The major talks Sunday are due to be held in Berlin, and a who's who of external backers of each side of the conflict will be in attendance, including Putin, Erdogan, France's Macron, and UK Prime Minister Boris Johnson, as well as the Italian prime minister and US Secretary of State Mike Pompeo.

The Berlin conference comes after a failed deal to establish a ceasefire in Moscow earlier in the week, when Haftar left the city after the head of the UN-backed Government of National Accord (GNA) in Tripoli, Fayez al-Sarraj, actually signed the agreement. Haftar also reportedly secretly scuttled to different Mediterranean capitals, including Athens, in a bid to gain recognition as legitimate leader on the ground.

Haftar's drastic move to block oil exports is likely aimed at torpedoing the Berlin meeting before it even starts, given he's proven intransigent in the face of international pressure for him to halt the ongoing Tripoli offensive — even during the talks hosted by one of his key political backers Vladimir Putin. 

Libya's National Oil Corp. (NOC) has now declared Force Majeure, per Bloomberg:

As a result of the blockage of ports in the central and eastern parts of the country, oil output will fall by about 800,000 barrels a day, costing $55 million daily, the National Oil Corp. said in a statement on Saturday. The NOC declared Force Majeure, which can allow Libya, which holds Africa’s largest-proven oil reserves, to legally suspend delivery contracts.

The stoppage also has military implications on the ground, given the GNA's national army relies on the country's oil revenue to purchase weapons via Tripoli's central bank. The NOC has placed sole blame on Haftar for the shutdown, while the LNA has claimed to be listening to the demands of "the people". 

Speaking to Bloomberg, European Council on Foreign Relations top official Arturo Varvelli acknowledged the action as bold ploy by Haftar to control Berlin discussions before they commence. “It could be counterproductive as it could make the Europeans, who are the largest consumers of Libyan oil, very upset,” he said.

And S&P Global Platts warns the country's oil sector could enter a "tailspin": 

Libya's oil sector could go into a tailspin with two-thirds of its total crude oil production of around 1.20 million b/d at risk after its key oil ports were suspended Saturday by the Libyan National Army...

There's huge potential for fireworks at the conference itself, given international heavyweights on either side of the conflict will be represented.

Turkey's Erdogan has recently ordered troops to prop up the Tripoli government, not to mention Turkish drones and military hardware which have for months already been active in defense of the capital against pro-Haftar forces. 

Oil exports make up over 90% of Libya's national revenue and as the below 2019 Stratfor map demonstrates, Haftar has long held the majority of the nation's oil fields.

Russia, for its part, is believed to have hundreds of mercenaries from the Wagner Group embedded within Haftar's forces. And complicating matters in the emerging proxy war, Egypt, the Saudis, and UAE (and most recently the Trump White House, apparently) also back Haftar, while Italy, Turkey, and other UN member nations back the GNA's Sarraj. 

Meanwhile, Haftar has vowed repeatedly to not give up until he has control of the Libyan capital, despite fighting for months staying at a relative stalemate. So the Berlin conference outcome is not looking good before it even starts. 

He claims that the deaf and hearing impaired can't understand the audio tracks of videos on the website and claims that some of his favorite titles - with names like "Hot Step Aunt Babysits Disobedient Nephew," "Sexy Cop Gets Witness to Talk" and "Daddy 4K -- Allison comes to Talk About Money to Her Boys' Naughty Father" - are difficult to follow.

This is a man who obviously appreciates artistic integrity of the actors and actresses...

He also says that he would pay for a Premium subscription to PornHub, but that it is pointless to shell out the money for it without closed captioning. Because we all know there isn't enough free porn out there - and there definitely isn't enough free porn with closed captioning. 

He is suing PornHub not only to request closed captioning, but also for damages.

PornHub, on the other hand (no pun intended), actually does have some closed captions.

PornHub's VP, Corey Price responded by saying: 

"We understand that Yaroslav Suris is suing Pornhub for claiming we’ve denied the deaf and hearing impaired access to our videos. While we do not generally comment on active lawsuits, we’d like to take this opportunity to point out that we do have a closed captions category."

We hope Yarslav doesn't spend too much of his spare time on the site, however. He could wind up deaf and blind. 

Ninety eight percent of all this instant reaction is “fog-horning.” It simply signals that something big and important is out there even though we don’t have a clear picture of its actual shape or dimensions — or its significance. That’s normal. What counts is moving swiftly to the “searchlight” stage of close observation and hard thinking.

Whether analysts, official or otherwise, get there is problematic. We’re out of practice when it comes to serious strategic appraisal. After all, we’ve been flailing about in Afghanistan for almost two decades with no realistic aim or evaluation of the chances of achieving it by whatever means at whatever cost. The disorientation on Syria is even greater. There, we haven’t as much as figured out who are the “bad guys” and who are the “good guys” — except for ISIS.

If you can’t differentiate friend from foe for want of rigorous strategic analysis, your actions are predictably erratic — little more than the expression of mental fibrillations. The same can be said for the rest of the Missile East.

The Washington consensus is sure about one thing: Russia is a mortal enemy. We sanction the Russians, we denounce the Russia, we coerce our European partners into ostracizing them, we conjure frightful images of Vladimir Putin while ignoring just about everything he says (as if they were Hitlerian rants). Still, no one seems able to provide a crisp formulation of what the Russian threat is — other than getting in our way in places where we demand to have full sway: Syria, Libya, Iran, Turkey, Ukraine, Georgia.

Of course, we also accuse them of working relentlessly to undermine American democracy. Yet, that remains debatable as does everything that bears the dubious label of “Washington consensus.” Anyway, whatever minuscule role the Kremlin might have in the accelerated unravelling of the American Republic, it barely registers amidst the hammer blows struck by the craziness of President Donald Trump, his enablers and a largely compromised, abject resistance.

