One of the great impending disasters of the COVID crisis is that despite the fact that the Coronavirus is rapidly disappearing and its true Infection Fatality Rate is in the exact same range as the seasonal flu, politicians and government health officials seem determined to roll-out the globalist “New Normal” regime.
We’re continually told by health officials and the media that the primary reason for requiring face masks is to protect people from the COVID-19 airborne pathogen. There are numerous problems with this government belief system, not least of all because it assumes that every person is equally at risk of illness due to COVID-19, which is false.
The vast majority of the general population are not at risk at all, as it mainly only affects one specific demographic: over 70 years old with chronic long-term health conditions, and within that risk group the majority of complications and fatalities have been with nursing/care home residents (none of these people travel on public transport).
The other reason why this virus is not a threat to the wider population is because it is seasonal in nature; it has followed the exact same trajectory of decline in every country worldwide, and by now has all but extinguished itself in any significant form. But even beyond all of this, it has already been well-established by numerous scientific experts that masks are incapable of protecting people against this or any other respiratory virus.
This means that wearing them is more a psychological reinforcement rather than any real medical prophylactic.
London Mayor Sadiq Khan said facemasks will be the ‘new normal’ for commuters in the capital for at least a year.
Protective face coverings are compulsory on public transport across England in a bid to keep coronavirus infection rates low and avoid a second wave of the deadly virus.
Free masks were handed out in their thousands on buses and trains in attempt to kick start the new laws on Monday as 3,000 more police took to the streets looking out for rule-breakers.
Those who don’t wear masks will face £100 penalty fines but confusion still reigned about how the regulations – followed by 90 per cent of Londoners on Monday – will be enforced, The Daily Telegraph reports.
Sadiq Khan told LBC: ‘This is part of the new normal. The reality is that for the foreseeable future – I predict for the next year or so – wearing face coverings is going to become the norm rather than the exception.’
Confederation of Passenger Transport Executive Graham Vidler told the BBC that those who are unable to wear masks due to a disability will be able to signal to a driver or conductor using a ‘journey assistance card’.
He said: ‘If passengers aren’t following the guidelines then other passengers might have difficulties with that and issues might arise.
‘That’s another reason we are encouraging people to use journey assistance cards to indicate that they have a valid reason for not wearing a face covering…
Even America’s health tsar, Anthony Fauci, admitted as much in a 60 Minutes interview in March, where he stated, “There’s no reason to be walking around with a mask.”
And despite all of that, the New Normal agenda is still being pushed through.
via ZeroHedge News https://ift.tt/2Nf6A4O Tyler Durden
“Second Month Of Quasi-Paralysis” – Swiss Watch Exports Collapse 68% In May Tyler Durden
Sat, 06/20/2020 – 07:35
It seems wealthy folks in Asia, Europe, and the US pulled back on purchasing Rolex Submariners and or any other type of fancy Swiss-made timepiece in May as Swiss watch exports continued to crash.
An industry representative told Reuters that economic fallout from the coronavirus pandemic “will have a lasting impact on demand for watches,” which could result in job cuts in the back half of the year at watch manufacturers.
The Federation of the Swiss Watch Industry (FH) released a report Thursday morning describing May as a “second month of quasi-paralysis.” Following 81.3% declines in April, Swiss watch exports continued to plunge in May, down 67.9% compared with May 2019, with a value of exports around 655.6 million CHF ($690 million).
“Performance was similar across all the main groups of materials, but in volume terms, the Other materials category fell by more than the average. In total, the sector exported 1.3 million fewer items compared with May 2019,” FH wrote.
FH calls it: “It seems that the recovery in this market is not yet a given.”
“The performance of the main markets fell by more than half compared with a year ago, across the board. The United States (-79.2%), Japan (-74.2%), France (-76.7%), Singapore (-74.8%), and the United Kingdom (-76.7%) were among the countries that fell by more than the average. While China (-54.6%) outperformed other countries for the second month in a row, it did not stand out to the same extent as in April and recorded a sharp decline.”
Francois-Henry Bennahmias, CEO of high-end watch brand Audemars Piguet, said: “It’s not that nobody wants to buy watches anymore, but in the after-COVID era many people will consume less, they will be more selective.”
Bennahmias told Reuters that he is the most concerned about the US market – expecting sales to fall up to 25% this year, diving below 1 billion CHF ($1.05 billion).
Joris Engisch, head of watchmaker Singer, said the watch industry is about to enter a period of pain: “Half of all the watches we sell go to Chinese customers and they won’t start traveling again soon.”
“We have not had a single new order in three months. We’ll have to shut down completely for several weeks this summer,” Engisch said, adding that smaller subcontractors with lower margins would struggle even more.
“I’m optimistic for the long term, but quite pessimistic for the end of the year, we’ll have one or even two extremely difficult years,” he said. “Companies will start laying off staff if they don’t see positive signals after the summer.”
Even before the virus-induced downturn, traditional Swiss watchmakers were locked in a war against tech companies who were taking market share via smartwatches. Apple Watch outsold the entire Swiss watch industry in 2019.
Changes in high-end Swiss watch exports has been a great leading indicator of the current economic downturn – virus or no virus – a plunge in economic growth was coming. Read what we wrote back in December:
“So could weakening consumer spending trends in diamonds, jewelry, and timepieces be an early warning sign that trouble is ahead for the global economy in 2020?”
In my last article, I reviewed the case of Gough Whitlam’s firing at the hands of the Queen’s Governor General Sir John Kerr during a dark day in November 1975 which mis-shaped the next 45 years of Australian history. Today I would like to tackle another chapter of the story.
I used to believe as many do, in a story called “the American Empire”. Over the last decade of research, that belief has changed a bit. The more I looked at the top down levers of world influence shaping past and present events that altered history, the hand of British Intelligence just kept slapping me squarely in the face at nearly every turn.
Who controlled the dodgy Steele dossier that put Russiagate into motion and nearly overthrew President Trump? British Intelligence.
How about the financial empire running the world drug trade? Well HSBC is the proven leading agency of that game and the British Caymen islands is the known center of world offshore drug money laundering.
Who created Saudi Arabia and the state of Israel in the 20th century (as well as both nations’ intelligence agencies?) The British.
What was the nature of the Deep State that Presidents Lincoln, Garfield, McKinley, Harding, FDR, and JFK combatted within their own nations?
What the heck was the American Revolution all about in the first place?
I could go on, but I think you get my point.
The Disrupted Post-WWII Potential
Franklin Roosevelt described his deep understanding of British operations in America, telling his son in 1943:
“You know, any number of times the men in the State Department have tried to conceal messages to me, delay them, hold them up somehow, just because some of those career diplomats over there aren’t in accord with what they know I think. They should be working for Winston. As a matter of fact, a lot of the time, they are [working for Churchill]. Stop to think of ’em: any number of ’em are convinced that the way for America to conduct its foreign policy is to find out what the British are doing and then copy that!” I was told… six years ago, to clean out that State Department. It’s like the British Foreign Office….”
Where the British Empire certainly adapted to the unstoppable post-WWII demands for political independence among its colonies, it is vital to keep in mind that no empire willfully dissolves or “gives its slaves freedom” without a higher evil agenda in mind. Freedom is fought for and not given by empires which never had a reason to seek humility or enlightenment required for freedom to be granted.
In the case of the post-war world, the deliverance of political freedom among the “former British Empire” was never accompanied by an ounce of economic freedom to give that liberation any meaning. Although it took a few years to iron out America’s anti-colonial impulses over the deaths of such figures as JFK, Malcolm X, MLK and RFK, eventually the rebellious republic was slowly converted into a dumb giant on behalf of the “British brains” controlling America’s Deep State from across the ocean.
The Case of Africa and the Crown Agents
Take the case of Africa as a quick example: Over 70% of the mineral control of African raw materials, mining, and refining are run by companies based in Britain or Commonwealth nations like Canada, South Africa or Australia managed by an international infrastructure of managers called “Crown Agents Ltd” (founded in 1833 as the administrative arm of the Empire and which still runs much of Africa’s health, and economic development policies to this day).
Crown Agents was originally set up as a non-profit with the mandate to manage British Empire holdings in Asia and Africa and its charter recognizes it as “an emanation of the Crown”. While it is “close to the monarchy” it is still outside governmental structures affording it to get its hands dirtier than other “official” branches of government (resulting in the occasional case of World Bank debarment as happened in 2011).
In 1996 Crown Agents was privatized as ‘Crown Agents for Overseas Government and Administration’ where it became active in Central and Eastern Europe with its greatest focus on Ukraine’s economic, energy and health management. The agency is partnered with the World Bank, UN and Bill and Melinda Gates Foundation and acts as a giant holding company with one shareholder called the Crown Agents Foundation based in Southwark London.
