American Troops To Leave Germany: Is It Goodbye Or Just Auf Wiedersehen? Tyler Durden Tue, 08/04/2020 - 02:00
The continued presence of tens of thousands of American military personnel in Europe seventy-five years after the end of the Second World War is rarely questioned either by politicians or the mainstream media. Currently there is little recollection of how, after the war ended, soldiers from Britain, France, the U.S. and the Soviet Union occupied Germany, each in a designated zone. Germany’s capital Berlin was divided into four sectors, each with a foreign military occupying force. I was a part of that occupation force from 1968 through 1971, serving in the U.S. Army’s Berlin Brigade as part of the 430th Military Intelligence Detachment.
The initial intention to keep postwar Germany in check morphed into the Cold War with the Soviets. The Soviet sector of Berlin became the capital of communist East Germany while the U.S. led efforts to create a military union based in Western Europe that would resist further Russian expansion. That alliance became the North Atlantic Treaty Organization (NATO) in 1949, a structure that incorporated the newly minted Federal Republic of Germany, and the Soviets countered with the Warsaw Pact that included nearly all of Eastern Europe. Both the Organization and Pact were ostensibly defensive alliances and the U.S. active participation was intended to demonstrate American resolve to come to the aid of the Europeans. The Cold War between the two alliances continued until 1991 when the Soviet Union collapsed. Germany was reunited, the Berlin wall was torn down, the foreign troops went home and the city again became the country’s capital.
During my time in Germany the Cold War was decidedly hot, having relatively recently witnessed the Russian denial of Berlin’s occupied city status shared among the four victorious nations by building a wall and confronting U.S. forces at the new border crossing points. My recollection is that in 1970 there were more than 10,000 GIs in Berlin alone and about 200,000 more stationed in West Germany.
Today there are approximately 36,000 American soldiers and airmen based in a reunited Germany but President Donald Trump decided in early June to withdraw 9,500 of them and to also cap the total U.S. military presence in that country at 24,000, which would involve 2,500 more cuts and might go even deeper depending on what is eventually included in the numbers. Preliminary planning suggests that about 5,600 will be repositioned to other NATO countries, including Italy, Belgium and Poland, while 6,400 will be returned to the U.S., from which point they might go on to the Pacific theater to confront “Chinese ambitions.” Unlike previous Trump pronouncements on reductions in force in Afghanistan and Syria, neither of which has actually been achieved, this latest move regarding Germany appears to be serious.
As some of the soldiers that are being re-positioned elsewhere in Europe will undoubtedly be closer to the border with Russia, there should be no doubt but that the Kremlin is still the designated enemy. Whether Russia is an actual threat is questionable and many observers privately believe that NATO is an anachronism, kept going by the many statesmen and military establishments of the various countries that have a vested interest in maintaining the status quo.
In spite of the clearly diminished threat in Europe, NATO has expanded to 30 members, including most of the former communist states that made up the Warsaw Pact. The most recent acquisition was Montenegro in 2016, which contributed 2,400 soldiers to the NATO force. Since the demise of the Warsaw Pact, NATO has found work in bombing Serbia, destroying Libya and in helping in the unending task to train an Afghan army, tasks which were not envisioned when the treaty was signed in 1949.
Trump has also stated his intention to move the European Headquarters of U.S. forces from Stuttgart in Germany to Mons, near Brussels in Belgium. The move would seem to make some limited sense as NATO headquarters is also in Brussels, but there is also a political dimension to it. Trump has been sending the not unreasonable message that if the Europeans want more defense, they should pay for it themselves, though he has wrapped his proposal in his usual insulting and derogatory language. A wealthy Germany currently spends 1.1% of GDP on its military, far less than the 2% that NATO has declared to be a target to meet alliance commitments. That compares with the nearly 5% that the U.S. has been spending globally, inclusive of intelligence and national security costs.
Trump might actually have a reasonable U.S. perspective on the burden sharing issue, but the European concern is more focused on how Trump does what he does. For example, he announced the downsizing in June without informing any of America’s NATO partners. The Germans were surprised and pushed back immediately. German Foreign Minister Heiko Maas regretted the planned withdrawal, describing Berlin's relationship with the Washington as "complicated.” Chancellor Angela Merkel was reportedly shocked. And Trump made matters worse last week when he tweeted “Germany pays Russia billions of dollars a year for Energy, and we are supposed to protect Germany from Russia” before maladroitly observing that “The United States has been taken advantage of for 25 years, both on trade and on the military. We are protecting Germany. So we’re reducing the force because they’re not paying their bill. It’s very simple: They’re delinquent. Very simple.”
The timing of the decision has also been questioned, with many observers believing that Trump deliberately staged the announcement to punish Merkel for refusing to attend a planned G-7 Summit in the U.S. that the president had been trying to arrange. Merkel argued that dealing with the consequences of the coronavirus made it difficult for her to leave home and the G-7 planning never got off the ground, which angered Trump, who wanted to demonstrate his global leadership in an election year.
Predictably, the Democrats and also some Republicans are piling on Trump over the decision.
Joe Biden sees a “profound problem” in the withdrawal while
Senator Bob Menendez of the Senate Foreign Relations Committee quipped “Champagne must be flowing freely this evening at the Kremlin.”
Republican Mitt Romney declared the move to be “grave error…a slap in the face at a friend and ally when we should instead be drawing closer in our mutual commitment to deter Russian and Chinese aggression. The move may temporarily play well in domestic politics, but its consequences will be lasting and harmful to American interests.”
The limited reduction in force actually makes no sense if one believes that NATO itself should instead be terminated due to its lacking any credible threat from Russia or from anyone else. A recent opinion poll suggests that keeping U.S. troops in Germany is not considered desirable by the Germans themselves, only 15% of whom support their remaining on national security grounds. And moving troops to Belgium and Italy is going in the wrong direction if one actually considers that there is an active threat from Moscow.
Nor does moving soldiers from one country that is behind on its 2% “dues” to NATO to other countries that are likewise in arrears make any practical sense but for a president who feels personally affronted by a foreign leader and is choosing to react petulantly as punishment. The disruption to U.S. military facilities that currently provide support to elements in Africa and the Middle East will be considerable, and the move will also not be cost-free. According to the New York Times, “Repositioning the troops will cost several billion dollars. The withdrawal and shifting of forces is likely to take months, if not years.”
And, of course, the real kicker is that if Joe Biden is elected president in a little less than three months the whole planned move will be scrapped by the victorious and persistently warlike Democrats.
No wonder Americans’ trust in the rationality of their government is at an all time low.
Parts Of France Impose Outdoor Mask Mandate In Controversial First Tyler Durden Tue, 08/04/2020 - 01:20
The global pandemic lockdowns and social distancing regulations have produced many new controversial firsts, leading to both disputes between citizens and law enforcement, and among people often wrangling with each other over things like mask wearing or proximity, or even the ability to have gatherings at a park.
Though we thought we'd seen everything, here's yet another true first: municipal governments in France have begun mandating the wearing of masks outdoors.
"Beach resorts along France’s Atlantic coast, picturesque promenades on the Loire River, farmers markets in the Alps — they’re among scores of spots around France where everyone is now required to wear a mask outdoors," the Associated Press reports.
The sure to be controversial policy in parts of the country comes as a national mask law goes into effect Monday; however, the mask law only mandates the wearing of a face covering indoors.
Currently, there are fears of a virus resurgence, with the French health authorities reporting 7,000 new cases over the course of the past week.
This second wave fear, such as the United States has been at the forefront of experiencing, is reportedly putting pressure on the government to go to the extreme of mandating the wearing of masks even outside.
The AP details further:
Several sites around France have started requiring masks outdoors in recent days. Starting Monday, 69 towns in the Mayenne region of western France imposed outdoor mask rules, as did parts of the northern city of Lille and coastal city of Biarritz in French Basque country.
Thus far there's been a clear scientific consensus that coronavirus is more easily spreadable indoors, while there's less danger for it's spread in the outside open air.
The idea that France could soon see a nationwide "outdoor" mask law would prove to be hugely controversial, given that it would require everyone from hikers to joggers to people just walking even in isolation to be masked up.
Indian Stocks Break Critical Support As Pandemic Accelerates Tyler Durden Tue, 08/04/2020 - 00:40
Indian shares have reversed in the last four sessions, breaking critical support, following financials, energy, healthcare, and telecommunication services pressuring the NIFTY 50 lower on Monday.
Ahead of the interest rate decision this week, investors have been souring over the prospects of rising coronavirus cases.
NIFTY 50 has fallen 4% since late last week, and this comes after a 50% increase in India's main equity index since mid-March after it plunged 38% on the eruption of the virus pandemic.
India's interior minister said hospitalization with COVID-19 is surging as cases soared Monday above 50,000 for the fifth consecutive day.
India's Ministry of Health and Family Welfare reported 52,972 new confirmed infections on Monday, pushing up the total to 1.8 million, just behind the US and Brazil.
With 771 new deaths, the virus pandemic has killed 38,135 people in the country, including that of a minister on Sunday.
Zee Business financial analyst Anil Singhvi warned NIFTY 50 downside could be seen if the ₹11,000-level support is violated. The index closed ₹10,891, indicating further downside is ahead.
Singhvi said investors should sell stocks if NIFTY 50 trends below ₹11,000. After the correction, he believes stocks could zoom higher.
"11000 most important level ... Anil Singhvi said - do not be afraid of a few digit correction after the boom ... If the market trades below 11000-10950, neutralize the position of the bull, said - for a big boom beyond 11300 Stay ready," tweeted Zee Business (translated into English).
11000 सबसे अहम स्तर...अनिल सिंघवी ने कहा- तेजी के बाद कुछ अंकों के करेक्शन से घबराएं नहीं...11000-10950 के नीचे बाजार ट्रेड करे तो तेजी की पोजीशन को न्यूट्रल करें, बोले- 11300 के पार बड़ी तेजी के लिए रहें तैयार#EditorsTake #Nifty #Sensex #NSE #BSE #MarketUpdate @AnilSinghvi_ pic.twitter.com/OP61xBbCAV— Zee Business (@ZeeBusiness) August 3, 2020
Perhaps waning Indian stocks is a warning sign for the MSCI World Index.
Earlier on Monday, Spanish stocks broke critical support after new rounds of lockdowns feared.
The Pentagon's New UFO Disclosures: 75 Years Of MK Ultra Psy Ops Tyler Durden Tue, 08/04/2020 - 00:05
In my last few articles, I have found myself writing on the theme of the emerging new system and the battle between two paradigms (multipolar vs unipolar).
Within that theme, the important issue of psy ops, false solutions and epistemological warfare which is a part of everyone’s’ daily life (whether they know it or not) arose as well. Recent events and announcements have caused me to tackle another aspect of psychological warfare in the modern age.
What would you do if the American and British governments both revealed that their secret UFO programs would declassify material from each nations’ respective National Archives?
What if you found out that leading politicians like former House Majority speaker Harry Reid had allocated $22 millions of tax payer dollars to UFO research and that Obama’s former chief counsellor (and rampant pedophile) John Podesta has openly called for UFO disclosure on several public occasions since 2002 or that Hillary Clinton herself called for UFO disclosure during her presidential campaign pledges of 2015?
Would you believe these claims or would you remain skeptical? How would you decide what to do?
With the July 23 public statement from the Pentagon that “off world vehicles not made on this earth” have been kept secret for decades, this question has become extremely important.
Major opinion-shapers like Joe Rogan, Tucker Carlson, and even Russia Today have promoted the cause of alien disclosure for the past few years and with the most recent Pentagon announcement, fascination in little grey men has spread like wildfire.
For the past several decades, government-sponsored UFO research has largely been driven by the work of private subcontractors like Bigelow Aerospace which was founded by billionaire real estate speculator Robert Bigelow who allocated large swaths of his fortunes to the creation of organizations like the National Institute for Discovery Science which have always worked in a private capacity with governments and academia. One of Bigelow’s biggest tools was Sen. Harry Reid who not only received generous campaign funds from the billionaire between 1998-2009 but also allocated tens of millions in national defense funds to his company starting in 2007.
In 2014, the creative force driving the “UFO-disclosure cause” has taken the form of a weird organization called To the Stars Academy of Arts and Science run by high level intelligence operatives and using a cardboard cut-out Tom Delonge (former lead singer of the punk band Blink 182). To the Stars has poured millions of dollars into cultural/educational and lobbying projects driven by books, movies, film and documentaries in the cause of “elevating global consciousness” in preparation for a new age of UFO disclosure.
As Delonge says in his promotional video:
“through a series of meetings I was soon connected to a large group of U.S. government officials. From the CIA, to the Department of Defense to Lockheed Martin Skunkworks. These were the guys involved in the secretive government programs that dealt with these subjects.”
Some of the shadowy figures affiliated with To the Stars include a former CIA director of operations, former Deputy Assistant secretary for Defense Intelligence, former Director of Information for White House Technology, and former chief of the CIA’s counter-biological weapons program. Both Podesta and Bigelow’s Aerospace have also worked closely with Delonge’s strange group over the past six years.
Bigelow is not the only billionaire who has allocated their vast fortunes to the cause of “UFO truth”.
