Given the way the euro has been rallying in the foreign exchange markets over the past three months, you would be forgiven for thinking the currency has become a beacon of stability in uncertain times. You couldn’t be further from the truth.
The rebound in the euro is simply the flip side of the US dollar being undermined by growinguncertainty about the upcoming US presidential election in November and how the US authorities are coping with the coronavirus crisis. Global investors are simply taking time out from long dollar exposures, and euro bulls are simply filling a temporary void. It won’t last long.
The euro is living on borrowed time and the deepening monetary muddle in Europe won’t help the currency once the dust settles on the US elections. The euro looks overvalued and a prime target for an ambush later this year. Europe’s monetary pacesetter, the European Central Bank, seems to be fighting a losing battle, struggling to keep the European economy from slipping into a deeper recession.
The more policy stimulus the ECB throws into the ring, the greater the damage to its monetary reputation, and to little avail so far.
Despite close to 3 trillion euros of assets purchased so far under the ECB’s quantitative easing programme and interest rates steeped in negative territory, the economy of Europe is showing precious few signs of a return to normality.
Europe’s three biggest economies, Germany, France and Italy, are all stuck in recession with little chance of output reaching pre-pandemic levels until 2022. Rumblings about throwing too much good money after bad are no surprise. The ECB’s defence is that it has no alternative, otherwise Europe might suffer an even worse fate.
Germany has given up the ghost on trying to control the ECB’s monetary excesses. There seems to be a palpable sense of “if you can’t beat them, join them” for the sake of presenting aunited front and avoiding a damaging public row. In the pre-euro days, tough Bundesbank policies and the strong Deutschmark were solid anchors of the European monetary system, implacable yardsticks which helped other European countries govern their own performances.
These days, Frankfurt’s fiduciary responsibility seems to have been quietly abandoned in favour of political expediency, economic survival and a softening in standards. The ECB has abandoned Germany’s monetary rigour, spending its way out of recession through debt monetisation and underwriting Europe’s explosive fiscal expansion in the process. The forefathers of the Deutsche Bundesbank would turn in their graves.
The worry for markets is that the triple-A-rated ECB’s vaults are bursting with a surfeit of lower-quality debt from nations like Italy, Spain, Portugal, Greece and Ireland, countries which have required support in times of market stress in the aftermath of the 2008 crash.
Like in the US subprime crisis, it’s fine while the charade lasts, but once confidence begins to wobble, that is where the danger lies. It’s a bit like the tale of the emperor’s new clothes – once someone calls attention to the reality, the pyramid of risk starts to implode.
Whether it will come from a constitutional reckoning in Germany or a credit doom loop from a heavily indebted country like Italy remains to be seen. A small economy like Greece almost brought the euro to its knees in 2012, so a bigger country could easily push the currency, the ECB and the euro zone past the point of no return.
Large holders of euros like China have been sorely tested before, but a major European credit event or acute political pressure could easily spark another euro debt crisis if confidence dives again. Up to 20 per cent of China’s US$3.15 trillion of foreign exchange reserves might be held in euro assets, a formidable wall of money for world markets to contend with if liquidation pressures rise.
China would be joined by a mighty throng of official and private sellers in the worst-case scenario. It could turn into a nasty bloodbath with euro-zone policy unity tested to breaking point.
The euro is only being supported by a weaker dollar right now, but the tide could turn abruptly for euro bulls before long. ECB coffers are not a bottomless pit and Germany’s patience might not be guaranteed forever. High noon is creeping up on the world and global investors must take care.
via ZeroHedge News https://ift.tt/34yc30p Tyler Durden
Russian Military Expo Starts With A ‘Bang’ Tyler Durden
Wed, 08/26/2020 – 02:45
The International military-technical forum “Army-2020” outside Moscow, Russia, began this week with a ‘bang’, as high-tech tanks, new lightweight assault rifles, stealth drones, and other advanced weaponry were displayed to foreign clients and visitors, reported RT News.
On Sunday, as the week-long annual defense expo began, Russia’s Defence Minister Sergei Shoigu said this year’s event would merge military forum and an international military sports competition.
A record number of defense companies are attending the expo this week, showcasing more than 28,000 products. The Russian Defense Ministry has already said 39 contracts worth $15.6 billion have already been signed.
Here is some of the military tech featured at the expo this week:
Kalashnikov’s new lightweight assault rifle called the AK-19.
Russian-made military drones
Drone weapons
Iranian officials are getting acquainted with helicopters and the S-400 missile system.
Called the “CyberBoat-330,” these vessels appear to be fully autonomous.
The MPT-2 ‘Terminator’ and T-90MS tank exhibit.
Amphibious military vehicle
Kamov Ka-50 attack helicopter
Here’s an overview of the facility housing the weapons expo.
As for the competition side of the expo – the first round of annual tank biathlon competition was hosted on Sunday in Alabino, Moscow region.
