The Pentagon confirmed this week that it has, for the first time, armed some of its submarines with long-range nuclear missiles which have a lower destructive power compared with existing warheads. These so-called “mini-nukes” represent – despite the diminutive-sounding name – an increased risk of nuclear war.
The newly deployed W76-2 warhead fitted to the Trident missile system is reported to have an explosive yield of five kilotons, or about 1 per cent of the existing W76-1 weapon. The supposed lower-yield weapon is nevertheless an instrument of immense mass destruction, equivalent to approximately a third of the power of the bomb the US dropped on Hiroshima in August 1945 which killed tens of thousands of people. That puts in perspective the seemingly more usable “mini-nuke” missile.
However, with Dr Strangelove-type logic, Pentagon official John Rood, claimed
…the new device “would make Americans safer because it would deter the danger of nuclear war happening.”
He also reportedly cited the weapon as a deterrent against alleged Russian aggression. (It is lamentable, if not absurd, how American officials incorrigibly portray Russia as a bogeyman. When will they ever evolve?)
The official US reassurance is not the view of the US-based Bulletin of Atomic Scientists who said the deployment of such weapons actually increases the risk of an eventual nuclear war. This is because the lower-yield W76-2 launched from US Ohio-class submarines will be indistinguishable from the existing Trident warheads. Therefore the danger of escalation to all-out nuclear war is increased.
Russia also condemned the US move. Sergei Ryabkov, Deputy Foreign Minister, said:
“The US is actually lowering the nuclear threshold and conceding the possibility of waging a limited nuclear war and winning this war… this is extremely alarming.”
What is doubly perplexing is the wider context in which the Trump administration has abnegated arms controls treaties. Last year, the administration walked away from the Intermediate-range Nuclear Forces (INF) treaty, governing the use of short-range, or tactical, nuclear missiles. So far, Washington has shown every indication that it has no intention to extend the New START accord with Russia governing long-range strategic weapons, which is due to expire next year.
The deployment of low-yield nuclear weapons as part of the strategic arsenal is bound to destabilize the global strategic balance. Moscow has repeatedly warned that Washington is trying to incite a new arms race. It points to the undoing of arms controls treaties and the US weaponization of outer-space as evidence of such an agenda of provoking global insecurity.
It is tempting to speculate that the US is reacting to Russia’s development of hypersonic non-nuclear weapons which are said to be able to evade any anti-missile defense system. Moscow maintains that its arsenal is predicated on a doctrine of self-defense and not a first-strike objective. In any case, it seems that the US having realized that it has lost out to Russia in development of hypersonic non-nuclear weapons has taken the tack of expanding its nuclear options. That move overturns decades of declared non-proliferation commitments.
It should also be noted that this week the Kremlin disclosed that an urgent call issued by Russian President Vladimir Putin for the five permanent members of the UN Security Council to convene a summit in order to address international peace has so far been ignored by Washington. Last month, at a Holocaust memorial in Israel, Putin repeated a proposal for the UN founding powers – the US, Britain, France, Russia and China – to consolidate efforts for strengthening global security, non-proliferation and arms controls. This week, the Kremlin said this call has not received any response from the US (or the UK) to participate in such a forum.
Furthermore, next month sees one of the biggest-ever NATO war maneuvers in Europe, including a massive trans-Atlantic deployment of US forces. Russia’s Ministry of Defense has deprecated the huge mobilization as being akin to a rehearsal for an invasion of Russia.
President Donald Trump has previously stated his abhorrence of nuclear war and has called for negotiation of a new comprehensive arms control treaty between the US, Russia and China.
All empirical evidence shows that American rhetoric is completely and contemptibly detached from the reality of its threatening practices. The world is moving towards more insecurity and risk of catastrophic war. And the fault of that damnable dynamic lies entirely with Washington.
This new interest rate climate has many observers wondering where the bottom truly lies.
Today’s graphic from Paul Schmelzing, visiting scholar at the Bank of England (BOE), shows how global real interest rates have experienced an average annual decline of -0.0196% (-1.96 basis points) throughout the past eight centuries.
The Evidence on Falling Rates
Collecting data from across 78% of total advanced economy GDP over the time frame, Schmelzing shows that real rates* have witnessed a negative historical slope spanning back to the 1300s.
Displayed across the graph is a series of personal nominal loans made to sovereign establishments, along with their nominal loan rates. Some from the 14th century, for example, had nominal rates of 35%. By contrast, key nominal loan rates had fallen to 6% by the mid 1800s.
Starting in 1311, data from the report shows how average real rates moved from 5.1% in the 1300s down to an average of 2% in the 1900s.
The average real rate between 2000-2018 stands at 1.3%.
Current Theories
Why have interest rates been trending downward for so long?
Here are the three prevailing theories as to why they’re dropping:
1. Productivity Growth
Since 1970, productivity growth has slowed. A nation’s productive capacity is determined by a number of factors, including labor force participation and economic output.
If total economic output shrinks, real rates will decline too, theory suggests. Lower productivity growth leads to lower wage growth expectations.
In addition, lower productivity growth means less business investment, therefore a lower demand for capital. This in turn causes the lower interest rates.
2. Demographics
Demographics impact interest rates on a number of levels. The aging population—paired with declining fertility levels—result in higher savings rates, longer life expectancies, and lower labor force participation rates.
In the U.S., baby boomers are retiring at a pace of 10,000 people per day, and other advanced economies are also seeing comparable growth in retirees. Theory suggests that this creates downward pressure on real interest rates, as the number of people in the workforce declines.
3. Economic Growth
Dampened economic growth can also have a negative impact on future earnings, pushing down the real interest rate in the process. Since 1961, GDP growth among OECD countries has dropped from 4.3% to 3% in 2018.
Larry Summers referred to this sloping trend since the 1970s as “secular stagnation” during an International Monetary Fund conference in 2013.
Secular stagnation occurs when the economy is faced with persistently lagging economic health. One possible way to address a declining interest rate conundrum, Summers has suggested, is through expansionary government spending.
Bond Yields Declining
According to the report, another trend has coincided with falling interest rates: declining bond yields.
