Month: April 2020

Authored by Brian Cloughley via The Strategic Culture Foundation,

In 2015 Bill Gates gave a talk titled “We’re Not Ready for the Next Epidemic” in which, in a remarkable exhibition of understated and uncannily accurate prescience, he reflected on the outbreak of Ebola virus and forecast worse to come. This amazing man told us that “As awful as this epidemic has been, the next one could be much worse. The world is simply not prepared to deal with a disease — an especially virulent flu, for example — that infects large numbers of people very quickly. Of all the things that could kill 10 million people or more, by far the most likely is an epidemic. But I believe we can prevent such a catastrophe by building a global warning and response system for epidemics. It would apply the kind of planning that goes into national defence — systems for recruiting, training, and equipping health workers; investments in new tools; etc — to the effort to prevent and contain outbreaks.”

The world did nothing, with Trump, for example, claiming on March 20 that “nobody could have ever seen something like this coming,” and we are now suffering the ravages of a terrifying virus that threatens to kill countless millions of people if such heads of state as the criminally dithering Trump continue to wield influence on our destiny.

It is likely, however, that logic and science will overcome ignorance and political point-scoring, and that Trump and his ilk will fade away while the world limps to normality after a price in lives and suffering that nobody can estimate.

But there could be positive spin-offs that could make the world a better place, and one of them is movement towards rapprochement between the US and Russia and China, both of which Washington’s finest insist are “a greater threat than terrorism”, so that the world will be spared the debilitating effects of continuing confrontation.

One of the things that should be examined is refocusing of the Nato military alliance. Bill Gates had some good ideas about what could be done to prepare for the Covid-19 pandemic, and in his talk about likely future developments went so far as to say that the best lessons from the Ebola years were to get prepared as “we do for war” and expanded on this by noting that:

“We have reserves that can scale us up to large numbers. NATO has a mobile unit that can deploy very rapidly. NATO does a lot of war games to check, are people well trained? Do they understand about fuel and logistics and the same radio frequencies? So they are absolutely ready to go. So those are the kinds of things we need to deal with an epidemic.”

Nato is indeed well-prepared for medical emergencies and has a logistics system ideally suited to cope with the problems now facing European and other communities. According to Nato Headquarters its medical support embraces “medical general practice, force health protection before and during deployments, medical logistics and supply, medical intelligence and the medical dimension of chemical, biological, radiological and nuclear (CBRN) warfare. Civilian-military cooperation in the medical area is very important during disaster relief, mass casualty situations and population movements, [and] military medical support may be involved in these missions too.”

Unfortunately, Nato is taking no action whatever on the medical front, but continues to concentrate on expansion, with its latest addition being North Macedonia, a country of two million people with armed forces of 8,000 whose contribution to international security — and combating Covid-19 — is trivial. But it seems that it’s the gesture, the symbolism, that counts with Nato, while practicalities — and international medical catastrophes — mean nothing when there’s an opportunity to show the world that yet another tiny country has joined the military alliance that has been expanded specifically to menace Russia. On 27 March Nato announced that “As Allied armed forces help save lives in the battle against the virus, NATO’s ability to conduct operations has not been undermined. Our forces remain ready, and our crucial work goes on, in the air, at sea, and in all other domains”.

While individual countries of Nato have committed their armed forces nationally and most effectively in their fight against Covid-19, Nato itself has not lifted a finger and concentrates on confronting Russia whenever and wherever it can. The latest charade involved Royal Navy warships which had supposedly been “shadowing seven Russian warships in the English Channel and North Sea [for] over a week.” The fact is that the Russian ships (two frigates, three corvettes and two landing ships) had grouped in the North Sea before sailing perfectly normally through the English Channel. This non-event was covered by some of the UK media in terms verging on the hysterical. The Daily Mail reported that “The Navy said ‘every movement’ of the Russian vessels was monitored, amid fears Vladimir Putin could try to exploit the turmoil over the spread of the killer virus. Concerns have also been raised that Russia is behind a wave of disinformation about the disease seemingly designed to foster panic among the public.”

