What Is A Christian Nationalist?

What Is A Christian Nationalist?

Authored by John Leonard via AmericanThinker.com,

On MSNBC “award-winning investigative journalist” (from Politico) Heidi Przybyla said this recently:

Remember when Trump ran in 2016?  A lot of the mainline evangelicals wanted nothing to do with the divorced real-estate mogul who cheated on his wife with a porn star and all of that, right?  So what happened was, he was surrounded by this more extremist element.  You’re going to hear words like Christian Nationalism, like the new apostolic reformation.

These are groups that you should get very schooled on because they have a lot of power in Trump’s circle. And the one thing that unites all of them because there’s many different groups orbiting Trump but the thing that unites them as Christian nationalists — not Christians by the way, because Christian nationalist is very different — is that they believe their rights as Americans don’t come from any earthly authority. They don’t come from Congress, they don’t come from the Supreme Court, they come from God.

Horrors!  Does this mean that a Christian nationalist believes what the Declaration of Independence said — that our inalienable rights to life, liberty, and the pursuit of happiness come not from King George III, but from our Creator?  How does that separate a Christian nationalist from any other ordinary Christian?  What is she trying to say?

Ms. Przybyla continued:   

The problem is that they are determining, man — men — are determining what God is telling them. And in the past, that so-called natural law … it’s a pillar of Catholicism, for instance, and has been used for good. In social justice campaigns, Martin Luther King evoked it talking about civil rights. But now you have an extremist element of conservative Christians who say this applies specifically to issues like abortion, gay marriage, and it’s going much further than that, as you’re seeing for instance in the ruling in Alabama. The judge is connected to a dominionist faction.

Um…what?  Is Ms. Przybyla trying to say that mainstream Christians support abortion rights and gay marriage, but Christian nationalists do not?

She was referring to the Alabama Supreme Court, which just ruled that human life begins at conception.  How dare the court agree with basic biology and the American College of Pediatricians?  According to a publication by the National Library of Medicine, eighty percent of Americans believe that biologists are the most qualified group to determine when life begins, and ninety-six percent of biologists affirm the view that life begins at fertilization, yet a portion of the American public still demand the right to legally murder their unborn children.

Does a Christian automatically qualify as some sort of religious zealot simply for opposing abortion?  What if he doesn’t oppose the “Plan B” pill?  Can a Christian be patriotic without being called a nationalist?  Can a Christian still sing the patriotic anthem “God Bless America”?  

What is a Christian nationalist?  We still don’t have a real answer.  Perhaps it would be helpful to break the term down into individual words to understand it better.

If you declare with your mouth that Jesus is Lord and believe in your heart that God raised him from the dead, you’re a Christian.  Okay, then…so what is a nationalist?  According to the Cambridge English Dictionary, a nationalist is a person who wants his country to be politically independent, or a person who strongly believes that his country is better than others.

Putting the two terms together, we get a follower of Jesus Christ who strongly believes that America is the greatest nation on the face of the Earth.  And that’s the problem?

Oh, wait a minute — one of the Alabama justices is accused of being a dominionist.  This is, apparently, a person who seeks to create a nation governed by Christians according to their understanding of biblical law.  Is the justice a dominionist because he quoted from the Bible instead of a biology textbook?  Both basically say the same thing on this issue.

Most Christians I know (and I know more than a few through social media) realize that America was founded not as a Christian nation, but as a secular nation founded by Christians with Christian principles.  Muslims, Jews, and atheists alike have been welcome to participate in our secular government that still operates on Christian principles. 

Obviously, the term “Christian nationalist” is meant to be seen as a pejorative.  It is being used to separate the “good” Christians (those who support abortion and gay marriage) from the bad Christians (actual Christians).  It is a term intended to divide and conquer.

The current problem for those attempting to employ the term to accomplish their nefarious goal of turning Christians on one another is that most people don’t seem to know what a Christian nationalist is.

According to Pew research, roughly twenty-four percent of the American public had a negative opinion of Christian nationalism and predictably said things like, “It is a euphemism for racism and antisemitic fascism; a polite term for a Nazi sympathizer” — but still, more than half of U.S. adults have never even heard of the term.

One of the Christian respondents to the survey shared a starkly different opinion: “It’s a term used to dismiss any Christian because they are dangerous, therefore dehumanize them and make them the enemy.  It should mean a follower of Christ and someone who is patriotic.”

Why was it so important for the Politico reporter to establish that the modern existential threat to the American republic is this largely unheard of “Christian nationalist” movement?  Because this same “journalist” co-authored an article saying that the Trump administration is going to infuse Christian nationalist ideas into their policies because a guy named Russell Vought is under consideration to become Trump’s chief of staff.

If you don’t remember Vought, he’s the guy who famously sparred with Bernie Sanders when Sanders tried to apply a religious litmus test to disqualify Vought from an appointment to the Office of Management and Budget.  According to Ms. Przybyla’s most recent article, “Vought has a close affiliation with Christian nationalist William Wolfe, a former Trump administration official who has advocated for overturning same-sex marriage, ending abortion and reducing access to contraceptives.”

Well, then!  We should burn him at the stake like a heretic, right?  No way should this guy be allowed to serve in the next Trump administration…unless, of course, Trump wants him.

Every Christian (nationalist) should utter just four words sure to send a cold chill through the heart of Ms. Przybyla and her ilk: Make America Great Again.

*  *  *

John Leonard is a freelance writer.  He blogs at southernprose.com.  His books, including The God Conclusion and Atheist’s Prayer, can be found at LeonardBooks.net.

Tyler Durden
Sun, 02/25/2024 – 16:20

via ZeroHedge News https://ift.tt/pIHrNCV Tyler Durden

Former Prime Minister Urges Israelis To ‘Besiege The Knesset’ To Oust Netanyahu

Former Prime Minister Urges Israelis To ‘Besiege The Knesset’ To Oust Netanyahu

This weekend has seen large tumultuous anti-Netanyahu protests in Tel Aviv led by the families of hostages and victims of Oct. 7. The families have long demanded that the government get more serious about another hostage/prisoner exchange. They’ve accused the prime minister of intentionally thwarting a deal for the sake of prolonging the war and in turn prolonging his hold on power.

The scene grew violent Saturday as riot police on horseback charge demonstrators in a central Tel Aviv square. Police also used water canons against the protesters. Watch some of the mayhem unfold in the below:

Netanyahu tried to calm the rising anger directed against him by a statement on X saying, “We are working to obtain another outline for the release of our hostages.” He added, “That is why I sent a delegation to Paris – and tonight we will discuss the next steps in the negotiations.”

