Category: zerohedge

The U.S. Air Force and the Presidential and Executive Airlift Directorate announced they have partnered with an Atlanta-based company called Hermeus to develop a hypersonic Air Force One. 

The partnership will allow for the development of a hypersonic aircraft for the presidential fleet, that can travel as fast as Mach 5. Hermeus successfully tested a Mach 5 engine prototype earlier this year. A demonstrator vehicle using the Mach 5 engines could be seen within the next five years. 

Mach 5 is about 3,300 mph, would travel 2.5x faster than the Aérospatiale/BAC Concorde and about 43% faster than the Virgin Galactic Holdings’ proposed supersonic jet. 

Here’s an excerpt from the Hermeus press release describing the new contract to build a hypersonic Air Force One: 

Hermeus Corporation, the aerospace company developing Mach 5 commercial aircraft, has partnered with the U.S. Air Force and the Presidential and Executive Airlift Directorate to work toward hypersonic travel for the Department of Defense.  This award comes under an Other Transaction For Prototype Agreement Direct to Phase II contract through AFWERX after Hermeus successfully tested a Mach 5 engine prototype in February 2020.

The effort is focused on rapidly assessing modifications to Hermeus Mach 5 aircraft to support the Presidential and Executive Airlift fleet.  Early integration of unique Air Force requirements for high-speed mobility and evaluation of interfaces between high-speed aircraft and existing communications, airport, and air traffic control infrastructure lays the groundwork for a seamless transition to service.  Additionally, Hermeus will prepare test plans to reduce technical risk associated with these modifications to support Air Force requirements. –Hermeus press release

Brigadier General Ryan Britton, Program Executive Officer for Presidential and Executive Airlift, commented on the project: 

“Leaps in capability are vital as we work to complicate the calculus of our adversaries. By leveraging commercial investment to drive new technologies into the Air Force, we are able to maximize our payback on the Department of Defense investments. The Presidential and Executive Airlift Directorate is proud to support Hermeus in making this game-changing capability a reality as we look to recapitalize the fleet in the future.”

Hermeus’ cofounders are ex-Blue Origin, SpaceX, and Generation Orbit could be the team that develops the first hypersonic aircraft for the president. 

Authored by Ritesh Jain via WorldOutOfWhack.com,

Real Rates (Inflation-Nominal rates) are currently at -1% levels and it seems they may go down even lower. But they have been negative before during the 1940s in the post WW2 Era and in the 1970s STAGFLATION.

Decline in real rates sometimes can be a deliberate policy to reduce the Debt burden of govt because the real value of debt falls with rising negative real rates. The policy of negative real rates is always preferred over the bitter pill of allowing companies to go bust.

The US policy response post-COVID has been to print loads to money to reliquify the banking system and avoid defaults. With the rate of US M2 growth reaching 23%, and no chance of increase in policy rates in next couple of years the real rates can fall further in coming years.

US real yields collapse as specter of inflation returns

Source: Bloomberg

When real rates decline, gold’s value tends to go up more because GOLD is a perpetual Zero coupon bond and holding Zero coupon asset with limited supply is better than holding negative real rate asset like US treasury whose supply is unlimited by issuance.Negative real rate also mean that you need to be an asset owner to maintain the purchasing value of depreciating paper currency.

I strongly believe that we are like ( 1942-51 ) headed to -3% to -4% real rates and if that is the expectation on real rates is there a way of mathematically finding the value of GOLD in that environment?

While I was grappling with the question of having an input (-3 to -4%) value but not the output i.e value of GOLD at that level of negative real rates, there came along an article from the Bloomberg columnist on this subject.

[ZH: we note that during the late ’70s negative real yield period, gold soared above $3,000 on an inflation-adjusted basis]

The analysis by Ven Ram (Currency and rates strategist for Bloomberg’s Markets) shows that the duration of gold is 17 when interest rates go up and 20 when yields trend lower, suggesting that the second derivative of the shift in rates is alive and kicking. Back in 2018, Pimco found a duration of almost 30.

