Month: August 2022

Submitted by Jan Nieuwenhuijs of Gainesville Coins

A bazooka issuance of 456 billion new SDRs (~$650 billion) by the IMF in August 2021, “to boost global liquidity,” has accomplished very little of what was intended. Numerous nations are teetering on the brink of collapse and global growth is declining. Paltry SDR trading volume over the past year confirms the flaws of this asset.

As we shall see, the SDR is mainly used to grease the IMF’s wheels of bureaucracy.

Before August 2021 total Special Drawing Right (SDR) allocations to International Monetary Fund (IMF) members stood at 204 billion. (1 SDR is currently worth about $1.3 U.S. dollars). Through the addition of 456 billion SDRs, total allocations increased by 124%. Yet the new issuance has done next to nothing of what IMF’s Managing Director Kristalina Georgieva promised in 2021:

This is a historic decision—the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis. The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy. It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.

When it sounds too good to be true, it usually is. First off, creating more SDRs doesn’t increase global liquidity (the quantity of international reserves). Nor does it benefit all members, build confidence, stabilize the global economy, or foster resilience.

The SDR disappoints because it’s not a currency, it isn’t backed by anything, there is no free market to exchange them, and trade is illiquid (difficult to convert large quantities into cash). Regardless, the IMF spreads falsehoods about the SDR to keep up appearances.

Let’s dispel the myths surrounding the SDR.

What Is an SDR?

Officially the SDR “is a potential claim on the freely usable currencies of IMF members.” The IMF can allocate new SDRs to all of its member states. The IMF can’t allocate SDRs to itself. At issuance a member gains a double book entry on its balance sheet based on its IMF quota. SDR holdings on the asset side are equal to the amount of SDR allocations on the liability side. Because holdings and allocations net out, a new issuance of SDRs doesn’t make any member richer nor poorer.

Only central banks or monetary authorities, and several international financial institutions such as the IMF and BIS, can hold SDR positions. SDRs cannot be spent on goods and services. Commonly, the only way for a member to make use of its SDR position is to exchange SDR holdings for freely usable currencies (dollars, euros, yen, etc.) with another member.

There is no free market for SDRs to relieve excess supply or demand. Members can exchange SDR holdings through the IMF’s SDR Department, or they can be exchanged directly between parties, though this is more rare. States will notify the SDR Department if they want to buy or sell SDR holdings, in what quantity, and in exchange for which currency. Next, they await if their orders are filled.

Only SDR holdings can be exchanged. A member’s SDR allocations are static unless the IMF decides to issue new SDRs. The SDR exchange rate is set by the exchange rates of a basket of currencies designated by the IMF: the U.S. dollar, euro, Chinese renminbi, Japanese yen, and British pound.

Suppose member A and member B both hold an equal amount of SDR holdings relative to their SDR allocations. Member A wants to sell 100 million SDR holdings for Japanese yen, and member B, coincidentally, wants to buy 100 million SDR holdings with Japanese yen. Both notify the SDR Department, and the exchange is cleared. After A received yen and B received SDR holdings, A will have more SDR allocations relative to its holdings, and, conversely, B will have more SDR holdings relative to its allocations.

Member A will now pay the SDR interest rate to the SDR Department and B will receive the SDR interest rate. Simplified, every member that is a net seller of SDR holdings will pay interest until it has bought back those holdings and vice versa (net buyers receive interest until they sell back). The SDR Department manages all interest flows. Effectively, selling SDRs is borrowing currency and buying SDRs is lending currency.

The IMF states SDRs are not their liabilities. This is although a country having a net SDR holding (more holdings than allocations), and thus eligible for receiving interest, is a liability of the IMF. See the SDR Department’s balance sheet from a Quarterly Report below. A country having a net allocation is an asset for the IMF.

The SDR interest rate is based on short term interest rates of the currencies that comprise the basket of currencies used to calculate the SDR’s exchange rate. SDR interest is paid every three months in SDRs, and the floor rate is 0.05%.

An SDR holding (“SDR” hereafter) provides the owner a potential opportunity to borrow freely usable currencies. An SDR is central bank collateral for a potential swap* without a specified maturity. I write, “potential opportunity to borrow,” and, “potential swap,” because there is little liquidity in SDRs and anything but a guarantee there is a seller of usable currency willing to buy SDRs. Hence, the SDR officially “is a potential claim on the freely usable currencies of IMF members.”

*In this case a swap means a “forward swap,” which has a spot and a forward leg. In the spot transaction a member sells SDRs for foreign exchange (FX)—and its counterparty does the opposite—and in the forward transaction this trade is undone buying SDRs with FX. A forward swap is the same as a collateralized loan. Hence, “swaps” often refer to lending/borrowing.

For more details, such as how the SDR exchange rate is calculated, please read my previous article.

