Month: July 2024

Authored by Conor Gallagher via NakedCapitalism.com,

In back-to-back weeks Turkish President Recep Tayyip Erdoğan attended first the Shanghai Cooperation Organization gathering in Astana and then the NATO summit in Washington DC. The contrast was stark.

Erdoğan made clear Türkiye’s opposition to escalation with Russia and US support for Israel, while Washington tried its usual small-carrot-big-stick approach. Far more interesting was what was happening with Türkiye, Russia, and China at the Shanghai Cooperation Organization gathering the week before the NATO summit.

But first, the problems with the world’s “most successful military alliance.” Türkiye is opposed to further escalation of Washington’s conflict with Russia. Public opinion at home is overwhelmingly against Israel and the US (during the NATO summit Erdogan said the US is “complicit” in Israeli war crimes). The US continues to support Türkiye’s Kurdish enemies in Syria while there are  increasing problems with Syrian refugees in Türkiye. NATO generally seems hellbent on starting even more conflicts, such as with China which is in no one’s interest, but only Türkiye, Hungary, and Slovakia are apparently willing to say so.

Meanwhile, Ankara is facing fresh sanctions threats from the US where the House of Representatives is pushing forward with legislation that would require the Biden administration to sanction Russian nuclear energy company Rosatom and “its affiliates and subsidiaries…[and] authorize secondary sanctions on any foreign person engaged in significant transactions with Rosatom.”

This would have major implications for Türkiye’s first and only nuclear power plant, which was inaugurated last year with the delivery of the first nuclear fuel to the plant site – a major occasion in Türkiye as it marked the country joining the ranks of nuclear power nations. Rosatom financed and is building the plant that would provide roughly 10 percent of Türkiye’s energy needs once completed, but has recently faced delays due to difficulties obtaining equipment from third countries because of US sanctions. [1]

At the same time that the US is trying to muscle out Rosatom 14 years after it signed a deal with Ankara and after nine years of work on the project, it is is trying to pressure Türkiye into deals with American companies to build reactors in the country despite a whole host of issues with US designs, safety, cost, and the overarching geopolitical strategy since they would likely still rely on Russia (or possibly China) for key parts of the nuclear fuel supply chain.

Despite the threat of sanctions, Türkiye remains in talks with Russia for a second nuclear power plant, as well as with China’s for a third plant.

That is representative of the overall trend of Türkiye’s relations with the US on one side and Russia and China on the other. Slowly but surely Türkiye is being drawn further East, and while US sanctions might erect some speed bumps, they are not stopping the process. Barring a government coming to power in Ankara that takes its orders from Washington, which at this point would require a coup given the Turkish public’s increasing opposition to the US and the EU. Despite the rising resentment of the West in Turkiye, the sanctions weapon is unlikely to be sheathed, and there will be even more calls from US lawmakers for more pressure to force Ankara to “abide by international law,” [2]

Türkiye and the Shanghai Cooperation Organization

While the NATO nobility spent last week talking about starting wars they can’t win and controlling events they can’t control,  Erdoğan enjoyed a warm reception at the Shanghai Cooperation Organization (SCO) summit in Astana two weeks ago. He met with both Russian President Vladimir Putin and Chinese President Xi Jinping, and both pledged to continue strengthening ties with Türkiye.

Founded in Shanghai in 2001, the SCO has always emphasized the importance of  combating terrorism and radicalism, especially in Central Asia. The recent summit, however, was seen as an expansion of the SCO’s ambitions to become the security provider to the Eurasian continent. Belarus joined the SCO at the summit, which also counts Russia, Kazakhstan, Kyrgyzstan, China, Tajikistan, Uzbekistan, India, Pakistan, and Iran as members. Afghanistan and Mongolia are observer states, and  there are 14 dialogue partners.

This is an organization that now represents roughly 42 percent of the world population and 80 percent of the Eurasian landmass. Most importantly, these countries constitute about one-third of world GDP and roughly $6 trillion more than the EU.

One only needs to look at a map to see how this bloc is becoming the center of the world in more than ways than one with Europe left out on the periphery – a decision of its own making.

What the SCO wants to guard against above all else is efforts by the West to use terrorism or any other division strategies to thwart the growing power of its member states. The US has tried to use central Asian nations in this way in recent years to no avail as investment by China and Russia in these countries absolutely dwarfs what the West has on offer.

The importance of security in Eurasia helps explain Türkiye’s attractiveness to the SCO and BRICS, which is increasingly the economic partner organization to the former. It’s not just that Türkiye is the world’s 18th most populous country with a GDP per capita at purchasing power parity that places it 47th. It’s not just that it has a customs union agreement with the EU that currently makes it an attractive point to get around tariffs or sanctions.

It’s also that Türkiye would be a key piece to security architecture of the SCO. Here’s Erdoğan stressing this point following a meeting with Xi:

“The organization has become one of our important dialogue channels with Asia owing to our dialogue partner status, which we’ve held since 2013,” he said. “Our many years of experience fighting terrorism show that international cooperation is essential to dealing with this threat. In this context, we are ready to further strengthen our dialogue with the Shanghai Cooperation Organization.”

Erdoğan, once an outspoken critic of Beijing due to its alleged treatment of Uyghurs, a Muslim minority of Turkic origin in western China, has almost completely dropped his criticism in recent years.

Turkish Foreign Minister Hakan Fidan was in China in June talking up the possibility of Türkiye joining BRICS, but most importantly, he made some major statements regarding Xinjiang. According to a Chinese statement, Fidan told Chinese Vice President Han Zheng that Türkiye adhered to the one-China principle and “will not allow activities in Türkiye that undermine China’s territorial integrity”. China attaches immense significance to the issue and would likely be the number one topic in any discussions with Türkiye about further integration with BRICS or the SCO.

That cements a major shift for Türkiye, which used to call Xinjiang “East Turkistan,” accuse China of “genocide” against Uyghurs (a claim the rest of the West still makes), and allegedly play a role in training Xinjiang militants. The change in Türkiye’s stance likely causes consternation in Washington, but is a clear sign of the shift underway for a country that is no stranger to supporting jihadists to further its and Washington’s goals in West Asia.

Inching Closer to Türkiye-Syria Reconciliation (and a Major Blow to US Occupation of Syria)?

One of the biggest items on the SCO agenda involving Türkiye is resolving the Syria issue and getting the Americans out – a goal for which Türkiye would need to play a central role.

We can see those pieces starting to come together with Syria now.

On his trip back from the NATO summit, Erdoğan announced that Türkiye and Syria will determine a roadmap to revive long-frozen relations between the two neighbors and will take steps accordingly. FM Fidan is being tasked with restoring ties and setting up a meeting between Erdoğan and Assad.

Erdoğan showed renewed motivation to mend fences with Damascus following his meetings in Astana. Whatever he saw or didn’t see in Washington apparently provided even more motivation to  restore ties with Syria – a relationship that was destroyed by Türkiye, in cahoots with the West, playing a major destabilizing role by funneling fighters to Syria and funding them. There has been noise about a Ankara-Damascus reconciliation for some time, but due to the steady encouragement from Moscow, it would appear to be getting closer. There would be benefits for both Türkiye and Syria of burying the hatchette, but the biggest impact viewed through a wider lens would be to make the US position in Syria more untenable.

And going forward, a Türkiye that is a member of the SCO and more in lockstep with Moscow and Beijing, would further the SCO mission to keep destabilizing forces at bay in Eurasia.