Gold has been on a tear this year, having surged 35% in response to a 120-basis point slump in real interest rates. Other catalysts include low global yields; erosion of confidence in global fiat money in general and a weaker dollar in particular; unbridled global monetary and fiscal stimulus; investor purchases through exchange-traded funds in response to uncertainty about the evolution of the pandemic.

However, the outlook for gold gets murky once it goes to around $2,500 an ounce. Beyond that level, it would imply a massive plunge in real rates and an even sharper rally in breakevens than what we have already seen.

Correlations suggest these factors would also imply a big decline in nominal 10-year yields, which currently sit near 0.50%. Such a move would essentially mean the markets are pricing in a depression-like scenario. Should it play out, the study indicates gold may be propelled toward $3,000 should real yields slump to -3.15%.

Given that gold has a longer duration than linkers, the metal offers a balance sheet-economical way to hedge against inflation.

Conclusion

We believe that US is going to have real rates south of -3% and the time period it is analogous to is the 1940s when real rates averaged -3.14%.

On this basis we believe that gold may reach levels of $3000 and go even higher if real rates go below -4%.

The state of the New York City restaurant industry is in dire straits. July proved to be another disastrous month for restaurants, bars, and nightlife establishments across the city with a majority unable to pay rent in July, a new survey found.

NYC Hospitality Alliance surveyed about 500 owners and operators of eateries in the city, with 83% of respondents indicating they couldn’t pay the entire rent in July while 37% paid no rent at all. 

“Restaurants and nightlife venues are essential to the economic and social fabric of our city, but they are struggling to survive and absent immediate and sweeping relief so many will be forced to close permanently,” said Andrew Rigie, executive director of The Alliance.

“While complying with the necessary pause, our industry has been uniquely and financially devasted. Small businesses urgently need solutions from government leaders at the city, state, and federal level, inclusive of extending the moratorium on evictions, extending the suspension of personal liability guarantees in leases, pausing commercial rent taxes, providing landlords with needed support, and infusing small businesses with enough cash to weather the storm,” Rigie said.

To make matters worse, 71% of owners and operators said landlords “would not waive portions of rent due to COVID-19.” About 61% said, landlords “would not defer rent payments,” while 90% of landlords “would not formally renegotiate leases.”

Indoor dining in the city remains halted, “outdoor dining service is not generating sufficient revenue to cover rent and other expenses, small business owners in the industry continue to express significant concerns about surviving the pandemic and staying viable in the future,” said The Alliance.

Through July, OpenTable restaurant data reveals foot traffic at eateries remains depressed. 

We recently outlined how high-frequency data suggests New York City’s recovery has stalled, as well as the US recovery has reversed. 

Some restaurants in the city are just calling it quits, liquidating everything they have on Facebook Marketplace. 

Is New York City in a depression? 

Via AlMasdarNews.com,

Iran’s Islamic Revolutionary Guard Corps (IRGC) conducted a large-scale military exercise in the Persian Gulf in late July, as they showcased their naval capabilities and new weapons. During the exercises, the IRGC was seen attacking a mock U.S. aircraft carrier that was positioned near the Strait of Hormuz.

It was expected that Iran would not fully destroy this replica of the U.S.S. Nimitz, as they would use it for future military drills; however, as shown in the photo below, the aircraft carrier is submerged in the Persian Gulf.

New imagery from yesterday shows the capsized #IRGC replica of the Nimitz Class Carrier appears to have listed more outside of Bandar Abbas Port, #Iran. She appears more listed here than previous imagery from the 31st July. The depth here is a reported 14m. Fun to reclaim…. pic.twitter.com/tKTHJAaGCS

— Aurora Intel (@AuroraIntel) August 2, 2020

As pointed out by South Front, who quoted an expert from the Forbes article that was previously posted about the vessel, this aircraft carrier was not meant to sink.

In fact, during the military drills in the Persian Gulf, the IRGC’s soldiers could be seen landing on the aircraft carrier from one of their transport helicopters.

“The Iranian armed forces, particularly the IRGC-N (Islamic Revolutionary Guard Corps Navy) delight in attacking the mock U.S. Navy aircraft carrier. It makes their war games more dramatic. And it may be intended to symbolize that they could, if called upon, sink an American carrier,” the Forbes article said.