Israeli media once again reports ‘cautious optimism’ regarding ceasefire talks, but Netanyahu has at the same time been insistent on rejecting Hamas’ “delusional” conditions for a deal – most especially the demand for all Israeli forces to withdraw from the Strip.

At least 21 people were arrested in Saturday’s demonstration, with some injuries among the protesters also reported. It’s a sign that such demonstrations are about to get more violent.

Relatives of the kidnap victims believe a deal is realistic and obtainable, and have held out hope of their loved ones being returned to Israel. There’s still over one hundred Israelis held in Gaza – though many could be deceased at this point.

On Sunday, the country’s former prime minister Ehud Barak added fuel to the anti-Netanyahu fire, however, by urging an escalation in protests until Netanyahu is forced to step down. According to Al Jazeera:

Ehud Barak says Israelis need to protest outside their parliament “day and night” to help bring an end to Netanyahu’s rule.

Barak, who served as Israel’s prime minister from 1999 to 2001, added that demonstrations should go on “until Netanyahu understands that his time is up and the public no longer trusts him”.

“When the state is shut down, Netanyahu will realize his time is up,” he told Army Radio, as reported by the Jerusalem Post newspaper.

In Sunday comments Netanyahu said his cabinet is mulling various options for Rafah, and said if a deal can be reached with Hamas the assault will be delayed. However he warned that if there is no deal, then a full-scale ground offensive will proceed. Earlier comments by Israeli officials suggested a timeframe of early March for an attack, as the US has continued to pressure the military to allow Gaza civilians to evacuate first.

There are an estimated 1.5 million – mostly internally displaced civilians – in Rafah currently, after most were pushed out of their homes in the north amid the Israeli operation that began after the Oct.7 terror attack by Hamas.

Tyler Durden
Sun, 02/25/2024 – 15:45

via ZeroHedge News https://ift.tt/r0l7vLb Tyler Durden

The Game Of “Chicken” In Today’s World

The Game Of “Chicken” In Today’s World

By Peter Tchir of Academy Securities

The Game of “Chicken” in Today’s World

I’ve been thinking a lot about the game of “chicken” lately. The “game” where two people drive at each other, effectively “daring” each other to swerve out of the way or not.

Maybe this fixation was triggered by all the 40th anniversary of “Footloose” messages I saw on social media. Since I cannot dance to save my life (I have absolutely no rhythm), I just remember the game of chicken played with farm equipment.

But the reality is that the game of chicken can apply to so many things: geopolitically, politically, and even in markets as of late. Certainly every time someone mentions “drawing lines in the sand,” which is happening a lot, I think of the game of chicken. We will attempt to look at a few things through the “chicken” lens:

  • Russia and Ukraine.

  • The Middle East.

  • Fighting the Magnificent 7.

  • The Chinese stock market.

But first, let’s think about the game of chicken a little bit more.

The Game Theory of “Chicken”

Chicken is a great way to start thinking in terms of game theory. The game itself seems quite simple:

  • Only 2 actors.

  • Only 1 choice each actor can make.

  • An obvious and immediate consequence of those actions.

It is so simple (yet far more interesting) from a game theory perspective.

The analysis begins with this simple board:

There are 4 possible outcomes. The first obvious step is to assign some “values” to these outcomes. Let’s use a scale of -10 to 10, with -10 being extremely bad and 10 being extremely good.

The “easiest” square to fill in seems to be the one in which neither side swerves. That ends in flames and death. So, let’s call it -10.

Both swerving is not really a win. You avoid flames and death, but you could have won, since the other side swerved. Let’s call this a -1. It is mildly annoying that you didn’t win, but no real consequences.

If you don’t swerve and the opponent swerves, you “won.” But what did you win? Some satisfaction, but I think it is obvious that you didn’t win as much as you lose if you really lose. So, let’s say you call a win a 5.

Similarly, if you swerve and your opponent doesn’t, you have “lost” pride more than anything. To make this a bit symmetric, to start, let’s assign a -5 to this outcome.

After this initial “analysis,” here is how “you” are thinking about the game.

You can see that it is asymmetric, at least with the values we’ve assigned.

Swerving limits how bad the outcome could be (worst case of -5 versus -10). If your opponent was equally likely to swerve or not swerve, your “expected” outcome of swerving is slightly worse than not swerving, as it is -3 vs -2.5.

Aside from telling us that this is a stupid game to get involved in (the expected values are negative no matter what decision you make), we “know” our opponent is not random and is likely engaging in a similar decision process. For starters, let’s assume that their outcome function is the same as ours (this is called “mirroring” in the intelligence world, and is often a mistake).

Two things come out of this step:

  • Are you really sure about the values you have assigned to the outcomes? Maybe on a cursory initial thought, they made sense, but are they true?

  • Not just for yourself, but for your opponent as well.

If your tendency is to reduce the tail risk (the -10 outcome), then you would tend to swerve. However, if you think your opponent thinks like you do, they may also have that tendency, allowing you to possibly “win” by not swerving.

The already simple game has become more complex.

There is no reason to believe that your opponent’s reaction function is the same as yours.

That concept of “mirroring” is problematic. Let’s assume, for the moment, that you went back and reviewed your valuations and are comfortable with them (easier said than done). Then your decision will ultimately be influenced by what you really believe your opponent believes.

What if flames and death isn’t viewed as a -10 by your opponent? What if they have some reason to view that as “only” a -8? What if “bravado” or something is an important feature of your opponent, and they place greater weight on “winning” and view the outcomes where they swerve with greater disdain?

In this scenario, your opponent seems far less likely to swerve. Their “downside” is only the difference between -8 and -6. Their “expected” outcome (assuming you were 50/50 on what to do) is -4.5 if they swerve, versus -1 if they don’t swerve. You, in your analysis, probably have to start assuming the opponent is unlikely to swerve, skewing your expected outcome calculations much more in the direction of swerving (because you believe your opponent is less likely to swerve).

Winning The Game of “Chicken”

We could play with a variety of scenarios, but one theory in the game of chicken is that if you can demonstrate an inability to “swerve” you “should” win.

The example that my professor used was you make a big show of dropping a concrete block on the accelerator, tying the steering wheel into position, and then sticking your hands and feet out of the window – clearly demonstrating that you cannot swerve. The opponent, if they believe you won’t panic at the last moment, has to assume you won’t swerve. In which case, unless they have dramatically different outcome values, they should swerve.

But enough about the game theory of chicken and let’s get back to the 4 things that we came to discuss.

