Category: zerohedge

Authored by Lance Roberts via RealInvestmentAdvice.com,

The Great Divide

One of the great tragedies of the modern age is that we have stopped “listening” to each other. There was a time when individuals could have a conversation about political issues. While neither person would change their position, they could politely agree to disagree. Today, the media has locked individuals into “information silos” where they disregard any “facts” which conflict with personal bias. If an intruder infiltrates the space, the “mob” levies a torrent of hate-filled expletives and threats

More than ever, such is the case in 2020.

“For the second election in a row, voters will cast ballots for the candidate they dislike less, not whose policies they like more.” – Lance Roberts, Real Investment Show

Today, the division between parties is greater than at any other single point in history. (2017 was the latest data from a 2019 report. That gap is even larger currently as Social Media fuels the divide.) The divide between parties has many dire long-term outcomes, from transitioning to a socialistic economy to the lack of real positive changes.

How can progress occur when no one is willing to listen, much compromise, with anyone else?

The Cynic In Me

In 2020, both parties are proposing fairly disastrous policies.

Biden’s proposed tax changes, green energy plans, and Government takeover of “healthcare” would indeed be bad for the markets. Such policies would weaken corporate profitability, specific sectors (energy and healthcare) would come under stress, and the surge in debt will make the Fed’s programs less effective.

On the other hand, Trump’s plans are not much better economically. More bailouts, poorly chosen infrastructure projects, and proposed tax policy lead to further indebtedness, larger deficits, and slower economic growth.

However, the reality is that while Presidential candidates make lots of claims on the campaign trail, it is Wall Street and Corporations that ultimately dictate policy. Such is why many suggest that our Congressmen wear racing jackets to see who is sponsoring them for office.

If you think for a moment that Congress comes up with, and writes, bills on their own, you are sadly mistaken. They are not that smart. Such is why whenever bills come to the floor for a vote, they always favor the group or industry whose lobby wrote and promoted the bill in the beginning.

I am not cynical. It is just how the Government works.

Okay, let’s dig into the policies with some help from our friends at the Committee For A Responsible Federal Budget (CFRB)

The Proposed Policies

“President Donald Trump has issued a 54 bullet point agenda. It calls for lowering taxes, strengthening the military, increasing infrastructure spending, expanding spending on veterans and space travel. It also calls for lowering drug prices, expanding school and health care choice, ending wars abroad, and reducing spending on immigrants. He also has proposed a “Platinum Plan” for black Americans, which increases spending on education and small businesses.

Meanwhile, Vice President Joe Biden has proposed a detailed agenda. From increasing spending on child care and education, health care, and retirement, to disability benefits, infrastructure, research, and climate change. It also aims to lower the costs of prescription drugs, ending wars abroad, and increasing taxes on high-income households and corporations.

Under our central estimate, both plans would add substantially to the debt. Specifically, we find the Trump plan would add $4.95 trillion to the debt over the 2021 to 2030 budget window. The Biden plan would add $5.60 trillion.” – CFRB

The table below breaks down the spending by candidates in different areas of the economy.

Assuming that both candidates were able to get their respective policies passed, which is highly doubtful, the impact on economic growth will be negative as the Federal debt surges higher.

The Cost

“Under the candidates’ plans, debt will continue to grow over the next decade and beyond.  Debt has already grown from 39 percent of the economy in 2008 to 76 percent in 2016. It is estimated to reach 98 percent by the end of FY2020. Under current law. The Congressional Budget Office (CBO) projects debt will continue to rise to 109 percent of GDP by 2030.

Our central estimate of the Trump plan finds debt would rise to 125 percent of the economy by 2030, excluding the effects of further COVID relief. Under our central estimate of the Biden plan, debt would rise to 128 percent of the economy by 2030, again excluding COVID proposals. For context, the standing historical record for debt is 106 percent of GDP, set just after World War II.” – CFRB.

As discussed in CBO & The One-Way Trip Of American Debt,” instead of running on a policy platform to reduce spending and the debt, both candidates have decided that more deficit spending is the only solution.

“Debt continues to increase in most years thereafter, reaching 195 percent of GDP by 2050. That amount of debt will be the highest in the nation’s history, and will increase further. High and rising federal debt makes the economy more vulnerable to rising interest rates and, depending on financing of the debt, rising inflation. The growing debt burden also raises borrowing costs and slows the growth of the economy and national income. There is an increased risk of a fiscal crisis or a gradual decline in the value of Treasury securities.” – CBO

The Debt

The policies put forth by both President Trump and Joe Biden require substantial debt issuance to meet those objectives. Given that mandatory spending already consumes more than 100% of Federal revenues, the debt increases will be massive.

Unfortunately, what continues to elude policy-makers in Washington is that the continuing expansion of debt erodes economic growth.

It is a myth that the economy has grown by roughly 5% since 1980. In reality, economic growth rates have been steadily declining over the past 40 years, supported by a massive push into deficit spending by both the Government and consumers.

Up until 1980, economic growth was trending higher from roughly 5% to a peak of nearly 15%. There were a couple of reasons for this.

1. Lower levels of debt allowed for personal savings to remain robust, fueling productive investment in the economy.

2. The focus of the economy was primarily on production and manufacturing, which has a high multiplier effect on the economy. 

Unlike the steadily growing economic environment before 1980, the post-1980 economy has experienced a steady decline. Therefore, a statement the economy has been growing at 5% since 1980 is grossly misleading. The trend of economic growth, wages, and productivity (5-year averages) show the real problem.

As wages declined, families turned to credit to fill the gap in maintaining their current living standards. What should be evident is that it requires increasing amounts of debt to create each dollar of economic growth. Such is due to the “diminished rate of return” for each successive increase in debt-funded growth.

Debt Isn’t The Answer

Such is one of the primary reasons why economic growth will continue to run at lower levels going into the future. As I showed just recently in the “2nd Derivative Of Debt:”

“From 1947 to 2008, the U.S. economy had real, inflation-adjusted economic growth than had a linear growth trend of 3.2%.

However, following the 2008 recession, the growth rate dropped to the exponential growth trend of roughly 2.2%. Unfortunately, instead of reducing outstanding debt problems, the Federal Reserve provided policies that fostered even greater unproductive debt and leverage levels.

Coming out of the 2020 recession, the economic trend of growth will be somewhere between 1.5% and 1.75%. Given the amount of debt added to the overall system, the ongoing debt service will continue to retard economic growth.”

Given the permanent loss in output and rising unproductive debt levels, the recovery will be slower and more protracted than those hoping for a “V-shaped” recovery. Notably, the U.S. economy will never return to either its long-term linear or exponential growth trends.

The Markets

The Republicans claim that Biden will crash the market. The Democrats suggest the same with President Trump. From a portfolio management perspective, we need to understand what happens during election years to stock markets and investor returns.

Since President Rosevelt’s victory in 1944, there have only been two losses during presidential election years: 2000 and 2008. Those two years corresponded with the “Dot.com Crash” and the “Financial Crisis.” On average, stocks produced their second-best performance in Presidential election years.

However, it is worth noting that while returns are positive regardless of who is elected, it should be of no surprise the markets performed better during a year when voters re-elect the incumbent. 

The market hates uncertainty. 

What markets do prefer is “political gridlock.”

“A split Congress historically has been better for stocks, which tend to like that one party doesn’t have too much sway. Stocks gained close to 30% in 1985, 2013, and 2019, all under a split Congress, according to LPL Financial. The average S&P 500 gain with a divided Congress was 17.2% while GDP growth averaged 2.8%.” – USA Today

It’s Not A Risk-Free Outcome

We can derive from the data that the odds suggest the market will end this year on a positive note. However, such says little about next year. If you go back to our data table above, the 1st year of a new Presidential cycle is roughly a 50/50 outcome. It is also the lowest average return year going back to 1833.

I don’t envy the person who takes the Oval Office in the months ahead. Whoever is inaugurated on January 20, 2021, will enormous fiscal challenges as trillion-dollar annual budget deficits will become the new normal. As we discussed recently, the national debt is projected to exceed the post-World War II record high over the next four-year term and reach twice the economy’s size within 30 years.

Four major trust funds are also headed for insolvency, including the Highway and Medicare Hospital Insurance trust funds, within the next presidential term. Furthermore, economic growth rates will continue to decline as the “wealth gap” widens.

There is no “will” to fix the problems plaguing the economy and welfare system before they break. Such is why whoever wins the Presidency, we all still wind up losing.

Just like their forebears (the millennials who graduated from college between 2008 and 2012) it appears Gen Z is facing a labor-market shock of serious magnitude, spurred by the coronavirus pandemic and its attendant impact on the American economy, swelling the unemployment rolls while also disrupting the typical pipeline of internships and entry-level gigs that usually help students find permanent entry-level jobs.

In a report published Friday morning, Bloomberg illustrated the difficulties faced by college graduates, and students in their early 2020s, who have just seen their job market plans go up in smoke. Data released yesterday showed the number of Americans filing for the first time for unemployment benefits fell to 787k (870k exp), the lowest point since lockdowns began.

But even worse for young people, the unemployment rate for those between 20 and 24 climbed to 12.5% in September, the highest among all adults. Joblessness peaked at nearly 26% in April at the height of the pandemic, which was 4x the level two months earlier, a bigger jump than in any previous recession going  back to 1940.

Following on from this, recent college graduates during the worst of COVID-19 saw unemployment peak at 20% in June, the highest of any age group with at least a bachelor’s degree.

That’s compared with a 13% peak during the years immediately after the financial crisis.

Young people without college degrees fared just as badly, as workers under the age of 20 saw an even larger spike in unemployment.

Bloomberg interviewed Tessa Filipczyk, a young recent college graduate, who hoped to kick-start her career in marine and coastal sciences. But after applying to dozens of jobs, and hearing nothing back, Flipiczyk has started babysitting for neighbors and doing whatever she can for cash.

For Tessa Filipczyk, this year was supposed to springboard her career in marine and coastal science. Graduating in June from the University of California at Davis, Filipczyk, 22, had applied for jobs related to ocean conservation, marine plant research and climate change advocacy. But none of those have panned out.

Now, she’s tutoring three children she used to babysit and it’s just eight hours of work a week.

“I was like ‘OK, I’m going to find a job; I’m going to work for a year and then I’m going to go to grad school,’” said Filipczyk, who’s living with her parents in Burlingame, California. “That all just got swept under the rug by Covid.”

And for students like Filipczyk who have missed the employment pipeline on their way out of college, does this mean their entire four years were a waste.

