Busan, Shanghai, Ningbo and Yantian. Ship charter rates have rocketed from $10,000 a day to as much as $200,000.[ix] There can be no doubt as the northern hemisphere enters its winter that the consuming nations in America and Europe will see yet more product shortages, more price rises, and continuing logistics disruption.

    Central banks will become increasingly desperate to discourage consumers’ from hoarding items by claiming that shortages and price increases are transitory. What they fail to realise is that the consequences of currency debasement have led to consumption goods being wrongly priced, fuelling the shortages. These shortages can only be addressed by yet higher prices, even in the absence of further monetary debasement — until no further price increases are expected by consumers.

    But with massive and increasing government deficits to finance, central banks have no mandate to restrict the expansion of currency. An acceleration of monetary debasement as each unit of it buys less is therefore inevitable because consumers and businesses alike will begin to understand there is no limit to prices increasing.

    Left to its logical conclusion, the purchasing power of a currency falls exponentially until it has no value left. The speed at which it happens depends on the time taken for acting humans to realise what is happening. Unless it is stopped, an economy experiences what in the 1920s was described as a flight into real goods, or a crack-up boom.

    Economists today seem unable to comprehend the instability caused by monetary inflation. They adopt their models to ignore it. As von Mises put it, “The mathematical economists are at a loss to comprehend the causal relation between the increase in the quantity of money and what they call ‘velocity of circulation’”. The confusion in the minds of central bank economists renders it unlikely that they will take the actions necessary to stop their currencies sliding towards worthlessness sooner rather than later.

    Central to resolving the problem is maintaining confidence that the currency will retain its purchasing power. But with the advent of cryptocurrencies, there is a growing proportion of the public who understand in advance of inflationary consequences that fiat currencies are being debauched at an accelerating rate. This represents a major change from the past, when, as Keynes put it supposedly quoting Lenin,

    “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in one million is able to diagnose”.

    The fact that millions now do understand the currency is being debauched is likely to make it more difficult for the state to maintain confidence in the currency in these troubled times.

    We should know that what is happening to commodity prices is not some long-term Kondratieff wave, or any other wave with origins in production beyond purely seasonal factors. We can say unequivocally that the cause is in changing quantities of currency and bank credit. We can also see that there are yet further effects driving prices higher from the expansion of currency so far. We can expect currency expansion to continue, so prices of commodities and consumer goods will continue to rise. Or put in a way in which it is likely to become more widely understood as the current hiatus continues, the purchasing power of the currencies in which prices are measured will continue to fall.

    Tyler Durden
    Mon, 10/04/2021 – 21:40

  • Manchin Breaks With Biden, Party Leaders: Says Dems Should Use Reconciliation To Raise Debt Limit
    Manchin Breaks With Biden, Party Leaders: Says Dems Should Use Reconciliation To Raise Debt Limit

    Update (2130ET): Hours after Schumer and McConnell exchanged blame for who will bring about the end of the world as we know it by not raising the debt ceiling, outspoken moderate Sen. Joe Manchin (D-W. Va.) went against party leadership and suggested that Democrats should use the reconciliation process to raise the debt limit as Republicans double down on their commitment to vote against any increase to government spending.

    As The Epoch Times’ Joseph Lord reports, Manchin broke with party leaders, emphasizing the importance of raising the debt ceiling by any means necessary. The West Virginia Democrat told reporters:

    “We shouldn’t rule out anything [including reconciliation]. We just can’t let the debt ceiling lapse, we just can’t.”

    Manchin, who has long promised that he supports the filibuster and will vote to defend it, was asked by reporters whether he would consider getting rid of the rule to allow Democrats to push through a debt ceiling increase.

    “The filibuster has nothing to do with the debt ceiling,” Manchin snapped back.

    “We have other tools that we can use,” he explained, ruling, “If we have to use them, we should use them.”

    And in a rather shocking turn of events, shortly after Manchin’s brief statement to reporters emphasizing the importance of raising the debt ceiling by any means necessary, party leaders have also shown signs they may be rallying behind this view despite their long opposition to using reconciliation.

    In a Monday letter to Senate Democrats, Schumer wrote:

     “Let me be clear about the task ahead of us: we must get a bill to the President’s desk dealing with the debt limit by the end of the week. Period.”

    Despite his previous opposition to using reconciliation, Schumer here indicates that leadership may be open to the option.

    Sen. Dick Durbin said of using reconciliation to raise the debt ceiling:

    “I’m not going to say anything’s impossible.”

    We can only presume that Chuck and Nancy finally read what Nancy said 3 years ago and faced reality as the ‘majority’.

