cash Archives - The Automatic Earth

The Iranian regime will lose the zero-sum game it is playing.

Any damage it inflicts on our allies in the Gulf will be paid for with funds extracted from Iranian Accounts.

Any tolls paid to the Persian Gulf Strait Authority will be offset by funds extracted from their accounts.…
— Treasury Secretary Scott Bessent (@SecScottBessent) June 11, 2026

https://twitter.com/ConstitustionX/status/2064787055348261235?s=20

Yes https://t.co/nlWL0b2aOy
— Elon Musk (@elonmusk) June 10, 2026

JUST NOW: In a massive development no one saw coming, President Trump has publicly declared that the U.S. will seize Kharg Island from Iran.

KHARG ISLAND — the Persian Gulf outpost that controls nearly 90% of Iran’s crude oil exports (about 1.5 million barrels per day). pic.twitter.com/T3w8itrv32
— WORLD NEWS (@_MAGA_NEWS_) June 11, 2026

Could just as easily be a 4-week old headline.

• ‘They Should Have Made a Deal’: Trump Wants To Seize Kharg Island (Green)

Iran “should have made a deal,” conservative radio superstar Dana Loesch quipped on Thursday, reacting to President Donald Trump’s threat that U.S. forces “will be taking Kharg Island and other oil infrastructure” in the near future. Are we in the endgame now? At last?

UPDATE: Nope. Trump, according to the WSJ, now says he’s canceled the strikes “after Tehran’s leadership and other parties negotiating a deal to end the conflict approved ‘discussions and final points.'” Echoing what I wrote below, whatever went on behind the scenes, Trump’s threat seems to have gotten what he wanted — even if what he wanted was for the talks to drag on while Iran’s economy continues crumbling. But do read the rest of the column because it includes some fun tidbits. Original post follows.
ANOTHER UPDATE: Iran’s official news outlet, Fars, says Tehran has not agreed to the text of any agreement, for whatever that’s worth. And I officially give up! Heh.
LAST UPDATE, I SWEAR: Everything to you need to know (for now) is here: ‘We Just Made a Great Settlement of the War With Iran.’
Kharg Island sits near the northern end of the Persian Gulf — or as Trump might think of it, the Other Gulf of America — almost due east from Kuwait City. It’s only a few miles long, but as you can see from this image I captured from Apple Maps, it’s virtually covered in oil infrastructure. Oil and LNG representing more than 90% of Iran’s energy exports are processed at Kharg, stored in those massive tank farms, then offloaded to supertankers for sale around the world. Tehran could divert to other facilities, but at a comparative trickle.
It’s a single point of failure. Saddam Hussein understood this, and attacked Kharg repeatedly during the Iran-Iraq War of 1980-1988. But Iraq lacked the air power to do much harm, and he certainly lacked the naval power to seize it. The U.S. military has no such limitations. In fact, a report earlier this week revealed that the Pentagon ordered elements of the 82nd Airborne Division to Israel in March for just such an eventuality.
Kharg Island
“A military source involved in war planning tells me the deployment is tied to new U.S.-Israeli joint contingency plans, completed since February, for seizing Kharg Island and carving out coastal territory inside Iran,” Ken Klippenstein wrote. According to his report, the soldiers deployed to Israel are from the 2nd “Geronimo” Battalion, 501st Infantry Regiment. The 501st dropped behind Nazi lines in Normandy on D-Day, fought the Battle of Hamburger Hill in Vietnam, was one of the first units sent to Afghanistan after 9/11, spent a year in Iraq during some of the worst fighting there, and much more. In short, the 501st is storied, and its men are badasses. But I digress.
If Trump does order in the Marines, Airborne, or other forces, I suppose it will prove the first real test of American troops against enemy drones. Godspeed, fellas. Trump’s full statement — on Truth Social, of course — reads: “The United States will be hitting Iran (Whose Navy, Air Force, Radar, Anti Aircraft, and all other forms of Defense, together with most of its offensive capability, are GONE!), VERY HARD TONIGHT. At some point in the not too distant future, we will be taking Kharg Island, and other oil infrastructure points, and assume total control of their Oil and Gas Markets, much like we have with Venezuela, which is working out brilliantly for both Venezuela and the United States of America.”
He finished with the now S.O.P., “Thank you for your attention to this matter!” which I just love. All that said, this could be more of Trump’s bluster, purposely designed to keep Iran’s Remnant Regime guessing, off-guard, and wondering if they’ll ever get a deal before their money runs out. Lowy Institute’s R.N. Prasher this week was hardly the first to ask whether Trump’s “protracted” negotiations are “part of U.S. strategy” to bring Iran “to an economically and logistically weak state where it has no option” but to give up its nuclear program and stranglehold on Hormuz. Despite a moment of impatience I suffered last month — and honestly, hits me at least once a day — Trump likely has turned the Mullahs’ “rug-merchant” negotiation tactics against them.
But that doesn’t mean that Trump hasn’t run out of patience, too, particularly after this week’s downing of a U.S. Army helicopter over the Gulf. Only the White House knows for sure, so stay tuned.

Or not.

• Trump: Iran Deal Should Be Done ‘Pretty Quickly’ (ZH)

President Donald Trump announced Thursday evening that he had cancelled scheduled U.S. strikes and bombings against Iran, citing rapid progress on a U.S.-Iran memorandum of understanding (MOU) aimed at extending a fragile ceasefire and launching formal negotiations on Tehran’s nuclear program. In a Truth Social post and a phone interview with the New York Post, Trump said the agreement was “pretty much all wrapped up,” with documents at a “fairly final stage.” He added that he had spoken with Israeli Prime Minister Benjamin Netanyahu and claimed the deal had received approval at the highest levels in Iran and from multiple regional players, including Saudi Arabia, the UAE, and others. The U.S. naval blockade of Iranian ports will remain in place until the deal is signed, with time and location of the signing to be announced shortly.

President Trump in the Oval says:
-a signing could happen as soon as this week
-Trump says it’s a “strong” MOU “that’s a little conceptual” and “very detailed”
-the US will lift its blockade when the deal is signed
-Trump thinks the time from the MOU to a final deal will go…
— Haley Bull (@HaleyBullNews) June 11, 2026

The Israeli Prime Minister’s Office later confirmed that Trump spoke with Netanyahu this evening specifically about the emerging MOU. According to the readout, Netanyahu expressed appreciation for Trump’s commitment that any final agreement would require the removal of enriched nuclear material, dismantling of enrichment infrastructure, limits on missile production, and an end to Iran’s support for terrorist proxies – even though Israel is not a direct party to the MOU. Earlier in the day, Trump had sharply escalated rhetoric by threatening to seize Iran’s key oil-export hub at Kharg Island and hit Iran “very hard,” a move widely seen as leverage that may have accelerated the diplomatic opening.
“President Trump spoke this evening with Prime Minister Netanyahu regarding the emerging memorandum of understanding (MOU) with Iran to enter into negotiations,” the PM’s office wrote on X. “Even though Israel is not a party to the memorandum of understanding, the Prime Minister expressed his appreciation for President Trump’s commitment that the final agreement at the conclusion of negotiations will include the removal of enriched material, the dismantling of enrichment infrastructure, limits on missile production, and the cessation of Iran’s support for its terrorist proxies in the region.”

Rickards says Iran is winning. Wonder what he means by that.

He’s OK with Iran having nuclear bombs. That’s his choice. Trump chooses differently. As does Israel.

Rickards draws comparisons to WWII and Vietnam. Is that wise?

• Trump’s 3 Bad Options in Iran (James Rickards)

Trump has three ways out of the Iran War. While the choices are all bad for Trump, they are not all bad for the U.S. economy. Some are better than others. Trump’s choice will not only determine the outcome of the war, it will determine the path of the U.S. economy over the year to come.

Choice One is surrender.
Basically, the U.S. would withdraw from the Iran War without having achieved any of its major goals (not that those goals have ever been well articulated by the administration). Iran would still have its highly-enriched uranium (HEU). The Iranian regime, consisting of the Iran Revolutionary Guard Corps (IRGC) and Supreme Leader Mojtaba Khamenei or a successor, would still be in charge. The Iranian people would be largely unified behind new leadership who are younger than the leaders Trump killed. This new group, in their 40s instead of their 70s and 80s, would feel more nationalist and more comfortable in power than their predecessors.
Iran would suffer enormous infrastructure damage, but it can repair and replace those assets over time. Most importantly, Iran would have de facto control of the Strait of Hormuz — something it has threatened but never actually accomplished in the 47 years since the Iranian Revolution.
Choice Two is stalemate.
This is basically the current state of the war. Calling it a ceasefire is a joke. Iran recently attacked the Kuwait airport and Israel. The U.S. bombed radar facilities in Iran. Israel struck Iranian energy infrastructure. Hezbollah and Israel continue to fight it out in southern Lebanon. This is a low-intensity conflict — all sides back off after a few strikes. But it’s not a ceasefire.
The stalemate suits Iran because it gives them time to dig out missile sites, build more drones and receive financial assistance from Russia and China. The stalemate suits the U.S. because it gives us time to rebuild stockpiles of cruise missiles and Patriot anti-missiles.= Most importantly, the stalemate favors Iran because the Strait of Hormuz remains closed. Iran can suffer economic consequences longer than the world can do without Persian Gulf oil, liquid natural gas, helium, nitrates and sulfur. It’s a game of chicken, and the U.S. will swerve first because it has more to lose.
Choice Three is escalation.
The logic is simple. Trump won’t surrender, and the game of chicken can’t go on much longer.= Trump will unleash the U.S. Department of War to bomb Iranian infrastructure, including bridges, railroads, key highways and telecommunications. Bombing may include sites believed to hold the Iranian HEU. More extreme versions of escalation could include a special operations mission to seize the Iranian HEU or precision bombing aimed at Iran’s oil export facilities on Kharg Island, or even desalination plants. The idea is to bomb Iran into submission and get the deal Trump wants while avoiding the stigma of surrender.
All three choices will fail. A surrender might be papered over with some kind of memorandum involving an “agreement to agree” in the future, but the world will see it for what it is — just another Iranian stalling tactic that preserves the status quo for Iran and solidifies the rule of a new younger regime. Iran won’t give Trump the satisfaction of saving face because Iran is winning. Trump won’t accept surrender because of ego and the bad optics. Neither side will accept the deal the other wants. So there will be no deal.
Choice Two will fail because the current stalemate is unsustainable. The world has been without Persian Gulf oil exports for almost four months. A combination of Gulf oil already underway in tankers before the Strait was closed, some increased production from the U.S. and Russia and a drawdown of strategic reserves by various countries has kept the global industrial economy going. Those lifelines are running out. There is no more Gulf oil in tankers on their way. Reserves are reaching critically low levels, at which pumps and pipelines begin to break down. The U.S. and Russia can supply some oil to their friends, but there’s not enough to go around.
Time is almost up on the stalemate. Something has to give. Escalation may be attempted, but it will fail also. There is no history of a side being bombed into submission without boots on the ground. Germany tried to bomb Britain into submission during the Battle of Britain, the first major military campaign fought entirely with air forces. It failed. Germany was never able to invade. The firebombing of Dresden did not defeat the Germans. It took D-Day, the Battle of the Bulge and the Red Army marching on Berlin after destroying Warsaw.
The firebombing of Tokyo, which used napalm on wooden structures, did not defeat the Japanese. The atomic bombs may have ended World War II, but that’s an exception that proves the rule. Is anyone up for using nukes in Iran? Ten years of bombing North Vietnam did not win the war in Vietnam. The U.S. never invaded the North in that war. In short, bombing doesn’t work without a land invasion.Invading Iran would be a military undertaking on a massive scale. With 80 million people and a landmass roughly the size of the U.S. east of the Mississippi River, Iran would require perhaps 60 divisions organized into six armies and two Army Groups, backed by air power, naval aviation and submarine-launched missiles.
Anything short of that would risk defeat. You can escalate all you want, but it won’t win the war. Surrender would be the best result for the U.S. economy.

If Russia/Ukraine is any example; be careful.

• Bessent To Use Frozen Funds To Reimburse Gulf Allies: ‘Iran Will Pay’ (ZH)

US Treasury Secretary Bessent announced on X Thursday morning that Washington is moving forward on a plan to compensate America’s Gulf regional allies for damage sustained during Iranian counterattacks on their energy and civic infrastructure. He made clear that any damage to Gulf allies would be paid for with frozen Iranian funds, which Tehran leadership has long blasted as blatant theft. According to Bessent’s latest announcement: “The Iranian regime will lose the zero-sum game it is playing.” The Treasury Secretary listed out the following new policy and plan:

Any damage it inflicts on our allies in the Gulf will be paid for with funds extracted from Iranian Accounts.
Any tolls paid to the Persian Gulf Strait Authority will be offset by funds extracted from their accounts.
Every attack Iran launches will only deepen the economic and financial consequences it faces.
via Reuters – Interestingly, there is implicit here a possible acknowledgement that US forces won’t be able to immediately be able to stop Iran from enacting its toll collection protocol, which it has hinted is being done in coordination – or at least with an ‘understanding’ – from Oman, which itself has come under pressure from the Trump administration of late. Over eighty oil, gas, and vital infrastructure facilities across the Gulf have been hit – with most of the attacks having occurred in March and April – with one recent report estimating up to $58 billion in damage. Iran has sought to justify these attacks as ‘retaliation’ for these Gulf countries hosting American bases during the US unprovoked assault on the Islamic Republic.
An unnamed US official had previously told ABC’s Senior White House correspondent Selina Wang last weekend: “Treasury will utilize all tools available to allow Iranian assets to be made available to our Gulf allies to support rebuilding and repairs for any future damage caused by Iran.” “The Secretary has also directed his team to assess conditions amongst our Gulf allies and request comprehensive estimates of the costs associated with repairing damage Iran has inflicted since the start of the conflict,” the source had added.
Also as part of that earlier reporting, it was revealed: The Iranian assets could include frozen assets and ships the U.S. has seized. The administration is reaching out to Gulf allies right now and asking for their evaluation. This is only likely to further derail efforts to get Tehran and Washington back to the negotiating table. Already the US has balked at Iran’s own insistent it be given reparations for damage done. Iran is meanwhile still demanding that its billions in funds long frozen by Washington be given back as part of a deal. The Trump administration has so far rejected this, at least in terms of its public-facing position.

FOMO.

• SpaceX Prices Biggest Ever IPO At $135 Per Share (ZH)

While there was little doubt as to SpaceX’s actual IPO price, which due to its novel structure was always going to be $135, and unlike the proposed IPO price ranges as is customary for other initial offerings, moments ago SpaceX (SPCX) made it official when it filed a free writing prospectus (FWP) which confirmed the company sold 555.6 million shares at $135 each, for a total size of $75 billion (excluding the greenshoe), making history with the biggest-ever IPO, launching it into the top ranks of the largest public companies and putting founder Elon Musk on the verge of becoming the world’s first trillionaire.

For context, SpaceX is more than double the size of the previous largest IPO – Saudi Aramco’s $29.4 billion listing in 2019. The SpaceX registration statement was declared effective June 11. The details of the pricing are shown below. At $135, SpaceX will have a market value of $1.77 trillion. Accounting for employee stock options and restricted share units, the pricing gives it a fully diluted valuation of about $1.8 trillion. SpaceX’s market value will rank it among the top 10 public companies globally, and make it larger even than Musk’s own Tesla. According to Polymarket, there is a 84% chance the IPO closes above its offering price tomorrow, and a 46% chance it rises more than 20%.
SpaceX, which made a net loss of $4.9bn in 2025, is made up of three businesses: space exploration, including its Falcon and Starship rockets; connectivity, such as its Starlink satellite constellation providing high-speed internet access; and artificial intelligence, though its xAI division. Musk’s fan base in the retail trading community is a crucial component of the deal: they have placed more than $100 billion in orders for the stock, Bloomberg reported, far more than the 20% of shares that had been reserved for them.
Yet not everyone is so excited. Noted short-seller James Chanos on Wednesday called it “a hopes-and-dreams IPO” driven by enthusiasm for Musk and artificial intelligence rather than the fundamentals of a company that has yet to post a profit.“The total addressable market for space is infinite,” Chanos, founder of Chanos & Co., said at the iConnections Global Alts conference in New York on Wednesday. “You can build whatever stories you want — colonies on Mars, factories on the moon, data centers in space — to justify the valuation.”
Investment research group Morningstar calculated that SpaceX is worth only $63 a share – half the IPO price – and warns there is “a major disconnect between market expectations and underlying fundamentals”. Michael Field, the chief equity strategist at Morningstar, suggests investors should sit out the IPO and wait for “a more attractive entry point down the line”. “We believe the business has real strengths, particularly in Starlink, but with so many unknown and untested technologies underpinning much of the valuation price, particularly within the AI business, we think the valuation is extremely speculative,” Field said.
Still, even among the skeptic about the company’s current valuation, many acknowledge Musk’s achievements building Tesla and SpaceX into giants – and making money for investors, thanks in part to his loyal retail investor fanbase. Coupled with rule changes that could fast track the stock into benchmark gauges like the Nasdaq-100 Index (if not the S&P where there will be at least a one year delay), demand from passive funds and retail investors unable to buy at the IPO price should set the stage for a solid cohort of buyers for shares of the rocket, satellite and AI company once they start trading.
“It’s probably the most hopeful IPO,” said Kim Forrest, chief investment officer at Bokeh Capital Partners, adding that she doesn’t buy IPOs. Buyers of SpaceX “want to be part of the future,” she said. “And I think that’s oddly hopeful in this time when we’re moving between the poles of greed and fear.”
As Bloomberg notes, SpaceX is the first of three major IPOs expected to capitalize on stock investors’ appetite for the leading AI companies, a seemingly insatiable demand that has propelled benchmark US indexes to records this year despite the acceleration in inflation and economic disruption caused by the war in Iran. Anthropic PBC and OpenAI, two of the company’s AI competitors, are expected to go public as soon as this year and could seek valuations of more than $1 trillion each, so the performance of SpaceX’s stock will be as closely scrutinized by Silicon Valley venture capitalists as it is by Wall Street traders. The deluge of public equity, on top of an $85 billion equity offering from Alphabet Inc. and the potential for other big-tech firms to follow suit, is triggering a debate over whether there is enough investor demand to meet the incoming supply. “
It’s a big deal as a kind of precursor for Anthropic and OpenAI,” said Anthony Saglimbene, chief market strategist at Ameriprise. “When I look at all three of those and the amount of capital that these companies are raising, it tells me that the demand for AI is still very strong even though we’ve seen more volatility. And I think some of that volatility in the market has been positioning around the expectations for these IPOs.”

Accountants in space.. Why am I thinking of Miss Piggy?

• After SpaceX IPO, Jefferies Lays Out Five Takeaways For Space Boom Into 2030s (ZH)

Friday’s SpaceX IPO will be a defining moment not only for capital markets but also for the booming space industry and Elon Musk’s broader industrial empire, which has catapulted America to the lead in the space race against Communist China and Russia. Ahead of the four-times-oversubscribed SpaceX IPO, we explained to readers how to profit from the incoming data center boom in low-Earth orbit and broke down the mechanics of the IPO in an easy-to-understand format. Next, we want to give readers the opportunity to understand where the space industry is headed to position bullish bets, as this industry will likely have tailwinds for years to come. It’s all about following the money.

We are leaning on Jefferies analyst Aniket Shah’s Wednesday report, which provided a roadmap for understanding the space industry through five easy takeaways. 1. The global space economy has reached $600bn, potentially tripling to $1.8trn by 2035. Commercial activity accounts for 80% and spans satellite TV, broadband, GPS infrastructure, and satellite manufacturing. The remaining 20% is government spending. Within the investable “backbone” of physical infrastructure, state-sponsored spending is projected to grow faster than commercial, rising from $125bn to $320bn (+256%) vs $205bn to $435bn (+212%) for commercial over the next decade. Defense is the fastest-growing category within the space economy.
2. Th e US accounts for 60% of global government spending on space; China ranks second. US government space spending is ~$80bn, more than the rest of the world combined. China spends ~ $20bn, but this figure is not PPP-adjusted, meaning its effective spending power is materially closer to the US than the nominal gap implies. Japan is a notable third player, having designated space as one of Prime Minister Takeshi’s 17 strategic sectors (see here & here). China has similarly identified space as a strategic area in its 15th Five-Year Plan (see here & here).
3. Space Force budget surged 40% in one year, fueled by the Golden Dome program. Golden Dome is a top strategic priority driving the budget surge. Golden Dome is a multi-layered missile defense initiative that integrates space-based sensors, interceptors, and AI-enabled command and control to address ballistic, hypersonic, and cruise missile threats. Space Force now commands ~$40bn and the Missile Defense Agency ~$10bn, totaling ~$50bn, far exceeding NASA’s budget ($24.4bn).
4. SpaceX has captured a structural share of federal space dollars. It is NASA’s largest commercial contractor and plays a critical role across launch services, communications, IT, and the broader data layer of the space architecture. The US government has effectively outsourced significant space activity to SpaceX, creating an inextricable linkage between federal spending priorities and the company’s business.
5. US vs China: Moon Race 2.0 is accelerating. The rivalry plays out across three dimensions: lunar programs, global coalitions, and codified policies.
Lunar programs: The US targets a crewed lunar landing by 2028 and a lunar outpost by 2030; China targets a crewed landing by 2030 and an outpost by 2035.
Global coalitions: The US-led Artemis Accords have 67 signatories, while the China-Russia International Lunar Research Station coalition has <20.
Codified policies: President Trump has issued executive orders on Iron Dome for America, commercial space competition, and ensuring US space superiority. China’s 15th Five-Year Plan also prioritizes space competitiveness.

Merkel sees the world through post Cold War East Germany eyes. The State decides, not the people.

• Merkel Repeats Call for Crackdown on Free Speech (Turley)

The European Union recently announced the first recipients of its new European Order of Merit, the organization’s highest award. The headliner was Angela Merkel, former Federal Chancellor of Germany, who indeed personifies the European Union for both her fans and her critics. For many years, some of us have criticized Merkel as one of the leading forces behind European censorship efforts that have eviscerated the “Indispensable Right.” Not surprisingly, Merkel called for more censorship and attacks on free speech to a thrilled audience of EU bureaucrats and globalists.

In one of the most ironic moments, Merkel declared, “Europe was not handed to us. It was built treaty by treaty, crisis by crisis and by people who chose solidarity over division and cooperation over self-interest.” Indeed, it was not handed to them. As I discuss in my new book, “Rage and the Republic, the EU was formed by design to incrementally get citizens in Europe to give up their national identities and rights: The EEC worked to remove barriers to trade and coordinate national regulations to achieve greater uniformity. As nations conformed to such transnational standards, the final step toward transnational governance became less of a conceptual barrier for citizens, particularly younger citizens…
…The evolution of the EU is a cautionary tale. It began with assurances of marginal coordinating bodies and policies over areas like nuclear power and scientific research. Through this planned incrementalism, each insular move was defended on its narrow purpose while dismissing objections as nationalistic or conspiratorial. That planned incrementalism worked brilliantly in getting citizens to accept transnational governance.
Merkel was critical in that effort. She is blamed for opening the borders to a flood of undocumented immigrants that has caused rising violence and protests throughout Europe. However, her crowning jewel was the crackdown on free speech. She can honestly claim that Germans (and Europeans as a whole) have fewer rights after her public service. She increased the power of government, stripped away free speech rights, and reduced national identities without firing a shot.
Merkel consistently opposed free speech, building a censorship system that gave the government ever greater control over speech. Her decision to first apologize to authoritarian Turkish President Recep Tayyip Erdogan for a satirical poem and then approve the prosecution of the comedian is a shocking and chilling disgrace. Now, she is throwing her support behind a crackdown on “hate speech” on social media like Facebook, Twitter, and YouTube — radically expanding the already broad scope of government regulation of speech.
Merkel declared, “I support efforts by Justice Minister Heiko Maas and Interior Minister Thomas de Maiziere to address hate speech, hate commentaries, devastating things that are incompatible with human dignity, and to do everything to prohibit it because it contradicts our values.” Merkel was a driving force in using such subjective standards as “compatibility with human dignity” as a foundation for government-imposed speech controls. Merkel also threatened social media companies, warning they would face a government crackdown if they failed to get rid of “fake news.” Merkel insisted that such postings must be dealt with by the companies or the government will step in.
In her speech in May to the EU, Merkel doubled down on her attacks on free speech as a threat to the world order. She called for the prosecution of American companies for spreading “disinformation” and “hate” online. She denounced the “so-called social media” platforms as still not facing “accountability for lies.” She added, “I can only encourage you to continue regulating social media.”I could think of no better recipient for the first European Order of Merit. No one better sums up EU values than Angela Merkel and her unrelenting campaign against free speech. For globalists who have called for “A New World Order with European Values,” Merkel is the perfect personification of a globalist dream of a world of regulated speech and transnational government.

Holland: no cash.

Greece: all cash.

• Europe Pondering Its Cashless Economy, Return To Currency (JTN)

Sweden has led the way in Europe’s transition to a cashless economy, being among the first to have credit or debit card readers at points of sale – even for something as low-cost as a newspaper so that customers no longer had to dig in their pockets for coins or paper currency. But now, the country that led Europe’s modern march toward a cashless society is among those reconsidering that journey amid growing concerns about cyberattacks, conflict, power outages, privacy and national resilience. Increasingly, policymakers in Sweden and other countries that have been pushing the trend, including Denmark, Estonia, Finland and the Netherlands are realizing that cash still matters.

Most transactions in these countries remain cashless. But the adoption rate for cashless transactions has leveled out, and now the government is creating incentives to stabilize the current level of cash usage rather than letting it fall further. “We now need to think about resilience,” Erik Thedéen, the governor of Sweden’s Central Reserve Bank, said last year. “If everything breaks down, we need to have cash.” Official government guidance in “emergency preparedness” brochures sent to Swedish households recommends citizens maintain at least one week’s worth of cash to be available in a time of crisis. Other early adopting countries are taking similar steps.
Thedéen said the reversal was sparked by a destabilized globe in which exists the threat of an expanded war between Russia and Ukraine, the threat of digital attacks, and signs from President Donald Trump that the U.S. may not come to the aid of its European allies if they were attacked. Thedéen said the country’s advanced digital payment infrastructure could make it more vulnerable.The shift does not mean Europeans are abandoning digital payments. Credit cards, mobile wallets and instant-payment apps continue to dominate everyday commerce, and few expect cash to regain the ground it has lost over the past two decades.
But most of the European Union still trails the northern European member states, where 90 percent or more of all transactions are conducted without the use of cash. In comparison, the European Union surpassed the 50-percent threshold for cashless transactions only last year. Among the European Union’s biggest economies, Italy was the laggard, ranking 21st in the 27-nation bloc in terms of frequency of cashless transactions, while smaller countries including Greece, Romania and Bulgaria remained below 30 percent.
Leaders still see overall adoption rates for cashless transactions increasing even if they level out in the countries that were quickest to adopt them. “The digital euro is not just a means of payment, it is also a political statement concerning the sovereignty of Europe,” said Christine Lagarde, the head of the European Central Bank. Cashless transactions are still broadly favored by governments because they reduce the reach of the black-market economy and make transactions traceable. Advocates say they also enhance security against physical theft and increase convenience for shoppers and vendors.

I never heard of Eurotroika before.

• Eurotroika’s Terms of Ukrainian Settlement Unacceptable — Zakharova (TASS)

The Eurotroika (the United Kingdom, Germany, and France) have proposed conditions for a settlement in Ukraine that are clearly unacceptable to Moscow, Russian Foreign Ministry Spokeswoman Maria Zakharova said.”There is nothing new in the statement of the three European leaders. They tried to promote the same theses back in 2022-2024 in the Copenhagen and Burgenstock formats, supporting the dead-end ‘Zelensky formula’. Those forums have long been forgotten because they discredited themselves, being initially aimed not at peace, but at war,” she said in a statement.

“Dmitry Sergeyevich Peskov, press secretary of the Russian president, also highlighted the contradictory positions of France, Germany, and Britain. With their statement, the leaders pretend to call for peace, but in reality, they are presenting a priori unacceptable conditions, boosting the production of long-range weapons for Kiev, and generally advancing the militarization of Ukraine and Europe,” Zakharova added.
She pointed out that in this way the Europeans are pursuing a course aimed at “preventing the creation of conditions for negotiations on a truly comprehensive, just and lasting peace. It’s noteworthy that they don’t hide it. Two weeks ago, on May 28 of this year, the European Union’s top diplomat Kaja Kallas said the following: ‘Europe will never be a neutral mediator between Russia and Ukraine, because we are on the side of Ukraine and protect our own security interests.’ Thus, she admitted that Europe is claiming a place at the negotiating table, in fact, as part of a united delegation of the West and Ukraine against Russia,” Zakharova added.
About the statement of Eurotroika
On June 7, French President Emmanuel Macron, German Chancellor Friedrich Merz, British Prime Minister Keir Starmer and Vladimir Zelensky held talks on Downing Street. Following the meeting, they issued a policy statement with five basic conditions for starting the settlement process, including security guarantees for Ukraine, the deployment of multinational forces, the continued freezing of Russian assets until full compensation for damage, and an immediate and complete ceasefire.

Don’t like mail-in ballots? Don’t deliver them.

• USPS Proposes Halting Delivery of Unverified Mail Ballots (AmG)

The US Postal Service (USPS) has proposed a new rule requiring states to share voter information related to mail-in and absentee voting. The proposal follows a March executive order from Trump aimed at tightening regulations governing mail-in voting in federal elections. Trump has made election integrity a central focus of his second administration, issuing executive orders designed to require proof of citizenship for voters and combat mail-in voting fraud. The administration has argued that stronger verification measures are necessary to restore confidence in elections and safeguard the voting process.

Several of those initiatives have faced legal challenges. Courts have blocked certain provisions, including proof-of-citizenship requirements, while appeals remain pending. Democratic-led states have also filed lawsuits challenging the administration’s mail-in voting policies. As litigation continues, the Postal Service has moved forward with a proposal directing states and the USPS to coordinate on identifying eligible mail-in and absentee voters. Under the proposed rule, states would submit lists of voters requesting mail-in ballots, along with personalized barcodes assigned to each ballot.
The Postal Service would then return a finalized “Mail-In and Absentee Participation List” to each state’s chief election official. The list would contain the names of approved voters and the corresponding ballot barcodes associated with each voter. Under the proposal, only voters included on the final participation list would be eligible to receive mail-in or absentee ballots. The USPS said the new system would help improve transparency and provide election officials and law enforcement with additional tools to verify election procedures.
“This provision will help determine adherence to federal law and facilitate law enforcement efforts,” the proposal states. “For example, the provided lists will evidence how many ballots have been mailed, and allow law enforcement officials to compare the total number of mailed ballots to the total number of received ballots to detect potential issues meriting further investigation.” Election integrity supporters argue that the process would create a clearer chain of custody for mailed ballots and help identify irregularities that might otherwise go undetected.
The Postal Service issued the proposal May 29, one day after Trump-appointed US District Judge Carl J. Nichols denied a request from Democratic plaintiffs seeking to block the administration’s mail-in voting executive order. Nichols ruled that the challengers failed to sufficiently demonstrate that the order would cause “imminent and irreparable harm.” The plaintiffs have appealed that decision, and the Postal Service proposal remains subject to ongoing legal uncertainty while the broader litigation proceeds.

“I should ask Larry David. I should have asked his a** too.”

• Jerry Seinfeld Just Triggered the Left With Three Words (Matt Margolis)

Jerry Seinfeld walked out of Madison Square Garden on Wednesday after watching the Knicks in the NBA Finals and may have triggered the left more than Donald Trump’s attendance Monday night. As Seinfeld left the arena, TikTok streamer FinesseFave, who was live-broadcasting outside, saw him and approached him. “Oh, Jerry. What up, Seinfeld? What up? Can we get a free Palestine?” Seinfeld laughed. The FinesseFave pressed again. “Can we get a free Palestine? Come on, give us one free Palestine.” Seinfeld kept walking. “It doesn’t exist,” he said.

