Month: April 2022

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Special counsel John Durham’s team on April 6 asked a federal judge to force Hillary Clinton’s presidential campaign and two other parties to hand over documents they claim are protected by attorney–client privilege.

The campaign, the Democratic National Committee (DNC), and research and intelligence firm Fusion GPS appear to be withholding documents that aren’t actually protected by the privilege, Durham’s team said in the filing, entered in the case against ex-Clinton lawyer Michael Sussmann.

Of the withheld materials, almost all “appear to lack any connection to actual or expected litigation or the provision of legal advice,” prosecutors told U.S. District Judge Christopher Cooper, an Obama appointee who is overseeing the case.

In fact, of the 1,455 documents being withheld by Fusion GPS, only 18 emails and attachments are said to involve an attorney.

The Clinton campaign, the DNC, and Fusion didn’t respond to requests for comment.

The documents in question are being sought for the upcoming trial of Sussmann, who was charged with lying to the FBI for going to a bureau lawyer in 2016 and falsely stating he didn’t hand over unsubstantiated claims about then-candidate Donald Trump on behalf of a client.

The claims were compiled with funding from the campaign and the DNC by former British spy Christopher Steele and Fusion GPS, which was founded by former reporters.

Sussmann and his lawyers have been pressing the judge to dismiss the case prior to trial, arguing that the lie about not bringing the information on behalf of a client wasn’t material to the information itself.

Attorney–client privilege protects many communications between a client and their lawyer. Disclosure to third parties usually undercuts privilege claims.

In the new filing, Durham’s team pointed out that Fusion GPS co-founders Glenn Simpson and Peter Fritsch penned a book published in 2019, which means even if a valid privilege did once exist, it might have since been waived.

Prosecutors also noted that Fusion GPS operatives regularly communicated with reporters about their work, resulting in several stories before the 2020 election and a spate of others after voters hit the polls.

Further, the Clinton campaign (HFA) and the DNC have claimed privilege over communications sent between Rodney Joffe, whom Sussmann was also representing at the time, and a Fusion operative, “despite the fact that no one from either the DNC or HFA is copied on certain of these communications,” prosecutors said.

The government subpoenaed information from the parties in 2021.

Fusion GPS was paid by the Democratic entities through Perkins Coie, a law firm. The agreement was introduced as an exhibit in the case.

Many if not most of the actions taken by Fusion GPS employees “do not appear to have been a necessary part of, or even related to” Perkins Coie’s legal advice to the campaign and the DNC, Durham’s team said.

Prosecutors want to examine the communications in a private, in-camera setting “in order to resolve these issues and ensure that only legitimately privileged and/or attorney work product-protected communications and testimony be withheld from the otherwise admissible evidence and testimony that is presented to the jury at trial.”

The trial is currently set to start on May 16.

Global food prices jumped to a new record high, soaring the fastest on record, as the conflict in Ukraine unleashed food supply shocks across the world. 

“The current conflict between Ukraine and the Russian Federation is increasing the risk of a further deterioration of the food insecurity situation at global level,” the FAO said in a recent food insecurity assessment (pdf).

March’s food price index from the Food and Agriculture Organization of the United Nations (FAO) printed 159.3 points in March, up 19.15 points from February, when it had already reached record highs. The index was up 33.6% from the same time last year.  

The March rise in food prices is a stunning 12.64% MoM – almost double the previous record monthly surge…

Leading the charge was the FAO Cereal Price Index, up 17.1% in March than in February, entirely driven by significant price increases in wheat and grains as a result of the Black Sea breadbasket region going offline because of the Russian invasion of Ukraine and sanctions-related supply disruptions by Western countries on Russia. The invasion has choked off more than a quarter of the global wheat trade, about a fifth of corn, and 12% of all calories traded globally. 

Another driver was FAO Vegetable Oil Price Index, up 23.2%, driven by higher prices of sunflower seed oil, of which Ukraine is the world’s leading exporter. Palm, soy, and rapeseed oil prices increased due to higher sunflower seed oil and Brent crude prices. 

It’s not just a shortage of food, but also shortages of fertilizer and skyrocketing diesel prices, the ability to farm and even perhaps produce robust harvests by the end of the Northern Hemisphere growing season could be in jeopardy, which would ultimately extend the global food crisis through 2023. 

“Looking forward to 2022-23, we’re already seeing signs that production is going to be reduced in Ukraine,” Erin Collier, an economist at the UN, told Bloomberg.