Russia and Ukraine

As we enter the third year of this war, the U.S. is debating what level of support to provide Ukraine.

From a “game of chicken” perspective, I think that Ukraine has already lost. Assuming that we get through this year’s process, it would seem logical for Putin to decide that next year might be the year funding doesn’t get approved. Yes, something decisive could happen during the U.S. elections, but November is a long way away right now. Putin’s logical conclusion would be to drag this out, and hope that next year, funding fails.

If the U.S. wanted Ukraine to “win” this war, it should approve a massive 5-year spending plan, that cannot be easily undone after the election. That would change Putin’s calculus. He doesn’t get the “free option” of thinking that the U.S. might tire of its spending.

For now, I expect this war to drag on.

As the U.S. election nears, both Zelensky and Putin will have to play their own games of chicken with the election results.

If it looks like a Trump/Biden rematch will be close at the polls in November, both Russia and Ukraine may gravitate towards a truce of some sort. The Ukrainians face existential risks if the outcome will ensure that funding will dry up. The Russians, as the “bad actors” in the area, can always go back to war if they like the outcome of the election, but since they are also tiring of this war that they seem incapable of winning, some sort of deal should make sense to them as well.

Status quo for now, with all parties keeping a close eye on the U.S. election.

The Magnificent 7

If I had a dollar for every time NVDA was mentioned this week, I’d have a LOT of $$$$$$s!

We went into this week having written A Retrospective of All-Time Highs on February 11th and A Market “Only a Mother” Could Love on February 19th. After the NVDA earnings came out, we published NVDA Crushes It, Nasdaq 100 Still Lower Than Friday early on Thursday.

The title of that latest report didn’t age well as stocks not only gapped higher on the open but continued their relentless push higher. On the other hand, for all the hype, all the excitement, and all the jubilation, I’m not sure who holds the winning hand right now – the bulls or the bears?

Given the excitement and hype, no one can be blamed for realizing that even with all the hoopla, the Nasdaq 100 was only higher than where it had been back on February 9th for a brief window and that didn’t occur until Friday!

Yes, if you have been fighting the market and the so-called Mag 7 for a year, it has been an epic failure. If you got in more recently and covered any shorts at all after the 3% to 5% pullback ahead of the now fabled earnings, you are probably sitting in pretty good shape!

But that isn’t the game of chicken I came to talk about.

When I look at QQQ (a Nasdaq 100 ETF with a transparent portfolio), you see that MSFT is 8.8% of that index. AAPL 8.2%. NVDA 5.6%. META and Broadcom and the two classes of Alphabet are also around 5%.

So, the game of “chicken” that I think is being played out is among active managers who are underweight those stocks relative to the index that gets so much attention (and, more importantly, the allocations).

Some managers are restricted to 5% or less in their portfolio by their own rules. But even managers who don’t have rules may find it “uncomfortable” owning so much of a stock (especially ones that have performed extremely well, outstripped the market, and have some metrics that seem to push the boundaries on some “traditional” rule of thumb valuation metrics).

How many managers have some of these stocks as their largest positions, but are still underweight relative to the indices?

That is the game of chicken that is being played out in real time. In many ways, whether we see a “capitulation” into market weight on these names, or not, will determine the next move. I find it difficult to believe, even after Thursday, that many who are underweight will change their minds now.

I’m staying bearish the market here. I will “buy the dips” but by that I mean cover some shorts, only to reload higher, but I am a fully committed U.S. equity bear here. While there is no obvious catalyst to a big move lower, I’m not sure what the catalyst higher is as we move away from the last vestiges of post-NVDA earnings trading.

On Friday, I did overhear someone on Bloomberg point out that large rallies into new highs (like we had on Thursday/Friday) have been a precursor to large downward moves in the past. I don’t have the details on that report, but I’d like to see it, as it fits my needs well!

Dancing With Myself

Since I cannot keep a beat, but enjoy dancing, I find that I have to dance to the 5 songs that seem to be at the beat I dance to. Ironically, or weirdly, or just strange, is that one of those songs is “Dancing with Myself” by Billy Idol. Anyways, felt compelled to share how I would try to “win the game of chicken” on the dance floor!

Don’t Fight the CCP

We all know that you Don’t Fight the Fed! It probably should be the first three chapters of any credible finance textbook right now. But, many seem comfortable fighting the Chinese Communist Party.

That just seems weird to me. While I don’t think China is investible longer-term (from either the asset management side of things or the corporate side of things), I think that it is tradable. Over time I don’t think the CCP will be good to foreign investors, but right now, I want to be overweight Chinese equities (overweight or max long, as my “normal” weighting to China is 0.0%).

Chinese stocks (based on FXI, an ETF that is easily accessible) are at levels that required a “crisis” to achieve in the past (post-GFC and post-COVID). While I don’t like the demographics in China, I do not think they will reclaim their role as an “industrial hub” of America and Western Europe, and while I don’t think they will treat foreign investors well, I think there are several reasons to own some Chinese shares right now.

As you all know, or anyone who has been reading the T-Report for the past year knows, I am all about the transition from “Made in China” to “Made by China.” Chinese brands will attempt to sell more and more of their products globally – with Emerging Market countries (where China has a trade deficit) as the focal point. I view it more as a threat to our companies, but it should help their companies. But that isn’t the main driver of things right now. I think it is quite simple:

  1. China, and especially the CCP, needs to keep the middle class at least somewhat happy. We saw how quickly some protests over COVID turned China’s COVID policy around. The CCP wants to retain power, and while “suppression” is one of their tools, so is “appeasement.”
  2. I think that the “mistake” many are making is that we are “mirroring” (to China) what we are used to in response to financial market and economic weakness domestically. The reality is that most of the time, the Fed is the only game in town. While D.C. acted relatively quickly and aggressively in response to COVID, the central bank has usually done the heavy lifting here. So far, the Bank of China has not been as aggressive as we would have expected if they were serious about getting the market to bounce. But I think that is where we are making a mistake. I expect China and the CCP to have a multi-pronged approach. They will attack the problem from many angles.
  3. One pertinent point is that “normally” I laugh at efforts to restrict short selling. Yeah, you have to run for the hills briefly, but you know it will just take out the short base (which will become a dip buyer) and markets will find ways to short the things anyways (either through proxies, or some other vehicle or mechanism) and things will get worse again. I do not think that with respect to China’s efforts to restrict selling and short selling. “Where there is a will, there is a way” applies to China here.

So, in this game of chicken, I’m staying long Chinese stocks.