In 1993, the Disclosure Initiative was created by none other than financier Laurence Rockefeller (4th son of Standard Oil Founder John D. Rockefeller) which had a two-fold purpose:
Unite all of the largest UFO research organizations in America under one umbrella organization which was promptly accomplished within one year and
Massively lobby the Clinton Administration to declassify millions of documents which was done in 1994, revealing little more than mountains of anecdotal testimonies and correspondences.
During the heyday of the Rockefeller UFO Disclosure Initiative, the Clintons stayed at the Laurence Rockefeller ranch in Wyoming, during which time an early recruit to the “disclosure mission” was Clinton Chief of Staff John Podesta. Podesta started going public with calls for UFO disclosure in 2002 and has continued to work with figures like Bigelow and To the Stars Academy over the next 18 years.
A fuller overview of Laurence Rockefeller’s “other” civilization-shifting programs from the 1950s-1990s can be seen here.
During the Clinton White House years, Laurence Rockefeller recruited a bodybuilding biologist named Stephen Greer to become the controller of the Disclosure Project which has provided his meal ticket to this very day. Greer has given thousands of interviews promoting the narrative that NASA’s Apollo Lunar projects were stopped in 1972 merely because the aliens who have been stationed on the Moon for eons didn’t want the truth to leak out (but were at least kind enough to let U.S. keep the technology they gave U.S. earlier in Roswell in the 1950s). If you believe in Greer’s narrative (which gets much crazier I promise), then human creative thought is actually not as special as “the shadowy forces controlling the government” wanted you to believe since space technology only existed because we stole stuff from ETs. Pretty much any inspired awe in universal creation and the power of the human mind to discover this creation with the effect of making life better through scientific and technological progress would easily be killed from this outlook.
The questions an intelligent person should now ask are:
Why would a leading figure of the Rockefeller dynasty devote the last decades of his life to the cause of “UFO truth”?
Did Laurence Rockefeller or those on his payroll or those in the CIA actually care about the right of the people to know hidden truths, or is the plan just designed to mis-direct the minds of credulous and jaded citizens into an invisible cage?
Might such a mis-direction prevent people from dealing with issues of America’s conversion into Nazism and accelerating disintegration?
Is it possible that these pedophiles, globalists, and Malthusian billionaires care less about the truth and more about inducing Americans to fixate on aliens while the republic is destroyed under economic collapse and war?
A large portion of the Disclosure Project’s work has gone into the investigation of crop circles which were first recorded in the early 1970s in Britain, and which have the peculiar characteristic of becoming increasingly well executed and complex over the course of five decades. Live Science reported that “the first real crop circles didn’t appear until the 1970s, when simple circles began appearing in the English countryside. The number and complexity of the circles increased dramatically, reaching a peak in the 1980s and 1990s when increasingly elaborate circles were produced”.
My question is: If transcendental alien races travelling at faster-than light speed, have been leaving encoded messages to U.S., then why would their artistic skills have improved so dramatically over a few years? Just a question.
Most people know of the CIA/MI6-funded mass brainwashing operation known as MK Ultra which was launched in 1953. Very few people have recognized the connection between MK Ultra and the rise of the UFO movement that grew in spades throughout the Cold War.
While U.S. and UK government UFO investigations did occur in piece meal starting in 1947 under Project Sign (1947), and Project Grudge (1949), it wasn’t until 1950 that official tax payer-funded departments were created in both nations to pursue “UFO research”. These took the form of the USA’s Project Blue Book (1952) which itself was modelled on the work conducted by Britain’s 1950 “Flying Saucer Working Party” spear-headed by Sir Henry Tizard (Chief Science Advisor to the Ministry of Defense and Chairman of Britain’s Defense Research Policy Committee).
Journalist Naomi Klein stated in her book The Shock Doctrine that Tizard played a leading role in the creation and funding of MK Ultra during a high level meeting in Montreal and Tizard’s Wikipedia entry notes that:
“One of the most controversial meetings he had to attend in his capacity as chair of the National Research Commission would only emerge many years later with the de-classification of CIA documents, namely a meeting on June 1st, 1951 at the Ritz-Carlton Hotel in Montreal Canada, between Tizard, Omond Solandt (chairman of Defence Research and Development Canada) and representatives of the CIA to discuss “brainwashing”.
This Ritz-Carleton meeting would lay the seeds for MK Ultra that was not only designed to deal with brainwashing, but created LSD, and explored the matter of breaking down a human mind into a blank slate with the explicit intention of reconstructing minds from scratch. As Klein’s book eloquently showcases, the intention was to use these discoveries on a national scale in order to conduct “shock therapy” on nations in order to break cultures and nations from their historic memories and traditions with the purpose of reconstructing them under a post-nation state (and post truth) neo liberal world order. While MK Ultra was funded by the Americans, the guidance for this operation were always driven by London’s Tavistock Clinic. A bone chilling expose of this clinic was produced by EIR’s Jeffrey Steinberg in 1993 which may keep you up at night.
As one can imagine, the very act of providing government funds to investigate flying saucers was itself sufficient to legitimize the existence of aliens in the minds of millions of Europeans and Americans during the Cold War years. During these dark years, faith in honest government collapsed under the imperial wars of Korea, Vietnam abroad and the growth of the Military Industrial Complex and McCarthyism at home. The world of secret patents, secret weapons, secret R&D that developed during this period in facilities like Area 51 made the frequent sightings by civilians and even un-vetted military pilots of “unidentified flying aircraft” an expected occurrence.
In her 2012 book Area 51 Uncensored, journalist Annie Jacobson provided lengthy detail of the Cold War experiments, aerospace technology and nuclear bomb testing that took place at Area 51 during this period which largely fed off the earlier social engineering experiment of H.G. Wells’ War of the Worlds emergency broadcast read aloud in 1938. The mass panic that ensued the broadcast provided an insight into the levers of mass psychology that certain social engineers drooled over.
What could account for observed UFO phenomena?
In an interview with NPR Radio, Jacobson stated:
“The UFO craze began in the summer of 1947. Several months later, the G2 intelligence, which was the Army intelligence corps at the time, spent an enormous amount of time and treasure seeking out two former Third Reich aerospace designers named Walter and Reimar Horten who had allegedly created [a] flying disc.
...American intelligence agents fanned out across Europe seeking the Horton brothers to find out if, in fact, they had made this flying disc.”
During WWII, the Horten brothers were associated with the Austrian scientist Viktor Shauberger whose innovative designs for implosion (vs explosion) flying technology utilized water currents, and electromagnetism to generate flying machines that by all surviving accounts flew faster than the speed of sound. While much of his research was confiscated and classified by victor nations after WWII, Schauberger was promised government sponsorship in America which induced the inventor to move across the Ocean where Canada’s Avro Arrow program sought his designs for supersonic nuclear missile delivery aircraft. When he discovered that his work would only be used for military purposes, Schauberger pushed back and over the course of several months, his patents were essentially stolen, and he returned to Austria to die broke and depressed in 1958.
It was never a secret that the post-1971 globalized world order championed by the likes of Sir Henry Kissinger, David and Laurence Rockefeller and other Malthusians throughout the 20th century was always designed to collapse. With the mass shock therapy that such a collapse would impose upon the world, it was believed that a deconstruction of the Abrahamic traditions that governed western society for 2000 years could be accomplished and a new society could be socially engineered in the image of the Brave New (depopulated) World that would live like happy sheep forever under the grip of a hereditary alpha class and their technocratic managers.
The only problem which these social engineers have encountered in recent years is the re-emergence of actual statesmen who are unwilling to sacrifice their people and traditions on the altar of a new global Gaia cult. Such defenders of humanity’s better traditions have launched the multipolar alliance and have driven a policy of long-term growth and advance scientific and technological progress which is embodied brilliantly by the New Silk Road, and its extensions to the Arctic. The most exciting aspect of this New Silk Road/Multipolar Paradigm is the leap into space exploration as the new frontier of human self-development which has not been seen since the days of President Kennedy.
With China and Russia signing a pact to jointly develop lunar bases and the NASA Artemis Accords calling for international cooperation on Lunar and Mars resource development/industrialization, the age of unlimited growth that was lost with the LSD-driven mass psychosis of 1968’s “live in the now” paradigm shift may finally be recaptured. Programs designed to put humanity’s focus on real objective threats like Asteroid collisions, and solar-induced new ice ages are seriously being discussed by leaders of Russia, China and the USA.
There are billions of suns and potentially billions of galaxies, and chances are there is indeed life on many of the planets orbiting some of the stars within our growing, creative universe… and there is also a fair chance that cognitive life has also emerged on some of those planets. The best way to find out however is not to sit at home while the world economic system collapses under a controlled disintegration thinking about Rockefeller-funded conspiracy theories, but rather to fight to revive humanity’s open system destiny starting with a cooperative space program to extend human culture and economy to the Moon and Mars, and then onto other planetary bodies followed by missions to deep space.
If other civilizations exist, maybe it is our duty to take up the torch left to U.S. by JFK and go find them.
Shootings, Murders Spike By Record In Portland After Disbanding 'Gun Violence Reduction Team' Tyler Durden Mon, 08/03/2020 - 23:45
Violent crime in US metro areas surged this summer amid the pandemic, recession, and social unrest: A perfect storm of distress that is unraveling society.
From Atlanta to Baltimore to New York City to Chicago to Houston to some major Californian metro areas, many of these democratically-controlled cities are facing an eruption in violent crime, including murders and thefts.
Readers may recall some of the cities listed above are the usual suspects when referring to metros with the most out of control crime in the US. Now Portland's liberal utopia appears to be imploding, as murders in July jump.
Portland Police Bureau has responded to 15 homicides in July, which is a three-decade high, reported The Oregonian. The Portland Metropolitan Area has seen approximately 24 homicides this year. Besides homicides - assaults, burglaries, and vandalism are also increasing over last year's figures.
Verified Non-Suicide Shootings In Portland
Police Chief Chuck Lovell is concerned by the increase in violent crime. He's shifted officers from patrols to aid in ongoing homicide investigations.
“That’s very concerning. I mean, to know that that many people have been killed in such a short period of time,” Lovell said at a recent virtual press conference.
At the same time, Lovell said Portland City Hall slashed its budget, which resulted in the massive defunding wave in early July that forced a sizeable cut in its Gun Violence Reduction Team. Also, there's been at least a month of lawless anarchists destroying property in the area. The federal government sent in personnel to squash the uprising.
Since the Gun Violence Reduction Team was disbanded on July 1, Lovell has repeatedly linked it with the struggle to police the city.
The loss “forced us into a position where we have to really look at what resources we can bring to bear, absent that structure that we had with the Gun Violence Reduction Team,” he said.
In another recent press conference about the rise in homicides, Portland Mayor Ted Wheeler admitted the city had seen “an unprecedented escalation of gun violence.”
In the first 12 days of the month, officials witnessed an over 380 percent spike in such violence, compared to the same time period in 2019.
“This is the city we live. Portlanders, our neighbors, are being hurt by this violence. They’re being killed. The violence and the loss of life are unacceptable,” Wheeler added.
Liberal cities, ones that have defunded police and allowed anarchists to run wild, are seeing a perfect storm of distress flare up as the virus-induced downturn has unleashed a social-economic bomb.
Is The Dollar Standard Slipping Out Of Control? Tyler Durden Mon, 08/03/2020 - 23:25
As commentators focus on the hospitalisations of two Gulf monarchs, and permutate likely succession issues, they may miss the wood for the succession trees: Of course, the death of either the Emir of Kuwait (91 years old) or King Salman of Saudi Arabia (84 years old) is a serious political matter. King Salman’s particularly has the potential to upturn the region (or not).
Yet Gulf stability today rests less on who succeeds, but rather on tectonic shifts in geo-finance and politics that are just becoming visible. Time to move on from stale ruminations about who’s ‘up and coming’, and who’s ‘down and out’ in these dysfunctional families.
The stark fact is that Gulf stability rests on selling enough energy to buy-off internal discontents, and to pay for supersized surveillance and security set-ups.
For the moment, times are hard, but the States’ financial ‘cushions’ are just about holding-up (albeit only for the big three: Saudi Arabia, Abu Dhabi and Qatar). For others the situation is dire. The question is, will this present status quo persist? This is where the warnings of shifts in certain global tectonic plates becomes salient.
The Kuwaiti succession struggle is emblematic of the Gulf rift: One candidate for Emir, (the brother), stands with Saudi Arabia and its Wahhabi-led ‘war’ on Sunni Islamists (the Muslim Brotherhood). Whereas the other, (the eldest son), is actively backed by the Muslim Brotherhood, Qatar and Turkey. Thus, Kuwait sits on firmly on the Gulf abyss – a region with significant, but disempowered Shi’a minorities, and a Sunni camp divided and ‘at war’ with itself over support for the Muslim Brotherhood; or what is (politely called) ‘autocratic secular stability’.
Interesting though this is, is this really still so relevant?
The Gulf, perhaps more significantly, is held hostage to two huge financial bubbles. The real risk to these States may prove to come from these bubbles, which are the very devil to prick-down into any gentle, expelling of gas. They are sustained by mass psychology – which can pivot on a dime – and usually end catastrophically in a market ‘tantrum’, or a ‘bust’ – and with consequent risk of depression, should Central Banks ever try to lift the foot off the monetary accelerator.
