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[World] Congress flies blind on Big Tech antitrust action

Last week, a hearing for the history books was held on Capitol Hill. The CEOs of tech giants Amazon, Apple, Facebook and Google all appeared before the House Judiciary Committee Subcommittee on Antitrust, Commercial, and Administrative Law via videoconference — the first time the four testified before Congress at the ... Published:8/6/2020 4:09:44 PM

[Markets] Millions Worth of PPP Loans Went to Chinese-Owned Companies, Report Finds Millions Worth of PPP Loans Went to Chinese-Owned Companies, Report Finds Tyler Durden Wed, 08/05/2020 - 20:55

Authored by Cathy He via The Epoch Times


A man looks at a J-31 gyrfalcon stealth fighter plane model designed by Aviation Industry Corporation of China (AVIC) at the Beijing International Aviation Expo in Beijing on Sept. 17, 2015. (WANG ZHAO/AFP via Getty Images)

Hundreds of millions of U.S. taxpayer dollars went to Chinese companies from the Paycheck Protection Program (PPP), which was designed to help small businesses survive during the pandemic, according to a new report.

A review of public PPP loan data by consultancy firm Horizon Advisory found that $192 million to $419 million in loans were given to more than 125 Chinese-owned or -invested companies operating in the United States. Many of the loans were substantial, with at least 32 Chinese-owned firms receiving more than $1 million under the program, totaling between $85 million and $180 million, it found.

The recipients included Chinese state-owned enterprises, companies that supported Beijing’s military development program, firms identified by the United States as national security threats, and media outlets controlled by the Chinese Communist Party (CCP), the report said. Many were based in critical industries such as aerospace, pharmaceuticals, and semiconductor manufacturing. These are sectors that the CCP has slated for aggressive development to achieve global dominance, with the goal of supplanting competitors in the United States and other countries.

The report concluded that “without appropriate policy guardrails and monitoring of U.S. tax dollars intended for relief, recovery, and growth of the U.S. economy, there is a significant risk that funds will support foreign strategic rivals, namely China.”

Many of these Chinese-linked firms could have tapped into other sources of capital from public or private markets to support their American operations, the report said.

Their PPP participation saved U.S.-based jobs, but likely at the expense of other U.S. small businesses.

Horizon Advisory’s findings come amid rising scrutiny of Chinese companies, particularly tech firms, in the United States. President Donald Trump said on Aug. 3 that he would ban Chinese-owned short video app TikTok on Sept. 15 if it’s not sold to Microsoft or another American company. His administration is also considering barring other Chinese social media apps, citing national security risks. U.S. officials have raised the alarm that these apps could be used to spy on Americans, given that Chinese laws compel all companies to cooperate with security agencies when asked.

Meanwhile, the Trump administration is also reviewing whether Chinese companies listed on American exchanges should be compelled to abide by U.S. audit laws. The Chinese regime denies U.S. regulators access to audit books of Chinese firms, citing the information as state secrets.

About $517 billion of PPP loans have been issued since March, when the measure was introduced to help businesses with 500 or fewer workers pay their staff and bills during the economic downturn as a result of the COVID-19 pandemic. The program drew criticism after reports that large companies that could have had access to other forms of credit received loans, prompting the Treasury Department to warn that bigger companies could face penalties if they couldn’t show the loan was essential.

The report said that loans went to affiliates of three Chinese companies that featured on a Pentagon list of 20 firms that are owned or controlled by the Chinese military. It found that six recipients were affiliated with state-owned companies that supply arms to China’s People’s Liberation Army, including Aviation Industry Corp. of China, China Aerospace Science and Industry, and China North Industries Group Corporation (Norinco Group).

Chinese-linked biotech companies were also identified, including California-based Dendreon Pharmaceuticals, which received between $5 million to $10 million in PPP loans. Dendreon is owned by Nanjing Xinbai, a Chinese state-invested company that is controlled by a tech conglomerate with close ties to the CCP.

California-based robotics and AI company CloudMinds Technology Inc. received between $1 million to $2 million in loans. It is a subsidiary of Beijing-based CloudMinds, which was added to the commerce department’s trade blacklist over their ties to the Chinese military back in May.

Loans also went to a U.S. subsidiary of Hong Kong-based Phoenix TV, a pro-Beijing media outlet. While the company is private, a 2019 report by the Hoover Institution at Stanford University said Phoenix TV is “fully controlled by [the] Chinese government.”

Congress and the Trump administration are currently negotiating a second stimulus package that is likely to include more funding for PPP. A Senate Republican recently proposed that the stimulus bill disqualify entities affiliated with China from the loan program, though it remains to be seen if this will be included in the final package.

The Treasury Department did not respond to a request for comment.

Follow Cathy on Twitter: @CathyHe_ET
Published:8/5/2020 8:00:41 PM
[Markets] Stunning Satellite Images Of Beirut Blast Epicenter Stunning Satellite Images Of Beirut Blast Epicenter Tyler Durden Wed, 08/05/2020 - 16:40

Close-up satellite 'before and after' photos have been produced by Planet Labs Inc., and republished by CNN, of Tuesday afternoon's enormous explosion centered on the Beirut port.

The images confirm every building at the vital port, through which the majority of commerce and staples, including the nation's grain supply comes, has been utterly destroyed

BEFORE, via Planet Labs/CNN
AFTER, via Planet Labs/CNN

A huge crater can be seen at the center of the leveled port.

Another angle  before and after:

The shockwave from the blast, which Lebanese officials now estimate left between three and five billion dollars worth of damage, resulted in damage to homes up to miles away from the blast site. 

Hundreds of thousands are reported to be essentially homeless, given entire walls were ripped off residential buildings up to a mile away, with windows shattered multiple miles away.

Close-up view from the port toward the downtown Beirut area: 

Top Beirut city government official Marwan Abboud told AFP: "It resembles what happened in Japan, in Hiroshima and Nagasaki," referencing the atomic bombs dropped during WWII.

"In my life, I haven't seen destruction on this scale," he said.

There are a number of shocking clips now circulating showing live feeds in progress the moment the blast tore through the city.

Watch as one woman's wedding shoot was disrupted by the blast:

Thankfully, the couple was unharmed after fleeing for cover along with the cameraman. They were later able to continue the wedding, though badly shaken by the ordeal.

In another terrifying instance, a BBC interview was in progress, when the interviewee appeared to be thrown from her chair:

And watch as a Maronite Catholic priest was serving mass the minute the blast went off.

The worship event was being live-streamed, and was reported as being offered for the healing of coronavirus patients:

Chunks of the church's roof are seen falling as the priest dashes from the altar and tries to dive for cover. 

Lebanese rescue services are reportedly still digging through rubble, looking for survivors or in some cases the deceased. 

The official death toll has risen to at least 135, with over 5,000 injured, but the number is expected to climb as more of the rubble is removed. Families are still searching for loved ones reported missing in the wake of the tragedy.

Published:8/5/2020 4:00:44 PM
[5c673284-f97e-5a3a-9de8-071229f4f31e] Chelsea Handler poses nude, covers breasts with ping pong paddles: ‘Do you guys like to have fun?’ Chelsea Handler posed nude on top of an outdoor ping pong table in order to promote different books. Published:8/5/2020 2:28:00 PM
[Entertainment] Washington Post hardcover bestsellers A snapshot of popular books. Published:8/5/2020 1:58:07 PM
[Markets] TikTok And America's Last-Ditch Desperation For Social Mobility TikTok And America's Last-Ditch Desperation For Social Mobility Tyler Durden Wed, 08/05/2020 - 12:50

Authored by Charles Hugh Smith via OfTwoMinds blog,

Social media offers hope of achieving higher social status, something that is increasingly out of reach in our winner-take-most economy.

I've often addressed the decline of social mobility and the addictive nature of social media, for example, Why Is Social Media So Toxic?

I have long held that the decline of social mobility--broad-based opportunities to get ahead financially and socially--is part of a larger dynamic I call social depression: the social decay resulting from economic stagnation and the decline of social mobility and financial security. America's Social Depression Is Accelerating.

Japan offers a real-world 30-year lab experiment in the negative social consequences of economic stagnation, a topic I've addressed since 2010: The Non-Financial Cost of Stagnation: "Social Recession" and Japan's "Lost Generations"

The conventional explanation of social media's addictive hold is that it activates the human brain's reward circuits much like an addictive drug: in effect, we become addicted to being "liked" and to checking our phones hundreds of times a day to see if we received any "likes".

FOMO, fear of missing out on some emotion-stimulating "news" or a "like" from someone in our network also feeds the addictiveness.

The innate addictive appeal of social media is pretty clear, but that's not all that's at work here. Being social animals, humans naturally seek to identify their status in the pecking order and improve their position by whatever means are available as a way of increasing their reproductive success and their relative share of resources.

Traditional societies were bifurcated into a small elite and a much larger mass of commoners. As a general rule, social mobility was limited to those extraordinary commoners who were especially valuable to the ruling elite as soldiers, scribes, etc.

From its inception in the early 1800s, the American Dream was to acquire the "good life" via mass produced luxury goods via conventional employment or entrepreneurial drive--two avenues available to the masses. This access to the social mobility of higher earnings enabling the purchase of status symbols that boosted one's social status has been the mainstay of the modern consumer economy.

The downside of mass-produced luxury items (status symbols) is that in a credit-based economy, just about everyone can afford to own them. Thus just about anyone can qualify for a mobile phone plan that offers a status-symbol iPhone as part of the multi-year contract.

As a result, the upper classes have been forced to greater extremes in cost and scarcity to differentiate themselves from the masses. For example, now that exotic travel is a affordable to anyone with credit, travel has little status value, unless it's extremely costly or difficult to duplicate.

The same is true of the arts and other cultural status markers, along with the traditional markers such as yachts and second (or third) homes.

As the underlying economy has stagnated, access to higher social states via earned income has decayed, and so commoners have been forced to find some other non-financial means to improve their social status.

Social media fits the bill perfectly: it's essentially free (since everyone has to pay for Internet service anyway) and the only "investment" is in time: time snapping and posting photos on Instagram and Facebook, time posting comments and links designed to attract tribal "likes" and so on.

A commoner with essentially zero social status economically can with enough effort become a "big shot" in some social media platform.

The bar is low enough to attract millions of players: a few dozen "likes" is still a potent reward to most people, as are having a couple hundred followers / readers.

Social media superstars with millions of followers on YouTube have cult-like groupies and all the other social status rewards of recognition and fame.

Social media offers hope of achieving higher online social status without having to succeed financially in a winner-take-most economy or having any of the conventional attributes of becoming famous: physical beauty, extraordinary talent, etc. These attributes are of course helpful in attracting a social media following, but they are not essential.

As a result, everyone wonders "how did so-and-so get hundreds of thousands of followers?" The answer varies, of course: a viral video, a high level of marketing moxie, an engaging style, charismatic presence on camera, a knack for something others admire, etc.

If we understand social media as a new and accessible-to-everyone way to improve our social status, its tremendous grip becomes less of a mystery.

As Jesse explains in our Salon #15 podcast, Toxic Tech Platforms and Disposable Social Media Stars, TikTok's explosive popularity is the direct result of its ease of access and promise of social mobility. TikTok's model bypasses the laborious process of gaining social status via collecting masses of followers/friends and offers an instantly accessible version of semi-celebrity via the number of people viewing one's videos-- a semi-celebrity that can be monetized once the numbers get big enough.

Achieving social status through social media is the last-ditch desperation of a society that has lost all other meaningful social mobility ladders. Conventional wages have stagnated for decades and unconventional wages (gig economy, etc.) are generally low and insecure. Credential pathways that once led to secure, high paying, high-status jobs have crumbled; legions of PhDs who were told their years of sacrifice and effort would lead to tenure-track faculty positions or secure positions in government or industry are academic ronin, wandering from temporary position to temporary position, in effect highly credentialed gig-economy workers.

The rungs of the ladder of entrepreneurial drive have decayed as the costs and risks of starting a business have soared, crowding the get-rich-quick hopefuls into the insanely over-crowded casinos of venture-capital funded tech start-ups, all of whom hope to reach the pinnacle of going public and skimming instant wealth--the tech version of a kid dreaming of becoming an NBA star.

A winner-take-most economy is the only possible output of our corrupt financial/political system which has systematically stripmined all sources of social mobility, leaving the masses with little hope of escaping debt-serfdom / just getting by. In this bleak landscape in which the masses constantly lose ground, TikTok and other social media platforms offer a rare beacon of hope to those who have little chance of winning recognition or riches in our winner-take-most economy.

TikTok and other social media reflect the last-ditch desperation of a society stripped of economically meaningful social mobility and positive social roles. Unfortunately the social media platforms are toxic to both their enthralled users and society at large.

Of related interest:

What's Behind the Erosion of Civil Society? November 2, 2018

*  *  *

My recent books:


Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).


Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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Published:8/5/2020 11:57:21 AM
[Markets] Illinois Rep Wants To Abolish History Classes As Racist Illinois Rep Wants To Abolish History Classes As Racist Tyler Durden Tue, 08/04/2020 - 11:30

Authored by Mike Shedlock via MishTalk,

State Rep. LaShawn K. Ford said current history teachings overlook the contributions of women and minorities.

His solution is to Abolish History Classes until an adequate remedy is in place.

Leaders in education, politics and other areas gathered in suburban Evanston Sunday to ask that the Illinois State Board of Education change the history curriculum at schools statewide, and temporarily halt instruction until an alternative is decided upon.

At a news conference, State Rep. LaShawn K. Ford said current history teachings lead to a racist society and overlook the contributions of women and minorities.

Before the event Sunday, Rep. Ford's office distributed a news release "Rep. Ford Today in Evanston to Call for the Abolishment of History Classes in Illinois Schools," in which Ford asked the ISBOE and school districts to immediately remove history curriculum and books that 'unfairly communicate' history "until a suitable alternative is developed."

Calls for Censorship

Who gets to decide which history books are unfair? 

And what about statues?

Logical Solution

I came up with the logical solution to this problem on July 24.

Let's just ban statues and be done with it. Books too. I am sure every book ever printed offends someone. Does the word Pizza offend anyone? If so, we need to ban pizzas.

I am really tired of all this nonsense.

Suitable Alternative Needed

We need a suitable alternative to state reps. 

How about an outright ban on these overpaid, underworked bureaucrats who are the primary reason people leave Illinois.

It Takes 3 Weeks to Escape Illinois

We escaped Illinois and if you live here you should consider doing the same. We chose Utah.

Bear in mind that It Takes 3 Weeks to Escape Illinois.


All the U-Hauls are leaving. It takes three weeks to reserve a one-way out of the state. 

"Everyone is leaving. No one is coming," a U-Haul agent told us when we reserved a truck.

Why Utah?

I discussed Utah in my October 5, 2019 post Escape Illinois: Get The Hell Out Now, We Are

Published:8/4/2020 10:50:19 AM
[Markets] The Pentagon's New UFO Disclosures: 75 Years Of MK Ultra Psy Ops The Pentagon's New UFO Disclosures: 75 Years Of MK Ultra Psy Ops Tyler Durden Tue, 08/04/2020 - 00:05

Authored by Matthew Ehret via The Strategic Culture Foundation,

In my last few articles, I have found myself writing on the theme of the emerging new system and the battle between two paradigms (multipolar vs unipolar).

Within that theme, the important issue of psy ops, false solutions and epistemological warfare which is a part of everyone’s’ daily life (whether they know it or not) arose as well. Recent events and announcements have caused me to tackle another aspect of psychological warfare in the modern age.

UFOs and You

What would you do if the American and British governments both revealed that their secret UFO programs would declassify material from each nations’ respective National Archives?

What if you found out that leading politicians like former House Majority speaker Harry Reid had allocated $22 millions of tax payer dollars to UFO research and that Obama’s former chief counsellor (and rampant pedophile) John Podesta has openly called for UFO disclosure on several public occasions since 2002 or that Hillary Clinton herself called for UFO disclosure during her presidential campaign pledges of 2015?

Would you believe these claims or would you remain skeptical? How would you decide what to do?

With the July 23 public statement from the Pentagon that “off world vehicles not made on this earth” have been kept secret for decades, this question has become extremely important.

Major opinion-shapers like Joe Rogan, Tucker Carlson, and even Russia Today have promoted the cause of alien disclosure for the past few years and with the most recent Pentagon announcement, fascination in little grey men has spread like wildfire.

Who’s Playing this Game?

For the past several decades, government-sponsored UFO research has largely been driven by the work of private subcontractors like Bigelow Aerospace which was founded by billionaire real estate speculator Robert Bigelow who allocated large swaths of his fortunes to the creation of organizations like the National Institute for Discovery Science which have always worked in a private capacity with governments and academia. One of Bigelow’s biggest tools was Sen. Harry Reid who not only received generous campaign funds from the billionaire between 1998-2009 but also allocated tens of millions in national defense funds to his company starting in 2007.

In 2014, the creative force driving the “UFO-disclosure cause” has taken the form of a weird organization called To the Stars Academy of Arts and Science run by high level intelligence operatives and using a cardboard cut-out Tom Delonge (former lead singer of the punk band Blink 182). To the Stars has poured millions of dollars into cultural/educational and lobbying projects driven by books, movies, film and documentaries in the cause of “elevating global consciousness” in preparation for a new age of UFO disclosure.

As Delonge says in his promotional video

“through a series of meetings I was soon connected to a large group of U.S. government officials. From the CIA, to the Department of Defense to Lockheed Martin Skunkworks. These were the guys involved in the secretive government programs that dealt with these subjects.”

Some of the shadowy figures affiliated with To the Stars include a former CIA director of operations, former Deputy Assistant secretary for Defense Intelligence, former Director of Information for White House Technology, and former chief of the CIA’s counter-biological weapons program. Both Podesta and Bigelow’s Aerospace have also worked closely with Delonge’s strange group over the past six years.

Bigelow is not the only billionaire who has allocated their vast fortunes to the cause of “UFO truth”.

The Rockefeller Project

In 1993, the Disclosure Initiative was created by none other than financier Laurence Rockefeller (4th son of Standard Oil Founder John D. Rockefeller) which had a two-fold purpose:

  1. Unite all of the largest UFO research organizations in America under one umbrella organization which was promptly accomplished within one year and

  2. Massively lobby the Clinton Administration to declassify millions of documents which was done in 1994, revealing little more than mountains of anecdotal testimonies and correspondences.

During the heyday of the Rockefeller UFO Disclosure Initiative, the Clintons stayed at the Laurence Rockefeller ranch in Wyoming, during which time an early recruit to the “disclosure mission” was Clinton Chief of Staff John Podesta. Podesta started going public with calls for UFO disclosure in 2002 and has continued to work with figures like Bigelow and To the Stars Academy over the next 18 years.

A fuller overview of Laurence Rockefeller’s “other” civilization-shifting programs from the 1950s-1990s can be seen here.

During the Clinton White House years, Laurence Rockefeller recruited a bodybuilding biologist named Stephen Greer to become the controller of the Disclosure Project which has provided his meal ticket to this very day. Greer has given thousands of interviews promoting the narrative that NASA’s Apollo Lunar projects were stopped in 1972 merely because the aliens who have been stationed on the Moon for eons didn’t want the truth to leak out (but were at least kind enough to let U.S. keep the technology they gave U.S. earlier in Roswell in the 1950s). If you believe in Greer’s narrative (which gets much crazier I promise), then human creative thought is actually not as special as “the shadowy forces controlling the government” wanted you to believe since space technology only existed because we stole stuff from ETs. Pretty much any inspired awe in universal creation and the power of the human mind to discover this creation with the effect of making life better through scientific and technological progress would easily be killed from this outlook.

The questions an intelligent person should now ask are:

  • Why would a leading figure of the Rockefeller dynasty devote the last decades of his life to the cause of “UFO truth”?

  • Did Laurence Rockefeller or those on his payroll or those in the CIA actually care about the right of the people to know hidden truths, or is the plan just designed to mis-direct the minds of credulous and jaded citizens into an invisible cage?

  • Might such a mis-direction prevent people from dealing with issues of America’s conversion into Nazism and accelerating disintegration?

  • Is it possible that these pedophiles, globalists, and Malthusian billionaires care less about the truth and more about inducing Americans to fixate on aliens while the republic is destroyed under economic collapse and war?

Squaring the Crop Circle

A large portion of the Disclosure Project’s work has gone into the investigation of crop circles which were first recorded in the early 1970s in Britain, and which have the peculiar characteristic of becoming increasingly well executed and complex over the course of five decades. Live Science reported that “the first real crop circles didn’t appear until the 1970s, when simple circles began appearing in the English countryside. The number and complexity of the circles increased dramatically, reaching a peak in the 1980s and 1990s when increasingly elaborate circles were produced”.

My question is: If transcendental alien races travelling at faster-than light speed, have been leaving encoded messages to U.S., then why would their artistic skills have improved so dramatically over a few years? Just a question.

MK Ultra & UFOs

Most people know of the CIA/MI6-funded mass brainwashing operation known as MK Ultra which was launched in 1953. Very few people have recognized the connection between MK Ultra and the rise of the UFO movement that grew in spades throughout the Cold War.

While U.S. and UK government UFO investigations did occur in piece meal starting in 1947 under Project Sign (1947), and Project Grudge (1949), it wasn’t until 1950 that official tax payer-funded departments were created in both nations to pursue “UFO research”. These took the form of the USA’s Project Blue Book (1952) which itself was modelled on the work conducted by Britain’s 1950 “Flying Saucer Working Party” spear-headed by Sir Henry Tizard (Chief Science Advisor to the Ministry of Defense and Chairman of Britain’s Defense Research Policy Committee).

Journalist Naomi Klein stated in her book The Shock Doctrine that Tizard played a leading role in the creation and funding of MK Ultra during a high level meeting in Montreal and Tizard’s Wikipedia entry notes that:

“One of the most controversial meetings he had to attend in his capacity as chair of the National Research Commission would only emerge many years later with the de-classification of CIA documents, namely a meeting on June 1st, 1951 at the Ritz-Carlton Hotel in Montreal Canada, between Tizard, Omond Solandt (chairman of Defence Research and Development Canada) and representatives of the CIA to discuss “brainwashing”.

This Ritz-Carleton meeting would lay the seeds for MK Ultra that was not only designed to deal with brainwashing, but created LSD, and explored the matter of breaking down a human mind into a blank slate with the explicit intention of reconstructing minds from scratch. As Klein’s book eloquently showcases, the intention was to use these discoveries on a national scale in order to conduct “shock therapy” on nations in order to break cultures and nations from their historic memories and traditions with the purpose of reconstructing them under a post-nation state (and post truth) neo liberal world order. While MK Ultra was funded by the Americans, the guidance for this operation were always driven by London’s Tavistock Clinic. A bone chilling expose of this clinic was produced by EIR’s Jeffrey Steinberg in 1993 which may keep you up at night.

As one can imagine, the very act of providing government funds to investigate flying saucers was itself sufficient to legitimize the existence of aliens in the minds of millions of Europeans and Americans during the Cold War years. During these dark years, faith in honest government collapsed under the imperial wars of Korea, Vietnam abroad and the growth of the Military Industrial Complex and McCarthyism at home. The world of secret patents, secret weapons, secret R&D that developed during this period in facilities like Area 51 made the frequent sightings by civilians and even un-vetted military pilots of “unidentified flying aircraft” an expected occurrence.

Flying Saucers and Area 51

In her 2012 book Area 51 Uncensored, journalist Annie Jacobson provided lengthy detail of the Cold War experiments, aerospace technology and nuclear bomb testing that took place at Area 51 during this period which largely fed off the earlier social engineering experiment of H.G. Wells’ War of the Worlds emergency broadcast read aloud in 1938. The mass panic that ensued the broadcast provided an insight into the levers of mass psychology that certain social engineers drooled over.

What could account for observed UFO phenomena?

In an interview with NPR Radio, Jacobson stated:

“The UFO craze began in the summer of 1947. Several months later, the G2 intelligence, which was the Army intelligence corps at the time, spent an enormous amount of time and treasure seeking out two former Third Reich aerospace designers named Walter and Reimar Horten who had allegedly created [a] flying disc. 

...American intelligence agents fanned out across Europe seeking the Horton brothers to find out if, in fact, they had made this flying disc.”

During WWII, the Horten brothers were associated with the Austrian scientist Viktor Shauberger whose innovative designs for implosion (vs explosion) flying technology utilized water currents, and electromagnetism to generate flying machines that by all surviving accounts flew faster than the speed of sound. While much of his research was confiscated and classified by victor nations after WWII, Schauberger was promised government sponsorship in America which induced the inventor to move across the Ocean where Canada’s Avro Arrow program sought his designs for supersonic nuclear missile delivery aircraft. When he discovered that his work would only be used for military purposes, Schauberger pushed back and over the course of several months, his patents were essentially stolen, and he returned to Austria to die broke and depressed in 1958.

The Strategic Importance of Space

It was never a secret that the post-1971 globalized world order championed by the likes of Sir Henry Kissinger, David and Laurence Rockefeller and other Malthusians throughout the 20th century was always designed to collapse. With the mass shock therapy that such a collapse would impose upon the world, it was believed that a deconstruction of the Abrahamic traditions that governed western society for 2000 years could be accomplished and a new society could be socially engineered in the image of the Brave New (depopulated) World that would live like happy sheep forever under the grip of a hereditary alpha class and their technocratic managers.

The only problem which these social engineers have encountered in recent years is the re-emergence of actual statesmen who are unwilling to sacrifice their people and traditions on the altar of a new global Gaia cult. Such defenders of humanity’s better traditions have launched the multipolar alliance and have driven a policy of long-term growth and advance scientific and technological progress which is embodied brilliantly by the New Silk Road, and its extensions to the Arctic. The most exciting aspect of this New Silk Road/Multipolar Paradigm is the leap into space exploration as the new frontier of human self-development which has not been seen since the days of President Kennedy.

With China and Russia signing a pact to jointly develop lunar bases and the NASA Artemis Accords calling for international cooperation on Lunar and Mars resource development/industrialization, the age of unlimited growth that was lost with the LSD-driven mass psychosis of 1968’s “live in the now” paradigm shift may finally be recaptured. Programs designed to put humanity’s focus on real objective threats like Asteroid collisions, and solar-induced new ice ages are seriously being discussed by leaders of Russia, China and the USA.

There are billions of suns and potentially billions of galaxies, and chances are there is indeed life on many of the planets orbiting some of the stars within our growing, creative universe… and there is also a fair chance that cognitive life has also emerged on some of those planets. The best way to find out however is not to sit at home while the world economic system collapses under a controlled disintegration thinking about Rockefeller-funded conspiracy theories, but rather to fight to revive humanity’s open system destiny starting with a cooperative space program to extend human culture and economy to the Moon and Mars, and then onto other planetary bodies followed by missions to deep space.

If other civilizations exist, maybe it is our duty to take up the torch left to U.S. by JFK and go find them.

Published:8/3/2020 11:22:51 PM
[Uncategorized] Chicago lawmaker proposes suspending grade school history classes until “a suitable alternative is developed” “I’m calling on the Illinois State Board of Education and local school districts to take immediate action by removing current history books and curriculum practices that unfairly communicate our history." Published:8/3/2020 12:16:39 PM
[Entertainment] Readers have many opinions on how to cull your book collection — and also why you never should Commenters responded to a recent essay about giving away books with a mix of philosophical musings and practical advice. Published:8/1/2020 7:28:18 AM
[Policing] Portlandia Forever (Steven Hayward) Having spent a lot of time in Portland (I probably acquired a quarter of my rather too large library at Powell’s City of Books, where I’ve been coming out the front door with heavy full bags since 1977), I always regarded the TV show “Portlandia” as a documentary rather than fictional satire. Clearly the show needs a gritty reboot, with an episode that tries to lampoon the “Wall of Moms” Published:7/31/2020 11:27:30 PM
[Markets] Smith: Martial Law Is Unacceptable Regardless Of The Circumstances Smith: Martial Law Is Unacceptable Regardless Of The Circumstances Tyler Durden Sat, 08/01/2020 - 00:05

Authored by Brandon Smith via,

Back in 2014, hundreds if not thousands of conservatives and liberty movement activists converged on a farm in rural Clark County, Nevada. The purpose was to protest the incursion of federal government agents onto the property of the Bundy family, who had defied pressure from the Bureau of Land Management to stop allowing their cattle to feed on “federal land” in a form of free ranging. It was a practice that had been going on for decades and one that was required for the Bundy farm to survive, ended abruptly by environmental laws protecting a tortoise.

The Bundy family had been improving on the area with aquifers and other measures for generations without interference. The claim by the BLM and other agencies was that the farmers were destroying wildlife habitat with their cattle, yet the Bundy's land improvements had actually allowed wildlife to THRIVE in areas where animals would find life difficult or impossible otherwise.

The federal government became fixated on the Bundy's, and decided to make an example out of them. Their defiance of the crackdown on their use of the land was met with extreme measures, including their cattle impounded, their farm being surrounded and sniper teams placed in the hills nearby. The liberty movement saw this as the last straw, and so reacted at a grassroots level. The concern was that Bundy Ranch could become another Waco. They locked and loaded and went to defend the Bundy's.

I completely agreed at the time with the efforts surrounding Bundy Ranch and I still agree with them today. The federal government had overstepped its bounds on multiple occasions when it came to rural farmers in sagebrush country and everyone had finally had enough. The feds were faced with a group of armed liberty movement members and eventually ran away. They even gave the Bundy's back the cattle the feds had initially tried to confiscate. This event showcased the power of the people to repel tyranny when necessary.

The claim that the public is impotent against government force was summarily trounced.  The action was not perfect, and there were many internal disputes and a plethora of mistakes, but overall it had achieved its goal.  It sent a message to the establishment that if you try to assert unconstitutional force against the citizenry there is a chance a Bundy Ranch scenario might happen again, and next time it might not simply be a defensive measure.

I mention Bundy Ranch because I want to remind conservatives of their roots. We are a constitutional movement. We are a small government movement. We believe in individual rights, states rights and the 10th Amendment, as well as strict limitations placed on the federal government and state governments when they try to violate the Bill of Rights.  If you don't believe in these things, you are not a conservative or a constitutionalist.

No government, whether state or federal, supersedes the boundaries placed upon them by the constitution. Once they violate those boundaries, they must be put in check by the citizenry, for the constitution is merely an object that represents an ideal. It can't defend itself. If a government undermines constitutional protections, it is not a failure of the constitution, it is a failure by the public to act.

Sadly, there are "conservatives" out there who supported the efforts at Bundy Ranch in 2014, but are now calling for federal overreach and martial law today. The very same people who argued vehemently against unconstitutional actions back then are arguing for bending or breaking the rules of the constitution now. This is something I have been warning about for years...

The greatest threat to freedom is not the government, extreme leftists or the globalist cabal; the greatest threat is when freedom fighters foresake their own principles and start rationalizing tyranny because it happens to benefit them in the moment. If freedom fighters stop fighting for freedom, who remains pick up the mantle? No one. And thus, the globalists and collectivists win the long game.

Right now there are two sides calling for martial law-like restrictions on the public, and both sides think they are doing what is best for society at large. They both believe they are morally justified and that totalitarian actions are necessary for “the greater good”. Both sides are wrong.

The Pandemic Puritans

On one side, we have a group made up primarily of political leftists but also some conservatives who say that the coronavius pandemic creates a scenario in which medical tyranny must be established to protect the public from itself. Leftists enjoy control in general and the pandemic simply offers an opportunity for them to act out their totalitarian fantasies in real life.

These are the people who wag their fingers at others on the street or in the park or at the beach for not “social distancing” properly. These are the people that inform on their neighbors, or inform on local businesses for not following strict guidelines. These are the people that get a thrill from forcing other people to conform.

This is not to say that precautions are not warranted, they certainly are. However, these precautions MUST be up to individuals, not enforced by bureaucracy. The moment you hand government ultimate power to dictate people's health decisions, personal daily activities, freedom of assembly and their ability to participate in the economy, you have given the government ultimate power to destroy our very culture. No government should be allowed to have that kind of influence.

The issue here is one of the greater EVIL, not the greater good. What is the greater evil? To avoid unconstitutional measures, avoid violating individual rights and allow the virus to spread faster than it normally would? Or, to completely throw out the Bill of Rights, individual liberty and economic security in the name of a brand of “safety” that is ambiguous and undefined?

As I write this, the state of New Jersey among others is implementing a draconian response against businesses that defy lockdown orders. NJ just arrested the owners of a gymnasium in Bellmawr who refused to close down. Even though they used social distancing measures and applied their own guidelines, the state has decided that citizens are children that must be controlled rather than adults that can make their own choices. This sets a dangerous precedence for the whole country.

Understand that small businesses that are not deemed “essential” by arbitrary decree from the state are on the verge of bankruptcy and collapse. Millions of people are having their livelihoods threatened by the lockdowns. Millions of jobs are at risk. Is the coronavirus really worth destroying our own economic system? Because that is EXACTLY what is happening right now. The US economy was already suffering from destabilization, and now the pandemic response is putting the final nail in the coffin.

If the economy tanks far more people will die from the resulting crisis of poverty, crime and civil unrest than will EVER die from the coronavirus pandemic. When you look at the big picture, how can anyone justify medical tyranny and martial law measures? There is simply no logical explanation for violating the economic and personal freedom of Americans in response to a disease. If some people die from the virus, so be it. Its a small price to pay to keep our freedoms intact.  Furthermore, I would stand by that argument even if I get sick from the virus.

Sock Puppet Conservatives

There are people out there that like constitutional rights and civil liberties “in theory”, but in practice they view these rights as inconvenient to their goals.  For these so-called “conservatives”, the Bill of Rights is only for peacetime. When war or domestic conflict rolls around, our rights are suddenly forfeit.

I use this particular metaphor often but I really can't find a better one:

Government power is like the “one ring” in Lord Of The Rings. Everyone desperately wants control of it. The side of evil thirsts for it. The side of good thinks that if only they had it they could use it for honorable ends; they think they can use it to defeat evil. They are wrong.

The “one ring” (government power) corrupts ALL. It cannot be controlled. It cannot be used for good. Eventually, it warps the minds of those who hold it, twisting them into something grotesque. Good people who exploit the ring end up becoming the very monsters they were trying to defeat, and evil wins.

Right now through the Trump Administration conservatives are being tempted with the "one ring". We are being tempted with ultimate government power. The leftist hordes and their actions are egregious. They act irrationally and foolishly. Their communist ideology and mindless zealotry is destructive and they openly seek the collapse of western civilization. But in the end this doesn't matter.  They are nothing more than useful idiots for a greater agenda.

It's interesting that the only solution I see being presented in conservative circles lately is the use of federal power to crush the protests and riots. Again, this might seem like a reasonable action in the face of so much lawlessness, but if taken too far the implications are horrifying.

Some conservative groups are cheering the deployment of federal agencies to cities like Portland in the name of stopping civil unrest, but there is a fine line between law enforcement and martial law. And by martial law, I mean ANY government force that is designed to suppress or break civil protections. This does not only include a military presence, it can also include federal agencies overstepping their bounds, just as they did at Bundy Ranch.

In Portland and other cities like New York, federal agents and police have been snatching protesters off the street in unmarked vans without identifying themselves.  Essentially, they are black-bagging people. This is the kind of behavior which real conservatives traditionally despise.

Yes, some of these protesters did in fact loot or participate in property damage; and some of them did absolutely nothing.  This is being done under 40 US Code 1315 which was signed into law by Neo-con president George W. Bush after the 9/11 attacks as part of the tidal wave of unconstitutional Patriot Act measures that were railroaded through during mass fear and panic.

Conservatives have been warning for years about the potential for misuse of these laws to violate people's rights. Will we now support them because they are being enforced against people we don't like? I will say this: If an unmarked van with unidentified armed people tried to grab me off the street, I would do everything in my power to put a bullet in each and every one of them.  And, I would not hold it against any person who did the same, even if they were my ideological opponent.

Some conservatives are calling for much more, including the deployment of the National Guard or a standing military presence. The use of such tactics opens the door to serious consequences, and I believe if we allow the federal government to bend the rules now, we set the stage for expansive martial law in the near future. By extension, labeling looters or rioters as “terrorists” also has dangerous implications.  Those of us that were activists during the Obama years know how freely that label is thrown around by government and the media.

We might feel righteous in violating the civil liberties of social justice Marxists because of their insane behavior and the threat they pose to the stability of the country, but, what happens when the roles are reversed? During Bundy Ranch, conservatives were also being labeled “terrorists”, and who is to say we won't find ourselves in that position again?   Would defying the pandemic lockdowns also be considered an existential threat to the country?

Uncomfortable Questions

There are some questions in all of this that are either not being asked or are being deliberately avoided.  For example:

1) Why is it that the Trump Administration has not bothered to go after the elites and globalists FUNDING Antifa and BLM groups behind the unrest?  Why does George Soros and his Open Society Foundation get to operate in the US with impunity?  And what about the Ford Foundation?  Members of that institution openly admit that they have been funding and organizing the social justice cult for decades.  Shouldn't the men behind the curtain paying for the entire thing be targeted first, instead of going after the useful idiots?  Perhaps the fact that Trump is surrounded by those very same elites in his cabinet has something to do with it...

2) If we support martial law measures, WHO are we giving that power to?  Is it Trump, or the deep state ghouls that advise him daily?  People like Wilber Ross, a New York Rothschild banking agent, Mike Pompeo, a long time Neo-con warmonger and promoter of mass surveillance, Robert Lightheizer, a member of the globalist Council On Foreign Relations, Steve Mnuchin, former Goldman Sachs banker, Larry Kudlow, former Federal Reserve, etc.  Even if you think Trump has the best of intentions, can anyone honestly say the same for his cabinet?

3) When the left is "defeated" and the riots stop, will martial law simply fade away, or, is it a Pandora's Box that can never be closed again?  And if it doesn't end, will supporters justify fighting against not just leftists, but also conservatives who will not tolerate it?  I for one will be among the people that will not tolerate it.

Real Solutions

There are other much better solutions than martial law when confronting the leftist riots or the pandemic.

For the pandemic, stop trying to dictate public behavior.  If individuals feel they are at risk from the virus, then they can take their own precautions.  The only other option is to continue on the path of shutdowns and an informant society that will destroy this nation in a matter of months.

For the leftists, communities that stage an armed presence in the face of protests have ALL escaped riots and property damage. Sometimes Antifa and BLM decide to not even show up. We DON'T NEED a federal presence or a military presence to get the job done. We can do it ourselves. We already have proof that this strategy works.

And, if the lefties want to burn down their own neighborhoods and cities and local governments don't want to stop them, then I say let it happen. It's sad for the people in these places that had no dog in the fight, but maybe this will teach the locals to speak out against BLM or Antifa instead of remaining silent or virtue signaling their support in the hopes that their businesses won't be attacked.  Maybe they should look for better government officials as well.

Finally, it's far past time to go after the elites that fund and engineer such groups.  Remove their influence and I suspect many people will be shocked at how fast all this unrest and chaos suddenly disappears.  Isn't this what people wanted Trump to do from the very beginning?  And yet, nothing happens to the vampires at the top.

Only cowards demand everyone else give up their freedoms just so they can feel safe.  The establishment is trying to pit the American people against each other as a means to pave a path to tyranny. I believe what the elites want more than anything else is to trick conservatives into forsaking their own principles. If we do, we become hypocrites that can no longer sustain a movement for freedom. By becoming the monster to fight the monster we hand our enemies victory. This is unacceptable.

*  *  *

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Published:7/31/2020 11:27:30 PM
[Markets] When Corporate Power Is Your Real Government, Corporate Media Is State Media When Corporate Power Is Your Real Government, Corporate Media Is State Media Tyler Durden Fri, 07/31/2020 - 19:25

Authored by Caitlin Johnstone via,

The New York Times published an astonishingly horrible article the other day titled “Latin America Is Facing a ‘Decline of Democracy’ Under the Pandemic” accusing governments like Venezuela and Nicaragua of exploiting Covid-19 to quash opposition and oppress democracy.

The article sources its jarringly propagandistic claims in multiple US government-funded narrative management operations like the Wilson Center and the National Endowment for Democracy-sponsored Freedom House, the extensively plutocrat-funded Carnegie Endowment for International Peace, and the United States Naval Academy.

The crown jewel of this piece of State Department stenography reads as follows:

“Adding to these challenges, democracy in Latin America has also lost a champion in the United States, which had played an important role in promoting democracy after the end of the Cold War by financing good governance programs and calling out authoritarian abuses.”

Whoa, nelly.

The fact that America’s most widely regarded newspaper feels perfectly comfortable making such a spectacularly in-your-face lie on behalf of the US government tells you everything you need to know about what the mass media in America really are and what they do.

The United States has never at any time been a champion of democracy in Latin America, before or since the Cold War. It has intervened hundreds of times in the continent’s affairs throughout history with everything from murderous corporate colonialism to deadly CIA regime change operations to overt military invasions. It is currently trying to orchestrate a coup in Venezuela after failing to stage one during the Bush administration, it’s pushing regime change in Nicaragua, and The New York Times itself admitted this year that it was wrong to promote the false US government narrative of electoral shenanigans in Bolivia’s presidential race last year, a narrative which facilitated a bloody fascist coup.

This is propaganda. There is no other word for it. And yet the only time western politicians and news reporters use that word is to talk about nations like Russia and China.

Why is propaganda used in an ostensibly free democracy with an ostensibly free media? Why are its news media outlets so consistently in alignment with every foreign policy objective of US government agencies no matter how destructive and inexcusable? If the media and the government are two separate institutions, why do they so consistently function as though they are not separate?

Well, that’s easy. It’s because they aren’t separate. The only thing keeping this from being seen is the fact that America’s real government isn’t located where people think it is.

In a corporatist system of government, where no hard lines are drawn between corporate/financial power and state power, corporate media is state media. Since bribery is legal in the US political system in the form of corporate lobbying and campaign donations, America’s elected government is controlled by wealthy elites who have money to burn and who benefit from maintaining a specific status quo arrangement.

The fact that this same plutocratic class also owns America’s media, which is now so consolidated that it’s almost entirely run by just six corporations, means that the people who run the government also run the media. This allows America’s true rulers to set up a system which promotes narratives that are favorable to their desired status quo.

Which means that the US has state propaganda. They just don’t call it that themselves.

Strip away the phony two-handed sock puppet show of US electoral politics and look at how power actually moves in that country, and you just see one more tyrannical regime which propagandizes its citizens, brutally cracks down on protestersdeliberately keeps its populace impoverished so they don’t get powerful enough to change things, and attacks any nation which dares to disobey its dictates.

Beneath the thin layer of narrative overlay about freedom and democracy, the US is just one more despotic, bloodthirsty empire. It’s no better than any of the other despotic, bloodthirsty empires throughout history. It just has good PR.

Plutocrats not only exert control over America’s media and politics, they also form alliances with the secretive government agencies whose operators remain amid the comings and goings of the official elected government. We see examples of this in the way new money tech plutocrats like Jeff BezosPeter Thiel and Pierre Omidyar have direct relationships with the CIA and its proxies.

We also see it in the sexual blackmail operation which was facilitated by the late Jeffrey Epstein in connection with billionaire Leslie Wexner and Israeli intelligence, along with potentially the FBI and/or other US intelligence agencies. Today the internet is abuzz as newly unsealed court documents relating to Epstein and his co-conspirator Ghislaine Maxwell reveal witness testimony regarding underage sex trafficking, with such high-profile names appearing in the documents as Alan DershowitzBill Clinton, and Prince Andrew.

The Overton window of acceptable political discourse has been shrunk into such a narrow spectrum of debate that talking about even well-known and extensively documented facts involving the real nature of America’s government and media will get you laughingly dismissed as a conspiracy theorist, which is itself a symptom of tight narrative control by a ruling class which much prefers Americans thinking they live in a free democracy whose government they control with their votes.

In the old days you used to be able to tell who your rulers were because they’d sit on thrones and wear golden crowns and make you bow before them. Human consciousness eventually evolved beyond the acceptability of such brazen indignities, so it became necessary for rulers to take on more of a background role while the citizenry clap and cheer for the illusory puppet show of electoral politics.

But the kings are still among us, just as cruel and tyrannical as ever. They’ve just figured out how to mask their tyranny behind the facade of freedom.

But 2020 has been a year of revelations, a trend which seems likely to continue accelerating. Truth cannot stay hidden forever.

* * *

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Published:7/31/2020 6:27:01 PM
[Markets] Israel Rolls Out Dystopian "Cyber Espionage Award" For US-Backed Digital Saboteurs Israel Rolls Out Dystopian "Cyber Espionage Award" For US-Backed Digital Saboteurs Tyler Durden Wed, 07/29/2020 - 02:00

Authored by Raul Diego via,

A “mastermind in the field of cyber espionage” will be awarded a lifetime achievement by the state of Israel in September. The “Israel Defense Award” ceremony is slated to take place in the residence of President Reuven Rivlin, himself a former member of the IDF’s intelligence corps, Haman, which is tasked with “collecting, disseminating, and publishing intelligence information.” In addition, prizes will also be handed out to members of three secret cybersecurity projects developed by Mossad, the IDF, the Shin Bet and MAFAT (Administration for the Development of Weapons and Technological Infrastructure) that have made a “long-standing contribution to national security and for initiating many technological solutions”, not to mention the forging of close ties to the U.S. National Security state.

The identity of the “legendary” Israeli spy who is slated to receive the official commendation has not been revealed and has only been referred to as “Aleph”; said to be in his forties and well-known both in Israeli and American intelligence circles. He is described as a “phenomenon” of the cyber field who turned down a lucrative career in the tech industry in order to serve the national interest. The mystery-man was credited with creating a “significant part” of the work in Israeli cybersecurity by an unnamed acquaintance.

Current Israeli Defense Minister and Alternate Prime Minister, Benny Gantz announced the winners and heaped praise on Israel’s “human capital,” whose work proves that there are “no borders in the war on Israel’s security.” Indeed, this statement by the IDF’s former chief of staff can be corroborated by taking a look at the corporate partners who are a part of the winning projects; the first of which is a joint collaboration between the Israeli national intelligence agency, Mossad, the Rafael Company, the Israeli Air Force and a new IDF Intelligence Unit 9900, which “provided the IDF with unique capabilities” and “technological breakthroughs.” The Rafael Company, (Rafael Advanced Defense Systems Ltd.), is also involved in the second project to be recognized by the Israeli state, along with Elbit Systems. Both of these companies have major cybersecurity contracts outside of Israel and the U.S., in particular.

Critical infrastructure

Elbit Systems received a contract from the U.S. government last year to build an “integrated” surveillance system across the Arizona-Mexico border spanning over 200 linear miles. They have since deployed dozens of “sophisticated” cameras on towers along the border and have also secured multi-million dollar contracts to equip an unnamed Southeast Asian navy’s ships with their AI-enabled technology for “complex reconnaissance missions.”

The Rafael Company, meanwhile, is a major player in international weapons systems development and is the principal creator of the “Iron Dome” anti-missile technology through a  subsidiary company, mPrest. The Iron Dome software is currently running on “critical infrastructure systems” in the United States and has been a recent subject of concern for the U.S. military, who refused to integrate the software into its air defense systems after the Israeli company failed to provide the source code, resulting in the loss of a $600 million-dollar contract for the Tel-Aviv-based company.

The Rafael Company subsidiary, nevertheless, has partnered with several American utility companies, providing “mission-critical monitoring” services to sectors of the U.S. power grid. mPrest’s “System of Systems” has been integrated by San Diego Gas & Electric (SDG&E), Southern Company – the second-largest utility company in the United States – and others. The New York Power Authority (NYPA) entered into a partnership with the Israeli company in 2017 to deploy their technology in a number of utility plants across the state.

In the official statement issued by Gantz announcing the prize winners, he gave special attention to the fact that their work “was done in secret,” while President Rivlin lauded the “long nights, days, weeks and months of exhausting and grueling work” put forward by the recipients of the Eliyahu Golomb award, named after the commander and chief architect of the Haganah (the Defence) militia – a paramilitary organization that would eventually become the IDF after the founding of the Jewish state and progenitor of terrorist organizations like Irgun and the Stern Gang.

Old collaborators

The history of the Haganah provides a unique look into the permanent relationship between certain U.S. interests and the state of Israel, dating back to its gestation period during the British mandate of Palestine, as well as a direct link to Israel’s present-day cybersecurity technology apparatus through a young RCA engineer from New York, Dan Fliderblum, who was recruited by the Zionist guerilla to set up a “network of secret radio transmitters in Palestine” to protect their illegal arms smuggling operation. Fliderblum would later change his name to David Avivi and pioneer the Isreali electronics industry.

At the time, an organized crime association comprised of the Sicilian and Jewish mafias, often referred to as “Murder, Inc.” controlled the Port of New York. Meyer Lansky, as leader of the New York crime families, was approached by Haganah operative and close aid to Ben-Gurion, Yehuda Arazi, to help move weapons to Palestine. Arazi was an underground agent who had been doing Ben-Gurion’s bidding throughout Europe for years and was sent to the United States by the future first Prime Minister of Israel to procure heavy armaments, including “aircraft, artillery pieces, tanks [and] antiaircraft guns.”

Jewish mobsters in the United States would henceforth play a pivotal role in obtaining and providing financial and other resources to the Haganah. Notorious Jewish gangsters, like Bugsy Siegel, Longy Zwillman, and Moe Dalitz, met with another Haganah agent every week in 1946 in the back of a Los Angeles restaurant to arrange or deliver money to finance the ongoing war in Palestine.

The extent of the mob’s involvement in these operations came to light when the FBI seized a B-25 bomber obtained by the “syndicate” was forced to return to Newark by bad weather, causing the entire shipment of aircraft, which included twenty AT-6 airplanes, to be confiscated.

As for the man whose name dons the prize Israel will award its undisclosed cyber-tech heroes in a few months’ time, it was his arguments in favor of a “much more extensive and orderly defensive force,” that convinced Ben-Gurion to move ahead with the creation of the IDF and, along with it, the establishment of less suspect partnerships that wouldn’t hinder the social advancement of the Jews involved, like the case of Miami mob figure Sam Kay, who it is claimed, was motivated to aid the Haganah’s arms-smuggling operation to “clean up” his own image and help his daughter marry up.

The candidates

The partners of today’s IDF-linked tech initiatives read more like a blue-chip investment portfolio than a police rap sheet, but the scope of the crimes dwarf those that occurred in the days of jukeboxes and trench coats. The myriad cybersecurity, AI, and IoT startups emerging out of Israel’s state-funded organizations have extensive ties to Fortune 100 companies like Apple, Google, Microsoft, and many others. The vast majority of these startups originate in military outfits like Unit 8200, which has been the center of offensive cyber warfare technology like Stuxnet, co-developed with the United States to take down an Iranian nuclear facility in 2010, among other covert operations and initiatives.

The Natanz enrichment facility was significantly damaged by a 'mystery' fire early this month, via Iran Atomic Energy Organization/AFP

While Israel won’t reveal the names of the winners selected for the Israel Defense prize awarded every year for the past six decades, we can take a few educated guesses as to who might have been some of the finalists. People like Lior Div come to mind; founder of a cybersecurity company called Cybereason, which has been running simulations on behalf of the U.S. government of a foreign-hacked 2020 general election. The table-top exercise predicted dozens of dead Americans, hundreds injured, and an election that never happens.

Div fits the age-range given for the winner of the lifetime achievement award but would be eliminated from consideration if we take the claim seriously that the recipient shied away from the millions he could have made in the private sector. Lior Div’s company is currently valued at just over $1 billion and his own net worth can be assumed to be near that, at least.

There are other potential nominees, such as Amit Yoran, who certainly fits the bill of an individual who is “known in [the Israeli] and the American intelligence community” as reported in several pieces about the mysterious “Aleph.” Yoran fits the age profile, as well, and as former Cybersecurity chief at DHS has the credentials to be recognized in both the halls of the Mossad and CIA’s Langley headquarters. But, he too has thrown his hat into the private sector many times and is currently CEO of a cybersecurity firm called Tenable, which offers solutions to address “vulnerabilities and misconfigurations in your modern IT environment.”