“101 companies listed on the London Stock Exchange (LSE) — most of them British — have mining operations in 37 sub-Saharan African countries. They collectively control over $1 trillion worth of Africa’s most valuable resources. The UK government has used its power and influence to ensure that British mining companies have access to Africa’s raw materials. This was the case during the colonial period and is still the case today.”
As we can see by this most summary overview of the modern imperial looting operations of Africa, the spirit of Cecil Rhodes is alive and well. This will take on an additional meaning as we look at another aspect of Rhodes’ powerful legacy in the 20th century.
The British Takeover of American Intelligence
Although many falsely believe that Britain was replaced with an American Empire after WWII, the sad truth on closer inspection is that British assets embedded in America’s early deep state (often Rhodes Scholars and Fabian Society assets tied to the Council on Foreign Relations/Chatham House of America) were behind a purge of leaders loyal to FDR’s vision for the post-colonial world. These purges resulted in the dismantling of the OSS months after FDR died, and the formation of the CIA in 1947 as a new weapon to carry out coups, assassinations and subversions of leaders within America and abroad seeking economic independence from the British Empire. This history was outlined brilliantly by Cynthia Chung in her paper Secret Wars, Forgotten Betrayals, Global Tyranny: Who is Really in Charge of the U.S. Military.
“Why should we not form a secret society with but one object the furtherance of the British Empire and the bringing of the whole uncivilised world under British rule, for the recovery of the United States, and for the making the Anglo-Saxon race but one Empire…”
Later on in his will Rhodes stated: “Let us form the same kind of society, a Church for the extension of the British Empire. A society which should have its members in every part of the British Empire working with one object and one idea we should have its members placed at our universities and our schools and should watch the English youth passing through their hands just one perhaps in every thousand would have the mind and feelings for such an object, he should be tried in every way, he should be tested whether he is endurant, possessed of eloquence, disregardful of the petty details of life, and if found to be such, then elected and bound by oath to serve for the rest of his life in his Country. He should then be supported if without means by the Society and sent to that part of the Empire where it was felt he was needed.”
Among the four Anglo-Saxon members of the Five Eyes that have the Queen as the official head of state (Britain, Canada, Australia and New Zealand), all feature irrational forms of government structured entirely around Deep State principles organized within two opposing forms of social organizing: democratic and oligarchical… with the true seat of power being oligarchical.
Because this peculiar self-contradictory form of government is so little understood today, and because its structure has made Britain’s globally extended empire so successful, a few words should be devoted to it now.
A House Divided Against Itself…
In the case of Westminster-modelled Parliamentary systems, Senates represent the House of Lords, while Houses of Commons (for the Commoners) represent the elected parts of government. A prime minister selected by the governing party is assumed to be that nation’s leader, but unlike republican forms of government, instead of the “buck stopping there” (at least legally speaking), it is precisely there that the true sphere of power only begins to be felt.
Here parliamentary/quasi-democratic systems projected for public consumption find themselves enshrined within a much more shadowy and Byzantine world of Governor Generals (acting as the heads of state) who give Royal Assents to all acts and wielding the infinite prerogative powers of the Queen (aka: the “Fount of All Honors”). In the British Imperial system, hereditary power is seen as the source of all authority for all aspects of government, military, and economic- whereas in republican forms of government that authority is seen as deriving from the consent of the governed.
Where rights are “granted by the sovereign” within hereditary governments, republican forms of government recognize correctly that rights are fundamentally “inalienable” to humanity (in principle though not always in practice as the troubled history of America can attest).
By being essentially the legal “cause” of all authority among every branch of the British official and unofficial corridors of power, an obvious absurdity strikes which the empire would prefer plebs not think too seriously about: The queen and her heirs cannot themselves be UNDER any law, since they “cause” the law. This means that the queen, her heirs and anyone whom she delegates authority to literally have “licenses to kill”. The queen cannot be taken to court and she has no need of a passport or even a drivers’ license… since these items are issued by her crown’s authority alone. Within the logic of British legal systems, she cannot be held legally accountable for anything which the Crown has done to anyone or any nation of the world.
Although much effort goes into portraying the Crown’s prerogative powers as merely symbolic, they cover nearly every branch of governance and have occasionally been used… although those British spheres of influence where they most apply are usually so self-regulating that they require very little input from such external influence to keep them in line.
These powers were first revealed publicly in 2003 and in an article titled ‘Mystery Lifted on the Prerogative Powers’, the London Guardian noted that these powers include (but are not limited to):
“Domestic Affair, the appointment and dismissal of ministers, the summoning, prorogation and dissolution of Parliament, Royal assent to bills, the appointment and regulation of the civil service, the commissioning of officers in the armed forces, directing the disposition of the armed forces in the UK (and other Commonwealth nations), appointment of Queen’s Counsel, Issue and withdrawal of passports, Prerogative of mercy. (Used to apply in capital punishment cases. Still used, eg to remedy errors in sentence calculation), granting honours, creation of corporations by Charter, foreign Affairs, the making of treaties, declaration of war, deployment of armed forces overseas, recognition of foreign states, and accreditation and reception of diplomats.”
When a 2009 bill was introduced into parliament proposing that these powers be limited, a Privy Council-led Justice Ministry review concluded that such limitations would ‘”dangerously weaken” the state’s ability to respond to a crisis’ and the bill was promptly killed.
Acting on Provincial levels, we find Lieutenant Governors who (in Canada) happen to be members of the Freemasonic Knights of St John of Jerusalem (patronized by the Queen herself).
All figures operating with these authorities within this strange Byzantine world are themselves a part of, or beholden to figures sworn into the Queen’s Privy Council- putting their allegiance under the total authority of the Queen and her heirs, rather than the people or nation in which that subject serves and lives. If this is hard to believe, then take the time to listen to Canadian Prime Minister Justin Trudeau’s oath upon entering the Privy Council to get a visceral taste of this medieval policy in action (every cabinet member, Prime Minister and opposition leader must take this oath if they are to be granted intelligence briefings from her majesty’s intelligence services.)
Take note that not even once does the welfare of the people or the nation arise in this oath.
Standing Defiant Against Natural Law
Despite these un-natural power structures, history has shown that from time to time, good leaders have found themselves in executive positions of high office. As rare as they are, such anomalies occurred in the cases of Canada’s Prime Ministers Wilfrid Laurier (1896-1911) and John Diefenbaker (1957-1963), Quebec Premiers Paul Sauvé (1959), Daniel Johnson Senior (1967-68), and Australia’s Gough Whitlam (1972-1975). Yet when these anomalies arise and such figures trespass beyond their acceptable sphere of action into policy territories reserved only for the governing elite, then more often then not a Rhodes Scholar-run coup occurs [Laurier 1911 (2), Diefenbaker 1963], an untimely death strikes [Sauvé 1959 and Johnson 1968] or a sacking by the Queen’s Governor General happens [Whitlam 1975].
In all aforementioned cases, Democratic institutions that are premised around the concept that all citizens are made equal and free in the image of a creator are never long tolerated within the cage of a system of oligarchism premised upon the belief that only one person is sovereign and her/his word is absolute law for all slaves, and minions of the ruling bloodline.
As Gough Whitlam discovered in 1975, the real British Empire is a nasty beast, and probably one which should have gone extinct a couple of centuries ago. Unfortunately, until this moment, history has been tainted by more than a few disruptions of progressive leaders who sacrificed their comfort, careers, and often their lives to resist this stubborn parasite which would rather suck its host dry than admit that the system of organization upon which it is based is an abomination to natural law and morality.
via ZeroHedge News https://ift.tt/3fIIbAY Tyler Durden
Growing up as I did in the Cold War, I still experience a special kind of shudder whenever I come across an anecdote like that of Katya Soldak, whose Soviet nursery school teacher once showed her class a photograph clipped from a Western newspaper, “depicting skinny [Russian] children in striped robes walking in a straight line.”
The capitalists who printed that picture wanted people to think Soviet children were “treated like prisoners,” the teacher declared angrily, “when in reality the kids were on their way to a swimming pool in their bathrobes.”
Which was a nice story (thought little Katya) — except that “I had never even seen a pool…. [T]hey existed in my mind as does an exotic animal or an unvisited city.”
A time capsule from a remote dystopia? Think again.
Staring at me right now from the latest quarterly newsletter of my alma mater, the University of Virginia, is an identical piece of bad-is-good fakery: a photograph of an involuntarily isolated graduate student named Kalea Obermeyer, accompanied by a caption blandly informing the reader that the woman seated alone on a trunk in the confines of a cramped dormitory room, clumsily swathed in a surgical mask, “shelters in place” in “her most secure housing during the pandemic.”