The SDR’s Shortcomings

1. Trading in SDRs is illiquid because there is no free market. Only 190 countries and a few institutions can own and exchange SDRs; no private entities can expand the user base and improve liquidity. Nor does the IMF ever want to create a free market. When several Highly Indebted Poor Countries (HIPCs) want to sell (supply) SDRs for currency through the SDR Department, but demand is much lower, the IMF selects the HIPCs to prioritize. On this basis, the IMF will prefer to maintain a managed market. As with communism, managed markets come with a wide variety of problems.

When confronted with the SDR’s poor liquidity, IMF economists will point to the “designation mechanism.” This option should allow the IMF to decree which country must buy SDRs. All members have signed the IMF’s charter—the Articles of Agreement—that stipulates all rights and obligations. But when push comes to shove the Articles of Agreement can’t overrule sovereign nations.

In 1971 the U.S. unilaterally suspended gold convertibility, ended Bretton Woods, and introduced an era of free floating exchange rates. In 1973, “not a single IMF member was any longer in conformity with the Articles of Agreement,” according to Benn Steil, author of The Battle of Bretton Woods. Just as the Articles of Agreement couldn’t force countries to sustain fixed exchange rates in 1970s, today they can’t force countries to buy SDRs in quantities dictated by the IMF.

2. The last SDR issuance was, according to the IMF website, “to boost global liquidity.” It seems the IMF (the Fund) wants us to think that an SDR issuance increases the total amount of convertible currencies. SDRs can’t be spend on goods and services, though, and thus an increase in SDRs “does not increase the total liquidity of the global monetary system.” Why the Fund states new SDRs increase net international reserves is due to the subtle art of accounting.

There is a discussion on creating and trading SDRs and its effect on the money supply in a paper from 2011 that reads, by the IMF’s own admission: “Overall, the creation and use of SDRs is likely to have a neutral effect on the global money supply.” So why all the talk about issuing SDRs to boost global liquidity and meet the global need for reserves? (By the way, why not revalue gold if there is a global need for reserves?)

3. Newly allocated SDRs are distributed among members based on their IMF quota. In general, due to how quotas are calculated, wealthy developed countries that have large economies are being allocated the most SDRs, and poor undeveloped countries that have small economies get the least. About two-thirds of the SDR allocation implemented in August 2021 went to developed economies.

4. All the literature about SDRs is focused on the benefits of selling SDRs, how many developing countries can or have sold SDRs, and so on. It is as if this instrument is designed to be sold. What about buying and owning SDRs?

Buying SDRs is risky. Suppose China buys 10 billion SDRs with U.S. dollars. Over time, these holdings grow due to compounding interest. If China can ever sell those SDRs to get back currency when needed is uncertain. The Fund may prioritize other countries, provided there are buyers. The more SDRs the bigger the risk.

5. The SDR only pays out a short-term interest rate. For central banks that have a long-term investment strategy, the SDR isn’t suitable, as it doesn’t offer a long-term interest rate, which is normally higher than the short-term rate.

6. According to the Fund, SDRs are not a claim on the IMF. In court this statement might hold true; in practice the counterparty of a net SDR holding—the one responsible for paying the SDR interest rate—is the IMF. Furthermore, members rely on the IMF for being able to exchange SDRs. Long story short, SDR owners are greatly exposed to the Fund and thus all its members. What happens when members default? Counterparty risk increases.

7. More than once the IMF has changed the essence of the SDR in the past and can do so again in the future. What an SDR is today can be something different tomorrow.

Who Are the Largest Buyers and Sellers of SDRs?

Although detailed SDR trading data is not available, it can be said the bulk of SDR trading comes from transactions between the Fund itself and member states. The biggest buyer of SDRs is the Fund and the largest sellers are developing countries. Consequently, the largest wallet is the IMF’s General Resources Account (GRA). In July 2022 the GRA held 23 billion SDRs, while the second-largest owner, the U.S., held 4.6 billion SDRs. From the IMF:

Broadly, most SDR transactions relate to Fund-related operations versus uses of SDRs unrelated to GRA … operations (see … Annex Figure 3).

Regarding residual trading activity, SDRs are mostly sold by poor countries to rich countries.

A chart of all SDR holdings shows how big of a buyer the IMF exactly is.

The Fund’s operations in a nutshell: members have to pay a subscription to the IMF (based on their quota) mainly in their national currencies and reserve currencies. In line with its mandate the IMF then lends out these funds to nations with balance of payments problems. If the borrowers want to repay those loans they can do so in SDRs, to a certain extent, and hence the Fund’s GRA tends to amass.

Strangely, as the SDR has existed since 1969, no basic SDR trading data is published on a recurrent basis. An imperfect option is to collect position data from all participants in the SDR universe and track changes month by month. Or, for more figures, wait until special reports are published.

Based on the first option I estimate 36 billion SDRs have changed hands over the twelve month period since the end of July 2021. By comparison, trading volume in the global repo market is $3.5 trillion U.S. dollars (2.7 trillion SDRs) per day! A meager 36 billion exchanged in a year after 456 billion SDRs were issued reflects the disadvantages of this asset.

Although it’s possible actual trading volume was somewhat higher or lower, I would like to stress it’s much lower if we subtract trades related to IMF transactions.

