The Indo-China border is a strategic chessboard and it’s gotten way more complex…
It was straight from an Orientalist romantic thriller set in the Himalayas: soldiers fighting each other with stones and iron bars in the dead of night on a mountain ridge over 4,000 meters high, some plunging to their deaths into a nearly frozen river and dying of hypothermia.
In November 1996, China and India had agreed not to use guns along their 3,800 km-long border, known as the Line of Actual Control (LAC), which sports an occasional tendency to derail into a Line Out of Control.
Yet this was not just another Himalayan scuffle. Of course there were echoes of the 1962 Sino-Indian war – which started pretty much the same way, leading Beijing to defeat New Delhi on the battlefield. But now the strategic chessboard is way more complex, part of the evolving 21st Century New Great Game.
Indian army marching in 1962 war, during which Indian Air Force was not used. (Indian Defence Review)
The situation had to be defused. Top military commanders from China and India finally met face to face this past weekend. And on Tuesday, Chinese Foreign Minister spokesman Zhao Lijian confirmed they “agreed to take necessary measures to promote a cooling of the situation.”
The Indian Army concurred: “There was mutual consensus to disengage (…) from all frictions areas in Eastern Ladakh.”
A day later, the breakthrough was confirmed at a videoconference meeting of the three foreign ministers of Russia, India and China, also known as the RICs: Sergey Lavrov, Subrahmanyam Jaishankar and Wang Yi. President Vladimir Putin, Prime Minister Narendra Modi and President Xi Jinping Xi will meet in person on the sidelines of the G-20 summit in Saudi Arabia next November.
And that will follow probably another videoconference special next month, in St. Petersburg, during the combined summits of the BRICS and the Shanghai Cooperation Organization (SCO.)
So How Did We Get Here?
Our Himalayan drama starts way back in October 1947, when the Maharaja of Kashmir signed an Instrument of Accession – joining the dominion of India in return for military support. As much as the Raj, Kashmir was also partitioned: West and North became Azad (“Free”) Kashmir and Gilgit-Baltistan, under Pakistan; the state of Jammu and Kashmir was to become an autonomous part of India; and significantly Aksai Chin, historically part of Tibet, became part of China.
CIA map from 2002 showing traditional borders of Jammu and Kashmir. (CIA, Wikimedia Commons)
On a personal level, this has always been among my top “roof of the world” travel/reporting areas. Not only for the unrivalled, breathtaking geological apotheosis, but for the people – Hunzakut, Baltistanis, Kashmiris, Tibetans.
Both Kashmirs – Pakistani and Indian – are majority Muslim. Everywhere you go you feel you’re in Central Asia, not India. Barren Aksai Chin is virtually population-free, apart from scattered military posts. Eastern Ladakh, historically and culturally, was part of the Tibetan plateau. The people are Buddhist, and speak a similar Tibetan dialect to the people of Aksai Chin.
Modi’s Move
The root of all contemporary strife is to be found less than a year ago, in August 2019. That’s when the Hindutva – Hindu nationalist, quasi-fascist – government led by Modi unilaterally revoked parts of the Indian constitution that established Jammu & Kashmir (J&K) as an autonomous region.
Narendra Modi in 2008. (Norbert Schiller,World Economic Forum, Wikimedia Commons)
Islamic J&K – heir to a long religious and cultural tradition – was deprived of a parliament and local government and de facto separated from Buddhist Ladakh and its very sensitive eastern border with China. They all fell under direct New Delhi control.
J&K’s characteristics shielded it since 1947 from mass immigration by Hindus. That’s now gone. The game now, for New Delhi, is about engineering a demographic change, turning a majority-Muslim area into majority-Hindu.
And even that might not be enough. For Home Minister Amit Shah, not only what the Hindutva describe as Pakistan-occupied Kashmir (PoK) but also Aksai Chin as part of J&K. They see the whole Kashmir Valley as an integral part of India.
It’s easy to imagine how this goes down in Islamabad and Beijing.
Add to it the interlocked strategic importance of the Indus river system – Pakistan’s main source of water: it starts in the J&K mountains. So it’s no wonder that for Islamabad, the whole province should be part of Pakistan, not India.
Recently, the action across the Line of Actual Control has been breathless.
India revamped the airfield of Daulet Beg Oldie (DBO), located on an old trade route through the Karakoram pass, and crucially only 9 km away from Aksai Chin. That happens to be right on India’s physical link to Xinjiang, and not Tibet.
(PANONIAN, CC0, Wikimedia Commons)
In parallel, India built the 255 km long Darbuk-Shayok-DBO road. This is an appraisal of what is innocently described as the single lane Indo-China border road. What it means in practice is that New Delhi now has more leeway to transport troops and military equipment across the LAC. No wonder Beijing interpreted it as an extra – unwanted – pressure on Aksai Chin.
As India built a new military access road, they had no clue the Chinese had finished their own on Aksai Chin: Highway 219, which links ultra-strategic Tibet to Xinjiang. Highway 219 then links to the legendary Karakoram Highway – which starts in Kashgar, crosses the border and weaves all the way down to Islamabad.
An important stretch of the Aksai Chin was in fact ceded to China by Islamabad in 1963 in exchange for financial and logistical support.
Predictably there has been a steady patrolling/military buildup on both sides. There are as many as 225,000 Indian troops right behind the LAC. That is matched by an undisclosed number of very well-equipped Chinese troops. The Hindu showed satellite images of Chinese movements at Galwan before the border clash. No less than three Chinese military sub-districts – subordinated to the military in Tibet and Xinjiang – were involved in the skirmishes in Galwan.
It’s All About CPEC
The China-Pakistan border at the Khunjerab pass and the area right to the south, the visually stunning Gilgit-Baltistan, happen to fall exactly into what the Indians call Pakistan-occupied Kashmir (PoK).
Prime Minister Narendra Modi with Chinese President Xi Jinping. (Narendra Modi, Flickr)
There’s absolutely no way Beijing would ever allow any sort of New Delhi regional adventurism. Especially because this is prime China-Pakistan Economic Corridor (CPEC) territory – one of the key nodes of the New Silk Roads, all the way to Islamabad and down to the port of Gwadar in the Indian Ocean.
In the near future, Gwadar will have solidified its direct energy links to the Persian Gulf, and China may even expand them by building an oil/gas pipeline all the way to Xinjiang.
Counteracting China’s New Silk Road nodes, we find, strategically, India’s ambiguous role in both the Quad (alongside the U.S., Japan and Australia) and the U.S. “Indo-Pacific” scheme — essentially a mechanism to contain China.
In practice, and in the name of its own, self-described “strategic autonomy,” New Delhi is not a full member of the Quad. The Quad is such a fuzzy concept that even Japan and Australia are not exactly enthusiastic.
U.S.-India defense “ties” are legion – but nothing really significant, apart from a self-defeating move by New Delhi to cut off oil imports from Iran. To appease Washington, New Delhi prodigiously hurt its own investments in the port of Chabahar — only 80 km away from Gwadar — which until recently was touted as the Indian Silk Road gateway to Afghanistan and Central Asia.
Apart from that, we find – what else – threats: the Trump administration is furious that New Delhi is buying S-400 missile systems from Russia.
Self-Reliance or Containment?
China is India’s second-largest trade partner. Beijing imports around 5 percent of everything made in India, while New Delhi imports less than 1 percent of Chinese production.