The streamer turned back to his audience, barely able to contain himself. “Oh my God. That was a f*****g insane clip,” he said. “He said it doesn’t exist.” Then, apparently regretting a missed opportunity, he later added, “I should ask Larry David. I should have asked his a** too.” Here is the clip. Obviously, there was foul language:
https://twitter.com/MaxNordau/status/2065023449450308042?s=20
The clip spread across social media almost instantly, reigniting the familiar cycle of outrage directed at one of the most famous comedians alive. You would think a 71-year-old Jewish man openly supporting Israel wouldn’t be controversial at all. The radical left has other ideas. Here’s the thing: Seinfeld’s position on Israel has never been a secret. After Hamas launched its attack on Oct. 7, 2023, he posted a statement on Instagram that made everything clear. “I lived and worked on a Kibbutz in Israel when I was 16, and I have loved our Jewish homeland ever since,” he wrote. “We survive and flourish no matter what. I will always stand with Israel and the Jewish people.”
Seinfeld’s stance on Israel is well known and consistent. These people confronting him know it too, and think they’re getting him in a gotcha moment. They’re not. During a September 2025 appearance at Duke University, he was, to say the least, unambiguous about his feelings about the Free Palestine movement. “Free Palestine is, to me, just… you’re free to say you don’t like Jews,” he said. “Just say you don’t like Jews.” He also compared the movement to the KKK. “Compared to the Ku Klux Klan, I’m actually thinking the Klan is actually a little better here, because they can come right out and say, ‘We don’t like blacks, we don’t like Jews.’ OK, that’s honest,” he said.
Here is the reality the far left refuses to sit with. Nothing Seinfeld has said is fringe or extreme. A Jewish man supporting Israel, rejecting a slogan he views as thinly veiled antisemitism, and refusing to apologize for any of it is a reasonable position held by millions of Americans. The radical left has drifted so deep into anti-Israel territory that straightforward pro-Jewish expression now reads to them as a provocation worth screaming about.
Let’s be honest, here. Seinfeld has fame, money, and nothing to prove to these bigots. He may be a liberal, but he owes the woke mob absolutely nothing, and he acts like it. That kind of backbone is genuinely rare in today’s entertainment industry, where most celebrities trip over themselves to signal the correct opinions to the right sort of people. Seinfeld doesn’t play that game, and that drives them absolutely crazy. Good for him.

Didn’t fight very hard for Bill Pulte.

• Trump Nominates US Attorney Jay Clayton as DNI (ET)

President Donald Trump on Thursday said he is nominating Jay Clayton, the U.S. Attorney for the Southern District of New York, to be his director of national intelligence. The move comes weeks after former intelligence chief Tulsi Gabbard said she is stepping down from the role. Trump, in announcing the decision on Truth Social, wrote that “few people anywhere” in the legal community have as much respect as Clayton, the former head of the Securities and Exchange Commission (SEC), whom the president also described as “highly respected.” “I encourage the United States Senate to confirm Jay as soon as possible,” he wrote in the post.

Last month, Gabbard announced she was stepping down as the head of the Office of the Director of National Intelligence (ODNI) because her husband was diagnosed with a rare form of cancer. Federal Housing Finance Agency Director Bill Pulte was named by Trump to serve as acting director in a move that drew pushback from Democratic and some Republican lawmakers. Pulte will serve as the acting U.S. intelligence chief and would take over from Gabbard later in June, Trump said on Tuesday.
Last week, the president told the Wall Street Journal that he would encourage Pulte to downsize parts of the intelligence office, which oversees 18 federal agencies and units. “I’d like to see it smaller. I think there are a lot of people in there that shouldn’t be there,” Trump said on June 5, adding that Pulte has broader latitude to make significant changes due to his being the acting head of the ODNI. “You’re less shackled,” he said. “It sort of gives you more power, you know, for a somewhat limited period of time.” Going further, Trump suggested that the ODNI could even be “terminated” in its entirety, noting that a similar downsizing process was undertaken at the Department of Education. “We’ve made the Department of Education much smaller, and likewise, this should be much smaller,” he added.
Trump praised Pulte as a “very smart guy” while speaking to reporters last week and added that he “may find out some things about the rigged elections.” The decision to name Pulte as acting director, however, prompted Democratic opposition to renew Section 702 of the Foreign Intelligence Surveillance Act (FISA) in a vote earlier this week. “Just voted NO again on a clean FISA reauthorization. We shouldn’t allow the government to conduct warrantless surveillance of Americans—especially with Bill Pulte in charge,” Rep. Sara Jacobs (D-Calif.) wrote in a post on X as the House failed to extend the provision.
Some Republican senators, meanwhile, indicated they would not have voted to appoint Pulte if Trump nominated him. “The Senate doesn’t have any role to play in terms of confirming acting officials, but I see no evidence of any qualifications for that job,” Sen. John Cornyn (R-Texas) told The Hill about Pulte. Clayton had served as head of the SEC from May 2017 until December 2020. He also served as the head of the prominent law firm Sullivan & Cromwell, one of the largest in the world.

The combination of California and wealth tax is enough.,

• Professors Behind California Wealth Tax Threaten Action (Turley)

There is an interesting controversy brewing in California after four California university professors threatened a political candidate, Richard Lucas, for criticizing them for their roles in the “Billionaire Tax” and sent him a “cease and desist” letter. David Gamage from the University of Missouri, Brian Galle and Emmanuel Saez from UC Berkeley, and Darien Shanske from UC Davis claimed that the public criticism violated anti-doxxing laws by sharing contact information. They are clearly wrong. One of the aggrieved professors, Brian Galle, teaches at Berkeley Law School called Lucas “a clown,” but insisted that sharing public information is unlawful.
Attorney Catha Worthman sent the letter, but has reportedly refused to respond to inquiries after attorneys for the Alliance Defending Freedom (ADF) pushed back on her legal claims and those of her clients. I have long been a critic of such wealth taxes, specifically California’s Billionaire Tax, as economically moronic and legally questionable. The proposal has already cost the state trillions in lost wealth as wealthy taxpayers have fled, taking their businesses and jobs with them. As I discuss in Rage and the Republic, these wealth taxes have a terrible track record and, on the federal level, face serious constitutional challenges. In California, the drafters included a retroactive clause that can also be challenged.
One of the four professors — who Lucas referred to as “the looter dream team” — destroyed the claims of many supporters that this is just a one-time tax. Some of us have written that this is simply the first salvo. Once they succeed in targeting billionaires, the same measure will likely be used for those in lower tax brackets. In a recent debate, Berkeley professor Emmanuel Saez admitted that he could not seriously claim this would be a one-time tax, as many in the public have asserted. He said they would have to wait to see if it passes, but it is likely to be repeated, and noted that there may also be a federal wealth tax on the way.
He said: “I don’t think it’s going to be a one-time tax…because you can’t surprise billionaires more than once. Even then, you know, maybe some of them were expecting something like this.So it’s going to be a debate about this time, you know, a permanent wealth tax at a low rate that’s going to last for a number of years.” Saez has publicly taunted the wealthy who are fleeing the state: He noted the move on the left to create a federal wealth tax which has been pushed by Bernie Sanders and Ro Khanna.
The legislation, “Make Billionaires Pay Their Fair Share Act,” echoes the growing “eat-the-rich” mantra on the left — seeking to replicate a disastrous push in California that has led to an exodus from that state and an estimated loss of $2 trillion in taxable assets. It is also flagrantly unconstitutional. Under the plan, Congress would target 938 billionaires to tap them for $4.4 trillion. That money would then be redistributed as a $3,000 direct payment to every man, woman, and child in a household making $150,000 or less – $12,000 for a family of four.
Now back to the legal threat. I believe that the threatened legal action is wildly off base. Putting aside the fact that this is protected speech, the two anti-doxing statutes, Penal Code §653.2(a) and Civil Code §1708.89, contain clear scienter or intent requirements. They must show that Lucas demonstrated an “intent to place another person in reasonable fear for their safety, or the safety of the other person’s immediate family.” Penal Code §653.2(a); Civil Code §1708.89. There is no evidence of such intent. If simply posting such identifying information is a violation, a significant range of protected speech would be proscribed.
There are ample reasons to criticize this tax and the claims made by its champions. There is a type of self-sustaining pattern on the left in support of such measures. Universities have largely purged conservatives and libertarians from departments, leaving most faculties with professors who run exclusively from the left to the far left.
These professors then added intellectual support for radical proposals like wealth taxes. The media then reports that experts have reviewed and approved the measures. It becomes an entirely closed loop from political groups to academics to media creating a uniform narrative. The ADF wrote a strong letter pointing out the flaws in the claims of these professors under anti-doxxing laws from the lack of intent to the protection of free speech. These professors became public advocates for this ill-conceived plan and, as a result, have drawn criticism for that advocacy.
Lucas was one of those critics: Nevertheless, the professors sent two cease and desist letters to Lucas, requesting that he remove their names and contact information from his website “California Wealth Exodus.” Lucas has remained adamant that he will not remove their contact information.
The site for figures like Galle link to his academic page, as I have done above. We routinely link to such sites for people to look at the background of figures discussed in columns. In the case of Lucas, it is also meant to allow citizens to express their views to those pushing this proposal. In my view, the threat of legal action is fundamentally flawed and would not prevail in the courts. These professors will need to respond to their critics rather than work to silence them.

”Apple and Google forcibly install age verification on every iPhone and Android device in the UK via app store updates.

No, it can’t be uninstalled.”

• Britain Goes Full Airstrip One (Stephen Green)

In George Orwell’s 1984, Great Britain was just a province of Oceania named “Airstrip One” as a none-too-subtle nod to the U.K.’s role as host to the heavy bombers of U.S. Eighth Air Force during World War II.Four decades past the real 1984, and there’s still no Oceania. But Britain looks more and more like Airstrip One as Parliament considers a bill opening up everyone’s smartphone to government supervision — and ja il time for tech execs who don’t submit. You had to figure this was probably coming, right? Right.

Reclaim the Net reports that “Ministers are reportedly drafting a law that would force Apple, Google, and the rest to make it impossible for a child to send, receive, view, or share a single nude image, with the executives who refuse facing up to five years in prison.” That might sound all well and good, but as usual, For the Children™ is little more than the government’s justification for total surveillance. “You cannot block every naked picture someone might stumble across without inspecting every picture, every message, every video call, every streamed film, on every device, all the time,” Reclaim noted, with nudity serving as “the excuse and the unbroken view into your phone is the actual prize.”
The industry term is “client-side scanning,” which sounds much nicer than “a government mandated app that looks at everything on your phone all the time.” And even that sounds better than “Big Brother is Watching You,” which is exactly what it is. As already required by Britain’s Online Safety Act, Apple and Google forcibly install age verification on every iPhone and Android device in the UK via app store updates. No, it can’t be uninstalled. As I reported in January, what this means in practice is that London’s Office of Communications (“Ofcom” in Newspeak) mandates on-device software able to read everybody’s “private” messages in real-time and scan their images, too, before any personal encryption tools come into play.
London pinky-swears that it’ll only look for CSAM and terrorism-related materials, but as the Telegram’s Zia Yusuf put it back then, “the slippery slope is obvious” and “mission creep is inevitable.” The country looking to ban traditional chef’s knives (really!) in the name of safety simply cannot be trusted with this much digital power. Nobody can, really. The way things work now, if you don’t pass the mandatory age check, the iPhone software bars adult websites on every installable browser, and the Communication Safety feature scans every AirDrop, FaceTime, Messages, and photo for nudity, blurring whatever it catches. And the Android filter works in a similar way.
All For the Children™, naturally. But as Reclaim also pointed out, client-side scanning is “a general-purpose content scanner pointed at one target this year and swivelable toward any other the next, a flyer for the wrong march, a banned book, a face the Home Office has taken against.” Now that the software is installed, Parliament can authorize the Home Office to ignore the age check and look for whatever it wants to on literally everyone’s device. That’s exactly what Parliament wants to do next.
Orwell envisioned ever-present two-way telescreens mounted on almost every wall that could only try to monitor everyone all the time. He never envisioned a telescreen that people would pay good money for, carry around 24/7, and trust with their every notion and secret.

US officials says they will SANCTION Keir Starmer and Britain if the government dares to ban X.

Trump won't tolerate dictators.

Do you firmly support trump on this? pic.twitter.com/FP684XFzHj
— Hope X (@Xmusknewsx) June 11, 2026

Bill O’Reilly says there is NO other way — President Trump has to continue to hit Iran “very, very hard.”

He argued that the only path left to end the war and bring the regime to its knees is using air power to take out key parts of Iran.

VITTERT: “Do you understand President… pic.twitter.com/BlD4O5Mfgd
— Overton (@overton_news) June 11, 2026

pic.twitter.com/Is2MNMnbI7
— Elon Musk (@elonmusk) June 11, 2026

After more than a century of construction, La Sagrada Família reached another milestone on 10 June 2026 when the Tower of Jesus Christ was lit for the first time pic.twitter.com/kKnw6kaORr
— Science girl (@sciencegirl) June 11, 2026

Support the Automatic Earth in wartime with Paypal, Bitcoin and Patreon.

Debt Rattle June 2 2026

Jun 022026

June 2, 2026 Posted by Raúl Ilargi Meijer at 9:57 am Finance Tagged with: Abrego Garcia, AI, Blanche, cash, Clint Eastwood, Cuba, Jill Biden, Netanyahu, OpenAI, physics, robot dog, Trump 14 Responses »

Giuseppe Sanmartino The veiled Christ (Christo velato) 1753

• Iran Halts All Messages With US, Orders Opening Of New Fronts (ZH)

• Trump Reportedly Ripped Netanyahu In Phone Call (ZH)

• Cuba Could Be the Bite Trump Can’t Chew (Scott Ritter)

• AI’s Coming Reality Check: When The Physics Finally Hits The Hype (IM)

• Florida Becomes First State To Sue “Unsafe” OpenAI and Sam Altman (ZH)

• The Slow Disappearance of Cash In Europe (Cláudia Ascensão Nunes)

• EU Following Path of Roman Empire’s Decline – Czech PM (RT)

• Dubious Opinion on Abrego Garcia, Bar Complaint Against Todd Blanche (Turley)

• Psychodrama (James Howard Kunstler)

• Jill Biden’s Memoir Is Going to Tear the Democrats Apart (Margolis)

• Ex-intel Official: Hunter Biden Laptop Letter Was Deception Operation (Turley)

• Aww Look At The Cute Dancing Robot Police State Surveillance Dog…(MN)

• Happy Birthday, Clint Eastwood — and a Happy Retirement, Too (Stephen Green)

Iran really wants to make a deal, and it will be a good one for the U.S.A. and those that are with us. But don’t the Dumocrats, and various seemingly unpatriotic Republicans, understand that it is MUCH tougher for me to properly do my job and negotiate, when political hacks keep… pic.twitter.com/aqE6G0UKGv
— Commentary Donald J Trump Truth Social Posts On X (@TrumpTruthOnX) June 1, 2026

Treasury Secretary Scott Bessent delivered the perfect answer when Maria Bartiromo asked whether he is confident that the Iranians will keep their promises when it comes to a deal.

He ended with a warning to the regime.

BESSENT: “Well, what I have confidence in is that… pic.twitter.com/kVcZcXPFMU
— Overton (@overton_news) May 31, 2026

https://twitter.com/MAGAVoice/status/2061622319664243021?s=20

In the last two weeks I've taken out many bad Political "Leaders” and Pundits including Senator Bill Cassidy of Louisiana, Lightweight “Congressman” Thomas Massie of Kentucky, Brad Raffensperger of Georgia, REALLY DUMB Stephen Colbert of CBS, and others. My score, for two weeks,… pic.twitter.com/wgsGOjf0mj
— Commentary Donald J Trump Truth Social Posts On X (@TrumpTruthOnX) June 2, 2026

Iran can and will play this game forever if you let them.

• Iran Halts All Messages With US, Orders Opening Of New Fronts (ZH)

Merely last week, Western MSM press reports were touting the usual ‘close to a deal’ headlines, but this morning demonstrates how illusory such claims were and are, as Iranian state media now suggests a total halt in communications between the sides. Per state Tasnim, “Iran stops exchanging messages with the US in protest against Zionist crimes.” This as the IDF has sent ground forces deep into Lebanon, past the Litani River – in the deepest operation in decades. Tehran has insisted on linking up any US-Iran deal with a Israel-Lebanon peace. Tehran is now warning to “completely block the Strait of Hormuz, including the Bab al-Mandab Strait” – the latter with the cooperation of Yemen’s Houthis. All of this has direct impact on the US-Iran ceasefire:

IRAN’S STATE TV SAYS PROBABILITY OF CEASEFIRE BETWEEN IRAN AND U.S. ENDING IS HIGH IF ATTACKS ON LEBANON DO NOT STOP. Below is the full translated statement:
• “The determination of the Iranian armed forces and all axes of the resistance front to respond to Zionist crimes and open new fronts”.
• “Tasnim has obtained information indicating that, given the continuation of the Zionist regime’s crimes in Lebanon and considering that Lebanon was one of the preconditions for the ceasefire and that this ceasefire has now been violated on all fronts, including Lebanon, the Iranian negotiating team is stopping “talks and exchange of texts through a mediator”.”
• “The immediate cessation of the Zionist regime’s aggressive and brutal army operations in Gaza and Lebanon and the necessity of the regime’s complete withdrawal from the occupied areas in Lebanon have been emphasized by Iranian officials and negotiators, and there will be no talks until Iran and the resistance’s views on this matter are met”.
• “Also, the Resistance Front and Iran have set their agenda to completely block the Strait of Hormuz, and activate other fronts, including the Bab al-Mandab Strait, in order to punish the Zionists and their supporters”.
Oil jumps on the headline of halted talks… Futures slide…
Author and University of Chicago professor of the ‘realist’ school Robert Pape says the following on Monday published report: “We will run out of our cushion of oil inventories in July, whether it’s the middle or end of July,” he said. “And Iran knows that. So what Iran is doing is just stringing out the clock to get a better deal.” “What that tells me is they’re not interested in returning the price of oil back to where it was before the war,” he said. “I think what we need to understand is Iran’s goal is to continue instability, continue elevated price of the world’s oil because it gains from that.”
[..] CENTCOM: Intercepted Pair of Ballistic Missiles on Base On Monday morning US Central Command issued its official statement and explanation over the earlier tit-for-tat brief flare-up in fighting, which appears to have ended… “Last night at 11 p.m. ET, U.S. forces successfully intercepted two Iranian ballistic missiles targeting American forces based in Kuwait. These missiles were immediately defeated and no American personnel were harmed,” it said. “U.S. Central Command remains vigilant and will continue to protect our forces from Iranian aggression while supporting the ongoing ceasefire.”
Fresh Missiles on Kuwait
The extended US-Iran ceasefire is once again being severely tested, after Iran earlier in the daylight hours of Monday initiated fresh attacks on neighboring Kuwait and even released video showing footage of a ballistic missile launch. Kuwait in turn confirmed that has been intercepting inbound drone and missile fire. It hosts a major American base, which is again being targeted, though it’s unclear if anything has been hit. The IRGC subsequently identified that it targeted the US base in response to weekend US strikes on Iranian sites. According to a description of the released propaganda video:
The start of the video includes a close-up of what looks to be a sticker on the body of a missile depicting a bruised US president Donald Trump, on the phone asking for help, and overlaid on a “closed” Strait of Hormuz. The caption reads: “Until the last American soldier leaves the region.”

Iran's IRGC released footage showing the moment it launched missile attacks on what it claimed to be US airbases in Kuwait early Monday.

READ MORE: https://t.co/yRpPilUQ9S pic.twitter.com/f1Q2l5OnMu
— Rudaw English (@RudawEnglish) June 1, 2026

All sides, including the Iranians and Kuwaitis, are saying they have a right to defend themselves. The United States, for its part, has said that it bombed radar and drone sites in Iran in response to the Iranians having shot down a US drone over the weekend.

Trump doesn’t want to leave the US in an ongoing war in 2028/9.

• Trump Reportedly Ripped Netanyahu In Phone Call (ZH)

A bizarre and unexpected evening report from Axios says that President Trump ripped into Netanyahu during a phone call, cussing at him and essentially ‘steamrolled’ him – angry over breaking the Lebanon truce and demanding that Israel’s military not attack Beirut. Trump is said to have told Netanyahu “you’re fucking crazy’” while demanding Lebanon truce: “I’m saving your ass,” he also reportedly said. Iran early Monday said it halted talks with Washington because of Israel’s escalation in Lebanon. From the report:

One U.S. official said Trump told Netanyahu that following through on his threats to bomb the Lebanese capital would further isolate Israel around the world. Two of the sources said Trump claimed he’d helped keep Netanyahu out of jail — a reference to his support during Netanyahu’s corruption trial. Summarizing Trump’s remarks to Netanyahu, the U.S. official said: “You’re fucking crazy. You’d be in prison if it weren’t for me. I’m saving your ass. Everybody hates you now. Everybody hates Israel because of this.” A second source briefed on the call said Trump was “pissed” and at one point yelled at Netanyahu: “What the fuck are you doing?” And more:
The second U.S. official claimed that, in reality, Trump had “steamrolled” Netanyahu on the call. “Bibi said, ‘OK, OK, just make sure everything is taken care of,'” according to the official. The level of detail in this call ‘leak’ is remarkable, suggesting it was an ‘official leak’ or intentional.
Fresh reports of fighting, amid shaky truce declaration: Sirens sound in the border community of Metula amid an apparent Hezbollah rocket attack from Lebanon. The rocket fire comes despite US President Donald Trump announcing that Hezbollah would stop carrying out attacks on Israel amid the ceasefire. Meanwhile, Iran claims it attacked a US container ship in the Sea of Oman (Fars News).
Lebanon Truce Affirmed
The Lebanese presidency has announced that Hezbollah agreed to a US proposal on the mutual cessation of attacks, which will expand to all Lebanese territory. Per a regional Arab correspondent: “As we emphasized, the Israeli attack on Lebanon was obstructing the reaching of the agreement. The mediators exerted great effort today, and after the American pressure and the Israeli retreat, the doors are now open to return the negotiations to their natural and positive course, and there is no longer much left.”
[..] Trump Suggests He is Forging Lebanon Ceasefire
Trump has announced the “shooting will stop” in Lebanon, after a flurry of phone calls, including with Netanyahu. This came shoon on the heels of Hezbollah signaling it is ready to agree to an immediate truce. Israel too has reportedly halted plans to begin new airstrikes on Beirut. The Lebanon crisis caused Tehran to earlier announced it is halting all contacts with the US. Will the US-Iran talks now be back on?
Trump to CNBC: ‘I don’t care’ if talks are over
Trump has shrugged off the apparent collapse of talks with Iran, after Tehran earlier said it has halted all communications with Washington over Israel’s expanded assault on Lebanon and Hezbollah. Trump has freshly told CNBC by phone, “I don’t care if they’re over, honestly.” “I really don’t care. I couldn’t care less,” he added, and indicated he was “going to ask” Israeli Prime Minister Benjamin Netanyahu “what’s going on with Lebanon.” This suggests Trump could pressure America’s ally to lower tensions.
Trump appears to be betting the US can ‘outlast’ the Islamic Republic, in terms of inflicting economic pain amid the growing global oil supply crisis due to the Hormuz Strait closure. On this, he reacted as follows: He also said he wasn’t worried about oil prices, which spiked following the report in Iranian state media that Tehran is vowing to “completely block” the Strait of Hormuz in addition to halting negotiations. “I think the oil will be dropping like a rock in the very near, you know, the very near distance,” Trump said.
President Trump tells NBC News that he’s not heard from Iran on reports they’re suspending talks, and on Iran, “I think we’ve been talking too much if you want to know the truth, going silent would be very good” We’ll keep the blockade in Hormuz. I think I can wait as long as they want. They’re losing a fortune.His comments to NBC: “It’s an appropriate thing to say, because they’re better negotiators than they are fighters,” he said in a brief phone call. “But they haven’t informed us of that.”
“It doesn’t mean we’re going to go and start dropping bombs all over there,” added Trump, who said Friday he would soon decide on a proposed deal to extend an ostensible ceasefire agreed to in early April. “We’ll keep the blockade.”

They want a peaceful transition away from the Castro clan.

• Cuba Could Be the Bite Trump Can’t Chew (Scott Ritter)

With much of the world’s attention on the still unresolved conflict between the US and Iran, the average consumer of news may be forgiven if they had forgotten that the US had, on January 3 of this year, launched a mini-invasion of Venezuela which resulted in the deaths of scores of persons, including a number of Cuban security personnel, and the capture of Venezuela’s President, Nicolas Maduro, and his wife. The US justified this action by noting that Maduro was, in its books, a fugitive from justice, having been previously indicted in a US Federal Court on narcotics trafficking charges.

The ease with which the US orchestrated the collapse of the Maduro regime and facilitated the transfer of power to a more than compliant vice president, Delcy Rodriguez, helped the administration of President Donald Trump project an aura of invincibility when it came to the implementation of what the President and his advisors were calling the ‘Donroe Doctrine’, their take on the 19th-century Monroe Doctrine which declared the Western Hemisphere to be the exclusive domain of the US.
Little more than a week later, on January 11, President Trump posted on his Truth Social account what amounted to a direct threat against the government of Cuba. “Cuba lived, for many years, on large amounts of OIL and MONEY from Venezuela,” the President wrote, stating that there had been a direct relationship between Venezuelan economic support to Cuba and Cuban security support to Venezuela. “Venezuela now has the United States of America, the most powerful military in the world (by far), to protect them, and protect them we will. THERE WILL BE NO MORE OIL OR MONEY GOING TO CUBA—ZERO! I strongly suggest they make a deal, BEFORE IT IS TOO LATE!”
The president then set off a firestorm of speculation on American social media when, responding to a joking post that was made on X late the week prior stating that said, “Marco Rubio will be president of Cuba”, he wrote in response “sounds good to me!” Regime change in Cuba, it seemed, was on the cards.
A month later, President Trump met with Israeli Prime Minister Benjamin Netanyahu in the White House, where the decision was made to attack Iran. The US and Israel launched a surprise attack on Iran on February 28, starting a 37-day campaign that ultimately saw the US and Israel fail to achieve any of their stated military and geopolitical objectives, and which left Iran in a position where it dictated the fate of the global economy by controlling the flow of oil and gas through the Strait of Hormuz.
An invasion of Cuba was no longer a top Trump administration policy.Almost overnight, this calculus changed. On May 21, Marco Rubio declared that Cuba was “one of the leading sponsors of terrorism in the entire region.” His comments came the same day that the US Department of Justice unsealed an indictment against former Cuban President Raul Castro. In one day, the Trump administration had reconstructed the pathway toward military action by the US against Cuba, mirroring the regime change justifications that had been cobbled together before the January 3 assault on Caracas that led to the capture of Nicolas Maduro and the collapse of his regime. These actions coincided with the arrival of a US carrier battlegroup off the shores of Cuba.

AI for the first time gets some counterweight. There’s never enough energy, and there’s never enough money.

• AI’s Coming Reality Check: When The Physics Finally Hits The Hype (IM)

In five years, we’ll all likely be chuckling and shaking our heads over AI. Because today, the tech feels free and limitless, doesn’t it? People are generating endless content: images, videos, memes, code snippets, social posts. Companies are bolting AI onto products by default, the way every Fortune 500 company suddenly discovered they were “sustainable” five years ago.There’s much deliberation on AI right now, and it splits into two main camps of thesis: The majority — those who will die on its hill of promise, convinced we’re months away from effective altruism, UBI, and sentient toasters.

And the minority — usually older, more experienced types — who don’t fully understand it, but look at numbers, remember the dot-com bust, and think this rhymes. We’ll leave that debate to the dinner parties. What interests us is something more boring. Physics. Because here’s the thing: AI isn’t free. Every token represents electricity. Something your average developer, product manager, user, or investor gives precisely zero thought to. Electricity means power plants, transmission lines, grid infrastructure — yes. It also means hot sheds; capital-intensive data centres and all the equipment, cooling systems, and real estate that go with them. Real things. Physical things.
We are surrounded by hype without consideration for the physics. bRight now, there’s a disconnect between the physical cost of this technology and the price users pay for it. That gap is being covered by Wall Street, venture capital, pension funds, hyperscaler balance sheets, and strategic spending on “growth” (a word which here means “losses we’ve chosen to rebrand”). The question is: what happens when that gap closes?
Scenario 1: The Industry Matures
No outright collapse, but financial discipline arrives. A novel concept in Silicon Valley. Low-value usage disappears first. “AI slop” dies because the people generating junk stop when it costs them actual money. Turns out nobody’s willing to pay real dollars to have a chatbot write their LinkedIn thought leadership posts. Tragic.
Serious users — those deriving profit or genuine productivity gains — remain. Growth slows but doesn’t stop. GPU upgrade cycles stretch from two years to three or five or seven. Valuations compress. The froth comes off but the infrastructure remains important. The boardroom shifts from “infinite logarithmic growth” to “focus only on what’s profitable.” Less bubble burst, more long, slow leak of disappointment. A bit like ESG.
Scenario 2: Energy as the Arbiter
Now overlay structurally higher energy prices. You know, the thing everyone was told wouldn’t matter because we’d all be running on solar and unicorn farts by now. If power becomes materially more expensive while capital markets tighten simultaneously, the economics get a lot harder.
Inference costs rise. Training LLMs gets hella more expensive. Shareholders start feeling like they’re holding the next NFT apes. Spending slows sharply. Many AI firms disappear. Hyperscalers pull back, maybe with taxpayer assistance (they are, after all, strategically important to those in power — funny how that works).
GPU cycles extend further. Seven-plus years between major upgrades becomes normal outside the top tier. Markets correct hard. Confidence takes a long time to rebuild. This is not the end of AI, but a reset. Users will fondly remember the “good old days” when it was free. When one could generate a movie scene and post on X about how they just ended a billion-dollar production company’s business model. Peak delusion makes for great content.
Scenario 3: AI Actually Delivers
There is also the upside case, though we admit it’s included here much like a “minority” conspicuously placed on a corporate board — a box-ticking exercise. In this scenario, AI meaningfully increases productivity across enterprises. It reduces costs durably. It embeds itself in everything from coding to logistics to research. The sentient toaster. Higher energy prices don’t kill demand because efficiency gains outweigh them. Hardware cycles remain short. Today’s valuations look justified in hindsight and Jensen Huang’s leather jacket gets its own wing at the Smithsonian.
For anyone familiar with us, you’ll know we think this is the most unlikely scenario. And yet it’s by far the consensus view. Which, if you’ve been paying attention to consensus views over the past decade (“inflation is transitory,” “ESG is the future,” “commercial real estate is fine”) should tell you something.] The gap between expectations and likely reality remains wide open. For Insider members, you’re familiar with the portfolio positioning and Nasdaq hedge.
What Really Matters
The key variable isn’t whether AI is impressive or useful (it is). The key variable is whether AI becomes a true profit engine or remains a subsidised cost centre dressed up in a hoodie and a TED talk.] If profitable and productivity-enhancing, current valuations are justified and the gravy train keeps chugging. If it remains mostly hype layered over weak economics, spending contracts, hardware cycles extend, and we could have an absolute humdinger of an economic “event.”
A ten-year stagnation would require something extreme: demand dropping significantly, hyperscalers becoming hyposcalers, capital markets wanting nothing to do with AI, and energy remaining expensive — all at once. Stranger things have happened. Just ask anyone who bought Peloton at $170. Almost 50 years of history show this eventually reverts to the mean… and the pendulum swings the other way.

There are known cases of AI models leading kids to suicide.

