- COVID Outbreaks At Taiwanese Chipmakers Is Latest Threat To Global Supplies
COVID Outbreaks At Taiwanese Chipmakers Is Latest Threat To Global Supplies
The past few weeks have seen Taiwan’s semiconductor industry hit by a variety of disasters that are creating more problems at a time when an international semiconductor shortage is creating problems around the world, including in the US, where a shortage of critical chips has hurt production of new vehicles. A worsening drought and rolling blackouts are also terrorizing the island.
Now, two more Taiwan tech suppliers have been hit by new clusters of COVID-19 cases, creating another disruption to production that’s threatening to have an outsize impact on the global supply chain. According to Nikkei, King Yuan Electronics Co suspended all domestic production on Friday, while chip packaging and testing supplier Greatek Electronics and networking gear provider Accton Technology have also reported clusters among employees that have impacted production.
Both Greatek and Accton have production sites near a King Yuan plant in Miaoli County which has confirmed at least 263 cases as of Sunday (219 involving foreign workers mainly from the Philippines. Around 30% of the company’s workers are migrants). Most of the cases have been linked to workplace outbreaks, with King Yuan workers accounting for half the infections. As a result, the company and local government officials are asking all foreign workers to shelter in place inside their dormitories (typically cramped environments).
King Yuan has finished testing and has so far reported 195 positive infections out of its workforce of more than 7,000 employees. The final number of cases will be finalized in a few days, a Miaoli health official told Nikkei Asia. The two other companies are still testing their employees.
Local health authorities have told the companies to ask all of their migrant workers to stay inside dormitories.
All the new cases prompted the government on Sunday to order King Yuan, which is a key supplier for Nvidia, Intel, MediaTek and many other top global chip developers, to stop all of its foreign laborers from working. The order was effective immediately, regardless of COVID test results.
“Foreign workers at King Yuan will have to stop working and begin quarantine for at least seven days. Only foreign workers with negative results of PCR tests after the quarantine can return to work,” the CDC director general Chuang Jen-hsiang told Nikkei Asia. “We will have another meeting to decide whether or not King Yuan can resume production later today.”
The company said it expects the two-day halt to reduce its expected revenue and output for June by up to 6%, while other down-stream companies that rely on King Yuan’s product are also struggling.
King Yuan on Friday said that its planned 48-hour production suspension was estimated to reduce revenue and output in June by around 4% to 6%. MediaTek, a customer and a leading mobile chip developer, said its revenue will be hit by King Yuan’s production halt.
“If our foreign workers could not come to work, that will further hit our production output for this month but the scale will need to be further calculated,” a King Yuan spokesperson told Nikkei Asia.
Taiwanese public-health officials must decree the working environment to be “safe” before production can ramp back up to 100%. Greatek is testing 4K of its employees, more than 1K of whom are migrant workers, while Accton is also testing its 1,500-strong staff.
As of Sunday, 11 workers at both Greatek and Accton, had been confirmed to have contracted the virus. A majority of these were migrant workers.
“We haven’t stopped our production lines, but the testing of all employees and some prevention measures will surely affect our production utilization and output,” Chen Sheng, vice president and spokesperson of Greaktek, told Nikkei Asia.
Taiwan’s Hsinchu Science Park, widely recognized as the most important hub for Taiwanese chipmakers, has set up a testing station and is testing around 4K out of the roughly 10K migrant workers who work in the area.
As a reminder, the chart below illustrates how production hiccups in Taiwan can quickly impact supply chains in the US and Europe.
Tyler Durden
Tue, 06/08/2021 – 02:45 - UK Border Force "Little More Than Taxi Service For Illegal Migrants": Lawmaker
UK Border Force “Little More Than Taxi Service For Illegal Migrants”: Lawmaker
Authored by Alexander Zhang via The Epoch Times,
Britain’s Border Force is “little more than a taxi service for illegal migrants,” a Conservative MP said on Monday, as he urged the government to take action to put an end to the “horrible trade” of people smuggling.
The Home Office is investigating an incident in which migrants attempting to cross the English Channel were reportedly picked up in French waters by the UK Border Force and taken to the English port of Dover.
The move was orchestrated between senior crew members of UK Border Force ship HMC Valiant and French patrol ship Athos on May 29, the Daily Mail reported.
Asking in the House of Commons what the Home Office is doing to tackle human smuggling, Sir Edward Leigh said: “Does the minister recognise the public anger at us being made fools of with this? Border Force is little more than a taxi service for illegal migrants, it’s ridiculous.
“So will the minister assure me that he will use his powers under the 1971 Immigration Act to arrest all illegal immigrants, put them in detention, prosecute them, imprison them, and deport them so that we can stop this horrible trade dead in its tracks?”
Responding to the question, Home Office minister Chris Philp said that he “completely” shares Sir Edward’s anger.
“We are actively prosecuting the facilitators. And in the forthcoming Sovereign Borders Bill, as part of the new plan for immigration, we plan to significantly strengthen the Section 24 illegal entry offence that he refers to in the 1971 act to make it easier to use and easier to implement in practice.
“And at the same time we are going to be increasing the sentence for illegal entry and the sentence for facilitation under Section 25 of that same act.”
According to the Home Office, the French authorities dealt with eight incidents involving 130 people on June 4, with the UK dealing with four boats involving 83 people.
This follows 201 people being stopped by Border Force officers in eight incidents on June 3.
In addition, the French authorities intercepted nine crossings on June 2 and 3, preventing 171 people from reaching the UK.
This makes a total of 585 attempting to make the crossing in just three days.
On Monday, migrants continued to arrive in Dover after crossing the English Channel.
Kent County Council has threatened legal action against Home Secretary Priti Patel, saying it faces extreme pressure on its services for unaccompanied child migrants.
The dangerous sea journey from France—made by more than 3,000 people including children so far in 2021—has claimed many lives.
Police confirmed on Monday that the body of a baby found on a Norwegian beach is that of a Kurdish-Iranian boy who went missing in the English Channel last year.
Fifteen-month-old Artin was onboard an overcrowded migrant boat heading for the UK with his parents and two siblings when it capsized on Oct. 27, 2020, claiming all five of their lives.
Artin’s family had sold their house before leaving Iran and paid £14,000 ($20,000) to get on to the boat, with a further £8,200 ($11,600) supposed to be due when they arrived safely in the UK.
Patel said at the time that the deaths were “an ultimate tragedy” and one that “could have been avoided.”
Tyler Durden
Tue, 06/08/2021 – 02:00 - Response To Fauci's Emails Proves Everything Is Fake, Narrative Management Trumps Reality, And Those In Power Want It That Way
Response To Fauci’s Emails Proves Everything Is Fake, Narrative Management Trumps Reality, And Those In Power Want It That Way
Authored by Nebojsa Malic via The Ron Paul Institute for Peace & Prosperity,
Watching the media coverage – or lack thereof – of Dr. Anthony Fauci’s emails and what they mean for the origin of the coronavirus, one is struck by how relentlessly fake everything is, from public health experts to science.
One of the things the emails suggest is that Fauci colluded with Peter Daszak – head of the EcoHealth Alliance, which channeled US research funding to the Wuhan Institute of Virology – to suppress and dismiss any notion that the virus causing Covid-19 may not have evolved naturally.
Thing is, Daszak actually went around giving interviews about his work in China throughout last year, and nobody in the media thought to connect the dots. Simply put, Donald Trump said the virus came from China and might have come from a lab, therefore that had to be wrong and racist, end of story, case closed.
That’s just one, most recent and most acute example of Narrative trumping reality at all cost. Millions of deaths, widespread destruction of the economy, tectonic changes in society itself? Small price to pay for “progress” and ensuring the “correct” outcome of the 2020 election, the fortifiers of Our Democracy might say, without anyone batting an eye. “Build back better!” the press parrots instead.
Trump disagreeing with CNN is a mortal threat to democracy and free speech, but Biden telling a reporter he’d rather run her over with an electric truck than answer a question about the war currently going on in Israel is a funny joke, haha, how hilarious. What flavor of ice cream did you order, sir?
This may seem partisan at first blush, but let’s remember this is the same media that once proudly carried water for the narrative about “Saddam’s WMDs.” So the old Democrat-vs-Republican dichotomy doesn’t really work here, and misses the bigger picture to boot.
A truly free society would have no official narratives, Australian columnist Caitlin Johnstone wrote earlier this week. Thing is, modern societies are not free, and official narratives are all they really have. Where would Joe Biden’s legitimacy be without the January 6 Capitol “insurrection” narrative?
