- S&P: Economic Downturn In Dubai To Persist Through 2022
An economic downturn, or below-trend growth, has been festering in Dubai’s economy since 2014, is expected to continue through 2022 due to depressed oil prices, a global synchronized slowdown, turmoil from the US and China trade war, and political uncertainties in the Middle East, Standard and Poor’s said Tuesday.
The international rating agency said deterioration in real estate and tourism sectors have weighed on the domestic economy.
Several days ago, we reported new data from Cavendish Maxwell’s Dubai House Price Index via Property Monitor that showed Dubai house prices fell to their lowest levels in June, not seen since the 2008 financial meltdown. Besides low oil prices, trade wars, global growth decline, and instability in the Middle East, there was another factor leading to the slump in real estate.
There’s a massive housing glut in the country that could take years to rebalance.
Besides housing, Dubai’s debt situation is deteriorating. Public debt has reached $124 billion, or 108% of GDP, split between the government and state-linked companies, the report said.
Dubai is a city-state that is one of seven sheikhdoms that make up the UAE. Growth in the UAE expanded a mere 1.94% in 2018, the lowest since 2010 when the city was still recovering from the financial crisis.
S&P expects Dubai’s GDP to expand 2.4% this year, thanks to the construction of projects related to the international trade exhibition Expo 2020 next year. But says growth afterward will likely fall below trend <2% through 2022.
The IHS Markit UAE PMI fell sharply to 51.6 in August 2019 from 55.1 in July. The latest PMI data pointed to the slowest expansion in the non-oil private sector in eight years, as output growth declined to a 6-year low.
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The rating agency said the trade war and geopolitical uncertainties around the Strait of Hormuz would decrease international trade in the region, could negatively affect Dubai’s Port of Jebel Ali in the coming quarters.The bust cycle is expected to gain momentum through the year. Several days ago, the government suspended work on Al Maktoum airport, was supposed to be the world’s biggest airport with up to 250 million passengers per year, but the project had to be put on hold due to a faltering economy.
Dubai ruler and UAE Prime Minister Sheikh Mohammed bin Rashed has taken several measures to boost the domestic economy, in hopes to attract new foreign direct investments by easing residency and business rules.
So can Dubai survive the next global recession?
We’ll find out shortly as the world is likely entering, or has already entered a global trade/manufacturing recession.
The highly leveraged city-state, already reeling from weaker oil prices and a housing bust, is a symptom that the most vulnerable fall first.
- Italy: Salvini Down But Not Out
Authored by Soeren Kern via The Gatestone Institute,
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The new governing alliance, if realized, may be short lived. In an interview with the Italian daily La Stampa, former Interior Minister Roberto Maroni of the Lega Nord party said that the new government, if it comes to fruition, will be “intrinsically weak” because it would exist, “not for a shared political project but only to avoid elections.” He added that there was a possibility that the new government could last for the entire legislature “in order to avoid delivering the country to Salvini.”
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“Do you think I am afraid of a few months in opposition?” Salvini asked in a Facebook video. “You have not got rid of me with your political games. You do not know me, I do not give in.” He has called for a protest against the new government in Rome on October 19. Polls show that 67% of Italians are in favor of early elections.
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“We Hungarians will never forget that you [Salvini] were the first Western European leader to make an effort to prevent illegal migrants from flooding Europe via the Mediterranean Sea. Irrespective of future political developments in Italy and of the fact that we belong to different European party groups, we consider you as a brother in arms in the fight to preserve Europe’s Christian heritage and stop migration.” — Hungarian President Viktor Orbán.
Matteo Salvini, Italy’s deputy premier and interior minister since 2018, has been shut out of the Italian government after his gambit to force snap elections to become prime minister backfired.
As the de facto leader of Europe’s anti-mass-migration movement, Salvini’s departure from government may set back efforts to slow illegal immigration to the continent. Many analysts, however, believe that Salvini, who continues to lead his rivals in opinion polls, will be back in government soon and in an even stronger position than before.
On August 8, after months of public feuding, Salvini declared the governing coalition between his League party and the anti-establishment Five Star Movement (M5S) unworkable. He accused M5S of blocking the League’s main policies and said that the only way forward was to hold fresh elections.
The League and M5S, ahead of an inconclusive election in March 2018, had been political adversaries. Three months later, however, they formed an unlikely alliance. Their June 2018 coalition agreement, outlined in a 39-page action plan, promised to crack down on illegal immigration and to deport up to 500,000 undocumented migrants.
Since then, Salvini has accused M5S of failing to implement parts of the coalition agreement. Tensions came to a head on August 7, when, during a session in Parliament, M5S voted against a project supported by Salvini for a high-speed train link with France. “It is useless to go ahead with ‘no’s’ and quarrels,” Salvini wrote on his Facebook page. “Italians need certainty and a government that works, not a Mr. ‘No.'” Salvini called for new elections to be held on October 13.