I couldn’t resist and I cherry picked the start date of Feb 2nd. For the month of February, FXI has done well versus the Nasdaq 100, but all we hear about is being bullish big tech/Mag 7 and bearish China. I think that is a lot like what we saw start in early November. Back then, the “laggards” had started to outperform, but it was ignored for several weeks until the trend was well in place, and only then did people jump on the bandwagon.

Nasdaq versus FXI seems like a losing game of chicken, but I highly suspect that positioning and news flow is on my side.

The Middle East

There are so many horrific “games of chicken” being played in the Middle East that I don’t know where to begin. So I won’t. I will focus on the one that I think is most important for financial markets.

That is Iran versus the U.S. Many see the two countries sitting across a chess board and moving pieces around. I see two drivers all geared up. So far away, that they look like specks on the horizon to each other. But they are travelling on a collision course and are gaining speed.

The biggest risk for markets is that the U.S. feels compelled to stop Iranian oil shipments. There are far worse things going on for people in the region, but the one thing that I think would move markets dramatically would be if the U.S. feels that they need to stop the Iranian flow of oil. That may be a relatively high hurdle (Russia still sells oil, after all), but would be the one that would send shockwaves through the market.

It is also the one game of chicken where I am incredibly fearful that we are not playing chicken properly!

  1. I don’t think we understand the other side’s outcome table very well. I am incredibly concerned that we are “mirroring” our own values when we think about their decisions. That would potentially be a big mistake.
  2. More importantly, and this is the first time we’ve discussed this, I think that we think how they think about us is wrong. That is incredibly confusing, but I think it is correct. We are trying to portray an image of power. Don’t cross this line or we will do this! And so far, we have done this. I think that the U.S. believes it has been successful in establishing fear. That the escalate to de-escalate strategy is working (see Escalation and Expansion). I am concerned that they think if they prod that line a few more times, we will “swerve.” That we don’t really have the stomach to not swerve. We are trying to convince them that we place a much higher value on not swerving than they believe we really have. I think that may be correct.

This is a game of chicken with real life consequences, and it is far from over.

Bottom Line

Maybe Goldilocks is here, but I think that the bears are quite comfortable right now too. Lots of head-to-head battles, figuratively and literally.

From a positioning standpoint:

  • 10-year to trade into the 4.4% to 4.6% range.
  • Start thinking about 2 cuts this year, rather than 4. The dot plot could surprise.
  • Be very cautious on risk here. Equities and the big winners in particular.
  • Still undecided on CRE and the banking space.
  • Credit will hold in better than other asset classes but will be pushed around by equity risk and if I’m right, expect a widening in credit spreads.

In any case, it will be curious what phrase takes over the airwaves this week, though I suspect it will still be AI.

Tyler Durden
Sun, 02/25/2024 – 15:10

via ZeroHedge News https://ift.tt/RJdtUIq Tyler Durden

Yale Reinstituting Standardized Tests For Admission

Yale Reinstituting Standardized Tests For Admission

After a humiliating year for elite universities, culminating in the Presidents of UPenn, MIT and Harvard embarrassing themselves in front of congress before Harvard’s Claudine Gay was slapped with plagiarism allegations, it looks like a small sliver of common sense could be making its way back to the Ivy League.

That’s because it was reported last week that Yale is once again instituting standardized tests for admission after years of keeping them optional for “DEI” reasons. 

The university’s undergraduate admissions dean announced a change in their student selection process amidst ongoing debate over the efficacy of traditional tests. Critics argue these exams don’t fully capture a student’s potential, suggesting high school GPAs as a more accurate measure. The move, seen as a step towards fairness for disadvantaged students, aligns Yale with institutions like Harvard, MIT, and Dartmouth, which have already adjusted their admissions policies, according to The Daily Mail.

Undergrad Admissions Dean Jeremiah Quinlan stated: “Standardized tests are imperfect and incomplete alone, but I also believe scores can help establish a student’s academic preparedness for college-level work.”

“When used together with other elements in an application, especially a high school transcript, test scores help establish the academic foundation for any case we consider,” he continued. 

Quinlan added: “Test scores convey a relatively small amount of information compared with the rich collection of insights and evidence we find in a complete application.”

“Simply put, students with higher scores have been more likely to have higher Yale GPAs, and test scores are the single greatest predictor of a student’s performance in Yale courses in every model we have constructed,” he said. 

“We have further found a statistically significant difference in average GPA between those who applied with and without test scores,” Quinlan said. 

The Daily Mail wrote that the move away from mandatory standardized test scores resulted in a 166% surge in applications, from 35,000 to over 57,000, without significantly increasing the number of academically strong applicants. Similarly, MIT’s Dean of Admissions, Stuart Schmill, noted that reinstating standardized tests in 2022 led to a more diverse and academically prepared incoming class, underscoring that high grades alone do not predict student success. Dartmouth College has also followed suit, revisiting its admissions criteria.

Along the same vein, last week we published that elite colleges were once again reconsidering SAT score requirements. 

According to Axios, multiple colleges used the pandemic as an excuse to weaken the importance of SAT and ACT test scores in most student applications. But in recent weeks, several schools have reversed course; Yale is considering repealing its prior policy of making SAT/ACT requirements optional, with Dartmouth already reinstating the requirements earlier this month. MIT reversed a similar policy back in 2022.

Other schools that have eliminated SAT/ACT requirements include Harvard and Columbia. Harvard, along with Cornell and Princeton, have extended their policy of making the scores optional, while Columbia’s policy remains permanent.

One of the motivating factors behind the reversal is ongoing research showing a clear correlation between students’ standardized test scores, and their subsequent academic performance and graduation rates in college. Some schools had previously opposed the test requirements for reasons of “diversity,” baselessly accusing the tests of being “racist” and against minority students.

Could we be entering an era of school’s starting to rid themselves of their woke ideologies? We’ll see – needless to say, we’re not optimistic…

Tyler Durden
Sun, 02/25/2024 – 14:35

via ZeroHedge News https://ift.tt/kcrQDfl Tyler Durden

Why Central Bank Digital Currencies Are Unnecessary And Dangerous

Why Central Bank Digital Currencies Are Unnecessary And Dangerous

Authored by Daniel Lacalle,

The main central banks have been deliberating on the concept of introducing a digital currency. However, many citizens fail to grasp the rationale behind it when the majority of transactions in major global currencies are carried out electronically. Nevertheless, a central bank digital currency is much more than electronic money. I will explain why.

Central banks are raising interest rates and enacting restrictive monetary policies as quickly as governmental regulations allow because they are aware that monetary factors are the primary cause of inflation. Central banks have recently lost credibility by initially disregarding the inflation danger, then attributing it to transitory factors, and finally responding belatedly and gradually.

