Category: zerohedge

While he may be willfully blind (or worse?) to China’s human rights abuses (stoking a sharp rebuke from the likes of Mitt Romney), when it comes to domestic matters Billionaire Ray Dalio thinks there’s a “dangerously high risk” of civil war in the United States within the next decade due to an “exceptional amount of polarization” in the country.

In his new book, “Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail,” Dalio points to the six stages of an internal order/disorder cycle – and estimates that there’s a 30% chance of civil war.

“For example, when close elections are adjudicated and the losers respect the decisions, it is clear that the order is respected. When power is fought over and grabbed, that clearly signals the significant risk of a revolutionary change with all its attendant disorder,” he writes, adding that “a vast number of people – including high-ranking officials, have openly doubted the validity of recent elections, and have expressed a willingness to fight for their beliefs.”

Dalio also points to various studies showing that Americans are currently in an emotionally charged divide between political parties, according to Russia’s state-sponsored RT. In one recent survey noted by Dalio, 15% of Republicans and 20% of Democrats thought the country would be better if the opposing political party “just died.”

Authored by Mitch Klee via BitcoinMagazine.com,

How looking at the history of technological adoption can give us insights into where Bitcoin could be embraced the fastest…

INTRO

Throughout time, technology has proven to change our lives by leveraging efficiencies in energy. New ways in how we hunt have saved time and energy for innovation and to live more intentionally. Currently, Bitcoin presents an immense opportunity to change the lives of those who are burdened by old forms of manipulated money and preserve their time and energy. It is the first self-sovereign, programmable money that is proving to destroy expectations of every “expert” imaginable. At the intersection of money and technology, Bitcoin’s network effect is spreading like a mind virus to all corners of the globe. This is not a coincidence but the manifestation of a zero to one moment; a radical new technology that will change nearly everything it touches.

This article explores the idea that some regions and nations have a higher susceptibility to adoption in new monetary networks. Specifically, I will outline how the unbanked populations of emerging countries can leapfrog legacy systems, straight into a new monetary standard. But first, let’s lay the groundwork for understanding how this can happen with some concepts.

DEMOCRATIZATION OF TECHNOLOGY

To understand leapfrogging, let’s first look into something that naturally happens when humans produce technology: the democratization of technology. As we make technology, the cost reduces, while the ease of production increases. Our tools get better, people’s skills improve, securing the material for production gets easier, logistics improve, and everything is less costly as humans continue increasing the output/yield over time. Simply put, cost goes down, while production goes up.

Figure 1.

A great example is the printing press. Before this innovation, each book had to be typed out or written one by one and distributed almost by osmosis. This means books were more expensive and were only in the hands of the few. After the printing press, people were able to automate a portion of the process by creating blueprints of the books. This cut down labor costs, and there was a huge explosion in printed material. This may have put people out of work; but it also introduced better dissemination of information to a wider group of people and new opportunities to produce more books for less cost and effort.

Another example is photography. Historically, taking photos on film took hours to produce in a dark room. The film had to be brought to a local expert and it would take several days to get back the finished product. Smartphones and photoshop technology made this essentially free. It was then possible to download an app or use the built-in app on smartphones, take pictures, and immediately process them. Democratization of technology has been happening across every single aspect of human society since the beginning of time. Humans create tools to make it easier and cheaper to survive. Each tool becomes better, we then expand and evolve with less energy improving the quality of life.

Fast-forward to the internet age. Emerging countries are just now tapping into the power of the internet. Although there are many factors underlying the reasons for expansion, one thing that is known is that technology builds on itself, making each successive technology easier to produce. Not only is there growth, but there is exponential growth. Certain times throughout history, technology has made such a large leap forward that it allows extremely poor countries to skip the legacy technology and quickly adopt the new one. This is called leapfrogging.

LEAPFROGGING EXPLAINED

Leapfrogging is when the cost to produce one technology is too great for a population, so when a new, drastically cheaper technology is created it’s quickly adopted and the old tech is skipped. This is the coexistence and benefit of separate populations within society. Let’s look at the mobile phone revolution as a way to explain leapfrogging. Some societies did not have the wealth or infrastructure to adopt landlines and phone communication when it was brand new, but when the mobile phone was introduced, this gave mostly everyone around the world the ability to opt-in.

Figure 2. Landlines in the U.S., 1900–2019.

Figure 2 shows the number of landlines in the U.S. population from the 1900s to 2019. Throughout the entirety of the 20th century, the landline was being adopted in the U.S. Consequently it only took a decade to dethrone this old technology. The decline started when the benefit of cell phones outweighed the cost compared to landlines. This is where democratization hit the tipping point and we saw a huge jump from one technology to the next. Now it’s extremely cheap to use technology that is 100 times or even 1,000 times more advanced than the previous. Mobile phones usurped landlines because they were more affordable, easier to use and more mobile. Figure 2 shows how quickly a society can adopt a technology that has significantly more benefits than the previous, even in an advanced society.

