An Interesting Professional Speech Case from 10 Years Ago, Involving Speech About Dead Bodies

I just ran across it for the first time, so I thought I’d pass it along; it’s Schoeller v. Bd. of Reg. (Mass. 2012) (opinion by Justice Fernande Duffy):

[T]he Board of Registration of Funeral Directors and Embalmers … permanently revok[ed] Troy J. Schoeller’s licenses to do business in the Commonwealth as a funeral director and embalmer … after Schoeller made comments to a newspaper reporter about his experiences in the embalming profession and those comments were later published as part of an article about Schoeller.

Schoeller did not reveal any confidential or private information about any deceased person or bereaved family members whom he had served. Rather, the board found that Schoeller had violated an ethical regulation prohibiting an embalmer from “comment[ing] on the condition of any dead human body entrusted to his or her care,” 239 Code Mass. Regs. § 3.13(7) (1998), and that he had used unprofessional language in his descriptions of dead bodies. By doing so, the board concluded, Schoeller had “engaged in gross misconduct and unprofessional conduct which undermines the integrity of the profession.” …

The conduct at issue here occurred in late 2006, when a newspaper reporter sought to interview Schoeller about a retail clothing store Schoeller had opened in the Allston section of Boston…. Among the topics discussed that evening was Schoeller’s work as an embalmer, and Schoeller made statements describing certain of his experiences. Approximately one week later, the newspaper published an article about Schoeller that included his comments about embalming[, including:]

“‘The medical examiner cut all the bones out of this infant …,’ Schoeller recalls, ‘and they did a calvarian, which means they cut the top of your head off and take out your brain. So I had a baby that looked like a bear skin rug. I had to rebuild it in nine hours. I used everything: duct tape, masking tape, tissue builder, wound filler. I worked for nine and a half hours…. I put, like, coat hangers and caulk in there and put him into a little baby outfit. He even weighed enough too, because I packed his head and his chest. He looked awesome.’ …

“Looking over the menu … before his wife arrives, Schoeller says he can’t order the chicken satay here because when he got it last time, the skewered meat had fat chunks on it. ‘I can’t eat fat like that,’ he says. ‘And I really hate embalming fat people, like people who weigh 300 pounds. Because when you cut open a fat person,’ he says matter-of-factly, ‘butter leaks out. Literally, yellow oil leaks out of the wound and floats on top of the water. If you put butter in the microwave and put it in the water, it turns into little balls — fat globules — and that’s what comes out of fat dead people. It’s so nasty.'” …

“On the walk home to the couple’s … apartment, Schoeller thinks of something else to tell me. ‘Here’s something my friends find amusing. Decomposing bodies give off methane. What your body does with methane, it puts it all in the same place, which is your bowels. So you actually fart out dead people rot and it smells like the guy you were working on today. I’ll go home and I’ll fart and [my wife] will be like, ‘Oh my God,’ and I’ll be like, ‘That was Mr. Rosenberg [a fictitious name -EV].'”

After seeing Schoeller’s statements in the article, the chapel that employed Schoeller as an embalmer terminated his employment and filed a complaint with the board….

If interpreted literally, the regulation would not only prohibit funeral directors and embalmers from discussing an essential component of their profession in the course of their personal lives, but would also prevent any comment about a deceased’s condition to bereaved family members or to authorities to whom embalmers and funeral directors are required to report. The board has construed § 3.13(7) more narrowly; it submits that the regulation prohibits only the use of “unprofessional language,” which it defines as comments made “in an undignified and salacious manner about the condition of dead bodies.” As construed by the board, § 3.13(7) prohibits an embalmer or funeral director from making any undignified comments about dead human bodies that have ever been entrusted to his or her care, including when made in a private capacity and not as a professional and when the speech is uttered outside of the presence of the deceased or the bereaved….

While the analogy is imperfect, the regulation governing the speech of funeral services professionals, like regulations governing that of attorneys, seeks to restrict speech both when embalmers and funeral directors are acting directly in the performance of their professional capacities and when they are not providing funeral services and are not speaking in the presence of the deceased or bereaved. The board found that Schoeller’s speech, which occurred while he was not rendering professional services, violated § 3.13(7) and “constituted misconduct that undermined the integrity of the profession.” Whether the board may permissibly regulate speech in this context — where the speaker is not acting in his or her professional capacity — turns on whether the restriction is narrowly drawn and whether the board’s interest is sufficient to require that the First Amendment interests at stake must “give way to other compelling needs of society.”

Here, the board has proposed that the compelling societal need to which speech rights must give way is the integrity of the funeral services profession…. As noted, the Legislature has provided that embalmers and funeral directors may be required to abstain from using “profane, indecent or obscene language” while acting in a professional capacity, and we agree that violation of such a restriction on speech could undermine the integrity of the funeral services profession. We have recognized in other contexts that there is a “special sensitivity” required in the processing and handling of a deceased human body,  and that funeral services “are always rendered and most often contracted for under emotional circumstances.”

The board proposes that these interests require the broadening of limitations on the speech of embalmers and funeral directors to include comments made outside of funeral homes, and would extend the prohibition to comments made by embalmers and funeral directors in any context…. As we have described, however, regulations that attempt to limit the speech of licensed professionals when acting outside of their professional capacity must be narrow, and applied with precision to the type of speech that the board has a legitimate interest in regulating…. [W]e conclude that the board’s generalized interest in maintaining the integrity of the profession cannot outweigh the First Amendment rights of embalmers and funeral directors when acting outside of their professional capacity; and, even if the board’s interest could outweigh those First Amendment rights, § 3.13(7) is not sufficiently narrow to achieve that end.