In an effort to avoid early elections, which polls show that Salvini would win, M5S reached out to the rival center-left Democratic Party (PD), cutting Salvini’s League party out of power. M5S and PD clinched a preliminary coalition agreement on August 28, and a day later Italian President Sergio Mattarella asked Prime Minister Giuseppe Conte, an independent, to form a new coalition government. Although the League is Italy’s most popular party, M5S and PD are the two largest forces in parliament.
Although the anti-establishment, anti-EU M5S and the pro-establishment, pro-EU PD have long been political enemies, M5S appears to have set aside many of its core principles to meet PD’s demands. For now, M5S has insisted on maintaining a hardline anti-illegal immigration law passed with the League in November 2018. The law, championed by Salvini, saw public support for the League skyrocket from 17% in the March 2018 election to 38% in August 2019.
The new government — which aims to govern until the next general election, due to be held no later than May 2023 — will have to be approved in a vote of confidence by both houses of Parliament.
The new governing alliance, if realized, may be short lived. In an interview with the Italian daily La Stampa, former Interior Minister Roberto Maroni of the Lega Nord party said that the new government, if it comes to fruition, will be “intrinsically weak” because it would exist, “not for a shared political project but only to avoid elections.” He added that there was a possibility that the new government could last for the entire legislature “in order to avoid delivering the country to Salvini.”
Several Italian newspapers reported on efforts by German Chancellor Angela Merkel and other European officials to prevent early elections in Italy — solely to stop Salvini from becoming prime minister. Merkel reportedly ordered leaders of the PD to reach a coalition agreement with M5S. “Make the agreement and stop Salvini,” she reportedly said.
A leaked document showed that outgoing EU Budget Commissioner Günther Oettinger had offered to relax EU rules on public debt in exchange for “a pro-European government that does not work against Europe.”
Writing for the Italian daily Il Giornale, political correspondent Andrea Indini noted:
“Berlin’s interference with the decisions of the Democratic Party are not surprising at all. As we have reported in recent days, the first meeting between M5S and PD dates back to July 16, when Ursula von der Leyen was elected president of the European Commission, thanks in part to support from M5S and PD. Von der Leyen is not just any person, she is Merkel’s clone. Her election is part of a strategy executed alongside French President Emmanuel Macron to split the nationalist bloc in Europe. It is certainly not a coincidence that, moments after Salvini pulled the plug on his government, [former Italian prime minister and former European Commission president] Romano Prodi, faster than a slingshot, called for Italy to be governed by an ‘Ursula Coalition’ that is formed by the same political forces [M5S and PD] that helped to elect von der Leyen.
“That there are international interests behind the formation of the new coalition government is now clear to most. ‘The Democratic Party is at the service of foreign countries,’ Salvini said last night during a rally in Pinzolo. ‘They think we are all sheep and slaves, ready to wait for what they say in Brussels and Paris, but the League defends the Italians, because we are free men.’ At this point Salvini has no choice but to play the next match against the opposition with the weapons he has available. His men have already made it known that they will pass nothing in the Parliament that comes from M5S-PD, but above all from those who sponsor them: Merkel, Macron and Ursula von der Leyen.”
Salvini’s political rivals relished his departure from government. Former Italian Prime Minister Matteo Renzi, in a Facebook post, proclaimed: “Today, Salvini has left the political stage. Institutions 1 — Populism 0.”
Salvini, however, has vowed to fight:
“While PD and others are fighting over government positions, we are preparing for the Italy that is to come from among the people. They will not be able to run away from the elections for long, let’s get ready to win!”
“Do you think I am afraid of a few months in opposition?” Salvini asked in a Facebook video. “You have not got rid of me with your political games. You do not know me, I do not give in.” He has called for a protest against the new government in Rome on October 19. Polls show that 67% of Italians are in favor of early elections.
International commentators agree that Salvini remains a political force to be reckoned with. International Business Editor of The Daily Telegraph, Ambrose Evans-Pritchard, noted that Salvini is down but not out:
“Be careful what you wish for in Italian politics. The exile of the volcanic Matteo Salvini is a Faustian Bargain for the EU establishment and the defenders of the euro project.
“There must be a high chance that the Lega strongman — and de facto leader of the Continent’s anti-EU rebellion — will sweep back into power with an overwhelming majority next year or soon after.
“He may then be strong enough to push revolutionary changes through the Italian constitutional system that would be impossible sooner: A New Deal spending blitz backed by a politically-controlled Bank of Italy and a parallel “minibot” currency that neutralizes the enforcement tools of the European Central Bank.
