Category: zerohedge

Authored by Michael Maharrey via SchiffGold.com,

Gold’s recent correction has taken silver down with it. The white metal dipped below $21 an ounce at its lowest, about $8 off its August highs.

That has led some to speculate that we’ve seen a knockout blow for silver. These are generally the same people who have declared the gold bull dead. But I think it’s way too early to hang “rest in peace” over the silver market for the same reasons I don’t think the gold bull run is over. In fact, this may be an ideal buying opportunity.

In order to begin saying last rites for precious metals, you have to believe the Federal Reserve is actually going to tighten monetary policy and the dollar is going to remain strong. Both of these prospects seem pretty implausible.

The big drop in both gold and silver last week was primarily been driven by dollar strength.  Investors have moved into the dollar due to concerns about a resurgence in coronavirus in Europe, the possibility of further economic lockdowns and political uncertainty with the upcoming presidential election.

But despite the resurgence of the greenback, the fundamentals don’t look particularly good for the dollar. It’s difficult to imagine a world where the dollar remains strong given all of the dollars the Fed is pumping into the financial system. The money supply has grown at record levels for five straight months.

In many ways, the selloff we saw last week in both stocks and precious metals was a big temper tantrum because the Federal Reserve didn’t promise more stimulus during the September FOMC meeting. Sure, the central bank maintained its commitment to extraordinary monetary policy. Apparently, the markets don’t think that’s enough. But if you listen closely to Fed Chair Jerome Powell and other key figures at the central bank, it’s clear they remain all-in on stimulus. They would prefer Congress to pass another fiscal stimulus bill. But when you boil it all down, fiscal stimulus is monetary stimulus. If Congress spends more, it will have to borrow and the Fed will have to monetize all that debt — in other words — more money printing.

And I am almost certain that even absent action from Congress, the Fed will do what it can to keep the bubbles inflated. If stocks keep falling, the Fed will up QE. This is not the environment conducive to a strong dollar. In fact, Peter Schiff has been warning about a dollar collapse. He’s not alone. Yale economist Stephen Roach recently wrote an op-ed projecting that the dollar to plunge by as much as 35% next year.

This is extremely bullish for both silver and gold.

Industrial demand has a significant impact on the silver market. As a result, silver tends to be more volatile than gold. But at its core, silver is a monetary metal. It tends to track with gold over time. When gold goes up, it almost always takes silver with it. In fact, silver has historically outperformed gold in a gold bull market. If the gold bull market is still alive, so is the silver bull market.

And if that’s where your thinking lies, this may well be an opportune time to buy silver.

The silver-gold ratio has opened back up over the last several weeks. After closing to under 70-1 in August, the spread has opened up to nearly 80-1 today. That tells us that silver is once again extremely undervalued compared to gold.

The silver-gold ratio is simply the number of ounces of silver it takes to buy one ounce of gold. It has been historically high for months. It was well over 100-1 back in March. The modern average over the last century has been between 40 and 60-1. At some point, you would expect that 80-1 ratio to close up again, meaning silver should have a lot of upside.

The supply and demand dynamics also look good for silver. Investment demand has skyrocketed and supply is down. Mine output was hit hard by shutdowns due to the coronavirus pandemic, but silver production was already on the decline with mine output dropping four straight years.

Industrial demand has been flat due to the economic slowdown from the coronavirus pandemic. Even so, there are expectations of increasing industrial demand, particularly in the solar energy sector.  Even if the global economy is slow to recover, silver may get a boost from government stimulus as various programs funnel money into “green energy” projects.

Bitcoin prices have plunged this morning after the US Commodity Futures Trading Commission (CFTC) alleged that major crypto-trading platform BitMEX facilitated unregistered trading and other violations.

Source: Bloomberg

The CFTC announced this morning that it was charging BitMEX, CEO Arthur Hayes, company owners Ben Delo and Samual Reed, and corporate entities HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Services (Bermuda) Limited with offering U.S. customers illicit crypto derivative trading services.

In a press release, the CFTC alleged that BitMEX received some $11 billion in bitcoin deposits and made more than $1 billion in fees, “while conducting significant aspects of its business from the U.S. and accepting orders and funds from U.S. customers.”