    The market won’t wait too much longer…

    *  *  *

    Senate GOP Leader Mitch McConnell (R-KY) has urged President Joe Biden to work with Congressional Democrats to raise the debt ceiling on their own and avoid an October 18th (or so) default.

    In a Monday letter, McConnell said he’s concerned “our nation is sleepwalking toward significant and avoidable danger because of confusion and inaction from the Speaker of the House and the Senate Democratic Leader concerning basic governing duties.”

    McConnell then reminds Biden that Republicans have spent nearly three months stating that Democrats will need to raise the debt limit by themselves – via a budgetary process known as reconciliation, as “your party has chosen to pursue staggering, “transformational” spending through unprecedented use of the party-line reconciliation process.”

    “Republicans’ position is simple. We have no list of demands. For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”

    Stating the obvious, McConnell points out that “Senate Democrats do not need Republican cooperation in any shape or form to o their job,” adding “Democrats do not need our consent to set a vote at 51 [via reconciliation] instead of 60.”

    At the end of the letter, McConnell ‘respectfully’ asks Biden to “engage directly with Congressional Democrats on this matter.”

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    President Biden on Monday ignored McConnell’s plea – saying in Monday remarks that he can’t guarantee that the US won’t breach the debt ceiling, and that it’s ‘up to McConnell’ at this point.

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    Biden pleaded with McConnell and the GOP leadership to give it a rest and just pass the bill, doing everything in his power to try and tag the GOP with responsibility for the holdup.

    “If you don’t want to help save the country, get out of the way,” Biden said.

    But the message that markets heard, loud and clear, was Biden confirming that, as of Monday, there’s no guarantee that the debt ceiling will be raised in time to prevent a breach or even a default.

    Hammering again on the GOP’s alleged obstructionism, Biden insisted that they  “need to stop playing Russian roulette with the American economy” and hold a vote on the Senate bill as quickly as possible this week. He also warned that these debt-ceiling standoffs hurt ordinary Americans.

    “Let the Democrats vote to raise the debt ceiling this week…the House has already done it…it’s sitting in the Senate, waiting [for them] to pass it. Let us vote and end the mess, we have got to get this done,” Biden said.

    “We can do it this week, just get out of the way and let us pass it”.

    In the Q&A, Biden was asked about the McConnell letter, which he said he saw just before walking out to speak. He said he plans to meet with McConnell on the matter: “I plan on talking to Mitch about it, he and I have been down this road before…and I hope we can have some honest conversation about what he’s proposing.”

    When asked by one reporter if Biden would agree to reconciliation if talks with McConnell go south, he stood firm and insisted that he couldn’t commit to using it, even if it were the only option.

    Put another way: the game of political chicken between Dems and the GOP continues.

    Democrats have been unwilling to pursue reconciliation to raise the debt ceiling – a staggering position to take three years after Speaker Nancy Pelosi (D-CA) chided Republicans for refusing to use reconciliation to avoid a government shutdown.

    Yet now that the shoe is on the other foot, Democrats are taking reconciliation off the table. 

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    Tyler Durden
    Mon, 10/04/2021 – 21:34

  • Veritas Records Pfizer Scientists: "Your Antibodies Probably Better Than Vax" After Infection
    Veritas Records Pfizer Scientists: “Your Antibodies Probably Better Than Vax” After Infection

    Three Pfizer scientists were recorded on undercover video by Project Veritas in the latest installment of their “Covid-19 Vaccine Exposed” series.

    In a 10-minute video released Monday night, all three scientists agreed separately conveyed that natural antibodies produced following a Covid-19 infection are superior to the vaccine.

    “When somebody is naturally immune — like they got COVID — they probably have more antibodies against the virus…When you actually get the virus, you’re going to start producing antibodies against multiple pieces of the virus…So, your antibodies are probably better at that point than the [COVID] vaccination,” said scientist Nick Karl. “The city [of New York] needs like vax cards and everything. It’s just about making it so inconvenient for unvaccinated people to the point where they’re just like, ‘F*ck it. I’ll get it.’ You know?” he added.

    Watch:

    Of note, an Israeli preprint study reported by Science Magazine in late August found that natural immunity after recovering from Covid-19 offers a much better shield against the delta variant than vaccines.

    A second Pfizer employee, Senior Associate Scientist Chris Croce echoed Karl – saying that those who have naturally acquired immunity are “probably more” protected vs. the vaccine.

    Veritas Journalist: “So, I am well-protected [with antibodies]?”

    Chris Croce, Pfizer Senior Associate Scientist: “Yeah.”

    Veritas Journalist: “Like as much as the vaccine?”

    Croce: “Probably more.”

    Veritas Journalist: “How so? Like, how much more?”

    Croce: “You’re protected most likely for longer since there was a natural response.”