Here is an example of how monthly changes in SDR holdings (my measurement of trading volume) are often affected: in August 2021, Argentina was allocated 3 billion SDRs. Up until February 2022 Argentina managed to sell nearly all its SDRs (+3 billion in trading volume). From August 2021 till February 2022 the Fund was the biggest buyer of SDRs, having mopped up 30% of all (and thus Argentina’s) sales. In March 2022, the IMF approved a loan to Argentina worth $44 billion U.S. dollars. Argentina received part of this loan in 5 billion SDRs from the IMF’s GRA (+5 billion in trading volume). Since March Argentina has mostly been selling, and so the cycle of shuffling SDRs between Argentina and the GRA can repeat.

Argentina has been responsible for nearly 10 billion of my total estimate of 36 billion in SDR trading volume, though 75% of it was sent back and forth with the Fund.

In 2009, trading after the 183 billion SDR issuance was also lackluster. During the twelve months that followed the allocation in 2009, only 3.4 billion SDRs changed hands in non-IMF-related transactions. The sellers were mostly developing nations, of which more than 80% sold at least 75% of their new SDRs. After an initial “spike,” volumes came down, save a few larger trades in 2015. Just 5 trades accounting for 35 million SDRs were executed in 2020. See the table below.

Before the 2009 issuance the Fund projected annual volume in non-IMF-related transactions to be 20 billion SDRs, which turned out to be 83% lower at 3.4 billion. Disappointing indeed.

In its first ever Annual Update on SDR Trading Operations, released in October 2021, not much is written about SDR trading volume after August 23, 2021. Without making a distinction between IMF-related and non-IMF-related transactions, it’s stated total volume was 6.9 billion SDRs in August and September 2021. My estimate of trading volume—based on month to month changes in positions of all participants—is roughly equal for this period. All sellers were developing countries, on average selling 82% of their new allocations.

Conclusion

According to the IMF, SDRs can be used by members to borrow FX unconditionally as opposed to the Fund’s regular lending operations that come with strings attached. I’m having a hard time acknowledging the unconditional aspect, because “most SDR transactions relate to Fund-related operations” and every member is largely depended on the Fund’s managed market to trade SDRs. The SDR is misrepresented by the Fund.

In my view, the SDR is an instrument used to reinforce the IMF’s right to exist. Certain theories of bureaucracy state that officials, too, “are motivated by their own self-interest [income and power] at least part of the time.” Like every other bureaucratic entity in existence the Fund wants to grow. Its inherent mission has produced a narrative about how the SDR is to “benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy.” A great pitch, of which little is true.

Here’s my theory of why new SDRs are issued periodically. Because the Fund is the biggest buyer and owner of SDRs, it’s also the largest recipient of SDR interest. As mentioned above, many developing nations sell 80% of their SDRs instantly when new ones are issued. In the course of time paying SDR interest becomes a problem for these countries as they run out of SDRs. For the Fund there is an incentive to issue new SDRs to bail out these countries and thus itself. When all countries get new SDRs, the ones in debt (having sold SDRs) can continue paying interest to the Fund. Yes, several countries had almost no SDRs left before August 2021.

In the Proposal For a General Allocation of Special Drawing Rights, published in July 2021, the IMF writes: “Potential additional SDR inflows to the GRA resulting from increased use by members of SDRs for transactions with the Fund would be closely monitored and are expected to be manageable.” Ironically, the IMF knows that buying too much SDRs is risky.

The SDR’s “value as a reserve asset derives from the commitments of members to exchange SDRs for freely usable currencies…” SDRs have no value outside the SDR system, and if members aren’t committed to the system anymore, for example because other members default or oppose the political views of partner members, the SDR value drops to zero.

The SDR will never be more than a fringe reserve asset, and thus can’t replace the dollar as the world reserve currency, like some economists want to believe.

With the Swiss people anxiously awaiting Tuesday’s governmental unveiling of their cunning plan to cope with potential energy shortages caused by the war in Ukraine, which is largely expected to push for voluntary cuts by consumers; Reuters reports that a group of Swiss politicians has formed ‘Stop The Blackouts’, which will launch a petition seeking a revision to the country’s energy policy to guarantee adequate power supplies and keep nuclear as part of the mix.

Switzerland produces more power than it consumes but is reliant on neighbors for imports in winter.

Switzerland plans to close its five nuclear reactors following a 2017 decision prompted by safety concerns after the 2011 nuclear disaster in Fukushima, Japan, and has already shut one reactor.

“Until recently, Switzerland had safe and virtually CO₂-free electricity production: the environmentally and climate-friendly combination of hydro and nuclear power is to be abandoned for no reason at all,” the website of ‘Stop The Blackouts’ said.

As a reminder, under Swiss direct democracy, its constitution can be changed via referendum if 100,000 signatures are collected within 18 months, although an actual outcome could take years.