Madras regiment of Indian Army. (Mannat Sharma, CC BY 3.0, Wikimedia Commons)
Only two months ago, in an address to the nation about Covid-19, Modi insisted on “self-reliant India” and “human centric globalization,” focused on local manufacturing, local markets and local supply chains.
For all of Modi’s bluster, foreign adventurism is incompatible with India’s tradition of non-alignment – and it would divert much needed efforts towards “self-reliance.”
There was a lot of expectation that India and Pakistan, becoming full-time members of the SCO, would defuse their myriad problems. That’s not what happened. Yet the SCO – along with the BRICS – is the way to go if India wants to become a significant player in the emerging multipolar world.
Beijing is very much aware of imperial containment/encirclement strategies. There are more than 200 U.S. military bases in the Western Pacific. The New Silk Roads, or Belt and Road Initiative (BRI), boast no fewer than seven connectivity corridors – including the Polar Silk Road. Five of these are overland. The only one including India is BCIM (Bangladesh-China-India-Myanmar).
If India wants out, BRI will keep rolling all the way to Bangladesh. Same with the Regional Comprehensive Economic Partnership (RCEP) negotiated by 15 Asia-Pacific nations. They want India in. New Delhi is paranoid that opening up its markets will balloon the trade deficit with China. With or without India, RCEP will also keep rolling, alongside BRI and CPEC.
Quite a few among upper caste ruling class Hindus cannot see that they are being played to the hilt, full time, by the imperial masters as a war front against China.
Yet Modi will have to play realpolitik – and realize that India is not a priority for Washington: rather a pawn in a full spectrum dominance, “existential threat” battle against China, Russia and Iran, which happen to be the three key nodes of Eurasia integration.
Washington will persist in treating New Delhi as a mere pawn in the Indo-Pacific drive for China containment. India – in theory very proud of its tradition of diplomatic independence – would rather use its ties with the U.S. to counterpunch China’s power across Southeast Asia and as a form of deterrence against Pakistan.
Yet Modi cannot possibly bet the farm on the Trump administration following his lead. The only way out is to sit down and talk to his BRICS/SCO partner Xi: next month in St. Petersburg and in November in Riyadh.
via ZeroHedge News https://ift.tt/2VpE8S6 Tyler Durden
Conservative Journalist Jack Posobiec Assaulted By DC Antifa Tyler Durden
Fri, 06/26/2020 – 23:25
One America News journalist Jack Posobiec was assaulted by a self-described member of Antifa – the violent leftist designated a terrorist organizationless than one month ago.
Posobiec was filming a speech by an elderly black man trying to prevent the protesters from destroying the Emancipation Memorial to Abraham Lincoln (funded entirely by the wages of freed slaves in 1876), when he was surrounded by hostile protesters and assaulted.
As the Post Millennialreports: “The situation escalated when a black-clad Antifa insurgent wearing a pair of red ski goggles and bicycle helmet identified Posobiec and accused him of “founding the alt-lite” and of being a “literal Nazi,” drawing a larger group of Antifa to approach and surround the journalist.”
Assault, battery & attempted robberty commited by antifa/blm on @OANN‘s reporter @JackPosobiec in DC
earlier this evening.
More video of violent black bloc militants attacking @JackPosobiec in D.C. They dumped liquid all over him, hit him and tried to steal his phone. pic.twitter.com/DCrOq8ZUtB
Kuhn made headlines in 2017 when Project Veritasbusted him in an undercover sting at Comet Ping Pong pizzeria – plotting to attack a DC Trump inauguration party. The sting resulted in the arrest of Kuhn – who once made several pedophilic posts to usenet internet groups. Kuhn was sentenced to probation in exchange for agreeing not to attend future Antifa events – however he was caught on camera in April, 2017 when Posobiec was assaulted by another member of Antifa.
It has been on my heart to write this article for a few days, but I knew that it wouldn’t be easy to write. 2020 has already been one of the worst years in modern U.S. history, and it looks like the next six months are going to be extremely challenging as well. But even though most Americans are expecting that things will return to “normal” in 2021 and beyond, the truth is that the “perfect storm” that we are witnessing is only in the very early stages. All of the old cycles are ending, all of the bubbles are bursting, and we are starting to experience the consequences of decades of incredibly foolish decisions. So even though the remaining months of 2020 will be chaotic, the truth is that things are going to get progressively worse as the years move along. That means that you should use this period of time to prepare for what is ahead of us, because at some point the window of opportunity to prepare will be closed for good.
COVID-19 should have been a wake up call for all of us. Lockdowns were implemented very suddenly once the virus started to spread in the U.S., and shortages of key items began to happen. To this day, many retailers are still limiting the number of items that you can buy in certain categories. Hopefully this has helped people to understand that if you have not stocked up in advance, you may not be able to go out and get what you need when a major crisis strikes.
During the initial stages of this pandemic, a lot of people ended up being stuck at home without enough supplies. In the event of a truly historic emergency, you can certainly survive without toilet paper, but if you run out of food you could find yourself in big trouble quite quickly.
The good news is that COVID-19 is not going to kill us all. About half a million people around the world have died so far, and the final death toll will be a lot lower than the tens of millions that died during the Spanish Flu pandemic of 1918 to 1920.
But if our society was extremely ill-prepared for a pandemic of this nature, what is going to happen when a pandemic that is much more severe hits us?
Scientists assure us that it is just a matter of time before a killer plague sweeps across the planet, and the Bible tells us that there will be “pestilences” in the last days. If you find yourself isolated at home for an extended period of time as millions of others are dying from a virus, will you be able to survive on what you have already stored up?
If not, you need to get to work.
Big economic problems are ahead as well. So far in 2020, more than 47 million Americans have filed new claims for unemployment benefits, more than 100,000 businesses have permanently closed their doors, and it is being projected that U.S. GDP will decline by 46.6 percent on an annualized bases during the second quarter. Those are absolutely disastrous numbers, but so far trillions of dollars of emergency government spending has helped to ease the pain.
But those emergency measures were only meant to get us through a few months, and it is now becoming clear that this new economic depression will be with us for a very long time to come.
Of course deteriorating economic conditions will fuel even more civil unrest. We have seen rioting, looting, arson and violence in city after city, and much more civil unrest is on the horizon.
If you live in one of our major urban areas, you may want to move while you still can. Due to a huge surge in demand, property prices in the most desirable small towns and rural areas are already starting to go through the roof.
On top of everything else, food shortages are starting to occur all over the globe. According to the head of the UN, we are on the verge of seeing “unimaginable devastation and suffering around the world”…
The U.N. chief on Thursday warned the largest gathering of world leaders since the coronavirus pandemic began that it will cause “unimaginable devastation and suffering around the world,” with historic levels of hunger and famine and up to 1.6 billion people unable to earn a living unless action is taken now.
Giant swarms of locusts the size of major cities are devouring crops in Africa, the Middle East and Asia, African Swine Fever has already killed about one-fourth of all the pigs in the entire world, and crazy weather patterns have been playing havoc with crop production all over the planet.
And now on top of everything else COVID-19 is greatly disrupting food distribution systems all over the world.
We have never seen so many severe threats to global food production occur simultaneously, and the Bible clearly tells us that there will be “famine” in the last days.