“The 16 tank crew are divided into two divisions, depending on their results in the Army Games-2019. The Chinese crew showed the best result in Sunday’s individual races, finishing in just 19 minutes and 20 seconds, with the Belarusians coming in second, and the crew from Azerbaijan coming third.
Teams from 32 countries are expected to participate in this year’s International Army Games in Russia, which consists of several contests involving tanks, snipers, and several aeronautical and naval disciplines. Notably, a team from South Ossetia will take part in the competition for the first time,” Ruptly said.
Watcch: Tank biathlon kicks off International Army Games 2020
The defense expo will conclude on August 29 and the competition will end on September 5.
via ZeroHedge News https://ift.tt/2YCsXqO Tyler Durden
The Greek Armed Forces are on high alert on land, sea and air, closely monitoring Turkish movements in the Eastern Mediterranean, according to Greek media. After Turkey last month restarted prospecting for oil and gas in an area overlapping Greece’s continental shelf, Greece deployed warships between the islands of Cyprus and Crete. Since then, tensions have run high between Turkey and Greece.
On August 12, Greek Prime Minister Kyriakos Mitsotakis warned about the possibility of an “accident” in the Eastern Mediterranean. Greek and Turkish naval forces deployed in the area after Ankara sent a vessel to conduct seismic research south of Kastellorizo.
“The risk of an accident lurks when so many naval forces gather in a limited area, and responsibility in such a case will be borne by the one who causes these conditions,” Mitsotakis said in a televised address.
Turkey has threatened to invade the Greek islands in the Aegean since at least 2018. A recent Egyptian-Greek maritime deal appears to have escalated Turkey’s regional aggression.
The maritime deal, which was signed on August 6, set the Mediterranean Sea boundary between Egypt and Greece. It also demarcated an exclusive economic zone (EEZ) for oil and gas drilling rights. The Egyptian-Greek move was widely seen as a response to a disputed agreement between Turkey and Libya’s Tripoli-based administration, according to the newspaper Kathimerini.
Meanwhile, Turkey has been systematically violating the territorial waters of Cyprus and Greece. In May, the foreign ministers of Egypt, France, Cyprus, Greece and the UAE issued a joint declaration “denouncing the ongoing Turkish illegal activities in the Cypriot Exclusive Economic Zone and its territorial waters, as they represent a clear violation of international law as reflected in the United Nations Convention on the Law of the Sea.”
On May 15, the European Union announced that it “condemned the escalation of Turkey’s violations of Greek national airspace, including overflights of inhabited areas, and territorial sea, in violation of international law.” But the condemnation has not stopped the violations by Turkey. On August 5, for instance, eight Turkish military airplanes carried out a total of 33 violations of Greece’s national airspace over the course of one day, Greek military authorities said.
After the deal between Greece and Egypt, Turkey again deployed a seismic research vessel to prospect for potential oil and gas reserves within Greece’s continental shelf. Greece has again placed its armed forces on high alert. Warships were sent to the spot between Crete and Cyprus, demanding the vessel’s withdrawal.
Turkey’s president Recep Tayyip Erdogan, however, continues defying Greece and Cyprus. On August 14, referring to Greece and other Western states, Erdogan said:
“They sent all terrorist organizations against us. We gave our response to these attacks in the language they understand through our operations in northern Iraq, Syria, Libya, and the Eastern Mediterranean. We gave [an answer] today too! We told them, ‘Look, don’t attack our Oruç Reis vessel. If you attack it, you will pay a heavy price’. And today they got the first answer.”
“No colonialist power,” Erdogan said on August 19, “can deprive our country of the rich oil and gas resources estimated to exist in this region.”
Turkey is a colonialist power that has been occupying Northern Cyprus since 1974. The Turkish government does not recognize the Republic of Cyprus as a state, and claims 44% of the Cypriot exclusive economic zone (EEZ) as its own. Another sizable section of that zone is claimed by the so-called “Turkish Republic of Northern Cyprus” in the island’s occupied north — recognized only by Turkey.
“Turkey has adopted a revisionist policy in the Eastern Mediterranean,” Dr. Giorgos Kentas, Associate Professor of International Politics and Governance at the University of Nicosia, said in an interview with Gatestone.
“Turkey’s policy is part and parcel of a broader strategy to expand Turkey’s influence in the Middle East, the Gulf, and Africa. The aim is to impose geopolitical dominion: an undisputed regional hegemonic regime whereby Turkey is be able to determine big and important developments. That revisionist policy is pursued by a mixture of soft and hard power instruments.
“With regard to Greece and Cyprus, Turkey clearly maintains an offensive posture. It appears willing to use military force in order to impose its revisionist plans. For almost two decades now, Turkey (under the leadership of Erdogan) has been developing a strategy to dominate over large maritime zones. [This] strategy is known as the ‘blue homeland’. It begins from the Black Sea and extends through the Aegean Sea towards the maritime zones of Libya, Egypt, Israel, and Syria. Turkey believes that Cyprus and Greece must voluntarily submit to the parameters of the blue homeland, otherwise they must face the consequences of its military might. Turkey plans against Greece and Cyprus under a strategic doctrine of a unified front.