The U.S. ubiquitous ‘asset bubble’ is famous. Central Bankers have been worrying about it for years. And the Fed is throwing money at it – with abandon – to keep it from popping. But as indicated earlier, such bubbles are highly vulnerable to psychology – and that may be turning, as the celebrated V-shaped, expected economic recovery recedes into the virus-induced distance. But for now, investors believe that the Fed daren’t let it implode – that the Fed has absolutely no option but go on throwing more and more money at it (at least until November elections … & then what?).
Less visible is that other vast ‘asset bubble’: The Chinese domestic property market. With its closed capital account, China has a huge sum (some $40 trillion) sloshing around in collective bank accounts. That money can’t go abroad (at least legally), so it rotates around between three asset markets: apartments, stocks, and commodities somewhat whimsically. But investing in apartments is absolutely king! 96% of urban Chinese own more than one: 75% of private wealth is represented by investments in condos – albeit with 21% standing empty in urban China, for lack of a tenant.
Long story, short, the Chinese massively chase property valuations. Indeed, as the WSJ has noted “the central problem in China is that buyers have figured out the government doesn’t appear to be willing to let the market fall. If home prices did drop significantly, it would wipe out most citizens’ primary source of wealth, and potentially trigger unrest”. Even during the pandemic – or, perhaps because of it as the Chinese piled-in – prices rose 4.9% in June, year on year. The total value of Chinese homes and developers’ inventory hit $52 trillion in 2019, according to Goldman Sachs; i.e. twice the size of the U.S. residential market, and outstripping even the entire U.S. bond market.
If it sounds just like America’s QE-inflated asset markets, that’s because it is. As things stand, both the Chinese residential and the U.S. equity bubbles are unstable. Which might fracture fist? Who knows … but bubbles are also vulnerable to pop on geo-political events (such as a U.S. naval landing on one of China’s disputed South Sea islands, to which China is promising, absolutely, a military response).
No one has any idea how Chinese officials can manage the property bubble, without destabilizing the broader economy. And even should the market stay strong, it creates headaches for policy makers, who have had to hold off on more aggressive economic stimulus this year – which some analysts say is needed, partly because of fears it will inflate housing further.
Ah … there it is: Out in plain view – the risk. The condo-trade has hijacked the entire Chinese economy, tying officials’ hands. This, at the moment when Trump’s trade war has turned into a new ideological cold war targeting the Chinese Communist Party. What if the Chinese economy, under further U.S. sanctions, slides further, or if Covid 19 resurges (as it is in Hong Kong)? Will then the housing market break, causing recession or depression? It is, after all, China and Asia that buy the bulk of Gulf energy: Demand shrinks, and price falls. The fate of the Gulf States’ economies – and stability – is tied to these mega-bubbles not popping.
Bubbles are one factor, but there are also signs of the tectonic plates drifting apart in a different way, but no less threatening.
Bankers Goldman Sachs sits at the very heart of the western financial system – and incidentally staffs much of Team Trump, as well as the Federal Reserve.
And Goldman wrote something this week that one might not expect from such a system stalwart: Its commodity strategist Jeffrey Currie, wrote that “real concerns around the longevity of the U.S. dollar as a reserve currency have started to emerge”.
What? Goldman says the dollar might lose its reserve currency status. Unthinkable? Well that would be the standard view. Dollar hegemony and sanctions have long been seen as Washington’s stranglehold on the world through which to preserve U.S. primacy. America’s ‘hidden war’, as it were. Trump clearly views the dollar as the bludgeon that can make America Great Again. Furthermore, as Trump and Mnuchin – and now Congress – have taken control of the Treasury arsenal, the roll-out of new sanctions bludgeoning has turned into a deluge.
But there has also been within certain U.S. circles, a contrarian view. Which is that the U.S. needs to ‘re-boot’ its economic model with a Tech-led, ‘supply-side’ miracle to end growth stagnation. Too much debt suffocates an economy, and populates it with zombie enterprises.
In 2014, Jared Bernstein, Obama’s former chief economist said that the U.S. Dollar must lose its reserve status, if such a re-boot were to be done. He explained why, in a New York Times op-ed:
“There are few truisms about the world economy, but for decades, one has been the role of the United States dollar as the world’s reserve currency. It’s a core principle of American economic policy. After all, who wouldn’t want their currency to be the one that foreign banks and governments want to hold in reserve?
“But new research reveals that what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles. To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status.”
In essence, this is the Davos Great Reset line. Christine Lagarde, in the same year, called too for a ‘reset’ (or re-boot) of monetary policy (in the face of “bubbles growing here and there) – and to deal with stagnant growth and unemployment. And this week, the U.S. Council on Foreign Relations issued a paper entitled: It is Time to Abandon Dollar Hegemony.
That, we repeat, is the globalist line. The CFR has been a progenitor of both the European and Davos projects. It is not Trump’s. He is fighting to keep America as the seat of western power, and not to accede that role to Merkel’s European project – or to China.
So why would Goldman Sachs say such a thing? Attend carefully to Goldman’s framing: It is not the Davos line.
Instead, Currie writes that the soaring disconnect between spiking gold price and a weakening dollar “is being driven by a potential shift in the U.S. Fed towards an inflationary bias, against a backdrop of rising geopolitical tensions, elevated U.S. domestic political and social uncertainty, and a growing second wave of covid-19 related infections”.
It is about U.S. explosive debt accumulation, on account of the Coronavirus lockdown. In a world where there is already over $100 trillion in dollar-denominated debt, on which the U.S. cannot default; nor will it ever be repaid. It can therefore only be inflated away. That is to say the debt can only be managed through debasing the currency. (Debt jubilees are viewed as beyond the pale.)
That is to say, Goldman’s man says dollar debasement is firmly on the Fed agenda. And that means that “real concerns around the longevity of the U.S. dollar as a reserve currency, have started to emerge”.
It is a nuanced message: It hints that the monetary experiment, which began in 1971, is ending. Currie is telling U.S. that the U.S. is no longer able to manage an economy with this much debt – simply by printing new currency, and with its hands tied on other options. The debt situation already is unprecedented – and the pandemic is accelerating the process.
In short, things are starting to spin out of control, which is not the same as advocating a re-boot. And the debasement of money is inevitable. That’s why Currie points to the disconnect between the gold price (which usually governments like to repress), and a weakening dollar. If it is out of the Fed’s control, it is ultimately (post-November) out of Trump’s hands, too.
Should confidence in the dollar begin to evaporate, all fiat currencies will sink in tandem – as G20 Central Banks are bound by the same policies as the U.S.. China’s situation is complicated. It would in one way be harmed by dollar debasement, but in another way, a general debasement of fiat currency would offer China and Russia the crisis (i.e. the opportunity), to escape the dollar’s knee pressed onto their throats.
And for Gulf States? The slump in oil prices this year already has prompted some investors to bet against Gulf nations’ currencies, putting longstanding currency pegs with the dollar under pressure. GCC states have kept their currencies glued to the dollar since the 1970s, but low oil demand, combined with dollar weakness would exacerbate the threat to Gulf ‘pegs’, as their trade deficits blow out. Were a peg to break, it is not clear there would be any obvious floor to that currency, in present circumstances.
Against such a backdrop, the royal successions underway in Gulf States might perhaps be regarded a sideshow.
It's Now Virtually Impossible To Get A Bank Loan As Lending Standards Soar Tyler Durden Mon, 08/03/2020 - 23:05
One quarter ago we pointed out something concerning: shortly after JPMorgan reported that its loan loss provision surged five fold to over $8.2 billion for the first quarter, the biggest quarterly increase since the financial crisis, in preparation for the biggest wave of commercial loan defaults since the financial crisis (a number which in the latest quarter surged to $10.5 billion along with all other banks' loan loss provisions)...
... the bank hinted that things are about to get much worse when it first halted all non-Paycheck Protection Program based loan issuance for the foreseeable future (i.e., all non-government guaranteed loans) because as we said "the only reason why JPMorgan would "temporarily suspend" all non-government backstopped loans such as PPP, is if the bank expects a default tsunami to hit coupled with a full-blown depression that wipes out the value of any and all assets pledged to collateralize the loans."
Shortly after, the bank also said it would raise its mortgage standards, stating that customers applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20% of the home’s value, a dramatic tightening since the typical minimum requirement for a conventional mortgage is a 620 FICO score and as little as 5% down. Reuters echoed our gloomy take, stating that "the change highlights how banks are quickly shifting gears to respond to the darkening U.S. economic outlook and stress in the housing market, after measures to contain the virus put 16 million people out of work and plunged the country into recession."
Finally, just days later, JPM also exited yet another loan product, when it announced that it has stopped accepting new home equity line of credit, or HELOC, applications. The bank confirmed that this change was made due to the uncertainty in the economy, and didn't give an end date to the pause.
In short, JPM appeared to be quietly exiting the origination of all interest income generating revenue streams over fears of the coming recession, which prompted us to ask "just how bad will the US depression get over the next few months if JPMorgan has just put up a "closed indefinitely" sign on its window."
On Monday, we got confirmation that it was not just JPMorgan but all US commercial banks that are making the issuance of almost all new credit (with one notable exception) virtually impossible, when the Fed's July senior loan officer survey showed that banks tightened lending standards across the board for C&I (commercial and industrial loans), CRE (commercial real estate), consumer (credit card and auto loans) and residential real estate (RRE) loans. The loan standards for most products - such as C&I loans, residential mortgages and credit cards - were hiked so much they nearly matched the standards during the financial crisis when it was virtually impossible to get any new loans.
This was the second quarter in a row in which loan officers reported sharply tighter financial conditions.
Just as concerning, demand for many loan products also slumped, and in the case of auto loans to record lows, with the exception of jumbo (both conforming and non-confirming) loans, which were roughly flat with demand boosted by record low interest rates.
Here are the details:
According to the July Fed’s Senior Loan Officer Opinion Survey (SLOOS), lending standards for commercial and industrial (C&I) loans tightened in the second quarter with a near record 71% of banks on net tightened lending standards for large and medium-market firms (vs. only 42% on net in the previous quarter), while 70% of banks on net tightened lending standards for small firms (vs. 40% on net in the previous quarter). 59% of banks on net increased spreads of loan rates over the cost of funds for large firms, while 54% on net increased spreads for small firms. In short, anything that is not explicitly guaranteed by the government such as PPP loans, banks won't go near with a ten foot pole for one simple reason: they have zero visibility if and when they will get repaid.
For banks that tightened credit standards or terms for C&I loans or credit lines:
More ominously for a consumer driven economy, demand for C&I loans from large- and medium-sized firms weakened after strengthening in Q1. 23% of banks on net reported weaker demand for C&I loans for large and medium-market firms, compared to 8% on net reporting stronger demand in the previous survey.
The biggest hit was for commercial real estate (CRE) loans, where standard tightened significantly in Q2. 81% (+29pp) of banks on net reported tightening credit standards for construction and land development loans, 78% (+26pp) on net reported tightening standards for loans secured by nonfarm nonresidential properties, and 64% (+15pp) on net reported tightening lending standards for loans secured by multifamily residential properties. Demand for CRE loans fell significantly across all three categories.
While demand for mortgages rose modestly, banks made it more difficult to get a mortgage by significantly tightening lending standards for mortgage loans. Lending standards for GSE-eligible (+53pp to +55%), non-jumbo, non-GSE eligible (+48pp to 59%), Qualified Mortgage jumbo (+50pp to 69%), non-Qualified Mortgage jumbo (+55pp to 70%), non-Qualified Mortgage non-jumbo (+49pp to +64%), and subprime (+29pp to t43%) mortgages all tightened. In other words, all those pleading the case that housing is exploding due to surging loan demand, are forgetting that there is also supply they need to consider, and contrary to conventional wisdom, banks have rarely been less willing to hand out mortgage loans.
Finally, banks’ willingness to make consumer installment loans declined significantly in Q2 (-41% on net vs. -20% on net previously). At the same time, credit standards for approving credit card applications tightened (+72% on net vs. +39% previously), while a modest share of banks also tightened standards for auto loans (+55% vs. +16% previously). Demand for credit card loans declined (-65% on net vs. -23% previously), as did demand for auto loans (-49% vs. -35% previously).
Shaping Eurasia: Russia – China Bilateral Trade And Cooperation Tyler Durden Mon, 08/03/2020 - 22:45
Submitted by SouthFront
Relations between Russia and China have gone from strength to strength over the last 10 years. This development is not exclusively due to the increasingly hostile attitude of Western countries, and the US in particularly, to Russia and China, but it has certainly been a major contributing factor. The deepening and diversification of their strategic relationship is apparent in all spheres, but is particularly notable in their economic and military relations.
