The Myth of the ‘Opium War’ 

Imperial Twilight: The Opium War and the End of China’s Last Golden Age, by Stephen R. Platt, Knopf, 592 pages, $35

Stephen R. Platt believes that the so-called Opium War of 1839–1842 was one of the most “shockingly unjust wars in the annals of imperial history.” The central question, he writes in Imperial Twilight, is a moral one: How could Britain—a country that had just abolished slavery—so hypocritically turn around and push drugs onto “a defenceless China”?

Platt, a University of Massachusetts Amherst historian, thus joins a long list of writers who have portrayed the Opium War as one of the worst crimes of the modern era. Karl Marx, for one, believed that the slave trade was merciful compared to the opium trade. Forty years ago, John King Fairbank, doyen of modern Chinese studies, called the opium trade “the most long-continued and systematic international crime of modern times.”

If this were so, one wonders why the production, trade, and use of opium were entirely legal in such places as Turkey, Egypt, Persia, and India for decades both before and after the Opium War. One wonders why the drug’s cultivation spread in the second half of the nineteenth century to the Netherlands, France, Italy, and the Balkans. One also wonders why, as Virginia Berridge revealed in her pioneering 1981 book Opium for the People, up to 100 tons of the substance was imported every year into England, where it was readily available until the end of the 19th century, commonly administered even to children in the form of laudanum.

The author claims that opium was recreational in China but medicinal elsewhere.  But this is a dubious distinction, one not even made in Britain—a country where, before 1900, alcohol, tobacco, and opium were all viewed as both palliatives and stimulants. In the absence of modern medicine, all too often pleasure meant absence of pain, especially in a poor and largely agrarian country such as China. Opium allowed ordinary people to relieve the symptoms of such endemic diseases as dysentery, cholera, and malaria and to cope with pain, fatigue, hunger, and cold.

And the vast majority of opium users in China were not the desperate addicts portrayed by proponents of prohibition. They were occasional, intermittent, light, and moderate users—a far cry from Thomas De Quincey, an English writer who famously ingested truly gargantuan quantities of the substance. Platt quotes De Quincey’s Confessions of an English Opium-Eater at length to invoke the horrors of addiction, but surely he realizes that De Quincey was one of the 19th century’s most eccentric addicts. (Then again, he appears ignorant of the fact that, despite the title of his book, De Quincey did not eat but rather drank opium, mixed with a bottle or two of strong spirits per day in his periods of heavy dependence.)

Readers, Platt tells us, have long been treated to triumphant accounts of how the West vanquished a “childish people who dared to look down on the British as barbarians,” with China appearing as no more than a caricature of “unthinking traditions and arrogant mandarins.” The author, instead, promises to “give motion and life” to the changing China of the early 19th century.

I am not sure which “triumphant accounts” he has in mind. There is no dearth of historians who have written engagingly about the events leading up to the Opium War. Dozens of titles fit the bill, some going back more than half a century. Surely Frederic Wakeman Jr.’s Strangers at the Gate (1966) is a model, in style and in substance, although the book is apparently not worthy of mention in Platt’s bibliography. Another classic is Peter Ward Fay’s well-crafted The Opium War, 1840–1842 (1975), a 500-page magnum opus with all the telling detail required to bring the era back to life.

What Platt’s book offers is a competent and entertaining, if somewhat meandering, account of British efforts to open up the Qing empire to foreign trade. Foreign merchants were confined to a small settlement in the southern port of Canton, where they had to negotiate with the government officials who maintained a virtual monopoly over the market. The import of opium, as well as saltpeter, salt, and other commodities, was forbidden, as were exports of a range of other products, from rice, copper, and iron to timber.

In consequence, there was a thriving black market from which many profited, not least the officials who used their monopoly to line their own pockets. For decades before the Opium War, foreigners tried to break through these constraints. Platt devotes several chapters to these adventurers, traders, missionaries, and diplomats: the failed Macartney embassy of 1793, the Scottish merchants William Jardine and James Matheson, the linguist and scholar George Staunton, the British superintendent Charles Elliot. This is well-trodden ground, even if Platt tells his tale ably.