The connection between the pandemic virus, President Putin, the Russian navy and the supposed “wave of disinformation” and “turmoil” are creatures of the West’s trash media.

Nato itself announced that “NATO navies shadowed seven Russian warships in the North Sea. While Russian navy ships generally transit through the English Channel on their way between the High North and the Mediterranean Sea, on this occasion they remained in the North Sea for several days.” Britain’s Ministry of Defence declared that “The Navy has completed a concentrated operation to shadow the Russian warships after unusually high levels of activity in the English Channel and North Sea.”

This was a nothing event. Nobody explained what the “high levels of activity” involved. The entire affair was a publicity fandango by Nato and its supporters.

Nato is desperate to justify its existence and it seems that Brussels will go to extraordinary lengths to maximise its profile, aided by media outlets such as the tabloid Mail, which is owned by the billionaire Lord Rothermere, who lives in France and “saves a fortune in tax each year on account of his ‘non-dom’ status.” Trash papers/websites like the Mail have enormous readerships, thus exercising great influence on the public, and the propaganda effect is enormous. So it is not surprising that Nato has achieved much support in the UK.

But this does not alter the fact that Nato is completely irrelevant, not only in the pandemic crisis, but in much wider terms. If Brussels, in essence the sub-office in Europe of the all-embracing Pentagon, had paid attention to the brilliant Mr Gates and heeded his advice to prepare for “the next epidemic” then the world would have been grateful beyond words for Nato’s foresight, expertise and assistance. As it stands, the Nato posturing about a few Russian ships in the North Sea and the addition of a totally unnecessary and valueless thirtieth member simply demonstrates its irrelevance in this virus-stricken world.

On March 27, as international efforts continued to counter the foul pandemic, Nato Secretary General Jens Stoltenberg announced that “North Macedonia is now part of the NATO family, a family of thirty nations and almost one billion people. A family based on the certainty that, no matter what challenges we face, we are all stronger and safer together.” He declared that “a flag-raising ceremony for North Macedonia will take place at NATO Headquarters on March 30.”

And so Nato wobbles from irrelevance to absurd triviality. It would be amusing were it not so tragic.

As the gold market continues to deal with global liquidity issues, and virus-lockdown-related disruptions between paper and physical pricing as extremely high physical demand creates shortages, Russia made a surprise announcement on Monday.

Starting April 1, Russia will be suspending its domestic gold purchases:

“Since April 1, 2020, the Bank of Russia has suspended the purchase of gold in the domestic precious metals market.

Further decisions on the purchase of gold will be made depending on the development of the situation in the financial market…” Russia’s central bank said.

In recent years, as Kitco notes, the Russian central bank has dominated the gold market, consistently increasing its gold reserves every month for the last three years. According to data from the World Gold Council, the Russian central bank bought 158.1 tons last year. The WGC data shows that the central bank bought 8.1 tons of gold in January.

Although Russia will not be adding to its gold reserves in the near future, analysts are not expecting the central bank to start selling its gold anytime soon.

So the question is – why is Russia stopping its domestic purchases? We see four main possibilities…

1) Russia reached a limit on the relative size of gold reserves to overall reserves…

Gold accounts for over 20% of Russian international reserves, which is a high level historically and compared with other central banks.

“The central bank probably doesn’t want to increase gold’s share in reserves, while the size of reserves is falling,” said Tatiana Evdokimova, an analyst at Nordea Bank in Moscow.

2) Ease tightness in global gold markets

This would have a manifold benefit by helping enable increased ownership of physical precious metals around the world, and potentially supporting the case for more de-dollarization.

It would also reduce the huge premiums that are being paid for physical gold (why would they want to pay up for it).

3) Offer domestic producers profit opportunities

As we have detailed previously, even though there’s literally thousands of tons of gold bars sitting in vaults around the world, it’s been hard to get metal when and where it’s needed, and so premiums for physical bullion is extreme to say the least.