What other factors are pushing Türkiye towards the East?

Western Hubris

The EU may look back at some point in a decade or two and rue the decision to snub Türkiye, but Türkiye has long been expected to go along with the wishes of NATO and the EU despite often being treated like a second-class citizen. The failure of Türkiye’s EU accession is just one of many examples.

As mentioned above, the US threatening to torpedo the nuclear power plant in Türkiye is representative of another. The US sanctions Turkish individuals and companies for “aiding Russia,” for “aiding Iran,” and the US is already threatening to slap on more sanctions over Turkish firms’ exports to Russia. A quick search on the US Treasury’s Office of Foreign Assets Control site turns up a whopping 232 sanctioned Turkish individuals or entities.  This is not a great look when Türkiye is going through its worst economic crisis in two decades.

There have also been, from the Turkish point of view, a lack of consideration of Turkish defense needs. In the 1990s, Ankara asked NATO multiple times to deploy early warning systems and Patriot missiles to Türkiye, but it never came to pass. In 2017 Russia sold Türkiye its S-400 missile defense systems, which are arguably superior to anything the West has. In response the US expelled Türkiye from its F-35 program and sanctioned the country’s defense industry organization and its leaders.

While the US keeps slapping more sanctions on Turkish entities, the economic relationship between Türkiye and SCO countries is growing exponentially.

The Economy – Sanctions or Investment?

Ahead of the SCO summit, the Turkish broadcaster TRT World highlighted the fact that Turkish exports to SCO countries increased by 85% in last 5 years:

Turkish exports to Shanghai Cooperation Organisation (SCO) member countries have skyrocketed 85 percent over the last five years from a value of $14.1 billion in 2019 to nearly $26.1 billion in 2023. The share of these countries in Türkiye’s overall exports last year was 10 percent.

Türkiye’s imports from SCO member countries also reached $106.3 billion last year, around double the $55.6 billion total in 2019.

Still, the EU is by far Türkiye’s top trading partner, accounting for almost one third of its trade while Türkiye is the EU’s seventh trading partner, making for 3.6 percent of total EU trade.

But Türkiye’s weak economy has the government seeking foreign investment. Enter China with its vast financial resources, which looks ready to provide an influx of capital for the price of cooperation on China and SCO goals.

Both Erdoğan at the SCO summit and FM Fidan in his recent trip to China were asking for more investment from Beijing in Türkiye. It looks like that is already coming through. Chinese automotive company BYD just announced that it will construct a $1 billion plant in western Türkiye. From the South China Morning Post:

The new factory would improve BYD’s access to the European Union, because Türkiye has a customs-union agreement with the bloc. The EU moved ahead this week with plans to impose provisional tariffs on electric vehicles imported from China, hitting BYD with an additional 17.4 per cent charge on top of the existing 10 per cent rate.

There’s also a domestic market to serve, with EVs accounting for 7.5 per cent of car sales last year in Türkiye, a country with a population of almost 90 million.

Türkiye announced Friday that it was walking back plans announced almost a month ago to impose an additional 40 per cent tariff on all vehicles from China, citing efforts to encourage investment. That decision followed talks between Erdoğan and China’s President Xi Jinping on Thursday during a meeting of the Shanghai Cooperation Organisation in Astana, Kazakhstan.

There is a belief that this BYD plant will open the floodgates to more Chinese investment turning Türkiye into a “production hub” with a heavy focus at least for now on tariff-free exports to European countries thanks to Ankara’s customs union agreement with Brussels.

As the economic balance of power cements its shift to Asia while Europe suffers through a partially self-inflicted decline, then Türkiye’s long-term importance is less clear. How valuable is Türkiye’s customs agreement with the EU going to be in 10 years?

But Türkiye could still be an important market on its own and security policy could be more important than a backdoor into the declining EU market. Russia, for example, would like to ensure going forward that Türkiye will not open the Turkish Straits to NATO warships thereby allowing them access to the Black Sea, and neither Beijing or Moscow want to see Ankara helping to destabilize central Asia.

Notably, China is also considering defense production cooperation with Türkiye, which would be a major step. Even as China’s foreign direct investment (FDI) rises in Türkiye, it still has a ways to go to match Europe. In 2022 Chinese FDI in Türkiye stood at $1.7 billion, but the EU-27 countries still contribute 59 percent of Türkiye’s FDI inflows. As for Russia, it supplies Türkiye with nearly half of its natural gas and a quarter of its oil. The two nations also cooperate on nuclear energy with Russia financing and building the aforementioned Akkuyu Nuclear Power Plant, and in talks to construct another.

Public Opinion

Türkiye’s pursuit of BRICS membership would mark a fundamental shift in the country, which has been positioning itself to become part of “the West” for decades, but in many ways the public in Türkiye has already turned its back on the EU and the US and looks more favorably to the East:

A poll conducted in December 2022 by the Turkish company Gezici found that 72.8% of Turkish citizens polled were in favor of good relations with Russia. By comparison, nearly 90% perceive the United States as a hostile country. It also revealed that 24.2% of citizens believe that Russia is hostile, while 62.6% believe that Russia is a friendly country. Similarly, more than 60% of respondents said that Russia contributes positively to the Turkish economy.

More recent polling for NATO’s 75-year anniversary by Pew Research Center don’t show such a dire picture, but Turks still have the second lowest approval rating of the alliance among members:

For Now, The Middle

Erdoğan talked about being part of both East and West in an interview with Newsweek. He’s effectively distancing himself from the lunatics at NATO while declaring neutrality in its conflicts. That’s playing to Türkiye’s advantage right now, but might not be all that valuable to be the bridge between Europe and Asia due to Europe’s long term economic prospects. It also becomes dangerous. There’s no way that NATO, for example, would tolerate Türkiye being a member in the SCO, and it will likely continue to try to wield stick measures in response to Ankara’s increasing cooperation with Moscow and Beijing. Türkiye has no reason to choose a side, as the commentary often goes, but it would not be uncharacteristic of the West’s with-us-or-against-us policies to try to force it to do so. That’s where the risk exists of being pulled apart by trying to straddle both sides as there is still a sizable bloc in the country that favors an exclusively western-oreiented policy.

It’s interesting to note that new legislation in Türkiye is attempting to crack down on “foreign interests.” According to Turkish Minute, that would apply to “anyone who carries out or orders research on (Turkish) citizens and institutions with the aim of acting against the security or the political, internal or external interests of the state, on the orders or in the strategic interests of a foreign organization or state.” Those convicted would face three to seven years in prison. These types of laws are increasingly being considered by states that say they fear Western meddling in their country, oftentimes with the aim of instigating color revolutions.

Should NATO and Turkiye suffer some sort of break, it will likely be the result of NATO’s flight from reality – not Turkiye. If the past is any guide, Türkiye has good odds to successfully navigate the transition to a more multipolar world with the Eurasian core at its center.

I’ve made the comparison before, but I think it bears repeating: In 1941, Türkiye and Germany signed a nonaggression pact, and Ankara raked in economic and military aid from both Axis and Allies trying to woo Türkiye to their side. As the tide changed in WWII, however, Türkiye wisely bet on the eventual victors, moving increasingly to the Allied side. In 1944 Türkiye stopped exporting chromite to Germany, a key ingredient in the manufacture of stainless steel, and later that year severed diplomatic relations with Germany. In 1945 Türkiye declared war on Germany – two months before its defeat.