“His departure this week means that others will be left to grapple with Italy’s intractable stagnation. It is they who will have to push through €23bn of austerity cuts to comply with the EU’s stability pact and the fiscal compact, the paraphernalia of arcane budget rules concocted by lawyers and unworkable in a serious downturn. Mr. Salvini’s hands will be clean. ‘It is a win-win situation for us,’ said Claudio Borghi, the Lega’s economics chief.”
Hungarian Prime Minister Viktor Orbán thanked Salvini for his efforts “benefitting Italy and the whole of Europe including Hungary.” In a letter published by the Hungarian news agency MTI, Orbán wrote:
“We Hungarians will never forget that you were the first Western European leader to make an effort to prevent illegal migrants from flooding Europe via the Mediterranean Sea. Irrespective of future political developments in Italy and of the fact that we belong to different European party groups, we consider you as a brother in arms in the fight to preserve Europe’s Christian heritage and stop migration.”
On August 30, meanwhile, 62 Pakistani migrants landed on an island off Gallipoli in southern Italy. On September 1, Salvini, who remains acting interior minister, banned the Alan Kurdi, a ship operated by the German charity Sea-Eye, with 13 migrants aboard, from entering Italian waters. Another ship, the Mare Jonio, is anchored a kilometer from the Italy’s southernmost island of Lampedusa with 34 migrants who were rescued on August 28 off the coast of Libya.
Salvini has warned that the new coalition would end his ban on migrant boats arriving from Africa: “If the PD wants to reopen the doors and allow the business of illegal immigration to start up again, it should tell that to Italians.”
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- Navy, Marine Corps Begin Arctic War Exercise To Counter Russia and China
The US Navy and Marine Corps are conducting a month-long war exercise in Alaska against the rising threats of Russia and China in the Arctic region.
A massive threat to the US is that Russia and China are trying to establish the Belt and Road Initiative in the Arctic, by developing new shipping lanes that are now more accessible thanks to global warming.
The US must continue to show force in the Arctic and not allow Russia and China from establishing the “Polar Silk Road.”
This can be done through the militarization of the Arctic Region, and regular war exercises in the region to deter both countries from sailing commercial and military vessels through the area.
The latest US deterrence is a war exercise called Arctic Expeditionary Capabilities Exercise (AECE) 2019, which is being held in the region of the Aleutian Islands, Southcentral Alaska and Southern California from Sept. 01 to 28.
#Amphibious ships #COMSTOCK LSD45 and #SOMERSET LPD25 and a couple thousand #Marines of 1 MEF are carring out #Arctic Expeditionary Capabilities Exercise (AECE) 2019 in the Aleutians and Alaska (and a bit of SoCal) all throughout September. https://t.co/Zl5eME9vI1 pic.twitter.com/0eY4GZJNc4
— Chris Cavas (@CavasShips) September 4, 2019
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More than 3,000 Navy and Marine Corps personnel will participate in the exercise, along with dozens of vessels, helicopters, planes, and land-based vehicles.
AECE will allow both services to jointly participate in the “logistical transfer capabilities in the Arctic environment, including wet logistics over the shore, expeditionary mine countermeasures, mobile diving and salvage, and an offshore petroleum discharge system,” said a press release from the US 3rd Fleet Public Affairs.
#USNavy, @USMC to conduct Arctic Expeditionary Capabilities Exercise in Alaska this month: https://t.co/yej7XW4QV9 pic.twitter.com/tMxFmP83NS
— U.S. Pacific Fleet (@USPacificFleet) September 4, 2019
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Navy and Marine Corps participants will conduct Littoral Operations in a Contested Environment (LOCE) to stimulate an emerging threat near the Aleutian Islands and Southern California. The exercise places emphasis on fighting for and gaining sea control around a heavily contested area in the Arctic.
The exercise will include surveillance, mine-clearing, and support for landing operations.
According to the press release, participating units include “U.S. Pacific Fleet, Marine Corps Forces Pacific, U.S. 3rd Fleet, Expeditionary Strike Group Three (ESG-3), and I Marine Expeditionary Force. Afloat units include USS Somerset (LPD 25) and USS Comstock (LSD 45). Ashore units include Explosive Ordnance Disposal Group One, Explosive Ordnance Disposal Expeditionary Support Unit One, Explosive Ordnance Disposal Mobile Unit One, Explosive Ordnance Disposal Mobile Unit Three, and Mobile Diving and Salvage Unit One.”
At the moment, the Arctic will not become a platform for cooperation between the US and Russia and China, but rather a region of hostility and militarization.