Meanwhile, a major war could erupt in the Middle East at any moment. Israeli Prime Minister Benjamin Netanyahu has said that he will begin the process of annexing portions of Judea and Samaria in July, and Israel’s Arab neighbors have promised a very forceful response if that actually happens.
The region has constantly been on the precipice of war for years, and this could potentially be the trigger that finally causes it to happen.
If everything that I have discussed so far wasn’t enough, the planet that we all live on is becoming increasingly unstable. We have witnessed a number of very alarming earthquakes this week, and a truly catastrophic event could literally happen at any moment.
As my regular readers already know, I am particularly concerned about seismic activity on the west coast and about the potential for a historic earthquake along the New Madrid fault zone.
But even considering everything that I just shared with you, there is no other time in human history that I would have rather been alive than right now.
All of human history has been building up to this point, and we are so fortunate to be living during this moment.
However, it is going to be exceedingly difficult to thrive during the historic events that are ahead if you have not made any preparations for what is coming.
I realize that things may seem very chaotic now, but the truth is that this is your window of opportunity to prepare.
I would take full advantage of that opportunity, because the clock is ticking.
via ZeroHedge News https://ift.tt/2NwxCEL Tyler Durden
“Parameters Of Paranoia Are Changing” As Doomsday-Bunker-Builders Boom In Post-COVID Normal Tyler Durden
Fri, 06/26/2020 – 22:45
As we’ve detailed on more than one occasion, and not limited to a certain part of the country, people are fleeing major cities for rural communities due to virus pandemic and social unrest.
Feeling insecure, even after the great migration out of cities to rural areas, some Americans are now exploring their options with an added layer of security if the socioeconomic collapse worsens, which is the installation of a doomsday bunker.
Frank Woodworth, the owner of Northeast Bunkers, specializing in design and construction of underground bunkers and based in Maine, said his business model has evolved, and he’s not concentrating on luxury bunkers for the top 1%, but rather building affordable bunkers that cost around $25,000.
Woodworth told The New York Times that demand for bunkers has increased since the pandemic and riots.
“Buyers of these kinds of underground dwellings say that they simply want to protect their families from an increasingly turbulent world. For many, the decision to build a bunker was made before the coronavirus pandemic surfaced, but they say that they now feel prepared for the next local or global crisis,” The Times said.
Jonathan Rawles, the owner of Survival Realty Brokerage Services, a company with agents and brokers specializing in doomsday bunkers, said:
“There is continual demand for people that are looking to find more of a sustainable future for themselves, for their families,” Rawles said. “A lot of real estate markets only focus on housing in the urban areas, suburban areas, exurbs, and there is very much a missed opportunity for people who are looking to live off-grid, wanting to live remote, or actually looking to secure a property, whether that’s a bunker or a more secure and sustainable home.”
Rawles’ firm connects clients with bunker-building companies in the US. “This market and desire for security cuts across all levels of society — social, political, racial, religious,” he said. “People are looking for the opportunity to secure the family’s future, to have a more sustainable future, and part of that may be having a bunker.”
Woodworth at Northeast Bunkers said inquiries about affordable bunkers isn’t just limited to the US, people from around the world have requested more information because of the unfolding economic turmoil.
“I’m just a businessman who deals with paranoid people,” he said, “and it seems like the parameters of paranoia are changing every day.”
Ron Hubbard, president and owner of Atlas Survival Shelters, a fallout shelter company based in Texas, said his underground shelters “meet FEMA standards for providing near-absolute protection.”
Hubbard’s YouTube account provides access into one of his latest luxury bomb shelter builds – which starts around $94,000 – again these are affordable shelters because demand is with ordinary people, as we’ve noted over the years, the rich have already built their underground luxury bunkers.
With the affordable bunker business booming – these installers are being kept busy as Americans flee big cities for rural communities and now seek shelters as they fear the socioeconomic collapse will worsen.
via ZeroHedge News https://ift.tt/3g3Za0M Tyler Durden
Besides revealing how the Truman White House and military sabotaged the first movie about the atomic bomb, from MGM, my new book, The Beginning or the End explores other key nuclear-related events of that crucial year of 1946. Among the most important: the start of U.S. nuclear blasts in the Pacific, which would fuel the coming arms race even as it imperiled natives, witnesses, sailors and others thousands of miles away with the radioactive fallout they produced. Here is an excerpt on the evil US military plans for moving the natives of Bikini to a far harsher new home in advance of the first test, which was set off 74 years ago next week.
The US had asked the 167 inhabitants of the Bikini atoll (made up of some 23 tiny islands) in Micronesia to “temporarily” relocate so that America could set up new and devastatingly powerful weapons for “the good of mankind and to end all world wars.” The first test was planned for late spring or early summer of 1946. It called for a weapon exceeding 21 kilotons in force (where the Hiroshima blast was 15 kilotons) to be dropped over dozens of unoccupied junked ships in the Bikini lagoon to judge the effects on that fleet. The second test would be set off in the same area under water, beneath another ghost fleet, by remote control. Journalists and film crew started signing up in vast numbers to witness all this.
The Bikini islanders learned of their forced evacuation when Navy Commodore Ben Wyatt, military governor of the Marshall Islands, arrived to remind them of Biblical passages – they had long welcomed Protestant missionaries – comparing them to “the children of Israel whom the Lord saved from their enemy and led into the Promised Land.” The Bikinians were none too pleased with this notion, but their leader, King Juda finally agreed to the relocation request, announcing “We will go, believing that everything is in the hands of God.”
Wyatt staged a reenactment of this meeting for a newsreel but it required seven retakes because King Juda failed to act enthusiastic enough.
Of the eleven heads of extended Bikini families, nine chose Rongerik, 125 miles to the east – about one-sixth the size of their current island – as their temporary home. In reality, Wyatt and other US officials knew that the islanders would never be allowed to return to what was certain to be a heavily-contaminated former paradise.
Commodore Ben H. Wyatt addressing the Bikini Island natives.
Time magazine quoted a US officer as boasting that easing the Bikinians out was “one hell of a good sales job.” The magazine writer added: “Progress chuckled over a victory.”
The US Navy would help the Bikinians to disassemble their meeting house and church while the residents packed supplies and personal belongings, then transported them to Rongerik in landing craft. Time observed that they took few possessions with them beyond their bibles, hymnals and furniture brought by missionaries, along with “latent syphilis left by Yankee whalers of the pre-atomic age.”
No one lived on Rongerik, which was helpful, but the reason for that was not: It had few supplies of food and fresh water. The Navy knew of the challenges the Bikinians would face there, but still left them with only a few weeks of water and food. Time predicted that to convince them not to flee back home after the tests the Navy might have to fly their leader King Juda over Bikini to show him what a tragic wasteland it had become.
Bikini chief, archived image.
As the planned July 1 date for the first test neared, few back in the US cared what happened to the Bikinian natives, but some worried the blast might ignite the atmosphere, trigger tidal waves or create a fissure in the earth’s crust. Newspapers carried witty accounts of Los Angeles residents planning to enjoy picnics high in the hills on the day of the blast instead of by the beach in case a tsunami rose from the ocean.
None of that happened, of course, when the test went off on July 1. Many in the press, from a distant vantage point, were disappointed that the mushroom cloud seemed not so large and most of the ships did not immediately sink. One witness, renowned Saturday Review editor Norman Cousins, would title his report in the Saturday Review, “The Standardization of Catastrophe.”
