Month: February 2024

Authored by Helen Partz via CoinTelegraph.com,

A future where Bitcoin, stablecoins and central bank digital currencies can coexist in the Swiss city of Lugano is “quite possible,” according to a local official.

Paolo Bortolin, deputy chief financial officer for the city of Lugano, is optimistic about a future where different digital currencies and assets could be used all together. That is because Bitcoin, central bank digital currencies (CBDC) and stablecoins could potentially effectively serve different purposes for users, the official believes.

“Bitcoin, being Bitcoin, is a constant presence and operates independently in a fully decentralized manner,” Bortolin said in an interview with Cointelegraph.

In contrast, CBDCs are centralized by definition and name. Wholesale CBDCs are used within the financial sector for transactions among institutions, while retail CBDCs are seen as the standard digital currency for everyday payments or peer-to-peer transactions, similar to those made with the traditional Swiss franc.

While Bitcoin and CBDCs do not have a direct conflict, some types of state-issued money could potentially conflict.

“While wholesale CBDCs are anticipated to arrive swiftly, the outlook for retail CBDCs is less certain,” Bortolin noted, referring to retail CBDC-associated concerns like privacy. Additionally, retail CBDCs pose competition to traditional banks, according to the official. He stated:

“If individuals can manage all their Swiss francs through a digital wallet controlled by the central bank, and may manage decentralized finance investments easily via a CBDC, the necessity for traditional banks might diminish.”

Bortolin said that stablecoins like Tether are also likely to be an important element of the digital financial ecosystem, at least before retail CBDCs are widely adopted.

“These stablecoins, issued by private entities, could compete for dominance, with one potentially emerging as the leader in each currency, much like Tether currently holds the position for the United States dollar,” Bortolin said.

Bortolin mentioned that Switzerland has progressed with its wholesale CBDC project Helvetia III. “While we haven’t actively participated in this new project — only two bonds have been issued under this system so far — discussions are underway to proceed with this approach in the coming months,” Bortolin said, adding:

“If the Swiss National Bank issues a CBDC, we will certainly use it; that is normal.”

In December 2023, Lugano extended the scope of supported crypto payments and started accepting Bitcoin and USDT as payment for taxes and other community fees. In addition to BTC and USDT, Lugano also accepts payments in LVGA, the local blockchain-based stablecoin specifically designed for payments in the city.

Since launching Lugano’s Plan B initiative in cooperation with Tether, Lugano has amassed 400 BTC and USDT-accepting merchants and 14,000 users.

The world’s largest producer of uranium issued a warning about production delays and escalating shortages of essential chemicals needed for extracting the heavy metal, predicting a near-term decrease in production levels. This development is likely to support higher uranium prices. 

NAC Kazatomprom wrote in an earnings report Thursday that 2024 uranium production volumes are expected to be in the range of 21,000 to 22,500 tons. It reduced its production guidance for the year by 12% to 14%. 

“Adjustments to the previously announced production intentions are due to challenges related to the availability of sulphuric acid and construction delays at the newly developed deposits,” Kazatomprom said. As a result, production at most of its uranium-mining operations will be 20% below the levels allowed by permits for this year. 

The company pointed out inventory levels are at “comfortable levels” to fulfill “existing contractual commitments in 2024.” 

“However, a swift return to a 100% production volume level relative to subsoil use agreements may be at risk,” it said.

Spot prices for uranium concentrate used in nuclear power generation have recently been hovering over $100 per pound – a 16-year high. 

Shares of Global X Uranium ETF jumped as high as 7.5%, the highest intraday level since 2014, on the news. 

Earlier this month, BofA’s metals and mining team told clients: “Uanium’s third bull market set up for a promising 2024.” 

And Citi analysts stated a growing uranium supply gap will boost prices. They laid out three scenarios for prices:

The report from Kazatomprom today only means the uranium market is getting tighter. 

Let’s revisit our December 2020 note to readers: “Buy Uranium: Is This The Beginning Of The Next ESG Craze,” since then, everything uranium has soared. 

Via Remix News,

A majority of Germans oppose the government’s radical immigration law, which will allow up to 2.5 million foreigners to obtain German citizenship in time for the federal election in 2025.

 

The poll, which was conducted by Insa on behalf of the Protestant News Agency, found that 51 percent of Germans are opposed to the new law, with only 32 percent supporting it. Not only is the law opposed by the majority of Germans, but they have a 19-point lead over supporters. Another 14 percent said they did not know how they felt about the law, and 3 percent had no answer for pollsters.

However, arguably an even more devastating poll from the Security Report 2024, conducted by the Allensbach Institute, shows that the population’s overall approval of the federal government’s current refugee policy is extremely low, with 65 percent of those surveyed saying that they did not consider their policy to be correct. According to the security report, over 80 percent of those surveyed have little or no trust in the federal government’s migration policy.

In the same poll, almost half (48 percent) of those questioned said that crime in Germany was increasing due to the influx of refugees, while in 2016, this figure was only 37 percent. The actual federal crime data shows that foreigners are vastly overrepresented in serious crimes, including murder, rape, robbery, and assault.

Germany’s new law would reduce the amount of time foreigners need to reside in Germany to be eligible for citizenship from seven years to five years, and in some cases, allow them to obtain citizenship in as little as three years. It would also allow for dual passports.

The recent Insa poll found that Alternative for Germany (AfD) supporters are the most opposed to the new law, with 86 percent rejecting easier naturalization. However, majorities also exist with the left-wing Sahra Wagenknecht alliance (BSW), with 61 percent against it, while supporters of the Christian Democrats (CDU) and Free Voters, both reject the law with 54 percent each.

Only 20 percent of voters of the Left reject the law, 29 percent from the Social Democrats (SPD) and 46 percent from the Free Democrats (FDP). Rejection is lowest among Green party supporters, at 18 percent.

The poll also shows that foreigners are very much in favor of the law, with only 35 percent saying they reject it, while half of them support faster naturalization. Fifty-three percent of those Germans without a migration background reject the law.

There is high support for the liberal immigration law among Germany’s Muslim population, with 57 percent saying they approve. However, despite the pro-refugee stance of many Christian organizations, there is a high rate of rejection among Christians for the new law, with majorities rejecting it for Catholics (52 percent), evangelicals (53 percent) and Free Church members (56 percent).