“The amount they’re able to export really depends on how much longer this conflict continues.”

The bad news is the world’s hunger problem isn’t going away and may only get worse from here…

The risks of soaring basic foods are possible inflation riots in emerging market economies. Last week, the UN pointed out millions of Middle Eastern and North African families struggle to buy even the most basic foods to keep hunger at bay. 

“People’s resilience is at a breaking point. This crisis is creating shock waves in the food markets that touch every home in this region. No one is spared,” Corinne Fleischer, UN’s World Food Programme Regional Director said. 

The risk of uprisings is increasing by the week as the UN projects food prices to soar even higher. It’s important to note that food prices were already rising before the Ukrainian conflict. 

We’ve outlined the most reliant countries on Ukraine wheat, including Egypt, Indonesia, Bangladesh, Pakistan, and Turkey (the countries that could see unrest first). 

However, in South America, inflation riots have already begun as the government declared a curfew last weekend. Arab Spring 2.0 appears to be emerging, but this time it could be global, unlike a decade ago. 

We are in the early innings of this https://t.co/PPKOq1vDzb

— Doomberg (@DoombergT) April 7, 2022

The U.S. dollar index hit 100 for the first time in two years on Friday, surging on the prospect of a more aggressive monetary tightening cycle on top of an increasingly fraught geopolitical landscape. Signs of inflation abound, even as the Federal Reserve asserts its hawkishness at every opportunity. The U.N. Food and Agriculture Organization’s food price index jumped nearly 13% in March to a new record high, with disruptions to global trade flows, specifically passage through the crucial Black Sea, fueling fears of food shortages. And prices for agricultural commodities continue to rise. U.S. equity indexes were mixed two hours before Friday’s close of regular trading, with tech stocks giving back much of what was gained on Thursday. The yield on the 10-year U.S. Treasury note touched a new three-year high. Jeremy Schwartz, Global Chief Investment Officer at WisdomTree Asset Management, joins Warren Pies on today’s Daily Briefing to discuss the U.S. dollar, supply chain disruptions, and inflation. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3xenRmT

Authored by David Stockman via InternationalMan.com,

International Man: Whether we like it or not, the reality is, the Federal Reserve has an enormous influence over the dollar and the stock market.

And right now, the Fed has an urgent and fateful decision to make.

It can keep printing trillions of dollars, let inflation skyrocket or tighten monetary policy, and watch the stock market crash.

In other words, it can sacrifice the stock market or the dollar. 

David, what do you think the Fed will do, and what are the implications?

David Stockman: Well, I think whether it wants to or not, the Fed will crash the stock market. The Fed has painted itself into a hellacious corner because it’s made such a fetish out of its 2% inflation target, especially since January 2012, when it officially adopted this quantitative target.

In fact, most of the massive money printing, which has occurred since 2012, when the economy was pretty much recovered from the Great Recession anyway, has been justified by an inflation shortfall, which wasn’t true, but that was the justification.

They were trying to raise inflation and therefore felt that they could keep quantitative easing at these huge rates, including $120 billion per month, until recently. And as a result, we’re now in a world in which inflation is heading towards double digits.

I think they’re going to have no choice but to throw on the brakes much harder than the market is expecting, much harder than they would like to do, or maybe even intend at the moment, but there’s no choice.

Now, when you have double-digit inflation, number one and second, you’re going into what’s going to be a nasty election season in which the Republicans will finally see hope for their salvation in a horrendous battle on the inflation front blaming the Democrats and Biden.

That means the Fed will not be in a position over the next 2, 3, 4 quarters to retreat on the inflation battle. Whether it wants to or not, it will have to raise interest rates even far more than are expected now.

It’s going to begin QT, quantitative tightening, or draining its $9 trillion balance sheet faster than it is talking about at the moment or what the market expects. That’s because it’s not going to be able to justify or maintain any credibility when inflation is running at the CPI level at nearly 10%.

So that’s a new ballgame.

We haven’t been in these kinds of uncharted waters for a long time, not since the 1970s, and even in the 1970s, the story was far different than it is today. So, the market will struggle with a Fed that turns out not to be their friend. It’s going to time and time again, think that the worst is over, buy the dip and make a lot of money, only to be disappointed.

I point out one final kind of analogy here.

If you go back to March 2000, when the dot-com bubble collapsed, the NASDAQ peaked at 4600, and the market dropped by 30% in the next 15 days. And after that bone-rattling drop people said it’s all over. The worst has happened, and you should buy the dip. You’re going to make a lot of money.