The uncertainty weighed on the entire crypto space…

Source: Bloomberg

BitMEX, which has reportedly been under investigation by the CFTC since at least July 2019, implemented mandatory KYC in April of this year.

“Digital assets hold great promise for our derivatives markets and for our economy,” said Chairman Heath P. Tarbert.

“For the United States to be a global leader in this space, it is imperative that we root out illegal activity like that alleged in this case. New and innovative financial products can flourish only if there is market integrity. We can’t allow bad actors that break the law to gain an advantage over exchanges that are doing the right thing by complying with our rules.”

“As the CFTC has made clear, registration requirements are a cornerstone of the regulatory framework that protects Americans and U.S. financial markets,” added Division of Enforcement Director James McDonald.

“Effective anti-money laundering procedures are among the fundamental requirements of intermediaries in the derivatives markets, whether in traditional products or in the growing digital asset market. This action shows the CFTC will continue to work vigilantly to protect the integrity of these markets.”

Case Background (from CFTC)

The complaint alleges that from at least November 2014 through the present, and at the direction of Hayes, Delo, and Reed, BitMEX has illegally offered leveraged retail commodity transactions, futures, options, and swaps on cryptocurrencies including bitcoin, ether, and litecoin, allowing traders to use leverage of up to 100 to 1 when entering into transactions on its platform. According to the complaint, BitMEX has facilitated cryptocurrency derivatives transactions with an aggregate notional value of trillions of dollars, and has earned fees of more than over $1 billion since beginning operations in 2014. Yet, as alleged in the complaint, BitMEX has failed to implement the most basic compliance procedures required of financial institutions that impact U.S. markets.

The complaint charges BitMEX with operating a facility for the trading or processing of swaps without having CFTC approval as a designated contract market or swap execution facility, and operating as a futures commission merchant by soliciting orders for and accepting bitcoin to margin digital asset derivatives transactions, and by acting as a counterparty to leveraged retail commodity transactions. The complaint further charges BitMEX with violating CFTC rules by failing to implement know-your-customer procedures, a customer information program, and anti-money laundering procedures.

As alleged in the complaint, BitMEX touts itself as the world’s largest cryptocurrency derivatives platform, with billions of dollars’ of trading volume each day. Much of this volume, and related transaction fees, derives from the operation of the platform from the U.S. and its extensive solicitation of and access to U.S. customers, the complaint alleges. Nevertheless, BitMEX has failed to register with the CFTC, and has failed to implement key safeguards required by the CEA and CFTC’s regulations designed to protect the U.S. derivatives markets and market participants.

The controversy and mystery surrounding the alleged poisoning of Russian activist and opposition figure Alexey Navalny just escalated dramatically upon the first published full media interview with Navalny, who after recovering in a German hospital was recently released. The bombshell interview with German newsmagazine Der Spiegel hit the web Thursday. Navalny alleged directly that Putin was behind the poisoning, saying he had “no other explanation for what happened.” 

“Putin is behind the crime,” Navalny said in the newly published interview. “I have no other versions of the crime. I am not saying this to flatter myself, but on the basis of facts.” And for the first time he described harrowing details aboard the Russian flight where he fell unconscious:

“I leave the toilet, turn to the steward – and instead of asking for help, I say, to my own surprise: ‘I’ve been poisoned. I’m dying.’ And then I lay down on the ground in front of him to die.”

Navalny has only recently fully recovered and left the hospital. Much of the interview was focused on Germany’s intervention in the saga, which began with an emergency medical transport flight across Russian borders and all the way to Berlin, where he was later even visited by Chancellor Angela Merkel. 

“They were waiting for me to die,” Navalny said of the Russians who he says poisoned him. “The Russian leadership has developed such an inclination to poison that it will not stop so soon,” he said. “My medical history will yet become instructive.”

This after German officials last month alleged the poison was from the ‘Novichok’ family — a Cold War era military grade nerve-agent which was developed only by the Soviet Union, which critics of the story say is bizarre given how “obvious” Russian fingerprints behind such an “assassination attempt” would be.

Navalny tells Der Spiegel: “I assert that Putin was behind the crime.”