American founders codified the First Amendment because they regarded a free press necessary for a free republic. Yet the corporate media complex and their Big Tech counterparts have become a lapdog, not a watchdog, of power. Even the agencies, once thought neutral and objective, are in on it. AP literally rewrote its stylebook to limit the use of “riot” last summer. Reuters “fact-checked” Biden’s eulogy for Robert Byrd as false because the Democrat senator wasn’t a “grand wizard” of the KKK but merely an “exalted cyclops.”
What this Orwellian replacement of facts with narratives does is condition the public to echo Hillary Clinton’s infamous Benghazi defense: “What difference, at this point, does it make?”
“Facts” mean nothing to this crowd. “Science” isn’t a rigorous process of finding the truth, but a word-totem invoked to grant authority and banish dissent. “Truth” is whatever they declare it is at the moment, and when it stops being convenient they’ll shamelessly go back and rewrite their own words, pretending all along that that’s what they’ve always believed. Yes, it’s literally Orwellian behavior, but they don’t seem to care.
After all, what are you going to do, change the channel? Actually, that’s happening. Month after month, ratings reports show CNN and MSNBC getting their clock cleaned by Fox News – and Tucker Carlson in particular. The response is to triple down on wokeness and Democrat talking points, while waging a veritable jihad against Fox for “misinformation.”
To think that the media will come to their senses when the reality of ratings hits them in the face, therefore, is foolish. They simply don’t give a damn. Could it be that they don’t care for money as much as they care about power? And not just proximity to political power, but the power to shape and control reality itself, to remake society according to their utopian ideas. Even assuming those ideas are good – and that’s debatable at best – having that sort of power corrupts absolutely, to borrow the expression from Lord Acton.
The media were meant to be a means through which the public collectively perceives reality – not the creators of reality itself! Yet they act as if the latter is true and intended. That’s dangerous. They believe themselves in control of reality, to the point where they’re impossible to reason with. Confront them with actual facts, or principles, or laws of physics, and they either censor you – or cackle and carry on.
Biden’s behavior starts making sense when you understand he exists in a fantasy world, entirely conjured by the press and his staff. As do thousands of activists, ‘NGOs’ and cultist consumers of US government grants around the world. How does one reach these people, who have internalized the “logic” of Who/Whom? That might be the most important question facing not just the US, but the world, very soon.
Tyler Durden
Mon, 06/07/2021 – 23:40 - China Beefs Up Latest COVID Lockdown In Guangzhou As New Cases Climb
China Beefs Up Latest COVID Lockdown In Guangzhou As New Cases Climb
Despite having doled out nearly 800MM doses of its home-made COVID-19 vaccines, Chinese authorities are struggling with yet another stubborn outbreak in the city of Guangzhou. A week ago, we reported that local authorities had ordered China’s first lockdown since January. But while initial restrictions were relatively mild compared to the lockdowns imposed in Wuhan, and elsewhere, last year, authorities have decided to tighten restrictions as new cases have continued to be identified.
The AP reports that residents of the southern Chinese city will no longer be able to leave unless they can show that it is absolutely necessary to do so, following an outbreak of COVID-19 that has sickened dozens of people in recent days.
According to local authorities, anyone who is given permission to leave must show a negative test for the virus taken in the previous 2 days, according to rules issued by the city government that take effect Monday. The same rule applies to anyone seeking to leave the surrounding province of Guangdong.
The city also is restricting indoor dining, conducting mass testing and banning residents in high-risk neighborhoods from leaving their homes. At least two districts in the city of 18 million people have been closed off entirely. And any residents who have traveled through the Nansha, Huadu and Conghua districts of the city have been ordered to be tested for COVID immediately. Reuters added that authorities in Nansha also ordered restaurants to stop offering dine-in services while calling on gyms, pools and other public venues to temporarily cease operations.
Meanwhile, about a dozen subway stops throughout the city were also closed.
The variant causing the Guangzhou outbreak (the “delta” strain which was first identified in India and has since spread across the US and Europe and Asia) is believed to be more infectious because those who carry it are slower to display symptoms while shedding more virus particles.
And although Guangzhou hasn’t reported any deaths from the outbreak, the city reported another four locally transmitted cases in the 24 hours to Monday morning, bringing its recent total to more than 100 cases since May 21.
Nationally, the CCP has been focused on rolling out COVID-19 vaccines to an increasingly younger group of patients. And on Monday, the country revealed that it has authorized the emergency use of one of the Chinese-developed jabs, CoronaVac, for children aged between 3 and 17 years. Coronavac vaccine is being manufactured by the Beijing-based pharmaceutical firm, Sinovac Biotech. Study data show the vaccine has been found to be 51% effective against symptomatic disease and 100% effective at preventing severe COVID-19 and hospitalization on adults 18 years and above.
Tyler Durden
Mon, 06/07/2021 – 23:20 - CIA (Dis)Information Operations Come Home To The US
CIA (Dis)Information Operations Come Home To The US
Reporters joke the easiest job in Washington is CIA spokesman. You need only listen carefully to questions and say “No comment’ before heading to Happy Hour. The joke, however, is on us. The reporters pretend to see only one side of the CIA, the passive hiding of information about itself. They meanwhile choose to profit from the other side of the equation, active information operations designed to influence events in America. It is 2021 and the CIA is running an op against the American people.
Leon Panetta, the Director CIA from 2009 to 2011 explained bluntly his CIA did influence foreign media outlets ahead of elections in order to “change attitudes within the country.” The method, Panetta said, was to “acquire media within a country or within a region that could very well be used for being able to deliver a specific message or work to influence those that may own elements of the media to be able to cooperate, work with you in delivering that message.”
The CIA has been running such information ops to influence foreign elections since the end of WWII. Richard Bissell, who ran the agency’s operations during the Cold War, wrote of “exercising control over a newspaper or broadcasting station, or of securing the desired outcome in an election.” A report on the CIA in Chile boasts the Agency portrayed its favored candidate in one election as a “wise, sincere and high-minded statesman” while painting his leftist opponent as a “calculating schemer.” At one point in the 1980s foreign media insertions ran 80 a day.
The goal is to control information as a tool of influence. Sometimes the control is very direct, simply paying a reporter to run a story, or, as was done in Iraq, simply operating the media outlet yourself (known as the Orwellian Indigenous Media Project.) The problem is such direct action is easily exposed, destroying credibility.
A more effective strategy is to become a source for legitimate media such that your (dis)information inherits their credibility. The most effective is an operation so complex one CIA plant is the initial information source while a second CIA plant acts seemingly independently as a confirming source. At that point you can push information to the mainstream media, who can then “independently” confirm it, sometimes unknowingly, through your secondary agents. You can basically write tomorrow’s headlines.
Other techniques include exclusive true information mixed with disinformation to establish credibility, using official sources like Embassy spokesmen to appear to inadvertently confirm sub details, and covert funding of research and side gigs to promote academics and experts who discredit counter-narratives. The academics may never know where their money comes from, adding to their credibility.
From the end of WWII to the Church Committee in 1976, this was all just a conspiracy theory. Of course the US would not use the CIA to influence elections, especially in fellow democracies. Except it did. By its nature reporting on intelligence always requires one to work with limited information. Always give time a chance to explain.
Through Operation Mockingbird the CIA ran over 400 American journalists as direct assets. Almost none have ever discussed their work publically. CIA documents show journalists were engaged to perform tasks for the CIA with the consent of the managements of America’s leading news organizations. The New York Times alone willingly provided cover for about ten CIA officers over decades and kept quiet about it. Such long term relationships are a powerful tool, so feeding a true big story to a young reporter to get him promoted is part of the game. Don’t forget the anonymous source who drove the Watergate story was an FBI official who through his actions made the careers of cub reporters Woodward and Bernstein. Bernstein went on to champion the Russiagate story. Woodward became a Washington hagiographer. Ken Dilanian, formerly with the Los Angeles Times, the Associated Press, and now working for NBC, maintains a “collaborative relationship” with the CIA.
That’s the tradecraft and the history. The problem for America is once again the tools of war abroad have come home. The intelligence community is currently operating against the American people using established media.
Some of it can’t be more obvious. The CIA always planted stories in foreign media for American outlets to pick up. The Agency works directly with Hollywood to control movies about itself. Turn on any of the advocacy media outlets and you see panels of former CIA officials. Journalist Matt Taibbi even created a list (and since ex-‘s need agency clearance to speak, all are of the officially approved class.) None is more egregious than John Brennan, former Director CIA, who for years touted Russiagate when he knew from information gathered while he was still in office it was all a lie. The uber-lie that Trump was dirty with Russia was leaked to the press most likely by Brennan in January 2017 as the kick off event to the info op still running today.
