Month: April 2022

In recent years (most notably since the dawn of TikTok, which has been known to intersperse bits of Chinese propaganda with videos of scantily clad, attention-seeking American teenagers) Beijing has sought to influence American public opinion in its favor by manipulating social media.

And as the international backlash over China’s treatment of its Uygher Muslim minority in the far-flung Xinjiang Province threatened to derail the Winter Olympics in Beijing, the CCP ratcheted up its influence campaign, and as it turns out, American social-media influencers, and one-well connected management firm, were eager to help (for a price).

According to the latest update from the Washington Free Beacon, which the story using records from the DoJ, Monumental Sports and Entertainment, a company co-owned by Jobs, was paid by China Central Television to carry out a ‘promotional blitz’ for the 2022 Winter Games during a Washington Capitals hockey game.

And as part of another promotional effort, the Chinese consulate in New York hired 11 social media influencers to talk up the Games (and China’s amenable business climate) on TikTok and Instagram.

Disclosure filings revealing work for foreign entities revealed that the consulate in New York paid $300,000 to public relations firm Vippi Media to have TikTok and Instagram users promote the Beijing Olympics, just as pressure was growing for corporate sponsors in the West to join a boycott over China’s human rights abuses.

One TikTok influencer, Anna Sitar, released a video on Feb. 11 that used the hashtags #Beijing2022 and #WinterOlympics. In the clip, Sitar touted the fact that Beijing is the only city to host both the winter and summer Olympics. The clip was a success: it went on to garner 2.2 million impressions.

@annaxsitar We know I woulda taken home gold if I was there ✨Go team USA! #Beijing2022 #WinterOlympics #Partner ♬ original sound – anna x

Through its American intermediary (a mercenary marketing firm), Beijing also recruited stars from The Real Housewives of Beverly Hills, and a former Paralympian swimmer, to promote the games. Some of these influencers even promoted claims from Chinese officials that the internment camps in Xinjiang were actually “education training centers” – a claim that Beijing has long pushed to its own people and the international press.

Vippi Media also hired Ryan Dubs, a TikTok influencer who uses the site to promote his line of beauty products. Dubs touted China’s business climate, at one point praising China’s “high tech and forward thinking.” In the same video, Dubs said it would be “impossible” to make his products elsewhere.

Dubs also published an interview he conducted with Huang Ping, the Chinese consul general in New York. Dubs said he was “really impressed” with Huang’s comments about China’s climate change goals. He and Huang expressed their mutual opposition to U.S. tariffs against Chinese products, which were enacted during the Trump administration in response to China’s unfair trade practices.

Huang has denied China is engaged in human rights atrocities and said that internment camps housing Uyghurs are legal “education training centers.”

Vippi Media also recruited a cast member of the reality show Real Housewives of Beverly Hills and American Paralympian swimmer Jessica Long to promote the games.

One Real Housewives star, Crystal Kung Minkoff, promoted the Beijing Winter Games on her Instagram account.

 

 

 

 

View this post on Instagram

 

 

 

 

 

 

 

 

 

 

 

A post shared by Crystal Kung Minkoff 孔令华 (@crystalkungminkoff)

Toward the end of its report, the Free Beacon mentioned that none of the influencers who shared Chinese propaganda on TikTok and Instagram were registered as foreign agents (something that all Americans who do any kind of politically-sensitive work on behalf of foreign governments are required by law to do).

This of course begs the question: how many more ‘influencers’ are presently engaged in similar work?

Authored by Dave DeCamp via AntiWar.com,

On Wednesday, Treasury Secretary Janet Yellen said that the US would be ready to use sanctions similar to what has been imposed on Russia against China if Beijing were to invade Taiwan.

Yellen told the House Financial Services Committee that she believes the US has shown it can impose significant economic pain. “I think you should not doubt our ability and resolve to do the same in other situations,” she said.

Deputy Secretary of State Wendy Sherman also testified before the Committee and warned that the US would impose harsh sanctions on China if it helped Russia in its war in Ukraine. “It gives President Xi, I think, a pretty good understanding of what might come his way should he, in fact, support Putin in any material fashion,” she said.