The book’s subtitle is The Opium War and the End of China’s Last Golden Age. This is somewhat puzzling. China, Platt reminds us in a short paragraph, was a powerful, prosperous, dominant country in the 18th century (an empire of “almost unimaginable height”), viewed with admiration by Europeans. But the notion of a golden age rapidly disappears from view as it becomes clear that by the turn of the century, the Qing empire was racked by rebellions, piracy, and corruption on a staggering scale.

Decades of tension in Canton over issues of trade, jurisdiction, and sovereignty came to a head in 1839, after the emperor rejected a proposal from his own advisors to legalize and tax opium. His envoy seized a vast amount of the substance and trapped foreign merchants and their families in the settlement of Canton without charge or trial. Up to this point, no British official disputed the Qing empire’s right to control its borders and determine which foreign goods should be admitted. But now, even George Staunton, who opposed the opium trade and had spent his career defending the sovereignty and dignity of the Qing, believed that force was required.

Others objected to retaliation: In a well-known speech reproduced in Imperial Twilight, a young William Gladstone declared in the House of Commons that he could not think of “a war more unjust in its origins.”

A single frigate was sent to protect merchants and civilians, followed by an expeditionary force. By 1841, following more talking than fighting, both sides had negotiated a deal in Canton, which London and Beijing then rejected. Time and again, as Julia Lovell showed in her 2014 book The Opium War: Drugs, Dreams and the Making of China, the British tried to inform their adversaries of their demands, but the dispatches the emperor’s underlings in Canton sent to the court in Beijing were fictitious. Two years into the war, the emperor still thought it was a mere skirmish and wondered where exactly England was on the map.

The Treaty of Nanjing was finally signed in 1842. It did not mention opium. England had gone to war to protest the arbitrary detention of British subjects and the confiscation of their private property. By 19th century standards, this was a legitimate reason for military engagement. Not until after the fall of the Qing in 1911 did a new generation of nationalists in the Republic of China come to see the agreement as unequal.

Even before the treaty was ratified, the former president of the United States, John Quincy Adams, commented in a lecture before the Massachusetts Historical Society that opium was a “mere incident to the dispute but no more the cause of the war than the throwing overboard of the tea in Boston harbour was the cause of the North American revolution.” It is a conclusion shared by many subsequent historians, including Peter Ward Fay and Frank Welsh, but evidently not by Stephen Platt.

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Escape from Earth

Everyone knows of the Nazi past of Wernher von Braun, yet he’s still rightly treated as a father of the American space program. So why was fellow rocketry pioneer Frank Malina written out of some histories of space exploration for his political sins? In Escape from Earth: A Secret History of the Space Rocket, Fraser MacDonald tells the story of Malina, one of the founders of the Jet Propulsion Laboratory and an irreplaceable early theorist and experimenter in finding the right explosives in the right delivery mechanisms to send rockets into space.

MacDonald believes Malina has gotten short shrift because he had been a member of the Communist Party. In 1952, after his groundbreaking work in rocketry was completed, he was indicted for lying about that fact. Malina also became disenchanted with his own invention when he saw it become a delivery device for bombs first, a tool of scientific exploration second.

MacDonald believes the U.S. government had some justification for taking a close look at rocket scientists who had had Communist Party connections in that first Cold War decade, though there was no evidence Malina ever engaged in espionage against the United States. MacDonald also makes a good case that when anti-communist fears chased one of Malina’s colleagues back to China, the result was the development of that nation’s deadly Silkworm missiles. There’s caution, and then there’s self-defeating totalitarian paranoia.

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Escape from Earth

Everyone knows of the Nazi past of Wernher von Braun, yet he’s still rightly treated as a father of the American space program. So why was fellow rocketry pioneer Frank Malina written out of some histories of space exploration for his political sins? In Escape from Earth: A Secret History of the Space Rocket, Fraser MacDonald tells the story of Malina, one of the founders of the Jet Propulsion Laboratory and an irreplaceable early theorist and experimenter in finding the right explosives in the right delivery mechanisms to send rockets into space.

MacDonald believes Malina has gotten short shrift because he had been a member of the Communist Party. In 1952, after his groundbreaking work in rocketry was completed, he was indicted for lying about that fact. Malina also became disenchanted with his own invention when he saw it become a delivery device for bombs first, a tool of scientific exploration second.