Brennan’s role is more than speculation. John Durham, the US attorney leading the ongoing “how it happened” Russiagate investigation into the intelligence community, has requested Brennan’s emails and call logs from CIA. Durham is also examining whether Brennan changed his story between his public comments (not under oath, say anything) and his May 2017 testimony to Congress (under oath, watch out for perjury) about the dossier. Reporter Aaron Mate is less delicate, laying out the evidence Brennan was “a central architect and promoter of the conspiracy theory from its inception.” Even blunter is Senator Rand Paul, who directly accuses Brennan of trying “to bring down a sitting president.”
Let’s see how that worked to understand how info ops intertwine with covert ops. Justice Department Inspector General Michael Horowitz’s report shows the FBI unleashed a full-spectrum spying campaign based on the root of the information op, the Dossier. Horowitz’s report shows it was a team effort among the 5 Eyes — Australian diplomat Alexander Downer, a man with ties to his nation’s intel services, arranged a meeting with Trump staffer George Papadopoulos to set in motion FBI FISA surveillance. Trump officials were also monitored by British GCHQ. The op used CIA assets, the shadowy academics Mark Halper and Joseph Mifsud, as dangles. We see a honey trap run in classic style, with a female FBI undercover agent inserted into social situations with a Trump staffer. Dossier author and ex-British intel officer Christopher Steele created a textbook officer’s information loop, secretly becoming his own corroborating source.
It was all based on nothing but disinformation and the American press swallowed every bit of it, turning the op into a three year tantrum falsely convincing a vast number of citizens their nation was run by a Russian asset. Robert Mueller, whose investigation was supposed to propel all this nothing into impeachment hearings, ended up exercising one of the last bits of political courage Americans will ever see in walking right to the edge of essentially a coup and refusing to step off into the abyss.
The CIA is a learning institution, and recovered well from Russiagate. Details can be investigated. That’s where the old story fell apart. The dossier wasn’t true. But the a-ha discovery was since you’ll never formally prosecute anyone, why bother with evidence. Just throw out accusations and let the media fill it all in for you. The new paradigm included let the nature of the source — the brave lads of the intelligence agencies — legitimize the accusations this time, not facts. Go overt and use the new, unexpected prestige of the CIA as progressive heros to substantiate things.
So in December 2017 CNN reported Donald Trump, Jr. had advance access to the WikiLeaks archive. Within an hour, NBC’s Ken Dilanian and CBS both claimed independent confirmation. It was a complete lie, based on fabricated documents. How do you confirm a lie? Ask another liar.
In February 2020, the Office of the Director of National Intelligence (ODNI) briefed the House Intelligence Committee the Russians were election meddling again to favor Trump. A few weeks earlier, the ODNI briefed Bernie Sanders the Russians were also meddling in the Democratic primaries in his favor. Both briefings were leaked, the former to the New York Times to smear Trump for replacing his DNI, the latter to the Washington Post ahead of the Nevada caucuses to damage Sanders.
In June 2020 The New York Times stated CIA officials concluded the Russians “secretly offered bounties to Taliban-linked militants for killing coalition forces in Afghanistan — including targeting American troops.” The story ran near another claiming Trump had spoken disrespectfully about fallen soldiers. Neither story was true. But they broke around the same time Trump announced his plan to withdraw troops from Afghanistan, aimed at discouraging pro-military voters.
Earlier this month The Washington Post, citing anonymous sources, claimed the FBI gave a defensive briefing to Rudy Giuliani in 2019, before he traveled to Ukraine. Giuliani supposedly ignored the warning. The story was “independently confirmed” by both NBC and The New York Times. It was totally false.
The American system always envisioned an adversarial role for the media. One of the earliest challenges to freedom of the press was the Colonial-era Peter Zenger case, which established the right of the press to criticize politicians free from libel charges. At times when things really mattered and even as other journalists hid under their beds, men like Edward R. Murrow worked their craft to preserve democracy. Same for Walter Cronkite finally reaching his opposition to the Vietnam War, and the New York Times reporters weighing imprisonment to publish the Pentagon Papers.
In each of those instances the handful of reporters who risked everything to tell the truth were held up as heroes. Seeing the Times fighting for its life, the Washington Post co-published the Pentagon Papers to force the government to make its case not just against a rival newspaper, but the 1A itself.
Not today. Journalism is today devoted to eliminating practitioners unwilling to play the game. Few have been targeted more than Glenn Greenwald (with Matt Taibbi as runner up.) Greenwald exploded into a journalistic superhero for his reporting on Edward Snowden’s NSA archive, founding The Intercept to serve as a platform for that work (Greenwald’s downfall parallels Julian Assange, who went from liberal hero for exposing the foundational lies of the Iraq War to zero when his Wikileaks was demonized for supposedly helping Donald Trump.)
Greenwald’s criticism of the media for accepting Deep State lies as truth, particularly concerning Russiagate, turned him into a villian for progressives. MSNBC banned him, and other media outlets ran stories critical of him. Then something very, very odd happened to make it appear The Intercept outed one of its own whistleblower sources. Evidence suggests the source was a patsy, set up by the intel community, and exposed via Matt Cole, one of The Intercept journalists on this story. Cole was also involved in the outing of source CIA officer John Kiriakou in connection with torture claims. Either way new whistleblowers will think twice before turning to The Intercept. Greenwald recently quit the site after it refused to publish his article on Hunter Biden’s ties to China unless he deleted portions critical of Joe Biden.
Greenwald seems to have figured out the intel community’s game, writing “the most significant Trump-era alliance is between corporate outlets and security state agencies, whose evidence-free claims they unquestioningly disseminate… Every journalist, even the most honest and careful, will get things wrong sometimes, and trustworthy journalists issue prompt corrections when they do. That behavior should be trust-building. But when media outlets continue to use the same reckless and deceitful tactics — such as claiming to have ‘independently confirmed‘ one another’s false stories when they have merely served as stenographers for the same anonymous security state agents while ‘confirming’ nothing — that strongly suggests a complete indifference to the truth and, even more so, a willingness to serve as disinformation agents.”
Democracy has no meaning if people simply vote uninformed, as they are propagandized. It will be sport for future historians to mark the thing that most pushed America into decline. Seeing decades of success abroad in using info ops, the CIA and others turned those weapons inward. So seeing her Deep State meddle in presidential politics, simultaneously destroying (albeit mostly with their cooperation) the adversarial media, while crushing faith in both our leaders and in the process of electing them, will certainly be a top qualifier.
Tyler Durden
Mon, 06/07/2021 – 23:00 - India's Hunger For Gold Extinguished By Covid Lockdowns
India’s Hunger For Gold Extinguished By Covid Lockdowns
As cryptos resume their ascent, more bad news has emerged for long-suffering gold bugs, this time out of India.
As the Nikkei reports, while India’s gold retailers had put all their hopes on the annual festival season last month, they have been disappointed by sluggish sales after most parts of the country were locked down to fight an explosion of COVID infections. They now pin their hopes on the next big peak period after India’s Monsoon season ends, hoping that the COVID crisis eases and that gold prices – which have rebounded from lows in March – remain favourable to encourage buying. Demand for gold from Indian buyers usually helps to underpin the gold price.
Just two months ago, India’s jewelers were optimistic about demand ahead of the May 14 Akshaya Tritiya, which is a holy day for Hindus, during which gold-buying spikes. In March, benchmark gold prices fell to a nine-month low of below $1,700 an ounce, which spurred hopes that Indians would take advantage of low prices during Akshaya Tritiya.
But then the COVID situation quickly deteriorated. “Things were looking positive earlier this year, but the rapid surge in COVID-19 cases and subsequent lockdown have changed everything,” said Vijay Soni, who runs a small jewelry store in New Delhi. India, the world’s second largest gold consumer after China, now also has the world’s second highest number of total infections [behind the U.S.] that crossed the grim mark of 400,000 per day several times in May.
Sunil Jain, who owns a jewelry store in New Delhi, says he has not done any business since the capital city was locked down on April 20.
“Until early April this year, the business was good as gold prices had come down to around 45,000 rupees ($619) per 10 gram and COVID cases were also not that high. We were hoping to do good business on the Akshaya Tritiya festival on May 14, but now it’s been over a month that we have not sold anything,” Jain told Nikkei Asia.
“It will take some time for the business to recover,” Jain said, pointing out that sales may pick up from November onward when the wedding season starts. “There’s always demand during the wedding season.”
Jain is not the only one suffering. Gold sales rose above 100 billion rupees ($1.36 billion) over the Akshaya Tritiya festival in 2019, but tumbled to just five billion rupees last year due to the pandemic and lockdowns.
Physical gold dealers in India have been offering discounts of up to $19 an ounce compared with the $5 premiums they were charging in March, according to World Gold Council.
“Having Akshaya Tritiya under [a] lockdown… for two continuous years, the gold and jewelry trade has suffered a big setback,” said Pankaj Arora, national secretary of the Confederation of All India Traders and national convener of All India Jewelers and Goldsmith Federation.