Too many Bikini observers felt the bomb had been “oversold,” that it was “merely” another weapon of war. Its “novelty” had passed. Cousins reminded his readers that too little attention was focused on radiation effects – and on the fact that bombs many times more powerful would be created in years to come.
Within four days a Frenchman named Louis Reard dubbed the new two-piece bathing suit he had designed le bikini.
The first one hundred natives among those forced out of the Bikini Atoll for the bomb tests could not return to their contaminated paradise until 1970.
Ten years later, however, they were forced to evacuate again after high levels of Strontium-90 was discovered in their well water and Cessium-137 in their blood. Only scientists, divers and the occasional tourist would visit in the decades that followed.
via ZeroHedge News https://ift.tt/2NAwRLa Tyler Durden
“Restaurant Of The Future” – KFC Unveils Automated Store With Robots And Food Lockers Tyler Durden
Fri, 06/26/2020 – 22:05
Fast-food chain Kentucky Fried Chicken (KFC) has debuted the “restaurant of the future,” one where automation dominates the storefront, and little to no interaction is seen between customers and employees, reported NBC News.
After the chicken is fried and sides are prepped by humans, the order is placed on a conveyor belt and travels to the front of the store. A robotic arm waits for the order to arrive, then grabs it off the conveyor belt and places it into a secured food locker.
KFC Moscow robotic-arm takes the order off the conveyor belt
Customers use their credit/debit cards and or the facial recognition system on the food locker to retrieve their order.
KFC Moscow food locker
A KFC representative told NBC News that the new store is located in Moscow and was built months before the virus outbreak. The representative said the contactless store is the future of frontend fast-food restaurants because it’s more sanitary.
KFC Moscow storefront
Disbanding human cashiers and order preppers at the front of a fast-food store will be the next big trend in the industry through 2030. Making these restaurants contactless between customers and employees will lower the probabilities of transmitting the virus.
Automating the frontend of a fast-food restaurant will come at a tremendous cost, that is, significant job loss. Nationwide (as of 2018), there were around 3.8 million employed at fast-food restaurants. Automation and artificial intelligence are set displace millions of jobs in the years ahead.
As for the new automated KFC restaurant in Moscow, well, it’s a glimpse of what is coming to America – this will lead to the widespread job loss that will force politicians to unveil universal basic income.
via ZeroHedge News https://ift.tt/31i0Tvb Tyler Durden
This article describes how China can escape the fate of a dollar collapse by tying the yuan to gold. There is little doubt she has access to sufficient gold. Currently, her interest is to preserve the dollar, not destroy it, because it is the principal means of Chinese foreign interests being secured .
Furthermore, a return to sound money requires China to reverse its interventionism under Xi, returning to Deng Xiaoping’s original vision. Sound money can only last if the relationship between the state and the wider economy is properly addressed.
Of all the major economies, China’s is best placed to implement a sound money solution. At the moment it seems unlikely the necessary reforms will be forthcoming; but a general collapse of the global fiat currency regime presents the opportunity for reassessment and change.
Introduction
In last week’s Insight I examined the position of the US dollar, given the Fed’s current monetary policies, and concluded that the Fed’s dollar is likely to become valueless by the end of this year. The consequences for other major currencies — the euro, yen and pound — are that they are likely to fall with the dollar. This is because they adopt the same monetary policies, the same macroeconomic fallacies, and through the Bank for International Settlements, G7 and G20 meetings agree to continue to be bound by common policies. While the intention is for all to survive by working together, instead it ensures that they all sink together.
The maverick nations are Russia and China. Russia is obviously working towards protecting her currency with gold — there is no controversy there. China’s position is more complex. Her leadership relies on the inflation of bank credit through state-owned banks to finance her infrastructure plans as well as in financing the massive uplift her non-financial private-sector economy has enjoyed since 1980. Yet, she has made aggressive moves to ensure her population owns physical gold and has invested in mine production, making her the largest national producer by far, while ensuring virtually no gold leaves the Chinese mainland.
Having more or less gained control over the world’s physical market, China is the greatest hoarder of gold on the planet. She appears to understand the importance of gold to monetary stability while at the same time playing the West’s neo-Keynesian games.
China’s gold
The most controversial aspect of my previous comments about China’s gold ownership is about the level of undeclared bullion. But the strategy has always been clear. In 1983 the Peoples Bank was given a monopolist mandate by the Communist Party to manage the state’s acquisition of gold and silver, while private ownership remained banned. This fitted in with the Peoples Bank’s monopoly of managing foreign currency dealing, confirming that in 1983 at least, the leadership and its advisors regarded both gold and silver as primarily money.
Nineteen years elapsed before the Peoples Bank opened the Shanghai Gold Exchange, permitting members of the general public for the first time to buy and take delivery of gold and silver. Following advertising campaigns, the market for 24 carat gold jewellery exploded, and together with investment gold, since 2002 withdrawals from the SGE’s vaults have been about 17,500 tonnes, admittedly not adjusted for scrap resubmitted for refining. To be consistent with gold policies after the SGE opened for business, those nineteen years must have been used by China to acquire significant quantities of undeclared bullion. But other analysts assume that the public held some gold illegally before 2002 as well, so about 17,000 tonnes net of scrap for private ownership seems about right.
The opportunity for the state to build a bullion hoard before 2002 was there. Following the bull market ,which culminated on 21 January 1980, gold entered a 19-year bear market taking it from $850 on that afternoon’s fix to a low of $256.8 in July 1999. But by January 2002, gold was still on the floor at under $280. And there were substantial sellers: portfolio disinvestment by Swiss banks, the largest private depositories at that time, left them holding virtually no gold.[i] Central banks and official sources reduced their holdings of monetary gold by 3,450 tonnes, but more importantly gold leasing by them supplied an estimated 10,000—16,000 tonnes into the market (Veneroso, 2005).
Meanwhile, demand was soaked up by the expansion of derivative markets, principally LBMA forwards and Comex futures. In all those years global mine output added 43,800 tonnes. Various parties must have absorbed the gold that wasn’t absorbed by jewellery, which probably accounted for about 25,000 tonnes.
US policy was to rub out monetary history by denying gold as having any monetary role and to be replaced by the Fed’s unbacked dollar as everyone’s reserve currency. A new generation of Harvard-educated Arabs went with the neo-Keynesians, preferring stocks to gold, the opposite of that of their forebears who disliked financial assets, including foreigners’ currencies. But these were also the formative years for China’s adoption of capitalism.
The Chinese leadership, having a high degree of control over its population, is given to long-term planning in the form of five-year plans with longer-term underlying objectives. It is inconceivable that these plans would have omitted a gold strategy, particularly since regulations were put in place giving the Peoples Bank its mandate to build national reserves.
Given all the foreign exchange dealings of the Peoples Bank, handling inward investment in the eighties and growing exports in the nineties, it could easily have accumulated 20,000 tonnes of gold at contemporary prices, representing approximately 10% of foreign currency flows across the bank’s trading desks. Traditional secrecy in gold markets would have provided cover. All the Peoples Bank needed to do was acquire an average of 1,000 tonnes a year, which given the bullion flows and market dynamics in gold’s great bear market would have been achievable without attracting attention.
It is only on the basis of this understanding that we can apply a 20,000-tonne ball-park figure to the unknowable. And since 2002, China continued to import gold in addition to its growing mine supplies to ensure its population ended up with significant quantities of gold as well. Whether intentioned or not, the leadership has ensured large quantities of 24 carat gold are in public circulation, which is important in the event that gold backing for China’s currency is implemented.