“The carrier itself, actually an elaborate target barge, is not intended to sink, however. It is meant to be reusable and has been symbolically ‘destroyed’ twice already. But now it really has sunk. And in very much the wrong place,” the report continued.

The Iranian drills have since been condemned by the U.S. because of the IRGC’s exercise near the strategic Strait of Hormuz.

Police across multiple US cities that months ago were scenes of often deadly rioting linked to George Floyd and Black Lives Matter protests are pouring through thousands of hours of surveillance footage to nab suspects far after the crimes.

This comes after business owners whose stores were subject of severe vandalism and mass looting pressured authorities to act after many police departments appeared helpless when the mayhem was initially unleashed during those spring and early summer weeks.

Philly Voice reports this is especially the case in Atlantic City, New Jersey, where “Police Chief Henry White announced the arrests Thursday, pointing to a lengthy investigation that relied heavily on video evidence recorded by public and private cameras.”

At the time of the riots, which hit Atlantic City particularly hard starting at the end of May, there was national media pressure for law enforcement not to act, as people unleashing mayhem in the streets, even including looters, seemed to be lionized somehow as part of advancing civil rights. This even as some among protest leaders themselves urged for an end to looting and destruction, saying the movement must remain peaceful.

The belated arrests were part of a herculean joint effort between law enforcement and local business owners. Philly Voice underscores that after police chief White set up a task force to comb through literally “thousands of hours” of street video surveillance, they identified at least 200 criminal acts, after which specific photos of individuals were released to the public.

“On June 30, authorities released photos of more than 200 people who they said were involved in criminal acts but whose identities were unknown to the authorities,” the report says. “After following up on every tip and working directly with 57 business owners, police said they have been able to file charges against 95 people.”

We noted in June that the FBI has its own program for combing through social media and video footage, identifying suspects.

For example in Chicago people were caught openly bragging about how many goods they stole during the riots, posting their own pictures to boot, leading to arrests.

Meanwhile, just this weekend in Chicago, police will have more video to examine:

Looters in Chicago calmly walk in and out of businesses with stolen merchandise at the BLM riot. #BlackLivesMatter #ChicagoRiots pic.twitter.com/JdvNahwXWm

— Andy Ngô (@MrAndyNgo) August 10, 2020

However, it remains unclear the degree which other major cities will go deep into investigations looking to nab vandals and looters. For many police chiefs and elected city officials, it won’t be a politically correct move and thus is likely to conveniently remain on the back burner, if pursued at all.

Authored by Jeff Deist via The Mises Institute,

Judy Shelton, a Trump nominee to the Fed Board of Governors, may not have coined the excellent term “Fed Bug,” but she used it to delicious effect in this 2019 Financial Times interview:

“People call me a goldbug, and I think, well, what does that make them? A Fed bug,” she says.

Can anyone the ​New York Times attacks this dishonestly be all bad?

For our purposes, Fed Bugs are people with a faith-based belief in the power of central banks (and central bankers) to engineer economic growth using “monetary policy,” despite decades of history and current evidence to the contrary. They believe tinkering with inputs and rates and velocity and flows somehow makes us richer in terms of productivity, goods, and services. They believe in financial alchemy, as economist Nomi Prins puts it, rather than precious metals. They believe paper has value so long as government issues it and legislates its use. Most of all, they believe in technocratic control over money in the economy. 

Central bankers almost by definition are Fed Bugs, but so are most monetary economists, financial journalists, and politicians. And they all hate gold with a passion. The reasons why are multifarious, but ultimately flow from their fundamental resentment of any money they do not control and cannot design. Central planning requires central money, and gold stands apart by it very decentralized nature. It is indifferent to human conceptions, and can be discovered and summoned from the earth only with tremendous risk and effort. It cannot easily be manipulated or destroyed, and its value cannot be decreed (though they try mightily). It is unchanging, unyielding, and stubbornly at odds with the political visions of Fed Bugs. 