• Florida Becomes First State To Sue “Unsafe” OpenAI and Sam Altman s(ZH)

OpenAI no longer has to worry about being last in the AI IPO race and lagging ARRs when compared to Anthropic, not to mention a potential Supreme Court showdown against Elon Musk (pending appeal). Earlier today, Florida became the first state to file a lawsuit against OpenAI and its chief executive, Sam Altman, launching a new broadside in a growing rebellion against the alleged safety failings of artificial-intelligence chatbots. The lawsuit, filed Monday by Florida Attorney General James Uthmeier, claims OpenAI and Altman knowingly released an unsafe product and ignored warnings that it could harm users, the WSJ reported.

The 83-page suit alleges that OpenAI allowed ChatGPT to aid and abet mass shooters, encourage people to take their own lives, degrade users’ critical thinking skills and addict minors to a tool that feigns human compassion. “This litany of harms is driven by Defendants’ insatiable quest to win the AI arms race and amass large fortunes, despite knowing the danger of ChatGPT,” the suit said. According to the WSJ, lawmakers, legal authorities and public interest groups have increasingly been raising concerns about the personal and societal risks posed by AI, one of the fastest-growing consumer technologies in history.
The suit says it seeks to protect Floridians from OpenAI’s conduct and mitigate what it describes as a dangerous public nuisance. The suit also seeks to hold Altman personally liable for harm it says he has caused Floridians. Uthmeier opened a criminal investigation into OpenAI in April over the role its chatbot played in a mass shooting that killed two people at Florida State University last year. The suit opens with a screenshot of an OpenAI blog post that says ChatGPT was built with safety in mind. “Not so,” reads the suit’s text under the screenshot.
The suit alleges that OpenAI marketed ChatGPT as reliable despite its tendency to frequently generate dangerous misinformation, which is to be expected from a generative LLM trained on such toxic, liberal cesspools as Reddit and Wikipedia. “ChatGPT was designed by the Defendants to keep users hooked into conversations by any means, regardless of the truth, because it leads to more use of the chatbot, more training data for its improvement, and more market value for OpenAI,” the suit alleges.
The suit also claims the company exploits human compassion to collect user data and lacks necessary safeguards for minors. The suit describes a lack of safeguards in ChatGPT for teens and minors as reckless, and refers to instances of adolescent users being encouraged by AI to take their own lives. The suit says OpenAI created some parental controls, but does not require children’s accounts to be linked to a parent’s account.At FSU, the suspect turned to ChatGPT as a confidant and sounding board to plan the attack. He asked ChatGPT how many classmates he needed to kill to attract n ational media attention, and also how to use a gun. The chatbot promptly dispensed advice for his questions.
Until now ChatGPT has mostly faced litigation over copyright infringement claims. In November, OpenAI was ordered by a federal judge to turn over 20 million anonymized ChatGPT user logs to the NY Times and other newspapers suing the chat giant over its generative AI model. The newspapers had demanded the user logs to inspect how ChatGPT is used to create outputs they say infringe their copyrighted works. OpenAI pushed back, citing privacy concerns.

What do you mean, slow?

• The Slow Disappearance of Cash In Europe (Cláudia Ascensão Nunes)

Under the guise of fighting money laundering, the EU is making anonymous economic activity progressively harder…

Starting in July 2027, Europeans will no longer be allowed to pay businesses or professionals more than €10,000 in cash (roughly $11,500). Any transaction above €3,000 (just under $3,500) will require mandatory customer identification. This is another step toward political uniformity across Europe, stripping countries of autonomy and subtly pushing citizens toward the digital euro. This measure, part of the new Anti-Money Laundering Regulation (AMLR), applies directly to all Member States. Under the pretext of fighting money laundering, Brussels is imposing yet another form of forced harmonization that ignores the principle of subsidiarity: the idea that decisions should be made at the level closest to citizens and national governments.
What was once a matter regulated by individual countries is now becoming a uniform mandate from Brussels. This is a thinly disguised restriction not only on political freedom, but above all on economic freedom. Cash remains one of the last truly private means of exchange still available; unlike digital transactions, cash does not automatically create a centralized record accessible to banks or public authorities. The use of cash is often associated with the intention to hide illicit activity. Yet the ability to conduct private and discreet transactions is a natural extension of property rights and freedom of contract. Many law-abiding citizens prefer cash for entirely legitimate reasons, including protection against financial instability or potential capital controls.
From that date onward, professionals will be forced to turn every transaction above €3,000 into a bureaucratic process involving identity verification, data collection, and the risk of penalties. This is yet another regulatory imposition that raises the cost of doing business, similar to the introduction of VAT in Europe decades ago, which pushed many small businesses to close their doors or move into the informal economy because of increased bureaucracy and compliance costs. Small entrepreneurs, already pressured by high taxes and excessive red tape, will once again bear the heaviest burden. What were once simple voluntary exchanges will become sources of additional costs, delays, and state intrusion.
Once again, centralized authorities are creating regulatory complexity under the difficult-to-challenge justification of fighting crime, even though each country already has its own rules in this area. More liberal countries such as Germany will lose flexibility, since they previously had no general limit on cash payments. The uniformity imposed by Brussels ignores cultural differences, particularly differing levels of trust in institutions. In some countries, cash culture remains deeply rooted, and confidence in digital systems is significantly lower.
This measure represents a gradual erosion of individual autonomy. If using cash becomes increasingly inconvenient for merchants and consumers, people will naturally migrate toward digital payments. Over time, this initially convenient shift will make the introduction of the digital euro far easier. It is difficult to believe that it is mere coincidence that these restrictions are scheduled to take effect in July 2027 at roughly the same time the European Central Bank (ECB) plans to launch the first pilots of the digital euro. Cash becomes inconvenient and potentially risky at the same time digital money is presented as the practical alternative.
Once the principle is established that the state can limit private cash transactions, there is a strong tendency for those limits to become progressively stricter. European countries themselves demonstrated this pattern when they still controlled these rules nationally. Belgium, for example, steadily lowered its cash payment ceiling over the years to the current €3,000.
The most likely outcome is that the new European-wide limit of €10,000, which may seem relatively high today, will gradually be reduced further until using cash for most significant transactions becomes impractical. In reality, the vast majority of cash transactions are already well below this threshold. According to studies by the ECB, around 81 percent of all point-of-sale payments are below €25, and cash is predominantly used for small everyday purchases. This means that the €10,000 limit will mainly affect legitimate higher-value transactions, such as the payment of certain professional services that many citizens and small businesses still prefer to carry out in cash.
The digital euro, presented as a complement to cash, will arrive at a moment when cash has already been substantially weakened. Unlike cash, this system is traceable, programmable, and potentially subject to holding limits, expiration mechanisms, or usage restrictions.
China has already offered real-world examples. In several pilots of its digital yuan, authorities tested expiration dates on funds, meaning the money would lose its value if not spent by a certain date. This turns money from a reliable store of value into a tool that encourages spending according to government timelines. Such features demonstrate how programmable digital currencies can be used to control economic behavior, punish saving, and steer consumption in line with state priorities.
These are conditions fundamentally incompatible with the freedom that cash provides. This accelerated yet discreet path toward a fully digital monetary system opens the door to an unprecedented level of financial surveillance and control in European history. By overriding the principle of subsidiarity, it will affect almost the entire continent.
The road to total societal control passes through the restriction of economic freedom.

“The bloc is weakening itself through its economic and military policies, Andrej Babis told the Financial Times”

• EU Following Path of Roman Empire’s Decline – Czech PM (RT)

Czech Prime Minister Andrej Babis has compared the EU to the Roman Empire in its twilight years, arguing that Brussels is weakening the bloc through its economic, climate, and security policies. Babis returned to office in December after his ANO movement won 34.5% of the vote and 80 seats in the 200-member lower house of parliament. Since then, he has positioned himself as a leading advocate of national sovereignty, a reassessment of EU policies, and a more pragmatic approach to Europe’s economic and security challenges. In an interview published on Sunday, Babis accused Brussels of steering the bloc’s economy toward decline through what he called its aggressive decarbonization agenda.

“The EU is now probably on the same road as the end of the Roman empire,” he told the FT. The EU’s push to phase out fossil fuels has become increasingly divisive, with critics in Germany, Italy, Poland, Hungary, and Slovakia arguing that climate targets, carbon pricing, and environmental rules are adding to energy costs and weakening industrial competitiveness as governments also face rising defense bills and the economic fallout from the Ukraine conflict. Babis also said Prague would probably miss NATO’s 2% of GDP defense-spending target this year, despite claiming it met it in 2025. He blamed the pressure partly on a deficit left by Petr Fiala’s previous pro-EU government.
The issue feeds into a broader EU debate over dependence on the US, which accounts for around 60% of NATO’s total military spending. President Donald Trump has warned that the US could scale back its role in European defense unless NATO countries significantly increase military spending. The economic pressures, security concerns, and reliance on external military protection underpin Babis’ comparison with ancient Rome.
The Roman Empire’s later centuries were marked by political instability, economic strain, and military overstretch. It became increasingly reliant on foreign troops while struggling to finance its defenses, as trade and economic activity declined and external pressures mounted. The Western Roman Empire formally collapsed in 476 AD when its last emperor was deposed. Political authority fragmented into successor kingdoms, and Europe entered centuries of decentralization and instability.

They squeeze out of Abrego Garcia as much as they can. The Dems havesome strange bedfellows.

• Dubious Opinion on Abrego Garcia, Bar Complaint Against Todd Blanche (Turley)

This week, a public interest group filed an ethics complaint against Acting Attorney General Todd Blanche, citing the recent dismissal of a criminal indictment against Kilmar Armando Abrego Garcia. The ethics complaint is the latest example of the left’s self-perpetuating lawfare machine. Liberal courts and groups first prime allegations against conservatives, which are then eagerly picked up by media and advocacy groups. It is no accident that this hit job on Blanche called upon the New York courts and bar to deliver the coup de grâce.

The New York bar and courts have long been willing allies on lawfare, including abusive charges against President Donald Trump and bar charges against his allies. This case, however, is particularly illustrative of how this system feeds on itself. At base, the complaint focused on a dubious decision by District Court Judge Waverly Crenshaw Jr., who dismissed the indictment against Abrego Garcia. The Clinton appointee found in his 32-page order that the prosecution was vindictive. However, Judge Crenshaw spent relatively little time actually addressing the evidence against Abrego Garcia, who was allegedly an associate of the vicious MS-13 gang in years of human trafficking.
Vindictive prosecution claims are notoriously difficult to prove. (I know because I have tried it as a criminal defense attorney). Under cases such as United States v. Goodwin (1982), you must show that the charges “could not be justified as a proper exercise of prosecutorial discretion.” In both cases of selective and vindictive prosecutions, the Supreme Court has recognized that, as the court explained in 1962, “the conscious exercise of some selectivity in enforcement is not in itself a federal constitutional violation.” Moreover, in United States v. Armstrong, a case involving alleged selective prosecution, Chief Justice Rehnquist stressed that there is a ‘’presumption of regularity” in criminal cases.
There was ample reason for Abrego Garcia to have been charged entirely separate from any retaliatory or vindictive purpose. According to his indictment, Abrego Garcia was a member of MS-13 and allegedly conspired with six others to “transport and move aliens” illegally into and throughout the country starting in 2016. This included alleged smuggling into the country of known “MS-13 members and associates.” The government accused him of over 100 such trips in specially outfitted vehicles as well as transporting firearms and narcotics. One witness testified that he had to warn Abrego Garcia against abusing some of the female aliens because it was “bad for business.” (Garcia was also previously charged with spousal abuse).
Judge Crenshaw, however, focused on the decision-making after Abrego Garcia was brought back from a deportation to El Salvador. I was one of those who wrote that he had to be returned in light of prior court orders. However, there were obvious reasons why, after he was returned, prosecutors decided to proceed with charges for his alleged criminal conduct in the United States. Crenshaw’s decision simply works too hard to find a basis for dismissing the indictment and will now be appealed. In my view, it is likely to be reversed. However, in the interim, the same voices are being heard for the disbarment or punishment of Blanche in New York where a Trump association is treated as far more incriminating than an MS-13 association.
It is fair to note that the Trump Administration has undermined its own position in denouncing lawfare by pursuing past critics, including dubious prosecutions over seashell threats against James Comey. However, that does not have bearing on the merits of the claim against Blanche or the dismissal of the Abrego Garcia indictment. The rage in New York has certainly not ebbed. There are ample rage addicts to applaud such claims inside the Bar. However, there are indicators that lawfare no longer holds the same cachet it once did.
Take Rep. Dan Goldman, who is fast becoming the Marie Antoinette of New York politics. Goldman was elected a few years ago on his pledge to investigate all things Trump and is still running on a “let-them-eat-impeachments” platform. In the meantime, his opponent, Mamdani-endorsed housing advocate Brad Lander, is running on bread-and-butter issues. Lander is reportedly 20 points ahead in the polls.
There is still hope that the New York courts and bar will restore a degree of apolitical, objective integrity to their ranks. The odds are still much greater that Blanche will stay in the bar than that Abrego Garcia will stay in the country. However, it is telling to see which of the two is being cheered on by the left.

“A sane society cannot debate its way out of psychosis. It must diagnose the patient with lethal precision and restore the ancient boundary between the mad and the free.” —LHGrey on X

• Psychodrama (James Howard Kunstler)

When you watch video of the shenanigans at the Delaney Hall ICE building in Newark, NJ, you must suspect you’re seeing a hopped-up political vaudeville act. Freaky as the “protesters” may be — with their tatts and piercings, gummi bear hair color, rolls of blubber, perpetually hoisted cell phones, drums, whistles, and pitiful umbrellas — they are no less actors than Jacob Elordi and Sydney Sweeney out in Hollywood. The Delaney Hall mobbers are allegedly paid by someone or some entity. You’d think the authorities and the news media would be racing to find out who that is.

But, so far, no official announcements and, wouldn’t you know, The New York Times did not even report on doings over there in its Monday morning edition. Independent reporter Nick Sortor, undercover in Antifi garb, discovered their “craft services” tent adjacent to the action in the industrial wasteland where Delaney Hall stands next to the reeking Passaic River. The tent was full of riot gear, tactical supplies, snacks, energy drinks, hot meals (lasagna!) delivered on the hour, first aid supplies, and other “protester necessities,” as if the siege of Delaney Hall was a major Hollywood production shoot.
Anyway, after days of freaks and geeks playacting “oppression” at Delaney Hall, the New Jersey riot cops showed up, including the mounted cavalry, and stuffed several busloads with arrested “protesters,” many of them from out-of-state. Did they bother to interview the folks manning the craft services tent to inquire what organization was paying for all the merch? Isn’t it about time for whoever is signing those checks to get indicted for fomenting and abetting insurrection?
The Democratic Party is reduced to psychodrama, and the nature of psychodrama is that it’s about nothing — nothing real, at least. It’s all concocted sound-and-fury to give the (false) impression that some injustice is occurring. In the case of Delaney Hall, a holding facility for illegal border-jumpers awaiting deportation, the alleged injustice is “unsanitary conditions, inadequate food, poor medical care, and physical and psychological torture.” In reality, conditions there are arguably better than the average Motel 8. Many of the inmates are murderers and rapists, of course, the worst of the worst.
You might suppose that the objective of the melodrama at Delaney Hall was to create another martyr a la Renée Nicole Good and Alex Pretti out in Minneapolis this past winter. Those two unfortunate dupes were induced by the party script to FAFO, leading to their tragic and pointless deaths. Alas, the incidents failed to incite the sort of national uprising that the Lefty-left will not stop seeking.
And now summer is nearly here and (the old song goes) “the time is right for dancing in the streets.” Or, rather, fighting in the streets. The time is also right for the FBI and the DOJ to shut down the funny money supply line for it, and it’s hard to figure now how they might fail to do that. The Delaney Hall arrests give them a vast opportunity to debrief the players, find out exactly how these stunts are being organized.

Tell them to stay home and count the geraniums.

• Jill Biden’s Memoir Is Going to Tear the Democrats Apart (Margolis)

The Bidens want to restore Joe Biden’s legacy after his disastrous presidency and his Hindenburg-style campaign collapse, and phase one is Jill Biden’s forthcoming memoir. The next step will be Joe Biden’s inevitable presidential memoir, which is sure to have quite a few doozies in it, but for now, we have Jill’s, and if she thought her book would “set the record straight” and the Democrat Party would be thrilled, well, that’s not what’s happening at all. Instead, it’s setting the Democrat Party on fire — and the people most enraged are the ones who spent years covering for Joe Biden.

According to Axios, several former Biden aides, including some of the most loyal ones, are furious about the former first lady’s efforts to rewrite history. Jill’s book, by all accounts, does what the Bidens have always done: point the finger everywhere except at the mirror. “The throughline between her book and [Kamala] Harris’ is that they blame everyone but themselves for the loss,” one former aide said. And another put it even more bluntly. “It’s just so selfish. The Bidens preached selflessness and service above all — and every decision they’ve made since he decided to run for reelection has been about themselves.” Ouch, that’s quite the indictment. And it’s coming from people who worked for the man.
The central tension in all of this is the June 2024 CNN debate with President Donald Trump. That was the night America watched Joe Biden visibly struggle to complete a coherent thought on a national stage. In one night, the liberal media, which had spent years pretending that Joe Biden was as sharp as a tack, could no longer pretend everything was okay. As PJ Media previously reported, Jill Biden claimed she thought Joe was having a stroke and cleverly suggested that her husband had never acted like that before or since.
Even former Obama aide Tommy Vietor couldn’t ignore the contradiction: if Jill Biden genuinely feared her husband was having a medical emergency on live television, why did the campaign proceed with the post-debate schedule? Joe went to a rally. Then he went to a Waffle House. Nobody called a doctor. Nobody pumped the brakes. That’s not the sign of a campaign thinking that Joe was having a medical issue.
Co-host Jon Favreau said he was “triggered” by the book’s framing and didn’t hold back. He rejected the idea that Democratic voters would simply forgive and forget by 2028. Voters, he argued, resent “being f***ing lied to by Joe Biden, Jill Biden and their entire f***ing campaign.”And the lying wasn’t just about one bad debate night. It was about Biden’s overall condition, the campaign’s internal polling, and a years-long effort to gaslight anyone who raised concerns. Critics who expressed worry were dismissed as “bedwetters.” Now, Favreau says, Joe Biden is essentially confirming by his own admissions that “they were lying the whole time.”
Which, of course, is exactly what conservatives were saying all along. How about that? Writer Zaid Jilani argued that it is “an underrated factor in how distrusted Democrats are that they systematically lied about Biden’s condition and in some cases still are.” Favreau agreed. The 2024 Democratic National Committee autopsy never even addressed Biden’s age or declining health as factors in Kamala’s defeat, a glaring omission that made it clear the party had zero interest in conducting an honest reckoning and was instead engaged in another cover-up.
The Bidens are now planning additional book appearances and campaign stops ahead of the 2026 midterms. Bad timing for the Democrats? You bet. Obviously, some Democrats wish they would just go away. One former official summed up the sentiment with barely concealed exhaustion: “I just wish they would give some more time and space and let people move on. It all feels so disingenuous.” The left-wing media is freaking out about the Biden book tour for two reasons. First, it reminds voters of the great deception, and that’s not good for Democrats at all. Second, they were all part of the deception, too, and they would really rather move on than get called out on it.

Remember, 51 signatorees. All willingly lied. Can we take their pensions away?

• Ex-intel Official: Hunter Biden Laptop Letter Was Deception Operation (Turley)

A former senior intelligence community official under President Barack Obama reported concerns earlier this year that the Hunter Biden laptop letter signed by 51 former intelligence officials in 2020 bore characteristics “consistent with coordinated intelligence deception operations,” according to a memo the ex-official submitted to the intelligence community inspector general. The concerns have now been referred to the Justice Department, a remarkable turnabout for a letter that was used six years ago to censor factually based concerns about Biden family corruption.

The October 2020 open letter–released as voters were making final decisions about whether to reelect Trump or elect Democrat Joe Biden–was signed by ex-intelligence officials including former National Intelligence Director James Clapper, former Defense Secretary Leon Panetta and former CIA Director John Brennan. Thomas Kuhns, the former official who submitted the memo recently to the Intelligence Community Inspector General, was a Senior Intelligence Officer and former advisor to the Deputy Director of National Intelligence during the Obama administration.
Kuhns told the inspector general that most of his career in government centered on maintaining the Intelligence Community’s analytic and integrity standards. “This assessment is not a political statement. It is based on the research and analysis of testified behavior, language choices, omissions, coordination, and effects attributable to intelligence tradecraft,” Kuhns wrote in a memo to the ICIG hotline, which was obtained by Just the News. Pro-Biden advocates warned that the public reporting on the contents of Hunter Biden’s personal laptop bore the “hallmarks of a Russian information operation.”
Then-candidate Joe Biden used the letter to fend off public criticism about his son’s overseas business dealings, drug use, and alleged influence peddling “This analysis is grounded in my expertise applying analytic integrity standards and intelligence tradecraft to evaluate raw and finished intelligence assessments/judgements. Those standards provide a framework to identify politicization, bias, and analytic weaknesses, as well as to identify whether intelligence tradecraft itself has been misapplied or misused,” he continued.

“The dancing bots are a warning, not a toy.”

• Aww Look At The Cute Dancing Robot Police State Surveillance Dog…(MN)

Boston Dynamics’ Spot robot dogs are being deployed at designated World Cup venues in the US to perform perimeter security inspections, prompting concerns over the advance of surveillance tech.The company has stated that the machines “will be used to assist security personnel with investigating things like suspicious packages or other potentially hazardous materials.” These four-legged fiends are set to roam, and even dance (oh how cute) around AT&T Stadium in Dallas and other FIFA sites ahead of the 2026 tournament, sending live feeds back to human teams with their 360-degree cameras, thermal sensors, acoustic pickups, and AI anomaly detection.

These are the new Boston Dynamics Spot robots deployed in Dallas for the 2026 FIFA World Cup

They are being used for security at World Cup venues in the Dallas area

Their jobs include:

– Perimeter security inspections
– Assisting with suspicious packages or hazardous materials… pic.twitter.com/rLsl2wnFuA
— Wall Street Apes (@WallStreetApes) May 30, 2026

“The robots do not have facial recognition capabilities,” a Boston Dynamics spokesperson told WFAA, insisting they spot unauthorized people in restricted zones without utilising facial scans for now, after a viral TikTok video made the claim. Hyundai, the South Korean owner of Boston Dynamics and major FIFA sponsor, added the bots “will support on-site security operations, helping contribute to a safer tournament environment.”But peel back the puppy-like head tilts and choreographed spins and you see the real rollout: tireless mechanical sentries normalizing constant surveillance on American soil. They look fun today at the soccer spectacle expecting half a million visitors.
Tomorrow the same platforms patrol streets, malls, and events nationwide, always watching, always recording. This isn’t some isolated gimmick. It’s fast becoming commonplace in cities such as Atlanta, where robot security dogs prowl apartment complexes and parking lots issuing verbal commands to citizens. Recent videos show residents greeting the units politely and complying instantly – only for the bot to still summon real police anyway. The voice responding through the speaker carries a clear foreign accent. Speculation is rife that the live operators controlling these machines and watching every feed sit thousands of miles away in India.
Another viral clip captured locals staring down the mechanical intruder with a classic line that perfectly summed it up. These aren’t fully autonomous terminators yet. Real people – often overseas – sit at consoles staring at your every move through the robot’s eyes and ears, deciding when to hit the siren or dial American cops on you. Your privacy, your neighborhood, your compliance all funneled through foreign call-center eyes. Data stored, analyzed, potentially shared who-knows-where. Ordinary citizens get lectured by a machine whose controller doesn’t even live in the country.
The same quadruped platform that dances cutely for World Cup selfies or patrols Atlanta lots is already being militarized abroad. Just weeks earlier, footage emerged of China unleashing machine-gun-toting robot wolves engineered with a shared “collective brain” that lets them hunt and coordinate in simulated street battles. These pack-hunting death machines storm positions, clear entire urban blocks in minutes, and spare human troops the risk while turning dissent or resistance into target practice. Non-military versions are even for sale to civilians. While American cities outsource low-level enforcement to remote foreign operators who record and report on citizens, China turns the same tech into lethal swarms ready for real conflict.
The cute dancing dog at the stadium today carries the same sensors and mobility as tomorrow’s enforcer. Denials about “no facial recognition” ring hollow when software upgrades and off-the-shelf AI can bolt it on. The hardware is already here. The willingness to expand its role grows every time the public shrugs and scrolls past another viral clip. While this tech supposedly keeps big events “safe,” everyday Americans already endure open-border chaos, rising crime in blue cities, and government agencies that treat citizens as the threat. Surely the real priority should be securing the actual border, deporting criminals, and backing law enforcement that answers to voters – not handing patrol duties to remote-operated spy dogs whose operators answer to foreign paychecks.
Once these machines become commonplace, backed by endless camera grids and AI flags, the slide into a permission-based society accelerates. Move along when the robot says so. Stay out of the restricted zone it defines. Don’t question the system streaming your life overseas. The dancing bots are a warning, not a toy. Freedom means rejecting the slow normalization of this dystopian show on American streets. Push back now, demand human accountability and constitutional limits, or watch the cute dancing routine quickly morph into a demand for compliance.

96.

• Happy Birthday, Clint Eastwood — and a Happy Retirement, Too (Stephen Green)

Clint Eastwood retired so quietly that I didn’t even notice until his birthday came around this weekend, and for the first time in my lifetime — almost my parents’ lifetimes for that matter — that there isn’t a Clint Eastwood movie in production. Well, maybe just one. But I’ll come back to that in a moment. The Hollywood legend turned 96 on Sunday, making him more than a third as old as the Republic itself. He was born in 1930, just as the Great Depression was really getting going. His first screen appearance was an uncredited role in 1955’s Revenge of the Creature, the quickie sequel The Creature From the Black Lagoon. Small parts on TV and movies followed, until his starring role as Rowdy Yates on the long-running TV western, Rawhide.

Movie stardom eluded Eastwood until he traveled to Italy to headline as Joe in Sergio Leone’s classic spaghetti western, A Fistful of Dollars. He quickly became one of the big screen’s biggest draws, but as the old Hollywood cliche goes, what he really wanted to do was direct. And produce. And continue those starring roles. Seriously, the man is a machine.His first directorial outing was 1971’s Play Misty for Me, which scarred the crap out of me when I saw it on TV as a kid and scarred me even more when I finally watched it again as an adult. That film allowed Eastwood his first public expression of his lifelong love for jazz, culminating in his 1988 Charlie Parker biopic, Bird.
He made no fewer than five Dirty Harry movies, but also blew the character apart by showing us what a rogue cop might look like in real life with the criminally underappreciated Tightrope in 1984. The man who helped reimagine westerns in the 1960s with Leone reimagined them again in 1992 with Unforgiven — and by then he was already in his 60s, with another 30-plus years of moviemaking ahead of him. In 2004, he finally won a belated second Best Director Oscar for Million Dollar Baby. For my money, Eastwood should have, or at least could have, also won for Play Misty, Bird, and Gran Torino. But he didn’t often make the kind of BIG IMPORTANT MOVIES that Academy members feel like they’re supposed to vote for.
Eastwood just made damn good movies, and his pictures typically came in on schedule and under budget. He rarely budgeted for big money or long shoots. That’s one reason that, despite directing 40-some movies and taking some serious chances along the way, he only made a handful that lost money. Did I mention he’s a machine? And while Eastwood might be done acting and directing, he still has one more upcoming producer credit on IMDB, a remake of his 1977 action classic, The Gauntlet— with Tom Cruise and Scarlett Johansson attached. But this is starting to sound like an obituary, when what I wanted to do was wish the man (not a machine, really) a happy birthday and a satisfying retirement.
So let’s talk about that for just a moment. Around the time of 2012’s Trouble With the Curve, I started joking that Eastwood — already 82 — would never retire. My prediction-disguised-as-a-joke was that he’d die on the set of some new movie, and would be working so hard that he wouldn’t notice until St. Peter cleared his throat at him. But Eastwood did quietly retire after 2024’s Juror #2, although I’m not sure his heart was really in it. The picture raised a tough moral question, without preaching and without any comforting answers. I still think about that flick sometimes, and can’t wait to go back to it.
With a solid cast — Nicholas Hoult, Toni Collette, Kiefer Sutherland, and J.K. Simmons — and a modest budget, Juror #2 was exactly the kind of taut, engrossing, and clever thriller Eastwood was known for directing, going all the way back to Misty. But Hollywood murdered Eastwood’s murder-trial flick. First, Warner Bros. spent maybe $18 on marketing. Me — a lifelong Eastwood fan — only heard of it by accident, and not until it had already ended its theatrical run. It had maybe a two-week theatrical run. On fewer than 50 screens.
Even though Juror #2 was considered good enough to cap off the 38th annual AFI Fest — the longest-running film festival in Los Angeles — that’s as much backing as Warner gave it before dumping it to rent on streaming. Even then, you had to squint like Clint to find it. Is that any way to treat one of Hollywood’s most storied names, who just made a $30 million picture with a 90% rating on Rotten Tomatoes?
Maybe it was belated payback for that Empty Chair bit Eastwood did for Mitt Romney at the 2012 Republican National Convention, I don’t know. I might hang it up after that, too, even if I did still have another picture or three left in me. So let me say this directly on his belated 96th birthday. Mr. Eastwood, if Warner’s poor treatment drove you into an early retirement — if “early” could be at all appropriate for a career as long as yours — then I’ll miss like hell the films you didn’t get to make. But there are an awful lot of us who still appreciate you for all the ones you did.
Happy birthday.

True https://t.co/sKtaF2breQ
— Elon Musk (@elonmusk) June 1, 2026

Tesla IPO market cap was 0.1% of its current value https://t.co/UhlqbkauzX
— Elon Musk (@elonmusk) June 2, 2026

https://twitter.com/BabyNetworkNews/status/2061489774968369601?s=20 https://twitter.com/Mick_O_Keeffe/status/2061101275610038509?s=20

Support the Automatic Earth in wartime with Paypal, Bitcoin and Patreon.

Debt Rattle August 6 2023

Aug 062023

August 6, 2023 Posted by Raúl Ilargi Meijer at 9:11 am Finance Tagged with: cash, Imran Khan, Musk, Nazism, Niger, peace summit, Wagner, X 37 Responses »

El Greco St. Paul and St. Peter 1595

• Asians Are Less ‘Humane’ – Ukrainian Security Chief (RT)

• Who is Responsible for Ukraine’s Failed Counteroffensive? (Scott Ritter)

• What Should Russia Expect From Saudi Arabia’s Ukraine ‘Peace Summit’? (RT)

• Ex-Pakistani PM Imran Khan Jailed For Three Years (RT)

• DOJ Seeks Protective Order in Election Case (ET)

• A Successful Prosecution Would Fold Space And Time (Taibbi)

• Niger Junta Turns To Wagner For Help – Media (RT)

• X to Fund Legal Bills of People ‘Unfairly Treated’ for Posts, Likes on X (Sp.)

• Austrian PM Proposes Constitutional ‘Right to Cash’ (Sp.)

Macgregor

Those who today are arguing for globalism are very similar to the people who wanted to go to Vietnam.

What they were interested in doing, particularly today's group is erasing national identities.pic.twitter.com/aICD6pUlSr

— Douglas Macgregor (@DougAMacgregor) August 6, 2023

Full German Nazism, complete with Untermenschen etc. This is what you fund.

• Asians Are Less ‘Humane’ – Ukrainian Security Chief (RT)

Russians are “Asians” and, therefore, lack the “humanity” that Ukrainians purportedly possess, Aleksey Danilov, the head of Ukraine’s National Security and Defense Council, has claimed. The top official made the remark as he spoke live on Ukrainian TV, which has been heavily censored and turned into a state-approved “broadcasting marathon” amid the ongoing conflict. “I’m fine with Asians, but Russians are Asians. They have a completely different culture, vision. Our key difference from them is humanity,” Danilov stated. The security chief, as well as other top Ukrainian officials, have repeatedly made hateful remarks about Russians during – and even well before – the ongoing hostilities between the two countries broke out back in February 2022.

