The impact of Covid-19 on supply chains has been tremendous. Uncertainty across the global economy is building as China remains in economic paralysis. The luxury fashion industry is suffering its most significant “shock” since the 2008 financial crisis, reported the Financial Times.
Our angle in this piece is to asses which luxury brand companies are most exposed/dependent on China. Many of these firms have complex operations in the country, from manufacturing facilities to brick and mortar stores to e-commerce platforms. Chinese consumers accounted for 40% of $303 billion spent on luxury goods globally last year.
The virus outbreak has also disrupted complex supply chains for mid-market apparel brands, like Under Armour, Adidas, and Puma, warning about collapsing demand and factory shutdown woes.
LVMH, Kering, and Richemont are luxury brands that are some of the least exposed to China because their manufacturing facilities are outside the country.
However, Luca Solca, a luxury goods analyst at Bernstein, said it doesn’t matter where luxury brands are making their products, the whole demand story in China has collapsed.
Kering, the owner of Gucci, warned earlier this month that the virus outbreak in China could damage sales in the first quarter.
A Moody’s report this week showed US-listed luxury brands, Coach and Kate Spade owner Tapestry, have increased their market exposure to China in recent years to gain access to a robust market, allowing their revenues to increase far faster than industry norms. That strategy today is likely to have backfired.
Fashion brands from Hennes & Mauritz, Next of the UK, and Tory Burch, have built factories in China to take advantage of inexpensive silk, fabrics, and cotton, along with lower labor costs, are now experiencing supply chain disruptions that could lead to product shortages in the months ahead.
The National Chamber for Italian Fashion warned earlier this week that the virus impact in China would lead to a $108 million drop in Italian exports in the first quarter because Chinese demand has fallen. If consumption remains depressed, then luxury exports to China could drop by a whopping $250 million in 1H20.
A top executive at Shanghai’s luxury shopping mall Plaza 66 said the mall had been deserted this month. Stores such as Cartier and Tiffany’s have been shuttered.
“We are now, brand by brand, reallocating that inventory to other regions in the world so that we are not too heavy in stock in China,” Kering chief executive François-Henri Pinault said last week. The move suggests the environment in China remains dire and to persist well into March.
Jefferies Group noted this week that Burberry Group is the most exposed luxury brand to China.
The crisis developing in the global luxury retail market is the first demand shock since that last financial crisis more than a decade ago. Brands that have manufacturing and retail exposure to China will be damaged the most.
UBS analyst Olivia Townsend said luxury brands she spoke with said factories are to remain shut for all of February may lead to product shortages.
The demand crisis comes as the global apparel industry rolls over suggests that world stocks could be headed for a correction.
French President Emmanuel Macron has announced new measures aimed at countering political Islam in France. The changes would limit the role that foreign governments have in France in training imams, financing mosques and educating children.
Macron also vowed to fight what he called “Islamist separatism” and to lead what he described as a “Republican reconquest” aimed at reasserting state control over Muslim ghettoes — so-called no-go zones (zones urbaines sensibles, sensitive urban zones) — in France.
In a much-anticipated policy speech, Macron, during a visit to the eastern French city of Mulhouse on February 18, said that his government would seek to combat “foreign interference” in how Islam is practiced, and the way that Muslim religious institutions are organized in France.
“The problem is when, in the name of a religion, some people want to separate themselves from the Republic and therefore not respect its laws,” he said.
“Here in France, there is no place for political Islam.”
Macron outlined a four-pronged strategy to combat Islamism in the country:
1) fight against foreign influences in schools and places of worship;
2) reorganize Muslim worship in France in accordance with the principles of secularism and French law;
3) fight against all manifestations of Islamist separatism and communitarianism; and
4) reassert state control over all parts of France.
Macron said that, among other measures, he plans to terminate a decades-old teacher exchange program called Teaching Language and Culture of Origin (L’Enseignement Langue et Culture d’origine, ELCO), which allows nine countries — Algeria, Croatia, Italy, Morocco, Portugal, Serbia, Spain, Tunisia and Turkey — to send teachers to France to provide foreign language and culture courses without oversight by French authorities.
Four majority-Muslim countries — Algeria, Morocco Tunisia and Turkey — are involved in ELCO, which serves approximately 80,000 students each year. These countries also send several hundred imams to France every year. Foreign imams, Macron said, were often linked to Salafism or the Muslim Brothers and “preach against the Republic.” He stressed: “This end to the consular Islam system is extremely important to curb foreign influence and make sure everybody respects the laws of the Republic.”
Macron said that ELCO will be replaced with bilateral agreements to ensure that the French state has control over the courses and their content, as of September 2020. Macron added that Turkey was the only country that had refused to sign a new bilateral agreement.
The Turkish government operates a large network of mosques in France and elsewhere in Europe under the auspices of Diyanet, or Directorate of Religious Affairs, which spent more than $2 billion on promoting Islam in 2019 and is controlled by Turkish President Recep Tayyip Erdoğan, who has been accused of using Diyanet to prevent the integration of Muslims in Europe.
“Turkey today can make the choice to follow that path with us or not, but I will not allow any foreign country feed a cultural, religious or identity-related separatism on our Republic’s territory,” Macron said.
“We cannot have Turkey’s laws on France’s soil. No way.”
Macron also said that a new law is being drafted to allow for transparency in how mosques are financed. “Mosques financed with transparency with imams trained in France and respectful of the Republican values and principles, that’s how we will create the conditions so that Muslims in France can freely practice their religion,” he said.
Macron added that he would ask the French Council of the Muslim Faith (Conseil français du culte musulman, CFCM), the body representing Islam in France, to help the government find solutions to train imams on French soil and ensure they can speak French and not spread Islamism.
Macron also called for better integration of Muslims in French society and warned of the dangers of communitarianism — the practice of communities governing themselves in France:
“We are here for a reason that we share with Muslims — that is the struggle against communitarianism. What we must put in place is not, as I have sometimes heard from some people, ‘a plan against Islam.’
That would be a profound mistake. What we must fight is the separatism, because when the Republic does not keep its promises, others will try to replace it.“
Macron’s speech, which comes just weeks before municipal elections set for March 15 and 22, is part of an effort to elicit support from conservative voters. The government has faced criticism over its lackluster efforts to promote Muslim integration in France, which is home to Europe’s largest Muslim population, estimated to number around 6 million, or 8 percent of the population.
Marine Le Pen, leader of the French nationalist party National Rally, has repeatedly argued that France has failed to assimilate its Muslim community — thus jeopardizing laïcité, or state secularism, a 1905 legal principle that separates church and state and requires the state’s neutrality on religion. Le Pen, who is neck and neck with Macron in public opinion polls, speaks for many voters who are concerned about the spread of radical Islam in France.
Macron, who took office in May 2017 and has focused most of his presidency on economic reform, has had mixed results on keeping promises regarding Islamism and mass migration.
October 2017. Macron signed a new counter-terrorism law — Law to Strengthen Internal Security and the Fight Against Terrorism (Loi renforçant la sécurité intérieure et la lutte contre le terrorisme) — which gives prefects, police and security forces wide-ranging powers, without the need to seek prior approval from a judge, to search homes, place people under house arrest and close places of worship. The measure also authorizes police to perform identity checks at French borders.
February 2018. Macron pledged to “lay the groundwork for the entire reorganization of Islam in France.” He said that the plan would be announced within six months and would limit the role that foreign governments have in training imams, financing mosques and educating children in France — the very same objectives that Macron announced two years later in his speech in Mulhouse in February 2020.
Le Pen noted that Macron’s latest plan mirrors her own report — “Le Pen Plan for the Suburbs” (Plan Le Pen pour les banlieues) — published in May 2018.
September 2018. French Interior Minister Gérard Collomb launched the “Republican Reconquest” (Reconquête Républicaine) aimed at retaking control of 60 so-called no-go zones in France by sending in extra police and improving public services.
