Month: July 2018

In the interests of transparency at The ‘New’ Federal Reserve, The St.Louis Fed has decided, suddenly and without warning, to discontinue the production of The Fed’s balance sheet size from its FRED website.

h/t @MichaelLebowitz

And while the data is still available on various data terminals and The New York Fed SOMA site continues to provide the updates, we can’t help but wonder why the government would decide that this data series – one that is simple to report, readily available from the source, and requires very little manpower to produce – would suddenly be discontinued from one of the most popular, publicly accessible, and free US government data repositories?

Perhaps it is because the pace of balance sheet normalization is about to take a huge step larger – from around $30bn to around $50bn per month in the next quarter…

 

Or perhaps its because if ‘average joes’ accessing FRED can see the normalization accelerating and will notice that the SMART money is piling out of the stock market – and selling to the greater fools chasing momo…

Or more likely, Gluskin Sheff’s David Rosenberg is right: “Don’t fight the Fed works in both directions…”

The NYSE comp is lower today than it was on Nov 28, even with the FAANG stocks! Nothing to show for 7 months except the nausea from all the roller coaster rides in a yr where the thematic is one of volatility and multiple compression. Don’t fight the Fed works in both directions.

— David Rosenberg (@EconguyRosie) July 4, 2018

 

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Authored by Patrick Armstrong via The Strategic Culture Foundation,

“NATO” can be a rather elusive concept: Libya was a NATO operation, even though Germany kept out of it. Somalia was not a NATO operation even though Germany was in it. Canada, a founding NATO member, was in Afghanistan but not in Iraq. Some interventions are NATO, others aren’t. But it doesn’t really mean much because NATO is only a box of spare parts out of which Washington assembles “coalitions of the willing”. So it’s easier for me to write “NATO” than “Washington plus/minus these or those minions”.

We are told – incessantly – that Putin is “Winning the Information War“, “We have no counterattack to Russia’s information warfare“. Nonsense. The real information war is being conducted by the British Army’s “77th Brigade“, the soldiers of Fort Bragg, NATO’s Centre of Excellence in Tallinn. Or by the BBC, RFE/RL, Deutsch Welle, AFP et al; each of whose budgets is many multiples of RT’s. They manipulate; they dominate; they predate; Moscow is a minor newcomer.

I am not a psychiatrist, psychologist or any other kind of psychist, but I cannot fail to notice the projection and gaslighting practised by Washington and its minions. They accuse Russia of doing things that they actually do – projection – and they manipulate our perception of reality – gaslighting. I will discuss gaslighting in the next essay.

Wikipedia defines projection as

Psychological projection is a theory in psychology in which humans defend themselves against their own unconscious impulses or qualities (both positive and negative) by denying their existence in themselves while attributing them to others. For example, a person who is habitually intolerant may constantly accuse other people of being intolerant. It incorporates blame shifting.

Another source calls it a “defence mechanism”:

Psychological projection involves projecting undesirable feelings or emotions onto someone else, rather than admitting to or dealing with the unwanted feelings.

Interference: Russia! Russia! But NATO actually does it

Russia, we are told, interfered in the US presidential election. And Brexit, and France, and Germany, Hungary, Greece, populism, and and and. The American story has metamorphosed from its initial version which was supposed to have been an attempt to elect Trump into an attempt to sow division in US society. The NYT attempts to explain how both stories fit together. The absurdity of the charge was shown when the 3500 or so Facebook ads paid for by the so-called Internet Research Agency were revealed: they were all over the place. Even more amusingly, Mueller, who no doubt thought he was safe to indict a Russian company, is trying to get out of having to prove it now that the company’s lawyers have shown up. If the matter ever does come to trial it will likely show that the whole operation was a scam designed to create interest groups to sell advertising to. (Which would explain why the majority of the ads appeared after the election: the election was the bait to create the groups.)

This is projection at its most obvious: the USA is by far the world champion at interfering in other people’s elections. No less an Establishment outlet than the Washington Post (one of the principals in sustaining Putindunnit hysteria) listed many in: “The long history of the U.S. interfering with elections elsewhere“; but piously insisted “the days of its worst behavior are long behind it”.

A quick diversion from the sordid reality of the rigged Democratic Party nomination – “don’t blame us for doing it, blame Russia for revealing it!” – attributed to Russia what it denied in itself. The actual interference, we now learn, was not by Russia on the outside but by, among others, FBI officials on the inside.

A textbook illustration of blame shifting, isn’t it?