However, Hindus, Buddhists, and Jews form a plurality in support of the law (40 percent) to allow for faster naturalization for foreign citizens.

The polling shows a growing trend towards anti-immigration sentiment in Germany. For example, recent polls show a strong majority of Germans believe migrants bring more problems than benefits.

Read more here…

Authored by Pepe Escobar,

A new book by scholar Glenn Diesen, The Ukraine War & The Eurasian World Order,  out in mid-February, asks the make-or-break question of the young 21st century: will the Hegemon accept a new geopolitical reality, or will it go Captain Ahab on Moby Dick and drag us all to the depths of a – nuclear – abyss?

An extra touch of poetic beauty is that the analysis is conducted by a Scandinavian. Diesen is a professor at the University of Southeast Norway (USN) and an associate editor at the Russia in Global Affairs journal. He had a stint at the Higher School of Economics in Moscow, working closely with the inimitable Sergey Karaganov.

It goes without saying that European MSM won’t touch him; rabid yells – “Putinista!” – prevail, including in Norway, where he’s been a prime target of cancel culture.

That’s irrelevant, anyway. What matters is that Diesen, an affable, unfailingly polite man and an ultra-sharp scholar, is aligned with the rarified cream of the crop who is asking the questions that really matter; among them, whether we are heading towards a Eurasian-Westphalian world order.

Apart from a meticulous deconstruction of the proxy war in Ukraine that devastatingly debunks, with proven facts, the official NATOstan narrative, Diesen offers a concise, easily accessible mini-history of how we got here.

He starts to make the case harking back to the Silk Roads: “The Silk Road was an early model of globalization, although it did not result in a common world order as the civilizations of the world were primarily connected to nomadic intermediaries.”

The demise of the Heartland-based Silk Road, actually roads, was caused by the rise of the thalassocratic European powers reconnecting the world in a different way. Yet the hegemony of the collective West could only be fully achieved by applying Divide and Rule across Eurasia.

We did not in fact had “five centuries of western dominance”, according to Diesen: it was more like three, or even two (see, for instance, the work of Andre Gunder Frank). In a historical Long View that barely registers.

What is indeed The Big Picture now is that “the unique world order” produced by controlling “the vast Eurasian continent from the maritime periphery is coming to an end”.

Mackinder is hit by a train

Diesen hits the nail on the head when it comes to the Russia-China strategic partnership – on which the overwhelmingly majority of European intellectuals is clueless (a crucial exception is French historian, demographer and anthropologist Emmanuel Todd, whose latest book I analyzed here.)

With a lovely on the road formulation, Diesen shows how “Russia can be considered the successor of the Mongolian nomads as the last custodian of the Eurasian land corridor”, while China revives the Ancient Silk Roads “with economic connectivity”. In consequence, “a powerful Eurasian gravitational pull is thus reorganizing the supercontinent and the wider world.”

Poviding context, Diesen needs to engage in an obligatory detour to the basics of the Great Game between the Russian and British empires. What stands out is how Moscow already was pivoting to Asia all the way to the late 19th century, when Russian Finance Minister Sergei Witte started to develop a groundbreaking road map for a Eurasia political economy, “borrowing from Alexander Hamilton and Friedrich List.”

Witte “wanted to end Russia’s role as an exporter of natural resources to Europe as it resembled ‘the relations of colonial countries with their metropolises’”.

And that implies going back to Dostoyevsky, who argued that “Russians are as much Asiatics as European. The mistake of our policy for the past two centuries has been to make the people of Europe believe that we are true Europeans (…) It will be better for us to seek alliances with the Asiatics.” Dostoyevsky meets Putin-Xi.

Diesen also needs to go through the obligatory references to Mackinder’s “heartland” obsession – which is the basis of all Anglo-American geopolitics for the past hundred and twenty years.

Mackinder was spooked by railway development – especially the Trans-Siberian by the Russians – as it enabled Moscow to “emulate the nomadic skills of the Scythians, Huns and Mongols” that were essential to control most of Eurasia.

Mackinder was particularly focused on railways acting “chiefly as feeders to ocean-going commerce”. Ergo, being a thalassocratic power was not enough: “The heartland is the region to which under modern conditions, sea power can be refused access.”

And that’s what leads to the Rosetta Stone of Anglo-American geopolitics: to “prevent the emergence of a hegemon or a group of states capable of dominating Europe and Eurasia that could threaten the dominant maritime power.”

That explains everything from WWI and WWII to the permanent NATO obsession in preventing a solid rapprochement between Germany and Russia, by any means necessary.

The Little Multipolar Helmsman

Diesen offers a succinct perspective of Russian Eurasianists of the 1920s such as Trubetskoi and Savitsky, who were promoting an alternative path to the USSR.

They conceptualized that with Anglo-American thalassocracy applying Divide and Rule in Russia, what was needed was a Eurasian political economy based on mutual cooperation: a stark prefiguration of the Russia-China drive to multipolarity.

Savitsky in fact could have been writing today: “Eurasia has previously played a unifying role in the Old World. Contemporary Russia, absorbing this tradition”, must abandon war as a method of unification.

Cue to post-Maidan in 2014. Moscow finally got the message that trying to build a Greater Europe “from Lisbon to Vladivostok” was a non-starter. Thus the new concept of Greater Eurasian Partnership was born. Sergey Karaganov, with whom Diesen worked at the Higher School of Economics, was the father of the concept.

Greater Eurasia Partnership repositions Russia “from the periphery of Europe and Asia to the center of a large super-region.” In short, a pivot to the East – and the consolidation of the Russia-China partnership.

Diesen dug up an extraordinary passage in the Selected Works of Deng Xiaoping, proving how the Little Helmsman in 1990 was a visionary prefiguring multipolar China:

“In the future when the world becomes three-polar, four-polar or five-polar, the Soviet Union, no matter how weakened it may be and even if some of its republics withdraw from it, will still be one pole. In the so-called multipolar world, China too will be a pole (…) Our foreign policies remain the same: first, opposing hegemonism and power politics and safeguarding world peace; and second, working to establish a new international political order and a new international economic order.”

Diesen breaks it down, noting how China has to a certain extent “replicated the three-pillared American System of the early 19th century, in which the U.S. developed a manufacturing base, physical transportation infrastructure, and a national bank to counter British economic hegemony.”