Saturday’s failed assassination attempt against Donald Trump not only shocked the world, but also added a tragic chapter to a 2024 presidential race that was already marred in turmoil and controversy. First there was Trump’s conviction in the hush money case, which makes him the first convicted felon to run for president as a major party candidate.

Then there was Biden’s debate debacle, which sent shockwaves through the Democratic Party, as large parts of the American public seem to have lost faith in the president’s ability to serve a second term.

And now this, another eruption of political violence, three and a half years after the January 6 attack on the U.S. Capitol.

The events of the past few years are just the culmination of a trend that started long before: the increasing polarization of the political landscape.

Reinforced by social media echo chambers and politicians seemingly more bound to their own agenda than to the truth or the good of the country, the U.S. seems more divided than ever, making compromise – a key component of a working democracy – virtually impossible.

All this hasn’t gone unnoticed outside the United States, where the country, once a role model for democracy, is viewed in an increasingly negative light.

As Statista’s Felix Richter reports, according to the Pew Research Center’s Global Attitudes Survey, the U.S. has lost its status as the shining light of democracy with the majority of respondents from 34 countries saying that the U.S. democracy is no longer or has never been a good example for other countries to follow.

You will find more infographics at Statista

As the chart shows, respondents from France and Mexico were particularly critical of the U.S., as nearly 40 percent of respondents from both countries said that U.S. democracy has never been the shining example it’s often made out to be. In most countries, the United States’ reputation as a democracy has suffered in recent years, with more than 60 percent of respondents from Germany, the UK, Canada or Japan saying that the U.S. used to be a good example but hasn’t been in recent years.

Authored by Gail Tverberg via Our Finite World,

It may be pleasant to think that the economies that are “on top” now will stay on top forever, but it is doubtful that this is the way the economy of the world works.

Figure 1. Three-year average GDP growth rates for Advanced Economies based on data published by the World Bank, with a linear trend line. GDP growth is net of inflation.

Figure 1 shows that, for the Advanced Economies viewed as a group (that is, members of the Organization for Economic Co-operation and Development (OECD)), GDP has been trending downward since the early 1960s; this is concerning. It makes it look as if within only a few years, the Advanced Economies might be in permanent shrinkage. In 2022, the expected annual GDP growth rate for the group seems to be only 1%.

What is even more concerning is the fact that the indications in the graph are based on a period when the debt of the Advanced Economies was growing. This growing debt acted as an economic stimulus; it helped the industries manufacturing goods and services as well as the citizens buying the goods and services. Without this stimulus, GDP growth would no doubt appear to be falling even faster than shown.

In this post, I will look at underlying factors that relate to this downward trend, including oil consumption growth and changes in interest rate policies. I will also discuss the Maximum Power Principle of biology. Based on this principle, the world economy seems to be headed for a major reorganization. In this reorganization, the Advanced Countries seem likely to lose their status as world leaders. Such a downfall could happen through a loss at war, or it could happen in other ways.

[1] The major factor in the downward trend in GDP growth seems to be the loss of growth of oil supply.

In the 1940 to 1970 period, the price of oil was very low (less than $20 per barrel at today’s prices), and oil supply growth was 7% to 8% per year, which is very rapid. The US was the dominant user of oil in this era, allowing the US to become the world’s leading country both in a military way (hegemony), and in a financial way, as the holder of the “reserve currency.”

Data on year-by-year oil consumption growth is not available for the earliest years, but we can view the trend over 10-year periods (Figure 2).

Figure 2. Smil estimates are based on estimates at 10-year intervals by Vaclav Smil in Appendix A of Energy Transitions: History, Requirements and Prospects. Energy Institute estimates are based on amounts in 2023 Statistical Review of World Energy.

With the rapid growth in the world oil supply in the 1940 to 1970 timeframe, the US was able to help Europe and Japan rebuild their infrastructure after World War II. The US also did a great deal of building at home, including adding electricity transmission lines, oil and gas pipelines, and interstate highways. It also added a Medicare program to provide healthcare for the elderly. The emphasis at this time was on building for the future.

In the 1960s, the Green Revolution was started, aimed at increasing the quantity of food produced. This revolution involved greater mechanization of farming, the use of hybrid seeds that required more fertilizer, the use of genetically modified seeds, and the use of herbicides and pesticides. With these changes, farming became increasingly dependent on oil and other fossil fuels. The green revolution led to lower inflation-adjusted prices for food, as well as greater supply.

The 1970s was a time of adaptation to spiking oil prices and declining growth in oil supplies. At the same time, wages were increasing, and more women were entering the workforce, making the rise in oil prices more tolerable. There were also advances in computerization, changing the nature of many kinds of work.

The 1980s marked a shift to an emphasis on how to get costs down for the consumer. There was more emphasis on competition and leverage (the euphemism for borrowing). Instead of building for the future, the emphasis was on using previously built infrastructure for as long as possible.

Also in the 1980s, the Advanced Economies started to shift toward becoming service economies. To do this, a significant share of manufacturing and mining was moved to lower-wage countries. Transferring a significant share of industry abroad had the additional benefit of holding down prices for the consumer.

[2] Oil consumption growth and GDP growth seem to be connected.

Figure 3. Chart showing both 3-year average GDP growth rate for Advanced Economies based on data published by the World Bank and 3-year average growth rates for oil consumption by Advanced Economies based on data of the 2023 Statistical Review of World Energy by the Energy Institute.

Figure 3 shows that oil consumption growth was higher than GDP growth up until 1973, when oil prices started to spike. This was the period of greatly adding to infrastructure, using the abundant oil supply, as discussed in Section [1]

After 1973-1974, GDP growth tended to stay slightly above oil consumption growth as Advanced Economies started to focus on becoming service economies. As part of this shift, Advanced Economies began moving industry to lower-wage countries. This shift became more pronounced after 1997, when the Kyoto Protocol (limiting CO2 emissions) was promulgated. The Kyoto Protocol gave participating countries (in practice, the Advanced Economies) a reason to hold down their own local consumption of fossil fuels, which is what is measured in Figure 3 and most other energy analyses.

Figure 3 shows that even after moving a significant share of industry to offshore locations, there still seems to be a significant correlation between oil consumption growth and GDP growth. Even with a service economy, oil consumption growth seems to be important!

[3] Prior to 1981, increasing interest rates were used to slow economic growth.

Figure 4. Secondary market interest rates with respect to 10-year US Treasury Notes and 3-month US Treasury Bills, in a chart made by the Federal Reserve of St. Louis and annotated by Gail Tverberg.

With the rapid growth in oil consumption in the 1940 to 1970 period, the economy often grew rapidly despite rising interest rates. After World War II, government loans became available to returning veterans to buy homes, helping to make the usage of oil affordable.

It was only as growth in oil consumption slowed and interest rates rose to a high level in the 1979-1981 period that high interest rates created a major recession. At such high interest rates, builders of all kinds were discouraged from building. Hardly anyone could afford a new home. Businesses couldn’t afford new factories, and governments couldn’t afford to build new schools. Few people could afford new car loans.

On Figure 3, it is not surprising that GDP dipped at the same time as oil consumption shortly after 1981. The dip in oil consumption was larger because heavy users of oil, such as construction and manufacturing, were squeezed out by the high interest rates.

[4] Falling interest rates in the period 1981 to 2020, as shown in Figure 4, stimulated the economy in many ways.