The Russian threat NATO created

NATO expansion is all projection: NATO expands to meet the threat its expansion creates. NATO justifies itself by pretending to solve the problems it creates: Canada/Libya leads to Libya/Mali leads to Canada/Mali. When the documents about the broken expansion promise were published, we saw that NATO’s own “false memory syndrome” had been projected onto Moscow.

This NYT headline from last year perfectly shifts the blame: “Russia’s Military Drills Near NATO Border Raise Fears of Aggression“.

NATO blames Russia when its fake news fails

Does anyone remember Gay Girl in Damascus tweeting about the horrors of life in Syria under Assad? Not gay, not girl, not Damascus. How about Sarah Abdallah, who, the BBC tells us is “a mysterious and possibly fictitious social media celebrity [who] tweets constant pro-Russia and pro-Assad messages“. But she actually exists. But the champion of champions is surely Bana from Aleppo whose English abilities declined so dramatically when she got out (and few wondered how, in a destroyed city, her Internet service could be so good). Aleppo has mostly disappeared from the West’s news outlets but here is AFP’s coverage a year later (a less NATOcentric view here). Even with the obligatory propaganda twists – “pro-regime residents back on the streets” – it’s obviously a better place after the “Assad regime” reclaimed it than it was when Bana wanted to start World War III. Believing Gay Girl, believing Bana, denigrating Sara is projection: because projectors live in a world of falsehood, they assume that everything they do not fake themselves must be faked by someone else.

And we’re still waiting for Kerry’s “we observed it”, a coherent Skripal story (here’s one but it’s not the authorities’), actual evidence of the Russian “invasion” and many other things that we were told were anything but “fake news”. Believing NATO’s stories requires crimestop: if you doubt 76 missiles hit this site (here’s just one), then you must be a Russian troll or a victim of Russian fake news.

Don’t look here, look there: our fakery is real, their reality is fake.

Russia challenges the ideas NATO puts in your head

The concern over Russia’s influence in the West has grown considerably in the past few years, particularly the Russian regime’s use of information technologies to malign unfriendly Western politicians and undermine the Western public’s faith in democracy.

Russian bots everywhere influencing, dividing, affecting. But the real bots are NATO’s: from Operation Mockingbird in the 1950s, through Udo Ulfkotte’s Bought Journalists to today:

The 1,200-strong psychological operations unit based at Fort Bragg turns out what its officers call ‘truthful messages’ to support the United States government’s objectives, though its commander acknowledges that those stories are one-sided and their American sponsorship is hidden. (New Yorker, December 2005).

Our vision is to be the main source of expertise in the field of cooperative cyber defence by accumulating, creating, and disseminating knowledge in related matters within NATO, NATO nations and partners. (NATO, October 2008)

A contest to re-design the USAF Cyberwarrior Badge (2010)

Three years later the accusations have not been substantiated, but they have served their purpose nonetheless: NATO dispatched cyber warfare experts to Estonia shortly after the events of 2007 and on May 14, 2008 the military bloc established what it calls the Cooperative Cyber Defence Centre of Excellence (CCD COE) in the nation’s capital of Tallin. (2010)

The British army is creating a special force of Facebook warriors, skilled in psychological operations and use of social media to engage in unconventional warfare in the information age. (Guardian, January 2015)

Members of the Military Information Support Task Force-Central influence and persuade targets or intended audiences within the U.S. Central Command area of responsibility to reject those enemy narratives and violent extremist ideologies in order to establish conditions for long-term regional stability. (CENTCOM, April 2017).

The Army announced on Wednesday (Nov. 29) that a team of its researchers would work alongside scientists from Ukraine and Bulgaria to ‘understand and ultimately combat disinformation attacks in cyberspace. (November, 2017)

Clearly NATO is projecting what it is actually doing onto Russia.

“Hybrid war” was invented by the Russian who’s reacting to it

In 2014 NATO worried about “hybrid war”, apparently something Russia practised. This writer tells us it is sometimes called the “Gerasimov doctrine” after an article written in 2013 (note the date) by the Chief of the Russian General Staff.

According to Gerasimov, the lessons of the Arab Spring are that if the ‘rules of war’ have changed, the consequences have not – the results of the ‘colored revolutions’ are that a ‘thriving state can, in a matter of months and even days, be transformed into an arena of fierce armed conflict, become a victim of foreign intervention and sink into a web of chaos, humanitarian catastrophe and civil war.’