MacDonald believes the U.S. government had some justification for taking a close look at rocket scientists who had had Communist Party connections in that first Cold War decade, though there was no evidence Malina ever engaged in espionage against the United States. MacDonald also makes a good case that when anti-communist fears chased one of Malina’s colleagues back to China, the result was the development of that nation’s deadly Silkworm missiles. There’s caution, and then there’s self-defeating totalitarian paranoia.

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Stockholm: 51% Of Women Feel Unsafe Going Out At Night

Stockholm: 51% Of Women Feel Unsafe Going Out At Night

Authored by Paul Joseph Watson via Summit News,

A new survey shows that 51 per cent of women in Stockholm, Sweden feel unsafe going out at night, while the number who feel insecure in the daytime has doubled.

According to the County Administrative Board’s new citizen survey, more than half of women feel insecure in the evenings while the overall figure who feel unsafe rose from 33 per cent to 44 per cent.

Since 2011, the proportion of citizens who feel unsafe in their own residential area during the daytime almost doubled from 11 per cent to 20 per cent.

“The growing insecurity in Stockholm is also underscored by the fact that more and more county residents are refraining from activities due to concern about being exposed to crime, such as walking, cinema or visiting acquaintances,” the report stated.

34 per cent of county residents now say they have ceased almost all outdoor activity due to fear of crime, compared to 20 per cent who gave the corresponding answer in 2011.

Sweden continues to experience huge problems with violent crime, shootings, explosions and grenade attacks, mostly as a result of turf warfare between rival migrant gangs. The country has accepted hundreds of thousands of new migrants, mainly from Africa and the Middle East, since 2015.

A recent opinion poll found that the anti-mass migration Sweden Democrats are now the most popular party in Sweden. The Sweden Democrats would get 24.2% of the votes if an election was held today, beating the ruling Social Democrats.

Back in October, Leif Östling, former CEO of trucking company Scania, warned that Sweden is heading towards civil war due to uncontrolled mass immigration.

We’ve taken in far too many people from outside. And we have. Those who come from the Middle East and Africa live in a society that we left almost a hundred years ago,” he said.

Meanwhile, new figures show that more Swedes than ever before are on anti-depressants, with a million of them taking the pharmaceutical drugs.

That’s one tenth of the population – double the amount who took anti-depressants in the early 2000s.

What could possibly explain the reason as to why people living in Sweden’s progressive utopia feel so unsafe and unhappy?

*  *  *

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Tyler Durden

Fri, 11/29/2019 – 05:00

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How $5 Billion In Physical Gold Was Secretly Moved From London To Poland

How $5 Billion In Physical Gold Was Secretly Moved From London To Poland

Yesterday we reported that over the past few months, 100 tons, or some 8,000 gold bars, were secretly transported from the Bank of England’s vaults in London to Poland. But how did this carefully planned transport take place happen? G4S explains how it managed one of the biggest movements of gold between global central banks in just eight trips, whereas it took the Bundesbank just about 5 years to repatriate 674 tons of gold from New York and Paris.

In the early hours of the morning on November 22, 2019, four G4S trucks raced from a secret facility northwest of London carrying a special cargo. They were accompanied by a police escort, with a helicopter flying overhead. Lights flashed as they drove to a London airport, where 20 heavy, wooden boxes were carefully loaded and tied down in a Boeing 737 freighter plane.

“It was the eighth time we had made the trip, in the middle of the night,” Paul Holt, General Manager of G4Si in Europe (North and South), Russia and the Commonwealth of Independent States, said. “It was all very secretive, and extremely important it was done well.” The boxes were full of gold bars, bound for Poland. 

The covert mission

Over the eight trips, G4Si helped transport 100 tonnes of gold – worth approximately $4.7 billion – from London’s Bank of England to the Narodowy Bank Polski, Poland’s central bank. On the UK side, 8,000 bars were carefully counted, prepared and packaged at a purpose-built G4S gold storage facility in London. They were then loaded into high-tech armored trucks.

“The movements of the gold were meticulously planned in coordination with everyone, including the police, the Bank of England, the Narodowy Bank Polski and G4Si,” John Lennox, Operations Director for G4S Cash Solutions UK, said.

“Given the sensitivity this operation, we needed to be prepared for anything. Plans can change at short notice. Having a strong team, flexible and professional drivers, and making sure everyone was regularly updated meant the operation was a complete success.”