If lifetime achievement is the true criteria, then former head of Mossad, Tamir Pardo, might be considered as the potential candidate that could claim that a “not insignificant part of [Israel’s Defense] work was created by him personally due to his special talent.” Pardo served under Bibi Netanhayu’s brother, Yoni’s military command, and has been a member of Israel’s top brass for a very long time. Pardo once described Mossad as a “criminal organization with a license.” But, far from a critique, Pardo followed his controversial statement by admitting it was “the fun part.”

Published:7/29/2020 1:08:49 AM
[4dfa5471-0e65-566a-a3ff-3f27fb559a62] Gregg Jarrett: Disgraced fired FBI officials Comey, McCabe and Strzok profit from a pathology of lies Three top FBI officials fired for their abuse of power, corrupt acts, and suspected lies are now earning big bucks by writing self-serving books, profiting handsomely from their misdeeds. Published:7/28/2020 6:04:38 PM
[Markets] The Nation Is Falling Into the Abyss Between Wall Street And Main Street The Nation Is Falling Into the Abyss Between Wall Street And Main Street Tyler Durden Tue, 07/28/2020 - 16:26

Authored by Charles Hugh Smith via OfTwoMinds blog,

The abyss between the Fed's illusion of phantom wealth for Wall Street and the collapse of Main Street is bottomless, and our descent into the abyss is accelerating.

I know this runs counter to every dominant narrative, but a vaccine doesn't really matter, opening up doesn't really matter, and the size of the "free money" stimulus checks doesn't matter.

What matters is that the nation is falling into the abyss that's opened between Wall Street and Main Street, and nothing will stave off the collapse of the social order other than a fundamental re-ordering of the way we create and distribute money and political power, as money buys political influence.

The last economic tide with widespread benefits to Main Street was 30 years ago. Since then, the Federal Reserve and other central banks have incentivized globalization and financialization, two dynamics that favor mobile capital and financier skims amd scams.

There are a number of factors behind the widening canyon of economic inequality, but the primary driver is financialization. Financialization has given those with access to central bank credit ways to skim great wealth from the system without creating any value whatsoever.

Financialization isn't a consequence of having capital: it's the consequence of having access to unlimited central bank credit, leverage and low-risk, low-tax skimming operations (for example, tax codes enable hedge funds to declare income as low-tax long-term capital gains).

Leveraging phantom collateral is another feature of financialization. Commoners were allowed a taste of this when subprime lenders were offering no-document, no-down payment mortgages back in 2004-2007. Phantom income was posted as collateral for the nothing-but-leverage loan.

Financialization is not about investing in productive enterprises; it's all about skimming wealth while providing no value to the real economy or society.

The hidden toxin in financialization is the resulting concentration of wealth can buy concentrations of political power. Financialization is thus self-perpetuating: once the skimming operations generate billions of dollars in profit, it only takes a relatively small piece of these profits to buy/influence the political class. Once the politicos are in your pocket, the regulators and judiciary fall into line or are marginalized by new statutes or gutted budgets.

Financialization is the disease eating away what's left of democracy.

Financialization is the exploitation of assets/income that were previously safe from predation by central bank funded financiers. While definitions vary, mine is:

Financialization is the commoditization of debt collaterized by previously unsecuritized assets, a pyramiding of risk and speculation that is only possible in a massive expansion of low-cost credit and leverage for those at the top of the wealth-power pyramid: financiers, banks and corporations.

One example is the student loan "industry," which prior to financialization did not exist. A previously safe from predation asset/source of income--college degrees--has been securitized so that loans issued to students for largely worthless diplomas can be sold globally as "secure assets with guaranteed yields."

That the exploited class of students have little to no income and no guarantee of income doesn't matter. What matters is a previously unexploited asset can be turned into debt that can be sold at an immense profit.

And so student loan debt has skyrocketed from near-zero to $1.6 trillion in less than a generation. This rapacious, ruthless exploitation would not have been possible without the central bank (Federal Reserve) and federal government enabling and enforcing the supremacy of private capital and the predation of the higher-education cartel.

Globalization and financialization have been the two engines of soaring wealth inequality. Globalization can mean many things, but its beating heart is the arbitraging of the labor of the powerless and commodity, environmental and tax costs by the powerful to increase their profits and wealth.

In other words, globalization is the result of those at the top of the wealth-power pyramid shifting borrowed capital around the world to exploit lower costs of labor, commodities, environmental regulations and taxes.

This manifests as offshoring of jobs, the stripmining of forests, minerals, etc., the degradation of local ecosystems, the decline of tax revenues derived from capital and the explosive rise in stock market valuations as wages stagnate or decline.

A key element in globalization is the transfer of risk from the owners of capital to the workers and public resources. Examples of this transfer of risk abound: rather than pay workers benefits, corporations game part-time/full-time labor laws so workers' health insurance is paid by taxpayers (Medicaid). Corporations pay wages too low to survive so workers depend on public-sector assistance (food stamps, etc.)

Alas, all good predations end when the prey has been dragged to the ground and consumed. All the fruit of financialization and globalization have been plucked by the powerful, and now both the engines of "growth" are sputtering as the hollowed-out Main Street economy implodes.

Central bank free money for financiers doesn't create collateral or creditworthy borrowers, and without those foundations, the decayed, rotted shack of debt will collapse.

If we set aside the proximate causes of social disorder, we discern the salient cause: the socio-economic political system no longer works for anyone but those skimming wealth from globalization and financialization.

Main Street has been in slow-motion collapse for a generation, but this terminal decay was masked by hyper-financialization and debt-fueled spending by consumers who became accustomed to filling the widening gap between their income (stagnant) and the costs of their lifestyle (rising), as they chased the top 5% who benefited from globalization and financialization.

Debt creates the warm and fuzzy illusion of wealth, but at a cost: debt payments never disappear, but income and profits can slide effortlessly to zero.

We come now to the key dynamic of this era: socio-economic psychosis, as most people are incapable of making sense of the contradictory messages being given by the status quo. The next result is madness, as every attempt to reconcile the contradictory messages veers further way from reality.

The relentless rise of Wall Street is constantly presented as "proof" the status quo is "creating wealth" and is enormously successful. It is impossible to reconcile this claim with the decay and collapse visible in Main Street, and so people lash out at whatever they can identify as the proximate cause of their suffering and poor prospects.

Ask yourself these questions: What kind of system will we get if the vast majority of the trillions created out of thin air by central banks goes to financiers and corporations?

What kind of system will we get if these financiers and corporations use some of this free money to buy political influence?

What kind of system will we get if the really big money is skimmed by financial games that generate no goods or services, no jobs, and no productivity--in essence, they are completely worthless to the real economy and society?

What kind of system will we get if the stock market bubble is touted as "proof" the system is working splendidly and wealth is bubbling up without any limit thanks to the Fed's magic money machine?

The answer is a system that's crazy-making and doomed by its internal contradictions. The Fed can create dollars out of thin air and sluice it to the super-wealthy to feed their skims and scams, but it can't create jobs, oil, tools, collateral or productivity out of thin air,

The abyss between the Fed's illusion of phantom wealth for Wall Street and the collapse of Main Street is bottomless, and our descent into the abyss is accelerating.

Richard Bonugli and I discuss The disconnect between the Markets and the Economy (51 min) in our recent podcast. We also explore the silver linings for successful adaptation that are coming into focus.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:7/28/2020 3:33:30 PM
[Markets] A Lost Year – Where Do You Go From Here? A Lost Year – Where Do You Go From Here? Tyler Durden Sat, 07/25/2020 - 11:56

Authored by Peter R. Quinones via The Liberarian Institute, 

The point of no return may have been reached. The effects of the government-mandated shutdowns due to Covid-19 on businesses — especially small businesses — may not be known for months, even decades, but anyone who is paying attention is beginning to realize we are somewhere new. A place no one could’ve predicted at the beginning of 2020 when onlookers were just anticipating an ugly election year. They got more, much more.  

Leaving aside an economy that is at best questionable: the culture, interactions amongst family members and strangers, have been negatively affected in an already insane age where one’s character is judged by whether they believe Donald Trump is “literally Hitler,” an amusing deviation, or “the Messiah who has come to deliver us from the Left.” This cultural phenomenon was already in full swing before the war between the “masked” and “unmasked,” or those who believed CV-19 will “have people dying in hospital parking lots,” and those who look upon it as just a “spicy cold” started. 

As if all of this wasn’t enough, in May a video was released of Minneapolis police officer Derek Chauvin with his knee forced onto the neck of a prone George Floyd who died during the 8 minute and 46 second assault. Protests, rioting and looting immediately sprung up in Minneapolis which spread all over the country and continue to the day this is being written. Calls for various sorts of police reform have largely gone ignored by those with the power of change. 

Some students of history may look at the past several months and see a government that is out of control. A few may see one that is at the top of their game, especially at the state and local level. Others might see a dying wild animal, losing power and lashing out; a sort of death throes. No matter how it is being interpreted by the onlooker, something big has to happen next. Solutions have to be presented.  

Shortages of certain items have already occurred but they are finding their way back onto shelves. But what if another lockdown is ordered? Production precedes demand and if production is further hindered, those shortages that were warned of could become a reality.  

It would not be unfair to ask if civility is dead. If people are willing to threaten each other’s livelihoods and, in many cases, yell at strangers in public for everything from politics to how to handle the CV-19 crisis, how does one cope? 

If there are dangerous, violent mobs in the streets, how is one to feel safe? If those mobs include the police, is there any reason to be optimistic about the future? 

Counter-Economics and Networking 

Samuel Edward Konkin III developed the idea of agorism. Many people now call themselves “Agorists” but agorism is something you do. The idea of counter-economics, doing business outside of the government approved market is nothing new. Sam was just the first to give it a name and develop it as a strategy. 

Sam’s vision was that if enough people can start to operate outside of the “white market,” interactions where taxes aren’t collected and delivered to the overlords, eventually the State could be starved, and subsequently toppled and replaced by a truly free market. As economist Per Bylund once put it, “agorism in action creates its own institutions and builds the institutions of a free society within the shell of the old. When people start offering services, they create markets and prices. When they have conflicts, they find means to arbitration and protection. That’s what’s so beautiful with counter-economics: by withdrawing your support (stop feeding the beast) and start acting economically in freedom, you bring about the market institutions we will need (and must rely on) when the state fails.” 

In the age of forced government lockdowns and potential shortages of bare necessities, the “black” and “gray” markets may become essential for survival. Constantly communicating with your local stores is a good idea. If a store owner feels like a shortage is coming, they may hold back supply for themselves so starting a relationship with them in which they may allow you to buy some of that supply for yourself is smart. For those who can access private farms the same kind of friendship would be prudent for in the experience of this author farmers are more apt to participate in such activities. 

Preparation is key and can in many cases save you in a time of hardship. 

Counter-Economics and Income 

At this point it is no longer just people who are “extremely-online” who are familiar with the putrid phrase “cancel culture.” A few short years (months?) ago it presented itself mostly in the online arena where someone who was making their living in the media or arts said or wrote something that a certain group found so offensive that they made it their goal to get that person fired and to make sure they were not re-hirable anywhere in their industry. A popular example is former Google engineer James Damore who wrote an internal memo where one of the things he suggested was ways tech could appeal to a more diverse demographic, especially women. More recently numerous employees of Cisco were fired for posting “All Lives Matter” on internal message boards. 

3D Printer

At a time when even private companies are bending the knee to the mob and destroying people’s livelihoods for having an opinion contrary to an incredibly small minority, it has never been more important to start a side-hustle outside of your day job. Quality 3D-printers can be had for under $300. There are free files all over the web that allow you to make wallets, statues and trinkets that can be sold on eBay, Poshmark, Etsy and other sites that will allow you to bring in tax-free income. People who live in apartments can grow potatoes in 55-gallon drums on their porch and sell them to friends or at the local farmer’s market. Again, untaxed income.  

Whatever you come up with just start doing it. Get moving. Protect yourself and your family in these extremely uncertain times. 

Counter-Economics and Safety 

Contrary to popular opinion the police are not there to protect you. If you are in the process of suffering a home invasion and the closest officer is five minutes away, that can be the longest five minutes of your life. Or it could be the end for you. The protests that have turned into riots and lootings clearly show the police are not only not willing to protect private citizens but, in many cases, they are abandoning their own precincts and allowing the mob to take them over.  

If you own firearms get training. In the experience of this author, most firearm instructors work counter-economically. Meaning, they will accept cash in exchange for their services. Many will even teach you how to buy a weapon privately and off the books (no taxes collected) if that is legal in your area. 3D-printers must be mentioned along with CNC machines as they will allow you to manufacture a quality weapon in the privacy of your own home. 

That there are still people out there who have experienced the last four months and are relying on the government for necessities, security and safety is a testament to how well the State has convinced us that they are mommy and daddy. The time for begging for scraps and calling for them to act is over. If we are to survive this chaotic epoch, it is incumbent upon the individual to act, that he or she takes matters into their own hands and become as independent from the system as they can. Many lives have already been lost or irreparably damaged due to either the action, or inaction of the State. Make a decision to cast them aside and live free. Death is on the table. 

Published:7/25/2020 11:13:14 AM
[Markets] Patriotic Dissent: How A Working-Class Soldier Turned Against "Forever Wars" Patriotic Dissent: How A Working-Class Soldier Turned Against "Forever Wars" Tyler Durden Sat, 07/25/2020 - 00:05

Authored by Steve Early and Suzanne Gordon via,

When it comes to debate about US military policy, the 2020 presidential election campaign is so far looking very similar to that of 2016. Joe Biden has pledged to ensure that “we have the strongest military in the world,” promising to “make the investments necessary to equip our troops for the challenges of the next century, not the last one.”

In the White House, President Trump is repeating the kind of anti-interventionist head feints that won him votes four years ago against a hawkish Hillary Clinton. In his recent graduation address at West Point, Trump re-cycled applause lines from 2016 about “ending an era of endless wars” as well as America’s role as “policeman of the world.”

In reality, since Trump took office, there’s been no reduction in the US military presence  abroad, which last year required a Pentagon budget of nearly $740 billion. As military historian and retired career officer Andrew Bacevich notes, “endless wars persist (and in some cases have even intensified); the nation’s various alliances and its empire of overseas bases remain intact; US troops are still present in something like 140 countries; Pentagon and national security state spending continues to increase astronomically.”

When the National Defense Authorization Act for the next fiscal year came before Congress this summer, Senator Bernie Sanders proposed a modest 10 percent reduction in military spending so $70 billion could be re-directed to domestic programs. Representative Barbara Lee introduced a House resolution calling for $350 billion worth of DOD cuts. Neither proposal has gained much traction, even among Democrats on Capitol Hill. Instead, the House Armed Services Committee just voted 56 to 0 to spend $740. 5 billion on the Pentagon in the coming year, prefiguring the outcome of upcoming votes by the full House and Senate.

An Appeal to Conscience

Even if Biden beats Trump in November, efforts to curb US military spending will face continuing bi-partisan resistance. In the never-ending work of building a stronger anti-war movement, Pentagon critics, with military credentials, are invaluable allies. Daniel Sjursen, a 37-year old veteran of combat in Iraq and Afghanistan is one such a critic. Inspired in part by the much-published Bacevich, Sjursen has just written a new book called Patriotic Dissent: America in the Age of Endless War (Heyday Books)

Patriotic Dissent is a short volume, just 141 pages, but it packs the same kind of punch as Howard Zinn’s classic 1967 polemic, Vietnam: The Logic of WithdrawalLike Zinn, who became a popular historian after his service in World War II, Sjursen skillfully debunks the conventional wisdom of the foreign policy establishment, and the military’s own current generation of “yes men for another war power hungry president.” His appeal to the conscience of fellow soldiers, veterans, and civilians is rooted in the unusual arc of an eighteen-year military career. His powerful voice, political insights, and painful personal reflections offer a timely reminder of how costly, wasteful, and disastrous our post 9/11 wars have been.

Sjursen has the distinction of being a graduate of West Point, an institution that produces few political dissenters. He grew up in a fire-fighter family on working class Staten Island. Even before enrolling at the Academy at age 17, he was no stranger to what he calls “deep-seated toxically masculine patriotism.” As a newly commissioned officer in 2005, he was still a “burgeoning neo-conservative and George W. Bush admirer” and definitely not, he reports, any kind of “defeatist liberal, pacifist, or dissenter.”

Sjursen’s initial experience in combat—vividly described in his first book, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of The Surge (University Press of New England)—“occurred at the statistical height of sectarian strife” in Iraq.  

“The horror, the futility, the farce of that war was the turning point in my life,” Sjursen writes in Patriotic Dissent.

When he returned, at age 24, from his “brutal, ghastly deployment” as a platoon leader, he “knew that the war was built on lies, ill-advised, illegal, and immoral.” This “unexpected, undesired realization generated profound doubts about the course and nature of the entire American enterprise in the Greater Middle East—what was then unapologetically labeled the Global War on Terrorism (GWOT).”

A Professional Soldier

By the time Sjursen landed in Kandahar Province, Afghanistan, in early 2011, he had been promoted to captain but “no longer believed in anything we were doing.”

He was, he confesses, “simply a professional soldier—a mercenary, really—on a mandatory mission I couldn’t avoid. Three more of my soldiers died, thirty-plus were wounded, including a triple amputee, and another over-dosed on pain meds after our return.”

Despite his disillusionment, Sjursen had long dreamed of returning to West Point to teach history. He applied for and won that highly competitive assignment, which meant the Army had to send him to grad school first. He ended up getting credentialed, while living out of uniform, in the “People’s Republic of Lawrence, Kansas, a progressive oasis in an intolerant, militarist sea of Republican red.” During his studies at the state university, Sjursen found an intellectual framework for his “own doubts about and opposition to US foreign policy.” He completed his first book, Ghost Riders, which combines personal memoir with counter-insurgency critique. Amazingly enough, it was published in 2015, while he was still on active duty, but with “almost no blowback” from superior officers.

Before retiring as a major four years later, Sjursen pushed the envelope further, by writing more than 100 critical articles for TomDispatch and other civilian publications. He was no longer at West Point so that body of work triggered “a grueling, stressful, and scary four-month investigation”by the brass at Fort Leavenworth, during which the author was subjected to “a non-publication order.” At risk were his career, military pension, and benefits. He ended up receiving only a verbal admonishment for violating a Pentagon rule against publishing words “contemptuous of the President of the United States.” His “PTSD and co-occurring diagnoses” helped him qualify for a medical retirement last year.

Sjursen has now traded his “identity as a soldier—the only identity I’ve known in my adult life—for that of an anti-war, anti-imperialist, social justice crusader,” albeit one who did not attend his first protest rally until he was thirty-two years old. With several left-leaning comrades, he started Fortress on A Hill, a lively podcast about military affairs and veterans’ issues. He’s a frequent, funny, and always well-informed guest on progressive radio and cable-TV shows, as well as a  contributing editor at, and a contributor to a host of mainstream liberal publications. This year, the Lannan Foundation made him a cultural freedom fellow.

In Patriotic Dissent, Sjursen not only recounts his own personal trajectory from military service to peace activism. He shows how that intellectual journey has been informed by reading and thinking about US history, the relationship between civil society and military culture, the meaning of patriotism, and the price of dissent.  

One historical figure he admires is Marine Corps Major General Smedley Butler, the recipient of two Medals of Honor for service between 1898 and 1931. Following his retirement, Butler sided with the poor and working-class veterans who marched on Washington to demand World War I bonus payments. And he wrote a best-selling Depression-era memoir, which famously declared that “war is just a racket” and lamented his own past role as “a high-class muscle-man for Big Business, for Wall Street, and for the Bankers.”

Reframing Dissent

Sjursen contrasts Butler’s anti-interventionist whistle-blowing, nearly a century ago, with the silence of high-ranking veterans today after “nineteen years of ill-advised, remarkably unsuccessful American wars.”  Among friends and former West Point classmates, he knows many still serving who “obediently resign themselves to continued combat deployments” because they long ago “stopped asking questions about their own role in perpetuating and enabling a counter-productive, inertia-driven warfare state.”

Sjursen looks instead to small left-leaning groups like Veterans for Peace and About Face: Veterans Against the War (formerly Iraq Veterans Against the War), and Bring Our Troops Home. US, a network of veterans influenced by the libertarian right. Each in, its own way, seeks to “reframe dissent, against empire and endless war, as the truest form of patriotism.” But actually taming the military-industrial complex will require “big-tent, intersectional action from civilian and soldier alike,” on a much larger scale. One obstacle to that, he believes, is the societal divide between the “vast majority of citizens who have chosen not to serve” in the military and the “one percent of their fellow citizens on active duty,” who then become part of “an increasingly insular, disconnected, and sometimes sententious post-9/11 veteran community.”

Not many on the left favor a return to conscription.

But Sjursen makes it clear there’s been a downside to the U.S. replacing “citizen soldiering” with “a tiny professional warrior caste,” created in response to draft-driven dissent against the Vietnam War, inside and outside the military. As he observes:

“Nothing so motivates a young adult to follow foreign policy, to weigh the advisability or morality of an ongoing war as the possibility of having to put ‘skin in the game.’ Without at least the potential requirement to serve in the military and in one of America’s now countless wars, an entire generation—or really two, since President Nixon ended the draft in 1973–has had the luxury of ignoring the ills of U.S. foreign policy, to distance themselves from its reality.”

At a time when the U.S. “desperately needs a massive, public, empowered anti-war and anti-imperial wave” sweeping over the country, we have instead a “civil-military” gap that, Sjursen believes, has “stifled antiwar and anti-imperial dissent and seemingly will continue to do so.” That’s why his own mission is to find more “socially conscious veterans of these endless, fruitless wars” who are willing to “step up and form a vanguard of sorts for revitalized patriotic dissent.” Readers of Sjursen’s book, whether new recruits to that vanguard or longtime peace activists, will find Patriotic Dissent to be an invaluable educational tool. It should be required reading in progressive study groups, high school and college history classes, and book clubs across the country. Let’s hope that the author’s willingness to take personal risks, re-think his view of the world, and then work to change it will inspire many others, in uniform and out.

Published:7/24/2020 11:12:38 PM
[Markets] US Manufacturing & Services Surveys Disappoint In Early July Look US Manufacturing & Services Surveys Disappoint In Early July Look Tyler Durden Fri, 07/24/2020 - 09:50

Having rebounded dramatically in May and June, US PMI surveys for manufacturing and services were expected to continue their resurgence into expansion territory in preliminary July data.

  • Markit US Manufacturing PMI MISS 51.3 vs 52.0 exp vs 49.8 prior

  • Markit US Services PMI MISS 49.6 vs 51.0 exp vs 47.9 prior

And as the chart below shows, macro surprise data is starting to lag again as hope-filled expectations are missed...

Source: Bloomberg

The Composite index rebounded to 50.0...

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit, said:

While the stabilisation of business activity in July is welcome news, the lack of growth is a disappointment. Moreover, a renewed acceleration in the rate of loss of new business raises concerns that demand is faltering. Many companies, notably in consumer-facing areas of the service sector, linked falling sales to re-imposed lockdowns.

Firms’ costs have meanwhile spiralled higher, surging at the steepest rate for seven years in the service sector, in part due to the additional burdens of safeguarding against the coronavirus.

“Thankfully, the job-shedding seen over the prior four months has come to an end, but companies remain wary of taking on more staff given the weakness of current order books. Future expectations have improved, however, with optimism rising to the highest for over a year, as increasing numbers of firms see better times ahead. Hopes are qualified, however, by uncertainty over the coronavirus outbreak and the political environment as November’s election draws closer.

Will bad news be good news for stocks? Or does it have to get worse first?

Published:7/24/2020 9:05:10 AM
[Markets] Inflation/Deflation: The Economy Is An Elephant Inflation/Deflation: The Economy Is An Elephant Tyler Durden Thu, 07/23/2020 - 17:50

Authored by Charles Hugh Smith via OfTwoMinds blog,

This is the key dynamic of the economy going forward: defaults on debt, declining wealth as assets are relentlessly repriced lower and sharp declines in income due to layoffs and debt defaults.

The economy is like an elephant surrounded by blindfolded economists and pundits: what each blindfolded person reports about the elephant depends on what part they happen to touch.

This is why aggregate measures such as gross domestic product (GDP) and the consumer price index (CPI) will be misleading and therefore useless going forward: different parts of the economy might experience sharp deflation while other parts are experiencing rapid inflation. What each household and enterprise will experience depends on their exposure to these cross-currents.

Adding up sharply deflationary and equally severe inflationary trends to get a total inflation reading near zero will be utterly meaningless. Let's review a few key sectors of the economy to see how different participants' experiences of the economy will be.

Let's start with two of the apple carts the pandemic has knocked over: retail and commercial office space.

The first chart reveals the enormous surplus of retail space in the U.S. compared to other developed nations. Half of all U.S. retail space could vanish and we'd still have more than twice as much retail space per person as most of the developed world.

Such a vast surplus and the implosion of demand suggests a highly deflationary future for retail space rents. Furthermore, empty retail = no income for landlords = default on mortgages = bank losses = banking crisis. How much is empty retail space worth when the prospects of ever getting a paying tenant are poor? The answer is zero, or even less than zero, since the owner still has to pay property taxes, liability insurance, maintenance, utilities, etc.

The same dynamic dominates the commercial office space there's a massive surplus of office space while demand is imploding as marginal businesses fold and remote work becomes the desired setting for millions of digital workers and the default setting for employers anxious to avoid lawsuits arising from needlessly exposing their workforce to crowded offices.

What's the value of an empty office tower if the current owner overpaid and has a mortgage that far exceeds any realistic valuation based on 50% vacancy rates for the foreseeable future?

Next up--lofty rents for apartments in previously hot metro areas like San Francisco and NYC. Rents in the S.F. Bay Area are up 60% from 2009, far more than most renters' income gains in the same period. If the exodus from these hot markets accelerates as layoffs gather momentum, rents could fall far more than many expect.

Then there's the core problem with our entire economy: debt payments are fixed, income and profits are not. Take a quick glance at the chart of student loans, now pushing $1.7 trillion, and ponder how many of the Millennials who have to make these fixed debt payments were employed in sectors that have collapsed: tourism, restaurants, musical venues, gig economy, etc.

Recall that every debt that crushes the borrower is an asset that yields monthly interest to the affluent owners of that debt. When unemployed people default on their student loans, the value of those loans falls, and the income flowing to the affluent owners of the debt drops to zero.

This is the key dynamic of the economy going forward: defaults on debt, declining wealth as assets are relentlessly repriced lower and sharp declines in income due to layoffs and debt defaults.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:7/23/2020 5:00:46 PM
[Markets] Introducing The "Everything Bubble" Sentiment-o-Meter Introducing The "Everything Bubble" Sentiment-o-Meter Tyler Durden Thu, 07/23/2020 - 16:30

Authored by Charles Hugh Smith via OfTwoMinds blog,

Since human wetware remains stuck in OS1.01, we can predict a remarkable reversal.

The "Everything Bubble" has been a sight to behold. With central banks providing trillions to the big players and margin debt enabling small punters to leverage up, the hot money rotation has been a real merry-go-round as one asset and sector after another is ignited by a massive flood of money seeking a quick return.

Once the hot sector has been slingshot to absurd heights, the hot money abandons it in favor of whatever hasn't been shot into orbit.

Bat guano is the new Tesla--or maybe it's Beanie Babies pulled out of attics, or sand. The sand index could be the next moonshot, who knows?

There's an interesting self-referential, self reinforcing dynamic in manic bubbles. As everyone sees other "regular folks" scoring massive gains from doing nothing but buying what everyone else is buying, the temptation to join the orgy of easy money becomes irresistible.

This new money adds momentum to the hot-money rotation, accelerating the moves and the gains. In other words, the easy money just keeps getting easier.

This feeds an irresistible compulsion to leverage up--to borrow money and throw it into the 100% guaranteed-to-rise market. Once debt has been maxxed out, then punters discover options and leveraged ETFs as avenues to increase the 100% guaranteed gains.

To chart this self-reinforcing momentum in sentiment and hot money, I've prepared this "Everything Bubble" Bubble-o-Meter. Clearly, we're at the very top: there's no fear except of missing out. Buy the dip has yielded 100% guaranteed returns, with the proviso that the more you"invest" (heh), the more you make, and the more leverage you take on, the greater your gains.

It's worth recalling that the tsunami of central bank money--let's call it $9 trillion--is less than 3% of total global financial wealth which is well north of $300 trillion. The core assumption of the "Everything Bubble" is that this 3% of newly printed cash can push the $340 trillion leviathan of global assets to new heights of everything: higher debt, higher leverage, and higher valuations.

The notion that this is akin to pushing on a string does not compute in the "Everything Bubble."

Since human wetware remains stuck in OS1.01, we can predict a remarkable reversal from mortgaging the house to chase the hot-money trade of the moment to securing a place in the soup kitchen line. In the manic FOMO stage, no one ponders the idea that the mania could end rather more abruptly than expected; they only ponder how to increase the size of their current bet.

The soup kitchen line awaits...

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:7/23/2020 3:40:44 PM
[Markets] Johnstone: The Only Obstacle To A Healthy World Is Government Secrecy And Propaganda Johnstone: The Only Obstacle To A Healthy World Is Government Secrecy And Propaganda Tyler Durden Wed, 07/22/2020 - 21:20

Authored by Caitlin Johnstone via,

If people in power were no longer able to hide secrets and spin lies about what’s going on in the world, all of our major problems would come to an end. Because secretive and manipulative power structures are the source of all of our major problems.

If the public could see what’s actually happening in their world, they would immediately begin using the power of their numbers to overhaul our current system. This is why our current system pours so much energy into preventing the public from seeing what’s actually happening in their world.

If it weren’t for the constant campaign of obfuscation and manipulation of public perception via veils of government secrecy and propaganda, humanity would naturally find its way out of the power-driven tribulations it now faces, as surely as you’ll avoid obstacles and hazards in your path when you are walking with your eyes open. The only problem in this case is that our eyes have not been permitted to open.

It isn’t actually necessary to hold a bunch of hard, rigid ideas about exactly what kind of society we should have, what kind of political system we should have, what kind of economic system we should have. There’s nothing wrong with promoting ideas and having preferences of course, but really if you just gave humanity the ability to navigate through its own troubles by removing the blindfolds of propaganda and power opacity, it would organically create a healthy society, and realistically such a society probably won’t look a whole lot like our mental models.

You do have the option, then, of simply promoting the end of government/political/corporate/financial opacity and the end of establishment perception management. Wanting humanity to see with clear eyes so that it can make its own informed decisions about where to take itself is a complete political position, in and of itself. You don’t have to hold any other political preferences of any kind if you don’t want to.

The desire for an end to the obfuscations and manipulations of the powerful so that humanity can find its own way is the most anti-authoritarian position you can possibly take, because it also protects the world from your own authoritarian impulses.

I personally am very leftwardly inclined and believe that if humanity had its perception management blindfolds removed it would naturally create a world where we’re all truly equal and everyone is taken care of by the collective each according to their need, but what the hell do I know? Maybe if the blindfold is removed I’d be proven wrong. I respect human sovereignty enough to want to find out, free from my own political preferences. I should not be the one making such societal decisions, society as a whole should. I just want human perception to be freed up enough to make that call.

If you choose to make the end of perception management your foremost priority, that means you push for government transparency at every opportunity and support any movement to take away secret hiding places from the powerful.

It means opposing the way the powerful bolt shut all the doors on public scrutiny of their behavior, smear anyone who speculates about what they might be up to as a crazy conspiracy theorist, and imprisons anyone who leaks information about what they’re really doing to the people.

It means you support whistleblowers like Chelsea Manning and Edward Snowden who help shine light on the things power tries to keep hidden in the dark.

It means you support WikiLeaks and Julian Assange and any journalist who helps expose the secrets of the powerful.

It means you fight the empire’s propaganda machine at every opportunity to break public trust in its manipulations.

It means you support breaking up the monolithic mass media and giving everyone the equal ability to influence the dominant narratives.

It means opposing internet censorship, since Silicon Valley plutocrats propping up the establishment their kingdoms are built upon by censoring anti-establishment voices is another way of keeping people from being shown the truth about their world.

I personally would add that it means supporting the decriminalization of psychedelics, because seeing within ourselves is just as important as seeing what’s happening in our world and entheogens can facilitate this seeing, but maybe that’s just me.

Again, there’s no harm in engaging in politics and pushing for the changes you’d like to see in your world, and there can be many benefits to doing so. But as long as people are successfully prevented from seeing and understanding what’s really happening in their world by the obfuscation of information and by the manipulation of people’s perception of that information, the status quo will always remain in place.

So in my opinion this is the most sensible point upon which to converge our energy. I personally have no interest in controlling what humanity does, and desire only that people come to see freely enough to make their own decisions.

It’s absolutely insane that information which affects us all is kept hidden away from our clear vision by secrecy and propaganda. It’s even crazier that they shame us when we wonder what’s really going on and throw us in prison when we try to find out. We must liberate ourselves from this madness so we can create a healthy world together.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics onTwitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:7/22/2020 8:29:40 PM
[Markets] Inequality Is America's Monster Id Inequality Is America's Monster Id Tyler Durden Wed, 07/22/2020 - 16:40

Authored by Charles Hugh Smith via OfTwoMinds blog,

What they don't understand is inequality is America's Monster Id: the more you try to suppress it, the more powerful it becomes.

The word privilege is much bandied about now. I've been writing about privilege for many years, and ended up writing a book about the source (and thus the end) of privilege: Inequality and the Collapse of Privilege.

Privilege and inequality are two sides of the same coin. Those with privilege get more than everyone else without actually creating more value, which is the definition of inequality.

What few seem to grasp is the absolute source of inequality / privilege is our financial system, specifically the way we create and distribute money.

Few people connect the dots between a central bank (the Federal Reserve) creating money out of thin air and giving the super-wealthy first dibs on this new money, and the vast inequalities of wealth and power that are widening to the point of social disorder on a grand scale.

While the majority may not fully understand the source of inequality, they do intuit that billionaires got the mine and the rest of us got the shaft. Since humans are social apes and social apes have a sense of fairness, even within pecking orders with a few at the top, the inherent unfairness of our financial system generates resentment and indignation, while the lack of understanding generates frustration.

My colleague Mark Jeftovic penned a post explaining how those closest to the Fed's money spigot get wealthier for doing absolutely nothing but being close to the spigot. This is the most basic structure of our financial system and economy. Everything else flows from this simple mechanism. On Cantillionaires, Sycophants and Losers.

Put another way: while the rest of us earn money by creating goods and services, those close to the Fed's money spigot create absolutely nothing but they get billions of dollars at rates of interest that are essentially zero, or adjusted for inflation, less than zero.

As a result, they can outbid the rest of us for all the assets that generate income.

The only possible result of this system is that the wealth of the nation is increasingly concentrated in the hands of the few with access to the Fed's nearly free money, and so the unearned income (interest, dividends, rents, etc.) all flow to them--not because they created value or goods and services, but because they were closest to the Fed's money spigot.

The political game is to obscure this source of inequality and distract the unprivileged many with bread and circuses: an extra $600 tossed to the restive crowd of unemployed, $1,200 to the fitful audience, and eventually, some monthly amount of Universal Basic Income (UBI) calibrated to be just enough to get by but not enough to ever own any productive assets.

As I often point out, the real goal of UBI is to ensure debtors can make their credit card / student loan / auto loan payments, as these monthly payments by the masses are the interest income of the super-wealthy with the privileged position by the Fed's money spigot.

The privileged super-wealthy also own the media, of course, and so they're delighted to virtue-signal their support of purely symbolic actions such as toppling statues and occupying worthless chunks of cities. None of these symbolic actions threaten their privileged position by the Fed's money spigot, and even better, they distract and divide the exploited populace.

For if the people never catch on to the source of inequality, that ignorance is all the protection the privileged super-wealthy need.

The privileged super-wealthy are feeling very confident in their control of the financial system, the source of inequality. They own the wealth, the income streams, the media, Big Tech, and the machinery of political power.

What they don't understand is inequality is America's Monster Id: the more you try to suppress it, the more powerful it becomes. The Monster Id of inequality is already rampaging through the social and political orders, and eventually it will burn through the Fed's free-money vault with a white-hot intensity that will surprise the privileged super-wealthy and their armies of self-serving toadies, lackeys, apparatchiks and technocrat flunkies.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)

(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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Published:7/22/2020 3:53:19 PM
[Entertainment] Washington Post hardcover bestsellers A snapshot of popular books. Published:7/22/2020 12:55:45 PM
[Markets] The Real Unemployment Rate Is 21%... And Heading Higher The Real Unemployment Rate Is 21%... And Heading Higher Tyler Durden Mon, 07/20/2020 - 20:10

Authored by Charles Hugh Smith via OfTwoMinds blog,

As businesses, agencies and organizations recalibrate to the reality that the V-shaped recovery was nothing but a brief fantasy, 6 million additional jobs lost may be a best-case scenario rather than the worst-case scenario.

It is somewhat less than reassuring that the "official" unemployment rate of around 12% is roughly half of the "real-world" unemployment rate. As always in the wonderful world of statistics, especially politically potent ones, it depends on what you measure, what you don't measure / act as if it doesn't exist, and how you measure what you do measure.

Everyone who digs beneath the headline numbers of employment / unemployment soon discovers a number of jarring anomalies in what the media presents as "factual statistics."

The first is that the Bureau of Labor Statistics (BLS) doesn't actually count the number of people who are employed / unemployed; they rely on a sampling survey of employers, which is more like an election poll than an actual measurement.

Secondly, they estimate the number of new businesses which are "born" and existing businesses that "die", and then guesstimate the number of additional employees this real-time churn generates. This birth/death model is notoriously inaccurate, as it ignores little things like pandemics and is often magically revised to create or eliminate hundreds of thousands of presumed jobs.

State unemployment offices tabulate the number of unemployment claims received and processed. These are real numbers, not guesses like the BLS estimates. Wolf Richter prepared a chart of the real unemployment claims numbers which is reprinted below, from his post 32 Million People on State & Federal Unemployment, 2nd Highest Ever: Week 17 of U.S. Labor Market Collapse.

The BLS reported that the U.S. employed workforce stood at about 152 million in February. With 32 million claiming unemployment, that's an unemployment rate of 21%. How do we arrive at a 12% unemployment rate? We ignore the 14.3 million contract / gig workers who are currently drawing emergency Federal unemployment via Pandemic Unemployment Assistance (PUA),and the 936,000 in the Pandemic Emergency Unemployment Compensation (PEUC) program.

But even the 21% real-world unemployment rate doesn't reflect the full unemployment picture: previously full-time workers who have had their hours cut to part-time aren't counted in unemployment statistics, even though their employment status has changed for the worse. 

Then there are the millions of workers who were recalled to work as businesses re-opened whose employment is up in the air as the expected return-to-normal has failed to materialize.

An entire class of workers has been glossed over: small business owners who have closed their businesses. Those owners who incorporated and paid unemployment insurance on themselves as employees of the corporation qualify for unemployment, but many small business owners didn't pay themselves as employees, and their status is uncertain.

Anecdotally, the number of small business owners who have decided to close in recent weeks appears to be significant, as the hoped-for V-shaped recovery failed to materialize even as states re-opened. This trend could gather momentum as hope decays into realistic assessment and funds borrowed from emergency federal programs (PPP) run out.

The number of employees who will be laid off again as a rising flood of small businesses throw in the towel could quickly become consequential.

Barring an immediate additional influsion of federal stimulus, local governments will also start laying off temp and contract workers as tax revenues continue their downward spiral.

As Corporate America's revenues falter, the only ways to reduce costs are 1) dump leases on commercial space and 2) lay off employees and 3) slash spending to the bone. All of these end up triggering layoffs.

Could the number of unemployed rise to 38 million from 32 million, a 25% rate of unemployment? As businesses, agencies and organizations recalibrate to the reality that the V-shaped recovery was nothing but a brief fantasy, 6 million additional jobs lost may be a best-case scenario rather than a worst-case scenario.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:7/20/2020 7:11:41 PM
[Markets] Europe Has Been Preparing A Global Gold Standard Since The 1970s Europe Has Been Preparing A Global Gold Standard Since The 1970s Tyler Durden Mon, 07/20/2020 - 03:30

Submitted by Jan Nieuwenhuijs from Voima Gold,

The current fiat international monetary system is ending—unconventional monetary policy has entered a dead end street and can’t reverse. I have written about this before, and will not repeat this message in today’s article. Instead, we will discuss a topic that deserves more attention, namely that European central banks saw this coming decades ago when the world shifted to a pure paper money standard. Accordingly, European central banks have carefully prepared a new monetary system based on gold.

When the last vestige of the gold standard was terminated by the U.S. in 1971, circumstances forced European central banks go along with the dollar hegemony, for the time being. Sentiment in Europe, however, was to counter dollar dominance and slowly prepare a new arrangement. Currently, central banks in Europe are signaling that a new system that incorporates gold is approaching.

If you want to read a summary of this article you can skip to the conclusion.


  • The Rise and Fall of Bretton Woods
  • Europe Equalizes Gold Reserves Internationally
  • Private Gold Ownership Distribution
  • Setting the Stage for a Gold Standard
  • Conclusion
  •  Sources

The Rise and Fall of Bretton Woods

At the end of the Second World War, a new international monetary system called Bretton Woods was ratified. Under Bretton Woods, the U.S. dollar was officially the world reserve currency, backed by gold at a parity of $35 per ounce. The United States owned 60% of all monetary gold—more than 18,000 tonnes—and promised the dollar to be “as good as gold.” All other participating countries committed to peg their currencies to the dollar. Bretton Woods was a typical gold exchange standard.

It didn’t take long for the U.S. to print and export more dollars than it had gold backing them, which raised concern about the parity of $35 dollars per ounce. As a consequence, foreign central banks started redeeming dollars for gold at the U.S. Treasury. The vast gold reserves of the U.S. began flowing out and ended up mainly in Western Europe.

In an attempt to stabilize the international monetary system, a consortium of eight Western central banks set up the London Gold Pool in 1961 to keep the gold price in the free market at $35. Despite being a member of the Pool, France—that was very critical of U.S. monetary policy—repeatedly redeemed dollars at the Treasury. France thus bought gold at the Treasury, to sell in the free market through the Pool.

In 1965 pressure on the dollar increased and the Pool had to supply huge amounts of gold to sustain the peg. European central bankers started deliberating how to get out of the Pool agreement. Europe didn’t want to defend the peg indefinitely for what was in essence a problem caused by the United States. In 1967 the British pound devalued, which injured confidence in the entire system and France withdrew from the Pool. The situation escalated quickly. Famous gold author Timothy Green writes in The New World of Gold (1982):  

Could $35 gold be maintained? The gold pool, except for France (under de Gaulle who shrewdly opted out), thought it could. They had nearly twenty-four thousand tons of gold at their disposal. And William McChesney Martin of the Federal Reserve Board rashly said they would defend the $35 price “to the last ingot.” But the Tet offensive in Vietnam crushed that pledge. Between March 8 and March 15, 1968, the pool had to provide nearly one thousand tons to hold the price at the fix. U.S. air force planes rushed more and more Fort Knox gold to London, and so much piled up in the Bank Of England’s weighing room that the floor collapsed.

On March 15, 1968, the Pool ceased its operations and the gold price in the free market was allowed to float. Though central banks agreed to keep trading gold among each other at $35 and not buy and sell in the free market. A “two-tier gold market” had emerged.

Foreign central banks could still redeem dollars at the Treasury—at the official gold price that was lower than the free market price—but it was seen as “unfriendly.” Early August, 1971, France, again, sent a battleship to New York to load up on gold in exchange for dollars. A few days later, on August 15, the United States unilaterally decided to end Bretton Woods by suspending dollar convertibility. Europe, Japan, and other countries, were not amused. Dollar reserves, previously backed by gold, had turned into pieces of paper plummeting in value against gold. What followed was a diplomatic conflict between Europe and the U.S.

Since the 1960s, America seduced foreign central banks to reinvest their dollar reserves in U.S. government bonds (Treasuries), instead of redeeming them for gold. If Treasuries would replace gold in the international monetary system, the United States could continue to print money for imports, and have savers abroad finance their fiscal deficits. Such a dollar standard would yield the U.S. unprecedented power, though it wouldn’t be an equitable system.

One of the reasons the euro was created was to counter dollar dominance. Many decades before it was launched, Western Europe started to integrate. The first seed was the Treaty of Rome in 1957 that gave birth to the European Economic Community (EEC). From classified documents that have been released in recent years, we know the U.S. opposed monetary cooperation in Europe, for the simple reason it didn’t want competition for the dollar hegemony. Below are excerpts from a telephone call between U.S. National Security Advisor, Henry Kissinger, and Deputy Secretary of the Treasury, William Simon, on March 14, 1973. 

Kissinger: … I basically have only one view right now which is to do as much as we can to prevent a united European position without showing our hand. … I don’t think a unified European monetary system is in our interest.  
… You understand, my reason’s entirely political, but I got an intelligence report of the discussions in the German Cabinet and when it became clear to me that all our enemies were for the European solution that pretty well decided me.

The “European solution” was to fix the exchange rates of the EEC’s currencies, and float as a bloc against the dollar. The “common float” would enhance trade within Europe and show the world Europe’s unity and leadership. This was not in the interest of the U.S. According to Under Secretary of the Treasury for Monetary Affairs, Paul Volcker, the European solution was a euphemism for saying: “Let’s leave the United States out of the world and go our independent course.”

Furthermore, the EEC took the stance that central banks should be able to buy and sell gold at a market-related price, both among themselves and on the free market. Also, in 1973 the EEC publicly stated in the New York Times: “[Europe] will promote agreement on international monetary reform to achieve an equitable and durable system taking into account the interests of the developing countries.” This statement can be traced to what Georges Pompidou, President of France, said in a meeting with Richard Nixon, President of the U.S., in 1970: “Power thus established never lasts long. The existence of more centers of economic and political power makes things more complicated but in the longer term has greater advantages.” France’s view was that if there were more centers of economic and political power, the world would be more stable.

The U.S. opposed the end of the two-tier system, because this would increase the official price of gold and put it back in the center of the international monetary system. America pushed for “phasing gold out of the international monetary system,” all the more because Europe was holding more gold than the U.S. since the 1960s.

A historic document that pointedly illustrates the aforementioned dynamics is, “Minutes of Secretary of State Kissinger’s Principals and Regionals Staff Meeting, Washington, April 25, 1974”. From the American meeting in 1974:

Mr. Enders: … It’s been in the newspapers now—the EC [EuropeanCommunity] proposal.
Secretary Kissinger: On what—revaluing their gold?
Mr. Enders: Revaluing their gold—in the individual transaction between the central banks [meaning the end of the two-tier system].
Secretary Kissinger: What’s Arthur Burns’ [Chair of the Federal Reserve] view?
Mr. Enders: Arthur Burns—I talked to him last night on it, and he didn’t define a general view yet. He was unwilling to do so. He said he wanted to look more closely on the proposal. Henry Wallich, the international affairs man, this morning indicated he would probably adopt the traditional position that we should be for phasing gold out of the international monetary system; but he wanted to have another look at it.
Secretary Kissinger: … my understanding of this proposal would be that they—by opening it up to other countries, they’re in effect putting gold back into the system at a higher price.
Mr. Enders: Correct.
Secretary Kissinger: Now, that’s what we have consistently opposed.
Mr. Enders: Yes, we have. You have convertibility if they—
Secretary Kissinger: Yes.
Mr. Enders: Both parties have to agree to this. But it slides towards and would result, within two or three years, in putting gold back into the centerpiece of the system—one. Two—at a much higher price. Three—at a price that could be determined by a few central bankers in deals among themselves.
Secretary Kissinger: Why are we so eager to get gold out of the system?
Mr. Enders: It’s against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings—about 11 billion [USD]—a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We’ve been trying to get away from that into a system in which we can control—
Secretary Kissinger: But that’s a balance of payments problem.
Mr. Enders: Yes, but it’s a question of who has the most leverage internationally. If they have the reserve-creating instrument, by having the largest amount of gold and the ability to change its price periodically, they have a position relative to ours of considerable power.
Secretary Kissinger: O.K. My instinct is to oppose it. What’s your view, … Ken?
[Ken] Rush: Well, I think probably I do. The question is: Suppose they go ahead on their own anyway. What then? 
Secretary Kissinger: We’ll bust them.
Mr. Enders: I think we should look very hard then, Ken, at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all.

The above goes to show the distaste of the U.S. with respect to gold, and their ambition to maintain the dollar hegemony.   

For informative comments by Arthur Burns we will turn to a “Memorandum For The President” he wrote on June, 3, 1975. From Burns:

… removal of the present restraints on inter-governmental gold transactions and on official purchases from the private market [meaning the end of the two-tier system] could well release forces and induce actions that would increase the relative importance of gold in the monetary system. In fact, there are reasons for believing that the French, with some support from one or two smaller countries, are seeking such an outcome.
It is an open secret among central bankers that, at a later date, the French and some others may well want to stabilize the market [gold] price within some range.
All in all, I am convinced that by far the best position for us to take at this time is to resist arrangements that provide wide latitude for central banks and governments to purchase gold at a market-related price.

The French, and some of its allies, wanted gold’s importance to increase in the international monetary system and stabilize its price “at a later date.” Which boils down to a gold standard. The Federal Reserve favored a continuation of the two-tier market, which in practice meant gold’s demonetization.

Right after the two-tier system was cancelled in 1978, eight European countries launched the European Monetary System (EMS). We will leave the exact mechanics of the EMS for a future article, but I will share a quote by Professor of American and Foreign Law, Kenneth W. Dam, with respect to the EMS. From The Rules of the Game: Reform and Evolution in the International Monetary System (1982):

Finally, the EMS may also turn out to be a first step toward rehabilitating gold as an integral part of the international monetary system.  

In 1998 the EMS was annulled and replaced by the Eurosystem.

Although France, and some other European countries, were surely in favor of gold and against the dollar hegemony in the 1970s, I don’t know if this group had a solid plan from the start. Perhaps, they had a direction in mind and adjusted their policies throughout the years.   

The U.S. never did “raid the gold market once and for all.” They sold roughly 500 tonnes in the late 1970s and 1980s in an attempt to lower the price in the free market. Gold traded more or less sideways throughout in the 1980s and 1990s, but didn’t get phased out of the international monetary system. However, the Americans succeeded in imposing the paper dollar standard on the world. There was a lot of discussion in the 1970s about the Special Drawing Right (SDR), a reserve asset issued by the International Monetary Fund, but it didn’t function (and still doesn’t). The U.S. could continue to print and export dollars, and Treasuries became the main international reserve asset. As a result, the U.S. has been running a trade and fiscal deficit since 1971.

Europe Equalizes Gold Reserves Internationally

As mentioned, Europe preferred a new “equitable and durable system taking into account the interests of the developing countries,” and France, supported by allies, was aiming for something of a gold standard “at a later date.” Remarkably, what I discovered is that European central banks started selling gold in the 1990s to equalize their gold reserves relative to other nations. A new gold standard would be equitable if all gold was distributed evenly, which is what European central banks have been managing.

After the Great Financial Crisis (GFC) in 2008, the Minister of Finance of the Netherlands, Jan Kees de Jager, was asked in parliament for the main reason why the Dutch central bank had sold 1,100 tonnes of gold since 1993, and if storage costs had been a motivation. His answer:

Through gold sales in the past, the Dutch central bank brought its relative gold holdings more in line with other important gold holding nations. Storage costs didn’t play any part in the decision to sell gold… 
At the time DNB [Dutch central bank] determined that from an international perspective it owned a lot of gold proportionally.

Another question directed at de Jager, was if he could confirm if other nations—in contrast to the Netherlands—had increased their official gold reserves in the past years. His answer:

The buyers are developing nations whose international reserves are growing, or historically have a small gold stock.

According to de Jager, the Dutch central bank sold gold to equalize reserves internationally. He mentioned no other reason for the sales. (De Jager denied the Dutch central bank sold gold for paying off the national debt of the Netherlands, which is a frequently mentioned reason for European gold sales.) In addition, Dutch newspaper NRC Handelsblad reported in 1993 that the Dutch central bank had sold 400 tonnes through the Bank for International Settlement, and this was partially bought by the Chinese central bank. I conclude that the Netherlands sold 1,100 tonnes to help developing nations get equal in terms of gold reserves proportionally and prepare for a new monetary system that incorporates gold. Why else—than to reposition gold in the international monetary system—would the Netherlands want to equalize their gold reserves with other “important gold holding nations”?