In short the theoretical foundation of this supposedly amazing, tricky, sinister and almost invisible Russian way of waging war originates in a paper written about Western-inspired “colour revolutions”. Like the 2003 Rose Revolution in Georgia (ten years before Gerasimov’s paper), the 2004 Orange Revolution in Ukraine (nine), the 2005 Tulip Revolution in Kyrgyzstan (eight). Once upon a time to get rid of a ruler you didn’t like, you invaded his country and, months later, fished him out of a hole and hanged him. But it’s much cheaper to invest money ($5 billion in Ukraine we are told) to organise protests and overthrow him. And, as we have seen in Ukraine, sometimes it becomes a real shooting war, with real dead bodies and entrails. Sometimes the one thing, sometimes the other; but it’s all conflict, and it’s all “hybrid”. It’s “hybrid” because it uses many methods to bring about the desired regime change: propaganda, manipulation, protest and, occasionally, a little judicious bombing or sniping.

So how ironic – how “hybrid” – to accuse Gerasimov of inventing something that began years earlier. His so-called textbook of Russian “hybrid war” is actually a response to the real “hybrid war” that Washington practises.

Projection: accusing Russia of doing what you are actually doing.

We bomb hospitals by mistake,Putin does it on purpose

Putin and Assad mercilessly bombed Aleppo – we heard about it for months. “Carpet bombing“. “War crimes“. The boy in the ambulance. Humanitarian convoys intentionally hit (although Bellingcat has become sloppy with his faked evidence). The implication was that Russia just threw lots of bombs around while NATO was precise, surgical.

We heard rather less about Mosul or Raqqa. Although that may change: even the managed Western media/human rights apparat has noticed the stunning, indiscriminate destruction.

Islamic State fighters have now essentially been defeated in Mosul after a nine-month, US-backed campaign that destroyed significant parts of Iraq’s second largest city, killing up to 40,000 civilians and forcing as many as one million more people from their homes.

In Raqqa: 20,000 bombs, 30,000 artillery rounds, altogether, about one per five pre-war occupants! Amnesty International condemned the NATO bombing of Raqqa: “we witnessed a level of destruction comparable to anything we’ve seen“.

But, as “The Persistent Myth of US Precision Bombing” shows, the US military has always pretended “surgical precision” while scattering prodigious numbers of bombs. “America has no idea how many innocent people it’s killing in the Middle East” said the Independent in 2017. Even the Establishment-friendly NYT concluded that the US military greatly understated the number of civilians it kills – reporting maybe as few as 4%! At least eight wedding parties. But the quantity of bombs dropped makes a mockery of “precision”: by its own count 114,000 weapons since 2013 on Iraq, Afghanistan and Syria. Who can believe there are a hundred thousand pinpoint targets in those countries? “The detonation of the bombs as they hit the ground appears to be pretty huge.” In Afghanistan the USAF is now bombing to “shape the terrain” – geological bombing.

If you want a single word to summarize American war-making in this last decade and a half, I would suggest rubble.

A tour through the rubble in Mosul.

To say nothing of the sustained destruction of a clearly marked and identified hospital in Afghanistan. (A mistake, for which no one was punished.)

Projection again: don’t look here, look over there.

Russian Federation is not the USSR

The USSR did lots of things in its time – influencing, fiddling elections, regime changes, fake news, projection and so on. But the Communist Party was the “leading and guiding force” in those days; today it’s the opposition; the Comintern is gone but Mockingbird is not. Things have changed in Moscow, but NATO rolls on.

Which, when you think of it, is the problem.

If NATO accuses Russia of something, NATO is actually doing it

I leave you with this simple rule of thumb:

Every time NATO accuses Russia of doing something 

you know it’s doing it itself.

And reflect on this: NATO and its propaganda minions are so unimaginative that they cannot imagine Russia doing anything but what they are doing. That’s why they are surprised all the time.

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Amid the illiquidty of a US trading holiday, Bloomberg reports that some European Central Bank policy makers are uneasy that investors aren’t betting on an interest-rate hike until December 2019, according to people familiar with the matter.

The headline was enough to spike EURUSD back to unchanged on the day…

As Bloomberg notes, investors in the money markets are fully pricing in a 10 basis points hike to the deposit rate only in December 2019, but a move in September or October next year is on the cards, the people said, asking not to be named because the discussions are confidential.

The ECB announced last month that it will end net bond purchases this year, but also that interest rates will stay unchanged until “at least through the summer of 2019.” The wording was generally interpreted as leaving open the possibility of increasing borrowing costs already at the September meeting.