The record contains numerous examples of circumstances in which the board’s regulation could reach constitutionally protected speech and potentially expose embalmers and funeral directors to discipline given the board’s prohibition of “unprofessional” or “undignified” comments. Among these examples are articles in professional publications in which the authors, who are funeral service professionals, comment on the condition of deceased bodies in graphic terms that some might subjectively view as undignified. {One such article describes in detail the “skin slip” that occurred as a consequence of bodies having been exposed to high heat in the fire that caused their deaths. In another article, an embalmer described as coming from Massachusetts offers a “Tech Tip”: “A dull [instrument] will prevent the cavity chemical from getting into [hollow organs] to do its job, and that may cause gas buildup.” Other articles detail the reconstruction of disfigured corpses, including a description of the swollen and distorted appearance of a body that had been shipped from overseas. The condition of the body “wasn’t good…. Some facial tissue was beginning to separate from early stages of decomposition.” One article is devoted to the difficulties of reconstructing the face of a teenage boy that had become distorted by a large tumor; the author wrote, “This distortion was (and probably still is) one of the most grotesque things I’ve ever seen in my life.” The author described the “tissues throughout the body” as “spongy and breaking down from the effects of drug treatment,” and proposed a procedure he had found useful in the circumstances to get “better control of the head.”} … Like these authors, Schoeller did not identify a particular deceased person or reveal confidential information about any decedent’s family. His comments described in detail the process of embalming the dead, an area recognized by the profession as one about which the public knows little and should be more informed….

In summary, while there may be circumstances in which the board can appropriately seek to limit the speech rights of licensed funeral directors and embalmers, in proscribing all “undignified” comments, the board has “traveled in the constitutionally unacceptable direction,”  of banning a substantial amount of protected speech. The board cannot apply § 3.13(7) to restrict such a wide range of speech, nor may it limit that speech by relying on a generalized notion of the integrity of the funeral services profession.

 

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Thoughts on the War in Ukraine

When Russian troops entered Ukraine last Thursday, it was hard not to feel an overwhelming sense of doom and gloom.  There were, it seemed to me, two possible outcomes, both terrible: Either the Russians would steamroll over the Ukrainian resistance, occupy Kyiv, install a puppet government, throw Zelensky and his associates in jail (or worse), and leave; or, the Ukrainian resistance would be more formidable than expected, and there would be a horrific, bloody carnage that would, inevitably, end in a Russian victory by virtue of their vastly superior force, at the cost of tens or hundreds of thousands of casualties.

But I hadn’t foreseen the third possibility:  that the Allies could deploy a weapon powerful enough to force Putin to reconsider the wisdom of what he was doing and bring him to the negotiating table. But that is what seems to be happening.

As I write this, the two sides are meeting at the Belarus-Ukraine border to explore whether some kind of negotiated settlement is possible. What is noteworthy – remarkable, even, – is that it was the Russians who instigated the negotiations, inviting Zelensky to come to the table. On Day Four of the invasion.

That does not look, to me, like the move of someone who believes he is in a strong position, with the situation well in hand. It looks even less like that when, after Zelensky refuses to come to Belarus, Putin compromises, and agrees that the two sides can hold their meeting at the border.

If you saw that coming on Thursday morning, you’re a lot smarter than I am.

Perhaps it will turn out to be all bluff and bother. But it feels, to me, like the tide has perhaps already started to turn. After four days. What happened?

Two things happened. The first, of course, is that the Ukrainian resistance appears to have been stronger, and the steamroll into Kyiv was going to take longer, than anticipated.

Not to minimize in any way the quite extraordinary bravery and valor that the Ukrainians are demonstrating,** my guess is that, standing alone, that didn’t give Putin too much pause. He had only deployed a relatively small fraction of his troops, and the overwhelming superiority of their numbers surely meant that the steamroll-into-Kyiv strategy was still available, it would just have to come at the cost of immense bloodshed and suffering.  And I’m not at all sure that those consequences weigh much in Putin’s calculus.

** I grew up in a household where, to be entirely candid, Ukrainians were not held in terribly high regard. My grand-parents fled from that part of the world; Jews had an especially tough time in the Ukrainian countryside, and the stories they brought with them of life in the Ukraine were not pleasant ones. But it’s hard not to be stirred by the incredible courage that so many Ukrainians are now demonstrating to defend their country’s independence.

The other thing that happened is that on Saturday – the day before Putin extended his offer to begin negotiations – the Allies rolled out their new “sanctions.” It includes a weapon that appears capable of inflicting – indeed, one that has already begun inflicting – catastrophic damage on the Russian economy and the Russian people.

The sanctions package announced on Saturday not only included kicking several large Russian banks off of the SWIFT network – the main global network for bank-to-bank transactions – it also

“…prohibits United States persons from engaging in transactions with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation. This action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located.”

It is rather breath-taking in its simplicity.  The Fed, of course, is a “United States person.” So it means that, henceforth, the Fed will not honor requests from the Russian Central Bank to “cash in” any portion of their dollar holdings.

So that stack of 600 billion or so dollars that Putin and his cohorts have gathered together to ride out the war?  It’s now worth a good deal less than it was on Friday, because a substantial portion of that stack is “held”** in US financial institutions that are ultimately under the Fed’s control, and the Fed is now prohibited from transferring control over those funds to the Russian Central Bank (or to anyone else designated as the recipient by the Russian Central Bank).