In a world where there is an excess in money supply growth, there are mechanisms in place to prevent a significant rise in consumer prices caused by the destruction of the purchasing power of the issued currency. Quantitative easing is subject to some constraints that partially prevent inflationary forces. As the banking channel serves as the transmission mechanism of monetary policy, credit demand acts as a constraint on inflationary pressures.

Now, consider if the transmission mechanism was direct and utilizing only one channel, the central bank. It is not the same to have a police officer walking down your street than to have a police officer in your kitchen watching your every move.

A central bank digital currency would be directly issued to your account held at the central bank. At best, it is surveillance masquerading as currency. The central bank would have precise information of your currency usage, savings, borrowing, spending, and transactions. It can enhance the fungibility of money to prevent the common but unfounded problem of “excess savings.” Moreover, as central banks become more politically involved, they might impose penalties on individuals who spend in a manner they consider unsuitable, while rewarding those who follow their recommendations. The entire privacy system and monetary limit mechanism would be removed. Moreover, if the central bank makes a mistake and creates an excess of money supply, as shown in 2020, it would immediately make consumer prices rocket. If the money supply increases dramatically in a year, we would experience massive inflation levels as the existing constraints of the transmission mechanism are eliminated.

Consider a scenario where you have a single account, a central bank, and the government. Guess what would happen? Full monetary financing of government spending leading to elevated inflation within a few years and the destruction of the private sector. Central bank digital currencies are likely to be a computerized rendition of the French Assignats. High inflation, complete government control, and financial repression.

Central bank digital currencies are unnecessary and dangerous. You cannot initiate an experiment pf such magnitude when the autonomy of central banks has been questioned for years and there is abundant evidence of mistakes made with policy measures that do not acknowledge the danger of increased inflation and economic stagnation. Central banks have never successfully prevented bubbles, high levels of risk-taking, excessive debt, or identified inflationary pressures. Given such history, no one should support a proposal that would grant them complete authority and control over the financial and monetary system. What do central banks mean when they discuss a novel digital currency? It is a further advancement in the ongoing process of eroding the purchasing power of the currency, disguised under the objective of enhancing oversight of payments and facilitating the tracking of specific payment methods.

The primary arguments for considering a central bank digital currency are efficiency and enhancing the transmission mechanism of monetary policy. However, none of them make sense. Central banks often claim the need to enhance the transmission mechanism of monetary policy, but many of their statements are founded on an inaccurate belief that there is an excess of savings that requires a change in behaviour. By manipulating the cost and quantity of the currency issued, central banks aim to correct what they perceive as imbalances. However, monetary policy rarely addresses the largest imbalances, which are the ones created by government deficits and debt accumulation. Disguising risk in sovereign debt leads to more imprudent fiscal policies and adds to the risk of bubbles in financial markets as perceptions of risk are clouded by low rates and high liquidity. A digital currency does not enhance the transmission mechanism of monetary policy unless the word “enhance” is used to hide a desire to boost the size of government in the economy through the erosion of the purchasing power of the currency and the constant monetary financing of public deficits. Another aspect to consider is efficiency. Central banks appear to prioritize the regulation of monetary transactions and encourage spending regardless of the risks involved. Creating a central bank digital money system is not more efficient. It is another form of financial control. If negative interest rates are ineffective in stimulating economic agents, some believe that implementing negative rates and devaluing the currency faster using a digital currency may be more successful. They are wrong. The economy does not strengthen by making the currency a disappearing reserve of value. Introducing a central bank digital currency is unlikely to reduce economic risks or stimulate productive investment but will encourage short-term malinvestment. Central banks are unable to compel economic agents to spend and invest, especially when their strategies continually focus on encouraging debt and prolonging government imbalances. The process of any asset becoming a widely used currency is highly democratic. It is beyond the jurisdiction of governments and cannot be enforced. When governments and central banks implement financial repression and devalue their currency, citizens may turn to other forms of payment that are considered genuine money. Cryptocurrencies have emerged due to a lack of trust in fiat currencies and the ongoing efforts of central banks and governments to devalue currencies in order to conceal underlying fiscal imbalances. A central bank digital currency is a contradiction in terms—an oxymoron. Citizens demand cryptocurrencies because they are not controlled by central banks that seek to grow the money supply and induce currency depreciation through inflation. Central banks should prioritize safeguarding the purchasing power of savings and salaries rather than seeking to destroy them. Using new means of financial repression may lead to a loss of confidence in the local currency. Once central banks acknowledge that they have exceeded the appropriate limits of their policy, it will already be too late.

Central bank digital currencies are unnecessary and dangerous.

The benefits of technology, digitalization and ease of transactions are already there. There is no need to create a currency issued directly to an account at the central bank. They are unnecessary as well because there is absolutely no need to compete with a digital yuan or bitcoin. China is moving closer to sound monetary policy and its central bank is purchasing more gold, not the opposite.

If central banks want to compete with other currencies or cryptocurrencies there is only one way: Make it absolutely clear that you will defend the reserve of value status of your currency. There is no need for the euro or the US dollar to compete with bitcoin or a digital yuan if the Fed and the ECB truly defend their reserve of value and purchasing power.

However, it looks like central banks want to behave like a monopoly that sells bad quality products but demands to remain the main supplier by eliminating the competition. The Fed and the ECB do not need to compete against cryptocurrencies if they show the world that they will defend the purchasing power of the US dollar and the euro.

The world’s financial challenges are not solved by imposing total control implemented by a monetary monopoly whose independence is seriously questioned, but by increasing competition and independence.

Tyler Durden
Sun, 02/25/2024 – 14:00

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From CIA To ‘Trust & Safety’: The Silicon Valley-US Intel Revolving Door Is Bigger Than You Thought

From CIA To ‘Trust & Safety’: The Silicon Valley-US Intel Revolving Door Is Bigger Than You Thought

The US government’s involvement in all forms of media is well known, and goes back to the 1940s.

And from the ‘Twitter Files’ – Elon Musk’s release of thousands of internal documents which exposed the Censorship Industrial Complex, and the ongoing dot-connecting being done by independent journalists, we know that both the CIA and FBI have been meddling in content moderation.

But just how deep does this rabbit hole of narrative shaping and censorship go? Deep…

In a Saturday X thread, user ‘Name Redacted‘ has compiled a stunning look at how career US intelligence personnel have infiltrated big tech:

Unpacking the thread (as it cuts off above), ‘Redacted’ writes (emphasis ours):

Google & Meta function as extensions of the US Intelligence Community. With Jacqueline Lopour, Google’s Head of Trust & Safety, and Aaron Berman, Meta’s Head of Elections Content/Misinformation Policy, both being career CIA officers, it underscores the CIA’s substantial control over online censorship.