“There is a structure to the labor market – if you miss the entrance, how do you get back in?” said Julia Coronado, founder of MacroPolicy Perspectives LLC. “If you veer off the career path by necessity, how do you get back into the pipeline?”

That’s a huge problem for this generation of young people, who, in many cases, borrowed larger sums than their forebears as college tuition rates peaked during the 2010s, while the quantity of young people with college degrees also reached a new level of saturation. Economic research suggests that young people who struggle to get a job early in their career can see lower total earnings dog them for their entire professional lives.

Will we see a wave of these students enroll in non-target MBA programs three years from now, when they get tired of working retail and decide it’s time to give a real career one last shot?

Or better yet: maybe some of them will give writing code a try: “Getting rejected constantly and being in that emotion was pretty hard,” Ghadiyali said of her early post-grad challenges. “Learning how to write code was far easier.”

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

Russia is done with the European Union. At last week’s Valdai Discussion Forum Russian Foreign Minister Sergei Lavrov made this quite clear with this statement.

 Those people in the West who are responsible for foreign policy and do not understand the necessity of mutually respectable conversation–well, we must simply stop for a while communicate with them. Especially since Ursula von der Leyen states that geopolitical partnership with current Russia’s leadership is impossible. If this is the way they want it, so be it. (H/T Andrei Martyanov)

Lavrov’s statements echo a number of statements made in recent months by Russian leadership that there is no opportunity for diplomacy possible with the United States.

We can now add the European Union to that list. Pepe Escobar’s latest piece goes over Lavrov’s comments about the European Union and they are devastating, as devastating as when he and Putin described the U.S. as “Not Agreement Capable” a few years ago.

Lavrov reiterated this with the following comments at Valdai last week.

But as badly as the U.S. has acted in recent years in international relations, unilaterally abrogating treaty after treaty, nominally with the goal of remaking them to be more inclusive, Lavrov’s upbraiding of the current leadership of the European Union is far worse.

Because they have gone along with, if not openly assisted, every U.S.-backed provocation against Russia for their own advantage. From Ukraine to MH-17, to Skripal to now Belarus and the ridiculous Navalny poisoning, the EU has proved to be worse than the U.S.

Because there can be no doubt the U.S. views Russia as an antagonist. We’re quite clear about this. But Europe plays off U.S. aggression, hiding in the U.S.’s skirts while telling Russia, usually through German Chancellor Angela Merkel, “Be patient, we are reluctantly going along with this.” But really they’re happy about it.

So Russia is ultimately caught between the U.S. and Europe on all basic issues of trade, politics, and international law.

Adding to Lavrov’s frustration, Andrei Martyanov, as an astute analyst on Russian politics as anyone, is correct when he says (H/T to Pepe Escobar).

You do not negotiate with monkeys, you treat them nicely, you make sure that they are not abused, but you don’t negotiate with them, same as you don’t negotiate with toddlers. They want to have their Navalny as their toy–let them. I call on Russia to start wrapping economic activity up with EU for a long time. They buy Russia’s hydrocarbons and hi-tech, fine. Other than that, any other activity should be dramatically reduced and necessity of the Iron Curtain must not be doubted anymore. 

And the truth is that Russia is dealing with monkeys in the U.S. and toddlers in the EU. And Martanyov’s right that it’s time Putin et.al. simply turn their backs on the West and move forward.

Lavrov’s statements at Valdai were momentous. They sent a clear signal that if Europe wants a future relationship with Russia they will have to change how they do business.

The problem is however, that the EU is suffused with arrogance on the eve of the U.S. election, mistakenly thinking Joe Biden will beat Trump.

Merkel has betrayed Putin at every turn since 2013. And Germany’s appalling behavior over the Alexei Navalny poisoning was the last straw.

That what was another sabotage effort to stop the Nordstream 2 pipeline and add grist to Trump’s re-election mill was given even a cursory glance by the highest levels of the German government was insulting enough.

That Merkel allowed her Foreign Minister Heiko Maas to run his mouth on the subject, and then throw the decision to sanction Russia (again) over this to the EU parliament and give it any kind of political play was truly treacherous.

And it proved, yet again, that Merkel’s word is worth less than nothing. She tells Putin one thing and then does the exact opposite. Glenn Deisen writing for RT chalked this up to Germany’s plans for domination. He rightly sees Germany using Russia to get what it wants in Europe.

Germany has taken the lead in advancing “European integration” and therefore prioritizes Eastern European member states that push for a more aggressive stance towards Russia. Economic connectivity with Russia is no longer an instrument for building trust and cooperation in the pan-European space, rather it was intended to strengthen Germany’s position as the center of the EU. Moscow should work with Berlin to construct Nord Stream 2, but not forget why Nord Stream 1 was built while South Stream was blocked.

This is a point I’ve been making for years. Nordstream 2 is a political tool for Germany to reroute gas coming in from Russia which Merkel can use as a political lever over Poland and the Visegrads.

And it is the Poles who have consistently shot themselves in the foot by not reconciling their relationship with Russia, banding together with its Eastern European brothers and securing an independent source of Russian gas. Putin and Gazprom would happily provide it to them, if they would but ask.

But they don’t and instead turn to the U.S. to be their protectors from both Russia and Germany, rather than conduct themselves as a sovereign nation.

That said, I think Mr. Diesen misses the larger point here. It is true Germany under Merkel is looking to expand its control over the EU and set itself up as a superpower for the next century. Putin himself acknowledged that possibility at Valdai. That may be more to dig at the U.S. and warn Europe rather than him actually believing it.

Because under Merkel and the EU Germany is losing its dynamism. And it may even lose control over the EU if it isn’t careful. If you look at the current situation from a German perspective you realize that Germany’s mighty export business is surrounded by hostile foreign powers.

1. Russia — Merkel cut off the country from Russian markets. Even though some of the trade with Russia has returned since sanctions over Crimea went into place in 2014 she hasn’t fought the U.S.’s hyper-aggressive use of sanctions to improve Germany’s position.
2. The U.K. — French President Emmanuel Macron looks like he’s engineered a No-Deal Brexit with Boris Johnson which will put up major export barriers for Germany into the U.K. cutting them off from that market.
3. The U.S. – Trump has all but declared Germany an enemy and when he wins a second term will tighten the screws on Merkel even tighter.
4. China – They know that the incoming Great Reset, which will have its Jahr Null event in Europe likely next year, is all about consolidating power into Europe and sucking it away from the U.S., a process Trump is dead-set against.

However, don’t think for a second that the Commies that run the EU and the World Economic Forum are teaming up with the Commies in China. Oh no, they have bigger plans than that.

And what’s been pretty clear to me is Europe’s delusions that it can subjugate the world under its rubric, forcing its rules and standards on the rest of us, including China, again allowing the U.S. to act as its proxy while it tries to maintain its standing.

I know what you’re thinking. That sounds completely ludicrous.

And you’re right, it is ludicrous.

But that doesn’t mean it isn’t true. This is clearly the mindset we’re dealing with in The Davos Crowd. They engineered a mostly-fake pandemic to accelerate their plans to remake the world economy by burning it down.

The multi-polar world will see the fading U.S. and U.K. band together while Russia and China continue to stitch together Asia into a coherent economic sphere. Trump is right to pull the U.S. out of Central Asia and has gotten nothing but grief from the U.S. establishment while Europe, through NATO, continues trying to expand to the Russian border, now with openly backing the attempted coup in Belarus.

This was the dominant theme at Valdai and the focus of Putin’s opening remarks.

Putin’s big failing as a leader has been his reluctance to see the EU as his real enemy. He’s been infinitely patient with them trying to pull them away from the U.S.

I don’t blame him, most people don’t see this. Putin had to try everything possible to get Europe to see the future and has now washed his hands of them. Most observers see the flailing of the U.S. empire and the rise of China and miss the real intentions of the EU, quietly pursuing a new empire based on usurping the U.S. and subsuming it into its technocratic Borg Cube.

But the EU is irredeemable in its dealings with Russia and the Navalny incident is simply a bridge too far.

The events of 2020 have laid this groundwork for the EU’s apotheosis. The upcoming Great Reset in 2021 and beyond will solidify this. They are crazy enough to believe they can pull this off, but only if they defeat the American voter who they think they can gaslight and blackmail into submission.

I just don’t think that’s likely. But, make no mistake, in two weeks we’re going to get a look here in the U.S. at what happens to a country that votes against the wishes of our European betters. They’ve reduced us to a bunch of poo-flinging monkeys screaming at each other behind masks sinking into inter-sectional madness.

However, now that Germany, and by extension, the EU have de facto declared their imperial intentions I expect the only thing the U.S., U.K. Russia and China will agree upon is that Europe should be relegated to eating at the kid’s table for the rest of the 21st century

*  *  *

Join my Patreon to stop the horde of monkeys taking over the asylum. Install the Brave Browser to fight the growing Panopticon.

As air traffic once again heads back toward normal levels, airlines are seeing more and more travelers unwilling to succumb to their rules about wearing masks.

For example, there was this incident we documented weeks ago, wherein a black Trump supporter was removed from a flight for pulling down his mask to eat some peanuts. 

And, there have been a steady number of similar cases on airlines, according to a new report from the WSJ. Nearly 1,500 people have been banned across 6 different airlines for violating facemask requirements, according to the report. Flight attendants have said that incidents have increased as the President has “belittled mask-wearing”.

The CDC reminded travelers at the beginning of this week that it “strongly recommends” masks or face coverings on flights. 

Airlines had previously made exceptions for those with medical reasons, but they had to roll back that concession after it became an outlet for widespread non-compliance. Now the Transportation Department argues that airlines may have “gone too far” for people with disabilities. 

After changes were put in place in July, only Delta will still allow medical exemptions – after a one hour virtual consultation with a Delta agent so you can explain your medical issue. The Transportation Department says it has gotten complaints from passengers who said they had disabilities and were denied boarding for not wearing a mask. 

The airlines don’t however, have the option of banning eating or drinking during flights; and this is where many anti-maskers find their “exception” while on the plane. Some will sip a coffee “for an hour or more”, the Journal notes, just so they don’t have to put their mask back on. 

The Association of Flight Attendants was pushing for an emergency federal rule that requires the masks, which means non-compliance could result in conviction and fines. Passenger group FlyersRights.org argued the government was creating “nationwide confusion among the public”. 

The Transportation Department denied these requests, stating: “The Department also embraces the notion that there should be no more regulations than necessary.”

Sara Nelson of the flight attendants’ union AFA, argued against airlines enforcing the policy: “It’s not the same as having a federal mandate with consequences and fines.” 