Understandably, it is not that easy to overlook nuclear weapons. It wasn’t that long ago that many of us were tormented by the dread of a prospective Armageddon, when the Cold War carried manifest dangers, when the air was thick with hostility and menace.

In October 1962, Americans were terrified over Soviet missiles in Cuba, as this newspaper map showing distances between Cuba and major North American cities demonstrates.

Those acute fears gradually faded over the 40 years of the nuclearized Cold War. We came to live with the Bomb — if not to love it. Subsequently, concerns shifted to the risks associated with nuclear weapons proliferation among less stable states in more fraught places.

The reasons for this sedating were three-fold.

• 
  

  Above all was the “balance of terror.’’ Leaders among the major nuclear powers absorbed the fundamental truth that not only was the notion of “winning” a nuclear war an oxymoron — but also that any use of nuclear weapons inexorably would escalate into acts of collective suicide. The survivors would envy the dead — as Nikita Khrushchev one said. That conviction became formalized in the doctrine of Mutually Assured Destruction.

  
  


• 
  

  Second, it was reified by a number of treaties and understandings: START I,II (Strategic Arms Reduction Treaty), the Anti-BallisticMissile Treaty (ABMT), the Comprehensive Nuclear Test Ban Treaty, introduction of the Hot Line between the White House and the Kremlin, and the several arms reduction accords signed when Mikhail Gorbachev came to power in Moscow. Their collective purpose was to ensure that no conceivable advantage might be gained that would jeopardize — however slightly — the balance of nuclear power, i.e. the assurance that any resort to nuclear weapons was tantamount to the death of civilization.

  
  


• 
  

  Finally, a number of technological developments reinforced Mutual  Assured Destruction: the deployment of submarine launched ballistic missiles — SLBM (immune to location and possible destruction in a “first strike” — thereby, guaranteeing a retaliatory capability); improved controls that reduced the chances of an “accidental” or miscalculated launch; and the moratorium in placing ballistic missile defenses around major population centers that could have the effect of removing their “hostage” status.

  
  

The last has turned out to be a largely redundant measure since the strenuous efforts of the Pentagon/NASA as well as their Soviet/Russian counterparts to devise a workable BMD all have come up well short of producing anything meaningful.

U.S. President Gerald Ford and Soviet Premier Leonid Brezhnev sign joint communiqué to limit strategic offensive arms, 1974. (Wikimedia)

Unfortunately, two policy developments have awakened the nuclear issue from its somnambulant state. One is Washington’s abandonment of arms control treaties that were important parts of the nuclear stability package. George Bush removed us from the Comprehensive Test Ban Treaty(while observing its provisions), and effectively voided restrictions on ballistic missile defense in the vain hope of countering remote threats from prospective nuclear powers (Iran), bolstering the sense of security of some East Europeans (a non-solution to a non-problem)and – frankly – to get under the Russians’ skin. Barack Obama had neither the conviction nor political courage to reverse those retrograde moves.

Under Donald Trump, there has been a comprehensive plan to break free of all manner of restrictive commitments — military, diplomatic or economic. Deployment of regional BMD systems directed at Russian, Chinese and North Korean forces has been expanded despite their demonstrated efficiencies (one version could not even protect Saudi oil complexes or U.S. air bases in Iraq from primitive Iranian missiles).

The other troubling development concerns the modernization of nuclear arsenals by both the United States and Russia. President Barack Obama committed us to a trillion-dollar program to refine and upgrade American warheads and delivery systems over the next 20 years. The strategic rationale is obscure.

The Russian hypersonic missile development is a parallel development. In a purely technical sense, they obviously are “ahead” of us. And that irritates the hell out of the American security establishment.

Does being “ahead” have any practical meaning, however? Is there a genuine contest for advantage that translates into their gaining an upper hand in some sense or other? The clear answer is “NO!” It is strategically meaningless. Why? Because it in no way alters the logic of Mutual Assured Destruction.

Theoretically, there are only two imaginable ways to do that. The most significant would be development/deployment of a massive, truly effective BMD system that shields population centers and other critical, high value sites from retaliatory attack. That has shown itself to be impossible – even if the initiator of an attack succeeded in reducing the other side’s retaliatory forces by some significant fraction.

A totally disarming first strike in principle could be the second method logically to qualify MAD. It cannot be done, though.Fortunately. The combination of SLBMs, cruise missiles, and increased warhead lethality makes the idea of a disarming first strike a pipe dream of military strategists disengaged from reality.  Hypersonic weapons do not change that calculus.

Accuracies of MIRVed warheads were lowered to 100 feet many years ago.(CEP, or Circular Error Probability = 50 percent chance of landing within radius.) Reducing that to 20 feet, therefore, is pointless – the silo is destroyed either way unless its missile has been “launched on warning” (tripwire automaticity as ultimate assurance of retaliatory strike). Similarly for missile defense.

Then, there is the question of an incoming missile’s speed. Current ICBMs that may give 18 minutes warning do not permit any defensive measures to be taken. If they arrive on target within six minutes, there is no additional benefit to the attacker. Today’s missiles that follow a straight trajectory cannot be intercepted — with or without their distracting decoys.

The fact that “swerve” capable hypersonic missiles can mambo their way to the target adds nothing to their effectiveness. Anyone who tells you that the Russians gain a strategic advantage thereby is lying — either in order to extract larger sums for R & D from the Treasury or to accentuate irrational fears of Russia.