Since the 1300s, global nominal bonds yields have dropped from over 14% to around 2%.
The graph illustrates how real interest rates and bond yields appear to slope across a similar trend line. While it may seem remarkable that interest rates keep falling, this phenomenon shows that a broader trend may be occurring—across centuries, asset classes, and fiscal regimes.
In fact, the historical record would imply that we will see ever new record lows in real rates in future business cycles in the 2020s/30s
-Paul Schmelzing
Although this may be fortunate for debt-seekers, it can create challenges for fixed income investors—who may seek alternatives strategies with higher yield potential instead.
One patient, admitted to a hospital in Wuhan, China, infected at least 10 health care workers and four other patients [actual suspect total is 57 see study below].
The patient who infected so many health workers had been placed in a surgical ward because of abdominal symptoms, and the coronavirus was not initially suspected. Four other patients in that ward also contracted the disease, presumably from the first patient.
The incident was a chilling reminder of the “super-spreaders” in outbreaks of other coronavirus diseases, SARS and MERS — patients who infected huge numbers of other people, sometimes dozens. The phenomenon is poorly understood and unpredictable, an epidemiologist’s nightmare. Super-spreaders led to considerable transmission of MERS and SARS inside hospitals.
Super-Spreader Infects 40 Health Care Workers
The JAMA Report, published on Friday, is among the most comprehensive articles to date about people infected with the newly identified virus.
Of the 138 patients, 57 (41.3%) were presumed to have been infected in hospital, including 17 patients (12.3%) who were already hospitalized for other reasons and 40 health care workers (29%). Of the hospitalized patients, 7 patients were from the surgical department, 5 were from internal medicine, and 5 were from the oncology department. Of the infected health care workers, 31 (77.5%) worked on general wards, 7 (17.5%) in the emergency department, and 2 (5%) in the ICU. One patient in the current study presented with abdominal symptoms and was admitted to the surgical department. More than 10 health care workers in this department were presumed to have been infected by this patient. Patient-to-patient transmission also was presumed to have occurred, and at least 4 hospitalized patients in the same ward were infected, and all presented with atypical abdominal symptoms. One of the 4 patients had fever and was diagnosed as having nCoV infection during hospitalization. Then, the patient was isolated. Subsequently, the other 3 patients in the same ward had fever, presented with abdominal symptoms, and were diagnosed as having nCoV infection.
The data in this study suggest rapid person-to-person transmission of 2019-nCoV may have occurred. The main reason is derived from the estimation of the basic reproductive number (R0) based on a previous study.
In this single-center case series of 138 hospitalized patients with confirmed NCIP in Wuhan, China, presumed hospital-related transmission of 2019-nCoV was suspected in 41% of patients, 26% of patients received ICU care, and mortality was 4.3%.
JAMA Video
“Fatality rate in a normal Flu is about 0.1%. When you get into the pandemics, of 1957 and 1968, it goes up to 0.8% to 1.2%. The 1918 pandemic, the famous Spanish Flu, you go up to as much as 2.0%…
I think I can say we don’t know everything about this virus, but it is evolving in a way that it looks like it is adapting itself to infecting much better but we are going to start seeing a diminution in the overall death rate…
The r0 of this one is supposedly somewhere around 2.0, 2.5, 3.0 depending upon how you model it. Which means that it is a virus that is quite good at transmitting from one person to another.“
You have to laugh… China’s virus mortality data is as massaged as its GDP and PMIs…
Or Not Enough Test Kits?
The numbers of new #coronavirus cases out of China remain relatively linear, varying from day to day within a narrow band. Tonight’s update is no different. It suggests that testing capacity may be influencing the reported cases more than epidemiology.
Downtown of Shanghai, a city with 24 million people and it is totally empty!
China ignores offers of help from the C.D.C. and W.H.O.
China probably wants and needs US assistance, but it absolutely does not want US reporting or any investigation into the alleged number of deaths.
The streets in Shanghai, population 24 million, are empty.
60 million people are quarantined not even able to leave their houses. That is equivalent to no one in California, Illinois, and Wisconsin being locked in, unable to go to work. The economic hit will be enormous.
I just cannot believe this would happen over the reported 700 dead.
Syria & Russia Publish Evidence Of US Weapons Recovered In Idlib ‘Terrorist Enclave’
The Syrian Army is making major gains inside Idlib in a military offensive condemned by Turkey and the United States, over the weekend capturing the key town of Saraqib from al-Qaeda linked Hayat Tahrir al-Sham.
Amid the military advance, the Syrian and Russian governments say they’ve recovered proof of US support for the anti-Assad al-Qaeda insurgent terrorists, publishing photographs of crates of weapons and supplies to state-run SANA:
Syrian Arab Army units have found US-made weapons and ammunition, and medicines made in Saudi Arabia and Kuwait at the positions and caches of terrorist organizations in the towns of Mardikh and Kafr Amim in Idleb southeastern countryside after crushing terrorism in them.
Syrian reporters say they were recovered in newly liberated areas of southeastern Idlib province, where army units “found weapons, ammunition and US-made shells and Grad missiles left behind by terrorists at their positions in the town of Kafr Amim after they fled from the area after the advancement of the army.”
The Russian Embassy in Syria also circulated the photos on Saturday, saying there were some “interesting findings” in areas that were controlled by terrorists:
For years since nearly the start of the war in 2011 and 2012, Damascus and Moscow have repeatedly offered proof of US weaponry in the hands of jihadist terrorist groups, including ISIS.
Meanwhile, in the past days the US State Department has issued repeat warnings to Damascus that it must halt its joint offensive with Russia – going so far as to release a new video framing the operation as an attack on civilians.
The US State Dept has issued a propaganda video that warns against any assaults on #Idlib & promises to “use all its power to oppose normalization of the Assad regime into the int’l community”. This is the US playing a part in supporting Al-Qaeda’s war effort in #Syria. pic.twitter.com/jyb8zHPzBZ
The US has charged that Damascus is harming “peace” in Idlib despite the fact that as of 2017 the US Treasury had quietly designated the main anti-Assad group in control of Idlib, Hayat Tahrir al-Sham, as a terrorist organization.