- The Future Of The Spectacle… Or How The West Learned To Stop Worrying And Love The Reality Police
Authored (satirically) by CJ Hopkins via Off-Guardian.org,
If you want a vision of the future, don’t imagine “a boot stamping on a human face — for ever,” as Orwell suggested in 1984. Instead, imagine that human face staring mesmerized into the screen of some kind of nifty futuristic device on which every word, sound, and image has been algorithmically approved for consumption by the Defense Advanced Research Projects Agency (“DARPA”) and its “innovation ecosystem” of “academic, corporate, and governmental partners.”
The screen of this futuristic device will offer a virtually unlimited range of “non-divisive” and “hate-free” content, none of which will falsify or distort the “truth,” or in any way deviate from “reality.”
Western consumers will finally be free to enjoy an assortment of news, opinion, entertainment, and educational content (like this Guardian podcast about a man who gave birth, or MSNBC’s latest bombshell about Donald Trump’s secret Russian oligarch backers) without having their enjoyment totally ruined by discord-sowing alternative journalists like Aaron Maté or satirists like myself.
“Fake news” will not appear on this screen. All the news will be “authentic.” DARPA and its partners will see to that. You won’t have to worry about being “influenced” by Russians, Nazis, conspiracy theorists, socialists, populists, extremists, or whomever.
Persons of Malicious Intent will still be able to post their content (because of “freedom of speech” and all that stuff), but they will do so down in the sewers of the Internet where normal consumers won’t have to see it.
Anyone who ventures down there looking for it (i.e., such “divisive” and “polarizing” content) will be immediately placed on an official DARPA watchlist for “potential extremists,” or “potential white supremacists,” or “potential Russians.”
Once that happens, their lives will be over (ie, the lives of the potentially extremist fools who have logged onto whatever dark web platform will still be posting essays like this, not the lives of the Persons of Malicious Intent, who never had any lives to begin with, and who by that time will probably be operating out of some heavily armed, off-the-grid compound in Idaho).
Their schools, employers, and landlords will be notified. Their photos and addresses will be published online. Anyone who ever said two words to them (or, God help them, appears in a photograph with them) will have 24 hours to publicly denounce them, or be placed on DARPA’s watchlist themselves.
Meanwhile, up where the air is clean, Western consumers will sit in their cubicles, or stagger blindly down the sidewalk like zombies, or come barrel-assing at you on their pink corporate scooters, staring down at the screens of their devices, where normal reality will be unfolding.
They will stare at their screens at their dinner tables, in restaurants, in bed, and everywhere else. Every waking hour of their lives will be spent consuming the all-consuming, smiley, happy, global capitalist Spectacle, every empty moment of which will be monitored and pre-approved by DARPA.
What a relief that will finally be, not to have to question anything, or wonder what is real and what isn’t.
When the corporate media tell us the Russians hacked an election,…or the Vermont power grid, …or are blackmailing the president with an FSB pee-tape,
…or that the non-corporate media are all “propaganda peddlers,”
…or that the Labour Party is a hive of anti-Semites,
…or that some boogeyman has WMDs, or is yanking little babies out of their incubators, or gratuitously gassing them, or attacking us with crickets,
…or that someone secretly met with Julian Assange in the Ecuadorian embassy,
…or that we’re being attacked by Russian spy whales, and suddenly self-radicalized Nazi terrorists,
…or it’s time for the “International Community” to humanitarianly intervene because “our house is burning,” and our world is on fire, and there are “concentration camps,” and a “coup in Great Britain”…
…or whatever ass-puckering apocalyptic panic the global capitalist ruling classes determine they need to foment that day, we will know that this news has been algorithmically vetted and approved by DARPA and its corporate, academic, and government partners, and thus, is absolutely “real” and “true,” or we wouldn’t be seeing it on the screen of our devices.
If you think this vision is science fiction, or dystopian satire, think again. Or read this recent article in Bloomberg, “U.S. Unleashes Military to Fight Fake News, Disinformation.”
Here’s the lede to get you started …
Fake news and social media posts are such a threat to U.S. security that the Defense Department is launching a project to repel ‘large-scale, automated disinformation attacks’…the Defense Advanced Research Projects Agency (DARPA) wants custom software that can unearth fakes hidden among more than 500,000 stories, photos, video and audio clips. If successful, the system after four years of trials may expand to detect malicious intent and prevent viral fake news from polarizing society…”
What could be more reassuring than the knowledge that DARPA and its corporate partners will be scanning the entire Internet for content created with “malicious intent,” or which has the potential to “polarize” society, and making sure we never see that stuff? If they can’t do it, I don’t know who can.
They developed the Internet, after all.
I’m not exactly sure how they did it, but Yasha Levine wrote a book about it, which I think we’re still technically allowed to read.