Demand in China also remains subdued after the Lunar New Year holidays, an auspicious time for many to purchase jewelry, in February.
Gold retailers in China have also been complaining that they missed the good opportunity to capture sales when prices were lower. “We haven’t seen the demand that we had been hoping for with the decline in gold prices,” said a salesperson at a Shanghai shopping mall branch of a popular jewelry retailer. Maybe it’s because everyone is buying cryptos?
As a result of the numerous recent setbacks, jewelers are now looking to the end of the year for recovery. Indians typically get married between November and May, but given the COVID situation in India now, many have postponed their weddings to later this year.
“In general also, people in India prefer to buy gold as a safe haven asset. So, once the lockdown is over, customers may gradually begin to buy again despite the fact that prices have now started going upward,” Jain said.
Gold prices have risen 13% to $1,900 an ounce by early June from the nine-month low in March. Gold market analyst Koichiro Kamei said falling real interest rates have triggered investors to buy gold again.
As there is speculation that the U.S. Federal Reserve is mulling rolling back its bond-purchasing program, gold is likely to face selling pressure as Treasury yields are expected to rise. Kamei sees gold prices falling to $1,800 if the Fed actually starts talking about tapering.
In the meantime, India’s jewelers are reaching out to their customers to weather this storm.
“We have a database of nearly 100,000 customers, and I asked my 50-member staff to call each one of them over [the] phone to just enquire about their well-being [amid rising COVID cases] and not to talk business at all with them,” said G. V. Sreedhar, a jeweler based in Bangalore, the capital city of the southern Karnataka state.
He added that during these calls, about 2-3% buyers voluntarily said they wanted to invest in gold. “It’s not a small figure. It means that there are over 2,000 customers who genuinely want to buy from us.”
However, he added, he can only make delivery after lockdown is lifted. “We are only sending them a receipt [electronically] for the items they have blocked to purchase, based on the gold rate of that particular day.
“I remain optimistic about the gold demand in India,” Sreedhar added.
Tyler Durden
Mon, 06/07/2021 – 22:40 - Ted Cruz: Facebook Could Be Held Liable For Actions And Correspondence With Dr. Fauci
Ted Cruz: Facebook Could Be Held Liable For Actions And Correspondence With Dr. Fauci
Authored by Masooma Haq via The Epoch Times,
Sen. Ted Cruz (R-Texas) said Facebook could be taken to court by those users that had their posts about the Wuhan lab (China’s Wuhan Institute of Virology) leak censored, since recently disclosed emails from Dr. Anthony Fauci show there was correspondence between him and Mark Zuckerberg, after which Facebook started censoring such information.
“But these latest breakthroughs have real consequence because it is now clear that Facebook was operating at the direction of and in the direct benefit of the federal government and operating as the government censor, utilizing their monopoly position to censor on behalf of the government,” Cruz told Maria Bartiromo the host of Fox News’s, Sunday Morning Futures.
Cruz made the comment in response to Bartimoro asking, “will these companies ever be held to account for this corporate dominance and misleading of information to the American people?”
“Well, they certainly should be. Unfortunately, I don’t expect the Biden administration will do anything to hold them to account,” Cruz said.
“Maria, that’s a very dangerous admission that is now out there for Facebook because it means anybody in the country, or anybody in the world, whose statements, whose speech was censored by Facebook—if you went out and posted the facts that led a year ago, to the very strong likelihood that the COVID virus escaped from a Chinese government lab in Wuhan, China—if you posted that a year ago and they took it down, I think there’s a very good argument you have a cause of action against Facebook.”
Recently revealed emails from Fauci show that he corresponded with Facebook CEO Mark Zuckerberg, after which Facebook changed its censorship policy about what information was true and what was “misinformation.”
Facebook founder and CEO Mark Zuckerberg testifies at a Senate Judiciary and Commerce Committees Joint Hearing in Washington, D.C., on April 10, 2018. (Samira Bouaou/The Epoch Times)
In February, the social media company stated in a blog post that it would take down posts that contained what it called false claims about COVID-19, including that COVID-19 is man-made and that experimental vaccines could be dangerous. Facebook said at the time that it would remove accounts, pages, and groups that share the claims repeatedly.
On May 26 Facebook announced that posts pushing the hypothesis that COVID-19 is man-made will no longer be banned on the platform. “In light of ongoing investigations into the origin of COVID-19 and in consultation with public health experts, we will no longer remove the claim that COVID-19 is man-made from our apps,” a Facebook statement said.
“Facebook would ordinarily say we’re a private company we’re not liable. Well, You know what, when they act at the behest of the government, when they contact Fauci, when they say, ‘should we censor this?’ and Fauci says yes, and they censor it for the federal government—and then magically when the government changes its mind and says, oh, all those facts that were there a year ago now you’re allowed to talk about it, [and] they stopped censoring it with a flip of a switch, that lays a very strong argument that Facebook is operating as a state agency, and that opens very significant legal liability,” Cruz said.
Meanwhile on Monday, Sen. Marsha Blackburn (R-Tenn.) called for an investigation into Fauci’s actions. “Well, what we do know is that definitely Dr. Fauci and Mark Zuckerberg were in cahoots on this, and it certainly deserves a look and an investigation from Congress,” said Blackburn.
Sen. Ron Johnson (R-Wisc.) recently told EpochTV’s “American Thought Leaders” program that the censorship that social media companies like Facebook and YouTube have engaged in needs to be addressed.
“Now the media and social media have an awful lot to account for,” Johnson said speaking of the censorship by YouTube that he experienced for talking about alternative treatments for COVID.
The calls to investigate the pandemic’s origins were magnified after the Wall Street Journal reported that three researchers at China’s Wuhan Institute of Virology exhibited symptoms severe enough to seek hospital treatment.
The disclosure led to President Joe Biden directing his national security adviser to develop a report on the virus’s origins, including the possibility that it emerged after a laboratory accident.
Fauci’s office and Facebook were contacted for comment about Senator Ted Cruz’s comments. The Epoch Times has not heard back from either office yet.
Tyler Durden
Mon, 06/07/2021 – 22:20 - White House Faces "Tough Sell" Pushing Corporate Tax Reform Through Congress After G-7 Deal
White House Faces “Tough Sell” Pushing Corporate Tax Reform Through Congress After G-7 Deal
Following news this afternoon that Amazon likely won’t be able to dodge a proposed new global minimum corporate tax being pushed by Janet Yellen and the Biden Administration. However, there’s a long road ahead for this plan, not just because to truly be effective it must be adopted by the entirety of the OECD, but also the Democrat-held US Congress.
Although the Dems control the legislative and executive branches of federal government power, the disagreement within their ranks has already resulted in one critical compromise: The negotiators have dropped the minimum rate for the international plan once already from 21% to 15%, and made other adjustments designed to make it more palatable to GOP lawmakers Id I
The G-7 committed to seek a global minimum corporate tax rate of “at least 15%.” That leaves a potential gap with the 21% rate that Biden has pitched to Congress for U.S. companies’ profits logged abroad. Any discrepancy could mean American firms effectively paying a surtax on profits in some nations.
“It’s very difficult, and maybe impossible, to call for 15% for an international standard and somehow convince lawmakers on Capitol Hill on 21%,” said Rohit Kumar, a principal at PwC’s Washington National Tax Services. “I would not want to be the person to convince Congress — that is a beyond heroic task.”
Biden’s tax plans also include a domestic corporate rate of 28%, up from 21% today. All three elements of the levies on businesses face strong opposition from Republican lawmakers, and even Democratic members have cautioned against any rush to legislate, pending a final global deal on a new corporate minimum rate.
Of course, as BBG reminds us, The G-7 pact is just a prelude to talks with the broader G-20, which Biden is hoping to make significant progress on by late this year. After all that, Yellen and Biden hope they can eventually push the deal through the OECD (several dozen members) and, finally, tailor a final agreement via the OECD that will be acceptable to some 139 nations, according to the FT (that’s larger than the OECD’s membership).
To successfully finance President Biden’s spending ambitions without further blowing out the federal budget deficit, Biden won’t only need to raise taxes on American corporations: he will need to block off their ability to flee the US. Back in Obama’s day, many of these deals were carried out via “inversions,” mergers that involved an American company and a foreign shell company.
Should the deal succeed, it will lead to billions of dollars’ worth of new tax revenue raised by more than 100 countries.
Top GOP leaders from the Congressional tax-writing committees are already mobilizing to scupper the deal, or at least greatly limit any new taxes for American firms, indicating it might be a “tough sell” in Congress, as BBG put it.