Danilov has repeatedly promised to “kill” Russians anywhere across the globe, with similar extreme statements consistently made by Mikhail Podoliak, the top aide to Ukrainian President Vladimir Zelensky. Podoliak has repeatedly claimed that all Ukrainians universally “hate Russians,” as well as voiced calls to “kill Russians” on a daily basis. Similarly radical remarks have been repeatedly made by the Ukrainian military spy chief, Kirill Budanov, who also expressed the same urge. Threats by the latter have been addressed by Russia’s permanent envoy to the UN, Vassily Nebenzia, who branded them a “blatant example of hateful remarks, Russophobia and incitement of violence based on nationality.”

“.. the fetid stench of rotting corpses, abandoned by their comrades who fled for their lives.”

• Who is Responsible for Ukraine’s Failed Counteroffensive? (Scott Ritter)

On a normal summer’s day, the road to Rabotino would be empty, save for the odd combine tractor and the vehicles driven by farmers and their families as they tend to the fields of crops they had planted in spring. The summer’s heat would reflect off the horizon, creating glimmering mirages, while the still air would echo with the chirping of birds and the buzzing of insects. On a normal summer’s day, the road to Rabotino would resemble paradise. Today, the road to Rabotino can best be described as a highway to hell: the serene landscape scarred with craters made by artillery shells, bombs, and mines. Fields that once grew crops intended to feed the world now seem to produce another crop—the torn, burned-out hulks of Ukrainian tanks, infantry fighting vehicles, and other military vehicles of all shapes and sizes.

The air buzzes not with bees, but bullets, and the sky above is torn by the sound of shells passing overhead, on their way to their intended target, often consisting of a new crop of military metal waiting to be consumed by fire. The smell of fresh soil, young crops, and flowers of the field has been replaced by the fetid stench of rotting corpses, abandoned by their comrades who fled for their lives. The Russian Ministry of Defense has assessed that, since the Ukrainian counteroffensive began in early June, the Ukrainian Army has suffered some 43,000 casualties, with more than 4,900 pieces of equipment, including 1,831 tanks and infantry fighting vehicles (among which are included 25 German-made Leopard tanks and 21 US-made M-2 Bradley Infantry Fighting Vehicles) having been destroyed.

Russian casualties, while unspecified, have been alluded to by President Putin, who stated that the kill ratio was 10:1 in Russia’s favor. That equates to 4,300 casualties: the brutal blade of war cuts both ways. The casualties suffered by Ukraine roughly align with the casualties suffered by German forces during their offensive operations against the Soviet Army in the battle of Kursk, fought in the month of July and August 1943. The Kursk battle was one of the largest during the Second World War.This should give one an idea of the scope and scale of the violence which has transpired in and around the village of Rabotino, and elsewhere in the Zaporozhye and Donetsk regions where Ukraine and Russian forces are confronting one another.

When an army suffers a defeat of the scope and scale of that suffered by Ukraine near Rabotino, and in other fields and villages across the line of contact with Russia, it is normally incumbent upon the leadership of the defeated forces to ascertain the reasons why the defeat occurred, and then to undertake remedial action to correct the problems identified.It came weeks after being on the receiving end of criticism from their erstwhile allies and partners in NATO, who provided Ukraine with both the material used to equip the Ukrainian Army, and training on how this equipment was to be used in battle against the Russians.

Where’s China?

• What Should Russia Expect From Saudi Arabia’s Ukraine ‘Peace Summit’? (RT)

Political expert Andrey Dubnov:

The goal of the conference is not to formulate “agreements acceptable to all parties.” Russia has not been invited to this event, and this makes sense, because otherwise the meeting would have been doomed to failure. It is obvious that Moscow’s position has been articulated; the last time it was expressed was at the Russia-Africa summit. Moscow’s main position is essentially an arrangement that can be called a ceasefire, based on Russia’s retention of the Ukrainian territories now organized as four Russian regions. It is difficult to imagine that Moscow is prepared to abandon this as its main negotiating position. On the other hand, Kiev’s stance on peace is articulated as being possible only if Russia withdraws its troops to the 1991 borders. With such positions of the parties, a general meeting would be pointless.

What is the purpose of the summit in Saudi Arabia? Since this initiative comes mainly from Kiev and is backed by the US, it is now about consolidating the whole wider world – not just the West, but the big South, including the BRICS member countries (India, Brazil and South Africa). It is an attempt to find a consolidated expression of support for the Ukrainian peace plan. Within this “formula of support” there are some limits regarding the flexibility of Kiev’s negotiating position: under what conditions it is ready to give up its categorical demand to return to the 1991 borders and to compromise with Russia? Clarifying this kind of flexibility may be one of the ulterior goals of this conference. But practice shows that such diplomatic conferences look first and foremost like big, big PR. Diplomacy needs silence and confidentiality. The Saudi initiative does not yet provide for this silence and confidentiality, so it is still more of a political meeting than a search for a diplomatic solution to the problem.

President Vladimir Zelensky’s peace plan will be at the center of the Saudi initiative. Within this framework, an attempt will be made to somehow find acceptable windows in which Kiev, I repeat, will be prepared to make further compromises with Moscow. But at the end of the day, everything will depend on the outcome of the military operations on the ground, which are being actively pursued. No peace plan for Ukraine can become a reality without China’s participation. The meeting in Saudi Arabia could be a precursor to a financial and economic assistance plan to rebuild Ukraine. This is how the plan to help Afghanistan began at the Bonn conference many years ago.

Remarkable how similar his story is to Trump’s. One man vs the establishment.

• Ex-Pakistani PM Imran Khan Jailed For Three Years (RT)

Former Pakistani prime minister Imran Khan was issued with a three-year jail sentence by an Islamabad court on Saturday after he was found guilty on corruption charges. The verdict means that Khan, who claims the prosecution was politically motivated, will not be able to contest elections later this year. In a pre-recorded statement released on X (formerly Twitter), Khan told his supporters: “I have only one appeal, don’t sit at home silently.” Judge Humayun Dilawar declared in court that Khan, 70, had “deliberately submitted fake details” after he was accused of illegally profiting from the sale of gifts he received while serving as Pakistan’s head of state between 2018 and 2022. After issuing the three-year custodial term, the judge also ordered Khan to be banned from politics for a period of five years.

Following the verdict, Khan, who was not in court, was arrested at his home in Lahore and taken into police custody. The claims against the former prime minister are a case of “political victimization,” according to his lawyer Intezar Hussain Panjutha. “Khan was not given an opportunity to defend himself and say his side of the story,” he said after the verdict. “We wanted to provide witnesses in his favor but he was not allowed this opportunity. Khan was not given a fair trial.” Khan’s barrister, Gohar Khan, added in comments to The Dawn newspaper that the court’s verdict had been a “murder of justice.” However, opponents of the former politician appeared to celebrate the court’s judgment outside the building, with some chanting: “Imran Khan is a thief.” More than 150 cases have been brought against Khan, the former sports star turned populist political figure, since he was ousted from office last April following a no-confidence vote. He has denied all wrongdoing.

Barring a successful appeal, Khan’s conviction means he will be prohibited from standing in Pakistan’s general elections, which are expected to take place in October or November. Khan, who had unsuccessfully called for early elections to take place, has previously stated his belief that Pakistan’s military authorities have attempted to obstruct his Tehreek-e-Insaf party from regaining political power. It’s the second time in recent months that Khan has been arrested. Around 100 paramilitary troops were involved in his detention last May in connection with one of the numerous cases against him. Khan has alleged that Pakistan’s military is responsible for attempts to subdue his political influence. He has also claimed that the United States has conspired with Pakistan’s government to prevent him from returning to political power.

“IF YOU GO AFTER ME, I’M COMING AFTER YOU!”

• DOJ Seeks Protective Order in Election Case (ET)

Justice Department special counsel Jack Smith on Aug. 4 requested the federal judge overseeing former President Donald Trump’s case to issue a “protective order” in light of a social media post made by the former president. The Aug. 4 Truth Social post by Mr. Trump said, “IF YOU GO AFTER ME, I’M COMING AFTER YOU!” Following this, Mr. Smith urged U.S. District Court Judge Tanya Chutkan to “enter a protective order governing or restricting discovery or inspection” of case details, to restrict what Mr. Trump can share publicly about the case and evidence. “Such a restriction is particularly important in this case because the defendant has previously issued public statements on social media regarding witnesses, judges, attorneys, and others associated with legal matters pending against him,” argued Mr. Smith in a filing, citing the Truth Social post.

“If the defendant were to begin issuing public posts using details—or, for example, grand jury transcripts—obtained in discovery here, it could have a harmful chilling effect on witnesses or adversely affect the fair administration of justice in this case,” Mr. Smith said, adding that such posts may influence jurors.A spokesperson for Mr. Trump responded immediately to the filing implying that the post was not a retaliation against Mr. Smith’s charges. “The Truth post cited is the definition of political speech, and was in response to the RINO, China-loving, dishonest special interest groups and Super PACs, like the ones funded by the Koch brothers and the Club for No Growth,” said the brief statement.

“I don’t care about a link… I have a much better link,” and “I have a lot of friends in Detroit… Detroit is totally corrupt.”

• A Successful Prosecution Would Fold Space And Time (Taibbi)

Special Counsel Jack Smith’s indictment is a case within a case, a prosecutorial enchilada filled with things for people of all political persuasions to hate. The outside is a shell of a conventional conspiracy prosecution, and these parts are genuinely damaging for Donald Trump. Inside, it’s a deranged authoritarian fantasy, at times reading more like a 45-page Louise Mensch tweet than an indictment. This radical core is somehow scarier than the allegations against Trump and co-conspirators like Rudy Giuliani, John Eastment, Sidney Powell, Jeffrey Clark, and Kenneth Cheeseboro. Despite early criticism describing the case as entirely about protected speech, Special Prosecutor Jack Smith’s case does focus on some overt acts, and these sections are buttressed by witnesses who could be convincing across the spectrum.

Former Arizona Speaker of the House and onetime Trump supporter Rusty Bowers will describe being asked not to certify the results by, among others, Trump and Giuliani. Ronna McDaniel, chair of the RNC, will say she was told votes by so-called “fraudulent electors” would only be deployed if election litigation was successful. Former Vice President Mike Pence, who is rumored to be running for president and took instant advantage of indictment news Tuesday, will testify Trump told him, “You’re too honest,” in response to prods to refuse to certify the outcome.

If Smith simply focused on those damaging episodes in states like Arizona, Michigan, and Georgia, or on Trump’s interactions with Pence, this prosecution would be an easier sell to the general population. Instead, Smith has tried to pen a Unified Field Theory of insurrection that would massively expand the meaning of concepts like incitement to include false statements, tweets, and other forms of protected speech, down to classic Trumpisms like “I don’t care about a link… I have a much better link,” and “I have a lot of friends in Detroit… Detroit is totally corrupt.”

In fact, if rumors are true and the four counts filed by Smith this week are later complemented by a superseding indictment, this document may end up expanding the definition of “seditious conspiracy” to include those things as well. As Adam Kinzinger said this week, he hoped additional counts will hold Trump “accountable” for all the actions of January 6th. It’s not hard to read this and see the framework of an argument that Trump’s ideas, tweets and “knowingly false statements” were elements of the same conspiracy to “violently disrupt” the election for which people like Oath Keepers Elmer Stewart Rhodes and Kelly Meggs have already been convicted and sentenced to 18 and 12 years in prison, respectively. A successful prosecution would fold space and time to make legal speech felony violence.

Flammable.

• Niger Junta Turns To Wagner For Help – Media (RT)

One of the leaders of last week’s coup in Niger has reportedly sought the assistance of Russian defense contractor Wagner Group PMC as the junta nears a deadline to either return the country’s ousted president to power or face a possible military intervention by neighboring nations. General Salifou Moody allegedly made the request during a visit to neighboring Mali, where he met with a Wagner representative, the Associated Press reported on Saturday, citing French journalist Wassim Nasr, a senior research fellow at the Soufan Center. The meeting was first reported by France 24, and Nasr said he had confirmed the talks with a French diplomat and three people familiar with the matter in Mali.

“They need (Wagner) because they will become their guarantee to hold onto power,” Nasr told the AP, claiming that Wagner is considering the request. Neither Wagner nor Russian government officials have commented on the junta’s alleged request for help from the contractor. The Kremlin said on Friday that any interference in Niger from powers outside the region wouldn’t likely improve the situation. “We continue to favor a swift return to constitutional normality without endangering human lives,” Kremlin spokesman Dmitry Peskov told reporters. Wagner chief Yevgeny Prigozhin has called the coup a “justified rebellion of the people against Western exploitation.”

The Economic Community of West African States (ECOWAS) has threatened to send troops into Niger if the coup leaders don’t return President Mohamed Bazoum to power by Sunday. Bazoum has been under house arrest since his ouster and has asked the US “and the entire international community” to restore his government. The militaries of several ECOWAS members, including Nigeria, have agreed on a plan for their intervention in Niger. Wagner has become a major player in the African security landscape, though it’s unclear how its influence on the continent stands after its failed mutiny against Moscow in June. Russian Foreign Minister Sergey Lavrov has said that the future of the contracts Wagner signed with various African countries is a matter for those client governments to decide. The firm’s troops have reportedly operated in such countries as Mali, Burkina Faso, Sudan, Mozambique and the Central African Republic.

Mali and Burkina Faso are among the ECOWAS member states that have sided with the Niger junta following the coup. Bazoum accused the two neighbors of employing “criminal Russian mercenaries.” African Freedom Institute President Franklin Nyamsi warned in an RT interview on Thursday that if ECOWAS carried out its threat to send troops into Niger, it would be seen as a declaration of war on the junta’s allies, including Mali and Burkina Faso. Such a conflict could escalate dramatically as the warring factions seek help from the world’s military superpowers, he said, adding, “We are now at the door of a world African war.”

Wonder how the idea would work out in practice.

• X to Fund Legal Bills of People ‘Unfairly Treated’ for Posts, Likes on X (Sp.)

US billionaire entrepreneur Elon Musk pledged on Saturday that his social media platform, X (formerly known as Twitter), will pay legal bills of those people who were “unfairly treated” at workplaces by their employers for posts and likes on the platform. He added that there would be “no limit” to funding the bills and called on people to inform the platform of such cases. “If you were unfairly treated by your employer due to posting or liking something on this platform, we will fund your legal bill,” Musk said on X. In late October 2022, Musk finalized the $44 billion acquisition of Twitter, a US company founded in 2006 and headquartered in San Francisco, California. Twitter Corporation ceased to exist as a separate company as a result of its merger with X Corp. founded by Musk in 2006. In late July, Twitter’s logo was changed from a blue bird to a black-and-white X logo. Musk specified that the new logo symbolized “the imperfections in us all that make us unique.”

“..the right to cash was worthless if “there won’t be a single ATM left in Austria..”

• Austrian PM Proposes Constitutional ‘Right to Cash’ (Sp.)

As cashless payment methods proliferate across Europe, Austrian Prime Minister Karl Nehammer has moved to legally preserve paying in the old-fashioned way, with banknotes and coins. Speaking on Friday, the conservative Austrian leader proposed a “constitutional protection of cash as a means of payment,” saying he would direct Finance Minister Magnus Brunner and the country’s central bank to come up with a plan in the coming months to ensure a “basic supply” of cash remains in the economy. “Everyone should have the opportunity to decide freely how and with what he wants to pay,” he said. “That can be by card, by transfer, perhaps in future also with the digital euro, but also with cash. This freedom to choose must and will remain.”

“More and more people are worried that cash could be restricted as a means of payment in Austria,” Nehammer said, adding that people have a “right to cash.” Nehammer noted that his comments are in response to claims circulating on social media that the country could soon do away with cash payments, forcing customers to use bank cards or payment apps. According to the Austrian leader, €47 billion is withdrawn from ATMs every year in Austria and the average Austrian carries €102 in cash. Further, two-thirds of payments under €20 are made in cash, he said. Roughly 9.1 million people live in the Central European country, which is part of the European Union and the Eurozone.

The debate isn’t new to Austria, and Nehammer’s proposal was criticized by both left and right politicos. Philip Kucher, an MP from the Social Democratic Party, said the right to cash was worthless if “there won’t be a single ATM left in Austria,” while the right-wing Freedom Party accused the prime minister of stealing their idea. While the Eurozone nations have been increasing options for cashless payment, the European Central Bank has also committed itself to preserving cash as a payment form. The Eurosystem Cash 2030 strategy was launched in 2020. A study published by the ECB in March found that within the Eurozone, cash is still the most frequent payment method, accounting for 59% of transactions. However, 55% of consumers said they preferred cashless payments. They also found that the value of card payments had exceeded the value of cash payments for the first time, rising to 46% of transactions.

Support the Automatic Earth in wartime with Paypal, Bitcoin and Patreon.

Debt Rattle September 24 2021

Sep 242021

September 24, 2021 Posted by Raúl Ilargi Meijer at 8:40 am Finance Tagged with: audit, cash, children, common cold, DeSantis, eugenics, genome, monoclonal, YouTube 78 Responses »

Vincent van Gogh A Restaurant at Asnieres 1887

• Why Are We Vaccinating Children Against Covid-19? (Elsevier)

• Full Covid Genome Found In Stools – Meaning For Prevention And Treatments (VC)

• Directed Evolution I – When Applied To People Is Eugenics (Anandamide)

• Directed Evolution II – Gates Got Your Tongue? (Anandamide)

• ‘Covid-19 Will Become Like Common Cold’ By Next Spring, Say Experts (INews)

• Covid-19 Pandemic Will Be Over In A Year – Moderna CEO (RT)

• You, In Fact, Have ALL The Power. Use It (Denninger)

• Scientists Slam Chris Whitty For Scare-mongering Over Unjabbed Children (DM)

• Americans Have No Clue What the True COVID Numbers Are (Mercola)

• DeSantis Acquires New Monoclonal Antibodies From UK Drug Firm (JTN)

• YouTube Promises Pullback On Covid Censorship (JTN)

• Arizona Audit for Dummies (Ivory Hecker)

• Agustín Carstens: Would You Buy A Dieting Régime From This Man? (Ward)

Perth nurses

Rebel News Melbourne

Toronto
https://twitter.com/i/status/1441015146609094659

Israel

Israel TV Drops the bombshell. Read the subtitles.

No difference. Say it again No difference.#NoVaccinePassportsAnywhere #COVID19 pic.twitter.com/flRjHdxv1r

— Elander’s Voice (@Elanders_Voice) September 23, 2021

The second narrative-damning report published by Science Direct in a week.

Robert W Malone, MD: “In summary, the value of these COVID-19 inoculations is not obvious from a cost-benefit perspective for the most vulnerable age demographic, and is not obvious from any perspective for the least vulnerable age demographic.”

“Thus, our extremely conservative estimate for risk-benefit ratio is about 5/1. In plain English, people in the 65+ demographic are five times as likely to die from the inoculation as from COVID-19 under the most favorable assumptions! ”

• Why Are We Vaccinating Children Against Covid-19? (Elsevier)

Adequate safety testing of the COVID-19 inoculations would have provided a distribution of the outcomes to be expected from ‘lighting the match’. Since adequate testing was not performed, we have no idea how many combustible materials are on the floor, and what the expected outcomes will be from ‘lighting the match’. The injection goes two steps further than the wild virus because 1) it contains the instructions for making the spike protein, which several experiments are showing can cause vascular and other forms of damage, and 2) it bypasses many front-line defenses of the innate immune system to enter the bloodstream directly in part. Unlike the virus example, the injection ensures there will always be some combustible materials on the floor, even if there are no other toxic exposures or behaviors.

In other words, the spike protein and the surrounding LNP are toxins with the potential to cause myriad short-, mid-, and long-term adverse health effects even in the absence of other contributing factors! Where and when these effects occur will depend on the biodistribution of the injected material. Pfizer’s own biodistribution studies have shown the injected material can be found in myriad critical organs throughout the body, leading to the possibility of multi-organ failure. And these studies were from a single injection. Multiple injections and booster shots may have cumulative effects on organ distributions of inoculant! The COVID-19 reported deaths are people who died with COVID-19, not necessarily from COVID-19. Likewise, the VAERS deaths are people who have died following inoculation, not necessarily from inoculation.

As stated before, CDC showed that 94 % of the reported deaths had multiple comorbidities, thereby reducing the CDC’s numbers attributed strictly to COVID-19 to about 35,000 for all age groups. Given the number of high false positives from the high amplification cycle PCR tests, and the willingness of healthcare professionals to attribute death to COVID-19 in the absence of tests or sometimes even with negative PCR tests, this 35,000 number is probably highly inflated as well. On the latter issue, both Virginia Stoner [85] and Jessica Rose [86] have shown independently that the deaths following inoculation are not coincidental and are strongly related to inoculation through strong clustering around the time of injection. Our independent analyses of the VAERS database reported in Appendix 1 confirmed these clustering findings.

Additionally, VAERS historically has under-reported adverse events by about two orders-of-magnitude, so COVID-19 inoculation deaths in the short-term could be in the hundreds of thousands for the USA for the period mid-December 2020 to the end of May 2021, potentially swamping the real COVID-19 deaths. Finally, the VAERS deaths reported so far are for the very short term. We have no idea what the death numbers will be in the intermediate and long-term; the clinical trials did not test for those. The clinical trials used a non-representative younger and healthier sample to get EUA for the injection. Following EUA, the mass inoculations were administered to the very sick (and first responders) initially, and many died quite rapidly. However, because the elderly who died following COVID-19 inoculation were very frail with multiple comorbidities, their deaths could easily be attributed to causes other than the injection (as should have been the case for COVID-19 deaths as well).

HCQ and IVM.

• Full Covid Genome Found In Stools – Meaning For Prevention And Treatments (VC)

“You heard it here first, COVID-20,” said Dr. Sabine Hazan on Sept. 16 during a discussion with the Ventura County Reporter at the offices of Ventura Clinical Trials and ProgenaBiome in Ventura. “We are already starting to see COVID-20-associated diarrhea and rectal bleeding.” She agreed to talk about findings in a ProgenaBiome report currently undergoing peer review. It is the first study she is aware of that finds the entire genome — along with 33 different mutations — in the stools of those with SARS-CoV-2. The paper, “Detection of SARS-CoV-2 from Patient Fecal Samples by Whole Genome Sequencing,” authored by Dr. Andreas Papaoutis, Jordan Daniels, Skylar Steinberg, Dr. Brad Barrows and Dr. Sabine Hazan (all with ProgenaBiome) and Dr. Thomas Borody and Dr. Siba Dolai of the Center for Digestive Diseases. (1)

That paper reports on the existence of hundreds of thousands of replicas of the complete genome of the virus in the stool samples of people who tested positive by nasal swab PCR testing, both symptomatic and asymptomatic. By using Next Generation Sequencing (NGS) the researchers identified 33 unique variations of the virus, indicating a high propensity for mutations, potentially making treatment by something as fine-tuned as a vaccine extremely challenging. The report also shows the initial findings of the clinical trial studying whether a combination treatment protocol called HAZDPaC (which includes hydroxychloroquine, azithromycin, zinc and Vitamins C and D) or high dosages of Vitamin C, D and Zinc alone (the placebo in the trial) may prove effective in eradicating the virus from the gut, where it could potentially cause long-lasting problems if left to “percolate.”

Eleven of 14 trial participants were positive (nasal swab PCR) for the virus. Eight of those people were not treated and the full virus genome was found in each of their stool samples. A total of 33 unique mutations of the virus were identified in those eight participants. The remaining three people who had the virus were treated for 10 days with HAZDPaC or high dosages of Vitamin C; when retested, they had no trace of the virus in their stools. Three additional trial participants served as the “control.” Two were negative (nasal swab PCR); one was not tested. None were treated and no virus was detected in stools. Until the report is printed as a peer reviewed paper (currently in process) it cannot be relied upon for other clinical study or purposes. But Hazan is confident of the findings’ ultimate confirmation through peer review.

[..] The initial protocols used in the FDA trial were formulated as a hypothesis to reach the ACE-2 receptors but also to destroy the virus. The treatment ProgenaBiome is using occupies those spots. Zinc fills up the ACE-2 receptors so there is nowhere for the virus to “park,” helping to maintain the gut barrier. Vitamins C and D boost the good gut bacteria. Hydroxychloroquine’s role is to raise the pH of the lysosome, or stomach of the cells. “If you change the pH in lysosome with medication, you change the pH…to 9 or 9.5. It’s a super alkaline environment and the virus disappears, it cannot replicate on the next cell. And so you stop the reproduction.” (2) With nowhere to go and unable to replicate, the virus is quickly evacuated by the bowel.

“At least that’s the hypothesis from the mechanism of action of all these products brought together as one formula. It’s not a one-pill solution,” said Hazan. She thinks earlier studies involving hydroxychloroquine were flawed because they were only using that one drug approach.

“To supercharge such a narrow directed evolution experiment, it is best to lower the defenses of the host. Tie all of their foot soldiers boots together.”

• Directed Evolution I – When Applied To People Is Eugenics (Anandamide)

Is there Spike Escape? This is hot debate stimulated by Geert Vanden Bossche. The critiques levied against his hypothesis (March 15th) are not completely compelling as more evidence matures demonstrating the waning protection of the vaccines and frequent transmission of the virus in Israel, Iceland and many other highly vaccinated countries. The premise of the argument against Geert appear to be rooted in a technophiles desire to always change the treatment. This is a desire to obtain the ultimate ring of power: A vax platform one can continually update (with no liability) and mandate to return freedom to its subjugates. I am more optimistic than Geert in that I believe many jurisdictions have enough natural immunity to thwart this experiment and the pandemic will cool down once all the vaccinated experience and develop immunity to the full 29kb virus.

So do we have Spike Escape? A frequent question these days but more akin to a retrospective “Oh Shit” inquiry. While it is deserving of its own captain obvious meme, it is important to explain why this is not only the expected outcome but how re-applying the same selective agent will only accelerate the escape. The more parsimonious response: If you can’t detect selection against the spike RNA sequence, you have no basis upon which to claim your vaccine has influence over this evolutionary experiment we have engaged in. This isn’t a small experiment. This is the grandest medical experiment ever imagined so it is important we reflect on the type of selection being applied.

These are non-sterilizing vaccines. There is a difference between being infected (RNA+) and being infectious (Virus+ and shedding). Non-Sterilizing vaccines leave the breakthrough patients as both. They can be PCR positive with a new virus. It can be replicative and have similar Ct scores as the unvaccinated control and the vaccinated can still transmit the virus. There are suggested benefits of these vaccines ( and risks) but one such benefit is not the reduction of RNA polymerase activity and evolution of the virus. The selection being applied is very narrow compared to how our bodies traditionally fight viruses and how most vaccines prior to 2020 fight viruses. 4,284 bases of this ~29,500 base pair virus (14% of the virus) encode the spike protein of a spike-only vaccine. This is a very narrow pressure point and is akin to using low dose antibiotics across the whole population… all at the same time.

In other evolutionary fights in medicine, narrow is naive. We fight sepsis with broad scale antibiotics. We fight cancer with cocktails that attack multiple pathways to prevent mutagensis. These are genomic diseases and one trick pony solutions are a hubristic trainwreck. To supercharge such a narrow directed evolution experiment, it is best to lower the defenses of the host. Tie all of their foot soldiers boots together. Get a good head start for your RdRp polymerase to kick into high gear. Promiscuous copying of viral genomes with low fidelity and a pinpointed selective pressure on a narrow region of the genome.

“More than one way to skin a cat…. but dont skin cats!! We kill bats.”

• Directed Evolution II – Gates Got Your Tongue? (Anandamide)

This is an excellent presentation on the evolutionary trajectory of SARs-CoVs-2 and just as fascinating as the genomics, is the content that is explicitly not spoken about. You see, NextStrain and GISAID all have alot of uncle Bills grant money and he loves vaccines so much, that he has over $100M in BioNtech stock and CureVac stock tucked away in the Bill and Melinda Gates Foundation. As a result, many people in the Epi space we affectionately refer to as the Nerd Sweater Mafia…. they know to never speak ill of vaccines. See if you can find the word vaccine anywhere in the first 24 minutes of this very well done analysis on the directed evolution of this virus. The fascinating aspect of this presentation is that it highlights the mutational spectrum of C19 during 2021 and it is as clear as day that there is a massive enrichment for mutations in the spike protein compared to other parts of the genome.

There is also a lot of squid ink diverting the viewers attention as to the cause of this. Let’s look at the running hypothesis they float to explain such an enrichment of mutagenesis in spike. 1.Natural selection against Host immunity. Note the language.. not vaccine immunity.. host immunity. Blame the victim some more and redirect attention from the obvious selective pressure going on with “Spike only vaccination” to those immunocompromised people (the ones you need to get vaccinated to save). Note at 8:52 he mentions this is speculative as they didn’t see any of this happening in the Spring 2020 during the ‘first’ pandemic wave. Remember this point as the emergence date of C19 continues to back into October 2019 with WIV employees losing their sense of smell. The first wave (in Trevor’s eyes) is only the wave he could see with qPCR but he forgets that viruses with R0 this high are unlikely to be at their first rodeo when we wise up and point our sequencers at them.

They begin to see spike mutagenesis in the fall of 2020 but it really takes off in 2021. This is where they will play their magic tricks. They will claim this was witnessed before the vax roll out therefore the vax is innocent. Watch them like a hawk. A fly in their ointment: You will also see them speak about convergent evolution being evident (min 20+) in the data which refutes their own chronological argument that attempts to blame this on pre-vax “partially immune” people. Convergent evolution is where the same mutations appear to evolve independently over and over again around the world as similar selective pressures are applied. The polymerase doesn’t make random errors. It has propensity to make some of the same errors due to the sequence context of the virus.

This means an ORF8 deletion can occur in Africa and Australia independently without anyone traveling between the two continents to spread it there. There are also similar selective pressures being applied in geographically distant places. In some of these cases, we can see different RNA variants emerge across the globe which may differ at a RNA sequence level but code for the same amino acid change. Let’s take the UUC codon for Phenylalanine. You can mutate it to UUA or UUG and still code for the same alternative amino acid Leucine. More than one way to skin a cat…. but dont skin cats!! We kill bats.

6 more months of misery.

“If you look at the trajectory we’re on, we’re a lot better off than we were six months ago… I think we’re over the worst of it now.”

• ‘Covid-19 Will Become Like Common Cold’ By Next Spring, Say Experts (INews)

Covid-19 could soon resemble the common cold as the virus weakens and people’s immunity is boosted by vaccines and exposure, two leading experts have said. Professor Sir John Bell, regius professor of medicine at Oxford University, has claimed the coronavirus could become like a cold by as soon as next spring. He also claimed the UK “is over the worst” of the pandemic and things “should be fine” once winter has passed. Professor Dame Sarah Gilbert, the co-creator of the Oxford/AstraZeneca vaccine, has made similar claims and said Covid-19 will become like a cold as it is unlikely to mutate into a dangerous variant. Speaking to a Royal Society of Medicine webinar last night, she said that viruses tend to become weaker as they spread.

She said: “We normally see that viruses become less virulent as they circulate more easily and there is no reason to think we will have a more virulent version of Sars-CoV-2 [Covid-19]. “We tend to see slow genetic drift of the virus and there will be gradual immunity developing in the population as there is to all the other seasonal coronaviruses.” Seasonal coronaviruses cause colds, and Dame Sarah said: “Eventually Sars-CoV-2 will become one of those.” Sir John was asked about the experts comments on Times Radio this morning, where he said the country’s position is much more promising than it was just six months ago. He said: “If you look at the trajectory we’re on, we’re a lot better off than we were six months ago… I think we’re over the worst of it now.” Sir John added that because cause numbers are currently high, immunity to Covid will increase substantially.