A similar thing is happening with television and the internet. Netflix came out and disrupted how people consume media on the television. As more platforms emerged, and people realized they could pay a fraction of the cost for a Netflix subscription rather than $100 for cable and a bunch of commercials, the switch was easy. Legacy systems were bogged down by all of the brick-and-mortar stores and overhead costs. They could not compete and pivot quickly enough, so they lost their seat at the table.

Figure 3. Number of telephone subscriptions in the U.S. versus worldwide.

When comparing fixed telephone subscriptions to other countries, the U.S. was way ahead of most. Many factors were contributing to this. Wealth played a huge part, but much of it was the production and first movers’ advantage. The U.S. was the first country to set up telephone lines from Boston to Somerville Massachusetts and expanded from there. Other countries did not have this opportunity, so they were laggards in the technology simply by default. It also made it easy to have a grid to run on top of, being a technologically advanced country with a power grid. Because it was so resource-heavy to set up this grid, this took over 30 years to build up the infrastructure.

Figure 4. Landline subscriptions compared to GDP per capita, 2019.

One of the main reasons why it was so hard to increase telephone subscriptions in other countries is because of the initial cost. You can’t just tap into a telephone line, there needs to be a large grid, infrastructure and companies/governments willing to build out this grid. Figure 4 shows that there is a rough line at a GDP per capita of $5,000 to get off zero and start communicating via landline. As the GDP per capita grows in a country, it is more likely they adopt fixed landlines. This is a huge barrier to entry as they try and compete to be a part of the 21st century. With telephones, it brings an easier flow of information across long distances quickly. These are important technologies that helped first-world countries advance quicker than their counterparts. This technology could mean the difference between surviving and thriving in the modern era.

Figure 5. Mobile phone subscriptions versus GDP per capita, 2019.

Things get much different when you start looking at mobile phones in Figure 5. To have a mobile phone is drastically cheaper than having a landline, all costs considered. Before, you needed the infrastructure and everything that came with installing a landline phone. But with mobile phones, even at a GDP per capita of less than $1,000, you get ~50% penetration of adoption within the population. All of the countries that were left out of communication with landlines, now have leapfrogged the old technology, right into a new standard of mobile phones.

People benefit, businesses benefit and countries benefit immensely from these technologies. With mobile communication, people have higher leverage over their energy output. Businesses and life in general are more efficient, in turn creating a higher GDP for the country. It is a feedback loop that is good for all of humanity. When one group of people creates new technology, everyone benefits at one point or another.

FROM LANDLINES TO MOBILE PHONES TO INTERNET-CONNECTED SMARTPHONES

Not only are poorer countries leapfrogging into mobile phone communication, but they are, in turn, jumping right into the internet age. On top of that, (Android) smartphone costs are dropping significantly every year, with the average cost down by 50% from 2008 to 2016. With the growing ability to connect with the rest of the world comes more opportunities to learn and grow with the rest of the world. An incredible amount of information is available on the internet, and the benefit of being on the network is immeasurable.

Figure 6. Mobile versus landline subscriptions, worldwide, 1960–2019.

When comparing the numbers of mobile phone users to the numbers of landlines, you get a huge disparity in the pace at which they were adopted. Fixed landlines were around for almost 50 years before they started to see some real competition. Thinking back to our Figure 5, this makes sense, because the cost to build infrastructure is drastically higher than that of mobile phones. The opportunity a landline brought to civilization was immense, but the cost-effective mobility of cell phones transcends previous communication technology by a longshot.

As of September 2021, the world’s population was ~7.89 billion people. Of that, there are 10.5 billion cell phones with network connections. That is 2.52 billion more activated phones than there are people. This becomes thought-provoking when adoption data starts to reveal where mobile phones are headed next.

As people adopt mobile phones, smartphones are becoming cheaper and more abundant. The cost of production for smartphones is less and less each year, and soon there will be little reason to have a cell phone without internet connection because the cost difference will be so minuscule. Smartphone abundance is allowing people around the world to tap into the internet and it is estimated that “by 2025, 72% of all internet users will solely use smartphones to access the web.”

Figure 7. Share of the population using the internet, 1990–2019.

Currently, the world is in a transitionary period of communication. Not all of the world has access to the internet, only 65%, with an increasingly rapid pace of adoption. Because it is so inexpensive to get a mobile phone, and the benefits are immense, the world is being onboarded at an incredible rate.