Senator Mike Crapo and Representative Kevin Brady, the top Republicans on the congressional tax-writing committees, are already mobilizing their members to oppose a deal, and framing it as an issue they could talk about during an upcoming campaign.
“We continue to caution against moving forward in a way that could adversely affect U.S. businesses, and ultimately harm American workers and jobs at a critical time in our country’s economic recovery,” the pair said in a statement.
Louisiana Representative Steve Scalise, the second-ranking House Republican, called the G-7 deal “part of a flawed $3.5 trillion tax hike that will crush American jobs and embolden China and Russia, who would cheat if they even agreed to go along with this radical proposal.”
Finally, as the FT reminds us, there is still a long way to go before the deal becomes the new international corporate tax framework.
“This is a starting point,” said French finance minister Bruno Le Maire, pledging that “in the coming months we will fight to ensure that this minimum corporate tax rate is as high as possible.”
Remember, the essence of this deal involves Washington letting foreign governments in on a revenue bonanza in the form of spreading some of big tech’s tax dollars around. In the end, governments like Singapore and Ireland must give up one of their major competitive advantages – their low minimum corporate tax rates.
Though it’s not clear whether any enticements will be enough to convince countries like Ireland to abandon one of the biggest policy boons to GDP.
Tyler Durden
Mon, 06/07/2021 – 22:00 - Liberals' Bizarre Fear Of An Unmasked Nation
Liberals’ Bizarre Fear Of An Unmasked Nation
During last year’s campaign, Joe Biden promised to “listen to the scientists.” He repeatedly said his coronavirus-response policy would be “informed by science and by experts.”
On issues from the environment to teaching evolution in public schools to the public health response to the COVID-19 pandemic, liberals often accuse conservatives of putting emotions ahead of facts. While recognizing that the scientific process of acquiring knowledge and putting hypotheses to an empirical test can and often does lead to shifts in consensus, we on the left claim to trust scientists such as Dr. Anthony Fauci, the infectious disease expert and unlikely media icon.
After Fauci and other authorities like the Centers for Disease Control and Prevention told us to wear masks, Blue America listened.
As of late June 2020, 86% of Democrats wore a face mask whenever they left home, compared with 48% of Republicans.
Now scientific consensus has changed. But lefties are choosing to ignore the new reality — not that it’s new. Beginning nearly a year ago , in July 2020, the CDC stated that wearing a mask outdoors was unnecessary unless one was less than six feet away from someone else. Aside from crowded events like rallies, sports and concerts, risk of outdoor transmission is lower than a rounding error.
Clarifying its long-held stance, the CDC said on May 13 that people need not wear a mask outdoors, unless they are in a crowd of strangers, or inside with their “pod” of friends and family members. Masking outside is “optional,” Paul Sax, clinical director of the Division of Infectious Diseases at Brigham and Women’s Hospital in Boston, told The Washington Post — optional as in unnecessary.
Let’s pivot toward hope. Nearly half of American adults have been fully vaccinated, and Pfizer is vaccinating children ages 12 to 15. We can go outside, have fun and socialize within the new liberalized guidelines, yet too many people remain traumatized and grimly coasting on paranoid inertia. “It’s the return of freedom,” said Dr. Mike Saag, an infectious disease expert at the University of Alabama at Birmingham.
Weeks after the latest CDC guidelines were issued, however, normalcy and freedom are still in short supply in liberal bastions like my neighborhood in Manhattan, where Biden won 91% of the vote. In compliance with the CDC, I walk outside without a mask because it’s unnecessary. Moreover, I’m fully vaccinated. Rules require that I put one on when I go into a store or ride the subway.
Furrowed brows, glares and general stink eyes still abound. My neighbors are ignoring the CDC as much as right-wingers in West Virginia did last summer.
One would expect attitudes to evolve with the passage of time, but that hasn’t been the case so far. When a fellow tenant confronted me recently about my masklessness in the lobby — where I’d been alone prior to her arrival — I informed her that I’d been fully vaccinated. “Everyone in the building has probably been vaccinated,” she said, “but here we still wear them.” I asked why. “It’s just the right thing to do,” she replied.
At a full-serve gas station in Manhattan, the attendant demanded that I put on my mask before giving me a fill-up.
“We’re outside,” I pointed out.
It was windy to boot.
“The CDC says you don’t need a mask.”
“I don’t care what the CDC says,” he told me. “I’m going to keep wearing a mask forever, like in Asia.”
Half-empty streets in majority-Democratic areas — where people are far more likely to get vaxxed — are still, CDC be damned, dotted with people wearing one or two masks on sidewalks where no one can be seen for hundreds of feet. Many of the bemasked will tell you that they have been fully vaccinated. You’ll see people jogging down lonely country roads, riding bikes and driving cars while wearing masks.
“You can understand that when people have been following a certain trend for a considerable period of time that it may take time for them to adjust” to the new mask rules, Fauci said on May 21.
“So I would not say that that’s irrational. I’d say that’s understandable.”
Go ahead, wear a mask indoors if you want to, despite being vaccinated. Wear one outside if you feel like it. However, you are — sorry, Dr. Fauci — acting irrationally. What’s the point of the jab if you behave the same way as a year ago when we wiped down our groceries, bleached our counters and wore plastic gloves out of since-debunked worries over surface transmission?
Masks have devolved from medical imperative to virtue signaling. According to a May 5 Ipsos poll, 63% of vaccinated Americans were still wearing masks outdoors, down from 74% in April but still a surprisingly high number. That number ticked up to 65% the following week. President Biden has begun appearing in public with his face fully exposed, yet his supporters are not following his example.
What’s the harm in a fashion accessory that, as the vaxxed-yet-masked crowd informs you, merely tries to make other people feel more comfortable while also sending a subtle anti-MAGA message? It’s about thinking straight. Democrats can’t credibly claim the scientific high ground unless they adapt to the latest medical consensus.
You have the right to be anxious and illogical, not the right to be catered to. No one should wear a mask outside. Vaxxed Americans shouldn’t wear them at all.
Tyler Durden
Mon, 06/07/2021 – 21:40 - Russia Hits Canada With Mirroring Sanctions: 9 Officials Barred From Country Indefinitely
Russia Hits Canada With Mirroring Sanctions: 9 Officials Barred From Country Indefinitely
Russia has hit back at Canada after March 24 sanctions which saw nine Russian officials banned from Canada over “gross and systematic violations of human rights in Russia” related to the Alexey Navalny saga.
At that time senior Russian officials had been accused over “the attempted murder” of Navalny last August, which saw the anti-Putin activist hospitalized in Berlin. Moscow had vowed it would prepare retaliatory sanctions in return, and that moment has come Monday, with the foreign ministry announcing a ban on precisely nine Canadian citizens from indefinitely entering its territory.
Canada has been among multiple countries, including the US and EU, to level sanctions on Moscow in relation to Navalny, who since his return from Germany to Moscow has been serving a couple year stint at a prison outside the Russian capital stemming from a prior embezzlement case.
Also on Monday Russian Deputy Foreign Minister Alexander Pankin had some interesting words testifying before Russia’s State Duma (lower house) on Monday.
“The sanctions regime has always been in place. And it will remain so forever, let us be realistic. Sanctions have been enshrined in many legal acts, in the US and other states, and it is impossible to roll them back,” the diplomat stated.
“All of them are illegitimate, they were slapped under very shaky pretexts, without any proof, but those facts, which are deemed as committed, cannot be rolled back,” Pankin added.
Pankin emphasized that he “would not ask anyone to lift sanctions and would not say sorry for what it is not doing” – which appears a response to the currently hyped accusations of everything from election interference to cyberattacks on US infrastructure to “aggression” in Eastern Ukraine.
On the latter point, the high-ranking diplomat said, “It’s clear that we won’t give up Crimea. If Crimea is part of Russia, we will always be under sanctions like there were sanctions against the Baltic Region until it separated and became three different states. This is a tough idea, but we need to be realistic.”
Tyler Durden
Mon, 06/07/2021 – 21:20 - Supreme Court Asked To Halt CDC Eviction Moratorium
Supreme Court Asked To Halt CDC Eviction Moratorium
Authored by Matthew Vadum via The Epoch Times,
Alabama and Georgia real estate agents have asked the Supreme Court to block a federal moratorium on evictions that was imposed last year by the Centers for Disease Control and Prevention (CDC) amid the pandemic.
Congress enacted a nationwide moratorium on evictions and extended its life through Jan. 31, 2021. The Atlanta-based CDC, which is part of the U.S. Department of Health and Human Services, then imposed its own moratorium at the behest of then-President Donald Trump, the current iteration of which is set to run out on June 30. The theory was that uprooting tenants would spread the virus, which now appears to be in decline. Violators could face criminal penalties and six-figure fines.
