- Erdogan Warns Of New Coup As He Arrests Ten Admirals
Erdogan Warns Of New Coup As He Arrests Ten Admirals
Two weeks ago, in the immediate aftermath of the latest financial crisis in Turkey following the shocking termination of the hawkish Turkish central bank head at the hands of Erdogan, we said that it was almost time for another diversionary “coup” to take place.
Almost time for another “coup” in Turkey
— zerohedge (@zerohedge) March 21, 2021
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While this was said (mostly) in jest to demonstrate how deeply in the banana republic rabbit hole Turkey, which now has negative net FX reserves…
… has fallen, it appears we were once again spot on because overnight Turkey detained ten retired admirals on Monday, as President Erdogan warned of a new coup following a letter signed by more than 100 retired admirals warning about a possible threat to a treaty governing the use of Turkey’s key waterways.
According to the Greek Reporter, the Ankara chief public prosecutor’s office said arrest warrants have been issued for the ten men. Prosecutors also ordered four other suspects to report to Ankara police within three days, opting not to detain them because of their age. The development comes one day after the letter was sharply condemned by the government, which said the move is “reminiscent of coup times” in Turkey’s past.
Turkey’s approval last month of plans to develop a shipping canal in Istanbul comparable to the Panama or Suez canals has opened up debate about the 1936 Montreux Convention. The admirals said in their letter that apart from its environmental impact, the new canal venture could undermine the Montreux accord.
The convention guarantees the free passage through the Bosphorus and Dardanelles straits of civilian vessels in times of both peace and war. It also regulates the use of the strait by military vessels from non-Black Sea nations.
The proposed canal would allow ships to transit between the Mediterranean and the Black Sea without passing through part of the straits that are covered by the treaty.
Turkey warns of a coup following letter
The declaration has drawn strong reactions from the government and officials. Presidential spokesperson Ibrahim Kalın said the statement is “reminiscent of coup periods” and made the former Navy men “a laughingstock.”
“Know your place and stay where you are,” he added. “These retirees, who’ve not been seen for years, are creating chaos with their agendas,” Parliament Speaker Mustafa Şentop charged.
Interior Minister Süleyman Soylu said the admirals should not use their ranks and uniforms as a means to push their political rhetoric.
On July 15, 2016 a fake coup attempt against Erdogan was carried out by a faction within the Turkish Armed Forces which according to Erdogan had organized themselves as the Peace at Home Council. They attempted to seize control of several places in Ankara, Istanbul, Marmaris and elsewhere, such as the Asian side entrance of the Bosphorus Bridge, but failed to do so after forces loyal to the state defeated them.
The Council cited an erosion of secularism, elimination of democratic rule, disregard for human rights, and Turkey’s loss of credibility in the international arena as reasons for the coup. The government said the coup leaders were linked to the Gülen movement, which is designated as a terrorist organization by the Republic of Turkey and led by Fethullah Gülen.
Tyler Durden
Tue, 04/06/2021 – 02:45 - Is War Between Russia And Ukraine Now Inevitable?
Is War Between Russia And Ukraine Now Inevitable?
The situation in Eastern Ukraine is critical. Russia and Ukraine are on the brink of an open armed conflict. In this context, many military experts suggest their opinions and forecasts on the military developments in the region. The position of famous warlord Igor Strelkov is definitely one that deserves special attention.
Igor Streikov
He became popular during the so-called Crimean Spring in 2014. Strelkov took part in the process of the Crimean unification with Russia, after which in Eastern Ukraine, he was one of the first who organized an open resistance to the nationalist forces that had earlier staged a coup in Kiev. During his military activity, he became more and more critical of Kremlin’s factual position. According to his later statements, the situation in Donbass remains close to disastrous due to the policy of the definite part of the Russian elite. Asserting his views, Strelkov even got in conflict with the Russian President’s adviser at that time Vladislav Surkov. As a result, Strelkov was forced to leave Eastern Ukraine and lost the opportunity to influence in the situation in the region.
In ideology, Strelkov’s vision may be characterized in terms that today become known as “Orthodox socialism.” This concept is based on justice, conciliarity, national unity and social responsibility.
Strelkov is widely known as a strong supporter of the so-called “Russian world” concept. This term despite the using of the word “Russian” has nothing to do with nationalism or a hurrah-patriotic adherence to the ideas of monarchism.
“The Russian world (Pax Rossica) is the social totality associated with Russian culture. Russkiy Mir is the core culture of Russia and is in interaction with the diverse cultures of Russia through traditions, history and the Russian language. It comprises also the Russian diaspora with its influence in the world. The concept is based on the notion of “Russianness”, and both have been considered ambiguous. The Russian world and awareness of it arose through Russian history and was shaped by the respective period.
The term received a new sound in the 21st century against the background of the restoration of the foreign policy influence of the Russian state, on the one hand, and the intensifying attacks on Russian culture and the Russian language in the former Soviet republics, on the other.
Today the “Russian world” is often indicated as a threat in speeches of Moscow’s geopolitical rivals, justifying the need to contain Russia.”
In the politic field, Strelkov is a supporter of the authoritarian strong Russian state, where social life is based on the principles indicated above.
In military terms, during the hostilities in 2014-2015 and to the present, he claimed that the only chance to ensure peace in Eastern Ukraine was a full participation of the Russian army and taking control of the Ukrainian territory at least to the Dnieper River.
Thus, Igor Strelkov is a rather controversial person. However, he is one of the few alive warlords of the 2014-2015 period, who deeply knows the situation inside the region, simultaneously being a dogged critic of Kremlin policy. His analysis is very valuable for predicting the situation and simulation of possible developments.
“At the end of the day:
1. The war between Russia and Ukraine is inevitable, but at the moment (in April), it is very likely;
2. For Russia and the Russian People, war “now” is preferable to war later;
3. The USA now will not fight for Ukraine with 99% probability;
4. Comments were disabled, I will not answer clarifying questions in private messages.” – Strelkov wrote in Telegram and Vkontakte.
On April 4, he published a post on his Telegram channel reflecting his opinion on the current situation in Eastern Ukraine. There were 3 main ideas:
The first one was that the war between Russia and Ukraine is inevitable, but at the moment (in April), it is very likely.
Many military experts agree with his opinion about state of affairs in the region.
The development of the current political situation in Russia, whatever directions it would move in, sooner or later will lead to an armed conflict with Ukraine. No matter which side would instigate the conflict. If the power remains in the hands of the so-called “Putin’s team”, the conflict will develop according to the current scenario and, as a result, most likely it will dissolve into armed one in short or mid terms. Even in case of radical changes in Russia and the coming to power of pro-Western opposition, the escalation would not be avoided. The Ukrainian military thought is based on the core ideas of deoccupation of the Eastern regions and taking control, in its further advance, over a good part of Russian territory. For example, it is referring to the Rostov, Krasnodar and even Volgograd regions. Thus, the weakening of Russia as a result of internal political turmoils may lead to the decision of the current Ukrainian leadership to start a major military operation in the regions with strategic goal to give checkmate to the Russian Federation.
Secondly, for Russia and the Russian People, war “now” is preferable to war later.
Igor Strelkov adheres to this position throughout the entire conflict in Ukraine. The longer the conflict drags on, the more the nationalist regime that came to power in Ukraine strengthens. At the same time in Russia, the so-called “Crimean effect”, i.e. social excitement, build-up caused by Russian geopolitical successes in 2014-2016, is weakening. In previous years, this phenomenon contributed to increase the level of support for the Putin’s government.
Today, when the conflict in Eastern Ukraine has been persisting for 7 years, any attempts to settle it peacefully are ineffective. Considering the complicated political situation in Russia, there are no signs that the current government has found a recipe to prevent further internal deterioration. Thus, the longer the hot phase of the conflict would be postponed, the worse the conditions of the Russian side would be.
In its turn, the hot phase of the conflict in Eastern Ukraine may become a kind of medicine necessary for Moscow that would be used as an internal unifying factor.
Thirdly, the USA now will not fight for Ukraine with 99% probability.
Firstly, one should take into account the current domestic political situation in the United States, where a transitional period with the new government is taking place. A participation in a military conflict is possible only if there are threats to a key ally of the Americans, which Ukraine is not.
Secondly, the global foreign policy situation is not favorable for the deployment of US forces far beyond the country’s borders. The Biden administration must first of all confront the growing global influence of China, which is also likely to be indirectly involved in the military conflict in Ukraine, for example, through financial support. On April 2, Russian Foreign Minister Sergey Lavrov received Zhang Hanhui, Ambassador of the People’s Republic of China to the Russian Federation. The exact topics that were discussed during the negotiations were not unveiled, but it is not difficult to assume that the military escalation in the Donbass region became part of the talks.
At the same time, the position of the United States in the Middle East is not stable. The Biden administration is actively working to regulate the relations with key partners in the region, developing its position on the main issues, including the Iranian nuclear deal, the Syrian crisis, the situation in Iraq, etc.
At the moment, Washington has a number of problems of paramount importance for maintaining its global influence, which does not allow it to openly intervene in the approaching war in Ukraine. However, in the near future, in a year or more, the Biden administration will strengthen US positions in key regions. Nothing will be able to contain it.
Tyler Durden
Tue, 04/06/2021 – 02:00 - Escobar: How Eurasia Will Be Interconnected
Escobar: How Eurasia Will Be Interconnected
Authored by Pepe Escobar via The Asia Times,
The extraordinary confluence between the signing of the Iran-China strategic partnership deal and the Ever Given saga in the Suez Canal is bound to spawn a renewed drive to the Belt and Road Initiative (BRI) and all interconnected corridors of Eurasia integration.