At the same time, top Turkish and Russian officials held high level talks in Ankara on Saturday over the worsening humanitarian crisis in Idlib.
Turkey fears the fallout and strain of the hundreds of thousands of refugees now fleeing Idlib toward the Turkish border, while Russia has charged that Erdogan has failed in his promises to bring neutralize terrorist groups, who have even begun attacking civilians deep inside of neighboring Aleppo province.
This article on Grist (h/t to James Taylor, The Heartland Institute) tries to point out how “terrible” the last decade was due to “climate change”. They write:
As this hottest-on-record, godforsaken decade draws to a close, it’s clear that global warming is no longer a problem for future generations but one that’s already displacing communities, costing billions, and driving mass extinctions. And it’s worth asking: Where did the past 10 years get us?
The seven charts below begin to hint at an answer to that question. Some of the changes they document, like the concentration of carbon dioxide in the atmosphere and the number of billion dollar disasters that occur each year, illustrate how little we did to reduce emissions and how unprepared the world is to deal with the warming we’ve already locked in.
We can also provide 7 charts that illustrate the last decade of climate change, and they tell a different story…
What they say:1. Atmospheric carbon dioxide rose by about 25 parts per million.
There’s no disputing that ambient CO2 has gone up in the atmosphere, however, that isn’t necessarily a bad thing. NASA, for example has this to say about the effects of that increased CO2 in study about CO2 and greening derived from satellite data.
From a quarter to half of Earth’s vegetated lands has shown significant greening over the last 35 years largely due to rising levels of atmospheric carbon dioxide, according to a new study published in the journal Nature Climate Change on April 25 2016
“We were able to tie the greening largely to the fertilizing effect of rising atmospheric CO2 concentration by tasking several computer models to mimic plant growth observed in the satellite data,” says co-author Prof. Ranga Myneni of the Department of Earth and Environment at Boston University.
“The greening over the past 33 years reported in this study is equivalent to adding a green continent about two-times the size of mainland USA (18 million km2)…”
It seems the Earth’s biosphere is responding to increased CO2 in a positive way, that’s also undeniable.
What they say:2. Climate change got expensive.
They cite this graph (produced by the Grist magazine):
And they say:
One of the best-established consequences of global warming is that it makes natural disasters, like fires and floods, more frequent and severe. In the 2010s, the costs of this consequence came into sharp focus as billion-dollar disasters struck the United States again and again.
But, that’s not true when you look at normalized weather disaster costs:
It appears that 2019, is on track to continue the record of good news. Robert Muir-Wood of RMS, a leading catastrophe modeling firm, wrote a month ago “Almost three months ago we passed a remarkable record in catastrophe loss. And yet no one seems to want to celebrate it. No banner headlines in the newspapers. . . The first half of 2019 generated the lowest catastrophe insurance loss for more than a decade.” Muir-Wood labelled 2019 “the year of the kitten.” With two months left, cross your fingers.
What they say:3. More people accept the basic premises that it’s getting hot and that it’s our fault.
Well, you might think that if you believe the highly adjusted temperature data published by NASA GISS and [University of East Anglia’s Climate Research unit] on climate (ground zero for the embarrassing and revealing Climategate affair in 2009).
But when you look at unadjusted data, such as is produced by the state-of- the-art United States Climate Reference Network (USCRN) operated by NOAA, you get a wholly different idea about temperature over the last decade:
That’s right, in the contiguous US, the temperature for 2019 was actually lower than for the start of the decade at 2010. The two peaks in 2012 and 2016 were from naturally caused El Nino events in the Pacific ocean. Granted, the USA isn’t the world, but the USA routinely gets blamed for all of the climate woes of the world, so the comparison seems a fair one. But really, where’s the climate crisis?
What they say:4. But there’s a widening partisan divide when it comes to worrying about the environment.
Well that’s true, Conservatives generally think things through and look at fact based evidence compared to the liberal side, which seems to “feel” issues far more than they critically examine them.
But when people of all stripes worldwide are polled about it, such as the United Nations does, it comes in dead last as a concern:
It seems people worldwide would rather have education, food, honest government, better roads, and reliable energy than they would some climate action.
What they say:5. Coal continued its death spiral.
Citing a Grist produced graph of data from the US Energy Information Administration (EIA) that they say depicts a “death spiral” for coal use, they say coal is on the way out.
Clayton Aldern / Grist
While that data is true, what they aren’t showing you is the rest of the story from the EIA:
What is really going on here is that natural gas is replacing coal because it is more efficient, less expensive to maintain, and has a smaller footprint. It’s really a market driven business decision rather than a nod to environmental concerns.
What they say:6. Solar skyrocketed, but fossil fuels still dominate.
Once again they cite a graph they produced from EIA data, and once again, it doesn’t tell the whole story.
Clayton Aldern / Grist
Gosh, it looks like the entire USA is being powered by solar energy! Hurray for environmentalism! Inconveniently, the reality is far different:
While renewables, including solar, have made gains, they still lag behind fossil fuels such as natural gas, crude oil, and coal in energy production in the USA. Without baseload (grid) generation by coal and natural gas, solar wouldn’t even work, since almost all solar installations are grid-tied – meaning that if the grid doesn’t have electricity, solar power can’t feed to it.
What they say:7. While coal flatlined, the price of renewables dropped precipitously.
I wonder what the price of renewables would be if they weren’t propped up by your tax dollars? According to EIA data, fossil fuels are still far less expensive:
The EIA estimates the two largest federal tax credit programs benefiting wind and solar paid out a combined $2.8 billion in 2016. These funds came through a tax credit worth 2.4 cents per kilowatt hour of power produced, as well as a deduction equal to 30 percent of a facility’s installation costs.
These two tax credits are set to expire at the end of 2021, though a permanent 10 percent investment tax credit for solar and geothermal installations would remain.
Global Air Freight Just Suffered Worst Year Since 2009
The International Air Transport Association (IATA) published a new report on Wednesday that showed global air freight markets declined in 2019, suggesting the global economy continues to decelerate.
Global air freight measured in freight tonne kilometers (FTKs), plunged 3.3% in 2019 over the prior year while available freight tonne-kilometers (AFTK) rose 2.1%.