“We cannot do without nuclear power plants,” Vanessa Meury, president of the Stop The Blackouts committee and the only committee member who is not a politician, told Swiss newspaper SonntagsZeitung.

Five of the group’s six committee members are lawmakers from center and right-wing parties.

The change of constitution sought by the group would render Bern officially responsible for guaranteeing energy supply, using “any form of climate-friendly electricity generation”.

First Japan folded, now the Swiss, when will Germany fully capitulate to the reality that ‘renewables’ just won’t cut in the real world… and what happens to all the ‘green’ narratives then as nuclear ?

Authored by Kyle Anzalone and Will Porter via The Libertarian Institute, 

In response to Russia’s attack on Ukraine, US President Joe Biden vowed to isolate and “cripple” the Russian economy. However, Moscow has been able to maintain its economic strength, in part by exporting over $1 billion per month in wood, metals, food and other goods to the US. 

More than 3,600 ships from Russia have arrived at US ports since February 24, according to statistics cited by the Associated Press. While that is nearly half of the shipments over the same period compared to last year, it still amounts to over $6 billion in imports. 

The number of Russian products entering US ports suggests Biden is falling short of his pledge to isolate Moscow’s economy. Due to so-called “wind down” periods that allow companies to complete previous deals, some of the goods continue to enter the country long after the White House announced sanctions on those products, including oil and gas.

Paradoxically, other Russian imports, such as fertilizer, came at the request of the Biden administration, which has urged American companies to make up for shortages.

And while the White House has seized several luxury yachts owned by rich Russians with loose ties to Russian President Vladimir Putin, the AP found that American and European firms are importing millions of dollars in metal from a Russian company that makes parts for Moscow’s fighter jets, highlighting another odd discrepancy in Biden’s sanctions campaign. 

Despite diplomatic pressure from Washington, other American allies are increasing their economic ties with Russia. Turkey – a NATO member – has doubled its imports of Russian oil this year. 

During Biden’s presidency, he has taken several steps to strengthen ties with New Delhi, with American troops currently engaged in war games with India on the Chinese border. But like Ankara, the country has similarly significantly increased energy imports from Moscow. The Indian rupee has also become a major currency for the diamond trade, allowing buyers to bypass US sanctions. 

“The effectiveness of this embargo (Western sanctions against Russia) is key to the outcome of the Ukraine war.” So far, it isn’t working. https://t.co/r4KqJ3pjml pic.twitter.com/CcCkHmE25J

— Sophia (@les_politiques) August 27, 2022

Though the Western economic war was meant to negate Moscow’s military might and bring it to the negotiation table, it has so far seen little success. With Russian energy exports topping pre-war levels in recent months and the ruble rallying against the dollar, Russia’s economy appears to have fared far better than much of Europe since fighting erupted last winter. 

Anyone with any sense could have seen it coming – Europe is on the precipice of an economic and social crisis not seen since World War II; and they basically did it to themselves.  Ever since the Russian invasion of Ukraine and the subsequent NATO sanctions, the talking heads in the mainstream media have consistently fed the public an endless narrative on how the EU doesn’t need Russian natural gas.  We’ve heard an array of theories and chest beating from corporate journalists and lying politicians; all of them sounding so certain that Russia would be isolated and economically destroyed within no time.  This has not happened, and now the reverse might soon be true for the EU and the UK.

To give you a sense of the disinformation being peddled to the public on this issue, take a look at the 10 point “battle plan” put together by the International Energy Agency (IEA) back in March to cut off Russian energy imports and save the EU from a crisis:

1)  Don’t sign new gas supply contracts with Russia. (REALITY: This foolishly assumes that Russia wants to sign new contracts with Europe.)

2)  Replace Russian gas supplies with alternative sources.  (REALITY:  No alternative sources exist that can come close to filling Europe’s energy needs and that can be as easily transported.  Europe will have to draw on energy commodities from around the world, taking up a large piece of a shrinking pie and driving up prices for most nations on the planet in the process.)

3)  Introduce minimum gas storage rules.  (REALITY:  This assumes there will be gas to store for later.)

4)  Accelerate the deployment of new wind and solar projects.  (REALITY:  Anti-carbon fantasy land not based in science.  There is no green energy in existence which has the ability to heat European homes and fuel their industry except nuclear, and EU governments have consistently been hostile to nuclear projects.)

5)  Maximize gas power from bio-energy and nuclear.  (REALITY:  The more bio-energy you develop the less farmland you have available for food.  And, nuclear power plants take years to build and EU governments continue to fight them.  If the EU had took some of the billions they use annually on useless green technology and anti-carbon programs and spent that money on nuclear plants 5 years ago, they would not be in the mess they are in today.)

6)  Enact short term tax measures on windfall energy profits – Cut energy bills when gas prices are high.  (REALITY:  You cannot enact greater taxes on energy producers and cut energy bills simultaneously without government price controls.  And, price controls lead to less supply anyway.  The more you tax energy producers the more the power bills are going to go up to compensate.  There is no way around this.)