This guy is a salesman, not a scientist.

• Covid-19 Pandemic Will Be Over In A Year – Moderna CEO (RT)

The CEO of US pharma giant Moderna, Stephane Bancel, has come up with a reassuring forecast, suggesting that increasing vaccine production could see the coronavirus pandemic finally coming to an end in mid-2022. “If you look at the industry-wide expansion of production capacities over the past six months, enough doses should be available by the middle of next year so that everyone on this Earth can be vaccinated,” Bancel said in an interview with Swiss newspaper Neue Zuercher Zeitung. There’ll be jabs available even for infants soon as well as booster doses for those who would require them, he said. “Those who don’t get vaccinated will immunize themselves naturally because the Delta variant is so contagious,” the chief executive pointed out.

According to Bancel, the situation with Covid-19 will become similar to the one with flu. “You can either get vaccinated and have a good winter. Or you don’t do it and risk getting sick and possibly even ending up in hospital.” When asked when humanity will be able to exit the pandemic, which already saw over 219 million people infected and more than 4.5 million dead, and return to normal life, he replied: “As of today, in a year, I assume.” Moderna’s two-dose Covid-19 vaccine is approved in some 100 countries, while also being one of three drugs used in the immunization campaign in the US. The jab boasts a high efficacy rate of 93% six months after the administration of its second shot, barely waning from the 94.5% reported during its phase-three clinical trials.

However, Bancel insisted that those vaccinated would “undoubtedly” need a refresher at some point to stay protected from the virus. He said he expects younger people to get a booster shot once every three years and older people – once a year. Moderna’s booster contains half a dose of the active ingredient compared to the original injection, which provides the company with a further opportunity to increase production, he said. “The volume of vaccine is the biggest limiting factor. With half the dose, we would have three billion doses available worldwide for the coming year instead of just two billion,” the CEO explained.

“So let’s say your really don’t like the idea of a vexxing mandate on employers in your state or county. Fine. Find the appropriate legislators and picket their house.

That’s legal. It’ll******them off but so what?”

• You, In Fact, Have ALL The Power. Use It (Denninger)

You think OSHA has the power? Biden? Wrong. The Founders gave us a government structure intentionally designed to give the people the tools necessary to prevent what is being done right now. The closer to the people – that is, the smaller the division of government – the less-likely it is that anyone serving in said government in a legislative role is doing that on an exclusive, or nearly-so, basis. Most State Legislatures are part-time; that is, they meet for a couple months out of the year, plus the rare special session here and there. Essentially all County Commissions and City Alderman (or whatever they call them in your town) are. Every one of those people is utterly reliant on either a job or a business they own or control to put food on their table, keep their house and feed their family — just like you are. They’re just as vulnerable to attack on that means of earning a living as you are as well so why don’t you use it and go after them when they threaten to or actually do it to you?

Every single place I have ever lived required any business to obtain a county license, most business require state registration (even if only for sales tax) and a large percentage require licensing of either the firm, certain people in it, or both. The County or State can pass an ordinance requiring any non-discriminatory code of conduct they choose on said firms as a condition of that license. Refuse to comply, you’re closed right here, right now. Period. It doesn’t matter who you are — a hospital, a car dealer, a grocery store, a restaurant, etc. Done through regular legislative order these ordinances (or in the case of a state, laws) are presumptively valid and enforceable. So let’s say your really don’t like the idea of a vexxing mandate on employers in your state or county. Fine. Find the appropriate legislators and picket their house.

That’s legal. It’ll******them off but so what? There’s not a damned thing they can do about it. That’s personal pressure and it won’t be long before their spouse and kids start getting really unhappy. Which, of course, is the point — to make them unhappy enough that they fold. But the best pressure that can be applied through legal means is economic, which is exactly what they’re trying to do to you. So to really **** them up find the business or businesses they and their spouse, if any own, control or are part of — all this is public record and trivial to discover — and picket those, especially if they transact with the general public. Be targeted about it. Get 10, 20 or 100 other people in your local area and pick on one of them. Let’s say one of your County Commissioners owns a very popular tourist location in your town.

Picket it with the intent of destroying the customer volume he does at his business until and unless he, along with the rest of the Commission, do what you want. In this case, specifically, as a condition of a County Business License “no license holder or their agent may inquire of employee or customer personal medical status nor demand any medical treatment, prophylaxis or personal health record, effective immediately.” That eliminates the firm’s ability to put in place a vaccine mandate and arguably bars mask mandates too; they either comply or they’re done. You can’t operate without a business license; the Sheriff can and will come and chain the doors closed! Oh, they don’t want to pass that? Fine — put the first Commissioner’s business in the dirt and then move to the next one. Keep going until you get what you want.

‘It is true that schoolchildren will mostly catch Covid, if unvaccinated. But it is a poor reason to vaccinate them.’

• Scientists Slam Chris Whitty For Scare-mongering Over Unjabbed Children (DM)

Unvaccinated children getting infected with Covid isn’t an issue because they face such a vanishingly rare chance of falling seriously ill, a scientist said today. England’s chief medical officer, Professor Chris Whitty, yesterday told MPs ‘virtually all’ unjabbed youngsters would eventually catch the virus. He revealed about half of youngsters have already had the virus but insisted others would get it ‘sooner or later’. Justifying the decision to roll-out jabs to millions of 12-15 year olds, Professor Whitty added: ‘Vaccination will reduce that risk’. But one academic today criticised the CMO’s reasoning, arguing the majority would probably still get infected even if they were inoculated.

Professor David Livermore, a medical microbiologist at the University of East Anglia, said the virus has evolved to be extremely transmissible — and that vaccines aren’t perfect at blocking the pathogen. And he said natural infection would be preferable to jabs for children because the virus poses little-to-no-threat of causing serious illness in youngsters, whereas the vaccines aren’t risk-free. Some studies even suggest immunity from infection is stronger than that produced by the vaccines. Despite the chief medical officers who advised the Government to extend the rollout claiming they did so after assessing the benefits to children themselves, critics view the move as one intended to protect adults by reducing the risk of transmission.

But a host of scientists are now suggesting the virus now amounts to little more than a common cold for the vast majority of vaccinated adults. Dame Sarah Gilbert, one of the chief scientists behind the AstraZeneca vaccine, last night claimed viruses tend to ‘become less virulent as they circulate’ through the population. And Professor Tim Spector, an epidemiologist at King’s College London, today said jabs had already drastically changed Covid’s tell-tale symptoms, effectively turning it into a bad cold for most who catch it. He said other warning signs like a sore throat, runny nose and sneezing should be added to the official list of symptoms.

Professor Livermore told MailOnline: ‘It is true that schoolchildren will mostly catch Covid, if unvaccinated. But it is a poor reason to vaccinate them. ‘First, vaccines provide only limited protection against infection and transmission, so children are going to be infected over time anyway regardless of whether they have been vaccinated. At most, vaccinating them will only delay this. ‘Secondly, Covid infection does healthy children little harm. They suffer mild disease and recover swiftly. The hazard from Covid is largely for the elderly, not children. ‘Thirdly, evidence from Israel shows natural immunity — which children will acquire from infection — is 13-fold more protective than vaccination.’

What you get when the MSM spread misinformation:

“..for people aged 18–24, the share of those worried about serious health consequences is 400 times higher than the share of total COVID deaths..”

• Americans Have No Clue What the True COVID Numbers Are (Mercola)

Six months after the start of the pandemic, investment management organization Franklin Templeton Investments, in collaboration with Gallup,2 released a report about Americans’ understanding of the COVID-19 infection. The research focused on fundamental and undisputed facts of the risk for individuals and did not address any information that might be seen as controversial, such as treatment options and lockdown policies. In the report, the firm wrote:“Six months into this pandemic, Americans still dramatically misunderstand the risk of dying from COVID-19 … These results are nothing short of stunning. Mortality data have shown from the very beginning that the COVID-19 virus age-discriminates, with deaths overwhelmingly concentrated in people who are older and suffer comorbidities.

This is perhaps the only uncontroversial piece of evidence we have about this virus. Nearly all US fatalities have been among people older than 55; and yet a large number of Americans are still convinced that the risk to those younger than 55 is almost the same as to those who are older.” The Franklin Templeton-Gallup Economics of Recovery Study of Americans found there were misconceptions in the general population about the risks associated with infection. The analysts then separated the beliefs and compared those to the actual data. This is from the report: “On average, Americans believe that people aged 55 and older account for just over half of total COVID-19 deaths; the actual figure is 92%. Americans believe that people aged 44 and younger account for about 30% of total deaths; the actual figure is 2.7%. Americans overestimate the risk of death from COVID-19 for people aged 24 and younger by a factor of 50; and they think the risk for people aged 65 and older is half of what it actually is (40% vs 80%).

When the data were broken down by age groups they found that most people under age 65 really had no concept of the actual number of deaths for their age group. “The discrepancy with the actual mortality data is staggering: for people aged 18–24, the share of those worried about serious health consequences is 400 times higher than the share of total COVID deaths; for those age 25–34 it is 90 times higher.” Writing in Wirepoints, Mark Glennon commented on the findings saying, “The only good news there is that folks 65 and older are much more aware of the heightened risk for their own age group.” The report identified two major culprits of the fundamental misunderstanding of basic facts from a COVID-19 infection. Those culprits were misinformation predominantly shared on social media and the partisan bias for Democrats to “mistakenly overstate the risk of death from COVID-19 for younger people.”

Best part:

“..the treatment is covered by the federal government. The Food and Drug Administration granted emergency authorization to the drug back in May..”

• DeSantis Acquires New Monoclonal Antibodies From UK Drug Firm (JTN)

Florida Gov. Ron DeSantis has arranged a shipment of a new monoclonal antibody medication to help treat those sick with COVID-19. The Republican governor on Thursday announced the shipment of 3,000 doses of the drug produced by U.K.-based GlaxoSmithKline, a direct response to the Biden administration’s abrupt rationing of other antibody drugs, like Regeneron. “That’s showing that we’re going to leave no stone unturned. And, if there’s somebody that needs a monoclonal antibody treatment, we’re going to work hard to get it to them,” DeSantis told a press conference in Tampa. According to the Epoch Times, one dose of the drug by GSK, known as Sotrovimab, costs approximately $2,100. However, the treatment is covered by the federal government.

The Food and Drug Administration granted emergency authorization to the drug back in May. During the press conference announcing the shipment of Sotrovimab, DeSantis blasted the Biden administration for withholding other antibody treatments that could potentially save the lives of thousands of Floridians. “We’re going to be able to use that Sotrovimab to bridge some of the gaps that are gonna be developing as a result of the Biden administration dramatically cutting medications to the state of Florida,” DeSantis said. According to the New York Times, Florida, alongside six other southern states, was consuming 70% of the federal government’s supply of the antibody drug, Regeneron. In response, the Biden administration began rationing the treatments due to a national shortage.

“It has successfully appealed four removals, including the Sept. 14 meeting, but the county is tired of dealing with YouTube’s censorship..”

• YouTube Promises Pullback On Covid Censorship (JTN)

Speaking your mind about COVID-19 policies at a public meeting can trigger YouTube into holding your local government hostage until it deplatforms your voice. The Google-owned video platform removed an Illinois school board meeting for “medical misinformation,” the latest example of tech giants policing what is permissible to say on the ever-evolving debate over pandemic research, restrictions and treatments. Springfield District 186 said it assumed YouTube objected to the public comment portion of the June 21 meeting, according to The Center Square. As a result, board president Anthony Mares said its YouTube videos will exclude public comments going forward. A parent in the district claimed partial credit for the removal, citing his own public comment.

Ryan Jugan said that “witnessing censorship, suppression of medical professionals, science and data is appalling.” District spokesperson Bree Hankins told Just the News it never got specifics on the purported misinformation in the video and that YouTube denied the district’s appeal. While YouTube said it restored the video following The Center Square report — conducting a third review prompted by the media organization — Hankins said the company has yet to inform the district the video has been reinstated. The video platform has a contentious history with COVID-19 contrarians, including Florida Gov. Ron DeSantis. It pulled down a healthcare roundtable he hosted with former White House COVID advisor Scott Atlas, Harvard Medical School’s Martin Kulldorff, Stanford Med’s Jay Bhattacharya and Oxford’s Sunetra Gupta. DeSantis defiantly hosted another.

Reclaim the Net, which tracks digital censorship, shared several similar incidents that involve public meetings upon request. The St. Louis County Council is dumping YouTube completely after four removals in less than two months due to public comments against mask and vaccine mandates. It has successfully appealed four removals, including the Sept. 14 meeting, but the county is tired of dealing with YouTube’s censorship, information technology director Charles Henderson told the St. Louis Post-Dispatch. It’s planning to sign a contract with BoxCast.

Today. Open hearing.

• Arizona Audit for Dummies (Ivory Hecker)

It’s hard to keep up with it all! Arizona State Senator Wendy Rogers gives a preview ahead of Friday’s release of the report documenting results of an audit of the Presidential Election in Maricopa County, Arizona.

“..the aim is to abolish physical cash within 27 months of right now.”

• Agustín Carstens: Would You Buy A Dieting Régime From This Man? (Ward)

The somewhat bulky gentleman to your left is the boss of the Bank for International Settlements (BIS), Agustín Guillermo Carstens Carstens. Clearly, one Carstens wasn’t enough for him…judging by his build, in fact, one of anything is never quite enough for Agustín. It’s the sort of build that could be Built Back Better…unless the aim is to Build Better Billy Bunter Backs & Bottoms. In 2018, he was demanding more BIS control over Central Banks, whom he accused of ‘piggy-backing’…I suppose if you have a piggy back yourself, that’s something about which you’re entitled to opinionate. In the last two days, he’s been pushing hard for complete digital control over all money. Many suggest that in calling for this, Aggy is punching above his weight; but if the bloke was any heavier, in the absence of 180 centimetre arms he’d be punching himself.

Carstens Carstens has been a regular feature of Davos meetings since 2010. Let’s face it, as a physical feature, il gran Mexicano is a topological man mountain worthy of his own personal contour lines: he’s a hard guy to miss, and impossible to mark absent. As a result of climbing his own mountain, he has become the 4th richest politician in Mexican history, with a personal wealth estimated at $27 million. If and when Agustín finally achieves his goal of “resetting” who gets what in the Brave New Normal, it’s hard to avoid the feeling that his sharing methodology might be “83 for me, 1 for you” and so forth. Take in this second shot of Senor Carstens: I met Robert Maxwell several times, and trust me – the bouncing Czech was borderline anorexic compared to this guy.

When not busy having doors widened in advance of his meetings outside the BIS, he’s a big wheel in The Innovation BIS 2025 project – a scheme that would be dear to the hearts of the Davos élite if they had such organs factory-fitted. By 2025, the BIS hopes to complete the digitalisation of all payment systems in the UK, the U.S, the EU and every nation State in their orbit. Note the use of the pronoun ‘by’ there, and work backwards: the aim is to abolish physical cash within 27 months of right now. In every context (especially those of France, Italy and Greece) that timetable is about as practical as the idea of picking a locked toilet door with a blade of grass when stricken with diarrhoea.

The BIS refers to electronic cash as central bank digital currency (CBDC), but even this is immensely misleading: the organisation’s project is nothing less than the establishment of a New World Order-valued virtual coinage without reference to any criteria beyond, um, well, er…what the Bank for International Settlements says it is – the clue’s in the name, and all that. But there’s a more than slightly concerning two-tier nature to CBDC. Carstens-Carstens “explains” as follows: “Like cash, a CBDC could and would be available 24/7, 365 days a year. At first glance, not much changes for someone, say, stopping off at the supermarket on the way home from work. He or she would no longer have the option of paying cash. All purchases would be electronic.”

Support the Automatic Earth in virustime; donate with Paypal, Bitcoin and Patreon.

Debt Rattle December 9 2019

Dec 092019

December 9, 2019 Posted by Raúl Ilargi Meijer at 10:14 am Finance Tagged with: BIS, Brexit, cash, drone, hedge funds, Huawei, JPMorgan, Lavrov, market makers, NATO, repocalypse, Treasuries 6 Responses »

Lewis Wickes Hine News of the Titanic and possible survivors 1912

• US Banks’ Reluctance To Lend Cash May Have Caused Repo Shock: BIS (R.)

• BIS Offers Stunning Explanation Of What Happened On Repocalypse Day (ZH)

• The Incredible Shrinking Private Sector (G.)

• Northern Ireland Customs Protocol Could Thwart Brexit Plans (G.)

• Boris Johnson’s Promise Of Brexit By End Of 2020 Torpedoed By EU Chief (Mi.)

• The Invisible Tories (Craig Murray)

• China Tells Government Offices To Remove All Foreign Computer Equipment (G.)

• NATO Seeks To “Dominate The World”, Eliminate Competitors: Lavrov (ZH)

• Russian Air Defense System Shot Down US Drone Over Libyan Capital (R.)

From what I understand, big banks moved from cash to Treasuries, which decreased the amount of cash available for lending. Hedge funds also play a role. Have they become market makers?

• US Banks’ Reluctance To Lend Cash May Have Caused Repo Shock: BIS (R.)

The unwillingness of the top four U.S. banks to lend cash combined with a burst of demand from hedge funds for secured funding could explain a recent spike in U.S. money market rates, the Bank for International Settlements said. Cash available to banks for short-term funding all but dried up in late September, and interest rates deep in the plumbing of U.S. financial markets climbed into double digits. That forced the Fed to make an emergency injection of billions of dollars for the first time since the global financial crisis more than a decade ago.

While the exact cause of the squeeze is unclear – with explanations ranging from large withdrawals for quarterly tax payments to a big settlement of a trade in U.S. Treasuries – BIS analysts said the growing reliance on the biggest U.S. banks to keep the repo market functioning may have been a big factor. The big four banks, which BIS did not name in its report, have become net providers of funds to repo markets as they account for more than half of all Treasuries held by banks in the United States at the Federal Reserve.

The repo market underpins much of the U.S. financial system, helping ensure banks have liquidity to meet their daily operational needs. In a repo trade, Wall Street firms and banks offer U.S. Treasuries and other high-quality securities as collateral to raise cash, often just overnight, to finance their trading and lending. The next day, borrowers repay the loans plus what is typically a nominal rate of interest and get their bonds back. In other words they repurchase, or repo, the bonds.

Did the big banks know the Fed would move in? Were there conversations between JPM and the Fed prior to the move into Treasuries??

• BIS Offers Stunning Explanation Of What Happened On Repocalypse Day (ZH)

About a month ago, we first laid out how the sequence of liquidity-shrinking events that started about a year ago, and which starred the largest US commercial bank, JPMorgan, ultimately culminated with the mid-September repo explosion. Specifically we showed how JPM’s drain of liquidity via Money Markets and reserves parked at the Fed may have prompted the September repo crisis and subsequent launch of “Not QE” by the Fed in order to reduce its at risk capital and potentially lower its G-SIB charge – currently the highest of all major US banks.

Shortly thereafter, the FT was kind enough to provide confirmation that the biggest US bank had been quietly rotating out of cash, while repositioning its balance sheet in a major way, pushing more than $130bn of excess cash away from reserves in the process significantly tightening overall liquidity in the interbank market. We learned that the bulk of this money was allocated to long-dated bonds while cutting the amount of loans it holds, in what the FT dubbed was a “major shift in how the largest US bank by assets manages its enormous balance sheet.”

The moves saw the bank’s bond portfolio soar by 50%, and were prompted by capital rules that treated loans as riskier than bonds. And since JPM has been aggressively returning billions of dollars to shareholders in dividends and share buybacks each year, JPMorgan had far less room than most rivals to hold riskier assets, explaining its substantially higher G-SIB surcharge, which indicated that the Fed currently perceives JPM as the riskiest US bank for a variety of reasons. An executive at a large institutional investor told the FT that what JPM did “is incredible”, adding that “the scale of what JPMorgan is doing is mind-boggling . . . migrating out of cash into securities while loans are flat.”

The dramatic change, which occurred gradually over the year, and which may have catalyzed the spike in repo rates in September, was first flagged by JPMorgan at an investor event back in February. Then CFO Marianne Lake said that, after years of industry-leading loan growth, “we have to recognize the reality of the capital regime that we live in”. About half a year later, the rest of the world did too when the overnight general collateral rate briefly did something nobody had ever expected it to do, when it exploded from 2% to about 10% in minutes, an absolutely unprecedented move, and certainly one that was seen as impossible in a world with an ocean of roughly $1.3 trillion in reserves floating around.

[..] in a novel twist, the BIS also found that hedge funds exacerbated the turmoil in the repo market with their thirst for borrowing cash to juice up returns on their trades. Here is what the BIS said: “US repo markets currently rely heavily on four banks as marginal lenders. As the composition of their liquid assets became more skewed towards US Treasuries, their ability to supply funding at short notice in repo markets was diminished. At the same time, increased demand for funding from leveraged financial institutions (eg hedge funds) via Treasury repos appears to have compounded the strains of the temporary factors.”

Britain.

• The Incredible Shrinking Private Sector (G.)

The latest GDP figures released on Wednesday suggest on the surface the overall economy is doing better, but further inspection highlights the underlying weakness. The domestic private sector is in a dire state, having now shrunk for four consecutive quarters – the worst result since the 1990s recession – and the economy is now more dependent on government spending to keep it afloat than at any time since the GFC . First the good news – things are better than we previously thought. The GDP figures contained some fairly significant revisions of past data, based on more accurate underlying data. Whereas in June it appeared the economy grew by just 1.5% – the worst since 2001 – now the ABS estimates in June the economy was growing at an annual rate of 1.7% and is now growing at 1.8% in trend terms:

This is good, and yet it is pretty sad really how low the bar has become to think economic growth can be called “good”. The current growth rate of 1.8% is around 1% point below the long-term trend and well below the old marker of 3% growth that used to be considered average. In the September quarter the economy grew by 0.4% (seasonally adjusted), or 0.5% (trend), still below average, but what is important is where this growth is being generated. The biggest driver was net exports – contributing 0.35% pts of that growth.

They don’t appear to have all the details figured out.

• Northern Ireland Customs Protocol Could Thwart Brexit Plans (G.)

Northern Ireland customs arrangements may thwart Boris Johnson’s plan to leave the EU by December 2020, according to a document said to be leaked from civil servants in the Department for Exiting the EU. In the document, seen by the Financial Times, staff raised concerns about the readiness of the new customs arrangement, calling the protocol to keep part of the EU customs code in Northern Ireland, a “major” obstacle to Brexit delivery. The FT reported that the document was sent to senior Whitehall officials last week and said that implementing the Northern Ireland protocol before next December was a “strategic, political and operational challenge”.

The protocol would implement a form of customs border between Northern Ireland and the rest of the UK – an alternative arrangement to the Northern Irish “backstop” in the withdrawal agreement. Civil servants reportedly highlighted the “legal and political” repercussions both within the UK and Europe of failing to deliver Brexit on time, which Boris Johnson has made it the focal issue of his election campaign. Doubt was also cast on the free-trade agreement that Johnson has pledged to establish with the EU next year, with the document, marked “official sensitive”, reportedly stating that “delivery on the ground would need to commence before we know the outcome of negotiations”.

The government said it did not comment on leaks, but insisted that its deal with the EU would comprehensively withdraw the whole of the UK – including Northern Ireland. It reiterated its commitment to complete the process before December 2020.

“The EU/UK future relationship cannot be settled in 11 months.”

• Boris Johnson’s Promise Of Brexit By End Of 2020 Torpedoed By EU Chief (Mi.)

Michel Barnier has torpedoed Boris Johnson’s promise that Brexit will be done and dusted by the end of next year. The Sunday Mirror has seen minutes of a private meeting between the EU’s chief Brexit negotiator and MEPs which rubbish the PM’s pledge. Mr Johnson has said he will not extend the transition period beyond 2020 – which raises the danger of the UK crashing out with no deal. Trade talks are planned after Britain formally leaves the EU on January 31. But Mr Barnier told EU Employment and Social Affairs Committee MEPs: “The EU/UK future relationship cannot be settled in 11 months.” He added that means prioritising some areas while more time will be needed for other issues such as transport.

Dominic Cummings focuses on social media, not canvassing.

• The Invisible Tories (Craig Murray)

I live in a marginal constituency, where the excellent Joanna Cherry of the SNP has a lead of just over 1,000 over the Tories. If the most recent opinion polls are correct, the parties’ standings at this moment are similar to the result last time, the momentum is with the Tories and this should be a key Tory target. Yet I have not received one single Tory leaflet (and I live on one of the main residential streets) nor have I seen one single Tory campaigner, including when I have been out delivering leaflets for Joanna Cherry myself. Nor have I seen one single Tory poster in a house.

It is not just on TV that the Tories have been skipping interviews and debates, they seem to have eschewed any semblance of a ground campaign too, in what presumably is a key target seat for them. Boris Johnson is not popular with any of the local residents I have spoken to, and there is no enthusiasm at all for Brexit in this part of Edinburgh. In short, I am absolutely unable to square the opinion polls with the evidence of my own eyes and ears.

What is your experience?

Sounds like quite the undertaking.

• China Tells Government Offices To Remove All Foreign Computer Equipment (G.)

China has ordered that all foreign computer equipment and software be removed from government offices and public institutions within three years, the Financial Times reports. The government directive is likely to be a blow to US multinational companies like HP, Dell and Microsoft and mirrors attempts by Washington to limit the use of Chinese technology, as the trade war between the countries turns into a tech cold war. The Trump administration banned US companies from doing business with Chinese Chinese telecommunications company Huawei earlier this year and in May, Google, Intel and Qualcomm announced they would freeze cooperation with Huawei.

By excluding China from western know-how, the Trump administration has made it clear that the real battle is about which of the two economic superpowers has the technological edge for the next two decades. This is the first known public directive from Beijing setting specific targets limiting China’s use of foreign technology, though it is part a wider move within China to increase its reliance on domestic technology.

“We have an answer to all the threats that the Alliance is multiplying in this world.”

• NATO Seeks To “Dominate The World”, Eliminate Competitors: Lavrov (ZH)

Russian Foreign Minister Sergei Lavrov has charged NATO with wanting to “dominate the world” a day after 70th anniversary events of the alliance concluded in London. “We absolutely understand that NATO wants to dominate the world and wants to eliminate any competitors, including resorting to an information war, trying to unbalance us and China,” Lavrov said from Bratislava, the capital of Slovakia, while attending the 26th Ministerial Council of the Organization for Security and Cooperation in Europe (OSCE). He seized upon NATO leaders’ comments this week, specifically Secretary General Jens Stoltenberg, naming China as a new enemy alongside Russia. Stoltenberg declared at the summit that NATO has to “tackle the issue” of China’s growing capabilities.

Lavrov told reporters Thursday: “I think that it is difficult to unbalance us and China. We are well aware of what is happening. We have an answer to all the threats that the Alliance is multiplying in this world.” He also said the West is seeking to dominate the Middle East under the guise of NATO as well. The new accusation of ‘world domination’ comes at a crisis moment of growing and deep divisions over the future of the Cold War era military alliance, including back-and-forth comments on Macron’s “brain death” remarks, and looming questions over Turkey’s fitness to remain in NATO, and the ongoing debate over cost sharing burdens and the scope of the mission.

“Naturally, we cannot but feel worried over what has been happening within NATO,” Lavrov stated. “The problem is NATO positions itself as a source of legitimacy and is adamant to persuade one and all it has no alternatives in this capacity, that only NATO is in the position to assign blame for everything that may be happening around us and what the West dislikes for some reason.”

Who operated each contraption?

• Russian Air Defense System Shot Down US Drone Over Libyan Capital (R.)

The U.S. military believes that an unarmed American drone reported lost near Libya’s capital last month was in fact shot down by Russian air defenses and it is demanding the return of the aircraft’s wreckage, U.S. Africa Command says. Such a shootdown would underscore Moscow’s increasingly muscular role in the energy-rich nation, where Russian mercenaries are reportedly intervening on behalf of east Libya-based commander Khalifa Haftar in Libya’s civil war. Haftar has sought to take the capital Tripoli, now held by Libya’s internationally recognized Government of National Accord (GNA). U.S. Army General Stephen Townsend, who leads Africa command, said he believed the operators of the air defenses at the time “didn’t know it was a U.S. remotely piloted aircraft when they fired on it.”

“But they certainly know who it belongs to now and they are refusing to return it. They say they don’t know where it is but I am not buying it,” Townsend told Reuters in a statement, without elaborating The U.S. assessment, which has not been previously disclosed, concludes that either Russian private military contractors or Haftar’s so-called Libyan National Army were operating the air defenses at the time the drone was reported lost on Nov. 21, said Africa Command spokesman Air Force Colonel Christopher Karns. Karns said the United States believed the air defense operators fired on the U.S. aircraft after “mistaking it for an opposition” drone. An official in Libya’s internationally recognized Government of National Accord (GNA) told Reuters that Russian mercenaries appeared to be responsible.

Please put the Automatic Earth on your Christmas charity donations list. Support us on Paypal and Patreon.

Top of the page, left and right sidebars. Thank you.

Debt Rattle February 28 2018

Feb 282018

February 28, 2018 Posted by Raúl Ilargi Meijer at 11:09 am Finance Tagged with: arctic, Brexit, cash, Draghi, Fed, leverage, Macedonia, plastic, polar vortex, Powell, Syria, tariffs, Trump 9 Responses »

Vincent van Gogh Le moulin de la galette 1886

• Fed Chairman Powell: Market Volatility Won’t Stop More Rate Hikes (CNBC)

• The Albatross Of Debt Part 4 (David Stockman)

• Slowing Euro-Area Inflation Helps Draghi Push Back Exit Debate (BBG)

• Banks Have The Right To ‘Do What They Want’ In Leveraged Lending: Otting (R.)

• EU and China Consider Retaliation To Potential Trump Tariffs (CNBC)

• People in Sweden at Risk of Losing Access to Cash Altogether (BBG)

• May Is Ready to Fight With EU Over Draft Brexit Deal (BBG)

• “We’ve Got To DO Something About Syria!” Uh, No You Don’t. Please Don’t. (CJ)

• Protesters in FYROM Decry Proposed ‘Macedonia’ Name Compromise (AP)

• World’s First Plastic-Free Aisle Opens In Netherlands Supermarket (G.)

• Arctic Warming: Scientists Alarmed By ‘Crazy’ Temperature Rises (G.)

The news about Powel’s first speech is as boring as the man himself. “We’re doing so well I just gotta wear shades..”

• Fed Chairman Powell: Market Volatility Won’t Stop More Rate Hikes (CNBC)

Federal Reserve Chairman Jerome Powell played down concerns about recent market volatility, arguing Tuesday that the dramatic swings do not weigh heavily on his outlook for the economy and maintaining his expectation for further gradual increases in interest rates. In Capitol Hill testimony, Powell emphasized that the job market remains robust, consumer spending is solid and wage growth is accelerating. He also highlighted gains in U.S. exports and stimulative fiscal policy as new “tailwinds” for the economy. “After easing substantially during 2017, financial conditions in the United States have reversed some of that easing,” he said in prepared remarks. “At this point, we do not see these developments as weighing heavily on the outlook for economic activity, the labor market and inflation. Indeed, the economic outlook remains strong.”

Powell’s appearance before the House Financial Services committee was his first as the powerful chairman of the world’s most influential central bank. The Fed has been aiming to boost inflation to 2%, but the recent pickup in monthly readings has spooked some investors who worry the central bank might overshoot its target. Instead, Powell’s remarks suggested the firmer data give Fed officials confidence they will actually hit a goal that has long proved elusive. He characterized inflation as “low and stable.” “Despite the recent volatility, financial conditions remain accommodative. At the same time, inflation remains below our 2% longer-run objective. In the FOMC’s view, further gradual increases in the federal funds rate will best promote attainment of both of our objectives.”