And so they hate it.

They hate gold because it never goes away and never goes to zero.  It holds monetary value intrinsically, without the imprimatur of a sovereign or government. Gold does not need the state or its bankers to operate as money, because individuals choose it as money on the market century after century.

Even after more than a century of political efforts to erase gold’s status as money, the public still view it as such. Gold quietly serves as a lingering rebuke of the entire political fiat money project—even as central banks are forced by circumstances to buy and hold it as collateral, as the ultimate hard currency and liquid asset for their balance sheets. In fact, central banks steadily bought or repatriated huge amounts of physical gold in recent years, despite the supposedly strong world economy prior to the Covid crisis. 

During the transitional period leading up to the full adoption of the Euro across 12 original Eurozone countries, Germans in particular secreted away millions of Deutschmarks in mattresses, closets, and safety deposit boxes. More than a decade after the Euro came into widespread use, Germans still held €6.6 billion(!) in unconverted Deutschmark notes and coins according to the Bundesbank. The reason for this is very simple: those Germans distrusted, and continue to distrust,  the stability and purchasing power of the Euro. They fear a crisis, however unlikely, and protect themselves by holding a “harder” currency in case the Euro depreciates rapidly someday.

In other words, they prefer “buying” peace of mind by holding Deutschmarks to converting them to Euros and buying goods or services. In the same way and for the same reasons, more and more Americans prefer exchanging some of their paper US dollars for physical gold. 

And yet the media campaign against gold continues.

With Congress ordering magical fiscal bailouts from the Treasury, Trump conjuring up continued $600 weekly unemployment payments by executive order, and the Fed adding assets of every dubious stripe to its swollen $7 trillion balance sheet, gold prices predictably spiked to over $2,000 per ounce last week.

Right on schedule, Fed Bug journalists respond with a litany of “Gold is foolish, don’t buy it!” articles. In fact they sound like real estate agents in reverse: there is never a good time to buy. Gold goes up relative to the dollar, it’s overpriced and poised for a big fall. Gold falls below $1,100, as it did in 2015? See, we told you this worthless shiny metal was headed down!

We rarely see this level of media vitriol and meta-analysis directed toward, say, the latest pump and dump medical device stock duping day traders on Robin Hood. The share price of bankrupt Hertz car rental goes from $20 to .80¢ and back up to $5 in a matter of a few months with little public ire or fanfare. And yet gold, the hated and denounced relic of late night Fox News infomercials, outperformed equity markets over the last 15 years despite its monetary rather than investment status.

Gold is still here. FDR attempted to ban its private ownership and force conversion into dollars in 1933; Nixon eliminated the right of foreign governments to redeem US dollars for gold in 1971. Both men acted without Congress; both knew what their actions meant for savers and inflation. But gold has not faded away, if anything it grows in importance as fiscal and monetary policy across the West becomes increasingly unmoored.

Here is what Ludwig von Mises had to say gold as real money 100 years ago: 

What the United States needs is not the gold-exchange standard but the Classical gold standard, decried by the inflationists as orthodox. Gold must be in the cash holdings of everybody. Everybody must see gold coins changing hands, must be used to having gold coins in his pockets, to receiving gold coins when he cashes his pay check, and to spending gold coins when he buys in a store.

What a wonderful vision, and not an impossible one. Uncle Sam and virtually all western nations have embarked on a campaign of money creation unlike anytime in human history. Where it all leads, and how long it lasts, cannot be predicted. But a global currency crisis, precipitated by a falling US dollar and finally arriving here at home, is hardly unthinkable. At that point we may see a new supranational currency created, or we may see a flight to known commodity money like gold.

When the day comes you might want some gold coins jangling in your pocket, or at least some gold-backed zeros glowing in your digital accounts. 

The province of British Columbia extended the temporary moratorium on evictions in June until the end of August to support distressed tenants impacted by the COVID-19 pandemic. 

When the moratorium is lifted next month, tenants will be responsible for all outstanding rent.