She continued: “This is putting not only our lives but also our jobs at risk. It’s incredibly frustrating. People are starting to understand it can be safe to travel. But people do not buy airplane tickets if there’s a question on safety.”

Airlines say they will continue to enforce the mask rule since it is recommended by the CDC. Meghan Ludtke, managing director of regulatory affairs at American Airlines, said: “It is a critical and obvious and important step that is not being disputed across the medical literature. This is a thing that works. We need to keep our team members and passengers safe, and this is a simple thing you can do to make it so.”

The issue remains crucial to a recovery in the airline business. Delta CEO Ed Bastian said last month: “Our customers overwhelmingly support the enforcement of masks on board our flights. Our medical experts we work with at the Mayo Clinic and Emory [University] tell us that masks are the single most important preventive measure we can take.”

Gary Tomasulo, managing director of corporate security at American, concluded: “For the most part, all our passengers need is a simple reminder and we see compliance in most cases.”

In a day when half the US population remained transfixed by the ongoing revelations about the contents of Hunter Biden’s “laptop from hell” and the other half was doing everything in its power to ignore the news which the socials have conveniently been desperate to censor, a far less noticed but perhaps just as important investigative report authored by the unknown Typhoon Investigations, was released by Christopher Balding, Associate Professor at Peking University HSBC School of Business Shenzhen, China and also Bloomberg contributor  (which is odd considering the clear anti-Trump bias of the Bloomberg media empire) exposing Biden activities in China which “the press has simply refused to cover”, and which reveals “how Biden was compromised by the Communist Party of China.”

In a series of tweets around noon on Thursday, Balding said that he had really “not wanted to do this but roughly 2 months ago I was handed a report about Biden activities in China the press has simply refused to cover. I want to strongly emphasize I did not write the report but I know who did.”

Some more background on the origins of the report from Balding’s website:

For two months I have worked on behalf of my colleague to ensure that this report helped others report on the documented evidence of Biden activities with regards to China. I want to emphasize a couple of things about my own involvement.

• First, I did not write the report and I am not responsible for the report. I have gone over the report with a fine tooth comb and can find nothing factually wrong with the report. Everything is cited and documented. Arguably the only weakness is that we do not have internal emails between Chinese players or the Chinese and Bidens that would make explicit what the links clearly imply.
• Second, I will not be disclosing the individual who did write this report. They have very valid reasons to fear for both their personal safety and professional risks. Throughout the years that I have known this individual we never discussed politics. I have never heard them criticize any political party other than the CCP. They are not a Republican.
• Third, it was my very real wish that the press would have reported on the documented evidence in this report and left me and the author entirely out of this situation. I did not vote for Trump in 2016 and will not vote for him in 2020. This information however is entirely valid public interest information that the press has simply refused to cover due to their own partisan wishes. I have serious policy differences with President Trump. I am pro-immigration. I would like to see more free trade efforts to shift trade away from China and into partner countries from Mexico to Vietnam and India. I believe that institution building in Asia is vital and America needs to take that lead. However, I cannot in good conscience allow documented evidence of the variety presented here go unreported by partisans who are simply choosing to hide information.
• Finally, I will not be answering any questions about the report. I had no wish to be involved in Presidential politics. I do not want to be on the news. I will not be answer any questions about who wrote the report. We need to return the focus to the known documented facts.

Upon review, this is how Balding summarized the report’s contents in his series of tweets:

Hunter Biden is partnered with the Chinese state. Entire investment partnership is Chinese state money from social security fund to China Development Bank. It is actually a subsidiary of the Bank of China. This is not remotely anything less than a Chinese state funded play.

Though the entire size of the fund cannot be reconstructed, the Taiwanese cofounder who is now detained in China, reports it to be NOT $1-1.5 billion but $6.5 billion. This would make Hunters stake worth at a minimum at least $50 million if he was to sell it.

Disturbingly, everyone on the Chinese side are clearly linked with influence and intelligence organizations. China uses very innocuous sounding organization names to hide PLA, United Front, or Ministry of Foreign Affairs influence/intelligence operations. This report cannot say Hunter was the target of such an operation or that China even targeted him. However, based upon the clear pattern of individuals and organizations surrounding him it is an entirely reasonable conclusion.

Finally, the believed Godfather in arranging everything is a gentleman named Yang Jiechi. He is currently the CCP Director of Foreign Affairs leading strategist for America, Politburo member one of the most powerful men in China, and Xi confidant. Why does this matter?

He met regularly with Joe Biden during his stint as Chinese ambassador the US when Biden chaired the Senate Foreign Relations Committee.  Later he was Minister of Foreign Affairs when the investment partnership was made official in 2013. Importantly, the Taiwanese national listed MOFA institutions as the key clients in helping to arrange everything. Yang would clearly have known the importance of Hunter Biden and undoubtedly would have been informed of any dealings. Given that he is now the point person in China for dealing with the US this raises major concerns about a Biden administration dealing impartially with an individual in this capacity. These are documented facts from Chinese corporate records like IPO prospectuses and media. They raise very valid concerns about Biden linkages to China.

Turning to the report itself, here is the 10-point summary of its findings:

Joe Biden’s compromising partnership with the Communist Party of China runs via Yang Jiechi (CPC’s Central Foreign Affairs Commission). YANG met frequently with BIDEN during his tenure at the Chinese embassy in Washington.

Hunter Biden’s 2013 Bohai Harvest Rosemont investment partnership was set-up by Ministry of Foreign Affairs institutions who are tasked with garnering influence with foreign leaders during YANG’s tenure as Foreign Minister.

HUNTER has a direct line to the Politburo, according to SOURCE A, a senior finance professional in China.

Michael Lin, a Taiwanese national now detained in China, brokered the BHR partnership and partners with MOFA foreign influence organizations.

LIN is a POI for his work on behalf of China, as confirmed by SOURCE B and SOURCE C (at two separate national intelligence agencies).

BHR is a state managed operation. Leading shareholder in BHR is a Bank of China which lists BHR as a subsidiary and BHR’s partners are SOEs that funnel revenue/assets to BHR.

HUNTER continues to hold 10% in BHR. He visited China in 2010 and met with major Chinese government financial companies that would later back BHR.

HUNTER’s BHR stake (purchased for $400,000) is now likely be worth approx. $50 million (fees and capital appreciation based on BHR’s $6.5 billion AUM as stated by Michael Lin).

HUNTER also did business with Chinese tycoons linked with the Chinese military and against the interests of US national security.

BIDEN’s foreign policy stance towards China (formerly hawkish), turned positive despite China’s country’s rising geopolitical assertiveness.

To simply the various opaque Chinese intermediaries, the report shows the transfer of Chinese state money to Hunter, via major Chinese financial SOEs.

The next chart shows how the Communist Party of China cultivated Hunter via Lian and multiple Chinese foreign influence organizations:

The third and final chart shows the relationships connecting US leaders with communist leaders in China and North Korea. While there is official state-to-state dialogue and relationships between US and Chinese leaders, just one or two levels below are connected business arrangements with their relatives and associates, who are always the personal recipients of Chinese state money.

The key section of the report begins on page 19, in which the anonymous author details how the Biden family was compromised by China:

The report also quotes from a 2019 National Review article detailing Hunter Biden’s financial links to China:

Late Summer 2006: Hunter Biden and his uncle, James Biden, purchase the hedge fund Paradigm Global Advisors. According to an unnamed executive quoted in Politico in August, James Biden declared to employees on his first day, “Don’t worry about investors. We’ve got people all around the world who want to invest in Joe Biden.” At this time, Joe Biden is months away from becoming chairman of the Senate Foreign Relations Committee and launching his second bid for president.

The unnamed executive who spoke to Politico charged that the purchase of the fund was designed to work around campaign-finance laws: “According to the executive, James Biden made it clear that he viewed the fund as a way to take money from rich foreigners who could not legally give money to his older brother or his campaign account. “We’ve got investors lined up in a line of 747s filled with cash ready to invest in this company,” the executive remembers James Biden saying.”

Incidentally, this same article also points out the following:

An outside audit of Paradigm by the firm of Briggs, Bunting & Dougherty finds a “failure to reconcile Investment Advisors reimbursement of fund expenses, failure to reconcile and review cash account on a timely basis, and failure to reconcile and review various other accounts on a timely basis.”

And while the National Review article does an exhaustive look into both Biden, Paradigm’s and Seneca Global Advisors, the real focus is on China, which concludes that its “research indicates the Biden family and associates went on to execute a string of business deals with China and the CPC for nearly a decade.”

Fast-forwarding through the report, we learn about a curious entity called Thornton consulting:

Shortly after BIDEN was named as Obama’s running mate in August, HUNTER founded Seneca Global Advisors and the Beijing government approved the incorporation of Thornton Beijing – Solebury Thornton（Beijing）Consulting Co Ltd.

On October 21, 2007 LIN, LAKIS and ARCHER visited HNA Group in Beijing, this time with ARCHER, acting as COO of Rosemont Solebury Capital, and had dinner with Chen. On the same day, the Thornton delegation also met with officials from PKU.

HNA, which was originally an airline carrier, is of course best known for becoming a major Chinese conglomerate which in 2015-2016 was the most acquisitive Chinese company involved in a flurry of multi-billion global M&A, including US electronics distributor Ingram Micro, CIT Group’s aircraft leasing business, a 25% stake in Hilton, a 5% stake in Deutsche Bank, and is widely regarded as backed by or ultimately owned by Wang Qishan, then former vice premier (2008 – 2013).

Wang is currently China’s Vice-President and a close aide of Xi. According to the report:

“HNA has allegedly used various methods to bribe targets in the past, including hosting parties and supplying targets with young women. It is unknown if Thornton representatives were targeted in this manner at Chen’s dinner, but if any nighttime entertainment was provided, it was probably recorded by HNA/Chinese intelligence (as is commonplace in China).“

The following day a Thornton/Rosemont Solebury/SLLF delegation, including LIN, ARCHER, and LAKIS, met with Peng Fang, Director General of the NPC’s Foreign Affairs Committee , which is responsible for communicating with foreign affairs committees from other countries.74 The meeting was held in the Great Hall of the People, China’s most prestigious state building used to host legislative and ceremonial activities. In other words, the Thornton delegation met with a senior Chinese foreign affairs official at China’s most famous state building, in a meeting which would have been approved by or informed to China’s top leaders. This was clearly not a business meeting, but (at least in the eyes of the Chinese contingent), rather a nation to nation, state to state meeting.