President Vladimir Put visiting an exhibit of advanced weapons before meeting with Russia’s Defence Ministry Board, December 2019. (The Kremlin)

Finally, no reasonably sane leader would risk national suicide for a 1 percent chance of getting away with a first strike and surviving retaliation. There is no stake worth even contemplating it. Indeed, that logic holds even were there an impossible 50 percent chance of pulling it off.

Today, the United States and Russia are not engaged in a life-or-death struggle for world domination or for ideological vindication. Ascribing anything like that notion to Vladimir Putin is simply a sign of mental derangement – ours, not his. The same holds for the super-power competition between the United States and China.

So, if this line of reasoning is compelling, why did Russia’s leaders bother with investment of great sums to produce hyper-sonic missiles? The answer is a matter of speculation. Doubtless, technological and bureaucratic momentum has much to do with it. These sorts of long-term programs take on a life of their own — just as they do in Washington. The is no more reason for the United States to squander a trillion dollars in refining our nuclear arsenal as two successive administrations have committed us to doing.

In Russia’s case, there likely is another factor at work. Historically, Moscow leaders have exaggerated American technical capabilities; they have something of an inferiority complex on this score despite their own remarkable accomplishments. It is particularly acute in the nuclear realm — most especially in regard to ballistic missile defense.

This goes back to Nixon’s proposed Safeguard system, followed two decades later by Reagan’s Star War’s plans. Neither of which in actuality had the potential to alter the strategic balance. This free-floating strategic anxiety should be placed in historical perspective. There is a touch of paranoia in the Russian strategic mind — engraved by the events of the 20th century.

Some of this sentiment is conveyed by Putin’s remarks in announcing the deployment of hypersonic missiles: “We’re used to being in the position of catching up. That no longer is the case. Russia is the   only country that has hypersonic weapons.”

To some unknowable degree these neuralgic points in the Russian psyche have been stimulated by the aggressive American program to surround Russia with BMD systems. “Might it just be conceivable that the United States could perfect them, make it work, and somehow jeopardize the credibility of our nuclear deterrent? Why are they expending so much money and effort? Why do those BMD sites make Poland and the Baltics feel more secure when they are in fact militarily useless and it makes no sense for us to attack them?”

Informed analysis suggests that the answer is negative to all these questions. The alternative explanation: U.S. leaders are inclined to do feckless things; they are strategically obtuse.

The broader lesson is that there is truth to the old adage: “Russia never is as strong as it seems; Russia is never as weak as it seems.” We wrote it off as a world power in the 1990s and never since made the proper adjustment. That perception may have contributed to the glaring failure of the United States’ intelligence community in missing Russia’s remarkable break-throughs in weaponry. 

It’s intelligence that counts more than Intelligence.

Residents in surrounding communities will hear explosions and loud noises, especially fighter jets traveling at subsonic speeds. 

Here's a 2012 video of an F-18 jet "5 miles" from the Pinecastle Range completing a tactical turn. 

A 2011 video records the moment when bombs were dropped on the range. 

Local news station provides more information about Pinecatle Range. 

Residents from Volusia, Lake and Marion counties will hear fighter jets and bombs throughout the weekend. Residents as far as Seminole and northern Orange County could also hear explosions. 

"During bombing periods, wildlife may be temporarily displaced. Use extra caution when driving through the Ocala National Forest and surrounding areas," the Navy said. "Secure any items around your residence that could attract wildlife. Always be mindful of larger animals, including black bears, and practice bearwise measures."

With the threat of war elevated in 2020 – the Navy is actively preparing its pilots for combat by bombing the hell out swamps in the middle of Florida. 

The assassination was intended to escalate America’s presence in Iraq to keep control of the region’s oil reserves, and to back Saudi Arabia’s Wahabi troops (Isis, Al Quaeda in Iraq, Al Nusra and other divisions of what are actually America’s foreign legion) to support U.S. control of Near Eastern oil as a buttress of the U.S. dollar. That remains the key to understanding this policy, and why it is in the process of escalating, not dying down.

The actual context for the neocon’s action was the balance of payments, and the role of oil and energy as a long-term lever of American diplomacy.

Basically, the US's propensity for driving up massive budget deficits has created a need for immense amounts of deficit spending. This can be handled through selling lots of government debt, or through monetizing the debt. But what if there isn't enough global demand for US debt? That would mean the US would have to pay more interest on its debt. Or, the US could monetize the debt through the central bank. But that might cause the value of the dollar to crash. So, the US regime realized that it must find ways to prevent the glut of dollars and debt from actually destroying the value of the dollar. Fortunately for the regime, this can be partly managed, it turns out, through foreign policy. Hudson continues:

The solution [to the problem of maintaining the demand for dollars] turned out to be to replace gold with U.S. Treasury securities (IOUs) as the basis of foreign central bank reserves. After 1971, foreign central banks had little option for what to do with their continuing dollar inflows except to recycle them to the U.S. economy by buying U.S. Treasury securities. The effect of U.S. foreign military spending thus did not undercut the dollar’s exchange rate, and did not even force the Treasury and Federal Reserve to raise interest rates to attract foreign exchange to offset the dollar outflows on military account. In fact, U.S. foreign military spending helped finance the domestic U.S. federal budget deficit.

An important piece of this strategy has been a continued alliance with Saudi Arabia. Saudi Arabia maintains the world's largest capacity for oil production, and it was the largest single producer of crude for most of the period from the mid-1970s to 2018, when the US surpassed both Saudi Arabia and Russia.

But Saudi Arabia remains under the US thumb:

what Saudi Arabia does not save in dollarized assets with its oil-export earnings is spent on buying hundreds of billion of dollars of U.S. arms exports. This locks them into dependence on U.S. supply [of] replacement parts and repairs, and enables the United States to turn off Saudi military hardware at any point of time, in the event that the Saudis may try to act independently of U.S. foreign policy.