Welcome to Pravda, COVID19 style.
Being an honest sort, I have considered whether I ought to write to the editors of my old university’s magazine, accusing them of playing toady to democracy-destroying propagandists.
Should I remind these so-called educators of the young that the term “shelter in place” is properly applied to air raids, not to “pandemics,” and is a cruel hoax when pressed into service to describe what is actually an illegal quarantine?
That the young woman in the photograph is not “sheltered” but confined? That pandemics have occurred many times before, and that what’s new this time around is not the flu but the police state? That the governor’s order placing this student (and the rest of the citizenry) under virtual house arrest is probably unconstitutional?
And that while she’s stuck in her room — for no good reason I can discern — a whole host of local bus drivers, contract workers and university employees, including dining hall service workers who’ve labored there for decades, are all out of jobs?
I’d like to write all that, and more, to the purveyors of this bit of fake news. But I suspect I’d be wasting my time.
Mainstream media have recycled so many lies about COVID19 that by now every respectable editor with enough sense to come in out of the rain knows perfectly well what he or she is supposed to make the rest of us believe. And heaven help the dissenters!
Thus the once-respectable Atlantic, after months of promoting coronavirus hysteria, has published a kind of palinode that admits virtually every charge made by critics of lockdown policies — but still winds up gloomily insisting on the freedom-haters’ moral supremacy, facts or no facts.
The authors (Alexis Madrigal and Robinson Meyer) grudgingly concede the growing evidence that going outdoors, instead of being cooped up for months at a time per lockdown fiats, actually reduces the risk of infection.
They also admit that those who enforce our confinement clearly don’t believe their own hype about “social distancing”: police are “crowding protesters together, blasting them with lung and eye irritants, and cramming them into paddy wagons and jails.”
They even point out that the police themselves rarely bother separating from one another. But ultimately none of that matters to the liberal Atlantic: it’s “obvious” — evidence be damned — that just “standing in a crowd for long periods raises the risk of increased transmission of SARS-CoV-2.” Who says so? Why, Anthony Fauci does.
And what about all the evidence that COVID19, never anywhere near as deadly as officials originally assured us it was, is on the way out?
Here, too, the Atlantic’s paladins admit the facts but refuse to draw the obvious conclusion. They note that “the outbreak has eased in the Northeast,” the hardest-hit section of the US; that new cases have leveled off or declined in the great majority of states; and that “hundreds of public-health professionals signed a letter this week declining to oppose the protests [against police brutality] ‘as risky for COVID19 transmission.’”
They even admit that in Georgia and Florida, two states that enforced lockdowns least and opened up earliest, the numbers of new infections have been “relatively flat.”
In the face of so much good news, what are right-thinking police-state enthusiasts to do?
“[T]he US is not going to beat the coronavirus,” Madrigal and Meyer groan in unison in the article’s key paragraph. “Collectively, we slowly seem to be giving up.” Now there’s a specimen of doublethink even Orwell missed: victory is surrender; lockdown is safety; hysteria is virtue.
So I’m not planning to write to the editors at my alma mater — at least, not about that propagandists’ playground known as COVID19. When rights-trampling, economy-busting general incarceration is the fashion in the Land of the Free, when lying is good sense and wrecking lives is “health care,” my old ideas of rational persuasion start to look like a parasol in a monsoon.
Instead, I am going to do a bit of ranting about words — the elements that lies are made of. I do this because I am sure the twisting of language to cloak political and economic skullduggery — which I take to be the worst evils of the coronavirus outbreak — will be glossed over in future mainstream accounts.
And I do it because the politicians who tore up the Bill of Rights and thrust the US and much of the world to the brink of another Great Depression are not likely to change their spots — and unless we insist on calling their actions by their right names, we will be defenseless against their future machinations. “Political language,” Orwell reminded us, “is designed to make lies sound truthful…and to give an appearance of solidity to pure wind.”
Well, here are some choice examples of “pure wind” that made “lies sound truthful” over the past three months:
Shelter in place.
The fraudulent use of this term stands in synecdoche to all the rest. “Shelter in place” originated in US Civil Defense regulations in the context of a possible nuclear attack; over the following decades, the term evolved to mean any emergency order to “take cover until the coast is clear on order of officials.” But it has never had the slightest connection with disease control.
An order that restricts the movement of someone who is not ill, but who is suspected of contact with someone who is, is called a “quarantine.” But there are laws that regulate slapping quarantine orders on people — to say nothing of an entire population — and the governors and mayors who were bent on lockdowns clearly didn’t intend to be constrained by anything as pedestrian as the law.
So they dug up this irrelevant phrase and plastered it over their arbitrary confinements of huge numbers of citizens — in violation of quarantine statutes, without a court order, and without even a semblance of public debate — hoping nobody would notice the compounding of official malfeasance with verbal fakery.
It’s worth taking a moment to imagine how this trick must have been hatched in the bowels of some executive mansion.
I can picture someone like New Jersey governor Phil Murphy (last seen claiming that the constraints of the Bill of Rights weren’t part of his job description) barking at his aides, “Damn it, there’s got to be something to justify locking up the whole state without going through those pesky quarantine procedures!”
And I can see a harried assistant, having rummaged for hours in the archives, jogging into an office with the term “shelter in place” and a rather sheepish explanation that, well, it’s not about infection control, and doesn’t really have anything to do with the present situation, but it does say “in place” and, um, “shelter” and, you know…and anyway, for God’s sake, there isn’t anything else!
And then it’s not hard to imagine the boss (who knows the media better than his subordinates do) triumphantly working the words “shelter in place” into his next public address, confident that few mainstream reporters will ask him where the phrase came from.
The imagined details are less important than the obvious fact that “shelter in place” could not have been sprung on us by way of an innocent error. The term had to be found, and the officials who found it would necessarily have known what it meant, and therefore that its use in the context of a viral epidemic would constitute a fraud.
Thus, anyone — and I mean anyone — who has employed the phrase “shelter in place” over the last three months has been repeating a lie. It’s as simple as that. Every public health care official who has used the phrase is a scoundrel; every “journalist” who has used it is a shameless propagandist; every politician who has used it is an imposter who, in my view, deserves to be impeached or voted out of office forthwith.
Social distancing.
This one runs “shelter in place” a close second. The phrase was nonexistent, or at best obscure, until rather recently; when officials of the Center for Disease Control and Prevention used it in a 2007 advisory memorandum, they felt obliged to explain the term in a footnote:
Social distancing refers to methods for reducing frequency and closeness of contact between people in order to decrease the risk of transmission of disease. Examples of social distancing include cancellation of public events such as concerts, sports events, or movies, closure of office buildings, schools, and other public places, and restriction of access to public places such as shopping malls or other places where people gather.
Note that this definition does not include keeping people six feet apart, stifling them with surgical masks, or barring them from inviting family members to their apartments. Evidently, not even the germophobes at the CDC were prepared to contemplate so brutal a disruption of human life just thirteen years ago.
In fact, the same memorandum stressed the importance of “[r]espect for individual autonomy” and “each individual’s general right to noninterference,” adding that even in the event the government did close office buildings or restrict access to shopping malls, “[a] process should be in place for objections to be heard, restrictions appealed, and for new procedures to be considered prior to implementation” — something never even remotely attempted during the last three months.
In other words, “social distancing” really means whatever the changing whims of our governors would like it to mean, as they continue to exercise “emergency” powers in what is clearly not an emergency. Meanwhile, the use of the term gives a false patina of scientific legitimacy to unprecedented government intrusions into the most basic interactions of human life.
The timing of the successive redefinitions of the phrase is itself instructive. In my own state of New Jersey, masks were not required as a component of “social distancing” until mid-April, by which time it was clear that the number of new cases in the region was already leveling off. (Masks remain mandatory in public as of this writing, even though the infection rate has fallen almost to pre-outbreak levels.)
Allow that point to sink in for a moment: “social distancing” took on a more extreme and divisive definition at just the moment that, by any rational calculation, restrictions should have been reduced, if not removed altogether! And the most recent fiats from the governor suggest that nothing like ordinary companionship is going to be permitted any time soon — regardless of the facts.
This implies that, at bottom, “social distancing” is not intended to serve any genuine medical purpose. It’s much better understood as an instrument of political repression — a way of keeping people apart and preventing any sort of public organizing.
I don’t consider it an accident that the “phased reopening plan” being peddled by nearly all media “experts,” and routinely attributed to Johns Hopkins University, was in fact produced under the leadership of Scott Gottlieb, a resident fellow of the American Enterprise Institute — the right-wing think tank that served as a major cheerleader for the Iraq invasion of 2003 and whose recent initiatives include efforts to sharply reduce federal spending on health care.