Now in English: Alexei Navalny on His Poisoning: “I Assert that Putin Was Behind the Crime” ⁦@derspiegel⁩ https://t.co/JBIgDo5LiE

— Mathieu von Rohr (@mathieuvonrohr) October 1, 2020

And there’s also the fact that prior to the alleged poisoning of a ‘popular opposition leader’ the reality is that a huge chunk of the Russian population may have never heard of him:

The ‘western’ media jumped onto the ‘Navalny was poisoned’ claim to heap the usual trash on Russia. They also claimed that Navalny is the ‘opposition leader’ in Russia even as he polls at 2% which is lower than the leader of the communist party and several other real opposition politicians.

Der Spiegel acknowledges at one point in the interview that prior to the poisoning incident, he was largely unknown to Europe or the rest of the world:

One of the startling things in the Navalny interview is how conscious he is of the geopolitical significance of his rescue by Germanyhttps://t.co/0QOyfDUTT2 pic.twitter.com/Xe6j9pmsxt

— Doug Saunders (@DougSaunders) October 1, 2020

The Kremlin has an explanation, apparently. Within hours after Navalny pointing the finger directly at President Putin, the Russian president’s spokesman Dmitry Peskov said this was all “probably” a CIA operation. 

The official Russian response is now being widely reported via state media sources:

Western intelligence agencies – in particular, agents from the American CIA – are working with Russian opposition figure Alexey Navalny, Vladimir Putin’s spokesman alleged on Thursday.

“Probably, it is not the patient [Navalny] who works for the Western special services, but that the Western intelligence services who work with him – this would be more correct [to say],” Dmitry Peskov explained.  “I can even be specific: these days, specialists from the Central Intelligence Agency (CIA) of the United States of America are working with him.”

“This isn’t the first time he’s been given different instructions,” the spokesman continued. “The instructions given to the patient are obvious. We have seen such patterns of behavior on more than one occasion.”

This bombshell accusation against Navalny also comes after Russia has been persistent in demanding further, independently obtained evidence from Germany. It appears the statement also referenced the “pattern” of accusations which surrounded the Skripal case in the UK.

Also on the question of Navalny being an “exile” from Russia, Peskov emphasized he can return to his homeland at any time.

“Any citizen of Russia can return to his homeland at any time,” the Kremlin spokesman said. “Treatment can take place in our country, in fact, almost all people avail of this. Lives are saved in our country, and the life of this patient was also saved in Russia.” 

Authored by Steve Watson via Summit News,

Chinese state media once again attacked diversity of opinion in the US to promote the Communist state’s brand of global authoritarianism, this time reviewing the Presidential debate between Trump and Biden, and noting that Americans must be “disappointed.”

Suddenly appearing to become television critics, China’s Global Times on Wednesday described the debate as “full of personal attacks and disruptions which jeopardized the audience’s viewing experience”.

The State run outlet described the debate as “epitome of U.S. chaos,” and a “representation of the sharp division within U.S. society.”

The piece also covered “racial issues”, suggesting that they “are triggered by the fundamental divergences over US values and where the US heads within its society.”

“Such divergences are implacable. What is worse, the US leadership is intensifying the divergences, making conflicts between different races more difficult to resolve,” the article proclaimed.

Given the communist Chinese government’s fondness of internment camps for Uyghur Muslims, using them as forced slave labor based on their ethnicity, which was even mentioned in the article, it is hardly in a position to lecture America about “racial issues”.

Another state publication, The People’s Daily, got in on the act, lamenting on how bad it feels for Americans because their politicians won’t make nice with communist China.

“The US can neither achieve lasting unity by “making” foreign enemies at the expense of America’s own interests nor deceive the public for a long time by playing a dangerous game of misleading the world about its relationship with China, as truth will come to light sooner or later,” the article proclaimed.

“It should be noted that the extreme words and deeds of the US for grabbing attention and gaining private profits will harm the country’s future,” the piece also threatened.

It also claimed that America’s “political shows to deflect attention and shift the blame to other countries are not conducive to solving the increasingly serious systemic crises inside the US,” adding that “Instead, such practices have caused damage to international relations that should not be overlooked.”

The piece concluded that “short-sighted political calculations are doomed to do more harm that good to the U.S.,” further claiming that “America has no choice but to come to some kind of way to live peacefully with China.”