“As of the early 2010s, Turkey started an illegitimate program of seismic surveys in the maritime zones of Cyprus, supported by considerable aeronautic forces. In May 2019, Turkey launched an offshore drilling program in Cyprus’ EEZ. So far it started and/or completed 7 drillings, at least one in Cyprus’ territorial waters. Turkey has actually de facto extended its military occupation of Cyprus from the land it occupies as of 1974 to island’s maritime zones. All that went mostly unanswered with the exception of some statements by third states and some symbolic sanctions by the EU.
“Turkey is currently attempting a similar policy of revisionism against Greece. The aim is to impose a hegemonic regime over Greece’s maritime zones and/or maritime zones that Greece claims in Eastern Mediterranean.
“Turkey has developed the military might, and acquired the means, to challenge and revise the geopolitical momentum created by a series of delimitation agreements between Cyprus, Egypt, Lebanon and Israel. [Turkey] also undermines the hydrocarbon program of Cyprus. Greece now tops the agenda of Ankara in the framework of the blue homeland dominium.”
According to Harris Samaras, an expert on the Cypriot EEZ and chairman of the international investment banking firm Pytheas, Turkey’s foreign policy in eastern Mediterranean is largely an extension of its Islamist domestic policies.
“Turkey is an authoritarian country increasingly shaped by ultranationalist and Islamist forces,” Samaras told Gatestone.
“Inspired by the 1979 Islamic Revolution in Iran, Erdogan and his Justice and Development Party (AKP) have pursued policies that furthered the Islamization of the country, promoting religion, fundamentalism, and limiting individual freedoms and rights. Turkey globally supports Islamism and jihadism as in the cases of ISIS, Hamas, Boko Haram, al Qaeda and the Iranian regime, among others. It is thus accurate to state that Turkey is today among the most anti-American and anti-European countries in the world. It operates as a polarized engine of religious radicalism with a global reach.”
According to Samaras, there are three main causes of Turkey’s aggression towards Greece and the general Turkish jingoistic behavior in the Eastern Mediterranean:
“1. Erdogan desires to lead the Islamic world, a project aimed at fulfilling his ambitions – and better regional supremacy complexes – to seize the Muslim world’s political leadership legitimated by consciously assuming the mantle as successor of the ‘glorious’ history of the Ottoman empire. ‘Turkey’, as Erdogan has repetitively stated, ‘is a continuation of the Ottoman Empire’. This infers that as its leader, Erdogan is analogous to the Caliph. Note here the similarities with statements by ISIS leaders.
“2. While the vast majority of European and US leaders from all parties, including the intelligence community and the Pentagon, recognize the reality of Turkey, certain EU leaders, US diplomats and appointees continue to apologize for and rationalize Turkish behavior. They dilute measures to hold Turkey to account. Their denial of evidence about Turkey’s regional malfeasance not only weakens the West and its credibility, but also benefits Russia, Iran and terrorism.
“Furthermore, and over and above, those elements who intentionally turn a blind eye to Turkey’s violations of the Rule of Law not only encourage Erdogan to intensify his bullying and jingoistic policies, but also pressurize Greece (like they do with Cyprus) to strike an energy and sovereignty ‘sale’ deal. This is contrary to international law and an attempt to delaying to convicting Turkey, eventually justifying its atrocities.
“3. Erdogan’s (and his AKP) popularity has slumped to the lowest level ever since his autocratic reign. This is a result of his systematic power grabbing, nepotism and corruption. The economy for one is in dire straits. Theatrics like the one with Hagia Sophia and the gunboat diplomacy in the Eastern Mediterranean, as well as bursts about the ‘tyrannical’ EU and Israel, are ‘required’ to direct the interests of his polarized compatriots elsewhere and away from the misery his foul administration has inflicted. Wrapping himself in a cloak of patriotism is part of Erdogan’s agenda and his regime’s propaganda narrative.
“Erdogan, however, is now anticipating that Chancellor of Germany, Angela Merkel, his best ally and in many ways his ‘accomplice’, will compel Greece into discussions. He is hoping that under Germany’s pressure Greece will ‘conform’ to selling part of its sovereignty. However, the Western world has to face and address the Turkish reality, the strategic reality that any possibility of a Western-leaning Turkey is gone.”
Meanwhile, the US State Department has issued a statement concerning Turkey’s activities in the region. “The United States is aware that Turkey has issued a notification to other ships of survey activity in the Eastern Mediterranean. We urge Turkish authorities to halt any such plans for operations and to and to avoid steps that raise tensions in the region,” a State Department spokesperson said on August 10.