To answer the question “What is Leapfrogging?” we can look directly at mobile phones. But it’s not just one leapfrog, it’s more of a continuous onboarding to the digital revolution for the entire human population. Things are getting cheaper, and technology is moving exponentially forward, toward a more connected future. Soon, everyone will have access to the internet and will bring about new and exciting opportunities for the world to grow. With the high rate of adoption in communication technology, mobile phones swept across low-GDP countries allowing information to spread. Smartphones are a small hop away from mobile phones. With smartphones comes all sorts of opportunities not to mention the connection to the world’s internet. In developing countries, the internet is starting to hit its hockey stick moment. Adoption continues to grow and as smartphones get cheaper, more people in the world have access to the internet, connecting them to their local and global economies and new innovations will come about in unforeseen ways.

This begs the question, what monetary network will they use to transact in the digital age? It’s taken years to get the legacy banking system up to speed. We’ve bootstrapped and “Frankensteined” many different ways to connect the internet to a centuries-old banking infrastructure, but these newly onboarded countries have the opportunity to skip that altogether. With no legacy banking infrastructure rooted within the nation, this leaves the door wide open for a new legacy.

LEAPFROGGING ONTO A BITCOIN STANDARD

It seems the stage is set for a paradigm shift. A perfect storm is brewing in populations that lack bank accounts and access to store their wealth. Coupling this with connection to the internet, and 21st-century e-commerce and monetary system, it is impossible for countries not to adopt it. Because bitcoin is a global asset with no intermediaries, its infrastructure is inherently global. Any improvements to the network, the entire world will benefit automatically without having to update the old tech. Unlike landlines, there is no infrastructure to build, and the barrier to entry is almost zero. You just opt in with a bit of hardware and an internet connection.

As of 2017, according to the World Bank, there are 1.7 billion adults in the world without a basic transacting account. Most of these countries with higher rates of unbanked are poor, have high rates of inflation and lower currency stability, not to mention a disconnected state government ripe with problems. This is extremely common when looking at currencies in other low-GDP countries. So, what are some of the biggest factors in which people would want or need to adopt Bitcoin? If we can answer this question, then maybe we can quantify and pinpoint which countries have the biggest opportunity and most to gain from adopting a Bitcoin standard.

Figure 8. World’s most unbanked countries (Source).

Figure 8 shows the top-10 most unbanked countries as of February 2021. The Oxford dictionary defines “unbanked” as “not having access to the services of a bank or similar financial organization.” Much like building the infrastructure for landlines, it’s expensive to build banks and serve the local economy. Not to mention, many of the people living in these countries don’t have the amount of money that would warrant the cost of owning a bank account. Some even share bank accounts with members of their families to save on costs. There is a huge opportunity to solve the problem of banking in low-GDP countries, but many of the digital banking companies around the world are constrained by regulation and geographical jurisdiction. It may be hard to grasp the importance of a bank account having never lived without one, but without a bank, citizens cannot secure funds safely. Without secure funds, the future is uncertain. This is where Bitcoin can solve some of the problems in these less developed and emerging countries. There are three specific ways in which these problems could be solved.

1. Bank the Unbanked

Bitcoin gives everyone the ability to be their own bank with something as little as a cell phone. All that’s needed is to be connected to the network and accept funds. The smartphone does all of this. It allows people to download a bitcoin wallet, connect to the internet and start transacting. There are many ways in which one can use this wallet. Coincidentally, the countries above who have low banking numbers within their population, also have mobile phones and high internet penetration. This is an open door from a technological standpoint, allowing people to opt into Bitcoin and secure their funds digitally.

In addition to using the Bitcoin network to transact on your phone, you can also use it as a cold storage solution. Cold storage is similar to a savings account. This savings account or cold storage is disconnected from the internet, making it harder for people to steal your funds. With the old technology of banks, you would have to pay for this solution, but with Bitcoin, it’s free, just download the software and/or buy a hardware wallet. There are some cold storage solutions where you can pay for a hardware device, but creating a phone wallet and securing your keys, gives the people an entry point and on-ramp to storing their wealth in a digital bank.

2. Securely Store Value Over Time

The second opportunity is the store of value function. Many of the countries that have unbanked populations and poverty issues are a result of a currency problem. In my previous article, “Bitcoin As A Pressure Release Valve,” I wrote that certain countries have hyperinflated currencies with no option but to turn to the black market. Most of the time, these countries use the U.S. dollar to transact since it holds its value better relative to their currency. Strictly from a monetary standpoint, bitcoin is scarce. It is the most scarce form of money there is. There will only ever be 21 million bitcoin in existence and when the value rises, the production does not increase. This is called elasticity or the lack of elasticity in bitcoin’s case. Unlike fiat money, no government, central bank or agency can print more. And unlike gold, silver or any other commodity, when the demand rises, the amount that is mined stays the same. The first completely inelastic asset in existence is a result of preprogrammed architecture, with consensus in the network that’s default is to not change the protocol.

People that live in countries where the money is known to be manipulated, understand Bitcoin almost immediately. When the idea of something that can’t be manipulated is presented, the concept of scarcity and 21 million is understood. With the reality of incorruptible money, the current regime in power can’t stuff their pockets without alienating the population through force. These people understand this idea because they have experienced it firsthand. When food prices rise faster than people can spend a weekly budget on groceries, it is immediately apparent the importance of a completely scarce, un-manipulatable asset.