China has strongly denied US claims that it was considering giving Russia military support. Last month, US officials told media outlets that Moscow had asked Beijing for help. But US officials told NBC News this week that the claim “lacked hard evidence.”

US officials have also warned that Washington would take action against Beijing if it helped Russia avoid Western sanctions. Over the past few years, the US has imposed a series of sanctions and export controls against Beijing, but they have not been as harsh as what Russia is facing.

While Washington is warning Beijing it could impose tougher sanctions, such measures could do serious damage to the US economy since it is so intertwined with China’s.

In comments to NBC News, US officials basically admit that the Biden administration is lying to us about Russia’s war in Ukrainehttps://t.co/4nNwBmyWHB pic.twitter.com/i5TwK82fXW

— Dave DeCamp (@DecampDave) April 6, 2022

For now, Yellen said that the US shouldn’t sanction China for its relationship with Russia. “We would be very concerned if they were to supply weapons to Russia, or to try to evade the sanctions that we’ve put in place on the Russian financial system and the central bank,” she said. “We don’t see that happening at this point.”

As the situation in Shanghai continues to deteriorate, residents have been pushing back against the CCP’s authority in ways that are rarely seen in China. Since the start of the pandemic, and the CCP’s decision to adopt a “war like” position to enforce its “zero COVID” policy, has rarely elicited much resistence. Until now.

Yesterday, videos of Shanghaiers taking to their balconies to sing in protest of the local authorities’ decision to order an ‘indefinite’ lockdown went viral in the West (they were quickly censored on Weibo).

As seen on Weibo: Shanghai residents go to their balconies to sing & protest lack of supplies. A drone appears: “Please comply w covid restrictions. Control your soul’s desire for freedom. Do not open the window or sing.” https://t.co/0ZTc8fznaV pic.twitter.com/pAnEGOlBIh

— Alice Su (@aliceysu) April 6, 2022

Authorities counted nearly 20K cases in Shanghai alone on Wednesday, nearly matching the number for all of China from the day before. It marked the sixth daily record for the city, according to the SCMP. Symptomatic cases climbed to 322, up from 311 a day earlier, while the vast majority of the cases showed no symptoms. Local authorities have counted more than 70K cases since March 1.

We noted a few days ago that the situation in Shanghai has evolved to become more than just a public health crisis. Instead, it has become a political test for the CCP, as it fights to protect the legitimacy of its “zero COVID” approach. In that sense, the battle for Shanghai has become “too big to fail.”

The NYT said as much Thursday.

As the coronavirus races through Shanghai, in the city’s worst outbreak since the pandemic began, the authorities have deployed their usual hard-nosed playbook to try and stamp out transmission, no matter the cost. What has been different is the response: an outpouring of public dissatisfaction rarely seen in China since the chaotic early days of the pandemic, in Wuhan.

The crisis in Shanghai is shaping up to be more than just a public health challenge. It is also a political test of the zero tolerance approach at large, on which the Communist Party has staked its legitimacy.

For much of the past two years, the Chinese government has stifled most domestic criticism of its zero tolerance Covid strategy, through a mixture of censorship, arrests and success at keeping caseloads low. But in Shanghai, which has recorded more than 70,000 cases since March 1, that is proving more difficult.

Shanghai is China’s most populous metropolis, its shimmering commercial heart. It is home to a vibrant middle class and many of China’s business, cultural and academic elite. A large share of foreign-educated Chinese live in Shanghai, and residents’ per capita disposable income is the highest in the country. Even in a country where dissent is dangerous, many there have long found ways to demand government responsiveness and have a say over their own lives.

“I’m just too angry, too sad,” said Kristine Wu, a 28-year-old employee of a tech company who was visited at home by two police officers after she criticized the city’s Communist Party leader on social media. She recorded her defiant confrontation with them, in which she asked why they were wasting time harassing her, when they could be helping people in need of care. She then shared a photo of the encounter on social media, despite the officers’ warnings against doing so. (It was later censored.)

“I thought, whatever, I’ll just go for it,” said Ms. Wu, who had not considered herself political before the lockdown. “I used to live pretty comfortably, and before anything had happened, everyone was very polite, very rule abiding. Now all that has just crumbled.”