** The use of “hold” in its various forms in connection with these accounts is antiquated and, worse, confusing. Putin’s stack – or, really, anybody’s stack – isn’t “held” anywhere, these days; at least, not in the sense that it consists of tangible things, like dollar bills, capable of a “holding.” The stack isn’t really a thing that can be held; it consists of ledger entries, inter-linked to various obligations of financial institutions within the global system requiring them to adjust their ledger entries as directed by the “holder” of the account.

And if the Germans, and the Swiss, and the British, and the others who “hold” these assets that “belong” to the Russian government also get on board, the stack gets smaller and smaller.

It starts a kind of death-spiral, because Putin will really need those dollars to prop up the ruble. That’s almost certainly why he put the stack together in the first place – a rainy day fund for buying up rubles to keep the price stable.  It has already, as of today, fallen by one-third. It will continue to fall, because as the sanctions noose tightens a ruble can buy fewer and fewer things; and the drop accelerates as more people become increasingly desperate to unload the rubles that they have and convert them into something of value before they fall further.

The Russian Central Bank can stop all this from happening by promising to keep buying rubles, at a set and stable price, in exchange for good old American dollars.

Except now it can’t.

This is the kind of thing that brings governments down – when the price of bread goes up 500% because your leaders have done something very stupid. Isolated from the global financial system – with nobody willing to take their rubles, or even their dollars and deutschemarks and euros in exchange for goods and services – the Russian economy will go into free fall.  And Putin surely knows that. His oligarch friends know it, too.  The suffering this will impose on the Russian people will be immense, and many of them may not take kindly to having had that imposed on them in order to satisfy Putin’s imperial fantasies. If they’re not worried about that, they should be.

It could all turn out differently, of course.  I could be wrong, and the war could take a completely different turn. The actual implementation of these sanctions, and the goal of isolating Russia from the global financial system, may prove too difficult to accomplish. As the saying goes, there’s nothing harder to predict than the future.

But the sanctions do already seem to be working: the ruble is collapsing, the Russian stock market (closed today, by order of the government) has lost around 40% of its value, the Russian Central Bank has raised interest rates to 20%, and Putin has asked for a meeting with the Ukrainians.

My sense is that this is not only a turning-point moment in this war; I think it may well be a turning-point moment in the long history of war. On Thursday, it looked, terrifyingly, like we were about to re-live something out of the 1940s – an all-out ground war in Europe, with tanks and infantry and air cover and the rest of it.

But if the Allies have found a way to wreak havoc on the entire Russian economy without, as it were, firing a shot, this war will not be remembered as a throwback but for the first appearance of a new kind of warfare, played out not on the actual battlefield but on the global network. I don’t know if it will work – but it sure looks to me like it can work, and – much more importantly – that the Russians are starting to act as if they know it can work, too.

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Sen. Josh Hawley Proposes Congress Reopen US Energy Production “Full Throttle”

Sen. Josh Hawley Proposes Congress Reopen US Energy Production “Full Throttle”

Authored by Katabella Roberts via The Epoch Times,

Senator Josh Hawley (R-Mo.) on Feb. 28 vowed to introduce legislation that will reopen energy production in the United States “full throttle” as the cost of oil continues to skyrocket amid record inflation and Russia’s invasion of Ukraine.

Announcing the legislation, dubbed The American Energy Independence Act of 2022, Hawley said on Twitter that the bill will “reverse President Biden’s shutdown of the American energy sector and return American energy to full production.”

“Tomorrow, I will introduce legislation in the Senate to reopen American energy production full throttle and reverse Joe Biden’s disastrous capitulation to our enemies,” Hawley said.

The bill comes as oil prices surged above the $100 per barrel mark on Feb. 23 after Russian President Vladimir Putin announced in a televised address that a military operation was set to get underway in Ukraine. The last time the price of oil rose over $100 per barrel was in 2014.

Meanwhile, gas and energy prices have steadily been rising in the United States where total domestic gasoline stocks have declined and demand for gas has increased, with experts warning that Americans could face more pain ahead at gasoline pumps.

Russia’s invasion of Ukraine prompted President Joe Biden to issue sanctions against the company building the Nord Stream 2 pipeline after Germany announced a freeze on the project. The pipelines would carry around 55 billion cubic meters of natural gas from Russia to Germany each year.

Subsequent “massive and targeted” sanctions against Russia were also announced by the EU, which includes targeting the country’s oil financial, energy and transport sector, among others.

Experts fear that such sanctions will drive up energy prices even more, with many NATO countries such as Germany dependent on Russian oil to fuel their countries while Russia remained the largest supplier of natural gas and petroleum oils to the EU in 2021, according to Eurostat.

Russia is also one of the world’s largest producers of oil and natural gas, accounting for 17 percent of the world’s natural gas and 12 percent of its oil.

Amid concerns over prices that look set to increase further, Hawley says his bill will ensure that the United States achieves “full energy independence and low energy costs for its citizens” and makes such a move an official policy.

It would also “instruct federal agencies to identify and rescind existing regulations that have the effect of reducing American energy independence,” and prohibit new rules that reduce energy security or raise energy prices, as well as direct agencies to work towards achieving “energy independence” by 2024.

The bill also proposes defunding contributions by the United States to any provisions of the Paris Climate Agreement, easing regulatory burdens on energy companies involved in fracking, and lowering the “social cost of carbon” to $0 per ton to focus government standards on boosting domestic energy production as opposed to prioritizing the U.N.’s climate change goals.

Finally, it would “rescind the Biden Administration’s moratorium on oil and natural gas leases on public lands,” and restore the permit for the Keystone XL Pipeline that runs between Canada and the United States after it was canceled by the Biden Administration last year, citing predicted impacts of climate change.

