Month: September 2024

Authored by David Stockman via InternationalMan.com,

When in the course of history’s twists and turns dire necessity becomes the mother of invention the hour is usually late. That’s the case with America’s septic fiscal derangement at the present time. There is simply not a snowball’s chance in the hot place that either the Trumpified GOP or the beltway blob-controlled Democrats will lift a finger to deflect America’s fiscal doomsday machine from its appointed rendezvous with disaster.

The latter stems from the UniParty’s bargain with the fiscal devil. It amounts to a coalition of convenience dedicated to the fierce perpetuation of the fiscal status quo at all corners of the budget.

For its part, the Trumpified GOP now says it will no longer be accused by the Dems of planning to throw granny out into the snow. Instead, its very own party platform now says no cuts from Medicare or Social Security. Not even a single thin dime is to be squeezed from what will be the staggering $36 trillion cost of these two programs over the next decade.

That’s right. Neither wing of the UniParty will now even utter the words entitlement reform or spending cuts in the same sentence with Social Security, which alone will cost $20 trillion over the next decade, or Medicare, which will clock in at $16 trillion.

The GOP also reiterates its long standing refrain of no tax increases in any way, shape or form. In fact, it calls for an extension of the expiring Trump tax cut (2025) at a deficit cost of $4.5 trillion over the next decade.

Such an extension, however, would bring down Federal revenues to an average of just 16.5% of GDP—the lowest level since the 1950s. And, no, it won’t even out in the wash of higher “growth” either because CBO’s Rosy Scenario already assumes loads of cumulative real growth owing to no recession or any other economic upset for the next 10-years. Effectively, CBO’s 2.0% real growth with no recession for a decade is the same thing as 3.0% growth interrupted by a normal cyclical downturn and recovery.

In any event, the resulting revenue number of $58 trillion over the 2025-2034 decade would actually give the idea of soaring red ink an altogether new definition. That’s because the baseline spending level during the same period according to CBO’s latest projections is just under $85 trillion or 24% of GDP. So as the Trumpified GOP would have it, Joe Biden’s parting public debt of $36 trillion would reach upwards of $65 trillion by the mid 2030s.

At the same time, the Beltway Blob on the Dem side of the aisle is dug in deeply on the Medicaid/ObamaCare complex and safety net programs like Food Stamps, SSI, unemployment insurance, family tax credits and child nutrition, which would cost about $13 trillion over the decade.

And when push comes to shove in the cauldron of legislative battle, the GOP doesn’t have the cojones to dislodge the Dem defenses in this corner of the budget, either, despite rampant abuse and weak to non-existent work requirements for most of these programs.

Finally, we come to the Forever Wars, the Washington global hegemon, the military/industrial/intelligence/security assistance complex and the $15 trillion of baseline spending over the next decade for defense, international relations and veterans.  As it happens, the neocons, war-hawks, the internationalist busy-bodies and the beltway racketeers which infest both parties have locked up this bulging corner of the budget tighter than a drum.

In fact, there is so much loose change seeping through the budgetary cracks of this $15 trillion Warfare State bonanza that the defense think tanks, international NGO’s and multitudinous military contractor lobbying arms are in high clover. The massively swollen national security budget thus funds its own lobbying and self-justification force—a self-licking ice cream cone, as it were.

Therefore, and to summarize: From a slate of $85 trillion of total baseline spending over the next decade we have the following UniParty “No Go”” zones:

• Medicare and Social Security: $36 trillion.

• Medicaid, ObamaCare and the Safety Net: $13 trillion.

• The National Security Budget: $15 trillion;

• Net Interest on the Debt: $13 trillion.

• Total UniParty No-Go Zones: $77 trillion.

• Percent of Baseline Spending: 91%.

In short, the frozen in place UniParty fiscal equation amounts to—

• A revenue take at 17% of GDP at best.

• Politically frozen spending at 24% of GDP—or far worse in the likely event that the weighted average cost of Treasury debt happens to rise above the absurdly low 3.0% level assumed by CBO.

• Annual deficits of 7-8% of GDP or 2X the assumed nominal GDP growth rate as far as the eye can see.

• A runaway public debt that reaches $65 trillion by 2034 and 166% of GDP or $150 trillion by 2050.

Needless to say, long before the public debt reached $150 trillion the financial system would implode because even the Keynesian mad-men, mad-women and mad-theys domiciled in the Eccles Building couldn’t come up with an excuse to monetize even a small share of the tsunami of public debt now coming down the pike. And make no mistake, the only reason we are at $36 trillion today is that the Fed has enabled it politically. That is, by massively monetizing the public debt it has temporarily deferred what would have otherwise been a severe crowding out of private borrowers and escalation of yields in the bond pits.

Still, we don’t think that the public debt will get to the financial implosion point because we do not believe that American democracy is inherently suicidal. In fact, even in the context of today’s tightening fiscal vice we see the emergent shadows of a path to resolution or at least a stick-save not too far down the treacherous road ahead.

To wit, it is now exceedingly likely that Donald Trump will not only win the 2024 election, but it is also possible that his return to the Oval Office could trigger the Great Realignment that might finally shatter the UniParty’s death grip on the fiscal equation.

To be sure, we italicize the “possible” part for good reason: The Donald is one of the most unstable, inconsistent and unpredictable politicians to ever prance upon the stage of presidential politics in America—so anything can happen, even a worse mis-governance disaster than his first time around the barn.

But our impression is that he is bitterly resentful of the manner in which the UniParty and its RINO wing undermined and ruined his first presidency. So this time he may actually allow himself to be guided and re-directed by the fantastic posse of brilliant dissidents—Robert Kennedy, Nicole Shanahan, Tulsi Gabbard, Vivek Ramaswamy, Tucker Carlson, Elon Musk and JD Vance—who have recently joined or rallied to his campaign. Call it the Good Squad.

Indeed, it is this flying wedge of anti-Washington statesmen and intellects that could constructively harness and channel the Donald’s own inchoate instincts to drain the swamp. If their natural leader, RFK, can use his co-chairmanship of the transition organization to keep the neocons, RINOs and anti-abortion howlers out of the key posts in the next administration, it would make all the difference in the world. And if he could manage to parlay that role into Chief of Staff and de facto deputy president after the inauguration it would obviously be all to the better.

That’s because the GOP needs a big purge. It has been hijacked and led astray from is core fiscal mission during recent decades by ideological factions—neocons, tax cons, right to lifers, nativists and militant nationalists. But during a Trump Administration, which is led or strongly influenced by the Good Squad, the Donald’s promise to settle the Ukraine disaster quickly via partition of the artificial country that Lenin, Stalin and Khrushchev built could trigger the very realignment that is sorely needed.