September 2019. Macron, arguing that the government must stop voters from drifting to populist parties, hinted at a tougher line on immigration. “France cannot host everyone if it wants to host them well,” Macron told French radio station Europe 1.
Macron’s comments caused a backlash from left-leaning members of his own party. They penned two open letters warning against “fueling hatred against all Muslim citizens.” Lawmaker Jean-François Cesarini accused Macron of “co-opting Le Pen’s talking points.”
Meanwhile, in a new book — “The Emirates of the Republic: How Islamists are Taking Control of the Suburbs” — François Pupponi, who for 20 years was the Socialist mayor of Sarcelles, a commune in the northern suburbs of Paris, recounts how supporters of political Islam have upset the balance in his community, where Arabs, Christians, Jews and Turks had lived together in peace for many decades.
Pupponi describes a landscape in which entire districts are being infiltrated by Islamists in order to “make a takeover bid on this community.” He added: “It is the fruit of my experience, what I live and what I observe.”
Paul Tudor Jones Literally “Bowed Down” To Pitbull At Florida Everglades Fundraiser Last Weekend
It was at an event in Palm Beach this past Saturday night that Paul Tudor Jones literally bowed down to Pitbull, who was performing a concert for the Everglades Foundation. Jones, in addition to being a hedge fund manager, is a well-known conservationalist.
Joining other billionaires like David Tepper and Robert Kraft, Jones made his case to them for helping support the restoration of 1.5 million acres of wetlands in South Florida, according to Bloomberg. He reportedly made the pitch for other billionaires to chip in while eating “ceviche in a papaya boat and grouper with blood orange-grapefruit slaw”.
Jones sees saving the Everglades as the crux of the Florida “climate anxiety” problem, stating: “It’s the antidote for all the climate anxiety Florida feels. Saving the Everglades is one of the best ways to buttress resiliency, achieve carbon neutrality and it’s our best hope for carbon sequestration, to reverse the effects.”
He continued: “This ecosystem — and we’re working on the science to prove it — might be one of the most valuable ecosystems in the world for that.”
The idea of freshwater flowing south not only ensures clear water supply for those living in the state, but it also protects habitats for animals, birds, fauna and fish.
The event was called “Foreverglades” and was hosted at the Breakers on February 15.
The event drew in many people concerned with protecting the environment and animals. Among the entertainment was Pitbull and 10-year-old Samantha Ramos, who reportedly introduced the well-known Miami-based rapper and singer as “Mr. 305, Mr. Worldwide.”
For two decades, US troops have been imposing their law on the broader Middle East. Entire countries are now without a state to defend them. Populations have been subjected to the dictatorship of the Islamists. Mass murders have been committed. There have been famines as well. President Donald Trump has forced his generals to repatriate their soldiers, but the Pentagon intends to continue its work with NATO soldiers.
President Trump will spend the last year of his first term in office bringing the Boys home. All U.S. troops stationed in the broader Middle East and Africa are expected to withdraw. However, this withdrawal of troops will in no way mean the end of US governance in these regions of the world. Quite the contrary.
The Pentagon’s strategy
Since 2001 – and this is one of the main reasons for the 9/11 attacks – the United States has secretly adopted the strategy outlined by Donald Rumsfeld and Admiral Arthur Cebrowski. This strategy was mentioned in the Army Review by Colonel Ralf Peters two days after the attacks and confirmed five years later by the publication of the staff map of the new Middle East. It was detailed by Admiral Cebrowski’s assistant, Thomas Barnett, in a popular book The Pentagon’s New Map.
It is about adapting the missions of the US armies to a new form of capitalism giving primacy to Finance over Economics. The world must be divided in two.
On the one hand, stable states integrated into globalization (which includes Russia and China);
on the other, a vast area of exploitation of raw materials.
This is why the state structures of the countries in this zone must be considerably weakened, ideally by destroying them and preventing their resurgence by all means. This “constructive chaos”, as Condoleeza Rice put it, should not be confused with the homonymous rabbinic concept, even though the supporters of the theopolitics have done everything in their power to do so. It is not a question of destroying a bad order in order to rebuild a better one, but of destroying all forms of human organization in order to prevent any form of resistance and to allow transnationals to exploit this area without political constraints. It is therefore a colonial project in the Anglo-Saxon sense of the term (not to be confused with a colonization of settlement).
According to this map, taken from a Powerpoint by Thomas P. M. Barnett at a conference at the Pentagon in 2003, all state structures in the dewy zone must be destroyed.
In beginning to implement this strategy, President George Bush Jr. spoke of a “war without end. Indeed, it is no longer a question of winning wars and defeating opponents, but of making them last as long as possible, “a century” he said. In fact, this strategy has been applied in the “Broader Middle East” – an area stretching from Pakistan to Morocco and covering the entire CentCom theatre of operations and the northern part of the AfriCom theatre of operations. In the past, the IMs guaranteed US access to oil from the Persian Gulf (Carter doctrine). Today, they are present in an area four times larger and aim to overturn any form of order. The state structures of Afghanistan since 2001, Iraq since 2003, Libya since 2011, Syria since 2012 and Yemen since 2015 are no longer capable of defending their citizens. Contrary to official discourse, there has never been any question of overthrowing governments, but rather of destroying states and preventing their reconstitution. For example, the situation of the people of Afghanistan did not improve with the fall of the Taliban 19 years ago, but is getting worse and worse by the day. The only counter-example could be that of Syria, which, in accordance with its historical tradition, has kept its state despite the war, absorbed the blows, and although ruined today, has weathered the storm.
It should be noted in passing that the Pentagon has always considered Israel as a European state and not as a Middle Eastern state. It is therefore not affected by this vast upheaval.
In 2001, the enthusiastic Colonel Ralf Peters assured that ethnic cleansing “it works! “(sic), but that the laws of war forbade the USA to carry it out itself. Hence the transformation of Al-Qaeda and the creation of Daesh, which did for the Pentagon what it wanted but could not undertake publicly.
To understand the Rumsfeld/Cebrowski strategy, it should be distinguished from the “Arab Spring” operation, imagined by the British on the model of the “Great Arab Revolt”. The idea was to put the Muslim Brotherhood in power, just as Lawrence of Arabia had put the Brotherhood of the Wahhabites in power in 1915.
The official, albeit not publicly assumed, objective of the U.S. General Staff: to blow up the borders of the Middle East, to destroy both enemy and friendly states, to practice ethnic cleansing.
Westerners in general have no vision of the broader Middle East as a geographical region. They know only certain countries and perceive them as isolated from each other. In this way, they convince themselves that the tragic events that these peoples are enduring are all due to special reasons, in some cases civil war, in others the overthrow of a bloodthirsty dictator. For each country, they have a well-written history of the reason for the tragedy, but they never have one to explain that the war lasts beyond that, and they certainly do not want to be asked about it. Each time, they denounce the “carelessness of the Americans” who could not end the war, forgetting that they rebuilt Germany and Japan after the Second World War. They refuse to acknowledge that for two decades the United States has been implementing a pre-stated plan at the cost of millions of lives. They therefore never see themselves as responsible for these massacres.
The United States itself denies that it is pursuing this strategy with regard to its citizens. For example, the inspector general investigating the situation in Afghanistan wrote a report lamenting the countless missed opportunities for the Pentagon to bring peace when precisely the Pentagon did not want peace.
The Russian intervention
In order to pulverize all the states of the broader Middle East, the Pentagon organized an absurd regional civil war in the manner it had invented the pointless war between Iraq and Iran (1980-88). Eventually President Saddam Hussein and Ayatollah Khomeini realized that they were killing each other for nothing and made peace against the West.