But Governing Council member Vitas Vasiliauskas said the guidance should be interpreted as “until the end of September,” highlighting the ambiguity of the language.

The market’s expectations for a Sept 2019 rate-hike has now jumped from 49% to 80%…

Of course, this is just the Bundesbank hawks trying to preserve optionality in case oil prices spike and the ECB is forced to hike sooner than expected, but is definitely tilting back towards a more hawkish position.

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With the US set to launch the first salvo in the trade war against China at 12:01am on Friday when Washington imposes 25% tariffs on $34 billion in Chinese products, and with Beijing set to immediately respond, a logistical issue emerged: who gets to strike first?

Due to Beijing being 12 time zones ahead of the US, and because China also planned to launch retaliatory tariffs against the US on Friday at midnight, it would mean Beijing would technically start the trade war, because 12:01 a.m. in Beijing on Friday would mean noon Thursday in Washington. So upon reflection, and realizing that the earth’s curvature could make China appears as the aggressor, China said that it wouldn’t implement tariffs ahead of the U.S. on Friday, after previous arrangements put it on course to do so.

The earlier arrangement, a Chinese official said Wednesday according to the WSJ, reflected Beijing’s determination to start its tariffs on July 6, the same date set by the U.S. for its tariffs. And since China’s plans a tit-for-tat escalation, a statement issued by the China’s State Council on June 16 said that retaliatory extra duties on $34 billion of U.S. imports are set to take effect on July 6.  “It’s the U.S. that started all this,” a Chinese official said. “China is fully prepared.”

However, in a statement published late on Wednesday, the Ministry of Finance said “we will never fire the first shot and will not implement tariffs ahead of the U.S.,” after media reported that Beijing would start levying tariffs hours ahead of the U.S. due to the time zone difference.

So, as a result of the timezone difference, it means Beijing would actually implement its tariffs from midday Friday in China—an unusual practice for Chinese customs, which generally assess levies on a full-day basis.

Beijing’s plan shifted as it was wary of being seen as provoking the battle, and as Bloomberg adds, in the brewing trade war between the U.S. and China, “Beijing officials consistently seek to portray their nation as simply being on the defensive against Donald Trump’s aggressive tactics.”

Moving ahead of Washington to impose tariffs would have entailed risks for Beijing, analysts said, making it harder for both sides to resume negotiations stalemated for the past month. A first strike would go against the Chinese leadership’s public position that China doesn’t want a trade war with the U.S. President Donald Trump has threatened to levy duties on an additional $400 billion in Chinese products if Beijing retaliates for his first batch of tariffs. – WSJ

Commenting on the 12 hour delay, Timothy Stratford, a lawyer at Covington & Burling in Beijing said that a Chinese head start “would not be moving hearts and minds on both sides toward the positive direction of de-escalation.”

China’s desire to be seen as the victim in the trade war also explains why the PBOC has been so careful not to give the impression that it is the entity behind the recent devaluation of the Yuan, over concerns that if Trump perceives the PBOC as easing the currency in response to tariffs and not, for example, because the Chinese economy is slowing and Beijing has cut RRR twice already, he would lob even more protectionist measures into the mix (which of course doesn’t mean the PBOC is not intervening, in fact as Reuters writes today, the central bank may well get involved, although to a far lesser extent than in 2015 when there was no potential allegation of aiding and abetting a concurrent trade war).

So this is the final sequence of events:

At one minute after midnight Eastern Time on July 6, Trump will roll out 25% tariffs on $34 billion of goods representing sectors including aerospace and information technology as well as auto parts and medical instruments.

At exactly the same time, which however happens to be one minute after noon on Friday Beijing time, China will retaliate by targeting $34 billion in U.S. products ranging from soybeans, beef, pork, chicken and seafood to sport-utility vehicles and electric vehicles.

Furthermore, China picked the farm goods it is targeting to hit U.S. states that supported Trump. However, as the WSJ notes, such tactics have upset U.S. officials, who said targeting American farmers was an ill-willed attempt by the Chinese government.

What happens then?

If both nations are satisfied with just this one round of implemented tariffs, nothing much. According to UBS, $34BN in tariffs will have a limited impact on China’s $11 trillion economy.

The question, of course, is what happens if the conflict escalates. As shown in the chart below, Trump has already proposed a total of nearly $800 billion in total tariffs and countetariffs as part of Washington’s trade war playbook.