Fast-forwarding to 2010 (the report has all the interim details), we read that between April 7-9, 2010, “HUNTER was introduced by LIN to China’s most powerful government controlled financial institutions.” Here the report notes that “while the English news item is no longer accessible on Thornton’s website, but the Chinese version remains.”

Only that’s no longer the case, because since the publication of this report, it appears that someone had a keen interest in quickly removing that particular URL as can be seen here. However, courtesy of the wayback machine, we can see what the Thornton consulting website, which was summarily taken down in the past 3-4 weeks, had to say as of this Sept 26 (after which the website just disappears) snapshot:

The report continues that according to Thornton’s news item, HUNTER was introduced as the chairman of Rosemont Seneca and the second son of the US Vice-President, and the purpose of his visit was to “deepen mutual understanding and explore the possibility of commercial cooperation”. LIN had delivered HUNTER to the Chinese for discussions on his pay-off.

Three days later, BIDEN met with then Chinese President Hu Jintao in Washington as part of the Nuclear Security Summit. At the time Hunter was just barely 40 years old.

The Secret Service protects, by statute, the president and vice president and their families.84 As the son of a sitting Vice-President, HUNTER will have had secret service protection during his business trip to China. Freedom of Information Act request records show that HUNTER visited China from April 6 to April 9, 2010. Unusually, for such a high-profile visit, there were no media reports in English or Chinese media. Therefore, his father BIDEN (even if unaware personally, which is unlikely given how close to each other they live and work), will have been aware of his son’s business trip to Beijing through official channels. Given the sensitive nature of US-China relations, HUNTER would have been closely watched by various Chinese securities agencies during the trip.

The report then pivots to dad Joe, who August 18, 2011 held talks with Xi, then Chinese Vice-President, during a five-day trip. At the meeting Biden said the US “fully understands that Taiwan and Tibet issues are China’s core interests, the U.S. will continue to resolutely pursue the one China policy, the U.S. does not support ‘Taiwan’s independence’, and the U.S. fully recognizes that Tibet is an inalienable part of the People’s Republic of China.”  Biden’s words are verbatim from China’s official standpoint on Taiwan and Tibet. Additionally, Biden said he “has spent more time in private meetings with Xi than any other world leader, including 25 hours of private dinners with Xi and one interpreter.“

A few days later BIDEN delivered a speech at Sichuan University, where he said:

“China’s development and prosperity are in line with the interest of the U.S”, in comments on the university’s website. The Obama Whitehouse records published a transcript of the speech during which BIDEN said “Let me be clear — let me be clear: I believed in 1979 and said so and I believe now that a rising China is a positive development, not only for the people of China but for the United States and the world as a whole…In order to cement this robust partnership, we have to go beyond close ties between Washington and Beijing, which we’re working on every day, go beyond it to include all levels of government, go beyond it to include classrooms and laboratories, athletic fields and boardrooms.”

A few months after Biden’s Sichuan trip, Archer and Lin worked with a Sichuan Chemical, a large Sichuan state-owned company to set-up a major potash deal (that never materialized) for Prospect Global, a listed US company at the time, that soon delisted and no longer appears to be in business. According to the report, “it is unclear if the purpose of the deal was to just deliver Archer millions of dollars in compensation, to talk up the Prospect Global stock, or if it resulted in Sichuan Chemical transferring millions of US dollars to the US (either for capital flight purposes or to be directed to US politicians such as BIDEN and KERRY).”

The story only gets more interesting from here, and focuses on the arrival on the scene in 2013 of none other than John Kerry, who is intimately tied to Hunter (and thus Joe Biden) via Rosemont Seneca’s predecessor Rosemont Capital, established in 2005 by Chris Heinz and Devon Archer who were roommates at Yale University. The firm was named after a Heinz family farm, and the capital was from Heinz, heir to the Heinz food processing empire, and step-son of John Kerry, a former Yale graduate who at the time was the senator for Massachusetts. On June 25 2009, Hunter Biden co-founded Rosemont Seneca with Archer and Heinz; the company’s offices in Georgetown were located two miles from both Biden’s office in the White House and his residence at the Naval Observatory, and one mile from Kerry’s Georgetown mansion.

We will let readers do their own digging but we will highlight one section from the report, detailing how the Hunter Biden received Chinese state money…

… and it involved the creation of BHR, which served as the entity facilitating the bulk of Chinese fund flows into the Bidens, as Hunter’s initial BHR stake, purchased for just $400,000, is now likely be worth approximately $50 million. From the report:

On December 4, 2013 HUNTER accompanies BIDEN on his official trip to China.

HUNTER told the New Yorker that he met Li during the December 2013 trip but described it as social encounter. “How do I go to Beijing, halfway around the world, and not see them (Li) for a cup of coffee?” he said. HUNTER arranged a quick meeting in the lobby of the American delegation’s hotel in Beijing between BIDEN and Li, the BHR CEO. This was followed by a “social meeting” between HUNTER and Li, according to reports by the New Yorker.

The trip by HUNTER coincided with an official trip by the Ukranian President Viktor Yanukovych. Many business deals promoting trade and investment between China and Ukraine were signed during this trip. Some deals between Chinese and Ukranian firms have ties to firms HUNTER is known to be involved with such as the Bohai Commodity Exchange, owned by the same local governments that own a part of Bohai Industrial Investment.

On 16 December 2013, a week after the BIDEN and HUNTER visit to Beijing, BHR was incorporated in Shanghai, with its registered address in the Shanghai Free Trade Zone, according to State Market Regulatory Administration records.

HUNTER’s profile no longer appears on the BHR website. One archived version lists him as a director on November 16, 2015. BIDEN is referred to in the profile as a managing partner of Rosement Seneca Partners and a consultant at Boies Schiller Flexner LPP . According to a statement by BIDEN’s lawyer George Mesires on October 13, 2019, BIDEN was of counsel with Boies Schiller and advising Ukraine-linked Burisma Holdings Limited on its corporate reform initiatives. He is also listed on Chinese PE websites where he is also referred to by the Chinese name ‘Hengte Baideng’ (亨特·拜登)

SMRA records show HUNTER purchased 10% of BHR on October 23, 2017 (via his investment vehicle Skaneateles LLC) and was a director until April 20, 2020. Previously he was invested via other holding companies.

BHR’s current shareholders are Bohai Capital (30%), Shanghai Ample Harvest Financial Services Group Co Ltd (上海丰实金融服务（集团）有限公司) (30%), Angju Investment (10%), Thornton (10%), Ulysses Diversified Inc (10%), Skaneateles LLC (10%). According to Chinese corporate records, the original owner of the US stake in BHR was Rosemont, Seneca Thornton, LLC with a 30% shareholding. This was split just under two years later into what is believed to be 20%/10% holding between Rosemont, Seneca, Bohai LLC and Thornton LLC. This was later changed again splitting Rosemont, Seneca, Bohai into Skanletes and Ulyssees. As Rosemont is the HEINZ KERRY vehicle and Seneca is the Biden vehicle, it is believed that the final split allowed HEINZ to exit the partnership divesting to ARCHER.

In summary, the Chinese government funded a business that it co-owned along with the son of a sitting US vice president and Secretary of State who was with high probability directly or indirectly invested in the holding company.

But if China funded a business, what was the value for Hunter? Here the report goes into detail calculating that the entity likely had $6.5BN in AUM, generating $100-$150MM in annual revenue, and if one day the business was sold, it could do so for ~$300 million (see page 14-15).

This returns the entire partnership to the fundamental problem: two sons of the Vice President of the United States and the Secretary of State willingly entered into a financial partnership with a government their fathers were supposed to deal with in an impartial manner.

Evidence indicates that the Secretary of State was directly or indirectly financially invested in his sons firms and benefitted from asset purchases made by firms directly linked to his son. HUNTER invested in a firm that by his own words has had almost nothing to do with, managed by state government with departments dedicated to elite capture, focusing on state enterprise deals in a foreign country, but has grown to manage $6.5 billion in assets and likely realize yearly revenue of $100-150 million. The ultimate sale price for his stake or the partnership would be whatever the Chinese Communist Party decides his partnership stake is worth.

And this is where the Typhoon Investigations report, the Biden presidential campaign, and Hunter’s “laptop from hell” all converge:

On May 2, 2019 BIDEN remarked, “They can’t figure out how they’re going to deal with the corruption that exists within the system. I mean, you know, they’re not bad folks, folks. But guess what, they’re not, they’re not competition for us.”

On May 3, it was reported that BHR [where Hunter was an investor] invested in Face++, a Chinese surveillance company which develops facial-recognition software for law enforcement in China, including targeting ethnic minority Muslims Xinjiang.

In September 2019, BIDEN said this of HUNTER’s business deals:

“I have never spoken to my son about his overseas business dealings,”

Still, while Hunter benefiting monetarily from deals with China may be unethical, it’s hardly illegal (all else equal). Where things get dicey is if to curry favor with China, and continue the freeflow of China-sourced cash, Hunter or his father, is betraying his fellow Americans. Is this what happened? Read on and decide:

Hunter Cultivated by Chinese Intelligence

Our research shows that for more than decade, HUNTER has been personally targeted by China’s intelligence apparatus and its various ‘foreign relations agencies’. A U.S. Senate Committee on Homeland Security and Governmental Affairs published on September 23, 2020, details HUNTER’s recent payoffs from a PLA linked tycoon, Ye Jianming , chairman of Chinese energy company CEFC China Energy Company Limited .

YE’s first break came when he purchased a small piston factory that supplied the Chinese army, after which he was a proxy for PLA officials, based on a New York Times article, and our proprietary research of the PLA’s logistics network. In the early 2000s, YE was the deputy secretary of CAIFC, according to his CEFC biography. As explained, the CAIFC is a PLA front organization that has dual roles of intelligence collection and propaganda work, and worked with LIN and the SLLF a few years after YE left the organization. YE also knows Xu, who was a CAIFC special advisor, and arranged for LIN and HUNTER’s access to the highest levels of government.

In line with his intelligence role, YE arranged events that brought together retired American and Chinese military officers. In 2015, YE arranged for an aide to meet with HUNTER and in May 2017, YE met privately with HUNTER at a Miami hotel. The purpose of the meeting was for HUNTER to use his contacts to help “identify investment opportunities for Ye’s company CEFC China Energy,” and afterwards YE gave HUNTER a 2.8-carat diamond.

According to HSGAC’s Confidential Document 9, YE and his associate Dong Gongwen, applied to a bank and opened credit lines for a business named Hudson West III LLC, giving HUNTER, his brother James (and James’ wife Sarah Biden), credit cards which the Bidens used to buy extravagant items. The HSGAC report details a series of transfers and transactions worth millions of US dollars between CEFC, Hudson West and the Bidens. This – 11 years after HUNTER and James denied selling their political connections to foreigners for personal gain.