In the event of a general fiat currency collapse, many nations have sufficient gold to operate a gold exchange standard, admittedly at higher gold prices than those that prevail today. That is not the problem. In government, treasuries and central banks, there are very few who understand economics proper, being sold entirely on neo-Keynesian macroeconomics. Neo-Keynesian macroeconomics is a belief system unfounded on reality and their Zeus, or Jupiter, is inflationism. Their lesser gods all owe fealty to this one overriding directive. Before sound money can be introduced, they must all be swept from their temples.
China’s worship of inflationism is less institutionally embedded and should be easier to overturn, particularly since Marxist philosophy predicts the end of capitalism, which today would be manifest in the collapse of the capitalists’ currencies. The ability of the Chinese to escape the monetary fates of the West is in theory still there.
China’s interest in the dollar
With all its gold, by monetising it China could kill off the dollar tomorrow. Undoubtedly, this financially nuclear option has become a backdrop to her strategy in the ongoing trade and financial war against America. But the idea that by using this undoubted power over the dollar China gains a simple victory if through her actions the dollar is destroyed understates a more complex situation. It is not in China’s interest on many levels, not least because of her ownership of dollars is about $3.4 trillion, of which only $1.5 trillion is invested in Treasuries, agency, corporate and short-term debt in the US. The balance is actively used in loan finance to China’s commodity suppliers, those involved with the belt and road initiatives and other states with which China desires to gain influence.
Destroy the dollar and China’s heft around the world is destroyed as well, because only a small proportion of China’s loan-influence is in renminbi. In that sense, if the dollar collapses America gains a geopolitical benefit over China, her means of international influence being crippled. The Chinese leadership will be acutely aware of the consequences of the dollar’s demise and therefore will do nothing to encourage it. Indeed, if the dollar begins its collapse in the foreign exchanges, we could find China increasingly calling out the Fed on its inflationary policies. But then the Fed’s problem is and will continue to be an inability to stop its addiction to unlimited inflationism.
Unfortunately, a banking crisis is embedded in the script, which will have fundamental effects on all fiat currencies, some more than others. And since international banking is overwhelmingly a dollar affair, after a short pause the consequences are bound to weigh heavily upon it as the reserve currency. This credit cycle unwind is a Category 5 compared with 2008—09’s Category 2 or 3. It is only after such a cataclysm that China will have no alternative to abandoning all attempts to support the dollar and its means of buying overseas influence. China will then need to secure its own currency.
It will require a return to gold backing — the nuclear option so far avoided. While the cost will be writing off trillions of dollars and its means of securing overseas influence, there will be a monetary vacuum to fill. And compensation will be found in an increase in the value of China’s declared and undeclared bullion stocks, as well as the enrichment of its gold-holding people.
Establishing a sound currency
To appreciate what is vital for a currency to be sound requires certain conditions to be satisfied. These are the three immutable ground rules for a gold-backed currency, all of which must be obeyed:
The state currency must be an accountable gold substitute; that is to say every unit of currency expansion must be fully backed by gold at the fixed exchange rate.
It must be freely convertible into physical gold on demand by everyone.
It must be freely convertible for the settlement of domestic transactions and imports and exports.
To these we can add an addendum, and that is to reform the banking system so that there is no expansion of unbacked bank credit.
If the Chinese obeyed these rules to the letter, not only would their gold-backed currency lead to a quantum leap in the progress of its own economy, but given China’s undoubted economic power the yuan would become accepted as the foreign currency of choice for most of the world and it would encourage other nations to adopt similar gold exchange standards.
The proof is found in a nation of ten million which two hundred years ago in less than a century dominated technology and international trade, saw its population increase threefold as prosperity spread and life-expectancy increased, encouraged other nations to adopt gold standards, and by 1914 had built over 80% of the world’s shipping afloat. That small nation was the United Kingdom. Just think of the potential if China repeated the exercise.
Sound money works best with free markets
The impediments to the implementation of the sound money rules defined above are, however, substantial. It requires the relationship between the state and its people to be fundamentally reformed and instead of state control a laissez-faire philosophy must be adopted. The whole point behind sound money is to remove it from state control so the temptation for inflationism, which is leading visibly to the destruction of the current global monetary system, is removed.
The money that people use for their current and deferred consumption is rightly their affair, and not the state’s. This is why every time the state takes control of money away from its people it eventually fails, and the monetary function returns to the metals trusted by people through millennia. Today, we face no less than this transformation, the return to the peoples’ money and the destruction of statist fiat currencies.
Of the world’s significant economies, China appears best able to plan for monetary reform. Even so, it will not be easy and requires the completion of the new capitalist mindset courageously introduced by Deng Xiaoping. Instead, under President Xi China has drifted away from Deng’s vision towards internal suppression and increasing state control. He must recognise that central planning in China has had its day and it is time to give his population its economic freedom.
If only he can recognise it, Xi’s vested interest now lies in that direction. It will not be easy, and there is no certainty he will grasp the opportunity. But if he decides to do so, it requires the following issues to be addressed.
The state and the economy
Being a burden upon it. the state must reduce its role in the economy to the barest minimum to absorb less than 20% of GDP, preferably even less than 10%. Welfarism must be abandoned, or at least reduced until its financial burden on the state is minimal. In this respect, China is better placed than more mature advanced economies. The World Bank estimates China’s government spending in 2018 was 14.7% of GDP, which compares with the US’s 34%.
China scores highly in this respect.
Functions of the state to be restricted
In a sound-money free-market economy the basic state functions are to establish and administer laws to ensure certainty in contracts, to provide national defence and domestic law and order. China discriminates in her laws, is territorially ambitious with respect to Taiwan and the South China Sea, and internal policing is oppressive. There is no sign of change in these regards, which affects international relations adversely. If China dropped its claims to Taiwan and respected Hong Kong’s independence, international relations would immediately improve. Persecution of the Uyghurs is indicative of a heavy-handed statist response to the threat of Moslem terrorism. In these respects, China scores badly and in a new sound-money regime would only gain significant influence with its trading partners if these attitudes were reformed.
Mercantilism must be abandoned
China adopts a mercantilist approach to economic management, which coupled with an iron-fist control over the population has had some successes. But it is one thing for a reforming government to take an impoverished population and provide a framework and monetary stimulation to lift it out of poverty and another to continue the process. In China’s case, anything was better than Mao and Deng seized the opportunity.
In its early stages a mercantilist approach can have obvious objectives, which leads to national capital being deployed with effect. But being based on monetary expansion, even then capital is misallocated through monetary distortion, which only becomes obvious later. As a continuing state policy, it leads eventually to substantial tribulations and inefficiencies, and China has had its share of these.
The error is to regard the state as capable of being fundamentally motivated by profit. A misleading precedent for mercantilists was the East India Company, which ran India as its fiefdom until the Indian Mutiny. But that was a company which was mandated to produce profits for shareholders.
A government is necessarily a bureaucracy, not suited to an entrepreneurial role. China will need to address the relationship between the state and its role in the economy if a yuan gold standard is to be freely accepted through trust and trade, and for the maximum benefit of its economy. In fairness, China is abandoning support for zombie companies, but it still tries to pick winners, so is hardly neutral.