“The Biden Administration’s energy priorities are completely backwards and now working Americans are paying the price,” Hawley said in a statement.

“The United States cannot afford to be energy dependent on our enemies. We must reopen domestic energy production full throttle, restore our energy independence, and reverse this policy of American energy surrender.”

Hawley’s announcement comes as White House press secretary Jen Psaki said on Sunday that calls for the United States to boost domestic production of oil are a “misdiagnosis.”

“The Keystone Pipeline was not processing oil through the system. That does not solve any problems. That’s a misdiagnosis or maybe a misdiagnosis of what needs to happen,” Psaki said during an interview with ABC This Week Sunday.

“I would also note that on oil leases, what this actually justifies, in President Biden’s view, is the fact that we need to reduce our dependence on foreign oil, on oil in general … and we need to look at other ways of having energy in our country and others.”

Before the Biden administration pulled the plug on Keystone XL, pipeline owner TransCanada had predicted the project to be open for use by 2023.

Tyler Durden
Mon, 02/28/2022 – 11:45

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Thoughts on the War in Ukraine

When Russian troops entered Ukraine last Thursday, it was hard not to feel an overwhelming sense of doom and gloom.  There were, it seemed to me, two possible outcomes, both terrible: Either the Russians would steamroll over the Ukrainian resistance, occupy Kyiv, install a puppet government, throw Zelensky and his associates in jail (or worse), and leave; or, the Ukrainian resistance would be more formidable than expected, and there would be a horrific, bloody carnage that would, inevitably, end in a Russian victory by virtue of their vastly superior force, at the cost of tens or hundreds of thousands of casualties.

But I hadn’t foreseen the third possibility:  that the Allies could deploy a weapon powerful enough to force Putin to reconsider the wisdom of what he was doing and bring him to the negotiating table. But that is what seems to be happening.

As I write this, the two sides are meeting at the Belarus-Ukraine border to explore whether some kind of negotiated settlement is possible. What is noteworthy – remarkable, even, – is that it was the Russians who instigated the negotiations, inviting Zelensky to come to the table. On Day Four of the invasion.

That does not look, to me, like the move of someone who believes he is in a strong position, with the situation well in hand. It looks even less like that when, after Zelensky refuses to come to Belarus, Putin compromises, and agrees that the two sides can hold their meeting at the border.

If you saw that coming on Thursday morning, you’re a lot smarter than I am.

Perhaps it will turn out to be all bluff and bother. But it feels, to me, like the tide has perhaps already started to turn. After four days. What happened?

Two things happened. The first, of course, is that the Ukrainian resistance appears to have been stronger, and the steamroll into Kyiv was going to take longer, than anticipated.

Not to minimize in any way the quite extraordinary bravery and valor that the Ukrainians are demonstrating,** my guess is that, standing alone, that didn’t give Putin too much pause. He had only deployed a relatively small fraction of his troops, and the overwhelming superiority of their numbers surely meant that the steamroll-into-Kyiv strategy was still available, it would just have to come at the cost of immense bloodshed and suffering.  And I’m not at all sure that those consequences weigh much in Putin’s calculus.

** I grew up in a household where, to be entirely candid, Ukrainians were not held in terribly high regard. My grand-parents fled from that part of the world; Jews had an especially tough time in the Ukrainian countryside, and the stories they brought with them of life in the Ukraine were not pleasant ones. But it’s hard not to be stirred by the incredible courage that so many Ukrainians are now demonstrating to defend their country’s independence.

The other thing that happened is that on Saturday – the day before Putin extended his offer to begin negotiations – the Allies rolled out their new “sanctions.” It includes a weapon that appears capable of inflicting – indeed, one that has already begun inflicting – catastrophic damage on the Russian economy and the Russian people.

The sanctions package announced on Saturday not only included kicking several large Russian banks off of the SWIFT network – the main global network for bank-to-bank transactions – it also

“…prohibits United States persons from engaging in transactions with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation. This action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located.”

It is rather breath-taking in its simplicity.  The Fed, of course, is a “United States person.” So it means that, henceforth, the Fed will not honor requests from the Russian Central Bank to “cash in” any portion of their dollar holdings.

So that stack of 600 billion or so dollars that Putin and his cohorts have gathered together to ride out the war?  It’s now worth a good deal less than it was on Friday, because a substantial portion of that stack is “held”** in US financial institutions that are ultimately under the Fed’s control, and the Fed is now prohibited from transferring control over those funds to the Russian Central Bank (or to anyone else designated as the recipient by the Russian Central Bank).

** The use of “hold” in its various forms in connection with these accounts is antiquated and, worse, confusing. Putin’s stack – or, really, anybody’s stack – isn’t “held” anywhere, these days; at least, not in the sense that it consists of tangible things, like dollar bills, capable of a “holding.” The stack isn’t really a thing that can be held; it consists of ledger entries, inter-linked to various obligations of financial institutions within the global system requiring them to adjust their ledger entries as directed by the “holder” of the account.

And if the Germans, and the Swiss, and the British, and the others who “hold” these assets that “belong” to the Russian government also get on board, the stack gets smaller and smaller.

It starts a kind of death-spiral, because Putin will really need those dollars to prop up the ruble. That’s almost certainly why he put the stack together in the first place – a rainy day fund for buying up rubles to keep the price stable.  It has already, as of today, fallen by one-third. It will continue to fall, because as the sanctions noose tightens a ruble can buy fewer and fewer things; and the drop accelerates as more people become increasingly desperate to unload the rubles that they have and convert them into something of value before they fall further.

The Russian Central Bank can stop all this from happening by promising to keep buying rubles, at a set and stable price, in exchange for good old American dollars.