According to UBS, if the conflict escalates to include only the incremental $200 billion of Chinese exports and global trade slows, it would reduce China’s 2017 GDP of 6.9% by 0.5%, excluding secondary effects.

Will it stop there? Unfortunately, that is the question nobody knows, because once tit-for-tat tariffs begin, the equilibrium strategy shift to mutual defection, resulting in growing escalation unless either Trump or Xi wave a white flag and halts the escalation.

Or, as UBS’ chief Chine economist Wang Tao puts it “The risk of further escalation has increased.”

But at least we’ll know that going forward every Chinese “retaliatory” tariff will take place just after noon Beijing time…

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In an unusual show of resilience for the cryptocurrency space, overnight anxiety surrounding headlines that Binance – the biggest crypto exchange in world – suspended all trading and withdrawal services has been shrugged off and Bitcoin is testing $6,800 – near one-month highs…

image courtesy of CoinTelegraph

After suspending service due to “irregular” SYS trading risk alerts, Binance has resumed services and Bitcoin is bouncing back…

As CoinTelegraph reports, the temporary suspension was due to an alert over “irregular” Syscoin (SYS) trades “from a number of API users.” Binance subsequently chose to suspend trading, withdrawals and other account functions, as well as to take a series of further measures in order to protect its users.

Syscoin for its part notified the public in a tweet yesterday that its developers were investigating a “possible issue” on the Syscoin blockchain, saying that it itself “asked for exchanges to halt trading while [its team] investigate[d].”

It later tweeted that notwithstanding “odd trading behavior” and “atypical blockchain activity,” its investigation suggested that the SYS blockchain was safe, and said it was asking exchanges to reopen SYS trading.

While exact details remain undisclosed, the incident appears to have seen Syscoin trades on Binance rocket to account for over 87 percent of the token’s total trade volumes, becoming the top traded coin on the Binance platform. Binance trading data indicates that at one point, SYS prices on the platform hit a staggering 96 BTC (around $640,000):

Binance SYS/BTC Chart. Source: Binance

In response to the alert, Binance acted to remove all existing API keys and has requested all API users to recreate their API keys — stressing that customers who are not regular API users should not create an API key for the time being.

The exchange also says it has rolled back all the irregular trades, and offers anyone who was negatively affected by trading during the rising SYS prices a zero-free trading regime from July 5 through July 14.

All other Binance users will be given a 70-percent rebate on trading fees throughout the same period, paid out in the platform’s native token, Binance Coin (BNB).

Lastly, the incident has prompted Binance to create a ‘Secure Asset Fund for Users’ (SAFU), which as of July 14, will allocate 10 percent of all trading fees received into the fund “to offer protection to users and their funds in extreme cases.” Binance says that it will use segregated cold wallet storage for all SAFU funds.

According to Coinmarketcap, Binance is currently the largest crypto exchange in the world with around $1.5 billion in trade volume in the 24 hours to press time.

Bitcoin has come ripping back and tests $6800 – near 1-month highs…

And the rest of the crypto space is jumping too…

This is the first time in a while that a FUD event has been so quickly dismissed by the crypto community.

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Two weeks after Daimler AG became the first German car company to cut its earnings forecasts due to trade war concerns (an implicit warning that already despondent European economic data still has room to worsen), German Chancellor Angela Merkel has ratcheted up her doomsaying rhetoric, invoking the memory of the global financial crisis in a warning about the potential fallout should the US continue to press its trade war with China, Europe and the rest of the world.

According to Bloomberg, Merkel warned during a speech before Germany’s lower house of Parliament that the levies on European car makers threatened by President Trump and the Commerce Department could potentially be “much more serious” than the US’s tariffs on steel and aluminum. Instead, Merkel argued that economic cooperation is far more effective at bolstering economic growth, as the response to the global financial crisis (when the world’s largest central banks worked in concert to pump some $14 trillion into the global financial system) demonstrated.

And in what sounded like a bit of denial about the current state of things, Merkel warned that the US must prevent the “trade conflict” with China from blossoming into an all-out “trade war,” according to the AFP (as if that hasn’t already happened).

“The international financial crisis, which ensured that we now act in the framework of the G-20, would never have been resolved so quickly, despite the pain, if we hadn’t cooperated in a multilateral fashion in the spirit of comradeship,” Merkel said on Wednesday. “This has to happen.”

[…]

“It’s worth every effort to try to defuse this conflict so it doesn’t turn into a war,” she said. “But of course it takes two sides to do that.”