The real estate agents argue in their emergency application in Alabama Association of Realtors v. Department of Health and Human Services, filed on June 3, that the CDC’s moratorium “shifted the economic burdens of the pandemic from renters to landlords.”
“In doing so, the CDC shifted the pandemic’s financial burdens from the nation’s 30 to 40 million renters to its 10 to 11 million landlords—most of whom, like applicants, are individuals and small businesses—resulting in over $13 billion in unpaid rent per month. Since then, the CDC has twice extended its moratorium, which is currently set to expire on June 30, 2021 (unless extended, yet again),” the application states.
“The total effect of the CDC’s overreach may reach up to $200 billion if it remains in effect for a year. And due to the government’s sovereign immunity, its inability to provide timely rental assistance, and the judgment-proof nature of the tenants covered by the moratorium, that massive wealth transfer (and accompanying government-sanctioned unlawful occupation of property) will never be fully undone.”
A month ago, U.S. District Judge Dabney Friedrich vacated the moratorium, finding it exceeded the authority that Congress gave the CDC in federal public health laws.
The Public Health Service Act “authorizes the Department to combat the spread of disease through a range of measures, but these measures plainly do not encompass the nationwide eviction moratorium set forth in the CDC Order,” Friedrich, a Trump appointee, wrote in a memorandum opinion on May 5.
“Thus, the Department has exceeded the authority provided in § 361 of the Public Health Service Act, 42 U.S.C. § 264(a).”
The real estate agents referred to the Public Health Service Act as “a rarely-used statute from 1944 dealing with quarantines and inspections for purposes of stopping the spread of disease on an international or interstate basis.”
They say the CDC claims the statute “bestowed upon it the unqualified power to take any measure imaginable to stop the spread of communicable disease—whether eviction moratoria, worship limits, nationwide lockdowns, school closures, or vaccine mandates.”
Friedrich stayed her order pending the government’s appeal. The U.S. Court of Appeals for the District of Columbia Circuit left the stay in place.
“The stay order cannot stand,” the real estate agents argue in their application.
“Congress never gave the CDC the staggering amount of power it now claims. Nor do this Court’s precedents permit unlawful agency actions to persist throughout the pendency of an appeal merely because the government has raised serious questions on the merits—a standard that will be satisfied in nearly every case where the government’s authority has been challenged.”
Chief Justice John Roberts asked the government to respond to the application by 5 p.m. on June 10.
Acting Solicitor General Elizabeth Prelogar didn’t respond to a request for comment by press time.
Tyler Durden
Mon, 06/07/2021 – 21:00 - China Will Use "Coercive Power" To Force Digital Yuan On Population
China Will Use “Coercive Power” To Force Digital Yuan On Population
It was supposed to be the biggest threat to the reserve status of the dollar (China’s denial that it has no desire to replace the USD with the digital yuan only confirms it) since the failed experiment that is the “whatever it takes” euro, but instead it is turning out to be one giant yawn.
While many pundits have argued that China’s digital yuan would be a “potentially fatal challenge” to American hegemony according to historian Niall Ferguson, Templeton’s Hasenstab saying it could undermine the dollar’s role as a reserve currency and even Biden’s White House studying the potential threats to the US currency, one month ago we reported that those who’ve actually used the digital yuan in China offer a vastly different response: big shrugs of indifference.
After interviewing users of China’s digital currency, Bloomberg noted that they showed little interest in switching from mobile payment systems run by Ant Group and Tencent that have already replaced cash in much of the country, with some openly balking the digital yuan – which recall is programmable and comes with an ad hoc expiration date – and which gives authorities access to real-time data on their financial lives.
“I’m not at all excited,” said Patricia Chen, a 36-year-old who works in the telecom industry and was one of the more than 500,000 people in Shenzhen eligible to take part in the trial. The lukewarm responses of the seven participants in China’s great monetary experiment underscored the major challenge facing President Xi’s government as it lays the groundwork for adoption at home and abroad. And, as we noted last month, “even if authorities ultimately convince – or rather force – citizens to embrace the digital yuan, it’s unclear how they can do the same with international consumers and businesses already wary of China’s capital controls, Communist Party-dominated legal system and state surveillance apparatus.”
It’s also why with the Yuan’s share of global payments seemingly capped at around 3% in recent years – in no small part due to China’s closed capital account and great monetary firewall – a digital version of the currency is unlikely to boost its share by much more than 1 percentage point, according to Zennon Kapron, managing director of Singapore-based consulting firm Kapronasia.
“The global impact will be very small” barring structural changes to China’s economy and financial system, said Kapron, author of “Chomping at the Bitcoin: The Past, Present and Future of Bitcoin in China.”
Those familiar with China’s grand ambitions suspect that Xi has high hopes for international use of the digital yuan as he tries to lessen his country’s reliance on the U.S.-led global financial system. But so far at least, Chinese policy makers have given mixed signals about their ambitions in public.
As Bloomberg reports, Zhu Jun, head of the central bank’s international department said in an article last month that China faces an “important window” to promote global use of yuan as U.S.-China decoupling threatens to spread to finance from trade, technology and investment. She said China “should take advantage of the early progress” in the digital yuan’s development to explore potential areas for internationalization.
There is just one problem: nobody can figure out why they need to use a digital currency which allows authorities to snoop on their every activity, when existing alternatives offer everything the digital yuan can do.
And speaking of China’s “coercive” tactics to force its currency upon the population, over the weekend Bloomberg penned an op-ed about the digital Yuan that suggests it might be soft launched with the 2022 Winter Olympics; and that it may operate more like the Hong Kong Dollar than a Central Bank Digital Coin, in that the liability may sit on the commercial issuer’s balance sheet, fully backed by CNY reserves. This – as Rabobank’s Michael Every writes – obviously won’t make it very attractive to banks, businesses, or consumers happy with current e-payment systems. As the op-ed notes, one would then have to *compel* them to use it via “the state’s coercive power.” For example, paying civil servants in e-CNY; or, more importantly, demanding tax payment in e-CNY to force people to earn them, so creating a natural demand.
The full op-ed from Bloomberg’s Andy Mukherjee is below:
Digital Yuan May Prove Hong Kong Dollar’s Cousin
The stronger the interest in China’s coming digital currency, the less we seem to know about it. Sifting through comments by officials thought to be the brains behind the project, Capital Economics’ chief Asia economist Mark Williams has raised an interesting question: What if the e-CNY, as some are beginning to call the new electronic cash, is not at all a central bank digital currency?
Most of us are by now familiar with electronic money, but popular apps like PayPal or Alipay are linked to bank accounts. A true central bank digital currency will bypass lenders and make us directly the customers of monetary authorities. We’ll use the liability of a central bank to pay for coffee or a book.
The excitement with the digital yuan — or the FedCoin or BritCoin — is precisely because of this: Tokenized money is supposed to be an IOU of a central bank, just like physical cash. We may use an ATM to draw down our accounts, but as soon as we do, the bank owes us less. The state owes us more. Digital cash has been conceptualized the same way. When we transfer funds from a savings account into our digital wallets, the commercial bank goes out of the picture, and the central bank steps in. Tokens make credit risk disappear from settlements. Transactions can remain anonymous unless the monetary authority wants to lift the hood to check for money-laundering.
However, if Williams is right, then e-CNY, which is believed to be heading for a soft launch coinciding with the 2022 Beijing Winter Olympics, may not be a claim on the People’s Bank of China. Then, “It isn’t strictly a CBDC at all,” he says. It may, in fact, be a digital relative of the Hong Kong dollar.Since 1846, banknotes in the city have been the liability of commercial issuers. The three banks that supply everyday money maintain full reserves with the Hong Kong Monetary Authority. That’s why nobody sitting on a pile of Hong Kong dollars is anxious about the creditworthiness of HSBC Holdings Plc, Standard Chartered Plc or Bank of China (Hong Kong) Ltd.
Digital yuan may have a similar design, according to Williams’s reading of former PBOC Governor Zhou Xiaochuan’s statements. The e-CNY will be the liability of the bank or fintech sponsor of digital wallets. They will issue tokens, each worth 1 yuan, and they will maintain reserve assets in their accounts with the central bank in the ratio of 1:1.
Customers sleep easy, though there’s a cost for intermediaries. Suppose a saver has 100 yuan in a Chinese bank. The major institution that holds her money has to keep 12.5% in required reserves with the PBOC. The rest is free for the lender to seek the best possible return. If the user moves funds to her e-CNY wallet, the bank would have to keep the full 100 yuan with the PBOC. In a pure digital currency model, the bank would have lost the entire deposit, something that no central bank running a digital cash pilot or experiment wants. However, if to retain a deposit, the lender has to put up cash for the entire amount, it may still be forced to curb advances. What bank would embrace a product like that?