So maintaining the dollar as the world’s reserve currency became a mainstay of U.S. military spending. Foreign countries do not have to pay the Pentagon directly for this spending. They simply finance the U.S. Treasury and U.S. banking system.

However, any move away from this status quo tends to be met with paranoia and intervention from the US:

Fear of this development was a major reason why the United States moved against Libya, whose foreign reserves were held in gold, not dollars, and which was urging other African countries to follow suit in order to free themselves from “Dollar Diplomacy.” Hillary and Obama invaded, grabbed their gold supplies (we still have no idea who ended up with these billions of dollars' worth of gold) and destroyed Libya's government, its public education system, its public infrastructure …

But the role of oil-producing states goes beyond merely churning dollars and US debt to keep the dollar afloat. These countries also provide the foot soldiers for many US interventions in terms of terrorists and guerrilla fighters who can be used against US enemies. Hudson declares:

The Vietnam War showed that modern democracies cannot field armies for any major military conflict, because this would require a draft of its citizens. That would lead any government attempting such a draft to be voted out of power. And without troops, it is not possible to invade a country to take it over.

The corollary of this perception is that democracies have only two choices when it comes to military strategy: They can only wage airpower, bombing opponents; or they can create a foreign legion, that is, hire mercenaries or back foreign governments that provide this military service.

That is, the US regime can certainly get away with lots of bombing operations and other low-manpower operations. But anything that might require conscription is a political nonstarter. Hudson notes that Saudi Arabia, with its particularly rabid and extreme strain of Islam is quite useful:

Here once again Saudi Arabia plays a critical role, through its control of Wahabi Sunnis turned into terrorist jihadis willing to sabotage, bomb, assassinate, blow up and otherwise fight any target designated as an enemy of “Islam,” the euphemism for Saudi Arabia acting as U.S. client state. (Religion really is not the key; I know of no ISIS or similar Wahabi attack on Israeli targets.) The United States needs the Saudis to supply or finance Wahabi crazies. So in addition to playing a key role in the U.S. balance of payments by recycling its oil-export earnings into U.S. stocks, bonds and other investments, Saudi Arabia provides manpower by supporting the Wahabi members of America’s foreign legion, ISIS and Al-Nusra/Al-Qaeda. Terrorism has become the “democratic” mode of today's U.S. military policy.

Hudson also notes that the term "democracy," when used in the context of foreign policy, has very little to do with what a normal person would regard as democracy. Rather,

From the U.S. vantage point, what is a “democracy”? In today’s Orwellian vocabulary, it means any country supporting U.S. foreign policy. … The antonym to “democracy” is “terrorist.” That simply means a nation willing to fight to become independent from U.S. neoliberal democracy.

And this leads us to Iran. Hudson explains:

America’s hatred of Iran starts with its attempt to control its own oil production, exports and earnings. It goes back to 1953, when Mossadegh was overthrown because he wanted domestic sovereignty over Anglo-Persian oil. The CIA-MI6 coup replaced him with the pliant Shah, who imposed a police state to prevent Iranian independence from U.S. policy. The only physical places free from the police were the mosques. That made the Islamic Republic the path of least resistance to overthrowing the Shah and re-asserting Iranian sovereignty.

Thus, we got the Islamic revolution of 1979 which has led to forty years of Iran refusing to play ball in the US dollar maintenance regime that is demanded of other oil-producing nations in the Middle East.

The US is unlikely to let up on this effort so long as Iran continues to refuse to take orders from DC on these matters. It's true that the US can't do much about China and Russia. But Iran — unlike North Korea, which wisely secured nuclear arms for itself — remains an easy target because of its lack of nuclear capability.

Being a leftist, Hudson includes some unfortunate stuff about "neoliberalism," as if low taxes and freedom to trade were somehow driving global war. Hudson also concocts a theory about how this oil-dollar policy is driving global warming. That's a bit of a stretch, but the connection between foreign policy and the US dollar that he identifies is a key factor that tends to be almost universally ignored by the mainstream media. As China and Russia work ever harder to undermine the dollar and its geopolitical position, small countries like Iran will become even more important in the US's drive to maintain the dollar's status quo. But it remains to be seen how long the US can keep it going.

If ever there was a story that epitomizes exactly how low Western media has sunk, the story involving the events leading up to the tragic death of Wilson Gavin would have to rank very high.

On Sunday, Gavin and about fifteen members of the University of Queensland’s Liberal National Club (UQLNC) walked into the Brisbane Square Library where a ‘Drag Queen Story Hour’ event for children was in full swing. Gavin went face-to-face with the star of the show, drag queen Johnny Valkyrie, aka Queenie, as the group began to chant “drag queens are not for kids.” No violence, no broken chairs, just a group of university students expressing their displeasure with a controversial event that is sponsored by the local government, i.e. the taxpayers.

What happened next was as predictable as winter in Russia. Social media lit up with thousands of people providing their personal commentary on the incident. An extra big log was tossed on the fire as the popular Australian band, The Veronicas, shared footage of the incident on Instagram, with the smug remark, ‘bigotry is alive in Brisbane today.’

The New Zealand Herald described the social media backlash that ensued against Wilson Gavin by quoting a friend, who wished to remain anonymous (“out of fear of becoming a target” too, the paper explained): “Gavin was relentlessly trolled with vile insults and taunts, and … received some messages with an encouragement that he die.”

“Some members of his family, classmates and friends were tracked down and contacted, while his school, The University of Queensland, was publicly encouraged to kick him out.”