Commentator Gordon G. Chang noted that diversity of opinion and heated debate is actually the cornerstone of a free country, something that the Chinese government knows all too well, and therefore has almost completely eradicated:

Yes, @HuXijin_GT, in #America there is “division.” In #China, no one is allowed to disagree with #XiJinping. Those who do are never heard from again. #CCP https://t.co/XSW8Dc1ldC

— Gordon G. Chang (@GordonGChang) September 30, 2020

Others joined in analysing the ridiculous claim that America’s political system is inferior to China’s:

“…the accelerating loss of advantages of the US political system”

This is a strange way to make the even more absurd claim that the CCP’s system is advantageous.

— Player Killers’ Exchange (@PlayerKillers__) September 30, 2020

Xitler has turned those who dared to debate him into organ donors.

— BenTallmadge (@BenKTallmadge) September 30, 2020

What a shameless hypocrite!

His country doesn’t have debates, elections or voting. But wants to talk about the flaws of SOME OTHER COUNTRY’S DEMOCRACY.

Let’s see if he can call Xi the Pooh a ‘Clown’ or ‘Shut up, man’. He will sent for sentry duty to the Galwan border.

— Siamsid99 (@siamsid99) September 30, 2020

In the least you don’t even have a debate crowning your emperor so what qualifications do you have commenting on others’ business?

— Richard Steandric (@Rsteandric) October 1, 2020

Hu, China is much short of it. You don’t have a freedom of speech in the first place.

— 美原 (@j7sztA8q8I14Zq6) September 30, 2020

A young world class athlete has had his career and future dreams crushed for a mere one word tweet amid a seemingly benign social media exchange with a journalist. 

Nineteen-year old American professional cyclist Quinn Simmons was suspended from his team Thursday for his tweet showing mere indirect support to President Trump after a journalist issued an ultimatum.

Dutch journalist José Been had initially tweeted hope to her American followers that “this horrible presidency ends for you,” after which she added “if you follow me and support Trump, you can go.”

That’s when Simmons responded with a simple, “Bye” and included a hand emoji waving. 

Immediately others jumped in, with one Twitter user writing that the professional cyclist was “Apparently a Trumper” (gasp!).

Simmons confirmed simply with “That’s right” and an American flag emoji.

It didn’t take long for the US-based World Tour team for which Simmons rides to essentially cancel him. Trek-Segafredo issued a statement suspending Simmons “until further notice” for what it called “divisive, incendiary” comments which were “detrimental” to the team.

Here’s the full statement stating that “(He) will not be racing for Trek-Segafredo until further notice.”

Simmons is seen as a young and rising star who was only in his first season with the Trek-Segafredo team.

Apparently he learned the hard way that suddenly professional athletes are not supposed to hold political views or participate in any level of public discussion, even if using one-word responses.

Illustrating just how absurd the whole thing is, the journalist whose tweet set off the controversy in the first place, José Been, has urged the cycling team not to suspend Simmons.

Fox News noted that Been later wrote she felt “horrible” about it, and appears to have now deleted her Twitter account altogether. 

Submitted by SouthFront,

On September 30, the Azerbaijani-Armenian war entered its third day with another increase in casualties and victorious communiqués from both sides…

In the morning, the Azerbaijani Defense Ministry claimed that its forces had put out of service an Armenian S-300 long-range air defense system near the village of Shushakend in the Khojaly District of the Nagorno-Karabakh Region. How the long-range system might have appeared near the contact line in the contested region remains a mystery. Unfortunately, the Azerbaijani troops and media units at the site were not able to film a video to explain the situation. Apparently, their phones and cameras must have run out of power.

Meanwhile, the Azerbaijani Defense Ministry announced that its forces had killed or injured up to 2,300 Armenian soldiers or officers, as well as eliminated up to 130 battle tanks and other equipment pieces, over 200 artillery guns and rocket launchers, 25 air defense systems, 6 HQs, 5 weapon depots, up to 50 anti-tank weapons and 55 vehicles.

The Azerbaijani side insists that its forces have victoriously repelled Armenian attacks in the Madagiza area. Clashes, artillery duels and drone strikes are being reported along the entire contact line in the contested region.