“Turkish aggression against Greece is really nothing new,” Anna Koukkides-Procopiou, a Senior Fellow and Member of Advisory Board of the Center for European and International Affairs of the University of Nicosia, told Gatestone.
“For example, there have been myriads of air space violations in recent years. Turkey is just taking everything to a different level nowadays. This gradual tension spiral, first, aimed at testing the waters, both literally and metaphorically. But Greece has proven it will not go quietly, despite Turkey trying hard to set a maximalist agenda on its own terms, before negotiations ensue at some point. Turkey considers her use of force both a carrot and a stick for Greece to succumb to its claims.
“Second, there is no doubt that all the neo-Ottoman, anti-Lausanne rhetoric which Erdogan and his ministers have been making good use of should be taken seriously. It is part and parcel of a hegemonic bid to master regional leadership, as well as an attempt to woo audiences at home. An authoritarian ruler reigns by bread and games. Bread seems to be running out in Turkey at the moment, so there also needs to be a focus on games.”
As for what the Europe and the US should do in the face of continued Turkish aggression, Procopiou said:
“There has been enough talk and little action. If Europe and the US are serious about halting Turkey’s aggression, they need to show that they mean business. Europe keeps feeding Erdogan money while he is making a spectacle of democracy, international law and human rights. [These are] fundamental values which the European Union supposedly stands for.
“In essence, Erdogan has been ridiculing the EU, NATO and the US with zero consequences. Why should he stop? If the only reaction he gets is a shamble of a sanctions list in Europe – with only two inconsequential individuals’ names on that list – and no enforcement of the American CAATSA [The Countering America’s Adversaries Through Sanctions Act], he is taking everyone for a ride. So, we could begin at least with that. The Turkish economy found itself on its knees last time US President Donald Trump cared to send Erdogan a message over the arrest of American Pastor Andrew Brunson. What is keeping President Trump from doing that now?”
via ZeroHedge News https://ift.tt/31qSJ3h Tyler Durden
Which presidential candidate will bankrupt America first?
When Donald Trump ran for president, he promised “big league” spending cuts. Once in office, he again said he’d cut the budget, adding, “There’s a lot of fat in there.”
There sure is.
Since I was born, spending has grown faster than inflation most every year.
Then, President Obama, as Trump liked to out, “put more debt on than all other presidents of the United States combined!”
It’s true. But then Trump increased the debt just as much. Now even more, with the COVID-19 spending.
One of his first biggest increases was the $738 billion defense spending bill. Trump bragged that it was “an all-time record!” He said Democrats had “depleted” our fighting ability, so he “had” to “fix our military.”
“The ‘fix’ looks a whole lot like bloated defense spending,” says Pete Sepp of the National Taxpayers Union. “It’s more than our rivals around the world could even hope to spend.”
Sepp’s organization has fought government spending for decades. Sadly, they’ve had little success.
Now federal spending will grow even faster because:
The COVID-19 “stimulus” will grow.
Both political parties love spending your money.
Old people like me keep living longer.
Sorry about that last one. But I, rudely, decline to die.
Soon, my generation’s Medicare and Social Security checks will crowd out everything else in the budget. (No, fellow geezers, we don’t just “get back what we put in.” We’ll get, on average, almost triple our FICA deductions.)
Sadly, no presidential candidate expresses much interest in addressing that: Trump promises to “protect” Social Security. Biden says he’ll increase it!
Trump was also eager to spend on special interests. He gave $16 billion to farmers and ranchers, $1.6 billion more to NASA and, despite government’s horrible track record at “picking winners,” he tried loaning $765 million to Kodak Pharmaceuticals.
After the pandemic hit, Trump joined Democrats in authorizing $6.2 trillion in new spending.
Signing that, Trump joked: “I’ve never signed anything with a “T” on it. I don’t know if I can handle this one!” The politicians standing behind him laughed.
But it’s not funny.
Now Democrats want to add even more spending.
Trump at least made some cuts, prepandemic. Sepp acknowledges that he made “important progress in reducing overhead (and) personnel costs.”
He also cut the budget of his own office, plus the Departments of Labor, Education and State. Good! The State Department is bloated with 60 subdepartments, and its spending had increased at triple the rate inflation.
Still, media pundits whined about every cut. On CNN, one “expert” called the cuts to the State Department “insanity.”
When Trump proposed other cuts, or just slowing the growth of government, Congress wouldn’t let him. Trump’s 2021 budget would still have increased spending by $39 billion. Rep. Chuck Schumer rejected that, calling it “a blueprint for destroying America!”
To sum up: What’s Trump’s total budget impact been?
Spending is up by more than $1 trillion a year. The national debt is over $26 trillion.
“Deficits and debt destroy economic growth,” says Sepp.
“Nobody’s talking about this stuff. You must be frustrated,” I say.
“Very,” he responds. “After 51 years as an organization, to see this kind of attitude and carelessness…”
“Biden,” replies Sepp, because he promises $1.2 trillion a year in new spending. “We’re already trillions in the hole. He’s spending money out of an empty pocket!”