7)  Speed up replacements of gas boilers and heat pumps.  (REALITY:  Before winter?  Not a chance.  This should have been done a couple years ago.  Also, it should be noted that the IEA zero-carbon agenda has called for gas boilers to be eliminated by 2025.  Rather convenient that the energy crisis is expediting their green energy goals, don’t you think?)

8)  Accelerate energy efficiency improvements in buildings and industry.  (REALITY:  Who is going to pay for this?)

9)  Encourage a temporary thermostat reduction of 1 °C by consumers.  (REALITY:  This opens the door to “smart meters” which power companies or governments can control without your consent.)

10)  Step up efforts to diversify and decarbonise sources of power system flexibility.  (REALITY:  More green energy, which has proven time and time again to be a completely ineffective replacement for carbon based fuels.)

The IEA is an institution that is hostile to carbon based energy and industries and calls for the end of all carbon emissions by 2050.  This is why none of their bullet points from March that have been attempted have worked; because they aren’t designed to work, only promote further carbon controls while harming global power generation in the process.  

There are currently no practical replacements for oil, coal and natural gas; none.  Especially not in a reasonable time frame that would spare Europeans from a full blown disaster.  The only way green technology would be able to provide enough energy for the world’s populations would be if the human population was greatly reduced.  Europe’s energy crisis actually helps the IEA agenda, just as it helps the UN and WEF climate agendas.  But what about all the people that will suffer in the meantime?

Expect to see extensive energy rationing this winter in the EU.  Around 80% of all EU natural gas is imported and Russia’s natural gas exports make up around 40% of Europe’s heating and electricity.  With Russia now reducing exports down to 20% of their original levels, there is zero chance that the EU will be able to maintain their normal energy usage.  

Supply-side shortages will mean a price explosion going into winter as demand increases.  Prices have the potential to double (or more) by the beginning of 2023.  

European governments will likely prioritize heating for public homes over energy for industry; they will do this to prevent civil unrest, as some government officials are already warning about.  There is a chance that EU industry will be hobbled as energy supplies are rerouted for public consumption.  We have seen something similar to this in China this year as their drought conditions worsen.

Civil unrest will probably happen anyway.  Climate restrictions, green energy rules on carbon emissions and other ludicrous measures are making it impossible for Europeans to adapt to crisis events.  Prices will be high, and price caps won’t help with supply shortages.  When people start to freeze, there will be anger and desperation.  

The only legitimate short term solution to prevent a historic energy calamity in the EU this winter would be to remove sanctions on Russia.  But, NATO has made it clear that this will not happen.  So, the European people are being positioned to face the consequences while being told there will be no consequences.  And, when the pain starts to hit, they will be told that it’s all for the “greater good.”

Authored by Peder Jensen via The Gatestone Institute,

• For the first time, crime tops the list of voters’ most important concerns in the run-up to the elections.

• Of the more than 8,200 people the Swedish police counted as being members of criminal gangs by late 2021, almost 15% were under the age of 18.

• Sweden has in just two generations gone from being one of the safest countries in the world to being one of the most dangerous countries in Europe. During the same time, mass immigration has dramatically altered Sweden’s population. 1.2 million of those eligible to vote in the elections in September 2022 were born outside Sweden…

• Basem Mahmoud is an imam operating in the heavily Muslim-dominated area of Rosengård in Malmö. He has called Jews “the offspring of pigs and apes,” said he was “only quoting the Koran,” and is looking forward to “the great battle” when all non-Muslims will be forced to submit themselves to Muslims.

• In a sermon in February 2022, Mahmoud went on the attack against Swedish schools and social services and stated that Muslims are taking over the country. “Sweden is ours,” he said. ” It is ours, whether they [Swedes] like it or not. In ten to fifteen years, it is ours.”

• Sweden has one of the world’s worst recorded rape rates. In 2018, the state broadcaster SVT revealed that 58% of men convicted in Sweden of rape and attempted rape over the previous five years were born abroad. Some of the most brutal rape cases have involved Muslim or African immigrants.

• Unfortunately, such problems are no longer confined only to major cities. They are spreading to smaller towns and even rural areas across Sweden. Kalmar, a relatively small medieval town of historical importance, has experienced multiple deadly gang shootings.

• Swedes who want their families to be safe from violent crime are running out of places to move to — unless they decide to leave their homeland behind entirely, as some are doing already.

Sweden will hold general elections on September 11, 2022. At the same time, the country is rocked by a wave of violent crime that is unprecedented in modern Scandinavian history.

For the first time, crime tops the list of voters’ most important concerns in the run-up to the elections. “It’s going to be a very unique type of Swedish election with a very unusual issue at the top of the agenda,” Henrik Ekengren Oscarsson, professor of political science at Gothenburg University, told newspaper Dagens Nyheter. Forty-one percent of those surveyed said that law and order are the most important issues in society, as well as the most important political issues.