In developed countries with low levels of unbanked, people have ways of storing their wealth. They have a 401k and IRA, and most people own property. This is a way of storing value over time. It may not be completely efficient, but it is sufficient enough to escape some level of inflation. The alternative would be to keep your dollars in a savings account, and the real yield of that is negative and not a smart way to store money. These countries put money in financial devices, because it is the smart thing to do and it preserves time and energy. Unbanked countries have no way of storing long-term value. It is degraded and evaporated through manipulation and high levels of money printing. Emerging countries cannot store time and value into financial instruments. There is no Apple stock or S&P 500 to put money into. They are stuck with low levels of wealth that are stolen away on an ever-moving treadmill. There is no way of truly saving value or energy spent over time.

For the first time, Bitcoin gives the world, particularly those in emerging countries, the ability to hold their value in a closed system that cannot be inflated. Much like the opportunity the mobile phone brought to change communication, bitcoin is the first “store of value” that is available for low-GDP countries to buy and hold. It allows them to securely transfer their wealth over time, without fear of inflation or confiscation. Add on top of that, if they need to transfer wealth out of the country and flee an oppressive regime, bitcoin is the first asset that gives the ability to do so. Large amounts of gold cannot be taken on a plane or property and homes cannot be transferred to another country. Bitcoin gives people the freedom to do what they want with their earned value, without fear of a centralized power removing it. Bitcoin preserves the fundamental human right of property.

3. Connection to the Digital Economy

The third problem Bitcoin solves is connecting and transacting digitally. Being a digitally native asset, bitcoin smooths the rails of commerce allowing low-GDP countries to join the 21st century of commerce. This is huge, and what cell phones did for communication, digital commerce will do the same. It immensely increases our ability to transact and exchange value. Bitcoin allows anyone, anywhere, to join a digital transacting network and exchange value natively over the internet, whether in person or without knowing them at all.

Digital economies move at the speed of light, while old-school economies move at the speed of osmosis. This brings more time and efficiency for people on both ends of the transaction. Businesses spend less time on transactions, widen their addressable market, and start putting more time and effort into other things that can improve their work. It is the difference between transacting daily in cash and using a preprogrammed point of sales system. It is simply better.

Not only does Bitcoin make things easier and frees up more time, but it is programmable money. Like the internet, Bitcoin can be built in layers. Each layer brings a new way to use it that widens the possibilities and use cases. What the internet did for communication, Bitcoin will do for money.

Combining all three of these factors, you get a massive magnetic pull toward adoption of the new technology. It is hard to slow the movement of technological adoption and impossible to stop. Like throwing a match on a tinder-filled hillside, years of opportunity build up in countries that lack technology where innovation and adoption prepare to explode at the right moment.

QUANTIFYING BITCOIN ADOPTION IN LOW-GDP COUNTRIES

Figure 9. LocalBitcoins and Paxful Vietnamese dong (VND) combined volume in Vietnam (Source).

Looking at every one of the top-10 countries from Figure 8, they all have meaningful adoption in Bitcoin and it is growing every week. Not only is Vietnam number two on the unbanked list, but it is also number one on the “Chainalysis 2021 Global Adoption Ranking.” In fact, looking at Figure 10 of adoption through LocalBitcoins and Paxful, USD volume shows that every one of the countries in the top-10 list of unbanked have meaningful adoption.

Figure 10. LocalBitcoins and Paxful Vietnamese dong (VND) combined volume.

What does this tell us about Bitcoin adoption in unbanked countries? It tells us that it’s working. Continuing to see these trends improve will be good for Bitcoin adoption and not to mention the countries in which they are adopting it. All the ingredients are there. Most are unbanked with high internet access and an unreliable currency that isn’t natively digital. All you need is time for the adoption to take hold.

There are also some concerns that come up when thinking about Bitcoin adoption. Like, “How can they adopt bitcoin when it is so volatile?” Well, there are a few solutions to this problem. The first is that when a population has no choice, something as volatile as bitcoin could mean the difference between losing 30% or losing 90% over the span of one year. Keep in mind that bitcoin is already solving three of the major problems listed above, we are just remedying the problem of volatility.

First, look at just bitcoin and its use cases today. For some countries, their currency is just as volatile if not more volatile than bitcoin. Not only that, but it is volatile to the downside, continuing to lose value as the government steals and prints away spent time and energy. If bitcoin were to be used, sure it might be volatile, but this volatility is either short lived, or it’s to the upside.