Earlier, the Azerbaijani Defense Ministry reported that its artillery strikes pounded positions of the 1st battalion of Armenia’s 5th Motorized Rifle Regiment near Gasangaya in the Tartar area and the 1st battalion of the 6th Motorized Rifle Regiment in the Talysh area. Azerbaijan claims that the Armenian military suffered heavy losses and has been facing difficulties in finding equipment to organize the evacuation of the dead and wounded.

As of September 30, the rhetoric of the Azerbaijani side shifted from declaring regular gains in the battle against Armenian forces to claiming that Armenian attacks on positions captured in the first day of the war had been successfully repelled. This, as is typical of war-time propaganda, attempts to deflect from the lack of notable gains on the ground despite the successful and active use of artillery, Turkish Bayraktar TB combat drones and Israeli Harpy loitering munitions. The Azerbaijani media has also been actively preparing the nation for a prolonged war by releasing multiple reports and explanations that Azerbaijan should be interested in a war of attrition to exhaust Armenian forces and to teach the Armenians a ‘lesson’.

The Armenian Defense Ministry is not lagging behind its Azerbaijani counterparts. On the evening of  September 29 , it claimed that since the morning of September 27, about 790 Azerbaijani servicemen had been killed and 1,900 people injured in the conflict, which had erupted in the Nagorno-Karabakh region. The Armenian military also claimed that its forces had destroyed 137 units of military equipment, including battle tanks, 72 drones, 7 helicopters and a military plane.

The Armenian side, including top officials of the Nagorno-Karabakh Republic and Armenia itself, insist that Turkey has been directly supporting Azerbaijan in this war. This support allegedly includes not only diplomatic support, but also military planning, intelligence assistance, the deployment of military advisers and special forces, weapon supplies and even direct participation of various Turkish units in the clashes. On September 29, they even reported that a Turkish F-16 fighter jet deployed in Azerbaiijan shot down an Armenian Su-25 warplane in order to provide air cover to combat drones, which were striking targets inside Armenia. Both Turkey and Azerbaijan denied this. As of now, the mysterious F-16 looks every bit as perplexing as the ghost S-300 system somehow found by Azerbaijan near the contact line in Karabakh.

At the same time, neither side seems to be interested in a resumption of the ceasefire. Instead, both Armenia and Azerbaijan declare their goal to be delivering a military defeat to their opponent. Azerbaijani President Ilham Aliyev said that there are no prospects for peace with Armenia as their position is unacceptable. “The Armenian Prime Minister publicly declares that Karabakh is Armenia, period. In this case, we cannot talk about any kind of negotiation process,” Aliyev said. Earlier he vowed to settle the Karabakh question by returning control over the contested region to Azerbaijan. In their own turn, the President of the Nagorno-Karabakh Republic,  thus speaking for Armenia, declared that the Armenians are not interested in requesting a ceasefire. Instead, he said, they will force the enemy to ask for it.

An investigation into potential election tampering has been launched in Philadelphia after several memory sticks and a laptop used to program voting machines were stolen from a city warehouse, officials confirmed on Wednesday. The laptop belonged to an on-site employee for the company that supplies the machines.

It is unclear when the equipment was stolen, however a Philadelphia Inquirer source says the items vanished last week.

And while City officials said on Wednesday that the theft would not disrupt voting on November 3, they worried behind the scenes that the theft would fuel theories from President Trump and his allies over the integrity of the city’s elections.

Perhaps coincidentally, President Trump on Tuesday knocked Philadelphia for allegedly refusing to let poll watchers into voting locations. (The Inquirer says that’s false)

Wow. Won’t let Poll Watchers & Security into Philadelphia Voting Places. There is only one reason why. Corruption!!! Must have a fair Election.

— Donald J. Trump (@realDonaldTrump) September 29, 2020

City commissioners initially refused to confirm the theft, or that an investigation had been launched, according to the Inquirer – and only did so after the outlet told them that they would be reporting the incident based on sources who were not authorized to discuss it publicly.

“Since being informed of the incident, I have immediately committed to making necessary police resources available to investigate this incident and find the perpetrators. I have also committed to the city commissioners additional resources to provide enhanced security at the warehouse going forward,” said Mayor Jim Kenney in a statement. “This matter should not deter Philadelphians from voting, nor from having confidence in the security of this election.”