The CCP is caught in a difficult dilemma. Public health experts are keenly aware of the fact that China is unprepared to live with the coronavirus: just over half the of Chinese age 80 and over are fully vaccinated as of late March. And Chinese vaccines have been shown to be less effective than their western counterparts.

Already, the people of Shanghai are struggling with crippling food shortages as they’re forced to rely on the government for essential supplies, according to the AP.

Residents of Shanghai are struggling to get meat, rice and other food supplies under anti-coronavirus controls that confine most of its 25 million people in their homes, fueling frustration as the government tries to contain a spreading outbreak.

People in China’s business capital complain that online grocers often are sold out. Some received government food packages of meat and vegetables for a few days. But with no word on when they will be allowed out, anxiety is rising.

Zhang Yu, 33, said her household of eight eats three meals a day but has cut back to noodles for lunch. They received no government supplies.

“It’s not easy to keep this up,” said Zhang, who starts shopping online at 7 a.m.

“We read on the news there is (food), but we just can’t buy it,” she said. “As soon as you go to the grocery shopping app, it says today’s orders are filled.”

As the food shortage worsens, containers full of frozen food and chemicals are piling up at Shanghai’s biggest port as the lock down of the city and virus testing prevents workers from getting to the docks to pick up boxes, according to Bloomberg.

Of course, Shanghai isn’t the only part of China struggling with an outbreak. The Province of Jilin is still facing a surge (and the attendent restrictions) even after authorities technically lifted a weeks-long lockdown

Source: BBG

Going even further than its rival the NYT, the Washington Post on Thursday declared the situation in Shanghai to be a “powder keg” that could call the entire CCP authoritarian system into question.

But Shanghai looks like a powder keg for China, where the party-state justifies its rule by casting itself as guardian of the people’s health and welfare. Shanghai’s residents are growing desperate. People are complaining on social media that they are unable to get food and water delivered. When some began shouting protests out their windows, demanding supplies in one Shanghai neighborhood, a drone flew by and warned them to stop, and to please “control the soul’s desire for freedom.”

Now, it is authoritarian China’s turn to face questions about whether its system, based on tight controls, is really better at controlling the pandemic. China would be well advised to learn lessons from the West and pivot to more flexibility. Mr. Xi should admit he needs a new strategy. But can he?

While no more videos of protesting locals have made it to western social media over the last day, one video of riot police being dispatched to prepare for any more ‘unrest’ did catch the public’s attention.

PLA arrived in Shanghai to support riot police against possible protests against the strict lockdown pic.twitter.com/BgqPKuOVjA

— Matt Davio (@MissTrade) April 6, 2022

Earlier today, futures slumped to session lows (before an algo driven meltup sent stocks soaring to session highs) when the Fed’s resident uberhawk and FOMC dissenter, James Bullard, poured more overpriced gasoline on the tightening fire when he said that “the current policy rate is too low by about 300 basis points” according to a version of the Taylor rule which showed that the Fed has a long way to go to catch up to where it should be if, somewhere around 3.5%, it has any hopes of denting runaway inflation around 8%, which as shown below sounds about right considering the last time inflation was here, the fed funds rate was 12%.

While Bullard’s comments were not surprising – we already knew that he had dissented in favor of a 50bps rate hikes in March – comments by Lael Brainard, regarded as the most dovish of all Fed Governors, shocked the markets on Tuesday when she highlighted the likelihood the Fed will undertake a more rapid shrinkage of its balance sheet than markets were expecting.

Here, one obvious question is whether the Fed can hike anywhere close to 12% – or even 3.5% – without crashing the entire financial system. Another question is whether the Taylor rule is applicable in such a unique situation where not only are rates still at rock bottom but the Fed has some $9 trillion in securities on its balance sheet. Indeed, while the prevailing hawkishness across the FOMC means  monetary policy will be tightened faster than expected, a third question is how much faster, or in other words, “what is the trade-off between QT and higher Fed Funds? Surely the faster the balance sheet is shrunk, the fewer rises will be needed in Fed Funds.”