    Croce then advises the undercover Veritas journalist to “wait” to get the vaccine until her natural immunity wanes because she’s already had Covid-19.

    A third Pfizer scientist, Rahul Khandke, said that Pfizer pressures employees to conceal negative information from the public.

    “We’re bred and taught to be like, ‘vaccine is safer than actually getting COVID.’ Honestly, we had to do so many seminars on this. You have no idea. Like, we have to sit there for hours and hours and listen to like — be like, ‘you cannot talk about this in public,” said Khandke, who also agreed on the antibodies.

    “If you have [COVID] antibodies built up, you should be able to prove that you have those built up,” he said.

    Croce, meanwhile, acknowledged that Pfizer is conducting tests to determine whether their vaccine causes myocarditis in younger individuals.

    “So, yeah, we’re doing, we just sent, like, 3,000 patients’ samples to get tested for like, elevated troponin levels (to detect heart attack) to see if it’s vaccine based – or so…”

    What will happen to these truth-tellers who decided to be extremely candid with a Project Veritas journalist?

    Tyler Durden
    Mon, 10/04/2021 – 21:16

  • Detained Marine Who Criticized Afghan Chaos May Get Secret Pretrial Hearing
    Detained Marine Who Criticized Afghan Chaos May Get Secret Pretrial Hearing

    Authored by Ken Silva via The Epoch Times (emphasis ours),

    The pretrial confinement initial review hearing for Lt. Col. Stuart Scheller—the U.S. Marine Corps officer jailed for criticizing senior military officials over the U.S. evacuation from Afghanistan—could be held in secret, The Epoch Times has learned.

    The pretrial confinement initial review hearing for Lt. Col. Stuart Scheller—the U.S. Marine jailed for criticizing senior military officials—could be held in secret, The Epoch Times has learned. (screenshot from Scheller’s Sept. 16 video/The Epoch Times)

    Members of Congress and Scheller’s family are seeking to attend the hearing, but the military’s position is that such matters should be held behind closed doors, according to a source familiar with the situation. The person, who spoke on the condition of anonymity to avoid backlash from the military, provided The Epoch Times with documentation supporting these claims.

    The public affairs office for Marine Corps Base Camp Lejeune in North Carolina—where Scheller is confined at the regional brig—didn’t respond to media inquiries by press time. USMC spokesperson Samuel Stephenson also didn’t respond to requests for comment by press time, nor did government counsel Troy Campbell.

    Scheller’s attorney, Brian Ferguson, declined to speak publicly about the case.

    When Scheller was initially jailed, a Marine Corps spokesman said he would be “afforded all due process.”

    The hearing, set for Oct. 5, will decide only whether Scheller is to remain in confinement. Either way, military officials must still decide whether to bring charges against him.

    Scheller captured headlines in late August for criticizing senior military leadership on the handling of the U.S. troop withdrawal from Afghanistan. His initial video was posted on the same day that 13 U.S. troops and more than 100 Afghans were killed in an attack outside of the international airport in Kabul, Afghanistan.

    He published another video on Sept. 16, saying that he was calling for “accountability of my senior leaders” over “obvious mistakes that were made.” In that video, Scheller also said he was “submitting charges” against Central Command (CENTCOM) Commander Gen. Kenneth “Frank” McKenzie for his role in the disastrous withdrawal.

    Scheller was reportedly thrown in the brig on Sept. 27, sparking outrage from some lawmakers and members of the public.

    In a Sept. 29 letter to Marine Corps Gen. David Berger and Gen. David Bligh, 35 members of Congress called for Scheller’s release.

    “In fact, this confinement appears to be simply for messaging, retribution, and convenience in flagrant violation of R.C.M. [Rule for Court Martial]: ‘a person should not be confined as a mere matter of convenience,’” says the letter, whose signers include Reps. Marjorie Taylor Greene (R-Ga.), Matt Gaetz (R-Fla.), Louie Gohmert (R-Texas), and Paul Gosar (R-Ariz.).

    “Furthermore, R.C.M. 305(h)(2)(B) also states that LTC Scheller should be accommodated in the ‘less serious forms of restraint.’ For the above reasons, we urge you to use your considerable authority to correct this misapplication of law and immediately remove LTC Scheller from his confinement.”

    In a separate letter, Sen. Roger Wicker (R-Miss.) questioned Berger about why Scheller is being detained.

    “Requirements for pretrial confinement are very specific. Restraint is not every case and should be no more rigorous than required to ensure the person’s trial or to prevent foreseeable serious criminal misconduct,” Wicker said. “Please provide the rationale, including any associated administrative or judicial records, used by Lt. Col. Scheller’s chain of command to justify and document the decision to place him in pretrial confinement.

    “Regardless of the accusations, he deserves the same rights as any other service member.”