IATA warned this was the first year of contracting freight volumes since 2012, and the slowest growth in the industry since 2009.
Cargo volumes dropped in December by 2.7 Y/Y, while capacity rose 2.8%.
The performance of air cargo is a reflection of a global synchronized slowdown that continues to deepen. Slowing GDP growth across major manufacturing-intensive economies has dented consumer confidence, led to falling export orders, and, in return, has hurt the air freight industry.
IATA said there are some signs that orders could bounce in 2020. It warned that a slowing global economy and coronavirus outbreak in Asia could lead to turbulence in 1H20.
“Trade tensions are at the root of the worst year for air cargo since the end of the Global Financial Crisis in 2009. While these are easing, there is little relief in that good news as we are in unknown territory with respect to the eventual impact of the coronavirus on the global economy. With all the restrictions being put in place, it will certainly be a drag on economic growth. And, for sure, 2020 will be another challenging year for the air cargo business,” said Alexandre de Juniac, IATA’s Director General and CEO.
Here’s IATA’s Regional Performance Report:
All markets except Africa suffered volume declines in 2019. Asia-Pacific retained the largest share of FTKs, at 34.6 percent. The share of freight traffic increased modestly for both North America and Europe, to 24.2 percent and 23.7 percent, respectively. Middle East carriers’ traffic share held steady at 13 percent. Africa and Latin America saw their shares lift marginally, to 1.8 percent and 2.8 percent.
Asia-Pacific carriers in December posted a decrease in demand of 3.5 percent compared to the same period a year earlier. Capacity increased by 2.8 percent. The full-year 2019 saw volumes decline 5.7 percent, the largest decrease of any region, while capacity increased by 1.1 percent. As the world’s main manufacturing region, international trade tensions and the global growth slowdown weighed heavily on regional air freight volumes in 2019. Within-Asia FTKs were particularly affected (down 8 percent compared to a year ago).
North American airlines saw volumes fall by 3.4 percent in December, while capacity grew by 2.1 percent. For 2019 in total, the region’s cargo volumes declined by 1.5 percent, compared to a capacity increase of 1.6 percent. Trade tensions and cooling US economic activity in the latter part of the year have been factors in the decline. The 5.6 percent fall in international year-on-year volumes in December was the weakest monthly growth outcome for the region since early 2016.
European airlines experienced a 1.1 percent year-on-year decrease in freight demand in December, with a capacity rise of 4.9 percent. The fall in December was typical of the performance for 2019 as a whole, where volumes fell 1.8 percent, but capacity increased by 3.4 percent. Softer activity, including in the manufacturing-intensive German economy, combined with ongoing Brexit uncertainty, contributed to the 2019 result, which in international freight volume terms was the weakest since 2012.
Middle Eastern carriers’ freight volumes decreased 3.4 percent year-on-year in December and capacity increased by just 1.9 percent, the lowest of any region. This contributed to an annual result of a decline in demand of 4.8 percent in 2019 – the second greatest decline in growth rate of all the regions. Annual capacity increased just 0.7 percent. Disruption to global supply chains and weak global trade, together with airline restructuring in the region, were the chief drivers of the weaker freight outcome.
Latin Americanairlines suffered the sharpest fall in demand of any region in December, of 5.3 percent. The region was also the only one to see a reduction in capacity (-3.1 percent). Although the region was the second strongest performer across 2019 as a whole, limiting its decline in volumes to just 0.4 percent, social unrest and economic difficulties in several key countries led to the weakest international FTK outcome since 2015. Annual capacity increased 4.7 percent.
African carriers’ saw freight demand increase by 10.3 percent in December 2019, compared to the same month in 2018. This was reflected in the strong 2019 full-year performance, which saw Africa freight volumes expand 7.4 percent. Capacity in December grew by 10 percent and for 2019 in total, increased by 13.3 percent. Over the year, air cargo volumes have been supported by strong capacity growth and investment linkages with Asia.
There is great concern (rightly) about the current Coronavirus and potential for a regional or global pandemic. The loss of life and associated deceleration of economic activity have a fair number of folks pretty concerned and market riggers working overtime to avoid an asset “panic” (aka, free market price discovery). However, how bad and widespread this may get is unknowable and speculative.
What is known before any pandemic is that the four regions of the world that make-up just 36% of global population but nearly 80% of global GDP (plus 80% of commodity / energy consumption) including East Asia (Japan, China, Taiwan, S/N Korea), Western Europe, Eastern Europe, and North America (US, Canada) all have declining under-60-year-old populations as of 2019.
As the chart below shows, all four regions are now in decline and the under 60 year-old declines are projected to continue and worsen through 2040 in all but North America. As for the US, the projections of a return to high rates of immigration and significant increases in fertility and births are unlikely to play out. North America’s under 60 year-old population is much more likely to hug the zero growth line through 2040 than return to growth.
Below is what this looks like on an annual change basis in millions of persons. Noteworthy is 2009 was the gateway from centuries of secular growth to what is now decades or perhaps centuries of secular decline. 2020 is really the jumping off point, as a period of minor under 60yr/old population declines ends, and the downside speed accelerates in these four regions (particularly China in East Asia). In 2020, the global population of consumers will decline by 5 million. By 2030, the decline will be “at least” 17 million annually. Why “at least”?
This data from the UN assumes birth rates and total births in these four regions far above what was observed in 2018 and 2019 and these UN assumptions of rising fertility and births is projected through 2040. Since 2007, birth rates and total births are significantly breaking to the downside, particularly in 2019… and the difference in these four regions was over 2 million fewer births in 2019 alone and the delta is only growing over time.
The actual declines in the under-60 population will likely be in excess of 20 million a year by 2030. Simply put, in 2020, we are looking at a 0.2% to 0.3% annual decline in consumers with the jobs, income, savings, and/or access to credit to consume. By 2030, the annual decline will be up to 0.7% to 0.8%. It is very hard to grow when you are shrinking…and all the poor and third world nations are dependent on the demand growth among these four consumer regions for their growth. You can see the problem (unless you are paid quite handsomely not to see it).