There are many factors underpinning the expansion and diversification of trade relations and other forms of economic cooperation between Russia and China. The most important ones include the imposition of sanctions on Russia by Western countries in 2014, the economic stagnation that has characterized most European countries for much of the last 10 years while the Chinese economy has continued to grow, symmetry in economic characteristics of both countries (surpluses in one and corresponding shortages in the other in a variety of sectors), US pressure bringing both countries closer together geo-strategically (which has also produced a mutual interest in shifting away from the US dollar in all transactions), and the consolidation and harmonization of the Chinese ‘One Road One Belt’ initiative and the Eurasian Economic Union
After a relatively flat period marked by what could be characterized as benign indifference and neglect, the trade relationship between Russia and China has grown rapidly since 2009 in terms of both imports and exports, although there was a sharp decline during 2014-2015 corresponding to a sharp decline in Russia’s overall GDP and trade volumes.
However, at least as importantly, the growth in trade and other forms of economic cooperation has not just been quantitative but also qualitative, as the governments of both countries have elaborated detailed industrial development strategies and plans over long periods which have channelled both public and private sector investment and production into priority areas.
This is in sharp contrast to the peculiar form of haphazard, opportunistic and hyper-militarized disaster capitalism that has reigned in the US for many years – arguably at least since the 1990s, when US companies began dismantling the US industrial capacity and offshoring production en masse to raise corporate profits, and the US Congress began to dismantle the anti-trust and financial regulatory frameworks that had been established during the Great Depression of the 1930s to limit the volatility and excesses of the financial sector. (It is also approximately the same period that the US began its post Cold War military adventurism in earnest.)
Most recently the Trump administration’s ambitious infrastructure investment fund (which appeared to be yet another corporate and political slush fund to a considerable extent, to be divided amongst political and corporate allies and withheld from opponents or intransigents) to modernize the US’ aging infrastructure never materialized, and the attempt to establish something resembling a coherent industrial policy complemented by a set of tariffs on selected imports to stimulate domestic production degenerated into an ad hoc series of punitive tariffs and charges whose main objective seemed to be to punish China for the US’ own economic and industrial failures.
The only thing the Republicans and Democrats have been able to agree on in recent times, apart from increasing the already astronomical level of military spending, was to establish another disaster capitalism multi-trillion dollar bailout fund (for the Coronavirus this time) for the financial and corporate sectors, which have increasingly fallen under the control of a very limited number of investment funds led by Vanguard and Black Rock.
In contrast, China’s long-running practice of elaborating and updating five year strategic economic development plans which are implemented by a combination of State-owned and private sector enterprises has proven to be a success. After a catastrophic period of experimentation with disaster capitalism under Boris Yeltsin, Russia has also adopted the strategy of developing a hybrid (or ‘mixed’) economy with substantial State and private sector involvement within the overall framework of strategic planning and industrial policies elaborated by the State in accordance with crucial national interests and objectives.
The underlying similarity in approaches and objectives – albeit obscured somewhat by China’s continued strong commitment to communism and Russia’s strong renunciation of the same – has provided a solid basis for both countries’ renewed interest in strengthening bilateral relations and cooperation in all spheres.
While the leadership of both countries have sought to develop and promote a wide range of bilateral trade, investment and R & D projects both by State entities as well as by the private sector, due to their vast scale the bilateral agreements and projects in the energy sector overshadow all others.
This should not however obscure the importance of cooperation in other sectors and the extent to which the different manifestations and forms of cooperation have continued to proliferate. Most Western analysts emphasize the excellent ties that have developed in terms of military cooperation, involving everything from basic R & D of new technologies and weapons systems to military training and exercises, but the bilateral cooperation goes far beyond these high profile sectors to include education, scientific and technical research, agriculture, manufacturing and services more generally.
Macroeconomic Data on the Russian Economy
To contextualize the changes that have taken place in the bilateral economic relations between Russia and China, they are placed against the background of economic developments in Russia more generally. As noted above, Russia’s economy has generally experienced solid if not spectacular growth since the disastrous decade of the 1990s, and although it was significantly impacted by the West’s sanctions imposed in 2014 (as well as by the fall in oil prices that ocurred around the same time) the economy soon stabilized and then recovered quantitative losses on an even more solid fundamental basis given the economy’s increased diversification, self-sufficiency and resistance to external shocks.
Overall Russia has performed at least as well as most Western countries since 2000, though of course China’s economic growth has far exceeded them.
China’s impressive economic growth therefore could explain the steady trend of increasing trade between the two neighbours by and of itself, however as mentioned above bilateral relations have been boosted by external factors (Western hostility and sanctions) and also nurtured and guided by internal factors (strategic economic and industrial planning based on compatible national priorities and objectives, augmented by significant levels of direct State participation in key economic sectors).
Imports and Exports
The growing economic importance of China to Russia has largely been at the expense of Europe, in part due to the imposition of sanctions against Russia but also a natural consequence of China’s continued economic growth and Europe’s economic stagnation, as well as the complementarity that exists between the Russian and Chinese economies, sectors of comparative advantage and resource endowments.
The share of the 28 European Union countries in Russian exports dropped from 52% in 2014 to 45% in 2017, and the corresponding shares in Russian imports fell from 41% to 38%. Over the same period, the share of China in Russian exports increased from 7.5% to 12%, and in imports from 11.5% to 21%. Nonetheless, as of 2017 Russian imports from China (EUR 48bn) remained about half the value of imports from the European Union (EUR 87bn). Thus although trade reorientation away from the West and towards China is steadily increasing, Europe remains an integral trade partner for Russia.
The figures for 2019 were very similar. The top 10 sources of imports were:
China 21% (54 billion US$), Germany 10.1% (25 billion US$), Belarus 5.52% (13.6 billion US$), USA 5.43% (13.4 billion US$), Italy 4.41% (10.9 billion US$), Japan 3.62% (8.96 billion US$), France 3.47% (8.59 billion US$), Korea 3.23% (8 billion US$), Kazakhstan 2.31% (5.71 billion US$), Turkey 2.01% (4.97 billion US$).
The top 10 export destinations for Russian exports in 2019 were:
China 13.4% (57 billion US$), Netherlands 10.4% (44 billion US$), Germany 6.57% (28 billion US$), Belarus 5.08% (21 billion US$), Turkey 4.95% (21 billion US$), Korea 3.83% (16.3 billion US$), Italy 3.36% (14.3 billion US$), Kazakhstan 3.34% (14.2 billion US$), United Kingdom 3.11% (13.2 billion US$), USA 3.09% (13.1 billion US$). Source
The continued importance of Europe to Russia’s economy is particularly evident when the analysis goes beyond the level of trade volumes, to a consideration of the evolution of trade structures by sector, particularly in the case of Russia’s imports. Whereas Russian exports are dominated by mineral fuels in both directions (accounting for more than 76% of exports to the EU and 64% of exports to China), there are important differences in the structure of Russian imports from the EU and China.
“This reflects the fact that, in certain areas, Russia still needs products and equipment that it can only obtain from Western sources. For example, whereas the HS84 category (nuclear reactors, boilers, machinery and mechanical equipment) represents the largest import item from both the EU and China (with shares in total Russian imports of 23% and 28% in 2017, respectively), the second and third most important categories of imports from the EU: HS87 (vehicles, 11% of Russian imports) and HS30 (pharmaceuticals, 9%) are still largely absent in imports from China…
Nevertheless, import structures are also converging: between 2014 and 2017 these structural ‘import gaps’ were substantially reduced – most spectacularly in the above mentioned three largest import items. The structure of Russian imports from China is also becoming more sophisticated: the shares of machinery and electrical equipment are already higher than the corresponding shares in imports from the EU. As the EU-China import gap closes for Russia, one can conclude that China is gradually replacing the EU as an import source, even with respect to structural developments (although there remain gaps at more detailed commodity levels).” LINK
Key Sectors and Major Projects
The negotiation and execution of structural agreements and operational projects and transactions has taken place within the framework of existing strategic planning elements so as to maximize their compatibility with existing projects and activities and contribution to the realization of national priorities and interests. Although Russia’s efforts to increase economic diversification and self-sufficiency in key sectors received a great boost from the imposition of sanctions in 2014, it had already taken substantial steps in this regard. For instance, a ‘food security doctrine’ has been official government policy since 2010, and the doctrine has been a key element of subsequent government programs for the development of the agriculture and fisheries sectors and the regulation of agri-food markets during the period 2013-2020. LINK
In the same way, ambitious infrastructure projects announced in the framework of developing bilateral relations – such as the Moscow-Kazan high speed railway, which will eventually be part of a high speed rail network linking China (and probably even southeast Asia) to Europe – are being laid out within the framework of a broader Russian strategy to overhaul and upgrade infrastructure throughout the country. In April 2019 the Moscow Times reported:
“The Russian government is pursuing a 6.3 trillion ruble ($96 billion) six-year modernization plan to revamp the country’s highways, airports, railways, ports and other transport infrastructure through 2024.
The comprehensive plan is geared toward improving the connectivity of Russian regions, as well as developing strategic routes including the Europe-Western China transport corridor and the Northern Sea Route.
The plan stems from President Vladimir Putin’s ambitious domestic goals outlined after his inauguration last May. Under a presidential decree, a 3.5 trillion ruble investment fund was set up last summer to finance around 170 construction and other projects from 2019 to 2024.”
Of course, both the general plan and specific details have been subject to scepticism by some experts:
“Bloomberg columnist Leonid Bershidsky has argued that the infrastructure plan risks neglecting underdeveloped regions the Kremlin sees as a “social liability.” Economists interviewed by The Christian Science Monitor have said the revitalization plans are geared toward boosting the export potential of big business and are ill-equipped toward future economic development.” LINK
Nonetheless, at least Russia is committed to thinking and acting strategically with the intention of improving the country’s stock of assets and capabilities, and early indications are that most of the projects have been thoroughly evaluated for current and future economic and social utility and that implementation is progressing steadily. What would the detractors of Russia’s efforts in this respect make of the non-existent efforts of the ruling classes in the US to undertake a similar national infrastructure modernization project?
Early on in the preparations for a massive expansion in bilateral ties the underlying financial infrastructure was laid.
Although still heavily reliant on the US dollar for all bilateral transactions at the time, by 2014 around 100 Russian commercial banks were already offering corresponding accounts for settlements in yuan, and in some ordinary depositors could also open an account in yuan. On November 18 Sberbank became the first Russian bank to begin financing letters of credit in Chinese yuan.
The settlement in national currencies between China and Russia in bilateral trade amounted to about 2% in 2013. However, the use of the yuan in mutual settlements between China and Russia increased ninefold in annual terms between January and September 2014, according to the Chinese Ministry of Economic Development, and has continued to rise. LINK
The financial basis for greatly expanded relations has continued to evolve in accordance with progress in other areas.
Thus, in 2015 Sberbank – Russia’s biggest lender – signed a facility agreement with China’s Development Bank to the amount of $966 million.
The goal of the agreement is to develop the “long-term cooperation between Sberbank and China Development Bank in the area of financing foreign trade operations between Russia and China.”
Russia’s state-owned VTB Bank and the Export-Import Bank of China also signed a $483.2 million loan facility agreement to finance trading operations between Russia and China.
The financial architecture has been further consolidated by broader regional frameworks and agreements for mutually beneficial cooperation.
In 2015, Russian President Vladimir Putin and Chinese leader Xi Jinping signed a decree to formalize cooperation in linking the development of the Eurasian Economic Union with the “Silk Road” economic project. The Silk Road project is aimed at connecting China with European and Middle Eastern markets.
“The integration of the Eurasian Economic Union and Silk Road projects means reaching a new level of partnership and actually implies a common economic space on the continent,” Putin said after the meeting with his Chinese counterpart.
Major transport corridors of the Chinese Belt and Road Initiative
Russia’s railway network is steadily undergoing a major program of extension and modernization
Also in 2015, China pledged to invest $5.8 billion in the construction of the Moscow-Kazan High Speed Railway. The railway will be extended to China, connecting the two countries through Kazakhstan. The total cost of the Moscow-Kazan high speed railroad project is $21.4 billion.
An agreement was signed to create a leasing company which will promote the sale of the Russian Sukhoi Superjet-100 passenger planes to the Chinese and South-East Asian markets, and the two countries agreed to develop a new heavy helicopter, called the Advanced Heavy Lift. LINK
The broadening of economic relations spearheaded by high profile State-led industrial projects is underpinned by a range of other initiatives. For example, in September 2018 Russian and Chinese businesses agreed to further develop trade and economic cooperation and increase mutual investments at the Eastern Economic Forum in Vladivostok.
According to a statement from the Russian Direct Investment Fund (RDIF), the sides are considering 73 investment projects worth more than $100 billion in total. The group overseeing the investments is the Russian-Chinese Business Advisory Committee, which includes more than 150 representatives from “leading Russian and Chinese companies.” RDIF said that seven projects worth a total of $4.6 billion have already been implemented as a result of the group’s activities.
The Russia-China Investment Fund was established in 2012 by China’s state-owned China Investment Corporation and RDIF to focus on projects that foster economic cooperation between Moscow and Beijing. LINK
Major China – Russia gas routes
The largest joint project that has been developed is the massive Power of Siberia gas project. In 2014 Gazprom and the China National Petroleum Corporation (CNPC) signed a $400 billion, 30-year framework agreement to deliver 38 billion cubic meters of Russian gas to China annually. According to Russian energy major Gazprom, 119 operational gas wells had been completed by 2017 at the Chayandinskoye field in Yakutia, and the 3,000km of pipelines from Yakutia to the Russian-Chinese border, connected to the Chinese grid via a two-thread underwater crossing of the pipeline across the Amur River, started deliveries as scheduled late in 2019. The deal on the ‘Eastern Route’ took more than a decade to negotiate.