Why is this CIA-Big Tech revolving door, where career CIA officers wield power to censor & decide what misinformation is, purposefully suppressed in the broader conversation about censorship?

Why are career CIA officers like Jacqueline Lopour & Nick Rossmann, who both have a history of spreading misinformation & promoting the RussiaGate conspiracy theory, now in senior roles in Trust & Safety at Google, deciding what is misinformation & overseeing content moderation?

The cumulative number of former Intelligence Community personnel hired by Meta & Google since 2018 is staggering. Before 2018, there were only a handful. Here are the combined hires by both companies:
State Dept-86


Why would Google specifically choose these six senior executives to attend an @ISF_OSAC
 event in DC?

Everyone in this picture, alongside former CIA Director Robert Gates, is a current senior executive at Google & a former career CIA officer, except for the attorney from Perkins Coie (2nd from the left):

Jacqueline Lopour, a career CIA officer, played a significant role in developing various intelligence programs at Google & YouTube:

*Manages intel operations for violent extremism, misinformation, hate speech, etc.
*Led development of intelligence programs for global election analysis.
*Developed the “YouTube Intelligence Desk.”
*Developed Google’s first machine-learning threat detection & analysis program.
*Provided daily COVID-19 briefings to senior leadership at Google & YouTube CEO

In 2015, Lopour authored a rather bizarre article titled: “The best reason for Iran deal? The West will learn where to drop bombs.”

Nick Rossmann spent over 5 years at the CIA before joining Google in 2022 as Senior Manager of Trust & Safety. His activity on Twitter/X is troubling, especially considering his current position in content moderation.

Why does Nick Rossmann have a problem with white people?

Here are some examples of Rossmann’s unhinged behavior on Twitter/X (all archived):

Negative tweets about white people:




Hoping Trump voters cough on their grandparents (giving them COVID) & “get to rot” archive.is/rppqw

Asking Trump if he is an agent of a foreign power archive.vn/xi7t8

Calling Trump “a lunatic & a racist”, tagging Keith Olbermann & using the hashtag “Resist”archive.vn/Pk5Kh

Calling anti-vaxxers Nazis & Confederates archive.vn/YWMDD

Christopher Porter spent most of his professional career in the Intelligence Community. After 9 years at the CIA, he joined ODNI where he was Head of the IC Cyber Analysis Council leading a team of CIA, FBI, NSA & DOD regarding US elections.

While at the ODNI, he regularly briefed President Biden so it’s only natural that as of June 2022, he joined Google as Head of Threat Intelligence. Porter is also a member of the Atlantic Council

His LinkedIn bio states that he likes to talk about Russia & election security. LinkedIn-  archive.is/pFOI2

Deborah Wituski joined Google in 2018 as Senior Director Global Intelligence. Her only prior work experience was 19 years at the CIA, where she was Chief of Staff to the Director. Wituski is a member of Council on Foreign Relations.

Katherine Tobin joined Google in 2021. Her career path is like the others listed in this thread: after 6 years at Booz Allen Hamilton, she spent 4 years at the ODNI, followed by 4 years at the CIA, & then returned to the ODNI for another 3 years.

With over 10 years of experience in the Intelligence Community, Google was the obvious choice for her. On her LinkedIn bio, she states that her favorite problems to solve are promoting DEI

The thread continues with several more examples, while ‘Name Redacted’ says there are “over 100 more examples of individuals whose sole work history is within the Intelligence Community or career State Department diplomats.

Many of these individuals hold positions as content moderators and policy managers. Most of them joined Google/YouTube after 2018.

Is it merely a coincidence that censorship has increased aggressively since then?

Read the rest of the thread here (and consider giving Name Redacted a follow).

Tyler Durden
Sun, 02/25/2024 – 13:25

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The New Satoshi Emails: 120 Pages Detailing Work On Bitcoin

The New Satoshi Emails: 120 Pages Detailing Work On Bitcoin

Authored by Pete Rizzo via BItcoin Magazine.com,

Satoshi Nakamoto’s earliest collaborator Martii ‘Sirius’ Malmi has released his entire email correspondence with Bitcoin’s creator.

Spurred by an ongoing lawsuit in the U.K., the new emails are the most significant addition to the canon of what we know about Bitcoin’s still anonymous creator. 

Here are the most important new findings.


When asked how Bitcoin might scale in the future, Satoshi theorized the network might have a maximum of 100,000 nodes. 

Here he goes into the calculations assessing the economics of bandwidth costs to nodes (read: miners) in propagating transactions across the network, the economic costs that would incur, and how that could be cost effectively passed on to users. 

He also discusses the implementation of users paying fees, and hints at the potential for the fee necessary for confirmation of your transaction being market driven due to the processing capacity of the network.

All in all, it’s interesting napkin math, though nothing out of the ordinary for those who have read Satoshi’s full Bitcoin forum posts. 

There Satoshi talked frequently about his vision for how the network might grow larger, and it’s notable much of his ideas were not proven to be viable based on subsequent development work.


Though he wouldn’t stick around to see the tremendous uptick in Bitcoin mining using stranded resources, it turns out, Satoshi knew the network was greent.

One of the first criticisms to be lobbied at his new creation, Satoshi spent time addressing the idea that Bitcoin mining was wasteful on the forums, most notably saying that not having a currency like Bitcoin would be the bigger waste. 

Here, however, he expands on the idea in more detail, and in a more vivid and descriptive way than we’ve seen before. 


A headed debated today remains whether Bitcoin is money, or whether it can or does have other ancillary uses. 

In this email exchange, Satoshi seems to offer some insight on the debate, noting his belief the blockchain can be used as a distributed time-stamping server. This is akin to what has happened in Guatemala, where the blockchain has been used to certify contentious elections in recent years. 


Satoshi describing the differences between #Bitcoin and DigiCash, David Chaum’s failed e-money.

This is notable as Chaum’s work had a profound impact on the cypherpunks, including Hal Finney. He specifically discusses the differences in privacy properties of the two models, and notes that unlike Chaum’s scheme did not support an offline model, requiring all participants to be online to make use of the system. 

He also explains the finite supply cap of bitcoin. 


Satoshi was concerned about his legal risk in launching #Bitcoin, noting he was “uncomfortable” with explicitly labeling it an investment. 

Note: Here also we see he didn’t come up with the term “cryptocurrency” himself.