Enter China’s Belt and Road Initiative (BRI); the Shanghai Cooperation Organization (SCO); the AIIB; the de-dollarization drive; the China International Payment System (CIPS); increased use of yuan in international trade; the use of national currencies; Made in China 2025; The Digital Silk Road; and last but not least, BRICS 10 and the NDB, the BRICS development bank.

Russia matched some of it – as in the Eurasia Development Bank (EDB) of the Eurasia Economic Union (EAEU) and in advancing the harmonization of financial arrangements of BRI and EAEU projects via the SCO.

Diesen is one of the very few Western analysts who actually understands the drive to multipolarity: “BRICS+ is anti-hegemony and not anti-Western, as the objective is to create a multipolar system and not assert collective dominance over the West.”

Diesen also contends that the emerging Eurasian World Order is “seemingly based on conservative principles.” That’s correct, as the Chinese system is drenched in Confucianism (social integration, stability, harmonious relationships, respect for tradition and hierarchy), part of the keen sense of belonging to a distinct, sophisticated civilization: that’s the foundation of Chinese nation-building.

Can’t bring Russia-China down

Diesen’s detailed analysis of the Ukraine proxy war, “a predictable consequence of an unsustainable world order”, is extrapolated to the battleground where the future, new world order is being decided; it is “either global hegemony or Westphalian multipolarity.”

Everyone with a brain by now knows how Russia absorbed and re-transformed everything thrown by the collective West after the start of the Special Military Operation (SMO). The problem is the rarified plutocracy that really runs the show will always refuse to acknowledge reality, as Diesen frames it: “Irrespective of the outcome of the war, the war has already become the graveyard of liberal hegemony.”

The overwhelming majority of the Global South clearly sees that even as what Ray McGovern indelibly defined as MICIMATT (military-industrial-congressional-intelligence-media-academia-think tank complex) cast the Russia-China partnership as the main “threats” – in reality those that created the “gravitational pull to reorganize the world order towards multipolarity” – they can’t bring Russia-China down geoeconomically.

So there’s no question “the conflicts of the future world order will continue to be militarized.” That’s where we are at the crossroads. There will be no peaceful road towards to Westphalian world order. Fasten your seat belts – it’s gonna be a bumpy ride.

Even as the frontlines are stalled and look bleak, Ukrainian forces have continued to strike both deep into Russian territory and against naval assets along the Crimea coast. These attacks have done nothing to change the tide of the war from a strategic standpoint, but it seems borne out of Kiev’s desire to inflict revenge on Russia and to keep up pressure on President Putin. Ukraine’s military intelligence (GUR) on Thursday announced that sea drones attacked and sank a Russian corvette in the Black Sea overnight.

The GUR claimed that the ship, identified as the Russian Tarantul-class Ivanovets missile corvette, was taken out while traveling in the western part of Crimea, near Lake Donuzlav. Ukraine Foreign Ministry official Olexander Scherba called the attack “impressive” and told the BBC, “At 03:45 [01:45 GMT] there was the first hit and at 04:00 the whole crew was evacuated already. So there was no chance at all that this vessel would be saved.”

Ukraine’s military intelligence subsequently released a video of the suicide sea drones approaching the ship. The video indicates that the Ivanovets received “direct hits to its hull” and was irreparably damaged. There’s the possibility that Ukraine may have had help from US or UK intelligence services in the attack (as with other high-level operations involving advanced military tech). Ukraine further said the vessel sunk afterward. Watch below:

Authored by John & Nisha Whitehead via The Rutherford Institute,

“We’re all potential victims.”

– Peter Christ, retired police officer

Sometimes ten seconds is all the warning you get.

Sometimes you don’t get a warning before all hell breaks loose.

Imagine it, if you will: It’s the middle of the night. Your neighborhood is in darkness. Your household is asleep. Suddenly, you’re awakened by a loud noise.

Barely ten seconds later, someone or an army of someones has crashed through your front door.

The intruders are in your home.

Your heart begins racing. Your stomach is tied in knots. The adrenaline is pumping through you.

You’re not just afraid. You’re terrified.

Desperate to protect yourself and your loved ones from whatever threat has invaded your home, you scramble to lay hold of something—anything—that you might use in self-defense. It might be a flashlight, a baseball bat, or that licensed and registered gun you thought you’d never need.

You brace for the confrontation.

Shadowy figures appear at the doorway, screaming orders, threatening violence, launching flash bang grenades.

Chaos reigns.

You stand frozen, your hands gripping whatever means of self-defense you could find.

Just that simple act—of standing frozen in fear and self-defense—is enough to spell your doom.

The assailants open fire, sending a hail of bullets in your direction.

In your final moments, you get a good look at your assassins: it’s the police.

Brace yourself, because this hair-raising, heart-pounding, jarring account of a SWAT team raid is what passes for court-sanctioned policing in America today, and it could happen to any one of us or our loved ones.

Nationwide, SWAT teams routinely invade homes, break down doors, kill family pets (they always shoot the dogs first), damage furnishings, terrorize families, and wound or kill those unlucky enough to be present during a raid.

No longer reserved exclusively for deadly situations, SWAT teams are now increasingly being deployed for relatively routine police matters such as serving a search warrant, with some SWAT teams being sent out as much as five times a day.

SWAT teams have been employed to address an astonishingly trivial array of so-called criminal activity or mere community nuisances: angry dogs, domestic disputes, improper paperwork filed by an orchid farmer, and misdemeanor marijuana possession, to give a brief sampling.

Police have also raided homes on the basis of mistaking the presence or scent of legal substances for drugs. Incredibly, these substances have included tomatoes, sunflowers, fish, elderberry bushes, kenaf plants, hibiscus, and ragweed. In some instances, SWAT teams are even employed, in full armament, to perform routine patrols.

These raids, which might be more aptly referred to as “knock-and-shoot” policing, have become a thinly veiled, court-sanctioned means of giving heavily armed police the green light to crash through doors in the middle of the night.

No-knock raids, a subset of the violent, terror-inducing raids carried out by police SWAT teams on unsuspecting households, differ in one significant respect: they are carried out without police even having to announce themselves.

Warning or not, to the unsuspecting homeowner woken from sleep by the sounds of a violent entry, there is no way of distinguishing between a home invasion by criminals as opposed to a police mob. In many instances, there is little real difference.