Patrik Öhberg, political scientist at the SOM Institute, states that “This is the first election campaign in modern times where it’s so high up on the agenda that all parties, whether they want to or not, have to discuss the issue.” This could benefit the Moderate Party, the Christian Democrats, or the Sweden Democrats. On the other side of the political spectrum, it could be detrimental to the Left Party, the Greens, and the ruling Social Democrats.

The Social Democratic Party has headed the Swedish government since 2014. During these eight years, crime has continued growing to intolerable levels nationwide. Sweden has in recent years suffered attacks involving bombs, hand grenades or other explosive devices on a weekly basis, sometimes several times a week.

In November 2021, Prime Minister Stefan Löfven stepped down as party leader and PM, and Magdalena Andersson became Sweden’s first female prime minister. In April 2022, several Swedish cities experienced violent riots and attacks against the police by Muslims when anti-Islamic activist Rasmus Paludan tried to burn copies of the Koran. Andersson then admitted that a lack of integration had contributed to gang violence, saying that there are “strong forces that are ready to go to great lengths to harm our society.”

“Segregation has been allowed to go so far that Sweden now has parallel societies,” Andersson said according to Aftonbladet. “We live in the same country but in completely different realities… Integration has been too poor while we have had large-scale migration. Society has also been too weak.”

Others, after having allowed these problems to grow largely unchecked for decades, have belatedly come to the same conclusion. Ulf Kristersson, leader of the liberal-conservative Moderate Party, in August 2022 co-authored a column which admitted that “Sweden has lost control over crime. While the violence is getting worse, the perpetrators are getting younger.”

Unfortunately, every single party represented in the Swedish Parliament (Riksdag) has contributed to the current problems, with the right-wing Sweden Democrats being a partial exception.

Even mainstream media outlets such as the BBC admit that Sweden has one of the highest rates of gun killings in Europe. An official Swedish government report published in 2021 stated that each year, four in every million inhabitants in Sweden die in shootings. The European average is 1.6 people per million inhabitants. Statistics reveal that 85% of suspects involved in fatal shootings in Sweden are either born abroad or come from an immigrant background. Recently, bombings and shootings have spread outside the main cities. After a spate of shootings in the smaller city of Örebro, the local police chief said that they now not only had more gangs, but that they had also become more violent. “Where maybe 10 years ago they gave someone a beating, they then switched to shooting each other in the legs,” Mattias Forssten told Reuters. “Now they shoot each other in the head.”

On August 19, a man was killed and a woman was sent to the hospital with serious wounds after a shooting incident in Malmö, Sweden’s third-largest city. The attack took place inside Emporia, a major shopping mall. According to the police, the murdered man had known ties to a criminal gang. The wounded woman, however, appears to have been an innocent bystander. The perpetrator fired many shots on a busy afternoon inside one of the country’s largest shopping malls. He could easily have wounded or killed many other people, even unintentionally.

A 15-year-old boy was arrested and admitted to the murder in Malmö. Unfortunately, he is far from unique. Of the more than 8,200 people the Swedish police counted as being members of criminal gangs by late 2021, almost 15% were under the age of 18. Some gangs recruit teenagers specifically. Under the Swedish legal system, they can expect more lenient sentences due to their young age and may even be able to avoid spending any time in jail. Prisons in Sweden are already overcrowded.

While confronted by a massive crime wave, the Swedish police force is overwhelmed and understaffed. A disturbing number of murders are never solved, while many lesser crimes go nearly unpunished.

Sweden has in just two generations gone from being one of the safest countries in the world to being one of the most dangerous countries in Europe. During the same time, mass immigration has dramatically altered Sweden’s population. 1.2 million of those eligible to vote in the elections in September 2022 were born outside Sweden — about 200,000 more foreigners than in the previous election, in 2018. Nearly one in four first-time voters aged 18-21 was either born abroad or has two parents born abroad. In central Malmö, almost every second person eligible to vote for the first time has a foreign background.

Muslim immigrants in Sweden, as in other European countries, tend overwhelmingly to vote for the Social Democrats or other socialist or left-wing parties. However, they have now become so numerous and self-confident that they also create their own political parties. Mikail Yüksel, a Turkish-born Muslim, heads Partiet Nyans, which has a following in cities such as Malmö. Yüksel has argued that an artwork by the late Swedish artist Lars Vilks should be burned because it allegedly represents Islamophobia.

Basem Mahmoud is an imam operating in the heavily Muslim-dominated area of Rosengård in Malmö. He has called Jews “the offspring of pigs and apes,” said he was “only quoting the Koran,” and is looking forward to “the great battle” when all non-Muslims will be forced to submit themselves to Muslims. He has also defended the brutal murder of the French teacher Samuel Paty in 2020, who was beheaded by a Chechen Muslim after teaching students a class on freedom of expression.

In a sermon in February 2022, Mahmoud went on the attack against Swedish schools and social services and stated that Muslims are taking over the country. “Sweden is ours,” he said. ” It is ours, whether they [Swedes] like it or not. In ten to fifteen years, it is ours.”