Regulation must be abandoned, allowing the public to set the parameters of its own demand.
Originally the means of control adopted by fascist governments, widespread regulation of economic activities has become the standard of modern government policies. The assumption is that the consumer must be protected from avaricious businessmen. The result is cronyism.
Instead of suffering from the West’s cronyism, China promotes businesses on a purely nationalistic basis, a policy which has now backfired in a crony world. The exclusion of American technology from China’s “Made in China 2025” strategic plan has intensified American hostility and is undermining Chinese technology’s international business. This would not have happened if China had a non-interventionist policy towards her domestic market. That has to change.
Banking must be reformed
The Achilles’ heel of the West’s banking system is the fraudulent issue of bank credit, which is no different in principal from central bank inflationism. Even in the days of the gold standard the expansion of bank credit increased currency in circulation without being backed by gold. There were, in effect, two types of currency; fully backed gold substitutes and fiat currency the product of unbacked bank credit, but indistinguishable from each other in circulation.
The expansion and subsequent contractions in bank credit created a destructive cycle of bank lending, particularly following the 1844 Bank Charter Act in English law, which set the subsequent international standard. This must be stopped. In the case of China, most banking is provided by state-owned banks, so if the state is determined to maintain a sound yuan it should present few difficulties in eliminating bank credit expansion.
The provision of monetary capital must be backed by savings and it is for the market to establish a balance between immediate consumption and its deferral. And here, China is in the fortunate position of having a strong savings culture, unlike the US and UK along with most members of the eurozone, where after allowing for consumer credit saving hardly exists.
Accumulation of private wealth to be embraced
The replacement of unbacked bank credit expansion with genuine savings as the source of investment capital requires the state to take a positive view on the accumulation of private sector wealth. Being a young modern economy, in this regard China is better placed than nations with more mature economies and ingrained socialism, where wealth is regarded as a morally justified source of tax revenue.
Progressively increasing tax rates mitigate against the acquisition of wealth, and China will need to reform its income tax regime to a flat tax rate. Since government spending is under 15% of GDP, with a reasonable personal allowance a flat income tax of 20% should allow for a balanced budget and other taxes to be eliminated over time. State spending targeted to an eventual 10% rate of state spending relative to GDP would allow the income tax rate to be reduced and held to a 15% rate and the abolition of all other taxes.
Income tax should be applied at the same rate on all sources of income. To make income from savings tax-free is a distortion of the market. Post-war Japan and Germany made it easy to avoid tax on savings interest, and their economies became savings driven and highly successful. But in China’s case, where a very high savings rate already exists, not only is such a policy unnecessary, but it leads to unwelcome imbalances in foreign trade which so long as other fiat currencies exist are politically destabilising in the longer term.
Digital money
China is almost certain to be tempted to adopt a centralised cryptocurrency approach, a forerunner of which is reportedly in trials at the moment. It is thought by many that application of this technology may well find a place in a new form of gold substitute.
Other commentators suspect that China’s motivation is to maintain control over its citizens’ spending. If this is the case it would be a mistake, and at odds with an objective to maximise the nation’s economic potential for the benefit of its citizens by returning to free markets. However, state-issued crypto technology is too young at this stage to be relevant to the successful establishment of a gold substitute currency.
The return to sound money
So far, we have established that of all the major economic powers, China is well placed to adopt a durable gold exchange standard. The most significant hurdle is the Communist Party’s control freakery over its people. Under wise leadership, this can be addressed, more likely during a monetary crisis when political objectives can be radically changed, than at any other time.
Otherwise, China has sufficient bullion reserves and gold ownership is widespread in the population. Silver, which is more naturally the money of the people is also widely available for coinage. Furthermore, there is reason to hope that the state is not as beholden to the neo-Keynesian macroeconomic inflationism as are other leading nations.
We have established that it is not in China’s current geopolitical interest to introduce a gold standard that undermines or destroys the dollar. For this reason, China will only do so once it is clear that the dollar is in the early stages of an unavoidable inflationary collapse, and the risk of the yuan going down with it must be urgently addressed. An increasingly certain banking crisis, likely in the next month or so, and a reappraisal of the dollar’s prospects and the debt trap of rising interest rates being sprung on western governments is likely to determine timing.
To be successful in defending the yuan from the gathering global monetary crisis, when the decision is taken to go ahead the following announcements should be immediately made.
The State is transferring its undeclared bullion to monetary reserves, announcing a figure which we believe could exceed 20,000 tonnes. At the same time, it announces the yuan will be backed by gold from a defining date, perhaps a month hence, the rate to be determined by the markets in the intervening period. The purpose is to let the gold price rise to an appropriate level for a yuan exchange rate to be fixed.
Following the defining date the quantity of yuan in circulation will be set by market demand, and any increase in the quantity will be fully backed by gold reserves held and allocated for that purpose by the Peoples Bank.
The announcement will also state that conversion terms will be offered for all government debt (currently about 40 trillion yuan) into a new perpetual loan, interest payable at the holders’ choice in yuan or gold at the yuan/gold fixed rate, which will be set at the defining date.
All holders of yuan will be free to exchange their yuan for new gold coin at the rate set on the defining date. In due course silver coins at sterling proof will also be issued as circulating currency, the rate set designed to ensure their continued circulation.
All exchange controls to be removed with immediate effect.
China’s withdrawal from all international cooperation at G7, G20 meetings etc., currency and economic management being no longer appropriate.
Digitising plans, if any, will be discarded as unnecessary for the circulation of a gold-backed yuan.
Consultation with the banks will be initiated to phase in over an appropriate period a restructured banking system. The objective will be to separate deposit-taking as a custodial function from investment funding of bonds and equities on an agency basis. Until these new provisions are in place, the expansion of bank credit will be frozen after which it will not exist.
The markets can then set a gold exchange rate which will be adopted as the fixed rate of exchange for the yuan. The return of a monetary function to silver is likely to reduce the gold/silver ratio to 20 or perhaps less, and allowance should be made for a settled relationship between gold and silver that might take a little longer to establish on a lasting basis. Only then can silver coins return to circulation.
There can be little doubt that a move to a gold yuan will have a profound effect on remaining fiat currencies. As noted above, a short period of time between announcing these plans and their implementation will be required for markets to adjust. It is likely that fiat currencies would face downward pressure on their purchasing power, and China must be seen to be protecting her own interests by returning to sound money and not deliberately undermining the dollar.
The consolidated perpetual loan has many advantages. It never has to be repaid. The coupon, reflecting gold’s rate of interest as well as issuer risk, could be set, at say 2%, and the conversion price set at 50 per notional 100 gold-yuan of the bond. Those prepared to back the Chinese government and its sound money regime would be rewarded for the risk by a running yield of 4%. As the government’s rating improves with the success of the return to gold, the price would rise towards par, giving early investors a solid reward. The wealth creation for holders becomes a solid contribution to providing capital for a progressing economy.
Other nations, particularly those in Asia, are likely to follow China in implementing their own gold exchange standards, and all nations will be then faced with a stark choice: do they hang on to their welfare states and their growing difficulties in financing them, or do they stabilise their currencies? If China does adopt a proper gold exchange standard, she would neutralise all America’s geopolitical power, whether America follows suit or not.