Other central banks in Europe have done the same as the Dutch central bank. In 1999, fourteen (Western) European central banks surprised the gold market with a statement regarding a “concerted programme of [gold] sales over the next five years.” The program was dubbed the Central Bank Gold Agreements (CBGA), and the signatories declared:

Gold will remain an important element of global monetary reserves. … Annual [aggregated] sales will not exceed approximately 400 tons and total sales over this period will not exceed 2,000 tons. … This agreement will be reviewed after five years.

Gold sales were tightly coordinated. In the knowledge Europe wanted to balance gold reserves internationally (more proof below) this statement makes perfect sense.

The World Gold Council interpreted CBGA as removing “concern that uncoordinated central bank gold sales were destabilising the market, driving the gold price sharply down.” It’s true that some European countries sold significant amounts of gold before CBGA, which drove the price down, and right after CBGA was announced the gold price started to rise. Mission accomplished, I would say.

Eventually, CBGA was extended three times, and ten more European countries joined. During CBGA 1-4 a little over 4,000 tonnes were sold, virtually all of which before 2009.

One of the members of Voima Gold’s Advisory Board is Pentti Pikkarainen, who was Head of Banking Operations at the central bank of Finland—one of the signatories of CBGA—from 2001 until 2010. When I asked Pikkarainen if in addition to the Dutch central bank, others had sold to bring their “relative gold holdings more in line with other important gold holding nations” as well, he answered:

It is true that some central banks compared their gold holdings with those of other central banks and came to that type of conclusion.

So, multiple central banks in Europe sold gold to equalize reserves internationally.

To get a sense of the equalization process within Europe, I have made a chart showing gold sales per country before and during CBGA, current gold reserves, and Gross Domestic Product (GDP).

Before and during CBGA, mainly medium sized economies sold gold to have an equal share relative to others. It’s not a perfect fit, but striking nonetheless. Still more, because Cyprus, Estonia, Italy, and Lithuania were signatories of CBGA, but didn’t sell an ounce of gold during the “concerted programme of sales.” Finland and Ireland were buyers during CBGA, albeit of small weights, which makes sense when comparing reserves across the board. It appears CBGA was not a concerted programme of gold sales, but a concerted programme of equalizing gold reserves. The main outlier is the U.K.  

Official gold reserves around the world are spread more evenly since the 1970s. Eurasia minus Western Europe held 2,000 tonnes in 1971, versus 9,300 tonnes currently.

The equalization process continues until this day. In 2018, the central bank of Hungary (MNB) purchased 31.5 tonnes of gold, a tenfold in their official reserves. MNB disclosed it bought gold because “it may play a stabilising role … in times of structural changes in the international financial system,” but also to bring their gold reserves more in line to its peers. The Polish central bank (NBP) bought 125.7 tonnes in 2019 and stated the same:

the share of gold in NBP foreign exchange reserves was below the average for all central banks (10.5%) and significantly below the average in European countries (20.5%). The purchase of gold allowed not only to increase the strategic financial buffer of the country, but also to bring the NBP closer in terms of the share of gold in foreign exchange reserves to the average of all central banks (10.5%).

We undoubtedly read about preparing for a change in the international financial system, and balancing gold reserves proportionally. I’m aware de Jager, MNB, and NBP talk about leveling “gold reserves as a percentage of total reserves,” but I see a more significant pattern in gold reserves versus GDP. To be complete, below is a chart showing official gold reserves as a percentage of total reserves (foreign exchange, gold, and SDRs) for European countries.  

Private Gold Ownership Distribution

Private gold holdings make up a larger portion of total above ground stocks than official holdings, but it’s a lot harder to localize. Although the data is limited, private gold distribution shows to be roughly equal for “important gold holding nations.” (Of course, it can never be exactly equal.)

Official gold reserves make up less than 20% of total above ground reserves.

When the Chinese Communist Party (CCP) took control over China in 1949 it effectively banned the private use of gold. Since the 1980s, Chinese citizens were slowly allowed to buy gold jewelry, and in 2002 the Chinese gold market was fully liberalized with the launch of the Shanghai Gold Exchange. Gradually, the CCP began stimulating its citizens to accumulate gold. In 2012, President of the China Gold Association, Sun Zhaoxue, elaborated on the importance of private gold ownership in the leading academic journal of the CCP’s Central Committee, Qiushi:

Practice shows that gold possession by citizens is an effective supplement to national reserves and is very important to national financial security. … We should advocate to ‘store gold among the people’ …

A year later Sun made a statement in the Wall Street Journal on how much gold Chinese people own on average:

Meanwhile, the average Chinese person “only holds 4.5gram of gold,” Mr. Sun said. “That is far below an average of 24 grams per person globally …

The Chinese government aims to elevate the amount of private gold per capita, to bring it more in line to the global average. China’s gold strategy matches Europe’s gold strategy in terms of equalizing reserves (next to the obvious reasons to own gold in the first place).

From previous research, I know approximately how much private gold is in India, China, France, Italy, and Germany. When I combine the private and official gold reserves of these countries, and compare it to GDP per capita, these measures appear to be quite close to each other.

The amount of gold each citizen owns on average, directly and via their central bank, is roughly equal to their economic income. At a gold price of about $10,000 dollars per ounce, that is. The biggest difference is between China and India.

For China’s official gold reserves I have used a speculative estimate of 5,000 tonnes. According to my calculations China currently is at 18 grams of gold per capita.

It goes without saying that partially the gold distribution in recent decades has been organic.

The story of China and gold goes back further than many people think. On the website of Bank of China—a state owned bank—we can read:

From 1973 to 1974, Vice Premier Chen Yun … carried out special research on foreign trade issues. On June 7, 1973, when listening to a bank report, Vice Premier Chen Yun raised ten important questions in international economy and finance, ... The ten research topics assigned by Chen Yun covered economy, finance, currency and other important aspects in the contemporary capitalist world, which were:
(1) How much money was issued in the U.S., Japan, UK, Federal Republic of Germany and France from 1969 to 1973? How much were their foreign currency reserves and gold reserves?
(6) In addition to political contradictions, what are the economic contradictions between the U.S. and UK, Japan, Federal Republic of Germany and France? What are the principal contradictions?
(7) What are the possible solutions to problems concerning trade and currency between the U.S. and Japan, UK, France and Federal Republic of Germany? Finance Minister Valery Giscard d'Estaing of France advocated the linkage between currency and gold. Can we reckon an approximate ratio between the total monetary flow and the total possession of gold in the world?

I don’t think it’s a coincidence the Chinese government started developing domestic gold mining in the 1970s, and is now the nation with the largest mine output. Don’t get me wrong, the Chinese didn’t become “gold bugs” overnight, but understood the strategic importance of gold. They anticipated gold’s role in international finance would anything but vanish, as the U.S. wanted the world to believe in the 1970s.

In 1979, the Chinese even set up a new military unit, called the Gold Armed Police, dedicated to gold exploration. This division of the Chinese army still exists.

Courtesy The China Times. “April 2011, about 100 soldiers from the 7th detachment [of the Gold Armed Police] carrying out geology and resources survey tasks in Xinjiang.”

Setting the Stage for a Gold Standard

After the GFC, Germany, the Netherlands, Hungary, Poland, Turkey, and Austria have repatriated gold from the Federal Reserve Bank of New York and Bank of England. These countries show to assign greater importance to gold as a reserve asset versus fiat currencies, and their trust in the U.S. and U.K. as custodians has waned. In the words of the Polish central bank:

central banks usually strive to diversify their gold storage locations, … to limit geopolitical risk, the consequence of which could be, for example, loss of access or limitation of the free disposal of gold reserves kept abroad.

Storing gold on domestic soil is safer than abroad, but having some of it in trading hubs such as London allows the gold to be used more easily for, i.e., swaps and international settlement. According to the German central bank their repatriation scheme had three objectives: cost efficiency, security, and liquidity

Another important indicator for what European countries have prepared for, is that after the GFC some have upgraded their official gold reserves to current wholesale industry standards. France, Germany, Sweden, and Poland, that we know of, have disclosed their gold bars to adhere to “London Good Delivery” standards. Consequently, their metal is liquid and ready for international settlement.  

From the Banque de France:

Since 2009, the Banque de France has been engaged in an ambitious programme to upgrade the quality of its gold reserves. The target is to ensure that all its bars comply with LBMA [London Bullion MarketAssociation] standards so that they can be traded on an international market. 

Europe is well prepared for a gold standard. The U.S. less so, because most of its gold does not comply to prevailing industry standards. Thereby, the audits of the U.S. official gold reserves have been executed with an “inadequate degree of integrity.”

Last but not least, after the GFC European central banks have started communicating gold’s unparalleled stable properties, and promote gold ownership. The French central banks states on its website gold is “the ultimate store of value.” According to the President of the German central bank, Jens Weidmann, gold is “the bedrock of stability for the international monetary system.” On the website of the central bank of Italy it reads:

Gold is an excellent hedge against adversity. … Another good reason for holding a large position in gold is as protection against high inflation since gold tends to keep its value over time. Moreover, unlike foreign currencies, gold cannot depreciate or be devalued …
Gold … is not an asset ‘issued’ by a government or a central bank and so does not depend on the issuer’s solvency.

The Dutch central bank states on its website:

A bar of gold always retains its value ...
Gold is the perfect piggy bank—it’s the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again.

Let this sink in. These are central banks that issue their own currency, and are solely tasked to ensure economic stability. Yet, they openly state gold is superior to the currency they issue and advice people to own gold as protection against “high inflation,” “adversity,” and the possibility “the system collapses.” If fiat currencies would be safer than gold, these central banks wouldn’t recommend people to own gold as “the perfect piggy bank.” But they do recommend people to own gold, because, ironically, gold “is not an asset ‘issued’ by a government or a central bank and so does not depend on the issuer’s solvency.” European central banks are confessing their own paper money system is failing. They can't say this explicitly because it would cause instant panic in financial markets, but how much more obvious can they make it?

In my opinion, these central banks are alluding to a new monetary system based on gold.


We have established that since the 1970s Europe has been countering the dollar hegemony and wanted gold back in the center of a new “equitable and durable system taking into account the interests of the developing countries.” Subsequently, they have equalized official gold reserves internationally, strategically allocated their gold, upgraded their gold to current industry standards, and are now promoting gold as the “perfect piggybank” and as “protection against high inflation.”

The trend in Asia is also increasingly against dollar dominance and in favor of gold. In May, 2019, Malaysian Prime Minister Mahathir Mohamad mooted the idea of a new international currency pegged to gold. Reuters reported in April, 2020, that the “president of the Shanghai Gold Exchange (SGE) called for a new super-sovereign currency to offset the global dominance of the U.S. dollar, which he predicted would decline long term, while gold prices rally.” The President of the SGE also said: “The global clout of the United States will reduce, while the status of the European Union and China will rise in global affairs.”

In line with the long-term trend discussed above is that economic strength is more equal than it was in 1971. Fifty years ago, the U.S. and Western Europe (Euro Area) accounted for 59% of global GDP; currently their share is 40%. This rhymes with Pompidou’s remark on “the existence of more centers of economic and political power makes things more complicated but in the longer term has greater advantages.”

Stunningly, economic strength of the largest power blocks—the U.S., China, Euro Area, and Russia—is roughly in line with their relative official gold reserves, as you can see in the chart below. For China’s official gold reserves I have used a speculative estimate of 5,000 tonnes (in this post I explain how I have computed this number).  

The importance of the chart above can be confirmed by an American memo dating from 1974. Sidney Weintraub, Deputy Assistant Secretary of State for International Finance and Development, wrote to Paul Volcker regarding the gold issue that “the distribution of … world [gold] reserves would be highly inequitable, with eight wealthy countries getting three-fourths, while the developing countries would get less than 10 percent.” The Europeans thought about this problem, and they helped solving it by equalizing gold reserves internationally.

The essence of the chart is that economic output (GDP) is real, and gold is too. When fiat currencies are devalued to alleviate the global debt burden, gold and GDP distribution won't change much, which is beneficial for a shift towards an equitable gold standard.

Likely, Japan and the U.K. have been pressured by the U.S. not to increase their gold reserves. In The Prospect for Gold: The View to the Year 2000 (1987) Timothy Green writes: “For many years the Bank of Japan, wishing to keep well with the US Treasury, deliberately avoided buying gold.” Japan’s official gold reserves have been flat since 1978, while it’s the largest foreign holder of Treasuries. India, Brazil and South Korea have all bought gold after the GFC. Why Canada has zero gold is beyond me, but it can be related to the fact that they have a lot of in-ground reserves.

Although it’s clear that Europe and other nations are prepared for a new monetary system that incorporates gold, it’s unknown how this system will look like. It can be similar to the classic gold standard, or it can be a new model. We will dive into the economics of this in a future article. In any case, I think that gold will get a prominent role in a forthcoming system. Needless to say, in such a scenario the nominal gold price will be significantly higher from where it trades today.

As we are currently witnessing, a monetary system without an anchor is bound to fail, and what anchor is more suitable than gold? Gold is internationally the most evenly spread financial asset without counterparty risk and its stability has a proven track record of 5,000 years.    

There hasn’t been a lack of signals from Europe and “developing nations” for a monetary reset. Let me finish with an example from 2014. Cheng Siwei, chairman of the International FinancialForum (IFF), said at an IFF conference: “The world today is facing a revolution. It is imperative to construct a new global financial framework and to formulate new rules.” On the same conference Jean-Claude Trichet, former President of the European Central Bank and co-chairman of the IFF, stated: “The global economy and global finance is at a turning point, … new rules have been discussed not only inside the advanced economies, but with all emerging economies, including the most important emerging economies, namely, China.”

These statements are compatible with the international movement towards gold that keen observers will have noticed.  

Sources (Books, Papers, and Articles):

  • Bank of China, 1973. Punctual Delivery of Ten Research Topics Assigned by Vice Premier Chen Yun. (link)
  • Bordo, M., Monnet, E., and Naef, A. 2017. The Gold Pool (1961-1968) And the Fall of The Bretton Woods System. Lessons for Central Bank Cooperation. (link)
  • China Daily, November 5, 2014. Reform of World Financial Order Needs Strategic Thinking. (link)
  • The China Times. Mysterious Gold Exploration Unit of People’s Armed Police. (link)
  • Dam, K. D. 1982. The Rules of the Game: Reform and Evolution in the International Monetary System.
  • Financial Express, May 20, 2019. In Gold We Trust: India’s Household Gold Reserves Valued at Over 40% of GDP. (link)
  • Green, T. 1982. The New World of Gold.
  • Green, T. 1987. The Prospect for Gold: The View to the Year 2000.
  • Grabbe, J. O. 1998. Gold Market. (link)
  • Jansen, K. July 20, 2017. PBOC Gold Purchases: Separating Facts from Speculation. (link)
  • Mundell, R. A. 1997. The International Monetary System in the 21st Century: Could Gold Make a Comeback? (link)
  • Nieuwenhuijs, J. November 25, 2019. German Central Bank: Gold Is the Bedrock of Stability for the International Monetary System. (link)
  • Nieuwenhuijs, J. December 17, 2019. US Official Gold Reserves Auditor Caught Lying. (link)
  • Nieuwenhuijs, J. January 15, 2020. China’s Gold Hoarding: Will It Cause the Price of Gold to Rise? (link)
  • Nieuwenhuijs, J. February 28, 2020. What Is an SDR and Will It Be the Next World Reserve Currency? (link)
  • Nieuwenhuijs, J. April 2, 2020. Germany Hoarding Gold to Prepare for Currency Reform, Italy Dishoards. (link)
  • Nieuwenhuijs, J. June 24, 2020. Why Gold, and Why Now. (link)
  • NewYork Times, September 27, 1972. Text of Shultz Talk Before International Monetary Fund and World Bank. (link)
  • New York Times, September 24, 1973. Text of the European Economic Community’s Proposal on Relations With U.S. (link)
  • Thiele, C. L. 2018. Germany’s Gold.
  • Trachtenberg, M. 2010. The French Factor in U.S. Foreign Policy during the Nixon-Pompidou Period, 1969-1974. (link)
  • Rueff, J. 1972. The Monetary Sin of the West. (link)
  • Reuters, May 30, 2019. Malaysia's Mahathir Proposes Common East Asia Currency Pegged to Gold. (link)
  • Reuters, April 28, 2020. Shanghai Gold Boss Wants Super-Sovereign Currency for Post-Crisis Times. (link)
  • Sun, Zhaoxue, August 1, 2012. Build a Secure Barrier for My Country's Economy and Finance. (link)
  • Wall Street Journal, June 30, 2013. Gold Standard? China Doesn’t Set It. (link)

Sources (Others):

  • Answers from Minister of Finance de Jager inDutch parliament, September 19, 2011. Antwoorden van de minister van Financiën op de vragen van het lid E. Irrgang (SP) over de goudvoorraad (kenmerk 2011Z17888, ingezonden 19 september2011). (link)
  • Burns, A. June, 3, 1975. Memorandum For The President. (link)
  • FOREIGN RELATIONS OF THE UNITED STATES, 1969–1976,VOLUME XXIV, MIDDLE EAST REGION AND ARABIAN PENINSULA, 1969–1972; JORDAN, SEPTEMBER 1970. 168. Memorandum From the President’s Assistant forInternational Economic Affairs (Flanigan) and the President’s Assistant for National Security Affairs (Kissinger) to President Nixon. (link)
  • FOREIGN RELATIONS OF THE UNITED STATES, 1969–1976, VOLUME III, FOREIGN ECONOMIC POLICY; INTERNATIONAL MONETARY POLICY, 1969–1972. 131. Action Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon. June 25, 1969. (link)
  • Pompidou, G. and Nixon, R. February, 24, 1970. Memorandum of Conversation. (link)
  • FOREIGN RELATIONS OF THE UNITED STATES, 1969–1976, VOLUME XXXI, FOREIGN ECONOMIC POLICY, 1973–1976. 16. Conversation Among President Nixon, the Chairman of the Federal Reserve System Board of Governors (Burns), the Director of the Office of Management and Budget (Ash), the Chairman of the Council of Economic Advisers (Stein), Secretary of the Treasury Shultz, and the Under Secretary of the Treasury for Monetary Affairs (Volcker). March 3, 1973. (link)
  • FOREIGN RELATIONS OF THE UNITED STATES, 1969–1976,VOLUME XXXI, FOREIGN ECONOMIC POLICY, 1973–1976. 61. Note From the Deputy Assistant Secretary of State for International Finance and Development (Weintraub) to the Under Secretary of the Treasury for Monetary Affairs (Volcker). March 6, 1974. (link)
  • FOREIGN RELATIONS OF THE UNITED STATES, 1969–1976, VOLUME XXXI, FOREIGN ECONOMIC POLICY, 1973–1976. 63. Minutes of Secretary of State Kissinger’s Principals and Regionals Staff Meeting. April 25, 1974. (link)
  • Kissinger, H., Simon, W. March 14, 1973. Telephone call. (link)

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The views expressed on Voima Insight are those of the author(s) and do not necessarily reflect the official views or position of Voima Gold.

Published:7/20/2020 2:35:42 AM
[Books] Summer classics revisited (Scott Johnson) It’s my goal in life to read the books I was supposed to read in college. I have looked to the St. John’s College Summer Classics program to help me achieve my goal. This year I took advantage of the Zoom edition of the program to sign up for classes over two weeks, the first on Thomas Mann’s The Magic Mountain and the second on Faulkner’s Flags in the Dust. Published:7/19/2020 10:03:40 AM
[] Sunday Morning Book Thread 07-19-2020 Daunt Books, London Good morning to all you 'rons, 'ettes, lurkers, and lurkettes, wine moms, frat bros, crétins sans pantalon (who are technically breaking the rules), and the rest of you lab rats, street rats, pack rats, womp rats, roof... Published:7/19/2020 8:28:59 AM
[Markets] "Putin Hacked Our Coronavirus Vaccine" Is The Dumbest Story Yet "Putin Hacked Our Coronavirus Vaccine" Is The Dumbest Story Yet Tyler Durden Sat, 07/18/2020 - 19:30

Authored by Caitlin Johnstone via,

OMG you guys Putin hacked our coronavirus vaccine secrets!

This week, mainstream media is reporting what is arguably the single dumbest Russiavape story of all time, against some very stiff competition.

“Russian hackers are targeting health care organizations in the West in an attempt to steal coronavirus vaccine research, the U.S. and Britain said,” reports The New York Times.

“Hackers backed by the Russian state are trying to steal COVID-19 vaccine and treatment research from academic and pharmaceutical institutions around the world, Britain’s National Cyber Security Centre (NCSC) said on Thursday,” Reuters reports.

“Russian news agency RIA cited spokesman Dmitry Peskov as saying the Kremlin rejected London’s allegations, which he said were not backed by proper evidence,” adds Reuters.

I mean, there are just so many layers of stupid.

First of all, how many more completely unsubstantiated government agency allegations about Russian nefariousness are we the public going to accept from the corporate mass media? Since 2016 it’s been wall-to-wall narrative about evil things Russia is doing to the empire-like cluster of allies loosely centralized around the United States, and they all just happen to be things nobody can actually provide the public with hard verifiable evidence of.

Ever since the shady cybersecurity firm Crowdstrike admitted that it never actually saw hard proof of Russia hacking the DNC servers, the already shaky and always unsubstantiated narrative that Russian hackers interfered in the US presidential election in 2016 has been on thinner ice than ever. Yet because the mass media converged on this narrative and repeated it as fact over and over again they’ve been able to get the mainstream headline-skimming public to accept it as an established truth, priming them for an increasingly idiotic litany of completely unsubstantiated Russia scandals, culminating most recently in the entirely debunked claim that Russia paid Taliban-linked fighters to kill coalition forces in Afghanistan.

Secondly, the news story doesn’t even claim that these supposed Russian hackers even succeeded in doing whatever they were supposed to have been doing in this supposed cyberattack.

“Officials have not commented on whether the attacks were successful but also have not ruled out that this is the case,” Wired reports.

Thirdly, this is a “vaccine” which does not even exist at this point in time, and the research which was supposedly hacked may never lead to one. Meanwhile, Sechenov First Moscow State Medical University reports that it has “successfully completed tests on volunteers of the world’s first vaccine against coronavirus,” in Russia.

Fourthly, and perhaps most importantly, how obnoxious and idiotic is it that coronavirus vaccine “secrets” are a even a thing??? This is a global pandemic which is hurting all of us; scientists should be free to collaborate with other scientists anywhere in the world to find a solution to this problem. Nobody has any business keeping “secrets” from the world about this virus or any possible vaccine or treatment. If they do, anyone in the world is well within their rights to pry those secrets away from them.

This intensely stupid story comes out at the same time British media are blaring stories about Russian interference in the 2019 election, which if you actually listen carefully to the claims being advanced amounts to literally nothing more than the assertion that Russians talked about already leaked documents pertaining to the UK’s healthcare system on the internet.

“Russian actors ‘sought to interfere’ in last winter’s general election by amplifying an illicitly acquired NHS dossier that was seized upon by Labour during the campaign, the foreign secretary has said,” reports The Guardian.

“Amplifying”. That’s literally all there is to this story. As we learned with the ridiculous US Russiagate narrative, Russia “amplifying” something in such allegations can mean anything from RT reporting on a major news story to a Twitter account from St Petersburg sharing an article from The Washington Post. Even the foreign secretary’s claim itself explicitly admits that “there is no evidence of a broad spectrum Russian campaign against the General Election”.

“The statement is so foggy and contradictory that it is almost impossible to understand it,” responded Russia’s foreign ministry to the allegations. “If it’s inappropriate to say something then don’t say it. If you say it, produce the facts.”

Instead of producing facts you’ve got the Murdoch press pestering Jeremy Corbyn on his doorstep over this ridiculous non-story, and popular right-wing outlets like Guido Fawkes running the blatantly false headline “Government Confirms Corbyn Used Russian-Hacked Documents in 2019 Election”. The completely bogus allegation that the NHS documents came to Jeremy Corbyn by way of Russian hackers is not made anywhere in the article itself, but for the headline-skimming majority this makes no difference. And headline skimmers get as many votes as people who read and think critically.

All this new cold war Russia hysteria is turning people’s brains into guacamole. We’ve got to find a way to snap out of the propaganda trance so we can start creating a world that is based on truth and a desire for peace.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics onTwitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:7/18/2020 6:54:08 PM
[Markets] White Helmets Co-Founder Defrauded Organization To Fund Lavish Wedding White Helmets Co-Founder Defrauded Organization To Fund Lavish Wedding Tyler Durden Sat, 07/18/2020 - 12:00

A little more than eight months after former British army officer and military contractor, then 43-year-old James Le Mesurier, who co-founded the shadowy 'White Helmets' (known as Syria Civil Defence), committed suicide, a new report details how he defrauded Mayday Rescue. This organization fundraised from Western countries to support the anti-government rescue group in Syria. 

RT News quotes a report via Dutch newspaper De Volkskrant, who says Le Mesurier informed an accountant during an audit that he "forged receipts" for tens of thousands of dollars. At the time, he listed the funds as lined items to support efforts in evacuations for refugees in war-torn Syria, though the money was actually expensed for his lavish 2018 wedding.

Le Mesurier was paid a generous salary of €24,000 ($27,414) per month. It was noted he issued loans to his wife, former diplomat Emma Winberg, using funds from the organization. 

The accountant, instructed by Western countries to investigate Mayday, found "tens of thousands of dollars in cash" were used to pay for Le Mesurier's "fairytale wedding."

Shortly afterward, a number of countries that had donated to Mayday demanded an accountant have another look over the organization's books. According to De Volkskrant, this probe found that most of Mayday's financial records are "missing." Donations were not just handed to the organization in Amsterdam and forwarded to Syria, but distributed through a network of commercial organizations in Turkey and Dubai. -RT

A Dutch Ministry of Foreign Affairs' 2018 report showed Mayday received $127 million from mostly Western state donors between 2014 and 2018.

Le Mesurier's White Helmets promote themselves as 'first responders' to emergencies in Syria, the group has been accused of staging multiple chemical attacks - including an April 2018 incident in Duma, Syria, which the White House used as a pretext to bomb Syrian government facilities and bases.

White Helmets have been accused of partnering with Al-Qaeda and even seen operating in rebel-held territory. 

At the time of the audit, Le Mesurier wrote a letter to donors explaining the mishap but maintained the fraud was not committed on purpose. 

Syrian President Bashar al-Assad said last November that Le Mesurier's death was no suicide, suggesting he was killed because he "knew major secrets."  

For more color on the questionable suicide of Le Mesurier, read: "Narrative Managers Claim White Helmets Founder Was Driven To Suicide By Syria Skeptics." 

Published:7/18/2020 11:22:05 AM
[Entertainment] Attention Parents: The Skinny Confidential's Lauryn Evarts Bosstick Can Help You Cope With Quarantine Lauryn EvartsThis was not in a single one of the parenting books. Now, obviously, when you undertake something as truly world-shifting as having children, you accept that will mean a number of...
Published:7/18/2020 2:22:11 AM
[Markets] Escobar: Turkey & The Clash Of Civilizations Escobar: Turkey & The Clash Of Civilizations Tyler Durden Sat, 07/18/2020 - 00:05

Authored by Pepe Escobar via The Asia Times,

Turkish President Erdogan’s move to make Hagia Sophia a mosque is part of his masterplan to claim leadership of global Islam...

Late afternoon in May 29, 1453, Sultan Mehmet, the third son of Murad, born of a slave-girl – probably Christian – in the harem, fluent in Turkish, Arabic, Greek, Latin, Persian and Hebrew, followed by his top ministers, his imams and his bodyguard of Janissaries, rides slowly towards the Great Church of St Sophia in Constantinople.

It’s unlikely that Sultan Mehmet would be sparing a thought for Emperor Justinian, the last of quite a breed: a true Roman Emperor in the throne of Byzantium, a speaker of “barbarous” Greek (he was born in Macedonia) but with a Latin mind.

Much like Sultan Mehmet, Justinian was quite the geopolitician. Byzantium trade was geared towards Cathay and the Indies: silk, spices, precious stones. Yet Persia controlled all the caravan routes on the Ancient Silk Road. The sea route was also a problem; all cargo had to depart from the Persian Gulf.

So Justinian had to bypass Persia.

He came up with a two-pronged strategy: a new northern route via Crimea and the Caucasus, and a new southern route via the Red Sea, bypassing the Persian Gulf.

The first was a relative success; the second a mess. But Justinian finally got his break when a bunch of Orthodox monks offered him to bring back from Asia some precious few silkworm eggs. Soon there were factories not only in Constantinople but in Antioch, Tyre and Beirut. The imperial silk industry – a state monopoly, of course – was up and running.

A fantastic mosaic in Ravenna from the year 546 depicts a Justinian much younger than 64, his age at the time. He was a prodigy of energy – and embellished Constantinople non-stop. The apex was the Church of St. Sophia – the largest building in the world for centuries.

So here we have Sultan Mehmet silently proceeding with his slow ride all the way to the central bronze doors of St Sophia.

He dismounts and picks up a handful of dust and in a gesture of humility, sprinkles it over his turban.

Then he enters the Great Church. He walks towards the altar.

A barely perceptible command leads his top imam to escalate the pulpit and proclaim in the name of Allah, the All Merciful and Compassionate, there is no God but God and Muhammad is his Prophet.

The Sultan then touches the ground with his turbaned head – in a silent prayer. St Sophia was now a mosque.

Sultan Mehmet leaves the mosque and crosses the square to the old Palace of the Emperors, in ruins, founded by Constantine The Great 11 and ½ centuries before. He slowly wanders the ancient halls, his fine velvet slippers brushing the dust from the fabulous pebbled floor mosaics.

Then he murmurs two verses of a Persian poet:

“As the spider weaves the curtain over the palace of the Roman Caesars

The owl sings the time of the house of Afrasiab”

The Byzantine empire, founded by Constantine The Great on Monday, May 11, 330, was over on a Tuesday, May 29, 1453.

Sultan Mehmet is now the Lord of Constantinople and the Lord of the Ottoman Empire. He’s only 21 years old.

Back to the Magic Mountain

Last week, Turkish President Recep Tayyip Erdogan re-christened Hagia Sophia from a museum back into a mosque. He may have done it because his popularity is waning; his proxy wars are a disaster; his AKP party is shattered; and the economy is bleeding badly.

But what’s striking is that right at the beginning of his official televised speech, Erdogan quoted exactly the same verses by the Persian poet murmured by Sultan Mehmet in that fateful afternoon in 1453.

Erdogan’s latest move – which is part of his perennial master plan to claim leadership of global Islam over the decrepit House of Saud – was widely interpreted in myriad latitudes as yet another instance of clash of civilizations: not only Orthodox Christianity vs. Islam but once again East vs. West.

That reminded me of another East vs. West recent derivation: a revival of the Settembrini vs. Naphta debate in Thomas Mann’s The Magic Mountain, promoted by a Dutch think tank, the Nexus Institute, which aims to “keep the spirit of European humanism alive”. The debate pitted Aleksander Dugin against Bernard-Henri Levy (widely known in France as BHL). The full transcript of the debate is here.

Dugin is a leading Eurasianist and the conceptualizer of the – largely banned in the West – Fourth Political Theory . As a philosopher and political theorist, Dugin is cartoonishly demonized across the West as “Putin’s brain”, a closet fascist and “the most dangerous philosopher in the world”.

BHL, hailed as “one of the West’s leading intellectuals”, is a vain poseur who emerged as a “nouveau philosophe” in the mid-1970s and ritually regurgitates the usual Atlanticist mantras enveloped in flowery quotes. He managed, among other feats, to write a book about Pakistan without knowing anything whatsoever about Pakistan, as I thrashed it on Asia Times back in 2002.

Here are a few interesting talking points throughout the debate.

Dugin stresses the end of Western hegemony and global liberalism. He asks BHL, directly, how, “interestingly, iyour book, you define the American empire or the global liberal system as a system of nihilism, based on nothing.” Dugin does define himself as a nihilist “in the sense that I refuse the universality of modern Western values (…) I just challenge that the only way to interpret democracy is as the rule of minorities against the majority, that the only way to interpret freedom is as individual freedom, and that the only way to interpret human rights is by projecting a modern, Western, individualistic version of what it means to be human on other cultures.”

BHL, which seems not to have read his own, dreary, book – this is something Dugin told me in person last year in Beirut, after the debate – prefers to resort to proverbial, infantile Putin bashing, picked up over and over again, stressing “there is a bad, dark wind of nihilism in its proper sense, which is a Nazi and a fascist sense, which is blowing in the great Russia.”

Later on in the debate, BHL adds, “I really believe that there is a link between, on the one side, your and Huntington’s way of thinking; and, on the other side, the occupation of Crimea, the 30,000 deaths in Ukraine and the war in Syria with its bloodbath, tragic and horrible.”

On racism, Dugin is adamant: he does not defend it. For him, “Racism is an Anglo-Saxon liberal construction based on a hierarchy between peoples. I think this is criminal.” Then he defines “a new Manichean division, a new racism. Those who are in favor of Western values, they are good. Everybody who challenges that, in the Islamic tradition, in the Russian tradition, in the Chinese tradition, in the Indian tradition, everywhere, they are populists, and they are classified as fascism. I think that is a new kind of racism.”

BHL prefers to concentrate on “the civilization of human rights, freedom, individual dignity, and so on. This deserves to be universalized. This should be conceived, except if you are a racist, as profitable for the entire humanity.” And then it’s Anti-Semitism all over again: “All the men who you quoted and from whom you draw your inspiration – Spengler, Heidegger, who is also a great philosopher of course, and others – are contaminated, corrupted, infected by this plague which is antisemitism. And alas – you too.”

In Paris circles, the joke is that the only thing BHL cares about is the promotion of BHL. And everyone who does not agree with one of the “leading Western intellectuals” is Anti-Semitic.

BHL insists he’s interested in building bridges. But it’s Dugin who frames the real heart of the matter: “When we try to build bridges too early, without knowing the structure of the Other – the problem is the Other. The West doesn’t understand the Other as something positive. It is all the same, and we immediately try to find bridges – they are illusions, and not bridges, because we are projecting ourselves. The Other is the same, the ideology of the same. We first need to understand otherness.”

BHL totally ignores Levi-Strauss. It’s Dugin who refers to Levi-Strauss when talking about The Other, describing him as one of his teachers:

“This anthropological pluralism, I agree, is precisely the American and French tradition. But it is not reflected in politics, or it is reflected in a very perverted way. So I think there is a big contradiction between this anthropological thought in American universities and French universities, and a kind of very aggressive colonial neo-imperialist form to promote American interests on the world scale with weapons.”

BHL is left with – what else – Putin demonization: “The real imperialism, the real one who is interfering and sowing disorder and interfering in the affairs of others, alas, is Putin. And I need not speak of America, where it is now proved that there has been a huge, crude, and evident Russian intervention in the electoral process of the last election.” BHL, who does not even qualify as a neophyte in geopolitics, is oblivious to the absolute debunking of Russiagate.

BHL is adamant “there is today a real clash of civilizations. But not the one you mention in your books, between the north and the east and the west and the south and all of that; there is a clash of civilizations all over the planet between those who believe in human rights, in liberty, in the right for a body not to be tortured and martyred, and those who are happy with illiberalism and the revival of authoritarianism and slavery.”

Dugin’s challenge for years has been to try to conceptualize what may come next, after the failure of Marxism, fascism and liberal democracy. As much as he thinks Eurasian, he’s inclusive – incorporating “Euro” with “Asia”. BHL for his part simplistically reduces every “evil” to “illiberalism”, where Russia, China, Iran and Turkey – no nuances – are thrown in the same dustbin alongside the vacuous and actually murderous House of Saud.

Mao returns

Now let’s attempt a light-hearted ending to our mini-triptych on the clash of civilizations. Inevitably, that has to do with the ongoing US-China Hybrid War.

Around two years ago, the following dialogue was a smash hit on Chinese Weibo. The Great Helmsman Mao Zedong – or his ghost – was back in town, and he wanted to know about everything that was goin’ on.

Mao: “Can the people eat their fill?”

Answer: “There’s so much to eat they’re dieting.”

Mao: “Are there still any capitalists?”

Answer: “They’re all doing business overseas now!”

Mao: “Do we produce more steel than England?”

Answer: “Tangshan alone produces more than America.”

Mao: “Did we beat social imperialism (as in the former USSR)?”

Answer: “They dissolved it themselves!”

Mao: “Did we smash imperialism?”

Answer: “We’re the imperialists now!”

Mao: “And what about my Cultural Revolution?”

Answer: “It’s in America now!”

Call it a – revisionist? – realpolitik version of the clash of civilizations.

Published:7/17/2020 11:18:40 PM
[439d57e2-07b5-505c-8d7b-45533f91bb3e] 'Magic School Bus' author Joanna Cole dies at age 75 Author Joanna Cole, whose “Magic School Bus” books transported millions of young people on extraordinary and educational adventures, has died at age 75. Published:7/16/2020 8:15:56 PM
[Markets] Calibrating The Craziness Calibrating The Craziness Tyler Durden Thu, 07/16/2020 - 10:26

Authored by David Robertson via,

After a record drawdown in the first quarter and a record rebound in the second quarter, no one is disputing that the first half of 2020 has been memorable. What is open for question is whether the first or the second quarter is a better portent for the foreseeable future.

There is no doubt that public policy is part of the equation. While overwhelming policy responses to the Covid-19 related lockdowns certainly affected the markets, the Fed didn’t force anybody to do anything either. The key to managing through this is understanding what has happened and why.

A pattern to which investors have become all too accustomed, the Fed pounced into action soon after stocks fell precipitously in March. And pounce it did. In a set of measures that were mind boggling both in terms of magnitude and breadth, the Fed sent a strong signal of its commitment to support markets. In addition, it kept rolling out new policies throughout the second quarter in order to quell any remaining doubt as to its intent.

Not only did stocks rebound, but they seemed to be completely reinvigorated. As markets continued bounding despite evidence of a relatively weak economic recovery, commentators have tried to capture the growing disconnect. Michael Every from Rabobank proclaimed, “Markets are, across the board, totally divorced from reality. Facts no longer matter”. Jeffrey Gundlach chimed in saying, “There’s no price-discovery mechanism”.

A Permanent Distortion Of Markets

Nomi Prins exclaimed, “I call this a ‘Permanent Distortion.’  I have not used this term in prior books, but I am using it because . . . the disconnect between financial assets, equity markets and the real economy . . . has become massive…” Upon leaving ValueAct Capital, the hedge fund he founded, Jeff Ubben declared, “Finance is, like, done. Everybody’s bought everybody else with low-cost debt”.

Other phenomena have corroborated these observations. Retail trading picked up significantly and focused much more on “story” stocks than fundamentals. On the other side of the spectrum, high profile hedge funds continued to close down, further highlighting how troublesome the environment has become.

Criticisms abound and revolve around the same points. The economy is weaker than people believe. Asset prices are disconnected from economic reality. The markets are manipulated. Many blame the Fed. The idea is that stocks have become untethered from reality because central banks have hijacked the capital markets.

Investor Realizaton

What should investors make of this? What does it imply for investment strategy?

These questions can be distilled down into more specific ones. What we seem to be observing is speculative fervor run amok. What we want to know is when it will end. Recent research by Mike Green of Logica Funds provides some extremely useful insights into these issues. A key element in looking for the cause of the problem is to consider sources other than the Fed. He sums it all up in his piece, Talking Your Book About Value, Part 3, by saying, “it’s all about flows”.

“As we have repeatedly discussed, the widespread transition to index products (both futures and passive mutual funds/ETFs) has changed the behavior of markets. Transactions focused on buying or selling all stocks and profitability derived from index arbitrage (again, both futures and the creation/redemption process of ETFs) rather than security selection have irrevocably changed the incentive structure on Wall Street.”

In other words, the widespread adoption of passive funds at the expense of actively managed ones has significantly changed the way the market works. It used to be that Wall Street would make money by executing trades and providing research on stocks. Now, Wall Street makes money by lending securities and arbitraging indexes.

The Inevitable Conclusion

The combination of the inexorable flows of money from active to passive and the new incentive system on Wall Street means that there is a declining cohort of investors willing to make investment decisions based on fundamentals. Just as soon as this intrepid fundamental investor makes a nonconsensus trade, that trade is overwhelmed by the wall of money coming in from passive funds. The investor underperforms by failing to keep up with stocks enjoying stronger flows and, adding insult to injury, loses assets.

“We have reached the inevitable conclusion that no one is standing in the way of insanity. We are seeing this in our social lives where Cancel Culture has raised the stakes for anyone willing to stand in the way of the shaming mob, and we are seeing it in our public (and private) markets where any attempt to express rationality is met with underperformance and redemptions.”

A key element in understanding the craziness of the market, then, is realizing that the key suspect is not the Fed but rather passive investing. Green elaborated on these mechanics in a separate presentation, a podcast hosted by Grant Williams and Bill Fleckenstein.

Passive Issues

An important starting point is identifying the marginal investor because that is who establishes prices. Part of Green’s insight is recognizing the owner of a passive target date fund as that marginal investor. This is useful because these investors have unique characteristics. The funds are “balanced” in the sense that there is some allocation to stocks and some to bonds. The bond portion diversifies the risk of the stocks which has allowed for the aggregate portfolio to appreciate fairly reliably.

As such, target date fund owners do not experience volatility in the same way that equity-only investors do. Being insulated from the vicissitudes of the stock market, they don’t really care about Fed announcements. The owners certainly don’t experience volatility in any kind of deep, visceral way. They just keep directing a portion of their paycheck into the fund and the flows are pretty much on autopilot. They do not care about stock prices.

Change Of Affairs

As a result of this behavior, however, they become an important enabler of market craziness. But it is not because of what they do. It is because of what they do NOT do. They do not police prices, nor do they make any effort to “stand in the way of insanity.” They do not sell because stock prices seem too high.

What could change this state of affairs? “The minute 10-year bonds in the United States offer a negative yield or are at zero … I think that’s the endgame,” is Green’s ready response. The reason is at that threshold, bonds no longer offset the volatility of stocks. When that happens, a number of investment strategies stop working altogether. Volatility targeting funds shut down. Risk parity is forced to liquidate.

Further, the target date portfolio takes on completely different characteristics. All of a sudden, that retirement nest egg starts bouncing around all over the place. It can even drop by a lot. Absent the protective diversification of bonds, these passive investors suddenly become fully exposed to volatility. It’s like someone turned a light on and now all the ugly volatility is visible.

It’s Worse

It’s actually worse than this though. Once passive investors decide to start selling, who will be the buyer? The remaining active investors aren’t touching stocks at anywhere close to current valuations. Newly unprotected passive investors just want out. As Green describes, liquidity becomes the thing to watch out for: “When the scale [of selling] that hits the market is incapable of being absorbed by the market … that’s where chaos occurs”.

While there is a lot to unpack from this analysis, there are a couple of general lessons that stand out. First, inordinate focus on the Fed creates an unhelpful distraction. Yes, it is certainly true that the Fed massively expanded monetary policy. Yes, it is also true that some of these expansions are effectively fiscal policy. And yes, all these things affect expectations and make it easier to speculate. But only in the context of a market structure that has no mechanism to stand in the way of insanity can craziness proliferate the way it has.

Second, the environment for much of traditional active management is brutal. As long as money keeps flowing into passive vehicles, there is little point in selecting securities. As Green makes clear, “The opportunity for traditional active management to outperform … is radically reduced in this environment as security selection becomes largely irrelevant.” The message for stock pickers is, “this market is just not that into you”.

Active Management Lives

Importantly, however, this does not mean that there is nothing for active managers to do. In fact, quite the opposite is true. As Green sees it, “Regulators have encouraged a process of consolidation in the name of ‘efficiency’ that has left us with nearly unimaginable levels of systemic risk.” Arguably then, the single biggest investment priority is to manage that systemic risk.

Although Green’s answer for dealing with current market dynamics is fascinating and intellectually stimulating, it is also designed for ultra high net worth investors. Nonetheless, there are important takeaways for everyone.

One is that exposure to the market is much more of a Faustian bargain than a reliable route to retirement riches. Exposure to risk assets may very well provide attractive incremental gains for some period of time, but that exposure is also likely to lead to substantial losses at some point.

This is especially important to remember since there are several compelling arguments that favor exposure to stocks. For example, the increasing liquidity from central banks does provide a tailwind for stocks. Stocks can also help reduce vulnerability to rising inflation since companies can increase prices. Further, bonds are so stretched at this point that stocks offer relative value. Finally, US stocks can be attractive assets for foreign investors at least partly because they are denominated in dollars. These arguments do have at least some merit, so don’t forget that stocks also come with “nearly unimaginable levels of systemic risk”.

The Silver Lining

Another takeaway is that this new market structure puts a fresh perspective on value investing. A key tenet of value investing is reversion to the mean which essentially means when things get out of hand, they will eventually normalize. This key tenet is undermined by passive investing, though. In the current market structure, the mechanism by which adjustments have been made in the past is disabled. There is “no one is standing in the way of insanity”. Until the market structure changes, the success of value investing is likely to be episodic at best.

In addition, investors should keep an eye on 10-year yields. If they remain comfortably positive, there is no reason to believe that things should change much. If those yields close in on zero, however, that could set up for a huge change in market action.

Finally, for those of us who have invested a great deal to develop skill and expertise in security selection and value investing, we need to recognize the limited usefulness of these tools in this environment. That doesn’t mean these things won’t be incredibly valuable at some point in the future; I believe they will be. I also believe risk management matters like it never has before. However, it is also important to respect the distinct possibility that there is no necessary reason for environment to change soon.


In conclusion, this market has been far more resilient than I, and many other value-oriented investors, ever thought possible. Passive flows go a long way in explaining this phenomenon. They also suggest whatever craziness we have experienced can continue for some time. Fundamentals really don’t matter much in this environment and as result, stock prices have little information content.

While this establishes a less than satisfying prospect for investors, there is a silver lining: We won’t have to keep wracking our brains trying to understand how in the world prices can become so crazy. So, at least we have that going for us.

Published:7/16/2020 9:40:13 AM
[Markets] This Is A Financial Extinction Event This Is A Financial Extinction Event Tyler Durden Thu, 07/16/2020 - 08:49

Authored by Charles Hugh Smith via OfTwoMinds blog,

The lower reaches of the financial food chain are already dying, and every entity that depended on that layer is doomed.

Though under pressure from climate change, the dinosaurs were still dominant 65 million year ago--until the meteor struck, creating a global "nuclear winter" that darkened the atmosphere for months, killing off most of the food chain that the dinosaurs depended on. (See chart below.)

The ancestors of modern birds were one of the few dinosaur species to survive the extinction event, which took months to play out.

It wasn't the impact and shock wave that killed off dinosaurs globally--it was the "nuclear winter" that doomed them to extinction. As plants withered, the plant-eating dinosaurs expired, depriving the predator dinosaurs of their food supply.

This is a precise analogy for the global economy, which is entering a financial "nuclear winter" extinction event. As I've been discussing for the past few months, costs are sticky but revenues and profits are on a slippery slope.

Businesses still have all the high fixed costs of 2019 but their revenues are sliding as the "nuclear winter" weakens consumer spending, investment in new capacity, etc.

Despite all the hoopla about a potential vaccine, no vaccine can change four realities: one, consumer sentiment has shifted from confidence to caution and from spending freely to saving. This is the financial equivalent of "nuclear winter": there is no way to return to the pre-impact environment.

Two, uncertainty cannot be dissipated, either. There are no guarantees a vaccine will be 99% effective, that it will last more than a few months, that it won't have side-effects, etc. There are also no guarantees that consumers will resume their care-free spending ways as credit tightens, incomes decline, risks emerge and the need for savings becomes more compelling.

Three, consumer behavior and uncertainty have already changed, and so businesses that cannot survive on much lower revenues won't last long enough to emerge from the "nuclear winter" of uncertainty and a shift in sentiment.

Four, assets based on 2019 revenues, profits and demand are now horrendously overvalued, and the repricing of all assets will bring down the predators, i.e. the banks.

As I've noted here before, the top 10% of households account for almost 50% of consumer spending. These households are older, and own the majority of assets --between 80% and 90% of stocks, bonds, business equity, rental real estate, etc. This is the demographic with the most to lose in returning to care-free air travel, jamming into crowded venues and cafes, etc.

This demographic has "been there, done that" and foregoing fine dining, sports events, concerts, cruises, etc. is not much a burden and may actually be a relief.

Meanwhile, the entire food chain of landlords, banks, local government, employees, etc. depends on enterprises returning to 100% of 2019 revenues. As tenants stop paying rent, landlords default on mortgages, sending banks into insolvency, leaving local government with less tax revenues and employees with fewer job prospects.

To a degree few appreciate, the "recovery" since 2009 has been dependent on over-spending, over-borrowing and over-speculating: as spending, borrowing and speculation all pull back to what would have been "normal" levels two generations ago, the economy collapses because it's become completely dependent on over-spending, over-borrowing and over-speculating.

As consumers and businesses retrench, borrowing declines while defaults and bankruptcies eviscerate bank profits and balance sheets. As spending declines, businesses with high fixed costs and pre-pandemic business models (crowding people together in close quarters, etc.) cannot generate enough revenues to survive. As the collateral of commercial real estate and profit streams collapse, assets are repriced all down the food chain, reversing the wealth effect: as people feel poorer, they borrow and spend less, creating a feedback loop of lower valuations, lower spending, lower profits, lower borrowing all of which feed back into each other, pushing everything lower.

The lower reaches of the financial food chain are already dying, and every entity that depended on that layer is doomed: the small business die-off will bring down distributors, banks, landlords, and employment, and as the this layer collapses then the top predators will starve to death as well: Big Tech, healthcare, higher education, tourism, local tax revenues, etc.

The clouds are spreading and thickening, and the dawn sky is tinted an ominous red. This is a financial extinction event, and the Fed's pathetic shamans can't reverse history.

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Published:7/16/2020 8:12:12 AM
[Markets] The COVID-19 Panic Shows Us Why Science Needs Skeptics The COVID-19 Panic Shows Us Why Science Needs Skeptics Tyler Durden Wed, 07/15/2020 - 21:50

Authored by Peter St.Onge via The Mises Institute,

The dumpster fire of COVID predictions has shown exactly why it’s important to sustain and nurture skeptics, lest we blunder into scientific monoculture and groupthink. And yet the explosion of “cancel culture” intolerance of any opinion that doesn’t fit a shrinking “3 x 5 card” of right-think risks destroying the very tolerance and science that sustains our civilization.

Since World War II, America has suffered two respiratory pandemics comparable to COVID-19: the 1958 “Asian flu,” then the 1969 “Hong Kong flu.” In neither case did we shut down the economy—people were simply more careful. Not all that careful, of course—Jimi Hendrix was playing at Woodstock in the middle of the 1969 pandemic, and social distancing wasn’t really a thing in the “Summer of Love.”

And yet COVID-19 was very different thanks to a single “buggy mess” of a computer prediction from one Neil Ferguson, a British epidemiologist given to hysterical overestimates of deaths, from mad cow to bird flu to H1N1.

For COVID-19, Ferguson predicted 3 million deaths in America unless we basically shut down the economy. Panicked policymakers took his prediction as gospel, dressed as it was in the cloak of science.

Now, long after governments plunged half the world into a Great Depression, those panicked revisions are being quietly revised down by an order of magnitude, now suggesting a final tally comparable to 1958 and 1969.

COVID-19 would have been a deadly pandemic with or without Ferguson’s fantasies, but had we known the true scale and parameters of the threat we might have chosen better tailored means to both safeguard the elderly and at-risk, while sustaining the wider economy. After all, economists have long known that mass unemployment and widespread bankruptcies carry enormous health consequences that are very real to the victims suffering drained life savings, ruined businesses, broken families, widespread mental and physical health deterioration, even suicide. Decisions involve tradeoffs.

COVID-19 has illustrated the importance of free and robust inquiry. After all, panicked politicians facing media accusations of “killing grandma” aren’t in a very good position to evaluate these tradeoffs, and they need intellectual ammunition. Not only to show them which path is best, but to bolster them when a left-wing media establishment attacks.

Moreover, voters need this ammunition so they can actually tell the politicians what to do. This means two things: debate that is transparent, and debate that is tolerant of skeptics.