This time it was the opposition between Sunnis and Shiites. On one side, Saudi Arabia and its allies, and on the other, Iran and its allies. It does not matter whether Wahhabi Saudi Arabia and Khomeini Iran fought together under NATO command during the war in Bosnia-Herzegovina (1992-95), or whether many troops of the “Axis of Resistance” are not Shiite (100% of the Palestinians of Islamic Jihad, 70% of the Lebanese, 90% of the Syrians, 35% of the Iraqis and 5% of the Iranians).
No one knows why these two camps are fighting each other, but they are asked to bleed each other.
One third of the populations of the Shia Axis of Resistance are not Shia.
In any case, in 2014, the Pentagon was preparing to recognise two new states in accordance with its map of objectives: “Free Kurdistan” (fusion of the Syrian Rojava and the Kurdish Governorate of Iraq to which part of Iran and all of eastern Turkey were to be added at a later date) and “Sunnistan” (composed of the Sunni part of Iraq and eastern Syria). By destroying four states, the Pentagon paved the way for a chain reaction that would in turn destroy the entire region.
Russia then intervened militarily and enforced the borders of the Second World War. It goes without saying that these are arbitrary, stemming from the Sykes-Picot-Sazonov agreements of 1915, and sometimes difficult to bear, but changing them by blood is even less acceptable.
The Pentagon’s communication has always pretended to ignore what was at stake. Both because it does not publicly assume the Rumsfeld/Cebrowski strategy and because it equates the Crimea’s accession to the Russian Federation with a coup de force.
The moult of supporters of the Rumsfeld/Cebrowski strategy
After two years of fierce fighting against President Trump, the general officers of the Pentagon, almost all of whom were personally trained by Admiral Cebrowski, submitted to him under conditions. They agreed not to
create a terrorist state (Sunnistan or Caliphate);
change borders by force;
maintaining US troops on the battlefields of the Broader Middle East and Africa.
In exchange, they ordered their loyal prosecutor Robert Mueller, whom they had already used against Panama (1987-89), Libya (1988-92) and in the 9/11 attacks (2001), to bury his investigation into Russiagate.
Then everything unfurled as smoothly as a player piano roll.
On 27 October 2019, President Trump ordered the execution of Caliph Abu Bakr al-Baghdadi, the main military figure in the Sunni camp. Two months later, on January 3, 2020, he ordered the execution of Iranian General Qassem Soleimani, the main military figure of the Axis of Resistance.
Having thus shown that he remained the master of the game by eliminating the most symbolic personalities of both sides, claiming it, and without incurring any significant retaliation, Secretary of State Mike Pompeo revealed the final scheme on January 19 in Cairo. He plans to pursue the Rumsfeld/Cebrowski strategy no longer with the US armies, but with those of NATO, including Israel and the Arab countries.
On the 1st of February, Turkey made its break with Russia official by assassinating four FSB officers in Idleb. Then President Erdogan went to Ukraine to chant the motto of the Banderists (the Ukrainian legionnaires of the Third Reich against the Soviets) with the Ukrainian National Guard and receive the head of the International Islamist Brigade (the anti-Russian Tatars), Mustafa Djemilev (known as “Mustafa Kırımoğlu”).
The North Atlantic Council acknowledges the deployment of NATO trainers to the Broader Middle East (Brussels, 13 February 2020).
On February 12 and 13, the Defence Ministers of the Atlantic Alliance noted the inevitable withdrawal of US forces and the forthcoming dissolution of the International Coalition Against Daesh. While stressing that they were not deploying fighting troops, they agreed to send their soldiers to train those of the Arab armies, i.e. to supervise the fighting on the ground.
NATO trainers will be deployed primarily to Tunisia, Egypt, Jordan and Iraq. For example:
Libya will be encircled in the west and east. The two rival governments of Fayez el-Sarraj -supported by Turkey, Qatar and already 5,000 jihadists from Syria via Tunisia- and Marshal Khalifa -supported by Egypt and the Emirates- will be able to kill each other forever. Germany, happy to regain the international role it has been deprived of since the Second World War, will play the gadfly by talking about peace to cover the moans of the dying.
Syria will be surrounded on all sides. Israel is already a de facto member of the Atlantic Alliance and bombs whoever it wants whenever it wants. Jordan is already NATO’s “best global partner”. King Abdullah II came to Brussels on January 14th for lengthy talks with the Secretary General of the Alliance, Jens Stoltenberg, and attended a meeting of the Atlantic Council. Israel and Jordan already have permanent offices at Alliance Headquarters. Iraq will also receive NATO trainers, although its parliament has just voted to withdraw foreign troops. Turkey is already a member of the Alliance and controls northern Lebanon through the Jamaa Islamiya . Together, they will be able to enforce the US ’Caesar’ law forbidding any company from anywhere to help in the reconstruction of this country.
Thus, the pillaging of the wider Middle East, which began in 2001, will continue. The martyred populations of this region, whose only fault is to have been divided, will continue to suffer and die en masse. The United States will keep its soldiers at home, warm and innocent, while the Europeans will have to take responsibility for the crimes of the US generals.
According to President Trump, the Alliance could change its name to NATO-Middle East (NATO-MO/NATO-ME). Its anti-Russian function would take a back seat to its strategy of destroying the non-globalized zone.
The question arises as to how Russia and China will react to this redistribution of the cards. China needs access to raw materials from the Middle East in order to develop. It should therefore oppose this Western takeover even though its military preparation is still incomplete. On the contrary, Russia and its huge territory are self-sufficient. Moscow has no material reason to fight. The Russians may even be relieved by NATO’s new orientation. It is likely, however, that, for spiritual reasons, they will not let Syria down and may support other peoples in the wider Middle East.
“Biggest Humanitarian Horror Story Of The 21st Century”: Up To A Million Refugees Trying To Flee Idlib
The ongoing final battle for Idlib could unleash the biggest refugee exodus the nine-year war has seen, United Nations officials are warning.
Recent statements from the UN Office for the Coordination of Humanitarian Affairs puts the latest wave of civilian displacement since December 1 at 700,000.
Turkey’s Erdogan is now petitioning the US and NATO to given military assistance against the rapidly advancing Syrian Army backed by Russian air power. International reports suggest up to one million internally displaced persons are now surging toward the Turkish border.
Civilians fleeing Idlib, via Anadolu Agency
The Wall Street Journalreports that “Families in northwestern Syria are trapped between the advancing Syrian military — backed by Russian airstrikes and pro-Iranian militias — and Turkey.”
The report notes Turkey has sealed the border using its military:
“The border is closed to refugees, secured by walls, trenches and guards who have shot people trying to cross without permission,” according to the WSJ.
However, the WSJ fails to mention that the US-designated terrorist organization which rules Idlib on the ground, al-Qaeda faction Hayat Tahrir al-Sham, has for years terrorized the local population and has prevented them from leaving.
Stillframe via WSJ
Estimates commonly put the total population of Idlib province at up to three million.
Media pundits are using heart-wrenching footage of massive fleeing refugee columns to argue for Western military intervention — despite the likelihood this would actually make the crisis worse.
OCHA: “The biggest humanitarian horror story of the 21st Century will only be avoided if Security Council members, and those with influence, overcome individual interests and put a collective stake in humanity first.” https://t.co/aaidFMazNepic.twitter.com/jND87mtuhA
So far the United States has ignored calls to intervene against Russia and the Syrian government, after for years covertly funding and supplying many of the very jihadists now occupying the province.
But calls for US action are growing louder as the media has “rediscovered” the war in Syria after it long being out of the headlines, and as Assad has vowed to “liberate every inch” of the country.