Anyway, according to the Bloomberg article, DARPA and its corporate partners won’t have the system up and running in time for the 2020 elections, so the Putin-Nazis will probably win again.
Which means we are looking at four more years of relentless Russia and fascism hysteria, and fake news and divisive content hysteria, and anti-Semitism and racism hysteria, and … well, basically, general apocalyptic panic over anything and everything you can possibly think of.
Believe me, I know, that prospect is exhausting … but the global capitalist ruling classes need to keep everyone whipped up into a shrieking apoplectic frenzy over anything other than global capitalism until they can win the War on Populism and globally implement the New Normality, after which the really serious reality policing can finally begin.
I don’t know, call me crazy, or a Person of Malicious Intent, but I think I’d prefer that boot in the face.
- Japanese Beer Exports To South Korea Plunge 97% As Trade Tensions Intensify
In the latest sign that the trade spat between Japan and South Korea is intensifying, South Korean imports of Japanese beer have fallen 97% in August, according to a local newspaper report that was picked up by Bloomberg.
South Korea imported only $223,000 worth of Japanese beer in the month, down from $7.57 million a year earlier, according to the Maeil Business Newspaper, which cited preliminary data from Korea Customs Service.
During every year since 2010, Japan has occupied the No. 1 spot for South Korea, with sales surging more than 6x by 2018 to $78.3 million.
The boycott of Japanese goods has spread since Tokyo first imposed export restrictions on key chip materials in July, and worsened as the spat grew to include South Korea’s preferential trade status and an intelligence-sharing agreement.
Asahi Group Holdings Ltd., Kirin Holdings Co. and Sapporo Holdings Ltd., Japan’s largest publicly-traded breweries, all export beer to South Korea. And all have identified the South Korean market as having major growth potential.
Consumer-facing brands have been hit particularly hard, with consumers boycotting clothing from Fast Retailing Co.’s Uniqlo, and sales of Japanese cars also falling. Tourism to Japan, a key economic driver of Prime Minister Shinzo Abe’s government, has also been impacted as Korean tourists cancel travel plans and airlines scale back flights.
Some contend that trade wars have no winners. However, shares in South Korean brewer Hite Jinro Co. have risen to their highest level in more than a year as its new year has sold remarkably well.
- Non-Elite Humans Are Daring To Create Their Own Narratives
Authored by Michael Krieger via Liberty Blitzkrieg blog,
Somewhere between the arrest of Jeffrey Epstein and his extremely suspicious death in a Department of Justice operated prison, the public learned that an FBI intelligence bulletin published by the bureau’s Phoenix field office mentioned for the first time that conspiracy theories pose a domestic terrorism threat. This was followed up last week by a Bloomberg article discussing a new project by the U.S. military (DARPA) to identify fake news and disinformation.
We learned:
Fake news and social media posts are such a threat to U.S. security that the Defense Department is launching a project to repel “large-scale, automated disinformation attacks,” as the top Republican in Congress blocks efforts to protect the integrity of elections.
The Defense Advanced Research Projects Agency wants custom software that can unearth fakes hidden among more than 500,000 stories, photos, videos and audio clips. If successful, the system after four years of trials may expand to detect malicious intent and prevent viral fake news from polarizing society.
Recall that after the 2016 election, focus was on social media companies and we saw tremendous pressure placed on these platforms by national security state politicians and distressed Democrats to “do something” about the supposed fake news epidemic. Fast forward three years and it’s now apparently the U.S. military’s job to police human content on the internet. This is the sort of natural regression a society will witness so long as it puts up with incremental censorship and the demonization of any thought which goes against the official narrative.
Before we dissect what’s really going on, allow me to point out the glaringly obvious, which is that politicians, pundits, mass media and the U.S. military don’t actually care about the societal harm of fake news or conspiracy theories. We know this based on how the media sold government lies in order to advocate for the Iraq war, and how many of the biggest proponents of that blatant war crime have gone on to spectacularly lucrative careers in subsequent years. There were zero consequences, proving the point that this has nothing to do with the dangers of fake news or conspiracy theories, and everything to do with protecting the establishment grip on narrative creation and propagation.
The worst kinds of crimes are those which impact millions of people, but we never properly prosecute those crimes because it’s billionaires and governments who commit them.
— Michael Krieger (@LibertyBlitz) August 28, 2019
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The above tweet summarizes what’s really going on. It’s a provable fact that the harm caused by some crazy person reacting to viral “fake news” on social media doesn’t compare with the destruction and criminality perpetrated by oligarchs like Jeffrey Epstein, or governments which destroy entire countries and murder millions without flinching. It’s the extremely wealthy and powerful, as a consequence of their societal status and influence, who are in a position to do the most harm. This isn’t debatable, yet the U.S. military and media don’t seem particularly bothered by this sort of thing. What really keeps them up at night is a realization that the powerless masses of humanity are suddenly talking to one another across borders and coming to their own conclusions about how the world works. You’re supposed to be told what to think, not to think for yourself.