Tensions between landlords and tenants may have reached a tipping point in Maple Ridge, a city located in the northeastern section of Greater Vancouver, where one landlord, fed up with his tenant missing a couple of months of rent, removed all of the doors and most of the windows from the rental unit, reported CTV News. 

The tenant, Jamie Hemson, a single mother with two kids, lost her job because of the virus-induced downturn, fell behind on rent payments for July and August, returned home last week, and was instantly shocked when doors and windows were removed.

“We were short rent the month of July and my landlord has decided to come in when I wasn’t home and remove all of the windows, and doors, on the exterior and the interior,” said Hemson.

She said, “there was no notice, he [the landlord] didn’t tell me it was coming. He waited until I was gone. So, I feel very violated.” 

Hemson had to borrow money to pay for someone to board up the house:

“I actually had to borrow that money (to pay for it).”

I’m a woman. I don’t really feel safe sleeping with my windows and doors open,” Hemson said. 

CTV News was at the house on Saturday when the landlord, Tiger Zhang, showed up. He said, “I think if she moves out it’s better and won’t give me too much trouble.” 

He admitted to the news team that he removed his tenant’s doors and windows.

Under the rent moratorium, a landlord cannot evict a tenant for unpaid rent and must formulate a repayment plan for missed payments. 

Rocco Triguero’s of the Vancouver Tenants Union, said landlords aren’t allowed to remove windows and doors to force tenants to leave. 

Zhang told the news team he wasn’t aware of the Residential Tenancy Act and might have made a mistake. 

We noted last week, as the eviction moratorium expired in the US, the battle between the landlord-tenant had begun. However, President Trump vowed to protect millions of Americans from eviction with an executive order on Saturday. 

The extended moratorium on evictions will surely result in landlords suing the administration.

“Every legal aid lawyer in the country faced with a destitute client being evicted will slap this executive order on the judge’s table and say there should not be any eviction,” said Charles Tiefer, a law professor at the University of Baltimore. “And their landlords who have federally insured mortgages will argue back that it would be illegal for evictions to be halted.”

Tensions are increasing between landlords and tenants as governments continue extending rent moratoriums. 

Authored by Steve Watson via Summit News,

CNN host Brian Stelter declared Sunday that it is both “offensive and otherworldly” that “right-wing” radio hosts would dare to question the mental health of Joe Biden, despite his constant brain freezes and bizarre gaffes.

“Let’s go on a trip together to a totally alternative universe.” Stelter sardonically began, adding “You never hear what’s happening there unless you tune in to right-wing talk radio, but you need to know what they are saying because the most popular, most powerful talkers in the country have trained their sights on Joe Biden.”

“What you are about to hear them say is mind-boggling. Look, whether you like Biden or not, this stuff is offensive and otherworldly,” Stelter added before playing clips of Rush Limbaugh, Mark Levin, Ben Shapiro and Michael Savage all noting how Biden doesn’t appear to be playing with a full deck.

“Every day, every day, this is what’s airing on the radio,” Stelter whined.

“There’s Michael Savage saying, I pity the man. There’s Mark Levin saying, I think Biden’s in a nursing home. What the heck is going on on these programs?” he further complained.

The CNN host proclaimed that “We are going to see negative partisanship fuel the next three months, the last three months of this never-ending campaign.”

It wasn’t so “offensive”, however, when Stelter did the EXACT same thing he is now calling “otherworldly”, when he continually questioned Trump’s mental health for weeks on end:

.@AllenFrancesMD, a psychiatrist, tells @Brianstelter: Trump “may be responsible for many more million deaths” than Adolf Hitler, Joseph Stalin, and Mao Zedong.https://t.co/cBUZVQjhNU pic.twitter.com/RVARyeVnVh

— Julio Rosas (@Julio_Rosas11) August 25, 2019

Trump’s mental health keeps being invoked by commentators online and on TV. The volume is much louder as of late…https://t.co/dZFc4ie8JD

— Brian Stelter (@brianstelter) August 26, 2019

Former San Francisco Mayor Willie Brown (D) said that if Joe Biden taps her as his running mate, she should decline – as becoming Vice President would curtail her political ambitions.