Stockman has the best assessment of Powell. A longtime and clueless Fed puppet with no opinion of his own.

• The Albatross Of Debt Part 4 (David Stockman)

Donald Trump is all about delusional and so are the casino punters. They keep buying what the robo-machines are buying, which, in turn, persist in feasting on the dip because it’s there and because it’s worked like a charm for nine years running. So doing, the punters have become downright reckless. After all, the market was already sky high last January – trading at 23X earnings on the S&P 500 and resting precariously on a record $554 billion of margin debt . Yet in order to load up on even more of these ultra risky shares, punters have since added $112 billion to their already staggering margin accounts, thereby helping to propel the S&P index to a truly ludicrous 27X by the end of January 2018.

And therein lies the true danger of the Fed’s 30-year long regime of Bubble Finance and the $67 trillion of debt it has piled upon the US economy. To wit, it has completely unmoored Wall Street from the main street economy, meaning that the speculative momentum and internals of the casino are operating in free flight: They will just keep levitating financial asset prices higher until some powerful shock triggers another meltdown of the type experienced during 2008, 2000 and 1987.

We happen to believe strongly that a bond market “yield shock” will be the crash-trigger this time around and for a self-evident reason. The central banks of the world have unleashed a credit monster – $67 trillion in the US, $40 trillion or more in China and $230 trillion on a global basis—and know they must finally stop the relentless monetization of existing debt and other assets. The leadership for that task falls to the new Fed Chairman, Jerome Powell, who is a dyed-in-the-wool Keynesian and lifetime crony capitalist bubble rider. Indeed, during the 45 meetings during which he served as a member of the Bernanke-Yellen Fed, he did not dissent a single time.

So he now owns the epic bubble generated by that madcap regime of massive money printing and drastic interest rate repression, but through his Keynesian beer goggles Powell is thoroughly clueless about the resulting giant disconnect between main street and Wall Street. Accordingly, he seems to think that there is a strong full-employment economy on main street, when it’s nothing of the kind; and a reformed, prudently regulated banking system at the center of Wall Street, when in fact it’s teeming with the fruits of relentless speculation – FANGS, leveraged ETFs, options gambling, risk parity trades, structured finance deals loaded with hidden risk and debt and countless more.`

In other words, the Fed’s new chairman avers that there is smooth sailing ahead, even suggesting to Congress today that the US economy is blessed with considerable tailwinds – including exports and fiscal policy! We will address that tommyrot below, but what’s ahead is tumult, not smooth. That’s because the disconnect between a flat-lining main street economy and Wall Street’s bubble ridden financial house of cards is blatantly unstable and unsustainable. Indeed, this fraught condition, which Powell and his Keynesian posse fail to see, will soon give rise to a thundering upheaval triggered by the Fed’s own action.

And Draghi too just keeps claiming the economy is doing great, and it’s due to him.

• Slowing Euro-Area Inflation Helps Draghi Push Back Exit Debate (BBG)

A third month of slowing inflation in the euro-area has given European Central Bank President Mario Draghi ammunition to ward off the hawks a little while longer. The rate of price growth slowed to 1.2% this month from 1.3%, dropping to its weakest since 2016. The core measure was unchanged at 1%. The figures follow a series of releases that have checked the economy’s thundering momentum at the start of 2018, which had emboldened policy makers who want a faster unwinding of the central bank’s crisis-era monetary stimulus. Draghi emphasized to European lawmakers this week that an expansionary policy is still warranted even as the economic situation is “improving constantly.”

At the same time, he’s more confident that declining unemployment will boost pay and inflation eventually, even if the rate remains below the ECB’s target of just under 2% for now. The ECB’s Governing Council meets next week and is likely to discuss a change in its policy language to pave the way for an end of quantitative easing. Executive Board member Benoit Coeure – an architect of the program who has more recently taken a hawkish turn – said last week that the ECB can afford to slow bond purchases, as long as it gives clear guidance on the path of interest rates. Bundesbank President Jens Weidmann, who has long argued in favor of unwinding stimulus, chimed in on Tuesday, saying in a Bloomberg TV interview that the ECB’s guidance on interest rates is “rather vague” and could be strengthened as the end of bond buying approaches.

The European Commission said on Tuesday euro-area economic sentiment slipped for a second month in February after touching a 17-year high in December. Data last week showed business confidence in Germany and manufacturing and services activity in the euro area all weakened more than economists forecast. Such bumps along the road of Europe’s recovery from the ravages of its debt crisis underscore why Draghi is not yet ready to pare back support for the euro area.

You mean the ones we bailed out, right?

• Banks Have The Right To ‘Do What They Want’ In Leveraged Lending: Otting (R.)

Banks have the “right” to do the leveraged lending they want as long as it does not impair their “safety and soundness,” Joseph Otting, Comptroller of the Currency, said on Tuesday. Otting was speaking to an audience at the ABS Vegas conference co-hosted by SFIG, in response to a question from the audience about whether the OCC would be more lenient with banks about leveraged lending. The Government Accounting Office, the investigative arm of the US Congress, said last October that US bank guidelines on leveraged lending are subject to Congressional review, clearing the way for them to possibly be overturned. The GAO said the guidelines, which critics said have hampered the leveraged debt market, are under the purview of the Congressional Review Act of 1996, which they would not be if the GAO had deemed them to be less formal instruments of policy.

“As long as banks have the capital, I am supportive of banks doing leveraged lending,” said Otting. That stands even if leveraged lending activities transgresses guidelines, he said. “When (the idea of the) guidance came out – it was like people were afraid to jump over the line without feeling the wrath of Khan from the regulators,” Otting said. “But you have the right to do what you want as long as it does not impair safety and soundness. It’s not our position to challenge that.” US regulators said they are open to revising restrictions on leveraged lending, offering an olive branch to a Republican-controlled Congress keen to roll back banking regulations. The response from regulators indicated a desire to avoid a protracted battle with a Congress.

Trump the anti-globalist. That should appeal to some people.

• EU and China Consider Retaliation To Potential Trump Tariffs (CNBC)

As the Trump administration considers what action to take on trade tariffs on steel and aluminum, EU and Chinese officials are considering taking aim at politically strategic products made in the U.S., such as bourbon and motorcycles. Of the options laid out by Commerce Secretary Wilbur Ross, the administration is considering the most wide-reaching penalty: slapping tariffs on all steel and aluminum imported into the U.S., not just imports from specific countries. The EU is targeting products with political punch, revisiting a list compiled during George W. Bush-era trade disputes of symbolic American brands. Potentially in the EU’s sights: items such as Harley-Davidson motorcycles, whose corporate headquarters is in House Speaker Paul Ryan’s home state of Wisconsin.

Bourbon is another target, having enjoyed a surge in exports to the EU. Senate Majority Leader Mitch McConnell’s home state of Kentucky exported $154 million worth of bourbon to the EU, up from $128 million in 2016, according to data from the International Trade Commission. Agriculture products such as cheese, orange juice, tomatoes and potatoes are also targets for retaliation. “The EU stands ready to react swiftly and appropriately in case our exports are affected by any restrictive trade measures from the U.S.,” a European Commission source tells CNBC. The counterpunch from China could land harder because of the scale of trade between the two countries and the reliance of American farmers on China as an export destination. China’s Ministry of Commerce is already investigating whether to limit imports of U.S. sorghum, a cereal grain used to feed livestock, in response to previous tariffs from the White House on solar panels and washing machines.

NOW they find out: “Cash is important in a crisis situation…”

• People in Sweden at Risk of Losing Access to Cash Altogether (BBG)

People living in the world’s most cashless society may soon lose their access to notes and coins. To avoid that extreme scenario, Swedish cash-handling provider Loomis wants authorities to force banks and retailers to continue accepting cash. The warning follows similar calls from the Swedish central bank, which is worried that the rapid disappearance of cash will ultimately lead to the disintegration of the infrastructure needed to use notes and coins and undermine its task to promote a safe and efficient payment system. “We have to have cars, vaults and all that, and in order to maintain the infrastructure we also need a base volume,” Loomis CEO Patrik Andersson said in an interview. He says Sweden’s more remotely populated areas in the north are most at risk of losing access to cash.

Such a scenario would be worrying in the event of natural disaster or a technological breakdown, with Swedes potentially unable to buy the basics needed to survive. “Cash is important in a crisis situation,” Andersson said. “Swedes don’t maybe have the insight to understand the effects of such a crisis, that it pervades the whole community.” A parliament committee reviewing the broader framework for the Riksbank plans to publish a special report this summer looking at the challenges posed by declines in cash usage. Riksbank Governor Stefan Ingves this week called for legal changes to safeguard the central bank’s governance of the payment system amid the rapid decrease in the use of cash. [..] The amount of cash in circulation in Sweden last year dropped to the lowest level since 1990 and is now more than 40% below its 2007 peak. The declines in 2016 and 2017 were the biggest on record.

Much as you may wish this were to vanish from the news, it’ll drag on for a very long time.

• May Is Ready to Fight With EU Over Draft Brexit Deal (BBG)

Prime Minister Theresa May is preparing to reject the EU’s draft Brexit deal when it’s published Wednesday, a senior official said, as her government steps up its fight with the bloc over the terms of Britain’s departure. With just three weeks left to agree on the Brexit transition phase, the EU will unveil a legal text that’s likely to infuriate euroskeptics in May’s Conservative government, piling further pressure on the premier at a critical time. According to the senior official, May will take on the EU over two of its key proposals that are unacceptable to her government. These are allowing the European Court of Justice to oversee the final deal, and arranging a separate trading regime for Northern Ireland – which, although it could avoid a “hard border” with Ireland, would impose new barriers with mainland Britain.

Almost a year in since May triggered the U.K.’s withdrawal from the 28-nation club, talks have yet to begin on what kind of trade accord will follow. Time is running out to limit the damage this ongoing uncertainty will cause to British businesses, who want a status quo transitional phase to be agreed by the end of March at the latest, to help them prepare and adapt when Britain leaves in March 2019. Yet key conflicts remain unresolved between the U.K. and the EU negotiating teams. “I maintain the evaluation that I gave you three weeks ago, which is that in light of these divergences, that we haven’t achieved the transition,” EU chief negotiator Michel Barnier said Tuesday. His remarks raise the prospect that the deal will miss its crucial end-March deadline.

Caitlin Johnstone has it right. It’s out leadership that has turned Syria into such a mess (like Lybia, Iraq), not Assad or Putin.

• “We’ve Got To DO Something About Syria!” Uh, No You Don’t. Please Don’t. (CJ)

Arguing that the western war machine is a good way to bring about peace and justice is like arguing that a bulldozer is a useful tool for brain surgery. Arguing that the western war machine is a good way to bring about peace and justice in Syria is like arguing that the gasoline which was used to start a house fire can also be used to extinguish it. The cutesy fairy tale you will hear from empire loyalists is that what started out as peaceful protests slowly morphed into a battle between the Syrian government and various terrorist factions, with the west only backing the terrorists later on in the conflict. This is false. [..] This has never been about “saving children”; this is about money, power, and resources, which are all of course ultimately the same thing as far as the empire is concerned.

Longtime US rival Russia has recently been awarded exclusive rights to oil and gas production in Syria in return for its efforts in helping its longtime ally stop the regime change, a predictable step in the fight for fossil fuel dominance in the region. Syria’s border dispute with Israel over the Golan Heights means that Israel has every reason to want to keep Syria destabilized, not only because the Golan Heights contains oil but because it provides a third of Israel’s water supply. Bashar al-Assad also launched what he called his “Five Seas Vision” in 2004, a strategy to use Syria’s supreme geographic location to become an economic superpower. Such a plan wouldn’t sit well with the US hegemon, which can only maintain its dominance by keeping other nations down.

“Once the economic space between Syria, Turkey, Iraq and Iran becomes integrated, linking the Mediterranean, the Caspian Sea, the Black Sea and the Arabian Gulf, will not only be important in the Middle East,” Assad once famously said in 2009. “When these seas are connected, we will become the inevitable intersection of the whole world in investment, transportation, and more.” It’s not hard to imagine how the imperialists would suddenly accelerate the urgency of removing Assad once he began speaking like that. Go try and find anything damning about Bashar al-Assad in the western mainstream media prior to 2009. You’ll find a bunch of positive expressions, including a nomination for honorary knighthood in 2002 by British Prime Minister Tony Blair. Interesting how he then suddenly transformed overnight into a bloodthirsty sexual sadist who gets off on gassing children to death for no reason.

The name dispute continues. Came upon a map recently (below), which explains quite well why Greeks don’t want FYROM to call itself Macedonia: 90% of former Macedonia is in Greece.

• Protesters in FYROM Decry Proposed ‘Macedonia’ Name Compromise (AP)

Several thousand protesters rallied in Skopje, the capital of the Former Yugoslav Republic of Macedonia (FYROM), late Tuesday for the government to call off talks with Greece aimed at settling a decades-long name dispute. The protesters marched peacefully from the main Orthodox cathedral in Skopje past the European Union office, chanting “Macedonia! Macedonia!” and waving national flags. Prime Minister Zoran Zaev’s 9-month-old center-left government has opened negotiations with Greece to resolve the dispute over the country’s name. Greece says the country’s name in its current form implies a territorial claim against its own region of Macedonia. Zaev has said he is willing to support a modified name. But the head of the so-called “World Macedonian Congress” group, Todor Petrov, told the protesters that changing the country’s name would be tantamount to committing treason.

“Our country has a name….To change it would mean that the Macedonian identity would be permanently lost,” he said. The rally was organized by several hard-line nationalist associations. The rally ended peacefully, but a Greek flag was burned during the march. Greeks also held a large rally in Athens earlier this month to reject a proposed compromise. Zaev has said he could accept a “geographical qualifier” in Macedonia’s name – such as “new”, “upper” or “north” – to forge a compromise, but insisted the new name must “respect the dignity” of people in both countries. Greece is also seeking changes in FYROM’s Constitution to eliminate what Athens considers tacit territorial claims. FYROM insists constitutional amendments made in 1995 already addressed Greek concerns.

1) It’s crazy that we find this so special.

2) Shops have had plastic free aisles for many years, and in many places. Just not your supermarket.

3) That unfortunate photo makes it look as if everything is wrapped in plastic.

• World’s First Plastic-Free Aisle Opens In Netherlands Supermarket (G.)

Shoppers in the Netherlands will get the chance to visit Europe’s first plastic-free supermarket aisle on Wednesday in what campaigners claim is an turning point in the war on plastic pollution. The store in Amsterdam will open its doors at 11am when shoppers will be able to choose from more than 700 plastic-free products, all available in one aisle. The move comes amid growing global concern about the damage plastic waste is having on oceans, habitats and food chains. Scientists warn plastic pollution is now so widespread it risks permanent contamination of the natural world. [..] Sian Sutherland, co-founder of A Plastic Planet, the group behind the campaign, said the opening represented “a landmark moment for the global fight against plastic pollution”.

“For decades shoppers have been sold the lie that we can’t live without plastic in food and drink. A plastic-free aisle dispels all that. Finally we can see a future where the public have a choice about whether to buy plastic or plastic-free. Right now we have no choice.” The aisle will open in the Amsterdam branch of the Dutch supermarket chain Ekoplaza. The company says it will roll out similar aisles in all of its 74 branches by the end of the year. Ekoplaza chief executive, Erik Does, has been working with the campaign for the past month and said the initiative was “an important stepping stone to a brighter future for food and drink”. “We know that our customers are sick to death of products laden in layer after layer of thick plastic packaging. Plastic-free aisles are a really innovative way of testing the compostable biomaterials that offer a more environmentally friendly alternative to plastic packaging.”

The aisle will have more than 700 plastic-free products including meat, rice, sauces, dairy, chocolate, cereals, yogurt, snacks, fresh fruit and vegetables. Campaigners say the products will not be anymore expensive than plastic-wrapped goods and will be “scalable and convenient”, using alternative biodegradable packing where necessary rather than ditching packaging altogether. They add the aisles will be a “testbed for innovative new compostable bio-materials as well as traditional materials such as glass, metal and cardboard.” Sutherland said: “There is absolutely no logic in wrapping something as fleeting as food in something as indestructible as plastic. Plastic food and drink packaging remains useful for a matter of days yet remains a destructive presence on the Earth for centuries afterwards.”

Really? ‘Alarmed’? ‘Crazy’? They knew weeks ago the polar vortex was about to split. And still don’t know why that is. Keep it real.

• Arctic Warming: Scientists Alarmed By ‘Crazy’ Temperature Rises (G.)

An alarming heatwave in the sunless winter Arctic is causing blizzards in Europe and forcing scientists to reconsider even their most pessimistic forecasts of climate change. Although it could yet prove to be a freak event, the primary concern is that global warming is eroding the polar vortex, the powerful winds that once insulated the frozen north. The north pole gets no sunlight until March, but an influx of warm air has pushed temperatures in Siberia up by as much as 35C above historical averages this month. Greenland has already experienced 61 hours above freezing in 2018 – more than three times as many hours as in any previous year. Seasoned observers have described what is happening as “crazy,” “weird,” and “simply shocking”.

“This is an anomaly among anomalies. It is far enough outside the historical range that it is worrying – it is a suggestion that there are further surprises in store as we continue to poke the angry beast that is our climate,” said Michael Mann, director of the Earth System Science Center at Pennsylvania State University. “The Arctic has always been regarded as a bellwether because of the vicious circle that amplify human-caused warming in that particular region. And it is sending out a clear warning.” Although most of the media headlines in recent days have focused on Europe’s unusually cold weather in a jolly tone, the concern is that this is not so much a reassuring return to winters as normal, but rather a displacement of what ought to be happening farther north.

At the world’s most northerly land weather station – Cape Morris Jesup at the northern tip of Greenland – recent temperatures have been, at times, warmer than London and Zurich, which are thousands of miles to the south. Although the recent peak of 6.1C on Sunday was not quite a record, but on the previous two occasions (2011 and 2017) the highs lasted just a few hours before returning closer to the historical average. Last week there were 10 days above freezing for at least part of the day at this weather station, just 440 miles from the north pole.

Snowstorm nears London Photo: NPAS

Debt Rattle December 18 2017

Dec 182017

December 18, 2017 Posted by Raúl Ilargi Meijer at 10:44 am Finance Tagged with: bitcoin, Brexit, cash, China, deflation, futures, Greece, Japan, Merkel, moms, Poland, reformation, refugees 11 Responses »

Russell Lee Sign Along the Road Near Capulin New Mexico 1939

• Bitcoin Futures Crash Over $2000 From Open (ZH)

• Bitcoin’s Illiquidity Is Going To Be A Huge Problem (BI)

• Japan Exports Boom, But Inflation Not Following Script (R.)

• China Should Let Its Migrant Workers Roam Free (Pettis)

• Desperate UK Homeowners Are Cutting Prices – Zoopla (G.)

• UK Banks Tell May: A Canada-Style Brexit Deal Is Not Good Enough (G.)

• Why Business Could Prosper Under A Corbyn Government (Pettifor)

• Heretics Welcome! Economics Needs A New Reformation (G.)

• Merkel’s Last Stand – Article 7 For Poland (Luongo)

• Cash Still King For The Majority Of Greek Consumers, Employers (K.)

• Greece Drafts Law to Accelerate Migrant Asylum Applications And Returns (K.)

• If Money Rewarded Hard Work, Moms Would Be The Billionaires (CJ)

Shaky, but give it time before deciding.

• Bitcoin Futures Crash Over $2000 From Open (ZH)

Update: Bitcoin and Bitcoin Futures have collapsed since the futures opened…

Dropping over $2200 to converge with spot…

Both CME and CBOE Bitcoin Futures contracts opened above $20,000 this evening (with Bitcoin spot hovering around $19,000). However, as soon as trading started, Bitcoin futures got hammered lower.

Those expecting a surge in futs volumes on the CME vs the CBOE will be disappointed: In fact, spoting actual trades in the first few minutes of trading is not heavy to say the least. Obviously Jan is seeing all the volume… And March not so much… (let alone the $1200 bid-offer spread).

The lack of trading will likely be a surprise to those who were expecting a more “vigorous” futures launch on the CME, such as Brooks Dudley, vice president of risk in New York at ED&F Man Capital Markets who told Bloomberg that “CME’s bitcoin contract may not be first, but they are a larger futures clearinghouse and we are looking forward to our clients trading their product on Sunday evening. Not all market participants have been able to short the Cboe bitcoin futures. We have allowed our clients to go long or short to take advantage of dislocations between the futures and the underlying spot market.” For now, nobody appears to be taking advantage of anything.

This seems to be a reasonable fear.

• Bitcoin’s Illiquidity Is Going To Be A Huge Problem (BI)

This chart shows a seven-day average of the total number of minutes it takes to confirm a bitcoin transaction, since May 2016. Like the price of bitcoin itself, transaction time has been rising as the months go by. At the time of writing, it took four-and-a-half hours to confirm a bitcoin trade, on average:

If you are holding bitcoin, and you’re worried that the price is a bubble – it cleared $17,000 last week – then bitcoin transaction times should really start to scare you. The price of bitcoin is shifting up and down by hundreds or thousands of dollars each day. No one knows what the price will be one hour from now, except that we know it will be very, very different. The schedule for the world’s largest ICO, the $500 million Dragon casino offering, has been pushed back two weeks, the company says, “due to the extreme congestion on both the Bitcoin and Ethereum Networks, [in which] ICO investors or contributors have faced significant challenges when transferring their Bitcoin and Ethereum to participate in the Dragon Pre-ICO.”

The transaction time is built into the system. Each transaction must be confirmed by six bitcoin miners, and that takes time. There is a finite number of miners, and the more transactions they have to confirm, the longer it takes as their network bandwidth gets filled. Worse, they charge for transactions and prioritise transactions based on price. Those who pay more get processed first. Imagine how bad this is going to get on the day some negative news hits the wires and the really significant holders of bitcoin decide, “I’ve had enough of this. I’ve made my money. I am bailing.” The majority of bitcoins are held by a tiny percentage of the market. 40% are held by 1,000 people. Those few major holders can crash the market whenever they want.

As anyone who remembers the market crashes of 2000 and 2008 knows, these things happen fast. Billions get wiped off the market in minutes. People who need to cash out now, but who are an hour or so behind the news, can lose their shirts. It is brutal. And blockchain just isn’t equipped to deal with it. Part of the increase in transaction time has, no doubt, been caused by the recent arrival of new, less knowledgeable investors who are coming into the market only because they have seen the headlines about the price of bitcoin going up, up, up. That gives us an idea of just how congested it will be on the way down. It will also be expensive. By some counts, transaction fees are doubling every three months. Ars Technica reported that fees reached $26 per trade recently.

Abe’s going to have to force his people to spend at gunpoint. And then find out they can’t.

• Japan Exports Boom, But Inflation Not Following Script (R.)

Japanese exports accelerated sharply in November, yet again pointing to growing momentum in the world’s third-biggest economy. There was just one catch: inflation remained stubbornly low and well off the central bank’s 2% target. The combination of steady growth and benign consumer prices mean the Bank of Japan will lag other major central banks in exiting crisis-era monetary stimulus, with analysts widely expecting BOJ Governor Haruhiko Kuroda to keep the liquidity tap wide open at a meeting later this week. “Inflation expectation is in a gradual recovery trend, but a gap between firm economic indicators and weak price indexes remains wide open,” said Yuichiro Nagai, economist at Barclays Securities.

Indeed, a BOJ survey on Monday showed companies’ inflation expectations heightened only a touch in December from three months ago, despite a tight labor market and business confidence at over a decade high. The persistently low inflation – with core prices running at an annual pace of 0.8% – was also hard to square off with the robust performance of Japan Inc., which has benefited from booming exports thanks to upbeat global demand. Separate data from the Ministry of Finance showed exports grew 16.2% in the year to November, beating a 14.6% gain expected by economists in a Reuters poll and accelerating from the prior month’s 14.0% increase, led by a stellar sales to China and Asia.

[..] “The BOJ will likely be forced into cutting its price projections once again in its quarterly outlook report in January. That will highlight a distance to an exit from the BOJ’s monetary stimulus,” said Barclays’ Nagai. The BOJ quarterly “tankan” survey on corporate inflation expectations survey showed companies expect consumer prices to rise 0.8% a year from now, slightly ahead of their projection for a 0.7% increase three months ago. The marginal nudge up in expectations underscored why inflation is still well off the BOJ’s target, with firms expecting consumer prices to rise an annual 1.1% three years from now and 1.1% five years ahead, unchanged from three months ago, the survey showed.

They’ll all go to the same places though.

• China Should Let Its Migrant Workers Roam Free (Pettis)

Over the past few weeks, people here in Beijing have been riveted by the so-called migrant “clean-out” – the government’s attempt to evict tens of thousands of migrant workers from their homes in the poorer parts of the city. What’s not being discussed, however, is how the crackdown could threaten one of the government’s other main priorities: managing debt. In China, mobility is legally restricted according to a household registration system, called the hukou. Chinese citizens receive an urban or rural hukou which officially identifies them as residents of a specific area and which allows them to live and work only in that area. Few if any of the migrant workers affected by the current sweep possess a Beijing hukou. Previously, this didn’t really matter.

For the past three decades, during the period of China’s furious economic growth, the country’s fastest-growing regions were desperate for cheap labor to fill factories and build infrastructure. With local government officials graded in large part on their ability to generate rapid growth, they largely ignored hukou restrictions and made migration into their cities easy. Hundreds of millions of workers traveled from their hukou areas to wherever there were jobs, in particular big cities such as Beijing, Shenzhen and Shanghai. The attitudes of local authorities may be changing now as the economy slows and officials become more concerned about unemployment and tensions over access to schools and other social services. One of the easiest tools the authorities have to manage both problems is to enforce the hukou rules that are already on the books.

In Beijing, the campaign is broadly popular among legal residents, who complain about overcrowding and rising rents. If it spreads, however, the crackdown could carry a significant macroeconomic cost. Enforcing the residency system nationally could severely limit labor mobility in China. This would in turn constrain monetary policy, which is critical to minimizing the cost to China of what’s likely to be a very difficult adjustment after decades of deeply unbalanced growth. How exactly would this happen? It’s important to remember that while China is a huge economy with a great deal of variety across different regions, it can nonetheless operate effectively with a single currency because it has most of the characteristics of an optimum currency area. In the 1960s, Columbia University’s Robert Mundell argued that four conditions were required to establish such an area.

They include high levels of labor mobility, high levels of capital mobility, a system of transfers that shares risks across the region, and coordinated business cycles. If labor mobility in China slows dramatically, growth rates in different parts of the country would diverge even more than they have already, rather than converge. As a result, monetary policies aimed at restraining credit growth overall might end up being too tight for some regions, leading to accelerating bankruptcies, and too loose for others, fueling out-of-control credit growth.

Inevitable.

• Desperate UK Homeowners Are Cutting Prices – Zoopla (G.)

Price cutting by homeowners desperate to shift their property in a slowing market has reached the highest levels in six years, according to an analysis by website Zoopla. Just over 35% of the homes marketed on the site have marked down their price in the hope of achieving a sale, with the biggest discounts in the London property market. The 35% figure compares with 29% just before the EU referendum in 2016, although it is below the levels recorded in the aftermath of the financial crisis. Sellers in Richmond and Kingston upon Thames in south-west London, both relatively prosperous areas, are among those to have made the deepest reductions in sale prices. Zoopla put the average mark-down by sellers in Kingston at £84,244.

It added that around half of all the properties for sale in Kingston and other nearby locations such as Mitcham and Camberley in Surrey have been reduced since their first listing, indicating that sellers are having to significantly readjust their hopes in the light of the Brexit vote. Lawrence Hall, at Zoopla, said it was good news for first-time buyers trying to get on the property ladder. “A slight rise in levels of discounting is to be expected at this time of year when house-hunters are likely to be delaying their property search until activity picks up in January,” Hall said. “Those on the look-out for a bargain should consider looking in Camberley or Kingston upon Thames in the south, or areas of the north-east – home to some of Britain’s biggest discounts.”

The average asking price reduction across the country currently stands at £25,562, according to Zoopla. The property website said towns in Scotland and northern England have proved more resilient to discounts. About 16% of homes in Edinburgh have been reduced in price, followed by 19% in Salford, 22% in Glasgow, and 25% in Manchester – all below the national average. In London, 39% of property listings have recorded a price reduction, up from 37% in July.

Banks want to be no. 1 consideration.

• UK Banks Tell May: A Canada-Style Brexit Deal Is Not Good Enough (G.)

Britain’s banks have written to Theresa May and Philip Hammond warning that a Canada-style free trade agreement with the EU post-Brexit is not ambitious enough and that alignment with EU rules on finance is crucial. The open letter from UK Finance, which represents major banks and other financial institutions, said the government must place the City at the centre of Brexit trade talks or risk dealing a major blow to the economy. “Ceta [the Comprehensive and Economic Trade Agreement between the EU and Canada] is an interesting template, but given the UK and the EU 27 start from a position of regulatory convergence that the UK and Canada didn’t have, we should seek to be far more ambitious,” said the letter.

The banks congratulated May on successfully negotiating a move to the second phase of withdrawal negotiations with the EU, which it called the first substantive evidence that a final deal could be agreed. But the trade body called on the government to avoid a cliff-edge Brexit and broker a smooth transition by focusing on alignment with Europe. “Pragmatic decisions to align the two regimes from a regulatory perspective … should be seen not as concessions, but as mechanisms to maximise benefits and choice within a deep regional capital market for the benefit of citizens and our economies,” it said. The alternative is “an unnecessary loss” of GDP, it added.

“A high degree of mutual cross-border market access is fundamental to the continued success of our financial services sector – and to the success of the economies and citizens which our sector serves in the UK and the EU 27,” UK Finance wrote.

Stimulus instead of austerity.

• Why Business Could Prosper Under A Corbyn Government (Pettifor)

[..] polling shows that the British people are disillusioned with the privatisation of key sectors, and favour nationalisation. They seek protection from the impact of deregulated market forces on their lives and livelihoods and on their children’s prospects. Business leaders have been made aware – by the IMF, the OECD and the Bank for International Settlements – that the Conservatives’ dependence on what David Cameron called his government’s “monetary radicalism and fiscal conservatism” has gone too far. There is now real concern about the long-term impact of quantitative easing which, coupled with austerity, has led to rocketing asset prices, falling wages and rising inequality. Those with access to central bank largesse have been enriched as the prices of assets have risen; while those without assets and dependent on earnings have suffered as incomes have fallen in real terms.

Falling incomes and spare capacity have not been good for business. While the Treasury, the Office for Budget Responsibility, an independent watchdog, and the National Institute of Economic and Social Research, a thinktank, have obsessed over supply-side issues, politicians have been persuaded by economists to sit on their hands, as Britain’s economy falters under huge, unused capacity. Howard Bogod, who runs a business with a turnover of under £20m, wrote recently: “Economic models have failed to explain why wages have not increased as unemployment has fallen so low. These same models are incorrect in their conclusions about productivity growth – indeed these two failures are linked. My conclusion based on observing actual businesses is that if nominal demand were to continue to grow then both productivity and real wages would start to grow more quickly, and economists would again be left scratching their heads.”

There is, nevertheless, anxiety over the scale of Labour’s public investment plans and their impact on the UK’s credit rating. But Labour has a record, in key respects, of being more fiscally conservative than Conservatives. For example, a review by economists at Policy Research in Macroeconomics of current budget deficits or surpluses (that is, excluding public investment) for the whole period before the global financial crisis, from 1956 to 2008, reveals that Conservative governments had an average annual surplus of 0.3% of GDP, while Labour governments had an average annual surplus of 1.1%.

“Steve Keen, dressed in a monk’s habit and wielding a blow up hammer, could be found outside the London School of Economics last week. ..”

• Heretics Welcome! Economics Needs A New Reformation (G.)