This is what the power structure’s really worried about.
It’s terrified that billions of people are now in direct, instantaneous communication with one another and thinking independently about world events. The mass media’s freakout over the election of Donald Trump was never rooted in concerns about the man and his specific policies. What really bothered them was his election proved they no longer matter. Enough people simply ignored the media’s instructions to suck it up and go vote for Hillary Clinton. This repudiation and loss of control was devastating and terrifying for U.S. media personalities and their bosses.
At this point, it’s important to note that what’s happening is exactly what you’d expect after half the people on earth come online and start talking to one another in the midst of an oligarch-fueled epidemic of gangsterism masquerading as democratic government. The advent of the internet created the conditions for cross-border, near instantaneous, peer-to-peer human communication for the first time in history.
We’re still in the very early stages of discovering what it means to live in such a world, but what you’d expect to emerge is precisely what we’ve seen. We see countless streams of diverse narratives emerging to explain what’s happening around us and how power really operates. Humans are no longer accepting the narratives force-fed to them via mass media channels, and are instead talking directly to one another and creating their own narratives. This is exactly how it should be.
Meanwhile, into this increasingly disruptive environment comes the Epstein affair, which I consider another major inflection point in the public’s increased and justified cynicism about the establishment. While the mass media swallows the increasingly clownish official story hook, line and sinker, the public simply isn’t buying it according to recent polls. The most recent one from Emerson College showed that more people think he was murdered than think he committed suicide.
“For most of the last 50 years, 60-80% of the country believe in some form of JFK conspiracy theory.”
Similarly, more people think Epstein was murdered than think he committed suicide, yet mass media pretends these are fringe views. They are not fringe, they are mainstream. pic.twitter.com/a4kDBVucbH
— Michael Krieger (@LibertyBlitz) September 2, 2019
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Alternative narratives are openly, and often successfully, competing with the spoon-fed narratives of mass media. Increased numbers are coming to understand that those who craft official narratives (government, mass media, billionaires) have their own interests, and those interests are typically not aligned with the interests of most people. There’s no reason to trust anything mass media or government says, because both groups are dominated by proven liars and war mongers. This obviously doesn’t mean you should believe everything you read online, but we must maintain perspective. Fake news from powerless citizens doesn’t compete with fake news from the government when it comes to disastrous consequences, yet the focus is always centered on the former and never the latter.
There’s a reason the U.S. military is suddenly talking about fighting fake news and disinformation, and the reason is the power structure is terrified of humans talking to each another and coming to their own conclusions. Moreover, this isn’t limited to an interpretation of world events. The emergence and success of Bitcoin represents a global movement of humans propagating an alternative narrative about money, how it could and how it should work. The longer human beings are allowed to freely talk to one another, the more likely they are to reject official narratives and shape society in a more sane manner. This represents an existential threat to the power structure. And they know it.
It’s also why CNN anchor Chris Cuomo instructed his viewers to not pay attention to those who were closest to Jeffrey Epstein.
Most of you understand CNN is status quo protecting garbage, but I need to highlight the following clip. This is by @ChrisCuomo, watch as he instructs viewers not to focus on who was close friends with Epstein. You cannot make this up:https://t.co/r02kK9wSrr
— Michael Krieger (@LibertyBlitz) August 28, 2019
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Now the good news. I think the cat’s already out of the bag. People aren’t going back to simply swallowing official narratives regurgitated by some television mannequin with makeup and an expensive suit who’s being paid by a billionaire. This doesn’t mean there won’t be a fight, in fact, we’re already in it.
Going forward, I suspect the narrative managers will more aggressively label anyone who doesn’t toe the official line as somehow linked to or sympathetic with foreign governments. They won’t offer any proof, but they’ll claim it authoritatively. This will become an increasingly potent weapon as governments begin to more intensely scapegoat foreign nations as the root of all our problems. We’ve already seen this since the 2016 election, but I expect it to increase in frequency and force.
As such, it’s going to be increasingly important for all of us to retain control of our minds and emotions as much as possible. We must never forget the importance of critical thinking, and must adamantly defend the right of humans to talk to one another freely and come to our own conclusions. We must never forget how preposterous it is to assume media giants owned by billionaires have any interest in telling us the truth about anything.
So keep writing, keep talking, keep thinking and never lose sight of the big picture. We have the power to create our own narratives, and with it, a much better future for generations to come.