According to an in-depth investigative report by The Washington Post, “police carry out tens of thousands of no-knock raids every year nationwide.”

While the Fourth Amendment requires that police obtain a warrant based on probable cause before they can enter one’s home, search and seize one’s property, or violate one’s privacy, SWAT teams are granted “no-knock” warrants at high rates such that the warrants themselves are rendered practically meaningless.

In addition to the terror brought on by these raids, general incompetence, collateral damage (fatalities, property damage, etc.) and botched raids are also characteristic of these SWAT team raids.

In some cases, officers misread the address on the warrant. In others, they simply barge into the wrong house or even the wrong building. In another subset of cases, SWAT teams have conducted multiple, sequential raids on wrong addresses; executed search warrants despite the fact that the suspect is already in police custody; or conducted a search of a building where the suspect no longer resides.

That appeared to be the case in Ohio, when a botched SWAT team raid in pursuit of stolen guns at a home where the suspects no longer resided resulted in a 17-month-old baby with a heart defect and a breathing disorder ending up in the ICU with burns around the eyes, chest and neck. In that Jan. 10, 2024, incident, police waited all of six seconds after knocking on the door before using a battering ram to break in and simultaneously launch two flash-bang grenades into the home. The baby’s mother, having lived in the house for a week, barely had time to approach the door before she was grabbed at gunpoint, handcuffed and hustled outside. Only later did police allow her to enter the home to check on the baby, who had been hooked up to a ventilator near the window that police shattered before deploying the flash grenades. 

Aiyana Jones is dead because of a SWAT raid gone awry. The 7-year-old was killed after a Detroit SWAT team—searching for a suspect—launched a flash-bang grenade into her family’s apartment, broke through the door and opened fire, hitting the little girl who was asleep on the living room couch. The cops weren’t even in the right apartment.

Exhibiting a similar lack of basic concern for public safety, a Georgia SWAT team launched a flash-bang grenade into the house in which Baby Bou Bou, his three sisters and his parents were staying. The grenade landed in the 2-year-old’s crib, burning a hole in his chest and leaving him with scarring that a lifetime of surgeries will not be able to easily undo.

The horror stories have become legion in which homeowners are injured or killed simply because they mistook a SWAT team raid by police for a home invasion by criminals.

That’s exactly what happened to a 16-year-old Alabama boy. Mistaking a pre-dawn SWAT team raid for a home invasion, the boy grabbed a gun to protect his family only to be gunned down by police attempting to execute a search warrant for drugs. The boy’s brother, not home at the time of the raid, was later arrested with 8 grams of marijuana.

Then there was Jose Guerena, the young ex-Marine who was killed after a SWAT team kicked open the door of his Arizona home during a drug raid and opened fire. According to news reports, Guerena, 26 years old and the father of two young children, grabbed a gun in response to the forced invasion but never fired. In fact, the safety was still on his gun when he was killed. Police officers were not as restrained. The young Iraqi war veteran was allegedly fired upon 71 times. Guerena had no prior criminal record, and the police found nothing illegal in his home.

All too often, botched SWAT team raids have resulted in one tragedy after another for those targeted with little consequences for law enforcement.

The problem, as one reporter rightly concluded, is “not that life has gotten that much more dangerous, it’s that authorities have chosen to respond to even innocent situations as if they were in a warzone.”

A study by a political scientist at Princeton University concludes that militarizing police and SWAT teams “provide no detectable benefits in terms of officer safety or violent crime reduction.” The study, the first systematic analysis on the use and consequences of militarized force, reveals that “police militarization neither reduces rates of violent crime nor changes the number of officers assaulted or killed.”

SWAT teams, designed to defuse dangerous situations such as those involving hostages, were never meant to be used for routine police work targeting nonviolent suspects, yet they have become intrinsic parts of federal and local law enforcement operations.

There are few communities without a SWAT team today.

In 1980, there were roughly 3,000 SWAT team-style raids in the US.

Incredibly, that number has since grown to more than 80,000 SWAT team raids per year, often for routine law enforcement tasks.

In the state of Maryland alone, 92 percent of 8200 SWAT missions were used to execute search or arrest warrants.

Police in both Baltimore and Dallas have used SWAT teams to bust up poker games.

A Connecticut SWAT team swarmed a bar suspected of serving alcohol to underage individuals.

In Arizona, a SWAT team was used to break up an alleged cockfighting ring.

An Atlanta SWAT team raided a music studio, allegedly out of a concern that it might have been involved in illegal music piracy.

And then there are the SWAT team raids arising from red flag gun laws, which gives police the authority to preemptively raid homes of people “suspected” of being threats who might be in possession of a gun, legal or otherwise.

With more states adding red flag gun laws to their books, what happened to Duncan Lemp—who was gunned down in his bedroom during an early morning, no-knock SWAT team raid on his family’s home—could very well happen to more people.

At 4:30 a.m. on March 12, 2020, in the midst of a COVID-19 pandemic that had most of the country under a partial lockdown and sheltering at home, a masked SWAT team—deployed to execute a “high risk” search warrant for unauthorized firearms—stormed the suburban house where 21-year-old Duncan lived with his parents and 19-year-old brother. The entire household, including Lemp and his girlfriend, was reportedly asleep when the SWAT team directed flash bang grenades and gunfire through Lemp’s bedroom window. Lemp was killed and his girlfriend injured.

No one in the house that morning, including Lemp, had a criminal record.

No one in the house that morning, including Lemp, was considered an “imminent threat” to law enforcement or the public, at least not according to the search warrant.

So, what was so urgent that militarized police felt compelled to employ battlefield tactics in the pre-dawn hours of a day when most people are asleep in bed, not to mention stuck at home as part of a nationwide lockdown?

According to police, they were tipped off that Lemp was in possession of “firearms.”

Thus, rather than approaching the house by the front door at a reasonable hour in order to investigate this complaint—which is what the Fourth Amendment requires—police instead strapped on their guns, loaded up their flash bang grenades and acted like battle-crazed warriors.

This is what happens when you use SWAT teams to carry out routine search warrants.

These incidents underscore a dangerous mindset in which the citizenry (often unarmed and defenseless) not only have less rights than militarized police, but also one in which the safety of the citizenry is treated as a lower priority than the safety of their police counterparts (who are armed to the hilt with an array of lethal and nonlethal weapons).