In March 2018, YE was detained and put under investigation on suspicion of economic crimes. CEFC was then declared bankrupt in March 2020 alleged to have faked deals and bribed foreign governments for oil rights. Some of these were facilitated by Patrick Ho , CPPCC member and the former Hong Kong Secretary for Home Affairs in Tung’s administration. On November 18, 2017, Ho was arrested at the John F. Kennedy International Airport on bribery and money-laundering charges, and called HUNTER for legal assistance.132 HUNTER later told The New Yorker that he doesn’t see Ye as a “shady character at all,” and he characterized the outcome as “bad luck.”

The report’s conclusion:

Whether he understands it or not, it is apparent that HUNTER has been compromised by Chinese intelligence, who most likely have detailed files on HUNTER’s time spent in China, encompassing his personal meetings and any other activities. Furthermore, YE is associated with the PLA’s General Political Department, which directly opposes the US military in Asia, creating a serious conflict of interest for his father BIDEN.

Putting it all together, the report concludes that the Chinese influence operation targeting Biden and Heinz, the two most important people in US foreign policy under the Obama administration, and their children can now be tied between a small group of organizations and individuals.

“Dating back to Biden’s time in the Senate meeting with Yang, this was never from the Chinese perspective anything less than an official influence operation. Everything surrounding HUNTER took place with official Chinese organizations known to engage in and tasked with influence operations.

Of course, in exchange for funneling tens of millions to Hunter (and, indirectly according to recent allegations, his father), China also got something: this:

Over time BIDEN’s approach to China changed significantly. Under the Clinton and early part of the Bush administrations he could be considered moderately hawkish on China. However, during his time in the Obama administration as one of the key people tasked with China policy, his views became very dovish. Interestingly, BIDEN repeatedly is using preferred CCP language in describing approaches to relations or specific issues. The CCPIT specifically works with businessmen to convince their home governments it is in their best interest to avoid damaging measures such as sanctions to China. Other organizations mentioned work specifically to engage in elite capture or influence politicians or governments. The presence of all these institutions collectively strongly imply this was an influence operation by the Chinese state and whether directly or indirectly, BIDEN shifted his view from hawkish to dovish after HUNTER began receiving entrée into Chinese elite political and financial institutions.

Finally, going back to Chris Balding who originally published the report, here is his own brief summary of everything laid out in the 64 page report:

Beginning just before Joe Biden’s ascendancy to the Vice Presidency, Hunter Biden was travelling to Beijing meeting with Chinese financial institutions and political figures would ultimately become his investors.  Finalized in 2013, the investment partnership included money from the Chinese government, social security, and major state-owned banks a veritable who’s who of Chinese state finance.

It is not simply the state money that should cause concern but the structures and deals that took place. Most investment in specific projects came from state owned entities and flowed into state backed projects or enterprises. Even the deals speak to the worst of cronyism. The Hunter Biden investment firm share of a copper mine in the Congo was guaranteed with assets put at risk by the larger copper company to ensure deal flow to Hunter’s firm.

In another instance, Bank of China working on an IPO in Hong Kong gave its share allocation to the BHR investment partnership. They were able to do this because even though the Hunter Biden firm completed no notable work on the IPO, it is counted as a subsidiary of the Bank of China. The Hunter Biden Chinese investment partnership is literally invested in by the Chinese state and a subsidiary of the Bank of China owned by the Chinese Ministry of Finance.

The entire arrangement speaks to Chinese state interests. Meetings were held at locations that in China speak to the welcoming of foreign dignitaries or state to state relations. The Chinese organizations surrounding Hunter Biden are known intelligence and influence operatives to the United States government. The innocuous names like Chinese People’s Institute for Foreign Affairs exist to “…carry out government-directed policies and cooperative initiatives with influential foreigners without being perceived as a formal part of the Chinese government.”

Interestingly the CPIFA is under the Chinese Ministry of Foreign Affairs. When the investment partnership was struck in 2013, the Minister of Foreign Affairs was Yang Jiechi. Yang would have been very familiar with Hunter Biden from his days in Washington as the Chinese Ambassador to the United States from 2001 to 2005 during which he met regularly with Joe Biden chairing the Senate Foreign Relations Committee. Today the same individual who oversaw institutions helping shepherd Hunter’s investment partnership as the Minister of Foreign Affairs is Xi Jinping’s right hand man on foreign affairs and member of the powerful Politburo.

Most worrying is the financial leverage this gives the Chinese state over a direct member of the Biden family.  Despite the widely reported $1-1.5 billion of investment the reality is likely much higher. A co-founder of the investment firm reports the total assets under management as $6.5 billion.  While this number cannot be completely replicated, given that two deal alone were worth in excess of $1.6 billion this number is not unrealistic at all.  A 2% annual fee on assets under management would generate $130 million annually. Add in the 20% fee on capital gains the firm would recognize and it is not difficult to see Hunter’s stake being worth in excess of $50 million.

According to Hunter’s attorney, he did not invest his $400,000 in the company until 2017. Even assuming the veracity of this statement, this raises a major problem. Founded in 2013, the firm had large amounts of revenue and assets under management by 2017. In other words, his $400,000 stake would have already been worth far more than what he paid for it. This paltry $400,000 investment worth more than $50 million now would have realized a gain of more than 12,400% in three years.

The difficulty in eluding these concerns is their documentability by anyone who cares to look.  There is no potential for hacking because it is all public record in China. Any journalist who wishes to look can go review IPO prospectuses, news reports, or corporate records. There is no secret method for discovering this data other than actually looking. There is simply no way to avoid the reality that Hunter Biden was granted a 10% stake worth far in excess of what he paid for a firm that is literally operated and owned by the Chinese state.

I did not vote for Donald Trump in 2016 and have significant concerns about his policies in areas like immigration. Having lived in China for nine years throughout the Xi regimes construction of concentration camps and having witnessed first hand their use of influence and intelligence operations, the Biden links worry me profoundly.

Whether Joe Biden personally knew the details, a very untenable position, it is simply political malpractice to not be aware of the details of these financial arrangements. These documentable financial links simply cannot be wished away.

And this is why Beijing is desperate to get Joe Biden – whose son got extremely wealthy thanks to China’s influence peddling operation for the past a decade- into the White House.

You can read the full report here (pdf link)

Authored by Hubert Moolman,

It is the the massive debt. It cannot be serviced. It will collapse the whole system.

The gold, silver and cryptocurrencies charts are showing signs of going parabolic. The US dollar is close to confirming a massive breakdown.

Gold, silver and cryptocurrencies all provide “crisis value” by simply being an acceptable debt-based-fiat alternative. It is only later in this crisis that we will see a divergence between cryptocurrency and precious metals.

For now, they are likely to move higher together.

Gold has recently made new all-time highs, and seems ready to go higher after a decent consolidation. The importance of the 2011 all-time high can be seen on these charts:

I have marked two fractals (ABC). Both fractals start from the Dow/Gold ratio peaks (1966 and 1999). For these to continue the similarity, the level ($1920) at A and C needs to be surpassed on the current fractal.

We’ve already seen the breakout, now price has just been consolidating around that level. It is very close to blasting higher.

From a cycle analysis point of view, we are right at a point where a sustained multi-year gold rally is possible:

The top chart is gold from about 1997 to 2020 (current fractal), and the bottom chart is gold from about 1965 to 1980 (70s fractals). If the current fractal continues to follow the 70s fractal, then we could see gold continue to multiples of its current all-time high.

Currently, we are just after, or close to, a major Dow peak in the economic cycle. Again, you can see that the 2011 peak is an important indicator to confirm these fractals as relevant. It could also be considered a marker after which the chart is likely to go parabolic.

Bitcoin has been quiet, but could be ready to move higher at a frightening pace. Here is an updated chart that I shared on my blog previously:

The setup for Bitcoin is very similar to the end of 2013, based on these fractals. Price has completed a successful breakout at the wedge, and the retrace is also done.

We are likely in a move towards the $100 000 level at least.

The outlook for silver is really the same: continue on its parabolic path.

Pope Francis has once again shaken up the Vatican with his progressive politics, but this time, instead of weighing in on economic matters with little consequence to the Vatican (like the morality of capitalism, which the Pope has frequently attacked in his sermons), it seems he has touched a nerve by appearing to endorse same-sex marriage, a position the Church has vehemently opposed.

Bloomberg reports that the Vatican’s massive media apparatus has gone silent, and that all of the Pope’s spokespeople aren’t returning reporters calls while struggling to formulate a statement of their own. It appears they were as taken aback by the Pope’s comment as millions of practicing Catholics.

Neither the daily newspaper produced by the Vatican, nor the official Twitter feed of the Pope have made mention of either.

In an interview from the documentary film “Francesco”, which premiered Wednesday at the Rome Film Festival, the Pope appeared to break with Catholic dogman by saying all homosexuals are “children of God” and “have a right to a family.” The Pope even mentioned a “Civil Union law”, a much more progressive policy position than the Church has ever endorsed.

“They’re children of God and have a right to a family. Nobody should be thrown out, or be made miserable because of it,” he said, speaking in Spanish. “What we have to create is a civil union law. That way they are legally covered. I stood up for that.”

But some from inside the Vatican press shop have been talking – off the record, of course – with reporters, and they’re saying that “a response is still being hashed out.” That means that inside the Vatican, the notion of endorsing Civil Unions is probably being taken seriously, as the Church contemplates what would be its most progressive step yet under a Pope who has made his progressive approach to the Church a cornerstone of his reign. This wave of enthusiasm among the faithful that has yet to die out. But after COVID-19 forced Catholics around the world out of the pews for months, the Church probably understands that it must tread carefully as worshippers slowly return to Church.

Meanwhile, some have raised questions about when the Pope first made the remark, as the rest of his interview was virtually identical to an interview he gave last year to the Mexican broadcaster Televisa, though that interview didn’t include any comments on homosexuality when it aired.

Authored by Alasdair Macleod via GoldMoney.com,

The Eurozone is bust. The deterioration of TARGET2 imbalances have been hardly noticed, but in recent months it has been alarming. Despite official denials over the years that it is a matter of concern, it is increasingly obvious that the national banks of Italy, Spain and other nations with increasing bad debts are hiding them within the TARGET2 system. The first wave of Covid-19, which is leading to bankruptcies throughout the Eurozone, is now being followed by a second wave, which will almost certainly take out a number of important banks, in which case the cross-border euro system will implode.