In the middle of the night, the trucks, escorted by police and helicopters, arrived at the London airport. The bars were then airlifted to two airports in Poland, where they were taken, under another full police escort, to the country’s central bank vaults.

They were London Good Delivery bars, a standard issue bar weighing 12.5kg each, stamped with a serial number and marker identifying the refinery at which they were produced.

G4Si has been transporting valuable commodities like gold, diamonds and fine art – for governments, museums, banks and mining companies all over the world for more than three decades. It has more than 250 specialist staff, a secure reach over 130 countries, and risk mitigation systems that ensure cargo is safe at every stage of the journey. 

One G4Si employee who accompanied the gold on two of the trips said: “This is one of the biggest private movements of gold between banks in the world.”

“It involved a huge amount of planning in a short period of time,” he said.

“We liaised with police forces, representatives from both central banks, arranged insurance – it’s $5bn worth of gold, after all – and made sure the whole operation was secure, safe, and efficient.

When the plane landed in Poland, two G4Si staff were greeted by an elite force of police officers. The gold was loaded into three armored vehicles, which were driven by a full motorcade to vaults in undisclosed locations. “Every precaution was taken to ensure the gold arrived safely,” the G4Si employee said. “We stopped at no traffic lights. G4Si took on the risk and liability of the entire transfer, until the gold was inside the Polish vaults and verified to be the right bars.”

Wartime gold

In the days after the outbreak of World War II, Poland arranged for its entire reserves of gold to be evacuated. On the evening of September 4, 1939, about 80 tonnes of gold bullion, along with other assets and banknotes, were sent on a journey that took them through Romania, Turkey, Africa, France and New York. Years later, in 1943, Poland’s national reserve was split into three and stored at the Bank of Canada in Ottawa, the Federal Reserve Bank in New York, and the Bank of England, in London.

Earlier this year, the Central Bank of Poland announced it would purchase 100 tonnes of gold, bringing its reserves to 228.6 tonnes.

Julian Haskard, Managing Director of G4Si, said this was a historic day in the gold industry. “With increasing geopolitical insecurity, this is not a surprising move,” he said.


Tyler Durden

Fri, 11/29/2019 – 04:15

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Brickbat: Pissed Off

Hundreds of former and current state inmates in New York have filed suit claiming they received additional punishment, such as forced isolation, after being given drug tests that produced false positives. A spokesman for the Department of Corrections and Community Supervision says the agency has stopped using the test and restored privileges to those who lost them as a result the test. But officials are refusing to say when they discovered the problem or how widespread it was. Leaked documents indicate some 2,000 prisoners may have been affected.

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Brickbat: Pissed Off

Hundreds of former and current state inmates in New York have filed suit claiming they received additional punishment, such as forced isolation, after being given drug tests that produced false positives. A spokesman for the Department of Corrections and Community Supervision says the agency has stopped using the test and restored privileges to those who lost them as a result the test. But officials are refusing to say when they discovered the problem or how widespread it was. Leaked documents indicate some 2,000 prisoners may have been affected.

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Brexit: The Death Knell For Further EU Integration Or An Opportunity?

Brexit: The Death Knell For Further EU Integration Or An Opportunity?

Authored by Steven Guinness,

With the UK still engaged in the process of leaving the European Union, you might consider it a strange paradox that Brexit could eventually lead to Britain integrating deeper into the EU project. On the face of it the country looks as far away now as it ever has from taking the next step on assimilating fully into the union – that being the abandonment of sterling and adoption of the Euro.

If we go back to 1997, a newly elected Labour government notified the EU council that the UK would not be joining the Euro on the 1st January 1999. Instead of being a binding decision, Britain was free to change its stance at any time provided it satisfied two conditions. The first was that the government and parliament would have to take the decision to relinquish the pound, with or without a public referendum. The second was that the UK must meet the EU’s ‘convergence criteria‘ before being accepted into the Euro fold.

Come 2003, an assessment was undertaken by Tony Blair’s government based upon five economic tests that had to be met prior to adopting the Euro. The conclusion they came to was that convergence to the currency could not be guaranteed as sustainable. For now at least, the Euro would not be in Britain’s ‘national interest‘.

When the Conservative and Liberal Democrat coalition formed seven years later, they pledged not to transfer any further powers to Brussels and to maintain sterling as the UK’s currency. Both pledges were honoured throughout the coalition’s five year term, a period which laid the foundations for an in/out referendum on EU membership.