According to at least one Wall Street strategist, the answer to these questions is also the reason why the Fed Funds rate won’t climb beyond 1.0%!

We refer to SocGen’s resident permaskeptic, Albert Edwards, who today writes that “the prospect of the Fed engaging in rapid balance sheet shrinkage (QT) has spooked the markets.” But, as we muse above, how does one combine the concurrent impact of QT with the Fed Fund hikes to get a handle on where Fed Funds might peak?

Well, Edwards believes he may have the answer, or rather he says that his “learned colleague”, SocGen’s in house quant guru Solomon Tadesse has an answer. While few in the mainstream have ever heard of Solomon, back in mid-2018, not long before the Fed’s rate hike plans blew up spectacularly, the SocGen quant made waves on Wall Street trading desks when he went against the consensus view, and in May 2018 pinpointed the peak in Fed Funds at a lowly 2½%. He was absolutely spot on.

The problem: his latest analysis for this cycle puts the peak of the Fed Funds at just below 1.0%, or less than 3 more rate hikes before the Fed is forced to reverse! That, as Edwards notes, “is so far away from  the current consensus that it deserves some serious analysis.”

* * *

First, for those curious about the details some background: Solomon’s explanation of the first generation Shadow FFR based on Wu and Xia (2016) and his second generation estimate from De Rezende and Ristiniemi (2020) are in this note here. For those pressed for time, what the analysis says is that the pace of QE or QT can be combined with the headline Fed Funds rate to calculate a Shadow FFR.

So combining the expansion of the Fed’s balance sheet from sub-$4 trillion at end 2018 to almost $9 trillion was the equivalent of the FFR falling to minus 5% (charts below)! But now that the Fed has reveresed, ending QE combined with just one ¼% hike in the headline FFR means the Shadow FFR has already jumped from minus 5% to minus 2.5% – a 250bp hike (blue line below).

We now take a brief tour down memory lane to remind readers how when Solomon made his mid-May 2018 call that the FFR would peak at 2½%, the market was looking at something nearer 3% (see chart below). Not much difference you might think, but as the Fed enacted its final hike to 2½% in Dec 2018, expectations of easing were rapidly taking hold as investors realized that the Fed had clearly overdone the tightening cycle (as we had said previously, the Ghost of 1937 has emerged right on schedule and the Fed has overtightened) even though just back in October 2018, Powell said that “we are a long way from neutral.”

Meanwhile, as Edwards reminds us, the US bond rally from mid-Nov 2018 onwards was typical of the situation when yields tend to peak before the last rate hike. By comparison, currently the market expects the Fed to tighten rates rapidly and the peak in the FFR to be close to 3½% by March 2023.

On that basis, you should wait until the back end of this year before dipping your toe into the bond market. But with inflation considered rampant, many investors believe the headline FFR will peak nearer 4%, despite recession fears mounting, and earlier this week, Deutsche Bank became the first large broker to forecast a US recession.

Needless to say with market consensus expecting rates to rise as high as 3% before the Fed starts cutting around the next recession, if Solomon is right that the Fed will struggle to raise FFR to 1% or above, this is a huge divergence with consensus. One can see clearly in Solomon’s chart below how the recent 250bp Shadow FFR hike compares to the cumulative easing and tightening in previous Fed cycles:

As depicted in the chart above, Solomon constructs a Monetary Tightening to Easing ratio (MTE, the ratio of the degree of tightening to the degree of easing in the preceding cycle). The charts below show how the MTE ratio declined in the 1980s as disinflation became the dominant theme. Hence since the mid-1980s the tightening cycle has topped out at around 70% of the previous easing cycle. But shouldn’t this ratio now return to 1.5x given CPI inflation has comprehensively overshot, Edwards asks and answers: Maybe…

 

You see, the main reason why Solomon’s MTE ratio has been consistently lower (at 70%) recently is that tightening cycles have been halted because financial market bubbles, created by excessive Fed easing, then blow up and prevent the Fed from further tightening. Another way of visualizing this is the infamous chart showing that every Fed tightening cycle ends in crisis (and this one will be no different);