Transparency means data and computer code open to public scrutiny as the minimum requirement for any study that is used to justify policy, from lockdowns to carbon taxes to whatever comes next. These studies must be based on verifiable facts, code that does what it says it does, and the ensuing decision-making process must be transparent and open to the public.

One former Indian bureaucrat put it well:

“Emergency situations like this pandemic should require a far higher—and not lower—level of scrutiny,” since policy choices have such tremendous impact.

“This suggests a need for democracies to strengthen their critical thinking capacity by creating an independent ‘Black Hat’ institution whose purpose would be to question any technical foundations of government decisions.”

Even more important than transparency, debate must be tolerant of alternative opinions. This means ideas that are wrong, offensive, even dangerous, have to be tolerated, even celebrated. By all means, refute them—most alternative hypotheses are completely wrong, so it shouldn’t be hard to simply refute them without censorship. This, after all, is the essence of science—to generate hypotheses testable by anybody, not just licensed “experts.”

Whether we are faced with a new crisis, a new policy innovation, or simply designing a better mousetrap, groupthink and censorship are recipes for disaster and stagnation, while transparency and tolerance of new ideas are the very essence of progress. Indeed, it is largely this scientific tolerance that allowed us to rise up from the long, brutal darkness of poverty.

As Francis Bacon observed three hundred years ago, innovation and new knowledge do not come from prestigious “learned” insiders, rather progress comes from the questioner, the tinkerer, the skeptic.

The industry of artificers maketh some small improvement of things invented; and chance sometimes in experimenting maketh us to stumble upon somewhat which is new; but all the disputation of the learned never brought to light one effect of nature before unknown. (In Praise of Knowledge, vol. 1, [1740] 1850)

Indeed, every major scientific advance challenged the “settled science” of its day, and was often denounced as pernicious and false, even dangerous. The modern blood transfusion, for example, was developed in the late 1600s, then banned for nearly a century by a hostile medical establishment, “canceling” tens of millions of lives at the altar of groupthink and hostility to skeptics.

It’s comforting to know that our problems are old ones, and also encouraging that our solution is both time-tested and simple: transparency and tolerance. After all, the very reason our culture elevates science is because it is built on a millennia-long evolutionary “battle of ideas” in which theories are constantly tested and retested in a delightfully endless search for ever better understanding.

This implies there is no such thing as “settled science”—the phrase itself is contrary to the scientific method. In reality, science is not some billion-dollar gleaming palace in Bethesda, rather it’s a gnarled mutant sewer rat that takes all comers because it’s been burned, cut, run over, crushed, run through the wood chipper, and survived. That ugly beast is our salvation, not the gleaming palace where we bow down to whichever random guy has the biggest degree in the room.

Only with free inquiry for the most unpopular, offensive, dangerous, and, yes, wrong ideas imaginable does that power sustain. And if we break that, we can expect a series of rapid catastrophes that, like failed golden ages of the past, return us to the nasty, brutish, and very short lives that have been humanity’s norm.

Whether pandemic, climate change, “institutional racism,” or whatever new crisis they conjure next, we have a fundamental right to tenaciously defend the transparency and tolerance that constitutes science itself so that it remains among humanity’s crowning achievements, and so that we preserve this golden age that would astound our ancestors.

Published:7/15/2020 9:06:24 PM
[Markets] Solomon: As Obama Marched Toward Iran Nuclear Deal, FBI Worried Russia Was Aiding Tehran's Program Solomon: As Obama Marched Toward Iran Nuclear Deal, FBI Worried Russia Was Aiding Tehran's Program Tyler Durden Wed, 07/15/2020 - 17:50

Authored by John Solomon via,

As President Obama aggressively pursued a nuclear deal with Iran, the FBI used an  operative who worked undercover for years inside Vladimir Putin’s nuclear empire to investigate and raise alarm that Russia was aiding Tehran’s nuclear ambitions.

The undercover work on Iran by William Douglas Campbell was overshadowed by his effort to help the FBI successfully prove that an executive at Rosatom, Russia’s state-owned nuclear energy company, was engaged in kickbacks, bribery and other crimes on U.S. soil and had compromised a U.S. uranium trucking company.

Campbell’s harrowing work posing as a consultant while informing for the FBI inside Rosatom’s Tenex subsidiary from 2007 to 2014 led to the successful prosecution of several players in the kickback scheme, including Russia’s top American nuclear executive, Vadim Mikerin.

The FBI warned the Nuclear Regulatory Commission and other major federal agencies in August 2010 that Campbell had uncovered significant evidence of wrongdoing inside Rosatom’s Tenex agency. But the Obama administration nonetheless proceeded to approve billions of dollars in nuclear fuel contracts and Moscow’s purchase of a large swath of U.S. uranium through a company known as Uranium One.

But Campbell’s efforts to uncover the nuclear alliance between Tehran and Moscow raised similar concerns inside the FBI and are chronicled in the new book Fallout: Nuclear Bribes, Russian Spies and the Washington Lies that Enriched the Clinton and Biden Dynasties.

Agents actually pressed Campbell so hard to get more intelligence on Iran from his Russian contacts that it ultimately blew his cover, the books reveals.

Campbell began providing evidence of the Russia-Iran nexus starting in 2010, including a memo he intercepted inside Rosatom written by an American adviser, Cheryl Moss Herman, who later would go to work in a senior nuclear energy policy job inside the Obama Energy Department.

Herman’s 11-page report, titled “Policy/Legislative Issues Affecting the Business Climate in the U.S. for TENAM/Tenex,” warned there was a growing concern inside Congress that Russia’s determined march into new U.S. uranium business conflicted with Western intelligence that Moscow was still aiding Iran’s illicit nuclear program.

“There are some in Congress who believe that Russia is providing Iran with sensitive nuclear technology as well as the nuclear know-how that will allow it to proliferate a nuclear weapons program, despite Russian Government statements to the contrary,” the report told the Russians.

The FBI had similar concerns. Here are excerpts from the books that reveal just how extensive those concerns were.

In one debriefing, for instance, Campbell related to his handling agents that Mikerin had identified a specific Russian company that was facilitating business between Iran and Tenex.

“As I have mentioned previously they do all the uranium business between Russia and Iran,” Campbell wrote of the intermediary. “Vadim is involved in the process under the same kind of payment network between Iran and the special TENEX group.

“I have asked him if he visits Tehran and he indicates he will not go because he feels it will cause trouble both for [U.S.] relations as well as his US travel.”

Such intelligence was intriguing for FBI counterintelligence, especially as the Obama administration secretly began discussions with Tehran aimed at reaching a deal to delay Iran’s nuclear weapons program.

In 2010, Campbell had obtained from his Russian sources a nonpublic report from the International Atomic Energy Agency (IAEA), the UN watchdog that was bird-dogging Iran’s illicit nuclear weapons program. The public version of the May 2010 report identified current enrichment-related activities inside Iran, including evidence that UN inspectors gathered related to a uranium enrichment plant in Natanz.

While U.S. officials likely already knew the contents of the report, Campbell’s acquisition had provided valuable insight: an IAEA report marked “restricted” for limited distribution had fallen into the hands of Rosatom’s leadership quickly. The long arm of Putin’s nuclear team knew few bounds.

Campbell continued to provide fragmentary intelligence on the Moscow-Tehran nuclear dealings, including additional IAEA reports that the Russians had obtained.

But in early 2012, a harbinger arrived that the bureau was preparing to pull out its operative and finally close the counterintelligence gathering part of the probe and transition to criminal prosecutions.

Special Agent [Timothy] Taylor contacted Campbell with the most specific instruction the team had ever given him over the years: a detailed list of 15 questions that the bureau wanted asked of Mikerin.

The questions were transmitted via the secret Sigma email accounts that the bureau had set up with Campbell. All were about Iran:

  • Is Iran seeking to create a weapon, either through obvious means, or through the design of their nuclear program?

  • Are there any other countries, other than Russia, partnering to help Iran’s nuclear program?

  • If there are other countries participating, what model for security and nuclear power generation is Iran following?

  • What security measures has Iran put in place at nuclear facilities to prevent the computer failures, the failure of automated systems, or a computer virus?

  • What political issues are of concern to Russia if they are to continue to support the Iranian nuclear program?

  • If Iran is seeking to enrich uranium to HEU, what is the timeframe in which they expect to achieve that level?

  • How many Russian employees are currently working on Iranian projects?

  • How many Iranian scientists are currently working on nuclear energy projects? Who are they? What are their specialties?

  • What is the megawatt capacity of Bushehr?

  • What are the long-term goals for the facility?

  • Are there other facilities currently enriching uranium?

  • Have there been requests for assistance or indications of interest in new facilities?

  • How may centrifuges are currently operating at Bushehr?

  • What are the safety standards to which Iranian nuclear facilities are built? IAEA standards?

  • How is Iran prepared to ensure force protection and answer international security concerns? · Are there concealed or restricted areas at Iranian nuclear facilities where Russians are not allowed to visit? Where are they, and what do the Russians feel is going on there?

  • Are there temporary storage facilities where nuclear materials are stored? How are they secured?

  • How is new and used nuclear material moved and stored, and by whom?

When Campbell got this list, he joked that the FBI was signing his death warrant. The questions were too specific, the kind only an American spy might ask. Campbell had already been threatened by the Russians with polonium poisoning to ensure that he would not betray their criminal network.

The FBI, however, would not back off, insisting that Campbell press ahead and corner Mikerin with the Iran questions. The agents even coached him on how he could put his Russian friend at ease while unloading this barrage of inquiries.

“As discussed: You spoke with contacts who understand US policy. After the conversations you wrote down notes and have some ideas. You believe that Russia, Rosatom and Tenex could improve working relations with the US by being transparent about activities in Iran. You believe that it would be easier for Tenex to do business in the US if the US knows that Rosatom and Tenex have their fingers on the pulse of what is going on in Iran and can ensure that the nuclear energy is being produced responsibly and safely,” the agents wrote Campbell in their instructions.

It might have sounded good to the agents, but after 30 years in the business of spying, Campbell knew that these questions would blow his cover, or at the very least break the bond of trust that he had built with his Russian targets.

Campbell was right.

Mikerin refused to provide much in terms of answers, and soon backed away from his longtime Sigma consultant.

Campbell’s work for Tenex dwindled, and his access to Rosatom diminished.

Published:7/15/2020 5:05:26 PM
[Entertainment] Washington Post paperback bestsellers A snapshot of popular books. Published:7/15/2020 8:06:21 AM
[Markets] Central Banks Buy Another 40 Tons Of Gold In May Central Banks Buy Another 40 Tons Of Gold In May Tyler Durden Wed, 07/15/2020 - 05:00


Central banks added a net of 39.8 tons of gold in May, according to the latest data from the World Gold Council. May purchases maintained the pace we’ve seen through the first four months of the year and was slightly above the four-month average of 35 tons.

So far in 2020, central banks have added a net of 181 tons of gold to their reserves. That’s about 31% lower than the total through the same period last year. The lower rate of purchases in 2020 was entirely expected given the strength of central bank buying both in 2018 and 2019.

Central bank demand came in at 650.3 tons last year. That was the second-highest level of annual purchases for 50 years, just slightly below the 2018 net purchases of 656.2 tons. According to the WGC, 2018 marked the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second-highest annual total on record.

The World Gold Council bases its data on information submitted to the International Monetary Fund.

Continuing a trend we’ve seen throughout 2020, Turkey drove central bank gold-buying in May, adding 36.8 tons. That brings its total reserves to roughly 561 tons. The Turkish lira dropped to all-time lows in early May. Analysts told CNBC  that rapidly shrinking foreign reserves, inflation and currency devaluation are showing no signs of abating. The Turkish central bank is frantically trying to backstop its currency. Meanwhile, Turkey is selling dollars. According to Bloomberg,  state banks sold roughly $1.1 billion of foreign currency in just two days in May.

Uzbekistan was the other major buyer of gold in May, adding 6.8 tons of gold to its reserves. The Uzbeks were big buyers in 2019, but have primarily been sellers this year.

Russia bought a half-ton of gold in May. In March, the Central Bank of Russia announced a plan to suspend gold-purchases for the time being, effective April 1. But there was immediate pressure on the bank to resume purchases. In early April, Russian banks asked the Central Bank of Russia to resume buying gold for its reserves as gold exports were hobbled by the coronavirus pandemic. In a letter released on April 29, the Russian central bank said it did not see any need to resume buying gold at the time, but added it would continue to monitor the situation in both the global gold market and the banking sector.

Mongolia was the only big seller in May, shrinking its gold reserves by 3.3 tons. Columbia sold 0.9 tons of the yellow metal.

For the eighth straight month, the People’s Bank of China did not report any gold purchases.  It’s not uncommon for China to go silent and then suddenly announce a large increase in reserves.

Many analysts believe China holds far more gold than it officially reveals. As Jim Rickards pointed out on Mises Daily back in 2015, many people speculate that China keeps several thousand tons of gold “off the books” in a separate entity called the State Administration for Foreign Exchange (SAFE). Given the political dynamics and the ongoing trade war, it seems unlikely the Chinese suddenly stopped increasing their gold reserves in 2016.

The World Gold Council says it expects central bank demand for gold to continue in the near-term.

As we noted in our Q1 2020 Gold Demand Trends report, the case for central banks holding gold remains strong. Especially considering the economic uncertainty caused by the COVID-19 pandemic.”

The WGC 2020 Central Bank Survey found that 20% of central banks globally plan to expand their gold holdings in the next 12 months.

Factors related to the economic environment – such as negative interest rates – were overwhelming drivers of these planned purchases. This was supported by gold’s role as a safe haven in times of crisis, as well as its lack of default risk.”

Published:7/15/2020 4:01:46 AM
[Markets] America, You've Been Blacklisted: McCarthyism Refashioned For A New Age America, You've Been Blacklisted: McCarthyism Refashioned For A New Age Tyler Durden Tue, 07/14/2020 - 23:50

Authored by John Whitehead via The Rutherford Institute,

“If we confuse dissent with disloyalty—if we deny the right of the individual to be wrong, unpopular, eccentric or unorthodox—if we deny the essence of racial equality then hundreds of millions in Asia and Africa who are shopping about for a new allegiance will conclude that we are concerned to defend a myth and our present privileged status. Every act that denies or limits the freedom of the individual in this country costs us the confidence of men and women who aspire to that freedom and independence of which we speak and for which our ancestors fought.”

- Edward R. Murrow

For those old enough to have lived through the McCarthy era, there is a whiff of something in the air that reeks of the heightened paranoia, finger-pointing, fear-mongering, totalitarian tactics that were hallmarks of the 1950s.

Back then, it was the government - spearheaded by Senator Joseph McCarthy and the House Un-American Activities Committee - working in tandem with private corporations and individuals to blacklist Americans suspected of being communist sympathizers.

By the time the witch hunts carried out by federal and state investigative agencies drew to a close, thousands of individuals (the vast majority of them innocent any crime whatsoever) had been accused of communist ties, investigated, subpoenaed and blacklisted. Regarded as bad risks, the accused were blacklisted, and struggled to secure employment. The witch hunt ruined careers, resulting in suicides, and tightened immigration to exclude alleged subversives.

Seventy years later, the vitriol, fear-mongering and knee-jerk intolerance associated with McCarthy’s tactics are once again being deployed in a free-for-all attack by those on both the political Left and Right against anyone who, in daring to think for themselves, subscribes to ideas or beliefs that run counter to the government’s or mainstream thought.

It doesn’t even seem to matter what the issue is anymore (racism, Confederate monuments, Donald Trump, COVID-19, etc.): modern-day activists are busily tearing down monuments, demonizing historic figures, boycotting corporations for perceived political transgressions, and using their bully pulpit to terrorize the rest of the country into kowtowing to their demands.

All the while, the American police state continues to march inexorably forward.

This is how fascism, which silences all dissenting views, prevails.

The silence is becoming deafening.

After years of fighting in and out of the courts to keep their 87-year-old name, the NFL’s Washington Redskins have bowed to public pressure and will change their name and team logo to avoid causing offense. The new name, not yet announced, aims to honor both the military and Native Americans.

Eleanor Holmes Norton, a delegate to the House of Representatives who supports the name change, believes the team’s move “reflects the present climate of intolerance to names, statues, figments of our past that are racist in nature or otherwise imply racism [and] are no longer tolerated.”

Present climate of intolerance, indeed.

Yet it wasn’t a heightened racial conscience that caused the Redskins to change their brand. It was the money. The team caved after its corporate sponsors including FedEx, PepsiCo, Nike and Bank of America threatened to pull their funding.

So much for that U.S. Supreme Court victory preventing the government from censoring trademarked names it considers distasteful or scandalous.

Who needs a government censor when the American people are already doing such a great job at censoring themselves and each other, right?

Now there’s a push underway to boycott Goya Foods after its CEO, Robert Unanue, praised President Trump during a press conference to announce Goya’s donation of a million cans of Goya chickpeas and a million other food products to American food banks as part of the president’s Hispanic Prosperity Initiative.

Mind you, Unanue—whose grandfather emigrated to the U.S. from Spain—also praised the Obamas when they were in office, but that kind of equanimity doesn’t carry much weight in this climate of intolerance.

Not to be outdone, the censors are also taking aim at To Kill a Mockingbird, Harper Lee’s Pulitzer Prize-winning novel about Atticus Finch, a white lawyer in the Jim Crow South who defends a black man falsely accused of rape. Sixty years after its debut, the book remains a powerful testament to moral courage in the face of racial bigotry and systemic injustice, told from the point of view of a child growing up in the South, but that’s not enough for the censors. They want to axe the book—along with The Adventures of Huckleberry Finn—from school reading curriculums because of the presence of racial slurs that could make students feel “humiliated or marginalized.”

Never mind that the N-word makes a regular appearance in hip-hop songs. The prevailing attitude seems to be that it’s okay to use the N-word as long as the person saying the word is not white. Rapper Kendrick Lamar “would like white America to let black people exclusively have the word.”

Talk about a double standard.

This is also the overlooked part of how oppression becomes systemic: it comes about as a result of a combined effort between the populace, the corporations and the government.

McCarthyism worked the same way.

What started with Joseph McCarthy’s headline-grabbing scare tactics in the 1950s about Communist infiltrators of American society snowballed into a devastating witch hunt once corporations and the American people caught the fever.

McCarthyism was a contagion, like the plague, spreading like wildfire among people too fearful or weak or gullible or paranoid or greedy or ambitious to denounce it for what it was: an opportunistic scare tactic engineered to make the government more powerful.

McCarthy, a young Republican senator, grasped the opportunity to make a name for himself by capitalizing on the Cold War paranoia of the time. In a speech in February 1950, McCarthy claimed to have a list of over 200 members of the Communist Party “working and shaping the policy of the U.S. State Department.” The speech was picked up by the Associated Press, without substantiating the facts, and within a few days the hysteria began.

McCarthy specialized in sensational and unsubstantiated accusations about Communist infiltration of the American government, particularly the State Department. He also targeted well-known Hollywood actors and directors, trade unionists and teachers. Many others were brought before the inquisitional House Committee on Un-American Activities for questioning.

“McCarthyism” eventually smeared all the accused with the same broad brush, whether the evidence was good, bad or nonexistent.

The parallels to the present movement cannot be understated.

Even now, with modern-day McCarthyism sweeping the nation and America’s own history being blacklisted, I have to wonder what this sudden outrage and crisis of conscience is really all about.

Certainly, anyone who believes that the injustices, cruelties and vicious callousness of the U.S. government are unique to the Trump Administration has not been paying attention.

No matter what the team colors might be at any given moment, the playbook remains the same. The leopard has not changed its spots.

Scrape off the surface layers and you will find that the American police state that is continuing to wreak havoc on the rights of the people under the Trump Administration is the same police state that wreaked havoc on the rights of the people under every previous administration.

So please spare me the media hysterics and the outrage and the hypocritical double standards of those whose moral conscience appears to be largely dictated by their political loyalties.

While we squabble over which side is winning this losing battle, a tsunami approaches.

While the populace wages war over past injustices, injustice in the here and now continues to trample innocent lives underfoot. Certainly, little of significance is being done to stem the tide of institutional racism that has resulted in disproportionate numbers of black Americans who continue to be stopped, frisked, shot at, arrested and jailed.

I’ve had enough of the short- and long-term amnesia that allows political sycophants to conveniently forget the duplicity, complicity and mendacity of their own party while casting blame on everyone else.

When you drill right down to the core of things, the policies of a Trump Administration have been no different from an Obama Administration or a Bush Administration, at least not where it really counts.

In other words, Democrats by any other name have been Republicans, and vice versa.

War has continued. Surveillance has continued. Drone killings have continued. Police shootings have continued. Highway robbery meted out by government officials has continued. Corrupt government has continued. Profit-driven prisons have continued. Censorship and persecution of anyone who criticizes the government have continued. The militarization of the police has continued. The devastating SWAT team raids have continued. The government’s efforts to label dissidents as extremists and terrorists has continued.

The more things change, the more they have stayed the same.

We’ve been stuck in this political Groundhog’s Day for so long that minor deviations appear to be major developments while obscuring the fact that we’re stuck on repeat, unable to see the forest for the trees.

This is what is referred to as creeping normality, or a death by a thousand cuts.

It’s a concept invoked by Pulitzer Prize-winning scientist Jared Diamond to describe how major changes, if implemented slowly in small stages over time, can be accepted as normal without the shock and resistance that might greet a sudden upheaval.

Diamond’s concerns related to Easter Island’s now-vanished civilization and the societal decline and environmental degradation that contributed to it, but it’s a powerful analogy for the steady erosion of our freedoms and decline of our country right under our noses.

As Diamond explains, “In just a few centuries, the people of Easter Island wiped out their forest, drove their plants and animals to extinction, and saw their complex society spiral into chaos and cannibalism… Why didn’t they look around, realize what they were doing, and stop before it was too late? What were they thinking when they cut down the last palm tree?”

His answer: “I suspect that the disaster happened not with a bang but with a whimper.”

Much like America’s own colonists, Easter Island’s early colonists discovered a new world—“a pristine paradise”—teeming with life. Yet almost 2000 years after its first settlers arrived, Easter Island was reduced to a barren graveyard by a populace so focused on their immediate needs that they failed to preserve paradise for future generations.

The same could be said of the America today: it, too, is being reduced to a barren graveyard by a populace so focused on their immediate needs that they are failing to preserve freedom for future generations.

In Easter Island’s case, as Diamond speculates:

The forest…vanished slowly, over decades. Perhaps war interrupted the moving teams; perhaps by the time the carvers had finished their work, the last rope snapped. In the meantime, any islander who tried to warn about the dangers of progressive deforestation would have been overridden by vested interests of carvers, bureaucrats, and chiefs, whose jobs depended on continued deforestation… The changes in forest cover from year to year would have been hard to detect… Only older people, recollecting their childhoods decades earlier, could have recognized a difference. Gradually trees became fewer, smaller, and less important. By the time the last fruit-bearing adult palm tree was cut, palms had long since ceased to be of economic significance. That left only smaller and smaller palm saplings to clear each year, along with other bushes and treelets. No one would have noticed the felling of the last small palm.

Sound painfully familiar yet?

We’ve already torn down the rich forest of liberties established by our founders. It has vanished slowly, over the decades. Those who warned against the dangers posed by too many laws, invasive surveillance, militarized police, SWAT team raids and the like have been silenced and ignored. They stopped teaching about freedom in the schools. Few Americans know their history. And even fewer seem to care that their fellow Americans are being jailed, muzzled, shot, tasered, and treated as if they have no rights at all.

The erosion of our freedoms happened so incrementally, no one seemed to notice. Only the older generations, remembering what true freedom was like, recognized the difference. Gradually, the freedoms enjoyed by the citizenry became fewer, smaller and less important. By the time the last freedom falls, no one will know the difference.

This is how tyranny rises and freedom falls: with a thousand cuts, each one justified or ignored or shrugged over as inconsequential enough by itself to bother, but they add up.

Each cut, each attempt to undermine our freedoms, each loss of some critical right—to think freely, to assemble, to speak without fear of being shamed or censored, to raise our children as we see fit, to worship or not worship as our conscience dictates, to eat what we want and love who we want, to live as we want—they add up to an immeasurable failure on the part of each and every one of us to stop the descent down that slippery slope.

We are on that downward slope now.

The contagion of fear that McCarthy helped spread with the help of government agencies, corporations and the power elite is still poisoning the well, whitewashing our history, turning citizen against citizen, and stripping us of our rights.

What we desperately need is the kind of resolve embodied by Edward R. Murrow, the most-respected newsman of his day.

On March 9, 1954, Murrow dared to speak truth to power about the damage McCarthy was inflicting on the American people. His message remains a timely warning for our age.

We will not walk in fear, one of another. We will not be driven by fear into an age of unreason, if we dig deep in our history and our doctrine; and remember that we are not descended from fearful men. Not from men who feared to write, to speak, to associate, and to defend causes that were for the moment unpopular. This is no time for men who oppose Senator McCarthy’s methods to keep silent, or for those who approve. We can deny our heritage and our history, but we cannot escape responsibility for the result. There is no way for a citizen of a republic to abdicate his responsibilities. As a nation we have come into our full inheritance at a tender age. We proclaim ourselves, as indeed we are, the defenders of freedom, wherever it continues to exist in the world, but we cannot defend freedom abroad by deserting it at home. The actions of the junior Senator from Wisconsin have caused alarm and dismay amongst our allies abroad, and given considerable comfort to our enemies. And whose fault is that? Not really his. He didn’t create this situation of fear; he merely exploited it—and rather successfully. Cassius was right. ”The fault, dear Brutus, is not in our stars, but in ourselves.”

America is approaching another reckoning right now, one that will pit our commitment to freedom principles against a level of fear-mongering that is being used to wreak havoc on everything in its path.

The outcome rests, as always, with “we the people.” As Murrow said to his staff before the historic March 9 broadcast: “No one can terrorize a whole nation, unless we are all his accomplices.”

Take heed, America.

As I make clear in my book Battlefield America: The War on the American People, this may be your last warning.

Published:7/14/2020 11:00:14 PM
[Markets] The Surveillance State: How To Disappear The Surveillance State: How To Disappear Tyler Durden Tue, 07/14/2020 - 22:30

Via 21st Century Wire,

With each passing day, supposedly ‘free and democratic’ western governments are working overtime to emulate the type of surveillance states we see in countries like China and North Korea. The goal is 24/7 digital tracking of every citizen, and this authoritarian agenda is being accelerated during the current manufactured COVID-19 ‘crisis.’ Besides going off-grid to a remote rural area, is it still possible to opt-out? 

To answer this question, you will first need to audit which lines of tracking are currently in use.

Is it possible for a person to successfully evade this rapidly emerging Orwellian grid of surveillance and social control?

Even when wearing a mask in public, the State and its corporate enablers still have multiple lines of tracking honed on members of the public.

To create effective privacy shields, it is first necessary to deconstruct your current web of digital networks. In addition, there are also a number a new tools at your disposal.

City Lab's Jessica Leigh Hester reports…

If extricating yourself from the electrical grid is, to some degree, a test of moxie and patience, extracting yourself from the web of urban surveillance technology strains the limits of both. If you live in a dense urban environment, you are being watched, in all kinds of ways. A graphic released by the Future of Privacy Forum highlights just how many sensors, CCTCV cameras, RFID readers, and other nodes of observation might be eying you as you maneuver around a city’s blocks. As cities race to fit themselves with smart technologies, it’s nearly impossible to know precisely how much data they’re accumulating, how it’s being stored, or what they’ll do with it.

“By and large, right now, it’s the Wild West, and the sheriff is also the bad guy, or could be,” says Albert Gidari, the director of privacy at Stanford Law School’s Center for Internet and Society.

The various nodes where sensors and other tech could detect your movements through the city (Image Source: Future of Privacy Forum)

Smart technologies can ease traffic, carve out safer pedestrian passages, and analyze environmental factors such as water quality and air pollution. But, as my colleague Linda Poon points out, their adoption is also stirring up a legal maelstrom. Surveillance fears have been aroused in Oakland, CaliforniaSeattle, and Chicago, and the applications of laws protecting citizen privacy are murky. For instance: data that’s stored on a server indefinitely could potentially infringe on the “right to be forgotten” that’s protected in some European countries. But accountability and recourse can be slippery, because civilians can’t necessarily sue cities for violating privacy torts, explains Gidari.

What would it look like to leapfrog that murkiness by opting out entirely? Can a contemporary urbanite successfully skirt surveillance? I asked Gidari and Lee Tien, a senior staff attorney at the Electronic Frontier Foundation, to teach me how to disappear.

During the course of our conversations, Tien and Gidari each remind me, again and again, that this was a fool’s errand: You can’t truly hide from urban surveillance. In an email before our phone call, Tien points out that we’re not even aware of all the traces of ourselves that are out in the world. He likens our data trail—from parking meters, streetlight cameras, automatic license plate readers, and more—to a kind of binary DNA that we’re constantly sloughing. Trying to scrub these streams of data would be impossible.

Moreover, as the tools of surveillance have become more sophisticated, detecting them has become a harder task. “There was a time when you could spot cameras,” Tien says. Maybe a bodega would hang up a metal sign warning passersby that they were being recorded by a clunky, conspicuous device. “But now, they’re smaller, recessed, and don’t look like what you expect them to look like.”

Other cameras are in the sky. As Buzzfeed has reported, some federal surveillance technologies are mounted in sound-dampened planes and helicopters that cruise over cities, using augmented reality to overlay a grid that identifies targets at a granular level. “There are sensors everywhere,” Gidari says. “The public has no ability to even see where they are.”

The surest way to dodge surveillance is to not encounter it in the first place—but that’s not a simple ask. While various groups have tried to plot out routes that allow pedestrians to literally sidestep nodes of surveillance, they haven’t been especially successful. In 2013, two software developers released a beta version of an app called Surv, which aspired to be a crowdsourced guide to cameras mounted in cities around the world. The app would detect cameras within a 100-meter radius of the user’s phone, but it failed to meet its crowdfunding threshold on Kickstarter.

The most effective solutions are also the least practical ones. To defeat facial recognition software, “you would have to wear a mask or disguises,” Tien says. “That doesn’t really scale up for people.” Other strategies include makeup that screws with a camera’s ability to recognize the contours of a human face, or thwarting cameras by blinding them with infrared LED lights fastened to a hat or glasses, as researchers at Japan’s National Institute of Informatics attempted in 2012. Those techniques are hardly subtle, though—in trying to trick the technology, you would stick out to the naked eye. And as biometrics continue to advance, cameras will likely be less dupable, too. There are also legal hiccups to consider: Drivers who don’t want city officials to know where they parked or when, Gidari says, would have to outwit license plate recognition tools by obscuring their license plate, such as with the noPhoto camera jammer, a new $399 device that fires a flash at red light cameras in an attempt to scramble a readable image. Obscuring license plates is already illegal in many cities and states, and others are chewing on new procedures.

LED glasses might not trick biometric cameras—but they will definitely attract the attention of folks on the street (Image Source: National institute of Informatics)

In their book Obfuscation: A User’s Guide for Privacy and ProtestFinn Brunton and Helen Nissenbaum, both professors at New York University, champion a strategy of “throwing some sand in the gears, kicking up dust and making some noise,” essentially relying on the melee of data jamming to “hide in a cloud of signals.” A number of apps, websites, and browser extensions attempt to aid users in this type of misdirection—say, for instance, by running in the background of your regular web activities, trying to cover your digital tracks by throwing surveillance off your scent.

For example: A site called Internet Noise searches for randomized phrases and opens five fresh tabs every ten seconds. (I left it running as I wrote this, and now my browser history includes pictures of badgers, an online mattress store, an NPR article about the Supreme Court, and a research paper about gene mutation in hamsters.) As a cloaking technique, it’s not a perfect veil, writes Emily Dreyfess in Wired: “It’s actually too random. It doesn’t linger on sites very long, nor does it revisit them. In other words, it doesn’t really look human, and smart-enough tracking algorithms likely know that.” The site is more of a protest over Congress rolling back a not-yet-implemented FCC regulation that would have stymied ISPs from selling users’ browsing history.

Still, Tien advocates a certain degree of self-protection. He views these measures as a kind of digital hygiene—the “equivalent of washing your hands when you go to the bathroom,” or getting a flu shot. But he stresses that they’re only a partial prophylactic: “Nothing that will make you immune from the problem.”

Other techniques include employing Tor—a network that tries to anonymize the source and destination of your web searches by routing traffic along a convoluted path—and Signal, which offers encrypted messaging and phone calls. The Electronic Frontier Foundation’s Surveillance Self-Defense toolkit also suggests particular tools and behaviors for specific scenarios. People participating in protests, the guide suggests, might consider stripping meta-data from photos, to make it harder to match them with identities and locations. But this isn’t a perfect solution, either, Tien says, because you can only control what you post. “If I take a picture and scrub the metadata, that’s one thing,” Tien says. “If my friend takes a picture of me, I can’t do anything about that.” The Intercept produced a video illustrating step-by-step instructions for phone security at a protest, from adding an access passcode to turning on encryption settings.

On a daily basis, Tien tells me, “I don’t think you or I can exercise much meaningful self-help against the kind of tracking we’ll be seeing in real-world physical space.” That’s fodder for a point he makes about a fundamental asymmetry in the information that’s available to the bodies that install the cameras and those who are surveilled by them. There are relatively few laws relating to the expectation of privacy in a public space. The officials and organizations that install sensors, cameras, and ever-more-sensitive devices, he says, “have much more money than you do, much more technology than you do, and they don’t have to tell you what they’re doing.”

Ultimately, Tien and Gidari both take a long view, arguing that the most payoff will come from pushing for more transparency about just what this technology is up to. Part and parcel of that, Tien says, is resisting the idea that data is inherently neutral. The whole messy, jumbled mass of it contains information that could have tangible consequences on people’s lives. Tien says citizens need to remind their elected officials what’s at stake with data—and in the process, maybe “dampen their enthusiasm” for the collection of it.

He points out that sanctuary cities could be a prime example. There, he says, some advocates of immigrant rights are realizing that data collected via municipal surveillance “might not be such a good thing when we’re interested in protecting immigrants and the federal government is interested in deporting them.”

The practical strategies for opting out—of becoming invisible to some of these modes of surveillance—are imperfect, to say the least. That’s not to say that data collection is inherently nefarious, Gidari says—as he wrote in a blog post for the CIS, “no one wants to live in a ‘dumb’ city.” But he says that opting out shouldn’t need to be the default: “I don’t think you should have been opted in in the first place.”

Published:7/14/2020 9:32:20 PM
[Markets] Could America Have A French-Style Revolution? Could America Have A French-Style Revolution? Tyler Durden Tue, 07/14/2020 - 16:20

Authored by Charles Hugh Smith via OfTwoMinds blog,

As with the French Revolution, that will be the trigger for a wholesale replacement of our failed institutions.

Since it's Bastille Day, a national holiday in France celebrating the French Revolution, let's ask a question few even think (or dare) to ask: could America have a French-style Revolution? Not in some distant era, but within the next five years?

By French-style Revolution I don't mean the extravagant use of the guillotine, I mean the complete political overthrow of the ruling elites. This overthrow need not be violent; it could be an entirely peaceful electoral rejection of the two-party political elites and the Federal Reserve / banking / financialization elites which together form the neoliberal-neofeudal ruling elites.

The BAU Crowd (business as usual) considers the possibility of such an overthrow of parasitic, predatory elites as remote as a landing by Martians. I suspect they're purposefully blind to the reality that America's elites and institutions are structurally incapable of accepting meaningful reforms that would address the extremes of dysfunction, exploitation, predation and wealth / power / income inequality that characterize America today.

America's elites and institutions have only one systemic response to crisis: do more of what's failed spectacularly.

This inability to acknowledge the reality of their own self-serving incompetence and the deeply dysfunctional nature of virtually every level of America's economic, social and political orders leaves an overthrow of the entire ruling elite as the only option left other than resignation to Bread and Circuses funded by the Fed, a policy of desperation that will inevitably debauch the U.S. dollar and impoverish everyone who counted on Bread and Circuses to fix what's broken.

Counting on Fed-funded Bread and Circuses to fix what's broken is the perfection of magical thinking, a state of denial expressed by the phrase routinely (but apparently falsely) attributed to Marie Antoinette, when she learned that the peasants had no bread: Then let them eat brioche (roughly translated into "cake" in English).

Ignoring the horror of the delusional BAU Crowd, let's explore the set-up for a French-style Revolution in America.

Setting aside the horrors of the guillotine, the French Revolution was many things unfolding at once:

-- The failure of the Monarchy's money system, as inflation soared to the point commoners could no longer afford bread. (The price of bread peaked the week that the Bastille was stormed by mobs.)

-- The overthrow of the state-religion nexus in favor of Enlightenment rationalism.

-- The romantic ascent of liberty as the rallying cry against an oppressive feudal hierarchy.

-- The fragmentation of the social and political orders into warring factions.

-- The failure of the Monarchy's institutions to recognize and understand the potentially fatal challenges and institute reforms that addressed the problems.

-- The failure of the French economy, which was plagued by poor roads and communication lines, limited trade due to regional fragmentation and low levels of productive investment.

-- Geopolitical rivalries with Great Britain, the rising power of the Germanic states and other continental European powers (Russia, Austria, Sweden).

In sum, institutions that had failed collapsed and were replaced, first by Napoleon's centralized bureaucracies and later by political reforms, a process that took much of the 19th century to play out.

I think the parallels to America in 2020 are obvious, if inexact.

Most importantly, America's core institutions have failed: the financial system, healthcare, higher education, the political process and the national defense/intelligence complex.

In every case, a class of insiders has come to dominate each centralized hierarchy for its own benefit. Blinded by their greed and hubris, they cannot recognize or understand the systemic failure they inhabit because their attachment to their position, privilege and power is blindingly strong.

Reform is impossible, for as with the French Monarchy, the existing system is the wrong structure and unit size, to borrow a phrase from Peter Drucker. Reforms profound enough to actually repair what's broken would require the insiders surrender much of their position, privilege and power, which they will never do.

As I have taken pains to explain, finance capitalism has fatally distorted the American economy in ways that few understand (or want to understand, since it's so disturbing).

The resulting concentration of wealth and power has also fatally distorted the political process of governance.

As I explained in my books Resistance, Revolution, Liberation and Inequality and the Collapse of PrivilegeAmerica's systems only function when there is more of everything to distribute, i.e. "growth": more money, more goods and services, more political power.

When there is less of everything, America's institutions fail because they have no mechanisms for DeGrowth / contraction.

This is the result of their systemic structure as centralized hierarchies. Expansion is effortless, contraction breaks the system. (See the chart of the rising wedge model of breakdown below.)

Much is being made of the fragmentation of American society into so-called progressive-conservative camps, and perhaps the best way to understand this fragmentation is that both camps recognize the failure of American institutions but differ on how to reform them.

Given that America's institutions only function with "more of everything," a reality that aligns with America's zeitgeist of "there's always more of everything," I consider it inevitable that whomever is in power will enthusiastically embrace the illusory "solution" of printing trillions of dollars out of thin air, in the delusional confidence that the world's appetite for dollars is essentially infinite.

Put another way: America finds it comforting to assume that it will always be able to digitally create "money" out of thin air and trade this "nothing" for real goods, i.e. "something."

That America has gotten away with this magic for decades only fuels the confidence of those who reckon the way to "get more of everything" is so easy and simple: just create another few trillion dollars out of thin air and buy the world's resources with this "free money."

Eventually the rest of the world will tire of this fraud, and America will face the loss of its magic printing press.

At that point, inflation will destroy the purchasing power of the US dollar and commoners will be unable to afford the cost of living.

As with the French Revolution, that will be the trigger for a wholesale replacement of our failed institutions. Whether that replacement can be accomplished within the existing political system will depend on a great many factors that will be unfolding simultaneously and interacting with each other in unpredictable, nonlinear ways.

My work is all about sketching out alternative systems that are non-hierarchical, opt-in, decentralized, adaptive, self-organizing and anti-fragile--everything that our current systems are not.

How do we get from "there"--failed, centralized hierarchies dominated by self-serving insiders-- to "here"--opt-in, decentralized, adaptive, self-organizing and anti-fragile institutions?

Nobody knows, but I suspect the decay of our failed institutions will accelerate rapidly, and we won't have to wait very long to witness the messy transition to new decentralized, localized, flexible non-elite-ruled institutional models.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)

(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:7/14/2020 3:27:25 PM
[Markets] Solomon: Joe Biden's Energy Adviser Aided Kremlin Nuclear Agenda Solomon: Joe Biden's Energy Adviser Aided Kremlin Nuclear Agenda Tyler Durden Tue, 07/14/2020 - 11:44

Exclusive excerpts from 'Fallout: Nuclear Bribes, Russian Spies and the Washington Lies that Enriched the Clinton and Biden Dynasties' by John Solomon and Seamus Bruner. These excerpts come from chapter 9, ‘The Ukraine Boomerang: Obama's Russia Failures Unleash New Chaos and Cronyism in Ukraine.'

Last month, Just the News reported  that shortly after Hunter Biden joined the board of Burisma Holdings, the Ukrainian gas company landed a deal with the Obama State Department's Agency for International Development (USAID). At the time, Burisma was under multiple investigations for corruption.

Not only did the controversial Ukrainian energy firm get a deal with USAID while Hunter Biden was on the board, but Joe Biden's energy advisor, Amos Hochstein, promoted the very program which worked to legitimize Burisma amid the allegations.

As an Obama official, Hochstein testified repeatedly to Congress, urging lawmakers to help "reform" Ukraine's energy sector to mitigate Putin's advances.

At an event hosted by the Atlantic Council (a think tank funded in part by Burisma), Hochstein warned that Russia's weaponization of energy deals was predictable and must be counterbalanced:

"When the gas was shut off from Russia to Ukraine on June 16th [2014], that was not a unique event. It happened in 2006 and it happened in 2009 and, therefore, it happened again in 2014. And there is no reason to believe it will not happen again," Hochstein said.

"The way to prevent it from happening again is to … [create] new infrastructures that can allow for energy, for gas and for other sources of energy to come into Europe from other places to compete with Russian supplies."

As it turned out, Hochstein was uniquely aware of Putin's energy strategy, according to chapter 9 of John Solomon’s and Seamus Bruner's "Fallout: Nuclear Bribes, Russian Spies, and the Washington Lies that Enriched the Clinton and Biden Dynasties."

Here is an excerpt from that chapter that lays out Hochstein's role

Between his visits to Congress (and well-connected think tanks) to apprise decision makers of Putin's energy antics, Hochstein was Biden's right-hand man meeting with numerous world leaders. He frequently flew to Ukraine (and other nations) with Biden to work out energy deals.  

But Hochstein had a secret. 

Time and again, Biden's advisor failed to mention that he had witnessed Putin's energy strategy firsthand. Hochstein communicated Putin's energy dominance strategy in the oil and gas sectors very effectively, but he never mentioned Russia's attempts to corner the global uranium market. It was something he had assisted personally.

While working as a U.S. lobbyist in the private sector, Hochstein had advised Rosatom's subsidiary: Tenex.

Hochstein became a revolving door extraordinaire early in his Beltway career. As he weaved in and out of the private sector, his positions (and profits) rose substantially. From 2001 to 2007, Hochstein worked in various capacities at Washington lobbying powerhouse Cassidy & Associates. In 2006, then-Governor Mark Warner (D-Va.) hired Hochstein to serve as a senior policy advisor. Hochstein purportedly left Cassidy in January 2007 to join Connecticut Senator Chris Dodd's presidential campaign, according to a press release by the firm. ...

Yet, Hochstein continued to work for Cassidy's deep-pocketed foreign clients, even while he was employed by Governor Warner and Senator Dodd's presidential campaign. In 2006, Russian nuclear corporation Tenex asked Doug Campbell (unaware that he was an FBI operative) to find a Beltway lobbying powerhouse to help further their interests.

By March 2006, Campbell found himself meeting with Hochstein, who ensured that Tenex hired Cassidy & Associates. Cassidy claimed that Hochstein left the firm in January 2007, but Hochstein continued to meet with Putin's top nuclear officials throughout 2007 and 2008 while he was working with powerful Democrats.

Did Warner and Dodd know that Hochstein was simultaneously serving Russian interests? Hochstein's public bios make no mention of his work on behalf of Tenex, although he does acknowledge returning to Cassidy in August 2008 (and remaining there until 2011).

Before long, he was directly advising Secretary of State Hillary Clinton, her successor John Kerry, and finally Vice President Biden (and even President Obama). His LinkedIn profile is meticulously manicured to show no overlap between his public and private sector gigs, but, in fact, Hochstein advised multiple public officials and simultaneously worked to advance foreign interests while on the payroll of Cassidy. 

According to the Obama White House's visitor records, Hochstein visited more than 150 times between December 2010 and September 2016, including several trips to the Situation Room. His first visits occurred while he was still working with Cassidy. 

Hochstein's global perspectives were clearly appreciated within the State Department, and he soon found himself regularly meeting with Secretary Clinton and her inner circle directly. As Clinton's special envoy and coordinator for international energy affairs and head of the department’s Bureau of Energy Resources (ENR), he traveled the globe promoting Secretary Clinton's energy agenda. "I have been privileged to help build and lead the bureau since its creation," Hochstein said.

After Clinton left State, Hochstein initially advised Secretary Kerry and traveled overseas with him to work on EU energy issues. While advising Kerry, Hochstein worked closely with other Obama officials including Assistant Secretary Victoria Nuland, Special Coordinator Jonathan Winer, and National Security Council (NSC) Senior Director Charles Kupchan (each of these individuals played starring roles in Obama's Russia and Ukraine operations and they later helped perpetrate the political dirty tricks against Trump). 

Hochstein soon found himself in the good graces of Vice President Biden. He traveled around the world with Biden — numerous times to Ukraine — and they also visited Turkey, Cyprus, Romania, and even the Caribbean. At an Atlantic Council summit in Istanbul, Biden praised the special energy envoy and announced that he had put Hochstein in charge of European energy security efforts. 

Despite a less-than-stellar review from the State Department inspector general's office, Hochstein was embraced by his superiors, especially Biden, who thanked Hochstein in his recent post-vice presidential memoir.

*  *  *

John Solomon's and Seamus Bruner's new book, "Fallout: Nuclear bribes, Russian spies and the Washington Lies that enriched the Clinton and Biden Dynasties," is available here at Amazon

Published:7/14/2020 10:58:58 AM
[Markets] Harper's "Bizarre" Letter & The Woke Revolution Harper's "Bizarre" Letter & The Woke Revolution Tyler Durden Sun, 07/12/2020 - 23:00

Authored by Paul Craig Roberts,

150 prominent intellectuals and Ivy League academics of leftish persuasion have signed a letter in Harper’s protesting the breakdown in civilized debate and imposition of ideological conformity.

The signatories made the obligatory bow to denouncing Trump as “a real threat to democracy” and called for “greater equality and inclusion across our society.”

But this wasn’t enough to save them from denunciation for stating these truthful facts:

The free exchange of information and ideas, the lifeblood of a liberal society, is daily becoming more constricted. While we have come to expect this on the radical right, censoriousness is also spreading more widely in our culture: an intolerance of opposing views, a vogue for public shaming and ostracism, and the tendency to dissolve complex policy issues in a blinding moral certainty. We uphold the value of robust and even caustic counter-speech from all quarters. But it is now all too common to hear calls for swift and severe retribution in response to perceived transgressions of speech and thought.

More troubling still, institutional leaders, in a spirit of panicked damage control, are delivering hasty and disproportionate punishments instead of considered reforms. Editors are fired for running controversial pieces; books are withdrawn for alleged inauthenticity; journalists are barred from writing on certain topics; professors are investigated for quoting works of literature in class; a researcher is fired for circulating a peer-reviewed academic study; and the heads of organizations are ousted for what are sometimes just clumsy mistakes.

Whatever the arguments around each particular incident, the result has been to steadily narrow the boundaries of what can be said without the threat of reprisal. We are already paying the price in greater risk aversion among writers, artists, and journalists who fear for their livelihoods if they depart from the consensus, or even lack sufficient zeal in agreement.”

The signatories to the letter do not understand that time has passed them by. Free speech is no longer a value. Free speach is an ally of oppression because it permits charges against Western civilization and the white racist oppressors to be answered, and facts are not welcome. The purpose of the woke revolution is to overthrow a liberal society and impose conformity with wokeness in its place. Whiteness has been declared evil. There is nothing to debate.

The signatories do not understand that today there is only one side. In place of debate there is denunciation, the purpose of which is to impose ideological conformity. It is pointless to search for truth when truth has been revealed: Western civilization and all its works are a white racist construct and must be destroyed. There is nothing to debate.

To make clear that in these revolutionary times not even prominent people of accomplishment such as Noam Chomsky are entitled to a voice different from woke-imposed conformity, the letter was answered by a condescending statement signed by a long list of woke journalists of no distinction or achievement, people no one has ever heard of.

The 150 prominent defenders of free speech were simply dismissed as no longer relevant.

Noam Chomsky and the other prominent signatories were dismissed as irrelevant just as the prominent historians were who took exception to the New York Times 1619 project, a packet of lies and anti-white propaganda. The famous historians found that they weren’t relevant. The New York Times has an agenda that is independent of the facts.

The message is clear: shutup “white, wealthy” people and you also Thomas Chatterton Williams, a black person with a white name. Your voices of oppression have been cancelled.

The “oppressed” and “marginalized” voices of woke revolutionaries, who have imposed tyranny in universities, the work place, and via social media, are the ones that now control explanations. No one is permitted to disagree with them.

Lining up on the woke side are CNN, New York Times, Los Angeles Times, Slate, and other presstitute organizations desperately trying to remain relevant. Everyone of these institutions quickly took the side of the woke revolution against facts and free speech.

The revolution is over unless the guillotine is next. Academic freedom no longer exists. Free speech no longer exists. The media is a propaganda ministry. Without free speech there can be no answer to denunciation. White people are guilty. Period.

Published:7/12/2020 10:19:04 PM
[Markets] The Sinking Titanic's Great Pumps Finally Fail The Sinking Titanic's Great Pumps Finally Fail Tyler Durden Sun, 07/12/2020 - 13:35

Authored by Charles Hugh Smith via OfTwoMinds blog,

The greater fools still partying in the first-class lounge are in denial that even the greatest, most technologically advanced ship can sink.

On April 14, 1912, the liner Titanic, considered unsinkable due to its watertight compartments and other features, struck a glancing blow against a massive iceberg on that moonless, weirdly calm night. In the early hours of April 15, the great ship broke in half and sank, ending the lives of the majority of its passengers and crew.

The usual analogy drawn between the Titanic and our financial meltdown stems from the initial complacency of the passengers after the collision. Some passengers went on deck to play with the ice scraped off the berg, while most returned to the festivities still working their magic as midnight approached.

The class structure of Edwardian Britain soon came into play, however; as the situation grew visibly threatening, the First Class passengers were herded into the few lifeboats while the steerage/Third Class passengers--many of them immigrants--were mostly kept below decks, sealing their doom.

But there are even more compelling analogies than initial complacency turning to panic. Consider this diagram of the great ship:

The large black rectangles on the lower deck represent the coal bunkers; they were located adjacent to the boilers which powered the engines. Though the ship only scraped against the iceberg, as Titanic explorer Robert Ballard explains, that was enough to pop rivets and open hull plates:

The glancing blow that ruptured the Titanic's hull over a distance of roughly 250 feet (out of a full length of 882 feet) and admitted water into six of her compartments sealed her fate.

Considerable hullabaloo attended the attempt in the summer of 1996 to raise a piece of the hull from the debris field, but far more interesting was the ultrasound investigation of the area of the bow damaged by the iceberg. These images revealed six small tears or openings affecting the first six compartments. Just as we had surmised in 1986, the great gash was a myth and the actual openings into the ship seem to have been the result of rivets popping and hull plates separating.

This offers a very powerful analogy to the fatal damage inflicted on our financial system by an apparently "glancing blow" with the pandemic shutdown. Just as the Titanic was mortally wounded not by great tears in its hull but by the buckling of steel hull plates, so the U.S. (and thus global) financial system is sinking from similarly "glancing" blows.

The actual damage could have been contained--do you sense another analogy about to surface?-- had the fifth watertight bulwark--shall we call it "the bulwark against systemic failure"?-- extended a few decks higher. But inexplicably, this watertight barrier did not extend as high as the other watertight bulkheads.