By July 2009, Satoshi was tired, saying he “needed a break” from Bitcoin. Here, he also explains Hal’s absence from the work. He also mentions spending a period of 18 months at that point developing Bitcoin. 

A curious note as well, he asks Malmi if he had any ideas for applications people can actually use Bitcoin for. 


Satoshi discussing how #Bitcoin might gain adoption. Of note is his emphasis that Bitcoin was easy to obtain given that you could mine it on a computer. He also goes to postulate how the nature of a market trading for Bitcoin would evolve, discussing how skeptical people might be of its value, stating he was confident the increasing mining difficulty would prove its scarcity to people. 

Very different from how we think about BTC today in terms of acquiring it, but demonstrating a prescience of how people would mentally value it in the future. 


In June 2010, someone offered to donate $2,000 to Satoshi for his #Bitcoin work. Notably, he had the donor send it to Martti’s address. He also communicated care that the donor’s privacy was respected.


Already known, but Satoshi was pretty adamant that early users consider #Bitcoin “free.” Here he is discussing removing transaction fees from the UX of an early software. 

It’s interesting that his reasoning was to obscure this feature from users, but simultaneously acknowledged its necessity in the far future. 


Satoshi worked on #Bitcoin on Christmas day. There are some interesting implications here to consider regarding his personal life. 


Satoshi saw #Bitcoin taking hold as a way to trade other internet currencies like Liberty Reserve. He also goes on to discuss the potential for markets selling gift cards for bitcoin, which wound up becoming and is to this day a significant market for bitcoin. 

Note: Liberty Reserve was later shut down by the US.


Satoshi had a mysterious leave of absence from #Bitcoin in 2010. Here he is talking about it with Martti, though it’s notably also short on details.


It was Satoshi who removed the language that Bitcoin was “anonymous” from http://Bitcoin.org. He worried it made Bitcoin sound “shady.” This echoes his later sentiments around Wikileaks announcing their acceptance of bitcoin for donations. 


Worth noting given the historical revisionism around this, Satoshi thought very highly of Gavin Andresen. Here he is praising Gavin and referring to someone else as a “goofball.”


We finally have a copy of the email Satoshi sent other developers before taking his name off the project website. As they’ve said, Satoshi doesn’t mention his intention to step back from the project at all.

Overall no substantial new information is brought to light, but the emails do give a new angle to Satoshi’s interactions with others involved in the project before his departure. 

Tyler Durden
Sun, 02/25/2024 – 12:50

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Media TDS Kicks Into High Gear; Costas Says Trump Supporters In ‘Toxic Cult’

Media TDS Kicks Into High Gear; Costas Says Trump Supporters In ‘Toxic Cult’

The media tentacles of the Trump resistance have been fully activated the most recent example being former NBC sportscaster Bob Costas, who appeared on CNN‘s “Smerconish” to slam the former president.

Michael Smerconish, Bob Costas

Trump “is by far the most disgraceful figure in modern presidential history” who “has a bubbling cauldron of loathsome traits.”

You have to be in the throes of some sort of toxic delusion in a toxic cult to believe that Donald Trump has ever been in any sense, emotionally, psychologically, intellectually or ethically fit to be president of the United States. But his supporters are locked in on that,” Costas continued.

Meanwhile, Costas doesn’t think that President Biden should run, and that Biden’s “legacy is likely to be that of a man whose hubris prevented him from seizing the moment in an appropriate way.”

“At best,” Biden “can squeak by Trump,” Costas continued. “If he squeaks by, it’s very likely that he cannot complete his second term, he’d be 86 at the end of it.”

According to Costas, Biden “cannot make a clear cogent vigorous case for himself nor can he prosecute the obvious case against Trump in the court of public opinion.”


h/t Just the News

Tyler Durden
Sun, 02/25/2024 – 12:15

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Ukraine’s New Defense Chief & The Untold Half Of The Zaluzhny Story

Ukraine’s New Defense Chief & The Untold Half Of The Zaluzhny Story

Authored by Ted Snider via The Libertarian Institute,

There were probably many reasons why Ukraine’s President Volodymyr Zelensky fired Ukraine’s popular commander in chief of the armed forces, Valerii Zaluzhny, on February 8, but one of the biggest seems to have been a disagreement over how to go forward in a war that seemed to have overwhelmingly turned against them. Zelensky spoke of a need for “the same vision of the war,” and Zaluzhny said “a decision was made about the need to change approaches and strategy.”

When the war began, Zelensky said that Ukraine “will definitely win” but stressed life over land. “Our land is important, yes, but ultimately it’s just territory.” He said that “Victory is being able to save as many lives as possible. Yes, to save as many lives as possible, because without this nothing would make sense.”

But actions speak louder than words. Zelensky began to define victory as the reclamation, not only of land lost during the war, but of Crimea and all of Ukraine’s pre-2014 territory. Zelensky insisted that Ukraine stay on the offensive. He insisted on moving forward, “Whether it’s by a kilometer or 500 meters, but forward every day.”

Zaluzhny saw Zelensky’s strategy of fighting for Bakhmut and Avdiivka at any cost as a strategic disaster that was costing Ukraine too much in weapons and in lives. Zaluzhny argued for preserving lives over forfeitable territory, lest Ukraine lose its land and its army.

In General Oleksandr Syrsky, Zelensky found the commander who would execute his vision and carry out his orders. Syrsky fought the Battle of Bakhmut. His performance there, and in other battles, gave him the reputation of a commander who is willing to give orders that lead to little real gain and lots of real loss of life. “Some soldiers say his orders are unreasonable, at times sending men to their obvious deaths,” The Washington Post reports.

According to The Economist, he “has a reputation for being willing to engage the enemy, even if the cost in men and machines is high.” His reported willingness to put “his men in danger to reach his military goals” has earned him the nicknames “Butcher” and General 200, 200 being the code for a soldier’s corpse. Syrsky is also seen as being a commander who is close to Zelensky and who will not question his orders.

The replacement of Zaluzhny by Syrsky signals Zelensky’s intent to push ahead with the suicidal war of attrition and fight for every inch of land despite the cost in lives. Aware of the optics of the choice in the public and, perhaps especially in the armed forces, Kiev assuaged the perception of Syrsky as “being indifferent to military casualties.” In his first statement as commander in chief, Syrsky said, “The lives and well-being of our servicemen have always been and remain the main asset of the Ukrainian army.”

But, again, actions speak louder than words. General Syrsky’s first words were about protecting the lives of his men, but his first actions were about fighting for every inch of territory.