Except now it can’t.

This is the kind of thing that brings governments down – when the price of bread goes up 500% because your leaders have done something very stupid. Isolated from the global financial system – with nobody willing to take their rubles, or even their dollars and deutschemarks and euros in exchange for goods and services – the Russian economy will go into free fall.  And Putin surely knows that. His oligarch friends know it, too.  The suffering this will impose on the Russian people will be immense, and many of them may not take kindly to having had that imposed on them in order to satisfy Putin’s imperial fantasies. If they’re not worried about that, they should be.

It could all turn out differently, of course.  I could be wrong, and the war could take a completely different turn. The actual implementation of these sanctions, and the goal of isolating Russia from the global financial system, may prove too difficult to accomplish. As the saying goes, there’s nothing harder to predict than the future.

But the sanctions do already seem to be working: the ruble is collapsing, the Russian stock market (closed today, by order of the government) has lost around 40% of its value, the Russian Central Bank has raised interest rates to 20%, and Putin has asked for a meeting with the Ukrainians.

My sense is that this is not only a turning-point moment in this war; I think it may well be a turning-point moment in the long history of war. On Thursday, it looked, terrifyingly, like we were about to re-live something out of the 1940s – an all-out ground war in Europe, with tanks and infantry and air cover and the rest of it.

But if the Allies have found a way to wreak havoc on the entire Russian economy without, as it were, firing a shot, this war will not be remembered as a throwback but for the first appearance of a new kind of warfare, played out not on the actual battlefield but on the global network. I don’t know if it will work – but it sure looks to me like it can work, and – much more importantly – that the Russians are starting to act as if they know it can work, too.

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Goldman Says Gold Is The Currency Of Last Resort; Trumps Treasuries As Haven-Of-Choice

Goldman Says Gold Is The Currency Of Last Resort; Trumps Treasuries As Haven-Of-Choice

In the last month, as global geopolitical tensions have soared, gold has dramatically outperformed peer ‘safe-havens’ such as US Treasuries, bitcoin, and the swiss franc.

“Gold may continue to outperform other haven assets, with an added tailwind from central bank purchases and also displaying its characteristic as an inflation hedge,” said Yeap Jun Rong, a strategist at IG Asia Pte.

“The conflict has not seen any signs of easing and further escalation may heighten risks of persistent inflationary pressures, which will continue to draw traction for gold prices.”

All three asset-classes had traded with a relatively high correlation for the last few years, but the last two months have that change dramatically…

As Bloomberg reports, the worst geopolitical crisis in Europe since World War II has redefined the limits of safety for investors as costlier commodities add to fears of accelerating inflation. Even the yen and the Swiss franc, which tend to strengthen during times of risk aversion, have fared poorly due to their respective central banks’ loose monetary policies.

“The whole crisis has gone to a level that we couldn’t have believed, and investors are no longer saying we’ll buy some defensive stocks or bonds,” said Global CIO Office chief executive officer Gary Dugan.

“It’s now about buying gold especially against the backdrop of inflation risks that have been made worse by the conflict.”

Goldman believes the outlook for the precious metal price is harder to call in the short-term, but still bullish medium-term.

  • On the one hand, gold’s unique role as the currency of last resort will likely be apparent if restrictions on Russia’s Central Bank accessing its offshore reserves leave it leveraging its large domestic gold stockpiles to continue foreign trade, most likely with China.

  • However, on the other hand, the required large sales of gold at below market prices, given the limited appetite outside of China for such trade settlement, would emphasize its potential limited scale in the future, with few other countries able to use gold as such a currency of last resort.

Ultimately, Goldman concludes that “the recent escalation with Russia create clear stagflationary risks to the broader economy, driven by higher energy prices, which reinforce our conviction in higher gold prices in coming months and our $2,150/toz price target.

Specifically, Goldman’s Damien Courvalin writes that Gold is the currency of last resort.

Gold acts as an effective geopolitical hedge, but only as long as the geopolitical event is severe enough to impact the US economy. This may be due to the fact that the Dollar itself often acts as a safe haven when tensions arise in other parts of the world, rather than gold. But when the US itself is affected, gold acts as a hedge of last resort. In our view, the ongoing global energy crisis and above-target US inflation mean that any disruption to commodity flows from Russia and Ukraine could raise concerns of a US inflation overshoot and a subsequent hard landing, which would be bullish for gold.

In addition, with energy prices high and Russia less dependent on external financing than in 2014, Russian sales of central bank gold reserves may be limited.

Russia’s “de-dollarization” could not be clearer…

On net, Goldman expects gold to maintain the cleanest positive correlation to the current geopolitical tensions, and serve as the most efficient hedge of last resort against them.

Tyler Durden
Mon, 02/28/2022 – 11:25

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The War in Ukraine Is Putin’s Fault, but 30 Years of Misguided U.S. Foreign Policy Didn’t Help


ppaphotos935076

There is one person—and just one person—who is responsible for the widespread death and devastation inside Ukraine right now, and that is Vladimir Putin. He has attacked and invaded a sovereign nation without justification. Putin’s nostalgia for the old Soviet Union is despicable, and his imperialist ambitions to expand his authoritarian grasp are in direct violation of international law, humanitarian principles, and the very stability of the post–World War II peace that has endured in much of the word for decades.

Putin is a tyrant and a killer. His decision to put Russia’s nuclear forces on high is unconscionable. It’s a move that harkens all the way back to the Cuban Missile Crisis of 1962—a leader of a superpower has unilaterally brought civilization closer to nuclear war. This is indefensible, and the whole world knows it. The people of Russia know it: That’s why thousands of them are protesting Putin’s war all over their country. Putin’s government has arrested more than 6,000 peaceful demonstrators so far.