And over the next two years, they kept buying the dip, but over the next two years, the NASDAQ went from 4,600 to 3,300, all the way down to 800. An 80% plus decline and all that dip buying resulted in massive losses and pain.

I think we’re going to go through the same thing again.

International Man: Suppose the Fed does raise rates aggressively in the months ahead. What are the chances that they will capitulate and reverse course as soon as Wall Street starts screaming about it?

David Stockman: Well, that’s what people expect, but I think this time, they’re not going to capitulate soon and easily. In other words, the so-called Fed put is a lot lower on the S&P 500 index than people may expect or that the Wall Street bulls would like to believe. They think it might be 3,500 or something like that. I think it’s around 2000 because the Fed won’t have the maneuvering room.

Even the official inflation statistics are running high. They are understating the true inflation when you adjust for all the gimmicks they put in the CPI in the last 20 years. But when inflation on the government statistics is running at 7-10%, they’re just not going to have room to start the printing presses again.

International Man: Given the rapidly rising debt levels—corporate, personal, and for the federal government—is it even possible for the Fed to raise interest rates beyond a token amount?

David Stockman: Well, I think you can say it would be dangerous, and yes, the debt levels are really something to behold.

If you take public and private debt today, it’s $88 trillion, which is 370% of GDP. It’s off the charts compared to where a stable economy historically stood. If you go back to 1970, before Nixon pulled the plug on sound money, the ratio was 150%. In other words, we had about $1.5 trillion of total debt and a GDP of $1.0 trillion.

So now we’ve had two extra turns of debt added to the economy over the last 50 years. Two turns of additional debt amount to $50 trillion today, burdening all sectors of the economy, households, non-financial business, governments especially, and even financial institutions, than would be the case had we stuck to kind of that golden mean of 150% debt to GDP. That’s the leverage ratio of the national economy that prevailed for a century up to 1970.

So yes, there is a massive problem with this enormous debt burden. When the Fed raises interest rates, it will notch up the carry cost and service cost enormously, creating all kinds of dislocations in households that will have to pay more for their mortgages and their other debt.

As interest rates go up, all that money corporations borrowed to buy back stock and pay dividends that weren’t being earned will result in larger interest expenses and lower profits.

So the whole thing will be a pretty big mess, but that will not stop the Fed from using the only tool it has.

It has one tool. It’s like the craftsman with a hammer, and everything looks like a nail. So if the Fed wants to accomplish something, it will have to hit the nail.

So the Fed will have to raise interest rates, not just a 2% by the end of this year or 2.5%. They’re going to have to go up into the 4-6% range to slow down the economy and break the back of inflation.

I was around when Volcker took interest rates to 20% on the overnight rate to finally break the back of inflation. But, of course, that will cause a lot of damage to the economy. But I don’t think they have much choice.

In short, you’re going to have one difficult time bringing inflation under control, and the consequences of those moves will be mind-boggling and historic in terms of their negative impact.

International Man: Given everything we’ve talked about today, what can the average person do? What can they do to protect themselves and profit from what is coming next?

David Stockman: Well, I think the most important thing is to stay out of the casino.

The bond market is vastly, massively overvalued. As a result, the price of bonds will drop dramatically, and people will be shocked by how much you can lose in allegedly safe sovereign debt.

The stock market is even more dangerous, and it’s entirely because of these artificially low, ultra-low interest rates. So now we’re starting to move into the realm of reality, let’s say normalcy, as interest rates come back up. And I think they got a long way yet to go.

If you’re going to be in the stock market, be on the short side.

But if you don’t have discretionary capital or savings, and if you don’t have the stomach for what will be a very volatile ride, the best thing to do is stay in cash, even though you’re losing ground against inflation. At least bank accounts are not going to lose principle. Whereas bonds and stocks can lose 30%, 40%, 50%, 60% of their value in the next year or two as we go through this great correction.

*  *  *

The Fed has already pumped enormous distortions into the economy and inflated an “everything bubble.” The next round of money printing is likely to bring the situation to a breaking point. If you want to navigate the complicated economic and political situation that is unfolding, then you need to see this newly released video from Doug Casey and his team. In it, Doug reveals what you need to know, and how these dangerous times could impact your wealth. Click here to watch it now.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Whether we admit it or not, collapse is the default “solution.” That destiny has already written by demographics.