Though the water gushing through a three-foot gash in the forward engine room was held back by the ship's great pumps, as the bow sank lower then water seeped over the fifth watertight bulkhead and gushed into the boiler room, extinguishing the fires that powered the pumps.

This generated a feedback loop: the higher the water rose, the more boilers were extinguished and the less power was available to the pumps.

And so against all "rational odds," the ship's apparently minor structural design flaw led to its inevitable loss as the mighty pumps lost their battle against the rising water.

To all the "experts," the risk of collision with an iceberg were considered low, while the risk of catastrophic damage were considered essentially zero. Hmm, does that remind you of our financial system circa September 2019, just as the great U.S. economy's hull was buckling?

Now we have the Great Pumps of Federal Reserve money-printing and Stimulus, which in a close analogy are pumping trillions of dollars into the sinking U.S. economy. But just as the engines of the Titanic lost power as the water extinguished the boilers supplying steam to the engines, so the stimulus is only keeping the rising water temporarily at bay-- it is not actually saving the "engines" of the economy from sputtering.

And what are those engines?

1. Debt, which must increase to fuel spending, income and thus taxes

2. Rising assets, which provide the basis for ever-more borrowing

3. Government borrowing, which enables government spending to keep rising without regard to actual tax revenues or the health of those being taxed

4. Rising employment as vast borrowing and spending creates new jobs

The ice-cold water is splashing into each of these engines. As assets fall then there is simply no foundation (collateral) to support more borrowing. As debt is paid down rather than expanded, then spending falls. As spending falls, so do revenues, profits and employment, all of which crimp tax revenues.

The last engine is government borrowing. To those still standing on the sloping deck, cheering the "good news" of Big Tech's meteoric ascent to the heavens of bubble overvaluation, this seems like the engine which can never be extinguished. Through thick and thin the Federal government and the state and local governments (via muni bonds) have been able to borrow and spend stupendous sums seemingly without consequence.

The demise of this last great engine will surprise as many as the sinking of the Titanic did, but it is as inevitable as the sinking of the great ship. The pumps can only hold the water back for a while, but the Stimulus magic will expire sooner than anyone imagines.

As the government scrambles to find buyers for endless trillions in new U.S. bonds (and trillions more in new corporate debt, new mortgages, new consumer debt, student loans, new muni debt, etc.) then interest rates will rise and the great engine of ever-greater debt will hiss and sigh as the water rises and then go silent and cold.

The first-class passengers have already been ushered to their lifeboats. They've sold to the euphoric passengers buying Big Tech's parabolic ascent and the greater fools still partying in the first-class lounge who are in denial that even the greatest, most technologically advanced ship can sink, taking everyone in denial down with it.

The sinking is not a possibility, it is an inevitability.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)

(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:7/12/2020 12:51:58 PM
[Markets] The New Deal Is A Bad Old Deal The New Deal Is A Bad Old Deal Tyler Durden Sun, 07/12/2020 - 09:20

Authored by Alasdair Macleod via,

So far, the current economic situation, together with the response by major governments, compares with the run-in to the depression of the 1930s. Yet to come in the repetitious credit cycle is the collapse in financial asset values and a banking crisis.

When the scale of the banking crisis is known the scale of monetary inflation involved will become more obvious. But in the politics of it, Trump is being set up as the equivalent of Herbert Hoover, and presumably Joe Biden, if he is well advised, will soon campaign as a latter-day Roosevelt. In Britain, Boris Johnson has already called for a modern “new deal”, and in his “Hundred Days” his Chancellor is delivering it.

In the thirties, prices fell, only offset by the dollar’s devaluation in January 1934. This time, monetary inflation knows no limit. The wealth destruction through monetary inflation will be an added burden to contend with compared with the situation ninety years ago.


Boris Johnson recently compared his reconstruction plan with Franklin D Roosevelt’s New Deal. Such is the myth of FDR and his new deal that even libertarian Boris now invokes them. Unless he is just being political, he shows he knows little about the economic situation that led to the depression.

It would not be unusual, even for a libertarian politician. FDR is immensely popular with the inflationists who overwhelmingly wrote the economic history of the depression era. In fact, FDR was not the first “something must be done” American president, a policy which started with his predecessor, Herbert Hoover. But the story told is that FDR took over from heartless Hoover who had failed to step in and rescue the economy from a free-market catastrophe, by standing back and letting events take their course instead. Nothing is further from the truth: Hoover was an interventionist to his fingertips. The last of the laissez-faire presidents was Calvin Coolidge, Hoover’s predecessor.

A few years ago, the BBC broadcast a programme extolling the virtues of FDR and his new deal. Stephanie Flanders, at that time the BBC’s economics correspondent, reiterated the myth about Hoover being a non-interventionist and FDR having all the correct reflationary policies. In a piece to camera at the Hoover Dam, no less, she recounted how it was an example of FDR’s new deal stimulus. While it wasn’t completed until 1936, building started in 1931 as a project by the eponymous Hoover, pursuing the same interventionist policies as FDR before FDR’s landslide election. It was never FDR’s project, the clue being in the dam’s name. Research by Flanders and the BBC was either biased, deficient, blind or all three.

The myth that has even drawn in Boris is so powerful it has intelligent people swearing the earth is flat. The FDR fairy-story is fundamental to the modern state’s interventionist stance; the very reason for its existence and its welfare commitments to the electorate. Wishful thinking about FDR’s pioneering role is now the pervasive theology. But the way the world is viewed cannot change the facts, and to quote FDR and his new deal as the template for economic policy is to repeat the errors that led to the longest and deepest depression in American history.

If in a few words one was to sum up why the state fails in its interventionist quest, it would be its inability to understand change. Free markets change all the time. Businesses and whole industries evolve and disappear in a natural process of selection driven by the consumer. The state’s response to a crisis is always aimed at a return to normality; normality being an unchanged state from before the crisis. The state protects yesterday’s jobs and yesterday’s businesses. Worse, by preventing evolutionary change at the heart of a dynamic economy it deprives it of the resources required to evolve. And that’s why the depression lasted into the Second World War.

The back-story to the depression

Before Hoover, US presidents understood a hands-off policy would let the economy rapidly fix itself. The post-war 1920—1921 depression in America was allowed to run its course. It lasted just eighteen months and was the prelude to a period of technological revolution that gave enormous benefits in the quality of life for all Americans. Following President Harding’s death in 1923, Coolidge was elected the new president. While Coolidge enforced a strict laissez-faire policy, he was either unaware of or ignored the monetary policies of Benjamin Strong at the Fed, which, to be fair to Coolidge, was only a decade old. The Fed’s monetary policy was the cause of an inflationary boom which ended in a stockmarket bubble in 1929.

In 1927, Coolidge announced he would not be standing for a second term, and Herbert Hoover was elected President in 1928 nearly a year before the  stock market crisis occurred.

Fuelled by a free market approach and the stimulus of unbacked credit, when Hoover took office in March 1929 the economy was, in the epithet of historians, roaring. We can now begin our comparison with the present day. Boris Johnson became Prime Minister after a similar inflation-fuelled period; but the more important correlation is with Republican Donald Trump, whose interventionist policies imitate Hoover’s from his time as Secretary of Commerce in Harding’s administration onwards. Hoover deported immigrants and Trump builds a wall, both reasoning they take American jobs. And like Hoover, Trump uses tariffs to protect farmers and businesses from foreign competition deemed unfair.

The combination of a massive credit expansion in the 1920s and the Smoot-Hawley Tariff Act passed by congress in October 1929 — the month of the Wall Street Crash — serves as a template for the condition of America’s economy today. Apart from some differences in timing, the most significant difference is in the money. Before April 1933 the dollar was freely exchangeable by the public for gold at $20.67 to the ounce; today the dollar is unbacked. Prices were stable, today they rise.

By passing the Smoot-Hawley Act at the top of the credit cycle, Congress ensured a sharp downturn in the economic outlook, persuading bankers to call in their loans. The economy began to contract, and interventionist Hoover went to work. To quote from his memoires;

“…the primary question at once arose as to whether the President and the Federal government should undertake to investigate and remedy the evils… No President before had ever believed that there was a governmental responsibility in such cases. No matter what the urging on previous occasions, Presidents steadfastly had maintained that the Federal government was apart from such eruptions . . . therefore, we had to pioneer a new field.”

Hoover called a series of White House conferences with industry leaders and bankers to persuade them to invest and maintain wages in order to keep consumer spending going. Like the neo-Keynesians of today, Hoover believed consumer spending was vital for the economy, but failed to make the connection with production, which is always first in temporal order, and provides the product for consumption without which it cannot happen. Hoover’s view on maintaining wages is reflected today in minimum wage rates, which innocuous though they may seem render certain activities uneconomic.

As is the case today, the Fed was ready to inflate. According to Murray Rothbard, the Fed

“…was just as ready to try to cure the depression by inflating further. It stepped in immediately to expand credit and bolster shaky financial positions. In an act unprecedented in its history, the Federal Reserve moved in during the week of the crash—the final week of October—and in that brief period added almost $300 million to the reserves of the nation’s banks. During that week, the Federal Reserve doubled its holdings of government securities, adding over $150 million to reserves, and it discounted about $200 million more for member banks.”

Monetary policy was a doppelganger for the Fed’s policies today. In today’s money, $300 million is about $26bn, using gold as the conversion factor. Today’s stimulus is a thousand times greater in real terms — so far.

In 1932 Roosevelt won a landslide against Hoover, and as was the custom at the time he took office the following March. Only a week before, an assassination attempt on Roosevelt struck the wrong man who died shortly afterwards. Banks were failing. Farmers were in revolt. The numbers of unemployed were increasing alarmingly. Hoover’s reflationary policies had failed, and he was said to be the least popular man in America on inauguration day. Fast-forward eighty-eight years and we see President Trump following in Hoover’s footsteps in this election year; and we can be pretty sure Joe Biden — if he is not asleep at the wheel — will cast himself as the new FDR with his version of the new deal.

Roosevelt then delivered his inaugural address, which included the famous line, “So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself.” His speech was followed by the Hundred Days, the first time a president had set such a schedule.

In Britain, Rishi Sunak, the new Chancellor, is now pursuing his version of a Hundred Days announcing subsidies and new support as the occasion demands, financed by monetary inflation. Admittedly Sunak remains a free marketeer but has yet to prove his measures are temporary. Meanwhile, President Trump is destroying his administration’s finances in an attempt to contain the economic fallout from the coronavirus in his election year.

They say that repeating a failed action in search of a different outcome is a sign of madness. Hoover and Roosevelt were pioneers of today’s failed economic policies and it is their post-war successors who are arguably certifiable. But the problem is deeper than that, with the public voting for the same failed policies, so even an economically literate politician has to deliver solutions in that context. It is what makes history repetitious. Instead of economics, psychological factors drive politics, including the public desire for the state to provide easy solutions to economic and personal difficulties. But the lesson from the Hoover era is that we stand on the precipice of an economic collapse as a result of a combination of excessive credit creation in the years before and the introduction of trade tariffs. And that was before the coronavirus was added to this lethal mix.

The psychology suggests that this time the politicians and the monetary authorities will pursue much the same course as before, even more aggressively. So far, the evidence supports this thesis, and it allows us to anticipate mistakes yet to be made.

The credit cycle and the banks

A notable feature of the Wall Street crash and the onset of the depression were bank failures. Not only had the 24,000 American commercial banks extended unbacked credit throughout the 1920s, but their reserves were to an extent, fictitious. This arose from double counting cheques in the process of clearing, remaining in the cash reserves of the bank upon which it was drawn while being immediately credited to the receiving bank’s cash reserves.

But when the public began to withdraw cash in increasing amounts this false liquidity was exposed. The initial banking panic began in November 1930 in Tennessee when a correspondent network in Nashville collapsed after the Bank of Tennessee closed its doors, forcing over 100 institutions to suspend operations. And as the contraction in bank credit continued, additional correspondent systems imploded. That was only the start of it. The Bank of the United States in New York in December was followed by a new banking crisis in Chicago the following June, this time involving real estate. In 1932 over 2,000 banks closed, and in 1933 a further 4,000.

The banking scene is very different today. Instead of many thousands of small one and two-branch banks the system is dominated by large international behemoths, global systemically important banks — the G-SIBs. They operate under the rules and regulations of the Basel Committee, currently Basel III, administered by national regulators.

Aping the crookery of double-counting floating cheques, today’s banks game the system, this time aided and abetted by the regulators, who, so long as the forms are correctly filed, are happy to look the other way. Indeed, as their stress tests have shown they would rather gloss over the issue of inadequate capitalisation.

The full weakness of the global banking system is illustrated in Figure 1, which shows the leverage between total assets on the G-SIB balance sheets and their market capitalisation. The regulators persist in using the relationship between total assets and balance sheet equity instead, despite the market valuing a typical bank’s equity at considerably less than book value.

Bank equity valuations on 8 July have benefited from the liquidity-driven rally in global stock markets, with Deutsche Bank’s shares, for example, almost doubling from a low of €4.50 in mid-March. The recovery is not a sign of new-found strength but merely reflects the severe disconnection between rising financial asset values and a collapsing economy, which will almost certainly lead to a substantial adjustment to the detriment of financial asset values.

The full weaknesses of the current system are described in a paper on the big UK banks, jointly authored by Dean Buckner and Kevin Dowd. Figure 1 was constructed using the methodology in that paper. It is a strongly recommended read for anyone seeking to understand the severe risks associated with not just the UK banking system, but the G-SIBs in all jurisdictions plus other significant banks not on the G-SIB list.

With a fundamentally weak global banking system, over-leveraged and virtually guaranteed to collapse as current financial and economic conditions deteriorate, a new banking failure could make the first wave of bank failures in 1930 Nashville look like a vicar’s tea-party. The failure of just one major bank anywhere in the world is likely to degenerate into a widespread panic, because global regulation has ensured they all game the system similarly and they all share the same weaknesses to greater or lesser degree.

In another potentially fatal error, following the Lehman crisis the G-20 agreed new rules designed to ensure that the costs of future bank failures are to be carried by bond holders and large depositors as well as shareholders, and not governments. Fortunately, this bail-in route is intended to be optional, but there is a risk that in a widespread banking crisis one or more of the G-20 members will go down the bail-in route, probably for banks not on the G-SIB list but smaller and no less significant banks. With some bailing-out and some bailing-in, simple nationalisation and preservation of all customer deposits becomes less likely, prompting a collapse not just in the banks bailed in, but a panic in all bank bonds and major deposits which would otherwise be protected in a clean bail-out.

Putting the bail-in uncertainty to one side, instead of a series of bank failures between 1930-33 today’s global banking interdependence suggests one major crisis is more likely, which arguably has already started given the liquidity injections that have taken place since last September, commencing in the repo market.

A difference from the thirties is that cash money today is a lower proportion of overall money supply, payments being overwhelmingly electronic. Depositors queueing up to withdraw their funds in old fashioned bank runs cannot be ruled out, but today failing banks find funds transferred from them far more swiftly by electronic means, particularly from larger account balances lacking depositor protection.

One reason that central banks have encouraged the abandonment of cash is to lessen banks’ vulnerability to old fashioned bank runs. Instead, by acting as back-stop liquidity provider, even when other banks reduce credit lines to a stricken bank, the intention is that no bank need fail. By the creation of bank reserves through QE and using the repo facility to provide overnight liquidity, commercial banks are already drawing on this support, without which there would almost certainly have been a banking crisis already.

On this basis, bank failures are already here, only they are hidden from public view. All that’s needed is for bank bond holders and large depositors to wake up fully to the risks to their capital for the banking crisis to become public. And that’s why the values of financial assets cannot be permitted to slide, because if they were to do so the whole financial system would rapidly collapse.

Money differences

In the 1930s the dollar was exchangeable for gold until one month after Roosevelt’s inauguration, when he signed an executive order banning the ownership of gold and gold certificates. It was a prelude to the devaluation of the dollar to $35 to the ounce the following January, the rate at which US citizens were forbidden to own gold. Apart from that devaluation, and despite its demonetarisation from gold the dollar retained its objective exchange value, while the depression led to falling prices for traded goods and commodities.

Falling prices were the natural consequence of the contraction of bank credit, the imposition of trade tariffs and failing price support operations. Instead of inflationary unbacked bank credit contracting, it was sound money in the form of a gold-backed dollar that took the blame. The inflationists were in control in both fact and of the narrative, but they couldn’t quite discard gold altogether — that didn’t happen until 1971.

Today there is no backing for government currencies, being entirely fiat. There is therefore no restriction in the deployment of an inflationary tax to balance the government’s books. Measured in gold, the dollar has already lost 98% of its purchasing power since the late sixties, and now its supply is being increased at an unprecedented rate.

The mistake being made by central banks is to not understand that money is merely the mechanism for converting an individual’s labour into consumption. It is the means by which we compare one good against another. It is not, as modern economists seem to think, a means for individuals to evaluate the cheapness or dearness of a good in isolation. If that was the case, then current and prospective prices would broadly have the effect they expect.

The failure of monetary policy, therefore, is in large measure due to the error of not understanding the true role of money in the economy. It wasn’t the increased purchasing power of the dollar in the 1930s which contracted the economy, but the withdrawal of bank credit combined with trade tariffs. Similarly, the falling purchasing power of the dollar today will not, on its own, stimulate consumption. This is not to merely dismiss the distortions in the market from changes in the quantity of money, which are damaging in many other respects. But above all, the debasement of the currency impoverishes the creative economy, the exact opposite of the effect intended.

It remains to be seen how far the destruction of fiat money will go, but as Figure 2 shows, M1 money has already jumped sharply — by 104% annualised between 24 February to 22 June.


Unfortunately, governments in the developed nations are making the same mistakes dealing with the current economic crisis as they made ninety years ago. As was the case between 1930—1933 we can be almost certain of a banking crisis. This time it will be global and almost certainly will require banks to be taken into public ownership. The cost will be immense, and it will be paid for by inflationary means.

The scale of it will mean an unprecedented destruction of wealth — hardly the basis for economic recovery. At the same time statist preservation of existing production for fear of unemployment will hamper, not help economic recovery; and, so long as fiat currencies retain any exchange value, there can be no economic revival.

Indeed, the most important difference from the 1930s is the money, which could well collapse entirely. Guided by the pre-Keynesian economic theory of the Austrian school, of the economic consequences we can be certain. The political consequences in the long run can only be guessed.

Published:7/12/2020 8:45:53 AM
[Markets] Official COVID-19 Statistics Are Missing Something Critical Official COVID-19 Statistics Are Missing Something Critical Tyler Durden Sat, 07/11/2020 - 16:45

Authored by Thomas Smith via Elemental,

Even if you recover from Covid-19, you may not escape unscathed...

At the moment, official record-keeping offers only three options when it comes to Covid-19: infection, recovery, or death. This misses a broad range of other potential outcomes for people who catch the virus — many of them bad.

In medicine, physicians talk about “M&M,” or “Mortality and Morbidity.” Many hospitals even hold closed-door “M&M” conferences, where their providers discuss everything that’s gone wrong with their patients over the last week or month.

Mortality is a pretty straightforward concept. Have patients died from a particular disease process, and if so, how? Were their deaths avoidable? Can the field of medicine learn anything from them which will improve patient care in the future?

Morbidity, though, is a much trickier concept. It includes the complications, health issues, and other negative outcomes (other than death) that a disease causes. Basically, it’s all the ways that a disease can make you unwell, even if it doesn’t actually kill you.

Official statistics capture deaths that occur from Covid-19 reasonably well. Reporting methods are often updated, and epidemiologists have gone back and attempted to quantify Covid-19 deaths that were originally missed. But overall, death counts are a relatively easy metric to apply. Patients are either alive or dead. Knowing the difference is comparatively simple.

But these official statistics miss quite a lot. Specifically, they fail to represent Covid-19 morbidity — the harm that the disease causes, even in people that it doesn’t kill. In terms of measuring the long-term impact of the disease — and accurately evaluating risk — that’s a big problem.

Mounting evidence shows that even if Covid-19 kills less than 1% of patients, it doesn’t necessarily leave the others it infects unharmed. Even those who have “recovered” may have long-term impacts from it.

Morbidity can happen over a long-term period, so it is a harder variable to study and track in the early stages of a pandemic than death. Anecdotal reports and early data, though, show that Covid-19 morbidity may be a very real concern. According to a report in The Atlantic which followed several people with Covid-19 over multiple months, many had long-lasting symptoms and impairments (including headaches and debilitating fatigue) that didn’t resolve when their active infection stopped.

All of these cases were considered “mild” and didn’t result in the use of a ventilator or a stay in the ICU. And they occurred in people from a variety of age groups, not only older adults and the infirm. Yet despite these “low risk” factors, patients were still experiencing major impacts from the disease months after contracting it.

A handful of studies about Covid-19 (as well as scholarship on previous coronaviruses) bears this out. Covid-19 infection can have long-term impacts on the lungs, heart, immune system, and even the brain. These include an increased risk for heart attacks, future respiratory infections (including more severe cases of flu), and neurological impacts like cognitive impairment.

These are in addition to the known risks for hospitalization, especially if a hospitalization results in an ICU stay and might trigger ICU delirium, a condition that can be permanent. Just because you’ve recovered from Covid-19 doesn’t mean you’ve necessarily escaped unscathed — especially if the disease landed you in the hospital.

Even more concerning is emerging data showing that “asymptomatic” Covid-19 infections can cause long-term damage. Recent studies, including one published in Nature Medicine, have found “ground-glass opacities” in the lungs of asymptomatic carriers of Covid-19 — evidence of inflammation which could be causing damage internally, even if the patient feels completely fine.

And although earlier evidence suggested that children are less affected by the disease, the emergence of a new condition, Multisystem Inflammatory Syndrome, suggests that the virus may be having longer-term impacts even on the young. MSIS symptoms can emerge weeks or months after the original infection and can be deadly without prompt treatment.

All these early reports point to the possibility that Covid-19 causes acute infection, but also long-term inflammatory damage. Inflammatory diseases are the leading cause of death worldwide. If Covid-19 worsens these conditions — or causes its own long-term inflammatory damage — the result could be millions of additional deaths from heart disease, diabetes, asthma, and the like, especially in already vulnerable populations. These effects of the disease may not be apparent for years or decades.

At the moment, official statistics largely fail to take such ongoing health impacts of the coronavirus into account. Traditional epidemiology does have metrics for morbidity. But they tend to focus on disease prevalence. Once a person’s active infection has passed, they are often no longer followed or counted.

As risk professionals like Nassim Nicholas Taleb have pointed out, the failure to measure Covid-19 morbidity makes it far harder to evaluate the true risk from the pandemic. Simply looking at deaths is not enough. Mortality statistics fail to account for the people who survive the disease but suffer long-term harm — or those who die from its complications long after their initial infection has subsided.

This blindness to morbidity may push populations toward more aggressive reopening, or away from risk-reduction measures like mandating face coverings. If deaths are declining, the picture may appear rosy. But in reality, the disease may be causing irreparable harm to millions of people — just in a way that’s invisible in current statistics.

In an increasingly polarized world, morbidity is an issue that cuts across political lines. Even if your primary goal is to restart the American economy, you should care about Covid-19 morbidity. Chronically sick people often have a hard time working, or the efficiency of their work suffers. Several of the patients profiled in The Atlantic experienced “brain fog” and other neurological effects from the virus, and have found even simple activities like housework and yoga challenging. These patients would almost certainly have a hard time returning to work. To achieve lasting economic recovery with minimal burden from worker illness, Covid-19 morbidity has to be accounted for.

Thankfully, tracking Covid-19 morbidity doesn’t require reinventing the wheel. Medicine and risk management already have a robust tool for measuring the impact (health-wise and financial) of morbidity: the Quality-Adjusted Life Year (QALY) and its sister statistic, the Disability-Adjusted Life Year (DALY).

QALYs and DALYs take into account both a person’s life expectancy and their quality of life (defined, broadly, by how much a disease affects their ability to perform daily tasks). Lowered life expectancy affects QALYs, but so do long-term disease effects like the kind we’re beginning to see from Covid-19.

QALYs and DALYs are often used to evaluate new treatments. But there’s no reason QALYs and DALYs couldn’t be applied more broadly, to estimate and measure the disease burden of the Covid-19 pandemic on a given population.

In the early stage of the Covid-19 pandemic, QALYs and DALYs could be applied by deciding on an estimate for a “weight factor” measuring the severity of Covid-19’s impact on patients’ health (this is usually done on a scale of 0 for “perfectly healthy” and 1 for “dead”). This weight factor could be set differently for different populations. For example, older people with Covid-19 or those with more preexisting conditions could receive a higher weight factor.

Using demographic data for a particular population (mean age, prevalence of existing diseases, etc.) and these weight factors, an estimate of the impact of Covid-19 morbidity could be established for a population. This could then be multiplied by the number of confirmed infections in the population to arrive at a crude estimate of the overall burden of Covid-19 morbidity.

Accounting for morbidity in this way could have some major impacts on plans for reopening. Regions with highly vulnerable populations (those expected to suffer more morbidity as a result of Covid-19 infections) could reopen more slowly. And those with relatively lower projected morbidity might be emboldened to open more quickly.

As the pandemic continues and more data on the long-term impact of Covid-19 becomes available, weights could be adjusted. If it emerges that certain populations are less vulnerable than expected, their weights could be adjusted downward. If more long-term impacts of Covid-19 infection emerge (like breathing issues in asymptomatic carriers), weight factors could be adjusted upward.

QALYs and DALYs are not perfect metrics. Setting weight factors is inherently subjective, and can reflect biases present in a society. At the early stage of a pandemic, very little data is available, so estimating morbidity is more an art than a science. There are also ethical concerns with QALYs and DALYs since they’re often used to weigh the value of one life against another. QALYs and DALYs can also miss the hard-to-measure impacts of disease, like their impact on mental health.

But given that Covid-19 morbidity is basically invisible in current public health models, measuring morbidity with metrics like QALYs and DALYs would at least be a helpful start. It could begin to give us a way to estimate not only how many people will die from Covid-19, but how many lives will be negatively impacted by the disease.

Measuring morbidity could also provide better treatment and follow-up. Current approaches assume that once an asymptomatic carrier of Covid-19 tests negative, their disease has run its course. Follow-up for these patients is likely to be limited. If it turns out that Covid-19 causes ongoing morbidity in patients who appear healthy, providers could shift toward monitoring them months or years after their infection (looking for evidence of inflammation and lung damage, for example).

On a personal level, if you’ve tested positive for Covid-19 and feel fine now, don’t assume your disease is over. Especially in the longer term, be aware of potential Covid-19 symptoms, and talk with your doctor about testing for any long-term impacts that emerge.

And if you still have symptoms after your Covid-19 test has turned negative, and are told that these are unrelated to the disease, be skeptical. In the grand scheme, very little is known about Covid-19. You may be experiencing lingering effects from your infection, which your doctor should help you address and manage.

Tracking deaths and recoveries is a start. But current approaches to tracking Covid-19 are binary — you’re either positive or negative, alive or dead. To truly measure (and react to) the long-term impacts of the pandemic, we need more nuanced measures.

Specifically, we need a way to measure morbidity. Otherwise, we risk missing impacts of Covid-19 which could have massive, invisible consequences — especially for our most vulnerable.

Published:7/11/2020 4:07:24 PM
[Free Speech] Book Banning Is Back (John Hinderaker) Every year, American libraries feature displays of “banned books” to promote freedom of speech and of the press. Of course, the books they display aren’t banned; hence their ability to display them. The books are titles like Ulysses, Catcher in the Rye, Lady Chatterly’s Lover, and so on. This reflects the fact that for close to a century, no books were actually banned in the United States. But book banning Published:7/11/2020 9:42:10 AM
[Markets] Here's What 75 Preppers Learned During The Lockdown Here's What 75 Preppers Learned During The Lockdown Tyler Durden Fri, 07/10/2020 - 20:25

Authored by Daisy Luther via The Organic Prepper blog,

The lockdown that recently took place due to the pandemic was like a practice run for a bigger SHTF event. Many of our prepper theories played out and were accurate, while others weren’t as realistic as we thought beforehand.

People who weren’t preppers already learned a lot about why they would want to be better prepared in the future, but they weren’t the only ones who learned lessons. These preppers took a moment to answer questions about the lessons they learned during the lockdown. (Here’s an article about the things I learned.)

What did you learn about preparedness during the lockdown?


I learned two main things. First, I was very surprised at how strongly the isolation hit me. I am a person who is “energized” by interacting with other people. I knew that already, but I was shocked at how MUCH it affected me. Second, I got a taste of normalcy bias. I kept trying to see ways in which our situation was still “Normal”. As a school teacher of little ones for thirty years, I was pretty much used to switching into action immediately to deal with a crisis and putting my feelings on the back burner. So, I was shocked that it took me a couple of months to “accept” the changes in our lives and start looking for creative ways to make life work and meet our needs.


I learned it is so important to pay attention to what’s going on and stay ahead of the crowd. My husband and I were able to stock up two weeks before everyone else panicked. I also learned my plan of being stocked up and shopping only for replacements is a great system. For example I have 3 jars of mayo on the shelf, when I open one I put it on the list to purchase next time and replenish. Same with Costco TP. Every time I shop there I grab one package. We didn’t even go through half our stock pile and I was able to leave it for those who really needed it. I also learned to listen to your instincts, inner voice, the spirit, God or whatever you call it. I listened every time and we have made it through very comfortably. Also, look for opportunities to help others prepare. I have gotten several people to prepare seriously because of staying ahead of everyone else. I couldn’t have done what I did with[out] Daisy and her spot on articles. Like I said earlier, they kept me two weeks ahead of the crowd.


That individuals mental state can be intrusive to yours. For me-it preteen having her 1st period.


That things happen really fast. If you act when things happen it is too late. Act now.


That prepping is far more than one type of crisis. Organization of preps is vitally important ( I am still not where I need to be). Having a list of recipes and items needed helps with how and what to shop for. Alternative sources for cooking, cleaning etc. are important.


Being in a lockdown during the spring was great. House was cool and could bake. Once it got hot, there was no baking. Need to learn to bake more via the fire, not just cook.


I had anticipated shortages like food, soap, TP, and PPEs, but I underestimated how short in supply durable consumer goods would be – like the fact that freezers would pretty much become extinct, all gardening supplies, etc. Luckily, I had stockpiled seeds (although this year I brought veggie starts because everything started late this year.) It took until June to get the raised bed kits (industrial area, it’s not safe to grow anything you want to eat in the ground). Canning jars have also become in short supply. I anticipated has shortages, which did not take place – in fact, gas became dirt cheap with nobody able to go anywhere. I did fail to anticipate that the border would be closed for half a year! Living in a border city, I tend to rely on the much cheaper US prices for many things. I really should not have put off dentist and eye appointments, or a haircut! I will get that attended to before the next wave of contamination and lock-downs. I am working now on beefing up food growing and preserving supplies. Desiccants, oxygen absorbers, Mylar bags, food grade buckets, canning lids, canning jars, and food saver bags are all likely to become harder to obtain as food prices rise and more people become aware of how to grow and preserve foods. I am also stocking up on organic fertilizers and indoor growing options. And sprouting seeds – I think I have at least 2 years’ worth of those.


Baby items. We have a brand-new great grandchild born on the 4th and an 8-month-old granddaughter. I have always kept some things for when they are here, or the kids need help. We learned when it first hit that formula and diapers go quick.


Realized we ATE way more than I thought we would and more than normal, I think. Also, it’s easy to slip into an [depressive] state even when you aren’t prone to depression.


I was truly surprised at how fast everything happened. I learned that people get really angry and do things that defy logic when they are panicking. I remember I kept thinking, “if they do this over hand sanitizer and toilet paper, how crazy are they going to be when it’s food!”. I learned that my preparations allowed me some measure of peace and calm that others didn’t have. It allowed me to enjoy family time at home. I was surprised by how information changed daily. You really didn’t know who or what info to trust. I had to be vigilant in reading sources and reasoning. I learned that people are generally idiots and very selfish. As much as we want to believe people will rise up for the greater good, many won’t. But also, there were many beautiful people out there willing to help anyone who felt scared going to the store. I didn’t see many holes because I truly planned ahead and made trips to the store when needed. I was surprised how quickly people lost their jobs and businesses went under. It really didn’t take much for that to happen. I have become wearier of information released. I don’t t trust it immediately because it will change the next day…which makes it harder to get a handle on the truth of a situation. I learned that when you watch, you will prepare…and we were stocked and self-isolating before the government required it. I learned emotionally preparing is just as important as physical. Mental and emotional resilience is what got us through when we realized this was a marathon and not a sprint.


I learned not to wait to get something you want or need. I was lucky to get new filters for our Berkey before they ran out. Also, I have wanted a grain mill forever and now I have one ordered but is back order until August. And remember, one is none and two is one rule!


Never assume that your job is safe. I’m a L&D nurse at a busy hospital. BUT, I’m per diem, April 8th I was sent home early and have not worked regularly since then. I just now found a travel nurse assignment that fits. I’ll be working both jobs for the time being. My hospital definitely puts profit over patient safety.


I was surprised how quickly the shut-down of stores, libraries, etc. happened. The notice went out only hours before the shutdown happened so there was little opportunity to get out and pick up the non-essential supplies (books, craft supplies, gardening supplies) that would have made isolation easier. I was/am also surprised by the shifting “news” and medical opinion. First–masks won’t help, then they may help, now they are required. And the fact that prepping quickly became “hoarding”.


Coffee and tonic water. People in SW Kansas found out that tonic water had quinine in it and bought it like crazy, once it was suggested that malaria drugs would fight the virus.


I learned I need a bigger network and plans for the winter. Things I thought I may need, but didn’t buy, I should have- like more masks. If I think maybe, then I should get it then like a pool or kayak cause the reasonable ones are gone. My family depended on me to send them things since they were in a hot spot and store were limited on particular items.


I learned to follow my instincts. I did, and I’m thankful, because we were better stocked than we would have been otherwise. Holes – I didn’t have enough TP. I also didn’t anticipate how much I would rely on easy to prepare foods for my kids, such as Mac and cheese cups. It seemed like when everything else was upside down, they really appreciated having a “fun” food.


I learned that “Alone Time” is worth more than anything we could’ve bought at the store. With quarantines and self-isolation ‘all in the same house’, it was very difficult at times to remain sane. Normal entertainment was taken advantage of as well and so some of us just sat there dumbfounded when our ‘normally scheduled program’ wasn’t there, or when the next episode of our favorite show wasn’t going to come out until next year sometime. This was different than a power outage, a big snowstorm, or a hurricane… There was very little entertainment, plenty of work that ‘could’ be done, but little to work with. Ultimately, creativity and imagination became my best friend. In lieu of that, I’ve ordered plenty of paper, pencils, new brushes, and canvas.


I learned that medical emergencies can appear out of the blue. Thanks to early pandemic prep posts here, the oxygen concentrator I got saved my dog during a sudden life-threatening ARDS episode when the vet ER was closed during lockdown and fish mox made all the difference when I developed a tooth abscess until oral surgery was available over a month later. I learned that my success during lockdown was largely because online ordering never stopped, and all utilities were available. Back in February and March, I had prepped for both being shut down and did a good job with that. The fact that they didn’t made our lockdown pretty easy. My house is like a disorganized warehouse now. My focus was getting supplies in and deal with it later. My current and future plans are to organize and work diligently to improve/optimize health.


Glasses. Always get your eye exam on time so that you aren’t facing an uncertain future using an outdated prescription. (I still need to get mine updated!)

What are some holes you found in your preps?


Reading the articles here on Prep Club kept me ahead of the curve by at least a month, if not 6 weeks. I didn’t hit us hard here on Vancouver Island, but the one thing I did fail with was yeast and baking soda. Never expected that so many would decide to start baking bread, and the baking soda I use mixed with dish soap in place of comet or vim. We were down to our last little box when the local Walmart finally got a shipment in. Also failed with seed potatoes. I had a lot left over from last years harvest, but I wanted to get more. Tried every store and nursery and they were all gone. I always get my seeds in January, so that was not an issue.


I didn’t plan adequately for fresh things like milk & eggs (I had powdered milk but more frozen for the shorter term would have been good). I also realized w[ith] the yeast & flour shortage (both of which I had but wanted to preserve my stock of) it was easier & a better use of my resources to buy inexpensive white sandwich bread for curbside pickup rather than bake it.


I found holes in personal items. My husband and I both were essential so we didn’t get to lock-down but we limited unnecessary travel/trips to the store in the beginning. I found that I had been so busy making sure we had plenty of water, food and tp. I didn’t realize I didn’t stock up on shampoo, soap etc. I have since made sure we have a year’s supply of personal toiletry items.

Becky Ann…

I ran out of Dawn and surprisingly coffee


I will never assume TP will always be available. Or frozen peas, rice, cleaners, pasta, flour, etc. When I see it any of these items, I’m going to go stay ahead of the game and get them consistently. THAT SAID, what will I do differently tomorrow? I will try to anticipate where the next shortage will occur. I need more beans, for sure. I think clothing and shoes may be harder to get at some point.


Holes was toiletries. I was so concentrated on food. I need to get bug out bags made and set up for us to grab. Honestly y’all have taught me so much! I’m just gonna keep going. Stocking food, bumping up security, bags, canning, growing food.


Masks were the item I missed in my preps. When I tried to order them before covid even hit here, they were sold out. I refuse to pay 50.00 for 10 so I’ve been slowly buying a box at a time as the price comes down. And I’ve yet to find yeast.


…not enough extension cords. Old house does not have a lot of 3 prong outlets, which I need for my current extension cords. We do not have a printer. So, schoolwork needed to be printed, adapted and overcome.


…we had gotten sloppy with replacing some of our frequently used food – peanut butter, popcorn, flour, etc. I also learned it is really, really important to be at least one step ahead of the masses when it comes to supplies. My son-in-law would say, “we need to make sure we have enough (********** )” and I would say, “Got it.” When the info about the virus started to filter through to Ohio, I made a special trip for gloves, hand sanitizer, masks, etc. Within another 2 weeks, you couldn’t find them anywhere, for any price. I couldn’t believe how a mistaken belief (How much toilet paper do you need for a respiratory virus.) caused such craziness. That freaked me out.


Ask my hubs this question and he said, “you did good”. I plan on getting things like paint and building supplies as they were unavailable. Took contractors almost two months to build my barn because of supply issues.


Need more chocolate and chips…. and canning supplies.


Thermometers. When covid started becoming a household word and it was recommended to check temperatures, I realized my never-been-used thermometer was a dud. My husband had been sick for a week- not covid, but we couldn’t tell if he had a low-grade fever or not. I went to four different stores to find a thermometer- all four stores were sold out! Then, I remembered we had bought three extensive first aid kits- we dug them out, and each had a thermometer. I thought we were prepared, but we weren’t prepared at all for a pandemic.


We need more storage space for animal feed. Found that out the hard way when we weren’t able to make our bimonthly run to the feed store.


I worked the whole time so not much changed. Holes were toiletries, medical supplies and I need to come up with an alternative energy solution. I need better organization and more room. One major issue is: foot problem (in pt now, may have to still do surgery) has caused me to not get some stuff done. Trying to rectify that slowly before I have to tell the Dr yes or no on the surgery.


The only hole in my preps was “entertainment “. We live out in the country so going outside was a great help but, for bad weather days I need more movies and maybe series on DVD. Where we live streaming is not yet optimal, and that is putting it nicely! Books, puzzles, and games are great but, sometimes you just want to watch a good movie.


My biggest problem was forgetting how much more I would need when my oldest daughter and her 2 toddlers moved back in. I also can’t depend on anyone but me to check out how low the resources are getting.


Dried yeast was the thing we didn’t have enough of that we missed. Next time I’ll make sure I have enough in sealed tins. I’ll double up on PPE although we still haven’t used it all up. For information two sources were useful… lists posted on here by knowledgeable group members, even in other countries and local info from friends about which shops had what scarce stuff.


I underestimated how QUICKLY shortages would show up in our rural town. Within HOURS of the first confirmed case of corona virus in our area (still several counties away), sections of the local Walmart were cleaned out and remained that way for weeks. I wish I had stocked more PPE. I had not expected garden supplies to sell out so quickly and remain sold out so long. Many garden supply items are sold out within hours of being stocked on the shelves. The rabbits this year seem to be eating everything. (peppers, marigolds, peas, beans, etc.) Hardware cloth is still difficult to find.

What will you do differently to prepare for any future lockdown?


I would stock a lot more liquid hand soap and dish washing liquid. It was truly hard to find hand soap, still is most places. Meat has gotten very expensive. I wish I had my chest freezer full of hamburger instead of turkey, a ham and chicken. I can do more things creatively with hamburger. With everyone home, it’s too hard to keep up with making bread. Hungry little piranhas trying to eat it before it’s even cool enough to slice…lol! Store bought bread to the rescue. These folks can go through a loaf in one lunch, with only 3 of them eating it!


My family was more prepared than needed which provided us confidence and peace of mind. What would I do differently? Buy more gloves. My stock was sized for medical use, not going to the grocery use.


Act on the thoughts and feelings you have immediately, and don’t stop to overthink them. For example: I had the thought back in January to learn how to can ground beef and get a few quarts canned. I didn’t act on that and now ground beef is almost $5 a pound. One thing I feel I did right, is that the month before seeds had sold out, I had already placed my order so I could start things inside. By the time I was ready to plant outside, things were pretty much sold out.


Watch my mental state. Keep watch on the news, but don’t get obsessed with it. Stay proactive. The only things missing were coffee and hair coloring….Oh! Need more popcorn for when the next wave of social media arguments break out. (j/k) Things we did that really worked: We sat down with my son & his wife and put a game plan together if supply chains got broken. He started an organic farm with dairy goats and chickens. We expanded our garden and made a good contact with a local family ranch. Their business was just gone because the restaurants had shut down, so I helped them figure out some veggie boxes and then promoted on social media. It helped both the people getting high quality fresh veggies and the farm. Now, they’re just flooding me with veggies. My thought was that if things go south, having a farm as a friend was a good thing.


Food-wise I would buy more frozen fruits and vegetables. My freezer is packed with meat and some quick meals(and frozen pizza for the teenager) I have canned veggies but wanted more variety. Broccoli, cauliflower, and such. Fruit, I needed more apples, bananas, oranges, lemons, and limes. Trying to problem solve the lack of citrus.


Aside from wishing I’d had more money for padding, about the only thing I plan on stocking more of is chocolate and sweets. It turns out that a Cadbury egg every day is what kept me feeling sane and safe. Weird, and please don’t judge me..(LOL) I think the excessive sugar/carb/fat triggers a serotonin reaction. And yes, I found where I can buy a box of 48 for $25. I did find that I’m reluctant to cook the dried beans I have. I’m not sure why. Lack of experience. Not having recipes. I have many types, and a lot of them, so I should start using them I suppose.


Adding more food and supplies. I wasn’t planning on having four more people back home so that made me change my game plan a bit. Otherwise, getting more pandemic supplies to carry in all vehicles.

How will you change your preparedness in general?

Leigh Ann…

My husband and I became sick with covid-19 and were pretty much unable to leave the house for almost a month. I thought I had done a decent job of preparing with food storage. But after not going to a store for a month and very limited shopping a couple months before that, I realized I had underestimated how much food we would go through. I also underestimated the amount of paper products, garbage bags, cleaning products etc. We still did OK and I am so glad I had what I had. But I am learning you need a lot more than what you think you do. I had heard and read that before but I think it’s hard to understand exactly what that means until you can see it firsthand.


I’ve actually coasted along quite nicely once I got past the initial upset of having my routine messed up, fresh produce was an issue, I’m planning an overhaul of the garden to help supplement that for this winter onward, what I did find odd was my reluctance to start using my stockpile, I was concerned as to how I would replenish it, I’m not sure how I can really overcome that other than having back ups of back ups so if, for example, I manage to work thru my 12 months supply of loo roll I then have other options I can fall back on until I can get more or if it never restocks.


We did pretty good overall. We have been long term preppers, dealing with weather related and power outages. We had no problem at all with social distancing because we generally do that anyways. What we learned was how much money we saved by working from home. Almost $500 month on just gas alone in savings was like a wonderful gift. I am thankful my husband has a job that he could do this. What we learned is we HAVE to get out of this rental and buy a place of our own. The fresh stuff we relied on as a staple kept us much healthier. We both gained weight living off of more pantry staples. While I have some pots of salad greens & herbs that’s a far cry from what I usually buy fresh. A garden is a must have for us. We have taken the opportunity to learn a lot of new skills including more medical skills, organizing preps & inventory keeping, planning for the unexpected, learning to slaughter & process a pig in hot weather – totally different than the usual early winter harvest. I learned how fast supplies can become unavailable because of importing of goods. I became aware of how much the media pushes their agenda in whatever direction it wants and is not to be trusted or relied on and how its really feeding the divisions that can easily fuel a civil war. Knowledge and skills are so much more important than having a lot of stuff. In all I think it really impacted our reasons as to why we prep and to step it up a lot more in our time frames from WHAT IF…To WHEN! Where are we going to be??? And giving us a START GETTING READY NOW! kick in the pants.


We did pretty well. I don’t know if I’m able to change what I need to which would be to stop helping others. I started pushing family members to start building a stock of hygiene/sanitizing products and I was ignored (I’m sure there were whispers that my tinfoil hat was too tight). Then when they couldn’t find the stuff, I gave out of my stash. I had/have enough but now need to rebuild my stockpile. It was frustrating to be sure! Can I look at my dad or my in-laws and tell them “I told you so”? Well, I did but I still gave them the supplies they needed. But the ‘kids’ (ages 25+), I told them they need to figure it out themselves and sent links on DIY stuff.


Keeping informed from sources outside msm kept me 3-4 weeks ahead of the crowds, thank you Prep Club. I felt comfortable with my preps when things got bad here in the US. I did find myself reluctant to use my stash. I was able to explain early the need to be ready for lockdown with extended family. In turn, they were better prepared and now know I’m not paranoid. It was surprising to learn how few times I truly need to go anywhere ever.


Snacks and quick stuff to eat. I typically don’t keep a lot of it anyway, but with everyone home constantly it was more of an issue. I’m still not quite sure how to impact that without impacting storage and stock rotation issues. Second was a little more emergency or liquid cash…that issue is currently changing. We just were not comfortable with how tight we were personally and for our business. Sometimes that can’t be helped, but we are making a concerted effort to have a little better padded emergency fund. We would have survived, but not as comfortably as we would like.


…coffee brings me sanity… and a bit of normality. How I look forward to my cup each morning. Part of my routine that never changed.


I was in the hospital when the whole COVID thing blew wide open. I came home to a disaster. My big fail was not explaining the prep system to hubby (who had previously no interest).


As full-time farmers we were never really “locked down”. The whole thing made me more aware though. We were well stocked on food and hygiene items, no real holes where supplies are concerned. In all honesty I believe we could go a year+ on total lockdown without going hungry or being dirty, or really doing without anything we really wanted or needed. We raise pretty much everything we eat, and I always keep a surplus stock of seeds. I think I would reconsider my water supply. We are on public water but if it quit running, we have a cistern and access to strip pits. It will just require considerably more work for transport and purification. I would like a solar set up for electricity. And always more means of defending our home and livestock. It’s the same as always, being able to afford those more expensive items.


I never knew that liquid bleach got weaker over time. You can stockpile it by the gallon, but that does you no good about six months out. I picked up granulated pool shock, which can be reconstituted a tiny bit at a time and make a similar product to bleach, useful in all the same situations, that we’ll use up in tiny batches then make more. Added plus: it’s a small packet that takes up almost no space and lasts indefinitely if stored properly.


I need to get to the range more.


After having been through several hurricanes and the ’08 crash and having to help family, we’re good.


Toilet paper & Clorox wipes are worth more than gold to some people. When tp starts being restocked and the sign says 1 per family you buy it every trip just in case. Friends and family in larger cities don’t stock up and their large stores were out a long time. I thought I might have to start shipping toilet paper. Learning about gardening and buying extra seeds BEFORE it’s time to plant. We weren’t ready for an in-ground garden and used containers. Gardening supplies, including vegetable starts, here went fast (within days) since everyone was stuck at home and didn’t want to go to the bigger cities. Buying a spare freezer mid shutdown was interesting. Home Depot delivery was 4 months wait! Our neighbor is finally getting one they ordered in April. We bought a used one local for $100 thankfully it’s still going…Oh and stock up even more on dry/canned pet foods. We usually buy the biggest bag possible and still needed to order more. Chewy & Walmart online was sold out of most options and our small local store only gets small bags and even that was hit or miss each week. Like toilet paper buy what you can every trip and stock up. Can’t ever have too much as long as it’s sealed and not around mice.


Organization. I honestly didn’t know how much I needed of everything. I still don’t have that nailed. And part of that is a place I can store goods so that is can see what I have more easily. Shelves, etc.


Had enough TP until just now. But now was able to find some and have restocked. I will now buy every time I go to the store. Seeds: I had heirloom seeds but will begin adding extra to my collection. Never thought as a nurse that I would ever have to worry about having a steady job as I have usually over the past 32 years worked at least 1-2 Full-time jobs (we work 12-hour shifts so can work 2 -FT jobs 3 -12 hr. shifts per week) but with Covid and me now not working in the Emergency Room I found myself not being able to work my job in pre-op surgery due to being shut down. But we are now back up and running at mostly normal schedules. Our garden is supplying fresh fruits and vegetables which is great. Chicken supplying eggs. Masks and cleaning supplies are what I will also stock up on. The pool shock is a great thing I will be checking into.


I need to work on stocking up on clothing for my son, as he is still growing. It is harder to come by good used clothes for boys in the size he is in now and forward, but I need to be prepared anyway! I always have had a stash of tp and still have quite a bit but will continue to stock up as needed. I think the hard thing now is the temptation to sit back and not press forward on prepping as much since I have a good stash of food, etc. But one never knows just what tomorrow will bring. I keep getting two pounds of butter every time I am at Aldi, as it’s the limit and it’s the cheapest it’s been in ages ($1.88/pound). I probably have an exorbitant amount of butter in my freezers, but the low price cannot last forever!


I need better organization, I have too much stuff and can’t find what I need when I need it!! I didn’t go grocery shopping for over 2 months at a store other than for some random unimportant things, pet food, and fresh produce/milk. I feel that we would be okay for a long time with human things! We do need more pet food, and I’ve bought powdered milk at bulk barn every time I get milk and vacuum-sealed what we would use in a month. I also need Mylar bags and more coffee! And less dog hair would be nice! Oh, and an adult inflatable pool would be awesome! My dryer died in March, so I’ve been doing a load every time a basket is full and hang drying. Getting a huge walnut tree taken down in August since it’s a major allergy issue and blocks the sun and kills all the grass/plants in the back yard, and getting my old deck ripped out. Going to replace with patio stones or concrete since it is home for skunks, rabbits, or rats at different times of their year and I had a major rat problem this winter in my old half of the basement. Also, will be putting in proper insulation to my bedroom crawlspace since it has none and new windows/doors (they are at least 50 years old) have been bought and I will be helping my dad put them in so I can learn how to! These all need to be done before SHTF to make sure I can keep the house comfortable since they are responsible for 30% heat/cooling loss!


I need better organization, inventory tracking methods, an upright freezer, more shelving in my storage area, and ammo. Need 9mm ammo and it’s impossible to find locally right now.


Not much changed for me, but my wife had several clients on hiatus out of fear of getting sick.


I love my kids, I love my kids, I love my kids. This mantra was said daily. And now with the hubby home going on week 4 it applies to him as well. I need school supplies at home, never saw that one coming. I stay home anyway so that didn’t change, the husband had to work so that was normal. I know I had some short and they were odd ones so those were taken care of.


I spent more money than expected! Although I typically buy extra supplies each shopping trip, in February and March with the potential for shelter in place I did some large grocery, ammo and cleaning supply purchasing. Ammo was impossible to find by mid-March, and it’s still very limited on availability in early July. I realized living alone and being furloughed, that after two weeks I craved human interaction. I ended up going to my parents for a week. When initially the lockdown began and there was not clear knowledge of what would happen with the virus, I avoided the stores but after a month caved to get fresh vegetables and fruit, but ironically during that time I also threw away vegetables as I over bought and I didn’t eat or process all of them before they rotted.