The 1981 to 2020 period marked a time of generally falling interest rates, with short term interest rates typically being below long-term interest rates. Reducing interest rates tends to stimulate the economy in a variety of ways:

(a) As we all know, lower interest rates make monthly payments on new home mortgages lower. This means that more citizens can afford to purchase homes, leading to greater demand for new homes and their furnishings. Prices of homes tend to rise, partly because people with a given income can afford larger, fancier homes, and partly because more people in total can afford homes.

(b) Even on existing home mortgages, new lower rates can have an impact. In the US, mortgages are frequently set for a long term, such as 20 years, but they can often be refinanced at a lower rate if interest rates fall lower. In many other countries and in the US for business property, mortgage rates are set for a shorter term, such as 5 years. As the loans renew, the new lower rates become available. Borrowers are happy; there is suddenly a smaller monthly payment for the same property.

(c) With lower interest rates, there is demand for more homes to be built. This stimulates the construction industry and helps the prices of all kinds of built structures rise.

(d) A similar situation to (a), (b) and (c) exists for all kinds of items normally purchased using loans. New cars, new boats, and new second homes are affected, as are many kinds of business loans. Even loans taken out by governmental organizations become less expensive. It suddenly becomes easier to buy goods, so more goods are sold. Market prices can be higher because at the new lower interest rates, more people can afford them.

(e) There can be some benefit with respect to long-term bond holdings, if interest rates fall. Bonds generally promise to pay a stated interest rate over the life of the bond, say 20 years. If the market interest rate falls, the selling price of a high coupon-rate long-term bond increases because such bonds are worth more than a similar new bond with a lower coupon interest rate.

Financial institutions such as banks, insurance companies, pension plans, and endowment funds generally have long-term bonds as part of their portfolios. The higher value of bonds may or may not be reflected in financial statements, depending on the accounting rules applied. Sometimes, “amortized cost” is used as the carrying value until the bond is sold, hiding the gain in value. Conversely, if bonds are “marked to market,” then the higher value becomes immediately reported in financial statements.

(f) With mark-to-market accounting, insurance companies, banks and many other kinds of financial organizations can reflect the benefit immediately. As a result, for example, insurance companies may be able to sell policies more cheaply in a falling interest rate environment. (Of course, as interest rates start rising, the opposite is true. I believe that is part of the problem with the spike in insurance rates that the world has been witnessing in the past two years. But this is seldom mentioned because it is less well understood.)

(g) With falling interest rates, practically all kinds of asset prices rise. For example, the prices of shares of stock tend to rise, as does the price of farmland. Prices of office buildings tend to rise. People feel richer. They can sell some of their investments and profit from the sale. Tax rates on long-term capital gains are low in the US, further helping investors.

(h) If generally falling interest rates can be maintained for many years (1981 to 2020), gambling in the stock market starts looking like a great idea. Investment using borrowed funds looks like it makes sense. Buying derivatives seems to make sense. Adding more and more leverage makes sense. People rich enough to gamble in the stock market or the housing market begin to gain huge advantages over the many poor people whose wages remain too low to buy more than the basics.

These advantages tend to drive a wider and wider wedge between the rich and the poor. As diminishing returns become more of a problem, wage and wealth disparities become increasingly major issues. These disparities arise partly because of competition with low-wage countries for less-skilled jobs, and partly because of the need to pay higher wages to highly educated workers. They also arise because owners of shares of stock and of homes have tended to receive the benefit of significant capital gains as interest rates have fallen, for the reasons described above.

[5] Since 2020, interest rates have begun to rise in the Advanced Economies. It is difficult to see how a shift to higher interest rates can turn out well.

News write-ups about the rise in interest rates often say something like the following:

The Fed hiked interest rates a total of 11 times between March 2022 and January 2024, making borrowing more expensive for banks, businesses, and people in an attempt to curb rampant inflation.

However, Figure 4 shows that long-term interest rates (the blue line) started to rise much earlier than this–about the time the US started to borrow a huge amount of money to support the programs it initiated to keep the economy functioning at the time of the Covid restrictions in 2020.

This funding went back into the economy to provide income to would-be workers who were forced to stay home and to small businesses that needed additional funds to cover their overhead. Pauses in student loan repayments had a similar effect. At the same time, fewer goods and services were created because non-essential activities were restricted.

This combination of more wealth in the hands of citizens at the same time as a limited quantity of goods and services were being produced was precisely the right combination of actions needed to generate inflation. So, it was no wonder that there was an inflation problem.

Indirectly, high US borrowing has been, and continues to be, part of the inflation problem. Total goods and services produced in the world economy are not currently rising very quickly because diesel and jet fuel are in short supply, something I wrote about here and here. The US and other Advanced Economies keep issuing more debt in the hope that using this debt will help them purchase a larger share of the goods and services produced by the world economy.

It is not clear to me that this problem can be fixed since the US and the other Advanced Economies need to keep borrowing to support their economies and to fight for causes such as the Ukraine War. Note the downward trend in Figure 1!

One of the big problems with high asset prices and higher-than-zero interest rates is that farmers find that the cost of their land becomes too high to make it worthwhile to grow crops. This is especially the case for new farmers, who may need to buy their land using the higher-cost debt.

People often believe that farm prices will rise indefinitely, but Reuters reports that high borrowing costs and low food prices are cutting demand for farm equipment from John Deere, the world’s largest manufacturer of agricultural machinery. Without a flow of new farm equipment to replace that which is breaking or worn out, food production can be expected to fall.

Another issue is that apartment owners find a need to raise the rent on their units if the interest rate they are forced to pay rises or if the cost of property insurance rises. If they raise the rent of their units, this leaves renters with less income for other goods and services. Indirectly, today’s wage and wealth disparity problems tend to become greater than they were before the rise in interest rates.

In theory, if long-term (not just short-term) interest rates rise and remain higher, the many benefits of falling interest rates in Section [4] will be erased, and even reversed. The economy will be far worse off than it is now because of falling asset prices and defaulting debt. Financial institutions, such as banks and insurance companies, will be especially damaged because the true value of their long-term bonds will tend to fall. This can sometimes be hidden by accounting approaches, but ultimately unrealized capital losses will cause a problem as they did for Silicon Valley Bank.

The heavy use of debt and leveraging in the Advanced Economies makes these economies especially vulnerable to major financial problems if interest rates rise, or even if they stay at the current level. The bubble of debt and other promises (such as pensions promises) holding up the Advanced Economies seems vulnerable to collapse.

[6] The problem facing the people of the Advanced Economies is like the problem the biological world often faces.

The biological world is constantly faced with the problem of too many animals (for example, wolves and deer) wanting to occupy a given space with specific resources, such as water, sunlight, and smaller plants and animals to eat. In some sense, the world economy is an ecosystem, too, one that we humans have made. The Advanced Economies are already in a conflict with the less advanced economies, trying to decide which parts of the world will “win” in the battle over the resources needed for future economic growth.

The Maximum Power Principle (MPP) tries to explain who can be expected to be the winners and losers in an ecosystem when there are not enough resources to go around. I think of the MPP as an extension of the “survival of the fittest” or “survival of the best adapted.” The difference is that MPP looks at the functioning of the overall system, which, in this case, is the world economy.

The parts of the system (such as the individual people, the levels of borrowing, the government organizations, and the narratives governments choose to tell to explain the current situation) will be selected based on how well they permit the overall world economy (not just the Advanced Economies) to function. The goal seems to be to create as many goods and services as possible by dissipating all available energy in as useful a way as possible. In this way, the world GDP, which is a measure of the output of the useful work performed by the world economy, can stay as high as possible, for each time period.