Yet it wasn’t always this way.

There was a time in America when a person’s home was a sanctuary, safe and secure from the threat of invasion by government agents, who were held at bay by the dictates of the Fourth Amendment, which protects American citizens from unreasonable searches and seizures.

The Fourth Amendment, in turn, was added to the U.S. Constitution by colonists still smarting from the abuses they had been forced to endure while under British rule, among these home invasions by the military under the guise of “writs of assistance.” These writs gave British soldiers blanket authority to raid homes, damage property and wreak havoc for any reason whatsoever, without any expectation of probable cause.

We have come full circle to a time before the American Revolution when government agents—with the blessing of the courts—could force their way into a citizen’s home, with seemingly little concern for lives lost and property damaged in the process.

If these aggressive, excessive police tactics have also become troublingly commonplace, it is in large part due to judges who largely rubberstamp the warrant requests based only on the word of police; police who have been known to lie or fabricate the facts in order to justify their claims of “reasonable suspicion” (as opposed to the higher standard of probable cause, which is required by the Constitution before any government official can search an individual or his property); and software that allows judges to remotely approve requests using computers, cellphones or tablets.

This sorry state of affairs is made even worse by the U.S. Supreme Court, which tends to shield police under the guise of qualified immunity. As Reuters concluded, “the Supreme Court has built qualified immunity into an often insurmountable police defense.”

Rubber-stamped, court-issued warrants for no-knock SWAT team raids have become the modern-day equivalent of colonial-era writs of assistance.

Given President Biden’s determination to expand law enforcement and so-called crime prevention at taxpayer expense, our privacy, property and security may be in even greater danger from government intrusion.

Be warned: as I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, the American police state has become a powder keg waiting for a lit match.

With the QRA, Fed and all megatech earnings now in the rearview mirror, the busiest week of the quarter comes to a merciful end tomorrow, but first we have to survive the January payrolls report. Here is what economists believe the report will show:

• Nonfarm payrolls are expected to grow by 185k, a drop from December’s 216k,
• The unemployment rate is forecast to tick up to 3.8% from 3.7%.
• Average hourly earnings are seen rising 0.3% M/M in January, easing from the 0.4% pace in December; the Y/Y increase is expected to remain unchanged at 4.1%.

According to Newsquawk, labor market proxies have been leaning soft with a miss in ADP and a rise in Challenger layoffs (since ADP is always the polar opposite of the BLS print, expect the jobs number to be a multiple-sigma beat).

Elsewhere, the initial jobless claims data for the week that coincides with the usual BLS survey window saw a notable decline, although it was likely weather-related with more recent initial claims figures rising, whereas the continued claims data rose. However, the December JOLTS data rose above expectations while the quits rate was unchanged (this data, however, lags by a month). Analysts highlight the unchanged quits rate signals slower wage gains, which was also evident in the softer US Employment Cost Index report for Q4. Note, the BLS will also be releasing annual revisions to the establishment survey, but it will not provide revisions to the household survey despite adopting a new methodology for the January figures, thus, the January household survey data will not be directly comparable with data for December 2023 or earlier periods.

Regarding Fed implications, Fed Chair Powell stated the base case is not for a March rate cut but he did add that if the labour market saw an unexpected weakening, the Fed would be prepared to cut sooner. A dire report which takes the Fed off their base case would likely help put a March rate cut in play, providing the disinflation process continues, but there is still plenty of data due between now and March, including another NFP and PCE report, as well as two CPI reports.

Some more details on each of these:

EXPECTATIONS:

• Headline jobs added are expected to grow by 185k in January, down from the 216k gain in December although analyst forecasts are wide, ranging between 120-300k.
  • Private payrolls are expected to rise by 170k, up from the 164k added in the prior month.
    • Manufacturing payrolls are expected to add 5k jobs vs 6k in December.

• The unemployment rate is expected to tick up to 3.8% from 3.7%, with analysts forecasting between 3.7-3.9%.
  • Note, in December the labour force participation saw a notable decline to 62.5% from 62.8%.
• On wages, average hourly earnings are seen rising 0.3%, easing from the prior 0.4%.
  • The Y/Y earnings are expected to rise by 4.1%, maintaining the pace in January, although forecasts range between 4.0 and 4.2%.

One of the notable upside outliers, is Goldman which in its preview writes that it expects “a strong report, with a large underlying gain in employment partially offset by weather effects… We estimate nonfarm payrolls rose by 250k in January (mom sa)—above consensus of +185k—reflecting below-normal end-of-year layoff rates that more than offset a roughly 50k drag from cold, snowy weather during the survey week. We see a wide range of outcomes for the weather drag and expect this headwind will be visible in the construction and leisure and hospitality categories. Big Data employment indicators were mixed in the month but are also broadly consistent with low layoff rates and a potentially large weather drag.”

LABOR MARKET PROXIES:

• The January ADP report, although not the best gauge for NFP, saw 107k jobs added in January, beneath the 145k forecast and prior 158k. However, Pantheon Macroeconomics highlight that the ADP measure has been close to the official estimate in the past three months. Meanwhile, within the ADP report, the wage metrics for job stayers eased to 5.2% from 5.4%, while for job changers it eased to 7.2% from 8.0%.
• The January Challenger Layoffs report saw a notable increase to 82k from 35k in December.
• The Initial Claims data for the week that coincides with the usual NFP survey window saw a notable decline to 189k from 203k, albeit the drop was likely related to the freezing weather in the US. The 4wk initial claims average over January rose to 208k from 203k in the prior week, but it does incorporate the steep weather-related drop, leaving it unchanged from the end of December 4wk average. The Continued Claims data for the NFP survey week, however, rose to 1.828mln from 1.806mln.
• The JOLTS data, albeit for December, was hotter than expected, rising to 9.026mln from 8.925mln (revised up from 8.79mln) although the quits rate was unchanged at 2.2%. Pantheon Macroeconomics writes the rebound in JOLTS does not matter as the data is volatile and subject to large revisions, however, the quits rate is more important as it signals slower wage gains.
• The Q4 Employment Costs Index eased to 0.9% from 1.1%, beneath the 1.0% forecast, also indicative of slowing wages. Employment wages within the report eased to 0.9% from 1.2%, while employment benefits eased to 0.7% from 0.9%.