In October 1517, an unknown Augustinian monk by the name of Martin Luther changed the world when he grabbed a hammer and nailed his 95 theses to the door of the Castle Church in Wittenberg. The Reformation started there. The tale of how the 95 theses were posted is almost certainly false. Luther never mentioned the incident and the first account of it didn’t surface until after his death. But it makes a better story than Luther writing a letter (which is what probably happened), and that’s why the economist Steve Keen, dressed in a monk’s habit and wielding a blow up hammer, could be found outside the London School of Economics last week.

Keen and those supporting him (full disclosure: I was one of them) were making a simple point as he used Blu Tack to stick their 33 theses to one of the world’s leading universities: economics needs its own Reformation just as the Catholic church did 500 years ago. Like the mediaeval church, orthodox economics thinks it has all the answers. Complex mathematics is used to mystify economics, just as congregations in Luther’s time were deliberately left in the dark by services conducted in Latin. Neo-classical economics has become an unquestioned belief system and treats anybody who challenges the creed of self-righting markets and rational consumers as dangerous heretics. Keen was one of those heretics. He was one of the economists who knew there was big trouble brewing in the years leading up to the financial crisis of a decade ago but whose warnings were ignored.

The reason Keen was proved right was that he paid no heed to the equilibrium models favoured by mainstream economics. He looked at what was actually happening rather than having a preconceived view of what ought to be happening. Somewhat depressingly, nothing much has happened, even though it was a crisis neo-classical economics said could not happen. There was a brief dalliance with unorthodox remedies when things were really bleak in the winter of 2008-09, but by late 2009 and early 2010, there was a return to business as normal.

“.. invoking Article 7 will eventually allow the European Parliament to rescind all economic aid to Poland and its voting rights within the body.”

• Merkel’s Last Stand – Article 7 For Poland (Luongo)

As she fights for her political life Soon-to-be-ex-Chancellor of Germany Angela Merkel will go down swinging against her stiffest political opponents in the European Union, the Poles. Merkel and French President Emmanual Macron publicly agreed to back Article 7 proceedings against Poland for refusing to comply with EU immigration quotas and changes to its judicial system. Immigration quotas, I might add, that are becoming harder to defend as the war in Syria is mostly over and the flow of refugees from there has slowed to a trickle. But, those brought in and stranded in camps in Italy and Greece apparently need to go somewhere else. But, no one wants them. And the rest of the EU is trying to bully Poland and the rest of the Visigrad countries – Hungary, Czech Republic and Slovakia – into taking on their ‘fair share.’

The problem with this is that Merkel made this decision unilaterally and foisted it on the rest of the EU. And she is determined not to lose this fight to Poland, not because this is any kind of humanitarian issue at this point. No, this is about the primacy of EU diktats being enforced at the expense of logic and political cohesion. And, as I’ve been warning about all year, Merkel will put the EU before any practical consideration and bring Article 7 proceedings against Poland. Because she has to. Immigration and the destruction of individual European cultures is the guiding principle behind the EU’s biggest benefactors. This policy is part of the long-term strategic goals of the EU. It has created an army which will be used to quell secessionist movements in the name of ‘continental security.’ Because despite the fevered dreams of a few hundred Latvians, the Russians are not invading Europe anytime soon.

And I have to wonder who will staff this Grand Army of the Oligarchy? After impoverishing an entire generation of people thanks to a decade-long banking system bailout, you shouldn’t be expecting the crème de la crème of the vanishing European middle class. You can expect a number of these newly-integrated immigrants that Merkel invited at everyone else’s expense will be in their ranks. And only the most politically-acceptable members of the current armies of each country will be invited to positions of authority in this new EU army. Their loyalty will be to the EU first and their homes second. The very definition of a Vichy gendarme for the 21st century. Poland and the rest of the Visigrad Four – Hungary, Czech Republic and Slovakia – are headed for a collision course with the rest of Western Europe over this issue and many others.

And invoking Article 7 will eventually allow the European Parliament to rescind all economic aid to Poland and its voting rights within the body. While at that same time not allowing Poland free access to international trade because it will not be an independent nation at that point. Any move to extricate itself from the EU politically or practically will be met with the most strident opposition. Look no further than Brexit talks and the brutal put-down of Catalonia’s independence movement to see Poland’s future.

They have that in common with Germans.

• Cash Still King For The Majority Of Greek Consumers, Employers (K.)

Greeks love cash: Not only do they make most of their payments in cash – more than in any other eurozone country – but they also use it to pay their regular monthly obligations, such as utility bills, rent and even their taxes. The main reason for this proclivity for paper money is not an inherent aversion towards electronic payments, but that the vast majority of Greeks, far more than in other eurozone member states, still get paid in cash. This is evident in the recent European Central Bank survey on cash use in eurozone households, which showed that 57% of Greeks are paid in paper. Cyprus and Slovenia come a distant second, with a rate of 28%, while in the other eurozone countries the share of people getting paid “cash in hand” ranges between 5 and 20%.

Behind this particularly high rate of people paid in cash in Greece lies the large number of small or family owned enterprises and freelancers who work for cash. This also serves to illustrate the extensive tax evasion in this country, which tends to be focused on a series of professional categories, mainly among freelancers. The above figures concern 2016, while banks estimate that this picture has started changing considerably after the compulsory payment of salaried workers via a bank account from early 2017. The ECB figures show that the cash culture is not a strictly Greek phenomenon, as 79% of transactions in the eurozone – with great variations from country to country – are conducted with coins and banknotes.

Yet contrary to European habits, Greeks use cash for a series of transactions that are regular every month: 40% of Greeks pay their taxes in cash against just 9% in the eurozone, 50% use paper to pay for their insurance against 10% in the eurozone, and 70% pay for their medicines in cash against 31% in the eurozone. Similarly, electricity and phone bills are paid by 60% of Greeks in cash, compared to 16% in the eurozone, and 30% of rents are covered by cash against just 6% in the eurozone. ECB data also revealed that Greeks hold an average of 80 euros in cash on them, against the Spaniards’ 50 euros and the Italians’ 69 euros, while the Portuguese like to keep just 29 euros at hand.

In a system as overwhelmed as it is, this does not spell a lot of good.

• Greece Drafts Law to Accelerate Migrant Asylum Applications And Returns (K.)

In a bid to ease growing pressure on overcrowded refugee camps on Greece’s eastern Aegean islands, the government is drafting a law to accelerate the process of granting asylum to refugees with a bill expected to go to Parliament as early as this week. Arrivals of migrants from Turkey radically dropped after Ankara signed an agreement with the European Union to crack down on human smuggling over the Aegean. But the influx has picked up in recent months. Also the process of returning migrants to Turkey, as foreseen by the pact, is very slow, partly due to the influence of critics of the deal within leftist SYRIZA. “The only way to deal with the problem on the Greek islands is for the EU-Turkey agreement to be effectively enforced and for there to be a significant number of returns to Turkey,” an official at the Citizens’ Protection Ministry told Kathimerini.

Since the deal was signed in March 2016, around 48,600 migrants have arrived on the Greek islands, according to the United Nations refugee agency. During that time only some 1, 500 people have been returned to Turkey. Thousands of asylum applications are pending, chiefly because migrants generally appeal rejected claims. At a summit of EU leaders last week, German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker pledged to bolster Greek efforts to accelerate the asylum process and to help increase the presence of Frontex, the EU’s border monitoring agency, at the country’s frontiers with Turkey and Bulgaria, Greek officials said. Meanwhile, there are concerns that a decision by the government to move migrants from cramped island camps to the mainland could encourage smugglers to bring more migrants to Greece.

“There’s something wrong with a valuing system that doesn’t recognize healthy humans, or the redistribution of goods, or the disappearing of problems forever.”

• If Money Rewarded Hard Work, Moms Would Be The Billionaires (CJ)

Ask a woman right now how her Christmas is going and she will almost certainly unfurl her to-do list before your eyes, from the turkey to the costumes for the kids’ concerts. They should call it the Season of To-dos. For women, anyway. Christmas is the one time of the year when the gender pay gap is an open festering wound. Most of women’s work goes unvalued, unpaid, unseen by the patriarchal valuing system we call money. It’s invisible to money but it’s also pretty invisible even to ourselves. For a woman, it’s just what you do. For men, it’s stuff that just… happens. Don’t get me wrong, I don’t want to give up being Santa. I love it, I’m good at it, and I still do it for my kids even though they’re way past believing. That doesn’t mean it’s not work and it’s not worth something. People love their work and still get money for it.

(A little aside: isn’t it interesting that the man behind Santa is almost never a man? It’s almost like the patriarchy wants to take the credit for all of women’s work at Christmas time.) But whoever coined the term “holiday season” was clearly a bloke. It ain’t no holiday. For women, it’s the busiest time of the year. There’s something really broken about a valuing system that doesn’t recognize how much important work goes into bringing up children, socially integrating the tribe, bonding with each other and appreciating the beauty of each individual in the family and all the gifts they bring. A valuing system that doesn’t recognize the gains of having good-natured humans brought up in solid, loving environments that are closely networked in the goodwill economy. A family that will look after each other.

There’s something wrong with a valuing system that doesn’t recognize healthy humans, or the redistribution of goods, or the disappearing of problems forever. There’s something deeply sick about a valuing system that only knows how to pay people to make more problems, more sickness, more work for themselves. Invent a problem, and then sell your “solution” to it. That’s pretty much every business model ever. Libertarians will tell you earnestly that all our valuing decisions should be left up to “the markets.” If left to its own devices, the intelligence of money is meant to somehow create a handsome retirement savings package for a hardworking single mom of six. It’s somehow going to pay people to reuse and redistribute goods that they don’t need and fill all the unused houses with house-less people. It’s going to reward leaving minerals in the ground and pay for people to be healthy and live simply and for the environment to flourish and sustain life.

Debt Rattle August 22 2017

Aug 222017

August 22, 2017 Posted by Raúl Ilargi Meijer at 8:35 am Finance Tagged with: bubble, cash, Civil War, debt ceiling, hate, Monsanto, plastic, refugees, repricing, Syngenta 6 Responses »

Pierre Bonnard Nude in an Interior c1935

• Periods Of Re-Pricing Are Usually Quick And Brutal (Roberts)

• US House Price Bubbles 2.0 (Hanson)

• QE Is Like Heroin, Says Former UK Treasury Official (G.)

• UK Credit Card Lending Booms As Real Wages Fall (Ind.)

• Cash is Not The Curse (Mark GB)

• US Gross National Debt to Spike by $800 Billion in October? (WS)

• Why Peter Costello Is Not Even Half Right On Housing (ND)

• Diminishing Returns (Jim Kunstler)

• What Would A US Civil War Look Like? (Copley)

• Hate is the New Sex (Greer)

• Greece Concerns Peak Amid Sudden Spike In Refugee Arrivals (K.)

• US Farmers Confused By Monsanto Weed Killer’s Complex Instructions (R.)

• UK Blasted Over ‘Shocking’ Export Of Deadly Weedkiller To Poorer Countries (G.)

• The Blue Dogs of Mumbai (G.)

And the longer re-pricing is postponed, through QE etc., the steeper the fall will be.

• Periods Of Re-Pricing Are Usually Quick And Brutal (Roberts)

1. Stock prices run in cycles. Periods of re-pricing are usually quick and powerful.

7. Your first loss will often be your best loss. No one is right all the time and you don’t have to be. There are market participants that are immensely profitable by being right only 30% of the time. It is good to have conviction in your investment thesis, but discipline should always trump conviction.

8. Optimism and pessimism in the stock market are contagious. Investor psychology often loses its logic and become emotional. The news media and the most recent price action play a particularly important role in developing moods of mass optimism or pessimism.

Debt slaves.

• US House Price Bubbles 2.0 (Hanson)

A big problem with house prices experiencing even a “moderate” correction of 10% to 20% — already underway in many of the most over-priced regions — is with between 40% and 50% of all house purchases for years being of the “less than 10% down” variety — and because it takes 8% to 10% equity to sell plus the 3% to 10% down payment on the new house — it doesn’t take much downside to swamp the nation in “NEGATIVE EQUITY” once again. And we know for certain that many homeowners rather pay their credit cards and car payments before their mortgage when they are underwater.

ITEM 1) Household income INCREASE needed to Buy the Median Priced House in Key Cities. Bottom Line: On a “national” basis the divergence isn’t too bad…6%. But, in the key cities that drive the US economy, Bubble 2.0 has blown large. This represents significant downside, especially in the sand states, just like in Bubble 1.0.

ITEM 2) DIVERGENCE between Actual Household Income & Income Needed to Buy the Median Priced House. Bottom Line: Here too, on a “national” basis the divergence isn’t too bad…-6%. But, in the key cities that drive the US economy, Bubble 2.0 has blown large.

It’s worse, actually. Heroin cold turkey is doable though hard. QE cold turkey is definitely not.

• QE Is Like Heroin, Says Former UK Treasury Official (G.)

A former senior Treasury mandarin has compared quantitative easing to heroin and called for an end to almost a decade of electronic money printing by central banks. Nick Macpherson was permanent secretary to the Treasury when Bank of England officials started buying UK government bonds to stimulate the economy following the financial crisis. On Monday, he said it was “time to move on” from QE, which is credited with helping Britain into recovery but remains in use nine years later amid concerns over Brexit. Threadneedle Street initially began pumping £200bn into the gilt market in 2009 to boost the economy, before expanding the programme to £435bn, including an extra £60bn following the EU referendum. The bond buying scheme is similar to massive stimulus packages used by other countries, such as the Fed’s $4.5tn of asset purchases (£3.5tn) and the ECB ’s €2.3tn (£2.1tn) plan.

Lord Macpherson’s call comes as pressure mounts on the world’s central bankers to give more clues about how they intend to exit QE in a process known as “normalisation” almost a decade on from the crash. Some indications could be given at a meeting of senior officials at Jackson Hole in the US later this week. Mario Draghi, the ECB governor, is expected to be the star turn at the event watched by global investors, although he is not thought to be preparing to announce the end of QE just yet. While QE is credited with lowering borrowing costs and helping banks to lend more to consumers and businesses, critics say such schemes inflate assets owned by the richest in society, while punishing savers without large amounts of wealth. Macpherson did not single out the specific bond-buying programme of a particular central bank. “QE like heroin: need ever increasing fixes to create a high. Meanwhile, negative side effects increase. Time to move on,” he wrote on Twitter.

And after all the QE, people are poorer than before.

• UK Credit Card Lending Booms As Real Wages Fall (Ind.)

UK consumers are increasingly purchasing goods on plastic with the number of transactions on credit and debit cards jumping 12% in the last year. The increase was the fastest annual rise in the number of card transactions since 2008 and comes after warnings from the Bank of England about the growth of personal debt. Shoppers spent 7.2% more on all types of cards in the year to the end of June, despite real wages falling over the period, data from industry body UK Finance showed. The total value of credit and charge card purchases increased 6.9% over the 12 months with credit card lending accelerating in April, May and June to an annual growth rate of 9%. During those three months, the number of people defaulting on their credit card bills and personal loans “increased significantly”, the Bank of England said in a recent report.

The rise comes as official figures show real earnings have declined. Average pay rose at an annual rate of 2.1% in the three months to June – well below the inflation rate of 2.6% in the year to the end of June. Overall consumer spending was up 1.3% in the year to July, the Office for National Statistics said in a separate release this month. Peter Tutton, head of policy at StepChange debt charity, expressed concern at the findings. “With our research estimating 3.2 million people are using credit cards to pay for everyday household expenses, the growing stock of credit card debt should focus attention on households in financial difficulties,” he said. Mr Tutton said the growth in credit card cash advances was particularly worrying. This type of borrowing is expensive and can be a warning sign that borrowers are facing financial difficulty.

More on Ken Rogoff and Larry Summers’ crazy ideas of power over people’s money.

• Cash is Not The Curse (Mark GB)

There’s a pub in the Welsh hills, not far from where I live, called ‘The Tylers Arms’ – pronounced ‘tillers’. The name originated, I believe, in the 18th century. The local villagers, who all worked on the land, would go there to pick up their wages in the form of ‘tyles’ – some of which would be immediately exchanged for beer, and thus returned to the landowner…who also owned the pub…and the local store. Thus, the ‘tyles’ circulated regularly, providing employment & cheap produce for the villagers, a steady and almost ‘captive’ profit for the landowner, and stability for the community. As the industrial revolution progressed some of the larger UK manufacturers adopted a similar system, but using fiat currency – e.g. there is a ‘village’ in Birmingham known as Bourneville, which was built by the Cadbury family.

Now before anyone thinks I’ve got unresolved baggage on feudalism, a ‘downer’ on capitalism, or a yearning for socialism…hold your horses please…this is about something far more serious than the ‘isms’. This is about who controls the money. The folks who do that…can, and do, call the tune for the rest of us. And that’s what I want to talk about here.

These days our monetary masters are much more sophisticated – our ‘tyles’ are pieces of paper backed by government fiat. You can work for pretty much whomever you like, and you can buy from whomever you like, but one way or another the government will take a cut of everything you earn and everything you spend. You can do the odd ‘swapsie’ with your pals but you can’t pay taxes with home grown tomatoes – the IRS don’t do vegetables – they can’t digitise them or create them with a keystroke so veggies would confuse the poor dears.

What happens next is technical and varies between territories, so let’s just deal with the ‘myth’: The taxman’s ‘cut’ is used to boost the economy on your behalf by spending it on useful things like building roads and bridges. It also includes an ever-growing list of things that you didn’t even realise you need, like cruise missiles & other stuff that goes ‘BANG’, along with other seemingly ‘essential’ services like bribing foreign governments and funding ‘moderate rebels’ to remove the foreign governments that can’t be bribed. Clearly we’ve come a long way from tyles, especially in the case of the dollar, which can used to bribe governments on seven continents. The chap who owned the Tillers never dreamt of such power – this is considered to be progress…

Now that Goldman rules the White House, default risk is definitely down.

• US Gross National Debt to Spike by $800 Billion in October? (WS)

“There is zero chance, no chance we won’t raise the debt ceiling,” swore Senate Majority Leader Mitch McConnell (R., Ky.) at an event in Louisville, Kentucky, on Monday. He who couldn’t get his Republican ducks all lined up in a row to get any major legislation passed this year was confident that the Senate would pass a bill that would raise the debt ceiling so that the government could continue to pay for things that Congress told the Government to pay for, and so that the government could service its debts, rather than default on them. Treasury Secretary Steven Mnuchin was there with him, pleading once again for a “clean” debt-ceiling increase, according to the Wall Street Journal. His “magic super Treasury powers” that allow the government to conserve cash to avoid having to issue more debt will expire at the end of September, he said.

“This is not about spending money,” he said. “This is about paying for what we’ve spent, and we cannot put the credit of the United States on the line.” The debt ceiling is just under $20 trillion. While the government can issue bonds to redeem maturing bonds – and it does this all the time – it cannot allow the gross national debt to go beyond the debt ceiling. But because it has to continue to pay for things that Congress mandated in its various spending bills over the years, the Treasury scrounges up the money from other government accounts, robbing Peter to pay Paul, so to speak. For example it temporarily short-changes the Civil Service Retirement and Disability Fund. These “extraordinary measures,” as they’re called, or the “magic super Treasury powers,” as Mnuchin called it, run out after a while.

Mnuchin said in his last letter to Congress that the out-of-money-date is September 29. But as in the past, the real out-of-money date can probably be stretched into October. These shenanigans make the entire world shake its collective head and pray that Congress, after going through its charade, will for the umpteenth time raise the debt limit. The other option is a US default. Its global consequences are too ugly to even imagine. But this charade has some peculiar effects, beyond its entertainment value: for months on end, it covers up the true extent of US government debt, and the current surge of this debt. This chart shows the gross national debt going back to 2011, including the last two debt-ceiling fights. Note the long flat lines leading into October or November, followed each time by an enormous spike:

A good example of exatly how stuck governments and central banks are after blowing housing bubbles. There was an Australian tycoon this week who said the Oz bubble won’t pop because people are too heavily invested in property…

• Why Peter Costello Is Not Even Half Right On Housing (ND)

When former treasurer Peter Costello called on Monday for interest rates to be ‘normalised’ upwards to stop Australia’s credit bubble getting any larger, he was very nearly half right. As long as the Reserve Bank keeps the official cash rate at the record low of 1.5%, the economy will become increasingly “unbalanced”, as he put it. And although struggling families will protest that they can’t afford higher mortgage repayments, the other side of that coin is that each successive wave of first home owners is taking on even higher debts. The longer that super-low rates persist, the more debt the banks will be able to balance on the shoulders of new home buyers. That has already created huge property-based inequality. But Mr Costello’s comments weren’t focused on that imbalance – he’s worried about the impact that unstable house prices or teetering banks could have on economic growth more generally.

He told The Australian that “once [the price of] money returns to more normal levels” Australia could face a “big problem” with asset prices and the housing market. Quite right, but what could prevent that? A gradual increase in rates will not, in itself, ‘fix’ the housing market. To do that, two other abnormalities need to be addressed. The one mentioned most by Mr Costello’s side of politics is the availability of suitable dwellings – the ‘supply problem’. That is a wildly misunderstood problem, so I will look at it separately in coming days. But bigger than either low rates or the supposed ‘supply problem’ is the abnormality that Mr Costello himself created – tax laws that reward investors for making annual losses in the housing market, so as to reap lightly-taxed capital gains years down the track.

“..an impenetrable smokescreen of legal blather in the service of racketeering.”

• Diminishing Returns (Jim Kunstler)

These two words are the hinge that is swinging American life — and the advanced techno-industrial world, for that matter — toward darkness. They represent an infection in the critical operations of daily life, like a metabolic disease, driving us into disorder and failure. And they are so omnipresent that we’ve failed to even notice the growing failure all around us. Mostly, these diminishing returns are the results of our over-investments in making complex systems more complex, for instance the replacement of the 37-page Glass-Steagall Act that regulated American banking, with the 848 page Dodd-Frank Act, which was only an outline for over 22,000 pages of subsequent regulatory content — all of it cooked up by banking lobbyists, and none of which replaced the single most important rule in Glass-Steagall, which required the separation of commercial banking from trafficking in securities.

Dodd-Frank was a colossal act of misdirection of the public’s attention, an impenetrable smokescreen of legal blather in the service of racketeering. For Wall Street, Dodd-Frank aggravated the conditions that allow stock indexes to only move in one direction, up, for nine years. During the same period, the American economy of real people and real stuff only went steadily down, including the number of people out of the work force, the incomes of those who still had jobs, the number of people with full-time jobs, the number of people who were able to buy food without government help, or pay for a place to live, or send a kid to college. When that morbid tension finally snaps, as it must, it won’t only be the Hedge Funders of the Hamptons who get hurt. It will be the entire global financial system, especially currencies (dollars, Euros, Yen, Pounds, Renminbi) that undergo a swift and dire re-pricing, and all the other things of this world priced in them.

And when that happens, the world will awake to a new reality of steeply reduced possibilities for supporting 7-plus billion people. The same over-investments in complexity have produced the racketeering colossus of so-called health care (formerly “medicine”), in case you’re wondering why the waiting room of your doctor’s office now looks exactly like the motor vehicle bureau. Meanwhile, it’s safe to say that the citizens of this land have never been so uniformly unhealthy, even as they’re being swindled and blackmailed by their “providers.” The eventual result will be a chaotic process of simplification, as giant hospital corporations, insurance companies, and overgrown doctors’ practices collapse, and the braver practitioners coalesce into something resembling Third World clinics.

“..such a conflict – physical or political – could, equally, lead to a victory for nationalism over globalism, and to the protection of currencies and values.”

• What Would A US Civil War Look Like? (Copley)

There is little doubt that the US, despite the evidence that economic recovery is at hand, could spiral into a self-destructive descent of dysfunction, dystopia, and anomie. The path toward a “second civil war” has significant parallels with the causes of the first US Civil War (1861-65). Both events — the 19th Century event and a possible 21st Century one — saw the polarization of a fundamentally urban, abstract society against a fundamentally regional, traditional society. In some respects, it is a conflict between people with long memories (even if those memories are flawed and selective) and people to whom memories and history are irrelevant. Equally, it is a conflict between identity and materialism, with the abstract social groups (the urban populations) the most preoccupied with short-term material gain.

I have covered the US for 50 years, and my earliest view of it was, a half century ago, that its populations would inevitably polarize into protective islands of self-interest, surrounded by seas of unthinking locusts. What is ironic is that the present islands of wealth and power — the cities — have come to represent short-term materialism, as cities have throughout history. But what is interesting is that, despite the global attention on the political/geographic polarizations occurring in the US and other parts of the Western world, there has been a reversion in other parts of the world to a sense of Westphalian or pre-Westphalian nationalism. The fact that “the West” may have ring-fenced Iran, Russia, and so on, with sanctions and other forms of isolation may well be what ensures their enduring status.

They have avoided the contagion of globalism. Russia, indeed, recovered from the Soviet form of globalism in 1991. An urban globalist “victory” over Trump and Brexit would trigger that meltdown toward a form of civil societal collapse – civil war in some form or other – as the regions disavow the diktats of the cities. That would, in turn, bring about the global economic uncertainty which could impact the PRC and then the en-tire world. But such a conflict – physical or political – could, equally, lead to a victory for nationalism over globalism, and to the protection of currencies and values. We have seen this cycle repeated for millennia. It is the eternal battle.

The Archdruid from a few weeks ago.

• Hate is the New Sex (Greer)

It occurred to me the other day that there’s a curious disconnect between one of the most common assumptions most of us make about how to make the world better, on the one hand, and the results that this assumption has had when put into practice, on the other. It’s reminiscent of the realization that led James Hillman and Michael Ventura to title a once-notorious book of theirs We’ve Had A Hundred Years Of Psychotherapy And The World’s Getting Worse. In this case as in that one, something that’s supposed to make things better doesn’t seem to be doing the trick—in fact, quite the opposite—and it’s time that we talked about that. You know the assumption I have in mind, dear reader. It’s the conviction that certain common human emotions are evil and harmful and wrong, and the way to make a better world is to get rid of them in one way or another.

That belief is taken for granted throughout the industrial societies of the modern West, and it’s been welded in place for a very long time, though—as we’ll see in a moment—the particular emotions so labeled have varied from time to time. Just now, of course, the emotion at the center of this particular rogue’s gallery is hate. These days hate has roughly the same role in popular culture that original sin has in traditional Christian theology. If you want to slap the worst imaginable label on an organization, you call it a hate group. If you want to push a category of discourse straight into the realm of the utterly unacceptable, you call it hate speech. If you’re speaking in public and you want to be sure that everyone in the crowd will beam approval at you, all you have to do is denounce hate.

At the far end of this sort of rhetoric, you get the meretricious slogan used by Hillary Clinton’s unsuccessful presidential campaign last year: LOVE TRUMPS HATE. I hope that none of my readers are under the illusion that Clinton’s partisans were primarily motivated by love, except in the sense of Clinton’s love for power and the Democrats’ love for the privileges and payouts they could expect from four more years of control of the White House; and of course Trump and the Republicans were head over heels in love with the same things. The fact that Clinton’s marketing flacks and focus groups thought that the slogan just quoted would have an impact on the election, though, shows just how pervasive the assumption I’m discussing has become in our culture.

Now of course most people these days, when confronted with the sort of things I’ve just written, are likely to respond, “Wait, are you saying that hate is good?”—as though the only alternatives available are condemning something as absolutely bad or praising it as absolutely good. Let’s set that simplistic reaction to one side for the moment, and ask a different question: what happens when people decide that some common human emotion is evil and harmful and wrong, and decide that the way to make a better world is to get rid of it?

Watch Erdogan. German elections coming up.

• Greece Concerns Peak Amid Sudden Spike In Refugee Arrivals (K.)

A sudden spike in the number of undocumented migrants arriving from neighboring Turkey has led to concern on the part of Greek authorities, who expect the next few days to reveal whether the rapid increase is a random occurence or the beginning of a new trend. A total of 643 migrants who had set out from the Turkish coast landed on the islands of the eastern Aegean between Friday and Monday morning, according to government figures. Another 114 people arrived in two separate smuggling boats later on Monday, putting authorities on alert.

Early on Monday, a vessel belonging to the European Union’s border monitoring agency Frontex spotted a smuggling boat off the coast of Chios and intercepted the 53 migrants who had been aboard. Later in the day another 61 migrants were found in a boat that had reached Samos and were also detained. Tensions are already high in reception centers on several Aegean islands. Most of the facilities are at around twice their capacity as hundreds of migrants and refugees await the outcome of asylum applications or deportation orders. Tolerance has been tested in several island communities as dozens of migrants continue to arrive daily from nearby Turkish shores. There are currently more than 14,400 migrants living on camps on Lesvos, Chios, Samos, Kos and Leros.

Confused? The instructions are impossible to follow, not confusing.

• US Farmers Confused By Monsanto Weed Killer’s Complex Instructions (R.)

With Monsanto’s latest flagship weed killer, dicamba, banned in Arkansas and under review by U.S. regulators over concerns it can drift in the wind, farmers and weed scientists are also complaining that confusing directions on the label make the product hard to use safely. Dicamba, sold under different brand names by BASF and DuPont, can vaporize under certain conditions and the wind can blow it into nearby crops and other plants. The herbicide can damage or even kill crops that have not been genetically engineered to resist it. To prevent that from happening, Monsanto created a 4,550-word label with detailed instructions. Its complexity is now being cited by farmers and critics of the product. It was even singled out in a lawsuit as evidence that Monsanto’s product may be virtually impossible to use properly.

At stake for Monsanto is the fate of Xtend soybeans, it largest ever biotech seed launch. Monsanto’s label, which the U.S. Environmental Protection Agency (EPA) reviewed and approved, instructs farmers to apply the company’s XtendiMax with VaporGrip on its latest genetically engineered soybeans only when winds are blowing at least 3 miles per hour, but not more than 15 mph. Growers must also spray it from no higher than 24 inches above the crops. They must adjust spraying equipment to produce larger droplets of the herbicide when temperatures creep above 91 degrees Fahrenheit. After using the product, they must rinse out spraying equipment. Three times. “The restriction on these labels is unlike anything that’s ever been seen before,” said Bob Hartzler, an agronomy professor and weed specialist at Iowa State University. The label instructions are also of interest to lawyers for farmers suing Monsanto, BASF and DuPont over damage they attribute to the potent weed killer moving off-target to nearby plants.

It’s not ‘shocking’, it’s criminal.

• UK Blasted Over ‘Shocking’ Export Of Deadly Weedkiller To Poorer Countries (G.)

Paraquat, a pesticide so lethal that a single sip can be fatal, has caused thousands of accidental deaths and suicides globally, and was outlawed by EU states in 2007. But Swiss pesticide manufacturer Syngenta is exporting thousands of tonnes of the substance to other parts of the world from an industrial plant in Huddersfield. Campaigners have condemned the practice as an “astonishing double standard”, while a UN expert said it was deeply disquieting that the human rights implications of producing a substance for export that is not authorised in the EU were being ignored. “The fact that the EU has decided to ban the pesticide for health and environmental reasons, but they still export it to countries with far weaker regulation and far weaker controls, is shocking to me,” said Baskut Tuncak, the UN special rapporteur on toxic wastes.

Syngenta is responsible for 95% of Europe’s exports of paraquat, which it sells under the brand name Gramoxone. The substance can be absorbed through the skin and has been linked with Parkinson’s disease. Syngenta has exported 122,831 tonnes of paraquat from the UK since 2015, an average of 41,000 tonnes a year, according to export licensing data analysed by the Swiss NGO Public Eye and shared with the Guardian. Since 2015, when a facility in Belgium stopped exporting paraquat, all EU exports of the pesticide have come from Syngenta’s UK base, according to Public Eye. Almost two-thirds of these exports by volume – 62% – go to poor countries, including Brazil, Mexico, Indonesia, Guatemala, Venezuela and India. A further 35% is exported to the US, where paraquat can only be applied by licensed users.

We are a brilliant species.