The between-the-line message here seems to be, ‘see what happens to people who protest too much?’

As the media went to great lengths to demonstrate the public wrath Gavin had incurred for daring to speak his mind at a library event (The Herald exhausted the bulk of its article discussing the “dangers of mob rule” on social media and “public shaming”), it failed to show the tremendous outpouring of support that he and his fellow students had received. The comments on social media were divided into two camps, which is normally the case involving any controversial subject. After all, millions of people are vigorously opposed to the idea of drag queens reading stories to children at public libraries, or at any other venue for that matter. Yet the media seriously downplayed that side of the debate, pushing the idea that “public shaming” led to Gavin’s decision to end his life. More on that later.

As current State patron of the UQ LN Club, I’m deeply saddened to hear of the death of Wilson Gavin. Wilson & his friends took a principled stand to protect children from inappropriate sexualisation & gender fluid ideology. For that he was treated terribly. Wilson, RIP!

— Mark Robinson MP (@MarkRobinsonMP) January 13, 2020

Another particularly inexplicable aspect about the media coverage is that every single publication sympathized with the drag queens and their ‘storytelling’ to very young children, as if nothing could be more natural. What books were the queens reading from? We are never told, but somehow I doubt it was Jack and Jill, unless one or both of them had undergone a sex-change operation along the way. But I digress.

The main message the media strove to deliver was that the young protesters were mean brutes, intimidating the performers and frightening staff and children, as if the sight of well-dressed college students chanting a slogan was the worst possible thing that could happen to them. Meanwhile, there was zero discussion about the possible psychological effects a child may experience when confronted with drag queens, as well as their personal choice of fine literature. No discussion as to why there needs to be a Drag Queen Story Time for children – paid for out of the public purse – in the first place. No comments provided by respectable psychologists about the possible mental side effects these children could face down the road. Instead, the media pushed the ridiculous narrative that the families suffered the very worst ordeal.

ABC Australia, for example, interviewed Jenny Griffin, a mother of two children, ages 6 and 8, who commented, “I was worried, I was concerned for my kids’ safety,” she said. “This was their first introduction to this more violent homophobia.”

Valkyrie, aka Queenie, said, “There were children crying, families distressed and of course, [fellow drag queen] Diamond (whose full stage name is ‘Diamond Good-rim,’ a clear allusion to a sexual act that should be considered inappropriate for children) and I were victim to vilification, harassment and nuisance.”

After several minutes of publicly expressing their criticism, the Queensland students peacefully exited the building, escorted by a single security guard.

End of story? Unfortunately not.

Early the next morning, Wilson Gavin was found dead at a train station as the result of “critical injuries.” Within a matter of hours the media was calling his death a suicide. Before continuing, a few necessary words about Mr. Gavin.

Wilson Gavin, as president of the LNC at his university, courted controversy on numerous occasions in the course of his short life. At the age of 19, Gavin, and despite being homosexual, voiced his opposition to gay marriages by organizing a ‘You Can Say No’ rally and making several appearances on national television.

On another occasion, Gavin brilliantly defended the British monarchy on an episode of “Outsiders,” a political talk show.

“I’m a lover of all things traditional. I’m a lover of all things beautiful,” he said on the show.

“And there’s nothing more traditional in this country than the monarchy.”

.@Austmonarchist’s Wilson Gavin: I’m a lover of all things traditional, all things beautiful, and there’s nothing more traditional in this country than the monarchy. It’s a tremendous asset.


MORE: https://t.co/Qbf8WwZ0WK #outsiders pic.twitter.com/wSmxJJsswB

— Sky News Australia (@SkyNewsAust) May 24, 2018

Judging by Gavin’s extremely confident demeanor in those past interviews, and at the library protest, he did not come across as a person who could be easily upset by hurtful remarks over social media. Indeed, just the opposite. He seemed to relish the opportunity to prove his detractors wrong. In short, he was a young intelligent man with a successful future ahead of him, and that fact may have unsettled his enemies. Although it is impossible to know what is going on inside of any person’s head, the fact that Gavin’s alleged suicide has shocked so many people is telling.

According to the Star Observer (“Setting Australia’s LGBTI agenda since 1979,” it declares in its masthead), “Gavin was found dead at Chelmer Railway Station this morning at 7:07am. Ambulance officers who attended say he died from critical injuries, but have provided no further details.”

On Thursday, The Guardian provided one short sentence regarding police accounts of the death: “Police did not treat his death as suspicious.”

In place of hard-hitting questions, the article provided the number for a suicide hotline as if the case was already closed. While a nice gesture that is not the sort of information the public needs from the media. Journalists need to be asking how a young man met his early demise at a train station in the wee hours of the morning following a protest that triggered a lot of controversy on social media. The public deserves to know more about the circumstances of the alleged suicide considering the context of events prior to that tragic moment Why is the possibility of foul play not mentioned – not even within the context to deny it, as if this were some sort of impossibility – as a matter of protocol in such a case?

One more note. As mentioned earlier, on the weekend of his death, Gavin had been minding the home of a politician, who has been identified as federal Liberal National Party Senator Paul Scarr, the Daily Mail Australia reported. Yet Liberal National politicians have said they have been disaffiliated from the UQLNC that Gavin headed since last month. Now, considering how media rarely shies away from sensational stories, the fact that it is not following up on this bit of information is, at the very least, strange.

Since the death of Wilson Gavin and the protest he organized, two petitions have been started on Brisbane City Council’s website to ban the Drag Queen Story Time events.