President Trump’s complaints about US trade deficits are overblown, Merkel argued. If services are factored in, the US actually has a trade surplus with the EU.

“If you include services like the digital services, then you have a completely different trade balance sheet with the US showing a surplus against the EU,” she noted.

“It is almost old-fashioned to only calculate goods and not include services,” Merkel told parliament.

This is in keeping with the chancellor’s demands for a “digital tax” that would target US tech companies like Amazon, Facebook and Google.

Of course, Merkel and other European leaders’ apprehensions about a trade war haven’t stopped Brussels from slapping retaliatory tariffs on US products from bourbon to motorcycles and threatening tariffs on an additional $300 billion in US goods.

We imagine this won’t be the last plea to “make it stop” that we hear from the embattled German chancellor, who narrowly survived a challenge to her leadership over Germany’s immigration policy – especially if the eurozone continues to be rocked by disappointing economic data that have already punctured the “global synchronous recovery” narrative, as even Mario Draghi admits that “growth may have peaked.”

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Submitted by Mish Shelock of MishTalk

Happy Hypocrite Not

The subtitle to the feature image is quite telling.

Chancellor Angela Merkel of Germany leaving a meeting of the Christian Democratic Union in Berlin early Monday. “We share a common goal in migration policy,” the party said in a statement. “We want to order, control and limit migration to Germany.”

Say what?

When did this become Germany’s goal? And what about refugee camps in Africa, with no African nation agreeing?

The New York Times reports Merkel, to Survive, Agrees to Border Camps for Migrants.

Chancellor Angela Merkel, who staked her legacy on welcoming hundreds of thousands of migrants into Germany, agreed on Monday to build border camps for asylum seekers and to tighten the border with Austria in a political deal to save her government.

Although the move to appease the conservatives exposed her growing political weakness, Ms. Merkel will limp on as chancellor. For how long is unclear. The nationalism and anti-migrant sentiment that has challenged multilateralism elsewhere in Europe is taking root — fast — in mainstream German politics.

“Her political capital is depleted,” said Thomas Kleine-Brockhoff, director of the Berlin office of the German Marshall Fund. “We are well into the final chapter of the Merkel era.”

Winner – AfD

Eurointelligence has some pertinent comments.

It is pointless to discuss who is the relative winner of this standoff. Both will lose because they have demonstrated that they cannot work together anymore. What it also shows is that attempts to solve the refugee problem, still the number one political issue in Germany, are secondary to the rivalries between CDU and CSU and inside the CSU. The beneficiary of this mess is the AfD. And there are state elections in Bavaria in October.

The deal buys a truce that will last until October. We agree with Berthold Kohler’s assessment in FAZ when he writes that Seehofer shares a large portion of the blame but not all of it. The CSU will increasingly blame Merkel – especially if they do badly at the elections. And the rest of the country has learned that the only way the two parties papered over the crisis is through the Kafkaesque legal fiction which they agreed last night.

Done Deal? No So Fast

CDU and CSU may have agreed to this deal but what about SPD?

DW comments Angela Merkel’s Last-Ditch Migrant Compromise Under Scrutiny.

Germany’s conservatives have finally found common ground on migration policy, but skepticism is rife. The proposed measures have also raised concerns over the future of the open-border Schengen Area.

Now the ball is in the center-left court of the Social Democrats (SPD) — the other player in the grand coalition. Without a green light from the SPD, new measures can’t be implemented. SPD party leader Andrea Nahles said there was “still a lot that needs to be discussed.”

In forming the long-awaited new German government earlier this year, the SPD made its opposition to closed migrant centers at borders clear — a stance which was reiterated by several SPD delegates on Tuesday.

“Transit centers are in no way covered by the coalition agreement,” Aziz Bozkurt, the SPD’s expert on migration, told German newspaper Die Welt, adding that the camps were “above the SPD’s pain threshold.”

“The SPD issued a clear rejection of closed camps,” Kevin Kühnert, head of the SPD’s youth wing, Jusos, told the dpa news agency.

Repercussions? You Bet!

The repercussions of the planned border controls could be felt well beyond the borders of Bavaria. Now the future of open-border travel across the 26 member states of the Schengen Zone could be threatened by stricter controls on the Bavarian-Austrian border.

Responding to the German conservatives’ deal, Vienna said it was prepared to take unspecified measures to “protect” Austria’s southern borders with Italy and Slovenia if its neighbor turns back migrants.

One of the key points in the migration deal between Germany’s conservatives is that asylum seekers will be rejected at the German-Austrian border if they are registered in another EU country.