If Donald Trump’s sister is right that he “has no principles,” he does at least have a few enduring instincts. Perhaps the most persistent is the president’s conviction that American greatness is threatened by voluntary economic exchange, the most powerful engine of peace and prosperity in human history.
Each of us has a fundamental right to the fruits of our labor, which includes the right to exchange the money we earn for products and services. When governments respect that right, mutually beneficial transactions replace zero-sum interactions that forcibly transfer resources from losers to winners. The value of those voluntary transactions does not depend on where buyers and sellers happen to be located.
Trump’s rejection of those principles pervades the second-term agenda he unveiled this week. He promises not only to “create 10 million new jobs in 10 months”—which itself betrays a basic misunderstanding of the president’s powers and the way a market economy works—but also to “keep jobs in America” through “Made in America” tax credits and “fair trade deals that protect American jobs.”
Even keeping jobs in America is not enough to satisfy Trump, who also wants to dictate who can fill those jobs. He would use immigration law to “prohibit American companies from replacing United States citizens with lower-cost foreign workers.”
Notwithstanding his vociferous rejection of the “socialism” he ascribes to the Democrats, Trump believes the government must manipulate the economy, which means overriding the choices Americans otherwise would make, to ensure his preferred outcomes, down to details as mundane as the location of air conditioner and washing machine factories. In his mind, trade is not a right to be respected but a process to be managed by politicians.
Ignoring the principle of comparative advantage as well as the self-evident benefits of transactions that both parties freely choose, Trump believes Americans should not be using oil, pharmaceuticals, or medical supplies produced in other countries. To “end our reliance on China” and “bring back 1 million manufacturing jobs,” he would provide tax benefits to companies that “bring back jobs from China” and deny federal contracts to businesses that “outsource to China.”
Trump’s obsession with stopping Americans from buying Chinese goods is at odds not only with his party’s former support of free trade but also with its avowed resistance to tax increases. Taking into account retaliatory tariffs as well as the taxes Trump imposed directly, his trade war with China is costing American consumers an estimated $57 billion a year, on top of the costs borne by U.S. farmers and manufacturers caught in the crossfire.
In contrast with his positions on, say, abortion or gun rights, Trump’s beef against free trade is longstanding and seemingly sincere. No matter what pointy-headed economists say, he knows in his gut that money spent on foreign goods is wasted, that immiserating autarky is the key to American greatness, and that something nefarious is going on whenever imports from a particular country happen to exceed exports.
“You only have to look at our trade deficit to see that we are being taken to the cleaners by our trading partners,” Trump wrote two decades ago in a book that likened peaceful economic exchange to warfare. “If we didn’t trade,” he averred two years ago, “we’d save a hell of a lot of money.”
When Trump ran for president in 2016, the Republican platform likewise bemoaned “massive trade deficits,” even while paying lip service to “open markets.” This year the party decided to forgo a platform, saying it stands for whatever Trump has in mind.
Whatever that is, we can be pretty sure it will ignore a wise warning from the 2016 GOP platform. “We are the party of a growing economy that gives everyone a chance in life, an opportunity to learn, work, and realize the prosperity freedom makes possible,” the Republicans said then. “Government cannot create prosperity, though government can limit or destroy it.”
Which presidential candidate will bankrupt America first?
When Donald Trump ran for president, he promised “big league” spending cuts. Once in office, he again said he’d cut the budget, adding, “There’s a lot of fat in there.”
There sure is.
Since I was born, spending has grown faster than inflation most every year.
Then, President Obama, as Trump liked to out, “put more debt on than all other presidents of the United States combined!”
It’s true. But then Trump increased the debt just as much. Now even more, with the COVID-19 spending.
One of his first biggest increases was the $738 billion defense spending bill. Trump bragged that it was “an all-time record!” He said Democrats had “depleted” our fighting ability, so he “had” to “fix our military.”
“The ‘fix’ looks a whole lot like bloated defense spending,” says Pete Sepp of the National Taxpayers Union. “It’s more than our rivals around the world could even hope to spend.”
Sepp’s organization has fought government spending for decades. Sadly, they’ve had little success.
Now federal spending will grow even faster because:
The COVID-19 “stimulus” will grow.
Both political parties love spending your money.
Old people like me keep living longer.
Sorry about that last one. But I, rudely, decline to die.
Soon, my generation’s Medicare and Social Security checks will crowd out everything else in the budget. (No, fellow geezers, we don’t just “get back what we put in.” We’ll get, on average, almost triple our FICA deductions.)
Sadly, no presidential candidate expresses much interest in addressing that: Trump promises to “protect” Social Security. Biden says he’ll increase it!
Trump was also eager to spend on special interests. He gave $16 billion to farmers and ranchers, $1.6 billion more to NASA and, despite government’s horrible track record at “picking winners,” he tried loaning $765 million to Kodak Pharmaceuticals.