ANNUAL REVISIONS: The report will see the incorporation of the 2023 revisions. Within the establishment survey, the BLS tells us that “nonfarm payroll employment, hours, and earnings data from the establishment survey will be revised to reflect the annual benchmark process and updated seasonal adjustment factors. Not seasonally adjusted data beginning with April 2022 and seasonally adjusted data beginning with January 2019 are subject to revision“. Meanwhile, for the household survey, new population controls will be used in the estimation process which reflect the annual update of population estimates by the US Census Bureau. However, the BLS highlights, “In accordance with usual practice, historical data will not be revised to incorporate the new controls. Consequently, household survey data for January 2024 will not be directly comparable with data for December 2023 or earlier periods“. Note, the US unemployment rate is derived from the household survey.

ARGUING FOR A STRONGER THAN EXPECTED REPORT:

• Layoffs. Expect a boost from below-normal end-of-year layoffs on the order of 100k in tomorrow’s report. As shown in Exhibit 1, the Goldman layoff tracker indicates 1.1 million layoffs in January, a low level and a roughly 10% decline since mid-2023. The January payroll seasonals have started to evolve to reflect and offset the this post-pandemic trend, with a month-over-month hurdle for private payrolls of -2,584k in January 2023 compared to -2,773k in January 2019 (which was also a 4-week payroll month). However, even with this unfavorable evolution, nonfarm payrolls still rose by 436k month-over-month in January 2023—a 140k pickup relative to the 3-month average. Goldman’s layoff tracker is 50k higher than it was last January, which would argue for a boost from low layoffs of around 90k this January, other things equal.

• Jobless claims. Initial jobless claims decreased to an average of 204k in the January payroll month, down from 212k in December and 225k on average in 2023. The JOLTS layoff rate was unchanged at low levels (1.0%) in December. Announced layoffs reported by Challenger, Gray & Christmas increased by 16k in January to 57k (SA by GS), compared to 54k on average in the second half of 2023.
• Job availability. JOLTS job openings increased by 101k month-over-month to 9.0mn in December, well above consensus expectations, and online measures have declined slightly in recent months. While labor demand has fallen meaningfully on net, it remains elevated by 1-2 million relative to 2019 and represents a positive factor for job growth, in our view. Indeed, job openings remain above their 2019 levels in nearly every industry. Additionally, the Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—increased by 8.4pt to +35.7 in January.

ARGUING FOR A WEAKER-THAN-EXPECTED REPORT

• Weather. Goldman assumes a 50k drag from cold, snowy weather during the survey week in the Midwest and Northeast. As shown below, the January increase in population-weighted snowfall (mom sa) argues for a drag in weather-sensitive industries such as construction, leisure, and retail—especially because good weather likely flattered the December employment report. While there are a wide range of outcomes for the weather drag, expect low layoff rates to offset or partially offset this headwind in the retail and leisure categories.

• Employer surveys. The employment components of business surveys were net weaker in January. The employment component of the GS manufacturing survey tracker declined 1.3pt to 47.5 while the employment component of the services survey tracker increased 0.2pt to 49.8. Both trackers remain below their 2018-2019 average levels of 55.3 and 56.6, respectively.

NEUTRAL/MIXED FACTORS:

• Big Data. Big Data employment indicators were mixed in January, with an average pace of +179k across the four indicators tracked by Goldman economists. This compares to the +150k median of these measures in December.

• Worker strikes. The return of 3k striking workers will boost payroll growth by that amount in tomorrow’s report. This compares to the 8k boost in last month’s report and a 38k boost in November.

FED IMPLICATIONS: The FOMC on Wednesday saw rates left unchanged and removed its tightening bias in the statement as expected, it also played down the prospects of near-term rate cuts with Powell explicitly saying a March cut is not likely. Money markets have pared back their implied probability of a rate cut for the March meeting to c. 35% from the 50%+ pricing pre-FOMC. The NFP report will help shape those expectations, where a surprise downside report for the labour market would support the case for a March cut but it is seen as increasingly unlikely. Barclays and Goldman Sachs have both pushed back their March rate cut calls since the FOMC to May, while BofA pushed back their rate cut call to June from March. Nonetheless, Fed Chair Powell said many times in his post-FOMC Presser/Q&A that the labor market remains strong, but he did warn of earlier rate cuts than expected if that were to change, “If we saw an unexpected weakening [in the labour market] that would certainly weigh on cutting sooner”, how sooner remains to be seen, but March would still appear a possibility, providing the data supported it. When questioned on a March cut, Powell said, “I don’t think that’s…what we would call the base case”, but he also didn’t rule out the possibility. Powell pointed to the December SEPs – which saw three rate cuts in 2024 – “as good evidence of where people are”, whilst saying that the “base case” assumes that “we have a strong labor market, we have inflation coming down, that’s what people are writing their SEP around”. So, if the base case assumes continued disinflation progress and a strong labor market leading to three rate cuts this year – with March being too early for the first cut in that scenario – a weak labour market report that takes the Fed off that base case could be the key to putting March back in play for the Fed and a deeper cutting cycle than the Dec SEPs median forecast of three 25bp cuts, assuming disinflation continues as expected.

DATES AHEAD: The next FOMC is on March 19-20th. The January & February CPI reports are due on February 13th and March 12th, respectively, as well as the February jobs report due March 8th and the January PCE due February 29th. All will be key in determining the timing of the Fed’s first rate cut and extrapolating the depth of cuts over the year, with the market still priced for nearly six 25bps cuts across the year.

MARKET REACTION: According to Goldman, while the S&P is less than 1% below ATHs, markets should still like a miss since it raises the chance of a cut (Reminder March Cut probability stands at 40%). The reaction should prove out to be more so asymmetric for equities as Powell was pretty unconcerned about upside growth, but acknowledged they will be quick to cut in a downside surprise scenario. Given that the market isn’t really concerned about a bad growth outcome anymore, bad news tomorrow should be good for the market.

• 250k+ S&P sells off at least 50-75bps
• 200k – 250k S&P + / – 40bps
• 150k – 200 S&P +75bps-100bps
• 50 – 150k S&P -25bps / +50bps  

The question, however, is what does Biden want: does he still believe that if he manipulates the data long and strong enough, the average American will finally give him credit for “Bidenomics.” Alternatively, has Biden given up on the economy, and is he more focused on levitating stocks as a shortcut to gaining votes. The answer to those two questions will determine what number we get tomorrow.