Strangely, the Federal Reserve and like central banks, in conjunction with federal governments, are making money ever cheaper with the aim of a continuation in global productive capacity…in the face of fast declining populations that do all the consuming.
We are officially in a period of fiscal lunacy in the face of depopulation among the global consumer base.
‘Bullets, Not Hugs’: Mexico Deploys Elite Marines To Fight Drug Cartels In Response To Pressure From Trump Admin
Mexican President Andrés Manuel López Obrador has deployed Mexico’s largely sidelined elite marine force to fight drug cartels, following pressure from the Trump administration to beef up its fight against illicit substances, according to the Wall Street Journal – which notes that the move marks a shift from a “counternarcotics strategy that largely ended the pursuit of high-profile arrests and focused almost exclusively on poverty alleviation.”
“We are operating again,” said one senior Mexican navy officer, adding “The targets we need to go after have been defined.”
Marines presented Joaquín “El Chapo” Guzmán to the media in Mexico City after his capture in 2014. He later escaped, and was recaptured in 2016. (Photo: ronaldo schemidt/Agence France-Presse/Getty Images)
The new strategy comes amid growing alarm in Washington that Mexico has failed to control the drug trade – highlighted by the November murder of nine US citizens by suspected cartel hit men. According to preliminary numbers, 2019 murders in Mexico are on track to exceed 2018’s record of 36,685, according to the report.
Spearheading the Trump administration’s push is US Attorney General William Barr, who has visited Mexico twice to encourage AMLO to bring the marines back to counternarcotics enforcement, as well as beefing up extraditions of suspects who have fled the US while wanted for crimes. In January, Barr urged the Mexican government to target fentanyl labs, as well as crack down on seaports used to deliver precursor chemicals used in the labs.
President Andrés Manuel López Obrador of Mexico, right, met with U.S. Attorney General William Barr at the National Palace in Mexico City in December.
In exchange for the enhanced crackdown, the US has agreed to step up efforts to prevent guns from being smuggled into Mexico, according to the Journal‘s sources.
The marines, the Mexican security force that U.S. officials say they trust the most, were behind most high-profile arrests and killings of cartel leaders in the past two decades, including twice capturing drug lord Joaquín “El Chapo” Guzmán.
The elite navy force was largely sidelined by Mr. López Obrador soon after he took office in late 2018, part of a strategy by the new government to halt the pursuit of top cartel figures and focus instead on attacking poverty—an approach it dubbed “hugs, not bullets.”
Last year, the marines took part in few counternarcotics operations. But in recent weeks, marine units have been involved in a flurry of high-profile arrests, including of the head of a Mexico City cartel and close relatives of two major drug lords. –Wall Street Journal
Mexico-city based security consultant Eduardo Guerrero told the Journal that the “Hugs, not bullets” approach is changing, and that he expects Americans ” to take a very proactive role in pushing Mexico to confront the most powerful groups, especially the Sinaloa and the Jalisco New Generation cartels.”
The Trump administration began increasing pressure on Mexico in November following the murders of three mothers and six of their children in a fundamentalist Mormon compound in the northern state of Sonora. Cartel gunmen reportedly ambushed the families while fighting for control of the area where the victims lived.
After the massacre, Mr. Trump said the U.S. would designate Mexico’s drug cartels as foreign terrorist organizations, a move that Mexico strongly opposed. Mr. Trump suspended the decision after Mr. Barr met with senior officials during a trip to Mexico in December. –Wall Street Journal
Barr’s visits have shown measurable results thus far, with Mexico stepping up the pace of extraditions (37 since December out of 58 in all of 2019) according to the Mexican Attorney General’s office.
A Filipino climate activist wrote an article for VICE saying that she left the environmental movement because it was too “white.”
Those awful white people and their…trying to save the planet!
“The climate movement is overwhelmingly white. So I walked away,” explains Karin Louise Hermes, accusing her fellow tree huggers of exploiting her for ‘woke’ token diversity points.
“After a while I realized I would only be called upon when climate organizations needed an inspiring story or a “diverse” voice, contacts for a campaign, or to participate in a workshop for “fun” when everyone else on the (all-white) project was getting paid,” she complains.
Hermes’ main bone of contention appears to be that her white comrades didn’t adequately embrace the notion of intersectionality, which basically means using climate change alarmism as a vehicle to push all your other demented far-left political demands.
“Anti-racism and anti-capitalism need to be made part of organizing,” claims Hermes.
“If “Green” policies fail to consider anti-racism and migrant rights, how is any person of colour supposed to feel voting for them or organizing in the same spaces?”
Hermes apparently made activist leaders uncomfortable by drawing attention to their lack of diversity.
“Whenever I would question the whiteness of these spaces and how strategies didn’t take race into account, I would be met with uncomfortable silences,” she writes, asserting that the mostly white activist leaders were not paying enough attention to what “whiteness, capitalism, and inequality have to do with climate change.”
In what was actually a fairly good point, Hermes also highlights how eco-warriors push veganism as a solution yet refuse to acknowledge “how people have been killed after protesting against the sourcing of plant-based foods like palm oil on Indigenous lands.”
In summary, Hermes accurately nails how climate activists use non-white people as human shields for their arguments, but her own inherent racism towards white people also shines through given the fact that most of this took place in Berlin, which is still 71 per cent ethnic German.
Respondents on Twitter also had some fun on the thread.
As a cis gendered hetero white man, I’m doing my part by not joining the climate movement.
My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.
It’s Time To Ask Again What Really Happened To Ukraine’s Missing Gold
Now that the Trump impeachment farce is finally over, vindicating the president and in the process for the first time boosting the president’s approval rating higher than where Obama was at this time in his first term much to the embarrassment of Nancy Pelosi, whose impeachment gambit has backfired spectacularly (just as Nancy knew it would, and is why she delayed triggering it until a critical mass of ultra left-wing demands in Congress made it impossible for her to ignore any longer)…
… the Democrats’ great diversion from Trump’s core question – did the Bidens willfully engage in, and benefit from corruption in the Ukraine, corruption which may have been enabled and facilitated by billions in taxpayer funds originating from the Obama administration no less – is over.