This is the most important geo-economic development in Southwest Asia in ages – even more crucial than the geopolitical and military support to Damascus by Russia since 2015.
Multiple overland railway corridors across Eurasia featuring cargo trains crammed with freight – the most iconic of which is arguably Chongqin-Duisburg – are a key plank of BRI. In a few years, this will all be conducted on high-speed rail.
The key overland corridor is Xinjiang-Kazakhstan – and then onwards to Russia and beyond; the other one traverses Central Asia and Iran, all the way to Turkey, the Balkans, and Eastern Europe. It may take time – in terms of volume – to compete with maritime routes, but the substantial reduction in shipping time is already propelling a massive cargo surge.
The Iran-China strategic connection is bound to accelerate all interconnected corridors leading to and crisscrossing Southwest Asia.
Crucially, multiple BRI trade connectivity corridors are directly linked to establishing alternative routes to oil and gas transit, controlled or “supervised” by the Hegemon since 1945: Suez, Malacca, Hormuz, Bab al Mandeb.
Informal conversations with Persian Gulf traders have revealed huge skepticism about the foremost reason for the Ever Given saga. Merchant marine pilots agree that winds in a desert storm were not enough to harass a state of the art mega-container ship equipped with very complex navigation systems. The pilot error scenario – induced or not – is being seriously considered.
Then there’s the predominant shoptalk: stalled Ever Given was Japanese owned, leased from Taiwan, UK-insured, with an all-Indian crew, transporting Chinese merchandise to Europe. No wonder cynics, addressing the whole episode, are asking, Cui Bono?
Persian Gulf traders, in hush hush mode, also drop hints about the project for Haifa to eventually become the main port in the region, in close cooperation with the Emirates via a railway to be built between Jabal Ali in Dubai to Haifa, bypassing Suez.
Back to facts on the ground, the most interesting short-term development is how Iran’s oil and gas may be shipped to Xinjiang via the Caspian Sea and Kazakhstan – using a to-be-built Trans-Caspian pipeline.
That falls right into classic BRI territory. Actually more than that, because Kazakhstan is a partner not only of BRI but also the Russia-led Eurasia Economic Union (EAEU).
From Beijing’s point of view, Iran is also absolutely essential for the development of a land corridor from the Persian Gulf to the Black Sea and further to Europe via the Danube.
It’s obviously no accident that the Hegemon is on high alert in all points of this trade corridor. “Maximum pressure” sanctions and hybrid war against Iran; an attempt to manipulate the Armenia-Azerbaijan war; the post-color revolution environment in both Georgia and Ukraine – which border the Black Sea; NATO’s overarching shadow over the Balkans; it’s all part of the plot.
Now get me some Lapis Lazuli
Another fascinating chapter of Iran-China concerns Afghanistan. According to Tehran sources, part of the strategic agreement deals with Iran’s area of influence in Afghanistan and the evolution of still another connectivity corridor all the way to Xinjiang.
And here we go back to the always intriguing Lapis Lazuli corridor – which was conceptualized in 2012, initially for increased connectivity between Afghanistan, Turkmenistan, Azerbaijan, Georgia and Turkey.
Lapis Lazuli, wonderfully evocative, harks back to the export of an array of semiprecious stones via the Ancient Silk Roads to the Caucasus, Russia, the Balkans and North Africa.
Now the Afghan government sees the ambitious 21st century remix as departing from Herat (a key area of Persian influence), continuing to the Caspian Sea port of Turkmenbashi in Turkmenistan, via a Trans-Caspian pipeline to Baku, onwards to Tblisi and the Georgian ports of Poti and Batumi in the Black Sea, and finally connected to Kars and Istanbul.
This is really serious business; a drive that may potentially link the Eastern Mediterranean to the Indian Ocean.
Since Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan signed the Convention on the Legal Status of the Caspian Sea in 2018, in the Kazakh port of Aktau, what’s interesting is that their major issues are now discussed at the Shanghai Cooperation Organization (SCO), where Russia and Kazakhstan are full members; Iran will soon be; Azerbaijan is a dialogue partner; and Turkmenistan is a permanent guest.
One of the key connectivity problems to be addressed is the viability of building a canal from the Caspian Sea to Iran’s shores in the Persian Gulf. That would cost at least US$7 billion. Another issue is the imperative transition towards container cargo transport in the Caspian. In SCO terms, that will increase Russian trade with India via Iran as well as offering an extra corridor for China trade with Europe.
With Azerbaijan prevailing over Armenia in the Nagorno-Karabakh flare up, while finally sealing a deal with Turkmenistan over their respective status in the Caspian Sea, impetus for the western part of Lapis Lazuli is now in the cards.
The eastern part is a much more complicated affair, involving an absolutely crucial issue now on the table not only for Beijing but for the SCO: the integration of Afghanistan to the China-Pakistan Economic Corridor (CPEC).
In late 2020, Afghanistan, Pakistan and Uzbekistan agreed to build what analyst Andrew Korybko delightfully described as the PAKAFUZ railway. PAKAFUZ will be a key step to expand CPEC to Central Asia, via Afghanistan. Russia is more than interested.
This can become a classic case of the evolving BRI-EAEU melting pot. Crunch time – serious decisions included – will happen this summer, when Uzbekistan plans to host a conference called “Central and South Asia: Regional Interconnectedness. Challenges and Opportunities”.
So everything will be proceeding interconnected: a Trans-Caspian link; the expansion of CPEC; Af-Pak connected to Central Asia; an extra Pakistan-Iran corridor (via Balochistan, including the finally possible conclusion of the IP gas pipeline) all the way to Azerbaijan and Turkey; China deeply involved in all these projects.
Beijing will be building roads and pipelines in Iran, including one to ship Iranian natural gas to Turkey. Iran-China, in terms of projected investment, is nearly ten times more ambitious than CPEC. Call it CIEC (China-Iran Economic Corridor).
In a nutshell: the Chinese and Persian civilization-states are on the road to emulate the very close relationship they enjoyed during the Silk Road-era Yuan dynasty in the 13th century.
INSTC or bust
An extra piece of the puzzle concerns how the International North-South Transportation Corridor (INSTC) will mix with BRI and the EAEU. Crucially, INSTC also happens to be an alternative to Suez.
Iran, Russia and India have been discussing the intricacies of this 7,200 km-long ship/rail/road trade corridor since 2002. INSTC technically starts in Mumbai and goes all the way via the Indian Ocean to Iran, the Caspian Sea, and then to Moscow. As a measure of its appeal, Azerbaijan, Armenia, Belarus, Kazakhstan, Tajikistan, Kyrgyzstan, Ukraine, Oman, and Syria are all INSTC members.
Much to the delight of Indian analysts, INSTC reduces transit time from West India to Western Russia from 40 to 20 days, while cutting costs by as much as 60%. It’s already operational – but not as a continuous, free flow sea and rail link.
New Delhi already spent $500 million on a crucial project: the expansion of Chabahar port in Iran, which was supposed to become its entry point for a made in India Silk Road to Afghanistan and onward to Central Asia. But then it all got derailed by New Delhi’s flirting with the losing Quad proposition.
India also invested $1.6 billion in a railway between Zahedan, the key city in southeast Iran, and the Hajigak iron/steel mining in central Afghanistan. This all falls into a possible Iran-India free trade agreement which is being negotiated since 2019 (for the moment, on stand-by). Iran and Russia already clinched a similar agreement. And India wants the same with the EAEU as a whole.
Following the Iran-China strategic partnership, chairman of the Iranian Parliament’s National Security and Foreign Policy Committee, Mojtaba Zonnour, has already hinted that the next step should be an Iran-Russia strategic cooperation deal, privileging “rail services, roads, refineries, petrochemicals, automobiles, oil, gas, environment and knowledge-based companies”.
What Moscow is already seriously considering is to build a canal between the Caspian and the Sea of Azov, north of the Black Sea. Meanwhile, the already built Caspian port of Lagan is a certified game-changer.
Lagan directly connects with multiple BRI nodes. There’s rail connectivity to the Trans-Siberian all the way to China. Across the Caspian, connectivity includes Turkmenbashi in Turkmenistan and Baku in Azerbaijan, which is the starting point of the BTK railway through to the Black Sea and then all the way from Turkey to Europe.
On the Iranian stretch of the Caspian, Amirabad port links to the INSTC, Chabahar port and further on to India. It’s not an accident that several Iranian companies, as well China’s Poly Group and China Energy Engineering Group International want to invest in Lagan.
What we see in play here is Iran at the center of a maze progressively interconnected with Russia, China and Central Asia. When the Caspian Sea is finally linked to international waters, we will see a de facto alternative trade/transport corridor to Suez.
Post-Iran-China, it’s not far-fetched anymore to even consider the possible emergence in a not too distant future of a Himalaya Silk Road uniting BRICS members China and India (think, for instance, of the power of Himalayan ice converging into a shared Hydropower Tunnel).
As it stands, Russia is very much focused on limitless possibilities in Southwest Asia, as Foreign Minister Sergey Lavrov made it clear in the 10th Middle East conference at the Valdai club. The Hegemon’s treats on multiple fronts – Ukraine, Belarus, Syria, Nord Stream 2 – pale in comparison.
The new architecture of 21st century geopolitics is already taking shape, with China providing multiple trade corridors for non-stop economic development while Russia is the reliable provider of energy and security goods, as well as the conceptualizer of a Greater Eurasia home, with “strategic partnership” Sino/Russian diplomacy playing the very long game.