More in the full payrolls preview folder available to pro subscribers.

Authored by Andrew Korybko via Substack,

The Russian leader knows the “new guard” of veterans haven’t been tainted by a life’s worth of Western-leaning sympathies unlike most of the “old guard” political and economic elite, whose naivete about the West led to them misleading him about its intentions and thus played role in the events leading up to the special operation.

President Putin shared his vision of a new veteran-led Russian elite in late January when meeting with ministers and top St. Petersburg officials according to RT’s report about their conversation:

“The Russian head of state previously revealed that some 617,000 service members had been deployed in Ukraine. ‘I met today with students, who put their studies on hold, many of them, [and] went to the warzone,’ Putin remarked. ‘It’s out of these people that we should be forming the country’s elite in the future,’ he added. The Russian head of state described returning troops as those who can be entrusted with the country’s development. ‘Hence, they should be supported [and] assisted.’”

Here are five background briefings about the ways in which the Russian leader has sought to reshape his country’s domestic affairs by way of reforming its elite:

* 1 January 2020: “20 Years Of Putin: His Top Domestic & Foreign Policy Successes”

* 28 October 2020: “President Putin’s 2020 Valdai Club Speech Articulated His Vision of Populist Statism”

* 4 November 2021: “Is Putin’s ‘Healthy/Moderate/Reasonable Conservatism’ Really a New Russian Ideology?”

* 11 June 2022: “President Putin’s Insight Into State Sovereignty Is Instructive For All Countries”

* 3 October 2022: “Putin’s Revolutionary Manifesto Focuses On The Struggle For Democracy Against The Deep State”

He basically wants to facilitate the rise of patriotic conservative-nationalists who’ll prioritize sovereignty and seamlessly channel the people’s will in order to continue safeguarding and modernizing the country.

The special operation, which has gone on for much longer than both sides expected due to each of them underestimating the other as explained here back in July 2022, led to over half a million Russians proving their patriotism by defending Russia’s national interests on the battlefield. These can be summarized as preserving its sovereignty, protecting its conservative–nationalist values, and promoting multipolarity. They’re accordingly the best crop of people to gradually replace the existing elite.

Up until the special operation, Russia’s political and economic elite privileged the West over the Global South, which was done for reasons of convenience and familiarity. Director of the Foreign Policy Planning Department of the Russian Ministry of Foreign Affairs Alexei Drobinin shared his detailed thoughts on “The lessons of history and vision for the future” in August 2022 where he lambasted this class for their “ideological separation from the popular masses” over the centuries. All of that has now changed.

While most existing members of the elite were able to change their stripes by pivoting to the Global South in light of changing circumstances, it’s much better for them all to be replaced by proven patriotic conservative-nationalists who literally put their lives on the line fighting the West. The latter are much more politically reliable and can more easily adapt to everything than the “old guard”, who either fled or were compelled to change their ways in order to keep what they’d obtained thus far in their lives.

The “new guard” is just starting off with their lives, however, and have little to lose but lots to gain by growing within this new elite system. The Russian leader also knows that they haven’t been tainted by a life’s worth of Western-leaning sympathies unlike most of the “old guard”, whose naivete about the West led to them misleading him about its intentions. He’s responsible for his policy choices, but they were arguably influenced by Western-leaning advisors. Here are five background briefings on this:

* 7 July 2022: “Putin Cautioned Russian Strategic Forecasters Against Indulging In Wishful Thinking”

* 8 December 2022: “Merkel’s Admission That Minsk Was Just A Ruse Guarantees A Protracted Conflict”

* 24 December 2022: “Putin Explained Why He Had No Choice But To Protect The Russian Population In Ukraine”

* 26 December 2022: “The Five Ways In Which 2022 Completely Changed Russian Grand Strategy”

* 20 December 2023: “Putin’s Admission Of Naivety About The West Signals His New Stance Towards Peace Talks”

The lesson that he learned is that he can no longer rely on the existing elite after their pre-special operation paradigm of International Relations was comprehensively debunked. That’s not to say that there don’t exist any patriotic conservative-nationalists within the elite whose previously fringe views were proven right by events, nor that some previously Western-leaning ones didn’t sincerely change their stripes, but just that he’s obviously uncomfortable with how few there are within their ranks.

President Putin couldn’t in good conscience hand the country off to whoever his successor may be without knowing that the “new guard” is actively in the process of replacing the “old guard”. To be sure, this is already underway, but he wants to accelerate it as much as possible and that’s why he explicitly said in late January that he envisages a veteran-led elite in the coming future. Just like Moscow wasn’t built in a day, so too will it take time to rebuild the Russian elite, but thankfully they’re off to a solid start.

By Masaki Kondo, Bloomberg Markets Live reporter and strategist

Aozora Bank’s shock loss projection serves as a reminder of just how little room the Bank of Japan has to tighten its policy and for the nation’s bond yields to rise.

Carry trade isn’t just about buying and selling currencies in the spot or forward market (see “The $20 Trillion Carry Trade That Will Destroy Japan“). When investors in a country where interest rates are low raise funds domestically and invest the proceeds in higher-yielding assets abroad, it’s a form of carry trade. Banks in Japan can do this by gathering deposits at an average rate on ordinary deposits at 0.001% and buying higher-yielding overseas securities, such as five-year Treasuries with a yield of 3.8%.

It looks like Aozora has been doing just that.

The bank sold foreign securities to cut losses that were mainly caused by a rise in US interest rates. Nearly 40% of Aozora’s securities portfolio consists of foreign bonds but a share of foreign-currency assets is probably higher considering other asset classes such as ETFs include overseas securities. Japanese government bonds made up just 2% of the total portfolio.

This isn’t to say other Japanese banks are facing similar risks. But Japanese investors as a whole have boosted their overseas investment since the BOJ expanded monetary easing in 2013. Even if overseas assets have positive returns, a substantial rise in yen borrowing costs could risk triggering unwinding of this big Japan carry trade.

This suggests a first rate hike since 2007 will be a balancing act for the BOJ. It will probably settle for only small increases to avoid wreaking havoc. This outlook also argues for low bond yields in Japan.

More here.