In 2015 when David Cameron’s Conservatives secured a majority in the general election, it was on a promise that the Tories would deliver the referendum to the British people. Just thirteen months later the vote was held and the UK opted to leave. Ever since then the conversation has been geared towards the ‘future relationship‘ between Britain and the EU. Not factored into this conversation is how the Euro could potentially play a part.

To build the case for why Brexit may prove a vehicle for further EU integration, consider the words of former Labour government minister Lord Andrew Adonis. Here is an extract from a speech he made last year at Chatham House in London on the subject of a ‘disorderly‘ Brexit:

We and our children will pay a steadily greater price in economic, diplomatic and possibly security vulnerability until, as we surely will in the next generation, either by our own initiative or through a European crisis, we once again take our place in the EU.

Whether unconsciously or otherwise, Adonis made an correlation between the onset of a crisis and the UK’s re-entry into the union. He alluded to the theory that a no deal Brexit outcome would place Britain in major economic peril, so much so that the country’s weakened financial state – in large part through a sustained devaluation of sterling – would lead to the UK gravitating back into the EU’s arms.

The subject of global planners using crisis scenarios as an opening to enact significant monetary and societal change is one that I have regularly discussed. When you look back throughout history, it cannot be denied that out of crisis has invariably come the consolidation of power to the benefit of globalist institutions.

But just how plausible is it that a country which is supposed to be vacating the EU could in the not so distant future become further entrenched within it? To examine the possibility, let’s trace the progression of the Economic and Monetary Union (EMU) which was founded, along with the European Union, through the Maastricht Treaty in the early nineties.

In 1988 the Hanover European Council established a committee tasked with devising a strategy to consolidate economic power within Europe. It led to the publication of the Delors Report in 1989, named after the head of the committee Jacques Delors who was also President of the European Commission at the time. The report called for a three stage introduction of EMU and a brand new institution to be responsible for the monetary policy of Euro Zone member states. Out of this the European Central Bank was founded in 1998, and the Euro Zone in 1999.

Following the Delors Report, it was recognised that amendments to the Treaty of Rome (signed in 1957 creating the European Economic Community) would be necessary in achieving its objectives.

This is where the Maastricht Treaty comes in. First adopted in 1991 and signed in 1992, it required that members of the European Union join the Euro once each nation had honoured the aforementioned convergence criteria. The criteria is made up of four parts:

  1. Price Stability – inflation cannot be higher than 1.5% above the rate of the 3 best performing member states

  2. Sound and sustainable public finances – government deficit cannot be higher than 3% of GDP and debt cannot be higher than 60% of GDP

  3. Exchange rate stability – member states must take part in ERM II for a minimum of 2 years without strong deviations in currency value

  4. Long term interest rates – should not be higher than 2% above the rate of the 3 best performing states in terms of price stability

In regards to point three, ERM II stands for Exchange Rate Mechanism. The UK joined the original ERM in 1990, but following ‘Black Wednesday‘ in 1992 was forced to withdraw. I wrote about this earlier in the year when debating whether Brexit could trigger the demise of sterling as a reserve currency.

In short, ERM II was devised in 1999 as the successor to ERM to ‘ensure that exchange rate fluctuations between the euro and other EU currencies do not disrupt economic stability within the single market, and to help non euro-area countries prepare themselves for participation in the euro area.’

Whilst participation is voluntary, as part of the convergence criteria for adopting the Euro a nation is required to take part in ERM II for at least two years before qualifying to join the currency. At present there are seven EU nations not in ERM II, including Sweden, Hungary and Croatia. Indeed, Sweden voted in a non binding referendum in 2003 to reject adoption of the Euro and with it ERM II. But all seven countries joined the EU after the Maastricht Treaty, meaning they are duty bound to take on the Euro at an undesignated point in the future.

That said, there are no time limits with ERM II participation. For example, Denmark has been in it since 1999 and is still using their own national currency the Krone. In 2000 the Danish people rejected joining the Euro in a referendum, and since then no further plebiscites have been held.