Introduction

If ever there was a political construct the unstated objective of which is to enslave its population, it is the European Union. Its opportunity stems from national governments which, with the exception of Germany and a few other northern states, had driven or were on the way to driving their failed states into the ground. The EU’s objectives were to support the policies of failure by corralling the accumulated wealth of the more successful nations to fund the failures in a socialistic doubling-down, and to accelerate the policies of failure to ensure that all power resides in the hands of statist looters in Brussels.

It is Ayn Rand’s vision of the socialising state as looter in action.[i] All of surviving big business is aligned with it: those who refused to play the game have disappeared. Senior executives with extensive lobbying budgets are no longer at the beck and call of contentious consumers and have hollowed out their smaller competitors. They have opted for the easier non-contentious life of seeking favours of the looters in Brussels, enjoying the champagne and foie gras, the partying with the movers and shakers, and the protection they bribe for their businesses

It is a corrupt super-state that evolved out of American post-war policy — the child of the American Committee of United Europe. Funded and staffed by the CIA in 1948, the committee’s objectives were to ensure the European countries bought into a US-controlled NATO, in the name of stopping Stalin’s westwards expansion from the post-war boundaries. This was the official story, but it is notable how it formed a template for subsequent American control of other foreign states. It is the action of the jewel wasp that turns a cockroach into a zombie, so that its lava can subsequently feed off it.

This European cockroach is now in the final stages of its zombified existence. In Brussels they don’t realise it, but they are partying into the dawn of the next world, and they will have nowhere left to go. Outside of the Brussels hothouse and EU capitals it is hard to discern any support for a failing political system, beyond simply keeping the show on the road. The German population grumbles about lending their money to economic failures, but like any creditor deep in the hole they will remain blind to the deeper systemic problem for fear of its collapse. At the other extreme are the Greek socialists who claim Germany still owes them for their brutality and destruction seventy-five years ago. It is a Faustian pact between creditors and debtors to ignore the reality of their respective positions. It is the method of imperialism; but instead of being applied to other nations, Brussels applies imperial suppression to its own member states. And now that they been hollowed out, there is nothing left to sustain Brussels.

This is the destination they have arrived at today. Brussels and its European Parliament are nearing the end of their ridiculously expensive and pointless pig-on-pork socialising destruction. Not only have the panjandrums no one left to rob, nowhere left to go, but they have bankrupted a whole continent. Surely, the robbing of the rich and giving to the poor is close to its end. The creditors and debtors have nothing material left — money in everyone’s balance sheet will be written off through a monetary and economic collapse. It is the process of it and the destination we must analyse.

The Eurozone’s banking system is a heartbeat from collapse, as will become evident in this article. There are two basic elements involved. At the bottom there are the commercial banks with rapidly escalating non-performing loans, a phrase which hides the truth, that they are irretrievable bad debts. At the top is the Eurozone-wide settlement system, TARGET2, which is increasingly used to hide the bad debts accumulating at national levels.

Before we look at the position of the commercial banks, in order to understand how toxic the Eurozone has become we will start by exposing the dangers hidden in the settlement system.

TARGET2 — chickens are coming home to roost

The imbalances between the ECB and the national central banks in the TARGET2 Eurozone settlement system are indicative of the current situation.

Germany (light blue) is now “owed” €1.15 trillion, an amount that has escalated by 27% between January and September. At the same time, the greatest debtors, Italy, Spain and the ECB itself have increased their combined debts by €275bn to €1.3 trillion (before September’s additional deterioration for Spain and the ECB are reported — only figures up to August for them are currently available). But the most rapid deterioration for its size is in Greece’s negative balance, increasing by €45.6bn between January and August.

Is the Bundesbank worried by the increasing quantities of euros owed to it in a system that was always intended to roughly balance? Certainly. Will it publicly complain, or privately demand they be corrected? Almost certainly not. For statist systems such as the EU depend entirely on total obedience towards a common objective. All dissenters are punished, in this case by the waves of destruction that would be unleashed by any state refusing to continue to support the PIGS. TARGET2 is a devil’s pact which is in no one’s interest to break.

The imbalances are all guaranteed by the ECB. In theory, they shouldn’t exist. They partially reflect accumulating trade imbalances between member states without the balancing payment flows the other way. Additionally, imbalances arise when the ECB instructs a regional central bank to purchase bonds issued by its government and other local corporate entities. As the imbalances between national banks grew, the ECB has stopped paying for some of its bond purchases, leading to a TARGET2 deficit of €297bn at the ECB. The corresponding credits conceal the true scale of the deficits on the books of the PIGS national central banks. For example, to the extent of the ECB’s unpaid purchases of Italian debt, the Bank of Italy owes more to the other regional banks than the €546bn headline amount suggests.

Inside the workings of TARGET2

The way TARGET2 works, in theory anyway, is as follows. A German manufacturer sells goods to an Italian business. The Italian business pays by bank transfer drawn on its Italian bank via the Italian central bank through the Target2 system, crediting the German manufacturer’s German bank through Germany’s central bank.

The balance was restored by trade deficits, in Italy, for example, being offset by capital inflows as residents elsewhere in the eurozone bought Italian bonds, other investments in Italy and the tourist trade collected net cash revenues.  As can be seen from the chart, before 2008 this was generally true. Part of the problem is down to the failure of private sector investment flows to recycle trade-related payments.

Then there is the question of “capital flight”, which is not capital flight as such. The problem is not that residents in Italy and Spain are opening bank accounts in Germany and transferring their deposits from domestic banks. It is that the national central banks which are heavily exposed to potentially bad loans in their domestic economy know that their losses, if materialised in a general banking crisis, will end up being shared throughout the central bank system, according to their capital keys if they are transferred into the TARGET2 settlement system.

If one national central bank runs a Target2 deficit with the other central banks, it is almost certainly because it has loaned money on a net basis to its commercial banks to cover payment transfers, instead of progressing them through the settlement system. Those loans appear as an asset on the national central bank’s balance sheet, which is offset by a liability to the ECB’s Eurosystem through Target2. But under the rules, if something goes wrong with the TARGET2 system, the costs are shared out by the ECB on the pre-set capital key formula.

It is therefore in the interest of a national central bank to run a greater deficit in relation to its capital key by supporting the insolvent banks in its jurisdiction. The capital key relates to the national central banks’ equity ownership in the ECB, which for Germany, for example, is 26.38% of the euro-area national banks’ capital keys.[ii] If TARGET2 collapsed, the Bundesbank, to the extent the bad debts in the Eurosystem are shared, would lose the trillion plus euros owed to it by the other national central banks, and instead have to pay up to €400bn of the net losses, based on current imbalances.

To understand how and why the problem arises, we must go back to the earlier European banking crisis following Lehman, which has informed national regulatory practices. If the national banking regulator deems loans to be non-performing, the losses would become a national problem. Alternatively, if the regulator deems them to be performing, they are eligible for the national central bank’s refinancing operations. A commercial bank can then use the questionable loans as collateral, borrowing from the national central bank, which spreads the loan risk with all the other national central banks in accordance with their capital keys. Insolvent loans are thereby removed from the PIGS’ national banking systems and dumped on the Eurosystem.

In Italy’s case, the very high level of non-performing loans peaked at 17.1% in September 2015 but by mid-2019 had been reduced to 6.9%. Given the incentives for the regulator to deflect the non-performing loan problem from the domestic economy into the Eurosystem, it would be a miracle if any of the reduction in NPLs is genuine. And with all the covid-19 lockdowns, Italian NPLs will be soaring again.

In the member states with negative TARGET2 balances such as Italy there have been trends to liquidity problems for legacy industries, rendering them insolvent. With the banking regulator incentivised to remove the problem from the domestic economy, loans to these insolvent companies have been continually rolled over and increased. The consequence is that new businesses have been starved of bank credit, because bank credit in the member nation’s banks is increasingly tied up supporting the government and businesses that should have gone to the wall long ago. The added pressure on failing Italian businesses from covid-19 is now being reflected in the Bank of Italy’s soaring TARGET2 deficit. The system could not be more calculated to cripple the Italian economy over the longer term.

Officially, there is no problem, because the ECB and all the national central bank TARGET2 positions net out to zero, and the mutual accounting between the national central banks keeps it that way. To its architects, a systemic failure of TARGET2 is inconceivable. But, because some national central banks end up using TARGET2 as a source of funding for their own balance sheets, which in turn fund their dodgy commercial banks using their non-performing loans as collateral, some national central banks have mounting potential liabilities, the making of national bank regulators.

The Eurosystem member with the greatest problem is Germany’s Bundesbank, now owed well over a trillion euros through TARGET2. The risk of losses is now accelerating rapidly as a consequence of the first round of Covid lockdowns, as can be seen in the chart of TARGET2 imbalances above. The second round of surging infections is leading to yet more economic destruction, yet to be reflected in TARGET2 balances, which will increase again. The Bundesbank should be very concerned.[iii]

Current imbalances in the system total over €1.5 trillion. According to the capital keys, in a systemic failure the Bundesbank’s assets of €1.115 trillion would be replaced by liabilities up to €400bn, the rest of the losses being spread around the other national banks. No one knows how it would work out because failure of the settlement system was never contemplated; but many if not all of the national central banks will have to be bailed out on a TARGET2 failure, presumably by the ECB as guarantor of the system. But with only €7.66bn of subscribed capital the ECB’s balance sheet is miniscule compared with the losses involved, and its shareholders will themselves be seeking a bailout to bailout the ECB. A TARGET2 failure would appear to require the ECB to effectively expand its QE programmes to recapitalise itself and the whole eurozone central banking system.

Now that really would be a crisis, the likes of which has never been seen before, where a central bank prints money purely to save itself and its regional agents.

The commercial banks are also in deep trouble

The deterioration in TARGET2 imbalances cannot be ignored by those with links to or outside of the Eurozone. While the UK is not in the euro or the TARGET2 settlement system, the Bank of England is a 14% shareholder in the ECB and could be on the hook for significant sums in the case of a Eurozone systemic crisis. Furthermore, with the City of London being the international financial centre for Europe, the UK banking system has considerable counterparty risks with Eurozone banks and other European banks.

Over 50% of the iShares STOXX Europe 600 Banks ETF is invested in Eurozone banks: 28% is invested in UK banks, 13% in Swedish banks, and the balance in Danish and Swiss banks. Its weighting in favour of the Eurozone and UK makes it a reasonable proxy for the market rating of the major banks based in the European time zone. Figure 2 shows the performance of this ETF compared with the S&P500 Index, taken as a proxy for the world’s stockmarkets.