Given the huge physical premiums in precious metals (and a plunge in crude profits for the nation), it would make sense to enable producers to sell into global markets at a sizable profit

“The central bank is now signaling to gold sellers that they should redirect their supplies externally,” said Dmitry Dolgin, ING Bank’s chief economist in Russia. “Global demand seems to be high.”

4) They no longer like gold…

This seems unlikely, as Bloomberg notes, Russia’s relentless gold buying in recent years has been a key pillar of support for the market, putting a floor under prices as investors ditched safe havens and bought riskier, higher-yielding assets.

The bullion stockpile held by Russia’s central bank is valued at about $120 billion.

*  *  *

So why is Russia ending its domestic purchases when the rest of the world is piling in? Perhaps they see what’s coming and are fully prepared…

What will $120 billion (at current prices) be worth when the dollar dies?

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

As much as I hate to invoke The Ayn Rand lest I give off the impression I’m some kind of Objectivist, which I am most certainly not, the engine of the world is coming to a halt.

Money velocity has been falling for years. It is now cratering as we hide in our homes from a bug that eventually we will all have to reconcile with. Credit is the engine of the world of today.

It is the gas which fuels the engine of the world.

COVID-19 has cratered the global economy exposing the internal rot within our hyper-financialized global economy as nothing more than a pyramid of Ponzi schemes…

… piling credit on top of credit until there are no more greater fools to sell the new debt to.

That’s the system we have. And it is collapsing precisely because the world is situated at the point where there is little more productive capacity to monetize and pull that capital from the future to fund the new debt.

It won’t matter if we replace this system with pure helicopter money without debt as the Modern Monetary Theory proponents argue. We’re already doing a version of this by having the central banks buy debt they never intend to sell on the open market. So, the debt itself is without value. The money printed from those bonds is as much scrip as if the bond had never been issued.

But the time lost by people in pursuit of uneconomic ends by mispricing risk and servicing debt they are legally obligated to service is real.

The engine is sputtering as trillions are printed to kick it back over one more time. But the gas has too much ethanol in it. There’s not enough air.

The engine is dying.

And it can no longer outrun the abyss swallowing the world staring back at us saying, “Thanks for the snack, those frackers and restaurants are tasty, but I’m still hungry. Who’s next?”

I’ve been very clear that Europe is the next big meal for the Abyss.

In the end, a home builder here, an over-leveraged bank there are nice. These are but apéritifs in the grand scheme of things. They are like sugar to a starving child, revving it up but not fulfilling its real needs.

Europe’s troubles are multiplying because the basic premise of how to fight this virus and the deflation it is engendering is functionally flawed. More money dropped from helicopters isn’t the solution.

Freeing Europe from the euro is.

And it will set Italy in the post-COVID-19 world at odds completely with the rest of Europe.

Ambrose Evans-Pritchard adds more color to what happened at last week’s meeting of EU national leaders in which both sides of the fiscal divide dug in their heels.

Dutch premier Mark Rutte has become the spokesman for the hardliners – giving political cover to Germany – categorically ruling out emergency “coronabonds” or other forms of debt mutualisation. “It would bring the eurozone into a different realm. You would cross the Rubicon into a eurozone that is more of a transfer union,” he said. “We are against it, but it’s not just us, and I cannot foresee any circumstances in which we would change that position.”

Enrico Letta, Italy’s former-premier and an ardent EU integrationist, accused the Netherlands of leading the pack of “irresponsibles” and trying to “replace the United Kingdom in the role of ‘Doctor No’”. The reflexive use of the UK as a rhetorical foil evades of the true issue. It was not London that blocked moves to fiscal union over the last decade; it was Germany.

Pritchard brings up the spectre of Lega’s Matteo Salvini coming back into the picture, especially as the mood sours among even the most ardent Euro-integrationists like Italian President Sergio Mattarella.

Merkel is hiding behind her quarantine and letting Dutch Prime Minister Mark Rutte speak for her. And that is driving the Italians to the point of no return.

Giuseppe Conte’s government is at a loss to fight the virus. It was ignored by the EU when it asked for help it paid for when this began. As Pritchard points out, what purpose does the EU serve when it won’t act to help a member in need as it is supposed to do?