Putin’s nuclear threats will put the rest of the developed world on high alert in response. This means we’ve rapidly landed in a place where the risk of all-out nuclear war is significantly higher. There’s no reason for this. We are in this situation because of the actions of one very evil man.

All of that said, it’s important to call out the bad U.S. foreign policy moves that helped get us here. And even though no one did this but Putin, the U.S.’s failed approach to Russia for the last 30 years—a bipartisan effort that includes mistakes by Presidents Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and Joe Biden—deserves criticism as well.

Let’s start with the Clinton administration in the 1990s. As Reason‘s Eric Boehm pointed out, Clinton was the first U.S. president in decades to inherit a world that did not include the Soviet Union. Clinton could have completely revamped NATO now that its purpose—defending member nations against the expansion of the Soviet Union—was no longer applicable. Instead, Clinton, with the Republican Party’s support, oversaw an expansion of NATO. Hungary, the Czech Republic, and Poland all joined. Years later, Putin would cite this enlargement of NATO as one of the West’s “broken promises” that justified his Ukraine policy.

Again, Putin is dead wrong. Nothing justifies his Ukraine policy. But the purpose of NATO was defensive: to protect the world from Russian aggression. If NATO policy is antagonizing Russia and being used as a pretext for invasion, it clearly isn’t serving that goal.

With the Clinton administration’s backing, NATO also intervened in Yugoslavia in 1999 to ensure an independent Kosovo. That military action never had the backing of the United Nations; it was a violation of international law, just like Putin’s attack on Ukraine.

George Bush’s foreign policy has not held up well, due to the U.S.’s horrendous misadventures in the Middle East, but Bush blundered in Europe as well. At a 2008 NATO summit—one attended by Putin—Bush staunchly supported Ukraine’s eventual admittance to NATO, over the objections of France, the U.K., and Germany.

The Obama administration, of course, inflamed tensions with Russia when the U.S. took sides in the 2014 Ukrainian revolution. And then came Donald Trump. Democrats and their allies in the mainstream media ceaselessly accused Trump of being a Russian stooge, even a pro-Putin plant, installed by Russia as president of the U.S. due to a subtle influence campaign on Facebook. This was of course ridiculous—and as evidence of how ridiculous the claims are, Trump’s actual administration was just as foolishly tough on Russia as his predecessors. In 2017, Vice President Mike Pence even reiterated the 2008 Bucharest declaration.

The Biden administration maintained that same fiction. A clear declaration that the Ukraine would not be joining NATO might have deprived Putin of the intellectual ammo he required to move forward with this invasion. We don’t know for sure. But it was incumbent on the U.S. to try. NATO is a means to an end—a more safe and secure Europe—not an end unto itself. If expansion is creating the very conditions that NATO’s existence is supposed to prevent, it’s not working. Yet every single U.S. president since the end of the Cold War has misunderstood this. And now here we are.

The post The War in Ukraine Is Putin's Fault, but 30 Years of Misguided U.S. Foreign Policy Didn't Help appeared first on Reason.com.

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The Impact Of A SWIFT Ban On Russia And The World

The Impact Of A SWIFT Ban On Russia And The World

Authored by Daniel Lacalle,

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the global financial system that allows immediate and secure transfers of money across borders. It is the web that verifies all financial transactions. It links 11,000 banks and institutions in more than 200 countries, with 40 million messages a day. Using SWIFT ensures that transactions happen in seconds in a secure way. Around 1% of those messages involve Russian payments, according to the BBC.

As part of the West sanctions against Russia, its banks have been banned from the SWIFT system. Additionally, the United States and the European Union have announced restrictions on the Russian central bank that block access to more than $600 billion in reserves. The Bank of Russia reports that only 22% of its international reserves are US Dollars, while gold accounts for 23%.

What does this mean? On the one hand, the move aims to block all options of the central bank to defend its currency from plummeting even more against the US dollar or the euro. In recent years, the Russian central bank has been reducing its exposure to US treasuries and shifting from US dollar reserves to euro and yuan, as well as gold. Access to those reserves is more difficult now, and in the case of euro and yen, probably close to impossible.

For Russian banks, the ban from the SWIFT system increases the risk of a bank run as citizens fear for the loss of their deposits and a collapse in daily operations, even if they start to use other alternatives.

However, we cannot forget there is an important impact on European banks as well. According to JP Morgan, European banks have up to $80 billion in claims with Russian banks. Being banned from SWIFT does not make these claims disappear, but if Russian banks fall into a de-capitalization process, the risks of defaults multiply.

Only three countries have been banned from SWIFT. Iran, since 2012, North Korea and now Russia, albeit partially. Oil and gas exports as well as other key commodities remain in the system.

Without SWIFT, Russian banks and the central bank are effectively blocked from operating on a global scale which means an added risk of a domino of defaults from issuers and the impossibility to conduct the most basic international operations.

However, Russian banks may bypass the SWIFT system and use other alternatives, mainly though a parallel system in China, called CIPS (Cross-Border Interbank Payments System), which facilitates transactions in yuan. According to CIPS, at least 25 Russian banks conduct yuan transactions through their system.

Using CIPS and other direct or indirect tools to bypass SWIFT has been an alternative for Iran and North Korea but does not solve the problem of access to reserves of the central bank nor does it truly mitigate the impossibility of conducting global transactions. The yuan is only used in 4% of global currency transactions according to the BIS (Bank Of International Settlements).