Writings by scientists on this subject tend to be difficult to understand, but they may add some insight. One definition of MPP says that systems which maximize their flow of energy survive in competition. Mark Brown, professor emeritus at the University of Florida, says that under the Maximum Power Principle, “System components are selectively reinforced based on their contribution to the larger systems within which they are embedded,” and, “When resources are in short supply, they need to be used efficiently.” John Delong from the University of New Mexico says, “Winning species were successfully predicted a priori from their status as the species with the highest power when alone.”

I suggest that if these principles are applied to the competition between the Advanced Economies and the less advanced economies of the world, the Advanced Economies will lose. For example, the Advanced Economies have been falling behind the less advanced economies in industrial output.

Figure 5. Industrial output of Advanced Economies, compared to that of Other than Advanced Economies based on data of the World Bank.

In addition, the Advanced Economies of the world have fallen behind in the bidding for oil supplies:

Figure 6. World oil consumption, based on data of the 2023 Statistical Review of World Energy, produced by the Energy Institute.

Furthermore, the NATO allies seem unable to pull ahead of Russia in the Ukraine conflict. In theory, this should have been an easy war to win, but with limited manufacturing capability, it has been hard for the allies to provide enough weapons of the right kinds to win.

To me, this all points to the conclusion that in a conflict over scarce resources, the Advanced Economies are likely to lose. The conflict could come in the form of war, or it could simply be a financial conflict. Figure 1 shows that the Advanced Economies are already falling behind in the competition for economic growth, even with all the debt they are adding.

[7] There is a lot of confusion about what is ahead.

We don’t know what is ahead. The economy is a self-organizing system that seems to figure out its own way of resolving the problem of not enough resources to go around because of diminishing returns. The world economy seems to be headed toward reorganization.

I believe that the Covid-19 era represented one rather strange self-organized response to the “not enough oil to go around” problem. Figure 6 shows a clear dip in the amount of oil consumed in 2020, particularly by the Advanced Economies. Some of this reduced oil consumption continues, even now, because more people started working from home, saving on oil. Another helpful change was a huge ramp-up in the use of online meetings.

It is possible that new adaptations to limited oil supply may appear in as strange a way as the Covid-19 era did.

Another possibility is that the Advanced Economies, particularly the US, will encounter severe financial problems as the rest of the world moves away from the US dollar. Or the problem could be falling asset prices because of higher interest rates, causing many financial institutions to fail. Or the problem could be too much money being printed, but practically nothing to buy, causing severe inflation of commodity prices.

War may be a possibility because it is an age-old way of dealing with resource problems. For one thing, it becomes easy to raise debt to pay for a war. This debt can be used to hire soldiers and buy munitions. With the higher debt, the GDP of the economy can be expected to suddenly look better because of the stimulus given to it. The major “catch” is that picking a fight with a major competitor or two could prove to be disastrous.

Let us hope that our leaders make wise choices and keep us away from severe problems for as long as possible.

For the first time in years, the Taliban says it has arrested and imprisoned American citizens, and is hoping to use them in a prisoner swap. The Taliban says that at least two US citizens are being held after violating Afghan laws, while the Washington Examiner has said three are in custody.

The detained individuals have been identified as George Glezmann, Mahmood Habibi, and Ryan Corbett – as confirmed also by a State Department statement. A Taliban government spokesperson announced that the “American nationals violated the country’s law, and discussion has been held with the US officials in this regard.”

And Taliban chief spokesman Zabiullah Mujahid recently told reporters in Kabul that “the topic of a prisoner release was discussed during his recent meeting with US officials in Doha, continuing a recurring theme in their negotiations.”

“Afghanistan’s conditions must be met. We have our citizens who are imprisoned in the US and Guantanamo,” Mujahid stated. “We should free our prisoners in exchange for them. Just as their prisoners are important to America, Afghans are equally important to us,” he added.

It as yet unclear what precise charges the men are being held on, but Afghan national media has alluded to the possibility of “espionage” – which would be a very serious accusation, possibly resulting in a capital case.

Both Glezmann and Corbett were initially detained in 2022, with the former having previously described he was on a tour of the country’s unique cultural landscape and history. US officials have complained that the American nationals are being held without charge or due process. Less is known about the third person who might be in custody, Muhammed Habibi, who is a US-Afghan dual citizen.

The Taliban has exercised complete control over the war-torn, central Asian country since the US coalition pullout of August 2021, which by all accounts was chaotic and resulted in both US military and Afghan civilian deaths. 

The US State Department has since then designated Afghanistan as a “Level 4: Do Not Travel” country for American citizens.

An official alert says the risk of detention for foreign travelers is high. “Multiple terrorist groups are active in country and U.S. citizens are targets of kidnapping and wrongful detentions. The Department has assessed that there is a risk of wrongful detention of U.S. citizens by the Taliban,” the US State Dept. says.

According to sources, Taliban’s Minister of Interior, Sirajuddin Haqqani, is set to meet US security officials during his visit to the #UAE.#Taliban are currently holding several Americans in their prisons, among them Ryan Corbett & George Glezmann. Paul Overby also disappeared… pic.twitter.com/UMy85zPONK

— Hostage Aid Worldwide (@HostageAid) June 6, 2024

“The Taliban have harassed and detained aid and humanitarian workers. The activities of foreigners may be viewed with suspicion, and reasons for detention may be unclear. Even if you are registered with the appropriate authorities to conduct business, the risk of detention is high,” the notification says.

Authored bv David Sacks via X,

I KNOW A HERO WHEN I SEE ONE

The Washington Post names me, along with as one of several businessmen, who are using their “megaphones” to spread “narratives” about the assassination attempt on President Trump.

I’m not sure what “narratives” they’re referring to, but I know what I saw, and I know what the crowd in Butler witnessed live.

At it turns out, my father-in-law lives in Pennsylvania and he was at the rally on Saturday.

When the shots rang out and Trump went down, he said pandemonium broke out around him.

Everyone feared the worst. 

But then Trump rose.

Covered in his own blood, resisting the secret service’s efforts to whisk him away to safety, Trump raised his fist defiantly, and the crowd could see him say:

“Fight. Fight. Fight.”

Immediately the fear of the crowd dissipated, the chaotic uncertainty lifted, and it was replaced with steely resolve.

The crowd responded back as one:

“USA, USA, USA!” 

This is not a “narrative.”

It is the truth.

Trump stood defiant in the face of an assassin’s bullet.

There is no way to fake courage like that.

It was more important for Trump to let the crowd know that he was unbowed and unbroken than to be taken to safety.

Donald Trump has already been in the fight of his life for months, as vindictive Democrats seek to imprison him, but on this day he came within inches of losing it. He has risked everything for this country. 

It is now up to us, the American people, to show him that he does not stand alone.

Let us reject the lies, the hoaxes, the hate and the division that the media has spread about this brave man, and support his resounding victory in November.

On Monday Hamas announced that its top military commander, the chief of the Qassem Brigades Mohammed Deif, is safe and escaped a massive Israeli strike targeting him Saturday.

The IDF military attack hit a camp for the internally displaced, killing at least 90 people and wounding hundreds more. Gaza authorities say that civilians were wiped out in what should have been a safe zone, but Israel has claimed it was mostly militants killed. The Associated Press is reporting, “Hamas said Sunday that Gaza cease-fire talks continue and the group’s military commander is in good health.”

Israeli leadership and media for nearly 24 hours speculated that Deif could be dead, but uncertainty has loomed. Israel has said, however, that Rafa Salama – a close associate to Deif – was killed in the operation.

US ambassador to Israel Jack Lew said Monday he believed there are indications Deif has been eliminated. “There are still many questions regarding the results of the attack against Mohammed Deif,” ​​he said in a press briefing. “I can’t confirm whether it was successful or not, but there are indications that they have achieved it.” 

Following the major aerial assault, there were reports Sunday that Hamas has pulled out of Qatar-mediated ceasefire talks, but the reports proved premature and Hamas has since announce it did not pull out.

Meanwhile, airstrikes have been reported Monday across all areas of Gaza, leading to an uptick in casualties. Al Jazeera has some of the latest updates as follows:

• The Gaza heaquarters of the UN’s Palestinian refugee agency, UNRWA, in Gaza City has been “flattened and turned into a battlefield”, says chief Philippe Lazzarini, as Israel’s latest ground campaign in the city continues to rage.
• Children among the 80 Palestinians killed over the past day as fighter jets, heavy artillery, and helicopter gunships attack Gaza from the north to south.
• Israeli Defence Minister Yoav Gallant praises the pilots who carried out deadly air strikes on the al-Mawasi displacement camp that killed 90 people, saying Hamas is being eroded every day with no ability to arm itself, organise, or “care for the wounded”.
• Officials in Gaza say Israeli missiles killed 17 Palestinians and injured 80 sheltering at a United Nations school for displaced people in Nuseirat refugee camp.

But the Israeli side could be taking more losses than what has been made public. On Monday the Israeli military in a briefing warned that it is low on tanks and ammunition.

“During the course of the war, many tanks were damaged, which are disabled at this stage and are not used for combat or training, and it is not expected that new tanks will be introduced into the corps in the near future,” the Israeli military said in a statement. It noted that resources are “very limited” due to the constraints of the war.

Authored by Susan Crabtree via RealClearPolitics (emphasis ours),

The Secret Service had already been under investigation by House Oversight Committee Republicans for several months when a bullet came within inches of killing former President Trump, killed a bystander, and injured at least two others at a rally in Pennsylvania Saturday afternoon.

Even though Trump and his family members credited the special agents and a counter sniper assigned to his protective detail with saving his life and possibly many others, recriminations against the Secret Service started almost immediately after the assassination attempt.

Americans could see for themselves how the agents and officers traveling with Trump on Saturday acted heroically, falling on the former president after his right ear was pierced by a bullet and returning heavy caliber gunfire, killing the 20-year-old shooter, Thomas Crooks. But questions remain over how Crooks managed to perch on a nearby rooftop and come within inches of killing Trump, renewing past criticisms of the once-vaunted agency with a troubled history of security lapses, employee misconduct, and uneven discipline practices.

Rep. James Comer, who chairs the House Committee on Oversight and Accountability, has called on Secret Service Director Kimberly Cheatle to testify at a hearing on Monday, July 22.

“Americans demand answers about the assassination attempt of President Trump,” Comer tweeted Saturday night.

In a letter to Cheatle, Comer was far more laudatory of the agency’s actions.

“The tremendous bravery of the individual United States Secret Service agents who protected President Trump eliminated the gunman, and possibly averted more loss of life cannot be overstated,” he said.

In late May, as RealClearPolitics first reported, Comer’s committee had launched an investigation into a previous incident that took place in April involving a female Secret Service agent, tasked with protecting Vice President Kamala Harris, who was removed from her duties after suffering an apparent mental breakdown and attacking superior agents.

The incident took place just before Harris was set to depart Joint Base Andrews, the home base for Air Force One and Air Force Two, the call signs of the Boeing aircraft used by the president and vice president. (Harris had not arrived at the airport when the altercation took place.)

After Saturday’s attempted assassination, when live images of Trump clutching a bloody ear and raising his fist in defiance appeared on cable news and social media, critics began to question why Secret Service snipers didn’t fire sooner amid reports that onlookers were pointing to Crooks, who was positioned and crawling on a nearby roof, before the shots rang out.

A source within the Secret Service community tells RCP that the agency’s rules of engagement in this situation are to wait until the president is fired upon to return fire. 

“You want to take a shot then find out the guy was holding a telescope?” the source asked. “The Secret Service is by nature reactive … and you better be right when you do react or you’re f—–d.” 

The Secret Service protocol requires that any counter sniper aware of a potential shooter must radio directly to the intelligence division team to respond and investigate. In this case, the investigation may have been cut short by the shooter firing his weapon, so the counter sniper then fired as quickly as possible in return. 

The source praised the counter sniper who acquired the target and responded within three seconds, calling their performance “incredible.” 

“The counter snipers are highly trained and extremely accurate,” he said.

Others with law enforcement and military backgrounds want to know whether the Secret Service utilized drones to provide detailed situational awareness and, if they didn’t, why that decision was made. The use of drones has been a controversial issue within the agency since at least 2016, the source told RCP. Implementing drones would have provided detailed line-of-site analysis and aerial surveillance that would have easily identified the rooftop as a potential threat area. 

“The USSS has access to all the best imagery and elevation data,” the military expert told RCP. “I’m not saying they didn’t [use drones], but it’s an open question.” 

Other critics, including conservative media personality Dan Bongino, a former senior special agent in the Secret Service who is close to Trump, his family, and top advisers, have asserted that the agency officials denied requests for more security from Secret Service supervisors on Trump’s protective detail.

Secret Service spokesman Anthony Guglielmi denied that such a request and denial took place.

“There’s an untrue assertion that a member of the former President’s team requested additional security resources & that those were rebuffed,” Guglielmi posted late Saturday night on X.com. “This is absolutely false. In fact, we added protective resources & technology & capabilities as part of the increased campaign travel tempo.”

The FBI, another agency buffeted by bad publicity – in particular, evidence of anti-Trump animus at the top levels –  has taken over the investigation into the attempted assassination against Trump. Special agents of the FBI Pittsburgh Field Office responded “immediately” after the shooting, the agency said in a statement.

“We will continue to support this investigation with the full resources of the FBI, alongside our partners at the U.S. Secret Service and the state and local enforcement,” the FBI said.

The Secret Service lost some of its former respect after a string of fence-jumping incidents, other security lapses, and discipline issues came to light during the Obama administration. At the beginning of the Trump administration, a senior special agent in the Secret Service came under fire for suggesting in a Facebook post that she wouldn’t “take a bullet” for Trump. Kerry O’Grady, the former agent in question, was placed on administrative leave but was allowed to retire with full benefits and her security clearance intact.

Others fired from the agency over discipline issues have lost their security clearances and at least part of their retirement benefits, spurring resentment among some in the Secret Service community.

This is the problem that my Secret Sources have cited: Secret Services resources were diverted to Jill Biden’s event and away from Trump’s because they followed agency protocol applying to Trump as a former president, according to two sources within the Secret Service community.… pic.twitter.com/9MzmS6Bia7

— Susan Crabtree (@susancrabtree) July 14, 2024

The agency, more recently, has come under scrutiny for its diversity, equity, and inclusion policies after the female agent’s apparent mental breakdown at Joint Base Andrews.

An agency spokesman called the issue a “medical incident,” but other members of the Secret Service launched a petition over the agency’s DEI hiring and vetting policies during the Biden administration, as first reported by RCP.

Cheatle, in 2021, signed onto a new initiative to increase the number of women in the Secret Service workforce. The agency is one of numerous federal, state, and local law enforcement agencies that have signed onto the 30×30 initiative, an effort to increase the representation of women in all ranks of policing across the country to 30% of the workforce by 2030.

In early May, Guglielmi rejected claims that the DEI policy impacted agency readiness.

“Claims that the Secret Service’s standards have been lowered as a result of our signing this pledge are categorically false,” Guglielmi told RCP. Comer held his first briefing with Secret Service officials over that April incident on June 24. Afterward, an Oversight Committee spokesperson said the briefing was “thorough,” but “questions remain regarding recruiting, vetting, training and morale at the agency.”

“The USSS provided the Committee on Friday a thorough briefing for staff, and we appreciate their time and ongoing cooperation as we continue to conduct oversight to ensure the Secret Service is fulfilling its mission,” the spokesperson told RCP. Questions remain regarding recruiting, vetting, training, and morale at the agency and the Committee looks forward to receiving additional information from the agency soon.”

In addition, after the attempted assassination of Trump Saturday night, conservatives on social media blasted Rep. Bennie Thompson, the ranking Democrat on the House Homeland Security Committee, for earlier this year introducing a bill co-sponsored by several other Democrats that would have denied Secret Service protection to Trump if he were convicted of a felony. The measure never gained traction in the GOP-controlled House. The Secret Service falls under the Department of Homeland Security.

After the attempted assassination, which killed one innocent spectator and injured at least two others, Thompson tweeted that he is “glad that the former president is safe” and is “grateful for law enforcement’s fast response.” 

Susan Crabtree is RealClearPolitics’ national political correspondent.

Authored by Mary Prenon via The Epoch Times (emphasis ours),

As the seller’s market persists throughout most of the United States, prices continue to rise and affordable housing appears to be slipping through the fingers of the average American.

The National Association of Realtors (NAR) reported the highest ever national median sales price of $419,300 for a single-family home in May.

“We’re actually forecasting that home prices will continue to grow based on the lack of inventory and demand for home ownership,” Jessica Lautz, NAR deputy chief economist and vice president of research, told The Epoch Times.

A $400,000 price tag translates to a $40,000 down payment—with the usual requirement of 10 percent of the home cost.

“That’s a lot of money for first-time homebuyers, which means sometimes they may have to borrow from parents or friends to make it happen,” Ms. Lautz said.

NAR reported that May’s existing home sales dropped 2.8 percent from one year ago while inventory of unsold existing homes grew 6.7 percent from the previous month.

In addition, 30 percent of homes sold garnered over-asking prices and bidding wars persist, with properties typically receiving three offers.

Only the Midwest saw a slight uptick in home sales in May with a 1 percent increase from one year ago. The Midwest also had the lowest median sales price of $317,100—a 6 percent increase over last year.

Existing home sales in the Northeast saw the biggest decline at 4 percent from May 2023. The median sales price rose to $479,200, up 9.2 percent from last year.

Home sales in both the South and West declined by 1.6 percent and 1.3 percent, respectively. Median sales prices in the South were up 3.6 percent over last year to $375,300, while those in the West experienced a 5.5 percent hike from 2023 to a median of $632,900.

First-time homebuyers are waiting longer to purchase homes. Last year the median age for these buyers was 35. Some of them are still waiting for either prices or mortgage rates to fall, but Ms. Lautz believes rates may stay between 6–7 percent through the end of the year.

According to Freddie Mac, the current 30-year fixed rate mortgage stands at or about 6.95 percent.

“If mortgage rates did come down significantly, that could also create more bidding wars as more buyers enter the market,” said Ms. Lautz. “I think those 2–3 percent rates were a once-in-a-lifetime experience, and I would not expect to see that again anytime soon. But if you look at rates historically, we are still at the low end.”

Many of those who are selling their homes are making their next purchase with all cash. In fact, noted the NAR, last month 28 percent of all homebuyers did not take a mortgage.

Dutch Mendenhall, founder of RAD Diversified, a real estate investment trust based in Tampa, Florida, also believes home prices will remain stable, given the current market.

“I don’t believe home prices are eventually going to take a large drop like they did in 2008,” he told The Epoch Times. “We have a lot more regulation now and a lot less loose lending. I don’t think we’re going to see any market crash or slowdown.”

Echoing Ms. Lautz’s concerns, Mr. Mendenhall notes the shortfall in new construction is also contributing to the lack of inventory, which in turn, keeps home prices moving forward.

“Higher interest rates also affect construction loans, and a lot of builders just can’t afford to take on large residential development projects,” he said. “New developments don’t drive home prices up—they create more affordable housing.”

While escalating home costs and interest rates are resulting in homebuyers paying twice as much as they paid two years ago, people are still buying homes.

“The most common forms of home buying are couples who have started a family, and retirees who are downsizing or moving to a new location,” he said.

“Sales have definitely been slower during the first half of this year, but I do think the real estate market will start to move forward, as we move toward 2025.”

Matt Willer, managing director and partner at Phoenix Capital Group Holdings, LLC in Denver, Colorado, also agrees that a “bursting bubble” is unlikely, even in this tight real estate market.

“I think we may eventually see a modest softening in some markets, and in others maybe not at all,” he told The Epoch Times.

Right now, Mr. Willer said, it’s all about affordability. “People got spoiled with 3–4 percent interest rates, and the mindset now is that those who don’t want to sell and repurchase with a higher interest rate are staying put and upgrading the home they have.”

Mr. Willer believes interest rates are probably going to stay in that 6–7 percent range for the remainder of 2024 and possibly into early 2025. “I don’t think anything of substance is going to happen prior to the election, and we could see a negligible drop towards the end of the year,” he said.

Addressing the home shortage, Mr. Willer contends the building industry is cyclical, but builders are also wary of the amount of debt they carry and may not want to overextend their budgets. “I don’t see a way we can get ahead of that right now,” he noted.

Meanwhile, the rental market is booming in many cities, as many potential homebuyers are playing the waiting game before jumping into home ownership.

Read more here…

48 hours after a ‘deluded gunman‘ with no internet footprint tried to assassinate Donald Trump at a Pennsylvania rally from a nearby rooftop that should have been a layup for the Secret Service, the Biden administration is finally giving Secret Service protection to Robert Kennedy, Jr.

“In light of this weekend’s events, the president has directed me to work with the Secret Service to provide protection to Robert Kennedy Jr.,” said DHS Secretary Alejandro Mayorkas, adding “We are in a heightened and very dynamic threat environment.”

MAYORKAS: “The President has directed me to work with the Secret Service to provide protection to Robert Kennedy Jr.” pic.twitter.com/oJKUAVs0jD

— Benny Johnson (@bennyjohnson) July 15, 2024

Earlier in the day, Trump said it was “imperative” that Kennedy be granted Secret Service protection.

“Given the history of the Kennedy Family, this is the obvious right thing to do!” he said on Truth Social.

Over the weekend, Kennedy security consultant Gavin de Becker told Politico that the campaign had a pending formal request with the DHS.

Kennedy has repeatedly asked for Secret Service protection throughout his campaign for president – including after a man was arrested twice in the same day for scaling the fence of Kennedy’s Los Angeles home last October.

Kennedy had been twice refused by DHS Secretary Alejandro Mayorkas.

“It’s not right for the President to provide protection to his family and political favorites while denying it to political rivals. During his first week as Attorney General, my father assembled all the DOJ’s senior prosecutors to tell them that he would not tolerate any politicization of law enforcement,” Kennedy wrote on X at the time.