#IDLIB: Civilians fleeing to Turkish border due to the Assad & Russia bombardment
Its happening… If the escalation in Idlib continues, another millions of refugees will appear in the borders of Turkey in the upcoming days.pic.twitter.com/4yi6dQrCdS
Throughout the war, surviving al-Qaeda and ISIS-linked factions from all over Syria have poured into the northwest province as their forces have been rolled back by pro-government forces. In many cases the families of anti-Assad insurgent jihadists have ended up there too, as it’s the last so-called “rebel enclave”.
This is why this week US coalition spokesman Col. Myles Caggins called Idlib“a magnet for terrorist groups” that are a “nuisance, a menace and a threat” to hundreds of thousands of civilians just “trying to make it through the winter.”
Thus the trapped civilian population is caught between a rock and hard place as they are under the bombs of a three-way war now involving the Syrian-Russian alliance fighting Turkey, as well as Turkish proxy jihadists as well as terror group Hayat Tahrir al-Sham.
Many civilians, including tragically many children, have also been documented as dying due to the extreme winter conditions of refugee camps.
The WSJ has cited opposition sources to say that nearly 370 civilians have died in the fighting so far this year, in what United Nations emergency relief coordinator Mark Lowcock has described as fast becoming “the biggest humanitarian horror story of the 21st century.”
Even before the coronavirus sprang upon an unprepared China the credit cycle was tipping the world into recession. The coronavirus makes an existing situation immeasurably worse, shutting down China and disrupting global supply chains to the point where large swathes of global production simply cease.
The crisis is likely to be a wake-up call for complacent investors, who are content to buy benchmark bonds issued by bankrupt governments at wildly excessive prices. A recession turned by the coronavirus into a fathomless slump will lead to a synchronised explosion of debt issuance for which there are no genuine buyers and can only be monetised.
The adjustment to reality will be catastrophic for government finances, and their currencies. This article explains why the collapse in overpriced financial assets and fiat currencies is likely to be rapid, perhaps giving ordinary people in some jurisdictions an early prospect of a return to gold and silver as circulating money.
Introduction
My last article suggested that both financial assets and currencies would collapse together. the basis of this supposition is twofold: first, central bank policies are binding together the rise in financial assets with the maintenance of value in fiat currencies. Therefore, if one falls, they both fall. And secondly there is historical precedence for this when one examines The Mississippi bubble 300 years ago.
The timing for such a collapse appears to be imminent. Every day, more and more data confirm that the global economy is sliding into recession. So far, people have been ignoring this important development, but now that it is becoming hard to ignore, no doubt the coronavirus will be blamed. This is a mistake because the factors leading to a slump, principally the end of the expansionary credit cycle combining with trade protectionism against Chinese imports by President Trump, echo developments leading up to the Wall Street crash in October 1929. If that point is accepted, then clearly the world could be on the edge of a very deep slump exacerbated but not caused by the virus.
The coronavirus has all but closed down China’s economy. It threatens to become a pandemic with serious consequences for all other national economies and their fiat currencies.
The central issue flowing from the upcoming monetary crisis centres on the rating of government debt. Almost all welfare-driven states are in debt traps. They think price inflation is under control, because their colleagues in the statistics departments tell them so, allowing them to continue to run increasing budget deficits with apparent impunity. Central banks do not realise that very soon they will be the only buyers of their governments’ debt which they will pay for with newly minted money. The irony of repeating the mistakes of Germany’s Reichsbank in 1918-23 will be completely lost to them and the path of escalating failure will only encourage the pace of printing to be accelerated.
The latest bombshell, coronavirus, is a trigger perhaps for the markets to regain control from the statist price riggers. This has to be the first step to fixing broken economies. The Panglossians in the ranks of the banking and investment communities will be rudely awakened to find themselves staring down the barrel of economic reality. Only then is there a chance that neo-Keynesian lies will be discarded by one and all, and a retreat towards sound money commence.
There is unlikely to be much time. Even without the downhill kick of coronavirus a bear market in bonds could be a devastating event on its own in a period of less than a year. Inflation of fiat currencies and interest rate suppression have been the principal agents for ramping bond prices, which tells us that their collapse will undermine currencies as well, giving complacent investors a double hit. But what are we to measure a decline of fiat currencies against? Sound money of course, gold and silver, with other stores of value, such as bitcoin, favoured by tech-savvy millennials, who will be quick to observe and understand the debauchment of fiat money. And the sooner we throw out fiat currencies, the sooner we can revert to sound money, which is gold.
Changing values for government bonds
We shall take as our primary example the US bond market, because fiat currency fans believe that other than individual time-values it is the risk-free investment yardstick. The ten-year US Treasury bond yields less than 1.6%, but its future pricing raises some serious issues.
Before addressing risk, we should note that time preference theory tells us that possession of cash is always worth more than its non-possession. The discount of that future value is not significant if you part with it to buy a ten-year UST with a view to trading it out in the next few days. But if you buy it with a view to holding it as an investment, then its discounted future value does become relevant. We cannot know what this time preference is, because it can only be realised in an unfettered market, not a market manipulated by the Fed’s actions. But with history as our guide an annualised discounted value of about two per cent for a 10-year bond can be used as a rough guide.
Figure 1, which is a long-term chart of the yield on this bond, appears to indicate there is a solid floor in the region of 1.4% represented by the horizontal line joining points at July 2012, July 2016 and August 2019. This floor is about half a per cent less than our estimated time preference value.
With its yield currently 1.56%, there appears to be very little upside in the price, and we can understand why. And if we accept government estimates of CPI-U all items index rising at 2.5% (year to January) the yield should be closer to 4% and must therefore be heavily suppressed at current levels.
That is not all. While the general level of prices is an economic concept, it is not measurable; a fact which allows the Bureau of Labour Statistics, along with all other nations who use “standardised” CPIs to effectively goal-seek an official figure for its rate of change. Two independent analysts, Chapwood Index and Shadowstats confirm each other that a more realistic rate for monetary depreciation of the US dollar is not 2%, but about 10% annually.
But for the moment, investors believe the price inflation lie because they want to. When they begin to realise the official rate is pure fiction, then one would expect government bonds to reflect a far higher redemption yield. In other words, any upside in bond prices is strictly limited while the downside is substantial. As an illustration, a 10-year bond at the current yield would have to fall from par to $47.40 to yield a more realistic gross 10% to redemption.
Clearly, the US Treasury market is badly mispriced. To estimate the likelihood of the Fed losing control of bond pricing, we should also take into account the state of the US Government’s finances, because we have not yet incorporated future currency debasement risks in our calculations. With a starting budget deficit in the current fiscal year estimated by the Congressional Budget Office at $1,027bn, a recession, let alone a slump, will make government finances considerably worse. For the years 2020-2022 the CBO expects real GDP to grow at an average 2% per annum. In the very near future, due to the coronavirus alone that is likely to be revised sharply downwards, if not by the CBO, but by market participants as further evidence of a looming slump becomes too hard to ignore.
All we need to know for now is the revision of economic prospects will be significant, based on recent evidence of recessionary trends and the potential impact of the coronavirus. The current stage of the credit cycle indicates the banks are in the process of withdrawing circulating credit, hitting SMEs particularly hard. Unemployment will rise, along with bankruptcies. And this assumes little or nothing for the effect of coronavirus.
But even if coronavirus is contained to China and East Asia, US corporations’ supply chains will cease to function, requiring both time and bank credit to relocate. Neither are available in the short term and in the current credit climate. And this is an election year, when any president’s financial and economic prudence are at their lowest ebb and his administration is most inclined to throw money at any and all economic problems.
Without a recession, other things being equal the CBO’s forecasting assumptions and the effect on government debt outstanding might be taken to be credible by gullible investors. But expressed in the economist’s jargon, not all else is equal and we can already see why these forecasts are going horribly wrong. The question then is what the effect on markets will be when these errors are realised and prices for financial assets are adjusted for reality.