    According to online publication Task and Purpose, the pretrial confinement hearing was initially scheduled for Sept. 30, but was delayed until Oct. 5 so that the defense and prosecution could “seek a joint resolution of the matter.” Scheller has agreed to stay in the brig in the meantime as a show of solidarity with fellow Marines in far worse conditions around the world, according to a person familiar with the matter.

    During a Sept. 29 hearing on the Afghanistan withdrawal—the same hearing at which McKenzie provided false information about the Aug. 29 drone attack that killed Afghan citizens—Gaetz lamented the fact that senior military officials are still in positions of power while Scheller sits in the brig.

    “When people in the military like Lt. Col. Scheller stand up and demand accountability, when they say you all screwed up, when they point out General Milley’s statement that Afghanistan’s not going to be defeated by the Taliban—well, he ends up in a brig, and you all end up in front of us,” Gaetz said.

    “And your [Defense Secretary Lloyd Austin’s] former employer Raytheon ends up with a lot of money, and we have poured cash and blood and credibility into a Ghani government that was a mirage.”

    Tyler Durden
    Mon, 10/04/2021 – 21:00

  • Homeownership Is The Least Affordable Since 2008 With Shelter Inflation About To Explode
    Homeownership Is The Least Affordable Since 2008 With Shelter Inflation About To Explode

    Yesterday we asked a rhetorical question: how can (record high) home prices be rising so fast that housing is both unaffordable and booming at the same time? While a rational answer has yet to emerge, today the WSJ picks up on the former and writes that the record growth in home prices has made owning a home less affordable than at any point since the financial crisis.

    Citing data from the Atlanta Fed, the Journal writes that the median American household would need just under a third, or 32.1% of its income, to cover mortgage payments on a median-priced home. Even though mortgage rates are at all time lows, that’s the most since November 2008, when the same outlays would eat up 34.2% of income. One can only imagine what will happen when prices continue to rise or when mortgage rates spike.

    The advent of the latest housing bubble means that supercharged home prices in markets across the country, which in August rose by a record 20% across the top 20 MSA, are canceling the impact of modestly higher incomes and historically low interest rates, two factors that typically make owning a home more affordable. Higher prices require buyers to take out larger loans, essentially signing them up to make larger mortgage payments each month for years.

    The Atlanta Fed calculates affordability using a three-month average of median home prices from CoreLogic and median household incomes based on census data. In July, the latest month in the Atlanta Fed’s calculations, median home prices were $342,350, up 23% from the year before. Median incomes were $67,031, up a tiny 3%, less than the current rate of inflation.

    Citing economists, the WSJ said that declining affordability will have the biggest impact on buyers shopping for their first homes, who will have to sign up for larger monthly payments, buy less desirable homes or step back from the market altogether. It’s also why Democrats recently proposed a subsidized 20-year mortgage for first-gen homebuyers, a gimmick that will only lead to even more taxpayer-funded market imbalances and an even greater bubble.

    “It’s a lot more difficult for people to get their foot in the door of the housing market,” said Ralph McLaughlin, chief economist at Haus, a home-finance startup. “The question is whether it is an insurmountable hurdle or is it just that these households have to spend more of their monthly income on the mortgage.”

    The current situation is unique: in 2008 the dynamics were different, even if the effect — complete disarray in the housing market — was the same. Home prices were falling, and many Americans owed more on their homes than the homes were worth. Furthermore, widespread job losses weighed on household income for years.

    Christopher Ferreris and his wife, Danielle Ferreris, have been hoping to purchase a home in the Tampa, Fla., area for close to two years. They can afford about $1,600 in monthly payments, but every house they have seen requires monthly payments about 25% bigger than that. As a result, they are stuck renting, where the double whammy of soaring rent prices is also hammering their disposable income.

    “It’s almost like we’ve gotten into a holding pattern because of how difficult it is,” Mr. Ferreris said.

    The typical value of a home in Tampa was $331,000 in August, up from $265,000 at the same time last year, according to Zillow.

    The Ferreris are doing everything they can think of to save money, and Christopher started a side business last year buying and selling sports cards. He now counts on it for about $500 each month.

    Of course, during the early months of the pandemic, homes became more affordable while interest rates fell. However, following trillions in fiscal and monetary stimulus, the dynamic reversed rapidly as many families, after sitting on the sidelines for a few months, raced to buy homes, eager for more space or to move out of crowded cities. The fierce competition sent home prices soaring. Affordability began to decline.

    According to the Atlanta Fed, at the start of 2021, Americans needed about 29% of their income to cover a mortgage. That has since risen to about 32% by July. The Atlanta Fed includes principal, interest, taxes, insurance and related costs in mortgage payments.