So putting it all together, if we take the 70% MTE ratio above, Solomon calculates that the Shadow FFR will likely top out with 550bp of tightening (70% of the 800bp easing), and even though the Fed will fail to tame inflation the crash in markets and the recession (or depression) that will hit the hyperfinancialized US economy, with its 6.3x financial assets to GDP…

… will force the Fed to not only end tightening early but to rush into an easing cycle

The final point: prior to Lael Brainard’s comments, the remaining 300bp hike in the Shadow FFR was split between a headline FFR rise to only 1½% with the remainder being QT. But now that the Fed minutes confirmed that the pace of QT will accelerate accelerate to $95BN (or more) per month, Edwards concludes that “the actual FFR will struggle to get to 1% before the Fed needs to halt the tightening cycle. That is shocking.”

The full notes: both Edwards and Solomon’s are available to pro subs in the usual place.

Authored by Alice Giordano via The Epoch Times (emphasis ours),

A 9-year-old boy is being denied a life-saving kidney transplant because his father is not vaccinated against COVID-19.

Dane Donaldson was found to be a perfect match for his son Tanner back in early 2018 by the Cleveland Clinic Children’s Hospital before the outbreak of the pandemic.

The family decided to wait a little longer before having Tanner undergo the transplant since transplanted kidneys from a live donor only lasted about 20 years.

Then COVID-19 hit and put a freeze on the procedure.

Now the hospital is refusing to perform the life-saving father-to-son kidney transplant it agreed to do nearly four years ago over the senior Donaldson’s unvaccinated status.

In a statement released to The Epoch Times, the Cleveland Clinic cited a 2021 policy it adopted requiring all donors and candidates for organ transplants to be fully vaccinated against the virus.

“Individuals who are actively infected with COVID-19 have a much higher rate of complications during and after surgery, even if the infection is asymptomatic,” the hospital stated.

Donaldson, who is in the insurance business, told The Epoch Times he is opposed to the COVID-19 vaccine for religious reasons, but also because he has seen a rising number of clients get critically ill after receiving it. 

He believes the hospital is contradicting itself by requiring a living donor to be vaccinated, but not a deceased one.

“I asked them in that car accident victim, would you vaccinate him on the way to the hospital to rip his kidney out and they said ‘no’,”  Donaldson told The Epoch Times.

Donaldson said he even offered to sign a waiver freeing the hospital from any liability should either himself or his son develop COVID-19. At the same time, the hospital has refused to agree to take any responsibility for any side effects that he or his son experienced from the vaccine.

The hospital, he said, is blowing the chance of a lifetime for his son.

“A live donor is the best donor for kidneys,” said Donaldson, “but they’ll take a kidney from a deceased person not vaccinated, it makes no sense.”

The Cleveland hospital agreed that live donors are the best source for kidney transplant recipients, but emphasized that they were “not without risks”—noting that there is medication kidney transplant patients must take that compromises the immune system.

“We continually strive to minimize risk to our living donors, and vaccination is an important component to ensure the safest approach and optimal outcomes for donors,” it stated. 

Donaldson said he and his wife Jenn are now in the process of finding another hospital to perform the transplant. They had wanted to stay with the children’s hospital because it has been treating his son since birth.

Tanner was born with compromised kidneys due to a rare birth defect that caused irreversible kidney damage in utero and resulted in stage 4 chronic kidney disease as well as bladder and urinary dysfunctions.

He now has only 18 percent function left of his kidneys, according to Donaldson.

The Donaldsons join a number of other publicized cases of U.S. hospitals that have refused to perform organ transplants because either the donor or recipient was not vaccinated.

Last month, The Epoch Times covered the story of an Air Force veteran who was denied a kidney transplant because he was refusing the vaccine. 

Chad Carswell had only 4 percent kidney function left when the Atrium Health Wake Forest Baptist Medical Center in Winston-Salem, North Carolina, refused to keep him on their candidate list for a donated kidney.

Fortunately, after his story went public the Medical City Fort Worth Transplant Institute in Texas offered to put Carswell on their recipient list for a kidney. His attorney Adam Draper said that as of April 3, Carswell was still in need of a match for the transplant.