Now look at bitcoin while using it for everyday transactions through Strike, as a more technical solution. This solution is currently available now in El Salvador as a test case and is starting to roll out to more and more countries. People use the Bitcoin and Lightning rails every single day but transact in USD, choosing to either save in bitcoin or not. This solution gives the best of both worlds. One, a population has the ability to transact short term in a currency that isn’t volatile, like other emerging countries. Two, this gives access to the payment rails of Bitcoin and the ability to save in the most scarce asset in existence. Looking back historically, bitcoin has grown at a 200% compound annual growth rate and this has the opportunity to conserve and grow wealth immensely. For someone in a developing world, this is life changing.

As this trend of adoption in underbanked countries continues, new and exciting ways where Bitcoin is used will emerge. For the first time in history, countries have the ability to store wealth in something that cannot be stolen. It gives the opportunity to transact freely without the permission of the state or government, and it allows people to break free from imposed serfdom. Bitcoin is here and it is only getting bigger. There is a change in the tides of time, and Bitcoin is a once-in-a-millennia technology that is pulling the shores.

On Friday top Ukraine officials continued sounding the alarm over what they believe is a large-scale mustering of Russian troops aimed at prepping an invasion of eastern Ukraine. 

“Our intelligence analyses all scenarios, including the worst,” Ukraine’s defense minister, Oleksii Reznikov, told parliament on Friday. “It notes that the likelihood of a large-scale escalation from Russia exists. The most likely time to reach readiness for an escalation will be the end of January.” He said more than 94,000 Russian soldiers have massed across the border. 

The charge comes two days after Moscow turned the accusation around, saying that it’s actually Kiev that has now stationed half the entire national army in Donbass. The Kremlin called Ukraine’s rhetoric and actions “excessively inflamed and dangerous”, and suggested the flurry of ratcheting allegations this week are designed to provoke Russia.

US Secretary of State Antony Blinken on Thursday said in Stockholm that Western allies have expressed “tremendous solidarity” to take action in the event of a Russian offensive in Ukraine.

Given this atmosphere of escalating accusations and fears of direct confrontation, the Russian foreign ministry is urging immediate deconfliction. Likely there will be engagement between the Pentagon and Russian defense officials. Over a week ago, on Nov.23, the heads of the Russian and United States militaries held a rare phone call in efforts to deescalate the soaring tensions in eastern Europe.

In his latest comments Friday, Russian FM Sergey Lavrov asserted that NATO is refusing calls to de-escalate the crisis: 

“NATO refuses to consider our proposals on de-escalation of tensions and prevention of dangerous incidents,” Lavrov said, accusing the US-led bloc of rejecting constructive discussion.

“On the contrary, the alliance’s military infrastructure is moving closer to Russia’s borders… The nightmarish scenario of military confrontation is returning.”

Blinken and Lavrov separated by about 25 feet and a large flower arrangement. pic.twitter.com/RypogEMcAC

— Nick Wadhams (@nwadhams) December 2, 2021

He actually met with Blinken on the sidelines of conference of the Organization for Security and Co-operation in Europe (OSCE), held in Sweden:

At a European security conference in Sweden, Mr Lavrov floated the idea of a new European security pact to try to stop Nato from expanding further east.

US Secretary of State Antony Blinken warned of “serious consequences” if Russia sought conflict with Ukraine.

Moscow has repeatedly denied that it’s preparing any kind of military offensive against Ukraine. It’s leader have said that troop movements within its own sovereign borders shouldn’t be cause for any other country’s concern. 

Meanwhile, Russia remains on edge while again finding itself in the international spotlight of the West’s accusations: “As tensions rise, Russia said on Thursday it had arrested three suspected Ukrainian security service agents,” BBC reported of the latest incident. “One of the three was accused of planning a terrorist attack, while the other two had been seeking to gather intelligence, Russia’s Federal Security Service said.”

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Nevada on Thursday became the first U.S. state to impose a surcharge on workers who have not gotten a COVID-19 vaccine, though the penalty doesn’t take effect until the middle of next year.

All but two members of the state’s Public Employees’ Benefit Program Board (PEBP) voted during a meeting to approve a surcharge of $55 a month on unvaccinated workers.

The approved proposal also stipulates a surcharge of $175 a month for workers’ spouses, partners, and dependents 18 and older. That could be adjusted down the road.

The surcharges will go into effect on July 1, 2022.

They’ll help offset the costs of COVID-19 testing, Laura Rich, executive officer of the board, said.

Testing costs through September were estimated at $3.3 million.

The board did not analyze the cost of COVID-19 hospitalizations for the proposal because that would have made the surcharge for spouses and dependents “significantly higher,” Rich said. State rules bar making the surcharge on workers any higher.

Nevada’s Department of Labor last month released guidance saying the surcharges were legal, and Rich compared them to surcharges on smokers imposed by plans in the past.

Exemptions are available for religious or medical reasons, as required by law.

Public commenters during the meeting, and those submitting written statements, spoke out against the proposal before the vote.