A key aspect of Maastricht as touched on above is that countries joining the EU after implementation of the Treaty are obliged as part of their accession treaties to eventually adopt the Euro as their currency. The treaty does not specify a specific timetable for joining the Euro Zone, but out of 13 countries that joined the EU back in 2004, 7 of them are now part of the zone. More broadly, 19 of the 28 states that make up the EU now use the Euro.

Of the nations that adopted Maastricht in 1991 (including Germany and France), only the UK and Denmark managed to negotiate opt outs from having to take part in stage three of the Economic and Monetary Union. This ensured that they would not be required to sacrifice their own national currencies in favour of the Euro.

Former Conservative Prime Minister John Major was credited with securing Britain’s opt out, which came in the same year that the Anti Federalist League was established in the UK in opposition to the Maastricht Treaty. The AFL was later succeeded by the UK Independence Party (UKIP).

The opt out clause was enacted when the UK formally approved the treaty in 1993. As a consequence, Britain only took part in stages one and two of the Economic and Monetary Union. Stage one allowed free movement of capital between member states, with stage two being the convergence of member states economic policies and the founding of the European Monetary Institute (a precursor to the ECB) as preparation for the Euro.

Those who took part in stage three, which commenced in 1999, committed to the gradual introduction of the Euro and a common monetary policy under the auspices of the ECB.

Stages one and two are now fully complete. With a number of member states having yet to adopt the Euro, stage three remains ongoing.

It will probably not surprise readers to learn that in recent years the EU has been vocal in wanting to complete the Economic and Monetary Union once and for all. The Five President’s Report published in 2015 underscored this fact. According to the report, completing the EMU would require progress on four fronts:

  1. Towards a genuine economic union

  2. Towards a financial union

  3. Towards a fiscal union

  4. Towards a political union that would provide the foundation for all of the above

Page five of the report states that preparing the ground for a ‘complete architecture in the medium term‘ would ‘inevitably involve sharing more sovereignty over time.’ Therefore, a ‘genuine‘ EMU would mean member states having to accept ‘joint decision-making on elements of their respective national budgets and economic policies.’

The target year for completing the EMU ‘architecture‘ is 2025 – the same year that is synonymous with the Bank for International Settlement’s Innovation Hub programme and when central banks are seeking wholesale implementation of new payment systems. The aim of 2025 was reaffirmed in a 2017 publication called, ‘Reflection paper on the deepening of the EMU.’ One particular passage from the paper reads:

Fifteen years after the launch of the euro, ten years after the crisis hit us, it is time to look afresh at where our Union should be in the next decade, and to lay the common ground for such a future.

In terms of wanting to finalise the EMU, crisis has undoubtedly opened up an avenue of opportunity. In separate instances, departing President of the European Commission, Jean Claude Juncker, used his 2017 State of the Union address to call for full EU integration. Months later Martin Schulz, leader of Germany’s SDP party and the former President of the European Parliament, called for a ‘United States of Europe‘ by 2025, with sovereignty being ceded to the European level and the creation of a centralised Eurozone budget.

My question at this point would be whether the UK is deemed by globalists as part of that vision. The introductory page to a separate paper published two years ago, ‘Reflection paper on the future of EU finances‘, appears to suggest not:

Europe should preserve its leading role on the global stage, as a major humanitarian and development aid donor and as a leader of the fight against climate change. That must be achieved with an EU budget that will only get smaller following the departure of the United Kingdom.

The EU is nearing the end of a seven year budget cycle that began in 2014 and lasts until the end of 2020. Over the seven years the budget amounts to almost €1.1 trillion. To give an idea of the UK’s contribution, from 2007 to 2013 Britain provided £77 billion – 10% of the budget and the 4th largest contribution in the EU.

It is not inconceivable that we may gradually be heading towards a ‘you need us as much as we need you‘ scenario, whereby an EU budgeting crisis coalesces with severe economic turbulence in the UK off the back of Brexit. What the last twenty years has demonstrated is a persistant lack of public support in Britain for adopting the Euro. But if we were to hypothesise that behind the scenes there exists an objective to assimilate the UK fully into the EU ‘architecture‘, then at this point I could only conclude that the likeliest way of achieving it is for the UK to leave the EU and rejoin at a later date under a new accession treaty.