The answer is the EU’s purpose is to be obeyed.

Italy’s two ways out of this mess is leaving the euro or forcing the northern bloc to cry uncle. But that has to occur within the prospect of removing so many internal roadblocks to Italian economic growth, starting with the euro but entailing much wider reforms, which are most definitely not on the post-Keynesian/MMT technocrats’ agenda.

Italy’s debt numbers are a large part of the hunger of the Abyss and no amount of blackmail by them and France will get Germany to go along with bailing them out.

I discussed these issues and more at length with Alexander Mercouris of The Duran in this series of videos we recorded over the weekend (here, here, and here) in which we tie Europe’s collapse to all the other things we’re experiencing in the world right now.

Most EU economies are fundamentally hampered by the ossified bureaucracy of the EU which is an over-layer of domestic bureaucracies.

And, as such, these national systems are barely capable of acting in a coordinated manner normally, no less with the EU enforcing its fiefdoms at the same time in the face of overwhelming strain.

In all situations the primary objective of all organizations is survival. All else is secondary.

The more credible the threat the more extreme their response.

They will dig in to protect against that threat rather then fulfill their stated mission. In the case of the EU that means using this crisis as the excuse to force fiscal integration and monetary reform on those that don’t want it as a means to survive.

Because in a crisis period there is no time for such luxuries as national sovereignty. There isn’t any reflection that the organization itself is the source of the problem. The organization is a default setting.

And now both sides of the fiscal debate are seeing the other for what they are and the result will most likely be an irreparable fracturing of the European Union.

Italy has now seen the true face of the EU. Conte has now tried histrionics to get his bailout, which won’t actually solve anything, because he’s aligned with the Euro-integrationists. What his country needs is a new currency and different leadership.

But he’s held onto power because his opposition would have already broken with the EU.

Like the obsequious worm that he is, instead of doing the right thing, issuing mini-BOTs, to free up domestic liquidity issues, Conte is looking at putting up the whole of the Italian government’s holdings as collateral against new debt to pay for stimulus of Einsteinian proportions.

This is the ultimate sellout of Italy to the EU. As a proposal it is the ultimate betrayal of the Italian people. These buildings and infrastructure are their legacy and they will be sold as collateral to loan sharks as opposed to reclaiming their national dignity.

There is no market for these bonds. So,who will buy them? The ECB.

Who then owns all of this property, ultimately?

The ECB and therefore the EU.

This is a proposal designed for Merkel to take back to home to the Bundestag and sell to the German people. If they bail out Italy, they will get something in return for their risk.

It’ll be just like they did with Greece in 2015, except then it was Germany forcing this upon them rather than the satrap Italian government offering themselves up like lambs.

But even with this desperation attempt to find buyers for their debt, Italy is facing a bleak future without serious reform.

And the odds are about equal at this point as to whether Germany or Italy breaks the EU. Because neither side can live with the other under the other’s terms.

At it’s core, however, this fight is a symbolic one over the continued belief that government can provide the solutions to our problems rather than being the source of them in the first place.

Socialized markets with bureaucratic controls are incapable of reacting in real time to swiftly changing conditions. No amount of helicopter money will change that. No amount of taxation as social engineering tool will create preferred outcomes.

Because remember when you advocate for things like that, you’re putting in charge of those taxes the same people who are mismanaging them now. Our governments aren’t staffed and run by angels. These are the same misinformed, mal-educated, biased, myopic, flawed people as everyone else.

In short, they are human.

And they have the same pretense to knowledge everyone else does. And they will make the same mistakes as everyone else. Under the pressure of outrunning the Abyss the character of the people in charge of the money reveals itself.

All that does is create the false signal of stability while perpetuating systems that are wholly inadequate to the job. COVID-19 has exposed them ruthlessly.

And still the Abyss stares back, like an implacable kidnapper, demanding its payday. Because there is no escaping the it.

So, while you can chuck funny money in there for as long as you want it doesn’t create value. It doesn’t produce sustainable outcomes. It produces theft and graft, it extends the grift, bails out the unproductive and punishes those that honestly went about their business.