Just trying to save money, get out of debt and looking for another (“essential”) job


It may seem silly or trivial but purchasing undergarments and clothing. I am in need of some things that need to be tried on before purchase and I won’t be able to do that for the foreseeable future. I have a backup plan, but I procrastinated too much on making these purchases.


Coming up with more options to supplement easily perishable items. For example, I learned that carton egg whites store very well frozen in the carton and switching to shelf stable nondairy milk lasts much longer than refrigerated. Also, I learned that if I see something, I need to not worry what others thought. In Feb I did a few rather large shopping trips and got a lot of looks/comments, but I didn’t mind. Those supplies were well used, and at that point there were several left for others of they so desired. Also important for me to learn was to prep snack supplies and actual meals, not just staples. My children get very tired of just basics so when I found good deals on shelf stable things they enjoy (granola bars, cereal, packaged Mac, and cheese) I’ve been adding them to my stockpile.


Definitely keep more cleaning wipes, paper towels and TP on hand (although I’m still good). Get another small chest freezer (I already have one) for frozen veggies, fruits and meat. For over a month I couldn’t find canned or frozen peas anywhere. Masks, definitely. Right now, I know I have a guaranteed job for this coming year, but not sure after. So, I will be saving and possibly converting to some gold and silver coin.


Going STRAIGHT to my BOL. If the wife doesn’t want to come, cool. Hasta la vista, baby. But I´ll take the kids with me. And the cat. You can keep the dog.


The pandemic virus was on my radar late January, early February. We started prepping seriously for the pandemic effect here in Massachusetts. Shopping was done by early March. Our group of friends had multiple planning conversations and we shared our resources and maximized our shopping together. We informed everyone we could. Bread was probably the one item I should have frozen more of.


I usually have enough of everything on hand, but when I first started reading about the virus (thank you, Daisy), I quickly bought extra masks, hand sanitizer, Clorox wipes, disposable gloves, and OTC drugs, as well as extra thermometers. It was all well-stocked at the beginning of the pandemic. The only thing I forgot to stock was yeast, but I’ve since been able to buy 2 one-pound packages online.


I’ll never again say “Do I really need more of those (insert whatever)? I already have x amount. No, I won’t get them.” I will get them. And more. And more if I can. Not because I’m a hoarder. Because so many people I know, and love had NONE. And I shared. And they learned that yes, they need to get more of them too. And also, I learned not to ignore that nagging little feeling of “Something’s coming”.

What about you?

What did you learn during the lockdown? Did you run out of anything that you thought you have plenty? Was there something unexpected that occurred that you never saw coming?

Published:7/10/2020 7:32:32 PM
[Markets] The Illiberalism At The Heart Of Cancel Culture The Illiberalism At The Heart Of Cancel Culture Tyler Durden Fri, 07/10/2020 - 19:45

Authored by John Lloyd via CAPX


In 2018, David Remnick, editor of the New Yorker and Pulitzer Prize-winning author, cancelled a public interview with Steve Bannon, a former senior adviser to President Donald Trump, which he had organised for the magazine’s annual festival. Several staff members had complained and two or three participants in the festival had said they would withdraw if Bannon appeared. Two of the magazine’s most distinguished writers, Malcolm Gladwell and Lawrence Wright, strongly criticised Remnick’s decision: “journalism is about hearing opposing views”, said Wright. Gladwell noted that “If you only invite your friends over, it’s called a dinner party”. The episode was a worrying sign of things to come.

In 2019, New York Review of Books publisher Rea Hederman – who has a proud history of anti-racism – fired Ian Buruma, editor of the Review for only sixteen months, after pressure from the staff. Buruma’s crime? He had printed an essay – ‘Confessions of a Hashtag’ by Jian Ghomeishi, a former Canadian Broadcasting radio host, who had been accused of violence to around twenty women, but had been recently acquitted in a case brought by some of them. Ghomeishi’s piece, which addressed these accusations, was deemed to be out of step with the spirit of the #MeToo movement. That the next issue of the NYRB was to devote a large amount of space to rebuttal was not enough to save Buruma.

A G Sulzberger had, in his apprentice journalist years, used relentless coverage to force a Lion’s Club in Narragansett to reverse its decision to bar women, and revealed misconduct in an Oregon sheriff’s office, causing his resignation. He took over as publisher of the New York Times in 2018, the sixth Sulzberger to take that position: he strongly criticised President Trump, in an Oval Office meeting, for calling the Times “treasonous” and rendering journalists’ work more dangerous.

Then in June 2020, he forced the resignation of James Bennet, editor of the NYT‘s op-ed page. Why? Because they carried an opinion piece by the Republican senator Tom Cotton which argued that demonstrations which turned violent should be met with “an overwhelming show of force” – a phrase that caused outrage among some of the staff. Bennet had been tipped as the future Editor of the New York Times. Now he was out the door.

In each case, the main actors were men I admired – Hederman and Sulzberger by reputation, Remnick (whom I met when we were both correspondents in Moscow) by his writing and editing. They had faced difficult decisions, made enemies and hard choices. In each case, the men worked for a journal with a history of innovative, no-hold-barred criticism of the powerful.

And in each case, they had folded because of pressure from the staff  – pressure which stemmed from an article or an event the complainants deemed unsuitable for any audience. For those staff, opinions they dislike are seen as intolerable in a publication on which they work. A red line had been crossed.

Journalism, in the protesting staffs’ view, must conform to novel, liberal verities, which include the protection of audiences from material seen as hurtful, even dangerous. The view of John Stuart Mill in On Liberty (1859) – “to utter and argue freely, according to conscience”- is now discarded in many parts of the cultural landscape. The sharpening of one’s own convictions by setting them against opposing opinions would now, under this approach, be impossible.

Part of this may be the phenomenon which Jonathan Swift noted when he wrote that “you cannot reason someone out of something that he or she was not reasoned into”: that views held because fashionable, or approved by one’s circle, or regarded as morally beyond question, are sometimes too shallow to be able to sustain argument. Dogmatic positions adopted with little thought except for signaling virtue often collapse when questioned hard.

What’s to be done about this? First, the phenomenon itself has to be held up to the light as much as possible. If, as I suspect, much of it is loudly proclaimed but lightly ingested, argument and debate has to be brought to bear. The best argument remains Mill’s: that opinions, many of them having to do with central issues of our time, are too important not to be challenged, worked over, considered anew and either strengthened or weakened – and, in the latter case, either modified or discarded.

Journalism needs now, more than ever, to build debate and contestation into news media worlds. The challenge is to rediscover the fundamentals of journalism – without which it ceases to be a necessary pillar of democratic, civic societies: in short, journalism needs to rediscover a belief in the fact of facts, and in the plurality of opinion. No liberal would for a moment agree that criticism of President Trump, distasteful to his supporters, should be censored.

Editors’ mission is to insist that, barring the dangerous extremes, all opinions deserve airing and contesting, just as all facts deserve to be checked and given context. Those in journalism who object to views in their journal, channel or website must accept that the robust clash of beliefs remains a necessary insurance against enforced conformity, and indeed reaction. In a society built on diverse ways of looking at the world, some upset on seeing or reading an account or a conviction which strongly contradicts your own has to be borne, considered and where possible replied to, not shut down.

A letter signed by prominent writers, scholars and others organized by Harper’s Magazine on July 7 – “On Justice and Open Debate” – noted that “it is now all too common to hear calls for swift and severe retribution in response to perceived transgressions of speech and thought. More troubling still, institutional leaders, in a spirit of panicked damage control, are delivering hasty and disproportionate punishments instead of considered reforms”.

The concession to staff protests in the great New York titles and the punishments to Buruma and Bennet were “hasty and disproportionate”. These journals stood as examples to others: their example has been weakened. Journalists have been trained to keep an open mind to all events they chronicle, conscious of their complexity: and to listen to and allow space for views which are far from their own. That tradition is not past its useful life.

John Lloyd is a Contributing Editor to the Financial Times, ex-editor of The New Statesman and a co-founder of the Reuters Institute for the Study of Journalism at the University of Oxford.

Published:7/10/2020 7:01:12 PM
[Academic left] How Bad Are America’s Colleges? This Bad (John Hinderaker) Some conservatives tend to say, “Sure the colleges and universities are bad, but…” There is no but. With rare exceptions, they are worse than you can imagine. Unless they are studying to be an engineer or a doctor, most people would be better off to avoid college altogether, learn a trade, and read books on their own. Which is the way it used to be. For a window into the Published:7/10/2020 6:02:40 PM
[Markets] As Long As Mass Media Propaganda Exists, Democracy Is A Sham As Long As Mass Media Propaganda Exists, Democracy Is A Sham Tyler Durden Fri, 07/10/2020 - 16:25

Authored by Caitlin Johnstone via,

A new Reuters/Ipsos poll has reportedly found that a majority of Americans believe the completely discredited narrative that the Russian government paid Taliban-linked fighters to kill the occupying forces of the US and its allies in Afghanistan.

“A majority of Americans believe that Russia paid the Taliban to kill U.S. soldiers in Afghanistan last year amid negotiations to end the war, and more than half want to respond with new economic sanctions against Moscow, according to a Reuters/Ipsos poll released on Wednesday,” Reuters reports.

Overall, 60% of Americans said they found reports of Russian bounties on American soldiers to be ‘very’ or ‘somewhat’ believable, while 21% said they were not credible and the rest were unsure,” says Reuters.

Those 21 percent are objectively correct: the story is not credible, and it’s not even close. Gareth Porter shows in The Grayzone how the “Bountygate” narrative is so utterly baseless that even US intelligence agencies have dismissed it, Joe Lauria of Consortium News explains how it doesn’t make any sense on its face, and FAIR’s Alan MacLeod breaks down the appalling journalistic malpractice that went into circulating this incredibly thinly sourced story to the mainstream public.

The story advances no solid facts or verified information. What it does advance is pre-existing imperialist agendas like remaining in Afghanistan, killing the last of the remaining nuclear deals with Moscow, and manufacturing public support for new Russia sanctions.

And yet a majority of people believed it, and still believe it.

The narrative that Russia paid Taliban fighters to kill occupying forces is now regarded as an established fact in many key circles, despite being backed by literally zero facts.

If people were as objective and adept at critical thinking as we tend to believe we are, the mass media’s unconscionable facilitation of a brazen cold war psyop would by itself have killed off all public trust in the institution of mass news reporting. But people are not as objective and adept at critical thinking as we tend to believe we are. People have many cognitive biases which distort our ability to objectively process information and understand events, including one which causes us to believe something is true just because they’ve heard it said multiple times. This makes us easily susceptible to mass media propaganda, where our encounters with daily news headlines can shape our perception of what’s going on in the world regardless of whether or not those headlines are backed by actual facts.

This latest poll is a perfect example of how the plutocrat-owned media manipulate public opinion in the interest of establishment agendas using brazen propaganda campaigns, but it is just the most recent example. Over and over and over again we see public perception of what’s going on distorted by lies inserted into their minds by the corporate news media, like when half a year after the invasion of Iraq seven in ten Americans believed Saddam Hussein was responsible for the 9/11 attacks. All it took to trick them into believing this and supporting the invasion was repeatedly mentioning 9/11 and Saddam in the same breath, despite there never being any evidence whatsoever for any such thing.

This kind of manipulation is not rare, it is ubiquitous and ongoing. Every single day the plutocratic media are putting ideas in people’s minds which favor the establishment upon which said plutocrats have built their kingdoms, normalizing the insane status quo and manufacturing support for agendas which bolster it. This is not some delusional conspiracy theory, it’s a well-documented fact to which many mainstream journalists have testified.

As long as this remains the case in our society, democracy cannot exist in any meaningful way. As long as a loose alliance of plutocrats and government operatives are able to consistently manipulate the way a critical mass of people think and vote, then you cannot rightly say that the people are in charge of the fate of their nation. If the majority is consistently in alignment with the plutocrats whose outsized media influence enables them to dominate the public narrative, then voting necessarily reflects the will of those plutocrats, not the people.

Even if you changed everything else that is wrong with the current system, nothing would change if the plutocratic class retained its ability to manipulate the way people think and vote. You can fix America’s garbage election integrity, end gerrymandering, even get money out of politics, but as long as the plutocratic class is still using its wealth to manipulate public thought in support of its interests, people would keep voting the way they’re manipulated to vote.

Manipulation is a key ingredient in any long-term abusive relationship, because people don’t tend to stay in abusive situations unless they are manipulated into doing so. This is true whether you’re talking about romantic partnerships, governments, or globe-spanning power structures. We don’t use the power of our numbers to end this abusive relationship where we are at the whim of crushing austerity, exploitative neoliberalism, endless war and rapacious ecocide, because we’re being manipulated into staying.

And, just like with any other abusive relationship, there comes a time to leave before it’s too late. That time is now. We can begin by expanding awareness of what’s really going on, both inwardly in ourselves and outwardly by sharing truthful information with others. In so doing, we stand a chance at making ourselves impossible to propagandize effectively and using our strength in numbers to force real change.

*  *  *

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Published:7/10/2020 3:30:09 PM
[Markets] Remember The Red Guards Before You Cheer The Woke Mobs Remember The Red Guards Before You Cheer The Woke Mobs Tyler Durden Thu, 07/09/2020 - 21:20

Authored by Peter Van Buren via,

Today statues, tomorrow mass firings... or even worse. There's a history here.

I'm ambivalent about statues and J.K. Rowling being torn down, but terrified of the thought process behind the destruction. Decisions should never be made by mobs. 

Is America on the edge of a cultural revolution?

The historical namesake and obvious parallel is the Cultural Revolution in China, which lasted from 1966 to 1976. Its stated goal was to purge capitalist and traditional elements from society, and to substitute a new way of thinking based on Mao’s own beliefs. The epic struggle for control and power waged war against anybody on the wrong side of an idea.

To set the mobs on somebody, one needed only to tie him to an official blacklist like the Four Olds (old customs, culture, habits, and ideas). China’s young people and urban workers formed Red Guard units to go after whomever was outed. Violence? Yes, please. When Mao launched the movement in May 1966, he told his mobs to “bombard the headquarters” and made clear that “to rebel is justified.” He said “revisionists should be removed through violent class struggle.” The old thinkers were everywhere and were systematically trying to preserve their power and subjugate the people.

Whetted, the mobs took the task to heart: Red Guards destroyed historical relics, statues, and artifacts, and ransacked cultural and religious sites. Libraries were burned. Religion was considered a tool of capitalists and so churches were destroyed—even the Temple of Confucius was wrecked. Eventually the Red Guards moved on to openly killing people who did not think as they did. Where were the police? The cops were told not to intervene in Red Guard activities, and if they did, the national police chief pardoned the Guards for any crimes.

Education was singled out, as it was the way the old values were preserved and transmitted. Teachers, particularly those at universities, were considered the “Stinking Old Ninth” and were widely persecuted. The lucky ones just suffered the public humiliation of shaved heads, while others were tortured. Many were slaughtered or harassed into suicide. Schools and universities eventually closed down and over 10 million former students were sent to the countryside to labor under the Down to the Countryside Movement. A lost generation was abandoned to fester, uneducated. Red Guard pogroms eventually came to include the cannibalization of revisionists. After all, as Mao said, a revolution is not a dinner party.

The Cultural Revolution destroyed China’s economy and traditional culture, leaving behind a possible death toll ranging from one to 20 million. Nobody really knows. It was a war on the way people think. And it failed. One immediate consequence of the Revolution’s failure was the rise in power of the military after regular people decided they’d had enough and wanted order restored. China then became even more of a capitalist society than it had ever imagined in pre-Revolution days. Oh well.

I spoke with an elderly Chinese academic who had been forced from her classroom and made to sleep outside with the animals during the Revolution. She recalled forced self-criticism sessions that required her to guess at her crimes, as she’d done nothing more than teach literature, a kind of systematic revisionism in that it espoused beliefs her tormentors thought contributed to the rotten society. She also had to write out long apologies for being who she was. She was personally held responsible for 4,000 years of oppression of the masses. Our meeting was last year, before white guilt became a whole category on Netflix, but I wonder if she’d see now how similar it all is.

That’s probably a longer version of events than a column like this would usually feature. A tragedy on the scale of the Holocaust in terms of human lives, an attempt to destroy culture on a level that would embarrass the Taliban—this topic is not widely taught in American colleges, never mind in China.

It should be taught, because history rhymes. Chinese students are again outing teachers, sometimes via cellphone videos, for “improper speech,” teaching hurtful things from the past using the wrong vocabulary. Other Chinese intellectuals are harassed online for holding outlier positions, or lose their jobs for teaching novels with the wrong values. Once abhorred as anti-free speech, most UC Berkeley students would likely now agree that such steps are proper. In Minnesota, To Kill A Mockingbird and Huckleberry Finn are banned because fictional characters use a racial slur.

There are no statues to the Cultural Revolution here or in China. Nobody builds monuments to chaos. But it’s never really about the statues anyway. In America, we moved quickly from demands to tear down the statues of Robert E. Lee to Thomas Jefferson to basically any Caucasian, including “White Jesus.

Of course, it was never going to stop with Confederate generals because it was not really about racism any more than the Cultural Revolution was really about capitalism. This is about rewriting history for political ends, both short-term power grabs (Not Trump 2020!) and longer term societal changes that one critic calls the “successor ideology,” the melange of academic radicalism now seeking hegemony throughout American institutions. Douglas Murray is more succinct. The purpose “is to embed a new metaphysics into our societies: a new religion.” The ideas—centered on there being only one accepted way of thought—are a tool of control.

It remains to be seen where America goes next in its own nascent cultural revolution. Like slow dancing in eighth grade, maybe nothing will come of it. These early stages, where the victims are Uncle Ben, Aunt Jemima, someone losing her temper while walking a dog in Central Park, and canceled celebrities, are a far cry from the millions murdered for the same goals in China. Much of what appears revolutionary is just Internet pranking and common looting amplified by an agendaized media. One writer sees “cancel culture as a game, the point of which is to impose unemployment on people as a form of recreation.” B-list celebs and Karens in the parking lot are easy enough targets. Ask the Red Guards: it’s fun to break things.

Still, the intellectual roots of our revolution and China’s seem similar: the hate of the old, the need for unacceptable ideas to be disappeared in the name of social progress, intolerance toward dissent, violence to enforce conformity. 

In America these are spreading outward from our universities so that everywhere today—movies, TV, publishing, news, ads, sports—is an Oberlin where in the name of free speech “hate speech” is banned, and in the name of safety dangerous ideas and the people who hold them are not only not discussed but canceled, shot down via the projectile of the heckler’s veto, unfriended, demonetized, deleted, de-platformed, demeaned, chased after by mobs both real and online in a horrible blend of self-righteousness and cyber bullying. They don’t believe in a marketplace of ideas. Ideas to the mob are either right or wrong and the “wrong” ones must be banished. The choices to survive the mobs are conformity or silence. In China, you showed conformity by carrying around Mao’s Little Red Book. In America, you wear a soiled surgical mask to the supermarket.

The philosophical spadework for an American Cultural Revolution is done. Switch the terms capitalism and revisionism with racism and white supremacy in some of Mao’s speeches and you have a decent speech draft for a Black Lives Matter rally. Actually, you can keep Mao’s references to destroying capitalism, as they track pretty closely with progressive thought in 2020 America.

History is not there to make anyone feel safe or justify current theories about policing. History exists so we can learn from it, and for us to learn from it, it has to exist for us to study it, to be offended and uncomfortable with it, to bathe in it, to taste it bitter or sweet. When you wash your hands of an idea, you lose all the other ideas that grew to challenge it. Think of those as antibodies fighting a disease. What happens when they are no longer at the ready? What happens when a body forgets how to fight an illness? What happens when a society forgets how to challenge a bad idea with a better one?

Published:7/9/2020 8:26:07 PM
[Markets] Fearing Cancelation, Public Figures Withdraw Support For Open Letter Decrying Cancel Culture Fearing Cancelation, Public Figures Withdraw Support For Open Letter Decrying Cancel Culture Tyler Durden Thu, 07/09/2020 - 14:45

Authored by Paul Joseph Watson via Summit News,

Some of the public figures who signed an open letter decrying the rise of cancel culture retracted their support, presumably fearing they too might become a victim of it.

As we highlighted yesterday, 150 intellectuals, authors and activists including Noam Chomsky, Salman Rushdie and JK Rowling signed the letter, which was published by Harpers Magazine.

The letter criticized how “the free exchange of information and ideas, the lifeblood of a liberal society, is daily becoming more constricted” as a result of “an intolerance of opposing views, a vogue for public shaming and ostracism, and the tendency to dissolve complex policy issues in a blinding moral certainty.”

“Editors are fired for running controversial pieces; books are withdrawn for alleged inauthenticity; journalists are barred from writing on certain topics; professors are investigated for quoting works of literature in class; a researcher is fired for circulating a peer-reviewed academic study; and the heads of organizations are ousted for what are sometimes just clumsy mistakes,” states the letter.

Following its publication and pushback from leftists, some of the signatories caved and publicly withdrew their support.

“I did not know who else had signed that letter,” tweeted author Jennifer Finney Boylan Dog. “I thought I was endorsing a well meaning, if vague, message against internet shaming. I did know Chomsky, Steinem, and Atwood were in, and I thought, good company.”

“The consequences are mine to bear. I am so sorry,” she added.

Historian Kerri Greenidge also tweeted, “I do not endorse this @Harpers letter. I am in contact with Harpers about a retraction.”

Vox journalist Matt Yglesias was also reported to his own employers by a transgender colleague because she claimed his support for free speech and his association with JK Rowling was an ‘anti-trans dog whistle’. (tweet since deleted)

Is it any wonder that free speech is in such dire straits when this is the reaction to a letter that simply expresses support for it?

*  *  *

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Published:7/9/2020 1:55:09 PM
[Entertainment] Best-Sellers-Books-USAToday Best-Sellers-Books-USAToday Published:7/9/2020 12:55:19 PM
[Markets] Hong Kong Schools Must Ensure "Patriotic" Content & Remove Books Breaching China Security Law Hong Kong Schools Must Ensure "Patriotic" Content & Remove Books Breaching China Security Law Tyler Durden Wed, 07/08/2020 - 22:05

Things in Hong Kong have rapidly gone straight Orwellian very quickly after the July 1 enactment of the new national security law.

As we detailed this week activists are busy scrubbing their digital footprints, including deleting social media profiles and chat histories, given authorities can reportedly pry citizens' online communications from internet companies without a warrant under the law.

But it's not just college-age and 'professional demonstrators' and pro-independence organizers that have to worry, as now even schools have been ordered to review textual content in books. This means teachers and young students are coming under threat if they don't visibly and "positively" conform.


Hong Kong's Education Bureau this week announced that schools must review their own long in use education material, including books in classrooms and on library shelves, to ensure that no content which violates the law is present.

The bureau described this as part of an initiative to “positively teach” students regarding the new law. "In accordance with the four types of offences clearly stipulated in the law, the school management and teachers should review teaching and learning materials in a timely manner, including books," the Education Bureau said.

"If they find outdated content or content that may concern the four aforementioned offences, they should remove them," it added. This essentially hearkens back to 1930's Germany book burning days.

And in a chilling statement which seems straight of a dystopian novel, the Education Bureau added: "As with other serious crimes or immoral behaviour that is not socially acceptable, materials should be removed and re-selected."

Hong Kong has long prided itself as a city of free expression set apart from the overshadowing mainland. But it appears that's changing fast, already as prominent anti-Beijing activists have begun fleeing the city, amid fears the national security law could be applied retroactively.

"Hong Kong has some of Asia's best universities and a campus culture where topics that would be taboo on the mainland are still discussed and written about," AFP noted, and added disturbingly: "But Beijing has made clear it wants education in the city to become more 'patriotic' especially after a year of huge, often violent and largely youth-led pro-democracy protests."

Meanwhile, for the first time since Hong Kong reached its semi-autonomous status, a new Beijing security office has opened in the city, placing mainland Chinese law enforcement and intelligence agents there for the first time.

Published:7/8/2020 9:19:05 PM
[Markets] Cancel Culture Targets Broadway Hit 'Hamilton' As Racial Politics Grow More Uncompromising Cancel Culture Targets Broadway Hit 'Hamilton' As Racial Politics Grow More Uncompromising Tyler Durden Wed, 07/08/2020 - 19:45

Authored by Daniel Payne via,

"Hamilton", the Broadway play which for half a decade has been a nearly unsurpassed cultural phenomenon across the globe, may be on the verge of a denouement. 

The play, written and originally starring the actor and musician Lin-Manuel Miranda, took America and the world by storm when it debuted in 2015. Combining a clever, lightning-quick hip-hop musical score with an imaginative yet mostly faithful take on American history — and with the vast majority of the cast being made up of nonwhite actors — it would go on to win nearly a dozen Tony awards as well as a Pulitzer Prize. 

Inspired by historian Ron Chernow's exhaustive biography of Founding Father Alexander Hamilton, Miranda's play depicts Hamilton's role in the American Revolution and its immediate aftermath, including his actions as a soldier and aide-de-camp to George Washington during the Revolutionary War, his turn as Washington's Treasury Secretary, his relationship with his wife Elizabeth, the death of his son, and his own eventual death in a duel with Aaron Burr. 

The production has spawned a franchise — including an album, merchandise, and books — that has grossed over $1 billion worldwide. A filmed version of the play, released this month on the streaming service Disney+, has been met with acclaim. The show has been so highly regarded that New York Times theater critic Ben Brantley once suggested that people should "mortgage their houses and lease their children" to see it. 

Yet a growing chorus of voices may be turning on both the play and the man who produced it.

The ongoing political moment in which America finds itself - where the dictates of Black Lives Matter have become something of a moral litmus test, and every aspect of American culture and history is under unforgiving scrutiny by ideologues and activists - may bring down the curtain on perhaps the premier cultural touchstone of the 21st century so far. 

[ZH: is that why the King is smiling?]

At issue for a growing number of activists is the contention that Miranda's play largely glosses over the issue of slavery in 18th century America.

Numerous historical characters in the production - George Washington, James Madison, Thomas Jefferson - in real life owned significant numbers of slaves; the play more or less skates around these facts, and it goes to great lengths to portray Washington in an almost hagiographic light. 

Hamilton, too, is subject to a similar sort of hagiography, even though his historical relevance largely comes from his service to Washington the slaveowner. Hamilton was an outspoken and committed abolitionist, but he appears to have had few compunctions about working for Washington and with other slavers. Moreover, there is evidence that he may have facilitated some slavery transactions for his wife's slaveowning family. 

Those tensions, which were mostly ignored in the early years of the play's meteoric success, are becoming more apparent today, as the nation engages in a protracted debate about whether we should rip down statues of not just Confederate generals but Founding Fathers and even Union heroes of the Civil War as well. 

Writing at CNN last week, journalist Ed Morales asked: "Is [Hamilton's] strategy of non-traditional casting a triumph that allows people of color to 'rise up' or are they undermined by the irony of how their embodiment as founding fathers ignores the fact that most of the characters they play were slave owners?"

Writer Tracy Clayton, meanwhile, wrote last week that "Hamilton" is "a flawed play about flawed people written by an imperfect person," though she claimed it gave her life "a big boost" when she first saw it. She wrote that she "would have appreciated more context [in the play] about hamilton & slavery," but she counseled against "lump[ing] it in with statues of columbus and robert e lee."

Earlier this month, a 2016 interview with Harvard historian Annette Gordon-Reed resurfaced in which the professor, who confessed she liked the play, nevertheless argued against interpreting Hamilton in too charitable a light.

"He was not an abolitionist," Gordon-Reed said. "He bought and sold slaves for his in-laws, and opposing slavery was never at the forefront of his agenda.

Esquire this week, meanwhile, echoed that criticism by noting that "Hamilton's actual relationship to slavery and slave owners was much more complex, and not as progressive as the play depicts."

Washington Post writer Gregory Schneider argued last week that Hamilton's "relationship with Washington, his marriage into the wealthy Schuyler family, his slaveholding friends — all advanced him socially while requiring him to turn his head from the toughest issue of the day."

Miranda's office did not respond to an interview request from Just the News. But the artist was clearly well aware of the growing backlash against his most famous work — a backlash which includes criticism that he has uttered the word the N-word on more than one occasion. On Monday, he briefly and favorably acknowledged the burgeoning reevaluation of his play.

"All the criticisms are valid," he wrote on Twitter, responding to Clayton's thread. "The sheer tonnage of complexities & failings of these people I couldn’t get. Or wrestled with but cut."

"I took 6 years and fit as much as I could in a 2.5 hour musical. Did my best. It’s all fair game," he added.

Whether that will be enough to save his show from "cancelation" remains to be seen, and may very well be determined by the course of American politics in 2020: If Black Lives Matter continues its dominating march through American academic, cultural, corporate, legal and political life, it may end up that Miranda's play will get the axe due to its relative soft-pedaling of American slavery.

Reflecting on the difference between the 2015 of the play's release and the 2020 of today,  Clayton observed, "Hamilton the play and the movie were given to us in two different worlds."

"Our willingness to interrogate things in this way," she continued, "feels like a clear sign of change."

Published:7/8/2020 6:46:39 PM
[Markets] In An Insane World, Madness Looks Moderate And Sanity Looks Radical In An Insane World, Madness Looks Moderate And Sanity Looks Radical Tyler Durden Wed, 07/08/2020 - 19:05

Authored by Caitlin Johnstone via,

There are no moderate, mainstream centrists in the US-centralized empire. They do not exist.

It’s not that moderate, mainstream centrism is an inherently impossible position. In a healthy world, that’s exactly what the predominant worldview would be. But we do not live in a healthy world.

There are no moderate, mainstream centrists anywhere in the tight alliance of nations which function as a single empire on foreign policy, because that functional empire is built upon murder, terrorism, exploitation, oppression, ecocide and the stockpiling of armageddon weapons.

People who support the status quo of this empire are called “moderates”, but, just like the so-called “moderate rebels” of Syria, they are in fact violent extremists.

This is the reality of living in a world that is profoundly psychologically unhealthy. If you make a career out of facilitating wars which cause explosives to be dropped from the sky on top of innocent human beings causing their bodies to be ripped to shreds and buried in rubble, then you are treated as an exemplar of ideal leadership and rewarded with prestigious positions in politics, punditry, book publishing and think tankery. If you oppose those same wars, you are marginalized and smeared as at best an extremist whack job and at worst a literal traitor conducting psyops for a foreign government.

Because the plutocratic class owns the political class which advances depraved plutocratic agendas and the media class which normalizes and justifies those agendas, a mainstream consensus has been forcibly manufactured that maintaining the oppressive, exploitative, omnicidal, ecocidal status quo is a good and sane thing to do. Voices which point out that this is bat shit crazy are marginalized and ignored when possible and smeared and demonized when necessary.

The ability of our plutocratic rulers and their lackeys to do this is the only reason why defenders of the status quo get to call themselves “centrists” and “moderates”. It’s not because their position is middle-of-the-road in any way whatsoever, it’s because they stand in alignment with the consensus that has been deliberately artificially manufactured and shoved into the mainstream by sheer force of narrative control.

This consensus manufacturing is then carried home by a glitch in human cognition known as status quo bias, which causes us to tend toward holding to the familiar as a default preference and perceive the risk of losing what we have as far less favorable than the reward gaining something better. Psychology Today explains:

Research from Kahneman and Tversky suggests that losses are twice as psychologically harmful as gains are beneficial. In other words, individuals feel twice as much psychological pain from losing $100 as pleasure from gaining $100. One interpretation is that in order for an individual to change course from their current state of affairs is that the alternative must be perceived as twice as beneficial. This highlights the challenges we may face when considering a change to our usual way of doing things.

When military members are considering their choices as their contract comes to an end, many consider re-enlisting simply because they are unaware of the many opportunities that exist for them. Even when we understand our current path is no longer beneficial or no longer makes us happy, we must still overcome the natural urge to stay on the path unless the alternative is sufficiently attractive. In order for us to readily pursue an alternate path, we must believe that the alternative is clearly superior to the current state of affairs.

The status quo effect is pervasive in both inconsequential and major decisions. Oftentimes we are held back by what we believe to be the safe option, simply because it is the default. Bearing in mind our natural propensity for the status quo will enable us to recognize the allure of inertia and more effectively overcome it.

Status quo bias is further exacerbated in our current predicament by the fact that so many people are now so close to the brink of financial ruin and so terrified of what can happen to them if things change in a sudden and unpredictable way. The result of this is that now you’ve got the majority of people in the most dominant country on earth supporting the “slow incremental change” philosophy of so-called centrism, which in practice has always ended up meaning no change whatsoever. Meanwhile our ecosystem is dying and the US is escalating nuclear tensions with Russia and China and everyone’s getting more and more crazy and miserable under the oppressive and exploitative status quo.

Did you ever climb a tree when you were a kid and get stuck because you were afraid to climb down? It’s a common experience for a lot of us. You get lost in the joy of the climb and so pleased with yourself in how well you’re doing, then suddenly you notice that the branches are getting a lot thinner and the wind is starting to sway you back and forth, and suddenly you look down and get terrified.

Maybe you called out for your mother and she came out and told you to climb down, calling up “Well you can’t stay up there!” And you knew she was right, but in that moment the idea of looking down and letting go of the thin branches you were clinging to felt so much scarier than just staying put in your precarious and unsustainable position.

That’s exactly where we’re at right now with status quo bias in our current predicament. People know things need to change, but they’re in such a precarious position that the risk of change feels far too scary to take the leap and force a deviation from our trajectory toward disaster.

But that is our only choice if we are to survive as a species. We know we were able to climb down from whatever trees we got stuck in as kids, and we know that our mother was as right then as that small inner voice inside us is now: we can’t stay here. We’ve got to wake up from the status quo narrative management and find a way to get down from our precarious and unsustainable position to the stable ground of sanity.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics onTwitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:7/8/2020 6:16:08 PM
[Artificial Intelligence] Garry Kasparov on AI: ‘People always called me an optimist’ Garry Kasparov is a political activist who’s written books and articles on artificial intelligence, cybersecurity and online privacy, but he’s best known for being the former World Chess Champion who took on the IBM computer known as Big Blue in the mid-1990s. I spoke to Kasparov before a speaking engagement at the Collision Conference last month where he […] Published:7/8/2020 4:16:25 PM
[Markets] The Problem With Monuments The Problem With Monuments Tyler Durden Wed, 07/08/2020 - 12:15

Authored by Simon Black via,

Well, we knew it was bound to happen sooner or later.

Last week a handful of students at the University of Wisconsin-Madison called for a statue of Abraham Lincoln to be removed from the campus.

Unlike other more ‘controversial’ Lincoln statues that portray him breaking the chains of slavery, this one simply shows Lincoln sitting in a chair.

But it’s offensive, say the students. And they want it removed.

As I wrote to you a few weeks ago– nearly EVERY American historical figure, including Lincoln, George Washington, Benjamin Franklin, all the way down to Amerigo Vespucci (for whom the American continents are named) was either a slave owner or a white supremacist.

Lincoln told the audience during a Presidential debate in 1858, for example, “I am in favor of the race to which I belong having the superior position.”

Clearly such a view does not express our modern sentiments.

According to one especially erudite student leader, “I just think [Lincoln] did, you know, some good things…the bad things that he’s done definitely outweighs them. . .”

And poof, judgment has been rendered: Lincoln’s flaws outweigh his achievements. So let it be written.

This, of course, is the problem with monuments. They tend to commemorate human beings… those flawed, complicated sacks of meat who are paradoxically full of accomplishments… and shortcomings.

Even some of the most exalted historical figures, including Lincoln, were highly imperfect.

Nobody’s legend ever survives real scrutiny.

Martin Luther King was a philanderer whose treatment of women would not hold up to modern #metoo views.

John F. Kennedy’s womanizing was so severe that he refused to fly back home from a Mediterranean vacation (with a mistress) after his wife gave birth to a stillborn baby.

Gandhi severely mistreated his wife and routinely slept naked with children in his bed.

Albert Einstein’s personal diary reveals a number of statements he made that would be viewed today as extremely racist, like saying Chinese are “more like automatons than people.”

And Barack Obama committed the most egregious sin of all when he said that “all lives matter.”

But the entire point of a monument isn’t to claim that every moment of every day of that person’s life was virtuous.

The idea is to commemorate achievement, and what that achievement stands for.

The Marine Corps War Memorial in Washington DC famously depicts six Marines raising a US flag on Mount Suribachi during the Battle of Iwo Jima in 1945.

The monument doesn’t mean that those six Marines were flawless human beings; it’s intended to memorialize the achievements and sacrifice of all Marines who died in service.

This is actually the root of the word ‘monument’. From Greek, the word ‘monument’ comes from “Mnemosyon”, the goddess who gave birth to the nine muses.

Mnemosyon was the mother of inspiration. And in many respects, that’s the point of a monument: inspiration.

From its Latin root, monument comes from the word ‘monemus’, which means ‘to remind,’ or ‘to warn’.

So in addition to inspiration, monuments may also serve as a reminder and warning about our mistakes of the past so that we are not doomed to repeat them.

As an example of this context, in the late 1500s at a time when most academic works were published in Latin, Sir Francis Bacon opened a chapter of one of his books with “primo monemus ex scriptoribus”

The translation is “First, the authors warn . . .”

“Monemus” = “to warn”. And then Bacon went on to warn readers that the ideas presented in his book may, in fact, be offensive.

Bacon lived in a time when intellectual dissent was met with censorship, persecution, and even death.

This is not so different than today.

Intellectual dissent is simply not tolerated. You cannot engage in civil discourse about areas where you agree, and areas in which you disagree.

Today’s Jacobian mob has appointed itself judge, jury, and executioner. And that’s not an exaggeration. Violence does occasionally ensue.

One member of the Twitter mob recently posted a video claiming that she wanted to stab anyone with the nerve to say that all lives matter.

NFL quarterback Drew Brees received death threats because he stated that he didn’t want to disrespect the flag.

These are not isolated incidents.

Personally I have no regard for most monuments and find it odd that so many Confederate leaders have been commemorated in bronze.

But I care deeply when people try to erase the past… or to change vocabulary… or destroy intellectual dissent… simply because someone who has been dead for hundreds of years did not live up to modern values.

The sole exception to this rule seems to be Joe Biden.

Several women have alleged sexual assault against Biden, or unwanted sexual advances, or inappropriate touching.

This alone would be enough for anyone else to be canceled.

But on top of this, Uncle Joe sponsored a racist bill in the 1970s, early in his Senate career, that would have limited the federal government’s power to enforce school desegregation.

Biden has also praised a former KKK leader, Robert Byrd, as a “friend” and “mentor”, and even just last year he bragged about how well he was able to compromise with racist, segregationist politicians in the 1970s and 80s.

None of this matters about Joe Biden. He gets a pass, simply because he’s not Orange Man. But Abe Lincoln? The guy who freed the slaves? He’s OFFENSIVE! Rip his statue down!

*  *  *

On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years.

That's why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

Published:7/8/2020 11:18:57 AM
[Entertainment] Washington Post hardcover bestsellers A snapshot of popular books. Published:7/8/2020 9:12:40 AM
[Markets] Visualizing The Size Of Amazon, The World's Most Valuable Retailer Visualizing The Size Of Amazon, The World's Most Valuable Retailer Tyler Durden Tue, 07/07/2020 - 22:30

As brick-and-mortar chains teeter in the face of the pandemic, Amazon continues to gain ground.

The retail juggernaut is valued at no less than $1.4 trillion - roughly four times what it was in late 2016 when its market cap hovered around $350 billion, and as Visual Capitalist's Dorothy Neufeld notes, last year, the Jeff Bezos-led company shipped 2 billion packages around the world.

Today’s infographic shows how Amazon’s market cap alone is bigger than the nine biggest U.S. retailers put together, highlighting the palpable presence of the once modest online bookstore.

The New Normal

COVID-19’s sudden shift has rendered many retail outfits obsolete.

Neiman Marcus, JCPenney, and J.Crew have all filed for bankruptcy as consumer spending has migrated online. This, coupled with heavy debt loads across many retail chains, is only compounding the demise of brick-and-mortar. In fact, one estimate projects that at least 25,000 U.S. stores will fold over the next year.

Still, as safety and supply chain challenges mount—with COVID-19 related costs in the billions—Amazon remains at the top. It surpasses its next closest competitor, Walmart, by $1 trillion in market valuation.

How does Amazon compare to the largest retailers in the U.S.?

Source: Deloitte, YCharts
*Largest public US retailers based on their retail revenue as of fiscal years ending through June 30, 2019, e=estimated

With nearly a 39% share of U.S. e-commerce retail sales, Amazon’s market cap has grown 2,830% over the last decade. Its business model, which aggressively pursues market dominance instead of focusing on short-term profits, is one factor behinds the rise.

By the same token, one recent estimate by The Economist pegged Amazon’s retail operating margins at -1% last year. Another analyst has suggested that the company purposefully sells retail goods at a loss.

How Amazon makes up for this operating shortfall is through its cash-generating cloud service, Amazon Web Services (AWS), and through a collection of diversified enterprise-focused services. AWS, with estimated operating margins of 26%, brought in $9.2 billion in profits in 2019—more than half of Amazon’s total.

Amazon’s Basket of Eggs

Unlike many of its retail competitors, Amazon has rapidly diversified its acquisitions since it originated in 1994.

Take the $1.2 billion acquisition of Zoox. Amazon plans to operate self-driving taxi fleets, all of which are designed without steering wheels. It is the company’s third largest since the $13.7 billion acquisition of organic grocer Whole Foods, followed by Zappos.



Visualizing the Size of Amazon, the World’s Most Valuable Retailer


 4 days ago


 July 2, 2020


 Dorothy Neufeld







Visualizing the Size of the World’s Most Valuable Retailer

As brick-and-mortar chains teeter in the face of the pandemic, Amazon continues to gain ground.

The retail juggernaut is valued at no less than $1.4 trillion—roughly four times what it was in late 2016 when its market cap hovered around $350 billion. Last year, the Jeff Bezos-led company shipped 2 billion packages around the world.

Today’s infographic shows how Amazon’s market cap alone is bigger than the nine biggest U.S. retailers put together, highlighting the palpable presence of the once modest online bookstore.

The New Normal

COVID-19’s sudden shift has rendered many retail outfits obsolete.

Neiman Marcus, JCPenney, and J.Crew have all filed for bankruptcy as consumer spending has migrated online. This, coupled with heavy debt loads across many retail chains, is only compounding the demise of brick-and-mortar. In fact, one estimate projects that at least 25,000 U.S. stores will fold over the next year.

Still, as safety and supply chain challenges mount—with COVID-19 related costs in the billions—Amazon remains at the top. It surpasses its next closest competitor, Walmart, by $1 trillion in market valuation.

Accounting for the lion’s share of Amazon-owned physical stores, Whole Foods has 508 stores across the U.S., UK, and Canada. While Amazon doesn’t outline revenues across its physical retail segments—which include Amazon Books stores, Amazon Go stores, and others—physical store sales tipped over $17 billion in 2019.

Meanwhile, Amazon also owns gaming streaming platform Twitch, which it acquired for $970 million in 2017. Currently, Twitch makes up 73% of the streaming market and brought in an estimated $300 million in ad revenues in 2019.

Carrying On

Despite the flood of online orders due to quarantines and social distancing requirements, Amazon’s bottom line has suffered. In the second quarter of 2020 alone, it is expected to rack up $4 billion in pandemic-related costs.

Yet, at the same time, its customer-obsessed business model appears to thrive under current market conditions. As of July 1, its stock price has spiked over 51% year-to-date. On an annualized basis, that’s roughly 100% in returns.

As margins get squeezed and expenses grow, is Amazon’s growth sustainable in the long-term? Or, are the company’s strategic acquisitions and revenue streams providing the catalysts (and cash) for only more short-term success?

Published:7/7/2020 9:38:43 PM
[Markets] The New CMBS: Italian Mafia Issues 'Crime & Murder Backed Securities' The New CMBS: Italian Mafia Issues 'Crime & Murder Backed Securities' Tyler Durden Tue, 07/07/2020 - 21:10

It appears global bond investors were "made an offer they could not refuse" as, according to financial and legal documents seen by the Financial Times, they bought bonds backed by the crime proceeds of Italy’s most powerful mafia.

An estimated €1bn of these private bonds - backed in part by front companies charged with working for the Calabrian ’Ndrangheta mafia group - were sold to international investors between 2015 and 2019

As The FT notes, the ’Ndrangheta is less well-known outside Italy than the Sicilian mafia but has risen over the past two decades to become one of the wealthiest and most feared criminal groups in the western world, engaging in crimes ranging from industrial-scale cocaine trafficking to money laundering, extortion and arms smuggling.

As reported back in 2014, unlike the world famous Cosa Nostra from Sicily and the Camorra from Naples, for years the ‘Ndrangheta has largely managed to avoid the attention of the media.

It's a tight-knit family affair and members have done their best not to make too much noise, while police informers have always been a rare breed. Its name comes from the Greek for "courage" or "loyalty" and aptly its well observed code of silence gives investigators a hard time.

the 'Ndrangheta has come a long way since it was denounced as a “sect of wrongdoers” way back in 1888. Between 1970 and 1991, besides usury and extortion in Calabria, the ‘Ndrangheta was mainly involved in kidnapping for ransom. The most famous case was that of John Paul Getty III, the son of Paul Getty and grandson of the industrialist Jean Paul Getty, founder of the Getty Oil company. The 'Ndrangheta ended up raking in a ransom of around $3 million for Getty III after kidnapping him in Rome in July 1973, before releasing him onto the Salerno-Reggio Calabria motorway.

When the Berlin Wall fell, the ‘Ndrangheta siezed the moment and the cheap assets, moving quickly to expand its operations in former Soviet bloc countries and turning its operation global. The syndicate dealt heroin and cocaine and became a reliable ally of the South American drug cartels. Last year, an investigation linked its operation with an IRA money laundering scam.

It is well known that Mexican drug gangs Los Zetas and the Gulf Cartel are in business with the ‘Ndrangheta, and recent joint operations by police in Italy and the US—code-named “Crime 3,” “Reckoning/Solare,” and “New Bridge”—uncovered an elaborate logistical network. Operation “Crime 3” showed that the ‘Ndrangheta exercises absolute “hegemony over cocaine trafficking in Europe based on the alliance with Colombian traffickers in Europe and Los Zetas in the US.”

"The 'Ndrangheta can and has to be considered one of the most powerful organizations in the world for the handling of international drug-trafficking," said Raffaele Grassi, head of Italy's national anti-racketeering division in February. He said that operations like “New Bridge” prove once more that the ‘Ndrangheta has expanded far beyond its place of origin and its activities in Northern Italy, and “is looking for criminals beyond the borders, invading new markets to make profit.”

And, for bond investors, it's a good business - according to Europol, the mafia's activities generate a combined turnover of €44bn a year...  and would appear to be in recession-proof businesses with a strong moat from competitors.

The bonds themselves are backed by collateral consisting of unpaid invoices to Italian public health authorities from companies providing them with medical services (which under EU law, prodeuce a guaranteed penalty interest rate).

Most of the assets securitised in the deals were legitimate but, as The FT details, some were from companies later revealed to be controlled by certain ’Ndrangheta clans, which had managed to evade anti-money laundering checks to take advantage of international investor demand for exotic debt instruments.

One bond deal purchased by institutional investors contained assets sold by a refugee camp in Calabria that had been taken over by organised criminals.

They were later convicted for stealing tens of millions of euros of EU funds.

Entities involved in buying these bonds claim they had never knowingly purchased any assets linked to criminal activity; all saying that they conducted significant due diligence on all the healthcare assets that they handled as financial intermediaries.

The question remains, did Luca Brasi hold a gun to investors' heads? And how long before the world's largest organized crime business - The Fed - starts buying these bonds (for the good of the economy?)

Published:7/7/2020 8:14:15 PM
[Markets] Slavery Rampant In Africa, Middle East; The West Wrongly Accuses Itself Slavery Rampant In Africa, Middle East; The West Wrongly Accuses Itself Tyler Durden Tue, 07/07/2020 - 02:00

Authored by Giulio Meotti via The Gatestone Institute,

The United States abolished slavery 150 years ago, and has affirmative action for minorities. It is the country that elected a Black president, Barack Obama -- twice! Yet, a new movement is toppling one historic monument after another one, as if the US is still enslaving African-Americans. Activists in Washington DC even targeted an Emancipation Memorial, depicting President Abraham Lincoln, who paid with his life for freeing slaves.

Today slavery still exists in many parts of Africa and Middle East, but the self-flagellating Western public is obsessively focused only on the Western past of African slavery rather than on real, ongoing slavery, which is alive and well -- and ignored. For today's slaves, there are no demonstrations in the streets, no international political pressure, and virtually no articles in the media.

"We must not forget that Arab-Muslims have been champions in this field," Kamel Bencheikh, a Muslim poet, wrote in Le Matin d'Algerie.

"Emirs and sultans bought entire convoys of young black ephebes to make into eunuchs to guard their harems. And this continued with Ottoman emperors.... Even today, Mauritania and Saudi Arabia are still housing their own Ku Klux Klan. Slavery is still the order of the day in Nouakchott [Mauritania]. As for Riad, all you have to do is find out about young Asian girls that the potentates hire as maidservants".

An investigation by BBC Arabic found that domestic workers in Saudi Arabia are even being sold online in a slave market that is booming.

According to Bencheikh, George Floyd's death was an opportunity for many in Europe to turn a respectable fight into an unimaginable depravity.

"So, on the Place de la République in Paris or the Avenue Louise in Brussels, there are vengeful thugs, fed with hatred, taking advantage of the allotments that these two countries offer them, and attacking the past of those who enabled them to free themselves from their dictatorships...

"In France and Belgium, we do not execute apostates, crucify heterodox people, throw stones at unfaithful women, spit at heretics...

"... this anti-racism is biting its tail to turn into racism. You only have to see the angry crowd, the drool on their lips, to realize that we are dealing with people who have come to insult the white man guilty of having had, more than a hundred years ago, inappropriate gestures or shameful thoughts, and to insist, like the wolf in La Fontaine who said to the lamb: 'If not you, then your brother'... Totalitarianism is among us again".

He calls it a "Stalinism of communitarianism (sectarian politics) that makes itself into an indigenous victimization". People who fled from Bouteflika and Gaddafi, the oppressors and tyrants of Kinshasa and Niamey, "come and spit incomprehensible hatred in Paris or Brussels".

Bencheikh's article shows just one brave group of dissidents in the Islamic world who are defending the West better than the Westerners are doing. These dissidents love freedom of expression and conscience; they know the difference between democracy and dictatorship; they enjoy religious tolerance, pluralism in the public sphere, and they outspokenly criticize the practice of Islam from which they fled. They also know that arousing historic and racial resentment is a dangerous game. For political Islam, their voices are revealing and devastating. For Western multiculturalism, they are "heretical" and annoying. Le Figaro pointed to this paradox: "Seen by their communities as 'traitors', they are accused by the elites in the West of 'stigmatizing'".

In The Spectator, Nick Cohen, explained:

"In the liberal orientalist world view the only 'authentic' Muslim is a barbarian. A battery of insults fires on any Muslim who says otherwise. They are 'neo-conservatives,' 'native informants,' and 'Zionists': they are as extreme as jihadists they oppose, or, let's face it, worse...".

Like Bencheikh, Algerian author Mohammed Sifaoui reminds all of us that "Mauritania, in North Africa, is the most slavery-supporting country in the world today. Qatar in the Middle East is as well, just as much, [as is] Saudi Arabia, under the banner of the Guardians of the Holy Places of Islam".

The author Ayaan Hirsi Ali, who fled her homeland of Somalia and now live in the US, writes:

"What the media do not tell you is that America is the best place on the planet to be black, female, gay, trans or what have you. We have our problems and we need to address those. But our society and our systems are far from racist".

Black, female and gay, the apex of "intersectionality." According to Andrew Sullivan:

"'Intersectionality' is the latest academic craze sweeping the American academy. On the surface, it's a recent neo-Marxist theory that argues that social oppression does not simply apply to single categories of identity — such as race, gender, sexual orientation, class, etc. — but to all of them in an interlocking system of hierarchy and power. "

For the intersectional activists, the US is the world's biggest oppressor. Not Saudi Arabia or Iran. Hirsi Ali, who fled Somalia and experienced female genital mutilation, knows about oppression better than anti-statues activists. According to Hirsi Ali, writing in The Wall Street Journal:

"When I hear it said that the U.S. is defined above all by racism, when I see books such as Robin DiAngelo's 'White Fragility' top the bestseller list, when I read of educators and journalists being fired for daring to question the orthodoxies of Black Lives Matter—then I feel obliged to speak up... America looks different if you grew up, as I did, in Africa and the Middle East".