How did Vienna respond to the CDU/CSU agreement? pic.twitter.com/t30KirQmrB

— DW | Politics (@dw_politics) July 3, 2018

​Agreement? Really?

So, not only does the SPD have a say in this matter, so does Austria.

Merkel repeatedly makes deals that are not hers to make. In fact, this crisis stems from precisely that fact. “We can do this.”

Well, no you can’t, and didn’t.

No Real Solution

Please consider Opinion: In bid for political survival, Angela Merkel takes refuge in Fortress Europe.

Let’s not kid ourselves. After all, in which North African countries should the reception camps be built? The reactions so far have been predominantly hostile. And with which countries can you do business if you want to preserve human rights at the very minimum? And who will take care of refugees if they are prevented from moving on? The latest pictures from Algeria show what can happen. Thousands were literally sent to the desert, including children and pregnant women, where at almost 50 degrees Celsius (122 Fahrenheit) in the shade they died miserably, of thirst and starvation. Countries like Lebanon are already taking in more refugees than the whole of Europe put together. This is also part of the truth of a European policy of isolation.

Peak Merkel

On October 18, 2015, in response to the migration crisis Merkel brought upon herself, I wrote Swamped By Stupidity; Peak Merkel.

This was my comment at that time: “Angela Merkel, being the chameleon that she is, will soon change her colors for the simple reason she needs to. If she doesn’t, it will certainly toll [the bell on] the end of her grand coalition“.

SPD Hypocrisy Coming Up

The hypocrisy spotlight now shifts to the SPD.

It will be amusing to see what logic SPD uses to agree to send migrants back to Austria and to refugee camps in Africa when no African nation is in support of the idea.

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In this era of “fake news”, trust is always being called into question, whether it’s the content in the president’s Twitter feed or the creepy notion that your Amazon Echo is listening in on your private conversations with sinister intentions. Even though “In God We Trust” is the official motto of the United States, distrust is rampant in 21st century America.

But, as Statista’a Niell McCarthy notes, when it comes to the nation’s institutions which are bedrocks of the country, however, trust levels are remaining consistent.

Gallup recently polled U.S. adults about their confidence levels in 15 different societal institutions, finding only three had a majority-level of trust.

You will find more infographics at Statista

Average confidence across the institutions has still remained consistent over the past three decades and all of them garner at least some trust. In 2018, the military remains the most trusted institution with 74 percent of Americans having some or quite a lot of confidence in it.

It comes as little surprise that small business is widely trusted given its importance to the community and it comes second with 67 percent. Even though the police has attracted criticism due to heavy-handed arrests and a spate of controversial shootings, it is the only other institution with majority trust at 54 percent.

When it comes to the church and organized religion, trust levels stand at 38 percent while the presidency is close behind with 37 percent.

Television news and Congress come last with just 20 and 11 percent trust among the public respectively.

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Publicizing its growing exasperation in dealing with president Donald Trump who refuses to halt the tit-for-tat retaliation in the growing trade war with China – which is set to officially begin on Friday when the US slaps $34 billion in Chinese exports with 25% tariffs – but has a habit of doubling down the threatened US reaction to every Chinese trade counteroffer (after all the US imports far more Chinese goods than vice versa)…

… China has proposed a novel idea: to form an alliance with the EU – the world’s largest trading block – against the US, while promising to open up more of China’s economy to European corporations.

The idea was reportedly floated in meetings in Brussels, Berlin and Beijing, between senior Chinese officials, including Vice Premier Liu He and the Chinese government’s top diplomat, State Councillor Wang Yi, according to Reuters. Willing to use either a carrot or a stick to achieve its goals, in these meetings China has been putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit later this month.

However, perhaps because China’s veneer of the leader of the free trade world is so laughably shallow – China was and remains a pure mercantilist power, whose grand total of protectionist policies put both the US and Europe to shame – the European Union has outright rejected any idea of allying with Beijing against Washington, EU officials and diplomats told Reuters ahead of a Sino-European summit in Beijing on July 16-17.

Instead, in the tradition of every grand, if ultimately worthless meeting of the G-X nations, the summit is expected to produce a “modest communique”, which affirms the commitment of both sides to the multilateral trading system and promises to set up a working group on modernizing the WTO. Incidentally, the past two summits, in 2016 and 2017, ended without a statement due to disagreements over the South China Sea and trade.