And finally, China should cease to provide the statistics beloved of neo-Keynesian macroeconomists, for they only serve to provide reasons for state intervention.
via ZeroHedge News https://ift.tt/2ZgGxQ6 Tyler Durden
The Simpsons announced that white actors will not be permitted to “voice” non-white characters. This raises so many questions. Is Hank Azaria–who is Sephardic and thus Hispanic under federal law–white? Is it still okay for Dan Castellaneta, a Gentile, to voice Krusty, a Jewish clown, or does he have to give the part to Azaria? And what’s up with a grown woman voicing Bart?
I know that Hollywood mistreated minority actors in the past, but color-me-skeptical that creating ethnic ghettos for actors is the way to move forward, or that Hollywood is really serious about properly representing (even non-cartoon) characters.
Did you read about the forthcoming West Side Story movie? Steven Spielberg hired all sorts of cultural and diversity consultants and this is what he and they came up with:
“When we began this process a year ago, we announced that we would cast the roles of Maria, Anita, Bernardo, Chino and the Sharks with Latina and Latino actors. I’m so happy that we’ve assembled a cast that reflects the astonishing depth of talent in America’s multifaceted Hispanic community,” said Spielberg. “I am in awe of the sheer force of the talent of these young performers, and I believe they’ll bring a new and electrifying energy to a magnificent musical that’s more relevant than ever.” ….
“I am so thrilled to be playing the iconic role of Maria alongside this amazing cast,” said [Rachel] Zegler. “West Side Story was the first musical I encountered with a Latina lead character. As a Colombian-American, I am humbled by the opportunity to play a role that means so much to the Hispanic community.”
I commented at Instapundit at the time:
Why do Puerto Rican characters in West Side Story need to be played by Latinos, but not Italian characters by people of Italian or (better yet, given the demographics of New York’s Italian community, specifically Sicilian) descent? Why is having a Colombian-American a politically-correct choice to play a Puerto Rican? What do Colombia and Puerto Rico have in common besides different dialects of the Spanish language? If you were trying to cast an Australian of 1960, would casting an English-speaking actor from the US, or India, be “authentic”? Isn’t kind of insulting to assume that all Spanish-speaking countries are interchangeable?
It gets worse. Here is Zegler’s ethnic background: “Her father is of Polish ancestry on his own father’s side, and of Irish, German, and Italian ancestry on his own mother’s. Rachel’s mother is of Colombian origin.” The notion that a half- European, half-Columbian descended actress, who, by the way, is from Clifton, New Jersey, is somehow a more appropriate choice to play a Puerto Rican character than, well, anyone else is just farcical. That this choice actually won praise rather than scorn from Hollywood’s diversity mavens makes me rather cynical about the entire enterprise.
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“The More I Won, The More Mad They Got” – Dave Portnoy “Beats Dennis Gartman Like A Drum” In Hilarious Editorial Tyler Durden
Fri, 06/26/2020 – 21:25
Dave Portnoy’s decision to leave E-Trade (he claims he was kicked off the platform after criticizing the company over a recent string of outages), was only the brash Barstool Sports founder’s latest repudiation of the Wall Street and financial establishment. Over the past few months, the outrageous founder of Davey Day Trader Global has led an army of Robinhood traders into the shares of bankrupt companies like Hertz, and turned the concept of active management on its head by picking stocks by randomly picking tickers out of scrabble letter bags.
Since dismissing Warren Buffett as “Washed up” and irrelevant on his daily livestream, where he shares his trades and stream-of-consciousness commentary, Portnoy has drawn the ire of handful of Wall Street luminaries running the gamut to the respectable (Howard Marks, Leon Cooperman, guys who have actually managed money) to the people like Dennis Gartman and Ron Ansana, whom he has torn apart on his twitter feed and during his broadcasts.
In a pair of amusing editorials, Gartman hysterically scolds Portnoy for his “rank, almost amateurish, speculation.” Here’s a snippet via Fox Business.
Thousands, perhaps many thousands, of naive, mostly very young and wholly inexperienced “investors” follow his every word and his every recommendation as he engages in day trading.
For the past several weeks he has been right. The market had rallied — but we are again reminded of Joseph Kennedy’s admonition.
We are also reminded of John Maynard Keynes’ admonition that the market can remain illogical far longer than we can remain solvent.
And here’s a clip from a recent interview where Gartman warns that “when the shoe clerks are in the market…that’s always been the sign of a market top.”
Because god forbid the proles make any money while the rich are out there stuffing themselves, right?
We suspect that after Portnoy is finished “beating [Gartman] like a drum” in his response, the newsletter writer will brush it all off as some kind of joke, or like he was being tongue-in-cheek, or whatever.
Portnoy admittedly lost big when he first tried his hand at day trading. But he quickly saw his fortunes turn around when he tuned out the talking heads on CNBC and figured out “that stocks only go up.” Fortunately for him and his army of traders, he came to this realization just as Warren Buffett was publicly dumping his airline stocks. This simple analytical assessment – that the airlines wouldn’t be going out of business – birthed his career as a fly-by-night stock analyst.
Portnoy expounds on his “stocks only go up” theory in a Fox News editorial published below:
* * *
Howard Marks is mad. Ron Insana is mad. Dennis Gartman is mad. In fact, it seems like all the Wall Street suits are mad.
Who are they mad at? Me.
Why are they mad? Because when COVID-19 caused sports to be postponed indefinitely a few months ago, I turned from sports gambling to day trading and founded my own fictional firm called Davey Day Trader Global Global.
Yes, that’s two globals because one global isn’t enough to describe how global we are.
I have livestreamed my trading exploits every single day for millions of people to watch.
In the beginning, I struggled. I was down $2 million before I could blink, and all the self-proclaimed pundits and talking heads on Wall Street treated me as a lovable loser.
The finance community welcomed me with open arms. But then something funny happened along the way. I started winning and they started losing.
The more I won, the more mad they got.
While Warren Buffett told people to get out of the airlines and cruises, I told my clients to dive headfirst into both industries.
I bought Spirit at $7.70. Within months, it had tripled. I openly wondered whether I was better than some of the legendary (albeit geriatric) traders of past generations.
Suddenly, I became the most talked about person on Wall Street. Every time I turned on the TV, my name was being mentioned, usually in an unflattering light.
It culminated with Dennis Gartman (who is that?) going on FOX Business Network’s “Varney & Co.” Thursday and essentially saying it’s unfair that the public is allowed to invest in the stock market.
He thinks it’s unfair that I’m leading an army of day traders who treat stocks like a game and am making it more difficult for Wall Street veterans to navigate.
Gartman was mad that for the first time in history, retail investors, or the “retail bros” as they call them, don’t need them to invest our money for us. They no longer get a fat commission check every single time the public wants to make a trade.
They want the public’s money, but they want to be the only ones allowed to spend it. They want to get paid whether they win or lose.
The pure arrogance of guys like Gartman, Insana and Marks is surreal. They somehow think trading is their birthright and that they alone should have a monopoly on making money.
They don’t think Joe Public can be smart enough or trusted enough to invest our own, hard-earned money. Only they have that knowledge and insight on what is best for us.
Yet here I am. Beating them like a drum for the past three months at their own game. While they have been slow to react to the changing markets, I’ve adapted on the fly.
All I hear is old-timers say that the retail bros are going to get crushed. That they’ve lived through this before. That the pride comes before the fall.
Yet I ask them, how many global pandemics have they actually lived through? The answer is zero.