To wit, much of the neocon Never Trumper brigade has already migrated to the Dems and will cement their departure through specious claims of being “Republicans for Kamala” during the balance of the campaign. But where the potential deal of the century with Putin will have its biggest impact on the Realignment will be among the neocon ranks of Republicans on Capitol Hill.

Upon the Kennedy-Trump led rapprochement with Putin, these befuddled souls will either—

• Retire from Congress disconsolately.

• Switch parties to join the rest of the bitter-end Never Trumpers.

• Or, in the main, see that their whole world view was wrong. That is, after a deal to split up Ukraine, Estonia did not fall, Poland remained free, the Brandenburg Gate was still visited by tourists not Russian troops, and that, alas, NATO could be disbanded with no harm done to Homeland Security.

In turn, what amounts to bringing the Empire Home could finally pave the way for breaking the fiscal deadlock. A Trump foreign policy formulated by the Good Squad would enable at least a 50% cut in defense spending and $5 trillion of savings from the baseline National Security budget over the next decade.

Beyond that, we seriously doubt that even the Good Squad could talk the Donald out of his 10% across the board tariff. But if it is applied to all of America’s $3 trillion of annual imports and not used as a club to start an economic war with China, so be it. A VAT (value added tax) would be a better instrument—but a Trumpified stealthy version might function as a second best alternative under the circumstances.

In any event, a stealthy VAT could generate $3-4 trillion of incremental revenue over a decade, without getting into the mischievous and counter-productive business of raising income, payroll or corporate taxes. And with the fiscal ball rolling in this manner, it is conceivable that another $4 trillion in interest savings, corporate boondoggles, green energy waste and the like might also be cobbled together by a realigned government led by the Good Squad.

Needless to say, $13 trillion of savings over the next decade would decisively stifle the current race to fiscal doom.

Finally, what happens if by some off chance Kamala wins? Or if the Good Squad gets squeezed out and shunted aside in a second Trump White House by the same protectionist, nativist and right-wing loonies who screwed the pooch the first time around?

Well, that’s why Bobby Kennedy will remain on the ballot in 40 states and thereby have the electoral base for a Realigned Anti-Washington Party in 2028. Coalesced around the leadership of the Good Squad and after 4 years of dismal partisan warfare between Kamala and the old guard GOP on Capitol Hill the electorate could be fairly begging for a Realignment next time around.

*  *  *

The truth is, we’re on the cusp of an economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.

Matt Walsh’s latest film, Am I Racist? is a scathing takedown of the far-left diversity, equity, and inclusion movement, often referred to as the “woke mind virus.” Funded by Jeremy Boreing and Ben Shapiro’s conservative media outlet, The Daily Wire, the documentary has already grossed $9 million in just ten days, securing the number six spot on the US box-office chart. 

According to figures shared by Box Office Mojo, Walsh’s Am I Racist? secured the number six spot in the US box office charts through Sunday, earning $9 million in the ten days out in theaters nationwide. Ahead of Walsh’s film is Deadpool & Wolverine at number 5, Never Let Go at number 4, Speak No Evil at number 3, Transformers One at 2, and Beetlejuice Beetlejuice at the first spot. 

Am I Racist? essentially took a page from Sacha Baron Cohen’s Borat to go deep undercover in the world of wokeism. Wash dressed like a white liberal hipster professor and paraded his DEI certification while speaking with so-called anti-racism experts. 

More from Walsh on X… 

After our second weekend: “Am I Racist?” remains in the box office top 10, it’s the top grossing documentary of the year, top 5 political doc in the last decade, earned 3x its production budget, and our total gross moves us into the top 40 for all docs, all time. And counting.

— Matt Walsh (@MattWalshBlog) September 23, 2024

On the movie rating website IMBD, Wash’s film is rated 7.5/10, and the film is ranked number 8 on the website’s ‘Most Popular Movies’ list. 

In the user review section of the IMBD, the featured review with 9/10 stated: 

Hilarious movie. Well worth the watch and everyone should see it.

This movie is excellent. My wife and I saw it over the weekend, and we haven’t laughed this much in a long time at the theatre. We both thought it was hilarious.

On top of that it is also enlightening and gives you a glimpse inside the world of DEI and systemic racism along with those who profit from it. Eye opening. I feel like everyone should watch this movie.

It’s also great to watch it in theatres because watching it with a crowd is just enhances the experience. Everyone was laughing the whole time.

I don’t want to give any spoilers at all because it’s worth it to see it all unspoiled. Many of the situations that Matt Walsh finds himself in have to be seen to be believed.

Fantastic watch and well worth the price of admission, and I’m far happier to spend my hard earned money on a movie like this than many other movies coming out of Hollywood these days.

Another user ranked the movie at 9/10, saying: 

Brilliantly sarcastic take on the racism and hate industry

This is the first movie in a long time where the arguments being presented are so absurd – so logically cork screwy -that laughter rolled through the cinema. There are horrible racist acts happening in our society – but the conclusion that our society is racist to the core, or that we are all racists, is bunkum. This film sets out to show the DEI industry (and cult) in all its intellectual shoddiness.

The skill of this film is to depict exactly the absurdity of these ideas.

Walsh is a remarkably skilled actor – wins the Borat award for straight faced interviews with people tying themselves up in absurd arguments. There are so many scenes that begin with a grave and seriously proposed premise…that then get taken by the ‘white guilt/society is totally racist’ workshop and TV show crowd to total farce.

A broader theme – brilliantly presented and established – is the degree to which we, as a society, have become a herd of grazing sheep, digesting whatever the media (of any type or any ideological leaning) present to us as “expert” information. The film is a must see as to how we are all being manipulated unless we keep our critical thinking skills in shape.

Official trailer. 

Conservative-themed movies and documentaries have been gaining popularity among American moviegoers in recent years.

In 2023, Angel Studios released Sounds of Freedom, which grossed $250 million against a $14.5 million budget. It has become one of the most successful independent films in history and exposed the horrors of child trafficking. 

Here’s what others are saying…

My thoughts on Am I Racist. pic.twitter.com/yEZMv8hpnP

— Irene BritUSA (@irenebritusa) September 16, 2024

Films with a purpose. This is the new trend. Forget mindless Hollywood movies about nothing.  

Authored by Victor Davis Hanson via American Greatness,

One of the most preposterous recent trends has been the political use of supposed expert letters and declarations of support from so-called “authorities.”

These pretentious testimonies of purported professionalism are different from the usual inane candidate endorsements from celebrities and politicos.

Instead, they are used by politicians to impress and persuade the public to follow the “expertise,” “science,” or “authorities” to support all sorts of injurious initiatives and policies—of dubious value and otherwise without much political support.