In January, attorneys for the conservative organization Informed Consent Action Network (ICAN) wrote a seven-page letter to the Cleveland Center requesting it reconsider the decision, and also the science behind it.

“Presently, it appears the hospital is operating under a psychosis of flawed morality in choosing to sacrifice the health and wellness of its 9-year-old patient in exchange for what it perceives to be the ‘greater good,’” ICAN’s lawyers Aaron Siri and Elizabeth Brehm wrote.

ICAN also called the hospital irrational because the entire family, including Tanner and his older brother, all had COVID-19 and recovered from it, meaning they have natural immunity.

In its letter to the hospital, ICAN cited a number of international studies that showed that re-infection of COVID-19 after recovering from the virus was rare.

Of the studies it cited was one performed by Cleveland Clinic itself.

In the study, the hospital looked at SARS-CoV-2 (the virus that causes COVID-19) infections in 52,238 vaccinated and unvaccinated health care workers over a five-month period.

It found that none of the previously infected healthcare workers who remained unvaccinated contracted SARS-CoV-2 over the course of the research despite a high background rate of COVID-19 in the hospital.

A massive container ship has been stuck in the Chesapeake Bay waters outside Baltimore for three weeks. Numerous refloating attempts have failed, and Evergreen Marine, the owner of Ever Forward, declared “General Average” last week. Now salvage crews, left with only one option, will begin to unload thousands of containers to reduce the ship’s current weight for future refloating attempts. 

According to local news WMAR, the massive 1,100-foot container ship with 5,000 containers on board is stuck in 24 feet of water and needs about 42 feet of draft. The failed attempts to refloat the vessel will make way for two cranes in the coming days that will begin unloading hundreds of containers from both the starboard and port side in a move called “lightering.” The entire process could take two weeks or more. 

“Salvage experts determined they would not be able to overcome the ground force of the Ever Forward in its current loaded condition,” the Coast Guard said in a statement.

John Martino, from the School of Seamanship, said unloading containers off the vessel will be no easy task:

“They also have to be careful the order they take the containers off.

“So, they have to make sure everything stays balanced as they go along,” Martino said. 

As an undertaking to free the container ship can be very expensive, Evergreen declared “General Average” last week to transfer some of the refloating costs to cargo owners. 

Unloading containers risks unbalancing and damaging the ship. There are concerns that stress on the hull buried in more than 20 feet of mud could result in a fuel leak, or worse, structural damage to the vessel that could make it a more permanent fixture in the Chesapeake Bay. 

More on the situation from local news channel WJZ. 

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

Food and Drug Administration (FDA) officials have proposed a future model for developing new COVID-19 vaccines that would be built on the approach to creating influenza vaccines.

Accumulating data suggest the current COVID-19 vaccines, based on a virus strain that is now generations old, “may need to be updated at some point to ensure the high level of efficacy demonstrated in the early vaccine clinical trials,” the FDA said.

One concern is how new strains of SARS-CoV-2 keep emerging, some of which bypass protection bestowed by the vaccines better than others.

The vaccines provide virtually no protection against infection from Omicron, the strain that is dominant in the United States at present, though they have held up better against severe disease.

U.S. regulators say an orderly and transparent process should be outlined for changing the composition of the COVID-19 vaccines, with the process ideally being adopted by countries around the world in addition to the World Health Organization (WHO).

The model in place for annually updating influenza vaccines can inform the process, officials say.

“The strain selection process for determining the composition of seasonal influenza vaccines may provide a general outline for the approach needed for updating the composition of COVID-19 vaccines to address current and emerging SARS-CoV-2 variants,” the FDA said.

The influenza vaccine model is based on predicting which variants will be circulating in the future. WHO leads the effort, voting on the composition of the vaccines to be deployed in the northern hemisphere five to six months later and the southern hemisphere three to four months in the future.

U.S. authorities often adopt the WHO’s recommended composition, though the FDA, in consultation with its expert advisory panel on vaccines, occasionally diverge from the advice.