Authored by Ryan McMaken via The Mises Institute,

In what can only be a surprising move, Texas Governor Greg Abbott has openly defied the White House and invoked Article 1 section 10 of the US constitution as a reason to ignore the Biden Administration’s demand that the State government cease erecting a border barrier along the Texas-Mexico border.

For months, the federal government has ratcheted up threats against the state government and condemned Texas for erecting razor-wire barriers and other impediments to migration. The White House has sued to force the demolition of these barriers in further efforts to increase foreign migration into Texas. Texas took legal action of its own against the federal order. However, on Monday, the US Supreme Court ruled that the Federal government could proceed with its plans to cut the razor-wire barrier. 

Texas officials, however, have refused to grant federal agents access to the border. This extends a Texas policy that has essentially ejected federal personnel from a 2.5 mile stretch of the Rio Grande in Eagle Pass which has been used extensively by coyotes, cartels, and migrants as an entry point into the US. 

The situation continues to escalate, and now Washington Democrats are demanding that Biden “take control” of the National Guard and turn it against the state government. 

The situation is shocking because Republican-controlled state and local governments rarely show any willingness to oppose federal usurpations of local authority. For decades, the standard operating procedure of Republicans has been to instantly surrender the second anyone in Washington utters the phrase “supremacy clause” or the Supreme Court makes a ruling. Democrats, on the other hand, routinely scoff at federal supremacy, such as with “sanctuary cities.” 

This is a rare instance in which a Republican-controlled state government has not immediately bent the knee in the name of national unity and “law and order.” 

So, what exactly does the Texas governor’s declaration say? Overall, it makes the case that the Biden administration has been ignoring federal immigration laws and illegally withdrawing border-control operations from the Texas-Mexico border. Abbott concludes: 

Under President Biden’s lawless border policies, more than 6 million illegal immigrants have crossed our southern border in just 3 years. That is more than the population of 33 different States in this country. This illegal refusal to protect the States has inflicted unprecedented harm on the People all across the United States.

If that were all, we’d just chalk this up to a document that amounts to little more than a letter to the editor. But then Abbott says that the US Constitution provides a remedy for the situation: 

the Framers included both Article IV, § 4, which promises that the federal government “shall protect each [State] against invasion,” and Article I, § 10, Clause 3, which acknowledges “the States’ sovereign interest in protecting their borders.

The final paragraph is where it gets interesting. Abbott writes: 

 The failure of the Biden Administration to fulfill the duties imposed by Article IV, § 4 has triggered Article I, § 10, Clause 3, which reserves to this State the right of self-defense. For these reasons, I have already declared an invasion under Article I, § 10, Clause 3 to invoke Texas’s constitutional authority to defend and protect itself. That authority is the supreme law of the land and supersedes any federal statutes to the contrary. The Texas National Guard, the Texas Department of Public Safety, and other Texas personnel are acting on that authority, as well as state law, to secure the Texas border.

Abbott is essentially saying that federal supremacy in this case has been rendered null and void by a federal refusal to enforce federal law. 

Can he get away with it? 

For clarity, let’s look at Article 1, section 10. It reads: 

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

The key phrase here is “unless actually invaded.” Whether or not the current flood of migrants across the border constitutes “invasion,” as stated here, is perhaps debatable. However, what is self-evident here is that it is up to the state government to determine for itself whether or not the state is being invaded. After all, the whole point of the section is to grant certain powers to states outside the authority of the federal government. If the federal government also gets to determine for itself whether or not the state is being invaded, then the section is pointless. 

So, an honest reading of this text ought to preclude the Biden administration or US Supreme Court coming back and saying “you’re not being invaded, now do what we say.” 

The governor’s letter is also well-worded in the way that it declares the state’s actions to be directly authorized by the US constitution and therefore not subject to mere federal statutes. This will be useful in resisting any federal attempts to federalize the Texas National Guard.  That is, if the Biden administration attempts to take control of the Guard, as it is generally authorized to do in federal law, Abbott could say “our right to command the National Guard under Article 1, Sec 10 supersedes your claim to federalize the Guard under federal statute.”

After all, the details of the president’s authority to “call forth the militia” relies primarily on federal statutes, and not on the constitution. Historically, state governments have had wide latitude to veto presidential attempts to use state troops. Those state veto powers were largely abolished in the past fifty years by conservatives, Cold Warriors, and other Pentagon simps. 

The way the Abbott declaration is worded, he could be making a case that he has constitutional authority over presidential attempts to seize control of the National Guard. 

The Situation Has Moved Beyond Legal Arguments 

As the situation progresses, we are likely to hear much from legal scholars about what court said this and what judicial text said that. Yet, in crises situations like the current one, legal rulings will grow increasingly irrelevant. Politics and public opinion will take over as the real criteria for what is feasible for each side.  

At this point, the Biden Administration is clearly motivated to move into Texas, take control of the situation, and throw the border open. In an election year, however, this will be problematic for Biden with many constituencies. Many will see the situation for what it is: a powerful Washington establishment, with no skin in the game in southern Texas, shows up to tell the locals that they are hereby ordered to house limitless numbers of unscreened migrants in their own neighborhoods, and for the taxpayers to cover the cost. With the legacy media on his side, Biden may be able to get away with it. 

Here’s what should happen, though: any federal agents that attempt to intervene with state agents on the border should be arrested and tried for obstruction and trespassing under Texas law.  Federal attempts to take control of the National Guard should be declared non-starters by the governor under Section 1, Article 10. Federal agents should be treated as the criminals they are. After all, the ATF, FBI, federal Border Control, NSA, and countless federal regulators are all unconstitutional agents with no authorization within the constitution itself. (Federal control over immigration is an invention of the late nineteenth century.)

It’s unclear what Washington’s next move would be. After all, the feds are used to unquestioning obedience from state governments. It is a sure thing that the White House would immediately seek out retaliatory action, such as denying Texans access to federal funds—which Texans already paid for through their payroll and income taxes. The Defense Department will send its stooge generals to threaten state authorities for not taking orders from the Pentagon—in a manner similar to its opposition to the Defend the Guard bills.

If the Supreme Court keeps issuing rulings that are subsequently ignored, then the SCOTUS will just make itself look ridiculous.

It will likely avoid this, and thus the situation will rest on political realities, not legal ones.

What is nice to see, however, is that the aura of authority around the central government is gradually being pierced and destroyed. Such things are long overdue.