Remember that if and when the UK departs the EU in a volatile manner, the current treaties that bind the country’s membership (which include an opt out of joining the Euro) would cease to apply. They could not simply be reactivated in the future. For that reason it is almost certain that if the UK sought to go back into the EU, one of the requirements would be a commitment to join the Euro, in line with every other nation that has joined the union since the inception of the Maastricht Treaty.

What might prompt the UK seeking re-entry? Most likely a severe and permanent devaluation of sterling. Since 2016 we have seen warnings over how Britain leaving the EU could jeopardise the pound’s position as a reserve currency. According to official foreign exchange reserves figures published by the IMF, pound sterling accounts for 4.43% of global reserves (£488 billion). Compare that to the Euro at 20.34% (€2.2 trillion). A drop below 3% of global reserves was touted by S&P Global Ratings in 2016 as the level where they would no longer consider sterling as a reserve currency.

These warnings have tied in with the possibility of the UK’s credit rating being cut substantially amidst uncertainty over Brexit. One consequence of that would be higher borrowing costs for the government. It is curious that in the current general election campaign all the leading parties are pledging tens of billions more in spending amidst the spectre of a no deal Brexit. Increased borrowing and debt servicing costs, amidst significant currency devaluation, is just one potential cause for holders of sterling to lose confidence – holders that include central banks.

My biggest concern is that Brexit is connected to a larger plan to destabalise global reserve currencies, perhaps to the point of either their demotion or abolition, and in the process fundamentally weaken the economies of countries such as the UK. It is well established that figureheads within the central banking fraternity are gradually beginning to question the current model of fiat currencies, most notably the Bank of England’s Mark Carney who back in August raised the prospect of reducing dependence on the dollar with the introduction of a digital ‘synthetic hegemonic currency‘. In Carney’s words, this could be provided ‘perhaps through a network of central bank digital currencies‘.

Globalists are not sentimental when it comes to currencies. They were perfectly content to dis-empower sterling a century ago in order to advance their own economic ‘new world order‘ agenda. Prior to World War I sterling was considered the world’s pre-eminent currency in global trade. Through two global conflicts it was abandoned in favour of the dollar. Whilst the pound remains a reserve currency, its global reach is now significantly diminished.

What should be appreciated is that economic pain, whether on an individual or collective level, makes people malleable. A financial collapse blamed on Brexit could quickly turn the UK public in favour of rejoining the EU and willing to surrender the pound for what many may perceive as economic security. It would not be instantaneous. Britain would first have to satisfy the convergence criteria before being allowed to join the Euro Zone, a process that would involve joining ERM II over thirty years since being forced to withdraw from its original incarnation.

A great deal would have to materialise for this elaborate theory to become a reality. Allowing the UK to leave the EU in 2020 would be a first step.


Tyler Durden

Fri, 11/29/2019 – 03:30

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Global Auto Sales Expected To Crash More Than After The Financial Crisis

Global Auto Sales Expected To Crash More Than After The Financial Crisis

The global auto industry continues to deteriorate, namely due to broke consumers after a decade of low-interest rates and endless incentives

The auto slowdown has sparked manufacturing recessions across the world, including manufacturing hubs in the US, Germany, India, and China. A prolonged downturn will likely result in stagnate global growth as world trade continues to decelerate into 2020. 

The Fitch Ratings economics team published a new report earlier this week, first reported by CNBC, outlining how global auto sales are expected to crash at a rate not seen since the last financial crisis. 

Global auto sales fell to 80.6 million in 2018 from 81.8 million in 2017, which was the first annual decline in nearly a decade. 2019 sales are likely to fall by 3.1 million, or 4%, to 77.5 million, the most significant drop since 2008. The slowdown in auto sales has been one of the largest contributors to the global manufacturing recession. 

“The downturn in the global car market since the middle of 2018 has been a key force behind the slump in global manufacturing, and the car sales picture is turning out a lot worse than we expected back in May,” Brian Coulton, Fitch Chief Economist, said in a statement. 

China has been labeled as the primary source of falling demand. YTD auto sales in the country are down 11% versus the first ten months of 2018. There are no signs that a recovery in the industry will be seen in 2020. The US and Western Europe are expected to see declines of 2% this year. Brazil, Russia, and India are expected to record a drop of at least 5.5% YTD. 

“Structurally, environmental concerns about diesel cars — and anticipated regulatory responses — and the growth of ride-hailing and car-sharing schemes are weighing on auto demand,” Coulton told CNBC.