I have as much experience in this trading climate as they do. And maybe the very fact that I’m not burdened with their history has allowed me to see this market for what it is, while they have failed miserably.
Whatever the case may be, I’m just glad I can make trades for myself and make money for myself instead of paying commissions for bad advice from talking heads.
The only region in the world that has proactively tried to incorporate western culture in its societies is East Asia — Singapore, Japan, Hong Kong, South Korea, and Taiwan. China, which was a grotesquely oppressed, poor, Third World country not too far in the past, notwithstanding its many struggles today, has furiously tried to copy the West.
Famous Greek philosophers: their thoughts are a cornerstone of Western culture. [PT]
Western culture, which developed organically over at least the two and half millennia, starting from Greco-Roman philosophers, is not easy to duplicate. This culture requires thrift, honesty, hard work, liberty, individuality, dispassionate reason, objective justice, loyalty, honor, stoicism, a desire to rise above oneself, and many other factors that perhaps cannot be seen or isolated but must be absorbed subliminally in all their complex interactions. These are reflected in social, religious, and political structures of the West — the three independent branches of government, the rule of law, compassion for others, charity, family system, etc.
The West and East Asia, including China, comprise a mere 2.5 billion people.
“The Rest,” the Third World, comprises 5 billion out of 7.5 billion people on the planet. The cultural factors underpinning the West sound like clichés until one who gives up political correctness for the truth starts to see that the Third World, despite its several centuries of interactions with the West, simply fails to understand them.
The Third World is blind to what makes the West a civilization. It is as if the Third World cannot rise above animal instincts — craving for food, power over others, sex, and for the material.
Over several centuries of western colonization and missionary activities, an attempt was made to infuse Western cultural factors into the Third World. It was only a marginal success. Since the third world countries achieved political independence, without constant Western involvement, all has been lost. Christianity became voodoo, and the political system became a tool for tribalism and tyranny.
Focus on Materialism
The Third World is tempted by only the physical products of Western society. They are pleasure-centric. When they look at the West, all they see is entertainment, an easy-going lifestyle, freedom from responsibility, liberal governments, free health-care, consumerism, social welfare, and good salaries. They either want to be economic migrants to the West or copy the Western lifestyle, without an iota of an understanding that they must have wealth-generating capabilities first and that there is something at the foundations of Western culture.
The lure of materialism [PT]
There is a virtual absence of reading habits in the Third World. If they end up reading Ayn Rand, all they see in it is a drama. They fail to see a non-collectivist philosophy embedded in it. If they watch movies like the Matrix, all they see is a sci-fi movie. They fail to see any suggestion that they might be getting indoctrinated by their leaders.
What they see as the culture of the West from their narrow worldview is primarily the culture of its lower-class and the entertainment industry.
European colonization and technology were a massive relief for the Third World, but merely temporary, for they never learned or even saw the principles that made such prosperity possible. All the advantages, given the mindset of expediency, have been frittered away, through wars, excessive consumption, malinvestment, an increase in population, etc. The Third World’s craving for the material, unconnected with morality or reason, means that it forever wallows in poverty, oppression, and at the edge of a Malthusian crisis.
Nothing it has is sustainable, neither capital nor institutions. All surplus gets consumed or frittered away — it takes a higher calling to invest and preserve the surplus. Everything has a pull towards decay, disintegration, and degradation.
European colonization provided a rational system for the Third World to operate in. Christian Missionaries tried to infuse reason among the inhabitants. In desperation, they sometimes even removed children from their families. All these attempts made only a marginal difference.
Departing European colonizers transferred Western tools — technology, institutions, etc. — to the democratically elected bodies of the Third World. The tools were subverted and used for tribalistic purposes. And democracy enabled the most irrational, base elements to rise to power.
Ease of travel made the situation worse by enabling the emigration of the best people from the Third World.
Post-Colonial Regression
Since the departure of European colonizers, the Third World has been culturally and institutionally regressing to its pre-European dark ages. None of these societies are sane, stable, or sustainable by themselves. It is the fear of America that keeps their tyrants behaving better than they otherwise would and their nations from falling into forever wars between their tribal units.
Despite this cultural and institutional regression, the free-gift of Western technology and the green revolution, and peace imparted by America still enabled economic growth, which alas has allowed more cultural problems to accumulate before Malthusian equilibrium kicks in again.
Thomas Malthus: his concerns over unsustainable population growth were misguided when applied to a Western capitalist market economy – he failed to take human ingenuity, problem-solving capabilities and capital accumulation into account. However, his concerns will become valid in a stagnating or regressing economy. [PT]
Marxist and Keynesian economics has a toehold in the Third World not because those works corrupted them, but because these pseudo-economics match their expectations for free stuff. Every single major leader of the Third World who studied in the UK during the British colonization became a socialist — socialism is all that they saw during their life in the UK.
Importing the wrong prophets from the UK: Marx and Keynes. [PT]
The contribution the West has made to Africa — which for all practical purposes did not have a written language, technology of farming, or tools before the arrival of Europeans — is immense. Unfortunately, these gifts have mostly gone unused.
In the Third World, girls in school-uniforms carry water buckets on their heads. Despite the concept of the wheel having been offered on a platter, they haven’t figured out its use. They have been taught English for centuries by now, but what they have is pidgin, a simple, non-nuanced, lacking-in-grammar language. This predicament had to happen for complex language can only be retained if the society has an interest in ideas, planning, and issues outside immediate needs.
For most in the Third World, “tomorrow” is too far in the future. Their communication needs are limited to teasing each other, consumption needs, activism, and discussing celebrities.
Christianity was spread in the Third World, but it ended up becoming voodoo, heavily mixed with superstitions. Formal education, seen as a magic wand that enables a good life, has turned into at best rote-learning, and its purpose is only to get a certificate at the end. Education without core western values sits unassimilated in superstitious minds. It merely increases stress levels, leading to the spread of ritualistic, superstitious, and materialistic religion.
The tools of Western technology have been corrupted for tribal purposes — steel instead of being used for constructing bridges and factories has been more commonly used for making machetes in Africa. The internet was expected to rapidly spread truth, knowledge, and awakening to the poorest in the Third World. Instead, if they are not watching pornography, they circulate superstitions, rumors and political activism.
Absence of Rationality
Tools for development and growth in the West have failed in the Third World, and often had the opposite effects. The question is, why is it that the Third World has failed to absorb and even notice the cultural qualities of the West? What went wrong? Why did the Third World fail to maintain the benefits offered?
The fundamental problem of the Third World is that the concept of reason is conspicuous by its absence. Without “reason,” intellectual and financial capital is not accumulated. The operating system in their minds is tribalism, superstition, magical thinking, and irrationality. This operating system makes them impervious to absorbing Western intellectual capital.
Rationality – the foundation of civilization [PT]
Without the rationality, civilization is not possible. Irrational societies must vacillate between dogma, hedonism, and savagery, never stumbling on another dimension, rationality.
A society of irrational people, particularly in a democratic system, where the most tribal, least-competent 50% people decide on who rules, eventually has to disintegrate into tribal units, who will then enter into never-ending wars. This is what will happen to 5 billion people living in the Third World, a humanitarian catastrophe never seen before. 100s of millions, perhaps billions will perish, once their problems have become too large for the West to contain.
via ZeroHedge News https://ift.tt/3idpjfx Tyler Durden