The adjustment will follow the current period of complacency. US Treasury bond prices have recently risen, partly on a safe-haven basis, but certainly with an enduring belief in the state’s economic management. Equities are at or close to all-time highs on a relative value to bond yields argument, and an expectation that any recession will be shallow. Further monetary easing is expected to support the economy and maintaining the long-term prospect of a resumption to decent economic growth. Further monetary easing is seen to be bullish.
Concerns about the dollar are broadly absent. There is embedded in investor psychology Part One of Triffin’s dilemma, that concludes otherwise irresponsible fiscal policies will allow the provider of the world’s reserve currency to run deficits to increase its supply to foreigners, always hungry for scarce dollars, which they reinvest in US Treasuries. And if there is a recession, the argument goes, then there will always be a further flight to the safety of dollars and US Treasuries.
Part Two of Triffin’s dilemma ends in crisis, which broadly is what we now face. Investors are yet to take note.
Putting the effects of the coronavirus to one side for the moment, in their private capacity businessmen and their bankers are usually the first to see that economic optimism is misplaced. Businessmen are battling in deteriorating trading conditions, and bankers with their internal market intelligence and its impact on risk assessment. The authorities, particularly the Fed, who have made the mistake of believing in their own statistics, and of falling hook, line and sinker for Keynesian stimulation theories, will be next.
One can envisage the setup: having seen from its own internal information the economy is not performing as hoped, the Fed decides to call in the management of the G-SIB banks to hear their concerns, gather intelligence and reassure them they are on the case. Afterwards, we can imagine the following conversation:
Banker A. “Well, what did you make of that?”
Banker B. “The Fed must be worried to feel the need to reassure us. Things must be worse than we thought.”
Bankers A & B. (Thinking) I’ll report back to my Board that the Fed is very worried, and we must urgently reduce our loan book before our competitors do.
It has happened before. None of this would occur in an economy which is based on sound money and free markets, only susceptible to one-off disasters, such as war and the coronavirus. Instead, the US economy is managed on the basis of maintaining the crumbling confidence of consumers and the uninterrupted provision to them of credit. After many years of being bailed out, economic actors have become fully dependent on confidence being maintained and have no alternative plan in the case of its failure. But failure is now becoming evident.
The central question therefore devolves upon the future credit rating of the US Government. Assuming the Fed is losing control of the overall monetary situation and pricing returns to being set by markets, how do you rate a very large borrower with the following credit profile:
No surplus of income over expenses since 2001. Current trend is for further deterioration with no end in sight.
Net present value of future liabilities mandated by law is independently estimated (Kotlikoff) to be over $200 trillion. Current income (taxes etc.) of $3.6 trillion gives a ratio of income to future expense of well over 50 times. Tax income will almost certainly decline raising this ratio further.
Net interest cost at unrealistically low interest rates is 38% of last year’s deficit. A more realistic interest rate could have an immediate and catastrophic effect on finances.
Management seems unjustifiably optimistic that future revenue will pick up.
In the absence of a management that agrees to radically alter course, there can only be one answer: do not lend it any money and eliminate all existing exposure. When they wake up, this should, and therefore will be, the reality facing not just the banks but all holders of US Treasuries, including foreigners without sound reasons to be invested in them.
Consequently, the switch from the current state of suppressive control to realistic pricing of government debt will be both vicious and rapid. The only foreigners likely to delay selling existing US Government debt are some governments, either under the US Government’s cosh, or not wishing to exacerbate the situation. With cross-border trade collapsing, others have no good reason to hold dollars and dollar-denominated debt, let alone extend their exposure. Furthermore, in recent years large hedge funds have made hay out of being short euros and yen and long dollars and US Treasury debt through fx swaps. Those trillion-dollar positions need to be unwound as well, which will put additional pressure on the dollar and the bond markets.
At anything close to these yields, the only buyer will be the Fed, which, as well as new issuance will have to absorb foreign sales and those of distressed hedge funds. For these reasons the monetisation of debt will almost certainly have to be on a far larger scale than following the Lehman crisis. There is no price for government debt in these circumstances, because the higher the interest rate, the worse the numbers become. Nor will there be any value in the currency used to buy it, because if the government is effectively bust its unbacked currency will also be worthless.
Other governments with substantial future welfare commitments are in a similar position. High debt to GDP ratios will become a debt trap on a combination of recession-fuelled budget deficits and realistic funding costs. In the EU and Japan, government funding costs have even further to travel from under the zero bound.
Meanwhile, there is an air of complacency with a general assumption that the next crisis will lead to yet lower rates, as has been the case with every credit crisis for the last forty years. But as Figure 1, the chart of the ten-year US Treasury above clearly showed, after a long decline in yields the world’s reserve currency benchmark yield is now struggling to go any lower. Zero or even negative dollar rates imposed by the Fed cannot alter that fact.
This is important, because central banks have tried everything that they can think of to restore economic growth and have run out of ideas. Led by the Bank for International Settlements, they are now pleading with their governments to borrow more while rates are cheap in the hope that greater budget deficits will stop the world from sliding into recession.
Other central banks are in the same boat
The debt devil tempts, and the weak follow, and debtor hell is the highest reward he can offer. The response by all G20 members to a sliding global economy will obviously be a BIS sanctioned coordinated burst of deficit spending leading to a synchronised expansion of government bond supply and fiat money to pay for it. It is proving impossible, even for a free trader like Boris Johnson, to resist the political imperative to build new hospitals, train thousands of new nurses and policemen and throw money at a new, wildly over-budget railway connecting the North of England to London. Which, incidentally, will probably empty the North of northerners seeking their fortunes in London, instead of spreading London’s wealth northwards. Most of this spending is classified as investment, but the fact is that without a commensurate increase in personal savings it is inflationary spending.
Perhaps the dollar will not be the first to slide, given the shutting down of China’s economy by the coronavirus. The yuan, surely, will be the first to suffer in the foreign exchanges, a process that appears to be starting. But this might galvanise the People’s Bank into positive action to stabilise the currency, which it can do by tying it to gold. In doing so, it would do humanity a favour by leading the way early towards a sound money solution to the unfolding financial and economic crisis, which with the coronavirus threatens to be potentially much worse than anything recorded in modern times.
The reason the dollar is likely to be next to slide is the exposure foreigners have to it, the equivalent of more than one year’s GDP. It is comprised of about $4 trillion in bank deposits, and $19.4 trillion of US securities, according to the last available TIC figures.
For the short-term, perhaps China’s imploding economy, taking Germany’s and others with it, encourages the investor’s myth that the dollar is a safe haven. The trade-weighted index has strengthened in recent weeks on the back of both the yuan and euro weakening, and US Treasury yields have declined as well. It is a situation unlikely to survive deteriorating economic conditions for much longer.
In addition to foreign sellers, speculative positions of perhaps several trillion dollars in currency swaps held by large hedge funds will have to be reversed if and when the dollar is undermined by foreign selling. That would lead to temporary buying of euros and yen. When that short-term effect is over, presumably these currencies will then suffer the combination of collapsing values for government bonds and stockmarket values at the same time as the currencies themselves fall measured against gold, silver and bitcoin.
Sound money alternatives signal the fiat crisis
An unfolding crisis from the combined effects of the turn of the credit cycle and the coronavirus can be expected to hit individual fiat currencies both sequentially and generally. This article has made some suggestions over a likely sequence: yuan, dollar, euro and yen. But how things actually unfold is for the moment a matter of speculation. From the turmoil ahead of us, the clear winners are likely to be gold and silver, and supply-constrained hedges such as bitcoin.
In real terms, gold is still under-priced relative to the dollar, based on their relative quantities. This is illustrated in Figure 2, which is of gold adjusted by the increase in the fiat money quantity.