President Biden displays a bust of my father in the oval office, but he seems to have forgotten this critical tenet of American democracy. During his administration, we’ve seen the wholesale corruption of federal law-enforcement agencies to censor criticism of White House…

— Robert F. Kennedy Jr (@RobertKennedyJr) October 27, 2023

The incident came roughly a month after an armed man posing as a US Marshall was arrested at a Los Angeles event. 

Kennedy made a third request for protection in an Oct. 25 letter to Mayorkas, detailing the September 15 incident, as well as the Oct. 25 incident involving a man named Jonathan Macht.

Mr. Macht, 28, was arrested on the morning of Oct. 25 at Mr. Kennedy’s Los Angeles property after being detained by the candidate’s security detail. He climbed a fence and asked to see Mr. Kennedy, according to the LAPD.

Authorities said the man was taken into custody at a nearby police station where he was cited for trespassing and then released. Police said he returned to Mr. Kennedy’s home and was arrested at 5:45 p.m. for violating a protective order. He is being held on $30,000 bail.

Mr. Macht is known to the U.S. Secret Service and Mr. Kennedy’s security Gavin de Becker and Associates (GDBA), Mr. Kennedy’s campaign said.

“GDBA had notified the Secret Service about this specific obsessed individual several times in recent months, and shared alarming communications he has sent to the candidate,” according to the press release. –Epoch Times

“After being released from police custody, the man immediately returned to Kennedy’s residence and was arrested again. The candidate was home at the time of both arrests,” Kennedy’s campaign said in a statement.

Not the norm…

While the law dictates that all major presidential candidates and their spouses must be protected within 120 days of an election, history reveals that several have received Secret Service detail much further out than that – with Obama receiving it 551 days before an election, Trump and Ben Carson receiving it a year before the 2016 election (when Trump was a ‘joke’ candidate), and Ted Kennedy receiving it 410 days before the 1979 election.

Maybe they’ll do a better job than they did on Saturday, should an assassin target Kennedy.

Authored by James Howard Kunstler via Kunstler.com,

“Trump is brushing off assassin’s bullets like dirt off his shoulder, racking up a mile long rap sheet of the fakest & gayest felonies known to man, chased through civil court by crazy-eyed harridans deranged by how horny he makes them. Joe Biden has jello for supper at 4pm.”

–  Aimee Terese on “X”

Dear Hitler, “Joe Biden” wrote his personal note of condolence Saturday night. 

So sorry to hear that you were inconvenienced by loud noises in PA, where I grew up in the black church. Chris Wray tells me that fine people may be behind it. Will keep you in the loop. Get well soon!”

Here’s some more consolation: The New York Times reports this morning that the FBI is looking into the attempt on Mr. Trump’s life as “possible domestic terrorism.” One must ask: are they trying to shed new light on this event, or just blowing more smoke up America’s ass — because that has been the FBI’s specialty for at least the past eight years. We’ll know if they take the definitive step of labeling the act a “hate crime.”

The weakness of narrative-tweaking is beginning to show. The amazing part is that only the elite thinking class of Americans fell for it, exactly the demographic that hangs on every word in The New York Times. The Deplorables out there in Flyoverland delivering Froot Loops to the Piggly-Wiggly and driving fork-lifts around the Amazon warehouse apparently never bought the narrative bullshit generated by the Media-Blob Industrial Complex. You’d hate to suppose that thinking is overrated. Or is it just a certain kind of thinking?

Try as you might to locate some malign, overweening, scheming cabal behind all the trips laid on our country, the truth is probably much simpler: set out on a journey defined by one lie, and then tell a lie to cover the first lie, and then another, and pretty soon you’re lying all over the place about everything until reality gets obliterated.

This is exactly what started in 2016 when Hillary Clinton sought to cover up her email and private server scandal with the Russia collusion hoax.

Have you forgotten how entrenched the FBI, CIA, and other agencies dug themselves in on that? It began as dumb-ass insinuation that Donald Trump was a Russian agent, but the FBI turned itself into fantasy factory when they ran with story. They manufactured one sub-plot after another, most of it comically absurd, like the entrapment of General Flynn for having a conversation with the Russian ambassador — as if foreign countries send ambassadors here for some other purpose than communicating with our government officials. Tell me, you Harvard grads who devour The New York Times every morning with your turmeric and wheat-grass detox smoothies: should an incoming White House National Security Advisor not speak with envoys from other lands?

So, following the election of 2016, scores of government officials from Barack Obama and Joe Biden on down set out to wreck Mr. Trump’s turn in office, and ran one hoax after another to disable and dislodge him, and each hoax was a battery of lies begetting more lies. The style of thinking behind all that is called unprincipled. Many of these lies entailed crimes, some of them gigantic frauds perpetrated on the citizenry such as the ballot-stuffing operation that jammed “Joe Biden” into office — and which you were not permitted to speak of on penalty of cancellation and prosecution.

By 2020, “Joe Biden” had racked up enough bribes from foreign lands that he was susceptible to blackmail and thus to manipulation. That his mind was failing through his entire term only made that easier. Both “Joe Biden” and the Neocon gang at State and the CIA were implicated in a web of crimes in Ukraine, and war there was one way to cover all of it up, so they made sure that war happened. The lies and hoaxes continued to multiply, accompanied by huge, destructive pranks — the George Floyd riots, the drag queens in the kiddie classrooms, the wide-open border, the FBI-instigated J-6 riot — and the Democratic Party was embroidered in that whole tapestry of degenerate politics along with the Deep State blob.

In short, the Democratic Party appears to be guilty of programmatic treason against the people of the United States.

They know that a reckoning awaits if Mr. Trump manages to return to office.

They’ve known it for years.

But two recent Supreme Court decisions really amped up their fears:

1) Trump v. the United States establishes presidential immunity from prosecution for acts involving his core constitutional duties;

and 2) Loper Bright v. Raimondo establishes that the federal bureaucracy can no longer rule over citizens unchecked by the courts.

Both of these would make it much easier for a President Trump to disassemble the Deep State.

And of course, that may lead to the investigation and prosecution of Deep State personae who abused their positions — possibly even prison. . . a discomfiting prospect.

The Democratic Party’s cover got blown on June 27th when Joe Biden had to go live in a debate and displayed his mental incompetency for all to see. That shock to the system forced a scramble to replace “JB” pretty late in the election cycle, since now just enough voters may be indisposed to re-electing an obvious human wreck. But the switcheroo effort seems to have lost traction. And the party may have muffed its blackmail leverage over “Joe Biden.” After all, his briberies are all well-cataloged by the House Oversight Committee, including the vast bank records of the many shell companies set up to receive the bribe money.

Is it possible, though, that “Joe Biden” holds blackmail material over his party confederates? After all, he’s still President. He has access to things you’d never dream of and, demented as he is, he has plenty of help close at hand from Hunter, Dr. Jill, and the Lawfare posse for sorting it out. He probably knows a thing or two about his old pard Barack Obama, too, that would make some folks uncomfortable. So, looks like “JB” is fixing to hang in there as his party’s nominee, and whoever doesn’t like it can go suck an egg.

After the stunning events of Saturday evening, it also looks like candidate “Joe Biden” would go down in flames against Donald Trump on November 5, stuffed drop-boxes and all. Not a few Democratic Party bigshots have already made noises about leaving the country if that happens, possibly to nations lacking extradition treaties with the USA. Many others must be gobbling Xanax like Tic Tacs now that Donald Trump has survived the ultimate affront to his existence.

You know the old nugget of wisdom: if you come at the king, you better not miss.

Ooops.

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