On February 11, just three days after the change in command, Syrsky ordered the reinforcement and defence of Avdiivka, a strategic town that faced imminent loss to the Russian army and enormous loss of Ukrainian lives. Zaluzhny would have withdrawn his troops, preserved lives and moved the front to more defensible positions.

Syrsky deployed the 3rd Separate Assault Brigade, one of the best armed and trained and most successful brigades in the Ukrainian Armed Forces. It did not go well. It went exactly as Zaluzhny said it would, and Syrsky was forced to respond exactly as Zaluzhny had said they should. But now the response was carried out in disarray instead of in an orderly, planned fashion. Perhaps Zelensky should have stuck with Zaluzhny.

In sending in reinforcements instead of retreating, Syrsky said the “goal of our operation is to exhaust the enemy, inflict maximum losses on him.” The opposite happened.

Less than a week later, on February 17, Syrsky announced the withdrawal of Ukrainian troops from Avdiivka. “Based on the operational situation around Avdiyivka, in order to avoid encirclement and preserve the lives and health of servicemen,” he said, “I decided to withdraw our units from the city and move to defense on more favorable lines…The life of military personnel is the highest value.” That’s exactly what Zaluzhny advised Zelensky to do.

Syrsky, who replaced General ValereyZaluzhny, screengrab via Al Jazeera

But the situation was worse than at first reported. Zaluzhny would have preplanned the retreat and executed it according to a plan. Zelensky and Skysky’s stubbornness turned the already costly loss into a disaster.

CNN at first reported that “Ukrainian forces are currently conducting a relatively controlled withdrawal from Avdiivka.” There were “indications,” though, “that not all Ukrainian units were able to escape an ever-tightening noose.” Though “the withdrawal was carried out in accordance with the plan that had been developed…a number of Ukrainian servicemen were taken prisoner at the final stage of the operation, under pressure from the enemy’s superior forces.”

Three days later, the situation was becoming clearer. Senior Western officials, The New York Times reported, now say that “Hundreds of Ukrainian troops may have been captured by advancing Russian units or disappeared during” what they now call, “Ukraine’s chaotic retreat from the eastern city of Avdiivka.” The Times was now calling it “a devastating loss.”

And hundreds may have been an understatement. Further down in the article, the Times reports that “soldiers with knowledge of Ukraine’s retreat estimated that 850 to 1,000 soldiers appear to have been captured or are unaccounted for.” There are unconfirmed reports of even higher numbers of dead and wounded.

That may not have happened under Zaluzhny, who long ago conceded that Avdiivka would fall and would have preplanned the retreat. Some Ukrainian soldiers and Western officials say “the Ukrainian withdrawal was ill-planned and began too late,” according to the Times. They say that “a failure to execute an orderly withdrawal, and the chaos that unfolded Friday and Saturday as the defenses collapsed, was directly responsible for what appears to be a significant number of soldiers captured.”

Suddenly, the 3rd Separate Assault Brigade was not assaulting but desperately trying “to cover the retreat.” The retreat was chaotic: “…some units pulled back before others were aware of the retreat. That put the units left behind at risk of encirclement by the Russians.”

But the true story may be even worse. Military analyst Stephen Bryen reports that the disaster may have begun before the reinforcements even arrived at Avdiivka. Some of the brigades Syrsky brought in gathered and organized in the nearby town of Selydove. Bryen says the Russian military discovered they were there and struck with missiles. Between 1,000 and 1,500 Ukrainian soldiers were reportedly killed.

Bryen says that when the 3rd Separate Assault Brigade arrived in Avdiivka, they found a desperate situation. They reportedly discarded Syrsky’s orders and retreated. Some reportedly surrendered. Syrsky then announced the troop withdrawal and the fall of Avdiivka.

Zelensky’s choice of Syrsky over Zaluzhny was, in part, the choice to maintain the course of a war of attrition to hold and retake all Ukrainian territory. Syrsky’s first orders fulfilled that choice in Avdiivka. It went exactly as Zaluzhny said it would but worse because Zelensky and Syrsky tried to defy the battlefield reality that Zaluzhny recognized. Perhaps Zelensky should have stuck with Zaluzhny.

Tyler Durden
Sun, 02/25/2024 – 11:40

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Oil Tanker Shortage Emerges After Red Sea Crisis Disrupts Global Trade

Oil Tanker Shortage Emerges After Red Sea Crisis Disrupts Global Trade

The Red Sea shipping crisis has been an explosive mess for the international shipping community and the global economy. With oil tankers increasingly steering clear of the southern Red Sea and the Bab el Mandeb Strait, shipping capacity has rapidly tightened, pressuring daily rates higher. 

Bloomberg reports only two new supertankers will join the global fleet in 2024, the fewest additions in forty years and about 90% below the yearly average over the last two decades. 

“The impact of the diversions can be seen every day in shipping in general, and I would say crude oil and product tanker shipping,” specifically, Alexander Saverys, CEO of Euronav NV, one of the largest tanker owners in the world, told investors during an earnings call earlier this month. 

Saverys said low deliveries and an aging global fleet are a perfect recipe for a positive outlook on tankers. 

We have stated that Houthi attacks on commercial shipping are the “next supply-driven inflation shock.” As a result, a key Clean Tanker rate tracked by the Baltic Exchange has moved north of $100,000 per day due to the disruptions, caused longer sails, which tightens capacity on the seas. 

The US and UK airstrikes on Houthi militants in Yemen were one of the major drivers that sent tanker rates soaring in the second half of January. Many of these tankers, hauling fuels like gasoline and diesel, have been forced to navigate around Africa. 

Charts from the latest Goldman Oil Tracker (full report available to pro subscribers in the usual place) show flows through the Bab-El-Mandeb continue to deteriorate and remain down 1.8mb/d (or 27% on a 14DMA Basis) since disruptions started on December 18. 

Goldman also shows tanker rates have surged.

“The situation is tight in the tanker market, in particular for crude oil tankers,” said Enrico Paglia, research manager at Banchero Costa, a shipping services firm. He warned, “It will be even tighter in the future.”

Bloomberg noted, “The tanker shortage comes as the efficiency of the global fleet is faltering. In addition to many vessels sailing around southern Africa instead of through the Red Sea and Suez Canal, a burgeoning dark fleet means that many ships are only available to certain customers.” 

Meanwhile, data from Banchero Costa shows the tanker order book will be extremely low in the next couple of years: Only five new tankers are expected to join the global fleet in 2025. That compares with 42 ships delivered in 2022. 

How long until the next tanker glut?

Tyler Durden
Sun, 02/25/2024 – 11:05

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