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- Bitcoin Miners Are Headed To This Siberian Town For Cheap Electricity
Bitcoin miners are flocking to abandoned Soviet-era factories in Eastern Siberia to take advantage of cheap hydroelectricity, reported Coindesk.
Several miners have already established operations in Bratsk, an industrial city in Irkutsk Oblast, Russia, located on Angara River near the vast Bratsk Reservoir. These miners are taking advantage of cold temperatures and inexpensive hydroelectricity.
Bratsk is centered on an industrial region that was intended for the Soviet Union to produce weapons. But since the Soviet Union collapsed in 1991, the area has remained unproductive, without sustainable industry until now.
“The surplus of electric power in Russia is huge, due to the closure of some of the Soviet plants and to the fact that energy consumption, in general, became much more efficient over time,” said Dmitry Ozersky, CEO of Eletro.Farm, a mining firm in Kazakhstan.
Coindesk said international mining firms have already established operations in Bratsk. Among them is BitRiver, a large scale mining data center, which has a total capacity of 100 megawatts per hour (MW/h) of electricity for its mining facility.
BitRiver’s presentation video on YouTube indicates that its power is generated by the Bratsk hydroelectric power station five miles away.
A competitor of Bitriver called Minery also opened up mining operations in the area. The miner told Coindesk, “Siberia’s climate makes it a no-brainer for choosing a mining host, providing natural cooling for most of the year.”
“The average temperature in winter in Bratsk is around 0 degrees Fahrenheit. In summer, it can get as hot as 77 degrees but mostly stays around the 60s, and the warm season (meaning when it’s not freezing) lasts four or five months a year. The average annual temperature here is 28,” said Coindesk.
There are over 18,000 application-specific integrated circuits (abbreviated as ASIC), otherwise known as miners, at Bitriver’s facility in August, according to Dmitri Ushakov, its chief commercial officer. Ushakov said most of the machines belong to owners from two countries, Russia and the US.
Bitriver and Minery aren’t the only miners in the region. The third notable miner is Cryptoreactor.
Crypto miners are taking full advantage of the city’s light regulatory strategy, along with no federal laws that oversee miners.
Hydroelectric power in Siberia is some of the cheapest in the world, about 3.4 cents per kilowatt-hour, less expensive than the US, China, Norway, and Canada.
Bratsk mayor Sergey Serebrennikov told Coindesk that crypto mining is revitalizing the local economy. Serebrennikov said:
“It’s an absolutely new part of the economy and commerce in Bratsk, and for us, this project is interesting in every regard. It’s providing new jobs and new big taxes paid to the city budget.”
Besides Iran, Iceland, and Venezuela, who all have cheaper per kilowatt-hour rates than Bratsk, it sure seems that Eastern Siberia could be one of the top regions in the world to mine.
- Gundlach Indicator: Treasury Yields And Copper-Gold Ratio Plummet
Authored by Richard Baker via Kitco,
Jeffrey Gundlach, CEO of DoubleLine Capital LP (DoubleLine), noted in his 2017 forecast that the copper-to-gold ratio was a “fantastic” indicator of interest rates. I have since written a number of Kitco commentaries on the stunning relation of the U.S. 10-year Treasury yield with copper and gold prices. High-fidelity yield models are often possible on a short- and even longer-term basis. During times when the copper-gold ratio diverges from the 10-year yield, the rise or fall of the former usually portends a rise or fall of the latter. (Kitco commentary July 1, 2019).
Source: Bloomberg
Since this spring, Treasury yields and the copper-to-gold ratio have plummeted. How is the Gundlach indicator performing now?
Jeffrey Mayberry, Co-Portfolio Manager of the DoubleLine Strategic Commodity Fund, has studied the relationship in great depth and makes this important observation:
The ratio’s absolute level is irrelevant. What matters is its direction – and whether the yield on the 10-year Treasury moved in the same direction or diverged. In past episodes of divergence, the 10-year yield has eventually tended to follow suit of copper-gold (“The Power of Copper-Gold: A Leading Indicator for the 10-year Treasury Yield,” Jeffrey Mayberry, DoubleLine Funds)
Loren Fleckenstein, one of the crew at DoubleLine®, invited me to Los Angeles last month to further discuss and explore the copper-gold ratio tie to interest rates. Their two-level office space on the 18th floor of the Wells Fargo Building has sweeping views of the faraway Hollywood sign to the northwest and Los Angeles City Hall to the northeast. Located atop Bunker Hill, it is across the street from the Museum of Contemporary Art and the famous “Angel’s Flight” funicular railway. A creative and innovative environment with a top-of-the-line trading floor on the second tier.
I met with Jeffrey Sherman, Deputy Chief Investment Officer of DoubleLine, Jeffrey Mayberry and Loren Fleckenstein to show them my latest models and analysis tools applied to the copper-gold indicator. Below is an update of two of the charts in that presentation.