Sweden has both imported and exported Jihadists for years. Some Muslims after 2014 traveled from Europe to the Middle East to support the self-proclaimed Islamic State, arguably the world’s most brutal terrorist organization. While many of them died there, some of the survivors in recent years returned to Europe. They have directly or indirectly supported brutal terrorist attacks, massacres, beheadings, and slave auctions. Nevertheless, many of them have not faced any real punishment after returning to Sweden. Some local municipalities even offered them free driving licenses and housing grants in an attempt to reintegrate these hardened Jihadists into Swedish society.

In early 2022, a man was charged with threatening the police after he hung what looked like an Islamic State flag from his balcony in the Broby, a town of about 3,000 people in southern Sweden. He told the police that he would behead them, but later claimed that they had a personal vendetta against him.

Norberg, an old mining community in central Sweden, has roughly 4,500 inhabitants. In April 2022, a man in his 40s who is believed to be from Afghanistan was arrested there for raping and attempting to murder a woman by pushing her down an old mine shaft. The man had come to Sweden with the migrant wave in 2015 and been denied a residence permit, but had nevertheless remained in the country. He had apparently asked a Swedish woman to marry him. When she refused, he raped her and then pushed her about 20 meters down a mine shaft. When he returned later and discovered that the woman was still alive, he started throwing rocks at her to kill her. By some miracle, the woman survived and, after lying in the abandoned mine for two days, was rescued. The assailant may also have killed his former wife.

In July 2022, a 9-year-old Swedish girl was the victim of a brutal attempted murder at a playground in the town of Skellefteå, in northern Sweden. She was raped and then beaten into a coma. The suspect was an immigrant from Ethiopia. He initially claimed to be 13 years old, but he is probably several years older. He had been granted permanent residency in Sweden merely a week before this attempted murder, despite being described in the local community as a “walking hand grenade.”

Sweden has one of the world’s worst recorded rape rates. In 2018, the state broadcaster SVT revealed that 58% of men convicted in Sweden of rape and attempted rape over the previous five years were born abroad. Some of the most brutal rape cases have involved Muslim or African immigrants.

Black Axe is an international and extremely violent criminal organization with roots in Nigeria. They are one of the many rival criminal gangs in the process of establishing themselves in Sweden. An official police report from 2019 indicated that Stockholm alone has at least 50 different criminal gangs currently operating in the city. They are also getting more aggressive and violent. Scandinavian countries traditionally did not have strong organized crime groups comparable to the mafia found in southern Italy. Now Sweden has dozens of different groups or clans competing against one another for control over the local market of narcotics, protection money or other illegal activities. Some of them have even managed to create a criminal infrastructure, with ties to lawyers or bureaucrats. Nearly all of them have been imported to the country since the 1970s. Many of these criminals have an ethnic background from far more brutal and cynical societies in the Islamic world or Africa. Soft Scandinavian prisons do not deter them.

Unfortunately, such problems are no longer confined only to major cities. They are spreading to smaller towns and even rural areas across Sweden. Kalmar, a relatively small medieval town of historical importance, has experienced multiple deadly gang shootings.

In December 2019, when three masked men robbed a local restaurant in the town of Gislaved, a 60-year old Swedish family man was murdered with a machete .

Swedes who want their families to be safe from violent crime are running out of places to move to — unless they decide to leave their homeland behind entirely, as some are doing already.

Authored by Pepe Escobar,

Dmitry Medvedev, relishing his unplugged self, has laid down the law on the Special Military Operation (SMO). Bluntly, he affirmed there is a “one and a half” scenario: either to go all the way, or a military coup d’Etat in Ukraine followed by admitting the inevitable. No tertium applies.

That’s as stark as it gets: the leadership in Moscow is making it very clear, to internal and international audiences, the new deal consists in slow cooking the Kiev racket inside a massive cauldron while polishing its status of financial black hole for the collective West. Until we reach boiling point – which will be a revolution or a putsch.

In parallel, The Lords of (Proxy) War will continue with their own strategy, which is to pillage an enfeebled, fearful, Europe, then dressing it up as a perfumed colony to be ruthlessly exploited ad nauseam by the imperial oligarchy.

Europe is now a runaway TGV – minus the requisite Hollywood production values. Assuming it does not veer off track – a dicey proposition – it may eventually arrive at a railway station called Agenda 2030, The Great Narrative, or some other NATO/Davos denomination du jour.

As it stands, what’s remarkable is how the “marginal” Russian economy hardly broke a sweat to “end the abundance” of the wealthiest region on the planet.

Moscow does not even entertain the notion of negotiating with Brussels because there’s nothing to negotiate – considering puny Eurocrats will only be hurled away from their zombified state when the dire socio-economic consequences of “the end of abundance” will finally translate into peasants with pitchforks roaming the continent.

It may be eons away, but inevitably the average Italian, German or Frenchman will connect the dots and realize it is their own “leaders” – national nullities and mostly unelected Eurocrats – who are paving their road to poverty.

You will be poor. And you will like it. Because we are all supporting freedom for Ukrainian neo-nazis. That brings the concept of “multicultural Europe” to a whole new level.