After the pandemic hit, Trump joined Democrats in authorizing $6.2 trillion in new spending.
Signing that, Trump joked: “I’ve never signed anything with a “T” on it. I don’t know if I can handle this one!” The politicians standing behind him laughed.
But it’s not funny.
Now Democrats want to add even more spending.
Trump at least made some cuts, prepandemic. Sepp acknowledges that he made “important progress in reducing overhead (and) personnel costs.”
He also cut the budget of his own office, plus the Departments of Labor, Education and State. Good! The State Department is bloated with 60 subdepartments, and its spending had increased at triple the rate inflation.
Still, media pundits whined about every cut. On CNN, one “expert” called the cuts to the State Department “insanity.”
When Trump proposed other cuts, or just slowing the growth of government, Congress wouldn’t let him. Trump’s 2021 budget would still have increased spending by $39 billion. Rep. Chuck Schumer rejected that, calling it “a blueprint for destroying America!”
To sum up: What’s Trump’s total budget impact been?
Spending is up by more than $1 trillion a year. The national debt is over $26 trillion.
“Deficits and debt destroy economic growth,” says Sepp.
“Nobody’s talking about this stuff. You must be frustrated,” I say.
“Very,” he responds. “After 51 years as an organization, to see this kind of attitude and carelessness…”
“Biden,” replies Sepp, because he promises $1.2 trillion a year in new spending. “We’re already trillions in the hole. He’s spending money out of an empty pocket!”
If Donald Trump’s sister is right that he “has no principles,” he does at least have a few enduring instincts. Perhaps the most persistent is the president’s conviction that American greatness is threatened by voluntary economic exchange, the most powerful engine of peace and prosperity in human history.
Each of us has a fundamental right to the fruits of our labor, which includes the right to exchange the money we earn for products and services. When governments respect that right, mutually beneficial transactions replace zero-sum interactions that forcibly transfer resources from losers to winners. The value of those voluntary transactions does not depend on where buyers and sellers happen to be located.
Trump’s rejection of those principles pervades the second-term agenda he unveiled this week. He promises not only to “create 10 million new jobs in 10 months”—which itself betrays a basic misunderstanding of the president’s powers and the way a market economy works—but also to “keep jobs in America” through “Made in America” tax credits and “fair trade deals that protect American jobs.”
Even keeping jobs in America is not enough to satisfy Trump, who also wants to dictate who can fill those jobs. He would use immigration law to “prohibit American companies from replacing United States citizens with lower-cost foreign workers.”
Notwithstanding his vociferous rejection of the “socialism” he ascribes to the Democrats, Trump believes the government must manipulate the economy, which means overriding the choices Americans otherwise would make, to ensure his preferred outcomes, down to details as mundane as the location of air conditioner and washing machine factories. In his mind, trade is not a right to be respected but a process to be managed by politicians.
Ignoring the principle of comparative advantage as well as the self-evident benefits of transactions that both parties freely choose, Trump believes Americans should not be using oil, pharmaceuticals, or medical supplies produced in other countries. To “end our reliance on China” and “bring back 1 million manufacturing jobs,” he would provide tax benefits to companies that “bring back jobs from China” and deny federal contracts to businesses that “outsource to China.”
Trump’s obsession with stopping Americans from buying Chinese goods is at odds not only with his party’s former support of free trade but also with its avowed resistance to tax increases. Taking into account retaliatory tariffs as well as the taxes Trump imposed directly, his trade war with China is costing American consumers an estimated $57 billion a year, on top of the costs borne by U.S. farmers and manufacturers caught in the crossfire.
In contrast with his positions on, say, abortion or gun rights, Trump’s beef against free trade is longstanding and seemingly sincere. No matter what pointy-headed economists say, he knows in his gut that money spent on foreign goods is wasted, that immiserating autarky is the key to American greatness, and that something nefarious is going on whenever imports from a particular country happen to exceed exports.
“You only have to look at our trade deficit to see that we are being taken to the cleaners by our trading partners,” Trump wrote two decades ago in a book that likened peaceful economic exchange to warfare. “If we didn’t trade,” he averred two years ago, “we’d save a hell of a lot of money.”
When Trump ran for president in 2016, the Republican platform likewise bemoaned “massive trade deficits,” even while paying lip service to “open markets.” This year the party decided to forgo a platform, saying it stands for whatever Trump has in mind.
Whatever that is, we can be pretty sure it will ignore a wise warning from the 2016 GOP platform. “We are the party of a growing economy that gives everyone a chance in life, an opportunity to learn, work, and realize the prosperity freedom makes possible,” the Republicans said then. “Government cannot create prosperity, though government can limit or destroy it.”
President Donald Trump pardoned Jon Ponder, a formerly incarcerated man who now runs a nonprofit to help others coming out of prison, in a video recorded Tuesday.