The memory sticks are encrypted to prevent tampering, and are matched with individual voting machines, according to a spokesperson for the vendor, Election Systems & Software. “Upon programming, these encryption keys ‘marry’ the USB with the machine, and if placed in another machine, it will cause an error and the machine will not work.”

Philadelphia has 3,750 of the ExpressVote XL touchscreen voting machines, and elections staff have begun programming them so they are ready to use on Nov. 3. The flash drives are inserted into the top of the machines; some of them are used to record the electronic votes used for unofficial results on election night, but it was unclear whether those stolen served that function.

Once a machine has been set up, it’s closed with a numbered seal. That means that any voting machines that are opened after being programmed should be identifiable because they would have broken seals. The commissioners have begun checking all the seals on the machines, which are numbered to prevent them from being opened and simply replaced, Custodio said, to ensure they have not been tampered with. –Philadelphia Inquirer

According to sources familiar with the investigation, officials found several voting machines with incorrect seal numbers, however Custodio said the discrepancies were likely due to a logging error in recording the numbers – adding that the machines “will be thoroughly examined, wiped, and tested just to be sure.”

Read the rest of the report here.

Authored by Michael Every via Rabobank,

We are apparently edging closer to a fresh round of US fiscal stimulus, with Treasury Secretary Mnuchin saying something in the range of USD1.5-2.2 trillion is “fair”. Talks with Nancy Pelosi are being extended to see if something can be ushered through. This might include a further round of cheques to households. If so, a set of tens of millions of envelopes with de facto cash in them may yet arrive before the tens of millions of envelopes with votes in them go the other way. That’s not quid pro quo if both sides of the US political divide are doing it,…right? It certainly gets libertarians and neoliberals shouting ‘treason’ as public debt soars yet again.

Ironically, this comes just after upbeat US data: ADP employment comfortably beat expectations to rise 749K, the Chicago PMI soared to 62.4, and pending home sales leaped 8.8% m/m to a record. Those low, low rates and high, high concerns about Covid are seeing a major, major shift in living patterns continue. Of course, revised Q2 GDP still collapsed -31.4% q/q annualised, and the last few days have also seen major US corporations announce a slew of job cuts – Disney for example firing 28,000. Not so many smiles there now.

Indeed, the evidence for a K-shaped recovery is still compelling. Those who are able to flee to the countryside and buy those lovely new homes and work remotely have never had it so good, in a way; those who have lost their jobs, don’t know how they will get a new job, and remain stranded have rarely ever had it so bad. You thought we had a polarized society before Covid? Now we won’t even have to physically interact with each other so much. Never the Twains shall meet. Literally. Sorry, Mr. Twain, but you can’t go and visit the other Mr Twain, because he’s on lockdown. This will do wonders for our politics, all over.

The USD has been on the back foot on these whispers of more stimulus, although that sits within the bigger picture of support stemming from the political risk associated with this particular election cycle. (As if the next will be magically better.) However, everyone is going to be playing the same stimulus game in different ways.

Indicatively, yesterday the ECB’s Lagarde said Europe –which has missed its 2% CPI target for the past seven years– is considering adopting the Fed’s new strategy of allowing inflation to overshoot its target before acting as part of a strategic overhaul. “If credible, such a strategy can strengthen the capacity of monetary policy to stabilize the economy when faced with the lower bound. This is because the promise of inflation overshooting raises inflation expectations and therefore lowers real interest rates,” stated Lagarde.

Of course, this is not credible – and we should not take it as such. There is the little fact of those seven years of consecutive ECB failure even before new structural challenges emerged; that inflation expectations continue to descend; that Japan is decades into the same process and has had no success escaping deflation at all (today’s weak Tankan report won’t have helped); and –as we keep stressing– that THIS IS ALL POLITICAL ECONOMY AND NOT ECONOMICS.

On which, a Tweet from Luttwak today refers to the French philosopher Benda (1867-1956) and his infamous 1927 book ‘La Trahison des Clercs’, known in the US as ‘The Treason of the Intellectuals’, and in the while the UK as ’The Great Betrayal’. It struck me as poignant.