"The shutdown of the transponder, which would have automatically signaled to the operator and Tor electronics that the plane was civilian, instead automatically indicated that it was hostile. The operator, having been particularly briefed on the possibility of incoming American cruise missiles, then fired," he said.

Giraldi said the Tor missile system used by Iran is vulnerable to being hacked or "spoofed," and at the same moment, Flight 752's transponder was taken offline "to create an aviation accident that would be attributed to the Iranian government."

The Pentagon has reportedly developed technologies that can trick enemy radars with false and deceptively moving targets, he said. 

"The same technology can, of course, be used to alter or even mask the transponder on a civilian airliner in such a fashion as to send false information about identity and location. The United States has the cyber and electronic warfare capability to both jam and alter signals relating to both airliner transponders and to the Iranian air defenses. Israel presumably has the same ability," Giraldi said.

Iran made the claim Wednesday that "enemy sabotage" cannot be ruled out in the downing of the plane. 

Iranian Brigadier General Ali Abdollahi suggested the U.S. hacked missile defense systems to make it appear Flight 752 was an incoming missile. 

Iranian President Hassan Rouhani also accused the U.S. of being responsible for the downing of the plane, saying that:

"The root of all sorrows goes back to America... this cannot be a reason for us not to look into all the root causes."

He added that:

"One cannot believe that a passenger plane is struck near an international airport while flying in a [commercial] flight channel," after previously saying that IRGC commanders were not the only ones involved in the plane downing, noting that "There were others, too."

The Iranian parliament also stated that "we are in powerful confrontation with the criminal U.S. and do not allow a mistake… to pave the ground for misusing the issue by the enemies."

Giraldi concludes by saying electronic warfare by the U.S. to bring down a civilian jet and blame it on Iran "suggests a premeditated and carefully planned event" to create a false flag for the next world war. 

In the messages, Strzok and Page regularly disparaged Trump and appeared to seek to reassure each other he could not be elected. Both called Trump an “idiot” and said Democratic nominee Hillary Clinton deserved to win.

The texts also included murky discussions of an “insurance policy” to guard against Trump’s election. Trump backers have interpreted the reference as a plan to use the then-ongoing investigation into ties between Trump advisers and Russia as way to prevent him from taking office or undermine his presidency, but Strzok and Page have denied any such intent. -Politico

Lisa Page - who sued the DOJ and FBI in December over the release, appears to be pissed.

All I can say is this: I very much look forward to Rod’s deposition. https://t.co/so43a38WBh

— Lisa Page (@NatSecLisa) January 18, 2020

Strzok has separately sued the agencies as well - for which Rosenstein's admission was submitted as part of the government's defense. The former DAG says that public disclosure of the texts was inevitable in connection with testimony he was set to give the next day in front of the House Judiciary Committee.

"With the express understanding that it would not violate the Privacy Act and that the text messages would become public by the next day in any event, I authorized [Justice’s Office of Public Affairs] to disclose to the news media the text messages that were being disclosed to Congressional committees," wrote Rosenstein.

In November, the Justice Department asked U.S. District Court Judge Amy Berman Jackson to throw out Strzok’s suit, which challenges both his firing from the FBI and the release of the texts. However, Strzok’s attorneys countered in a court filing last month that one reason to allow the suit to proceed was that Justice Department was being vague about just who made the final call to give the messages.

Arguing that an air of mystery continued to surround the disclosure, Strzok lawyer Aitan Goelman called “revealing” Justice’s decision to seek dismissal of the suit without identifying the responsible official.

“An agency cannot avoid Privacy Act liability for a disclosure actually made for an improper purpose by eliciting a sanitized after-the-fact rationale from an official who does not have all of the facts,” Goelman wrote. -Politico

According to Rosenstein, his aides originally suggested that he should delay sending the texts to Congress until after his testimony in front of the House, however he thought it would be "inappropriate" to do so for that reason. He also said he decided to give them to the media prior to his testimony over concerns that they would be cherrypicked and weaponized.

"The Department’s Office of Public Affairs … recommended providing the text messages to the media because otherwise, some congressional members and staff were expected to release them intermittently before, during and after the hearing, exacerbating the adverse publicity for Mr. Strzok, Ms. Page and the Department," wrote Rosenstein. "Providing the most egregious messages in one package would avoid the additional harm of prolonged selective disclosures and minimize the appearance of the Department concealing information that was embarrassing to the FBI."

See the filing below:

Researchers from the National Institute on Alcohol Abuse and Alcoholism studied the cause of death for Americans aged 16 and up between 1999 and 2017. They determined that while 35,914 deaths were tied to alcohol in 1999, it doubled to 72,558 in 2017. The rate of deaths per 100,000 soared by 50.9% from 16.9 to 25.5.

Over that 20-year period, the study determined that alcohol was involved in more than 1 million deaths. Half of these deaths resulted from liver disease, or a person drinking themselves to death, or a drug overdose that involved alcohol.

For more context: In 2017 alone, 2.6% of roughly 2.8 million deaths in the US were alcohol-related.

One doesn't need to be a chronic alcoholic to suffer from alcohol: Nine states - Maine, Indiana, Idaho, Montana, New Jersey, New York, North Dakota, Ohio and Virginia -  saw a "significant" increase in adults who binge drink, a dangerous activity that can lead to deadly car crashes and other fatal accidents, according to a report released Thursday by the CDC.

And across the country, Americans who binge drink are consuming more drinks per person: That number spiked from 472 in 2011 to 529 in 2017, a 12% increase.

Historically, men have been more predisposed to "deaths of despair" than women: But a study published in "Alcoholism: Clinical and Experimental Research" found that the largest increase in recent years in these types of deaths occurred among non-hispanic white women.