Russian banks and the central bank may moderate the financial blow using alternative systems, but the negative impact cannot be underestimated.

There may be a backlash for the United States as well. If other countries find that there is a valid alternative to SWIFT, they might feel compelled to strengthen ties with China.

Banning Russian banks from SWIFT may cripple many Latin American and Middle East economies that have deep financial connections with Russia, but there is a risk for the United States that the CIPS alternative, which is marginal at best today, grows rapidly.

The United States and Europe cannot fully ban SWIFT due to the importance of Russian oil, gas, metals, and wheat exports, and this may create numerous challenges that significantly limit the so-called “nuclear option”. The Russian central bank’s large gold reserves are also a differentiating factor compared to other economies.

No matter how we look at these sanctions, there is no doubt that there are unintended cross-border impacts and there may be unexpected negative consequences for everyone involved.

There is no doubt that the SWIFT ban is probably the most severe of financial sanctions possible and that there are no easy alternatives, but as time passes it is also clear that the widespread negative consequences of the Ukraine war will likely last for many years.

Will this measure accelerate a global financial shift toward China? Probably not in the short term, given the relatively modest use of the yuan compared to the importance of China in the global economy, but the ramifications of this measure in the global financial world are yet to be fully understood. A global financial transaction system remains as the undisputed leader only if it is truly global and far-reaching. The negative impact for Russia is unquestionable, but the long-term implications of this measure must be seen.

Tyler Durden
Mon, 02/28/2022 – 11:09

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The War in Ukraine Is Putin’s Fault, but 30 Years of Misguided U.S. Foreign Policy Didn’t Help


ppaphotos935076

There is one person—and just one person—who is responsible for the widespread death and devastation inside Ukraine right now, and that is Vladimir Putin. He has attacked and invaded a sovereign nation without justification. Putin’s nostalgia for the old Soviet Union is despicable, and his imperialist ambitions to expand his authoritarian grasp are in direct violation of international law, humanitarian principles, and the very stability of the post–World War II peace that has endured in much of the word for decades.

Putin is a tyrant and a killer. His decision to put Russia’s nuclear forces on high is unconscionable. It’s a move that harkens all the way back to the Cuban Missile Crisis of 1962—a leader of a superpower has unilaterally brought civilization closer to nuclear war. This is indefensible, and the whole world knows it. The people of Russia know it: That’s why thousands of them are protesting Putin’s war all over their country. Putin’s government has arrested more than 6,000 peaceful demonstrators so far.

Putin’s nuclear threats will put the rest of the developed world on high alert in response. This means we’ve rapidly landed in a place where the risk of all-out nuclear war is significantly higher. There’s no reason for this. We are in this situation because of the actions of one very evil man.

All of that said, it’s important to call out the bad U.S. foreign policy moves that helped get us here. And even though no one did this but Putin, the U.S.’s failed approach to Russia for the last 30 years—a bipartisan effort that includes mistakes by Presidents Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and Joe Biden—deserves criticism as well.

Let’s start with the Clinton administration in the 1990s. As Reason‘s Eric Boehm pointed out, Clinton was the first U.S. president in decades to inherit a world that did not include the Soviet Union. Clinton could have completely revamped NATO now that its purpose—defending member nations against the expansion of the Soviet Union—was no longer applicable. Instead, Clinton, with the Republican Party’s support, oversaw an expansion of NATO. Hungary, the Czech Republic, and Poland all joined. Years later, Putin would cite this enlargement of NATO as one of the West’s “broken promises” that justified his Ukraine policy.

Again, Putin is dead wrong. Nothing justifies his Ukraine policy. But the purpose of NATO was defensive: to protect the world from Russian aggression. If NATO policy is antagonizing Russia and being used as a pretext for invasion, it clearly isn’t serving that goal.

With the Clinton administration’s backing, NATO also intervened in Yugoslavia in 1999 to ensure an independent Kosovo. That military action never had the backing of the United Nations; it was a violation of international law, just like Putin’s attack on Ukraine.

George Bush’s foreign policy has not held up well, due to the U.S.’s horrendous misadventures in the Middle East, but Bush blundered in Europe as well. At a 2008 NATO summit—one attended by Putin—Bush staunchly supported Ukraine’s eventual admittance to NATO, over the objections of France, the U.K., and Germany.

The Obama administration, of course, inflamed tensions with Russia when the U.S. took sides in the 2014 Ukrainian revolution. And then came Donald Trump. Democrats and their allies in the mainstream media ceaselessly accused Trump of being a Russian stooge, even a pro-Putin plant, installed by Russia as president of the U.S. due to a subtle influence campaign on Facebook. This was of course ridiculous—and as evidence of how ridiculous the claims are, Trump’s actual administration was just as foolishly tough on Russia as his predecessors. In 2017, Vice President Mike Pence even reiterated the 2008 Bucharest declaration.

The Biden administration maintained that same fiction. A clear declaration that the Ukraine would not be joining NATO might have deprived Putin of the intellectual ammo he required to move forward with this invasion. We don’t know for sure. But it was incumbent on the U.S. to try. NATO is a means to an end—a more safe and secure Europe—not an end unto itself. If expansion is creating the very conditions that NATO’s existence is supposed to prevent, it’s not working. Yet every single U.S. president since the end of the Cold War has misunderstood this. And now here we are.

The post The War in Ukraine Is Putin's Fault, but 30 Years of Misguided U.S. Foreign Policy Didn't Help appeared first on Reason.com.