While the flu model could be used as a foundation for future COVID-19 vaccines, there are unique issues for COVID-19 that will need to be addressed, FDA officials say, including how the seasonal pattern for SARS-CoV-2 surges has yet to be identified; how the COVID-19 vaccines are built across different platforms, such as messenger RNA; and how the experience with those vaccines to date wouldn’t be sufficient to get authorization or approval without clinical trial data.

Further, even the best-matched flu vaccines end up being around 60 percent effective, a figure some vaccine manufacturers have described as poor.

The proposed shift to a flu-like model contains “a lot of assumptions,” John Moore, a professor of immunology at Weill Cornell Medicine, told The Epoch Times.

Clinical trials of Omicron-specific shots are ongoing, with data on human subjects not out yet. Data from animal studies, though, which are “usually pretty predictive, do not support the use of that specific vaccine as a boost,” Moore said. “So if that’s going to be the case in the humans, why go through the complexity of introducing a new vaccine if it’s not needed?”

The new model was proposed in a briefing document published ahead of an April 6 meeting. During the meeting, which The Epoch Times will stream live, FDA officials will discuss with the agency’s expert advisers various matters relating to COVID-19 vaccines, including optimal use of additional COVID-19 shots in the future.

The FDA recently cleared fourth doses for millions of Americans without consulting the advisers, part of a growing pattern of minimizing their role.

Among those presenting will be Dr. Kanta Subbarao, a WHO official, on COVID-19 vaccine composition, and Robert Johnson, a government official on the development of variant-specific vaccines.

On the same day as oil prices slip to their lowest since Putin’s invasion of Ukraine – and reports of Russia selling oil to China for Yuan – Goldman Sachs doubled-down on their Poszar-esque commodity-currency-linked warnings about the regime-change under way in the energy complex.

As Goldman’s Jeff Currie recently warned, commodities are entering a volatility trap.

Crucially, as we detail below, this self-sustaining regime-shift driven by both physical and financial factors, is likely to last years rather than weeks.

‘Physically’

Inventories are already at historical lows in terms of ‘days of demand’ following 20 consecutive months of deficit…

…and Goldman notes that the unavailability of the usual system buffers of inventory and spare capacity…

…has required an evolution in the pricing regime towards the more abrupt mechanism of demand destruction, amplifying the price and volatility impact of the continued pandemic shocks and, currently, the Russia-Ukraine war.

Remember, the ‘physical’ markets have suddenly become significantly more complicated (and delivery anything but guaranteed) as we recently noted ‘oil is no longer fungible’ to some extent, for some buyers… “Russian oil bidless, non-Russian oil offerless”…

‘Financially’

Volatility is both curbing liquidity and restricting access to the very credit required to maintain orderly financial and physical trading of commodities.

In addition, it is also exacerbating the medium- to long-term capital shortages that have built up after an era of low returns and ample supply, reinforced by political and investor ESG concerns.

This can be visualized in the following vicious doom-loop of volatility creating more illiquidity and lowering capital, leading to more volatility and so on…

As oil becomes more volatile…

…the range of possible outcomes becomes wider, with a greater potential for loss…

…that shifting distribution drives up the Vale-at-Risk (VaR)…

…which drives down the hedgeable amount of commodities, for any given amount of risk capital…

And a lack of risk capital lowers market participation, driving down liquidity and exacerbating volatility, and further discouraging potential lenders and investors, reinforcing lower participation and higher volatility.

This volatility trap is a direct consequence of the “Revenge of the Old Economy”.

As commodity producers under-invest in new supply, commodity inventories deplete, raising volatility as the market loses its balancing buffer between small supply and demand shocks. This volatility in turn keeps commodity producer assets unattractive – it raises the uncertainty surrounding the investment’s true value, lowering its appeal to investors. Capital continues to stay away from the sector, keeping new supply capacity – and hence inventories – low.

And as we saw in the 1970s, such a volatility trap can create persistently higher commodity inflation and a supply constrained market.

• In the 1970s, the markets turned to long-term fixed price contracts and built large conglomerates to deepen the balance sheets required to deal with these funding stresses.

• In the 2000s (pre GFC) they used financial markets, and a higher degree of bank leverage, to share the risks. Neither avenue is fully available in today’s regulatory environment.

But, it’s different this time.