The saying “demographics is destiny” encapsulates the reality that demographics–rising or falling trends of births and deaths–energize or constrain economies and societies regardless of other conditions.

Demographics are long-term trends, but the trends can change relatively rapidly while policies remain fixed in the distant past. This disconnect between demographic reality and policies has momentous future consequences. An appropriate analogy is the meteor wiping out the dinosaurs; in the case of demographics, this equates to the complete financial collapse of the retirement and healthcare systems.

As this article below mentions, extrapolating the high birth rates and falling death rates of the 1960s led to predictions of global famine.

As death rates declined and women’s educational and economics prospects brightened, birth rates fell, a trend that now encompasses most of the world.

As a result of the Green Revolution (hybrid seeds and hydrocarbon-based fertilizers), the Earth supports more than twice as many humans as were alive in the 1960s (3.5 billion then, 7.9 billion now).

Now the problem is a shrinking working-age population that will be unable to support the financial and healthcare promises made to the retired generations.

Birth rates in developed nations have fallen below replacement rates, which means populations are shrinking and populations are aging rapidly, i.e. the average age of the populace is rising..

One side effect discussed in this article is the decline of the cohort of young males and the rise in the average age reduces the likelihood of conflict: Children of Men’ is really happening–Why Russia can’t afford to spare its young soldiers anymore.

I remember reading similar research in the mid-1970s that identified a strong correlation between the relative size of the cohort of young males and the likelihood of war.

If the cohort was above a specific percentage of the total population, war was likely. One example was Germany in the 1930, which had a large cohort of young males under the age of 25.

This may partially explain the increasing reliance on economic war (sanctions) and cyberwarfare–nations no longer have large enough cohorts of young males to field armies where high casualties are a reality.

What the article mentions in passing–the demographic impact of social values and political power–is worth exploring.

In broad brush, several trends are visible in many nations and cultures.

One is that having children has gone from being an economic necessity or benefit to a tremendous financial liability in the developed world.

A Danish friend once commented that only wealthy families could afford to have three children now in Northern European countries. The same can be said of the U.S. and many other countries, once we consider the higher demands now placed on parents.

Where in the good old days of previous generations, parents were deemed adequate if they provided a roof over the kids’ heads, basic meals and clothing. Education was left up to the public schools, and public college was low-cost, should the child want to continue their education.

(The University of Hawaii tuition was $89 and student fees were $27, for a grand total of $117 per semester from 1971 to 1975, $780 in today’s dollars. I was able to support myself, pay all my university expenses and carry a full class load on a part-time job–in one of the two most expensive cities in the nation, Honolulu.)

In a fully globalized “winner take most” economy, parents with aspirations for a top 20% career and lifestyle for their children have a much more demanding burden.

Parents seeking to give their children a leg up must provide costly enrichment lessons and juggle complicated schedules of after-school classes. Prestigious universities now expect more than mere academic excellence; applicants must show evidence of leadership, civic engagement, etc., and even public universities are outrageously expensive.

Another trend is the cultural bias of favoring the elderly in terms of government support.

As workers increasingly lived long enough to actually retire, social and political values supported government funded pensions and healthcare for retirees.

In the high birth rates 1940, 50s and 60s, governments greatly increased benefits for the elderly / retired, as everyone assumed there would always be 4 or 5 workers for every retiree. Relatively few people lived to age 80 or older.

The steady decline in birth rates and the steady increase in longevity have dropped that ratio to less than 2 workers for every retiree. In the US, there are 127 million fulltime workers and 69 million Social Security beneficiaries (including disabled). That is less than 2 fulltime workers for every beneficiary.

In a recession, Boomers will continue retiring en masse while the workforce will shrink. A ratio of 1.5 workers to every beneficiary isn’t that far away.

Is there any doubt this ratio is unsustainable financially? No.

These two trends are a double-whammy on those young adults having children: the costs of raising kids is much higher, the expectations are much higher while the government support is heavily weighted to the elderly populace, which is exploding as people now live into their 80s and 90s. (My Mom is 93, my Mom-in-law who we care for here at home is 91, our neighbor’s Mom is 99, and so on.)

We have elderly friends who retired from federal government jobs at age 55 after 30 years of service and have collected 40 years of retirement. Is this financially sustainable? No.

The actuarial foundations of Social Security and Medicare were based on 4 or 5 workers per beneficiary and average lifespans around 70. Retirees were expected to collect benefits for 5 to 7 years, not 25 to 30 years.