Think of all the health experts who collectively swore to us that the COVID mRNA vaccinations would give us ironclad and lasting protection from being either infectious or infected and were without any side effects.

Other “authorities” assured us the first nationwide lockdown in U.S. history would stop COVID without hurting the social or economic life of the country.

Ditto testimonies about the pangolin-bat origins of COVID or the authenticity of the bogus Steele dossier.

Do we still remember the 1,200 healthcare “professionals” who in June 2020 told us that hitting the streets in mass numbers to protest during the post-George Floyd riots was a legitimate exemption from their own prior insistence on a complete nationwide quarantine? Or as these ideologues lectured us as “experts”:

“We wanted to present a narrative that prioritizes opposition to racism as vital to the public health, including the epidemic response. We believe that the way forward is not to suppress protests in the name of public health but to respond to protesters demands in the name of public health.”

To convince the public to get behind the agendas of politicians—increasingly on the left—ideologues round up groups of politically kindred professors, researchers, retired officials, and former bureaucrats to show off their supposed expertise and convince the public by means of their “authority”.

Perhaps one of the most notorious examples was the “70 arms control and nuclear experts,” who in 2015 were gathered together by Obama subordinates to persuade Americans to support the administration’s bankrupt Iran Deal—the so-called Joint Comprehensive Plan of Action (JCPOA).

It was clearly a treaty designed to appease and empower Iran on empty promises that the theocracy would slow down its nuclear bomb program. And it was railroaded, illegally, through Congress without the constitutionally required two-thirds treaty vote of the Senate.

But what followed from the deal was an empowered Iran. Freed from the burden of embargoes, it subsequently raked in billions of dollars in oil revenues—to lavish upon its terrorist appendages Hezbollah, Hamas, and the Houthis.

Trump withdrew from the farce in 2018. His actions quickly bankrupted the terrorist state with embargoes and sanctions—only to see Biden-Harris beg Iran, in vain, to reenter the deal in 2021.

What followed was a second round of U.S. appeasement and the greatest Iranian-fueled terrorist wave in the Middle East since the 1980 theocratic Iranian revolution.

None of those Iran-Deal experts have weighed in since.

Do we remember Joe Biden’s disastrous “Build Back Better” and related huge spending packages? Coupled with additional borrowing, they contributed to well over a combined $4 trillion deficit from 2021 to 2022.

The public at least knew well enough that the economy was beginning to boom after the gradual decline of COVID. Pent-up consumer demand was starting to skyrocket. Still low interest rates encouraged reckless borrowing. Supply chains were still backed up and had not recovered from the national quarantines.

Stuff that the now cash-laden public wanted was often in short supply.

In other words, people wished to splurge on things that were scarce—just as Biden printed $4 trillion of new “stimulus” to boil an already overheating economy.

The result would soon be hyperinflation topping out at a 9% percent annual inflation rate. During the Biden-Harris administration’s four years, the price surge would leave key staple costs some 20-30 percent higher than in 2021.

Yet to ensure such madness, in 2021, we were assured there would be no such inflation. To convince us of the unconvincing, Team Biden rounded up “Seventeen recipients of the Nobel Memorial Prize in Economic Sciences” to sign an implausible letter to reassure the public that the massive spending (called “investments”) was “long overdue.”

Worse still, the illustrious left-wing economists blindly doubled down on public fears of what soon would be crippling price hikes due to the massive borrowing: “Some, however, have invoked fears of inflation as a reason to not undertake these investments. This view is shortsighted.”

None of the seventeen Noble Prize winners ever apologized for their wrongheaded predictions and assessments that greenlighted destructive inflation.

In 2024, the academic economists were back at it again, this time manifested in media speak as “sixteen of the world’s most notable economists—all Nobel Prize winners.”

They were now signing another letter for the very opposite agenda: warning that a putative President Trump’s third term would spur inflation by way of his supposedly reckless spending proposals!

In other words, when Biden wished to print trillions of dollars, partisan Nobel Prize winners in advance discounted the crippling hyperinflation that followed. But now, given their dislike of Trump, they reversed course, warning the country that Trump’s likely deficit spending was “irresponsible.”

Would that such suddenly tight-fisted, inflation-hawk Nobel laureates had earlier warned us of their concerns in 2021, before the inevitable Biden inflation emasculated the middle class.

Yet the worst groupthink letter of supposed authorities was the now infamous and abject lie spread by the supposedly illustrious “51 former intelligence officials.” In weaselly language, they pontificated that Hunter Biden’s laptop had “all the classic earmarks of a Russian information operation”—an emphatic assertion designed, however, by the word “earmarks” to shield them from the charge of lying, which, in fact, they knew that they were.

The signees were supposedly our best and brightest—headed by former CIA directors John Brennan (who previously had confessed to lying twice to Congress) and Leon Panetta, and former Director of National Intelligence James Clapper (who previously also confessed he had lied once to Congress).

The point of the letter, like the aim of all such disingenuous politicking masked by supposed academic credentials and past government expertise, was political: to help Joe Biden’s evasions in his last 2020 debate on the eve of the election.

Armed with the fraudulent letter, Biden on the stage trashed Trump’s charge of Biden family corruption by citing the letter’s professional authentication that his son’s incriminating laptop was cooked up in Moscow.

The charge of “Russian disinformation” was, of course, a blatant lie—given the FBI already had taken possession of the laptop and knew it was genuine.

Everything about the letter stunk.

It was cooked up by then-Biden campaign aide Antony Blinken (later rewarded by becoming our current Secretary of State). He wrote Michael Morrell, a past interim CIA director, asking him to round up supposedly retired intelligence grandees to thwart Trump’s plausible accusations that the authentic laptop’s contents proved the corruption and tax evasion of the Biden family.

In a close election, the purpose was to prevent a Biden debate disaster and thus the perception that the Biden family was crooked. Such convincing charges might have lost him the election.

Many of the supposed disinterested “retired” authorities were actually still employed as contractors by the CIA.

In the end, none of the experts apologized for their misinformation, even when one post-election poll revealed that their deliberate efforts to mislead the voting public had affected the outcome of the 2020 election. Our experts’ charge of “Russian disinformation” turned out to be classic “American election interference.”

More recently, we saw another such letter with the same-old, same-old boilerplate. Lots of names (100!) of supposedly “retired” Republican “national security figures” emphatically endorsed Kamala Harris.

Given the predictably corrupt genre, almost anyone could have anticipated the letter’s contents. The list of “former” national security signees broadcast their bloated titles (but did not disclose whether any are now still contracting for the government) to assure us of their exalted expertise.

Like all such letters, the public has no idea who these obscure supposed expert national security figures are or even who they were when they worked for past Republican administrations. The point is simply to scare the public into voting for Democrat Harris because supposed experts, who have titles and were once insider Republicans, now despise Donald Trump and want to use their former positions and supposedly conservative credentials to convince us he’s dangerous. But it does not take a Ph.D. or J.D. to fathom that Afghanistan, Gaza, Israel, the wider Middle East in general, Ukraine, North Korea, and Iran were all quiet during the Trump administration. And all have blown up during the derelict Harris-Biden tenure. In the case of Russia, Vladimir Putin invaded other countries on his border in three of the last four administrations—except Donald Trump’s.

We no longer have a southern border, given the directorship of Border Czar Kamala Harris. We have no idea where or who some 10 million illegal aliens are who entered the country under Harris—after she and Joe Biden blew up an inherited 2020 secure border from Trump.

No matter. Our Republican experts nevertheless assure us that Trump “is unfit to serve again as President, or indeed in any office of public trust,” while Harris, they insist, has “consistently championed the rule of law, democracy, and our constitutional principles.”

In such Orwellian language, destroying the border and federal immigration law with it, helping to unleash an unprecedented lawfare at election time to ruin a presidential rival, or urging court packing, an end to the electoral college and the senate filibuster are all championing “the rule of law, democracy, and our constitutional principles.”

In sum, as a general rule, anytime we read an election-cycle solicited letter from retired functionaries, replete with their grandiose former titles, we should completely discount it.

They inevitably were rounded up by politicos.

The signees in many cases are likely angling for a return to government; in others, they are loudly virtue-signaling – and in nearly all instances, are usually wrong but will never issue a second letter of apology when their concocted expertise and pretentiousness are thoroughly discredited by subsequent events.

Something remarkable happened to the price of gold back in early 2022 around the time of the Ukraine war: having previously tracked gold ETF inflows to the tick, the price of gold suddenly disconnected and exploded higher even as “paper gold” as some call it, slumped. We showed this for the first time back in April with the following chart which showed the clear decoupling between paper and physical gold in 2022.

A few months later, and two years after gold ETF holdings continued to drop even as the price of gold rose, it finally happened: attempts at brute gold price manipulation via shifts in ETF holdings finally ended, and with gold at all time highs, ETF flows finally turned positive, a move which we noted would send gold surging even higher (it did).

Which brings us to this weekend, and yet another remarkable observation: while gold did correlate very closely with ETF holdings in the years prior to the Ukraine war (regime 1), since then gold has completely lost all correlation with ETF holdings, and instead has been correlating tightly with another data series: Managed Money (i.e., hedge fund) net futures (regime 2).

Of course, it’s not really just hedge fund buying: as we first explained back in 2022, central bank – mostly Chinese central bank – buying was the biggest driver behind gold’s (physical) decoupling with paper holdings and prices (ETFs). But while many central banks keep their purchases hidden from the public and disclose only what they want to disclose, especially in the case of the PBOC, here hedge funds – perhaps due to their ability to collect and trade on “non-public” central bank information – have become the barometer and real-time indicator of central bank purchasing. As such, spot gold prices are now directly correlating with net gold managed futures (Bloomberg ticker CFCDUMMN), as can be seen on the chart above.

But where things get interesting is that even ETF flows are now turning positive, and when combined with continued central bank buying, combined with record Indian gold imports, combined with unprecedented demand for physical in the US, no wonder that gold is hitting new all time highs day after day.

But that’s just the beginning, another reason why gold is set to soar is the Fed’s recent “recalibration”, whereby Powell launched the easing cycle with a jumbo rate cut which gold clearly thought was unnecessary, hence sending gold surging. This is how Rabobank’s Benjamin Picton put it this morning:

Gold prices traded at fresh all-time highs on Friday, closing well above the $2600/oz barrier. The rally in gold seems unstoppable at this point and resets on the all-time-high are becoming a frequent occurrence. This perhaps comes as no surprise given that the Fed wrong-footed many economists to start the easing cycle with a supersized rate cut even as growth has remained strong, inflation above target and the Federal deficit at eyewatering levels.

What was odd about the surge in gold, which has been the second best performing assets with just Bitcoin outperforming since last week’s rate cut…

… is that gold jumped even as Treasuries sank. As Picton put it, “usually we would expect a zero-yield asset that some disparagingly refer to as a “pet rock” to perform poorly when market yields are rising. Equity markets responded to the lift in long-end yields by closing the session flat in the case of the ‘money today’ Dow Jones, and down by 1/3rd of a percentage point in the case of the ‘money tomorrow’ (we hope!) NASDAQ.”

“So why was gold insensitive to higher yields while equities were not”, the Rabobank strategist asked rhetorically? His answer…

Perhaps markets simply picked up on Christine Lagarde’s comments in Washington about the parallels between the 2020s and the 1920s? Particularly the bit where she cautioned that adherence to the gold standard in the 1920s induced deflation (true) and contributed to the rise of economic nationalism.

Lagarde’s point is that deflation is worse than the alternative of inflation; so clearly it makes sense to get long “pet rock” while the world’s second most powerful central banker is openly hinting that she views the erosion of your salary and savings as the lesser of two evils. And speaking of pet rock, it is up 140% since it was dubbed that by the WSJ’s Jason Zweig in 2015.

But fundamentals aside, a far more proximal reason to turn bullish on gold has emerged, and it has to do with what we said up top: over the past 2 years, gold ETF holdings had declined, even as the price of gold rose. Well, not any more.

As Goldman’s ETF desk wrote in its weekly rundown report (full report available to pro subs) “the desk has been fielding increased demand for spot gold exposure via ETFs like GLD, GLDM, and IAU, and gold miners exposure via GDX” and as a result, the Goldman desk has acted as a better buyer across the gold complex, which aligns with broader market sentiment – both GLD & IAU haven’t witnessed an outflow in nearly a month. Since the middle of August, +$3.3bn has been added to Gold ETFs. In other words, it’s not just central banks and hedge funds that are ravenously buying gold: the biggest driver of gold upside in the decade prior to the Ukraine war, ETFs, are about to join the fray too!

And then there is silver.

According to Goldman Trader Robert Quinn, while gold ETFs are finally rising, silver managed money longs (which recall have been the big driver in gold prices in the past two years) are soaring.

As Quinn observes, prior to the September Federal Reserve meeting, “speculative positioning in Silver futures surged, and Managed Money dominated. With Producers reiterating a tighter physical balance, lower US real rates and the Dollar served as incremental catalysts. After the Fed delivered a 50bps cut, silver price extended higher however flow indicators were more mixed.” Here are some more observations from the Goldman trader (full note available here):

• Prior to the September Federal Reserve meeting, speculative positioning in Silver futures surged. Per Commitment of Traders, combined Managed Money, Other, and Non-Reportable net length jumped $2.6bn from September 10th – 17th as price gained 8%. For context, the increase marked the 2nd largest over the past 5 years. New longs were the sole driver.
• Managed Money dominated. Managed Money purchased $2.3bn. Since late 2019, Managed Money Silver buying exceeded $2bn in only 3 other instances.

• With producers reiterating a tighter physical balance, lower US real rates and the Dollar served as incremental catalysts. In a presentation, Fresnillo highlighted strong end-user demand due to 5G, solar, automotive, and nanotechnology. In addition, US 5 year real rates decreased 8bps and the Dollar Index lost -0.7%, sparking investor appetite.
• After the Fed delivered, Silver price extended higher. During September 17th – 20th, Silver rose 1.7%.
• However flows were more mixed. GS Futures Strategists’ CTA model exhibited long augmentation. That said, ETF Holders continued to sell into strength, similar to what they have been doing with gold until they finally capitulated in recent months. This, too, won’t last. Moreover, 3 month implied volatility cheapened while normalized 25 delta put-call skew richened. Call holders potentially booked profits.

• That said, the term structure has yet to reflect a stressed system. Throughout the aforementioned price strength, December-March Silver actually declined. This seemed consistent with several indicators. First, Producer, Processor, Merchant, and User shorts resided below average on September 17th. Secondly, COMEX inventories only recently retraced from a 1 year peak. Thus despite Fresnillo’s rhetoric, physical participants possess capacity to facilitate more speculative longs.

Of course, just like with the gold meltup, there is only so much physical that sellers and shorts can unload, lowering the price, before silver too explodes higher, and since its convexity is much greater than that of gold, it wouldn’t be surprising to see silver outperform gold substantially in the coming year.

Finally, those curious what Goldman’s commodity research desk thinks, here is a link to the team’s latest note “Fed Support to Gold Prices; The Rates Relationship Isn’t Broken” in which they make two points which ZH readers have known for a long time: “first common argument against Fed support to gold prices is that the traditional relationship between interest rates and gold prices would have broken down, as suggested by the divergence in their levels since 2022…

… the perceived disconnect between gold prices and interest rates is actually due to increased gold purchases by EM central banks concerned about US financial sanctions and rising US debt. This surge in central bank demand has elevated gold prices and reset the relationship between gold prices and absolute interest rate levels.”

They then go on with the second common argument against gold which is that “the gold market would already have fully priced in the Fed interest rate cutting cycle. While the bond market has priced in more interest rate cuts than our economists’ baseline forecast (for three consecutive cuts in 2024, and an eventual terminal rate of 3.25-35%), we find that ETFs backed by physical gold holdings rise only gradually as the Fed policy rate comes down. Specifically, we find that the boost to ETF holdings from a policy rate cut rises gradually for about six months using a statistical model, which also controls for policy rate expectations proxied with the US 2-year Treasury rate.1 Increases in ETF holdings matter for gold prices.”

And here is a stunning admission from Goldman gold analyst Lina Thomas, which until a few years ago could be heard only among the “tinfoil” gold bug blogosphere: “gold ETFs are fully backed by “allocated” physical gold, rising ETF holdings reduce the physical supply of gold available to the market (in contrast to paper gold, which is typically not backed by physical gold).”

Translation: the surge in gold ETF buying is only getting started.

So, in light of the above, Goldman’s commodity team reiterates its “long gold trading recommendation and our price target of $2,700/toz by early 2025” for three reasons:

1. We believe that the tripling in central bank purchases since mid-2022 on fears about US financial sanctions and US sovereign debt is structural and will continue, reported or unreported.
2. Fed rate cuts are poised to bring Western capital back into gold ETFs, a component largely absent of the sharp gold rally observed in the last two years. Since ETF holdings only increase gradually as the Fed cuts, this upside is not yet fully priced in.
3. Gold offers significant hedging value to portfolios against geopolitical shocks including tariffs, Fed subordination risk, debt fears, and recessionary risks. Our analysis suggests an additional upside of 15% in gold prices under a hypothetical rise in financial sanctions equal to the rise seen since 2021 and a similar upside if US CDS spreads widen by 1 standard deviation (13bps) amid rising debt concerns.

Add to this the technicals and flow issues described above and the move in gold is just getting started.

More in the full notes available to pro subs here, here and here.

Authored by James Howard Kunstler,

Wheezing Past The Graveyard

“The Democrats are self-immolating on the altar of their own tenuous relationship with common decency.”

– Tom Luongo

What could go wrong? Probably more than you might imagine. We have just turned the corner into autumn. Now, things get serious, even gravely dark. America has never been so into dancing skeletons and morbidity. The small-town yards are filling up with inflatable signifiers of hell and death. Don’t you wonder what all this signifies besides good old family fun? The zeitgeist maybe having a little sport with us, you think?

We are chiefly preoccupied with our badly dysfunctional self-governance, of course, and the method for periodically revising it, which we call an election. Nobody has confidence in the process, which has acquired so many layers of absurd, needless complexity for the sole purpose of perverting the outcome that every lawyer in the land will have a hefty guaranteed annual income in the probably futile effort to sort it out come November 6. There is your hell-scape, with overtones of death on a pale horse. . .  and all. Chaos. . . riots. . . anarchy. . . civil war.

The threat of World War Three may have abated for the moment, but in a peculiar and disconcerting way, viz. a coup in the executive branch. The gadfly Col. Lawrence Wilkerson, long ago chief-of-staff to Sec’y of State Colin Powell, reports that the Pentagon has cancelled “Joe Biden,” that is, taken him out of the decision-loop for anything. Well, you ask yourself, how is it possible he had even remained remotely close to any decision-loop this long, in any case, given the problem of his obviously broken brain? But now, it is unofficially official: just eat your mint-chocolate ice-cream and shut up, and let Dr. Jill run those “cabinet meeting” photo ops.

According to Col. Wilkerson, Sec’y of Defense Lloyd Austin told the “president” to his face that there will be no flinging of US-supplied long-range missiles from Ukraine “deep into Russia,” as the neocon-infested White House been chattering about endlessly. Wiser heads deep in the DOD HQ have decided the matter. Lump it, if you must, Tony Blinken and Jake Sullivan. The Russians’ “red-line” on such a caper is so wide you can see it from the International Space Station — that is, if you’re an astronaut marooned up there due to combined NASA/Boeing incompetence. . . but that’s another story.

Meanwhile, UK Prime Minister Keir Starmer was all revved up for the missile operation and flew to Washington for a one-to-one meet-up with “JB” to get the go-ahead. The Brits are avid for another World War. The last two went so well for them that they kissed their vast empire goodbye. Now they want to kiss goodbye their sceptered isle itself, which has almost no economy left and is overrun by cultural hostiles who are not into Shakespeare. The Brits’ floundering government is a posse of monomaniacs fixated on defeating Russia which, at this point in history, is like a dormouse (Glis glis) facing down a brown bear (Ursus arctos).

“Joe Biden,” reportedly “furious” at losing his executive power, was constrained to tell Mr. Starmer that the missile strike op was off, which left the UK PM miffed that he had crossed the ocean for no reason. Who knows, the Brits are so nuts these days that perhaps they’ll try to pull it off on their own. Mr. Zelensky, the no-longer-elected leader of Ukraine was begging them to try it because Ukraine has nothing left. NATO as a whole really has nothing left, either. Not much of a combined military, scant munitions left in the cupboard, and no will to wage war among the depressed citizens of its member nations.

There is nothing left except to come to terms on a settlement that will leave Ukraine not a member of NATO. The entire affair has been a humiliation for NATO and America, especially for the “Joe Biden” management team (whatever it actually consists of these days). The longer they refuse to engage in talks, the less of Ukraine will be left as a sovereign entity — having proven to the world that its sovereignty rests solely on its capacity to be used as a catspaw by the American neocon / intel blob. You’re reminded that for seventy years prior to 2014, Ukraine was not a problem for anyone until we made it a problem on-purpose — our purpose being idiotic and malicious — and Ukraine could, in theory, revert to not being a problem for anyone again. Wouldn’t that be wonderful?

The neocon / intel blob’s other catspaw (domestic version), candidate Kamala Harris, is promising all kinds of good things “when [she] is in-office.” For some reason, nobody on The New York Times’s enormous staff of Ivy League germinated journalist-geniuses has informed Ms. Harris that she is actually in-office now, and has been since 1/20/2021. Why no good things for us plebes all these many months? No rainbows, unicorns, tax cuts, or ten-pound blocks of government cheese? Nothing but a disintegrating dollar, floods of savage mutts crossing the border and landing everywhere from Springfield, Ohio, to Nantucket, and endless raging bullshit about fighting “misinformation” — i.e., any idea that contradicts the Democratic Party’s agenda for assisted national suicide.

Ms. Harris’s gaslight-powered campaign has lost its loft in recent days, its most newsworthy event being last week’s cuddle hour with America’s official Care-Bear, Oprah. . . because, you see, there is nothing left except to pander to the emotional void induced by Woke-ism in the desperately needy minds of X-million voters of the birthing-person persuasion — especially among those unhappy souls who never got around to the birthing. Ms. Harris’s loathsome accessory, Tim Walz, has performed so discordantly that the campaign had to hang him in a closet somewhere, along with all his assorted skeletons, and lock the door.

As ever, October surprises await: monsters, demons, ghouls, shrieking ghosts, the walking dead, and all the paid-up minions of the teachers’ union.

After last week’s chaotic dumps and pumps across various asset classes amid Powell’s comments, a giant ‘quad witch’ OpEx, and mean-reverting FedSpeak, today saw markets take a pause (of sorts) with stocks, bonds, the dollar, gold, and crypto all relatively flat close-to-close…

…with only crude oil showing any real action – monkeyhammered lower for no apparently good reason…

Source: Bloomberg

Today’s apparently calm demeanour perhaps reflects anxious traders gearing up for a pretty busy week of ‘hard’ and ‘soft’ data, including the Thursday’s durable goods report, Friday’s PCE inflation report, plus the Consumer Confidence survey and Richmond Fed survey tomorrow.

The vol market is showing nervousness (and the election is well and truly priced in)…

Source: Bloomberg

All the US majors plunged as European PMIs hit at the European open (ugly across the board). Then futs rallied into the US open, only to be sold again with Small Caps the biggest losers on the day. Of course, we managed a new closing high for both The Dow and S&P 500 though…

Mag7 stocks continued in their post-Powell surge wedge…

Source: Bloomberg

A somewhat chaotic looking day under the hood in stocks with energy puking at the open, then panic bid, then dumped into the European close. Discretionary outperformed as Real Estate lagged…

Source: Bloomberg

Stocks and bonds remain significantly decoupled since the July FOMC meeting…

Source: Bloomberg

Treasury yields were relatively unchanged close-to-close, despite selling pressure during the EU session and buying during US…

Source: Bloomberg

The yield curve continues to steepen dramatically with 2s10s up yo +16bps today – its steepest since June 2022…

Source: Bloomberg

Not exactly a good sign for those hoping that The Fed will bring down mortgage rates.

The dollar also ended flat on the day after surging on the EU PMIs (EUR weakness) and then fading back into its recent range…

Source: Bloomberg

Gold limped a bit higher – another record high but was basically unchanged…

Source: Bloomberg

Bitcoin ripped higher overnight (topping $64,500) before fading back to almost unchanged…

Source: Bloomberg

Ethereum continues to outperform Bitcoin, surging up to one-month highs on a relative basis…

Source: Bloomberg

Finally, this just happened…

Source: Bloomberg

That is a sudden surge in the market’s perception of USA’s short-term sovereign credit risk.

Are traders starting to worry about Kamalanomics (Communism?)

It has been one month since the arrest by French authorities of Pavel Durov, the billionaire co-founder and CEO of the Telegram messaging app, on charges of allegedly failing to act against criminals using his platform. He’s still in France after being released on a five-million-euro ($5.6 million) bail and must check in with police twice a week.

He very quickly began cooperating with the French government, it appears, though his lawyer decried it as “absurd” and Telegram supporters and free speech advocates blasted the efforts at state censorship. “It is totally absurd to think that the head of a social network… could be involved in criminal acts that could be committed on the messaging service,” Durov’s lawyer David-Olivier Kaminski had said. The question from the start was: why the highly unusual effort to prosecute a CEO directly instead of bringing legal action against the company as a whole? (the normative route)

The whole spectacle of him being hauled into custody after disembarking from his private jet over the possibility that individuals were using the world’s largest messaging app for criminal activity also seemed designed to ‘send a message’ from Western governments and create a chilling effect. We explored this scenario in “Musk Should Be Nervous” – Deep State Lackey Admits Real Target Following Telegram Founder’s Arrest.

On Monday Durov made a significant announcement which is clearly the result of his ongoing legal ordeal in France. He said Telegram has removed more “problematic content” at this point. He further acknowledged in the new statement that the app’s search feature “has been abused by people who violated our terms of service to sell illegal goods.”

“Over the past few weeks” his staff has been carefully searching through the platform using artificial intelligence to ensure “all the problematic content we identified in Search is no longer accessible,” he explained.

Importantly, he then said Telegram has changed its terms of service and privacy policy, now making clear that suspected criminals and policy violators can now have their personal details handed over to authorities, including internet IP addresses and phone numbers “in response to valid legal requests.”

The founder and CEO added that: “We won’t let bad actors jeopardize the integrity of our platform for almost a billion users.”

While the United Arab Emirates-based platform boasts nearly one billion monthly active users, that could change with this new policy update. There could be some degree of a user exodus over ‘trust’ and data security at a moment Durov is still essentially a hostage of the French state.

Durov was detained by the National Anti-Fraud Office (ONAF) over the alleged facilitation of crimes including terrorism, narcotics trafficking, and fraud. “On his platform, he allowed an incalculable number of offences and crimes to be committed, for which he did nothing to moderate or cooperate,” a source told TF1 TV.

There are also allegations of widespread child exploitation, and Durov has been repeatedly accused of ignoring outreach from child safety watchdogs.

But ultimately the arrest was characterized by Megaupload founder Kim Dotcom as part of the “crackdown against free speech.”

Authored by Adam Sharp via DailyReckoning.com,

I’ve had at least a dozen Uber drivers pitch me on suspect investments. For a while, it seemed like every trip came with free, and invariably horrible, picks.

Interestingly, I’ve never had a driver, or a barber for that matter, pitch me on gold and silver. Despite gold regularly breaking out to new highs, we really haven’t yet seen any signs of a typical retail mania.

Looking at Google trends, there are no signs of increased investor interest in precious metals. Here’s a chart showing Google search volume for “gold price” over the last year.

Barely any movement. Other search terms such as “buy gold online”, “gold etf”, which would indicate growing interest, are similarly flat.

Despite solid performance, gold and silver are not yet hot commodities. A 2023 survey by Bank of America showed that 71% of financial advisors had a 0-1% allocation to gold. Only 27% had a 1-5% exposure rate.

Perhaps even worse, only 2% of advisors report a 5-10% allocation to gold. Madness.

So if investors aren’t snatching up all the gold, what’s driving the price up?

Central bankers are buying in droves. The chart below shows purchases by country in 2024 through July.

According to the World Gold Council, central banks added 37 tons in July alone. That’s up 206% month-over-month.

There’s no sign of central banks slowing their buying anytime soon. It’s also important to note that we don’t have great data on Russia or China, which could both be buying substantially more bullion than reported.

There’s rich irony in the fact that the primary gold bulls today aren’t individual investors, it’s the guys running the fiat printers. This is an insider buy signal at a global scale. And these aren’t fickle day traders in for a quick flip. These central banks have a new reserve policy, and it appears to heavily favor gold.

Gold Re-Emerges as a Reserve Asset

Over the past 75 years, the U.S. dollar emerged as the world’s leading international reserve asset. It eclipsed gold in the early 1990’s and remains dominant to this day. But the trend has finally flipped. Today, gold as a percent of international reserves is climbing, and the dollar is falling.

This is a monumentally important trend. De-dollarization is actually beginning to happen. But central banks aren’t switching to the Chinese renminbi or the euro, they’re reverting to classic hard currency: gold. It’s re-goldification on a massive scale.

The era of fiat dominance may well be in its twilight years. And good riddance. Being home to the world’s reserve currency has hollowed out the U.S. manufacturing base and caused spending to spiral out of control.

Metals Mania Starts at $3k Gold

All of this helps confirm my view that we are still very early on precious metals. Fed printing operations are just now about to start back up. QE will eventually reignite, and the scale will likely dwarf previous episodes within a few years. Depending on who wins the White House, a stimulus program may be in the works as well.

Gold and silver are absolutely crucial aspects of a modern portfolio, and are still wildly under-owned by investors. In the next 5 years, we will likely see a number of sovereign debt crises, and/or sustained inflation above 10% in a number of countries. The piles of government debt have simply grown out of control.

Lower interest rates will help cut the debt servicing costs (interest expenses). But there’s a good chance it will also reaccelerate inflation. No matter which path we choose, the piper will be paid for past excesses.

Eventually, we will experience a true precious metal mania. I suspect it will begin when gold hits $3,000 and silver breaks out above $49.45, its 1980 all-time high. Everyone will be buzzing about gold and silver. Your neighbors, friends, and colleagues. And it will be glorious.

Fortunately, we’re not there yet and still have time to prepare. We may even get a pullback after gold’s impressive run from $2,000 in Feb 2024 to $2,569 as I write this on Sept 17 2024. But then again, we may not…

The revival of nuclear power generation could get an enormous boost as more than a dozen of the world’s largest banks and financial institutions are pledging support to new projects aimed at tripling global nuclear energy capacity by mid-century. 

Financial Times reports that White House climate policy adviser John Podesta and fourteen of the world’s largest banks and financial institutions, including Bank of America, Barclays, BNP Paribas, Citi, Morgan Stanley, and Goldman Sachs, on Monday are expected to support a COP28 declaration outlined in late 2023 to triple nuclear energy capacity by 2050. 

The banks appear to be aligning with COP28’s “Declaration to Triple Nuclear Energy,” which specifies, “Recognizing the key role of nuclear energy in achieving global net-zero greenhouse gas emissions/carbon neutrality by or around mid-century and in keeping a 1.5°C limit on temperature rise within reach.” 

No specifics will be mentioned today about how the banks plan to support nuclear power projects, but FT quoted energy experts who said this support has been long-awaited as atomic power will be crucial to power AI data centers, electric vehicles, and other quickly emerging electrification trends. 

“This event is going to be a game-changer,” said George Borovas, head of the nuclear practice at law firm Hunton Andrews Kurth and a World Nuclear Association board member. He said that until now, banks have discovered that funding new nuclear projects is very tricky. 

Borovas said, “Banks at their senior management level would just say, we don’t understand anything about nuclear. We just know it’s very difficult, very controversial.” He added that support from the banks would allow nuclear power to be “part of the solution for climate change” rather than “a necessary evil.”

Today’s event with Podesta and big banks comes just days after the owner of Three Mile Island announced plans to invest about $1.6 billion to revive the nuclear power plant near Middletown, Pa., and locked in a 20-year energy contract to sell the power to Microsoft. Microsoft is seeking low-cost ‘green’ power to supply regional artificial intelligence data centers. 

This momentum continues our “Next AI Trade,” which we pointed out in April of this year, where we outlined various investment opportunities for powering up America, which are already underway. It goes back nearly four years ago to when we first told readers, “Buy Uranium: Is This The Beginning Of The Next ESG Craze.”