(Dr. Gottlieb, who until recently was Trump’s Commissioner of the Food and Drug Administration, now sits on the boards of pharma heavyweights Pfizer, Illumina and Tempus — so it’s not hard to see where his interests lie.)
That AEI is in no hurry to help small businesses reopen or to keep working people from losing their jobs will come as no surprise. What needs emphasis is that if such an outfit couldn’t hide its agenda behind the medical-sounding phrase “social distancing,” it would stand little chance of slipping its initiatives past the general public and into practice. But while we’re all creeping around with our faces wrapped like mummies, turned away from each other whenever possible, staying at least six feet apart, and speaking only when spoken to, how are we supposed to mount effective political opposition as the high rollers play their favorite games?
Emergency.
Though it’s not often reported this way, the United States largely suspended democratic government back in March, when some 40 state executives declared “health emergencies,” granting themselves quasi-dictatorial powers to act without legislative approval or legal process.
They did this by invoking each state’s version of the Emergency Health Powers Act, a controversial piece of legislation crafted in the nervous aftermath of the September 2001 attacks and supposedly designed for a coordinated response to a massive act of bioterrorism. The American Civil Liberties Union was not alone back then in condemning the bill as “replete with civil liberties problems” and “a throwback to a time before the legal system recognized basic protections for fairness.”
Nevertheless, liberal media didn’t utter a peep when governors across the nation effectively scuppered democracy in the face of what, however threatening, didn’t even arguably resemble a catastrophic bioterror attack.
If that strikes you as a flagrant abuse of the word “emergency” for questionable political purposes — and it should — you ain’t seen nothing yet.
On June 4, New Jersey’s Governor Murphy issued his third consecutive extension of what was supposed to be a thirty-day “state of emergency” he had originally declared — unilaterally — on March 9.
What was the “emergency” this time around? In the governor’s own words: “there has now been a decrease in the rate of reported new cases of COVID19 in New Jersey, in the total number of individuals being admitted to hospitals for COVID19, and in the rate of reproduction for COVID19 infections in New Jersey.”
Got that? New cases, hospitalizations, even the “rate of reproduction” for the virus are all on the wane throughout Murphy’s jurisdiction. (And have been for months.) Yet in today’s Newspeak, that’s an “emergency” — enough to justify another month of democracy-free rule by executive fiat.
And I’m the Maharaja of Mysore…
I won’t even bother writing about that most buffoonish of phrases, “flattening the curve.” If that ever meant anything (which I doubt), it means literally nothing, or more accurately less than nothing, when applied (as it is now) to an outbreak that is demonstrably almost over.
I’ll only note that if the lockdown enthusiasts had been able to specify an actual goal, in intelligible language, they would have done so from the start. They couldn’t — because their true objectives were political, not medical — so they offered us a magical-thinking cartoon image instead. They must be hoping we still haven’t noticed.
As always, fraudulent language goes hand in hand with fraudulent political posturing, of which the Atlantic article I’ve already mentioned — oozing crocodile tears over the excesses of the cops while oblivious to the Constitution-defying antics of Governors Cuomo, Murphy, Whitmer et al. — is a rather rank example.
In a similar vein, Ross Douthat’s recent op-ed in the New York Times is an interesting confession of liberal dishonesty in the service of a slightly different form of liberal dishonesty.
Douthat correctly complains about members of the “public health establishment” who condemned anti-lockdown protesters just weeks ago as a dangerous death cult, but are now bowing and scraping before the parallel behavior of Black Lives Matter, “tying themselves in ideological knots” in the process.
Douthat’s indictment of highbrow hypocrisy on this score is so accurate that it is worth quoting at length:
[T]he original theory behind a stern public health response — that the danger to life and health justified suspending even the most righteous pursuits, including not just normal economic life but the practices and institutions that protect children, comfort the dying, serve the poor — has been abandoned or subverted by every faction in our national debate…. There is no First Amendment warrant to break up Hasidic funerals while blessing Black Lives Matter protests, and there is no moral warrant to claim that only anti-racism, however pressing its goals, deserves a sweeping exception from rules that have forbidden so many morally important activities for the last few months.
All this is perfectly true. But with a pinch more honesty, Douthat might have concluded that “the original theory” was a sham to begin with. If the Right Thinkers had been telling the truth when they herded us all into captivity back in March, they’d still be yelling “obey or die!” at every crowd that defies lockdown orders.
Douthat interprets their inconsistency as a surrender to the virus; he can’t admit that the Right Thinkers’ real battle was never against COVID19. It was against us.
The same conclusion stares us in the face from the Right Thinkers’ eulogizing of protests against police brutality — or, rather, from what their encomiums to those protests consistently omit.
The demonstrations spearheaded by Black Lives Matter focus on police-state tactics employed by uniformed enforcers of the will of the State; the much-maligned anti-lockdown protesters have been objecting to police-state tactics employed by political officials of the State itself.
The connection between the two sets of protests should be obvious. But have you heard any of the high-profile liberals who are paying homage to Black Lives Matter breathe a single word to the effect that these different groups of protesters ought to combine their efforts, or at least to coordinate their campaigns in order to increase their political effectiveness?
Of course not — and in my view, that’s the real reason behind the hypocritical nonsense being spouted in support of BLM by establishmentarians who merely sneered when the protesters were white working people.
As long as Black Lives Matter continues to observe the double limitation that has so far marked its demonstrations — protesting only along racial lines, and only against the police — the ruling class’s left-wing will go on blessing it, because it won’t constitute too large a threat to established order.
If the demonstrations start to talk about the rights of all people to be free of arbitrary confinement as well as violence, of all ordinary Americans to be able to work for a living as well as staying out of prison, the evils of all officials who stand in their way…well, that will be a horse of a different color.
Remember the snapshot of congressional Democrats kneeling in pious rows with those silly kente stoles around their necks?
That was styled as a “protest,” but don’t kid yourselves: if Pelosi & Co. were genuinely horrified about police racism, they would have done something about it years ago. I think those Democratic heavyweights knelt to pray that BLM doesn’t realize it’s confronting a broader issue than racist police violence.
As I write this, the US is teetering simultaneously on the edge of its worst financial collapse since the 1930s and on the brink of a descent into quasi-dictatorial rule. Sectarian protests, however justified, won’t halt that descent. General political resistance just might. And liberal pundits are scared to death that protesters, black and white, progressive and conservative, might figure out that they’re really fighting the same enemy.
Of course, nothing I can write is going to penetrate the minds of people who have drunk the lockdown Kool-Aid and will hear, in my dissection of the fraudulent language used by “public servants” to foment poverty and to shred the Bill of Rights, only some sort of “coronavirus denial.”
So let me say it clearly: the coronavirus epidemic is real. Okay? It exists — but saying it exists is a mere truism. Iraq exists too, and it was once ruled by a particularly vicious dictator — though the fact that his worst atrocities were committed with extensive US support is mentioned far less often than it should be.
But it is still true that the American and British publics were tricked into endorsing a criminal invasion of that country on the strength of false claims. And no assortment of after-the-fact apologetics can turn those lies into truths.
The same holds for COVID19 and its flagrantly deceitful handling by nearly everyone involved: politicians, reporters, pundits, public health “experts.” (The US leadership of my own Orthodox Jewish community has been just as bad.) Yes, this is a highly contagious respiratory infection that can have serious effects on unusually vulnerable people. But beyond that, just about everything we were told about COVID19 has turned out to be false.
We were told the virus would kill millions in the US alone, and that was false.
We were told lockdowns would make it go away, and that was false.
We were told we would only be confined until the rate of new cases leveled off, and that was false.
We were told that while the outbreak lasted no state government would tolerate any sort of public gathering for any reason, and that was false.
We were told that anyone who questioned the wisdom of the draconian restrictions foisted on us by our governments was a crypto-Nazi whose real goal was to kill off the weak — and that was false, not to mention slanderous.
Most unforgivably of all, we were told — and told, and told — that morality was entirely on the side of the democracy-destroyers. That was a lie of breathtaking proportions.
Not only did the lockdowns violate state laws and make a mockery of the US Constitution; not only did they deprive at least tens of millions of Americans of their basic liberties; not only have they cost millions of people their jobs and thrust the country into its worst economic straits since the 1930s — on top of all that, they have sown untold misery around the world, as mushrooming numbers of poor people experience acute food shortages and millions of children face the interruption of vital medical supplies.
And even as mainstream media begin to admit these facts, they still subvert reality by pretending that all this suffering is a result “of the coronavirus.”