Correlation Map Indicates Strong Persistence
A correlation map is a powerful technique for detecting changing directional behavior between two market variables. Figure 1 is the 3-month (Y-axis) and 1-month (X-axis) rolling Pearson correlations of the copper-to-gold ratio (CGR) and the U.S. 10-year Treasury yield.
Figure 1 – Copper-to-Gold Ratio & 10-year U.S. Treasury yield Correlation
The correlation trajectory of Figure 1 begins April 18, 2019 during a period of divergence between the ratio and yields. Starting in the lower-right quadrant, 3-month correlations are negative; and 1-month, positive. The positive short-term correlations eventually pull the longer-term positive as the trajectory enters the upper-right quadrant on May 10.
From this point forward, the correlations of each time period increase positively (arrow #1) until both exceed +0.8. When short- and longer-term correlations have the same sign, we say the relation exhibits “persistent” correlation (shaded upper-right quadrant indicates positive persistence). Data concentrated in the +0.8 by +0.8 box indicates “high persistence density” (darker shaded area).
Construction of a high-fidelity yield model is possible for cases of positive correlation persistence with improving accuracy given high persistence density.
Figure 1 indicates weakening of the 1-month correlation (arrow #2) which briefly turned negative until a July 26th reversal. A quick return to the +0.8 box in late-August (arrow #2) follows.
In terms of Mr. Mayberry’s definition, the relationship has moved from weak divergence to a strong directional behavior between interest rates and the copper-gold ratio – a correlation journey from mid-April to late-August.
High-Fidelity 3-Month Yield Model
Figure 2 is a 3-month regression model of 10-year U.S. Treasury yields based on the ratio of copper and gold prices as of Friday’s close, August 30.
Figure 2 – U.S. 10-year Treasury yield model based on Comex copper & gold prices
Reassuringly, the high correlation persistence shown in Figure 1 results in the high-fidelity model of Figure 2. The R2, or “goodness-of-fit,” is a respectable 0.905 with a statistical error less than 7 basis points (bps). The model also provides upper and lower 2-standard deviation (2-s) bounds for yields. The lower bound of 1.427% is a sobering reminder of how far yields have fallen and may continue to drop.
Ongoing geopolitical concerns, slowing global growth and uncertainty about U.S./China trade relations have caused a decrease in the CGR and decline in U.S. Treasury yields. As market participants run to safe havens like gold and U.S. Treasurys, they typically retreat from “risk-on” assets like copper. Rising gold and declining copper prices lower the CGR while higher bond prices produce lower yields. At last week’s close, the CGR was at a lowly 0.01668 or, in reciprocal, an historically elevated 599 pounds per ounce. The 10-year Treasury plumbed 1.506%, only 6 bps above the August 28 three-year low.
Hats off to the DoubleLine team for discovering a leading market indicator with proven performance in troubled markets. The market events since spring provide further testament to that record.
- Futures Soar, Yields Jump After China, US Agree To Resume Trade Talks In October
S&P futures surged and 10Y yields jumped after China’s CCTV reported that its top trade negotiators will travel to Washington in early October for talks with U.S. counterparts, to resume trade war negotiations. The decision came after an early Thursday phone call Beijing time between Chinese Vice-Premier Liu He and the USTR Robert Lighthizer and Treasury Secretary Steven Mnuchin, according to a statement from China’s commerce ministry.
Other Chinese officials, including Commerce Minister Zhong Shan, central bank governor Yi Gang and Ning Jizhe, the deputy head of the National Development and Reform Commission, also joined the phone call, CCTV reported.
In the lead up to the talks, lower-level officials will have “serious” discussions this month to prepare for the talks, which incidentally were expected to begin in September.
However, for headline-scanning algos, October is even more bullish than September as equity futures went vertical on the news, spiked the Emini by 26 points to 2,965, just 2% away from all time highs, and the Dow was some 250 point higher.
Treasury yields spiked as well, with the 30Y US Treasury rising back over 2.00%
Meanwhile, the offshore Chinese yuan jumped as low as 7.12, its highest level since last week’s sharp drop on the escalation in tariffs…
… while gold slumped even though the dollar barely budged on the news.
So is this just more posturing by both sides, when both Washington and Beijing know very well that a real deal is impossible? The answer is most likely yes, although the CCTV report said both sides agreed to make concrete efforts to create positive conditions to continue dialogue.
That said, prepare for more deja vu disappointment: after their previous phone call, Donald Trump said the two sides would meet in September. Instead, since then, both countries have increased tariffs on imports of each other’s products, and China has said it would not make concessions because of US pressure.
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