While Western experts are trying to downplay the merits and prospects for the Power of Siberia project – and the bilateral strategic relationship more generally – the project started supplying gas on schedule and at this stage it appears that the claims of the detractors consist of logistical and operational challenges that the Russians have ample experience in confronting or are largely wishful thinking (the terrain is very inhospitable and operating costs and risks are therefore very high, the project will crowd out smaller producers, Russia is locking itself into an arrangement that eliminates other opportunities, Chinese market power means Russia will have to accept unfavourable conditions, the Asian giant will inevitably swallow up its northern neighbour, bilateral relations are founded on a ‘marriage of convenience’, etc.). LINK
As the US has continued to intensify its hostility and associated geopolitical and economic pressure on China and Russia, the two countries have continued to expand their military cooperation as well as a strong high-tech partnership spanning telecommunications, artificial intelligence and robotics, biotechnology and the digital economy based on the exploitation of existing and potential synergies.
The deepening of the bilateral relationship includes more dialogue and exchanges of information, increased academic cooperation and the development of joint industrial science and technology parks. In addition, Russian President Vladimir Putin said Russia would help the Chinese build their own missile early-warning system – a technology that only Russia and the U.S. have successfully implemented so far. LINK
The crucial role of strategic economic and industrial planning and direct State participation in key sectors has been emphasized throughout this report. This is not to suggest that such planning and participation has been perfect; of course, significant errors have been made in both planning and execution, unforeseeable external shocks or factors that could have been predicted but were not taken into account have disrupted progress, as in all other countries.
One area of particular concern is the adverse material impact and effect on morale caused by corruption, which continues to plague both State and private sectors suggesting that the systems of accounting and accountability applying to both require further improvement in both design and implementation. Also, it is arguable that the vision of public forms of economic ownership and participation remains somewhat limited to a strict State/ private company dichotomy and to elitist management structures and procedures within each.
One aspect of this is that more forms of State participation could be considered at the regional and local levels; another is in terms of inclusion of the workforce of each enterprise in the planning, management and accountability structures and decisions of existing State-owned enterprises.
Beyond this, there may be scope for the promotion of other forms of organization, such as producer, professional or community-based cooperatives and collectives that can provide an organizational basis for economic projects and activities in a manner that can incorporate other values and objectives beyond the profit motive.
The basic data for foreign capital flows also suggest a major structural defect which is inherent to the ‘actual existing’ international economy: a vastly disproportionate amount of capital arrives from and departs for small countries that have no clear trade significance or investment capacity of their own, meaning that such capital flows are routed via these jurisdictions either to avoid taxes and other regulations or to deliberately obscure the identity of the owners and beneficiaries of the resources involved.
According to UNCTAD, between 30% and 50% of all ‘foreign direct investment’ worldwide passes through “conduit” countries, making it hard to determine the source.
According to data from the Central Bank of Russia for 2017, Russia receives 36.8% of ‘foreign direct investment’ (or more accurately, international capital flows) from Cyprus, 5.8% from the Bahamas, 7.2% from Bermuda, 0.8% from China, 3.4% from France, 4.1% from Germany, 0.5% from Japan, 0.4% from Korea, 4.4% from Luxembourg, 9.2% from Netherlands, 3.7% from Singapore, 2.9% from Switzerland, 4.2% from the UK, 0.7% from the US and 0.8% from the Ukraine.
According to estimates compiled by UNCTAD, approximately 6.5% of Russia’s ‘FDI’ stock — about $28.7 billion worth based on 2017 data — was actually of Russian origin. The UNCTAD estimates also showed a significantly increased amount of European and US investment. According to the estimates produced, the US is actually the biggest foreign investor in the Russian economy, worth about $39.2 billion.
While such features of international capital flows can be useful to, for example, elude punitive sanctions from hostile states, they greatly restrict efforts to reduce corruption and improve planning and accountability. The Russian government is no doubt well aware of both the potential advantages as well as the drawbacks involved. For example, Bloomberg reported last year:
“For Russia, meanwhile, repatriating the capital that’s recorded as foreign but isn’t remains an important policy goal. In the 2019 World Investment Report, Unctad attributes the 2018 drop in Russia’s investment inflows to the government’s effort to get Russian business owners to redomicile their holdings to the home country.” LINK
While some aspects and consequences of this inimical structural feature of the international economy have been addressed, it remains a major challenge not just for Russia but everywhere.
Overall, however, the available macro-economic data and preliminary results of major joint projects between Russia and China suggest that their approach has been successful as the Russian economy has withstood the external shocks of sanctions imposed by major trading partners as well as large falls in oil and gas prices, and continued on the path of diversification, deepening and constant improvement of existing production capacities to ensure a core level of resilience and self-sufficiency without going to the other extreme of going xenophobic and renouncing foreign trade and cooperation.
Journalist (Who Survived Previous 'Hit') Shot Dead In Mexico While Eating At Restaurant Tyler Durden Mon, 08/03/2020 - 22:25
A Mexican journalist was shot dead on Sunday in the city of Iguala in the southwestern state of Guerrero, reported Reuters.
Pablo Morrugares, the editor of PM Noticias, was at dinner Sunday evening when a gunman opened fire and killed him on the spot. He was accompanied by his bodyguard who was also shot dead.
Morrugares' PM Noticias focused primarily on reporting crime in the central Guerrero state, which the US State Department has labeled the region a "Level 4: Do Not Travel." In fact, the state is one of Mexico's most violent cartel infested regions.
PM Noticias' Facebook account published a post late Sunday that read: "We are in mourning at PM News but the page will continue with its legacy of our dear friend Pablito."
Reuters notes Morrugares survived a 2016 assassination. The motive behind Sunday's slaying of the reporter is unknown, but one can only suspect it's due to the newspaper's reporting on local crime.
The Mexican Association of Displaced and Attacked Journalists said Morrugares was recently threatened. Fellow journalists are in shock over his death.
Reporters Without Borders, an international non-profit organization that safeguards the right to freedom of information, indicate three other journalists have been killed in Mexico this year.
Reporters Without Borders released a report in 2018 that described Afghanistan, Syria, Mexico, Yemen, and India as the most dangerous areas for reporters.
NYC Mayor Admits City Did Not Submit Application To Paint 'Black Lives Matter' Murals Tyler Durden Mon, 08/03/2020 - 22:05
His comments come after the city is facing scrutiny for refusing to let other groups to paint similar murals on city streets, with the groups accusing the mayor of depriving them of their First Amendment rights.
De Blasio told reporters in July that he would not allow Blue Lives Matter and other groups to paint similar messages. He justified his decision by saying that “Black Lives Matter” represents a “seismic moment” in the nation’s history and transcends the message of any one group.
Meanwhile, a conservative women’s group, Women for America First, sued De Blasio and Transportation Commissioner Polly Trottenberg in July for allegedly blocking their request to paint a mural with the message “Engaging, Inspiring and Empowering Women to Make a Difference!”
During a press conference, De Blasio appeared to backtrack on his comments, saying that he hadn’t said “no to people.”
“We’ve said, if you want to apply, you can apply, but there’s a process,” he said.
New York Mayor Bill de Blasio (third from left) participates in painting Black Lives Matter on Fifth Avenue in front of Trump Tower in Manhattan, N.Y., on July 9, 2020. (Mark Lennihan/AP Photo)
The mayor added that the decision to paint the Black Lives Matter murals came out of a meeting at Gracie Mansion with community leaders and activists who urged the mayor to declare the message official. He justified the decision to not follow the normal permit process, saying that that message “transcends all normal realities because we are in a moment of history where this had to be said and done.”
“That’s a decision I made,” he said.
“But the normal process continues for anyone who wants to apply.”
Trottenberg told reporters during the same press conference that anyone can apply for the public art program but added that the city has the discretion on picking those projects.
De Blasio drew an inflammatory response from President Donald Trump in June when he decided to paint “Black Lives Matter” in large yellow letters on the street outside of the Trump Tower. City officials have portrayed the location chosen as a way to rebuke the president for his response to the protests in the wake of George Floyd’s death.
The mayor has previously defended the mural, saying that the Black Lives Matter movement “transcends any notion of politics.”
“This is about righting a wrong and moving us all forward,” he added.
City councilors in Tulsa, Oklahoma, are also facing similar requests from groups after a Black Lives Matter mural was painted on a city street. The officials on July 29 agreed to remove a “Black Lives Matter” mural from its Greenwood District, which was painted without a permit, saying that allowing the Black Lives Matter mural to remain on the street would invite other groups to request to have their own messages painted. One of the councilors said he had already received requests from several pro-police groups about painting the words “Back the Blue” in another area in the city, in support of the Tulsa Police Department.
Egypt To Elon Musk: No, Aliens Did Not Build The Pyramids Tyler Durden Mon, 08/03/2020 - 21:45
Continuing with our world's decade long history of rewarding Elon Musk for obvious idiocy, the Tesla CEO has now been invited to visit Egypt after the "genius" Tweeted late last week that "Aliens built the pyramids".
Aliens built the pyramids obv— Elon Musk (@elonmusk) July 31, 2020
The Tweet alludes to a popular conspiracy theory about the origins of the pyramids, which many think was a feat unable to be carried out by humans. The topic is often discussed by pseudo-scientist writers and followers of sacred geometry in popular media, like The Joe Rogan Experience.
Egypt seems unamused by the theories. Raina al-Mashat, Egypt's Minister of International Co-operation, invited Musk to the country so he could see for himself, according to The Telegraph.
He said to Musk: “I follow your work with a lot of admiration. I invite you & SpaceX to explore the writings about how the pyramids were built and also to check out the tombs of the pyramid builders. Mr Musk, we are waiting for you.”
Egyptian archaeologist Zahi Hawass called Musk's argument a "complete hallucination".
And given rumors of Musk's drug use, Hawass may not be that far off...
Minneapolis Authorities Warn Residents "Prepare" To Be Robbed & Obey Criminals Tyler Durden Mon, 08/03/2020 - 21:25
Authorities in Minneapolis sent out a letter to residents telling them to ‘prepare’ to be robbed and to obey criminals following a recent surge in robberies and carjackings.
“Be prepared to give up your cell phone and purse/wallet,” states the email, which also says that if a resident encounters a criminal, they should “do as they say.”
The advisory comes off the back of over two months of rioting, protests and unrest following the death of George Floyd.
Minneapolis has experienced a 46% increase in carjackings and a 36% increase in robberies compared to this same time last year, while “Police in the city’s Third Precinct alone have received more than 100 reports of robberies and 20 reports of carjackings in just the last month,” reports Alpha News.
Minneapolis’ Congressional representative Ilhan Omar has also repeatedly called for the police force to be dismantled and replaced with an army of glorified social workers.
It appears as though authorities in the city have waved a white flag to criminals who will now be emboldened to target more victims who are less likely to put up any resistance.
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Soros Infuses $116K Into McCloskey Prosecutor's PAC Days After Charges Filed Tyler Durden Mon, 08/03/2020 - 21:05
Just eight days after St. Louis Circuit Attorney Kim Gardner filed charges against a wealthy couple who defended their home against trespassing protesters, George Soros donated $116,000 to a Political Action Committee (PAC) established for the activist prosecutor, according to JustTheNews.
A Saturday filing with the Missouri Ethics Commission revealed the donation made directly from Soros to the Missouri Justice and Public Safety PAC - for which Soros is the only donor so far. The PAC has already spent at least $104,393 - including $77,804 directly on Gardner, and a payoff of accumulated debt. Of note, Gardner has a primary this Tuesday.
Soros spokesman Michael Vachon told Just The News that Soros has made no secret that he supports prosecutors like Gardner for criminal justice reform.
Gardner slapped charges on personal injury lawyers Mark McCloskey, 63, and his wife Patricia, 61, who armed themselves and stood outside their mansion as a group of roughly 100 protesters broke down a gate to march down their private road.
For defending their property, the McCloskeys were each charged with a felony count of unlawful use of a weapon. Days after the charges were filed, it emerged that Gardner's staff ordered a crime lab to tamper with evidence, by reassembling the 'prop' pistol Patricia was waving in order to make it "capable of lethal use."
This isn't the first brush with shoddy evidence for Gardner's office;
Gardner, a Democrat, was elected in 2016 and supported by Soros-funded PACs, which financially back several prosecutors across America on a progressive criminal justice reform platform.
She drew national attention when she filed criminal charges against then-Republican Missouri Gov. Eric Greitens, forcing him to resign, only to reveal later she did not have evidence to substantiate her allegations. She is facing investigation for her conduct in the Greitens case, and her former chief investigator is awaiting trial on tampering charges. -JustTheNews
Gardner's decision to prosecute the McCloskeys ignited a controversy over Second Amendment rights, a well as Missouri's "Castle Doctrine" which governs use of firearms to defend one's home. Those defending the couple include President Trump, Missouri GOP Senator Josh Hawley, Missouri AG Eric Schmitt, and Gov. Michael Parson (R) who says he'll pardon the McCloskeys.