That’s simply another lie. It would be as true to say that millions died in Nazi gas chambers as a result of the rise of Soviet communism. (The putative threat of “the Bolsheviks” was a crucial theme in the anti-Semitism that underpinned the Nazi “Final Solution.”)
The truth, of course, is that the coronavirus didn’t cause these hardships, at least not by itself. Politicians chose to inflict them. And unless we keep that knowledge alive, we will never be able to hold those responsible to account — nor prevent a repetition of such behavior in the future.
“The beginning of wisdom,” said Confucius, “is to call things by their proper name.”
Katya Soldak and her nursery school classmates could not dismantle their country’s ruling Communist Party, but they could refuse to call a prison camp a health resort. Surely we can refuse to cooperate in the use of language whose sole purpose is to swindle us. At present our civil liberties are under serious assault, as is the very principle of democracy. Can’t we call those ugly things the names they deserve?
I know what I am proposing is more difficult than it sounds. The enemies of honesty in politics have vast resources at their disposal, and they are not shy about abusing them. Already the UN’s euphemistically-named Special Rapporteur on Freedom of Opinion and Expression, David Kaye, has openly applauded censorship of lockdown critics, even acknowledging that social media “platforms are serving as stand-ins for government authorities” in an effort to curb unwanted political protest.
The dishonesty infects even small details: the Washington Post, like most US media outlets with paywalls, makes an exception for COVID19, “providing this important information about the coronavirus for free”; but the Post’s only story on the Wisconsin Supreme Court’s reversal of the governor’s mass-confinement order that contains the court’s explanation of its ruling is behind the same paywall as every ordinary article.
Evidently, stories that promote coronavirus hysteria constitute “important information,” while stories that lend support to dissenters do not — not even when they concern the reasoning of the highest court of a major state.
So yes, the COVID19 game is rigged — as games run by our rulers usually are. But false depictions of reality have power only to the extent honest people allow themselves to be deceived.
Powerful politicians, and their tame pundits, are plainly betting that the public can be manipulated by the fear of a novel virus. But the thing we should fear the most is irrational submissiveness, what Max Weber called “the cowardly will to impotence.”
The moral of the Emperor’s new clothes is as relevant as ever: a single honest voice can unravel the most elaborately designed fakery. People who demand the truth may be outnumbered. They cannot easily be overcome.
via ZeroHedge News https://ift.tt/3fMSt33 Tyler Durden
Another ‘Friday Night Massacre?’ DoJ Abruptly Axes Prosecutor Who Targeted Giuliani, Trump Campaign Tyler Durden
Fri, 06/19/2020 – 23:20
In a surprising move that inevitably will be denounced by President Trump’s political opponents as another “Friday Night Massacre”, the DoJ just announced that Geoffrey Berman, the US attorney for the southern district of New York, will soon depart.
Regular readers who followed our coverage of the Mueller probe and the various and sundry investigations handed off to federal prosecutors in New York, Virginia and elsewhere. Most memorably, perhaps, have been the cases brought by Berman and his office against Michael Cohen and Paul Manafort. Berman’s office once subpoenaed Trump’s inaugural committee, infuriating the president, and more recently has been running an investigation into Rudy Giuliani, according to leaked media reports.
Geoffrey Berman
A Republican who contributed to Trump’s campaign, Berman was considered a highly qualified pick to succeed Preet Bharara, the previous occupant of his Berman’s soon-to-be-former office, which also features heavily in the TV show “Billions” (it’s the position held by the show’s antagonist, a corrupt federal prosecutor).
AG Barr didn’t offer much in the way of an explanation, and Berman hasn’t said much either. Then again, we’re only just finding out about this, and it’s 10pmET on a holiday Friday.
But even more surprising than the news of Berman’s sudden departure is the news of who will take his place. Following a brief interlude, SEC Chairman Jay Clayton will become the next US Attorney for the Southern District of New York.
But even more extraordinary than his handling of the Hertz situation is Clayton’s decision to allow Tesla CEO Elon Musk walk away from a dispute with the SEC in which the CEO flagrantly and blithely violated basic securities regulations involving disclosures of material information to the public (remember “funding secured?” and the tedious legal melodrama that ensued in which Musk, in full blown tantrum mode, was repeatedly appeased by government regulators seemingly robbed of all willingness to hold him accountable).
Indeed, the news elicited some late-breaking chuckles on twitter.
North Korea Sends Troops & Ships To Border As More Attention-Grabbing ‘Explosive Displays’ Loom Tyler Durden
Fri, 06/19/2020 – 23:15
While the world awaits more of North Korea’s attempt at attention-grabbing “explosive displays” following the dramatic televised explosion of the inter-Korean liaison office Tuesday, there’s been a reported build-up of NK troops along the the demilitarized zone (DMZ), according to new reports. Ships have also been observed entering areas along the disputed maritime border.
Pyongyang’s recent threats to mobilize extra forces have been made good on, apparently: “North Korea’s military appeared to be moving to the front lines near the South as a U.S. reconnaissance plane flew over the peninsula, following days of threats and provocations from Pyongyang,” UPI reports.
Prior illustrative image via North Korea’s Korean Central News Agency/Reuters.
South Korean media and military sources report that “North Korean troops were stationed on the North’s side of the Korean demilitarized zones, at vacated guard posts of the tense border.”
Pyongyang’s latest saber-rattling is ostensibly related to an ongoing campaign of defectors spreading propaganda leaflets into the north via the border. Apparently in some cases activists are using balloons to transport messages into the north encouraging people to defect.
“On Wednesday North Korea had said it would retake vacated guard posts and take military action if North Korean defectors in the South continued to send anti-Pyongyang leaflets by helium balloon,” the UPI report adds.
Thus it appears Pyongyang’s troop movements, including what it says are elite units, are an attempt to make good on the prior threats.
North Korea releases pics of the destruction of the inter-Korean liason office.
It also comes amid disappointment at stalled – and what now appears to be completely failed – nuclear talks with Washington, which Seoul had previously touted as something it would help achieve.
South Korean diplomats have reportedly reached out to restore communications with the north but have been rebuffed. It’s widely believed that Kim John Un and his increasingly visible sister Kim Yo-jong, who has lately emerged as an outspoken military ‘enforcer’ of sorts, are seeking new leverage with the Trump administration, at a time sanctions are still in place with little openings forward.
via ZeroHedge News https://ift.tt/2V1cOtw Tyler Durden
Dollar-denominated financial markets appeared to suffer a dramatic change on or about the 23 March. This article examines the possibility that it marks the beginning of the end for the Fed’s dollar.
At this stage of an evolving economic and financial crisis, such thoughts are necessarily speculative. But an imminent banking crisis is now a near certainty, with most global systemically important banks in a weaker position than at the time of the Lehman crisis. US markets appear oblivious to this risk, though the ratings of G-SIBs in other jurisdictions do reflect specific banking risks rather than a systemic one at this stage.
A banking collapse will be a game-changer for financial markets, and we should then worry that the Fed has bound the dollar’s future to their fortunes.
The dollar could fail completely by the end of this year. Against that possibility a reset might be implemented, perhaps by reintroducing the greenback, which is not the same as the Fed’s dollar. Any reset is likely to fail unless the US Government desists from inflationary financing, which requires a radically changed mindset, even harder to imagine in a presidential election year.
Introduction
The most important mistake economists and financial watchers make is to assume events and prices tomorrow are simply projections of those of today. It is the basis of all economic and financial modelling. Yet despite the hard lessons of experience economic forecasters persist with their misleading models.
Nowhere is the failure of linear projection from the past more important than in the lifeblood common to everything. While knowing that state-issued currencies change in their utility over time, almost no one expects their demise, other perhaps at some point in the far distant future. But what if this generally linear expectation is as wrong as all other forecasting models? What if the response to the current economic crisis is a more rapid depreciation of currencies? And what happens if they die altogether? And what are the consequences for the ordinary person?
This article explores these what-ifs. It examines the conditions that could lead to this outcome. History gives us a guide, not through extrapolation, but by telling us that every recorded currency collapse has occurred to fiat currencies unbacked by gold or silver. So, we know it will happen — eventually. Less understood is that the pattern is always the same: a prolonged period of falling purchasing power, followed by a sudden collapse when a currency’s users finally reject it. In terms of time the latter phase usually lasts approximately six months.
Assessing the turning point
The early morning of Monday, 23 March was a significant time, marking the top of the dollar’s trade-weighted index. At the same time, gold, silver and copper prices, having fallen in the weeks before turned sharply higher. And while oil initially followed, it was a month before it resumed its uptrend — delayed by the delivery hiatus in the futures markets which briefly drove the price negative. The S&P 500 rallied the following day, ending a near 30% decline before recovering all of it, and then some.