However, while Trump has finally moved on beyond what in retrospect was a remarkable, if failed presidential coup attempt, orchestrated by the Ukraine lobby in the US, backed by the Atlantic Council and various other “deep-state” institutions and apparatchiks, and implemented by Congressional democrats who are now watching the chances of the Democratic party winning the 2020 presidential election melt before their eyes, some long overdue questions surrounding the Bidens’ involvement in Ukraine – one of the world’s most corrupt nations according to the World Economic Forum – especially around the time of the 2014 presidential coup and the months immediately following, are about to be asked, and haunt Joe Biden and his son like a very angry and vengeful ghost, only this time there will be no Trump impeachment to distract from revealing the shocking answers.
Needless to say, we are delighted by this outcome because as regular readers will recall, there are many unanswered questions that emerged back in 2014, some from following the money both in and out of Ukraine, and some from following the country’s gold, much of which was put on board a plane headed to the US in one cold, wintry night in March 2014, never to come back again.
But before we get there, first we need to a rather lengthy detour into the history of Ukraine corruption since the February 2014 Euromadian revolution, for the background on why Trump had to be stopped at all costs from asking either Ukraine, or anyone else, questions that may expose corruption involving Joe Biden in particular, and the Obama administration in general. To do that, we need to follow some $1.8 billion in US taxpayer funds that quietly went missing back in 2014, and most likely ended up in the offshore bank account of some Ukrainian oligarch; conveniently PJ Media’s senior editor Tyler O’Neill did just that almost two years ago, in March 2018. Here’s what he said back then, together with some additions from ZH:
In the last days of the Obama administration, then-Vice President Joe Biden took a “swan song” trip to Ukraine, a notoriously corrupt country where he had been the administration’s “point person.” On the eve of this trip, the country announced it would end a criminal investigation into an infamous company connected to the loss of $1.8 billion in aid funding — a company whose board of directors included Biden’s son Hunter.
The Biden family’s dealings with this Ukrainian company involved getting one of the country’s most notorious mob bankers, Ihor Kolomoiski, off the U.S. government visa ban list. Under Biden’s leadership, $3 billion in aid went to Ukraine, and his son’s company was implicated in the disappearance of $1.8 billion of that money. Peter Schweizer revealed the former vice president’s role in his new book “Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends.”
Ihor Kolomoiski
Secretary of State John Kerry announced the U.S. support for Ukraine’s nationalist government in March 2014, a month after a mass uprising pushed pro-Russian President Viktor Yanukovych out of office and inspired a corresponding pro-Russian uprising in the east. It was also at this time that a leaked recording between US assistant secretary of state Victoria “Fuck the EU” Nuland and the US envoy to the Ukraine, Geoffrey Pyatt, emerged, a clip which as the FT said then “could also bolster [claims] that the protests that erupted against Ukraine’s President Viktor Yanukovich last November are being funded and orchestrated by the US.” In other words, the clip confirmed that the US was masterminding the entire “Euromaidan” process all along and deciding who should be in Ukraine’s next government. In short: what happened in Ukraine in February 2014 was another CIA-staged presidential coup. Finally, it was also the time that Biden became the Obama administration’s “point person” for the country.
On April 16, 2014, shortly after the February 2014 Ukrainian revolution which culminated with the overthrow of democratically-elected president Yanukovich, Biden met with Devon Archer, a former star fundraiser for John Kerry’s 2004 presidential run and business partner in Rosemont Capital with Biden’s son Hunter. (Federal agents would later arrest Archer in May 2016 for defrauding a Native American tribe.)
Less than a week later (April 22) came an announcement that Archer had joined the board of Burisma, a secretive Ukrainian natural gas company. On May 13, Hunter Biden would also join the company’s board.
On the day before Archer’s hiring, April 21, the vice president landed in Kiev for high-level meetings with Ukrainian officials. He spearheaded the effort to invest $1 billion from the U.S. and the International Monetary Fund (IMF) into Ukraine.
The vice president’s presence helps explain a conundrum. Burisma hired his son and Archer despite the fact that neither of them had any experience in the energy sector. Schweizer notes, “The choice of Hunter Biden to handle transparency and corporate governance of Burisma is curious, because Biden had little if any experience in Ukrainian law, or professional legal counsel, period.”
Furthermore, Hunter Biden “seemed undeterred by the fact that as he was joining the Burisma board the British government’s Serious Fraud Office (SFO) was seizing $23 million from [founder Mykola] Zlochevsky’s bank accounts.” Furthermore, a year after Biden joined the firm, “experienced industry observers warned investors that Burisma was still a company to be avoided.”
Mykola Zlochevsky
On the other hand, Ukraine is one of the most corrupt countries in the world. Out of 148 nations studied by the World Economic Forum, Ukraine ranks 143 for property rights, 130 for “irregular payments and bribes,” 133 for “favoritism in decisions of government officials,” and 146 for “protection of minority shareholders’ interests.”
Two major figures in this corruption feature prominently in Biden’s Ukraine investment.
Zlochevsky founded Burisma in Cyprus in 2006. He served as natural resources minister under Yanukovych, and gave himself the licenses to develop the country’s abundant gas fields. He also had a flare for lavishness, running a super-exclusive fashion boutique named after himself.
Burisma’s major subsidiaries ended up sharing the same business address as the natural gas firm controlled by Ukrainian oligarch Ihor Kolomoisky. He controlled the country’s largest financial institution, PrivatBank, through which the Ukrainian military and government workers got paid. He also owned media companies and airlines. In violation of Ukraine law, he maintained Ukrainian, Israeli, and Cypriot passports.
Kolomoisky gained a reputation for violence and brutality, along with lawlessness. Rival oligarchs have sued him for alleged involvement in “murders and beheadings” related to a business deal. He also allegedly used “hired rowdies armed with baseball bats, iron bars, gas and rubber bullet pistols and chainsaws” to take over a steel plant in 2006. He built his multibillion-dollar empire by “raiding” other companies, forcing them to merge with his own using brute force.