Given there is unlikely to be a widespread lift of sanctions on Russia, regardless of the outcome of the war, as has historically been the case with such regulatory impositions, Goldman expects this new, more volatile pricing regime to persist for the foreseeable future.

All of which reinforces Goldman’s forecast for $125/bbl Brent crude in 2H22 and reinforces Poszar’s warnings that you can print money but not print oil, iron, or wheat, or VLCCs or other ships to guarantee delivery of the critical commodities. Thus, as Poszar concludes rather ominously, commodity reserves will be an essential part of Bretton Woods III, and historically wars are won by those who have more food and energy supplies. And as Goldman’s price forecast suggests, the current ‘lull’ in the stagflationary storm (as oil prices slide to post-invasion lows) is perhaps just the eye of a very much larger and longer storm.

However, while many have been predicting the birth of a new monetary system in the past decade, it is the nuances of Zoltan’s vision of the monetary future that is especially troubling: as he puts it “we are witnessing the birth of Bretton Woods III – a new world (monetary) order centered around commodity-based currencies in the East that will likely weaken the Eurodollar system and also contribute to inflationary forces in the West.”

Authored by Shawn Amick via BitcoinMagazine.com,

The Tennessee Titans are the first NFL team to accept bitcoin for large and recurring purchases through a third-party service provider…

The Tennessee Titans today announced they are now the first NFL team accepting bitcoin for key investments through a third-party conversion service. The establishment of this partnership allows fans to offer bitcoin in payment for season tickets, suites, PSLs and sponsorship opportunities with the Titans and Nissan Stadium events.

Initially the Titans will only allow bitcoin for larger purchases and recurring payments, but the team hopes to open up the initiative to allow the purchase of single-tickets, merchandise, and at-game food and beverage sales.

Bitcoin Magazine and UTXO Management, a Nashville-based digital assets fund, offered close advice through a partnership with the Titans in order to bring this functionality to the team.

“We’re proud to partner with the Tennessee Titans as they start their Bitcoin journey and offer fans a new way to pay,” said David Bailey, CEO of BTC Inc and partner at UTXO Management.

“2022 is a special year as we continue to work with professional sports teams to help educate and further mass adoption of Bitcoin. The Titans are a top NFL franchise and a natural fit for this partnership.”

Joining the ranks of MLB’s Oakland Athletics and the NBA’s Sacramento Kings and Dallas Mavericks, the Titans will be the first NFL team to accept bitcoin.

What goes up must come down.

At least, that looks like what the story is going to wind up being for the Canadian housing market. The country is reportedly set to announce that it will ban foreign purchases of residential real estate for two years. 

“The foreign buyers ban will apply to condos, apartments, and single residential units,” according to CTV. “Permanent residents, foreign workers, and students will be excluded from this new measure. Foreigners who are purchasing their primary residence here in Canada will be exempt.”

The effects will likely be dramatic, as foreign purchases of real estate accounted for a lot of the bid that helped Canadian housing skyrocket to begin with. 

“The timing is a classic case of closing the barn door after the horses have left,” ForexLive’s Adam Button wrote this week. He noted that the market had already started to cool in March amidst interest rate hikes.

After calling the housing market top on Bloomberg last month, Button says this action by the government “certainly adds” to his conviction. He wrote:

“The question now is whether it will be a soft or hard landing. These measures from the Federal government are being combined with provincial measures and BOC hikes to create a perfect storm in a market that was already way out of line.”

As recent as last fall we were documenting how rural shacks were selling for as much as 37% above asking price within days of being listed. 

A rancher built in the 1970s had an asking price of $998,000 in June 2021 and sold later that month for $1,365,000. Just days on the market, a fierce bidding war broke out with 13 bidders who ultimately bid up the price 37% above list. 

“There wasn’t a lot of inventory, and there was another property that had sold recently in multiple offers, so we wanted to take advantage of any leftover buyers,” Toronto-based agent Luisa Piccirilli said at the time. 

Piccirilli described the bidding war mainly between those who wanted to escape city life and wanted a backyard. 

“There’s an exodus of people leaving the city and wanting more property and land,” Piccirilli said.