“I believe that the proposed surcharge is inappropriate and excessive,” Ellen Crecelius, one member of the public, said in a statement. She noted that many people enjoy natural immunity, or the protection one gets after having recovered from COVID-19.

Shanna Cobb-Adams said she already pays $255.06 a month. The new surcharges would increase that by 90 percent. She expressed concern about her 18-year-old son getting a vaccine when studies show that young males are at elevated risk of developing heart inflammation after getting a vaccine, while COVID-19 poses little risk to healthy youth without serious underlying health conditions.

Another commenter noted that Gov. Steve Sisolak, a Democrat, is the one forcing workers to get tested weekly if they don’t get a vaccine. “The unvaccinated should not have to foot the bill for the agency’s unjust decisions,” she wrote. “The fact is vaccinated and unvaccinated employees both can contract and spread the virus equally, yet the state has decided to only put the hardships on the unvaccinated unfairly.”

Some members also voiced opposition to the proposal, and two voted against it.

Several state residents did support the measure, including one who said that “anti-vaxxers should pay for their choice since their freedom is not free.”

Sisolak’s policy director, DuAne Young, said that the pandemic “has been shouldered on the burden of everyone.”

“And now this particular burden—the testing—should be shouldered on the burden of those who refuse to (be vaccinated),” Young added.

Some companies have imposed surcharges but no states had before Thursday.

Discussions with entities that had imposed penalties pointed to benefits like increasing the percent of workers who are vaccinated and offsetting rising costs, Rich said. If the board did not approve the surcharges, every workers’ premium, regardless of vaccination status, would need to be hiked, she said.

Revenue from the surcharges is expected to be about $18 million a year. Testing costs are pegged at ranging from $12 million to $24 million.

Prior to the vote, representatives for the American Federation of State, County, and Municipal Employees and the Nevada Faculty Alliance said the unions were not taking a position on the proposal.

Terri Laird, representing the Retired Public Employees of Nevada, said the organization also was neutral on the surcharges.

But, she told members, the added costs would “burden many employees.”

For the past week many had speculated that more than anything else, the Omicron variant conveniently emerged just as the slowing global economy was set to enter stall speed and would be used by authorities to push through a fresh round of stimulus packages. Well, it appears that this cynical take was accurate because the fix now appears to be in: according to Bloomberg, the IMF’s disgraced pro-China Managing Director Kristalina Georgieva said that she expects the organization will pare back its expectations for the global economic rebound as the number of Covid-19 cases attributable to the new omicron strain picks up.

“We are likely to see some downgrades of our October projections for global growth,” Georgieva said at conference hosted by Reuters Friday.

New strains of the coronavirus “very rapidly can dent confidence,” she said.

That this is happening even as nobody really has any idea just how dangerous Omicron will end up being (and according to some, such as Marko Kolanovic, it will even precipitate the early end of the covid pandemic as the “extremely mild” but highly transmissible variant displaces much more dangerous strains), confirms that the strain would be used purely for political purposes and – once the lockdowns are in place – will enable politicians to demand trillions more in fiscal (and monetary, since we now live in an MMT world) stimulus.

The Washington-based IMF in October predicted that the global economy would expand 4.9% next year. For 2021, it had trimmed its outlook to 5.9%.

Meanwhile, problems that pre-date the emergence of omicron are now entrenching, including a deepening divergence between some countries recovering faster from the pandemic and others falling behind, Georgieva said.

In the meantime, “new problems are stepping forward for policy makers — in particular, inflation,” she said.

Of course, more lockdowns and more stimulus will only make the inflation problem worse, but that’s of secondary importance to placating a world that is now habituated to getting Universal Basic Income from its benign authoritarian rulers. And in exchange, all the world’s population has to do is hand over its last shred of independence to the world’s globalist rulers.

The NASDAQ is down today over 300 points, and the VIX continues to edge up to its 52-week high. Jim Bianco discusses the latest tech fallout and where the equities sell-off is concentrated. The Omicron variant is rattling the markets. Fears of a deepening supply chain crisis are at the forefront of investors’ minds. Despite these fears, the unemployment rate’s drop to 4.2% may signify a positive turn for the economic growth story. Bianco shares predictions on the Fed’s actions and year-end dynamics for fund managers and retail investors. Interviewed by Maggie Lake. Want to ask questions? Drop them right here on the Exchange: https://rvtv.io/31oSQyK

Authored by Jonathan Turley,

If you thought that Smollett case could not get more bizarre, think again. 

CBS 2 Legal Analyst Irv Miller is reporting that defense attorney Tamara Walker had a sidebar conversation with attorneys from both sides and Cook County Judge James Linn.

She reportedly accused Judge Linn of some improper comment and then said that he lunged at her in the courtroom.  She was crying during the sidebar. 

Another Smollett attorney accused Linn of snarling and making faces during the trial. In thirty years of practice as a criminal defense attorney, I have never heard of such allegations in a criminal trial.