For these and other reasons, the U.S. government placed Kolomoisky on its visa ban list, prohibiting him from entering the country legally. In 2015, however, after Hunter Biden and Devon Archer had joined Burisma’s board, Kolomoisky was given admittance back into the U.S. According to a follow-up report in 2016, “today, the oligarch mainly resides in Switzerland. He spends much time in the United States and is getting less and less involved in the Ukrainian affairs.”
Archer and the younger Biden brought other benefits to Burisma, however. Archer represented the company at the Louisiana Gulf Coast Oil Exposition in 2015. Biden addressed the Energy Security for the Future conference in Monaco. The vice president’s son brought much-needed legitimacy to the shoddy gas company. Less than a month after Archer joined Burisma’s board, the company hired another Kerry lackey, David Leiter, as a lobbyist in Washington, D.C. He successfully lobbied for more aid to the country.
And Both Biden and Kerry championed $1.8 billion in taxpayer-backed loans given to Ukraine in September 2014 courtesy of the IMF. That money would go directly through Kolomoisky’s PrivatBank, and then it would disappear. According to the Ukrainian anti-corruption watchdog Nashi Groshi, “This transaction of $1.8 billion … with the help of fake contracts was simply an asset siphoning operation.”
What is even more fascinating, is that in the chaos following the February 2014 revolution, Ukraine appears to have embezzled money from none other than the IMF (whose biggest source of funds is the US). As German newspaper Deutsche Wirtshafts Nachrichten reported in August 2015, a huge chunk of the $17 billion in bailout money the IMF granted to Ukraine in April 2014 was discovered in a bank account in Cyprus controlled by, who else, Ukrainian oligarch Kolomoisky. As the German publication went on to add, in April 2014, $3.2 billion was immediately disbursed to Ukraine, and over the following five months, another $4.5 billion was disbursed to the Ukrainian Central Bank in order to stabilize the country’s financial system. “The money should have been used to stabilize the country’s ailing banks, but $1.8 billion disappeared down murky channels,” DWN wrote.
DWN also reported that according to the IMF, in January 2015 the equity ratio of Ukraine’s banking system had dropped to 13.8 percent, from 15.9 percent in late June 2014. By February 2015 even PrivatBank had to be saved from bankruptcy, and was given a 62 million Euro two-year loan from the Central Bank. “So where have the IMF’s billions gone?”
The racket executed by Kolomoiski’s PrivatBank was first uncovered by the Ukrainian anti-corruption initiative ‘Nashi Groshi,’ meaning ‘our money’ in Ukrainian.
According to Nashi Groshi’s investigations, PrivatBank has connections to 42 Ukrainian companies, which are owned by another 54 offshore companies based in the Caribbean, USA and Cyprus. These companies took out loans from PrivatBank totaling $1.8 billion.
These Ukrainian companies ordered investment products from six foreign suppliers based in the UK, the Virgin Islands and the Caribbean, and then transferred money to a branch of PrivatBank in Cyprus, ostensibly to pay for the products.The products were then used as collateral for the loans taken out from PrivatBank – however, the overseas suppliers never delivered the goods, and the 42 companies took legal action in court in Dnipropetrovsk, demanding reimbursement for payments made for the goods, and the termination of the loans from Privatbank. The court’s ruling was the same for all 42 companies; the foreign suppliers should return the money, but the credit agreement with Privatbank remains in place.
“Basically, this was a transaction of $1.8 billion abroad, with the help of fake contracts, the siphoning off of assets and violation of existing laws,” explained journalist Lesya Ivanovna of Nashi Groshi.
Then in March 2015, Kolomoiski, whom some have described as the Tony Soprano of Ukraine, and increasingly a pariah in the country that made him a billionaire was dismissed from his position as governor of Dnipropetrovsk after a power struggle with Ukrainian President Petro Poroshenko; the fraud was carried out while he was governor of the region in East-Central Ukraine.
“The whole story with the court case was only necessary to make it look like the bank itself was not involved in the fraud scheme. Officially it now looks like as if the bank has the products, but in reality they were never delivered,” said Ivanovna.
Such business practices, which earned Kolomoskyi a fortune estimated by Forbes in March 2012 to be $3 billion, were known to investigators beyond Ukraine’s borders; Kolomoiski was once banned from entering the US due to suspicions of connections with international organized crime but then Biden’s involvement quietly lifted the visa ban.
Despite these suspicions, Kolomoiski is unlikely to face justice, as he is currently living in exile in Switzerland , Israel and the US, after he fled Ukraine in early 2015. Not long after Kolomoiski fled Ukraine, in December 2016, Ukraine’s government nationalize his Privatbank in order to shore up Ukrainians’ savings. A Ukrainian lawmaker called it the “greatest robbery of Ukraine’s state budget of the millennium.” A few months earlier, in February 2016, the government seized Burisma founder Zlochevsky’s assets and placed him on Ukraine’s wanted list. The Ukrainian Prosecutor General’s Office seized Burisma’s gas wells.
Which brings us to January 2017, and when Joe Biden infamous arrived for his “swan song” visit and demanded, before the entire world, that the criminal investigation into Burisma was dropped.
Devon Archer left the scandal-plagued company at the end of 2016, although a clueless Hunter Biden remained on the board through October 2019 – well after his presence there sparked the biggest political scandal since the Bill Clinton impeachment – providing “legal assistance” in exchange for millions of dollars received from the gas giant. Archer and Biden have not been required to disclose their compensation from Burisma, but Bowling Green State University professorOliver Boyd-Barrett wrote, “Potentially, the Biden family could become billionaires.”
So did Joe Biden get Burisma off the hook for $1.8 billion in lost aid funding? Did he or his son get Kolomoisky off the visa ban list? To be sure, many questions still remain and were all conveniently swept under the rug over the “faux outrage” over the Trump impeachment farce. But now that the great impeachment diversion is over, these all too pressing questions can and finally should be asked.
Incidentally, anyone who is confused by the narrative above, and how $1.8 billion in taxpayer dollars “disappeared” in Ukraine starting in September 2014 when the money was deposited in PrivatBank, is encouraged to watch the following video by Glenn Beck who does a surprisingly good job at connecting the confusing dots behind what may be one of the greatest sovereign corruption and money heist stories in history.