Digging holes and filling them in doesn’t produce wealth anymore than breaking a window stimulates aggregate demand for glass.

It just creates an accounting fiction which costs twice as much as having not dug the hole or broken the window in the first place. It may delay the Abyss from swallowing you until tomorrow.

Until, of course, you run out of time.

And then there won’t be enough credit in the world to keep the engine of the world from sputtering and dying. That’s when real leadership is needed.

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The very first transaction of the INSTEX special purpose ‘alternative’ vehicle between Europe and Iran has been successfully completed, according Germany’s Foreign Ministry Tuesday. “France, Germany and the United Kingdom confirm that INSTEX has successfully concluded its first transaction, facilitating the export of medical goods from Europe to Iran. These goods are now in Iran,” the ministry said in a statement.

It was created over a year ago by European signatories to the 2015 nuclear deal in order to bypass Trump administration Iran-related sanctions, after the Belgium-based SWIFT financial messaging service suspended access for Iranian banks in Nov. 2018 under pressure from Washington.

France, Germany, and the United Kingdom confirmed the first transaction with Iran involving the export of medical goods, at a crucial moment the coronavirus is ravaging the population, and vowed it was the first of many to come. 

France, Germany and the United Kingdom confirm that INSTEX has successfully concluded its first transaction, facilitating the export of medical goods from Europe to Iran. INSTEX and its Iranian counterpart STFI will work on more transactions and enhancing the mechanism. pic.twitter.com/0z4KJwDjuw

— GermanForeignOffice (@GermanyDiplo) March 31, 2020

“Now the first transaction is complete, INSTEX and its Iranian counterpart STFI will work on more transactions and enhancing the mechanism,” the statement said on behalf of the three nuclear deal signatories.

Though Tehran has long criticized the Europeans for bowing to Trump’s sanctions and not doing enough to keep up their end of the JCPOA, the ‘SWIFT-alternative’ of INSTEX is designed to save the nuclear deal by at least partially ensuring trade transactions with Europe continues, also with the assurance that no money directly changes hands.

The mechanism also seeks to woo European companies back into doing business with Iran, and to provide a legal and ‘humanitarian’ means of bypassing US sanctions without fear of penalties.

How INSTEX is designed to work, via Global Trade Law Blog: “The program sets up a trade finance system between Europe and Iran. EU exporters send goods to Iran, submit invoices to INSTEX, and receive payment from the INSTEX entity in Europe. Likewise, Iranian exporters send goods to Europe, submit invoices to the INSTEX-related entity in Iran, and receive payments in Iranian Rials. No U.S. dollars are involved, nor is the SWIFT system (both of which could subject the transactions to U.S. sanctions).”

The timing is sure to not be missed by the Trump administration, given that even amid the global coronavirus pandemic, which has been particularly fierce in Iran – taking over 2,800 lives among 44,600 confirmed cases – the US has kept up its “maximum pressure” campaign, despite critics saying the sanctions are ensuring the further spread of the virus through hitting Iran’s already weakened medical sector hard.

Authored by Paul Joseph Watson via Summit News,

The Spanish government is being sued for gross negligence after it encouraged citizens to attend giant feminist rallies across the country on March 8, potentially exposing hundreds of thousands of people to coronavirus.

“A class action lawsuit filed on March 19 accuses the Spanish government — highly ideological by any standard, as the Communist coalition partner, Podemos, was founded with seed money from the Venezuelan government — of knowingly endangering public safety by encouraging the public to participate in more than 75 feminist marches, held across Spain on March 8, to mark International Women’s Day,” writes Soeren Kern.

The rallies were attended by Spain’s deputy prime minister, as well as the prime minister’s wife and mother.

In Madrid alone, which has been devastated by the coronavirus outbreak, “Thousands of women marched…against gender inequality to mark International Women’s Day, despite concerns the gatherings could help the spread of coronavirus,” reported Reuters.

According to journalist Matthew Bennett, in an apparent effort to downplay the danger of attending the rallies to the public, the Spanish government failed to report new coronavirus cases between March 6 and March 9.