The demand for a mistrial was rejected.

In a case where the defendant is accused of manufacturing a bizarre alleged attack, the allegation of a judge lunging at his counsel seems weirdly consistent.  There is no indication if there is proof of such threatening act or the alleged faces being made from the bench.

The case itself is a train wreck of a defense. Counsel seems to be throwing out unsubstantiated claims or suggestions in cross examination, including affairs with Smollett. The evidence is overwhelming against Smollett who is alleged to have hired two Nigerian brothers to stage the attack. This allegedly included a “dry run” with the men.

From the outset, the attack was facially unbelievable in many of its details.

The unbelievable elements of the original allegation did not stop the media and many politicians from immediately denouncing the racist attack as a fact. Harris described what happened to Jussie Smollett as an “attempted modern-day lynching.” Nancy Pelosi said it was a “homophobic attack and an affront to our humanity.”

He was given a fawning interview by Robin Roberts of ABC, which ended with her calling his comments “beautiful.”

ROBERTS: It’s been two weeks since that night left actor Jussie Smollett bruised but not broken.

SMOLLETT: I still want to believe, with everything that has happened, that there’s something called justice. Because if I stop believing that, then what was it all for?

ROBERTS: Beautiful, thank you, Jussie.

On ABC’s The Talk one host objected “The media has really cast so much doubt on his story, which I find so personally offensive that a gay Black man is targeted and then suddenly he becomes the victim of people’s disbelief.”

That disbelief now extends to his lawyers. If a judge lunged at counsel and has been making faces from the bench, I would expect an emergency motion and possible appeal. Such a demand for recusal of a judge who is allegedly lunging at counsel would not ordinarily ended with a simple sidebar.

The parents of the suspect in the suburban Detroit school shooting on Tuesday have been charged with involuntary manslaughter after Oakland County Prosecutor Karen McDonald said they bought the gun used in the shooting as a Christmas gift for their 15-year-old son.

James and Jennifer Crumbley were charged with four counts of involuntary manslaughter each. Their son Ethan stands accused of killing four students and injuring seven others at Oxford High School on Tuesday.

The gun had been stored in an unlocked drawer in their house, and Crumbley’s parents did not ask where it was when they were called to the school the day of the shooting for a disturbing drawing their son made of a firearm, said Oakland County Prosecutor Karen McDonald at a news conference Friday.

Crumbley had posted about the firearm online and researched ammunition while at school, McDonald said the investigation revealed. He was also allowed to return to class on the day of the shooting after the meeting with his parents, she said. –USA Today

“The facts of this case are so egregious,” McDonald said, adding “While the shooter was the one who entered the high school and pulled the trigger, there are other individuals who contributed to the events on Nov. 30, and it’s my intention to hold them accountable as well.:

The teen was charged as an adult on Wednesday with murder, terrorism and other crimes – with investigators describing the shooting as a methodical and deliberate massacre.

During a Friday news conference, McDonald explained how the suspect obtained the firearm – as well as ignored warning signs leading up to the shooting.

McDonald said the suspect was present when his dad purchased the the 9mm Sig Sauer SP 2022 on Nov. 26. The same day, the suspect posted photos of the weapon online, calling it his “new beauty.” His mom said in a post the following day, “Mom and son day testing out his new Christmas present,” McDonald said.

The teen was also caught looking up ammo online at school prior to the shooting. In response, school officials contacted Jennifer Crubley about the online search – leaving her a voicemail and an email with no response. She instead texted Ethan the same day, writing “LOL I’m not mad at you. You have to learn not to get caught.”

“Clearly based on the statements of the shooter (and) the statements of mom, that was his gun,” McDonald said.

Meanwhile, hours before the shooting Ethan was also found with a ‘disturbing picture’ depicting a firearm and someone who appeared to be bleeding.

“Of course, he shouldn’t have gone back to that classroom,” McDonald added.

After reports of the shooting at the school, Jennifer Crumbley texted her son, “Ethan don’t do it,” McDonald said. James Crumbley drove home to search for the firearm and called 911 to report it missing, saying he believed his son was the shooter, McDonald said.

“I’m angry as a mother. I’m angry as the prosecutor. I’m angry as a person that lives in this county. I’m angry. There were a lot of things that could have been so simple to prevent,” McDonald said. –USA Today

Meanwhile, the FBI and Secret Service are reportedly investigating copycat threats.

Authored by Steve Watson via Summit News,

Senator Rand Paul escalated his feud with Anthony Fauci Thursday by calling for the NAID head’s arrest and imprisonment for continually lying to Congress and denying he funded gain of function research on coronaviruses.

Appearing on Fox Business, the Senator remarked “Fauci should go to prison for five years for lying to congress. They [the DOJ] have prosecuted other people and they have selectively gone after republicans, but in no way will they do anything about him lying.”