Writing in Le Monde and Le Point, Algerian writer Kamel Daoud indicted this hypocrisy. "There is an instinct for death in the air of the total revolution", Daoud notes.

"According to some, the West is guilty by definition, we find ourselves not in a demand for change but, little by little, in [a demand for] destruction, the restoration of a barbarity of revenge".

Daoud calls these "anti-Western Soviet-style trials".

"It is forbidden to say that the West is also the place to which we flee when we want to escape the injustice of our country of origin, dictatorship, war, hunger, or simply boredom. It is fashionable to say that the West is guilty of everything".

In Le Point, Daoud states that "with the great announcement of antiracism, the Inquisition returns".

Daoud has been accused by twenty leftist academics, in an appeal in Le Monde, of "orientalist clichés" and "colonialist paternalism". This new accusation of racism serves publicly to shame, mark and disqualify a politician or an intellectual who comments with too much frankness on the damage of multiculturalism.

Zineb el Rhazoui, a Moroccan-born anti-Islamist French journalist facing death threats, recently said:

"The only racism I suffer from comes from North Africans. For the Algerians, I am a Moroccan whore. For Moroccans, I am an Algerian whore. For both, a 'whore of the Jews'".

Arabs threaten other Arabs for speaking the truth about real racism and Islamization. They are the invisible victims of racism in France. Rhazoui claimed that "France is one of the most tolerant and least racist country in the world" and that real threat is not racism, but communitarism [importance placed on groups rather than individuals], denounced as well by French President Emmanuel Macron.

The Iranian writer Abnousse Shalmani, born in Tehran but now living in Paris, said to Le Figaro:

"The new anti-racism is racism disguised as humanism (...) What resonates in this discourse is the prison of victimization....It implies that every white person is bad -- as witnessed by the recent debunking of the statues of Victor Schoelcher, father of the abolition of slavery, in Martinique -- and that every black person is a victim".

While the economist Thomas Piketty, in Le Monde, invited the West to make amends for its colonial past, the Franco-Senegalese author, Fatou Diome, called for the abandonment of a discourse on decolonization:

"It is an emergency for those who do not yet know that they are free. I do not consider myself colonized. The catchphrase on colonization and slavery has become a business".

The "ideology" is simple: colonialism is supposedly still at work, people from formerly colonized countries continue to be oppressed, in particular Muslims who are said to be targets of a "racist" and "Islamophobic" hate. In this view, "White Western males" are always the oppressors, and the minorities are always victims.

A prominent anti-racism campaigner, Rokhaya Diallo, has said that France is "racist" in an opposition between "the dominator" and "the dominated". It is a view that sees racism everywhere, especially where it does not exist. It has also produced many of the disasters of multiculturalism throughout Europe by making it impossible to criticize the consequences of mass immigration and Islamist separatism. The French author Pascal Bruckner has called this stance "imaginary racism". It is a penitential creation that leads the public in the West -- even though presumably no one in the West either was a slave or had a slave -- to believe that anti-Western hatred is deserved.

The border between this Marxist view, in which someone always has to be a victim, has become porous with Islamism. In the movement named after Adama Traoré, the "French George Floyd", you will find an alliance of organizations such as SOS Racisme and Muslim Salafists. Human rights organizations also rally with the "Union of Islamic Organization of France", considered fundamentalist.

Manuel Valls, the former French prime minister, in an interview with Valuers Actuelles magazine said, "Human rights associations have been lost and have opened the doors to Tariq Ramadan". This instead of taking the side of the many great Muslim reformers. Ayaan Hirsi Ali writes:

"Reformers such as Asra Nomani, Irshad Manji, Tawfiq Hamid, Maajid Nawaz, Zuhdi Jasser, Saleem Ahmed, Yunis Qandil, Seyran Ates, Bassam Tibi and Abd al-Hamid al-Ansari must be supported and protected... These reformers should be as well known in the West as Solzhenitsyn, Sakharov and Havel were generations earlier." Instead, so-called human rights associations, politicians and the media have chosen to back political Islam.

By contrast, a group of 12 writers put their names to a statement in the French magazine Charlie Hebdo warning against Islamic "totalitarianism".

"After having overcome fascism, Nazism, and Stalinism, the world now faces a new global totalitarian threat: Islamism. We, writers, journalists, intellectuals, call for resistance to religious totalitarianism and for the promotion of freedom, equal opportunity and secular values for all".

Among the 12 signatories, eight came from the Islamic world.

These anti-Islamist Muslim intellectuals were not born free; they fled dictatorships for democracies, where they still suffer death threats and abuses, but where they are far freer and prouder of the West than those Westerners who know only freedom but now practice a dreadful feeing of guilt -- mostly for things they did not do.

The West not only turns its back the new slave markets; the UN Human Rights Council actually welcomes states such as Sudan, where tens of thousands of women and children from mostly Christian villages were enslaved during Jihadi raids; Kenya and Nigeria, where the police last fall rescued hundreds of men and boys chained in an Islamic school; Pakistan, where Christians are condemned to servitude, and Mauritania, where two in every 100 people are still held as slaves. It is the same UN Human Rights Council that now, thanks to pressure by African countries, wants to investigate "systemic racism in the US". US Secretary of State Mike Pompeo noted:

"If the Council were honest, it would recognize the strengths of American democracy and urge authoritarian regimes around the world to model American democracy and to hold their nations to the same high standards of accountability and transparency that we Americans apply to ourselves".

It is high time for the United States to stop funding the United Nations. The United Nations is being used to perpetuate injustice, not stop it.

Real slave traders and racists -- those who believe Western societies and values should not exist at all -- most likely look at the current Western self-flagellation and cheer their approval.

Published:7/7/2020 1:06:05 AM
[] The Media Finally Finds an Act of Vandalism They Won't Applaud Published:7/6/2020 11:38:30 AM
[] The book-burning in Hong Kong is well underway Published:7/6/2020 8:35:43 AM
[Markets] S&P Futures Surge As Chinese Stocks Explode Higher S&P Futures Surge As Chinese Stocks Explode Higher Tyler Durden Mon, 07/06/2020 - 07:54

After two consecutive weeks of cautious Sunday sessions entering the new week, overnight futures blasted out from the gate, surging more than 1%, sparked by fresh animal spirits out of China, after the country's state media stoked bullish enthusiasm. S&P futures were up 35 points, rising to 3,165 and finally breaking above the 3,150 zone that has proven to be stern resistance over the past month. The dollar index fell for a fifth day and Treasuries dipped even as surging coronavirus cases delayed business re-openings across the United States, while precious metals and oil rose.

MSCI’s All-Country World Index rose 0.7% to its highest since June 6 after the start of European trading, with investors putting their faith in an economic recovery powered by historic government stimulus.

European stocks also jumped, with the STOXX 600 index rising 1.64%. Banks and autos lead gains in early European trading, with the sectors up 4.5% and 3.5% respectively, as both industry groups trade at the highest level since June 10. The gains come amid an overall bullish market Monday with global stocks higher, led by gains in China after the country’s influential state media stoked enthusiasm in the market. Stocks exposed to China, like carmakers, industrials, energy firms and luxury goods makers rose strongly, while banks also rallied. U.K. homebuilders rallied after a report that the government is considering a temporary increase in the threshold at which buyers pay stamp duty. 

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.6% to its highest since February, with the bullish sentiment spilling into other markets. China's Shanghai Composite surged 5.7% on top of a 7% gain last week to the highest level in five years. Even Japan’s Nikkei, which has lagged with a soft domestic economy, managed a rise of 1.8%.

A front-page editorial in China’s Securities Times on Monday said that fostering a “healthy” bull market after the pandemic is now more important to the economy than ever, as there now appears to be a full-blown race between the US and China who has a bigger stock bubble.

Similar to the US daytrading euphoria, Chinese social media has exploded with searches for the term “open a stock account,” with bullish sentiment also lifting the yuan. The Shanghai Composite Index closed up 5.7%, the biggest advance since 2015.

In Hong Kong, Jefferies chief global equity strategist Sean Darby said the positive sentiment towards Asian markets was the result of better than expected regional economic data and elevated liquidity levels.  “All of the global monetary policy indicators are flashing green right now. It is very loose and that should mean markets which have underperformed should do well,” Darby told Reuters. “The dollar has also been weaker over the past five days so emerging markets, led by China, normally do well on that back of that.”

Among the reasons investors cited for the buying was improving economic data - UBS noted Citi’s Economic Surprise Index for the U.S. has risen to its highest level on record. The index measures how well economic data releases are faring relative to consensus forecasts.

“We advise against regarding uncertainty as a reason for exiting markets. Instead, we see ways for investors to cope with uncertainty - including averaging into markets - or even take advantage of volatility,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Ironically, the surge comes just hours after JPMorgan said the risk-reward in 2H Is ‘Unattractive’ (which in turn comes just two weeks after the bank upgraded US stocks to Overweight), and after Goldman Sachs cut estimates for U.S. growth this quarter and said consumer spending appears likely to stall this month and next. Still, economists led by Jan Hatzius said other economies have proved it’s possible to resume activity and changes in behavior such as wearing masks will help too.

“The willingness of investors to look through the current disruption to an anticipated recovery this quarter is imperiled by still rising virus infection rates,” said Michael McCarthy, a markets strategist at CMC Markets Plc in Sydney.

Meanwhile, confirming that away from markets the reality is getting more concerning by the day, two U.S. aircraft carriers conducted exercises in the disputed South China Sea on Saturday, the U.S. Navy said, as China also carried out military drills that have been criticised by the Pentagon and neighbouring states.

The risks, combined with unceasing stimulus from central banks, have kept sovereign bonds supported in the face of better economic data. While U.S. 10-year yields edged up to 0.7% on Monday, well off the June top of 0.959%. Germany’s benchmark 10-year Bund yield edged up, pulling further away from recent five-week lows in the face of rallying equity markets.

Analysts at Citi estimate global central banks are likely to buy $6 trillion of financial assets over the next 12 months, more than twice the previous peak.

In FX, major currencies were largely rangebound with the dollar index down 0.3% at 96.894, having spent an entire month in a snug band of 95.714 to 97.808. The Bloomberg Dollar Spot Index fell a fifth day after a slowdown in the U.S. infection rate and a call by Chinese state media to support a bull market spurred risk appetite. The dollar was a shade firmer on the yen at 107.57 on Monday, while the euro rose above the $1.13 mark. The Norwegian krone and Swedish krona led advances against the greenback among G-10 currencies. The rise in Brent crude underpinned the krone.

The yuan led commodity currencies higher against the dollar on Monday as investors lapped up risky assets on growing expectations of a strong Chinese economic rebound and the United States continued to report a surge in coronavirus infections. “The rally in mainland China equities has been the big catalyst,” said Stephen Gallo, European head of FX strategy at BMO Financial Group. “The only caveat is that China’s economy not driven purely by free-market forces. But if regulators in China are engineering a stronger equity market, it can still feed through to the rest of the world.”

“Risk appetite is higher as reflected in Asian stock markets and the Australian dollar, and the U.S. dollar is down because of that,” said Janu Chan, senior economist at St. George Bank in Sydney. “A global economic recovery, though uneven, is expected to point to a weaker USD over the medium term.”

In commodity markets, oil prices were mixed with Brent crude futures up 1.87% at $43.58 a barrel, while U.S. crude gained 0.84% to $40.99 amid worries the surge in U.S. coronavirus cases would curb fuel demand. Gold traded at $1,776.21 per ounce, just off last week’s peak of $1,788.96. The precious metal continues to benefit from super-low interest rates across the globe as negative real yields for many bonds make the non-interest paying metal more attractive.  Copper is on the cusp of erasing this year’s losses after virus-related disruptions tightened supplies.

Expected data include PMI and ISM Non-Manufacturing Index. Immunomedics reports earnings

Market Snapshot

  • S&P 500 futures up 1% to 3,159.50
  • MXAP up 1.6% to 164.57
  • STOXX Europe 600 up 1.6% to 371.12
  • German 10Y yield unchanged at -0.432%
  • Euro up 0.3% to $1.1285
  • Brent Futures up 1.8% to $43.57/bbl
  • Italian 10Y yield rose 4.3 bps to 1.127%
  • Spanish 10Y yield fell 0.3 bps to 0.443%
  • MXAPJ up 1.7% to 542.15
  • Nikkei up 1.8% to 22,714.44
  • Topix up 1.6% to 1,577.15
  • Hang Seng Index up 3.8% to 26,339.16
  • Shanghai Composite up 5.7% to 3,332.88
  • Sensex up 1.5% to 36,565.50
  • Australia S&P/ASX 200 down 0.7% to 6,014.61
  • Kospi up 1.7% to 2,187.93
  • Brent futures up 1.5% to $43.46/bbl
  • Gold spot up 0.3% to $1,777.41
  • U.S. Dollar Index down 0.3% to 96.93

Top Overnight News from Bloomberg

  • The dramatic moves in Chinese stocks over the past week are inviting comparisons with a bubble that burst spectacularly five years ago.
  • U.S. virus cases increased by 1.2%, less than the seven-day average of 1.8%. A former Food and Drug Administration head said the U.S. needs a better pandemic strategy and should start by stockpiling therapeutic antibodies before authorizing their use.
  • Chinese companies last month shelved the biggest amount of domestic bond sales in almost three years, after a sell-off in government debt pushed up corporate borrowing costs.

Asian equity markets and US equity futures began the week mostly firmer as trade picked up from the holiday lull in which the broad heightened risk appetite consigned the increasing COVID-19 infection rates to the backseat. ASX 200 (-0.7%) and Nikkei 225 (+1.8%) were mixed as the Australian benchmark lagged due to weakness in industrials and the commodity related sectors and with sentiment also subdued by rising infections in the country’s 2nd largest city of Melbourne which prompted the Victoria state government to close the border with New South Wales from tomorrow, while Tokyo stocks coat-tailed on the favourable currency flows and after the decisive victory by Tokyo Governor Koike at the gubernatorial election on Sunday. Hang Seng (+3.8%) and Shanghai Comp. (+5.7%) surged despite the lack of solid fundamental catalysts and amid the ongoing global reproach towards China with Canada suspending its extradition treaty with Hong Kong in the wake of the security law and with the UK set to end the use of Huawei technology in the 5G networks as early as this year due to security issues, while it was separately reported that China is considering retaliatory measures against Britain and Australia in the form of increased tariffs. Nonetheless, this failed to impede the rally in Chinese stocks and the mainland bourse extended to its highest level seen since the beginning of 2018 with financials leading the ascent amid increased IPO activity and after the latest PBoC survey showed the loan demand index surged to 75.8 in Q2 vs. Prev. 66.0 in Q1. Finally, 10yr JGBs were lower amid similar weakness in T-notes as havens were shunned by the heightened risk appetite, which saw prices retreat further away from resistance near 152.00, but with downside also stemmed by the BoJ’s presence in the market whereby it upped purchases of 5yr-10yr maturities.

Top Asian News

  • China Stokes a Stock-Market Mania, Risking Repeat of 2015 Bubble
  • Hong Kong Stocks Enter Bull Market After $1.1 Trillion Rebound
  • Chipmaker SMIC Eyes China’s Biggest Share Sale in a Decade
  • World’s Largest Listing of 2020 Comes From China: ECM Watch
  • Tokyo Finds 102 Virus Cases as It Tries to Avoid Mass Curbs

European stocks kick the week off on a firm footing [Euro Stoxx 50 +1.9%] albeit off highs, but nonetheless supported by the stellar Chinese performance which saw the Shanghai Comp rally over 5% amid a number of factors including commentary from Securities Times which suggested that fostering a "healthy" bull market is now more important to the economy than ever.  The article said investors could look forward “to the wealth effect of the capital markets”. This coupled with Friday’s announcement of easing margin financing rules stoked gains in the Mainland whilst Hong Kong’s Hang Seng ended the day in bull market territory – some 21% off March lows. Gains in Europe are broad-based with the SMI (+0.8%) somewhat lagging amid its heavy exposure to the health sector – which lags amid inflows into cyclicals. Sectors are all in positive territory with cyclicals outpacing defensives on the constructive risk tone, whilst the detailed breakdown paints a similar picture; Travel & Leisure names piggyback on the risk appetite and reside among the winners.  In terms of individual movers, UK housing names were bolstered at the open on the back of reports the Treasury is said to plan to increase the property tax threshold to as high as GBP 500,000. As such, Persimmon (+5.7%), Barrat Development (+6.7%) and Taylor Wimpey (+5.0%) hold their positions as the top Stoxx 600 gainers. GSK (+1.3%) and Sanofi (+0.8%) performs better than the overall Health sector amid reports the Cos are close to agreeing a GBP 500mln deal to supply the UK government with 60mln doses of its COVID-19 vaccine, should it work in human trials due to begin in September. Commerzbank (+6.0%) derived support from reports Co. is said to be mulling cuts to its foreign business as part of its revised strategy - which would include cutting 450/1000 branches, 10k job cuts in total and cuts to the international businesses. Finally, no reprieve for Wirecard (-17%) as FT reported the Co’s European and American core businesses have reportedly been lossmaking for years, with profits appearing to have largely existed on paper, according to the KPMG confidential appendix of the special audit.

Top European News

  • German Factory Orders Rise Less Than Forecast After Lockdown
  • Banks Are Ditching London Offices and Not Just Because of Covid
  • Rolls-Royce Seeks Pension Halt to Save Cash in Virus Crunch
  • Cerberus Urges Orderly Process After Commerzbank CEO Ouster

In FX, broad USD weakness after the long US holiday weekend amidst a pronounced upturn in risk sentiment on the back of bullish Chinese stock market remarks in the Securities Journal overnight that has boosted the YUAN from a fractionally softer PBoC midpoint fix through a key Fib (7.0441) to test 7.0300 in both onshore and offshore terms. The DXY has lost grip of the 97.000 handle in response and is hovering just above a 96.818 low awaiting final Markit services and composite PMIs, the non-manufacturing ISM and employment trends.

  • NOK/EUR/AUD - The major beneficiaries of heightened risk appetite, also manifest in firm crude prices, and general Greenback weakness, as Eur/Nok nudges down towards 10.6000 and Eur/Usd extends above several chart resistance levels, like the 100 and 200 HMAs plus a Fib retracement (1.1241, 1.1243 and 1.1157 respectively) to retest 1.1300. Meanwhile, the Aussie has revisited near 1 month peaks around 0.6980 in the run up to the RBA policy meeting on Tuesday and potential reaction to the renewed COVID-19 outbreak in the state of Victoria.
  • NZD/CHF - Both firmer vs their US counterpart as the Kiwi holds near 0.6550 and Franc close to the upper end of a 0.9462-14 range in advance of NZIER’s Q2 survey, but with Eur/Chf acknowledging latest Swiss bank sight deposit rises more than Fitch’s AAA ratings affirmation between 1.0650-25 parameters.
  • CAD/GBP/JPY - All narrowly mixed, as the Loonie meanders from 1.3520-65 against the backdrop of buoyant oil benchmarks and eyeing the looming BoC outlook survey for some independent direction, while Cable has ventured beyond 1.2500, but unsustainably despite a significant rebound in the UK construction PMI. Elsewhere, the Yen is marginally lagging on less safe-haven demand, albeit vying with the Dollar on risk factors, with the headline pair in a relatively tight 107.77-49 band and hardly reacting to BoJ sources suggesting that the Bank will stick to view for as gradual economic recovery in the latter part of 2020.
  • EM - The Lira remains tethered to 6.8500 even though the Turkish Government has taken more measures to restrict negative positioning in stocks from foreign entities via a short-selling for 6 banks for up to 3 months.

In commodities, WTI and Brent crude futures extended on APAC gains in early hours as the contracts coat-tail on the overall risk appetite across the market as rising COVID-19 cases across the globe are somewhat side-lined, albeit prices have since waned off highs. The fundamental landscape is little changed but from the supply slide of the equation, OPEC’s JMMC is set to meet mid-July ahead of the planned tapering of cuts in August – with the Committee set to advise OPEC as opposed to setting policy. On that front, Saudi Aramco upped the price for its flagship Arab Light grade to Asia by USD 1/bbl from July – alluding to firmer demand in the region. Looking ahead, the week will see the release of the EIA STEO and IEA Monthly Oil Market report ahead of OPEC’s take next week. WTI and Brent futures reside under USD 41/bbl (vs. low 40.20/bbl) and below USD 43.50/bbl (vs. low 42.74/bbl) respectively. Elsewhere, spot gold remains underpinned on Dollar-dynamics around the USD 1775/oz mark ahead of its recent almost-8yr peak at around 1789/oz. Copper prices receive a double boost from the softer Buck coupled with the surge in Chinese stock markets – with the red metal reclaiming USD 2.75/lb to the upside and nursing steep losses posted at the latter end of last week.

US Event Calendar

  • 9:45am: Markit US Services PMI, est. 47, prior 46.7; Markit US Composite PMI, prior 46.8
  • 10am: ISM Non-Manufacturing Index, est. 50, prior 45.4

DB's Jim Reid concludes the overnight wrap

As you may have seen late last week, Torsten Slok is leaving DB to join a good client of the bank. We wish him well in the future and will try to persuade him to vote for DB Research in all the analyst surveys now. I will be taking over responsibilities for sending out DB charts of the day and will also be sending out repackaged chart books soon. If you’ve previously got Torsten’s emails then you’ll be continuing to get them from me. If you didn’t get anything from Torsten and want to be included then please send me an email. I sent my first missive out to 30,000 new people on Friday and it ended up taking me five hours and ended up with my mail account suspended with a third left unsent. So if I don’t reply to anyone today you’ll know why. Off to speak to IT first thing this morning. We think we have a solution. Thankfully the EMR distribution list is handled externally so I don’t have to worry about that.

As the US comes back from the long weekend it’s difficult to make too much of the weekend’s covid-19 new cases and fatality data. The weekend normally sees some under reporting but on a holiday weekend that could be magnified. However in my opinion the trend remains the same. A continued strong rise in new cases but fatalities that aren’t going up anywhere near as much as they did in the first wave even with the appropriate lag. Overall, cases in the US surged by an average of +1.7% over the weekend versus an average of +1.9% in the five days prior while fatalities on average rose by +0.2% as against an average of +0.6% in the five days prior. At a state level, California, Florida and Arizona saw cases rise +2.1%, +5.3% and +3.7% yesterday respectively. In the short-term this surge in cases isn’t good news for the US economy’s reopening pace. However if we continue to see fatalities much lower in this second wave then it should give us more medium-term confidence that we are getting better at treating the virus or protecting the most vulnerable. Let’s see where the data is by mid-week to further reflect on whether we’re correct or not. Our H2 2020 credit outlook (link here) partly rests on this view so we’ll be watching carefully.

In terms of markets this morning we’ve seen big gains for the Shanghai Comp (+4.24%) and Hang Seng (+3.45%). Those moves are being attributed to positive commentary on the stock market from Chinese state media, namely a front-page editorial in the Securities Times which suggested that a “healthy” bull market after the pandemic is now more important to the economy than ever. The Nikkei (+1.67%) and Kospi (+1.72%) are also up however gains have been more modest while the ASX is flat. Yields on 10y USTS are up +2.6bps while futures on the S&P 500 are also up +1.14%.

In other news, ECB President Lagarde said over the weekend that the euro zone faces about two years of disinflation, followed by inflation as the coronavirus crisis accelerates the transformation of the economy towards greater digitization and automation. She added that the ECB will need to keep its monetary policy exceptionally loose, and financial instruments will need to be developed that allow the economic transformation to be funded. Meanwhile, Bank of France Governor Francois Villeroy de Galhau said the country’s economy is picking up faster than expected and that forecasts from the IMF may be too gloomy.

Moving on. As the US comes back after the Independence Day holiday, one of the main data releases this week will be the ISM non-manufacturing index today, along with the services and composite PMIs. The ISM manufacturing release already surprised to the upside at 52.6, its highest since April 2019 and above the 50-mark that separates expansion from contraction. So the question will be whether this momentum has been seen elsewhere in the economy. Otherwise in the US, investors will also be attuned to the weekly initial jobless claims on Thursday. These have been worse-than-expected for 3 consecutive weeks now, and are still running at more than double their pre-Covid record, raising concerns that the pace of improvement in the labour market is slower than had originally been hoped for. This theme may continue with the second virus wave sweeping through the US.

In terms of data elsewhere, the releases are somewhat more backward-looking in Europe now that the PMI releases are out. Today will see the release of Euro Area retail sales for May, while Germany, France and Italy will all be releasing their industrial production data for May through the week. Elsewhere, China will be releasing CPI and PPI data for June on Thursday.

Here in the UK, Chancellor Sunak will be delivering a statement in the House of Commons on Wednesday. It might be a bit early to get full clues as to how policy will change post crisis but markets will look for evidence as to how much fiscal policy will be unleashed going forward. The worry for some so far is that the words are big but the numbers relatively small. So one to watch. Against this backdrop, the UK and the EU will continue their discussions on their future relationship in London this week. That comes after last week’s negotiations, where chief EU negotiator Michel Barnier said that “serious divergences remain”, and on the UK side chief negotiator David Frost said that the talks had “underlined the significant differences that still remain between us on a number of important issues.”

Recapping last week now and also Friday’s news. It was a fairly quiet end to the week for markets with the US out on holiday. However, European equities pared back their gains from earlier in the week to close the 5 days with a +1.98% advance (-0.78% Friday). This was in spite of some fairly positive services and composite PMI data from Europe, with the numbers generally revised up relative to the flash readings, a picture consistent with the fact that the extra data covered a longer period of reopening. In terms of the specific numbers, the composite PMI for the Euro Area was revised up to 48.5 (vs. flash 47.5), while France at 51.7 and Germany at 47.0 also saw upward revisions relative to the flash print. In all these cases, as well as in Spain and Italy, the composite PMIs were at their strongest level since February, though it’s worth noting that only France had a reading above the 50-mark separating expansion from contraction.

Although Europe fell back somewhat, the broader picture of the week was still one of a rotation out of safe havens into risk assets. By the end of the week, the S&P 500 was up +4.02% albeit with futures down just under 0.5% on Friday as the US was closed. Meanwhile core government bonds lost ground, with yields on 10yr Treasuries and bunds up +2.8bps and +4.9bps respectively, as the US Dollar index (-0.27%) and the Japanese Yen (-0.27% vs USD) both lost ground through the week. Peripheral bonds advanced however, with the spread of both 10yr Italian (-8.7bps) and Spanish (-6.1bps) debt over bunds tightening.

One news report that might be worth noting from Friday was a Bloomberg article saying that there was a rift on the Governing Council over the extent to which the ECB’s asset purchases should deviate from the capital key – which is based on countries’ GDP and population size. The deviation from the capital key in the ECB’s Pandemic Emergency Purchase Programme (PEPP) has allowed them to purchase larger amounts of Italian debt than the capital key would suggest, but the article cited officials who said that views differed among the members on this issue. One to watch moving forward.

And finally, we also got some political news out of France, as President Macron named Jean Castex as the new Prime Minister. French presidents have previously ditched their PMs mid-term, so this wasn’t an exceptional move, and marks an attempt at revitalising his presidency following some poor municipal election results in June. Castex was previously in charge of coordinating the 2024 Olympic Games in Paris and managed the government’s lockdown exit strategy, which has been perceived as a success.

Published:7/6/2020 7:00:50 AM
[Markets] Johnstone: Seriously, Get The Hell Out Of Afghanistan Johnstone: Seriously, Get The Hell Out Of Afghanistan Tyler Durden Mon, 07/06/2020 - 00:00

Authored by Caitlin Johnstone via,

With overwhelming bipartisan support, the House Armed Services Committee has added a Liz Cheney-spearheaded amendment to the National Defense Authorization Act (NDAA) which throws severe roadblocks in the Trump administration’s proposed scale-down of US military presence in Afghanistan and Germany.

As The Intercept’s Glenn Greenwald notes, both parties advancing the amendment cited in their arguments the completely unsubstantiated intelligence leak that was recently published by credulous mass media reporters alleging that Russia has paid bounties to Taliban fighters for killing the occupying forces in Afghanistan. Yet another western imperialist agenda once again facilitated by unforgivably egregious journalistic malpractice in the mass media.

Every aspect of this development is enraging.

The mass media have continued to add to their mountain of Gish gallop fallacies promoting this narrative with a new Daily Beast report citing former senior Taliban figure Mullah Manan Niazi who asserts that “The Taliban have been paid by Russian intelligence for attacks on U.S. forces — and on ISIS forces — in Afghanistan from 2014 up to the present.” The Beast’s own article admits that its source has severe conflicts of interest and is believed to be a CIA asset by Taliban leadership, and that Niazi provided no evidence of any kind for his claim or any further details whatsoever.

These flimsy, poorly-sourced allegations are being hammered into mainstream liberal consciousness on a daily basis now in the exact same way the discredited Russiagate psyop was, and just like with Russiagate the narrative they are being used to shape helps advance military expansionism and new cold war escalations which just so happen to fit perfectly into pre-existing geostrategic agendas of planetary domination.

The way mainstream news outlets consistently refuse to account for a fact so obvious and indisputable as intelligence agencies being known liars should by itself be enough to discredit the entire institution of mass news reporting. Yet here we are with these reports being treated as established fact throughout the entire political/media class and down through the entire population of propagandized rank-and-file citizenry.

The Afghanistan Papers established conclusively that the occupation has been unwinnable and without a clear picture of what winning would even look like from the very beginning, and that this fact has been hidden from the world by systematic deceit for two decades. The revelation was in the news for a day and then quickly memory holed without having any meaningful impact on the dominant narrative about Afghanistan, and now the mainstream consensus is that even trying to reduce the number of troops there is a hazardous and outlandish notion.

This is because the mainstream consensus is shaped not by facts, but by narrative. We see this in the way the fact-filled Afghanistan Papers have played no role in shaping the dominant narrative about what should be done about the nineteen-year occupation, and we see it in the way the fact-free “bounty” narrative is shaping public opinion and determining US foreign policy. The propagandists who manufacture consent for imperialist agendas understand that truth and facts play far less of a role in what the propagandized consider important than does mindless repetition and emotion.

The Empire Files has an absolutely phenomenal mini-documentary on the Afghanistan occupation which came out the other day, and everyone should watch it. Abby Martin quickly breaks down the geostrategic, resource control, and military-industrial complex agendas which are advanced by this interminable war, the deceit and depravity which went into initiating and maintaining it, and the devastating toll it has taken on the Afghan people. I strongly encourage my readers to give it a view when you get the chance.

The continued Afghanistan occupation is like if the police stormed a house, shot a bunch of people, realized they got the wrong house and they’d never find the guy they were looking for by staying there, stayed anyway, moved in, and then years later said they can’t move out because they heard a rumor that the neighbors are trying to make them leave.

In a sane world it would be the violent invasion and occupation of sovereign nations which elicits outrage and opposition from elected officials and intense skepticism and critical reporting from prominent journalists. In today’s propaganda-maddened society we get the exact opposite: the invasions and occupations are treated as the normal default position and any attempt to end them is regarded as outlandish.

This cannot continue. We must find a way to awaken from the brainwashing and force it to end. Anyone who works to prevent this from happening is an enemy of human progress.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics onTwitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:7/5/2020 11:30:55 PM
[Markets] Prins: "We're Living In A Permanent Distortion" Prins: "We're Living In A Permanent Distortion" Tyler Durden Sun, 07/05/2020 - 22:00

Via Greg Hunter’s,

Three time best-selling book author Nomi Prins says long before the Covid 19 crisis, the global economy was faltering big time.  The Fed stepped in with the start of massive money printing in late 2019 to save the day. 

Prins explains, “We were already in crisis mode as I mentioned at the end of my last book going into 2019."

"What did we see at the end of 2019?  We saw this pivot, and I call it phase two. . . . Central banks had pivoted to easing mode. . . . Come September, October, November and December, the Fed is producing repo operations.  Those are short-term lending operations that are supposed to be the purview of the banks . . . . The Fed is not supposed to get involved, but it did.  The Fed had all kinds of excuses.  It said it was not QE, but it was. . . . The debt at the end of 2019 for the world was three times GDP.  For every $3 borrowed, only $1 of economic activity occurred.  That’s what we started 2020 with.  Throw a pandemic into that . . . and you have a long drawn out financial and economic crisis.”

Now, the money printing has gone into overdrive to save the system from the virus crisis.  The social and economic damage, according to Prins, is profound and not going away.  Prins points out,

“We are not going to pay back this debt, and this is global.  Nobody is even considering trying to pay back the debt that has been created.  Let’s think about why that debt has been created.  It’s not just because the economy slowed down.  That’s one reason and kind of an excuse.  The reality is the Fed is on steroids, and other central banks are on steroids . . . throughout the world in a larger number and larger magnitude than in the wake of the financial crisis of 2008.  This means all this new debt created is even cheaper than the debt created going into the 2008 crisis.  So, more debt, created more cheaply, means less incentive to pay it back and more incentive to push it down the road and grow it.  You’ve got this snowball of debt rolling down this high mountain, and it’s rolling and growing and getting bigger.  The mountain, which is the main street economy, is coming down as the snow ball is coming down, and the main street economy itself, that foundation, is really shaky. . . . How does this end?  It ends with us, the foundation, which is the main street economy, by both that snowball of debt and the avalanche of the mountain.  That’s going to be a multi-decade problem.

Prins says this next stage has a brand new name and explains,

I call this a ‘Permanent Distortion.’  I have not used this term in prior books, but I am using it because . . . the disconnect between financial assets, equity markets and the real economy . . . has become massive...

There is going to be this endless supply of artificial stimulation into the markets. . . . Former New York Fed President Bill Dudley said the Fed’s balance sheet is going to $10 trillion.  That’s what I have been saying, and now he finally said it.  That’s not going away anytime soon.  That’s not being unwound anytime soon.  That becomes permanent lift to financial assets. . . . In the wake of that, less real capital gets used for infrastructure, research and development, growth and retooling the economy and getting jobs into this new period.”

Prins says gold prices are going to “follow the expansion of the Fed’s balance sheet.”  It is that simple, and Prins predicts,

“As we saw in the wake of the financial crisis of 2008, gold and silver will have the ability to go up quite substantially as the Fed’s book increases in size, which we know it is going to do.  We have been told that multiple times by many different words by Federal Reserve Chairman Jerome Powell.”

In closing, Prins says, “We are continuing to drive up asset bubbles where we don’t have the real economy to back it up..." 

"The more this ‘Permanent Distortion’ gets bigger, the more the likelihood the next crisis will happen... and it will be from a higher height.  It will be from a larger bubble, a bigger snowball accelerating downward more quickly.  I don’t think we are out of this crisis.  I think the markets are going to have a bumpy ride as the economy has a bumpier ride.”

Join Greg Hunter as he goes One-on-One with three time best-selling author Nomi Prins.

*  *  *

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Published:7/5/2020 9:25:53 PM
[Markets] How Deutsche Bank Helped Con The Public Into Believing In Wirecard How Deutsche Bank Helped Con The Public Into Believing In Wirecard Tyler Durden Sun, 07/05/2020 - 19:30

More reporting on the Wirecard situation has emerged over the long weekend in the US, and none of it is flattering.

As a court-appointed administrator begins the process of managing what's left of Wirecard through the insolvency process, while doing the best the government can to compensate shareholders who were deceived by the onetime fintech darling, WSJ reports that the (now former) COO, Jan Marsalek, has disappeared, with many suspecting that the longtime COO - who probably knows where many of the bodies are buried - has gone on the run as German prosecutors seek to question hi,.

His motives aren't too difficult to discern: With CEO Markus Braun out on bail, it's likely that Marsalek, who's suspected of playing a critical role in maintaining the company's complex shell game with the "Asian third-parties" which helped Wirecard conceal its accounting fraud, even from the auditors who apparently never bothered to actually check these accounts.

When the FT reported last year that most of Wirecard's actual profits were generated by its opaque Asian businesses, the company denied it, with CEO Markus Braun insisting this was "simply not true".  But once again, it appears the FT reporters were spot-on, as an appendix to to KPMG's damning third-party report obtained exclusively by the FT purports to show.

Per the FT, Wirecard’s core business in Europe and the Americas has been lossmaking for years, which means the only Wirecard subsidiaries worth any money are those tied to the company's most opaque operations, which might make it more difficult to sell the business lines that aren't impacted by the fraud, and which still have value (theoretically, at least).

Some background: German payments group collapsed into insolvency last month after revealing that €1.9 billion ($2.1 billion) in cash in its accounts actually "didn't exist", exposing the "highly profitable" payments company and lender as a fraud.

According to its EY-audited financial reports, between 2016 and 2018 Wirecard generated operating margins of around 22% and almost doubled annual earnings before interest and taxes to €439 million. However, these profits appear to have existed largely on paper, according to the section of the KMPG report (which has already been made public, though the appendix has not) obtained by the FT. The businesses in question are WC's payments business in Europe and Asia, and its credit card business in Europe and North America. Not only were these businesses lossmaking, but they've become increasingly money-losing in recent years.

During this time, Wirecard contended that its opaque Asian business more than offset these losses. But now it appears that 2/3rds of that businesses profits were completely imaginary. The company's activities outside Asia haven't actually generated a profit since 2016.

Wirecard’s court-appointed administrator Michael Jaffé is facing a difficult task as he tries to manage the sale of a few profitable business lines in WC's banking and payments businesses. As more damning information comes to light, a sale of Wirecard’s subsidiaries needs to happen within weeks or they will lose any remaining value. "Wirecard has very few physical assets, and the risk is that many of its clients will switch to rivals soon," said an anonymous source quoted by the FT. That source also claimed that the legal claims against Wirecard's former management and its auditor (EY)  said one of the people, adding that Wirecard’s legal claims against its former management and its accountant may be more valuable than its remaining operating business.

Several buyers have expressed interest, including - most notably - Deutsche Bank, which maintains it is best positioned to integrate Wirecard's legit businesses into its existing operations.

In an extraordinary example of how banks can sometimes abuse the "Chinese Wall" that's supposed to exist between the stock analysts and the investment bankers, Deutsche Bank, over the course of a year, hedged all of its loan exposure (some $300 million in loans to both Wirecard and its (now former) chief executive, Markus Braun) to Wirecard. Meanwhile, its independent investment-management unit (DWS) piled into Wirecard's shares, and DB's analysts issued at least one "buy" rating on the DAX component's shares.

As Wirecard's shares eclipsed those of Germany financial champions like Deutsche Bank and Commerzbank (which WDI would later replace as a component of the DAX), the financial establishment in the country went from treating Wirecard like a pariah or a novelty (the company got its start providing payments infrastructure to adult entertainment sites and other shadier corners of the Internet) to a true national champion.

One of DB's most egregious decisions involving Wirecard was hiring Andreas Loetscher, the Ernst & Young partner who oversaw several audits of Wirecard’s results, as chief accounting officer. Loetscher is now under investigation by German authorities.

Source: BBG

When the FT, published its first story alleging certain 'accounting irregularities' at Wirecard (the first in a series led by intrepid investigative reporter Dan McCrum) DB's investment bankers immediately started worrying about the bank's exposure should the company's shares (against which all of DB's loans were collateralized).

At Deutsche Bank, some executives grew alarmed, including Garth Ritchie, the head of investment banking at the time. Ritchie’s skepticism had arisen in part from conversations with hedge-fund clients that had conducted their own research into the firm’s workings, and who had been betting against the stock. His unit oversaw a 150 million-euro loan to Braun that was secured by Wirecard shares, so if the shares fell, the bank could lose a lot of money.

Risk managers led by Stuart Lewis, Deutsche Bank’s chief risk officer, were also worried. The lender had agreed to provide around 120 million euros to Wirecard as part of that firm’s revolving credit facility, but the payments company was expanding very rapidly and Deutsche Bank didn’t fully understand all the factors at play. They reduced their exposure and increased their hedge in the wake of the FT story.

When Wirecard approached DB about a merger last spring, the bank courteously declined. As its bankers sold off chunks of its Wirecard exposure, they made sure to do so quietly, so as not to spark a market panic that the biggest bank in Germany was getting cold feet on Wirecard. When SoftBank stepped up and invested €900 million in a complicated capital injection, DB's analysts upped their rating on Wirecard stock to buy from hold, and projected 20% upside.

Later that year, when SoftBank got cold feet and started looking for a way out of its partnership with Wirecard, DB declined to help underwrite a convertible bond sold by Wirecard as part of the deal last spring. And while the bank did underwrite a €500 million bond deal for Wirecard in September, the entire inventory of debt was sold on to investors. The bank was more than happy to underwrite this debt and sell it on to yield-starve institutions despite having declined to underwrite a more complicated debt security for fear of getting stuck with too much of the product on its books, according to BBG.

When Wirecard shares sold off last fall, DWS doubled down. Yet, by the time Wirecard spiraled into insolvency in the spring, a margin loan to CEO Braun was off the bank's books. But DB apparently helped Braun find another lender in the form of German bank Oldenburgische Landesbank, a small regional lender backed by private equity investors including Apollo Global Management.

Although DB is among a group of 15 lenders owed some €1.6 billion by Wirecard, its actual exposure is closer to €70 million, assuming the credit facility was 90% drawn down. Commerzbank, ABN Amro and ING are each owed twice as much.

And here's the kicker: With Wirecard headed for insolvency, Deutsche Bank is now considering buying Wirecard’s banking operations, which have been ringfenced from the rest of the company by BaFin. After all that, DB could walk away with the only profitable business in the entire toxic company at a substantial discount. And with the explicit help of BaFin, the German securities regulator that actively protected Wirecard by attacking the FT and its reporters and even going so far as to bar short-selling in Wirecard shares. Most analysts believe that the company's lending business will be worthless soon if clients go elsewhere. That should set the stage for DB to acquire the business at a substantial discount.

In summary, DB basically did more than any other member of the German establishment (perhaps aside from BaFin) to legitimize Wirecard. Now, DB is set to become one of the biggest beneficiaries of the company's historic collapse.

Published:7/5/2020 7:00:24 PM
[Entertainment] Summer Books 2020: 18 New Beach Reads You'll Love This Season E-Comm: Summer BooksWe love these products, and we hope you do too. E! has affiliate relationships, so we may get a small share of the revenue from your purchases. Items are sold by the retailer, not...
Published:7/4/2020 5:54:46 PM
[History] Dan Mahoney: Rejecting the culture of hate (Scott Johnson) RealClearPolitics has made available its Independence Day Series for publication with attribution. Below is Dan Mahoney’s column “What Does Our Nation Mean to Us? Rejecting the Culture of Hate,” followed by Steve Hayward’s podcast with Professor Mahoney on the themes of this column. Daniel J. Mahoney holds the Augustine Chair in Distinguished Scholarship at Assumption University. He has written numerous books, essays, and reviews on statesmanship, religion and politics, totalitarianism, Published:7/4/2020 10:46:17 AM
[Markets] Is America Heading For Civil War? Is America Heading For Civil War? Tyler Durden Fri, 07/03/2020 - 23:10

Authored by Brandon Smith via,

In last week's article I discussed the issue of American “balkanization” and the rapid migration of conservatives and moderates from large population centers and states that are becoming militant in their progressive ideology. In my home state of Montana there has been a surge of people trying to escape the chaos and oppression of leftist states. Some are here because of the pandemic and the harsh restrictions they had to endure during the first lockdowns. Others are here because they can't stand the hostility of identity politics, cancel culture and race riots. Either way, they are fleeing places with decidedly leftist influences.

Uprooting and moving to an entirely new place is not an easy thing to do, especially in the middle of a pandemic. For many people, such an idea would have been unthinkable only a few years ago. Believe me, moving to a place like the Rocky Mountain Redoubt is not an easy transition for most. Hopefully these people understand that they will have to make extensive preparations for the rough winter and be ready to work hard in the spring and summer months to survive. Maybe they don't realize yet how tough it is here; maybe they know and don't care.

That's how bad the situation has become – Rational and reasonable people are willing to leave behind their old life and risk it all to keep a margin of freedom.

In my view it is clear that the political left has gone so far off the rails into its own cultism that there is no coming back. There can be no reconciliation between the two sides, so we must separate, or we must fight. I advocate for separation first for a number of reasons:

  • First and foremost, conservatives are the primary producers within American culture. If we leave the leftists to their own devices there is a chance they will simply implode in on themselves and eat each other because they have no idea how to fill the production void. The recent developments in the defunct CHAZ/CHOP autonomous zone are a perfect example. Those people don't have the slightest clue what they are doing and it shows.

  • Second, if conservatives separate it provides a buffer that helps defuse future random conflicts. When you force the two sides into a box together eventually they will find a reason to try to kill each other. Putting some distance between them and us reduces the angst.

  • Third, if the leftists decide they don't like that we have separated and are thriving on our own, and they attempt to antagonize or attack us where we live, then we hold the clear moral high ground when we smash them to pieces in response.

I fully realize that the third outcome is the most likely. War is probably inevitable. Why? Because collectivists and narcissists are never satisfied. They desire unlimited control over the lives of others and they will use any means to get that control no matter how destructive. Separating from them is only a stop-gap that allows us to take the superior position. Through peaceful migration, we set the pace of the conflict. Eventually they will come after us, and there will be no doubt about our response then. There will be no way to spin the result in their favor, no way for them to play the victims.

Some people might question if we are actually to the point of open conflict; they might accuse me of “doom mongering”. Others may argue that conservatives are acting “passive” and that we will never take any action. These assumptions are common right now because such people do not understand how history progresses and how group psychology evolves.

Domestic war is not something pursued lightly, or haphazardly. The average person knows at least subconsciously that it is better to seek resolution or to remain patient as events unfold. Conservatives aren't stupid; we know that before any civil war there is first a culture war. And, we know that the cards are stacked against us and that if we act rashly in any way we will lose position in that culture war.

So, we let the leftists spit and rage like madmen for a little while. Each day people who were on the fence when it comes to the culture war are witnessing this and come over to our side because we're the only side that is sane. The drawback is, there comes a point in which calm professionalism might be wrongly perceived as weakness. And when people sense weakness among conservatives, they might run into the arms of the extreme left thinking that it's safer to join the “winning team”.

I think conservatives have not been sucked into a reactionary stance yet because they are thinking logically and refusing to play the game for now. In some ways it is how we enter the fight that is more important than the fight itself.  To understand why, we have to look at the bigger picture beyond the left/right conflict.

As I noted last week, the political left is a tool for a greater agenda. They are being used as a weapon of chaos by globalist interests. This is not “conspiracy theory”, this is conspiracy fact. Millions of dollar have poured into Antifa and BLM related groups through elitist donors like George Soros and his Open Society Foundation as well as the Ford Foundation. Globalist institutions like these have been influencing the extreme left and promoting identity politics for DECADES. This is openly admitted. What we are witnessing in 2020 is simply the culmination of a half-century long propaganda campaign that created the modern feminist movement, victim group status, entitlement culture, etc.

The reason for the agenda should be obvious: Chaos creates fear. Fear creates division and crisis. And, crisis creates opportunity (as globalist Rahm Emanuel once bragged). Meaning, the extreme left is going to start a war because that's exactly what the global elites created them for.

Now, some might suggest that this places conservatives in a Catch-22 position; if we don't fight back then we will look weak. We will be culturally isolated and eventually overrun and wiped from the history books. If we do fight back we will be giving the globalists what they want – A civil war that will tear America apart.

The suggestion by certain special interests will be that there is only one way out; use government power to turn the tide to our advantage. In other words, institute martial law. I don't really see it that way.

Once we understand that a fight is coming regardless, our task is to position ourselves with the most advantage possible while keeping our culture and our principles intact. This includes our belief in constitutionalism, civil liberties and opposition to tyranny in ANY form. Winning the fight is important, but maintaining our principles in the process is more important. Becoming a monster to fight the monster is the same as losing.

When the left comes for us (and they will), the fight has to be won by us, not government. We cannot hand even more power to government in the name of security. We cannot become the fascists the leftists accuse us of being.

I am often asked these days about my view of the 2020 election and how it will turn out. I did predict Trump's election win in the summer of 2016 based on the idea that Trump's presence in the White House would drive the left insane, as well as give the globalists a perfect “conservative” scapegoat for the economic collapse they had been engineering since at least 2008.

Trump's cabinet of global elitists suggests his complacency in this plan.  We still live under a one party system pretending as if it is a two party paradigm.

Furthermore, I am not convinced there will even be an election in November. With pandemic lockdowns surely returning as infections spike once again, the US economy will be in ruins by winter. Voting in a traditional fashion will be difficult or restricted in some states. And, mail-in or digital ballots will not be accepted by most conservatives because of their history of being used to rig election outcomes.

Look at it this way: If Trump “wins”, or delays the election, the left will riot and a civil war will be triggered. Conservatives will have to deal with the violence of the left while also dealing with the potential for martial law (which we cannot tolerate or support either). If Biden “wins”, it will be perceived by many conservatives who still think elections matter as a stolen presidency engineered through fraudulent ballot practices.

To summarize, if Trump is still in the White House in 2021, get ready to fight back against leftist mobs as well as martial law measures. If you believe in freedom, realize that fake conservatives that support government tyranny will be as much a problem as Marxist lefties. If Biden enters the White House, expect him to immediately implement unconstitutional policies including medical tyranny, gun confiscation and martial law. Either way, it ends in war.

It's also the classic false choice narrative:  You can choose Marxism and communism, or you can choose fascism.  Communism being the elevation of the weak and the oppression of the strong in the name of arbitrary "equality", and fascism being the elimination of the weak or less fortunate in the name of making more room for the strong.  Both sides rely on totalitarian government to assert dominance, and both sides benefit the elitist establishment.  The great con is that there is no third option, when there is; the non-aggression principle, citizen defense, voluntarism and freedom.

Frankly, I almost prefer a scenario in which Biden and the left are perceived as stealing the election. At least then conservatives will be fully united once again and ready to fight, instead of passively relying on a Pied Piper like Trump to save them.

The truth is, in 2020-2021 we stand at a massive nexus point in human history. We are spiraling into a decade and a fight that will decide the fate liberty for the next century or more. On one side stands the global elites and the useful idiots on the hard left. They will push for a collectivist system that erases all memory of the Constitutional Republic we once new, and they will get help from fake conservatives that value power over principle. On the other side stands the people that just want to be left alone; the free minds, the people that don't need or desire to have power over anybody.

If humanity is to have a future at all, the second group must continue to exist and prosper. They are the wellspring that feeds us, that gives us something to hope for. If the elites and the social justice mob take control, there can be no future for our species. They desire what they cannot and should not have. They value only what they can take from others. They have a hunger that can never be satiated. They will devour the world until there is nothing left while claiming they stand for the “greater good”. War cannot be avoided with such people; the only question is, will liberty minded people stay the course and stick by their principles or will they fall to their darker impulses to ensure victory?

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Published:7/3/2020 10:13:24 PM
[Markets] Why The US Empire Works So Hard To Control The International Narrative About Russia Why The US Empire Works So Hard To Control The International Narrative About Russia Tyler Durden Wed, 07/01/2020 - 23:45

Authored by Caitlin Johnstone via,

On a December 2010 episode of Fox News’ Freedom Watch, John Bolton and the show’s host Andrew Napolitano were debating about recent WikiLeaks publications, and naturally the subject of government secrecy came up.

“Now I want to make the case for secrecy in government when it comes to the conduct of national security affairs, and possibly for deception where that’s appropriate,” Bolton said.

“You know Winston Churchill said during World War Two that in wartime truth is so important it should be surrounded by a bodyguard of lies.”

“Do you really believe that?” asked an incredulous Napolitano.

“Absolutely,” Bolton replied.

“You would lie in order to preserve the truth?” asked Napolitano.

“If I had to say something I knew was false to protect American national security, I would do it,” Bolton answered.

“Why do people in the government think that the laws of society or the rules don’t apply to them?” Napolitano asked.

“Because they are not dealing in the civil society we live in under the Constitution,” Bolton replied. “They are dealing in the anarchic environment internationally where different rules apply.”