    “Any affordability that mortgage rates lended has pretty much been erased at this point,” said Daryl Fairweather, chief economist at real-estate brokerage Redfin.

    Home buyers have noticed. About 63% of consumers surveyed in August believed it was a bad time to buy a house, according to Fannie Mae. That was up from 35% at the same time last year.

    The punchline: while the Fed pretends none of this is happening, Goldman’s shelter inflation tracker just surged to the highest level on record, rising 4.6% Y/Y, a print which suggests that PCE Shelter Index, which lags by about 6 months, is about to go through the roof.

    How and whether the Fed responds to a surge in housing inflation it will no longer be able to ignore remains to be seen.

    Tyler Durden
    Mon, 10/04/2021 – 20:40

  • Biden's Red Queen Justice: How He Shatters Both The Investigation & Reputations Of Border Agents
    Biden’s Red Queen Justice: How He Shatters Both The Investigation & Reputations Of Border Agents

    Authored by Jonathan Turley,

    Below is my column in the Hill on the controversy over U.S. Customs and Border Protection agents allegedly whipping undocumented immigrants on the southern border.

    The false accounts given by members of Congress and the media were alarming and likely defamatory. However, it was the comments of President Joe Biden that were the most damaging to both the investigation and the reputation of these agents.

    He seemed to finally find his “dog-faced lying pony soldiers” in the mounted border unit. Ironically, he is the most legally protected person in making defamatory comments.

    Here is the column:

    “Those people will pay.” With that promise, President Biden vowed to punish Customs and Border Protection agents accused of whipping undocumented immigrants on the southern border. Despite the announcement of an investigation into the allegation just the day before, Biden did not stop for the pretense of process in declaring the agents guilty.

    This “sentence first — verdict afterwards” approach may amuse the Red Queen of Alice in Wonderland, but it should be anathema to an American president. Not only did Biden shatter his own administration’s investigation but he joined other leading Democratic figures in defaming the agents.

    Biden told the American people that these easily identifiable officers would be punished after they allegedly “strapped” the Haitian migrants. Other Democratic politicians like Rep. Maxine Waters (D-Calif.) declared that the whipping was “worse than what we witnessed in slavery” and described “the cowboys who were running down Haitians and using their reins to whip them.”  Rep. Ayanna Pressley (D-Mass.) called it simply “white supremacist behavior.” Many in the media went into high gear, too, denouncing what one outlet described as the “Whipping (of) Haitian Asylum Seekers.”

    However, Biden’s behavior was the worst, due to his position as head of the Executive Branch: “It was horrible what — to see, as you saw — to see people treated like they did: horses nearly running them over and people being strapped. It’s outrageous. I promise you, those people will pay.”

    By announcing that the agents were guilty and needed to be punished, Biden destroyed the credibility of the Department of Homeland Security’s ongoing investigation. It is akin to what is called “command influence” in the military, when comments or actions of a superior officer influence an investigation or prosecution. Investigators and department officials could well be worried about their own careers if they do not find a basis to punish one or more of the border agents. The failure to do so would be an embarrassment to the president and risk the wrath of powerful figures in Washington. Conversely, any action taken against these agents can now be challenged due to Biden’s preemptive declaration.

    The biggest problem is that the whipping story was entirely untrue.

    Indeed, it was obviously untrue from the start. We were all watching the same video, and the officer was clearly using his strap to control his skittish horse. Even the photographer expressed astonishment at the coverage and said he did not see a single person strapped or whipped by agents.

    The profile of this scandal is familiar. The media repeatedly has worked people into a frenzy over stories that eventually were proven false, but with little later coverage when the truth contradicted earlier accounts. One such example is the Lafayette Park incident in 2020, in which the media declared that then-Attorney General Bill Barr cleared the area with tear gas to enable a photo op for President Trump. From the outset, there was ample evidence undermining that claim, but it was uniformly ignored. Later, the Justice Department’s inspector general disproved the claim — but few reporters or commentators corrected the earlier false claims.

    Biden and other figures ran with this false claim because it was popular — and they did not have to bear the costs. They simply declared the border agents to be modern-day Bull Connors, whipping helpless migrants.

    Legally, however, this has all of the makings of a defamation case.

    The most important element is that all of the whipping stories were based on the same videotape; there were no added sources for most of these accounts. Even if these officers were treated as “public officials” under the more difficult standard of New York Times v. Sullivan, they could still make a compelling argument that the comments were made with the “actual knowledge” of the falsity or “reckless disregard of the truth.” Moreover, these claims would be recognized in many states as per se defamation. While some can legitimately argue that the use of the horses was still abusive or dangerous, horses are routinely used for crowd control and these border agents were ordered to the river for that purpose.