Since the aftermath of the Lehman crisis in 2008, the S&P500 index was in a continual bull market until February this year. At the same time, the share prices of European banks as represented in the ETF were in a bear market. Ahead of the Fed’s reflationary move on 23 March, from mid-February both the S&P500 and the European banks ETF crashed, but the S&P then soared to new hights. After the briefest of recoveries, the ETF sank to new lows.

Given the strong performance of equity markets following the March lows, the abysmal performance of the banks’ shares is ominous. In fact, the contradiction is so great the message from the stock markets appears to be that the Fed and other central banks will ensure, so far as they can, that stimulus will reach businesses sufficiently for them to recover from the covid-19 hiatus irrespective of the banks survival. It is a contradictory message suggesting businesses may survive and prosper but banks might not.

Besides the enormous implied faith among investors being placed in the ability of central banks to keep the wealth creating stock market bubble on the boil, either banks are being overlooked or are in serious trouble. The latter appears to be the case. Being more undercapitalised than the major commercial banks in any other region, many Eurozone banks present serious systemic risks and should not be trading. Figure 1 shows the market leverages of European globally-important banks — the G-SIBs, including those of EU, UK and Switzerland.

Only two of them, the Swiss banks, have price to book ratios in excess of 50%. As well as these G-SIBs there are many other commercial banks in Europe with similarly horrifying price to book ratios and balance sheet to market capital leverage ratios. Blind to the implications of market capitalisations, regulators look no further than the relationship between total assets and balance sheet equity. But when markets place a price to book valuation of considerably less than 100% on any enterprise, they tell us the enterprise is not just insolvent, but in a winding-up, shareholders are unlikely to recover their funds. So, when we observe that Société Generale, the major French bank, has a price to book ratio of only 16.4%, without a major capital injection it is almost certainly bankrupt because its share price is little more than option money on its future survival.

The price to book values of all these G-SIBs have improved marginally in recent weeks, carried along by a dead-cat bounce. Even then, bank stocks remain close to their long-term lows when stock indices such as the S&P500 index have been forging new highs. This contradiction also suggests that investors have not been making rational decisions, and that with the exception of banks, stock markets are being driven by a combination of monetary expansion and the madness of crowds.

European businesses are now being bankrupted by a second covid-19 wave. The bankruptcies from the first have not yet fully worked into the financial system and will now be compounded by a second wave. Nothing can stop non-performing loans increasing and undermining overstretched commercial banks. The game of passing the parcel up into TARGET2 imbalances will continue until it crashes. Since few understand TARGET2 and those that do are frightened into silence, presumably it will be market assessments of individual banks  and their collapse into bankruptcy that will be the trigger for a widespread systemic crisis in the Eurozone. The whole Eurozone monetary system is deep into borrowed time.

The euro’s valuation

For the moment, the euro is riding high against the dollar, encouraging the ECB to explore deeper negative interest rates. But it is worth reminding ourselves of the currency dynamics behind the euro-dollar cross rate.

Until September 2019, large hedge funds were playing the fx swaps market. In effect, through their banks they were borrowing euros, selling them for dollars, and gaining the interest differential. This was one of the reasons for last September’s repo crisis in New York, when the leading banks ran out of balance sheet to finance both fx swaps and other derivative and credit activities. The repo crisis ended with the Fed cutting its funds rate from 2%, first to 1.5% then 1%, which took much of the steam out of the euro-dollar fx cross. With those positions now closed down the euro is more influenced by trade flows. And here, the EU runs a trade surplus of about €150bn with the US, which given that the US budget deficit has increased substantially, seems set to increase further unless Americans suddenly adopt a savings habit.

The capital position is favourable to the euro as well, when in June 2019, the last recorded total of US financial securities held by EU residents, totalled $9.631 trillion.[iv] And US residents’ ownership of Euro area securities totalled $2.952 trillion at end-2019[v] — a gap of $6.679 trillion. Therefore, in a banking crisis when foreign investments get sold down, there is likely to be substantial net buying of the euro against the dollar.

The euro has the potential to rise further against the dollar before and possibly during a systemic banking crisis. After such a crisis, all bets will be off. All we know is that the rottenness of the euro area monetary system will almost certainly lead to its destruction and most likely the end of the euro itself. The immediacy of the problem allows us to dismiss talk of resets and central bank digital currencies, which are being pushed by the monetary looters at the ECB who might sense there is a crisis to avoid. The talk of monetary stimulation with yet deeper negative interest rates is part of it, the hope being a new central bank digital currency will bypass a broken banking system.

But now the commercial banks are bust, we are about to see a monetary implosion that can only result in the euro’s destruction.

A Phoenix will arise from the ashes — eventually

It was not the people, but the governments they were fooled into electing, and which in turn were fooled into the European project, which will bear responsibility for the collapse of the European Union. The large corporations which were corrupted into supporting socialistic ideals instead of serving their customers for profit, played their part in the looting. All this will be destroyed. There will be acute hardship as the rotten system collapses, but so be it.

Hopefully, the civil conflicts and the evolution to a sounder form of money and monetary system will be time-limited — but that depends on how long events take to evict the looters in government. The best that the residents of Euroland can hope for at this juncture is that the collapse of the money will hasten their demise.

The fate of the euro will be shared with the majority — if not all — of other fiat currencies for reasons specific to them. The recovery from the ashes of government incompetence can be swift — a matter of a year or two, so long as successor governments quickly learn that free markets, sound money and minimal interference from government are all required for the restoration of economic progress. Additionally, all socialist policies must be discarded, and the profit motive and individual wealth creation embraced.

It will require the wholesale destruction of state bureaucracies — that will happen when the euro collapses. And they must not be replaced by new bureaucracies beyond a bare minimum required for administering law and order. Politicians must learn that bureaucratic power is a false and dishonest objective, and that a nation can only become great by the efforts of its people pursuing profits by providing what consumers want. As a creed, Caveat emptor for consumers must be reinstated.

Consumers are the kings to be worshipped by producers seeking profits. And consumers have a responsibility to themselves, judging what is best for them and not relying on regulating government agencies to decide on their behalf. In business, there is no room for the luxuries of dissent. Employing people on the basis of their sex, race, disabilities and other mores must cease. The basis of any employment must be purely on ability, skills and suitability. All regulations over production must be abandoned. The businesses that supped with the devil in Brussels must never regain the advantages through their political influence. If they don’t collapse with the euro, these corporations will have to learn to survive competition from new challengers on their own.

The concept of a European superstate must be discarded, and any attempt to reinvent it firmly stopped. European nations must stand by the successes and failures of their national abilities to create wealth, allowing their peoples to do it and retain it for themselves. Tax competition between jurisdictions will help guarantee that the growth of government is contained.

Underwriting a new Europe must be small government, free markets and sound money. As Germany discovered following both world wars, sound money is the precondition for economic progress. Fortunately, there are still a few sound money men in the central banks of Germany, The Netherlands, and believe it or not France and Italy — evidenced by their gold holdings and in the case of the former two their repatriation from foreign vaults. They must establish their own gold substitutes and be directly exposed to the consequences of monetary manipulation, should future governments be tempted to corrupt the money again.

The concept of farming out monetary affairs to a superstate organisation will have been disproved by the collapse of the euro and must not be attempted again. In a successful future, the people of Europe will decide personal their needs and wants, individually.

Authored by Joaquin Flores via The Strategic Culture Foundation,

People living in the western world are in the greatest fight for the future of pluralist and republican forms of governance since the rise and fall of fascism 75 years ago. As then, society had to be built up from a war. Today’s war has been an economic war of the oligarchs against the republic, and it increasingly appears that the coronavirus pandemic is being used, on the political end, as a massive coup against pluralist society. We are being confronted with this ‘great reset’, alluding to post-war construction. But for a whole generation people have already been living under an ever-increasing austerity regimen. This is a regimen that can only be explained as some toxic combination of the systemic inevitabilities of a consumer-driven society on the foundation of planned obsolescence, and the never-ending greed and lust for power which defines whole sections of the sociopathic oligarchy.

Recently we saw UK PM Boris Johnson stand in front of a ‘Build Back Better’ sign, speaking to the need for a ‘great reset’. ‘Build Back Better’ happens to be Joe Biden’s campaign slogan, which raises many other questions for another time. But, to what extent are the handlers who manage ‘Joe Biden’, and those managing ‘Boris Johnson’ working the same script?

The more pertinent question is to ask: in whose interest is this ‘great reset’ being carried out?

Certainly it cannot be left to those who have built their careers upon the theory and practice of austerity. Certainly it cannot be left to those who have built their careers as puppets of a morally decaying oligarchy.

What Johnson calls the ‘Great Reset’, Biden calls the ‘Biden Plan for a Clean Energy Revolution & Environmental Justice’. Certainly the coming economy cannot be left to Boris Johnson or Joe Biden.

How is it that now Boris Johnson speaks publicly of a ‘great reset’, whereas just months ago when those outside the ruling media paradigm used this phrase, it was censured by corporate Atlanticist media as being conspiratorial in nature? This is an excellent question posed by Neil Clark.

And so we have by now all read numerous articles in the official press talking about how economic life after coronavirus will never be the same as it was before. Atlanticist press has even run numerous opinion articles talking about how this may cut against globalization – a fair point, and one which many thinking people by and large agree with.

Yet they have set aside any substantive discussion about what exists in lieu of globalization, and what the economy looks like in various parts of the world if it is not globalized. We have consistently spoken of multipolarity, a term that in decades past was utilized frequently in western vectors, in the sphere of geopolitics and international relations. Now there is some strange ban on the term, and so we are now bereft of a language with which to have an honest discussion about the post-globalization paradigm.

Technocracy or Pluralism? A Fight Against the Newspeak

Until now, we have only been given a steady diet of distancing, of lockdown provisions, quarantining, track and trace, and we have forgotten entirely about the fact that all of this was only supposed to be a two or three-week long exercise to flatten the curve. And now the truth is emerging that what is being planned is a new proposal being disguised as a ‘great reset’.

One of the large problems in discussing the ‘great reset’ is that a false dichotomy has arisen around it. Either one wants things to be how they were before and without changes to the status quo, or they promote this ‘great reset’. Unfortunately, Clark in his RT article falls into this false dichotomy, and perhaps only for expedience sake in discussing some other point, he does not challenge the inherent problems in ‘how things were before’. In truth, we would be surprised if Clark did not appreciate what we are going to propose.

What we propose is that we must oppose their ‘new normal’ ‘great reset’, while also understanding the inherent problems of what had been normalized up until Covid.