“But you took an oath to uphold the Constitution, and the Constitution mandates certain openness and certain fairness,” Napolitano protested.

“You’re willing to do away with that in order to attain a temporary military goal?”

“I think as Justice Jackson said in a famous decision, the Constitution is not a suicide pact,” Bolton said.

“And I think defending the United States from foreign threats does require actions that in a normal business environment in the United States we would find unprofessional. I don’t make any apology for it.”

I am going to type a sequence of words that I have never typed before, and don’t expect to ever type again: John Bolton is right.

Bolton is of course not right in his pathetic spin job on the use of lies to promote military agendas, which just looks like a feeble attempt to justify the psychopathic measures he himself took to deceive the world into consenting to the unforgivably evil invasion of Iraq. What he is right about is that conflicts between nations take place in an “anarchic environment internationally where different rules apply.”

Individual nations have governments with laws that are enforced by those governments. Since we do not have a single unified government for our planet (at least not yet), the interactions between those governments is largely anarchic, and not in a good way.

“International law”, in reality, only meaningfully exists to the extent that the international community is collectively willing to enforce it. In practice what this means is that only nations which have no influence over the dominant narratives in the international community are subject to “international law”.

This is why you will see leaders in African nations sentenced to prison by the International Criminal Court (ICC) for war crimes, but the USA can get away with actually sanctioning ICC personnel if they so much as talk about investigating American war crimes and suffer no consequences for it whatsoever. It is also why Noam Chomsky famously said that if the Nuremberg laws had continued to be applied with fairness and consistency, then every post-war US president would have been hanged.

And this is also why so much effort gets poured into controlling the dominant international narrative about nations like Russia which have resisted being absorbed into the US power alliance. If you have the influence and leverage to control what narratives the international community accepts as true about the behavior of a given targeted nation, then you can do things like manufacture international collaboration with aggressive economic sanctions of the sort Senate Minority Leader Chuck Schumer is currently calling for in response to the the completely unsubstantiated narrative that Russia paid Taliban fighters bounties to kill occupying forces in Afghanistan.

In its ongoing slow-motion third world war against nations which refuse to be absorbed into the blob of the US power alliance, this tight empire-like cluster of allies stands everything to gain by doing whatever it takes to undermine and sabotage Russia in an attempt to shove it off the world stage and eliminate the role it plays in opposing that war. Advancing as many narratives as possible about Russia doing nefarious things on the world stage manufactures consent for international collaboration toward that end in the form of economic warfare, proxy conflicts, NATO expansionism and other measures, as well as facilitating a new arms race by killing the last of the US-Russia nuclear treaties and ensuring a continued imperial military presence in Afghanistan.

We haven’t been shown any hard evidence for Russians paying bounties in Afghanistan, and we almost certainly never will be. This doesn’t matter as far as the imperial propagandists are concerned; they know they don’t need actual facts to get this story believed, they just need narrative control. All the propagandists need to do is say over and over again that Russia paid bounties to kill the troops in Afghanistan in an increasingly assertive and authoritative tone, and after awhile people will start assuming it’s true, just because the propagandists have been doing this.

They’ll add new pieces of data to the narrative, none of which will constitute hard proof of their claims, but after enough “bombshell” stories reported in an assertive and ominous tone of voice, people will start assuming it’s a proven fact that Russia paid those bounties. Narrative managers will be able to simply wave their hands at a disparate, unverified cloud of information and proclaim that it is a mountain of evidence and that anyone doubting all this proof must be a kook. (This by the way is a textbook Gish gallop fallacy, where a bunch of individually weak arguments are presented to give the illusion of a single strong case.)

This is all because “international law” only exists in practical terms to the extent that governments around the world agree to pretend it exists. As long as US-centralized empire is able to control the prevailing narrative about what Russia is doing, that empire will be able to continue to use the pretext of “international law” as a bludgeon against its enemies. That’s all we’re really seeing here.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics onTwitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:7/1/2020 10:47:20 PM
[Markets] Matt Taibbi On "White Fragility" Matt Taibbi On "White Fragility" Tyler Durden Tue, 06/30/2020 - 16:45

Authored by Matt Taibbi,

A few thoughts on America’s smash-hit #1 guide to egghead racialism...

A core principle of the academic movement that shot through elite schools in America since the early nineties was the view that individual rights, humanism, and the democratic process are all just stalking-horses for white supremacy. The concept, as articulated in books like former corporate consultant Robin DiAngelo’s White Fragility (Amazon’s #1 seller!) reduces everything, even the smallest and most innocent human interactions, to racial power contests.

It’s been mind-boggling to watch White Fragility celebrated in recent weeks. When it surged past a Hunger Games book on bestseller lists, USA Today cheered, “American readers are more interested in combatting racism than in literary escapism.” When DiAngelo appeared on The Tonight Show, Jimmy Fallon gushed, “I know… everyone wants to talk to you right now!” White Fragility has been pitched as an uncontroversial road-map for fighting racism, at a time when after the murder of George Floyd Americans are suddenly (and appropriately) interested in doing just that. Except this isn’t a straightforward book about examining one’s own prejudices. Have the people hyping this impressively crazy book actually read it?

DiAngelo isn’t the first person to make a buck pushing tricked-up pseudo-intellectual horseshit as corporate wisdom, but she might be the first to do it selling Hitlerian race theory. White Fragility has a simple message: there is no such thing as a universal human experience, and we are defined not by our individual personalities or moral choices, but only by our racial category.

If your category is “white,” bad news: you have no identity apart from your participation in white supremacy (“Anti-blackness is foundational to our very identities… Whiteness has always been predicated on blackness”), which naturally means “a positive white identity is an impossible goal.”

DiAngelo instructs us there is nothing to be done here, except “strive to be less white.” To deny this theory, or to have the effrontery to sneak away from the tedium of DiAngelo’s lecturing – what she describes as “leaving the stress-inducing situation” – is to affirm her conception of white supremacy. This intellectual equivalent of the “ordeal by water” (if you float, you’re a witch) is orthodoxy across much of academia.

DiAngelo’s writing style is pure pain. The lexicon favored by intersectional theorists of this type is built around the same principles as Orwell’s Newspeak: it banishes ambiguity, nuance, and feeling and structures itself around sterile word pairs, like racist and antiracist, platform and deplatformcenter and silence, that reduce all thinking to a series of binary choicesIronically, Donald Trump does something similar, only with words like “AMAZING!” and “SAD!” that are simultaneously more childish and livelier.

Writers like DiAngelo like to make ugly verbs out of ugly nouns and ugly nouns out of ugly verbs (there are countless permutations on centering and privileging alone). In a world where only a few ideas are considered important, redundancy is encouraged, e.g. “To be less white is to break with white silence and white solidarity, to stop privileging the comfort of white people,” or “Ruth Frankenberg, a premier white scholar in the field of whiteness, describes whiteness as multidimensional…”

DiAngelo writes like a person who was put in timeout as a child for speaking clearly. “When there is disequilibrium in the habitus — when social cues are unfamiliar and/or when they challenge our capital — we use strategies to regain our balance,” she says (“People taken out of their comfort zones find ways to deal,” according to Google Translate). Ideas that go through the English-DiAngelo translator usually end up significantly altered, as in this key part of the book when she addresses Dr. Martin Luther King’s “I have a dream,” speech:

One line of King’s speech in particular—that one day he might be judged by the content of his character and not the color of his skin—was seized upon by the white public because the words were seen to provide a simple and immediate solution to racial tensions: pretend that we don’t see race, and racism will end. Color blindness was now promoted as the remedy for racism, with white people insisting that they didn’t see race or, if they did, that it had no meaning to them.

That this speech was held up as the framework for American race relations for more than half a century precisely because people of all races understood King to be referring to a difficult and beautiful long-term goal worth pursuing is discounted, of course. White Fragility is based upon the idea that human beings are incapable of judging each other by the content of their character, and if people of different races think they are getting along or even loving one another, they probably need immediate antiracism training. This is an important passage because rejection of King’s “dream” of racial harmony — not even as a description of the obviously flawed present, but as the aspirational goal of a better future — has become a central tenet of this brand of antiracist doctrine mainstream press outlets are rushing to embrace.

The book’s most amazing passage concerns the story of Jackie Robinson:

The story of Jackie Robinson is a classic example of how whiteness obscures racism by rendering whites, white privilege, and racist institutions invisible. Robinson is often celebrated as the first African American to break the color line…

While Robinson was certainly an amazing baseball player, this story line depicts him as racially special, a black man who broke the color line himself. The subtext is that Robinson finally had what it took to play with whites, as if no black athlete before him was strong enough to compete at that level. Imagine if instead, the story went something like this: “Jackie Robinson, the first black man whites allowed to play major-league baseball.”

There is not a single baseball fan anywhere – literally not one, except perhaps Robin DiAngelo, I guess – who believes Jackie Robinson broke the color barrier because he “finally had what it took to play with whites.” Everyone familiar with this story understands that Robinson had to be exceptional, both as a player and as a human being, to confront the racist institution known as Major League Baseball. His story has always been understood as a complex, long-developing political tale about overcoming violent systemic oppression. For DiAngelo to suggest history should re-cast Robinson as “the first black man whites allowed to play major league baseball” is grotesque and profoundly belittling.

Robinson’s story moreover did not render “whites, white privilege, and racist institutions invisible.” It did the opposite. Robinson uncovered a generation of job inflation for mediocre white ballplayers in a dramatic example of “privilege” that was keenly understood by baseball fans of all races fifty years before White Fragility. Baseball statistics nerds have long been arguing about whether to put asterisks next to the records of white stars who never had to pitch to Josh Gibson, or hit against prime Satchel Paige or Webster McDonald. Robinson’s story, on every level, exposed and evangelized the truth about the very forces DiAngelo argues it rendered “invisible.”

It takes a special kind of ignorant for an author to choose an example that illustrates the mathematical opposite of one’s intended point, but this isn’t uncommon in White Fragility, which may be the dumbest book ever written. It makes The Art of the Deal read like Anna Karenina.

Yet these ideas are taking America by storm. The movement that calls itself “antiracism” – I think it deserves that name a lot less than “pro-lifers” deserve theirs and am amazed journalists parrot it without question – is complete in its pessimism about race relations. It sees the human being as locked into one of three categories: members of oppressed groups, allies, and white oppressors.

Where we reside on the spectrum of righteousness is, they say, almost entirely determined by birth, a view probably shared by a lot of 4chan readers. With a full commitment to the program of psychological ablutions outlined in the book, one may strive for a “less white identity,” but again, DiAngelo explicitly rejects the Kingian goal of just trying to love one another as impossible, for two people born with different skin colors.

This dingbat racialist cult, which has no art, music, literature, and certainly no comedy, is the vision of “progress” institutional America has chosen to endorse in the Trump era. Why? Maybe because it fits. It won’t hurt the business model of the news media, which for decades now has been monetizing division and has known how to profit from moral panics and witch hunts since before Fleet street discovered the Mod/Rocker wars.

Democratic Party leaders, pioneers of the costless gesture, have already embraced this performative race politics as a useful tool for disciplining apostates like Bernie Sanders. Bernie took off in presidential politics as a hard-charging crusader against a Wall Street-fattened political establishment, and exited four years later a self-flagellating, defeated old white man who seemed to regret not apologizing more for his third house. Clad in kente cloth scarves, the Democrats who crushed him will burn up CSPAN with homilies on privilege even as they reassure donors they’ll stay away from Medicare for All or the carried interest tax break.

For corporate America the calculation is simple. What’s easier, giving up business models based on war, slave labor, and regulatory arbitrage, or benching Aunt Jemima? There’s a deal to be made here, greased by the fact that the “antiracism” prophets promoted in books like White Fragility share corporate Americas instinctive hostility to privacy, individual rights, freedom of speech, etc.

Corporate America doubtless views the current protest movement as something that can be addressed as an H.R. matter, among other things by hiring thousands of DiAngelos to institute codes for the proper mode of Black-white workplace interaction.

If you’re wondering what that might look like, here’s DiAngelo explaining how she handled the fallout from making a bad joke while she was “facilitating antiracism training” at the office of one of her clients.

When one employee responds negatively to the training, DiAngelo quips the person must have been put off by one of her Black female team members: “The white people,” she says, “were scared by Deborah’s hair.” (White priests of antiracism like DiAngelo seem universally to be more awkward and clueless around minorities than your average Trump-supporting construction worker).

DiAngelo doesn’t grasp the joke flopped and has to be told two days later that one of her web developer clients was offended. In despair, she writes, “I seek out a friend who is white and has a solid understanding of cross-racial dynamics.”

After DiAngelo confesses her feelings of embarrassment, shame and guilt to the enlightened white cross-racial dynamics expert (everyone should have such a person on speed-dial), she approaches the offended web developer. She asks, “Would you be willing to grant me the opportunity to repair the racism I perpetrated toward you in that meeting?” At which point the web developer agrees, leading to a conversation establishing the parameters of problematic joke resolution.

This dialogue straight out of South Park – “Is it okay if I touch your penis? No, you may not touch my penis at this time!” – has a good shot of becoming standard at every transnational corporation, law firm, university, newsroom, etc.

Of course the upside such consultants can offer is an important one. Under pressure from people like this, companies might address long-overdue inequities in boardroom diversity.

The downside, which we’re already seeing, is that organizations everywhere will embrace powerful new tools for solving professional disputes, through a never-ending purge. One of the central tenets of DiAngelo’s book (and others like it) is that racism cannot be eradicated and can only be managed through constant, “lifelong” vigilance, much like the battle with addiction. A useful theory, if your business is selling teams of high-priced toxicity-hunters to corporations as next-generation versions of efficiency experts — in the fight against this disease, companies will need the help forever and ever.

Cancelations already are happening too fast to track. In a phenomenon that will be familiar to students of Russian history, accusers are beginning to appear alongside the accused. Three years ago a popular Canadian writer named Hal Niedzviecki was denounced for expressing the opinion that “anyone, anywhere, should be encouraged to imagine other peoples, other cultures, other identities." He reportedly was forced out of the Writer’s Union of Canada for the crime of “cultural appropriation,” and denounced as a racist by many, including a poet named Gwen Benaway. The latter said Niedzviecki “doesn’t see the humanity of indigenous peoples.” Last week, Benaway herself was denounced on Twitter for failing to provide proof that she was Indigenous.

Michael Korenberg, the chair of the board at the University of British Columbia, was forced to resign for liking tweets by Dinesh D’Souza and Donald Trump, which you might think is fine – but what about Latino electrical worker Emmanuel Cafferty, fired after a white activist took a photo of him making an OK symbol (it was described online as a “white power” sign)? How about Sue Schafer, the heretofore unknown graphic designer the Washington Post decided to out in a 3000-word article for attending a Halloween party two years ago in blackface (a failed parody of a different blackface incident involving Megyn Kelly)? She was fired, of course. How was this news? Why was ruining this person’s life necessary?

People everywhere today are being encouraged to snitch out schoolmates, parents, and colleagues for thoughtcrime. The New York Times wrote a salutary piece about high schoolers scanning social media accounts of peers for evidence of “anti-black racism” to make public, because what can go wrong with encouraging teenagers to start submarining each other’s careers before they’ve even finished growing?  

“People who go to college end up becoming racist lawyers and doctors. I don’t want people like that to keep getting jobs,” one 16 year-old said.

“Someone rly started a Google doc of racists and their info for us to ruin their lives… I love twitter,” wrote a different person, adding cheery emojis.

A bizarre echo of North Korea’s “three generations of punishment” doctrine could be seen in the boycotts of Holy Land grocery, a well-known hummus maker in Minneapolis. In recent weeks it’s been abandoned by clients and seen its lease pulled because of racist tweets made by the CEO’s 14 year-old daughter eight years ago.

Parents calling out their kids is also in vogue. In Slate, “Making a Mountain Out of a Molehill” wrote to advice columnist Michelle Herman in a letter headlined, “I think I’ve screwed up the way my kids think about race.” The problem, the aggrieved parent noted, was that his/her sons had gone to a diverse school, and their “closest friends are still a mix of black, Hispanic, and white kids,” which to them was natural. The parent worried when one son was asked to fill out an application for a potential college roommate and expressed annoyance at having to specify race, because “I don’t care about race.”

Clearly, a situation needing fixing! The parent asked if someone who didn’t care about race was “just as racist as someone who only has white friends” and asked if it was “too late” to do anything. No fear, Herman wrote: it’s never too late for kids like yours to educate themselves. To help, she linked to a program of materials designed for just that purpose, a “Lesson Plan for Being An Ally,” that included a month of readings of… White Fragility. Hopefully that kid with the Black and Hispanic friends can be cured!

This notion that color-blindness is itself racist, one of the main themes of White Fragility, could have amazing consequences. In researching I Can’t Breathe, I met civil rights activists who recounted decades of struggle to remove race from the law. I heard stories of lawyers who were physically threatened for years in places like rural Arkansas just for trying to end explicit hiring and housing discrimination and other remnants of Jim Crow. Last week, an Oregon County casually exempted “people of color who have heightened concerns about racial profiling” from a Covid-19 related mask order. Who thinks creating different laws for different racial categories is going to end well? When has it ever?

At a time of catastrophe and national despair, when conservative nationalism is on the rise and violent confrontation on the streets is becoming commonplace, it’s extremely suspicious that the books politicians, the press, university administrators, and corporate consultants alike are asking us to read are urging us to put race even more at the center of our identities, and fetishize the unbridgeable nature of our differences.

Meanwhile books like The Adventures of Huckleberry Finn and To Kill a Mockingbird, which are both beautiful and actually anti-racist, have been banned, for containing the “N-word.” (White Fragility contains it too, by the way).

It’s almost like someone thinks there’s a benefit to keeping people divided.

Published:6/30/2020 3:53:46 PM
[Markets] Goldman: We "Don't Love Risk/Reward Up Here... Starting To Worry About Valuation" Goldman: We "Don't Love Risk/Reward Up Here... Starting To Worry About Valuation" Tyler Durden Tue, 06/30/2020 - 14:40

By Tony Pasquariello, global head of HF Sales at Goldman Sachs

The dominant narrative of the week was a return to trading COVID headlines, as the worst period for US case growth since April served as disruption for those expecting business-as-usual trading conditions this summer.  

Along the way, stock operators absorbed another heavy dose of deal supply -- adding to what will be a record month and record quarter for US new issue -- with quarter end looming.  On the week, S&P lost 2.9%, although one can reasonably argue the market traded with decently thick skin. 

In fact, when you get below the hood of the major indices, there were a number of sub-plots that were patently bullish -- witness the breakout in biotech or the ongoing (and blistering) surge in high valuation software stocks.  

In the end, I think you have to be a little impressed with the market’s ability compartmentalize the risk factors and manage through some genuine headwinds.  

At the same time, however, it’s getting harder to dismiss the argument that certain parts of the equity complex are approaching bubble territory ... more on all of this below, which a chart heavy note that you can get through in less than five minutes.

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1. Market direction: I admit to not loving risk/reward up here.  one can see the tactical argument quickly turning to “quarter end is nigh, the fast hands in retail are very long and it’s naïve to think the reopening will be a smooth process.”  when coupled with the news on case growth, and a growing set of known unknowns, it’s not crazy to expect some struggle around current prices (notably, a confluence of key levels).  That said, the dangerous thing about being short risk assets right now is the Fed is still going full throttle; so too is one segment the largest holder of domestic equities, the younger vintage of US households. 

As a wise macro trader recently said, stocks follow liquidity -- recall that GIR expects zero rates for 4-5 years (and another $1.5tr of fiscal support this summer; link).  in the end, if you strip everything else out of the equation, you’re left with two dominant investment forces right now: the Fed and the US retail investor. They are both driving very fast in the same lane.  Yes, I’m concerned about how this story ends -- but, note the following chart, a simple overlay of the Fed’s balance sheet and NDX.  We started the year at $4.22 tr.  GIR expects to end the year at $7.75tr and to end 2021 at ... $8.9tr (link).

2. Flows/positioning. A mark-to-market on some key actors:

i. quarterly derivatives expiry has come and gone, in the process we burned off ~ $2tr of open interest in S&P options.  To an extent, the print lived up to its billing with a very high SQ (3161 in SPX).  again, I’m a believer that one needs to respect the occasional power of expiry to mark inflection points, so I tend to think 3161 becomes a level to watch overhead in the near-term.  I don’t want to make too much of quarter end rebalance -- it’s exceptionally well socialized -- but, it does suggest some programmatic selling needs to be absorbed.

ii. Within the institutional trading community, systematic funds are generally inconsequential at current market levels (link).  Discretionary funds are still decently risked up, more with respect to net exposure than gross exposure on our books (and noting the micro community is more sanguine than the macro community, where sentiment remains perceptibly negative).  All taken together, I don’t see any big asymmetry in hedge fund land.

iii. The bifurcation continues within the retail community.  Again, an older generation continues to make sales via mutual funds and ETFs (link); a younger generation continue to trade stocks like it’s 1999 (“free trades, jackpot dreams lure small investors to options”; link).  At some point, the $64,000 question is ... where are we in the retail cycle?  Having lived through the late 90’s, I tend to think the recent euphoria can persist a bit longer.

iv. The market continues to do a commendable job of absorbing round after round of record corporate new issue (which is to say, $230bn in the past seven weeks, with half of that in the US).  It’s totally remarkable to me that the dynamics around corporate supply-and-demand have changed so enormously in the past three months, and yet the market has largely powered through it all. 

v. To pull a few positioning angles together, this chart tells a certain story.  The dark blue line is US equity index futures positioning (non-dealers), as reported by the CFTC.  the light blue line is the number of distinct positions open on the Robinhood trading platform in S&P 500 stocks (credit Ben Snider, GIR).  These are apples and oranges ... we’re comparing $’s vs line items here ... And, it’s by no means an all-inclusive capture of all market participants ... But, I do think this illustrates a stark disjunction between one segment of the professional trading community and one segment of the retail trading community:

3. Volatility: the market has obviously recovered hugely from the lows of March. That said, volume and volatility remain elevated.  Put another way, S&P over 3000 and VIX over 34 is not something many would have predicted just a few months ago.  So, as you can see in the clever chart below from GIR (link), implied volatility has remained sticky in a very unusual way.  Is this a signal or is this noise?  I suspect it’s reflective of a handful of factors:

i. The market continues to realize a decently high level of actual volatility.  While clearly things aren’t as unhinged as they were in March -- when three consecutive days featured +9% / -12% / +6% moves -- the fact is 1-month realized volatility is still 32%. 

ii. While the broader market feels a bit complacent to me on the US election, the vol market isn’t necessarily. Again, November expiry features the peak of both term structure and put-call skew.

iii. Furthermore, intuit what the current VIX level mathematically implies.  Bluntly speaking (i.e. more back-of-the-envelope vs deeper math), a 34 VIX signals 2-in-3 odds the market will be +/- 34% from here over the next one year.  it also implies for the next month an average daily move of around 1.7%.  I don’t think this is so off-market given the range of possible outcomes. 

iv. On flow-of-funds, it seems quite reasonable to assume the dynamics around the supply of volatility are very different today than they were at the start of the year. 

v. The moral of this story: vol is high.  As you can see here, it’s been sticky in a very aberrational way. My guess is that while yield hunters ultimately find their way back to the supply side, the current story persists a bit longer.  GIR: “the potential for the current high vol regime to linger for longer remains high, in our view.  As we have written before, volatility tends to cluster: since 1928 there have been several high and low vol regimes during which S&P 500 realised volatility has clustered for prolonged periods of time (at least six months) in the bottom (<10%) and top (>18%) quartile, and on average such high vol regimes lasted 26 months.  our volatility regime model, which aggregates macro, macro uncertainty and markets indicators suggests close to a 100% probability of a high volatility regime in the near term” (link).


4. Quick Points:

i. Economics: GIR’s updated profile for US GDP growth: Q2 -33%, Q3 +33% and Q4 +8%. That rolls up to FY ’20 -4.2%, an upgrade vs the previous forecast of -5.2%.  further note that US GDP returns to the pre-virus base level in mid-’21 (that doesn’t sound so bad, does it).  the full note: link.

ii. A steady and significant decline in market liquidity has been an inconvenient truth of the past ten years. Like many things, that decline went into overdrive during the collapse.  I find that discussion of illiquidity receives a lot of air time when markets are breaking down.  by comparison, it receives much less attention on the way back up ... but, that shouldn’t suggest it isn’t a contributing factor to price action in rallies. 

iii. Maybe I shouldn’t have been surprised by this, but I was (emphasis mine; feel free to visualize the chart of asset growth in money markets as you’re reading this): "the third implication is that the private sector may react to the increase in cash and deposit holdings forced on it by the Fed by seeking other, riskier higher yielding assets.  in fact, this is a major motivation of quantitative easing.  by reducing the supply of safe assets and increasing the amount of deposits that the private sector must hold, the Fed generates a demand by the private sector for more risky assets.  the result is a rise in financial-asset valuations and an easing of financial conditions.  the Fed’s asset purchases change the mix of assets available to be held by private investors and this influences asset valuations.”  Bill Dudley, "A $10 Trillion Fed Balance Sheet Is Coming" (link). 

iv. I didn’t favor European assets coming into the crisis, and I don’t favor them now.  For the sake of balance, however, this from GIR is notable: “we therefore expect a steeper and smoother rebound from the coronacrisis in Europe than the US.  although we have recently upgraded our forecasts on both sides of the Atlantic, we now look for significantly stronger growth in the Euro area than the US over the next two years.  while much of this reflects the unwind of the sharper activity drop in Europe, a sustained period of European growth outperformance has not been seen since 2006-07.  consistent with this, our markets team expects European assets to outperform over the next year.  our equity strategists see more upside in Europe than the US in coming months and raised European equities to overweight in our asset allocation, although they are less convinced that Europe can outperform longer term.  on the fixed income side, we expect the Euro to strengthen against the dollar, reaching 1.17 in twelve months, and see a more gradual sell-off in Bunds than Treasuries” (link).  here’s one simple compare/contrast ... US GDP profile: -4.2% ’20, +5.8% ’21, +3.2% ’22.  EU GDP profile: -9.4% ’20, +8.8% ’21, +3.6% ’22. 

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5. The attached note from Peter Oppenheimer is a treasure trove for market aficionados.  here are three charts that stuck out to me:

i. sales & trading colleague Brian Friedman and I have a long-standing debate about how much of the post-crisis equity rally has been driven by the multiple (as influenced by lower real rates) and how much has been more “genuine.”  I think this graph allows us both to claim victory.  yes, P/E expansion has been the single largest factor in the rally; that said, P/E expansion accounts for less than half of the total rally:

ii. On the topic of US vs Europe, again the story of US outperformance largely traces back to an EPS differential (driven by a sector differential):

iii. You’ve seen this before, and it continues to speak for itself:

6. As a wise macro trader once said, lower-for-longer is very stimulative for the multiples of secular growers.  This reminds me a little of the amplifier discussion from This Is Spinal Tap: “these go to eleven."  "does that mean it's louder?" "well, it's one louder isn't it?” ... (link).  to circle back to where this email started, yes, I’m starting to worry about valuation in certain parts of the market.  If the Fed keeps expanding their balance sheet and pressing real rates lower, however, it’s not obvious to me that the normal rules will apply in the near-term. The blue line here is inverted US 10yr real rates; the blue line is NDX:

Source for charts: GIR, Bloomberg

Published:6/30/2020 1:49:47 PM
[Entertainment] US-Apple-Books-Top-10 US-Apple-Books-Top-10 for week ending 6/28/20 Published:6/30/2020 11:51:41 AM
[Markets] Barron's on MarketWatch: Day 1 of Boeing 737 Max test flights in the books Barron's on MarketWatch: Day 1 of Boeing 737 Max test flights in the books Published:6/30/2020 7:58:18 AM
[Markets] Futures Flat On Last Day Of Best Quarter In 22 Years Futures Flat On Last Day Of Best Quarter In 22 Years Tyler Durden Tue, 06/30/2020 - 08:06

There was some sound and fury in a very illiquid overnight session, which ended up signifying nothing, and futures were little changed from their Monday closing ramp as markets puts a close to the best quarter for stocks since 1998.

The MSCI world equity index was up about 0.1% in early trading after Asian shares rose on strong data from the U.S. housing market and Chinese factories. European shares continued the rally.  S&P futures fluctuated and the dollar index strengthened to a one-month high amid concern that new virus infections could slow the pace of business re-openings.

Overnight sentiment fizzled after Australia's Victoria state said it would shutter 10 areas in the metropolis of Melbourne. Arizona also ordered a number of establishments including gyms to close for 30 days and New Jersey halted plans for indoor dining. However, this latest gloom was quickly forgotten shortly after Europe reopened and the magical overnight futures levitation kicked in right on schedule.

"Renewed shutdowns of economic activity would bring additional market volatility," said Kristina Hooper, the chief global market strategist at Invesco in New York. "But importantly, we do not expect the same draconian shut-down measures as seen earlier in the year."

After new cases of the coronavirus trended lower in May, they climbed again in June, denting investors’ enthusiasm that the U.S. economy would recovery relatively quickly from the crisis. Investor enthusiasm had been driven in part by recent economic data that were better than expected.

A spike in virus infections in Southern and Western states last week spooked investors. Florida, Texas, California and Arizona, which were the top four states with the most new cases, account for nearly a third of U.S. economic output. California’s government on Sunday ordered bars in several counties to close due to the coronavirus rebound, while San Francisco put plans to reopen businesses on hold.

Los Angeles has become a new epicenter in the pandemic as coronavirus cases and hospitalizations surge there despite California Governor Gavin Newsom’s orders requiring bars to close and residents to wear masks in nearly all public spaces. The World Health Organization (WHO) will “read carefully” a Chinese study on a new flu virus found in pigs, a spokesman said, adding that the findings underscored the importance of influenza surveillance during the current pandemic.

“Asset markets are looking beyond COVID stats,” said Neil Jones, head of FX sales at Mizuho Bank. “There’s some expectation of containment and then, further down the line, an expectation of some form of measure to combat the virus.”

Anyway, back to markets, where Uber climbed in pre-market trading after reports that the company is in talks to buy Postmates as a consolation prize after it failed to acquire Grub Hub. Boeing, which idiotically surged yesterday on trials of the 737 MAX airplane which nobody will want to fly in, slipped after one of its biggest European customers scrapped its $10.6 billion purchase deal.

European shares edged up, with the Euro STOXX 600 up 0.1% in early trading having been relatively range-bound for the past two weeks. Germany’s DAX was up 0.3%.  London’s FTSE 100 was down 0.6%. Britain’s economy shrank by the most since 1979 in early 2020 as households slashed their spending, according to official data that included the first few days of the lockdown. Annual inflation in the Euro area accelerated to 0.3% in June from a four-year low of 0.1% in May, beating forecasts for no change and supporting the European Central Bank’s expectation that a negative reading may be avoided.

Earlier in the session,  Asian stocks gained, led by materials and communications, after falling in the last session. The Topix gained 0.6%, with EJ HD and DVX rising the most. The Shanghai Composite Index rose 0.8%, with Xinjiang Yilu Wanyuan Industrial Investment and Chengtun Mining posting the biggest advances. China’s parliament passed national security legislation for Hong Kong in response to last year’s pro-democracy protests. The United States, Britain and other Western governments have said the legislation erodes the autonomy the city was granted at its 1997 handover. Market reaction was limited.

While the latest stronger than expected Chinese PMI print added to reopening optimism...

...  some investors are questioning the rally that has carried global stock benchmarks higher. The MSCI All Country World Index is up about 18% this quarter and just 10% below its February record high, the biggest advance in a decade. Yet the World Health Organization warned that the worst of the coronavirus pandemic is still to come. As a result, investors are parsing an array of factors that could weigh on stocks in the months ahead, including potential delays in reopening parts of the U.S. economy and sky-high stock valuations.

The S&P 500’s strongest quarterly performance since the fourth quarter of 1998 — during the dot-com boom — was driven by gains in April and May, followed by an overall flat June after Wall Street gave back gains in the second half of the month.

In FX, the dollar advanced against all its Group-of-10 peers amid quarter-end positioning and as investors tracked a resurgence in coronavirus infections. The dollar got a boost while the Aussie swung to a loss as the Australia’s second-most populous state imposed a lockdown in some areas for four weeks, while also diverting flights for a shorter period; other risk-sensitive currencies reacted in a similar fashion.

“I would expect overall dollar demand to continue as we go into July,” Mizuho’s Neil Jones said. “If there’s a summer lull then we may see a dollar sell-off into the elections but as we run up to the end of the year I would expect to see a resurgence of dollar demand,” he added.

The euro was down around 0.3% against the dollar, at $1.1208, while the Australian and New Zealand dollars also edged down. The Australian and New Zealand dollars are set to end the best quarter against the greenback since the financial crisis; Sweden’s krona and Norway’s krone are heading for their best quarter against the euro in a decade or more.

In rates, Treasuries were steady ahead of a slew of Fed speakers. European peripheral spreads widened as Bunds popped through Monday’s best levels, however Italian bonds advanced as a sale of 10-year debt saw the highest oversubscription rate since 2012. Copper rose above $6,000 a ton for the first time since January.

In commodities, oil prices slipped as traders took profits after sharp gains the previous session and Libya’s state oil company flagged progress in talks to resume exports, potentially boosting supply. Prices then recovered partially. WTI was down 0.6% at $39.15 a barrel, having hit as low as $39.00, while Brent crude slipped 0.6% to $41.16 per barrel.

Looking at today's calendar, expected data include Chicago PMI. FedEx reports earnings.

Market Snapshot

  • S&P 500 futures down 0.1% to 3,045.75
  • STOXX Europe 600 down 0.3% to 358.75
  • MXAP up 0.7% to 157.99
  • MXAPJ up 0.7% to 513.21
  • Nikkei up 1.3% to 22,288.14
  • Topix up 0.6% to 1,558.77
  • Hang Seng Index up 0.5% to 24,427.19
  • Shanghai Composite up 0.8% to 2,984.67
  • Sensex up 0.5% to 35,128.74
  • Australia S&P/ASX 200 up 1.4% to 5,897.88
  • Kospi up 0.7% to 2,108.33
  • German 10Y yield fell 0.8 bps to -0.478%
  • Euro down 0.2% to $1.1221
  • Brent futures down 0.7% to $41.44/bbl
  • Italian 10Y yield rose 0.6 bps to 1.17%
  • Spanish 10Y yield unchanged at 0.47%
  • Brent futures down 1.2% to $41.22/bbl
  • Gold spot down 0.1% to $1,771.15
  • U.S. Dollar Index up 0.18% to 97.70

Top Overnight News

  • China’s top legislative body approved a landmark national security law for Hong Kong, a sweeping attempt to quell dissent that drew fresh U.S. retaliation and could endanger the city’s appeal as a financial hub
  • Boris Johnson will confirm his commitment to spending billions of pounds on infrastructure to rebuild the coronavirus-ravaged U.K. economy in a major speech on Tuesday, arguing that balancing the books must wait until recovery is secure
  • Bets that the Federal Reserve will implement yield-curve control sooner rather than later are showing up in positioning data and the curve itself
  • Germany is paving the way for a green bond revolution in Europe by announcing it will sell its first government-backed securities later this year
  • Some of Germany’s furloughed workers are beginning to return to work full time, according to a survey by the Ifo Institute
  • Prices in the euro area rose 0.3% in June from a year ago, according to preliminary data, versus a 0.2% estimate, as economies across the bloc allowed more businesses to reopen
  • France risks losing control of its debts unless the government overhauls its long- term fiscal policy, according to the national auditor

Asian equity markets traded higher as the region took its cue from the firm performance on Wall St which was attributed to several factors including technical buying in the S&P 500 around the 3000 level and encouraging comments by Fed Chair Powell who suggested the US economy entered an important new phase sooner than expected and that recent economic data offers some positive signs, while better than expected Chinese PMI figures also contributed to the overnight optimism. ASX 200 (+1.4%) was lifted from the open with upside in Australia led by firm gains in energy and strength in the top weighted financials sector, with industrials also inspired by the outperformance of their counterparts stateside after Boeing shares soared by double digits as it began 737 MAX test flights. Nikkei 225 (+1.3%) was underpinned as recent favourable currency moves helped participants overlook the soft data which showed the weakest Industrial Production since March 2009 and highest Unemployment Rate in 3 years. Hang Seng (+0.5%) and Shanghai Comp. (+0.8%) were also positive after Chinese Manufacturing PMI and Non-Manufacturing PMI both topped estimates, but with gains capped following another PBoC liquidity drain and after China’s legislature reportedly passed the Hong Kong security bill as expected. Finally, 10yr JGBs traded lower to test support at the 152.00 level as the gains in riskier assets sapped haven demand which also resulted in the 40yr yield rising to its highest since March last year, while weaker results at the 2yr JGB auction further weighed on prices.      

Top Asian News

  • BOJ’s Bond Purchases Signal Japan’s Curve to Steepen Further
  • CAR Inc Surges 17%, Sparks Speculation of Progress in Stake Sale
  • BOJ Widens Buying Ranges for Bonds Due Up to 10 Yrs in July Plan

Another day of volatile price action across the equity-sphere but European bourses are ultimately negative [Euro Stoxx -0.1%] as the risk appetite seen during APAC hours petered out on month/quarter and HY-end, where Citi’s month-end model shows a relatively strong signal for a rotation out of European and Japanese stocks into bonds, specifically US, Asian and Canadian. Furthermore, markets could also be bracing for a rise in COVID case-counts as the weekend effect dissipates. Add to that the passage of the Hong Kong security law which is likely to face international pushback, namely from the US, UK and the EU, albeit the latter two have previously signalled a more balanced approach to the situation given their preferability for a Chinese partnership. It’s also worth bearing in mind that Germany will take the EU presidency from tomorrow and have previously hinted at the tougher stance against China. For refence, Eurex suffered an outage overnight for several hours. Nonetheless, European stocks saw a bout of buying immediately after the cash open – somewhat mimicking yesterday’s actions – before gains again subsided. Sectors are now mixed after earlier flow rotated into defensives from cyclicals shortly after the open. The detailed breakdown sees Tech holding its position in the green on the back of Micron’s (+4% pre-mkt) after-market earnings in which guidance was upgraded – thus propping up European peers STMicroelectronics (+1.8%), Dialog Semiconductor (+1.9%), Micro Focus (+0.8%) and Infineon (+0.3%). Banks are on the other end of the spectrum amid lower yields and after Wells Fargo (-1.8%), the fourth largest bank State-side, opted to cut its Q3 dividend when it reports earnings on July 14th. In terms of individual movers, Wirecard (+96%) shares feel some reprieve after UK FCA lifted restrictions on the Co’s UK arm. Meanwhile, Novartis (-1.0%), the likely culprit for losses in the Healthcare sector, remains pressured after the Canadian federal court dismissed a plea by drug makers, including Co., challenging the government’s new regulation aimed at lowering prices of patented drugs.

Top European News

  • Shell to Write Down Up to $22 Billion as Virus Hits Big Oil
  • Boris Johnson Vows ‘New Deal’ to Rebuild Britain After Virus
  • Hedge Funds Score Big Gains on Dividend Bets That Hurt Banks

In FX, the Dollar may yet succumb to bearish rebalancing flows around daily fixes, but more pronounced weakness in major currency rivals is keeping the index afloat around 97.500 and close to a new 97.774 peak amidst waning risk appetite on the final day of June, Q2 and the first half of 2020. Moreover, the Greenback has maintained momentum following Monday’s positive US data (pending home sales) and a slightly more upbeat economic assessment via the text of a speech to be delivered by Fed chair Powell to the House later today.

  • NOK/NZD/AUD - Another downturn in crude prices has undermined the Norwegian Krona’s revival, while the Kiwi and Aussie have pulled back from overnight highs after the latter failed to sustain post-Chinese PMI gains on reports that 10 sectors of Melbourne are returning to lockdown and some suburbs may be on the verge of being ordered to stay at home. Eur/Nok has rebounded from sub-10.9000 towards 10.9500, Nzd/Usd has lost grip of the 0.6400 handle and Aud/Usd is back below 0.6850 after fading ahead of 0.6900 where a hefty 1.4 bn option expiry resides.
  • GBP/EUR/CAD - Also weaker vs the Buck, as Cable languishes below 1.2300 in wake of weaker than expected UK Q1 GDP awaiting further BoE commentary via Haldane and Cunliffe, while the Euro is only just holding up above 1.1200 and the 100 DMA (1.1205) in the midst of big expiries either side of the round number, and with Eur/Usd one of the only exceptions to the modest sell Dollar for portfolio mantra over month/quarter/half year end. Elsewhere, the Loonie is trying to keep its head above 1.3700 in advance of Canadian GDP for April and the first full month of COVID-19 contagion.
  • CHF/JPY - Relative G10 ‘outperformers’ or at least showing more resilience than others due to underlying safe-haven demand and for the Yen in particular reports of RHS Usd/Jpy interest that is seen gathering pace, if not peaking in the run up to 4 pm London time. However, a weaker than forecast Swiss KOF survey has offset a rebound in retail sales, while Japanese ip missed consensus and the jobless rate hit a 3 year high.
  • EM - Some respite for the Rand via SA Q1 GDP contracting considerably less than anticipated, as Usd/Zar pares back from nearly 17.4000, albeit still higher in line with peers against the backdrop of fragile risk sentiment and broad Dollar strength. Conversely, the Rouble is still underperforming and jittery on the last day of voting for/against the new Russian convention before Wednesday’s national holiday, with Usd/Rub hovering just shy of 70.9000, and Eur/Pln is firmer following a surprise rebound in Polish CPI.

In commodities, A downbeat session thus far for the oil complex as stocks hold onto losses as with global economies re-imposing some targeted lockdowns amid local flare-ups in COVID-19 cases, with Australia’s Victoria state the latest to re-introduce stay-at-home orders across 10 postcodes. Negativity also arises from the passage of the Hong Kong Security Bill, poised to be implemented tomorrow. WTI Aug resides near session lows, just north of the USD 39/bbl mark (vs. high 39.80/bbl), whilst Brent Sep trades on either side of USD 41.50/bbl, off its USD 41.80/bbl high. Looking ahead, price action will likely be dictated by COVID-related headlines in the absence of anti-China flare-ups over the National Security Bill ahead of the weekly Private Inventory numbers . Elsewhere, spot gold remains within recent ranges between USD 1768-1774/oz as markets eye portfolio rebalancing. Copper prices meanwhile gained overnight amid broader upside in APAC stocks and with supply concerns still on trader’s minds.

US Event Calendar

  • 9am: S&P CoreLogic CS 20-City MoM SA, est. 0.5%, prior 0.47%;  CS 20-City YoY NSA, est. 3.8%, prior 3.92%;
  • 9:45am: MNI Chicago PMI, est. 45, prior 32.3
  • 10am: Conf. Board Consumer Confidence, est. 91.4, prior 86.6; Expectations, prior 96.9; Present Situation, prior 71.1

Central Bank Speakers

  • 11am: Fed’s Williams Speaks on Central Banking in the Age of Covid
  • 11:05am: Fed’s Brainard Discusses a Decade of Dodd- Frank
  • 12:30pm: Powell and Mnuchin Speak Before House Financial Panel
  • 2pm: Fed’s Bostic and Kashkari Takes Part in Panel on Diversity

DB's Jim Reid concludes the overnight wrap

Welcome to the last day of the first half of 2020. We’ll have our usual month, quarter and YTD (H1) performance review out tomorrow. As H1 draws to a close, equity markets yesterday resolutely looked past the negative headlines from the US and abroad on the coronavirus, choosing to focus on some better than expected economic data. However it’s quite clear from yesterday that there will be hiccups to come in terms of re-openings. In New York City, Mayor de Blasio said that the city might slow the restart of indoor dining, which is currently scheduled to be reopened from July 6, given the spread seen elsewhere. Concurrently, the New York Times reported that Broadway would remain closed for the N this year, with other large cultural venues such as the Metropolitan Museum and Lincoln Center likely to delay opening until later in the summer even if the city gives them a green light. Over in Florida, cases continued to grow, with the state seeing a further 3.7% increase (weekly average of 5.5%), and parts of the state are now indicating they will make mask wearing mandatory. Florida’s slight drop in case growth was seen elsewhere in US. Cases rose by 1.5% overall, compared to the 1.6% weekly average, but the weekend effect was clearly seen in some states. Arizona saw cases rise by 0.8%, but cited a clerical error, where one lab didn’t submit a report to the state’s record keepers. This compounded by the lower testing capacity that we have seen across the US over the weekend likely means there will be a sharp revision in the next couple of days.

Our US Chief Economist, Matthew Luzzetti, released a new video yesterday where he assesses whether the recent deterioration in covid trends across many states led to a retrenchment in economic activity even prior to official rollback of reopenings. A link to video and report are here.

Looking elsewhere, reports continued to be concerning, with Iran reporting its highest number of daily fatalities since the outbreak began, with 162 new deaths in 24 hours. New cases in India continue to grow rapidly, at roughly 3.8% per day on average over the past month, while South America as a whole is now seeing over 40,000 new cases per day with the largest countries yet to see a meaningful drop in new cases. However reported fatalities remain relatively contained given caseloads in those regions. With around 280 fatalities per 1 million residents, Chile, Brazil, and Peru are well below the US (388), UK (642), and Italy (575), however they do trail Germany (108) and Canada (225).

Even against this worrisome virus backdrop, global equity markets rallied following a rather lackluster start to the day as economic data from the US came in stronger than expected and turned the session around. The S&P 500 closed up +1.47%, which as it stands puts the index just one day away from its strongest quarterly performance on a total returns basis since Q4 1998. And that comes after a first quarter that was the worst since Q4 2008, so it’s fair to say we’ve had an eventful few months in financial markets. There may have been some quarter-end rebalancing at work as well given the over +0.5% move in the last 10 minutes of US trading - typical of quarter end type price action. Tech stocks just slightly underperformed, with the NASDAQ up +1.20%, while the Dow Jones climbed +2.32% as Boeing surged +14.43% (best S&P performer on the day) following the weekend announcement that the Federal Aviation Administration had approved some test flights for the 737 Max. Europe lagged slightly as it missed the afternoon rally in New York. The Stoxx 600 gained +0.44%, even while some of the individual bourses were higher. The DAX (+1.18%), IBEX (+1.39%) and FTSEMIB (+1.69%) all outperformed the index.

Other risk assets also benefited from the sudden turn in sentiment yesterday, including commodities. Oil prices recovered from their losses earlier in the session to move higher, with Brent (+1.68%) and WTI (+3.14 %) both advancing, while copper rose +0.77% to a 5-month high as well. Over in fixed income, yields on 10yr Treasuries fell a further -1.8bps to 0.623%, which is their lowest level in over 6 weeks. And in the UK, yields on both 2yr and 5yr gilts fell to a record low as they inched deeper into negative territory.

Asian markets have followed Wall Street’s lead this morning with the Nikkei (+1.67%), Hang Seng (+0.89%), Shanghai Comp (+0.58%), Kospi (+1.74%) and ASX (+1.39%) all up. Meanwhile, futures on the S&P 500 are up a more modest +0.22%.

In terms of the main headlines overnight, China’s NPC has passed the new Hong Kong security law, expected to become effective from July 1. The SCMP has reported that Hong Kong’s Basic Law committee is expected to meet immediately to discuss insertion into Annex III of the city’s mini-constitution. Xinhua, the official state news agency, is expected to publish the details at some point today, marking the first time the law will be fully disclosed to the public.

Prior to that, US Commerce Secretary Wilbur Ross said that regulations affording preferential treatment to Hong Kong over China, including the availability of export license exceptions, are to be suspended while adding “further actions to eliminate differential treatment are also being evaluated”. He also said, “with the Chinese Communist Party’s imposition of new security measures on Hong Kong, the risk that sensitive U.S. technology will be diverted to the People’s Liberation Army or Ministry of State Security has increased, all while undermining the territory’s autonomy.”

Meanwhile, we’ve also had the latest PMIs out of China which surprised to the upside. The manufacturing PMI rose to 50.9 (vs. 50.5 expected and 50.6 last month) while the non-manufacturing PMI printed at 54.4 (vs. 53.6 expected and 53.6 last month) which left the composite at 54.2 (vs. 53.4 last month). Encouragingly, there was a broad improvement in the details for the manufacturing PMI with output, new orders and new export orders all rising from last month.

The other overnight story has come from here in the UK, with Bloomberg reporting that PM Johnson will announce £5bn of accelerated spending today in roads, schools and hospitals while promising to publish a strategy for further capital spending in the fall. The report further added that in a briefing note about the speech, Johnson’s office has said decisions over increasing taxes or cutting services to pay for the debt will have to wait. The report also added that UK’s Chancellor Sunak is poised to make an economic statement next week.

Back to yesterday. When referencing the EU Recovery plan in a joint press conference with President Macron, Chancellor Merkel made it clear the “talks won’t fail because of us, but there will be no new proposal.” This is not necessarily a negative coming from the two biggest proponents of an extensive continent-wide recovery proposal, as the President of the European Council, Charles Michel, is the one trying to craft a compromise proposal based on the original Merkel-Macron plan. All 27 EU members will convene in Brussels on July 17 to continue hammering out the details of the nearly €750bn plan. Ahead of their press conference, continental sovereign bonds were steady yesterday, with yields on 10yr bunds (+1.2bps), OATs (+0.5bps) and BTPs (+0.6bps) seeing relatively little movement.

While we’re on Europe, it’s worth mentioning a couple of ECB headlines in the light of the recent German constitutional court ruling on their asset purchases. One was a letter from ECB President Lagarde to an MEP which said that the ECB Governing Council had received a request earlier this month from the Bundesbank President “to authorise the disclosure by the Deutsche Bundesbank of non-public documents that show how the ECB has assessed and continues to assess the proportionality of the PSPP and of all its instruments of monetary policy.” It said that the Governing Council had accommodated the request and authorised them to disclose these to the German government, who in turn can share the documents with the German Parliament. This followed a report from FAZ earlier in the day that German finance minister Scholz had told the Bundestag President that the Bundesbank was “permitted to continue to participate in the implementation and execution” of the PSPP since the demands of the German constitutional court had been fulfilled.

Staying with Europe, yesterday our UK team put out a note looking at the state of play in the Brexit negotiations (link here ), and whether there’s room for a deal in the remaining time before the end of the year. Their view is that although the UK has said it wants to complete a deal by the end of the summer, the bar for this remains high. And with a deal also needing time for ratification, it could be that late October/early November becomes the real deadline. On balance, they still see a deal as the more likely outcome, with space for compromise in many of the key areas slowly emerging.

Looking at yesterday’s data releases, in Germany the EU-harmonised CPI reading rose to +0.8% in June, which was above expectations for a +0.6% reading, and up from its nearly-four year low of +0.5% back in May. Meanwhile the European Commission’s economic sentiment indicator for the Euro Area rose to 75.7 (vs. 80.0 expected), which was the second successive increase from April’s low, but still well below the 103.4 reading recorded back in February. And over in the US the data surprised to the upside, with pending home sales rebounding by +44.3% month-on-month in May, well above the +19.3% rebound expected, while the Dallas Fed manufacturing activity also beat expectations to rise to -6.1 (vs. -21.4 expected).

To the day ahead now, and one of the main highlights will be the appearance of Fed Chair Powell and US Treasury Secretary Mnuchin before the House Financial Services Committee. Otherwise, central bank speakers include the BoE’s Haldane and Cunliffe, the Fed’s Williams and Kashkari, and the ECB’s Schnabel and de Guindos. In terms of data, we’ll get the flash June CPI reading for the Euro Area, along with the preliminary June CPI for France and Italy as well. Otherwise, there’ll be Canada’s GDP for April, and from the US we have the Conference Board’s consumer confidence reading for June and the MNI Chicago PMI for June.

Published:6/30/2020 7:20:07 AM
[Markets] The Old America Is Dead: Three Scenarios For The Way Forward The Old America Is Dead: Three Scenarios For The Way Forward Tyler Durden Mon, 06/29/2020 - 00:00

Authored by Wayne Allenswroth via,

“Then who do we shoot?” Like Muley Graves the sharecropper, John Steinbeck’s evocative Okie everyman in John Ford’s 1940 film, many Americans are bewildered by a tidal wave of forces that seem beyond their control. The answer is not easy. But increasingly it seems likely to involve geographical partition.