The runaway train, of course, may veer off track and plunge into an Alpine abyss. In this case something might be saved from the wreckage – and “reconstruction” might be on the cards. But reconstruct what?

Europe could always reconstruct a new Reich (collapsed with a bang in 1945); a soft Reich (erected at the end of WWII); or break with its past failures, sing “I’m Free” – and connect with Eurasia. Don’t bet on it.

Get back those Taurian lands

The SMO may be about to radically change – something that will drive the already clueless denizens of US Think Tankland and their Euro vassals even more berserk.

President Putin and Defense Minister Shoigu have been giving serious hints the only way for the pain dial is up – considering the mounting evidence of terrorism inside Russian territory; the vile assassination of Darya Dugina; non-stop shelling of civilians in border regions; attacks on Crimea; the use of chemical weapons; and the shelling of Zaporizhzhya power plant raising the risk of a nuclear catastrophe.

This past Tuesday, one day before the SMO completing six months, Crimea’s permanent representative to the Kremlin, Georgy Muradov, all but spelled it out.

He stressed the necessity to “reintegrate all the Taurian lands” – Crimea, the Northern Black Sea and the Azov Sea – into a single entity as soon as “in the next few months”. He defined this process as “objective and demanded by the population of these regions.”

Muradov added, “given not only the strikes on Crimea, but also the continuous shelling of the Zaporizhzhya nuclear power plant, the dam of the Kakhovka reservoir, peaceful facilities on the territory of Russia, the DNR and LNR, there are all preconditions to qualify the actions of the Banderite regime as terrorist.”

The conclusion is inevitable: “the political issue of changing the format of the special military operation” enters the agenda. After all, Washington and Brussels “have already prepared new anti-Crimean provocations of the NATO-Bandera alliance”.

So when we examine what the “restoration of the Taurian lands” implies, we see not only the contours of Novorossiya but most of all that there won’t be any security for Crimea – and thus Russia – in the Black Sea without Odessa becoming Russian again. And that, on top of it, will solve the Transnistria dilemma.

Add to it Kharkov – the capital and top industrial center of Greater Donbass. And of course Dnipropetrovsk. They are all SMO objectives, the whole combo to be later protected by buffer zones in Chernihiv and Sumy oblasts.

Only then the “tasks” – as Shoigu calls them – of the SMO would be declared fulfilled. The timeline could be eight to ten months – after a lull under General Winter.

As the turbo-charged SMO rolls on, it’s a given the Empire of Chaos, Lies and Plunder will continue to prop up and weaponize the Kiev racket till Kingdom Come – and that will apply especially after the Return of Odessa. What’s unclear is who and what gang will be left in Kiev posing as the ruling party and doing specials for Vogue while duly fulfilling the mass of imperial diktats.

It’s also a given the CIA/MI6 combo will be refining non-stop the contours of a massive guerrilla war against Russia in multiple fronts – crammed with terror attacks and all sorts of provocations.

Yet in the Bigger Picture it’s the inevitable Russian military victory in Donbass and then “all the Taurian lands” that will hit the collective West like a lethal asteroid. The geopolitical humiliation will be unbearable; not to mention the geoeconomic humiliation for vassalized Europe.

As Eurasian integration will become an even stronger vector, Russian diplomacy will be solidifying the new normal. Never forget that Moscow had no trouble normalizing relations, for instance, with China, Iran, Qatar, Saudi Arabia, Pakistan and Israel. All these actors, in different ways, directly contributed to the fall of the USSR. Now – with one exception – they are all focused on The Dawn of the Eurasian Century.

In the following clip, China-In-Focus’ Tiffany Meier sat down with Casey Fleming, CEO of intelligence and security strategy firm BlackOps Partners.

He sheds light on the recent reports that TikTok can monitor keystrokes, what kind of information TikTok is getting, and what the Chinese regime can do with that.

Fleming said:

“What people need to understand is that TikTok is a military application.

It’s a weaponized espionage application to get every bit of information they possibly can off the phone, which they do – your whereabouts, how you go about your day, your access to other people, access to technology, intellectual property, and things that you can be blackmailed on, and so on.

So people need to understand that TikTok is a weaponized military application in the hands of our middle schoolers, our kids, our high school kids, and our young adults.”

He added the Chinese regime “can use that information really, number one, the most important thing is to steal intellectual property. Secondly, to blackmail. Thirdly, it’s a propaganda platform.”

“You can see all these TikTok challenges, and most of them are very dangerous to our children – to steal cars, to do challenges … we’ve lost a lot of kids to these TikTok challenges that come up about once a month.

You have to understand it’s a propaganda platform completely owned, operated, and controlled by the Chinese Communist Party. And it’s under the guise of this fun app that everybody loves to use, and it’s spread like wildfire, and it’s a lot of fun…

So there’s a lot of fun content on it, but you have to understand it’s a military application, and it’s going to achieve military results under the guise and under this facade of being a fun app.”

Watch the full interview below: