Category: zerohedge

Blain’s Morning Porridge submitted by Bill Blain

Thanks to all the Porridge Readers who have forwarded me the Bank of England Job, suggesting I apply. Not for me…

A few years ago I used to think I was being hilariously witty when I wrote about the Global Financial Crisis 2007-2027.

I fear I might not have joking! It doesn’t necessarily mean we’re in for 8 more years of austerity, doom and gloom. Fortunes will continue be won and lost. Markets will go up and down. There will be plenty more to write about in terms of extraordinary corporate madness – like Tesla’s new convertible issue (Please!) – and credulous markets. I’m not convinced there will be the global financial reset many fear. 

But there are going to be long-term tectonic finance shifts. The next few years will likely see a complete turnaround in the basics of current markets. Be prepared. I suspect we’ve hit peak greed. There will be significant political shifts and reinvention – populism won’t last long. I also expect a massive change in the role of central banks, and their inter-reaction with governments, to drive clearer economic goals and objectives. The age of inflation targeting is over – we are going to undergo profound change after the scale of the last 10-years mistakes becomes apparent. It’s going to be bad news for some, but great for others.

I suspect Green/environmental themes will also come to the fore as the scale of what we’ve done to ourselves becomes apparent – and our kids will thank us for finally waking up to our responsibilities. (Perhaps the Climate Change Deniers should remember that capitalism is about taking responsibility!) As soon as I finish the Morning Porridge, I’ll be due dilligencing a carbon sequestration deal that looks very interesting and an industry of the future!

There are a whole series of things the week that have triggered this morning’s Friday rant:

• Billionaire Ray Dalio’s comments on the inevitability of Modern Monetary Theory, and his acceptance of the need for taxing the rich, is one aspect of the new financial reality. The imperative for change in the actions of central banks as they are stuck in zero rates is one thing. The fact his thoughts are echoed my many other leading economists, but also by the rising star of politics, Alexandria Ocasio-Cortez, is fascinating.
• I was stuck by the Sob-Story of a Chinese mother who blubbed she thought the $6mm she paid a corrupt sports coach was sponsorship to get her daughter into Stanford University. The video her daughter made was much more revealing – justifying her privileged admission to her “followers” on the basis of hard work she never did.
• Or how about the billionaire boss of US pharma firm INSYS, John Kapoor, going to jail for bribing doctors to overprescribe opioids – now one of the largest killers in the US. What shocks me is the numbers of doctors happy to take $150k per year from Insys not blinking as they were killing their patients!
• This week in LA was the “Predators Ball” in Los Angeles – the Milken Institute’s annual gab-fest of the great and greedy of the markets. It’s been described as yet another gathering of “Billionaires telling Millionaires what the ordinary people think”. The theme of the conference was “Driving Shared Prosperity”. (WTF does that mean?)  Some of the participant quotes are shocking – but at least the Billionaire message was very simple: Capitalism is Good, Venezuela and Russia prove that Socialism is very bad – taxing billionaires is Socialist and therefore very bad. The conference came complete with a sound garden and a puppy petting park – because petting puppies “reduces blood pressure, promotes focused inter-reactions, and stimulates problem solving.” BARF.

And then there was a discussion I had with a client this week. He’s a very successful fund manager who has been doing well. He was enthused, interested, and keen to explore new investment ideas. Over coffees we got onto talking about his young family, the fact he doesn’t see enough of them, the misery of his 1 hour each way commute, and his feeling of constant struggle – his earnings seem to just cover the mortgage, fees, schools, the cars and all the other sundries of modern life. He is time poor and feels financially stretched. He’s certainly in the top 0.2% of UK earners, but feels he’s just making do.

Most of us will know exactly how he feels. He is not alone. Apparently, you need a £250k income to survive in London these days. San Francisco is even more expensive.

What is in store for our kids? Even after we poured money into their education and they’ve found “good” jobs, they struggle to pay rent on grotty flats (with little expectation of buying their own), and are lumbered with student debt. What have they got to look forward to? 30/40 years of clinging on before retiring on miserable pensions they’ve struggled to save in the heartless gig economy? And these are the better off kids..

Its no wonder there is so much talk about social revolution across markets today. We need to make things better. We are confronted with political failure across the occidental economies – the UK paralysed by Brexit, Europe in sway to populism, and the US – enough said. Many of my market colleagues agree with my analysis we face a summer of increasing protest and struggle. History tells us that times of such social imbalance and political impotence spawn the most dangerous event risks.

Let’s go back to the Predators’ Ball in LA. Conference founder Mike Milken is now a philanthropic legend supporting medical causes. Those of us of a certain age remember him as the king of the junk bonds who was sent down to sew mailbags for Uncle Sam after his shady dealings at Drexel Burnham Lambert were exposed in the 1980s. He remains insanely wealthy.  (Some say he was the model for Gorden Gecko – check it yourself…)

Apparently, the conference highlight this year was a 1977 video of Margaret Thatcher telling every one “Capitalism has a moral basis… to be free, you have to be capitalist.”

Thatcher made a good point in 1977 as she prescribed her drastic cure for a very sick and troubled UK in the iron grip of the unions, spiralling from daily power cuts towards the dire Winter of Discontent, before her election victory in 1979. But, I am sure Thatcher would be shocked by Capitalism today. Capitalism is justifiably under attack because of its excesses. Let’s not think it’s a battle between humanity and few billionaires – but what the 0.01% elites have come to represent looks crass, shoddy and vulgar. They are a tiny minority.

The issues should not be about social revolution against the insanely wealthy – but making everyone better. (If they were smart, the wealthy would agree.) At the core of the crisis is income inequality and a populist leftward-shift fuelled by the growing and very visible divide between the haves and the have nots. Firebrands like Democrat Alexandria Ocasio-Cortez have seized the imagination. She is clearly scaring the billionaire class – because they are doing their utmost to dismiss her as a blundering momentary fad. But, she and the rest of the Social Democrats – or Socialists as the right wing are demonising them – are getting airtime, and hitting the pulse of the stretched middle who are nervous on their futures, their families, healthcare, education, taxes and jobs.

At heart, Democrats in the US, and most Labour voters here in the UK, remain Capitalists at heart – taking responsibility for themselves and striving for better. Voting from AOC or for Jeremy Corbyn does not mean Moscow wins and we all start singing the Red Flag. (Disclosure: I am Scottish, that makes me genetically a socialist, but the politician I most admire is probably Thatcher, even though we were chanting: “Maggie Thatcher, Milk Snatcher” on the first Demo I went on!)

When I was at university I was a socialist. Then I joined the city, I reaped the benefits of capitalism and embraced it. But, Its difficult to support Billionaire capitalism when ostentatious wealth is flouted in our faces, our monied “betters” won’t embrace society, and the weak and struggling of society are treated with contempt. (I suppose I had some kind of Road to Damascus moment when I wrote about the shocking poverty, homelessness and drug abuse in San Francisco earlier this year.)

The new Democratic/Socialist agenda is not that shocking – it boils down to upskilling, an educational rebuild, reaffirming opportunities for all, and providing training to create a workforce prepped to succeed in the new modern/robotic environment, and able to be more productive in a competitive/disruptive global marketplace. It aims to create future security by investing across infrastructure to future proof the economy. It aims to cover and provide strong and stable healthcare for all. These are all common goods to benefit the whole of society.

What’s not to like?

The horror is because the Democrats propose taxing the rich to pay for it. The sheer effrontery! They don’t believe in trickle down. They don’t believe rich entrepreneurs create jobs and pay more to their workers. They dare to suggest their social betters pay minimum wages to their workers and pay themselves obscene amounts!

They do that because its true…

Ray Dalio – the hedge fund manager who paid himself $2 bln in 2018 – has noted the change in the wind. Despite that $2 bln paycheck he admits capitalism is flawed and needs reform. He accepts he will pay greater taxes.

Moreover the predicts an enormous shift in policy responses –Monetary Policy 3 and Modern Monetary Theory (MMT) as inevitable consequences of failed monetary experimentation these past few years. These are dangerous concepts – governments spending money is always open to abuse. Issues from simply writing off the vast amounts of public debt held by central banks to generating public consumption through directly paying consumers to consume could be on the table. You can read Dalio here.

There are going to be fascinating times ahead! Right… where is that pitch on Carbon Sequestration….

via ZeroHedge News http://bit.ly/2GRPk1N Tyler Durden

Though it hasn’t made much of a difference in the share price, the Wall Street Journal has been publishing one groundbreaking (and, for Boeing, deeply embarrassing) scoop after another about how the aerospace company either mislead its largest customer and the FAA about disabling critical safety alerts on the 737 MAX 8, or simply wasn’t aware that the alerts had been disabled (it’s not entirely clear which is the case).

And on Friday, with Boeing shares still inexplicably up double-digits on the year despite new orders having ground to a halt and the grounding of the 737 MAX having no end in sight, WSJ published its latest bombshell about Boeing’s mishandling of the MCAS rollout, reporting that Boeing had limited the role of test pilots in the final stages of development. These pilots also lacked key details about the system and, importantly, the alerts that would signal to pilots when MCAS was malfunctioning.

This is extremely puzzling, because as has previously been reported, MCAS marked an unprecedented level of automation in the new generation of the 737. One would think Boeing would want to get as much human input as possible to stress test the system, especially since the new Boeing jets would rely on a single sensor to feed into the system.

For what it’s worth, Boeing has denied the report. However, given WSJ‘s track record on Boeing-related scoops, it appears likely that this revelation will lead to increased scrutiny of Boeing from the FAA as the aerospace company tries to win approval for its updated MCAS software from the FAA.

As a result, Boeing test pilots and senior pilots involved in the MAX’s development didn’t receive detailed briefings about how fast or steeply the automated system known as MCAS could push down a plane’s nose, these people said. Nor were they informed that the system relied on a single sensor—rather than two—to verify the accuracy of incoming data about the angle of a plane’s nose, they added.
Investigators have linked faulty sensor data to the flight-control system’s misfire, which led to crashes in Indonesia and Ethiopia that took 346 lives.

The extent of pilots’ lack of involvement hasn’t been previously reported and could bring fresh scrutiny from investigators and regulators already looking into Boeing’s design and engineering practices. It isn’t clear whether greater pilot participation would have altered the ultimate design of the flight-control system. But the scaling back of pilots’ involvement and their lack of detailed knowledge about the plane’s system add to the list of questions about engineering and design practices facing the Chicago-based aerospace giant.
A Boeing spokesman said test pilots and senior pilots didn’t have less of a role in the design, briefing and testing of the final version of MCAS when compared with their counterparts who worked on previous models featuring important new systems.

“Listening to pilots is an important aspect of our work,” the spokesman said. “Their experienced input is front and center in our mind when we develop airplanes. We share a common priority – safety – and we listen to them carefully.”

Though WSJ caveats its story by writing that it’s unclear whether the pilots’ input would have made a difference in its ultimate design, we imagine their involvement might have tipped off Boeing to the difficulties pilots faced in bringing a mis-firing MCAS under control. Remember, the team investigating the Ethiopian Airlines crash revealed that MCAS fired four times before it ultimately doomed all 157 people aboard the flight. Maybe, if the test pilots had experienced something similar and been able to warn Boeing about this defect, nearly 350 people – the total number aboard ET302 and the Lion Air flight that crashed just minutes after takeoff back in October – wouldn’t have had to die.

via ZeroHedge News http://bit.ly/2IXy1A5 Tyler Durden

Berkshire Hathaway shareholders already had plenty to squawk about heading into this weekend after Warren Buffett announced his deal to back Occidental’s bid for Anadarko Petroleum with $10 billion just days before the start of the company’s annual “Woodstock for Capitalists” in Omaha. But in what appears to be the billionaire investors’ latest ruse to shift the focus away from the disastrous performance of Kraft-Heinz and its recent leadership upheaval, the ‘Oracle of Omaha’ has decided to make another stunning revelation during an interview with CNBC that ran late Thursday: For the first time, Berkshire has bought Amazon shares, marking yet another departure from Buffett’s longstanding aversion to tech stocks.

Just like with Berkshire’s decision to trim its Apple stake, the decision to buy Amazon wasn’t made by Buffett, but by ‘one of the other fellows in the office’ – either ‘Todd or Ted’ (Todd Combs and Ted Weschler, two portfolio managers at Berkshire).

“One of the fellows in the office that manage money…bought some Amazon so it will show up in the 13F” later this month, Buffett told CNBC Thursday, on the eve of the kick off of Berkshire’s annual shareholders meeting in Omaha. Buffett was referring to either Todd Combs or Ted Weschler, who each manage portfolios of more than $13 billion in equities for Berkshire.

The 13-F reflecting Berkshire’s decision to buy won’t be out for two more weeks, but the decision to buy isn’t that much of a surprise. Buffett has expressed admiration for Amazon CEO Jeff Bezos, but despite his praise, he has never bought the company’s shares, something he said he’s been ‘an idiot’ for not doing.

“Yeah, I’ve been a fan, and I’ve been an idiot for not buying” Amazon shares, Buffett said. “But I want you to know it’s no personality changes taking place.”

The interview was set to air in full on Squawk Box.

Though this is the first time Berkshire has invested in Amazon, Buffett, Bezos and Jamie Dimon famously teamed up to launch a health-care venture designed to serve the employees of their companies.

Amazon shares traded higher in the pre-market on the news.

via ZeroHedge News http://bit.ly/2WkDV0Z Tyler Durden

Authored by Soeren Kern via The Gatestone Institute,

• “We are fighting for Europe to remain European, with European values…” – Tomio Okamura, President, Czech Freedom and Direct Democracy party (SPD) and Deputy Speaker of the Chamber of Deputies.

• “My friends, we are gathered here today to stand up for our freedom and our sovereignty. The most precious things we have. Because without a strong nation state, there is no democracy. And without democracy there are no liberties…. My friends, our countries are strong nations. Based on a Jewish-Christian and humanistic civilization. That should never change. So, we want to control our own borders again. We do not want mass immigration. And we do not want to be invaded by a tyrannical ideology.” – Geert Wilders, leader of the Dutch Freedom Party (PVV).

• “However, my friends, it isn’t easy to leave the EU, as the British have found out. Despite a majority voting for Brexit, the establishment and the EU have colluded to stop us.” – Janice Atkinson, British MEP, who is also Vice Chair of the Europe of Nations and Freedom (ENF) political group in the European Parliament.

• “Immigration must be stopped, and the Islamist ideology must be eradicated…. Islamization and globalism are new totalitarianisms that threaten European countries.” – Marine Le Pen, Prague Press Conference.

The leaders of several European nationalist parties campaigned in Prague on April 25, ahead of the European Parliament elections set for May 23-26. Pictured: Tomio Okamura (left), president of the Czech Freedom and Direct Democracy Party, Marine Le Pen (center), leader of France’s National Rally, and Geert Wilders (right), leader of the Dutch Freedom Party. (Photo by Gabriel Kuchta/Getty Images)

The leaders of several European nationalist parties campaigned in Prague on April 25, ahead of the European Parliament elections set for May 23-26.

The rally was sponsored by the Movement for a Europe of Nations and Freedom (MENF), a pan-European alliance of nine nationalist parties dedicated to stopping mass migration and recovering national sovereignty from the European Union.

The Prague event was organized by the president of the Czech Freedom and Direct Democracy Party (SPD), Tomio Okamura, who was joined by Dutch Freedom Party (PVV) leader Geert Wilders, French National Rally (RN) leader Marine Le Pen, the President of Movement for a Europe of Nations and Freedom (MENF), Gerolf Annemans, and British MEP Janice Atkinson, who is also Vice Chair of the Europe of Nations and Freedom (ENF) political group in the European Parliament. Italian Interior Minister Matteo Salvini, leader of the anti-mass migration League party, sent a video message. They spoke to a crowd in Prague’s downtown Wenceslas Square. Following are some excerpts of the keynote speeches:

Tomio Okamura, President, Freedom and Direct Democracy party (SPD) and Deputy Speaker of the Chamber of Deputies:

“Dear friends, dear guests, dear Marine, dear Geert, dear colleagues, I warmly welcome you here in the historical center of the Czech capital. We stand here symbolically at the statue of St. Wenceslas. Under the banner of St. Wenceslas, our ancestors fought more than a thousand years of hard struggle for the freedom and sovereignty of the Czech crown countries….

“Today, Europeans are once again fighting for their survival. It is not just the migration of colonists from Africa and the Arab countries that is changing the face of Western Europe. It is also the growing assault from Brussels on the sovereignty of Europe’s nation states in the name of a multicultural superstate.

“For those who downplay this warning, I would like to mention a quote from the former President of the European Union, Herman Von Rompuy: ‘The time of the homogenous nation-state is over. Each European country has to be open for different cultures.’

“In contemporary Europe, the Brussels aristocracy has no place for nations, and no place for democracy either. The former President of the European Parliament, Martin Schulz, has been quoted as saying: ‘It is not the EU’s philosophy that the crowd can decide its destiny.’

“And for those who are still not sure about Europe’s ambitions, German Deputy Foreign Minister Michael Roth has called for replacing the principle of unanimity in EU decision-making with qualified majority voting.

“Dear Citizens, the mass immigration of millions of Africans and Muslims to Europe is no coincidence — it is a targeted liquidation of traditional European nation states, as well as the targeted destruction of traditional European values — hence the concept of the traditional family is being liquidated, and patriotism becomes a rude word, because these values ​​are the biggest obstacle to the demolition of nation states.

“It is up to us to decide whether we give up all that our ancestors have sacrificed their lives for, whether we will savor their memory, or defend their heritage….

“I say clearly that the current EU must end! I remind you that at present, European Union directives and regulations outrank the laws of the EU’s member states….

“The European Parliament is the only place where we can change Europe. Come to the polls! Together across Europe we advocate a return to the original model of European cooperation, without regulation from Brussels, when sovereign nation states had a common market and free movement of citizens of European nations. And each state was at the same time a sovereign in its territory, adopting its own laws and, if necessary, protecting its borders.

“We are fighting for Europe to remain European, with European values….

“Dear citizens, dear friends, we say a clear ‘NO’ to further restrictions on the rights of citizens, including the right to own a gun. NO acceptance of Euro currency by the Czech Republic. NO transferring further power from state to EU….

“We are not alone. National patriotic parties are on the rise all over Europe, promoting freedom, democracy and the sovereignty of their peoples.

“We are not alone and together we have a tremendous historic opportunity to win and change the European Union from the Brussels dictatorship to the Union of Free European States, which cooperate on the basis of mutual equality and mutual benefit.

“These elections, if we want, can be a real referendum on the European Union.”

Geert Wilders, MP and Chairman, Party for Freedom:

“My friends, we are gathered here today to stand up for our freedom and our sovereignty. The most precious things we have. Because without a strong nation state, there is no democracy. And without democracy there are no liberties.

“Today, we are fighting for our existence. And the biggest threats to our survival and our freedom are the European Union, mass immigration and the Islamic ideology of submission and violence.

“First, let’s talk about the European Union. An undemocratic superstate. It is forcing its commands on the peoples of Europe. It is trying to take away our national sovereignty! And we want to be sovereign, don’t we?

“The European Union is attempting to erase our nation states. But we say; no more! Let’s say it loud and clear: no more! Our nations are shaped by their own history, culture, language and identity and therefore they are impossible to erase!

“My friends, our countries are strong nations. Based on a Jewish-Christian and humanistic civilization. That should never change.

“So, we want to control our own borders again. We do not want mass immigration. And we do not want to be invaded by a tyrannical ideology.

“You Czechs are — as a matter of fact — an example to us all. Because you are opposing the EU asylum policy. You are opposing the Islamization of Europe. You say: Ne, Nikdy [No, not ever]. Your resistance inspires us!

“Let me tell you something about my country, the Netherlands. A few weeks ago, a jihadi attack took place in one of our major cities, Utrecht. Four innocent people were killed in broad daylight in a tram by a jihadist. And in the three largest cities in the Netherlands, the majority of people under the age of 25 are non-Western immigrants. Mostly Islamic. Our people are already a stranger in their own town and country. The Netherlands is given away by the elites. On a silver platter. In many western European countries, it is just like that or even worse.

“The European Union has been pampering Islam for decades now. But Islam is a medieval cult that denies freedom to others. So why should we grant Islam any liberties? We should not, we should stop Islam. By depriving Islam of the means to destroy our identity, we are not violating freedom; we are preserving our identity and guaranteeing freedom.

“As we have seen, the free world has been the victim of many terror attacks in the last few years. From New York, Madrid, Paris, Brussels and Nice to Barcelona, Manchester, Berlin, Stockholm and Marseille innocent people were murdered by Islamic inspired terrorists, that hate us and cherish death more than life. And a few days ago, innocent people died on Easter Sunday in Sri Lanka, where Christians in churches and westerners in hotels were attacked and brutally slaughtered. So, Islamization comes with a very high price. One we are not willing to pay.

“Freedom obviously also has a price and we must be prepared to pay it: a choice has to be made. The choice between Islam and freedom. There is no middle way. Because nothing is more precious than liberty and freedom.

“Defending our freedom, defending our way of life, requires all of us to be vigilant, courageous and audacious. It requires all of us to raise our voice. To raise our voice against the enemies of freedom. Against the tyranny of Islamization. Against everyone who tries to silence us!

“The European Union and many governments facilitate Islam and Islamic immigration. Why are they facilitating a totalitarian ideology? Why are they accommodating an intolerant dogma? It is as if they have surrendered. It is as if they have capitulated. But not on behalf of the people. Not on behalf of you.

“We will never apologize for being free men. We will never surrender. We stand on the shoulders of giants. And there is no stronger power than the force of free men fighting for the great cause of liberty. Because freedom is the birthright of all men. And Islam and freedom are incompatible.

“Unless there are radical changes to the present policies towards migration, over 30% of Sweden will be Islamic by the year 2050. And almost 20% in Germany and France. And it will only get worse in the next decades, because the population of Africa is exploding. According to the United Nations, the population of Africa will grow from one billion people to 4 billion Africans by the end of this century. Many of them will want to come to Europe. Many of them will come from Islamic countries. My friends, Europe is on the brink of cultural suicide.

“The European Union will never defend our national interest and our freedom. So, we need strong nation states. And we need brave leaders who care about the freedom and security of their own people. Who are not afraid to speak the truth about the dangers of mass immigration.

“That is why it is so important to have a huge group of political allies working together in the next European elections. That’s why it is so important that brave leaders as Marine Le Pen and Matteo Salvini have our support.

“And that’s why it is so important to have one of the bravest politicians of all Europe on our side, a hero who is not afraid to speak the truth about the EU and Islam: Tomio Okamura!

“My friends, we are the patriots! And we will win! Long live the Czech Republic! Svoboda! Thank you.”

Gerolf Annemans, President, Movement for a Europe of Nations and Freedom (MENF):

“I stand like all of you on this central spot of the continent, not only on the crossroads of Europe, but also and more than ever we stand at the crossroads of European history.

“The European Union has become an institution that crushes the peoples of member states because the big bosses of the European Union want to put their organization to become the one and only superstate on the continent.

“Our proud nations will become powerless provinces if we let this happen. What this all means for the future of our children can be seen in the way the European Union put mass migration in motion on the continent.

“Under EU rules, mass migration became a historic icon of wild migration. We have to resist this chaos. We are the resistance. Our political family has the image of Matteo Salvini, who showed as Italian minister that to reverse migration you need one thing and one thing only, the political will to do so. Nothing more, but unfortunately, these days, nothing less.

“Putting this political will into the center of politics is our goal.

“I ask you, did the brave Czech people fight for their freedom to become oppressed by disappearing in the European Union? Did we, did you fight the USSR to get a similar threat in return? Tell us, yes or no?

“No, of course. We fought, you fought for freedom. We stand for freedom. And in this historical election of May 2019 the battle for our freedom will be decisive.

“We are the resistance. Matteo Salvini, Marine Le Pen, Geert Wilders, my party president Tom Van Grieken of the Flemish party Vlaams Belang, and all the others, we are proud to have you and Tomio as strong allies in Central Europe of what will become a force for change in Europe.

“For our homeland and for our freedom, let us join forces and let us stand strong. No matter how strong our opponents could be, we will be stronger because we have the strength of our conviction, and we are the hope that the people of Europe have in us.

“Long live the Europe of nations. Long live the Europe of freedom.”

Janice Atkinson, British MEP and Vice President, Europe of Nations and Freedom:

“My message to the Czechs and for the citizens of the EU is to vote for the parties that will take you out of the EU. It is the evil empire. Vote for the parties that will tear down the EU state, so that power is returned to the nations of Europe and freedom.

“The EU is the dictatorship of the unelected, the failed politicians of their own nations, as they suck the lifeblood of democracy out of our countries. These unelected dictators have imposed mass uncontrolled immigration on our countries. They have failed to secure our external borders. They have failed to stop migrants arriving by foot, by boats and via people smugglers.

“The Schengen system allows them to walk freely, to live and work where they choose — even though it is not what we choose. They have unleashed terror on our streets. They have the rape and sexual assault of women on their hands. They have Europe’s blood on their hands.

“They have changed our cities and our streets and towns so that they are unrecognizable, and we are foreigners in our own lands. They encourage radical Islam, which has brought into our lives Sharia law, female genital mutilation, child marriage and medieval clothing such as the burka. Enough. No more!

“Do not accept that this is Europe’s fate. It is reversible and can be stopped. If you value your freedoms, your way of life, your rule of law, your culture and heritage, the EU has to be stopped. The only way to do this is to vote for Tomio Okamura and his party, the SPD. Tomio, together with my colleagues, Geert Wilders, Marine Le Pen and Matteo Salvini can change the course of Europe.

“The SPD will also give you the freedom for Czexit, a referendum on whether you want to stay in the EU. I hope you follow the British and vote to leave. However, my friends, it isn’t easy to leave the EU, as the British have found out. Despite a majority voting for Brexit, the establishment and the EU have colluded to stop us. And that’s the trouble. We have elected MEPs and MPs who have given control of our lives and our countries and our day to day life and our future to the people who do not believe in the nation state, sovereignty and control over our own laws.

“In these EU elections, you have the change to save the Czech Republic and to save Europe. Do you want to be robbed by unelected bureaucrats such as Jean-Claude Juncker, Frans Timmermans or Donald Tusk? No!

“My friends, we are at a tipping point in Europe. You can save our continent.”

Marine Le Pen, President, National Rally:

“The battle for Europe has begun. In these elections, the supporters of globalism stand against supporters of the nation state. The globalists against the localists.

“European federalists support total deregulation, the complete abolition of borders, the free movement of migration across the planet and the weakening of nation states for the benefit of oligarchs, civil servants and experts. On the other hand, there are us patriots from all across Europe.

“We have chosen our nations, nations whose diversity is the richness of Europe. They must remain themselves and cooperate freely with each other….

“We do not want to seal the borders, but we want to put the doors back to our home….

“My country offers a sad example of migratory submersion. If you are not careful, it will be your future. Whole neighborhoods have become non-French areas!….

“The democratic push of the patriots in all the countries of Europe will make it possible to recast the European framework….

“Today, the European Union does not have the capacity to send tanks on the streets or to fire on the crowd… Yet the goal is the same: to reduce our political, legal, and national identity — our capacities of resistance….

“We, the French and the Czechs, will be at the rendezvous of history on May 26! Long live the Czech people! Long live the French people! Long live the Europe of sovereign nations!”

During a press conference, Le Pen added:

“What we see here, before our eyes, is the emergence of a new European harmony that sees the national parties coming together to offer 500 million Europeans a new framework of cooperation, a new project and a new momentum for the future.

“Immigration must be stopped, and the Islamist ideology must be eradicated…. Islamization and globalism are new totalitarianisms that threaten European countries.”

In a video broadcast at the Prague event, Italian Interior Minister Matteo Salvini said:

“Ladies and gentlemen, I am sending a greeting to my friend Tomio Okamura and the Czech friends at the SPD. I hope, and in fact I’m sure that after May 26, after the European elections, we will finally be working together in a new Europe that defends borders and our children against immigration and Islamic extremism, which must be stopped.”

Salvini is trying to unite nationalist parties scattered across the 28-nation European Union to join forces in a new political alliance. On April 8, Salvini was joined in Milan by representatives of Germany’s Alternative for Germany (AfD) party, the Danish People’s Party and the Finns Party, to launch a new alliance called “Towards a Common Sense Europe.” Salvini hopes that the new bloc will emerge as the largest in the 751-member parliament after the elections in May.

via ZeroHedge News http://bit.ly/2ZUP4aY Tyler Durden

Ever since it became apparent that the Deutsche Bank-Commerzbank tie-up wasn’t meant to be after all, despite incessant lobbying from the German Finance Ministry over the objections of pretty much every other stakeholder, both Deutsche Bank shareholders as well as the bank’s still-relatively-new CEO have probably been wondering: What’s next for Europe’s least-favorite perennially troubled megabank? 

Well, as DB’s management team scrambles to close a deal with UBS to merge the Swiss bank’s once-storied asset-management business with DWS, the asset-management arm that functions as a separate corporate entity controlled by Deutsche, Bloomberg and the FT have effectively confirmed what most shareholders have been hoping for: Despite Sewing and Chairman Paul Achleitner’s insistence that the investment bank is vital to Deutsche’s future, it’s probably time for Deutsche to take an axe to its long-suffering investment bank (the bank has already reportedly been considering the ring-fencing of its most toxic businesses and assets in a shadow ‘bad bank’).

Specifically, the bank’s equities business (and more specifically, it’s US equities trading business) will likely be on the chopping block.

But even a restructuring would be difficult, coming with many up-front costs, according to analysts quoted by Bloomberg:

With a Commerzbank deal gone, Deutsche Bank’s only move is “a more radical investment bank restructure, with a potential exit from the U.S. region and the equities product line,” Citigroup Inc. analysts wrote in a note on April 29. Such a move would be difficult. Restructuring costs would hit upfront, and revenue would be squeezed at first, potentially exacerbating rather than fixing Deutsche Bank’s core problem. In any case, that option seems off the table. Achleitner and Sewing say the trading and corporate finance businesses are crucial. “Every executive has to constantly adjust to a changing market environment,” Achleitner told the Financial Times. “But in this regard, we are not talking about strategy, we are talking about execution” of the existing plan.

As if the bank needed another incentive, Reuters reported a few days back that Deutsche’s US operation – which would be greatly curtailed  or shuttered entirely in a restructuring – is once again in danger of failing one of the Fed’s stress tests.

In a detailed insider account of the factors that inspired Sewing’s decision to walk away from merger talks (according to the FT, though it had been announced as a mutual decision, the idea to walk away was first broached by Sewing and his team, who argued that financing the deal would be too burdensome).

As one regulator put it:

“Calling the merger off wasn’t a strategic decision,” a top regulator said. “They could just not afford the deal.”  “Without the one-off [accounting and tax] effects the transaction would have triggered, the deal stacked up,” the person said, adding it was “unsettling…[that] both banks do not have enough firepower to bring forward a merger that makes strategic sense.” Deutsche disputes that it lacked firepower to do the deal.

But while Commerzbank’s steady corporate business will make it an ideal acquisition target for another European lender (UniCredit and ING have reportedly been weighing bids), DB has no obvious path to finally shed the mantle of ‘most hated bank in Europe’.

 

via ZeroHedge News http://bit.ly/2DKa4be Tyler Durden

Authored by Tim Kirby via The Strategic Culture Foundation,

The French marched off to war in 1914 in glorious lines of infantry in baby blue coats and bright red trousers to be mowed down by the finest technology the Industrial Revolution had to offer. For us now it is easy to see how insane this was and how flawed the understanding of both the commoners and even the experts was in terms of how combat and war actually worked at the time. This naive view of modern tactics certainly applies to street conflicts we are seeing in France as part of the Yellow Vest protests. The so-called non-lethal (and less-lethal) arms of the French authorities gives them a tactical advantage far beyond that of any assault rifle.

Thanks to the media we have become accustomed to video of protestors getting sprayed by water or having their ranks dispersed thanks to tear gas, leaving everyone wet or coughing respectively but otherwise unharmed. However this humane picture does not meet up with the realities of this civilian vs. cop style warfare.

If we are to take the Yellow Vest protestors at their word then at least 22 of them have lost an eye (from “less-lethal” Flash-ball guns) and 5 have had their hands blown off with 154 being “seriously injured”. Obviously the protestors will want to maximize their statistics but there are plenty of videos from the various actions/demonstrations showing horrible injuries which are too numerous to all be fakes. So the numbers may be off but the overall general tendencies of these injuries do occur from the French authorities in the Human Rights defending EU is a proven fact. The simple reality is that despite a nice marketing phrase non-lethal weapons cripple and on occasion kill.

In order to understand the tactical advantage that non-lethal weapons offer the government (not the individual police but the state itself) we need to put aside our emotional response to seeing French people having their limbs blown off. We have to not jump into ranting about the flagrant hypocrisy of the EU when it comes to human rights and rationally break down how the conflicts between Yellow and Blue vests could look if the arms situation were different.

Scenario A: What if the Yellow Vests were armed?

If the organizers of the Yellow Vests (all movements are organized by someone regardless of what the media tells you) were able to arm their masses with rifles this would indeed lead to horrific short-term violence that would leave a permanent stain on French history. Often hundreds or thousands of protestors are met by dozens of police and handfuls of soldiers, if the protestors were on par with their adversaries in terms of guns, then their numerical advantage would shatter the police’s will to fight.

No policemen are going to fight to the last man against a force 20 times their number, which they may partially agree with dying for nothing, nor will they open fire with tanks in the centers of their own cities. Human psychology would allow them to kill foreigners in some distant country in this manner but not at home.

In this instance of near certain death from pure numbers the police would either “stay home” or possibly switch sides overtly or covertly.

Obviously a full civil war could start from this situation, but in a street warfare sense, escalating from protest to actual hot war is technically a winning scenario as it advances them closer to attaining/changing power.

Scenario B: What if the police fought like an army?

One key component of many Color Revolutions is getting the “bad leader” to be blamed for some sort of direct use of lethal bloody media-friendly massacre. If the French police actually used assault rifles against the protestors this would demonize them to the point of justifying a Revolution. This would not just cause a civil conflict but be a national call to arms to join it, which would be a bad move on the state’s part.

Furthermore, only sociopaths can fire rifles into unarmed crowds (who are not posing a direct threat) of people who speak their own language (i.e. their own “kind”). If the French police just decided to give the order to shoot them all, then in this instance many of the French police would find rifle and bayonet worthless as they would have no desire to shoot.

The result would be a handful of deaths from each protest but the utter collapse of legitimacy of the state and possible “retreats” of police forces unwilling to fire on “their own”.

Scenario C: The “non-lethal” reality we see today.

Psychologically it is much easier for the French police to use non-lethal (in their minds) weapons against the protestors. In the subconscious mind of the policeman he can justify shooting into masses much easier with this type of weapon because in theory it “shouldn’t” kill anyone and if it does it was an “accident”. This is much easier on our psyche and morals than shooting someone in the chest with a Lebel Rifle.

Research by the University of Cambridge supports this tendency. They found that police are far more likely to use force when it is supposedly from non-lethal weapons. This non-lethal status of weapons like tasers (which can and do kill people all the time) makes them so much easier to apply on the populace especially when the subconscious of the police officer tells him that, the guy he fried the other day with a taser died as an accident, one in every so many thousand people just has a weak heart.

So looking at non-lethal weapons tactically they offer the massive psychological advantage of being able to attack without an attack registering in their conscience of the user. As stated above they are also very media and propaganda friendly when anyone who dies from them is just “an accident” giving the government the ability to retain legitimacy while gouging out they eyes of its own populace. Real guns fail at both of these points completely.

Conclusion:

One bizarre irony in our strange postmodern times is that if the Yellow Vests were actually being shot at by real guns and being killed they would be far closer to achieving some sort of systemic change. Being mutilated by all sorts of gadgets and devices of one sort or another makes it easy for the police to do their job psychologically without generating the levels of sympathy and horror from live rounds hitting the innocent that the protestors need to shatter or change the system.

The French Flash-Ball gun should be made the symbol for the EU for it provides crushing repression of the masses with great PR spin to make it seem humane and caring. It is for our safety after all that they use these, right?

via ZeroHedge News http://bit.ly/2UXGRiP Tyler Durden

 

Royal Marines conducted a “ground-breaking” exercise simulating an amphibious assault of a beach supported by unmanned vehicles for the first time, reported the Royal Navy newspaper.

Alpha Company of 40 special forces carried out ‘Exercise Commando Warrior’ alongside 1 Assault Group Royal Marines (1AGRM) at Tregantle Beach, in Cornwall, a county on England’s rugged southwestern tip.

The amphibious assault began late last month with marines in special forces vessels transported to the beach while being supported by unmanned boats with machine guns searching for enemy forces on land and at sea, using advanced cameras and sensors.

In the sky, small to medium-sized unmanned aerial vehicles patrolled the skies, and two unmanned ground vehicles provided direct and indirect fire support to landing troops.

The war exercise successfully achieved connecting all of these unmanned systems to central commanders who will then use data collected from the exercise to influence their future tactical decision-making.

With autonomous vehicles on three domains (air, land, and sea) protecting marines from enemy forces, the troops successfully stormed the beach, climbed the cliffs, eliminated enemy forces, and retreated to the shore.

Royal Marines were the first ever forces to use autonomous vehicles in three domains simultaneously while simulating a beach assault.

The two unmanned ground vehicles were designed and produced by QinetiQ, a British multinational defense robotics company and a supplier of robots to the Royal Marines.

Corporal Scott Shaw was one of the marines participating in the beach assault exercise.

Shaw said: “This is very early steps in the capacity of the Future Commando Force and reinventing ourselves back to the original definition of what Commandos are.”

“It is about reinventing the force with new technology that’s available,” he added.

Corporal Ashley Hill agreed with Shaw — indicating that “Trialling this new kit, and new formations, is about pushing us away from just being an infantry force that gets off the boats and moving us back towards our Commando roots.”

“There is a space to be filled in defense and we are trying to fill it thanks to this new technology,” Shaw said.

All video from the unmanned systems were fed through a downlink to a central command and then relayed back to marines that had tablets.

Colonel Chris Haw, commanding officer of 1AGRM and Commando Warrior exercise director, said: “This is a really exciting start and although it is only the first step, it is a milestone in Future Commando Force and Littoral Strike development.”

The Royal Navy funded all unmanned systems used in the exercise in the 2018/19 financial year.

Haw said, “In future, we will be able to do things with more precision and less risk.”

Since the 20th century began, amphibious assaults onto beaches have been one of the most sophisticated military maneuvers. It seems that now, the Royal Marines are integrating autonomous systems on three domains to gain a tremendous edge against enemy forces in future conflicts. 

via ZeroHedge News http://bit.ly/2GZ6yeX Tyler Durden

Authored by Alasdair Macleod via The Mises Institute,

There is a certain tension in the phrase, “social democracy,” and the description of someone as a social democrat. Social in this context is socialism by the state. A democrat supports the freedom for individual electors to express and defend personal interests in regular plebiscites. The two positions are incompatible.

At this point we should note that in economic terms there is little philosophical difference between European socialism and communism. Both seek to relieve capitalists of the means of production in favor of the state, either by ownership or control. Marx himself saw socialism as a temporary phase on the way to full communism. However, we all know from experience that communism fails by impoverishing everyone except a coterie of leaders. The same problem of the state’s inability to calculate prices, other than with reference to labor costs, and to foresee what consumers require on the morrow bedevils both socialism and communism. The principal difference between the two is the speed at which economic disintegration takes place, tied to the rate at which the socializing state removes personal freedoms and destroys wealth.

Social democrats assume that moderate socialism does not lead to those outcomes, which is a mistake. They are deceived.

With social democracy we observe committed socialists and communists using democracy as the pathway towards increasing socialism and eventual communism. But there’s a problem, which in time becomes increasingly obvious to the electorate. Electors become poorer over time, and the more progressive among them seek to escape in order to participate in more capitalistic economies. Lenin and Mao Zedong dealt with this tendency by suppressing all freedom of expression and they redefined democracy to permit only the election of communist officials. Intellectuals, always the first to express discontent, were liquidated or sent to the Soviet gulags and China’s penal labor camps. 

In Western Europe a different, more patient approach was needed for the communist revolution. And this is where the concept of the social democrat springs from.

The tactic was (and still is) to stand firm on socialism and force compromises always to be made by the democrats. For decades it was the basis of Soviet foreign policy, which employed “useful idiots” to spread communism in both universities and political circles. Their influence was what defeated Enoch Powell and still drives Ken Clarke and his fellow appeasers towards greater socialism. It is clear that social democratic politicians need not be communists, only appeasers. 

Social democratic political parties express a belief in social justice. But social justice is a meaningless term used by the far left to attract support for more extreme forms of socialism. In Europe, social democrats advocating social justice have held sway since the Second World War. But they are becoming victims of their success at taking down capitalism, because they are losing electoral support. 

The era of social democracy appears to be coming to an end.

Germany’s SPD recently suffered its worst electoral result since the Second World War, and France’s Socialist Party came fifth in the presidential election won by Emmanuel Macron, a political outsider. Other social democratic parties to have lost ground include the Netherlands’ Labour Party, Italy’s Democratic Party and Austria’s Social Democrats. In the United States there was a rejection of the Democrats in favor of President Trump, who like Macron in France started as a political outsider. 

Brexit was the rejection by the British voter of the socializing controls imposed by a remote super-state. The British parliament initially paid lip-service to the electorate’s wishes, before rallying round its socialist credentials and is now conspiring to stop Brexit. So strong is Parliament’s collective socialist instinct that May’s appeasing government is prepared to destroy its electoral base rather than stand against the socialist tide. It comes at a time when the Labour Party has been captured by a Marxist clique which appears increasingly likely to form the next government. 

Commentators attribute the decline in social democracy to events such as the great financial crisis. This and other reasons are why traditional working-class and blue-collar workers have drifted away. The philosophical conflict between socialism and democracy is at the heart of the rebellion, if only the voters themselves knew it. Instead of rejecting socialism, they are embracing extremes, and the extremes are always socialist extremes. Notably, almost none of the disillusioned social democrats support free markets.

The point missed by most analysts is that social democracy is failing because of the contradiction between personal freedom and state control.

As a form of mild socialism, it fails for the same reason as did communism. It all plays into the hands of the communists, for whom the failure of social democracy is an opportunity. They encourage the rank and file to blame capitalism. The collapse of capitalism is inevitable, as Marx wrote. And its collapse hastens full-blooded communism. Communism is a broken philosophy, as has been clearly demonstrated. But ruthless leaders still see it as the means of obtaining power over their fellow humans.

via ZeroHedge News http://bit.ly/2VGJfyM Tyler Durden

A new Bloomberg report details “Kim Jong Un’s Game of Thrones” as he appears to be rapidly changing high level posts connected with nuclear negotiations with the United States, suggesting a change in negotiating strategy following President Trump’s walking away from the Hanoi talks in February. 

The report concludes that the “swirl of mysterious personnel changes” in Pyongyang signals a dramatic makeover as Kim purges ranks, including the North Korean dictator’s own sister who’s quickly faded to the background in a possible demotion along with his chief nuclear negotiator. 

The shake-up further follows Kim’s first historic meeting with President Putin in Russia last month, and is fueling speculation that Pyongyang could be ready to approach US talks with a firmer line, given observers have seen no evidence North Korea is ready to given up any aspect of its nuclear program in exchange for sanctions relief. 

It comes after last month The New York Times reported that ongoing leadership changes in the ruling Workers’ Party signaled preparations for “protracted negotiations” based on replacing “aging senior officials with younger, more aggressive ones and vowed repeatedly to overcome the sanctions.”

Weeks ago Kim told a government assembly that he remains “open” to another meeting with Trump, but with conditions.

He indicated in a public speech: “I am willing to accept if the United States proposes a third North Korea-United States summit on the condition that it has a right attitude and seeks a solution that we can share,” according to the Times.

“What is clear is that if the United States sticks to its current political calculations, it will darken the prospects for solving the problem and will in fact be very dangerous,” Kim said during the April 10 remarks. 

Below are some of the highlights of Kim Jong Un’s Game of Thrones style shake-up from the Bloomberg report.

* * *

Kim Yo Jong, Sister

Long considered the most powerful woman in North Korea, she’s recently faded from view.

Bloomberg summarizes:

Part royal representative, part personal assistant, Kim Yo Jong has emerged as one of her older brother’s closest aides in recent months. While she became the first member of the ruling family to visit Seoul and accompanied Kim Jong Un in his summits with Trump and Chinese President Xi Jinping, she’s also performed mundane tasks, such as helping the leader extinguish a cigarette during a train stop in China.

That proximity to power has made Kim Yo Jong’s disappearance in recent weeks all the more intriguing. Besides being left off a list of newly elected Political Bureau alternate members last month, she was absent from the Putin meetings. In fact, she hasn’t appeared in any state media since the early April reshuffle, after participating in nine public events earlier in the year, according to a tally by the North Korea news site NKPro.

Kim Hyok Chol, Chief Negotiator

The nuclear deterrence expert who was initially relatively unknown became point man for negotiations in Hanoi, but has since completely dropped from view. 

Says Bloomberg: 

A career diplomat known for his expertise in nuclear deterrence against the U.S., Kim Hyok Chol’s appointment as counterpart to the Trump administration’s chief envoy Stephen Biegun earlier this year surprised North Korea watchers. One South Korean TV outlet drew a circle around him in a video from a White House meeting between Trump and North Korean officials, asking who he was.

In the aftermath of the Hanoi talks, Kim Hyok Chol has plunged back into obscurity, receiving no mention in state media reports. That could reflect his relatively low rank in Pyongyong’s power structure — or suggest a purge. Lee Hye-hoon, the South Korean lawmaker, said intelligence officials wouldn’t confirm whether Kim Hyok Chol had been punished.

* * *

Kim Yong Chol, State Affairs Commission

Powerful former spy chief, he was the main emissary between Trump and Kim Jong Un, helping arrange both Trump-Kim summits, but he’s just been replaced as head of a key ruling party department.

Per the Bloomberg report:

Last month, Kim Yong Chol was unexpectedly replaced as head of the ruling party’s United Front Department by a lesser-known official and was absent from Kim Jong Un’s side during meetings with Putin last week in Russia. Experts disagree over whether the change was a demotion. He was re-appointed to the 14-member State Affairs Commission led by Kim Jong Un and is believed to have retained his various ruling party positions.

* * *

Ri Yong Ho, Foreign Minister

Appears to be more central in decision making, perhaps displacing Chol in terms of influence. 

According to Bloomberg:

The veteran diplomat who once denounced Trump at the United Nations as a “mentally deranged person, full of megalomania” has maintained a central foreign policy role since Hanoi. In addition to being re-appointed to the State Affairs Commission last month, he’s also appeared repeatedly by Kim Jong Un side in recent diplomatic events, including the meetings with Putin in Vladivostok.

* * *

Choe Son Hui, First Vice Foreign Minister

From diplomat and translator, her rapid rise to first vice foreign minister – but more importantly her apparent closeness to Kim – has stunned observers.

Per Bloomberg:

Among the most surprising developments has been the ascent of Choe Son Hui. The blunt-spoken diplomat was once best known to foreign negotiators as a translator who took liberties with her boss’s words during six-party talks, according to Chun Yung-woo, a former South Korean nuclear envoy.

Since participating the Hanoi talks, Choe has been promoted to the State Affairs Commission alongside Ri and received the title of first vice foreign minister. She has enjoyed other nods of trust from Kim Jong Un, sharing his table with Putin at their Vladivostok banquet and briefing the foreign media, where she conveyed what she said were the supreme leader’s personal views.

 

via ZeroHedge News http://bit.ly/2UWBdgI Tyler Durden

Authored by Mike Whitney via The Unz Review,

Your Geopolitical Quiz for the Day:

Two countries are embroiled in a ferocious rivalry. One country’s meteoric growth has put it on a path to become the world’s biggest economic superpower while the other country appears to be slipping into irreversible decline. Which country will lead the world into the future?

Country A builds factories and plants, it employees zillions of people who manufacture things, it launches massive infrastructure programs, paves millions of miles of highways and roads, opens new sea lanes, vastly expands its high-speed rail network, and pumps profits back into productive operations that turbo-charge its economy and bolster its stature among the nations of the world.

Country B has the finest military in the world, it has more than 800 bases scattered across the planet, and spends more on weapons systems and war-making than all the other nations combined. Country B has gutted its industrial core, hollowed out its factory base, allowed its vital infrastructure to crumble, outsourced millions of jobs, off-shored thousands of businesses, plunged the center of the country into permanent recession, delivered control of its economy to the Central Bank, and recycled 96 percent of its corporate and financial profits into a stock buyback scam that sucks critical capital out of the economy and into the pockets of corrupt Wall Street plutocrats whose voracious greed is pushing the world towards another catastrophic meltdown.

Which of these two countries is going to lead the world into the future? Which of these two countries offers a path to security and prosperity that doesn’t involve black sites, extraordinary rendition, extrajudicial assassinations, color-coded revolutions, waterboarding, strategic disinformation, false-flag provocations, regime change and perennial war?

China’s Belt and Road Initiative: A Tectonic Shift in the Geopolitical Balance of Power

Over the weekend, more than 5,000 delegates from across the world met in Beijing for The Second Belt and Road Forum For International Cooperation. The conference provided an opportunity for public and private investors to learn more about Xi Jinping’s “signature infrastructure project” that is reshaping trade relations across Europe, Asia, Latin America and Africa. According to journalist Pepe Escobar, “The BRI is now supported by no less than 126 states and territories, plus a host of international organizations” and will involve “six major connectivity corridors spanning Eurasia.” The massive development project is “one of the largest infrastructure and investment projects in history, ….including 65% of the world’s population and 40% of the global gross domestic product as of 2017.” (Wikipedia) The improvements to road, rail and sea routes will vastly increase connectivity, lower shipping costs, boost productivity, and enhance widespread prosperity. The BRI is China’s attempt to replace the crumbling post-WW2 “liberal” order with a system that respects the rights of sovereign nations, rejects unilateralism, and relies on market-based principles to effect a more equitable distribution of wealth. The Belt and Road Initiative is China’s blueprint for a New World Order. It is the face of 21st century capitalism.

The prestigious event in Beijing was barely covered by the western media which sees the project as a looming threat to US plans to pivot to Asia and become the dominant player in the most prosperous and populous region in the world. Growing international support for the Chinese roadmap suggests that Washington’s hegemonic ambitions are likely to be short-circuited by an aggressive development agenda that eclipses anything the US is currently doing or plans to do in the foreseeable future.

The Chinese plan will funnel trillions of dollars into state of the art transportation projects that draw the continents closer together in a webbing of high-speed rail and energy pipelines (Russia). Far-flung locations in Central Asia will be modernized while standards of living will steadily rise. By creating an integrated economic space, in which low tariffs and the free flow of capital help to promote investment, the BRI initiative will produce the world’s biggest free trade zone, a common market in which business is transacted in Chinese or EU currency. There will be no need to trade in USD’s despite the dollar’s historic role as the world’s reserve currency. The shift in currencies will inevitably increase the flow of dollars back to the United States increasing the already-ginormous $22 trillion dollar National Debt while precipitating an excruciating period of adjustment.

Chinese and Russian leaders are taking steps to “harmonize” their two economic initiatives, the Belt and Road and the Eurasian Economic Union (EAEU). This will be a challenging task as the expansion of infrastructure implies compatibility between leaders, mutual security guarantees, new rules and regulations for the common economic space, and supranational political structures to oversee trade, tariffs, foreign investment and immigration. Despite the hurtles, both Putin and Xi appear to be fully committed to their vision of economic integration which they see as based on the “unconditional adherence to the primacy of national sovereignty and the central role of the United Nations.”

It comes at no surprise that US powerbrokers see Putin’s plan as a significant threat to their regional ambitions, in fact, former Secretary of State Hillary Clinton admitted as much in 2012 when she said, “It’s going to be called a customs union, it will be called the Eurasian Union and all of that, but let’s make no mistake about it. We know what the goal is and we are trying to figure out effective ways to slow down or prevent it.” Washington opposes any free trade project in which it is excluded or cannot control. Both the EEU and the BRI fall into that category.

The United States continues to demonize countries that simply want to use the market to improve the lives of their people and increase their prospects for prosperity. Washington’s hostile approach is both misguided and counterproductive. Competition should be seen as a way to improve productivity and lower costs, not as a threat to over-bloated, inefficient industries that have outlived their usefulness. Here’s an excerpt from an article that Putin wrote in 2011. It helps to show that Putin is not the scheming tyrant he is made out to be in the western media, but a free market capitalist who enthusiastically supports globalization:

“For the first time in the history of humanity, the world is becoming truly global, in both politics and economics. A central part of this globalization is the growing importance of the Asia-Pacific region as compared to the EuroAtlantic world in the global economy. Asia’s rise is lifting with it the economies of countries outside Asia that have managed to latch onto the “Asian economic engine”….The US has also effectively hitched itself to this “engine”, creating an economic and financial network with China and other countries in the region…

The “supercontinent” of Eurasia is home to two-thirds of the world’s population and produces over 60 percent of its economic output. Because of the dramatic opening of China and the former Soviet Union to the world, almost all the countries in Eurasia are becoming more economically, politically, and culturally interdependent. …

There is huge potential for development in infrastructure, in spite of some formidable bottlenecks. …A unified and homogeneous common power market stretching from Lisbon to Hanoi via Vladivostok is not necessary, because electric power markets do not function in that way. But the creation of infrastructure that could support a number of regional and sub-regional common markets would do much for the economic development of Greater Eurasia.” (Russian newspaper, Izvestia, 2011)

Keep in mind, the article was written back in 2011 long before Xi had even conjured up his grand pan-Asia infrastructure scheme. Putin was already a committed capitalist looking for ways to put the Soviet era behind him and skillfully use the markets to build his nation’s power and prosperity. Regrettably, he has been blocked at every turn. Washington does not want others to effectively use the markets. Washington wants to threaten, bully, sanction and harass its competitors so that outcomes can be controlled and more of the world’s wealth can be skimmed off the top by the noncompetitive, monopolistic corporate behemoths that diktat foreign policy to their political underlings (in congress and the White House) and who see rivals as blood enemies that must be ground into dust.

Is it any wonder why Russia and China have emerged as Washington’s biggest enemies? It has nothing to do with the fictitious claims of election meddling or so-called “hostile behavior” in the South China Sea. That’s nonsense. Washington is terrified that the Russo-Chinese economic integration plan will replace the US-dominated “liberal” world order, that cutting edge infrastructure will create an Asia-Europe super-continent that no longer trades in dollars or recirculates profits into US debt instruments. They are afraid that an expansive free trade zone that extends from Lisbon to Vladivostok will inevitably lead to new institutions for lending, oversight and governance. They are afraid that a revamped 21st century capitalism will result in more ferocious competition for their clunker corporations, less opportunity for unilateralism and meddling, and a rules-based system where the playing field is painstakingly kept level. That’s what scares Washington.

The Belt and Road Initiative and the Eurasian Economic Union represent the changing of the guard. The US-backed ‘neoliberal’ model of globalisation is being rejected everywhere, from the streets of Paris, to Brexit, to the rise of right wings groups across Europe, to the unexpected election of Donald Trump in 2016. The Russo-Chinese model is built on a more solid, and less extractive, foundation. This new vision anticipates an interconnected multipolar world where the rules governing commerce are decided by the participants, where the rights of every state are respected equally, and where the new guarantors for regional security scrupulously keep the peace.

It is this vision of ‘revitalized capitalism’ that Washington sees as its mortal enemy.

via ZeroHedge News http://bit.ly/2VbUmjX Tyler Durden