Southwest Asia and Greater Eurasia have already seen which way the (desert) winds are blowing. And soon will the masters of international capital. Russia, China, Iran, India, Central Asia, Vietnam, Indonesia, the Korean Peninsula, everyone will experience a capital surge – financial vultures included. Following the Greed is Good gospel, Eurasia is about to become the ultimate Greed frontier.
Tyler Durden
Mon, 04/05/2021 – 23:40 - Chicago Shootings In March Top Four Year High As Mayor Lightfoot's Plan To Combat Crime Fails
Chicago Shootings In March Top Four Year High As Mayor Lightfoot’s Plan To Combat Crime Fails
Two years since Chicago mayor Lori Lightfoot won that runoff election, her multi-year plan to combat violent crime across the Democratic-run city is in shambles.
The Chicago Police’s Monthly Crime Newsletter shows the number of shootings in the metro area in March – and the number of shooting victims – jumped to a four-year high. The report is a stark reminder of Lightfoot’s anti-violence plan to reduce violent crime and rebuild communities has hit a snag.
In March, there were 233 shooting incidents and 298 shooting victims, the report showed. This compares to 146 shootings and 175 victims in March 2020, 136 shooting incidents and 165 victims in March 2019, and 136 shootings, with 151 victims in March 2018.
Homicides in the Democratic stronghold city were up 33% in the first three months of this year compared with the same period in 2020. For the same period, shootings were up 40%.
The surge in violence comes as Lightfoot is fighting the unprecedented socio-economic impacts of COVID-19 across the metro area. Her multi-year plan to heal the community, protect and secure public places, improve policing, among other goals, has yet to decrease violent crime.
At some point, her stated goals will have to come into question as some public health experts warn of a “perfect storm” of socio-economic collapse, virus pandemic, mental health crisis, and drug epidemic are some factors resulting in the wave of violent crime. There’s also a community-based movement calling for de-policing that continues to widen the trust between the community and police.
Just this weekend alone, seven people were killed and at least 27 others wounded in shootings across the city. An uptick in shootings and violence could be associated with warmer weather trends as criminal gangs fight for turf.
Data compiled by HeyJackass shows on a year-to-date basis, homicides, and shootings are significantly higher than last year. This is problematic ahead of the summer season when much of the killing occurs.
54 people were shot last week in #Chicago, 7 fatally.
Same week last year: 45 shot, 6 fatally.
2021 YTD: 149 killed, 632 wounded
2020 YTD: 112 killed, 459 wounded pic.twitter.com/rxEnNa0jmC— HeyJackass.com (@w_h_thompson) April 5, 2021
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On a community basis, HeyJackass shows a high number of homicides and shootings have occurred in Englewood, Grand Crossing, Austin, and Garfield Park.
In the last 30 days, 52 people have been killed and 257 wounded.
Black-on-Black shootings in Chicago are out of control,
Already, the year-to-date homicide trend in 2021 appears to be nearing the decade record. This suggests momentum in violent crime will continue into summer.
Chicago’s situation echoes that of many other liberal-run cities, where crime has run rampant since last summer’s “peaceful protests,” which consisted of property damage, assaults, looting, and lighting cities on fire. The latest “police reform” protest turned violent last month.
Tyler Durden
Mon, 04/05/2021 – 23:20 - 88 Years Ago Today, FDR Banned Gold. Will A Bitcoin Ban Be Next?
88 Years Ago Today, FDR Banned Gold. Will A Bitcoin Ban Be Next?
Authored by Tho Bishop via The Mises Institute,
Today is the 88th anniversary of Executive Order 6102, signed by President Franklin Delano Roosevelt, “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.” The order was one of the several disastrous responses to the Great Depression that succeed in escalating the financial crisis. Later in the year, the US Congress would pass a resolution retroactively supporting the legislation, however, it was the determined autocratic leadership of FDR that gave way for these unprecedented measures.
It would be a crime for Americans to hold gold for over forty years when President Gerald Ford reversed the order in 1974.
This episode has several lessons for the current financial environment, particularly given the acceleration of tyranny-by-expert rule that has taken over much of the worst this past year.
The underlying legislation that evoked by FDR’s Executive Order was the Trading with the Enemy Act of 1917 – a byproduct of WWI – despite the fact US was in no way in a period of war in 1932. Similarly, we have seen War on Terror-inspired financial legislation increasingly be used against American citizens. For example, in the name of “fighting terrorism” the US Patriot Act significantly increased Know Your Customer laws, empowering Federal regulators to use the traditional banking system to better track the economic behavior of American citizens.
In the eyes of the Federal government, “anti-terrorism” legislation was quickly expanded to include additional missions – such as stopping money laundering and drug crimes. Increasingly, these boogeymen have used by policymakers around the world to erode financial privacy assets – such as cash and secret Swiss bank accounts.
On the domestic side, we have increasingly seen US corporate actors demonstrate their loyalty to the progressive political zeitgeist by pro-actively cracking down on various dissident political figures and conservative action groups. Bank of America, for example, has de-banked various gun manufacturers and also turned over client data following the January 6th protests at the US Capitol. These moves could prove useful if BoA needs another federal bailout from a Biden-Harris administration, but highlights the degree to which the modern financial system can easily be weaponized against a state’s political enemies.
The same playbook is being increasingly used to target Bitcoin and other cryptocurrencies that are beyond the reach of the state.
Earlier this year, Treasury Secretary Janet Yellen indicated that cryptocurrencies are in her crosshairs, telling an industry roundtable that:
The misuse of cryptocurrencies and virtual assets is a growing problem….I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.
European Central Bank President Christine Lagarde has also called for global regulation of cryptocurrencies, responding to increased interest in these alternative assets. Of course, the increased interest in assets like Bitcoin is itself a direct response to the monetary policy of the Federal Reserve, ECB, and other global central banks responding to government-caused economic shutdowns in 2020.
While central bankers often publicly dismiss the role of non-politicized assets like gold and Bitcoin in financial markets, in their own circles they understand the dangers that exist in allowing the public the option of opting out of their financial schemes.
For example, at an annual Federal Reserve conference in 2016, the late Marvin Goodfriend noted the role that cash played in limiting what anti-saving policies a central bank could pursue. He advocated the abolishment of cash in return, and drew comparisons to the elimination of the gold standard. In 2018, an IMF report warned that cryptocurrencies could reduce demand in fiat money, and recommended “rigorously applying measures to prevent money laundering and the financing of terrorism” in an attempt to undermine this consumer behavior.
In addition, central banks have sought to compete with the convenience of digital currency by developing their own versions. China – whose central bank has been one of the most aggressive in credit expansion since 2008 – has recently released a “digital yuan”, while the ECB is working on a “digital euro.”
As I noted in 2017, this could set up a “next generation” of global currency war between private crypto and state digital currency. Since it is the nature of a state to defend its power, we should expect to see regulators and central bankers around the world escalate regulatory and legal pressure against financial assets beyond their control.
As FDR’s gold crackdown showed, tyrants know the importance of controlling money in a time of crisis.
Thankfully, so far Bitcoin has demonstrated to be resilient against the most forceful of state actions. For example, in countries like Morocco – which has banned Bitcoin entirely – peer-to-peer trading of Bitcoin has skyrocketed.
What will be interesting to see is whether countries that are suspicious of international governing organizations – such as the IMF, EU, and UN – recognize the political value of private money as a check against globalist political hegemony.
We’ve seen Russia recognize the value of gold as a check against the weaponization of the dollar, could Bitcoin be next?
Tyler Durden
Mon, 04/05/2021 – 23:00 - "We Are Struggling" – Capitol Police Union Head Warns Of Officer Exodus
“We Are Struggling” – Capitol Police Union Head Warns Of Officer Exodus
The US Capitol Police (USCP) union commander warned of a possible officer exodus and the need to bolster security following the latest attacks.
“We are struggling to meet existing mission requirements even with the officers working massive amounts of forced overtime,” Gus Papathanasiou, chairman of the Capitol Police Labor Committee, said in a statement.
“I’ve had many younger officers confide in me that they’re actively looking at other agencies and departments right now.”
USCP has had a remarkably traumatic year. Last Friday, the latest incident occurred when a driver slammed into a barricade, killing one officer and injuring another. The attack came months after Trump supporters stormed the Capitol complex on Jan. 6, injuring 80 officers.
“We have now lost two officers in the line of duty this year,” Papathanasiou said.
“Another officer has taken his own life, and we have 80 officers who were seriously injured in the insurrection. Some of those injured officers may never return to duty.”
The union chief said police are short-staffed and morale is low. Younger officers are moving to other agencies or departments, and older officers are putting in their retirement papers.
“In the next three to five years, we have another 500 officers who will be eligible to retire,” he said.
“Many of these officers could put in their retirement papers tomorrow.”
Papathanasiou said the department is 233 officers below its authorized level of more than 2,000. The shortage has already forced some officers to work “massive amounts of forced overtime,” he added.
The Capitol Police is the law enforcement agency responsible for protecting Congress – its members, visitors, and facilities.
… and perhaps the shortage that could transform into a mass exodus at any moment is the reason why the Pentagon recently extended National Guard presence around the Capitol complex
Tyler Durden
Mon, 04/05/2021 – 22:40 - Rebound In Full Swing As Capacity Crowd Expected For Rangers Home Opener
Rebound In Full Swing As Capacity Crowd Expected For Rangers Home Opener
One month after Texas Governor Greg Abbott lifted the mask mandate and all other anti-pandemic restrictions amid declining hospitalizations and infection rates, the Texas Rangers held their first full-capacity sports game on Monday.
For now, the lockdown nightmare is over, for millions of Texans, with at least 38,238 of them attending the first home game for the team at Globe Life Field in Arlington.
So this is what a packed ballpark feels like?! Almost forgot. What a sight! pic.twitter.com/L4nz2lc7fi
— Sam Gannon (@SamGannon87) April 5, 2021
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FOX 4 News Dallas-Fort Worth said the game was declared a “sellout” as fans have been waiting nearly a year to attend a game.
“Been waiting for a while; we are fired up and ready to go,” said fan Lane Smith.
In fact, this is one of the first full capacity major sports events in the US since the COVID-19 pandemic began more than a year ago. With the stands full, event staff made sure fans were abiding by safety guidelines.
“After being safe for a year, to be in a large crowd, it’s just a little nervous,” said fan Carmen Smith.
“Yes, there are some mild concerns, but it seems as if people are being safe, and we are being as safe as we can be,” said Tommy Ware.
Some of the safety guidelines included mandatory mask-wearing inside the ballpark despite Abbott’s lift on the mask mandate.
Home opener #Rangers pic.twitter.com/KTMkjMxqFQ
— Mike Doocy (@MikeDoocyFox4) April 5, 2021
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Abbott’s anti-pandemic measures had drawn the ire of other governors, CDC, and the Biden administration.
The Rangers game comes one day after Michael Osterholm, an adviser to President Biden’s coronavirus task force, told NBC’s “Meet the Press” that “the highest number of cases reported globally since the beginning of the pandemic” will occur in the coming weeks.
Despite the federal government’s fearmongering, Texas health officials reported around 1,000 new infections on Monday, the lowest since June 2020.
The Ranges said Abbott’s lifting of health restrictions allowed full capacity for Monday’s home game.
“We waited for one year to open this business with Rangers fans in it. Certainly excited when the governor issued the executive order on March 2 to give us that capability,” said Rob Matwick, the Rangers executive vice president of ballpark operations. “When we found out that would be the opportunity, we certainly look forward to welcoming as many fans as we can this season.”
About a month after Abbott eased virus restrictions, the state has not observed a surge in new infections. People are cautiously emerging from their homes, trying to remember what it was like in pre-COVID times. Perhaps the best way to feel liberated from the draconian lockdown measures is for people to get outside and attend a good old fashion baseball game.
Those in other states who don’t have the luxury to attend a major sports event because of restrictions, try visiting parks, pick up a new outdoor hobby, and or just go outside and relax.
Tyler Durden
Mon, 04/05/2021 – 22:20 - Senate Parliamentarian Sets Dangerous Precedent, Grants Schumer Permission For Second Reconciliation Vote
Senate Parliamentarian Sets Dangerous Precedent, Grants Schumer Permission For Second Reconciliation Vote
Congressional Democrats are resorting to desperate and undemocratic measures to bulldoze new legislation into law, which – as Politico warns – “could set a significant new precedent by empowering any party in full control of Washington to stretch the limits of its power.”
At issue; Senate Majority Leader Chuck Schumer says his office was just given the green light by the chamber’s parliamentarian to use the budget reconciliation process for a second time to “recycle the fiscal ’21 budget resolution,” which only requires a simple majority to pass certain measures as opposed to a bipartisan 60 votes currently mandated by the Senate filibuster rule, according to Politico‘s Caitlin Emma.
Schumer scores a major win with Senate parliamentarian, who says he can recycle the fiscal ’21 budget resolution to deploy reconciliation for a second time.
Could have *huge* repercussions for the use of reconciliation moving forward: https://t.co/AW4ZvmMu9M
— Caitlin Emma (@caitlinzemma) April 5, 2021
“The Parliamentarian has advised that a revised budget resolution may contain budget reconciliation instructions,” reads a statement from Schumer’s office, adding that “While no decisions have been made on a legislative path forward using section 304 and some parameters still need to be worked out, the Parliamentarian’s opinion is an important step forward…”
Infrastructure news: Chuck Schumer’s office says the parliamentarian agrees with his interpretation of the Senate budget process, which could enable Democrats to bypass a filibuster and use reconciliation once more in fiscal year 2021 (and several more times next year). pic.twitter.com/OoiEQpd6lX
— Sahil Kapur (@sahilkapur) April 5, 2021
https://platform.twitter.com/widgets.js
Democrats used budget reconciliation to pave the way for the most recent – and massive – pandemic stimulus bill, allowing them to pass the measure with a 51-vote majority (with Vice President Kamala Harris serving as the tie-breaker).
As Emma wrote last week, “Democrats could pass Biden’s multi-trillion-dollar infrastructure agenda without GOP support, while keeping another shot at muscling through major priorities that are now stuck on the back burner.”
The move is certain to set a new precedent for any party that commands ‘every lever of government power’ – “to muscle its priorities past partisan roadblocks by using a process that’s supposed to be an exhausting lift for lawmakers.”
Now, “reconciliation could technically get used as often as a Senate majority party wants to, provided that it also holds the House and White House. The biggest reason Democrats may not want to use the procedure over and over again, though, is the sheer laboriousness of a process that forces members to spend hours upon hours on the floor in both chambers, in addition to two Senate voting marathons in which anyone can force a roll-call vote on any amendment of their choice,” according to the report.
“If this is allowed, that’s going to be the thing that limits this process,” said Zach Moller, deputy director of economics at the Third Way think tank, in comments prior to today’s news. “Because Senate floor time is incredibly valuable.”
That said, Democrats aren’t going to want to use reconciliation every time – as it means that the parliamentarian can scrap portions of Democrats’ legislation if they feel they’re incompatible with various ‘arcane’ rules that dictate when the rule can be used. As such, “Democrats recognize that reconciliation doesn’t work as an end-run around eliminating the filibuster, the 60-vote threshold for passage of most bills that their left flank is pushing to kill for good.”
“You don’t want to do business via reconciliation all the time,” one House Democratic lawmaker told Politico on condition of anonymity, adding “The Senate is totally screwed up.”
“The Senate needs to figure out how it wants to be an effective legislative body, and that’s kind of the bottom line,” the added.
Last week, Senate Minority Leader Mitch McConnell (R-KY) telegraphed the decision – saying “Unfortunately, this looks like it’s not going to head in the direction that I had hoped,” adding “My advice to the administration is, if you want to do an infrastructure bill, let’s do an infrastructure bill. Let’s not turn it into a massive effort to raise taxes on businesses and individuals.“
Tyler Durden
Mon, 04/05/2021 – 22:00 - Blue States Lead US COVID Resurgence As "Double Mutant" Strains Discovered In California
Blue States Lead US COVID Resurgence As “Double Mutant” Strains Discovered In California
COVID cases continued to climb in the US over the holiday weekend, as the 7-day average of new cases nationwide topped 64K yesterday, its highest level since March 1. The US reported just under 68K new cases yesterday, along with 804 deaths (for what it’s worth, deaths in the US have continued to decline, as some have theorized that many of the new cases being recorded are the result of false positives).
Source: mSightly
All told, the US has more than 30.7M confirmed coronavirus cases and 555K deaths.
Furthermore, Massachusetts public health authorities warned that the Bay State now accounts for roughly 25% of total cases of the P.1 coronavirus “variant” confirmed in the US. the mutant strain was first discovered in Brazil, and has been blamed for driving the sharp acceleration in mortality rates seen among younger patients in Latin America’s largest economy.
Researchers from MIT and Harvard have traced the mutant strain to a cluster on Cape Cod. The state announced the first case of the P.1 variant, which was originally detected in Brazil and is more transmissible than the original strain, on March 16, and said it was identified in a Barnstable County woman in her 30s. She first tested positive for the virus in late February, and at the time officials said there was no information available pertaining to her travel history or illness.
But Massachusetts isn’t alone: Many of its neighboring northeastern states are also seeing new cases accelerate.
Source: mSightly
What’s more, 13 US states are now in the highest COVID-19 risk level, up from 11 last week.
Source: mSightly
In Michigan, one of the states in the “red” column, federal officials have warned about a potential fourth wave of infections as the state emerges as one of the most troublesome hotspots in the country, with average daily infections now 5x higher than they were 6 weeks ago. According to state data, since Feb. 19, average daily new COVID-19 cases among children under 10 jumped 230%, more than any other age group. The second-highest increase in infections is in the 10 to 19 age group, which saw cases rise 227%. The trends in these groups exceed that of the state as a whole. Doctors and infectious disease experts in Michigan attributed much of the rise in pediatric cases to the reopening of schools and youth sports. State data show more than 40% of new outbreaks (defined as two or more cases linked by place and time) have been traced to either K-12 schools or youth programs.
As reports about the risks posed by mutant strains spread, researchers in California’s Bay Area have confirmed a “double-mutant” strain first identified in India. The strain’s arrival in the US was recently confirmed by researchers at Stanford’s Clinical Virology Lab. Genomic sequencing was used to identify the strain, and at least 7 cases of the variant have been confirmed by the team. The variant is being labeled as the “double mutant” because it carries two mutations in the virus that helps it latch onto cells, according to Fox News.
“If you are in an elevator with someone that is infected with the variant you are more likely to be infected by that variant,” said Stanford Clinical Virology Lab Director, Dr. Ben Pinsky.
Pinsky added that the variant could be more infectious because it accounts for 20% of cases in the hard-hit Indian state of Maharashtra. Cases there have increased 50% within the last week, he said.
As the US reacts to the “mutant” threat, Cornell University officially became the first Ivy League school to follow suit, announcing Sunday night that it plans to require students (and faculty, unlike Rutgers, which gave faculty a pass) to get vaccinated against COVID-19 if they want to be allowed onto the school’s campuses in the fall. The decision follows a similar decision by Rutgers, New Jersey’s flagship public university, announced that it would require all students to be fully vaccinated before returning to campus in the fall,
Last week, New Jersey-based Rutgers became the first major university to announce that it, too, would require students and staffed to get inoculated before the state of the fall semester.
‘With the recent announcements of expanded vaccine eligibility in New York and other states, and increasing vaccine production, it is likely that all members of our community will be able to obtain vaccination sometime this spring or summer,’ Cornell President Martha Pollack and Provost Michael Kotlikoff wrote in a joint statement.
On the vaccine front, 12 more US states are allowing all adults to sign up for vaccinations starting Monday.
Source: mSightly
Still, according to pubic health experts, the US is still a ways away from achieving herd immunity. Even after hitting a new record of more than 4M vaccinations delivered over the weekend, only about 18.5% of adults are fully vaccinated.
Looking abroad, India also made headlines Monday as health officials reported more than 100K new COVID cases over the prior 24 hours – the highest daily tally since late last year. Daily infections in India have climbed 12x since hitting a multi-month loaw in February, as authorities have eased restrictions, and scientists warned that mutant cases have “supercharged” the pandemic. Indian stocks tumbled on Monday, as the country’s resurgent COVID outbreak has horrified investors.
Tyler Durden
Mon, 04/05/2021 – 21:40 - Mea Culpa: Oregon's Largest Newspaper Admits Defunding Police Was A Terrible Idea As Homicides Skyrocket
Mea Culpa: Oregon’s Largest Newspaper Admits Defunding Police Was A Terrible Idea As Homicides Skyrocket
Oregon’s largest newspaper, The Oregonian, has published a mea culpa over their previous endorsement of defunding the police, after 266 shootings and 25 homicides in the first quarter of 2021. In fact, in a Monday article from the paper’s editorial board, they heaped praise on the city’s gun violence reduction team and defended the mayor’s recent proposal to restart the ‘canceled’ unit after a spate of violence ensued.
An investigation is underway after one person was fatally shot in March near a North Portland park, police say.Beth Nakamura/The Oregonian “While we supported the move at the time, we – and all Portlanders – should recognize what has also been lost. The gun violence reduction team responded to every shooting, identifying incidents that were connected and helping disrupt potential retaliatory action. Officers had established relationships with many of those considered high-risk for being involved in gun-violence, connecting people with resources in the community as well as communicating with them about ongoing disputes to keep violence down. And as part of their work, they took dozens of guns off the street.”
The paper then slams the city council for ignoring the “reality of the threat” that removing cops from enforcement jobs has had on the city, saying that a proposal by commissioners to hand $3.5 million to unspecified community groups reflects a “startling lack of seriousness, if not outright naivete,” which “fails to show the urgency or understanding of the scope of this crisis.”
“The council’s three newest commissioners told Mayor Ted Wheeler that they oppose the $2 million proposal to revive the gun-violence unit that he developed with members of the Interfaith Peace & Action Collaborative…”
— Ryan Chittum (@ryanchittum) April 4, 2021
As PJMedia‘s Jeff Wreynolds noted last month, after (George) Floyd’s death, the “defund the police” movement sprung up under misplaced motivations of social justice, and many people died unnecessarily.
Crime policy expert Sean Kennedy, a fellow at Maryland Public Policy Institute, crunched the numbers, based on Portland Police Bureau stats and media reports:
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Since June 2020, there has been a 255% increase in murder in Portland through February 2021;
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Shootings increased 126% in 2020, and Year to Date have increased 93%.
The numbers are truly alarming. From January through April 2020, there were a total of three murders in Portland. Just in January and February 2021, we’ve already seen 20 murders. For the period of June 2020 through February 2021, 71 murders have occurred in Portland. That’s a staggering 255% increase over the same period one year prior.
* * *
“These shootings and murders are happening now – on streets, in convenience stores, in homeless camps as well as in parks, with homicides occurring at a pace to reach a record-busting 100 this year. Many shootings are tied to retaliatory violence between rival groups – a complex dynamic of relationships, families and history that was well understood by the disbanded Portland Police’s gun violence team but whose connections now go largely unrecognized as investigations are handled by whoever is on duty,” the editorial continues, adding that restarting the gun violence unit would not be an easy undertaking.
Then, the paper suggests that “somehow” the city has become polarized to the point where everything has been painted as a “zero-sum game” in which “support for one thing translates into rejection of another.”
When will leftist lawmakers stop making sweeping, kneejerk decisions that affect entire communities so they can signal their virtue? We won’t hold our breath.
Tyler Durden
Mon, 04/05/2021 – 21:20 -
- Credit Suisse Fires Risk Chief, Others As Archegos Losses Climb To $5 Billion
Credit Suisse Fires Risk Chief, Others As Archegos Losses Climb To $5 Billion
Shortly after Credit Suisse dumped its last blocks of the so-called Archegos stocks Monday evening in the US (and in the middle of the night in Switzerland), the Financial Times confirmed rumors from earlier in the day by reporting that Lara Warner, Credit Suisse’s chief risk and compliance officer, had been fired, along with two other senior bankers.
The others included Brian Chin, head of Credit Suisse’s investment banking division, and Paul Galietto, head of equities sales and trading.
Insider reported Galietto’s departure, while the FT reported on Chin and Warner. Chin was fired since the prime brokerage unit was part of the investment bank.
Brian Chin
While Warner wasn’t directly involved in nurturing the relationship with Greensill, she did sign off on a $140M bridge loan made by Credit Suisse to Greensill even after other risk managers raised concerns.
The FT reported that the Archegos collapse and Greensill’s filing for administration had called into question “the risk management processes within the bank.”
Fair enough.
Still, by firing Warner, the bank is axing one of the most senior women on Wall Street.
Having moved from Lehman, Warner had been with Credit Suisse since 2002, rising from senior equity analyst to head of global fixed income research (interesting specialty shift?) to COO of Investment Banking and finally to board member and Chief Risk and Compliance Officer…
And sits (or sat, we should say) on numerous boards…
As far as optics are concerned, it might lead to some awkwardness, especially as the reins to American rival Citigroup were recently taken over by CEO Jane Fraser, the first female CEO of a Wall Street megabank.
Lara Warner
As the FT explained, Gottstein, shortly after taking over the bank, expanded the remits of both Warner and Chin, which would in theory give him exposure to the scandal. Though the firings haven’t been made official, the FT said the bank is expected to announce their departures a soon as Tuesday morning.
However, as a number of sell-side analysts (and arm-chair commentators) have pointed out, CS has spared CEO Thomas Gottstein, a decision that the bank’s shareholders seem to support, and understandably so.
“I think it is unfair at this stage to put this on Mr. Gottstein,” David Herro from Harris Associates, one of the bank’s top shareholders, said in a Bloomberg TV interview last week.
“He attempted and has been attempting to reorganize Credit Suisse, but Rome wasn’t built in a day. Unless we see evidence to the contrary, I think he is the right person to continue to lead the organization.”
Setting aside the question of whether Gottstein truly deserves to be fired, it’s important to remember that Switzerland’s second-largest bank is still recovering from 2019’s corporate spying scandal, which resulted in the firing of the bank’s prior CEO, Tidjane Thiam, last February. Firing two CEOs in just over a year would set a new precedent for C-suite churn, even for the famously scandal-prone Swiss bank.
As we noted earlier, if there’s a silver lining to Monday’s bloc-by-bloc dumps, it’s that Credit Suisse finally appears to be out of inventory to unload (CS having been the only bank involved in the blowup not to release an accounting of its losses). Not long after the FT broke news of the firings, Reuters reported that CS’s losses from the Archegos michegas have reached at least $5 billion. That’s more than the $4 billion initially anticipated, according to “early estimates” quoted by the FT.
Combined with the $3 billion to $5 billion CS might owe to clients (should it make good on rumors to make some of the clients who lost big on the Greensill funds whole), the bank could be looking at up to $10 billion in losses from the twin crises alone. Fortunately, the SPAC deal boom has continued to drive massive dealmaking activity – the strongest globally since 1980, even as another wave of COVID descends upon the West.
Tyler Durden
Mon, 04/05/2021 – 21:00 - One Bank Spoils The Party, Reminds Traders We Are This Close To The "Breaking Point"
One Bank Spoils The Party, Reminds Traders We Are This Close To The “Breaking Point”
One look at the S&P500, which closed today at a fresh all time high well above 4,000, suggests that after a period of rangebound trading and some modest quarter-end market jitters, traders once again don’t have a worry on their mind with even mega cap tech stocks ramping in recent days as concerns about reflation and higher rates are seemingly fading away.
Commenting on the market’s endurance and willingness to push higher even amid higher yields, Bloomberg’s Ye Xie notes that after a record services PMI, and nearly 1 million jobs added, “treasuries barely changed much over the past two days.” As he notes, “that perhaps suggests a lot of bad news for bonds is in the price. After all, the markets have now priced in four rate hikes through the end of 2023, when the Fed indicated it plans to keep rates unchanged throughout.” And with yields stalling, the dollar’s rally seems to also be losing some momentum (ironically, just as Goldman covered its dollar short), and as the DXY index is sitting right at the 200-day moving average. As for equities, Xie notes, “yield stability allows for some breathing room as stock benchmarks hit new records.”
He is right… the only question is how much longer with this yield stability persist. Because if Deutsche Bank rates strategist Steven Zang is correct, the next move higher in yields is on its way.
In a note that could sober up some of the stock market Kool-aid drinkers, Zeng reminds us that the amount of outstanding Treasury coupon debt is increasing at a record pace, and “every quarter, the Treasury is adding more than $650bn of new debt to replace the T-bills issued last year and to support new stimulus spending.”
The math is, to put it mildly, startling: even with the Fed buying substantial amounts, the amount of coupon supply left to private investors is staggering, and it will only go up more once the Fed begins to taper its purchases.
“All of that begs the question: who will buy all these Treasuries”, Zeng asks rhetorically (especially since the Fed’s next move is not more QE but an eventual tapering of QE). As DB recently highlighted, households have taken on an increasing role in Treasuries ownership, accounting for nearly half of total net issuance between 2017 and 2020.
The risk though, as Janet Yellen noted to Congress last week, is that too much Treasury debt owned by households (and in general) could crowd out other forms of productive investment and private spending. This means that overreliance on any one sector to buy that many Treasuries and potentially pushing beyond their natural limit could also spell trouble for the future.
Zeng then notes that the bank’s model suggests that the increase in coupon issuance since last year has raised the 10y yield by about 48bp, although about 30bp of that is being offset by the Fed buying $80BN per month.
The question is what all of this comes to a head, and when does the market realize that MMT is nothing but bullshit. Zeng does not know the answer, but writes that “looking ahead, the Treasury will soon do another review of its coupon issuance sizes against the current financing needs; expect the spotlight to be on its decision in a few weeks’ time.”
Here’s hoping they can pull out another magic money tree out of their hat… or at least a rabbit..
Tyler Durden
Mon, 04/05/2021 – 20:40 - Supreme Court Justice Thomas Suggests Facebook, Twitter Could Be Regulated Like Utilities
Supreme Court Justice Thomas Suggests Facebook, Twitter Could Be Regulated Like Utilities
Authored by Jack Phillips via The Epoch Times,
Supreme Court Justice Clarence Thomas appeared to signal that Big Tech firms could be regulated after Facebook and Twitter suspended President Donald Trump earlier this year.
Thomas, considered a conservative on the high court, made the point during a 12-page submission as the Supreme Court issued an order that rejected a lawsuit over Trump’s blocking of certain Twitter users from commenting on his posts before his account was taken down. The Supreme Court said the lawsuit ultimately should be dismissed as Trump isn’t in office anymore and was blocked from using Twitter, coming after the Second Circuit Court of Appeals had ruled against Trump.
“Today’s digital platforms provide avenues for historically unprecedented amounts of speech, including speech by government actors. Also unprecedented, however, is control of so much speech in the hands of a few private parties,” Thomas wrote Monday (pdf).
“We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.”
Thomas also noted there are arguments suggesting digital platforms such as Twitter or Facebook “are sufficiently akin to common carriers or places of accommodation to be regulated in this manner.”
Thomas made reference to the respective owners of Facebook and Google by name—Mark Zuckerberg, Larry Page, and Sergey Brin.
“Although both companies are public, one person controls Facebook (Mark Zuckerberg), and just two control Google (Larry Page and Sergey Brin),” he wrote.
Thomas agreed that Trump’s Twitter account did “resemble a constitutionally protected public forum” in certain aspects, he noted that “it seems rather odd to say that something is a government forum when a private company has unrestricted authority to do away with it,” possibly referring to Twitter’s ban against Trump following the Jan. 6 incident.
“Any control Mr. Trump exercised over the account greatly paled in comparison to Twitter’s authority, dictated in its terms of service, to remove the account ‘at any time for any or no reason,’” he added.
“Twitter exercised its authority to do exactly that.”
Thomas then said that modern technology isn’t easily addressed by existing laws and regulations. But he warned that the Supreme Court may “soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.”
“The Second Circuit feared that then-President Trump cut off speech by using the features that Twitter made available to him,” Thomas said.
“But if the aim is to ensure that speech is not smothered, then the more glaring concern must perforce be the dominant digital platforms themselves. As Twitter made clear, the right to cut off speech lies most powerfully in the hands of private digital platforms. The extent to which that power matters for purposes of the First Amendment and the extent to which that power could lawfully be modified raise interesting and important questions.”
Thomas noted that Big Tech firms have a vast amount of power over the flow of information—even books. He said it does not matter that Amazon, Facebook, Twitter, and others are not the only ways in which to distribute speech as long as their power to do so is unequaled.
“A person always could choose to avoid the toll bridge or train and instead swim the Charles River or hike the Oregon Trail,” he wrote. “But in assessing whether a company exercises substantial market power, what matters is whether the alternatives are comparable. For many of today’s digital platforms, nothing is.”
Tyler Durden
Mon, 04/05/2021 – 20:20 - Majority Of Americans Reject Democrats' "Election Integrity" Outrage, Support Voter IDs
Majority Of Americans Reject Democrats’ “Election Integrity” Outrage, Support Voter IDs
Earlier today, Mitch McConnell blasted the “Outrage Industrial Complex” over the lemming-like response to Georgia’s voting integrity reforms.
“Our private sector must stop taking cues from the Outrage-Industrial Complex,” McConnell added. “Americans do not need or want big business to amplify disinformation or react to every manufactured controversy with frantic left-wing signaling.”
It turns out McConnell is right and in fact, a new AP-NORC poll released Friday shows an overwhelming amount of American support requiring identification to vote.
Voter identification requirements are supported by 72% of the public. That popularity is largely driven by support from Republicans, 91% of whom support a requirement that all voters provide photo identification in order to cast their ballot.
However, as the poll shows, 56% of Democrats also support requiring photo ID to vote.
As AmericanThinker’s Eric Utter recently noted, we live in a hyper-credentialed society.
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Little girls need a government-granted license to sell lemonade at their sidewalk stands.
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One must provide a valid photo I.D. and be vetted by the FBI’s National Instant Criminal Background Check System (NICS) – and possibly be subject to a several-day waiting period – to purchase a firearm.
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One must present a current, valid photo I.D. to cash a check, or buy a loaf of bread, a six-pack of beer, or pack of smokes at a grocery store.
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Want to board a plane? I.D. please.
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And probably soon, a vaccine I.D.
But one should never have to be troubled to identify oneself to vote for the most powerful person on earth, say Democrats. That would be racist!
It’s sad that even a majority of their voting public disagrees with Democratic politicians’ (admittedly false) narrative over Voter IDs.
Tyler Durden
Mon, 04/05/2021 – 20:00 -
- Peter Schiff: Friday's Payrolls Report Does Not Reflect "Job Creation"
Peter Schiff: Friday’s Payrolls Report Does Not Reflect “Job Creation”
The economy is recovering quickly! Just look at the rebounding jobs market. But in a recent podcast, Peter Schiff poured cold water on the notion that falling unemployment is necessarily a sign of an impending economic boom. After all, people going back to work do not reflect actual job creation.
The March jobs report came in better than expected. According to Labor Department numbers, nonfarm payrolls rose by 916,000 last month, and the unemployment rate declined to 6%. But even within this rosy report, there were some shadows. While the labor participation rate ticked up slightly to 61.5, this remains a very low number.
So, despite the fact that a lot of people returned to their jobs, there’re still a lot of people that aren’t working at all, thanks in large part to the US government, which is providing tremendous financial incentives for people not to return to work.”
There are still nearly 7.9 million fewer Americans counted as employed than in February 2020, while the labor force is down 3.9 million.
Peter said it’s important to keep the jobs report in perspective. It does not reflect a strong economy creating all sorts of new jobs that never existed before.
This is an economy where jobs that were temporarily put on hold are being restored. People who left their jobs because of the COVID shutdowns are now returning to those jobs.”
The Labor Department numbers reflect this. The biggest job gains in March were in sectors hardest hit by the government response to the pandemic. The leisure and hospitality sectors showed the strongest gains with 280,000 “new” jobs. Bars and restaurants added 176,000 jobs. Arts, entertainment, and recreation added 64,000 jobs on the month.
There was also a big jump in education jobs as schools begin to reopen for in-person learning.
But even with the big job gains, the leisure and hospitality sectors remain 3.1 million jobs below their pre-pandemic total. And Peter noted that all of the people who lost their jobs are not going to return to work.
Many of the businesses they use to work at are not going to reopen. Or some of the ones that do reopen may only reopen temporarily before they shut down. So yes, we’re going to get some big job numbers in the near term. But don’t confuse that with a booming economy. We’re simply allowing the jobs that we already had and which were temporarily lost to be restored. But again, we’re not going to restore all that was lost due to a lot of the damage that is permanent.”
We also have to contend with the effects of the government “cure” for the economic hit inflicted by the COVID – the debt, the money printing, all of the new government spending. This is going to take a further toll on an economy that was weak before coronavirus reared its ugly head.
I expect a lot of the jobs that have been restored to be lost again. Except this time it won’t be a temporary loss. It will be a permanent loss.”
Even as the number of jobs increased, average hourly earnings ticked down slightly. They were expected to rise 0.2%, but instead, they fell 0.1%. Average hourly earnings year-over-year were also well below estimates. Economists estimated a rise of 4.6%, but it came in at just 4.2%.
The number of jobs added in the manufacturing sector was less stellar, coming in at an unimpressive 53,000.
The US continued to lag on manufacturing, which is why our manufacturing trade deficits continue to hit record highs. And I think we’re going to keep setting a string of new record highs in the months ahead because the vast majority of the jobs that we are going to be adding are not going to be in goods-producing jobs but in service-providing jobs. And all these workers are going to need to buy things that other Americans are not making. The stuff that they’re going to be buying are things that workers in other countries that actually have stronger economies are going to be producing. So, the trade deficits are going continue to rise.”
Peter said the most important thing to keep in mind as you look at these job numbers is that they don’t evidence a strong economy.
It evidences the inflation that’s being created by the Fed and all of the money that’s being spent by the US government. Yes, if you print enough money and spend enough money, well sure, in the short run, people are going to go back to work as they’re spending all that money. But this is not the result of economic growth. We’re spending money without actually producing the goods to give that money value. We are relying on the goods that are being produced by the rest of the world and their continued willingness to exchange the goods that they produce for the paper that we print. And what we’re ignoring as we’re looking at these strong GDP numbers — we’re not paying attention to the exploding debt, which is making that GDP growth possible.”
The question is what are the consequences of that debt? How will servicing that debt and trying to repay that debt weigh on future GDP?
Tyler Durden
Mon, 04/05/2021 – 19:40 - South Korea's LG Abandons Smartphones As Electric Vehicles Business Sees Explosive Growth
South Korea’s LG Abandons Smartphones As Electric Vehicles Business Sees Explosive Growth
Samsung, the world’s biggest smartphone maker, has just cemented its dominance in its home market after one of its earliest domestic competitors, LG, decided to throw in the towel.
After five years of worsening losses, South Korea’s LG Electronics, a dominant player in the pre-iPhone cellphone market, announced Monday that it would finally exit the smartphone business and instead focus on growth areas, like producing parts for EVs, which are once again ascendant following Tesla’s latest sales figures, published earlier today. Just three weeks ago, LG Energy Solution, the world’s largest producer of electric vehicle batteries, announced plans to invest more than $4.5 billion in the US by 2025 to meet growing consumer demand for non-carbon emitting cars.
The company cautioned that it will continue support for its phones, with the length of the extension expected to vary depending on the model.
As the FT explains, LG has seen its competitive edge eroded by Chinese firms who create cheaper competitors in the low-to-mid end segment, while its premium phones have been badly outcompeted by Apple and Samsung (despite some stumbles there).
LG’s mobile phone business has posted cumulative losses of nearly $4.5 billion over the past five years, with its global market share falling to about 2%, according to research provider Counterpoint. The smartphone business generated just $4.6 billion of sales last year, equivalent to just 8.2% of LG’s total revenues. Successive failures for its flagship phones have caused LG to drop out of the global top seven players by market share, as Chinese rivals like Huawei (which has struggled with its own issues thanks to a crackdown by Washington), Xiaomi and Oppo.
Shareholders have urged LG to wind down the smartphone business, complaining that the money could be better spent on other business lines. The smartphone business has been seen as weighing on the company’s market cap, despite strong growth in premium home appliances and televisions, along with the prospects for its EV business.
“Being late is always better than never,” said Daniel Kim, an analyst at Macquarie, of LG’s decision to retire from the sector. “It entered the smartphone market too late and couldn’t scale up amid stiff competition in the saturated market.”
And with President Biden including tens of billions of dollars in handouts to EV makers in his new infrastructure plan, analysts have heralded the company’s investment in its EV partnerships with General Motors – which just unveiled its electric Hummer to much fanfare – as a major potential moneymaker. Plus, LG’s involvement will help ease supply shortages of critical components like batteries and chips in the US. The company also plans to launch a joint venture with automotive supplier Magna International in July to produce more EV components.
Tyler Durden
Mon, 04/05/2021 – 19:20 - Is Outside Air COVID-Safe? Are Masks Needed Outdoors?
Is Outside Air COVID-Safe? Are Masks Needed Outdoors?
When I visit parks in Seattle and the region, bike along the Burke Gilman Trail, cross-country ski at WA snowparks, or go hiking in the Cascades, I note that many people are wearing masks outdoors to avoid COVID-19. A lot of people.
Some folks are clearly afraid and fearful of COVID exposure outdoors. For example, I often see individuals making a point to avoid unmasked bikers or joggers on the Burke-Gilman trail…moving 5-10 feet off the trail and sometimes turning away. Occasionally it gets tense, as when one local scientist (not me) was angrily called a “Republican” when he was walking in a park without a mask.
The fear of outdoor spread even hit the management of Seattle Parks last year, when several parks and their parking lots were closed because of COVID fears.
Photo by Nate Loper Through a Creative Commons License
It is time to bring science to this issue and to relieve the worries of many who wish to enjoy outdoor recreation.
In this blog, I will tell you about measurements of carbon dioxide (CO2) I took around Seattle this weekend, measurements that suggest little threat of COVID transmission outdoors. I will also review some of the latest scientific literature, which again does not indicate a significant threat of COVID transmission in the outside air.
The message of this information is obvious: wearing masks outdoors does not appear to be necessary.
My Field Experiment Around Seattle
In my experiment, I used a sensitive CO2 sensor that makes use of proven measurement technology (see below). Human breathing puts out a lot of CO2, roughly 4 percent by volume or roughly 40,000 parts per million (ppm). The background level of CO2 in the free atmosphere is currently approximately 415 ppm…. a concentration much, much less than coming out of our mouths.
Thus, CO2 can act as a tracer of the air coming out of our respiratory systems, something mosquitoes know all about since they use the plume of CO2 we exhale to find us. By measuring CO2 levels, it is possible to determine the relative concentration of air coming from humans and the degree of dilution by the surrounding air.
There have been a number of peer-reviewed scientific papers that have shown that CO2 concentrations are a potent tool for evaluating the potential for disease spread by viruses and other agents, with higher concentrations of CO2 associated with more transmission of disease (some examples of relevant scientific papers found here and here).
Most of these papers use CO2 to measure the potential for transmission in indoor spaces, so why not take it one step further and evaluate potential disease transmission in the outside environment? That is what I did around Seattle on Saturday, a very nice day (high around 63F) with lots of people in the parks and outdoor locations.
My CO2 unit reported about 400-405 ppm away from roads and people, and this value represents the background level of carbon dioxide.
The Burke-Gilman Trail
My first stop was the crowded Burke Gilman trail, with folks walking, running, and whizzing by continuously. There was no increase in CO2 concentrations compared to the background at any time (around 400). Clearly, the diffusion/dispersion/dilution of CO2 by outside environmental air was very large. And the same would be true of any COVID virus breathed out by anyone on the trail.
Magnuson Park
I then traveled to Magnuson Park, one of the most popular parks in Seattle. First, I walked about a half-mile, back and forth, on a crowded path. No increase in CO2 values above background (still around 400 ppm).
Then I decided to really push things and walked around crowded picnic shelters, some with as many as 15-20 peoples without masks. (I suspect they thought I was being a bit odd as I circled around the groups, but this was for science!) I could find no enhancement of CO2 above the background levels….natural movement of air diffused their CO2 emissions completely. I did find a weak signal downstream of a raging barbecue fire…but even that was muted (about a 10 ppm increase 40 feet downwind).
So the bottom line so far: natural ventilation and mixing in the outside air was effective in diffusing the CO2 emitted by people in an outside park environment, even when there was a high density of people. And if CO2 enhancement by all the people was undetectable, the same would be true of COVID-19 virus emission by any infected individuals. Parks appear to be entirely safe locations and masks are not necessary.
University Village Shopping Center: Outside and Inside
Next, I went to the University Village shopping center. There is a nice little urban park adjacent to the Apple Store. It was packed with people enjoying the nice weather. If there was going to be a place where human CO2 would be evident, this would be it, particularly with nearby structures lessening the wind flow.
I walked all around the park, even close to groups of people. Only background levels of CO2 were observed. No hint of people’s CO2. Atmospheric mixing was still large, and thus there was little threat of catching COVID-19 from the general environment. And I found similar results near lines of individuals waiting to enter some U. Village stores.
Supermarkets and Indoor Restaurants
As a little side test, I then went into a busy local supermarket. The CO2 concentration zoomed up to 830 ppm. A warning, perhaps, about food stores.
Then I went into a restaurant, one that was well ventilated (I could feel the breeze) and with reasonable spacing between tables. The CO2 level was a very modest 520. Turns out the restaurant had a CO2 meter, which read 530. Good confirmation of my calibration and a positive note about the restaurant providing a safe environment for its patrons.
A Visit to A Gym
Then I stopped in a local gym, a major one located in northeast Seattle. Lots of ventilation and the CO2 level was a very modest 465. A safe place for one’s workout and less than the value in my home (which is about 530). People are required to wear masks in the gym, but quite honestly they probably aren’t needed.
Reality Check
I shared my results with some local air quality experts and a well-known epidemiologist. They thought my results were reasonable and not surprising. They acknowledged that COVID transmission is far less problematic outdoors.
One suggested that the risk outside was not zero: imagine if you had a conversation with a highly infectious individual for an extended time at close proximity (within a foot or two), with little wind and the person was upstream of you. Perhaps. But you can imagine how unlikely this situation would be. And easily avoided.
The epidemiologist, although generally agreeing about the safety of outdoor air, suggested the potential for a very short (transient) exposure to the long-distance breath of a COVID-infected person.
He noted the example of smelling cigar or pot smoke at a distance–might one get exposed to COVID the same way? I suspect this is highly unlikely. First, large virus-containing droplets tend to fall out close to the infected (that is why there is a six-foot “rule” for separation). And smaller particles tend to get diluted with distance. But just as important is that current best science suggests that extended or prolonged exposure to a COVID-infected individual is necessary, with the Centers for Disease Control indicating 30 minutes or longer (see here). That is simply not going to happen outside if you and the source are moving around.