The good news is that there are so many loose threads in this narrative, that any real probe will have little difficulty in getting to the bottom of where and how the $1.8 billion in US taxpayer funding to Ukraine “disappeared” and whether Biden, both father and son, are indeed involved.
And just to help them out, one place where any serious probe can start is with a story we wrote in March 2014, when citing a local media report, we shone light on a mysterious operation in which a substantial portion of Ukraine’s gold reserves were loaded onboard an unmarked plane, and flown to the US, just weeks after the February 2014 revolution.From the source, March 7, 2014:
Tonight, around at 2:00 am, an unregistered transport plane took off took off from Boryspil airport.
According to Boryspil staff, prior to the plane’s appearance, four trucks and two cargo minibuses arrived at the airport all with their license plates missing. Fifteen people in black uniforms, masks and body armor stepped out, some armed with machine guns. These people loaded the plane with more than forty heavy boxes.
After this, several mysterious men arrived and also entered the plane. The loading was carried out in a hurry. After unloading, the plateless cars immediately left the runway, and the plane took off on an emergency basis.
Airport officials who saw this mysterious “special operation” immediately notified the administration of the airport, which however strongly advised them “not to meddle in other people’s business.”
Later, the editors were called by one of the senior officials of the former Ministry of Income and Fees, who reported that, according to him, tonight on the orders of one of the “new leaders” of Ukraine, all the gold reserves of the Ukraine were taken to the United States.
Needless to say there was no official confirmation of any of this taking place, and in fact our report, in which we mused if the “price of Ukraine’s liberation” was the handover of Ukraine’s gold to the Fed at a time when Germany was actively seeking to repatriate its own physical gold located at the bedrock of the NY Fed, led to the usual mainstream media mockery.
But then everything changed in November 2014, when in an interview on Ukraine TV, none other than the then-head of the Ukraine Central Bank, Valeriya Gontareva (who, became head of the Ukraine central bank in June 2014 when she replaced Stepan Kubiv and also presided over the nationalization of Kolomoiski’s PrivateBank in December 2016), made the stunning admission that “in the vaults of the central bank there is almost no gold left. There is a small amount of gold bullion left, but it’s just 1% of reserves.”
As Ukrainareported at the time, this stunning revelation means that not only has Ukraine been quietly depleting its gold throughout the year, but that the latest official number, according to which Ukraine gold was 8 times greater than the reported 1%, was fabricated, and that the real number is about 90% lower.
According to official statistics the NBU, the amount of gold in the vaults should be eight times more than is actually in stock. At the beginning of this month, the volume of gold was about $ 1 billion, or 8% of the total gold reserves. Now this is just one percent.
Assuming Gonaterva’s admission was true, it would imply that the official reserve data at the Central Bank was clearly fabricated, prompting questions about just how long ago the actual gold “displacement” took place. Could it have been during a cold night in March when “more than 40 heavy boxes” full of gold were loaded up on the plane and flown off to an unknown destination in the US?
To help out in this puzzle, we got some additional information from Rusila, which in Nov 2014 reported that “Ukraine’s gold reserves disappeared.”
According to recent data, the value of Ukraine gold should be $988.7 million. That is the value of gold proportion of gold in gold reserves is 8%. If you believe Gontareva, it turns out there is a mere $123.6 million in gold remaining. The figure is fantastic, considering that the amount of gold at the end of February (when the new authorities have already taken key positions) was $1.8 billion or 12% of the reserves.
In other words, since the beginning of the year gold reserves dropped almost 16 times. Gold stock in February were approximately 21 tons of gold, the presence of which was once proudly reported by Sergei Arbuzov, who led the NBU in 2010-2012. So what happened to 20.8 tons of gold?
Explaining the dramatic reduction in the context of the hryvnia devaluation through gold sales is impossible. After all, 92% of the reserves of the National Bank is in the form of a foreign currency that is much easier to use to maintain hryvnia levels and cover current liabilities. Besides since March the international price of gold has plummeted. Selling gold under such circumstances is a crime. In fact it would be more expedient to increase gold reserves through currency conversion in precious metals.
But apparently the result is not due to someone’s negligence or carelessness. The gold reserve has been actively carted out of the country, as a result of the very vague economic and political prospects of Ukraine. Something similar happened to the gold reserves of the USSR – when the Gorbachev elite realized that perestroika is leading the country to the abyss, gold simply disappeared in an unknown direction.
Oddly enough there was no official gold reduction just prior to the time when Victoria “Fuck the EU” Nuland was planning Yanukovich’s ouster, and as shown above, quite the contrary: Ukraine’s gold pile was increasing with every passing year… until it collapsed in early 2014. It is a little more odd that it was during the period when Ukraine was “supported” by its western allies that several billion dollars worth of physical gold – the people’s gold – just “vaporized.”
Which brings us to the $1.8 billion question: what happened to Ukraine’s gold, because if the now former central banker’s story is accurate, that’s roughly the amount of gold that quietly left the country just days after the US-backed presidential coup. And, it is also roughly how much taxpayer-funded Ukraine aid, procured by Joe Biden while his son was working at Burisma, is now missing.
At this point, there are certainly many pressing questions but one stands out: was the real “quid pro quo” not one of Trump holding up payments to Kiev in exchange for a probe of Biden – which after reading all of the above is more than warranted – but if the quo, namely US support for regime change in Ukraine and almost two billion in now missing taxpayer funds which ended up in an oligarch’s bank and mysteriously “vaporized” but not before said oligarch hired the son of the US vice president, wasn’t the quid to some 40 tons of Ukraine leaving forever to an unknown destination in the US.
We hope that Trump’s second term will provide ample time and opportunity to answer this critical question, and just to set off investigators on the right track, we believe that any investigation should begin with the former central bank head, Gontareva, who he also fled to London where she now lives in self-appointed exile and where she now “fears for her life” after one of her homes near Kiev was badly damaged in an arson attack, and was also injured in August when she was knocked down by a car in London. Failing that, one can always check the flight manifests and the cargo contents of all planes that left the Ukraine and arrived in the US on March 7, 2014 with a cargo consisting of billions of dollars in gold…