    Congressional members like Waters and Pressley can often rely on the protections of the Speech or Debate Clause of the Constitution (Article I, Section 6, Clause 1). However, their remarks in this case were made outside of protected congressional areas.

    Those in the media might limit their legal liability with corrections posted or published within a few days of the initial reports — but they can still be sued. It could be argued that some apparently did not care if the border agents did or did not whip migrants because “it was a fact too good to check.” Moreover, the use of the still photos was uniformly misleading and could be used as the basis for “false light” charges, in which pictures are used to present a false or misleading image.

    The greatest irony, however, is that the person most at fault here — President Biden — may be the most protected from lawsuit, despite defaming federal employees. In Nixon v. Fitzgerald, the Supreme Court held that a president “is entitled to absolute immunity from damages liability predicated on his official acts.” The court recognized that “a President must concern himself with matters likely to ‘arouse the most intense feelings’” and thus would be subject to endless lawsuits. Later, in Clinton v. Jones, the court denied such immunity in private matters involving “unofficial conduct.”

    Biden can argue that these were statements issued in his official capacity. Of course, that makes it worse, since he is not supposed to proclaim the guilt of those who are being investigated or who remain unadjudicated.

    The danger is that defamation actions often chill speech on issues of public importance. The Supreme Court has struggled to find a balance in such cases in order to limit defamation actions to guarantee free, robust public debates. It is important for people to be able to allege abuses by law enforcement. Conversely, responsible presidents and members of Congress are expected to reaffirm the need for investigations and due process.

    What is notable here is that the truth could have been confirmed easily before any political or media figures portrayed the border agents as white supremacists in a race-fueled whipping frenzy.

    In the end, we might all agree with President Biden that “it was horrible what you see, what you saw — to see people treated like they did.” But that should include federal agents who were sentenced to officials’ public condemnation before any verdicts were reached.

    Tyler Durden
    Mon, 10/04/2021 – 20:20

  • Panic-Buying Over? US Gun Demand Tumbles Near 2 Year Lows, FBI Data Suggests
    Panic-Buying Over? US Gun Demand Tumbles Near 2 Year Lows, FBI Data Suggests

    September background checks for firearms conducted by the FBI were at the lowest in 22 months, suggesting the year and a half of panic buying guns has lost momentum. 

    FBI’s National Instant Criminal Background Check System (NICS) data shows background checks slumped 9.2% in September from a year ago. Unadjusted checks dropped to 2.63 million when compared with last September. 

    Gun sales aren’t tracked by NICS data. Background checks only serve as a proxy for sales by the firearms industry. 

    For more color on the firearms industry and how panic-buying guns, sparked by the virus pandemic and social unrest of 2020, along with President Biden’s gun control push in 2021, has likely peaked is Baltimore-based gunshop and gun policy advocacy group The Machine Gun Nest, who said: 

    “Considering that has been a solid year and a half of panic buying, it had to end sometime. If you walk into your local gun shop, you’ll see the shelves are much more stocked than they were this time last year. The fact that we’ve been able to keep 9mm on our shelves for longer than a day has been a clear indicator for us that the panic buying has died down.

    “We are continuing to see strong sales numbers, and even though the panic buy is dying down, it seems that more and more people are exercising their 2nd amendment rights and participating in shooting sports.” 

    So if panic buying guns has run its course – this means inflated prices should undergo a mean reversion of some sort. As for ammo, we suspect prices will remain elevated as there are millions of new gun owners in the last two years. 

    Tyler Durden
    Mon, 10/04/2021 – 20:00

  • North Carolina County To Discipline, Fire Teachers Who Say America And Founders Are Racist
    North Carolina County To Discipline, Fire Teachers Who Say America And Founders Are Racist

    Authored by GQ Pan via The Epoch Times (emphasis ours),

    A North Carolina school board has adopted a policy that would discipline or dismiss teachers if they incorporate critical race theory (CRT) into their teaching of the history of the United States.

    Children hold up signs during a rally against critical race theory being taught in schools at the Loudoun County Government center in Leesburg, Va., on June 12, 2021. (Andrew Caballero-Reynolds/AFP via Getty Images)

    The Johnston County school board on Oct. 1 unanimously approved an amended code of ethics policy after the county’s Republican-run board of commissioners said it would withhold $7.9 million in school funding until the policy was passed, The News & Observer of Raleigh reported.

    While CRT wasn’t specifically mentioned in the changes, the new policy did target key ideas aligning with the quasi-Marxist ideology, including claims that U.S. laws and institutions are built upon racial oppression, and that racism is so deeply embedded in the nation that racist views are considered normal throughout all aspects of society.

    “Racism causes damage to individuals and the community. When racism is present, it creates a lack of trust and respect,” the document reads. “No student or staff member shall be subjected to the notion that racism is a permanent component of American life.”