Something had changed. Either markets decided that economic growth, both in the US and the rest of the world was going to continue following lockdowns, and growing demand for key commodities was going to be resumed. Or, as the decline in the dollar’s TWI indicated, the purchasing power of the dollar was going to decline, and commodity prices were reflecting an accelerating downtrend for the dollar’s purchasing power.
The performance of the S&P 500 since 23 March, being unhinged from any business conditions, gives us a clue: the flood of money emanating from the Fed is fuelling stock prices. It is also fuelling prices of all other financial assets.
The turnaround in silver is a more subtle story, shown in the chart as the reciprocal of the more usual gold/silver ratio. Silver had been ignored, classed solely as an industrial metal. Gold was seen by the financial community as the only metallic hedge against uncertainty in the financial system. That changed on 23 March when the gold/silver ratio peaked at 125 on the previous business day. It is now beginning to outperform gold with the gold/silver ratio currently down to 98. We might look back and pinpoint this time as marking the beginning of a return to some moneyness in silver.
The weeks before had seen the Fed ease monetary policy. On 3 March, the Fed cut its funds rate from 1 ½% to 1%. In the accompanying announcement the Fed said that the fundamentals of the economy remained strong, but the coronavirus posed evolving risks to the economy.
On 15 March, the Fed cut its funds rate again, this time to zero, but the statement now said the coronavirus had harmed communities and disrupted economic activity in many countries, including the US. On a twelve-month basis, overall price inflation and price increases for other than food and energy were running at below 2%. The Fed announced renewed quantitative easing of at least $500bn of Treasury purchases and $200bn of mortgage-backed securities “in the coming months”. It was “prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.”
That day the Fed made two other announcements. The first detailed arrangements for the encouragement of credit expansion to support both consumers and businesses, including the reduction of reserve ratios for all banks to zero. The second concerned the reduction of costs in drawing down USD swap lines at the other major central banks. They were followed over the course of the week by a series of announcements facilitating the availability of credit.
Clearly, the Fed was engaging the ultimate in aggressive monetary policies. And taking a phrase from the last head of the ECB, the Fed had signalled it was prepared to do whatever it takes without limitation. But the response in the markets took a week to develop into an inflection point, a normal pause before a new direction is found.
Central bank inflation and bank credit difficulties
Since the Fed is one step removed from the non-financial economy it relies on commercial banks to implement its monetary policy. But commercial banks will only act as the Fed’s agents if they are confident the rewards are greater than the risks involved. If the current crisis is simply a matter of the coronavirus being contained before everything returns to normal, then bankers might be prepared to take a punt on an increase of bank lending.
But as time passes, the losses mount. Business and consumer defaults are increasing, and the prospects for a rapid recovery appear to be receding. Furthermore, liquidity strains in the banking system are resurfacing, despite the massive injections of QE by the Fed. After subsiding from the panicky days of last September, overnight repos are on the increase again totalling anything between $20—$100bn daily.
It has been generally forgotten that the global economy was already facing a recession before the virus lockdowns. Trade wars between America and China and bank credit expansion having run for a decade were a repeat of the conditions that led to the Wall Street Crash in 1929, when the Smoot-Hawley Tariff Act following the roaring twenties was enacted, bank credit imploded, and the 1930s depression followed. Similarly, banks are now highly leveraged on their balance sheets and fear of bad debts has taken over from lending greed. The global banking cohort is increasingly desperate to reduce balance sheet commitments at the same time as the Fed and other central banks are frantic to see them expanded.
It is no wonder that the Fed’s expansion has remained bottled up in financial markets, driving financial assets even further into dangerous overvaluation territory. Consequently, without liquidity flowing more freely into the non-financial economy, bad debts can only deteriorate further, with loan risk rapidly increasing for commercial banks.
Systemic issues are being ignored
When the coronavirus first became an economic issue, there were mounting concerns over payment failures in supply chains. In the US, these payments are effectively the equivalent of gross output, which at the end of last year was running at $38 trillion. While we regard gross output as the value of products as they flow through their production stages, the payments flow the other way, back down the chains. Therefore, the $38 trillion figure can be taken as proxy for the sum of all supply chain payments in the US, to which must be added the dollar equivalents of supply chain payments outside the US for semi-manufactured imports.
Not all supply chains have been completely disrupted, so the good news is payment disruptions onshore should be significantly less than $38 trillion but could easily be half that. But there is likely to be additional disruption from abroad, a point addressed by the Fed when it increased the number of central banks (but not China) having access to its swap lines.
The risks to commercial banks are not so much from the largest corporations, likely to be bailed out if in trouble, but from lower tiers of borrowers. This affects banks with exposure to collateralised loan obligations, which are bundled loans to companies often unable to raise funds any other way — today’s version of the collateralised debt obligations that blew up the banking system in 2008. Additionally, banks have direct loans and revolving capital exposure on their balance sheets with all businesses in the $38 trillion of onshore supply chains.
The market capitalisation of the US’s G-SIBs — global systemically important banks — is less than a trillion dollars. Yet the supply chain failures that they are expected to backstop are many trillions — multiple times their market capitalisation, and even of their balance sheet equity.
It seems hardly possible that the US banking system will survive the current supply chain disruption without help. The added bad news is that the US G-SIBs are rated much more highly in stock markets than their Chinese, Japanese, Eurozone, Swiss and UK competitors, shown in Figure 1 above. It indicates that a systemic failure in dollar-denominated financial markets is not widely expected, given the generally higher market ratings afforded to US G-SIBs than for those in other jurisdictions. This probably explains why this topic is not yet a significant issue for dollar investors, though individual bank failures are more obviously an issue in other jurisdictions, where some G-SIB price to book ratios are below 30% while those of US G-SIBs average 93%.
The next significant event therefore will almost certainly be the failure of a G-SIB, if not in America, then elsewhere. Given the sheer scale of the problems in supply chains in all currencies and the accumulating bad debts attributable to lockdowns it could happen in a matter of weeks. Presumably, failing banks will be taken into public ownership with the Fed backstopping it with yet more inflationary finance. The impact on the Fed’s balance sheet, which has already grown to over $7 trillion will probably be several times its current size. But that, on its own, may not be enough to destroy the dollar.
A more direct danger is posed from monetary policies aimed at supporting financial asset values. In common with other major central banks the Fed has become reliant on a policy of ultra-low interest rates to fund its government’s deficit. At the same time, there has been a longstanding belief, particularly in America, that rising prices for financial assets, chiefly stocks, have been vital to generate a wealth effect and therefore maintain public confidence in the economic outlook. In current markets, this overvaluation policy has been taken to extremes with even teenagers reportedly buying fractionalised stocks through aggregating platforms, such as Robinhood, as if it is a just another computer game.
The dollar’s inevitable descent
In more normal times the excessive speculation in the markets seen today would encourage the Fed to inject some caution into monetary policy; but the Fed cannot backtrack for fear of triggering a catastrophic collapse. Consequently, the future of the dollar has become firmly tied to that of confidence in financial markets.
With a rapidly escalating budget deficit the US Government has a growing funding requirement, the cost of which already absorbs $400bn in interest charges annually. The Trump administration had increased its deficit to record levels in the good times when tax revenue was buoyant. And now the crisis has hit, higher interest rates will expose the US Government to a debt trap. This is a weapon the Fed cannot use.
As noted above, the next market shock is likely to be a systemic failure in the banking system. It matters not where that occurs, but when it does it makes bank depositors autarkic. Not only do they withdraw funds from banks they deem to be at risk thereby increasing their problems, but they also reduce cross-border currency exposure. The dollar is most exposed of all currencies to the latter risk: on last known figures foreigners owned about $25 trillion in securities, short-term paper and bank deposits, while Americans held roughly half that invested mainly in illiquid production facilities abroad, limited portfolio exposure to listed securities and with very little liquid foreign currency exposure.
In our headline chart we noted that the dollar’s turning point was 23 March and its subsequent downturn was part of a bigger commodity picture with gold, silver, copper and — belatedly — oil prices rising. In March, US TIC data showed that foreigners reduced their dollar exposure by $227.9bn, only offset by US residents’ net sales of foreign securities of $133.3bn.[ii] Here is the evidence that in troubled times money heads for home. Additionally, that month saw a trade deficit of $44.4bn suggesting total foreign-related dollar selling amounted to $177.7bn. This is only part of a bigger dollar picture, but it does appear foreigners were reducing their dollar exposure at the time that the dollar’s TWI peaked on 23 March.