This chart should contradict any thoughts that the recent increase in the price of gold might be overdone. The truth is that the devastating bear market in the gold price following the spike in 1980 has almost eliminated gold from investment portfolios in favour of inflation beneficiaries. If that long period is coming to an end, investors will attempt to switch their allocations from inflation beneficiaries and bonds with rising yields in favour of inflation protection. For this reason, the rise in the dollar gold price could be very dramatic, particularly when a further acceleration of global monetary debasement is taken into account. And this is before we see official CPI measures move much above their 2% goal-sought targets.
For both gold and silver, we can expect initial moves reflecting their eventual replacement of failing fiat as the trusted money in circulation. In the case of silver, it is worth mentioning that its original price relationship under bimetallic standards only become discarded when silver was generally dropped as money in favour of gold alone in the 1870s. When fiat fails, it is likely that silver will regain a secondary monetary role, and its remonetisation will have a substantial impact on its purchasing power. From a current gold/silver ratio of 87 times, a move towards the old ratio of approximately 15 times means that for speculators buying into the sound money argument, silver is likely to be the catch-up form of sound money.
Bitcoin
During previous currency hiatuses, the problem of failing fiat money has always been evidenced in the rising prices of precious metals. Since the last financial crisis, there has arisen a new category of store of value in thousands of different cryptocurrencies. While most of them appear to be akin to quack monetary remedies, the first cryptocurrency to be devised with its innovative blockchain technology is sufficiently understood by a growing band of followers to be firmly established as a form of money.
Bitcoin is currently not ideally suited as a means of settling transactions, or for making value comparisons between one good against another. Settlements are severely restricted relative to the superior scalability offered by credit and debit cards. Where bitcoin scores is as a store of value.
In learning about bitcoin and why it works, a new generation of tech-savvy millennials have become aware of the way their governments debauch their currencies as a means of secretly transferring wealth from them as individuals to the state, the banks, and their favoured borrowers. Bitcoin supporters are an intelligent, educated mob angry at their governments’ abuse of their fiat currencies.
In all populations, there is therefore a marginally greater recognition of the fragility of state currencies, and therefore the abandonment of them by the general public is likely to develop over a shorter time period than experience of previous instances would suggest.
Conclusion
The straws in the wind listed in this article point to a more rapid collapse of financial asset values and currencies than generally thought by sound money theorists who have long anticipated this outcome. Doubts about the timing have been settled to a degree by the sudden development of the coronavirus, which has already imploded China’s economy, disrupting global supply chains and the provision of consumer goods.
To the extent the coronavirus has had a hand in the forthcoming destruction of fiat currencies and Keynesian mythology, we can take some comfort that it will have brought forward the eventual reintroduction of gold and gold standards. The path is not straightforward. There will be destruction of financial asset values and the economic consequences for ordinary people will be dire. We can expect widespread civil unrest and political instability.
Western governments and their advisers are not familiar with the arguments in favour of gold, having spent half a century dismissing it. This fact favours the new economies which have not discarded gold, which include Russia, China, and many other Asian nations. Some governments, such as India, might attempt to confiscate their citizens’ gold, but in general the collapse of western economic fallacies could lead to Asia’s economic superiority.
“Every day in communities across the United States, children and adolescents spend the majority of their waking hours in schools that have increasingly come to resemble places of detention more than places of learning.”
– Investigative journalist Annette Fuentes
Just when you thought the government couldn’t get any more tone-deaf about civil liberties and the growing need to protect “we the people” against an overreaching, overbearing police state, the Trump Administration ushers in even more strident zero tolerance policies that treat children like suspects and criminals, greater numbers of school cops, and all the trappings of a prison complex (unsurmountable fences, entrapment areas, no windows or trees, etc.).
The fallout has been what you’d expect, with the nation’s young people treated like hardened criminals: handcuffed, arrested, tasered, tackled and taught the painful lesson that the Constitution (especially the Fourth Amendment) doesn’t mean much in the American police state.
Welcome to Compliance 101: the police state’s primer in how to churn out compliant citizens and transform the nation’s school’s into quasi-prisons through the use of surveillance cameras, metal detectors, police patrols, zero tolerance policies, lock downs, drug sniffing dogs, strip searches and active shooter drills.
If you were wondering, these police state tactics have not made the schools any safer.
Rather, they’ve turned the schools into authoritarian microcosms of the police state, containing almost every aspect of the militarized, intolerant, senseless, overcriminalized, legalistic, surveillance-riddled, totalitarian landscape that plagues those of us on the “outside.”
Two years after President Trump announced his intention to “harden” the schools, our nation’s children are reaping the ill effects of gun-toting, taser-wielding cops in government-run schools that bear an uncomfortable resemblance to prisons.
America’s schools are about as authoritarian as they come.
draconian zero tolerance policies that criminalize childish behavior,
overreaching anti-bullying statutes that criminalize speech,
school resource officers (police) tasked with disciplining and/or arresting so-called “disorderly” students,
standardized testing that emphasizes rote answers over critical thinking,
politically correct mindsets that teach young people to censor themselves and those around them,
and extensive biometric and surveillance systems that, coupled with the rest, acclimate young people to a world in which they have no freedom of thought, speech or movement.
Young people in America are now first in line to be searched, surveilled, spied on, threatened, tied up, locked down, treated like criminals for non-criminal behavior, tasered and in some cases shot.
In my day, if you talked back to a teacher, or played a prank on a classmate, or just failed to do your homework, you might find yourself in detention or doing an extra writing assignment after school.
That is no longer the case.
Nowadays, students are not only punished for minor transgressions such as playing cops and robbers on the playground, bringing LEGOs to school, or having a food fight, but the punishments have become far more severe, shifting from detention and visits to the principal’s office into misdemeanor tickets, juvenile court, handcuffs, tasers and even prison terms.
Students have been suspended under school zero tolerance policies for bringing to school “look alike substances” such as oregano, breath mints, birth control pills and powdered sugar.
Look-alike weapons (toy guns—even Lego-sized ones, hand-drawn pictures of guns, pencils twirled in a “threatening” manner, imaginary bows and arrows, even fingers positioned like guns) can also land a student in hot water.
Even good deeds do not go unpunished.
One 13-year-old was given detention for exposing the school to “liability” by sharing his lunch with a hungry friend. A third grader was suspended for shaving her head in sympathy for a friend who had lost her hair to chemotherapy. And then there was the high school senior who was suspended for saying “bless you” after a fellow classmate sneezed.
These outrageous incidents are exactly what you’ll see more of if the Trump Administration gets its way.
Increasing the number of cops in the schools only adds to the problem.
Thanks to a combination of media hype, political pandering and financial incentives, the use of armed police officers (a.k.a. school resource officers) to patrol school hallways has risen dramatically in the years since the Columbine school shooting.
Funded by the U.S. Department of Justice, these school resource officers (SRO) have become de facto wardens in elementary, middle and high schools, doling out their own brand of justice to the so-called “criminals” in their midst with the help of tasers, pepper spray, batons and brute force.
In the absence of school-appropriate guidelines, police are more and more “stepping in to deal with minor rulebreaking: sagging pants, disrespectful comments, brief physical skirmishes. What previously might have resulted in a detention or a visit to the principal’s office was replaced with excruciating pain and temporary blindness, often followed by a trip to the courthouse.”
Young Alex Stone didn’t even make it past the first week of school before he became a victim of the police state. Directed by his teacher to do a creative writing assignment involving a series of fictional Facebook statuses, Stone wrote, “I killed my neighbor’s pet dinosaur. I bought the gun to take care of the business.” Despite the fact that dinosaurs are extinct, the status fabricated, and the South Carolina student was merely following orders, his teacher reported him to school administrators, who in turn called the police.
In almost every case, these undeniably harsh methods are used to punish kids—some as young as 4 and 5 years old—for simply failing to follow directions or throwing tantrums.
Very rarely do the kids pose any credible danger to themselves or others.
Unbelievably, these tactics are all legal, at least when employed by school officials or school resource officers in the nation’s public schools.