Fitch also warned that the global auto industry won’t rebound in 2020, and it’s also likely the industry has entered a low growth period. 

“While we don’t see a further sharp decline in global manufacturing in 2020, the auto outlook is pointing to stabilization at best rather than any sharp rebound,” Coulton said.

And with no sharp rebound in the global auto sales projected for next year, there can be no monster rebound in global manufacturing in the coming quarters. 

Nevertheless, as we’ve explained in recent months, the driver of global growth is China, and currently, China continues to see economic deceleration with no troughing in sight.

With that being said, global stocks have priced in a massive rebound in Global PMI, and, likely, the rebound won’t be coming early next year, making a case for blowoff tops in equities even stronger in the months ahead. 


Tyler Durden

Fri, 11/29/2019 – 02:45

via ZeroHedge News https://ift.tt/2Y79Tjj Tyler Durden

Eastern Europe Is Turning Into An Energy Battleground

Eastern Europe Is Turning Into An Energy Battleground

Via OilPrice.com,

Bulgaria has agreed to allow NATO to use its Black Sea port for naval coordination efforts as tensions rise between the Western military alliance and Russia.

The agreement was reached following a meeting between U.S. President Donald Trump and Bulgarian Prime Minister Boyko Borisov at the White House on November 25.

NATO has bolstered its defenses in Eastern Europe, including the Black Sea region, which is becoming a new frontier for energy geopolitics, after Russia annexed Ukraine’s Crimean Peninsula in 2014 and seized Ukrainian Navy vessels last year.

NATO earlier this year carried out military exercises in the Black Sea that involved more than 20 ships and crews from Romania, Bulgaria, Canada, Greece, the Netherlands, and Turkey to the consternation of Moscow. Russia’s Black Sea fleet is based in Crimea.

“Viewing with concern the security situation in the Black Sea, the United States welcomes Bulgaria’s offer to provide a maritime coordination function at Varna in support of NATO’s Tailored Forward Presence initiative,” the United States and Bulgaria said in a joint statement.

U.S. and Bulgarian officials will hold high-level meetings to discuss further maritime military cooperation, the statement said.

NATO members Bulgaria, Romania, and Turkey border the Black Sea along with Ukraine, Georgia, and Russia. Both Ukraine and Georgia have expressed a desire to join NATO.

Trump hosted Romanian President Klaus Iohannis last month as part of a series of engagements with leaders from Central and Eastern Europe, including Poland, the Czech Republic, Slovakia, Hungary, and Austria.

Prior to his arrival in Washington, Borisov told journalists that he would not allow a permanent NATO military base on the Black Sea, a move that would anger Russia.

Bulgaria agreed to continue increasing its military spending to modernize its military and meet NATO’s spending targets of at least 2 percent of gross domestic product, a threshold it will surpass this year following the purchase of its first F-16 fighter jets from the United States.

It’s part of a $1.67 billion package that is the country’s biggest military procurement since the fall of communism in the early 1990s. It includes ammunition, training, and support from the United States.

The eight F-16 jets are expected to be delivered to Bulgaria in 2023 and 2024 to replace the Bulgarian Air Force’s fleet of Soviet-built MiG-29s.

Washington agreed to seek defense-industry partnerships with Bulgarian companies, while Sofia agreed to open its defense procurement to U.S. companies, a separate joint statement from the two presidents said.

Energy Diversification

Washington will aim to help Bulgaria wean itself off Russian energy dependence, not just through exports of natural gas but also through the supply of nuclear fuel, the joint presidential statement said.

Bulgaria’s only nuclear plant, Kozloduy, runs on energy supplied by Russia while it imports the majority of its oil and gas from Russia. The United States will send a “technical team” to Bulgaria to study cooperation in different areas of energy, including nuclear.

“The United States and Bulgaria also plan to work together to enhance Bulgaria’s energy security by supporting expeditiously the licensing and use of American nuclear fuel for the Kozloduy nuclear power plant,” the joint presidential statement said.

The United States also called on Bulgaria to fight corruption and protect media freedoms, which have eroded over the past decade as the energy sector comes under the control of politically connected oligarchs.


Tyler Durden

Fri, 11/29/2019 – 02:00

via ZeroHedge News https://ift.tt/2pZNQhC Tyler Durden