This is important, because there are two market factors that have always led to a fiat currency collapse. The first is selling by foreigners, which appears to have commenced, and in this respect the dollar is particularly exposed. With some $25 trillion invested in US securities etc., the potential destruction to the dollar’s purchasing power from this source is significant. As global trade shrinks further, not only will foreigners be driven by the need to redeploy dollars into their currencies of origin, but they will stop funding the US Government, choosing to sell down their US Treasury holdings, a process which has already started. If the Fed is to successfully fund the growing budget deficit it must absorb foreign sales of US Treasuries as well as maintain sufficient levels of QE to fund a rapidly increasing budget deficit.
Just imagine the consequences of a systemic failure. The spell cast over financial assets will be broken. First, investors and speculators are likely to turn their attention to equities, being obviously the most overvalued financial assets at a time of intensifying crisis. Foreign investors will join, selling down their portfolio exposure, repatriating some, if not all of the proceeds by selling dollars as well. Next, with a falling dollar and a growing sensitivity to the political aspect of the crisis, market participants will reassess the US Government’s funding requirements and question the yield suppression policy of the Fed. Dollar selling seems bound to intensify.
It will then become obvious to everyone that the Fed is sacrificing the dollar in order to fund the government, keep the banking system going and to support the economy by attempting to provide the liquidity to defray supply chain failures. It will already be demonstrably failing to support financial asset prices, which has become the visible manifestation of a successful monetary policy. It would be a miracle if this failure, in Trump’s election year with a socialistic president being lined up by the Democrats, does not lead to a full-blown financial and dollar crisis.
Unless the Fed can raise interest rates to the point where it is too expensive for speculators to short the dollar (which we can rule out), it will enter the second phase of its collapse, driven by US residents realising the dollar is losing purchasing power, rather than prices rising. The purchasing power of any money depends on the balance between money and goods maintained by its users. If they collectively reject the money in favour of goods, then money’s purchasing power declines, potentially to zero. Following foreign selling, this is the second phase of the destruction of a fiat currency, which in past examples have taken roughly six months for it to become worthless.
There are three factors that could shorten this timescale even further: the replacement of cash and cheques by digital payments, modern communications leading to the rapid spread of information, and as a consequence of the development of cryptocurrencies, wider public foreknowledge of the weaknesses of unbacked fiat currencies.
The case for fiat currency survival beyond 2020
The circumstantial evidence that the dollar will collapse before the year-end is mounting. Cassandra opened her casket, the evils escaped, and only hope remains trapped.
Or so it seems. We cannot divine the future. We can only sift the evidence, be aware of common fallacies and avoid the temptation to wrongly extrapolate from yesterday into the future. While our method may be better than the macroeconomic forecasting beloved of the establishment, a predicted outcome is never reality. And it is possible the US Treasury might attempt a reset, perhaps using Treasury dollars, otherwise known as greenbacks, which were last issued in 1971. But without axing government welfare commitments to the American public, returning to balanced budgets and abandoning Fed dollar denominated debt this sort of legerdemain is unconvincing. Furthermore, the dollar’s reserve role for other currencies would have to be abandoned because of the monetary inflation involved in Triffin’s dilemma. And other currencies tied to the Fed’s dollar held in their reserves would still face their own collapse.
A reset abandoning the Fed’s dollar in favour of greenbacks is possible. But history has shown that the introduction of a replacement currency for one that has collapsed fails unless government financing by monetary expansion is demonstrably abandoned. Only time will tell whether in a presidential election year the US Government musters the clarity of purpose to implement a new lasting dollar regime.
The US Treasury says it still has over 8,000 tonnes of gold. If it is willing to drop its neo-Keynesian economics and its long-standing denial of gold’s monetary function, America could reintroduce gold convertibility for the greenbacks. This would probably be a last resort. It reneges on the Fed’s balance sheet note — which in these conditions would be its only significant asset, involves the abandonment of the welfare state and America’s longstanding geopolitical aims, and it allows China to gain potential advantage by displacing the dollar with a more convincing gold convertibility of its own.
China has deliberately cornered the gold bullion market in plans that go back to the time of Deng. Almost certainly, following the introduction of its Regulations on the Control of Gold and Silver (1983), the Chinese state accumulated sufficient gold for its strategic purposes by the time it then permitted its citizens to buy gold with the opening of the Shanghai Gold Exchange in 2002. The gold acquired by the state at that time is not declared as monetary gold and the quantity is unknown, but after examining inward investment flows net of trade deficits in the 1980s and growing export surpluses subsequently, a ten per cent allocation of foreign exchange gained into gold at contemporary prices suggests a position of some 20,000 tonnes of bullion was likely to have been accumulated by 2002.
There is no way of establishing the facts, and therefore statements about the Chinese state’s ownership of bullion are necessarily speculative. But additional evidence is compelling:
China is now the largest gold mining nation by far, extracting an estimated 4,200 tonnes since 2010, more than any other nation. This has been driven by government policy.
The state controls all Chinese gold and silver refining, taking in doré from abroad to add to Chinese stocks. At the same time, virtually no Chinese refined gold kilo bars are permitted to leave the country.
In 2002, when the Shanghai Gold Exchange was set up by the Peoples’ Bank of China the Chinese government encouraged its nationals to acquire physical gold, even advertising its attractions in state media. Since 2010 alone, 17,200 tonnes have been delivered into public hands by the SGE. These figures were achieved by importing bullion from the West in enormous quantities.
Its allies in Asia, principally members of the Shanghai Cooperation Organisation, have also been acquiring gold. Russia has been particularly aggressive in dumping dollars for gold.
China now dominates physical gold markets and can be said to control them.
Given all these verifiable facts, it seems unlikely that a state which centrally plans would not have acquired for its own use substantial quantities of bullion ahead of the establishment of the SGE. America knows it and continues to resist gold having a monetary role. If America’s anti-gold policy changed, it would restrict the dollar’s circulation abroad. It would mark the end of dollar hegemony and a gold-backed yuan would become the foreign currency of choice throughout Asia, eastern Europe, the Middle East and Africa.
Conclusions and consequences
A banking crisis in the coming weeks is an increasingly likely event, given the scale of disruption to supply chains. The escalation of bankruptcies and of non-performing loans worldwide will almost certainly take the banking system down. It will be a watershed, a wake-up call to all those who expect a return to normality after the coronavirus passes.
For the moment, central banks are throwing money at the problem; money which remains stuck in financial assets, inflating them even further, and not being transmitted to the non-financial economy by banks already over-leveraged to failing borrowers.
We can be certain central bankers and government treasury departments are only now grasping the enormity of these problems, but they are still behaving as if chucking money at them is a viable solution. They will only destroy their unbacked fiat currencies, and that destruction, starting with the dollar, is already in progress. The clock is ticking from 23 March. While there may be attempts at a fiat money reset, without clear legal commitments from central banks and treasury departments to end inflationary financing, any reset will only delay currency destruction by a matter of months.
The consequences of such an outcome are always devastating, the more so because all major westernised central banks are committed to the same inflationary policies at the same time. The political consequences do not bear thinking about.
At some stage, hopefully sooner rather than later, metallic money will regain circulation. And when prices are set in gold or silver, perhaps through fully backed substitutes, the stability they bring will end the trappings of fiat currencies. All this destruction is measured in current terms, nearly all from statistics collected by the Bank for International Settlements.
Gone will be worldwide fiat currency debt, amounting to some $250—$300 trillion. Gone will be all OTC derivatives which settle in fiat, amounting to a further $560 trillion. Gone will be listed derivatives, a further $33 trillion. Gone will be options, a further $65 trillion. All these, totalling over $900 trillion, are only part of the destruction.
Global deposits held as bank balances totalling $60 trillion will evaporate. Worldwide equity markets denominated in fiat are a further $70 trillion; anything that does not migrate from fiat pricing disappears, including most, if not all ETFs. Goodbye to hedge funds. Goodbye to offshore financial centres. Goodbye to onshore financial centres. Goodbye to $100 trillion of fiat money.
Life will be very different, and those not prepared for it, principally by retaining a store of non-fiat, sound money, which can only be physical gold and silver until credible substitutes arise, will face impoverishment. Measured in real money, the value of non-financial physical assets will collapse due to the preponderance of desperate sellers to whom survival is most important, even though priced in worthless fiat their prices will have risen. The experience of inflationary collapses in Germany and Austria in the early 1920s showed the way, when country estates went for almost nothing in gold-back dollars and $100 would buy a mansion in Berlin.