    When it comes to U.S. history, the policy states that “all people deserve full credit and recognition for their struggles and accomplishments throughout United States history,” and that the nation’s founding documents “shall not be undermined.” It banned any Johnston County Schools employee from “making any attempt to discredit the efforts made by all people using foundational documents for reform.”

    “No fictional accounts or narratives shall be used to invalidate actual objective historical events. All people who contributed to American Society will be recognized and presented as reformists, innovators, and heroes to our culture,” it added. “Failure to comply with this policy will result in disciplinary action up to and including dismissal.”

    The vote was welcomed by Citizen Advocates for Accountable Government, an advocacy group founded by two Johnston residents. They said the policy would “prohibit the implementing of divisive principles of Critical Race Theory in the classroom.”

    “The approach used stands as an example of how diverse voices can work together for the betterment of the Students in our Public Schools,” Dale Lands, the group’s founder, said in a statement to The Observer.

    The idea that American society is inherently racist has been popularized by proponents of CRT, notably Nikole Hannah-Jones, the leading author of The New York Times’ highly controversial “1619 Project,” an essay collection arguing that the Revolutionary War was fought to preserve slavery; and Ibram X. Kendi, a professor at Boston University who advocates for active discrimination against white people, whom he deems privileged, as a remedy for historical racism.

    Tyler Durden
    Mon, 10/04/2021 – 19:40

  • NYC's Abandoned Outdoor Restaurant Sheds Being Used As Garbage Dumps Or Homeless Shelters
    NYC’s Abandoned Outdoor Restaurant Sheds Being Used As Garbage Dumps Or Homeless Shelters

    The benefits of a draconian set of Covid lockdowns are continuing in New York City – if you’re homeless or looking for a place to dump garbage, that is.

    That’s because homeless people are now using outdoor dining sheds, erected during lockdowns for restaurants to move their businesses outdoors, for housing. 

    Heading into the winter months, outdoor dining areas are being used as “hovels for the homeless, giant garbage dumps, and traffic-blocking storage sheds,” according to a new report by the NY Post.

    The report says that many of the structures have shuttered as businesses refocus on indoor dining. The Post pointed out abandoned structures outside of restaurants like Boise, Le Sou and the former GMT Tavern. 

    Michelin-starred Jua uses its outdoor shed for cardboard boxes, the report says, despite the fact that restaurants are not allowed to use the areas as storage, per the Department of Transportation. 

    One July complaint to the Department of Buildings said: “These sheds are an eyesore — people are now depositing garbage in them. Why are they up months after restaurants have shut down?” 

    Another referred to the sheds as a “breeding ground” for rats, stating: “It’s not economically feasible for the landlords or (former) tenants to take them down, and the city doesn’t have the political will to get it done.” 

    Leif Arntzen says he sees homeless people sleeping in the sheds “all the time” and told the Post: “I think they pick it because they’ve got this sort of AstroTurf on the pavement that they can just kind of lay down on.”

    And while those on the ground are getting fed up with the structures, politicians have been lacking in action.  Assemblywoman Deborah Glick complained about one such structure this week:

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

    According to the DOT, there are about 12,000 outdoor sheds, with 1,202 of those located directly on roadway. It has only instructed the sanitation department to remove 21 of these structures citywide. 

    A City Council survey of 418 restaurants downtown found that 93% were not complying with “at least one” DOT guideline, the Post reported.

    136 complaints about abandoned setups had been placed between May 6 and September 23 of this year. 

    Tyler Durden
    Mon, 10/04/2021 – 19:20

  • World's Largest Commodity Traders Face Massive Margin Calls As Global NatGas Arb Explodes
    World’s Largest Commodity Traders Face Massive Margin Calls As Global NatGas Arb Explodes

    Just one week ago, we highlighted the first victim of the latest “rogue wave” in global natural gas markets.

    As Miami-based Statar Capital gave up its “hefty gains” from earlier in the year, tumbling into the red amid the NatGas market turbulence, we warned that it would not be the last fund to admit major losses through this period of chaos.

    It appears we were right, and three years after James Cordier – head trader at OptionsSellers.com – became infamous after a “catastrophic loss event” thanks to a “rogue wave” in NatGas options markets, Reuters reports on what could be the next escalation in energy markets,

    Seven sources with direct knowledge of the matter told Reuters that the world’s top commodity trading houses are being told by brokers and exchanges to deposit hundreds of millions of dollars in extra funds to cover their exposure to soaring gas prices.

    Glencore, Gunvor, Trafigura and Vitol are among the commodity merchants facing massive margin calls on their positions in natural gas markets across Europe and US.

    According to reports, it appears the trading shops have all been hammered by a spread (or arbitrage trade) gone wrong.