Their attorney, Joel Schwartz, has filed a motion to dismiss both Gardner and her office from moving forward with their prosecution - claiming a conflict of interest, as "that Gardner's campaign has used the McCloskeys' incident to further her own financial, personal, and professional gain because Gardner sent out campaign solicitations for her re-election mentioning the McCloskeys," according to the report.
Unheard Stories Of Economic Despair From America's Worst Economic Downturn Since The Great Depression Tyler Durden Mon, 08/03/2020 - 20:45
The economic pain that we are witnessing right now is far greater than anything that we witnessed during the last recession. U.S. GDP declined by 32.9 percent on an annualized basis last quarter, more than 100,000 businesses have permanently shut down since the COVID-19 pandemic first hit the United States, and more than 54 million Americans have filed new claims for unemployment benefits over the last 19 weeks. Up until just recently, a $600 weekly unemployment “supplement” and a federal moratorium that prevented many evictions had helped to ease the suffering for millions of American families, but both of those measures have now expired.
As a result, a tremendous amount of economic pain which had previously been deferred will now come rushing back with a vengeance. Millions of American families are no longer going to be able to pay their bills, and experts are warning that we could soon see an “eviction crisis” that is absolutely unprecedented in American history.
48-year-old Thomas Darnell of West Point, Mississippi never thought that he would be in this position. He had been a factory worker for over 20 years until he lost his job in May, and since then he hasn’t been able to find another. And then on top of everything else, everyone in his house caught COVID-19…
First, he was furloughed for three weeks in April and then laid off in May. Then things got worse: His entire household of seven, including himself, his wife, three kids and daughter-in-law, along with his baby grandson, contracted coronavirus after they saw their immediate family over the Independence Day weekend.
“I’m tired and shaky. Even after a few weeks, I’m still trying to recover,” Darnell says, who has since been cleared of the virus but still has lingering symptoms.
He is concerned that employers will be scared away by his recent illness, and he is becoming desperate because he is running out of money.
With no health insurance and no paychecks coming in, Darnell and his wife have gotten to the point where they have to make a choice between buying insulin or buying groceries…
He can’t afford health insurance, which has added to his anxiety because he and his wife are both diabetic, he says. Like Bolei, Darnell and his wife have been forced to make a grueling decision between either paying for their medications or keeping food on the table.
“Do we buy insulin or groceries? It’s a hard juggle,” Darnell says. “I’m willing to make less money and start working again to get health insurance, but no one is hiring.”
The weekly $600 unemployment supplements from the federal government had helped to keep them going for a while, but now those payments have ended, and the immediate future is looking quite bleak.
In Richmond, Virginia, a mother of eight named Shamika Rollins wasn’t sure how she was going to make it when her hours as a home health aid were reduced. Unpaid bills started piling up, and then she got an eviction notice a few weeks ago. The following comes from CBS News…
Shamika Rollins’ eight children share two bedrooms in Richmond, Virginia. But she’s worried about losing their home after she says she received an eviction notice in June.
“First thing, I panic, and then next thing, I look, and I’m like, I got my kids. And it’s like, okay, now you gotta figure this out,” she told CBS News correspondent Adriana Diaz.
If a miracle does not happen, Rollins and her eight children will soon be out in the street, and this is causing her to have “a lot of sleepless nights”…
“I have a lot of sleepless nights,” Rollins said. “My mind is constantly racing, you know, what’s your next move?”
Sadly, there are millions of other Americans in the exact same position.
In fact, experts are projecting that up to 40 million Americans could be evicted from their homes during this pandemic.
Many small business owners are also facing heartbreaking choices during this downturn. A restaurant owner in Delaware named Alex Heidenberger “hasn’t paid the mortgage on his home the past four months” as he desperately tries to keep his once profitable restaurants alive…
Heidenberger, who typically draws about $20,000 a month in profit from the restaurant, now receives nothing. He says he hasn’t paid the mortgage on his home the past four months. He served lifeguard duty for a couple of weeks, mostly to help a beach crew depleted by COVID-19 quarantines but also to make some cash.
“I’m working harder than I have ever worked in my life,” he says, adding that he puts in about 80 hours a week at the two restaurants. Yet, “I have no money… This is all I think about. I don’t sleep.”
The COVID-19 pandemic has hit the restaurant industry particularly hard. Americans are not eating out as regularly as they once did because of the virus, and it is probably going to remain that way for the foreseeable future.
In Massachusetts, a restaurant owner named John Pepper once had eight thriving locations, but at this point only two of them remain open…
John Pepper used a PPP loan to pay employees and reopen four of his eight Boloco restaurants when Massachusetts lifted its shutdown order in early May. But with the money spent and business at the restaurants down as much as 70%, Pepper had to again close two locations. The staff of 125 he had before the virus outbreak is down to 50.
“A lot of this is out of our hands at this point,” Pepper says. “At this moment, I don’t see getting my full payroll back.”
Overall, we are facing a “restaurant apocalypse” in the U.S. that is unprecedented in size and scope.
According to one estimate, we could lose more than a third of all of our restaurants by the end of this calendar year…
As many as 231,000 of the nation’s roughly 660,000 eateries will likely shut down this year, according to an estimate from restaurant consultancy Aaron Allen & Associates provided to Bloomberg News. This will bring the industry’s steady growth to a halt and mark the first time in two decades that U.S. restaurant counts don’t climb. Restaurants have already shed millions of jobs this year, economic data show.
What we are watching is truly horrifying. So many hopes and dreams went into each one of those restaurants that are shutting down, and countless restaurant owners are going to be completely financially ruined by all of this.
For other Americans, this economic downturn has put their very lives at risk. In Colorado, 70-year-old Catherine Azar was already dealing with heart problems and diabetes, and now she is in danger of being thrown out into the street…
“It’s hard for me to conceive of someone being willing to put another person out in the street in the middle of a deadly pandemic, and I’m high risk. I’m 70. I have heart issues and I’m diabetic,” Azar said.
Rollins and Azar are just two of the 43 million Americans at risk of eviction in the coming months. For context, about 1 million Americans were evicted in 2010, the year after the Great Recession.
How long do you think that a 70-year-old woman with heart problems and diabetes would last on the street or in a shelter?
And as millions upon millions of Americans get evicted during the months ahead, the shelters are all going to fill up really fast.
America simply was not prepared for an economic downturn of this nature, and the truth is that much bigger challenges are still ahead.
So please do not look down on anyone that needs help right now, because soon you may find yourself in the exact same position.
Sotheby's Sales Plunge 25% Despite Bored Millennials Bidding Online Tyler Durden Mon, 08/03/2020 - 20:25
The world's largest broker of fine and decorative art, jewelry, and collectibles, Sotheby's, announced Monday that total sales for the first seven months of the year were $2.5 billion, down 25% from the same period a year earlier when it sold $3.3 billion, reported artnet news.
Sotheby's said $1.9 billion came from auction and online sales (down 30.4%). Private sales totaled $575 million (down 1.5%).
The auction house said declining sales might have been worse if it wasn't for its online segment.
"The art and luxury markets have proven to be incredibly resilient, and demand for quality across categories is unabated," said Charles Stewart, Sotheby's CEO, in a statement.
Stewart said, "although driven by necessity, it's clear that our clients' interest and confidence in technology have fundamentally changed."
Sotheby's said bidders are getting younger, a trend where millennials are starting to become more dominant in online auctions. About a third of bidders over the period were under 40 years old.
Ahead of lockdowns, Sotheby's was already building the infrastructure for virtual-only auctions. By the time lockdowns began, online sales had surged to $285 million, more than tripling its online total for all of 2019.
The virus pandemic's silver lining is that it helped supercharge global online art sales that were declining ahead of 2020.
Bored millennials during lockdowns bid up Michael Jordan's Nike Air Jordan 1's to $560,000, expected to sell for around $150,000.
With overall waning sales, Sotheby's furloughed 12% of its staff in April. Employees in the US and UK were not furloughed but took a 20% pay reduction through summer.
"Like many businesses, Sotheby's is adjusting to the challenging circumstances resulting from COVID-19 and taking the necessary steps to protect our employees and the future of the company," the auction house said in April.
As for rival Christies, well, it sold $1.4 billion worth of art for the first seven months, down 50% over the same period in 2019.
Overall, auction houses are seeing slowing sales in a virus-induced recession, as millennial bidders now drive online sales.
The Spreading Feeling "This Is Happening All By Design" Tyler Durden Mon, 08/03/2020 - 20:05
As events unfold I have witnessed a growing opinion being batted around that something sinister is happening beneath the surface. This includes the feeling we are no longer in control of our fate. More and more the idea that form follows function and the winners were picked before all this started is being injected into the mix. This theory embraces the proposition the bottom half of society is destitute and totally dependent on the government which means they have been removed from the battlefield. Now that these people are no longer a threat, corporate and government collaborators are consolidating power and control.
Like many of the people watching this slow-moving train wreck, I'm beginning to lose perspective. My insight has become blocked by the increasingly irrational actions taking place. The uneasy feeling that things will get far worse is being heightened by the suggestion this is all by design, and when you don't get that 'you have no defense', it is indeed frightening. It is bolstered by the supporting argument we should not listen to what those in charge say but rather that we watch what they do. Much of the growing apprehension is rooted in the domino effects about to be unleashed upon the economy. An example is, the tenant doesn't pay the landlord and risks eviction. The landlord doesn't pay his mortgage and risks foreclosure. The bank doesn't get paid, but that's OK because taxpayers will bail them out.
With so much unresolved and hanging in the wind conspiracy theories are taking wing. While I do not endorse the theory this is all developing as planned, it is difficult to deny the situation is dire and the general population remains clueless as to the dangers ahead. Collectively this includes a Fed which is out of control and a polarized government that is dysfunctional at best. Add to this the market manipulation which has reached epic levels. This whole scheme has resulted in a massive huge transfer of wealth and the creation of social chaos. For the "greater good" we have seen rules to further restrict our freedom being instituted and more expected to be imposed in one way or another.
Just how unkind the recent Covid-economy has been to the middle-class has been masked by the helicopter money flowing from Washington. This has skewed income and spending across America but little attention has been paid to those taking it on the chin. This includes the owners of small businesses and those making substantially more than before the pandemic hit. The evidence of the pain and damage being inflicted on the Main Street economy is going beginning to become apparent. It can be seen as we drive down the street and see move empty windows and for lease signs which are sprouting up like weeds.
Even the appearance of a coin shortage due to our government being inept is causing people to claim this is all an intentional part of a larger plan. It means businesses are using the coin shortage to stop taking cash. This has left some people wondering if those wanting the demise of paper money are using the virus scam to eliminate cash altogether. The pandemic and warning germs can be transferred on the surface of money mean that suddenly "money" has now been deemed "unsafe." The rumor is out that Nancy Pelosi has already inserted in one stimulus bill the seeds of "taking our currency digital."
This would force everyone into the banking system increasing the government's ability to tax, track, and control just about everything. The complete transformation to digital currency would mean if the government does not like your business or politics they could just lock you out of the system. They could even charge you to park your money while the bank would be allowed to lend it out and charge interest on it. Eliminating cash is the first step they must adopt for this to work. It would lock money into their system, they would eliminate or control all alternatives to money so it cannot be diverted from or moved out of the banking or financial system.
Is the plan to crash the US into the most devastating depression we have ever seen? While this could wipe out all US debt and clean the country of past obligations it would result in lost credibility and standing for generations to come. To construct such a calamity is simply insane and would shake the world economy and global financial system to its core. Many people claim a crash was coming anyway and the virus just sped things up. When looking at the alternative paths forward the importance of the forthcoming election could never be more crucial. These people point to the fact you can't have an economy that is solely built on fast food and shopping, you have to make stuff and export.
We should at least acknowledge claims by the "it is all happening by design" faction extend to saying that all efforts to halt the coming collapse will not be enough. They contend the question is whether the markets will implode before or after tens of millions of Americans hit rock bottom and become totally destitute and ruined. Judging by the failure of Congress to even grasp the urgency or just how enormous the threat to our future is, perhaps this is the way the entire evil system was designed to unfold.
The US Has Started To Identify The Mystery Seeds Being Sent From China Tyler Durden Mon, 08/03/2020 - 19:45
It was just about week ago that we highlighted a mysterious trend that was sweeping the U.S.: citizens were receiving unsolicited packages of seeds, with return addresses from China, for apparently no reason at all.
Now, the U.S. has started to identify "14 types of plants" that the seeds belonged to, revealing a “mix of ornamental, fruit and vegetable, herb and weed species,” according to the NY Times. Cabbage, hibiscus, lavender, mint, morning glory, mustard, rose, rosemary and sage have all been identified.
Osama El-Lissy of the U.S. Department of Agriculture Animal and Plant Health Inspection Service said: “This is just a subset of the samples we’ve collected so far.”
Art Gover, a plant science researcher at Penn State University said the "risk is low" of the plants being involved in biological warfare, but that the seeds "can be troublesome because they can introduce problematic weeds and diseases".