Public health crises tied to substance abuse have been plaguing American for decades. So, what is it about our contemporary society that's causing deaths to skyrocket?

There's some food for thought.

"Those limits begin where hatred is spread. They begin where the dignity of other people is violated. This house will and must oppose extreme speech. Otherwise, our society will no longer be the free society that it was."

Merkel received great applause.

Critics, however, would claim that curtailing freedom in order to protect freedom sounds a bit Orwellian. One of the first acts of any tyrant or repressive regime is usually to abolish freedom of speech. Merkel should know this: she lived under a repressive regime -- in the communist dictatorship of East Germany, where she studied at Karl Marx University.

The First Amendment to the United States Constitution protects freedom of speech, specifically speech critical of the government, and prohibits the state from limiting free speech. The First Amendment was placed first in the Bill of Rights because the American Founding Fathers realized that freedom of speech is fundamental to a free society. US President George Washington said:

"For if Men are to be precluded from offering their Sentiments on a matter, which may involve the most serious and alarming consequences... reason is of no use to us; the freedom of Speech may be taken away, and, dumb and silent we may be led, like sheep, to the Slaughter."

Without freedom of speech, you cannot truly be free. Freedom of speech exists precisely to protect the minority from the tyranny of the majority.

What exactly is "hate speech," and who gets to define it? Those who love justice usually also hate injustice. But what is justice? Social justice? Economic justice? Ecological justice? Religious fundamentalist justice? Climate justice?

Hate may be a negative emotion, but you cannot ban emotions. Envy and jealousy are also widely considered negative feelings. Yet we do not ban them. Envy of people who are wealthier than you is arguably a component of Socialist and Marxist political parties everywhere.

The concept of a "hate crime" is also flawed. If you rob, assault or murder people, that is equally injurious regardless of the motivation of the assailant or of who the victim is. We should not have different penalties depending upon whether the victim is a gay black man, a straight white man, a Muslim woman or a Christian nun, or we will end up with a kind of a legal caste system.

Although the legal system should not be based on feelings or emotions, we see an increasing tendency toward this subjectivity. There is a tendency to censor certain viewpoints because they might "offend" others. The problem is, it is not the inoffensive things that need protecting; it is only the offensive things that do. When, in the US, the National Socialist Party of America wanted to march though Skokie, Illinois, home to many Holocaust survivors, the Supreme Court decided that the Nazis' right of free speech overrode suppressing the marchers. According to the Bill of Rights Institute:

"In these cases, National Socialist Party of America v. Village of Skokie (1977), and Brandenburg v. Ohio (1968), the Supreme Court held that the First Amendment protects individuals' rights to express their views, even if those views are considered extremely offensive by most people...

"American writer Noam Chomsky said 'If we don't believe in freedom of expression for people we despise, we don't believe in it at all.' Individuals who express unpopular opinions are protected by the First Amendment. The First Amendment prevents majorities from silencing views with which they do not agree—even views that the majority of people find offensive to their very core. "

Possibly many things people say will be considered offensive to somebody, somewhere. In 1600, Giordano Bruno was burned alive at the stake as a heretic for saying that the universe has no center, and stars are suns, surrounded by planets and moons. The findings of Charles Darwin were challenged by the "Scopes Monkey Trial" in 1925, when a high-school teacher in Tennessee, John T. Scopes, was charged with violating state law by teaching the theory of human evolution.

Just a few years ago, it was uncontroversial to state that there are only two biological sexes. After all, this is a fact that would seem pretty straightforward. Yet recently, even this simple statement has become explosive. When the tennis champion Martina Navratilova questioned the fairness of having transgender men compete in sports again women, but was eventually driven to "apologize."

In the UK, a physician, David Mackereth, recently lost his government job as a medical assessor after more than three decades for refusing to renounce his view that gender is determined at birth.

People who claim to combat "hate" often seem to be quite full of hate themselves. Some Americans claim that US President Donald J. Trump is a racist, yet themselves express open hatred toward Trump, and those who vote for him. They do not object to hating. They just seem to believe that their hate is the only legitimate one.

In 2013, the American scholar Robert Spencer was banned by British authorities from entering the UK. Spencer the author of many books about Islam and runs the website Jihad Watch.

The Koran sura 9:5 has verse stating:

"When the sacred months are over slay the idolaters wherever you find them. Arrest them, besiege them, and lie in ambush everywhere for them. If they repent and take to prayer and render the alms levy, allow them to go their way. God is forgiving and merciful."

The exact translation of this verse can be debated, but the Arabic verb qatala generally means to kill, slay or murder somebody. How come it is all right to publish the original source, prescribing murder, but that it is "hate speech" to point out that quote?

Robert Spencer and others have observed, for instance, that verse 9:5 and other intolerant verses in the Koran have been quoted repeatedly by militant Muslims to justify jihad attacks and violence (for instance here, here and here). Although other religious books also contain violence, as the scholar Bruce Bawer points out:

"Sometimes, when one points out these rules, people will respond: 'Well, the Bible says such-and-such.' The point is not that these things are written in Islamic scripture, but that people still live by them."

Muslims in Britain and other Western nations are free to spread teachings that are hateful towards non-Muslims. Yet because non-Muslims such as Robert Spencer pointed out that some teachings are hateful and have inspired actual atrocities, UK authorities banned Spencer for spreading "hate."

One sees, then, that restrictions against "hate speech" often do not really ban hate speech; instead they may actually be protecting certain forms of hate speech against legitimate inquiry.

Laws against "hate speech" and "racism" always lead to political censorship, because the definition of what constitutes "hate" is always influenced by politics and ideology. Laws against hate speech or racism should therefore be removed. No person has the right "not to be offended." Freedom of speech means saying and hearing things with which you may disagree. What remains important is to be able to say and hear them.