The video played at the Republican National Convention (RNC) Tuesday night during a program that focused on Trump’s record on criminal justice reform.
“I will continue to give all Americans, including former inmates, the best chance to build a new life and achieve their own American dream,” Trump said.
On the National Day of Prayer, Hope for Prisoners founder Jon Ponder came to the White House to share his story with the American people.
Ponder is the founder of Hope for Prisoners, a Nevada nonprofit that offers support services and training to formerly incarcerated people. Trump met with Ponder at the 2018 National Day of Prayer at the White House, and the president was a guest speaker at a Hope for Prisoners graduation ceremony in February.
Trump’s pardon wipes away a federal bank robbery conviction from Ponder’s record.
“Today, praise God, I am filled with hope,” Ponder said. “A proud American citizen who has been given a second chance. My transformation began in a prison cell, while I found myself a three-time convicted felon facing yet another sentence. I gave my life to Jesus.”
The pardon was the latest in a string of high-profile commutations and pardons by Trump. Alice Johnson, a former federal inmate who was serving life in prison before Trump commuted her sentence in 2018, is also expected to speak at the RNC.
But while criminal justice advocates have applauded pardons and commutations issued in deserving cases like those, there have been criticisms that the Justice Department’s Office of the Pardon Attorney, the regular office that handles clemency applications, has been sidelined. The Washington Postfound the vast majority of the pardons and commutations under Trump have gone to cases that caught his attention on TV or were brought to him personally by advocates or celebrities.
At a July 13 White House press briefing, White House Press Secretary Kayleigh McEnany was asked specifically about Ponder’s possible pardon and the neglect of regular clemency applications.
“It’s absolutely not the case that only those who are politically connected get a pardon. This president is the president of criminal justice reform,” McEnany responded. “This president did the FIRST STEP Act. This president has fought for those who are given unduly harsh sentences more than any Democrat who like to talk about it but never actually did it.”
Trump’s tendency to pardon his cronies has led to some calls to restrict the executive’s pardon powers, but that would be a terrible mistake. There are thousands more Jon Ponders and Alice Johnsons in the federal prison system, many of them passed over by the Obama administration’s clemency initiative. Precious few of them have the sort of connections to get their case to the president’s ears. If Trump wants to show he will fight for their second chances—and isn’t just putting on a show or helping his pals—he can and should prove it.
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The contours of China’s long-term strategy for the new Cold War are quickly coming into view…
Let’s start with the story of an incredibly disappearing summit.
Every August, the leadership of the Chinese Communist Party (CCP) converges to the town of Beidaihe, a seaside resort some two hours away from Beijing, to discuss serious policies that then coalesce into key planning strategies to be approved at the CCP Central Committee plenary session in October.
The Beidaihe ritual was established by none other than Great Helmsman Mao, who loved the town where, not by accident, Emperor Qin, the unifier of China in the 3rd century B.C., kept a palace.
2020 being, so far, a notorious Year of Living Dangerously, it’s no surprise that in the end Beidaihe was nowhere to be seen. Yet Beidaihe’s invisibility does not mean it did not happen.
Exhibit 1 was the fact that Premier Li Keqiang simply disappeared from public view for nearly two weeks – after President Xi chaired a crucial Politburo gathering in late July where what was laid out was no less than China’s whole development strategy for the next 15 years.
Li Keqiang resurfaced by chairing a special session of the all-powerful State Council, just as the CCP’s top ideologue, Wang Huning – who happens to be number 5 in the Politburo – showed up as the special guest at a meeting of the All China Youth Federation.
What’s even more intriguing is that side by side with Wang, one would find Ding Xuexiang, none other than President Xi’s chief of staff, as well as three other Politburo members.
In this “now you see them, now you don’t” variation, the fact that they all showed up in unison after an absence of nearly two weeks led sharp Chinese observers to conclude that Beidaihe in fact had taken place. Even if no visible signs of political action by the seaside had been detected. The semi-official spin is that no get-together happened at Beidaihe because of Covid-19.
Yet it’s Exhibit 2 that may clinch the deal for good. The by now famous end of July Politburo meeting chaired by Xi in fact sealed the Central Committee plenary session in October.
Translation:
the contours of the strategic road map ahead had already been approved by consensus. There was no need to retreat to Beidaihe for further discussions.
Trial balloons or official policy?
The plot thickens when one takes into consideration a series of trial balloons that started to float a few days ago in select Chinese media. Here are some of the key points.
1. On the trade war front, Beijing won’t shut down US businesses already operating in China. But companies which want to enter the market in finance, information technology, healthcare and education services will not be approved.
2. Beijing won’t dump all its overwhelming mass of US Treasuries in one go, but – as it already happens – divestment will accelerate. Last year, that amounted to $100 billion. Up to the end of 2020, that could reach $300 billion.