Lisa Delissio, a professor of biology at Salem State University in Massachusetts, said: "If any of the unidentified seeds turned out to be invasive species, they could displace native plants and compete for resources and cause harm to the environment, agriculture or human health."
Bernd Blossey, a professor in the department of natural resources at Cornell University commented: “Obviously planting rosemary or thyme in your garden isn’t something that will endanger our environment. But there may be other things in there that have not been identified yet. Any time you gain something unknown, my suggestion is burning them, not even throwing them in the trash.”
As of now, it seems too early to tell whether or not something nefarious is taking place. But, like Blossey says, we wouldn't take any chances either. In our prior report, we suggested the mailings could be some sort of agricultural warfare brewing between the U.S. and China - where agriculture remains a key point of trade tensions - and where a cold war of sorts appears to be bubbling up under the surface.
After multiple reports in the U.S. media regarding the seeds, China's Foreign Ministry responded last week by saying that China Post (the country's state owned mail service) "has strictly followed regulations that ban the sending and receiving of seeds," according to Bloomberg.
Further, Chinese Foreign Ministry spokesman Wang Wenbin says that the parcels were "forged" and "not from China". China has supposedly requested that the U.S. mail the seeds back to China so they could investigate further.
We noted last week that the response is anything but re-assuring. We're not postmaster generals but we find the idea of being able to forge mailing labels - and get products to their final destination - in this day and age where even the decrepit U.S. postal service is mostly digital, as a difficult one.
Recall, we wrote days ago that Americans across the country were starting to report receiving unsolicited packages of different types of seeds that they didn't order - and don't know anything about - at their door. The return address on the packages is always from China.
The Washington State Department of Agriculture wrote about the phenomenon on their Facebook page on July 24, 2020 and said that the seeds are being shipping in packaging that identifies the contents as jewelry. Similar advisories have been issued in Virginia, Utah, Kansas, Arizona and Louisiana.
Facebook users have been adding photos in the comments section of the post sharing photographs of seeds they have received from China. “It’s not a joke. I got some the other day!!!” one user commented, stating that the package identified the contents as a "Rose flower stud earring".
“Look’s like it’s all across the country,” stated an Indiana resident who also received seeds in the mail unsolicited.
At least 40 residents in Utah were said to have been mailed the unsolicited packages, according to the Daily Mail. The Kansas Department of Agriculture and the Arizona Department of Agriculture also addressed the phenomenon, as did the Louisiana Department of Agriculture and Forestry, who said:
"Right now, we are uncertain what types of seeds are in the package. Out of caution, we are urging anyone who receives a package that was not ordered by the recipient, to please call the LDAF immediately. We need to identify the seeds to ensure they do not pose a risk to Louisiana’s agricultural industry or the environment."
There had been similar reports from Virginia's Department of Agriculture and Consumer Services. "The seeds have yet to be identified, but officials speculate that the seeds may be of an invasive plant species and are advising residents not to use them," Fox News reported.
"Taking steps to prevent their introduction is the most effective method of reducing both the risk of invasive species infestations and the cost to control and mitigate those infestations," VDACS wrote in a press release.
Twitter is also littered with reports of people receiving these seeds:
We have received 2 of those packages here in Indiana. One from China, and one from Kyrgystan. pic.twitter.com/Fm6CBxf1mD— Don ⭐⭐⭐ (@SmallTownIndy) July 26, 2020
The Washington State Department of Agriculture has advised people on its Facebook page:
1) DO NOT plant them and if they are in sealed packaging (as in the photo below) don’t open the sealed package.
2) This is known as agricultural smuggling. Report it to USDA and maintain the seeds and packaging until USDA instructs you what to do with the packages and seeds. They may be needed as evidence.
Anyone who has received seeds in the mail can report them to the United States Department of Agriculture by visiting their website here. The site says:
If individuals are aware of the potential smuggling of prohibited exotic fruits, vegetables, or meat products into or through the USA, they can help APHIS by contacting the confidential Antismuggling Hotline number at 800-877-3835 or by sending an Email to SITC.Mail@aphis.usda.gov.
USDA will make every attempt to protect the confidentiality of any information sources during an investigation within the extent of the law.
Chicago Man Arrested For Spitting In Cop's Coffee At Dunkin' Donuts Tyler Durden Mon, 08/03/2020 - 19:25
We recently discussed the arrest of a Starbucks employee for spitting in the coffee of a police officer. Now, Vincent J. Sessler, 25, has been arrested for the same act at a Chicago Dunkin' Donuts.
The Illinois State Trooper spotted the spit when he opened the coffee to let it cool. Later surveillance cameras reportedly showed Sessler spitting in the coffee.
What is interesting is the comparison of the charges in the two cases. There is also an issue as to whether such crimes constitute tampering with a food product.
The officer was in uniform and using a marked police car when he visited the Dunkin’ Donuts. According to a social media post, it was a surveillance camera that captured the despicable act.
According to CBS 2 Chicago, Dunkin Donuts fired Sessler after he was arrested and the owner conducted an independent investigation.
What drew my attention to the story (besides being my home town) were the charges: disorderly conduct, reckless conduct, and battery to a peace officer.
Battery is the most serious offense .
Now consider the three charges in North Carolina: subjecting a law enforcement officer to bodily fluid, purposely tampering with a law enforcement officer’s drink and creating a hazardous environment.
I previously expressed surprise over the North Carolina charges. The Chicago charges are more predictable in these cases. We have seen the use of bodily fluids as a form of battery in attacks on police officers.
One question that I had was whether the battery would be elevated for aggravated battery under Section 5/12-2:
§ 12-2. Aggravated assault.
(a) Offense based on location of conduct. A person commits aggravated assault when he or she commits an assault against an individual who is on or about a public way, public property, a public place of accommodation or amusement, or a sports venue.
(b) Offense based on status of victim. A person commits aggravated assault when, in committing an assault, he or she knows the individual assaulted to be any of the following:
(4.1) A peace officer, fireman, emergency management worker, or emergency medical services personnel:
(i) performing his or her official duties;
(ii) assaulted to prevent performance of his or her official duties; or
(iii) assaulted in retaliation for performing his or her official duties.
The language appears mandatory but there is the key qualification of “performing his or her official duties.” Is getting coffee while on duty part of his official duties? The law appears directed as interference with a police activity so, as a criminal defense attorney, I would argue that it does not.
However, this case would seem an example of “retaliation for performing his or her official duties.”
Notably, the Chicago charges do not try to use the same COVID angle in North Carolina. In neither case was the person known to be COVID positive, but the prosecutors still used the pandemic as a foundation for the charges. Even without COVID contamination, it could be argued that saliva carries other dangers but those would also seem to depend on the defendant’s health status.
What is interesting is also the comparison to product tampering laws. These laws are designed to not only punish culprits who do things like post videos of licking ice cream in stores. It is also to product stores and businesses from the loss of sales from consumers who are concerned with the safety and purity of products. Such acts can devastate a manufacturer or even an industry. Notably, in this case, the police said that they will no longer use Dunkin’ Donuts. That is precisely the reaction that these laws seek to avoid. However, these defendants allegedly committed these acts with the intent of that the contamination would not be public. Such acts are committed to secretly take joy from knowing that the officer drank contaminated coffee. That makes it different from many cases like the ice cream licking cases where the culprits post videos of the act.
In Illinois the tampering charge also would raise the foregoing question of the actual risk from saliva:
Sec. 12-4.5. Tampering with food, drugs or cosmetics.
(a) A person who knowingly puts any substance capable of causing death or great bodily harm to a human being into any food, drug or cosmetic offered for sale or consumption commits tampering with food, drugs or cosmetics.
(b) Sentence. Tampering with food, drugs or cosmetics is a Class 2 felony.
(Source: P.A. 96-1551, eff. 7-1-11.)
It is not clear if saliva in a hot cup of coffee present a “capacity” (rather than a threat) of “great bodily harm.”
The Chicago charges are, in my view, a better avenue to avoid such appellate issues. In the end, these are all serious charges, as they should be.
US Confirms American Company Has Signed Deal With 'Rebels' To Take Syria's Oil Tyler Durden Mon, 08/03/2020 - 19:05
For anyone who still actually thinks America's role in Syria was ever somehow about "protecting human rights" or "promoting democracy" — here's the latest out of Syria, which the Trump administration has since confirmed:
Syria’s foreign ministry said on Sunday that an American oil company had signed an agreement with Kurdish-led rebels who control northeastern oilfields in what it described as an illegal deal aimed at “stealing” Syria’s crude.
That's right, the some 700 to perhaps 1000+ US troops still occupying Syrian territory in the country's oil and gas rich northeast are overseeing a deal for an American company to come in and take the oil.
This is after Trump has said for much of the past year that he's keeping American forces there to "secure the oil" — though it's long been left open whether this means "secure" it from ISIS, or the Russians, or Damascus. Now in practice we see it's all about taking these vital resources away from the government and ultimately the already impoverished Syrian people.
Syria's foreign ministry as well as state media SANA said it “condemns in the strongest terms the agreement signed between al-Qasd militia (SDF) and an American oil company to steal Syria’s oil under the sponsorship and support of the American administration.”
Damascus also said “This agreement is null and void and has no legal basis,” and is likely to lodge an official complaint with the UN. It's as yet unknown precisely what US company or companies are involved.
When early reports surfaced last week, it was Syrian state sources making the allegation. But US Secretary of State Mike Pompeo since confirmed it, according to Reuters:
A U.S. senator and Secretary of State Mike Pompeo had referred to an oilfields deal between the SDF and a U.S. firm during a Senate Foreign Relations Committee hearing on Thursday.
Republican Senator Lindsey Graham said during the committee hearing that SDF General Commander Mazloum Abdi informed him that a deal had been signed with an American company to “modernize the oil fields in northeastern Syria”, and asked Pompeo whether the administration was supportive of it.
“We are,” Pompeo responded during the hearing streamed live by PBS. “The deal took a little longer... than we had hoped, and now we’re in implementation.”
Administration hawks have argued that it's ultimately about keeping funding and resources out of Iranians' hands, and out of the control of Tehran's allies like Damascus.
Pre-war Syria had produced a meager 380,000 barrels of oil per day, but it was enough fuel local industries and to support the population.
Secretary of State Mike Pompeo described the deal between a US firm and the Syrian Democratic Forces (SDF) as "very powerful"https://t.co/kXB879Dk3g— Middle East Eye (@MiddleEastEye) August 2, 2020
But now, not only will Syrians see their oil siphoned off by an American company via US proxy 'rebels' on the ground, but the population is being strangled through far-reaching Washington-imposed sanctions to boot.
Meanwhile, like in neighboring Iraq, the mass looting of national resources is set to further devastate the local population for generations. As the The National Interest describes: "The lack of modern oil infrastructure has forced the region’s inhabitants to rely on dangerous, primitive backyard refineries and high-risk smuggling operations to export their oil. Local doctors report massive increases in birth defects and other diseases as oil spills and plumes of smoke from poorly-maintained facilities pollute the water and air."
So much for America's "humanitarian war"... the mask has utterly fallen off, and did so long ago for those who were paying attention.
Garrison: The Revenge Of "Real Money" Or "Cashless Enslavement Of Humanity"? Tyler Durden Mon, 08/03/2020 - 18:45
Just over 10 years ago I drew several pro-silver cartoons. One of them showed a giant, fast-moving silver coin cutting the JP Morgan ‘paper tiger’ in half. For years, JPM had shorted silver and has been doing it illegally and collusively. I knew this, but I went ‘all in’ on silver anyway because I thought JPM would have to cover and spark a massive short squeeze. I was convinced my long positions would make me a fortune. Instead JPM drove the price of silver down from almost $50 early in 2011 all the way down to $13 just a few years later. Paper covered rock. Needless to say, I learned a hard lesson about putting all my eggs in a silver basket.
Now silver is back up over $20 and some are predicting much higher prices on the horizon, just like they said over 10 years ago. Gold is also close to making ‘all-time highs,’ which is incorrect because inflation needs to be factored into such a high due to years of incessant dollar printing. Silver and gold have broken out higher due to a weaker dollar and some experts such as Peter Schiff claim ‘King Dollar’ will die due to over-printing.
I have my doubts.
The dollar is still greatly desired by America’s poor and the middle classes, whose wages have not risen much in nearly 30 years. They are not getting more dollars like citizens did in Weimar Germany. You won’t see dollars in wheelbarrows any time soon. Most of the Federal Reserve’s dollar printing goes directly to a handful of fantastically wealthy people at the top of the pyramid.
Many of them own the Federal Reserve. The Fed is propping up a market that is mostly owned by the top.
We The People are not receiving what the Fed is buying whether it is treasuries, corporate bonds, or ETFs, but we are forced to pay for it. Citizens must cough up more taxes to pay the interest on the absurdly high debt in order to make sure the fabulously rich get fabulously richer.
Until those at the very top start giving their money away to the rest of the country, the dollar will be fine.
No, I’m not advocating class warfare and it’s not socialism. What we’re seeing is not capitalism.
The top 1 percent is getting their money by ill-gotten means. It’s fascism when their Fed gets to pick and choose which globalist company or sector to prop up.