This is what happens when you introduce police and police tactics into the schools.
Paradoxically, by the time you add in the lockdowns and active shooter drills, instead of making the schools safer, school officials have succeeded in creating an environment in which children are so traumatized that they suffer from post-traumatic stress disorder, nightmares, anxiety, mistrust of adults in authority, as well as feelings of anger, depression, humiliation, despair and delusion.
If these exercises are intended to instill fear and compliance into young people, they’re working.
As journalist Dahlia Lithwick points out: “I don’t recall any serious national public dialogue about lockdown protocols or how they became the norm. It seems simply to have begun, modeling itself on the lockdowns that occur during prison riots, and then spread until school lockdowns and lockdown drills are as common for our children as fire drills, and as routine as duck-and-cover drills were in the 1950s.”
The toll such incidents take on adults can be life-altering, but when such police brutality is perpetrated on young people, the end result is nothing less than complete indoctrination into becoming compliant citizens of a totalitarian state.
Schools acting like prisons.
School officials acting like wardens.
Students treated like inmates and punished like hardened criminals.
This is the end product of all those so-called school “safety” policies, which run the gamut from zero tolerance policies that punish all infractions harshly to surveillance cameras, metal detectors, random searches, drug-sniffing dogs, school-wide lockdowns, active-shooter drills and militarized police officers.
Unfortunately, advocates for such harsh police tactics and weaponry like to trot out the line that school safety should be our first priority lest we find ourselves with another Sandy Hook.
What they will not tell you is that such shootings are rare.
As one congressional report found, the schools are, generally speaking, safe places for children.
In their zeal to crack down on guns and lock down the schools, these cheerleaders for police state tactics in the schools might also fail to mention the lucrative, multi-million dollar deals being cut with military contractors such as Taser International to equip these school cops with tasers, tanks, rifles and $100,000 shooting detection systems.
According to one law review article on the school-to-prison pipeline, “Many school districts have formed their own police departments, some so large they rival the forces of major United States cities in size. For example, the safety division in New York City’s public schools is so large that if it were a local police department, it would be the fifth-largest police force in the country.”
The ramifications are far-reaching.
There can be no avoiding the hands-on lessons being taught in the schools about the role of police in our lives, ranging from active shooter drills and school-wide lockdowns to incidents in which children engaging in typically childlike behavior are suspended (for shooting an imaginary “arrow” at a fellow classmate), handcuffed (for being disruptive at school), arrested (for throwing water balloons as part of a school prank), and even tasered (for not obeying instructions).
Instead of raising up a generation of freedom fighters—which one would hope would be the objective of the schools—government officials seem determined to churn out newly minted citizens of the American police state who are being taught the hard way what it means to comply, fear and march in lockstep with the government’s dictates.
So what’s the answer, not only for the here-and-now—the children growing up in these quasi-prisons—but for the future of this country?
How do you convince a child who has been routinely handcuffed, shackled, tied down, locked up, and immobilized by government officials—all before he reaches the age of adulthood—that he has any rights at all, let alone the right to challenge wrongdoing, resist oppression and defend himself against injustice?
Most of all, how do you persuade a fellow American that the government works for him when, for most of his young life, he has been incarcerated in an institution that teaches young people to be obedient and compliant citizens who don’t talk back, don’t question and don’t challenge authority?
Clearly, the pathology that characterizes the American police state has passed down to the schools.
Now in addition to the government and its agents viewing the citizenry as suspects to be probed, poked, pinched, tasered, searched, seized, stripped and generally manhandled, all with the general blessing of the courts, our children in the public schools are also fair game for school resource officers who taser teenagers and handcuff kindergartners, school officials who have criminalized childhood behavior, school lockdowns and terror drills that teach your children to fear and comply, and a police state mindset that has transformed the schools into quasi-prisons.
Don’t even get me started on the “school-to-prison pipeline,” the phenomenon in which children who are suspended or expelled from school have a greater likelihood of ending up in jail. One study found that “being suspended or expelled made a student nearly three times more likely to come into contact with the juvenile justice system within the next year.”
Indeed, this profit-driven system of incarceration has also given rise to a growth in juvenile prisons and financial incentives for jailing young people. In this way, young people have become easy targets for the private prison industry, which profits from criminalizing childish behavior and jailing young people.
None of these tactics are making our communities or schools any safer, and they’re certainly not contributing to environments in which learning flourishes. Incredibly, despite the fact that the U.S. invests more money in public education (roughly $13,000 per child per year) than many other developed countries, we rank around the middle of the pack in science, math and reading, and behind many other advanced industrial nations.
Without a doubt, change is needed, but that will mean taking on the teachers’ unions, the school unions, the educators’ associations, and the police unions, not to mention the politicians dependent on their votes and all of the corporations that profit mightily from an industrial school complex.
As we’ve seen with other issues, any significant reforms will have to start locally and trickle upwards.
For starters, parents need to be vocal, visible and organized and demand that school officials 1) adopt a policy of positive reinforcement in dealing with behavior issues; 2) minimize the presence in the schools of police officers and cease involving them in student discipline; and 3) insist that all behavioral issues be addressed first and foremost with a child’s parents, before any other disciplinary tactics are attempted.
If you want young people who grow up seeing themselves as prisoners, run the schools like prisons.
If, on the other hand, you want to raise up a generation of freedom fighters, who will actually operate with justice, fairness, accountability and equality towards each other and their government, then run the schools like freedom forums.
Remove the metal detectors and surveillance cameras, re-assign the cops elsewhere, and start treating our nation’s young people like citizens of a republic and not inmates in a police state penitentiary.
Trump Not Giving Up On “Military Options” For Maduro’s Ouster, Considers Naval Blockade
Despite Venezuelan President Nicolas Maduro emerging victorious after last year’s tumultuous events, which included a US assisted coup attempt by a faction of the military last Spring, out of which Washington also maintained a diplomatic fiction that opposition leader Juan Guaidó is actually the president, it appears the White House is still considering military options against Maduro.
Bloomberg reports “President Donald Trump is frustrated that pressure is building too slowly on Venezuelan President Nicolas Maduro and is still considering military options in the country, including a naval blockade, a senior administration official said.”
Image via CNN
Apparently the current sanctions regimen and attempt to block all oil exports, which has seen the US go after major oil companies still doing business with state-run PDVSA (most recently sanctioning a subsidiary of Russian state oil major Rosneft), is not putting swift or severe enough pressure on the Maduro government.
The goal remains, the unnamed top official told Bloomberg, “securing free and fair elections in Venezuela”— which in Washington-speak really means ensuring US-backed Guaidó secures loyalty of the military and thereby leadership over the country. “The U.S. doesn’t believe that free elections are possible with Maduro in power,” the official said further.
The report names Spain as a key European barrier to the US and EU campaign to ouster Maduro. Several new initiatives are being undertaken keep keep up and increase the pressure, however, as Bloomberg notes:
The U.S. has put several companies that continue to do business in Venezuela on notice, the official said, including India’s Reliance Industries, Spain’s Repsol, Chevron and Greek shippers. Trump is likely to raise the issue of India’s oil imports from Venezuela with Indian Prime Minister Narendra Modi during a two-day visit next week, the official said Friday in a briefing for reporters.
Trump’s perhaps most aggressive plan of action remains a “naval blockade” of all goods going in and out of the country, which gained a lot of media coverage last August.
The president had frequently vocalized the idea of a naval embargo which would involve multiple warships stationed up and down the South American country’s coastline.
But top US military officers were said to have consistently opposed the plan, saying it was impractical and would take away already stretched naval resources busy engaging Iran and China.
The White House has further been deeply frustrated that the Venezuelan opposition, which failed to deliver results after a months-long standoff last year and with full Washington support that even likely included covert aid via the CIA.