Benda argued European intellectuals had lost the Classical World’s ability to reason dispassionately about political and military matters, instead becoming apologists for crass nationalism, warmongering and racism – which were all popular in the 1920’s given the failure of post-WW1 capitalism to deal with its deep-rooted socio-economic problems and massive war debts. Things got far worse less than a decade later, of course. As Benda bitterly –accurately–concluded: “And History will smile to think that this is the species for which Socrates and Jesus Christ died“.

One can take Benda as a warning about the current breakdown of political norms and niceties; or a warning about rising populism and nationalism and warmongering – which we are hardly short of; or even of the risks to liberal democracy itself, which are increasingly front-page news even in the financial press. (On which note, please see our report ‘The World in 2030: Fragments of the Imagination’ on what things may look like a decade from now, which begins with an analysis of the looming breakdown Benda was pointing to in 1927.)

Yet equally look at central banks impotently talking as if they have control over an economic variable like inflation when they don’t; a variable which, in isolation, does not even matter much in the bigger picture – who *CARES* if CPI is 2% or 1.6% over a seven-year period if society is split in two?!; and who are displaying the ‘intellectual treason’ of not saying this out loud to those who set the parameters within which they operate at a time when society is under strain. It’s not just populists whose lack of Classical reasoning is dangerous: the Establishment is just as bad.

“Sorry, everyone. We can’t hit our inflation target without the following list of socio-economic reforms, no matter how controversial – and we recommend them. Anything else we do will be dangerously distorting to both markets and the fabric of the free society within which we live.”

Can you imagine the ECB or the Fed or the BOE saying this? Of course not. Ridiculous.

Yes, there is now overt central bank support for vanilla ‘fiscal stimulus’ – but just for the short term, and not within any kind of new structural framework that would make it effective.

Yet as I shared a few weeks ago, in the 1930’s, the Fed Chair was honest enough to say exactly that in public testimony. More recently, Greenspan happily shilled his way through calls for tax cuts for the rich and payroll tax hikes for working Joes. It was the complete opposite policy, and helped pave the path to where we are today, but he shilled for it nonetheless.

In short, if you look around you, and then don’t sleep well, look for those who have ‘treasonously’ lost the ability to reason; and find they are not all holders of, or pretenders to, elected office.

The Senate Commerce Committee has just voted to subpoena a group of Big Tech CEOs to appear for another round of Congressional testimony, possibly before Election Day.

But while the most recent ‘Big Tech’ hearing back in July, which compelled the CEOs of Apple, Facebook, Alphabet and Amazon – including Jeff Bezos and Mark Zuckerberg – was held by the House and organized to discuss anti-trust issues pertaining to the Silicon Valley giants, it looks like the GOP-controlled Senate is going to investigate – what else? – anti-conservative bias on the biggest’ social media platforms, as the subpeona targeted the CEOs of Twitter, Facebook and Google-owner Alphabet.

Specifically, the CEOs will be called upon to discuss Section 230 of the Communications Decency Act of 1996, which is typically referred to as the tech platform “shield law”, or “the 26 words that created the Internet”. In essence, the law gives companies like Facebook immunity for anything posted on its platform, from political opinions to live feeds of mass shootings.

Both President Trump and Joe Biden have called for amending Section 230, though the two have different reasons for doing so. Trump has filed an executive order laying out the administration’s line of attack on Section 230, though the “liability shield” for social media platforms remains intact – at least for now.

Headlines signaling dwindling chance of new fiscal stimulus combined with notable dissapointments in US manufacturing data has sent the ‘growth-signaling’ commodities crashing…

Crude is collapsing, back below $39…

But it’s not just US, as COVID continues to re-emerge worldwide in its so-called second-wave, there are ominous signs for consumption. A 7-day moving average of worldwide commercial flights declined to the lowest since mid-August, according to Flightradar24, a website that tracks flights in real time, while U.K. car usage slumped last week amid new virus restrictions. Europe’s oil refineries are struggling to cope with a diesel glut, limiting their prospects for extra crude buying.

And so much for Dr. Copper?

Copper has a long way to fall (versus Gold) to catch down to bonds’ reality…

But, but, but everyone said we were coming back?