I took some time off in Idaho last week and I visited one of my favorite places on Earth: Wallace. It’s a mining town in northern Idaho. It’s just off I-90 and has a long, storied history. It’s also known as the center of the universe and it is—at least when it comes to silver. There are many silver mines in the surrounding area, also known as ‘The Silver Valley.’ A total of 1.2 billion ounces of silver came out of those mines over the years and there’s still plenty of silver left.
It costs a lot of dollars to run a gold or silver mine. Sometimes it costs lives. 91 miners died of carbon monoxide exposure at the Sunshine Mine in 1972 after a ventilation system caught fire.
Precious metals are not easy to find. Gold is rare. It takes a lot of money to start a mine. Equipment, labor, environmental permits—all very expensive. Once the ore is removed it must be milled and smelted. Gold in particular is very hard to find. I know—I drove many miles to do some gold panning on a claim in eastern Idaho and got skunked. I could not find gold with my metal detector, either. Compare this to how easy it is for the Federal Reserve to create debt dollars with a flip of a switch.
Gold and silver remain Constitutional money, but they are no longer in common circulation. Gold and silver (and copper, too) have been the best form of money throughout the ages, but no longer. They have become anachronisms and are incompatible with the digital age. There will be no revenge. Sure, the dollar can become gold backed once more, but that’s not likely.
What’s likely is the Fed will convert us to a cashless society and adopt a social credit system.
This will be the worst form of money because it will mean the total enslavement of humanity.
BLM Uses 'Mafia Tactics' To Threaten Cuban Restaurant Owner With Diversity Demands Tyler Durden Mon, 08/03/2020 - 18:25
The owner of a Cuban restaurant in Louisville has decried a list of 'diversity demands sent to him and dozens of other small business owners by Black Lives Matter activists - which include guaranteeing that at least 23% of staff are black, 23% of the business's supplies are from black-owned retailers, and 1.5% of their net sales go to black charities. They also need to publicly display a sign showing their support for the movement.
If they don't comply, the business owners face a series of "repercussions," including social media shaming, 'invasive reclamation' where black owned businesses would set up competing 'booths and tables' outside the stores, and they would have 'their storefronts fucked with,' according to the Daily Mail.
The letter was sent to business owners in the city's 'NuLu' East Market District during a July 24 protest which forced some area businesses to close. BLM argues that the neighborhood was only able to flourish after a housing project was demolished in the 2000s, which 'robbed the black community of opportunities and wiped out their homes,' according to the report.
Fernando Martinez, who owns La Bodeguita de Mima, claims that one of the activists warned him: 'You better put the letter on the door so your business is not f*cked with.'
For the next two days after the protest, he claims he kept his restaurant closed because staff feared for their safety. It meant that more than 30 staff members were not able to earn a paycheck.
He took to Facebook to accuse them of 'mafia tactics' and said that while he respects the movement and wants to support it, it's unfair for his business and safety to be threatened.
'There comes a time in life that you have to make a stand and you have to really prove your convictions and what you believe in.
'All good people need to denounce this. How can you justified (sic) injustice with more injustice?' he wrote on Facebook. -Daily Mail
Read the letter below:
On Sunday, Martinez spoke at Cuban community rally to express support for BLM, but also make clear that they won't be strong-armed into anything.
"There are people out there who are trying to define who I am as a man, who I am as a businessman, and who we are as a community," said Martinez, adding "The Cuban community is not the enemy of the Black community."
"La Bodeguita is open to everybody. If you're gay, this is your home. If you're Black, this is your home. If you're White, this is your home. If you're human, this is your home."
Apparently BLM doesn't see things that way.
Twitter Shares Slide As Company Faces $250 Million FTC Fine Tyler Durden Mon, 08/03/2020 - 18:13
Twitter shares shed more than 3% of their value in after-hours trading Monday evening when the company revealed in its 10-Q, filed Monday afternoon, that it had set aside between $150 and $250 million for a FTC fine allegedly over violations of a 2011 agreement to respect users' data privacy.
A Twitter spokesperson told the Verge that the company only received word of the violation and potential fine on July 28, which is why it wasn't included in its Q2 earnings report. Twitter reported its earnings for the quarter ended in June on July 23.
Under a section of its 10-Q entitled "Legal Proceedings", Twitter revealed the allegations and potential fine, which are tied to the use of "phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019.
On July 28, 2020, the Company received a draft complaint from the Federal Trade Commission (FTC) alleging violations of the Company’s 2011 consent order with the FTC and the FTC Act. The allegations relate to the Company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019. The Company estimates that the range of probable loss in this matter is $150.0 million to $250.0 million and has recorded an accrual of $150.0 million. The accrual is included in accrued and other current liabilities in the consolidated balance sheet and in general and administrative expenses in the consolidated statements of operations. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.
The Company is also currently involved in, and may in the future be involved in, legal proceedings, claims, investigations, and government inquiries and investigations arising in the ordinary course of business. These proceedings, which include both individual and class action litigation and administrative proceedings, have included, but are not limited to matters involving content on the platform, intellectual property, privacy, data protection, securities, employment and contractual rights. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Litigation accruals are recorded when and if it is determined that a loss related matter is both probable and reasonably estimable. Material loss contingencies that are reasonably possible of occurrence, if any, are subject to disclosure. As of June 30, 2020, except for the above referenced class actions, derivative actions and FTC matter, there was no litigation or contingency with at least a reasonable possibility of a material loss. Except for the aforementioned accrual of $150.0 million recorded in relation to the FTC matter, no other material losses were recorded during the three and six months ended June 30, 2020 and 2019 with respect to litigation or loss contingencies.
Ben and Jerry's ice cream recently decided that it would cease advertising on Twitter to take a stand against the platform's tolerance of "hate speech" (ie CEO Dorsey's unwillingness to completely cave to the demands of the looney left and bar everyone with remotely conservative views, from the centrist political hack Andrew Sullivan, to Ben Shapiro, the left's Public Enemy No. 1.
BEN & JERRY'S: STOPPING TWITTER ADS FOR REST OF YEAR— zerohedge (@zerohedge) July 30, 2020
Not the Ben and Jerry ads!!
News of these latest abuses, and the government's allegations that Twitter lied about these abuses when it first admitted these "errors" last fall, might entice more corporations to cut back on ad spending, and that could impact the company's bottom line, or at least stir up enough investor anxiety to drive shares lower, making Twitter an even more attractive acquisition for another tech behemoth (since, if there's anything we've learned from Microsoft's courtship of TikTok, it's that big tech deals aren't REALLY verboten, so long as they serve a political interest).
If Microsoft can have TikTok, then why can't, say, Alphabet, be allowed to buy Twitter, perhaps by agreeing to sign a pledge promising to purge Twitter of "hate speech", perhaps by appointing a committee of SJWs to oversee it all content?
It's just the latest piece of bad news for twitter, which is still reeling from last month's embarrassing bitcoin hack.
We just recently learned that this attack was orchestrated by a 17-year-old from - where else? - Tampa, Florida.
Twitter has largely gotten a pass from the Trump Administration lately (Jack Dorsey was deemed not important enough to drag in front of Congress during last week's historic hearings involving CEOs of 4 of the biggest tech giants). The FTC and DoJ are investigating Facebook, Amazon and Google for anti-trust abuses, and it's become clear that last week's testimony did little to slacken lawmaker's thirst for the kill.
Democratic Socialists Of America Teams Up With Teachers Unions To Reform Schools Tyler Durden Mon, 08/03/2020 - 18:05
Submitted by Sovereign Man,
The Democratic Socialists of America has endorsed the demands of some of the largest teachers’ unions in the US.
These are conditions that the unions say must be met before teachers are willing to return to teach public school during a pandemic.
For example, the unions say school should be cancelled this fall to allow more time for the pandemic to die down.
They could also use that time to retrofit schools with safety measures, using “a massive influx of federal funds” that the unions and Democratic Socialists are also demanding.
The unions also want to ban charter schools and school voucher programs… to combat Covid-19?
And that is where the demands stop having much to do with Covid and start taking advantage of a crisis.
For instance, the DSA and unions also call for police-free schools.
We’ve covered plenty of school resource officers overreacting to student misbehavior. So it's not like this is necessarily a bad demand, but what does it have to do with Covid?
Then they demand a “moratorium on evictions/foreclosures, providing direct cash assistance” to the community.
What does that have to do with school?
Again, they are using the crisis to push through a socialist agenda while everyone is worried and distracted.
And if these are the people running the schools, all the more reason to homeschool.
Daily Briefing - August 3, 2020
US Treasury Set To Spend Trillions In The Next Few Months Tyler Durden Mon, 08/03/2020 - 17:45
Three months ago, in its then latest estimate of Marketable Borrowings published on May 4, the US Treasury shocked markets when it unveiled that in the April-June quarter it would borrow a humongous $2.999 trillion, exponentially higher than what it had expected to borrow during the quarter in its previous estimate in February when it forecast a $56 billion decline in debt. And while the projected debt number stunned the market, it barely registered on the price or yield of US Treasurys for the simple reason that just weeks earlier the Fed announced it would monetize all gross debt issuance for the US when it unveiled Unlimited QE, something it has been doing since.
This massive surge in debt issuance would also result in a far higher Treasury cash balance which would be used to pre-fund various fiscal stimulus programs, and as the chart below shows, that's precisely what happened with the Treasury cash balance exploding from $400BN at the end of March to an record high just above $1.7 trillion currently, an amount that is just waiting to be spent as soon as Congress gives the green light.
In retrospect the cash surge was too much: in fact, more than double what the Treasury had expected on May 4. While the Treasury had forecast a $3 trillion increase in marketable borrowing for the quarter ending June 30, it also expected the cash balance to grow to $800 billion on that same date (shown highlighted in yellow on the table below).
And yet the final number ended up being over $922 billion higher, meaning that the Treasury had substantially overshot its funding need and had a cash buffer of nearly $1 trillion more than it had anticipated.
So with all this extra cash in hand, did the Treasury reduce its debt need for the current quarter? As shown above, three months ago the Treasury expected that it would need to borrow $677BN in the final fiscal quarter of the year ending Sept 30, which while a massive number, was still well below the $2.753 trillion it ended up borrowing (just shy of the $2.999 trillion initial forecast, a number which was not hit due to "lower-than-projected expenditures and higher receipts largely offset by the increase in the cash balance.")?
The answer, it will shock exactly nobody, was a resounding no because as it disclosed in its latest estimate of Marketable Borrowing needs, the Treasury once again surprised markets by announcing it would borrow a whopping $947BN this quarter, $270BN more than it had forecast a quarter ago, even though the Treasury started this quarter with a cash balance that is $922 billion higher than it had expected one quarter ago!
Why this unexpected increase in debt even though the Treasury was starting off with nearly $1 trillion more in cash than originally budgeted? This is how it explains it.
During the July - September 2020 quarter, Treasury expects to borrow $947 billion in privately-held net marketable debt, assuming an end-of-September cash balance of $800 billion. The borrowing estimate is $270 billion higher than announced in May 2020. The increase in privately-held net marketable borrowing is primarily driven by higher expenditures, due to a shift from the prior quarter and anticipated new legislation, largely offset by the higher beginning-of-July cash balance and higher receipts.
In other words, not only will the Treasury draw down on $922 billion in cash in the calendar quarter the ends in less than two months...
... but it will also sell enough debt to raise an additional $881 billion (net) which will also end up being spent, suggesting that in the current quarter the Treasury plans on spending a gargantuan $1.8 trillion!
But that's not all, because in its first glimpse of Oct-Dec quarter funding needs, the Treasury now expects to borrow another $1.216 trillion in privately-held net marketable debt, once again assuming that the end-of-December cash balance remains unchanged from the Sept 30 balance of $800 billion. This means that the Treasury will spend an additional $1.2 trillion in the quarter ending Dec. 31, assuming every dollar it raises in the open market is then promptly spent (since the cash balance remains unchanged).
According to the Treasury, "these estimates assume $1 trillion of additional borrowing need in anticipation of additional legislation being passed in response to the COVID-19 outbreak."
So what does this mean?
First, when putting together the actual data for the first three quarters of fiscal 2020 and adding the Fiscal Q4 estimate of $947BN in new issuance, the Treasury will borrow a record $4.5 trillion in Fiscal 2020, more than it borrowed in the previous view years combined!
Second, it means that for calendar Q3 and Q4, the Treasury will spend almost $3 trillion consisting of:
... for a grand total of $3.085 trillion in new funds (either from spending cash or raising debt).
And even if the Treasury uses some of this cash to pay down maturing Bills (which we doubt as it will most likely keep rolling this short-term debt indefinitely with rates at all time lows), it still means that there will be nearly $3 trillion left for Congress and Trump to spend as they fit in order to boost the economy in the next few months to make sure there is no imminent economic crash. It also means that for all the posturing about whether the $1 trillion Republican or $3 trillion Democrat stimulus package is accepted, the Treasury is already budgeting for the latter.
Finally, with the presidential elections are looming, we hope that we don't need to answer "why" - despite the Congressional theater - it is only a matter of time before this massive spending tsunami is unleashed.