These systems are fundamentally unsustainable at current retirement ages (55 for many government workers, 62 for “early retirement” Social Security and 67 for full benefits and Medicare at 65), current longevity trends and less than 2 workers per retiree.

The only way to reverse these demographic trends would be for government support for retirees taking a back seat to government support of children and young parents, greatly reducing the financial burden of having children.

The only way an economy can support a massive population of elderly is if there are enough young workers entering the workforce to keep the society and economy functioning.

Forward-looking populations would realize supporting parents and children is the only way to support future retirees.

But humans aren’t very forward-looking; we want all the good stuff now. So the elderly support politicians who promise their benefits are sacrosanct and untouchable–except to increase them.

Almost all elderly people vote while a much lower percentage of young people vote. So the government continues supporting the elderly even as the population of elderly explodes and the means to provide this support are in free-fall.

Retirement ages have barely budged, increasing a mere two years in 40 years from 65 to 67, while lifespans have greatly advanced and the worker-retiree ratio has collapsed.

Open-ended healthcare expenses are an invitation for profiteering, fraud and unnecessary or even harmful medications and procedures. By some estimates, 40% of the $1.5 trillion dollars spent on Medicare and Medicaid annually is paper-shuffling, fraud and needless medications and procedures.

A third trend is female workers wanting a fulfilling career and children, too.

With childcare costing $25,000 or more annually, one parent may essentially be working just to pay the childcare costs for two children.

A fourth trend is relying on high birth rate immigrants to substitute for native-born workers is no longer viable, as birth rates have plummeted in nations that provide immigrants.

As the saying has it, something’s gotta give. Doing nothing will lead to the collapse of the programs benefiting the elderly while the birth rate continues declining.

All these values and programs assumed high birth rates, high worker-retiree ratios and modest costs for raising children were forever. They weren’t.

Now we need a new set of values that reduce or eliminate the financial burdens on parents raising children. It would be nice if we could afford to pay for everything we want but printing money to do so just collapses the entire system.

Personally, I would raise all retirement ages to match the rise in lifespans, limit Social Security benefits to those with no other pension or retirement income, limit publicly funded extraordinary healthcare measures for people over the average lifespan, tax revenues rather than labor, and pay all childcare and after-school programs expenses currently paid by parents, plus a modest sum per child that can only be spent on after-school enrichment classes and programs.

That seems common-sense to me, but I’m open to other permutations of hard choices.

Hard choices lead to better outcomes than collapse, but few have any stomach for hard choices. Politicians who make hard choices that require sacrifices of powerful lobbies and voting blocks lose elections.

The fantasy that we can “print our way out of any problem” is strong because it’s so convenient and apparently so successful–at first.

Whether we admit it or not, collapse is the default “solution.” That destiny has already written by demographics.

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My new book is now available at a 10% discount this month: Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $8.95, print $20). If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NBC News staffers concerned about their network’s credibility are fuming over a decision to hire White House press secretary Jen Psaki as an MSNBC talking head, according to CNN.

The outrage caused NBC News president Noah Oppenheim to hold an impromptu Friday phone call with staffers from the Washington DC desk so he could address the matter – where he reportedly tried to emphasize the distinction between NBC News‘ hard news vs. MSNBC‘s opinion programming – and told them to ‘ignore the noise’ and ‘continue doing their jobs as normal.’

“Here’s what he was saying: They have perspective programming. This was done on the perspective programming side. Not anything that reflects on NBC News,” one of the people who was on the call explained. “People wanted answers on what NBC’s role was in this and NBC News had no role in this.”

Psaki’s tentative deal with MSNBC perturbed staffers because news of the negotiations between her and the network came while she is still in her post as White House press secretary.

Additionally, instead of hiring Psaki into the more typical post-White House role, such as a political analyst offering opinion and analysis on another person’s program, MSNBC intends to make her a host for a show that will stream on its Peacock platform. -CNN

It appears that Oppenheim’s advice to ignore the hire went unheeded – as NBC News‘ chief White House correspondent repeatedly asked Psaki about the ethics related to her jump to MSNBC while continuing to serve as press secretary.

In a statement, Psaki said: “I have always gone over and above the stringent ethical and legal requirements of the Biden administration and I take that very seriously,” adding “And as a standard for every employee of the White House, I have received rigorous ethics counseling, including as it relates to any future employment.”