3. The internationalization of the yuan, also predictably, will be accelerated. That will include configuring the final parameters for clearing US dollars through the CHIPS Chinese system – foreseeing the incandescent possibility Beijing might be cut off from SWIFT by the Trump administration or whoever will be in power at the White House after January 2021.
4. On what is largely interpreted across China as the “full spectrum war” front, mostly Hybrid War, the PLA has been put into Stage 3 alert – and all leaves are canceled for the rest of 2020. There will be a concerted drive to increase all-round defense spending to 4% of GDP and accelerate the development of nuclear weapons. Details are bound to emerge during the Central Committee meeting in October.
5. The overall emphasis is on a very Chinese spirit of self-reliance, and building what can be defined as a national economic “dual circulation” system: the consolidation of the Eurasian integration project running in parallel to a global yuan settlement mechanism.
Inbuilt in this drive is what has been described as “to firmly abandon all illusions about the United States and conduct war mobilization with our people. We shall vigorously promote the war to resist US aggression (…) We will use a war mindset to steer the national economy (…) Prepare for the complete interruption of relations with the US.”
It’s unclear as it stands if these are only trial balloons disseminated across Chinese public opinion or decisions reached at the “invisible” Beidaihe. So all eyes will be on what kind of language this alarming configuration will be packaged when the Central Committee presents its strategic planning in October. Significantly, that will happen only a few weeks before the US election.
It’s all about continuity
All of the above somewhat mirrors a recent debate in Amsterdam on what constitutes the Chinese “threat” to the West. Here are the key points.
1. China constantly reinforces its hybrid economic model – which is an absolute rarity, globally: neither totally publicly owned nor a market economy.
2. The level of patriotism is staggering: once the Chinese face a foreign enemy, 1.4 billion people act as one.
3. National mechanisms have tremendous force: absolutely nothing blocks the full use of China’s financial, material and manpower resources once a policy is set.
4. China has set up the most comprehensive, back to back industrial system on the planet, without foreign interference if need be (well, there’s always the matter of semiconductors to Huawei to be solved).
China plans not only in years, but in decades. Five year plans are complemented by ten year plans and as the meeting chaired by Xi showed, 15 year plans. The Belt and Road Initiative (BRI) is in fact a nearly 40-year plan, designed in 2013 to be completed in 2049.
And continuity is the name of the game – when one thinks that the Five Principles of Peaceful Coexistence, first developed in 1949 and then expanded by Zhou Enlai at the Bandung conference in 1955 are set in stone as China’s foreign policy guidelines.
The Qiao collective, an independent group that advances the role of qiao (“bridge”) by the strategically important huaqiao (“overseas Chinese”) is on point when they note that Beijing never proclaimed a Chinese model as a solution to global problems. What they extol is Chinese solutions to specific Chinese conditions.
A forceful point is also made that historical materialism is incompatible with capitalist liberal democracy forcing austerity and regime change on national systems, shaping them towards preconceived models.
That always comes back to the core of the CCP foreign policy: each nation must chart a course fit for its national conditions.
And that reveals the full contours of what can be reasonably described as a Centralized Meritocracy with Confucian, Socialist Characteristics: a different civilization paradigm that the “indispensable nation” still refuses to accept, and certainly won’t abolish by practicing Hybrid War.
via ZeroHedge News https://ift.tt/3b1bnll Tyler Durden
Photos Emerge Of ‘Secret’ Stealth Drone Made By Boeing Tyler Durden
Tue, 08/25/2020 – 23:45
For the last couple of years, we’ve kept readers abreast of new developments concerning the Boeing Airpower Teaming System (ATS), a combat stealth drone also known as “loyal wingman” for fourth and fifth-generation aircraft.
Boeing Australia announced in early 2019 that ATS would be manufactured at the Boeing Phantom Works in Brisbane. Since then, not much has been revealed about the ‘top secret’ stealth drone project until now:
Spotted on the tarmac at an undisclosed location, possibly at the RAAF Base Amberley, ATS was conducting taxi trials ahead of its first test flight, reported Australian Defence Magazine (ADM).
“The first ATS aircraft is currently undergoing ground testing, which will be followed by taxi and a first flight later this year,” a Boeing spokesperson told ADM and declined to provide a location and exact trial details.
ATS is a stealth unmanned aerial vehicle that can autonomously fly with RAAF aircraft, such as the F-35, F/A-18E/F, and E-7A Wedgetail, to provide defense and surveillance support while on combat missions. It will be the first aircraft designed and developed in Australia in over five decades.
Boeing ATS program director Shane Arnott told ADM that ATS’ payload would be dependent on the needs of the mission of the customer. He revealed the drone is powered by a commercial turbofan engine but wouldn’t disclose any other information.
Last week, DARPAtv held a live-streamed event that featured an AI-controlled virtual fighter jet beating a human pilot in a series of simulated dogfights.
The rise of Skynet continues…
via ZeroHedge News https://ift.tt/31u6A8R Tyler Durden