• The Blue Dogs of Mumbai (G.)

Authorities in Mumbai have shut down a manufacturing company after it was accused of dumping untreated industrial waste and dyes into a local river that resulted in 11 dogs turning blue. The group of strangely coloured canines was first spotted on 11 August, according to the Hindustan Times, prompting locals to complain to the Maharashtra Pollution Control Board about dyes being dumped in the Kasadi river, where the animals often swim. Footage shows the animals roaming the streets with bright blue fur. “It was shocking to see how the dog’s white fur had turned completely blue,” said Arati Chauhan, head of the Navi Mumbai Animal Protection Cell, told the Times. “We have spotted almost five such dogs here and have asked the pollution control board to act against such industries.”

Chauhan had posted images of the blue dogs on the group’s Facebook page, saying the “pollutants from Taloja Industrial area not only ruining the water bodies affecting humans there but also affecting animals, birds, reptiles”. The board investigated, shutting down the company on Wednesday after confirming that canines were turning blue due to air and water pollution linked to the plant. An animal welfare agency managed to capture one of the dogs and wash some of the blue dye off. The group concluded that animal seemed unharmed in all other ways. The Kasadi River flows through an area with hundreds of factories.

Rogoff, Orwell and Kafka

Aug 152017

August 15, 2017 Posted by Raúl Ilargi Meijer at 12:53 pm Finance Tagged with: cash, central banks, megalomania, NIRP, QE, Rogoff, theft, ZIRP 5 Responses »

Salvador Dali Madrid. Drunk man 1922

Harvard professor and chess grandmaster Kenneth Rogoff has said some pretty out there stuff before, in his role as self-appointed crusader against cash, but apparently he’s not done yet. In fact, he might just be getting started. This time around he sounds like a crossover between George Orwell and Franz Kafka, with a serving of ‘theater of the absurd’ on top. Rogoff wants to give central banks total control over your lives. They must decide what you do with your money. First and foremost, they must make it impossible for you to save your money from their disastrous policies, so they are free to create more mayhem.

Prepare For Negative Interest Rates In The Next Recession Says Top Economist

Negative interest rates will be needed in the next major recession or financial crisis, and central banks should do more to prepare the ground for such policies, according to leading economist Kenneth Rogoff. Quantitative easing is not as effective a tonic as cutting rates to below zero, he believes. Central banks around the world turned to money creation in the credit crunch to stimulate the economy when interest rates were already at rock bottom.

Central banks create recessions and crises. Not people, and not economies. Central banks. The next recession, which is inevitable, that’s the one thing Rogoff has right, will come when the bubbles in housing, stocks, bonds, etc., created by central banks’ QE, ZIRP, NIRP, start to pop. And there’s nothing worse than giving central banks even more tools for creating crises. We should take away the tools they have now, not hand them more sledgehammers.

In a new paper published in the Journal of Economic Perspectives the professor of economics at Harvard University argues that central banks should start preparing now to find ways to cut rates to below zero so they are not caught out when the next recession strikes. Traditionally economists have assumed that cutting rates into negative territory would risk pushing savers to take their money out of banks and stuff the cash – metaphorically or possibly literally – under their mattress. As electronic transfers become the standard way of paying for purchases, Mr Rogoff believes this is a diminishing risk.

Risk? What risk? The risk of people doing with their money what they choose to do, doing what they think is best? Of people trying to save their savings from being burned by central bank policies? What kind of mind comes up with this nonsense? Who is Ken Rogoff to think that he knows better what you should do with the money you worked for than you yourself do? You’d be a fool not to protect you hard-earned earnings from negative interest rates. Rogoff therefore seems intent on creating nations full of fools.

“It makes sense not to wait until the next financial crisis to develop plans and, in any event, it is time for economists to stop pretending that implementing effective negative rates is as difficult today as it seemed in Keynes time”, he said. The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago. Countries can scrap larger denomination notes to reduce the likelihood of cash being held in substantial quantities, he suggests. This is also a potentially practical idea because cash tends now to be used largely for only small transactions. Law enforcement officials may also back the idea to cut down on money laundering and tax evasion.

What makes sense is to not create crises. What does not make sense is negative interest rates. Ultra low interest rates have already destroyed trillions in savings and pensions, and now Rogoff effectively says central banks should take this a step further, and target whatever it is you have left. This is insane megalomania. It’s communism in its worst possible form. Oh, and it’s outright theft. Of a form that’s far more insidious and harmful than money laundering.

The key consequence from an economic point of view is that forcing savers to keep cash in an electronic format would make it easier to levy a negative interest rate. “With today’s ultra-low policy interest rates – inching up in the United States and still slightly negative in the eurozone and Japan – it is sobering to ask what major central banks will do should another major prolonged global recession come any time soon,” he said, noting that the Fed cut rates by an average of 5.5 percentage points in the nine recessions since the mid-1950s, something which is impossible at the current low rate of interest, unless negative rates become an option. That would be substantially better than trying to use QE or forward guidance as central bankers have attempted in recent years.

Forcing savers to keep cash in an electronic format would make it easier to steal it. Central banks could dictate that you lose 5% of your money every year. Or at least, that’s what they think. They want you to spend your money, and they got just the way to force you to do that. Or so they think. Well, go ask Abe and Kuroda how that’s worked out in Japan lately. What actually happens is that when you start stealing people’s money, savings etc., they become afraid of losing the rest too, so they start looking for ways to save their savings, not spend them.

In that sense, Rogoff’s suggestions amount to terror, to terrorizing people into doing things that go against their very survival instincts. What gets people to spend money is if they don’t feel terror, when they see their money and savings grow by a few percent per year. That is the exact opposite of what Rogoff wants to do. When people ‘sit’ on their savings, they do so for good reasons. What do you think has happened to Japan?

“Alternative monetary policy instruments such as forward guidance and quantitative easing offer some theoretical promise for addressing the zero bound,” he said, in the paper which is titled ‘Dealing with Monetary Paralysis at the Zero Bound’. “But these policies have now been deployed for some years – in the case of Japan, for more than two decades – and at least so far, they have not convincingly shown an ability to decisively overcome the problems posed by the zero bound.”

No wait, Rogoff is right second time: indeed “they have not convincingly shown an ability to decisively overcome the problems”. Because they’re terribly wrong. Theoretical promise? That’s all? But that means you’re just experimenting with people’s lives and wellbeing. Who gave you that right?

It’s high time, even if it’s very late in the game, to take political power away from central banks- and thereby from the banks that own them. There is nothing worse for our societies than letting these people decide what you can and cannot do with our money. Because as long as they have that power, they will seek to expand it. To prop up their member banks at your expense. And there is only one possible end result: you’ll be left with nothing. They want it all.

Until we take that power away from them, please don’t talk to me about democracy. Talk to me about Orwell and Kafka instead.

Debt Rattle July 19 2017

Jul 192017

July 19, 2017 Posted by Raúl Ilargi Meijer at 8:47 am Finance Tagged with: 9/11, cash, China, dollar, health care, homes, Italy, migrants, opioids, Pentagon 5 Responses »

US photographer Margaret Bourke-White on top of the Chrysler Building, NYC 1931

• America Makes China Great Again – People’s Daily (CNBC)

• Pentagon Report Declares US Empire ‘Collapsing’ (Nafeez Ahmed)

• A Government Can Always Afford High-Quality Health Care Provision (BIlbo)

• US Dollar Will Rebound In The Second Half Of 2017 – JPMorgan (CNBC)

• Foreigners Snap Up Record Number Of US Homes (CNBC)

• Big Australian Banks Told To Hold More Capital, On Notice Over Mortgages (R.)

• One Million Homes Left Empty Across Australia (SMH)

• In Urban China, Nobody Uses Cash Or Cards Anymore (NYT)

• Survivors Of 9/11 Urge May To Release Saudi Arabia Terror Report (Ind.)

• West Virginians Are Fighting To Save Their Neighbors From Opioids (NewYorker)

• This Isn’t the First US Opiate-Addiction Crisis (BBG)

• A Despot In Disguise: One Man’s Mission To Rip Up Democracy (Monbiot)

• Italy Mulls Temporary Humanitarian Visas For Migrants, Refugees (G.)

If I were Beijing, I’d be a tad worried about the implication that Chine needs the US to be great again.

• America Makes China Great Again – People’s Daily (CNBC)

A Communist Party mouthpiece is crowing that malfunctioning U.S. leadership is making China “great again” on the eve of highly anticipated bilateral trade talks between the two countries. The op-ed published in the People’s Daily said the U.S. was in political chaos and suffered from a broken system, which was why Washington couldn’t get anything done. It also claimed the U.S. mess was giving China an opportunity to shine. “U.S. foreign policy is in total disarray, and world regard for the U.S. has plummeted. Indeed, America is making China ‘great again,'” the op-ed said. “Once the world’s model, the great American meltdown has turned the U.S. into some bizarre soap opera.” This isn’t the first time China has piggybacked off an American saying — remember President Xi Jinping’s “Chinese Dream” slogan?

This time around, the tone is a bit sharper, with Chinese state media not backing down ahead of annual bilateral talks that have been rebranded this year as the U.S.-China Comprehensive Economic Dialogue. Although both Beijing and Washington have indicated they understand the need to play nice, both sides are pushing their own agenda as expected. The U.S. wants to reduce the more than $300 billion trade deficit with China and make good on a campaign promise from President Donald Trump to pressure China on a number of fronts, such as opening up its markets to more foreign participation and to bring jobs back to America. China, on the other hand, has pushed back, saying Chinese investment has helped the U.S. But it’s clear that as the U.S. continues to face political turmoil, China is enjoying its time in the spotlight. That is, Beijing is explicitly seeking to fill the void the U.S. left as it backed out of various multilateral talks and agreements…

Got the money? Got the money? Show me the money!

• Pentagon Report Declares US Empire ‘Collapsing’ (Nafeez Ahmed)

An extraordinary new Pentagon study has concluded that the US-backed international order established after World War 2 is “fraying” and may even be “collapsing”, leading the United States to lose its position of “primacy” in world affairs. The solution proposed to protect US power in this new “post-primacy” environment is, however, more of the same: more surveillance, more propaganda (“strategic manipulation of perceptions”) and more military expansionism. The document concludes that the world has entered a fundamentally new phase of transformation in which US power is in decline, international order is unravelling, and the authority of governments everywhere is crumbling. Having lost its past status of “pre-eminence”, the US now inhabits a dangerous, unpredictable “post-primacy” world, whose defining feature is “resistance to authority”.

Danger comes not just from great power rivals like Russia and China, both portrayed as rapidly growing threats to American interests, but also from the increasing risk of “Arab Spring”-style events. These will erupt not just in the Middle East, but all over the world, potentially undermining trust in incumbent governments for the foreseeable future. The report, based on a year-long intensive research process involving consultation with key agencies across the Department of Defense and US Army, calls for the US government to invest in more surveillance, better propaganda through “strategic manipulation” of public opinion, and a “wider and more flexible” US military.

[..] Observing that US officials “naturally feel an obligation to preserve the US global position within a favorable international order,” the report concludes that this “rules-based global order that the United States built and sustained for 7 decades is under enormous stress.” The report provides a detailed breakdown of how the DoD perceives this order to be rapidly unravelling, with the Pentagon being increasingly outpaced by world events. Warning that “global events will happen faster than DoD is currently equipped to handle”, the study concludes that the US “can no longer count on the unassailable position of dominance, supremacy, or pre-eminence it enjoyed for the 20-plus years after the fall of the Soviet Union.” So weakened is US power, that it can no longer even “automatically generate consistent and sustained local military superiority at range.”

I can’t really do Bill Mitchell justice in this format, but the health care debate badly needs views such as his.

• A Government Can Always Afford High-Quality Health Care Provision (BIlbo)

The US is the only advanced nation that lacks universal health care. Even though it is the world’s richest nation, millions of US citizens cannot afford to see a doctor much less acquire more complex health care (for example, surgery). It it clear that in seeking private profits, the private health care insurers drive up the cost of health care which means, in nominal terms, the proportion of GDP expenditure devoted to it will rise. It is quite obvious that when private profits are included costs will rise unless efficiency is vastly improved. The ‘free market (not!)’ lobby always appeal to arguments that competitive systems are always more effective. The Commonwealth Report shows emphatically that strong (dare we call them socialist) government-dominated universal care systems like the NHS are vastly more effective than the profit-driven US system.

There also doesn’t seem to be any reason for private insurance in health care at all. And it is here that we enounter the ‘funding’ myths. Too often health care debates get stuck in irrelevant fiscal arguments about whether the government can afford to expand and/or invest in health care. The justification for private insurance is usually predicated on these ‘governments cannot afford’ to pay for the system type arguments. They are fallacious of course. In the pursuit of profits, private health insurance providers have an incentive to move towards the US model where they seek to avoid payment and set up exclusions etc. There is no ‘funding’ reason for the existence of these private insurance providers. The NHS in the UK demonstrates that clearly.

There has clearly been a strong private health industry lobby to privatise as much of the health care system as possible in places like Australia and the UK, where there are good fully-funded public systems of universal health care operating. That lobby has been powerful in the US and continually claims there will be a fiscal blow out and Americans will live in high-taxed penury forever because some latinos or blacks are getting health care for the first time as a result of the Obama changes. From a MMT perspective, the fiscal component of the debate is irrelevant.

The fiscal beat-up is framed in terms of ‘adding heavy costs’ to the ‘budget’ such that their will be soaring deficits, which will penalise future generations etc etc. What is a heavy cost? What is a soaring deficit? These are irrelevant concepts devoid of meaning. Any sophisticated society will deem health care to be a human right. The constitution of the World Health Organisation says: “The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without the distinction of race, religion, political belief, economic or social condition.” The hallmark of a sophisticated nation is maximising the potential of its citizens. That must include placing health care under the responsibility of the currency-issuing government.

Line of the day: “Some market observers have said that a weaker dollar can help to boost earnings of S&P 500 companies and eventually justify their high valuations.”

• US Dollar Will Rebound In The Second Half Of 2017 – JPMorgan (CNBC)

The current weakness in the U.S. dollar may be short lived, as a pick-up in inflation and expected rate hikes by the Federal Reserve will support the greenback in the coming months, JPMorgan Asset Management said Wednesday. “We’re thinking that the dollar will actually rebound in the second half, and this is mainly as the markets re-price in interest rates hike. We’re of the view that inflation will actually be picking up in the U.S. and currently, markets have only priced in one rate hike now till end-2018,” Jasslyn Yeo, global market strategist at JPMorgan Asset Management, told CNBC’s “Street Signs.” “So, we think (markets) are going to do a bit of re-pricing and that will support a bit of a rebound in the dollar,” she added.

The U.S. dollar tumbled to a 10-month low on Tuesday after the Republican health-care bill aimed at replacing Obamacare failed to get enough backing to proceed to a debate. Some market observers have said that a weaker dollar can help to boost earnings of S&P 500 companies and eventually justify their high valuations. But Yeo said equity markets outside the U.S., such as Europe and Japan, have more upside potential. Yeo noted that margins in Europe are starting to improve and that could translate into stronger earnings growth, while Japan is likely to benefit from a weaker yen versus the U.S. dollar. “We still like certain spots in the U.S. market. Currently we still favor U.S. banks, which we like in terms of rate hike expectations, bond yields moving higher as well as the promise for financial deregulation in the banking system,” she said.

Sell it all off, who cares?

• Foreigners Snap Up Record Number Of US Homes (CNBC)

Foreign purchases of U.S. residential real estate surged to the highest level ever in terms of number of homes sold and dollar volume. Foreign buyers closed on $153 billion worth of U.S. residential properties between April 2016 and March 2017, a 49% jump from the period a year earlier, according to the National Association of Realtors. That surpasses the previous high, set in 2015. The jump follows a year-earlier retreat and comes as a surprise, given the current strength of the U.S. dollar against most foreign currencies, which makes U.S. housing even more expensive. Apparently, the value of a financial safe-haven is outweighing the rising costs. Foreign sales accounted for 10% of all existing home sales by dollar volume and 5% by number of properties. In total, foreign buyers purchased 284,455 homes, up 32% from the previous year.

Half of all foreign sales were in just three states: Florida, California and Texas. Chinese buyers led the pack for the fourth straight year, followed by buyers from Canada, the United Kingdom, Mexico and India. Russian buyers made up barely 1% of the purchases. But the biggest overall surge in sales in the last year came from Canadian buyers, who scooped up $19 billion worth of properties, mostly in Florida. They are also spending more, with the average price of a Canadian-bought home nearly doubling to $561,000. “There are more [baby] boomers now than ever before. It’s the demographic,” said Elli Davis, a real estate agent in Toronto who said she is seeing more older buyers downsize their primary home and purchase a second or third home in Florida. “The real estate here is worth so much more money. They all have more money. They’re selling the big city houses that are now $2 million-plus, where they went up so much in the last 10 to 15 years, so they’re cashing in.”

Noooo, that’s not late at all…

• Big Australian Banks Told To Hold More Capital, On Notice Over Mortgages (R.)

Australia on Wednesday ordered the country’s biggest banks to raise capital for the second time in two years and signalled further action to shore up their burgeoning mortgage books, potentially squeezing shareholder returns. The banking regulator said it would release a discussion paper later this year to include risk weights on mortgages among other changes, in-line with expected rules due to be finalised by global regulators. The warning on mortgages came as it raised the target for the four major banks’ common equity Tier 1 ratio – a key gauge of a lender’s strength – to at least 10.5%. That translates into an average increase of 100 basis points above the banks’ December 2016 levels. They are expected to meet the new benchmarks by January 2020.

The Australian Prudential Regulation Authority (APRA) has now ordered the big banks to boost capital twice since 2015 as it seeks to make the sector impregnable to global shocks. Australia’s major lenders – Commonwealth Bank of Australia , Westpac Banking Corp, ANZ Banking Group and National Australia Bank – hold combined market share of more than 80%, raising fears their failure could fatally weaken the broader economy. “Capital levels that are unquestionably strong will undoubtedly equip the Australian banking sector to better handle adversity in the future and reduce the need for public sector support,” APRA Chairman Wayne Byres said in a statement.

Inevitable result of property bubbles.

• One Million Homes Left Empty Across Australia (SMH)

Australia has 200,000 more homes sitting empty than it had a decade ago, new figures show, despite the country grappling with a housing supply shortage that is pushing the cost of a first home beyond many of its residents. The figures from the 2016 census have been described as “cruel and immoral” by leading UNSW urban policy expert Hal Pawson, who has warned the government must act to stem the growth in unoccupied housing. “There is gross under-occupation across Australia,” Mr Pawson said, adding that there were up to a million homes with three or more extra bedrooms than the owner required. “There is a growing realisation that our housing market is not working well. It doesn’t just create a problem for people on low incomes, it also hurts spending in the economy when housing is overvalued.”

The figures from the Australian Bureau of Statistics show up to 11.2% of properties are now unoccupied, up from 9.8% in 2006. In the space of two decades Australia has added 2.1 million homes to its property portfolio but an extra 360,000 are being left vacant. Separate analysis by the Grattan Institute, released on Monday, found the number of Australian home owners has been falling for three decades, with the spike in home ownership restricted to baby boomers. “Falling home ownership rates for younger Australians, especially 25 to 34-year-olds where home ownership rates are down 6% in the last decade alone, are just the latest evidence that the traditional Australian dream is slipping out of their reach,” said Grattan Institute fellow Brendan Coates.

[..] “The census showed empty property numbers up by 19% in Melbourne and 15% in Sydney over the past five years alone,” he said. “Considering that thousands of people sleep rough – almost 7000 on census night in 2011, more than 400 per night in Sydney in 2017 and that hundreds of thousands face overcrowded homes or unaffordable rents – these seem like cruel and immoral revelations.”

Better not lose your phone. Or the government can’t seeyou anymore.

• In Urban China, Nobody Uses Cash Or Cards Anymore (NYT)

There is an audacious economic experiment happening in China. It has nothing to do with debt, infrastructure spending or the other major economic topics du jour. It has to do with cash – specifically, how China is systematically and rapidly doing away with paper money and coins. Almost everyone in major Chinese cities is using a smartphone to pay for just about everything. At restaurants, a waiter will ask if you want to use WeChat or Alipay – the two smartphone payment options –before bringing up cash as a third, remote possibility. Just as startling is how quickly the transition has happened. Only three years ago there would be no question at all, because everyone was still using cash. “From a tech standpoint, this is probably one of the single most important innovations that has happened first in China, and at the moment it’s only in China,” says Richard Lim, managing director of the venture capital firm GSR Ventures.

There are certain parts of the Chinese internet that have to be seen to be believed. Coming from outside the country, it’s hard to comprehend that Facebook or Google can be completely blocked until you are forced to do without them. It’s tough to fathom how critical the messenger app WeChat is for everyday life until the sixth person of the day asks to scan your QR (quick response) code – a square-shaped barcode – to connect the two of you. What’s happening with cash in China is similar. For the past three years, I have been outside mainland China covering Asian technology from Hong Kong, which has a very different internet culture from the mainland. I knew that smartphone payments were taking over in China, as the statistics were stark: in 2016, China’s mobile payments hit £42 trillion ($5.5tn), roughly 50 times the size of America’s £860bn market, according to consulting firm iResearch.

[..] Some Scandinavian countries have also weaned themselves from cash but still use cards frequently. In China, the change has been to phones. One friend didn’t realise how reliant she had become on mobile payments until her bank called her. She had left her ATM card in the machine three weeks earlier and had not noticed its absence. In practical terms, this means that two Chinese companies – Tencent, which runs WeChat, and Alibaba, whose financial affiliate, Ant Financial, runs Alipay – are sitting atop a goldmine of staggering proportions. Both companies can make money off the transactions, charge other companies to use their payment platforms and all the while collect the payments data to be used in everything from new credit systems to advertising.

My wild guess: it’s not going to happen.

• Survivors Of 9/11 Urge May To Release Saudi Arabia Terror Report (Ind.)

Survivors of the 9/11 attacks have written to Prime Minister Theresa May – urging her to make public a British government report into the extent of Saudi Arabia’s funding of Islamist extremism in the UK. The report into the significance of the financing of Islamic extremists in Britain by Saudi Arabia and other nations was commissioned by Ms May’s predecessor, David Cameron, as part of a deal to obtain political support for a parliamentary vote on UK airstrikes on Syria. Last week, British Home Secretary Amber Rudd said the report was not being published “because of the volume of personal information it contains and for national security reasons”. Green Party co-leader Caroline Lucas suggested the refusal to make public the report was linked to a reluctance to criticise the kingdom, with which Britain has long had close strategic and economic ties.

Now, a group representing US survivors of the 9/11 attacks and the relatives of some of the almost 3,000 people who died, has urged Ms May to seize the chance to release the report, even if it is not fully complete. “The UK now has the unique historic opportunity to stop the killing spree of Wahhabism-inspired terrorists by releasing the UK government’s report on terrorism financing in the UK which, according to media reports, places Saudi Arabia at its centre of culpability,” says the letter, signed by 15 people. “The longer Saudi Arabia’s complicity is hidden from sunlight, the longer terrorism will continue. They must be stopped; but who will stop them? We submit that you are uniquely situated to shine the cleansing light of public consciousness.” It adds: “We respectfully urge you to release the report now, finished or unfinished. We ask you to consider all the victims of state-sponsored, Saudi-financed terrorism, their families and their survivors in the UK and all over the world.”

Completely insane. Lawless.

• West Virginians Are Fighting To Save Their Neighbors From Opioids (NewYorker)

Michael Barrett and Jenna Mulligan, emergency paramedics in Berkeley County, West Virginia, recently got a call that sent them to the youth softball field in a tiny town called Hedgesville. It was the first practice of the season for the girls’ Little League team, and dusk was descending. Barrett and Mulligan drove past a clubhouse with a blue-and-yellow sign that read “Home of the Lady Eagles,” and stopped near a scrubby set of bleachers, where parents had gathered to watch their daughters bat and field. Two of the parents were lying on the ground, unconscious, several yards apart. As Barrett later recalled, the couple’s thirteen-year-old daughter was sitting behind a chain-link backstop with her teammates, who were hugging her and comforting her.

The couple’s younger children, aged ten and seven, were running back and forth between their parents, screaming, “Wake up! Wake up!” When Barrett and Mulligan knelt down to administer Narcan, a drug that reverses heroin overdoses, some of the other parents got angry. “You know, saying, ‘This is bullcrap,’ ” Barrett told me. “ ‘Why’s my kid gotta see this? Just let ’em lay there.’ After a few minutes, the couple began to groan as they revived. Adults ushered the younger kids away. From the other side of the backstop, the older kids asked Barrett if the parents had overdosed. “I was, like, ‘I’m not gonna say.’ The kids aren’t stupid. They know people don’t just pass out for no reason.” During the chaos, someone made a call to Child Protective Services.

At this stage of the American opioid epidemic, many addicts are collapsing in public—in gas stations, in restaurant bathrooms, in the aisles of big-box stores. Brian Costello, a former Army medic who is the director of the Berkeley County Emergency Medical Services, believes that more overdoses are occurring in this way because users figure that somebody will find them before they die. “To people who don’t have that addiction, that sounds crazy,” he said. “But, from a health-care provider’s standpoint, you say to yourself, ‘No, this is survival to them.’ They’re struggling with using but not wanting to die.”

So?

• This Isn’t the First US Opiate-Addiction Crisis (BBG)

The U.S. is in the throes of an “unprecedented opioid epidemic,” reports the Centers for Disease Control. The crisis has spurred calls for action to halt the rising death toll, which has devastated many rural communities. It’s true that there’s an opioid epidemic, a public health disaster. It’s not true that it’s unprecedented. A remarkably similar epidemic beset the U.S. some 150 years ago. The story of that earlier catastrophe offers some sobering lessons as to how to address the problem. Opioids are a broad class of drugs that relieve pain by acting directly on the central nervous system. They include substances such as morphine and its close cousin, heroin, both derived from the opium poppy. There are also synthetic versions, such as fentanyl, and medications that are derived from a mix of natural and synthetic sources, such as oxycodone.

Opioid addiction can take many forms, but the current crisis began with the use and abuse of legal painkillers in the 1990s, and has since metastasized into a larger epidemic, with heroin playing an especially outsized role. All of this is depressingly familiar. The first great U.S. opiate-addiction epidemic began much the same way, with medications handed out by well-meaning doctors who embraced a wondrous new class of drugs as the answer to a wide range of aches and pains. The pharmacologist Nathaniel Chapman, writing in 1817, held up opium as the most useful drug in the physician’s arsenal, arguing that there was “scarcely one morbid affection or disordered condition” that would fail to respond to its wonder-working powers. That same year, chemists devised a process for isolating a key alkaloid compound from raw opium: morphine.

Though there’s some evidence that opiate dependency had become a problem as early as the 1840s, it wasn’t until the 1860s and 1870s that addiction became a widespread phenomenon. The key, according to historian David Courtwright, was the widespread adoption of the hypodermic needle in the 1870s. Prior to this innovation, physicians administered opiates orally. During the Civil War, for example, doctors on the Union side administered 10 million opium pills and nearly three million ounces of opium powders and tinctures. Though some soldiers undoubtedly became junkies in the process, oral administration had all manner of unpleasant gastric side effects, limiting the appeal to potential addicts.

The Koch brothers and the Fauxbel for economics.

• A Despot In Disguise: One Man’s Mission To Rip Up Democracy (Monbiot)

In 2013 she stumbled across a deserted clapboard house on the campus of George Mason University in Virginia. It was stuffed with the unsorted archives of a man who had died that year whose name is probably unfamiliar to you: James McGill Buchanan. She says the first thing she picked up was a stack of confidential letters concerning millions of dollars transferred to the university by the billionaire Charles Koch. Her discoveries in that house of horrors reveal how Buchanan, in collaboration with business tycoons and the institutes they founded, developed a hidden programme for suppressing democracy on behalf of the very rich. The programme is now reshaping politics, and not just in the US.

Buchanan was strongly influenced by both the neoliberalism of Friedrich Hayek and Ludwig von Mises, and the property supremacism of John C Calhoun, who argued in the first half of the 19th century that freedom consists of the absolute right to use your property (including your slaves) however you may wish; any institution that impinges on this right is an agent of oppression, exploiting men of property on behalf of the undeserving masses. James Buchanan brought these influences together to create what he called public choice theory. He argued that a society could not be considered free unless every citizen has the right to veto its decisions. What he meant by this was that no one should be taxed against their will. But the rich were being exploited by people who use their votes to demand money that others have earned, through involuntary taxes to support public spending and welfare.

Allowing workers to form trade unions and imposing graduated income taxes were forms of “differential or discriminatory legislation” against the owners of capital. Any clash between “freedom” (allowing the rich to do as they wish) and democracy should be resolved in favour of freedom. In his book The Limits of Liberty, he noted that “despotism may be the only organisational alternative to the political structure that we observe.” Despotism in defence of freedom. His prescription was a “constitutional revolution”: creating irrevocable restraints to limit democratic choice. Sponsored throughout his working life by wealthy foundations, billionaires and corporations, he developed a theoretical account of what this constitutional revolution would look like, and a strategy for implementing it. He explained how attempts to desegregate schooling in the American south could be frustrated by setting up a network of state-sponsored private schools. It was he who first proposed privatising universities, and imposing full tuition fees on students: his original purpose was to crush student activism.

He urged privatisation of social security and many other functions of the state. He sought to break the links between people and government, and demolish trust in public institutions. He aimed, in short, to save capitalism from democracy. In 1980, he was able to put the programme into action. He was invited to Chile, where he helped the Pinochet dictatorship write a new constitution, which, partly through the clever devices Buchanan proposed, has proved impossible to reverse entirely. Amid the torture and killings, he advised the government to extend programmes of privatisation, austerity, monetary restraint, deregulation and the destruction of trade unions: a package that helped trigger economic collapse in 1982. None of this troubled the Swedish Academy, which through his devotee at Stockholm University Assar Lindbeck in 1986 awarded James Buchanan the Nobel memorial prize for economics. It is one of several decisions that have turned this prize toxic.

Well, it would create a ton of chaos…

• Italy Mulls Temporary Humanitarian Visas For Migrants, Refugees (G.)

Italy has confirmed it is considering issuing temporary humanitarian visas that would allow tens of thousands of migrants who have arrived in the country from Libya to travel around the European Union. The move would provoke an immediate Austrian response, including the closure of the border with Italy at the Brenner Pass. The chances of Italy being able legally to grant unilateral humanitarian visas in this way is slight, but the threat is intended to concentrate minds in the EU after Italy failed to win clear practical support from Germany and France to take more people that have been arriving in increasing numbers from Libya.

The refugee crisis is putting growing political domestic pressure on the Democratic party (PD)-led government, with PD mayors refusing to take extra migrants and plans for legislation on citizenship being shelved at the weekend by the Italian prime minister, Paulo Gentiloni. In an interview with Il Manifesto, Mario Giro, the deputy foreign minister, said the government was looking at all options including the granting of temporary visas. Previously he had simply described the idea as speculation, and it had been dismissed by the interior minister. Giro said: “We are in a tug of war.” He said Italy wanted to avoid unilateral gestures, but was against the strict application of EU law which required migrants to remain in their first country of arrival.

“We don’t accept being turned into a European hotspot, or feeling guilty because we rescue people, so deciding what to do with the migrants who arrive is everyone’s responsibility,” he said. On Monday, the Italian foreign minister, Angelino Alfano, said the idea of humanitarian visas was not on the agenda. The EU high commissioner for external affairs, Federica Mogherini, insisted the issue was not discussed at the EU foreign affairs council meeting on Monday in Brussels. But the Italians are examining whether they could invoke the application of directive 2001/55, a measure approved following the Balkan wars, that allows the granting of humanitarian visas. It was too early to say when or how many such permits could be issued, Giro said, adding that the Italian authorities who received asylum requests already had the power to grant them.

Older Entries