The way things were before was also a tremendous problem, and yet now it only seems better in comparison to the police state-like provisions we’ve encountered throughout the course of politicizing the spectre of this ‘pandemic’.

Oddly this politicization is based in positive cases (and not hospitalizations) ostensibly linked to the novel coronavirus. Strangely, we are told to ‘listen to the consensus science’ even as these very institutions consist of politically arrived at appointments. Certainly science is not about consensus, but about challenging assumptions, repeatability and a lively debate between disagreeing scientists with relatively equal qualifications. As Kuhn explains in The Structure of Scientific Revolutions, science is always evolving, and by definition potentially overturns consensus paradigms. This is a debate we have not seen, and this fact by itself represents an illiberal cancer growing on an already defective pluralist society – ironically, all flying under the banner of liberalism.

Decisions that a society decides to take should be driven by reason, prudence, and justice. What is or isn’t scientific plays a role, but cannot be the deciding factor. Science clearly says that we may eliminate cross-walk injuries by banning street-crossing or by banning driving, but what policy makers must do is account for the need to have both cars and crossing the street, in deciding how – if it’s even possible – to reduce or eliminate such injuries. Science is only one part of this equation.

But isn’t economics also a science? Is sociology not a science? What about psychology and psychiatry – as in the known effects of social isolation and, say, suicide prevention? What about housing and urban planning? The great sociologist Emile Durkheim explains how these are sciences – they adopt and apply the scientific method in their work. Universities have been awarding doctoral degrees in these sciences for a century or more, do these expert opinions not count when managing a public catastrophe?

It is, and always has been, a political and politicized position to listen to some scientists, and not others.

And so what of our term ‘reset’? Indeed, it is itself misleading, and we would propose it is intentionally so if we understand Orwell’s critique of the use of language – newspeak – in technocratic oligarchies.

A ‘reset’ textually refers to going back to something once known, erasing defects or contradictions which arose along the way, which carries with it the familiar, and something we had previously all agreed to. A ‘reset’ by definition means going back to how things were before – not just recently, but before at some point farther back. Its definition is literally contrary to how Boris Johnson means it in his shocking public statement at the start of October.

The term ‘reset’ was therefore arrived with extraordinary planning and thoughtfulness, with the intent to persuade [manipulate] the public. It simultaneously straddles two unique concepts, and bundles them together at once into a single term in a manner that reduces nuance and complexity and therefore also reduces thinking. It does so while appealing to the implicit notion of the term that it relates to a past consensus agreement.

If understood as we are told to understand it, we must hold two mutually contradictory notions at the same time – we are incongruously told that this reset must effectively restore society to how it was at some point before because things can never be how they were at any time before. Only within the paradigm of this vicious newspeak could anything ever have the public thinking that such a textual construction makes any bit of sense.

What are Our Real Options? Whose Reset?

Those who understand that this ‘reset’ is not a reset but rather a whole new proposal on the entire organization of society, but being done through oligarchical methods and without the sort of mandate required in a society governed by laws and not men, are – as we have said – reluctant to admit that a great change is indeed necessary.

Rather, we must understand that the underlying catastrophic economic mechanisms which are forcing this great change exist independently of the coronavirus, and exist independently of the particular changes which the oligarchs promoting their version of a ‘reset’ (read: new proposals) would like to see.

You see, the people and the oligarchs are locked into a single system together. In the long-term, it seems as if the oligarchs are looking for solutions to change that fact, and effect a final solution that grants them an entirely break-away civilization. But at this moment, that is not the case. Yet this system cannot carry forward as it has been, and the Coronavirus presents a reason at once both mysterious in its timing and also profound in its implications, to push forward a new proposal.

We believe that technology is quickly arriving at a point where the vast majority of human beings will be considered redundant. If the technocracy wants to create a walled civilization, and leave the rest of humanity to manage their own lives along some agrarian, mediaeval mode of production, there may indeed be benefits to those who live along agrarian lines. But based in what we know about psychopathy, and the tendency of that among those who govern, such an amicable solution is likely not in the cards.

That is why the anti-lockdown protests are so critically important to endorse. This is precisely because the lockdown measures are used to ban mass public demonstrations, a critical part of pushing public policy in the direction of the interests of the general public. A whole part of the left has been compromised, and rolled out to fight imaginary fascists, by which they mean anyone with conventional social views which predate May of 1968. All the while the actual plutocrats unleash a new system of oligarchical control which, for most, has not been hitherto contemplated except by relatively obscure political scientists, futurists, and science fiction authors.

Certainly the consumerist economic system (sometimes called ‘capitalism’ by the left), which is based in both globalized supply chains but also planned obsolescence, is no longer feasible. In truth, this relied upon a third-world to be a source of both raw materials and cheaper labor. The plus here is that this ‘developing world’ has largely now developed. But that means they will be needing their own raw materials, and their own middle-classes have driven up their own cost of labor. Globalization was based in some world before development, where the real dynamic is best explained as imperialism, and so it makes sense that this system is a relic of the past, and indeed ought to be.

It increasingly appears that the ‘Coronavirus pandemic’, was secondary to the foregone economic crisis which we were told accompanied it. Rather, it seems that the former came into being to explain-away the latter.

Another world is possible, but it is one which citizens fight for. In the U.S., England, Scotland, Ireland, and Germany, there have already been rather large anti-lockdown demonstrations. These, as we have explained, are not just against lockdown but are positively pushing to assert the right to public and political association, to public and political speech, and the redressing of grievances. This is a fundamental right for citizens in any republic where there is any sort of check on the oligarchy.

We have written on the kind of world that is possible, in our piece from April 2020 titled: “Coronavirus Shutdown: The End of Globalization and Planned Obsolescence – Enter Multipolarity”. That lays out what is possible, and what the problems of pre-corona system were, in economic terms more than political. Here we discuss the problems of globalization-based supply chain security in a multipolar world, and the larger problem of planned obsolescence, especially in light of 3D printing, automation, and the internet of things.

We posed the philosophical question as to whether it is justified to have a goods-production system based upon both the guaranteed re-sale of the same type of goods due to planned obsolescence and the ‘work guarantees’ that came with it. In short, do we live to work or to we work to live? And with the 4th industrial revolution looming, we posed the question of what will happen after human workers are no longer required.

Pluralist society is the compromise outcome of a ceasefire in the class war between the oligarchy and the various other classes that compromise the people, at large. Largely idealized and romantic ideas that form the basis of the liberal-democratic ideology (as well as classical fascism) are used to explain how it is the oligarchy that is so very committed to that arrangement of pluralism, and that this very arrangement is the product of their benevolence, and not the truth: that it was the fight put up by common people to fight for a more just future. No doubt there have been benevolent oligarchs who really believed in the liberal ideology, of which fascism is one of its more radical products. But the view that the class struggle can be acculturated or legislated into non-existence is similar to believing that the law of gravity can be ruled unlawful in a court.

Perhaps we have forgotten what it takes, and perhaps things just have not gotten bad enough. Decreases in testosterone levels in the population may be leading to a dangerous moment where vigorous defiance to injustice is much less possible. Critical now is to avoid any artificial means to opiate ourselves into thinking things are better than they are, whether by way of anti-depressants or other self-medication. Only with a clear assessment of the real situation on the ground can we forge the necessary strategy.

The great political crisis now is that a pandemic is being used to justify an end-run around constitutional rights, an end-run around pluralist society, and so the vehicle – the mechanism – that the general public might use to fight for their version of a ‘reset’ is on the verge of disappearing.

In many ways this means that now is the final moment. We ask – whose great reset, ours or theirs?

The mysterious Havana “sonic attacks” are back in the media after Secretary of State Mike Pompeo on Wednesday said an investigation is still underway. He was responding to newly published allegations of a cover-up.

Recall that starting in 2016 into 2017 there were bizarre reports that nearly two dozen American diplomats – and a handful of Canadians – serving at embassies in Havana suffered hard-to-pin-down symptoms from the alleged “sonic attacks”. Personnel reported experiencing everything from vomiting to concussions to chronic headaches to minor brain injuries.

“It’s a very complicated situation and there is not yet any complete US government analysis which definitively tells us precisely how these all came to be, whether they’re part of a single cohort,” Pompeo told reporters Wednesday.

“There are multiple theories, and you should know there are significant US government resources… three-plus years on, devoted to getting to the bottom of this and then holding those responsible accountable should we determine that that’s required,” he said.

It was thought serious enough for the Trump administration to withdraw half the US embassy staff while expelling Cuban diplomats in September 2017, given the ‘sound waves’ were thought intentional, or “specific attacks”. Investigators had offered several theories about a high-tech attack by Cuba’s government, or perhaps a rogue faction of its security forces, or possibly a third country like – wait for it – Russia. Another theory was that an eavesdropping device may have gone awry. 

The whole episode gave rise to endless theories, even that it was a natural phenomenon due to sounds produced by crickets in Havana, according to one scientific inquiry featured in The Guardian in 2019. Other scientists posited the possibility of mass hysteria among staff serving in a high stress environment. 

Asked about the mysterious ‘Havana Syndrome’ among US diplomats in #Cuba, #China and elsewhere, @SecPompeo says it’s “patently false” that @StateDept didn’t protect its personnel because of larger political objectives. “We can continue to try to determine the causation of this.” pic.twitter.com/o1fGGdLxEq

— Steve Herman (@W7VOA) October 21, 2020

But apparently it wasn’t just American personnel stationed in Cuba that were harmed, as the AFP notes this week:

Similar cases began emerging in 2018 among US personnel in the southern Chinese city of Guangzhou, with Pompeo initially linking the situation to the episodes in Havana.

But The New York Times, in an investigation published Tuesday, said that the State Department had played down the incidents in China and did not open a similar investigation.

The newspaper said that a clandestine CIA officer in Moscow also suffered debilitating headaches that forced him into retirement, raising suspicions that Russia was waging non-traditional warfare in multiple sites.

The issue is also surfacing again over allegations the Trump administration ultimately did nothing to resolve the issue. US diplomats and spies have recently accused the White House and top brass in federal agencies of intentionally downplaying it to the point of cover-up, given they don’t have answers. 

“There were no politics attached to this. The suggestion somehow is that we didn’t protect our officers because of some larger political objective – that is patently false,” Pompeo hit backed when pressed.

There now appears to be consensus within the US administration that Cuba or Russia may be using James Bond villain type high-tech devices which can imperceptibly impact the health of American personnel stationed abroad without them knowing about it. At this point there’s even a name for it and lengthy entry in Wikipedia, called “Havana Syndrome”.