Paul added that Fauci “should be prosecuted for lying, and at the very least he should be taken out of his position because I think he cost people lives through misinformation.“

Every time he tells people, ‘Oh, wear a cloth mask,’ he is actually endangering people. If you are around someone with COVID, you don’t want to wear a mask because they don’t work,” he added.

Watch:

SEN. RAND PAUL: “Fauci should go to prison for 5 years for lying to Congress.”

pic.twitter.com/yywXKTAhAd

— Breaking911 (@Breaking911) December 2, 2021

“We’ve referred him to the Department of Justice,” Paul urged, adding “but then again, Merrick Garland is the one now going after parents that go to school board meetings, so I don’t have a lot of hope that Merrick Garland is objectively looking at Fauci’s lying.”

Meanwhile, Joe Biden is joking that Fauci is the President:

Joe Biden “jokes” that Dr. Facui is actually the President of the United States: pic.twitter.com/2B6vQF9zOY

— Townhall.com (@townhallcom) December 2, 2021

Paul joins Senator Ted Cruz who also this week called for Fauci to be prosecuted.

Elsewhere during the interview, Paul took aim at the stalled Biden spending bill, noting that Democrats “couldn’t run a 7-Eleven, much less the government.”

Paul explained “If they want to force it through with no amendments and they want to do it in a short period of time, they have to have unanimous consent. Well, a lot of us don’t consent… just because the Democrats are incompetent and haven’t brought it forward that we should speed up time to let them spend more money that is bankrupting our country.”

The Senator continued, “They’ve had plenty of time to go to committee, to do all the things they need to do to do it through reconciliation. Instead, they’re going to wait to the last minute and ask people like me, who are dead set against raising the debt ceiling, like, say, ‘Oh, can you pretty, pretty please speed it up and let only Democrats pass this?’ No. If they want to raise the debt ceiling, they ought to do it.”

Watch the full interview below:

*  *  *

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What a shitshow! It appears that the Hindenburg Omen struck again…

Source: Bloomberg

Bubble markets busted…

Source: Bloomberg

Omicron anxiety? Good news is bad news? Taper Tantrum? Technical Default fears? It was all going so well as long as ‘gurus’ could rely on The Fed do support the market with the promise of moar. But sometimes, things just need to purged…

Worst 3-day start to a December for stocks in about 20 years. Since Omicron reared its ugly head, Small Caps are down over 8%, Nasdaq down over 5% and the rest of the US majors down over 4%…

This is the longest stretch of +/-1% swings for the S&P 500 since the election…

Source: Bloomberg

A very technical late-day bounce lifted Nasdaq to its 100DMA, bounced The Dow off its 200DMA, but couldn’t break the S&P back above its 50DMA…

New 52-week lows are surging…

Source: Bloomberg

Within the Nasdaq (3765 stocks) 5 stocks Microsoft, Google, Apple, Nvidia, Tesla account for 71% of 19% YTD gain.

Cyclicals have been clubbed like a baby seal since the emergence of Omicron (Cyclicals were also slammed this week)..

Source: Bloomberg

China tech puked…

Unprofitable tech stocks suffered their biggest weekly loss since March 2020, crashing to their lowest since Oct 2020…

Source: Bloomberg

 

Treasuries were chaotic this week as taper tantrums broke out at the short-end and the long-end was aggressively bid. The chart below is from the start of Omicron anxiety…

Source: Bloomberg

The 30Y Yield is at its lowest of 2021 (and 2Y at its highest yield since March 2020)…

Source: Bloomberg

The yield curve imploded in a hissy fit of fear that The Fed is heading for a major policy mistake…

Source: Bloomberg

Powell’s hawkish pivot sparked a surge in rate-hike odds with the market pricing a full hike by June 2022…

Source: Bloomberg

Critically, the market is pricing in rate-cuts between 2023 and 2025… In other words – The Fed policy puke…

Source: Bloomberg

The dollar ended the week slightly lower but had some wild swings on the way…

Source: Bloomberg

Cryptos were wild this week with today’s liquidation-like puke dragging everything down. ETH outperformed, clinging to a modest 2% gain on the week while BTC ended down around 1.5%…

Source: Bloomberg

Bitcoin broke down to a $51k handle and below its 100DMA (lowest since early October) and Ethereum tested a $4k handle, breaking back down below its 50DMA…

 

Black Gold was a bloodbath this week but the barbarous relic managed to cling to unchanged since the Omicron variant emerged. Copper and Silver down hard…

Source: Bloomberg

NatGas crashed to its worst week in almost 25 years…

Finally, if you need an analogy, “you are here” in early December 2018 as the market puked 20% and forced Powell to flip-flop from his hawkish position…

Source: Bloomberg

The word ‘brace’ comes to mind as the market tries to find out just where the new Powell Put strike level is.