People like Justice Amy Berman Jackson, who claim to hold the greatest devotion to our institutions, who purport to cherish the rule of law above all else, are the ones responsible for systematically demolishing it all.
She claim sounded like something from Representative Adam Schiff (D-Calif.) or Rachel Maddow or any number of Russian collusion propagandists:
“He was not prosecuted for standing up for the president. He was prosecuted for covering up for the president.”
Those words, however, were not uttered on MSNBC but rather in a federal courtroom by Amy Berman Jackson, a U.S. district court judge seated in the nation’s capital, whose job is to ensure the fair administration of justice based on the rule of law.
The “he” Jackson was referring to is Roger Stone, a Trump confidant; the “president,” of course, is Donald Trump.
Now, Stone wasn’t charged with covering up for the president nor did the indictment against him suggest as much. There was nothing to “cover up” as election collusion is a fantasy concocted by the Democrats and the news media. But the Obama-appointee was on a roll; facts, at that point, didn’t matter to Jackson. (In a tweet Thursday morning, Schiff echoed Jackson’s evidence-free remark, claiming Stone “did it to cover up for Trump.”)
Her absurd and blatantly political accusation from the bench was just part of Jackson’s 40-minute monologue Thursday morning prior to sentencing Stone to 40 months in prison for lying to Congress, obstructing justice, and witness tampering. (The loquacious judge doesn’t like competition; she put a gag order on Stone last year that is still in effect.)
The seven charges against Stone stemmed from Robert Mueller’s investigation into nonexistent collusion between the Trump campaign and the Kremlin to sway the outcome of the 2016 presidential election. The Justice Department accused Stone of thwarting a similar investigation conducted by the House Intelligence Committee, then headed by Rep. Devin Nunes (R-Calif.).
The case against Stone is rooted in the claim that the Russians hacked the email system of the Democratic National Committee—an intrusion, it’s important to note, that is backed up solely by an analysis conducted by CrowdStrike, a private cybersecurity firm. The politically connected company was hired to investigate the breach in the spring of 2016 by Perkins Coie, the same law firm that hired Fusion GPS to do opposition research on Trump. The DNC refused to surrender any devices or data to the FBI, despite several requests by then-director James Comey.
Stone allegedly, in no small measure due to his own boasting, was in touch with WikiLeaks, the website that eventually leaked the DNC’s hacked emails. His concealment of communications related to WikiLeaks earned Stone and his wife an early-morning FBI raid at their home in January 2019 as the CNN news cameras rolled.
Former prosecutor Andrew McCarthy wrote this of the government’s case against the eccentric political gadfly prior to his sentencing Thursday:
The Stone prosecution is more politics than law enforcement. It was the Mueller probe’s last gasp at pretending there might be something to the Russia-collusion narrative. Notwithstanding that, when the “gee, it sure feels like there could be some collusion here” indictment was filed, over a year and a half after special counsel Robert Mueller was appointed, it had long been manifest that there was no Trump–Russia conspiracy.
It appears that Jackson, like so many Trump-haters in the Beltway, still clings to the fantasy that the collusion hoax is legitimate.
Evidently, in the judge’s mind, bad actors like Stone are the only reason why Team Mueller and congressional investigators failed to find what Schiff repeatedly assured the public was convincing evidence of collusion. Jackson told the courtroom prior to her ruling that Stone’s deception “led to an inaccurate, incomplete and incorrect report,” by the Republican-led House Intelligence Committee.
But there is no evidence to support Judge Jackson’s accusation, nor did she offer any explanation. The lengthy report issued in March 2018—one month after Nunes released his memo revealing for the first time how the FBI deceived the Foreign Intelligence Surveillance Court—details the committee’s yearlong investigation into the matter. The report concluded that while the Russians attempted to interfere in the election, there was no coordination to do so with members of the Trump campaign.
Jackson’s purpose was clear:
To assist the Democrats’ nonstop crusade to undermine the credibility of Nunes and his report, and to suggest that if only Trump’s lackeys hadn’t hampered the work of dozens of super-smart investigators working with unlimited resources, proof of the secret conspiracy would have been uncovered and Trump would have been ousted from the White House.
In a statement by email, Jack Langer, a spokesman for Nunes, told me:
“Our 240-page report has precisely one sentence that may be inaccurate information provided by Stone. That line had no impact on any of the report’s findings whatsoever. For the judge to use that to characterize our report as inaccurate and incomplete is absurd. Then again, a lot of the judge’s sentencing speech seemed to be regurgitating the Democrats’ debunked talking points about Russian collusion.”
That was not Jackson’s only impersonation of Adam Schiff; she went full drama queen mode warning that Stone poses an insidious danger to the very foundation of our nation.
“The truth still exists, the truth still matters,” Jackson lectured. (This is exactly why we need cameras in federal courtrooms so the public is privy to these sort of self-indulgent performances.)
“Roger Stone’s insistence that it doesn’t, his belligerence, his pride in his own lies are a threat to our most fundamental institutions. If it goes unpunished it will not be a victory for one party or another. Everyone loses.”
And it isn’t just enough for the judge to express her outrage about how Roger Stone almost single-handedly destroyed the work of our founding fathers by misleading lawmakers pursuing a concocted crime. No, we all need to rise up to signal our collective “dismay and disgust” at the American menace with a Nixon tattoo—and it must, the judge ordered, “transcend party.”
Jackson rattled off all the parties who “cared” about making sure Stone paid for his crimes against humanity, including Congress and the American people. (It’s a safe bet most Americans were paying no attention to this trial or could even identify Stone in a lineup.) She took more potshots at Stone; perhaps without being ironic, Jackson called Stone an “insecure” person who craves attention.
Jackson’s grandstanding might have been met with shrugs (or ignored altogether) in any other political climate but her dire warnings about the necessary consequences for committing perjury and obstructing justice and covering up for political pals demonstrate an astonishing level of hypocrisy if not flat-out complicity in the selective application of the law.
The president and his supporters can hardly tolerate lectures about fairness when Trump foes such as Andrew McCabe, James Comey, Hillary Clinton, John Brennan, James Clapper, and others continue to escape justice for far worse crimes.
Further, unlike Stone, those offenders held positions of power and influence—and abused both in service of achieving their mutual goal that Jackson so dramatically endorsed today: The sabotage of Donald Trump and anyone associated with him.
The people, like Jackson, who claim to hold the greatest devotion to our institutions, who purport to cherish the rule of law above all else, are the ones responsible for systematically demolishing it all.
77-Year-Old Man Pummels Thief After Parking Lot Sneak Attack
Who doesn’t enjoy a fun video where a seemingly elderly looking man beats the shit out of some young punk who tried to steal his cash?
A behatted old man was minding his own business standing in front of a surveillance camera near a parking lot when a young masked punk in a bright-colored vest suddenly rushes him and tries to rob him.
The man pushes back the young lad, then throws up his fists and clocks him right in the jaw. They dance for a bit, eventually moving out of frame. As the video ends, its clear the would-be thief has run away.
Surveillance footage shows 77-year-old fight off masked man who tried to steal his cash as he walked away from an ATM.
But why stop there? You know how liberals refuse to believe that armed citizens actually foil crimes? We suspect it’s because they couldn’t imagine showing that kind of courage, but for one southern couple, a pair of off-duty police officers, the ‘good guy with a gun myth’ became a reality.
The pair foiled a robbery when they chased off a masked suspect who tried to hold up the restaurant.
Off-duty husband-and-wife police officers from Elizabethtown, Kentucky, had their meal interrupted when a masked man walked into a Louisville chicken restaurant and demanded money.
According to ABC, the couple were the only ones eating at the restaurant when the thief approached. The would-be thief was identified and, later, arrested.
That incident could have played out much differently if it weren’t for Kentucky’s generous 2nd amendment protections.