None of this is expected. It may not happen, but the chances of it happening appear to have increased significantly from 23 March.
via ZeroHedge News https://ift.tt/3fBEi0k Tyler Durden
Trump Admin To Name Most Recipients Of Bailout Loans Tyler Durden
Fri, 06/19/2020 – 22:23
When the government said it would give out thousands of dollars in bailout loans grants under the Paycheck Protection Program, every eligible business – which was most small and medium businesses (that had no access to capital markets) with up to 500 employees, signed up. And why not: it was free money from a government that had launched helicopter money, and was seeking to ram the newly created money into the economy. There was no downside – the grants would be forgiven if used to pay wages or rent, and – at least according to widespread speculation – the loans would remain a secret. Which is why it was so surprising when it emerged that some “asset managers” such as Ritholtz Asset Management, led by Josh Brown and Barry Ritholtz, had also accepted bailout grants to stay in business. In retrospect, Ritholtz is the author of Bailout Nation so it probably should not have been a surprise.
What should have been a surprise is that an asset manager – i.e., a professional collecting generous fees to predict the future and entrusted with billions in capital not only failed to do that, but himself needed a bailout. It just goes to show how important it is to pick very calm and patient clients.
Of course, we can’t blame them: like most other recipients, Ritholtz probably expected that his name would never see the light of day, even though technically he used taxpayer money to prop up his company. And since it is taxpayer money, everyone has a right to know how it would be used.
Only in the case of just over half a trillion dollars in PPP grants that wasn’t the case, because for nearly 3 months after the PPP program was launched, Treasury Secretary Steven Mnuchin persisted in keeping the names of all recipients secret, much to the growing anger of those who effectively funded the loans.
That all changed late on Friday, when Bloomberg reported that the Trump administration said it would disclose details about companies that received loans of $150,000 or more from a coronavirus relief program for small businesses, following a backlash against its earlier refusal to release data about which firms got billions of dollars in government aid. Eleven news organizations had sued to make details about PPP loan recipients public.
Which is bad news for all those “financial advisors” like Ritholtz who will soon be revealed as getting paid to “predict” the future, yet not having the sense to even budget for a short-term crisis, let along have hedges in place for a downside scenario. As for the rest, it’s unclear how willing most small businesses would have been had they known that the very act of requesting a bailout would open them up to eventual public shaming.
The company names, addresses, demographic data and other information will be disclosed in five ranges starting with $150,000 to $350,000 and going up to between $5 million and $10 million, the Treasury Department and Small Business Administration said in a joint statement.
For loans below $150,000, only totals will be released aggregated by zip code, by industry, by business type, and by various demographic categories, the agencies said. The loans above $150,000 account for almost 75% of the total loan dollars approved, they said. It wasn not clear when the data would be released.
According to the latest SBA data, loans had been approved for almost 4.7 million small businesses totaling $514.5 billion. As of June 12, there were 3.9 million loans of less than $150,000 totaling $136.7 billion and almost 650,000 larger loans worth $375.6 billion.
* * *
Lawmakers had been demanding the disclosure of details about Paycheck Protection Program loans after Treasury Secretary Steven Mnuchin said at a Senate committee hearing on June 10 that the names of companies that received forgivable loans and the amounts were proprietary or confidential – even though as Bloomberg notes, the administration had previously said the details would be disclosed, and the PPP application says such data will “automatically” be released.
Officials had expressed concerns about releasing the details because a company’s payroll is used to determine the loan amount, and some independent contractors and small businesses use their home addresses that would be disclosed.
“I am pleased that we have been able to reach a bipartisan agreement on disclosure which will strike the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors, and independent contractors,” Mnuchin said in a statement.
Critics said the public has a right to know how taxpayer dollars were used and that more detail was needed to know whether PPP was serving businesses that need help.
“The administration’s decision to hide basic PPP loan data is a disturbing sign of its lack of concern for who gets this funding, how much they receive or why,” House Speaker Nancy Pelosi said in a June 12 statement. “The administration must immediately reverse this decision and uphold its obligation to release this data.”
Republican Senator Marco Rubio of Florida, chairman of the Small Business & Entrepreneurship Committee, said the public deserves to know how effective the PPP has been, but that there are legitimate concerns about disclosing information about small firms. “Today’s announcement strikes a balance between those concerns and the need for transparency,” Rubio said in a statement.
Lawmakers have also called on Treasury and the SBA to provide details about its coronavirus relief loans to the Government Accountability Office, which is preparing a report about how relief dollars were spent.
via ZeroHedge News https://ift.tt/2YfWkiT Tyler Durden
We should all be prepared for what’s coming next. In order to prepare effectively, we need to know what will happen when the economy finally collapses under its own weight. The creation of money out of thin air could only go on for so long, and we are approaching the end.
Epic Economist put together a great video detailing the 15 things (and yes, some are a little scary) that will happen when the economy collapses. At this point in time and history, it is no surprise that an economic collapse is coming for us. When the world’s largest economy is deep down in a recession, many other countries will not be late to follow the same path.
The financial breakdown the world is about to face over the next few years will be an unprecedented catastrophe, especially considering that the underlying problems from previous crashes were never fixed, only mended together. A real repair would require a complete restructuration in the system, and the elites were never interested in fixing the system that they set up to screw the rest of us.
These are the 15 things that will happen that you should be prepared for:
1 -Fuel Shortages, or rationing of fuel
2 -Carjackings rise
3- Interstate Trucking is compromised, limiting the supply of essential goods
4-Defaults in garbage disposal and urban sanitation
5- Food scarcity, a disruption in food supply chains
6-Water quality drops
7-The population gets on survival mode, one example of this could be the slaughtering of zoo animals for food.
8-Pets go missing
9-Civil agitation leads to turbulence in the streets
10-Attacks become more frequent
11-Kidnappings Increase
12-Gang Activity Increases
13-Banks Close
14-Hospitals become Overloaded
15-Martial Law Enacted
Knowing that these things are likely to happen when the economy collapses should help give you an idea of what you’re going to need to be prepared. Make sure you know how to defend yourself and your family. Make sure you have a way to filter water. You will need to be able to avoid crowds and live on your own, potentially off the grid. Become self-reliant and do not put your faith in the system. Most people are still desperately fighting to keep the system intact in spite of the awareness that it’s rigged and corrupt. Instead, leave the system, put your faith in yourself, improve critical thinking skills, and create your back up plans.
via ZeroHedge News https://ift.tt/3hK5Jam Tyler Durden
Majority Of Americans Oppose Renaming Military Bases & Reparations: ABC/Ipsos Poll Tyler Durden
Fri, 06/19/2020 – 21:35
The recent George Floyd protests and riots have triggered broader debates of everything ranging from removal of Confederate monuments and statues, to renaming Confederate military bases and even memorials to American founding fathers, especially ones that had connections to slavery.
In the latest controvery, for examples, New York City council members are pushing to remove a long-standing Thomas Jeffeson statue from city hall. As statues across the country continue to be subject to vandalism and in some cases toppling, there’s yet to be little public debate or surveying of the American people.
One new poll conducted by ABC News and Ipos released Friday, however, suggests the wave of removals and ‘renamings’ remains unpopular on a national level. At a moment iconic base names like Fort Bragg and Fort Hood could be on the chopping block with enough political momentum gained, a majority of Americans oppose the renaming initiative. The Pentagon is said to actually be considering it.
XVIII Airborne Corps Headquarters sign at Fort Bragg, N.C., US Army image.
“While 56% are opposed to changing U.S. military bases named for Confederate leaders, which stand as a reminder of the nation’s complicated history with race, 42% of Americans support the move,” ABC reports of the poll conducted among 727 adults from June 17 to 18.
The survey further asked about reparations for slavery: “Nearly three-fourths of Americans believe that the federal government should not provide payments to black Americans whose ancestors were slaves to compensate for the toll of slavery. Only 26% of Americans are in favor of reparations,” the poll found.
56% are against renaming military bases that currently bear the name of Confederate leaders. Party-wise, 71% of Democrats support changing the names, while 13% of Republicans and 40% of independents do.
73% said they oppose the federal government paying black Americans whose ancestors were slaves. 54% of Democrats are in favor of reparations, while 94% of Republicans and 82% of independents are against the practice.
63% said they support a ban on police officers using chokeholds.
The poll further found thatamong black Americans, 67% surveyed want to see the bases renamed.
The broader unpopularity of things like base name changes could be why in many instances Black Lives Matter protesters are taking matters in their own hands and defacing and toppling statues linked to the Confederacy.
16 Statues And Memorials Were Damaged During Sunday’s Protests, Including One Dedicated To African American Soldiers https://t.co/oSlN9cZ1WO via @wburartery
However, as we’ve recently noted, any colonial era or even 19th century historical figures are being attacked, even well-known abolitionists in a few cases.
via ZeroHedge News https://ift.tt/2Nf5czi Tyler Durden