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Biden Dispatches Former Top Defense Officials To Taiwan After China Said “It’s Not Ukraine”

Biden Dispatches Former Top Defense Officials To Taiwan After China Said “It’s Not Ukraine”

Likely barely struggling to handle one rapidly developing crisis in the Russia-Ukraine conflict, the Biden administration could be stepping into another as it will dispatch a high level US delegation to Taiwan on Monday in a “gesture of support” – as one senior official quoted in Reuters put it. 

The former chairman of the Joint Chiefs of Staff under the Bush and Obama presidencies, Mike Mullen, will head up the team – and will be accompanied by former deputy national security advisors under Bush Michele Flournoy and Meghan O’Sullivan. The additional two officials are former senior National Security Council directors for Asia Evan Medeiros and Mike Green will also be on the trip. 

“This is to demonstrate our support for Taiwan,” a Biden official told Reuters. Additionally Taiwan recently revealed that Trump’s former Secretary of State Mike Pompeo will visit Taipei in the first week of March, which is not connected with the official Biden delegation; instead, Pompeo is said to be visiting as a “private citizen” – though still without doubt it will be taken as provocative by Beijing. 

President Tsai Ing-wen, via Reuters

According to details in Reuters:

They are expected to arrive in Taiwan Tuesday afternoon, and will stay there until Wednesday night. During this time, they intend to meet Taiwan President TsaiIng-wen and Defense Minister Chiukuo-cheng, as well as other high-ranking officials.

According to the official, it was not possible for him to confirm whether Russia had influenced his visit due the ongoing invasion of Ukraine.

Taiwan stated last week that Mike Pompeo, former Secretary of State to the U.S., will visit Taiwan between March 2-5, and meet Tsai.

A White House official was quoted as describing that the five selected officials represent “an important signal about U.S. bipartisan commitment to Taiwan democracy and peace, and it demonstrates how the Biden administration remains committed to Taiwan in a larger sense.”

Though the world and especial Western media has had a singular focus of late in the Ukraine crisis, a number of pundits have commented that if Beijing wanted to move on Taiwan at this tense moment for NATO and Eastern Europe, it would do so with perhaps little initial notice given the complete focus of Western leaders on Ukraine. This is perhaps part of Biden’s rationale in sending the delegation… to send a message saying: ‘we are still watching closely’. 

Just days ago the US also sailed a warship through the Taiwan Strait, something which has now become a semi-regular occurrence. “The official stated that the United States would continue to be able to resist the use of force and other coercion to threaten the safety or social system or economy of Taiwanese people,” Reuters quoted a senior official as underscoring. 

Last week as the war in Ukraine kicked off, China’s foreign ministry said provocatively that Taiwan is “not Ukraine”. As Nikkei described:

Taiwan is “not Ukraine” and has always been an inalienable part of China, China’s foreign ministry said on Wednesday, as Taiwan President Tsai Ing-wen called for the island to beef up vigilance on military activities in response to the crisis.

The comments come after British Prime Minister Boris Johnson flagged the risk for Taiwan in a warning last week about the damaging worldwide consequences if Western nations failed to fulfil their promises to support Ukraine’s independence.

More broadly, many Western officials fear an emerging scenario where Moscow and Beijing increasingly act in concert. Earlier this month China issued an unprecedented and scathing critique of NATO expansion in Eastern Europe – echoing precisely the view from Moscow – while urging that Russia’s legitimate security interests be met. 

Tyler Durden
Mon, 02/28/2022 – 10:50

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MI6 Chief Faces Backlash For Saying Ukraine War Is About LGBT Rights

MI6 Chief Faces Backlash For Saying Ukraine War Is About LGBT Rights

Authored by Paul Joseph Watson via Summit News,

The head of MI6, who includes his preferred pronouns in his Twitter bio, faced backlash for suggesting that a large part of the war in Ukraine was about “LGBT+ rights.”

Yes, really.

Richard Moore (he/him), leader of Britain’s Secret Intelligence Service, made the comments in a Twitter thread.

“With the tragedy and destruction unfolding so distressingly in Ukraine, we should remember the values and hard won freedoms that distinguish us from Putin, none more than LGBT+ rights. So let’s resume our series of tweets to mark #LGBTHM2022,” he wrote.

Moore then went on to describe the experiences of an LBGT agent who told him, “I had to move for the job when I joined #MI6, so I was relieved to find out there was an LGBT+ network group. Through the group I’ve made some great friends in the office, and it’s reassuring to know it’s there for support if I need it.”

Quite how any of this relates to Russia’s bombardment of Ukraine and the innumerable violent street battles now taking place across the country is anyone’s guess.

“Is this supposed to motivate Ukrainian nationalists or demoralize them?” asked Chris Menahan.

Other Twitter users reacted with a mixture of confusion and derision.

“My only hope is this is some sort of top secret coded message. Otherwise we’re all fucked,” said one.

“Yes, the values of Western civilization didn’t exist until the creation of LGBTQIA2S+ rights in the 1960s. You virtue signalling idiot. The only hard won freedom I want is from woke ideologues like you,” added another.

“We are at the brink of World War 3 and all you can do is virtue signal over what people do with their private parts. Absolute joke,” remarked another.

As we highlighted last week, MI6 also marked the day Putin invaded Ukraine by tweeting about the success of their gay coffee morning.

The Times also revealed how MI6 spies have been told to consider their “white privilege” and avoid using offensive words like “manpower” and “grip” as part of an effort to improve “diversity and inclusion in the security services.”

“Critics have argued that security officials should have been less focused on inclusion and more alert to events in Afghanistan and Ukraine,” reported the newspaper.

*  *  *

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Tyler Durden
Mon, 02/28/2022 – 10:25

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