1. Vamos. Veo a algunos incrédulos con lo de la falta de datos Coronavirus de Sanidad el fin de semana del 8M. Lo vimos en su momento: no hubo actualización entre el viernes 6 a las 18:00 horas hasta el lunes 9 de marzo casi a la hora de comer. Miren los pdfs y las estadísticas… pic.twitter.com/yhJJMKvoI7

— Matthew Bennett (@matthewbennett) March 24, 2020

Despite numerous warnings and the government having already ordered major football and basketball matches to be held behind closed doors with no spectators, the Spanish government’s main point man for the coronavirus, Fernando Simón, told the public there was no risk.

“If my son asks me if he can go, I will tell him to do whatever he wants,” said Simón.

One protester at the march even held a sign that said, “Machismo kills more than coronavirus.”

Spain has now lost over 8,000 people to COVID-19.

“The lawsuit, involving more than 5,000 plaintiffs, accuses Spanish Prime Minister Pedro Sánchez and his representatives in Spain’s 17 autonomous regions of “prevarication” — a Spanish legal term that means lying and deceiving,” writes Kern. “The government was allegedly so determined to ensure that the feminist marches took place on March 8 that it deliberately downplayed warnings about the pandemic.”

If found guilty, officials will face a penalty of between nine to 15 years of disqualification from public office.

“The result of the calls for these demonstrations and their direct approval by government delegations and by the inaction of the central government chaired by the accused, Prime Minister Pedro Sánchez, could not be more antagonistic to what the EU indicated in its report. Why was not an order issued to prevent any type of mass event?” asked Víctor Valladares, a Madrid-based lawyer who is leading the lawsuit.

The Spanish government’s culpability for exposing its own citizens to coronavirus in the name of ‘woke’ activism has been almost completely ignored by the western media, despite there being much reporting about a Champions League soccer game in Milan, Italy on February 19th which was attended by 40,000 residents of Bergamo and has been described as a “biological bomb” during which “the virus was widely spread” according to Mayor Giorgio Gori.

As we document in the video below, it wasn’t just in Spain that political leaders were urging citizens to attend huge rallies and parades right as COVID-19 hit hard.

In Italy, the left-wing Mayor of Florence and leftist activist groups urged Italians to hug Chinese people in the street, despite thousands of Chinese migrant workers in northern Italy having potentially been exposed to COVID-19.

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On Tuesday a key pipeline carrying gas between Turkey and Iran exploded at the Gurbulak border gate on the Turkish side near the Iranian border, temporarily halting gas exports from Iran.

Though most international reports treated the blast as mysterious in origin, including some Turkish state broadcasters such as TRT, Iranian leader were quick to blame “terrorists”.

“This morning, terrorists attacked a natural gas pipeline inside Turkey near Iran’s Bazargan border with Turkey… Flow of gas has been halted,” director of the National Iranian Gas Company, Mehdi Jamshidi Dana, said in a statement.

Fire and smoke could be seen billowing from the site throughout the much of the day in dramatic footage captured by Russian media.

“The gas flow on the natural gas pipeline was cut and the fire that had started was extinguished by fire squads,” Turkish broadcaster TRT said, adding that the incident is under investigation.

According to the New York Times, citing Iranian state sources further, Kurdish militants operating in eastern under the PKK are being blamed for the blast :

Iran’s state-run IRNA news agency quoted National Iranian Gas Co. gas dispatching director Mahdi Jamshidi Dana as saying authorities suspected the Kurdistan Workers’ Party, or PKK, likely attacked the pipeline.

Kurdish militants belonging to the outlawed PKK have targeted oil and gas pipelines from Iraq and Iran as part of their more than three-decade old campaign for self-rule in southeast Turkey.

Indeed at the height of fighting between PKK militants and the Turkish state throughout the 1990’s and into the 2000’s the pipeline was attacked and disabled on repeat occasions. 

Turkey reportedly has kept an extremely reduced border security force in the area of late due to the coronavirus pandemic.

“It takes usually three to four days to repair and resume gas exports,” Turkish reports said.