That’s one reason why Williams seems to think that the digital yuan will be a hard sell. Consumers in China are already getting all the flexibility they want with Alipay or WeChat Pay, which are entrenched and offer highly innovative uses. Similarly, banks will be loath to lock 100% of even a part of their deposits in idle reserves. The duopoly of Alipay and WeChat Pay, which processes 94% of China’s third-party mobile-phone payments, will be reluctant to give up their rich harvest of consumer data.
So how to make the digital yuan work?
A neat solution — as with every form of money, according to the Chartalist theory — is to use the state’s coercive power. All that authorities need to do is to pay civil servants and demand tax payments only in official digital currency. Payment platforms will then have no option except to offer an e-CNY alternative. In a few years, offering customers such a choice might even become mandatory.
As Williams says, “Left to the market, e-CNY is unlikely to succeed. But the government doesn’t have to leave it to the market.”
China’s long-standing ambition to challenge the dollar’s hegemony in global commerce hasn’t gone anywhere. A digital yuan that’s a popular means of payment overseas, especially in the Belt-and-Road network, would reinforce that goal. But before that, Beijing has to ensure widespread domestic use. So policy makers’ more immediate motivation may be to curb the sway of local tech titans, with minimum damage to banks’ deposit base.
The final architecture of the new currency is still unknown, but conceiving e-CNY as a cousin of the Hong Kong dollar — a synthetic central bank digital currency issued by banks and payment firms — and flexing the muscles of state power might tick most of the boxes.
Tyler Durden
Mon, 06/07/2021 – 20:40 - The Mysterious $85 Billion Surge In China's FX Reverse Repo
The Mysterious $85 Billion Surge In China’s FX Reverse Repo
By Ye Xie, Bloomberg reporter and Markets Live commentator
A mysterious surge in dollar lending by Chinese banks in an arcane corner of the financial market is leading some investors to wonder whether it’s somehow related to the “stealth intervention” by the PBOC to slow yuan appreciation.
For years, Chinese banks had little use for foreign-currency reverse repo, which is effectively collateralized lending. That has dramatically changed since the pandemic. Banks’ FX reverse repos surged to a record $87 billion in April, from less than $2 billion a year earlier.
“Historically, Chinese banks FX assets and liabilities have consisted almost exclusively of loans and deposits,” Alex Etra, a senior strategist at Exante Data who previously worked at the New York Fed, wrote in a blog post. “But the surge in interbank lending (via reverse repo) in recent quarters is quite stark.”
It’s unclear why there’s this sudden surge. But what we do know is that:
- There’s a lot of dollar inflows to China through trade and portfolio investment over the past year.
- A lot of these flows have been absorbed by Chinese banks, while the PBOC shows few signs of intervention on its balance sheet. Without commercial banks’ activities, the yuan would have appreciated more.
- As a result, commercial banks have taken more currency risks. For example, Bank of China, one of the largest state lenders, used to be a net borrower in the FX swap market, but has become a net lender, according to Etra. The bank’s net open foreign-currency position on and off-balance sheet rose to $19 billion last year, the highest level since 2014.
It’s debatable whether Chinese banks are accumulating dollar assets and taking on more currency risks for commercial reasons, or if they are acting on behalf of the central bank to engage in “stealth intervention.”
But as Etra noted, so long as China runs a current account surplus, and global investors continue to purchase more Chinese assets, “someone somewhere in China is going to have plenty of dollars to lend.”
Janet Yellen’s Treasury Department has been keen to learn more about activities by Chinese state banks in the currency market. The curious surge in dollar lending in the derivative market could be a good starting point.
Tyler Durden
Mon, 06/07/2021 – 20:20 - Blinken Says Biden Will Put "Future Cyberattacks" Front & Center In Putin Summit
Blinken Says Biden Will Put “Future Cyberattacks” Front & Center In Putin Summit
Secretary of State Antony Blinken in an appearance on “Axios on HBO” previewed what he expects to come out of the Putin-Biden summit set for June 16 in Geneva. The short answer is: not much except for vague warnings and threats, it appears. Blinken said during the interview that the US president intends to warn Putin “directly and clearly what he can expect from the United States if aggressive, reckless actions toward us continue.”
While explaining that Washington would prefer a “more stable” relationship with Russia, Blinken also sought to distance the White House from growing criticism that Biden is getting ‘weak’ on promises to “stand up” to Putin, particularly after recently dropping sanctions on the German company overseeing completion of the Russia-to-Germany Nord Stream 2 pipeline.
Blinken tried to assure Axios’ Mike Allen that Biden is meeting with Putin face to face to deliver a tough message:
Biden is meeting with Vladimir Putin nine days from now “not in spite of” the cyberattacks that disrupted U.S. meat and gas supplies: “It’s because of them.”
He further repeated the prior common assessment of US officials which don’t see any “breakthrough” coming from the meeting.
“I can’t tell you whether I’m optimistic or not about the results,” Blinken said. “I don’t think we’re going to know after one meeting, but we’ll have some indications… We’re prepared either way.”
His comments on US leadership in the world and China seeking opportunity to take over where Washington influence is absent or waning were also interesting…
“We’ve certainly seen China … try to fill voids where we’ve been relatively disengaged.” And he added the caveat – “and maybe not in a way that advances our interests or values.”
“Our partners see the same thing that we do,” he explained. “If you’re looking at all of the really big problems that we’re trying to solve — … like the pandemic, like climate change, like emerging technologies … — no one country can do it alone.”
Tyler Durden
Mon, 06/07/2021 – 20:00 - The Currency Story Has Undergone A Silent, Subtle Curve Shift
The Currency Story Has Undergone A Silent, Subtle Curve Shift
By Ven Ram, Bloomberg reporter and macro commentator
Front-end yields held hostage by central banks around the world have engendered a silent shift in currency pricing: exchange movements are being increasingly influenced by changes in the intermediate and longer segments of the yield curve.
Currencies that were typically more responsive to relative changes in yields at, say, the two-year part of the curve are now responding more and more to shifts at the five- and 10-year segments, with the dollar being a case in point.
The chart above shows how closely the Dollar Index has tracked five-year real yield spreads between the U.S. and Germany (hat tip to J. Paul Knight, assistant portfolio manager of U.S. large-cap equity at the Employees Retirement System of Texas for his observation). Indeed, the correlation between the spreads and the dollar in the past year is running at 0.57, reflecting its influence on the currency. Taken together with 10-year differentials , the two points of the curve delineate the trajectory of the dollar by more than four-fifths.
To be sure, it wasn’t always like this. Take a look at this chart above that encompasses a longer time frame, which shows the Dollar Index ignoring the movement in spreads. That was a time clearly before the pandemic when the U.S. economy was still in the midst of its longest post-war expansion, with central banks not anywhere near controlling the yield curve, de facto or de jure.
Tyler Durden
Mon, 06/07/2021 – 19:40 - MTA Inspector General "Furious" After Probe Finds Seven Track Inspectors "Skipped" And "Falsified" Inspection Reports
MTA Inspector General “Furious” After Probe Finds Seven Track Inspectors “Skipped” And “Falsified” Inspection Reports
It looks like much to the surprise of no one, there’s considerable waste and malfeasance taking place at the perpetually-taxpayer-bailed-out MTA.
A new MTA inspector general’s report has revealed that MTA track engineers – to quote Rep. Al Green talking about Citadel earlier this year – “have been naughty for some time”.
The inspector general is reportedly “furious” after the findings of an 11 month investigation found that seven NYC Transit track inspectors were skipping inspections and falsifying inspection reports. The employees in question have been suspended, according to an RT&S report.
But rather than fire all seven employees – in true taxpayer funded fashion – only one was fired while “six of the track inspectors received a final warning that similar conduct could result in termination and are prohibited from performing track inspections for five years,” the report says.
The MTA Inspector General (OIG) also, as part of the probe, performed an audit to determine how such deception could occur without management’s knowledge. The answer? There could be “significant, systemic issues with how supervisors and managers at NYC Transit oversee the work of track inspectors”.
MTA Inspector General Carolyn Pokorny said: “It is appalling that so many track inspectors, on so many occasions, skipped safety inspections, filed false reports to cover their tracks, and then lied to OIG investigators about it. Management needs to utilize a technology that will ensure supervisors can verify when inspectors do their job – and when they do not.”
You can read the full MTA/OIG report here. Its findings were summarized as follows:
- Supervisors did not verify track inspectors’ walks, either in real time or after the fact. Track supervisors until recently were expected to rely on a series of self-reported status updates from the inspectors to confirm that inspections were occurring daily. Supervisors were not expected to directly observe inspectors in the field and thus did not know that some inspectors were not actually performing their inspections as assigned.