BNP told FT there was “no scenario” in which the world could achieve carbon neutrality by 2050 without atomic power. Barclays noted that its nuclear support comes from wind and solar power generation, which is unreliable on grids.

FT noted that other financial institutions expressing support for nuclear power include Abu Dhabi Commercial Bank, Ares Management, Brookfield, Crédit Agricole CIB, Guggenheim Securities, Rothschild & Co, Segra Capital Management, and Société Générale.

Meanwhile, the West needs to wake up to the radical climate activists within governments who have pushed damaging de-growth policies by targeting fossil fuels. These policies have driven energy prices sky-high, while Asia continues to operate fossil fuel power plants and expand nuclear capacity. In other words, these climate activists are essentially allowing China to gain more economic power while the West sputters into energy chaos. It’s time to reverse this nonsense.

Furthermore, here’s Goldman’s latest note on uranium prices that are only expected to “stairstep” higher over time. 

Authored by Jonathan Turley,

Below is my column in The Hill on a growing crisis at the Supreme Court for Chief Justice John Roberts. A new breach of confidentiality shows cultural crisis at the Court. While the earlier leaking of the Dobbs decision could have come from a clerk, much of the recent information could only have originated with a justice.

Here is the column:

Chief Justice John Roberts has always been “a man more sinned against than sinning.”

That line from Shakespeare’s “King Lear” seems increasingly apt for the head of our highest court.

Roberts was installed almost exactly 20 years ago and soon found himself grappling with a series of controversies that have rocked the court as an institution.

He is now faced with another monumental scandal, after the New York Times published leaked confidential information that could only have come from one of the nine members of the court.

By most accounts, Roberts is popular with his colleagues and someone with an unquestioning institutional knowledge and loyalty. He is, in many respects, the ideal chief justice: engaging, empathetic, and unfailingly respectful of the court’s justices and staff.

Roberts has been chief justice during some of the court’s most contentious times.

Major decisions like overturning Roe v. Wade (which Roberts sought to avoid) have galvanized many against the court.

According to recent polling, fewer than half of Americans (47 percent) hold a favorable opinion of the court (51 percent have an unfavorable view). Of course, that level of support should inspire envy in the court’s critics in Congress (18 percent approval) and the media (which only 32 percent trust).

Some, however, want to express their dissatisfaction more directly and even permanently. This week, Alaskan Panos Anastasiou, 76, was indicted with 22 federal charges for threatening to torture and kill the six conservative justices.

Another man, Nicolas Roske, 28, will go on trial next June for attempting to assassinate Associate Justice Brett Kavanaugh.

In the meantime, law professors have rallied the mob, calling for them to be more aggressive against the conservative justices and even calling for Congress to cut off their air conditioning to make them retire.

Politicians have also fueled the rage against the court. On one infamous occasion, Senate Majority Leader Chuck Schumer (D-N.Y.) declared in front of the Supreme Court, “I want to tell you, [Neil] Gorsuch, I want to tell you, [Brett] Kavanaugh, you have released the whirlwind, and you will pay the price.”

Yet, it is what has occurred inside the court that should be most troubling for Roberts. On May 2, 2022, someone inside the court leaked to Politico a copy of the draft of the opinion in Dobbs v. Jackson Women’s Health Organization overturning Roe v. Wade.

It was one of the greatest breaches of ethics in the court’s history. The subsequent investigation failed to produce any charges for the culprit or culprits.

Now, the New York Times has published highly detailed accounts of the internal deliberations of the court. The account seemed largely directed at the conservative justices and Roberts.

Some of the information on deliberations in three cases (Trump v. Anderson, Fischer v. United States, and Trump v. United States) had to come either directly or indirectly from a justice.

Some of these deliberations were confined to members of the court.

Seeing a pattern in this and past leaks, one law professor, Josh Blackmun, even went so far as to suggest that it is “likely that [Justice Elena] Kagan, or at least Kagan surrogates, are behind these leaks.”

That remains pure speculation.

Yet after the earlier Dobbs leak, Roberts is now dealing with leaks coming out of the confidential conference sessions and memoranda of the justices. This occurs after Roberts pledged that security protocols had been strengthened to protect confidentiality.

The disclosure of this information to third parties violates Canon 4(D)(5) of judicial ethics: “A judge should not disclose or use nonpublic information acquired in a judicial capacity for any purpose unrelated to the judge’s official duties.”

Roberts and the court have long maintained that judicial ethics rules that apply to other federal judges are merely advisory for them.

However, some in Congress are now pushing for new binding ethics rules that could make fundamental changes to the court. Justice Kagan is supporting the ethical changes, which would allow lower court judges to render judgment on the justices. Justice Ketanji Brown Jackson also declared publicly that she does not “have any problem” with an enforceable ethics code for the Supreme Court.

A truly “enforceable” code would presumably allow the lower court judges appointed by the chief justice to compel the removal of a justice from a given case. That could flip the outcome on a closely divided court.

Given the latest leak, what would such a panel do with a justice who has breached the confidentiality of internal judicial deliberations? Under the Constitution, a justice can be removed by Congress only through impeachment. Impeachment of a justice has happened only once, in 1805, when Associate Justice Samuel Chase was acquitted.

Roberts has the demeanor and decency of a great chief justice. Despite those strengths, however, some are now wondering if he has the drive and determination to confront his colleagues on a worsening situation at the court. Many years ago, I believed that Roberts erred in failing to publicly rebuke Justice Samuel Alito for publicly displaying disagreement with President Barack Obama during a State of the Union address. Although I was sympathetic with Alito’s objections to Obama’s misleading statements about the Citizens United ruling, it was still a breach of judicial decorum.

Roberts is a good chief in bad times. He can hardly be blamed for the alleged abandonment of the most fundamental ethical principles by justices or clerks. Yet, the court is now in an undeniable crisis of faith. For decades, institutional faith and fealty have maintained confidentiality and civility. Once again, that tradition has been shattered by the reckless and self-serving conduct of those entrusted with the court’s business.

For a man who truly reveres the court, it is an almost Lear-like betrayal of an isolated and even tragic figure. It is time for an institutional reckoning for Roberts in calling his colleagues to account.

While there have been a few prior leaks, the Supreme Court has been largely immune from the weaponized leaks so characteristic of Washington. In a city that floats on leaks, the court was an island of integrity. And more has been lost at the court than just confidentiality. There is a loss of confidence, even innocence, at an institution that once aspired to be something more than a source for the New York Times.

*  *  *

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of “The Indispensable Right: Free Speech in an Age of Rage” (Simon & Schuster).