“Historically, the vice presidency has often ended up being a dead end. For every George H.W. Bush, who ascended from the job to the presidency, there’s an Al Gore, who never got there,” wrote Brown in a Saturday Op-Ed for the San Francisco Chronicle.

“The next few years promise to be a very bumpy ride,” Brown continues. “Barack Obama and the Democrats saved the nation from economic collapse when he took office, and their reward was a blowout loss in the 2010 midterm elections.”

Instead, Kamala would make a better Attorney General, according to the former San Francisco Mayor.

“Given the department’s current disarray under William Barr, just showing up and being halfway sane will make the new AG a hero,” he wrote, adding “Best of all, being attorney general would give Harris enough distance from the White House to still be a viable candidate for the top slot in 2024 or 2028, no matter what the state of the nation.”

Of course Brown – who had an extramarital affair with Harris at the beginning of her career, launching it, fails to note that if Biden were to be unable to perform his duties, or died, we’d be looking at President Harris.

Biden is expected to name a woman as his running mate. Prospective nominees include Elizabeth Warren (D-MA), Tammy Duckworth (D-IL), former National Security Adviser Susan Rice, and Michigan Gov. Gretchen Whitmer (D).

 

Authored by Ben Zeisloft via Campus Reform,

The Foundation for Individual Rights in Education (FIRE) sent Stockton University a letter, expressing concern that the university may have disciplined a student after he used a photo of President Donald Trump as his Zoom background in one of his online courses.

According to FIRE’s letter, Stockton University doctoral student Robert Dailyda utilized the Trump background during a class held via Zoom on July 1. There was no evidence that the Zoom background affected classroom order, according to the letter.

However, later that day, students criticized Dailyda’s background in a private GroupMe chat, FIRE claims.

Dailyda removed himself from the chat and expressed his disappointment on Facebook.

“I am done with the leftist agenda of BLM and the white self haters,” Dailyda said, according to FIRE.

“I have seen it in action in my doctoral classes at Stockton and the general media. I’m not backing down. If we can’t get past this, ok, I’m ready to fight to the death for our country and against those that want to take it down.” 

In a separate Facebook post, Dailyda said his initial post was “an outpouring from my heart and meant to be patriotic.”

But on July 3, university police contacted Dailyda, informing him they had received a report claiming he made threatening statements, FIRE said.

Dailyda met with two members of Stockton’s Care and Community Standards Office on July 10. The letter alleged that they informed Dailyda that students were offended by his Zoom background and Facebook post, and that the two university employees asked him to explain his political views. The letter then said that  on July 16, Stockton charged Dailyda with violating the Disruptive Behavior, Discrimination, Harassment, Hostile Environment, and Harm provisions of its campus code.

FIRE’s letter expressed concern that Dailyda’s First Amendment rights were violated. 

“While a university has a critical interest in ensuring that classroom discussions are not substantially and materially interrupted, that interest does not justify punishing a student for non-disruptive expression, even when it occurs in the classroom context,” FIRE said.

Referring to the Supreme Court’s 1969 ruling in Tinker v. Des Moines, which addressed the First Amendment rights of students, FIRE called on Stockton to rescind the charges against Dailyda by August 11.

According to FIRE, Dailyda had until Friday to contest the charges, which he is doing by sending the college FIRE’s letter.

The letter states that a university employee informed Dailyda during a pre-trial hearing that he could face up to a “[s]uspension, $50 fine, community service project, social justice workshop, and decision making workshop” if he is found to be in violation of the student code.

Stockton University did not respond to Campus Reform‘s request for comment in time for publication.

“I’m frankly confused except for knowing that my views are in conflict with the Stockton Social justice agenda. They are figuratively putting their knee on my neck. Stockton University has become a joke in my opinion,” Dailyda wrote on Facebook.

“As a student in their organizational leadership. doctoral program, I see a downward spiral over the last 2 years as the core professors have left…I’ll likely face additional sanctions for this in addition to those I am currently facing for also speaking my mind about BLM. Unbelievable!” he added. “This University does not support open dialog and has a strong bias against conservatives. It should not be publicly funded.”