- Interim controls that Track put in place after the OIG investigation report was issued create records that could be analyzed retroactively with much effort but do not provide assurance in real time.
- The new IT application (Infor EAM) rolled out in the first quarter of 2021 for track inspections does not take full advantage of the technology’s capability to quickly place the inspector at a given location at the appropriate time. One limitation is that the application cannot make use of the GPS feature on cellphones to track employees directly due to a pre-existing agreement between management and the union not to do so except for certain circumstances.
- Track’s policies, oversight, and monitoring of workers’ cellphone usage are inadequate.
The inquiry was opened back in January 2020 after reports of track debris large enough to cause damage and injury were reported. The failure to spot the debris had the OIG “concerned that inspectors might not be walking their assigned sections”. A follow up investigation “repeatedly found inspectors, who work with limited oversight, absent from their duties.”
In addition to simply not doing their jobs, track inspectors were also found to be using their personal cell phones when they were supposed to be inspecting, creating a “safety hazard for themselves, other employees, and customers; and further illustrating their lack of attention to their duties”.
And it starts with the tone at the top: track supervisors did not verify track inspectors’ walks, either, the report also revealed.
Looks like it’s time for another fare hike!
Tyler Durden
Mon, 06/07/2021 – 19:20 - Malaysian Police Use Heat Drones To Check People's Temperatures From Above
Malaysian Police Use Heat Drones To Check People’s Temperatures From Above
Authored by Paul Joseph Watson via Summit News,
Malaysian police are using drones which can check temperatures from as high as 20 meters above ground in the latest example of coronavirus population control.
The drones alert authorities if someone has a high temperature reading by emitting a red light, according to Bernama, Malaysia’s state news agency.
“Malaysian police have previously warned they will use drones to enforce earlier travel restrictions, with officers in some areas also stating they would carry out surprise home visits to ensure people were following rules,” reports the Guardian.
There have been numerous previous examples of authorities deploying surveillance drone technology to enforce COVID-19 rules.
Authorities in Spain have used surveillance drones to make sure people who visit beaches are complying with social distancing regulations.
In Brussels, Belgium, police used drones fitted with loudspeakers to bark orders to people to “stay at home.”
Police drones are being used in Brussels to warn the public that lockdown is in force, and that social distancing regulations must be adhered to.
For the latest updates on #coronavirus, click here: https://t.co/nINriV0Bo4 pic.twitter.com/M3JNMNJhCH
— Sky News (@SkyNews) March 23, 2020
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In Australia, more expensive drones were used to catch people not wearing masks while also scanning for vehicles that were parked more than 5km from their owner’s home.
Police are preparing to launch their aerial arsenal as part of a crackdown on COVID rule breakers. High powered drones will be used to find people not wearing masks, and cars too far from home. https://t.co/5zYfOfohG3 @tdolling #7NEWS pic.twitter.com/Yy84UBTH0V
— 7NEWS Melbourne (@7NewsMelbourne) August 17, 2020
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In the UK, authorities were blasted for using surveillance drones to keep tabs on dog walkers in remote areas to check if they were hiking too far from home.
Despite posts yesterday highlighting issues of people still visiting the #PeakDistrict despite government guidance, the message is still not getting through. @DerPolDroneUnit have been out at beauty spots across the county, and this footage was captured at #CurbarEdge last night. pic.twitter.com/soxWvMl0ls
— Derbyshire Police (@DerbysPolice) March 26, 2020
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Tyler Durden
Mon, 06/07/2021 – 19:00 - Senior Japanese Olympic Official Jumps In Front Of Train In Suspected Suicide
Senior Japanese Olympic Official Jumps In Front Of Train In Suspected Suicide
Tokyo Police are investigating an apparent suicide on Monday morning (local time) of a senior official at the Japanese Olympic Committee (JOC) who jumped in front of a subway train.
Nippon TV’s News24 channel reports Yasushi Moriya, who led JOC’s accounting department, apparently ended his own life in the Tokyo Metro system. Police have yet to release details surrounding the death of the official.
Latest update of Yasushi Moriya’s death from our correspondent Phoebe Amoroso. Yasushi is a senior official of the Japanese Olympic Committee (JOC). #Tokyo2020 https://t.co/DjYGUpZf3C pic.twitter.com/GMQrHJagzi
— CGTN Global Watch (@GlobalWatchCGTN) June 7, 2021
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The Tokyo 2020 Olympic Games, which were canceled last summer due to the virus pandemic, are expected to begin on July 23 and end on August 8.
A staff member of #Japan‘s #Olympic Committee died on Monday in a suicide in #Tokyo’s subway, local broadcaster Nippon Television said. Yasushi Moriya, 52, who worked as an accounting manager with the committee, jumped in front of a train from a subway platform in the morning. pic.twitter.com/f60cMcibt6
— China Daily World (@ChinaDailyWorld) June 7, 2021
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Despite recent objections from government scientists and prominent business people, Japan is moving forward with the postponed 2020 Summer Games in Tokyo next month. In an interview with the Japanese press, the president of the 2020 Games, Seiko Hashimoto, declared that the event would move ahead as planned, with the Japanese government taking certain precautions to prevent an outbreak of mutant COVID.
“We cannot postpone again,” Hashimoto told the Nikkan Sports newspaper via Reuters. This is happening as a recent rise in Japan’s coronavirus numbers.
Even if the Games are held, the entire event will be a financial disaster for the country who went well over budget to stage it. This is because foreign fans have been barred from entering all sporting events, and those who are eligible to enter will need a negative COVID-19 test or vaccination history. Once inside, spectators might be forbidden from eating, drinking, and cheering.
A recent study by Britain’s Oxford University said the Tokyo Olympics are the most expensive summer games ever. With no foreign fans allowed, the alleged suicide of the JOC’s accounting department head makes you wonder just how bad of investment the Games will turn out to be.
Tyler Durden
Mon, 06/07/2021 – 18:40 - Imagine Being A Central Banker In June 2021
Imagine Being A Central Banker In June 2021
By Larry McDonald, author of the Bear Traps Report
Imagine sitting in the seat of a central banker in June of 2021. You are looking down the barrel of millions of AMC nutjobs making up 9% of all U.S. equity market option volume on Friday and 8.2 million jobless Americans.
Since Jackson Hole (August 2020) you have been lecturing most of the planet ́s inhabitants that ridding the world of inequality is closest to your heart. Above all your message has been, “we did it all wrong in previous hiking cycles in pulling back accommodation too soon, this time we are going to let it run hot and lift all Americans up into the heavens.”
After the loud song and dance messaging, we have a moral hazard overdose and a job market that won’t normalize at the current pace until October 2022 (837k jobs created the last TWO months vs. 8.2-million-person shortfall in the labor force vs. January 2020 levels).
U.S. central bankers have two choices:
- a) stay dovish and sow the seeds of a Lehman, LTCM event, while manufacturing more Bernie Madoffs and Al Dunlaps monthly or
- b) arrest accommodation and throw your social justice mantra out the window.
You want that job? NO thanks.
Over the last week it looks a lot like last month. Payrolls miss, bonds are bid with a HOT CPI waiting in the wings this coming Thursday. Clients we respect in the Bloomberg chat are talking up the U.S. Rates (lower) vs. Brent Oil (higher) divergence. This speaks to the power of the global re-opening catchup, fleeting American exceptionalism.
We continue to be oil bulls with India and Europe coming on strong with surprise demand upside. Since May 12, the copper – gold ratio has reversed favoring the precious metal. This is important to monitor, right on the 14-month trend line.
What is hyperinflation? From 1993 to 2020, the Fed ́s favorite inflation measure (PCE YoY) has ranged from 0.97% to 2.46%, with no exceptions.
After walking through this long valley, asset prices have been highly conditioned for “beyond tame” data. By this definition, anything near 3.00% is hyper. Today, PCE YoY is at 3.06% with $5T of U.S. GDP (California CA –NY New York), locked down for most of Q1 and Q2.
We see a meaningful inflation shock in the weeks/months ahead. Rents are rising fast across the U.S., and heretofore they have held back CPI and PCE inflation data. A mean-reversion is in the works and will drive inflation expectations higher – gold bullish.
We make the case; 1) wage pressures are vastly underestimated, 2) labor as a political power base is surging, and 3) a colossal secular shift is upon us.
The G7 “Global Minimum Tax” agreement still has some wood left to chop, BUT do NOT underestimate the importance of this trend. There are bills to pay and FAANGMT have a target on their back.
In the growth vs. value tug of war, the former has seen six months of failed rallies with lower highs. We will use pullbacks in commodity sector longs to add to positions and sell tech rallies.
Tyler Durden
Mon, 06/07/2021 – 18:20
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