    For years, the prices of European (red) and US natural gas (green) have traded within a well-defined range. When the spread between the two reaches one extreme or the other, you buy one and sell the other – easy, right?

    Source: Bloomberg

    So as European NatGas prices surged in Q2, it reached a notable extreme relative to US NatGas, prompting traders to instigate the strategy of selling European Gas and Buying US Gas in the hopes the spread compresses.

    The strategy backfired last month when European gas prices soared due to a variety of factors including low inventories, high demand for gas in Asia, low Russian and LNG supply to Europe, and outages.

    Source: Bloomberg

    As the chart above makes clear, this is not just a modest break of the strategy, it’s a multiple-sigma collapse of what was – for 12 years – a relatively low risk, slow reversion strategy.

    Officials are of course playing down this report:

    “While there have been margin calls associated with the European natural gas price rally, Gunvor maintains a healthy liquidity position and instruments to manage any further volatility,” a company spokesperson said.

    Glencore, Trafigura and Vitol declined to comment.

    The situation is particularly difficult for small-to-mid-sized trading firms, the sources said, who described the margin calls as on a scale not seen before.

    One wonders if these shops have been buying options protection to try and manage this position’s massive wrong way bet. NatGas implied vols have never been higher…

    Source: Bloomberg

    “Nothing to see here, move along” is the message but we wonder just how bad this could be as Reuters reports that two of the sources said trading houses and other players had together accumulated $30 billion worth of short positions in the TTF market, with European utilities taking the opposite long side of the play.

    Tyler Durden
    Mon, 10/04/2021 – 19:06

  • What's The Driving Force In China?
    What’s The Driving Force In China?

    Authored by Bill Blain via MorningPorridge.com,

    “Some day, and that day may never come, I will call upon you to do a service for me..”

    Understanding what is going on in China means understanding the politics – which should be very familiar to students of 1970’s and 80’s US films.

    I was up in London yesterday and spent some time with colleagues and visiting clients. Some fascinating conversations – and lots of them revolved around WTF is happening in China. The situation looks increasingly unclear. The Evergrande bailout/rescue is confusing and unclear. Now the Energy companies have been told to secure power at any price. It’s possible to smell wobble in the air – something is happening, but we are not sure what it is.

    China has been the big story in markets this year. We are all trying to fathom what successive government crackdown means. The purge of Jack Ma and other entrepreneurs, the regulatory assault against big tech and a host of other “reforms” have wrong footed markets. Now it’s clear the Government is struggling with energy security. Maybe the Middle Kingdom is in more trouble that we perceive?

    Or, do we just need to think about China in a different way? To understand China today, you need a sense of its history. Imperial China ran from 221 BC till 1912. Empire, courts, bureaucracy and plots. I wonder how much has really changed?

    Since the foundation of Communist China the Chinese Communist Party (CCP) has been highly factionalised – broadly divided into the Chinese Commmunist Youth League (CCYL) faction of “populists” and the Shanghai Gang of “elitists”.

    There isn’t a simple way to characterise each side due to the links of patronage than characterise who-knows-who in China, but broadly the elitists tended to comprise the princelings (from families of party veterans and officials) and many of the richer entrepreneurial figures. The populists typically worked their way up the system. For many decades there was a form of “collective” balance between the factions at the top of the party with a rotation between the two as the tides of power balanced each other out.

    Now there is a new faction in charge.

    President Xi Jinping rose through the ranks of the princelings in the Shanghai gang, but has now consolidated own power around himself in the Xi Gang. His Gang now controls all the significant leadership posts in the CCP – eroding the power and significance of the Shanghai and CCYL gangs. He is de-facto Emperor.

    If all the above reads a bit like a Mario Puzo “Godfather” Novel… spot on. Xi is now enforcing his power over the other families by removing their leaders in time-honoured style. To read it all in detail – let me suggest this primer: The Rise of the Xi Gang

    Evergrande is an example of how it hits the economy and investment decisions: Evergrande’s founder Hui Ka Yan is a princeling from the Shanghai gang. He owes his connections and support as a client of former vice-President Zeng Qinghong, who in turn was the right-hand man of President Jiang Zemin. Xi came up through the Shanghai gang, but has now founded his own family/gang, thus the Zemin faction is his enemy.

    Now that Hui Ka Yan is neutralised and broken, then the Government/Xi Clan can move on to protecting its clients across other property companies. You are with or against him. Simples.. Eh?

    Much of the current unrest in China is about which side of the Jiang Zemim / Xi Jinping divide players stand on. At the moment, Emperor Xi is winning. When placing new bets on China one would be well advised to check who the patron is.

    Tyler Durden
    Mon, 10/04/2021 – 19:00

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