This never made any sense and prevent people from enjoying a healthful environment
Finally, what does the current scientific literature indicate about outdoor transmission? The scientific literature is very thin on this topic, but here are some examples:
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Qian et al., 2020: Examined 1245 confirmed cases in 120 cities in China and identified only a single outbreak in an outdoor environment, which involved two cases.
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Nishiura et al., 2020: Transmission of COVID-19 in a closed environment was 18.7 times greater compared to an open-air environment (95% confidence interval). (they could not exclude the possibility that the few “outdoor” transmission might have occurred by undocumented indoor transmission)
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Bulfone et al., 2021: A review of all the literature on outdoor transmission. They found only five studies, two of which are above. They noted the poor quality and inconsistent approaches of most of the studies so far.
Quite honestly, one can only be disappointed in the quality of the “studies” on outdoor transmission, which is surprising at this point in time. Importantly, there is no compelling published research that demonstrates significant outdoor transmission.
The Key Message
My observations of CO2 concentrations suggest that the diffusion, dilution, and dispersion of human exhalations are very large outdoors, making the threat of outdoor COVID-19 transmission very, very low. This is consistent with the (limited) scientific literature on the topic.
Outside air is very safe, and it gets even safer during the summer since ultraviolet radiation rapidly kills airborne virus. The logical conclusion from these results is that wearing a mask outdoors is probably unnecessary. Closing outdoor parks makes no sense at all.
If any of you see some weaknesses in the above logic, let me know. That is how science works.
Tyler Durden
Mon, 04/05/2021 – 19:00 -
- Japan Poised To Allow Coast Guard To Fire On Chinese Vessels In New Legislation
Japan Poised To Allow Coast Guard To Fire On Chinese Vessels In New Legislation
New legislation being considered that would radically alter current Japan Coast Guard policy toward how it engages foreign vessels in Japan’s waters could inadvertently hurl the region toward a hot conflict involving China.
The new proposed law comes at a moment of more frequent and heightened incidents between Chinese and Japanese vessels around the contested Senkaku islands near Taiwan (and which happen to also be claimed as Taiwan’s). Currently Japan doesn’t have a mechanism which would activate its Self-Defense Forces in any entanglement with Chinese fishermen landing on the islands, which might escalate to involve Chinse military patrols.
But that could change, especially after Beijing recently allowed its own coast guard to be militarized at a moment it attempts to stave off regional rivals’ claims to islands in the East and South China Seas. Tokyo is preparing to beef up is own ability for an immediate and rapid response, as Nikkei details of the new legislation: “The Japanese government says the Police Duties Execution Act allows ships to fire on vessels to halt an unauthorized landing,” Further it explains, “If the police or coast guard is unable to mount an adequate response, then a phone call and a snap decision by the Cabinet would mobilize the Self-Defense Forces to a police operation.”
Via Japan Coast Guard/NY Times And here’s more on why Japan considers the beefing up of its rules of engagement necessary, according to Nikkei:
Unconvinced, LDP lawmakers involved in defense policy last week put together a proposal for legislation that “fills the gap.”
The document calls for amending Japan’s coast guard law. The changes would allow coast guard vessels, within the bounds of international law, to use arms against foreign ships that refuse to comply with expulsion orders.
The caucus is also pushing for rules that would allow the deployment of the Japanese Ground Self-Defense Force to remote islands in advance to cut down on the response time in the event of a hostile situation.
It would take current potential conflict situations that previously were dubbed ‘gray-zone’ matters – which fall short of allowing for hostile engagement – and would effectively allow for the weaponization of the coast guard to stave off a surprise takeover of an island (such as in the Senkakus).
Senkakus, known in China as the Diaoyu Islands The Nikkei report describes that one common emerging view among Japanese officials is that China is indeed preparing to dramatically scale-up its presence in the Senkakus and other contested islands in a bid to assert control.
This, the report says, is likely to lead to a “nightmare scenario” for the Japan Coast Guard, which goes something like this:
A Chinese fishing boat breaks down near Japan’s Senkaku Islands. China, which claims the islands and calls them the Diaoyu, instructs its own coast guard to protect the boat. The fishermen land on one of the islands to wait for repair parts, ignoring warnings by Japan. Amid tension and confusion, alarmed China coast guard personnel start firing at their Japanese counterparts.
Amid repeated Chinese incursions in waters near the Senkakus, such scenarios are not out of the question any more. Discussions within Japan’s ruling party have reignited regarding the need for legislation that explicitly lays out the rules of engagement in such cases.
China has spent years warning Tokyo over the islands which have been contested for over a century, with the United States officially recognizing Japan’s claims over the uninhabited islands, and with Biden previously reiterating America’s commitment to protective them in accord with Article 5 of the US-Japan Security Treaty.
Despite Japan laying claim to the islands since 1895 China began strongly reasserting claims especially in the 1970s, triggering a crisis which became more acute after in 2012 when Japan’s government purchased three of the disputed islands from a private owner. The area is considered potentially resource-rich, including likely oil and gas reserves, along with being considered excellent fishing grounds and close to key shipping lanes.
Tyler Durden
Mon, 04/05/2021 – 18:40 - Monetary Policy At A Crossroad: Policymakers Need To Break Promise Of Easy Money To Avoid Boom-Bust
Monetary Policy At A Crossroad: Policymakers Need To Break Promise Of Easy Money To Avoid Boom-Bust
Submitted by Joseph Carson, former chief economist at Alliance Bernstein
The Federal Reserve’s new policy approach is that policymakers want to see “actual progress, not forecast progress” before deciding to change its policy stance. Substantial actual progress is occurring in the economy, some places faster than others. How much monetary accommodation is needed to meet the ultimate employment and inflation objectives is debatable. But it is less than when the pandemic started and less after the passage of $1.9 trillion in federal stimulus.
Determining when a policy stance has become too accommodative is not an easy matter—but enabling excessive risk-taking to become well-entrenched is comparable to past policy mistakes by allowing a build-up of inflation and inflation expectations. Both are difficult to unwind, and past episodes have shown it is impossible without triggering significant adverse effects in the economy.
Evidence of Actual Economic Progress & Excessive Risk-Taking
Employment and Jobless Rate: In March, payroll employment increased 916,000, far above market expectations, bringing the three-month job gains of Q1 to 1.6 million. The strong string of monthly job gains helped lower the jobless rate by 0.7 percentage points, from 6.7% to 6.0%.
Job gains in Q2 could easily double Q1 numbers. The rapid increase in vaccinations, enabling the many parts of the economy to re-open, especially travel and schools, will trigger outsized solid job gains. By mid-year, the jobless rate could drop a whole percentage point to 5%, getting very close to the Fed’s year-end target of 4.5%.
Does it make sense to maintain the same monetary accommodation scale with the jobless rate at 5% as when it was 10% one year earlier?
Manufacturing, Growth & Inflation Outlook: The Institute of Supply Management (ISM) composite diffusion index for manufacturing in March increased 4 points to 64.7%, the highest reading in 37 years. The substantial gains in new orders and production provide hard evidence of rapid economic growth in Q1 and coming quarters.
But there are also signs of more inflation. The prices paid diffusion index at 85.6, off 0.4 points, remained at a relatively high level. A diffusion index does not distinguish between the scale of the gains and declines, so it is unclear how much inflation is in the pipeline. However, purchasing managers listed 57 commodities rising in price (not sure if that is a record number) and 25 items in short supply, which together speak of a broad range of price and cost pressures hitting companies.
Does it make sense to maintain the same monetary accommodation scale from a year ago now that the growth and inflation outlook has flipped?
Inflation & Housing: The Federal Reserve is committed to hitting the 2% general inflation target, but in doing so, they are fueling a fire-storm in the housing market.
The house price index published by the Federal Housing Finance Agency (FHFA) is up 12% in the last twelve months, pushing house prices to record levels. That compares to the 2% increase in the imputed owners’ rent used to calculate the consumer price index. The gap of 1000 basis points between actual house prices and implied rents is 200 basis points wider than the gap during the peak of the housing bubble of the early 2000s.
Oddly, policymakers employ the same monetary tools of zero official rates and massive purchases of mortgage back securities today to support the housing market as they did after the housing bubble burst in 2008/09.
How can the Fed justify the same monetary accommodation scale for the housing sector when prices rise at a double-digit pace and when they fall double-digits?
Finance & Risk-Taking: In Q1, the broad equity markets reached record levels, extending the fast gains of 2019 and 2020. Domestic equities’ market value has increased 50% or $16 trillion to $48.7 trillion in the past two years. At least one policymaker had acknowledged the dizzying heights of asset prices.
Last week, Federal Reserve Bank of Dallas President Robert Kaplan stated, “There’s no question that financial assets, broadly, are at elevated valuation levels.” Mr.Kaplan went on to say that he was “concerned about excess risk-taking and if risk-taking goes too far, whether it creates excesses or imbalances, that could ultimately create challenges..”
The Fed’s dot plot suggests that policymakers plan to maintain the same monetary accommodation scale for the next three years. That creates a vision of continued gains in equity prices and encourages speculation and excessive risk-taking.
The overly stimulative monetary policy stance is evident in the rapid price increases for residential real estate and financial assets. In the past, policymakers failed to take reasonable steps to head off inflation pressures before they intensified. Nowadays, policymakers need to counter a build-up of excessive increases in asset prices.
A successful monetary policy is to avoid fueling financial and price imbalances that cut short a business cycle and not hit arbitrary jobless and inflation rates. Policymakers need to signal a break in the promise in its easy money policy soon to avoid a boom-bust economic cycle.
Tyler Durden
Mon, 04/05/2021 – 18:20
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