Then there is China’s “free-trade” reputation: a recent Rhodium Group report showed that Chinese restrictions on foreign investment are higher in every single sector save real estate, compared to the European Union, while many of the big Chinese takeovers in the bloc would not have been possible for EU companies in China. And while China has promised to open up, EU officials expect any moves to be more symbolic than substantive.

Almost as if behind the facade of smiles and agreement, Europe has absolutely no belief that Beijing will ever follow through with its promises.

In other words, not even when faced with the specter of a full-blown trade war, is Europe willing to terminally alienate the world’s biggest buying power: the US consumer, in exchange for some vague promises for “open trade” from Beijing.

That doesn’t mean that China won’t try however.

Vice Premier Liu He has said privately that China is ready to set out for the first time what sectors it can open to European investment at the annual summit, expected to be attended by President Xi Jinping, China’s Premier Li Keqiang and top EU officials.

Meanwhile, as the US-China trade war has drifted into the front pages of domestic propaganda, Chinese state media has been promoting the message that the European Union is on China’s side, putting the bloc in a delicate position according to Reuters.

In a commentary on Wednesday, China’s official Xinhua news agency said China and Europe “should resist trade protectionism hand in hand”.

“China and European countries are natural partners,” it said. “They firmly believe that free trade is a powerful engine for global economic growth.”

Or maybe Europe’s position is not all that delicate, because when push comes to shove, Europe is nowhere near ready to abandon its trans-Atlantic trade routes:

“China wants the European Union to stand with Beijing against Washington, to take sides,” one European diplomat told Reuters. “We won’t do it and we have told them that.”

But why does Europe – which has so staunchly publicized its disagreement with Trump’s policies – refuse to align with China? Simple: behind closed doors it admits that Trump’s complaints about Beijing are, drumroll, spot on.

Despite Trump’s tariffs on European metals exports and threats to hit the EU’s automobile industry, Brussels shares Washington’s concern about China’s closed markets and what Western governments say is Beijing’s manipulation of trade to dominate global markets.

“We agree with almost all the complaints the U.S. has against China, it’s just we don’t agree with how the United States is handling it,” another diplomat told Reuters.

And while Europe’s position is understandable, if hypocritical – after all if it believes that Trump’s approach to dealing with an ascendant China is the right one, why not just say it – the attention will shift to China, and the admission that Beijing is terrified about the consequences of a full blown trade war.

As Reuters notes, China’s stance is striking given Washington’s deep economic and security ties with European nations. It shows the depth of Chinese concern about a trade war with Washington, as Trump is set to impose tariffs on billions of dollars worth of Chinese imports on July 6.

It also underscores China’s new boldness in trying to seize leadership amid divisions between the United States and its European, Canadian and Japanese allies over issues including free trade, climate change and foreign policy.

“Trump has split the West, and China is seeking to capitalize on that. It was never comfortable with the West being one bloc,” said a European official involved in EU-China diplomacy.

Wait, that’s the exact same thing the media claims about Putin is doing, although usually in the context of some grand “Kremlin mastermind” when the establishment does not get the desired outcome. The irony is that whereas Putin is merely sitting back and enjoying the show, it is China that is actively engaging in secretive negotiations trying to shift the global balance of power.

“China now feels it can try to split off the European Union in so many areas, on trade, on human rights,” the official said.

So, when “they” say Putin, they really mean Xi? Confusing…

* * *

Never one to act without a long-term strategic plan, Beijing’s approach to cozy up with Europe may have an entirely different motive than isolating Trump: China’s offer at the upcoming summit to open up reflects Beijing’s concern that it is set to face tighter EU controls. Just like in the US, the European Union is seeking to pass legislation to allow greater scrutiny of foreign investments.

Said otherwise, China is suddenly scrambling because it realizes that unless it locks up Europe, it may well be Trump who succeeds in convincing Brussels to sign a bilateral deal with the US, at the expense of cracking down even more on China, a move which would send China’s annual GDP growth well below 6% as Beijing loses full access to its biggest trading partner.

Summarizing Europe’s position, a third diplomat told Reuters quite simply that “we don’t know if this offer to open up is genuine yet,” adding that “it’s unlikely to mark a systemic change.”

To be sure, European envoys say they already sensed a greater urgency from China in 2017 to find like-minded countries willing to stand up against Trump’s “America First” policies. And yet, according to the Reuters report, Europe is not one of those “like-minded countries.”

Almost as if everything that is publicly taking place on the international stage is nothing but a spectacle, one in which everyone’s true motivations are 180 degrees the opposite of what is stated.

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