The House legal filing (due by 5pmET) reiterates the findings of the House Intelligence and Judiciary panels, which, after hearing from witnesses and experts, settled on charging Trump with abuse of power and obstruction of Congress.

Additionally, the case that House prosecutors sent to the Senate references new evidence that wasn’t part of the impeachment inquiry, including material from Lev Parnas, an associate of Trump’s personal lawyer Rudy Giuliani, according to Democratic officials familiar with the argument.

President Trump's legal team outlined the fiery response to its impeachment summons, calling the two articles of impeachment passed by the House last month “a dangerous attack on the right of the American people to freely choose their president.”

The six-page document - which they stressed is different from the brief that is not due until Monday - offers a taste of the rhetoric expected to be deployed by the president’s defenders in the Senate.

“This is a brazen and unlawful attempt to overturn the results of the 2016 election and interfere with the 2020 election, now just months away,” the filing states.

Trump’s legal team, led by White House counsel Pat Cipollone and Trump personal lawyer Jay Sekulow, is challenging the impeachment on both procedural and constitutional grounds, claiming Trump has been mistreated by House Democrats and that he did nothing wrong.

Read the president's full response to articles of impeachment:

Notably, at least four of the impeachment managers, including Schiff, are scheduled to appear Sunday on political talk shows.

Former Rep. Trey Gowdy (R-SC) told Fox News this week that he predicts President Donald Trump’s Senate trial will be short and that the president’s best defense is a review of the transcript.

“The transcript is the single best piece of evidence that the president has,” Gowdy said. “Who brought up Rudy Giuliani’s name? It wasn’t Donald Trump. It was Zelensky. This was the second call, not the first call. If President Trump were really hell-bent on ensuring that Ukraine investigate the Bidens, would he not have brought that up in the first telephone call he had with Zelensky? Why wait till the second?”

“As far as the timing of this trial is concerned, Trey, they are estimates that it could be quick, it could last as long as six weeks,” Fox News co-host Sandra Smith said. “Where do you fall on that, and what is the length of time mean?”

“I mean God help us if it lasts six weeks,” Gowdy responded. “The investigation is over, so it’s Schiff’s job to present the case. If he’s going to present the case on the paper with the depositions, it shouldn’t take that long. I don’t need Adam to read the depositions to me; the jury can go read it themselves.”

“If they open it up to witnesses, and they want Bolton, and then there’s some Republicans that want four or five other witnesses, it could last six weeks,” Gowdy continued. “Sandra, I just have not met anyone whose opinion has changed during the pendency of this investigation. I can’t identify – maybe three open-minded jurors in the U.S. Senate. I just don’t, no matter how long it lasts, I don’t think it’s gonna change anyone’s mind in the Senate or among my fellow citizens. The shorter the better.”

Fox News co-host Bill Hemmer asked, “Did you want to give us a time frame for that?”

“I’m saying two weeks,” Gowdy said. “If it goes six weeks, then they’re going to have to make some hard decisions on which witnesses are important enough to hear from and which ones, while they may have relevant evidence, we just don’t – I think in terms of a real trial.”

“Why would you ever not call a witness if that witness has relevant information?” Gowdy continued. “How do you pick which ones to call and which ones not to? You can never do that in a real trial. So, if we’re going to open this thing up anew to a brand new investigation, then call everybody, and God knows how long that’ll take.”

“President Trump has done nothing wrong and is confident that this team will defend him, the voters, and our democracy from this baseless, illegitimate impeachment,” White House Press Secretary Stephanie Grisham said in a statement on Friday night.

One of the key drivers in recent decades for the US dollar gold price is real interest rates. It is thought that when interest rates on long-term sovereign bonds, minus inflation, are falling, it becomes more attractive to own gold as it is a less risky asset than sovereign bonds (gold has no counterparty risk). However, gold doesn’t yield a return (unless you lend it). So, when real rates rise, it becomes more attractive to own bonds.

Although the correlation is clear, it might change in the future. Possibly, when real rates fall, the gold price will rise faster than before. Let me explain why.

In my previous post, we have seen that the gold price in the short and medium-term is mainly set in the West by institutional supply of and demand for above-ground stocks. For the gold price, what matters is how much above-ground stock is in strong hands, i.e., owners of gold that will not be easily persuaded to sell.

A significant change in the global economy in the past two decades was the rapid expansion of China’s economy. As early as the 1980s, China started to liberalize its economy, but it was only after it joined the World Trade Organization in 2001 that its economy gained significance internationally. At the time of writing, the size of China’s economy is second globally. In 2002 China freed up its gold market with the opening of the Shanghai Gold Exchange (SGE).

Because of the aforementioned developments, and its Eastern mentality regarding gold, a few years after the Great Financial Crisis (GFC), China became a major player in the global gold market. It was a net importer since the 1990s, but imports grew in 2010 and exploded in 2013.

China’s central bank (which supervises the SGE) and other government departments have been stimulating physical gold ownership. One reason the government erected the SGE, was to allow the people to have direct access to the wholesale market and to be able to trade 999.9 fine gold at the lowest spreads. The stimulation program is sometimes referred to as the “People’s Gold.” In 2012, President of the China Gold Association, Sun Zhaoxue, wrote in Qiushi, the leading academic journal of the Chinese Communist Party’s Central Committee:

Because gold possesses stable intrinsic value, it is both the cornerstone of a countries’ currency and credit, as well as a global strategic reserve. Without exception, world economic powers established gold strategies at the national level. … the state will need to elevate gold to an equal strategic resource as oil and energy, …

In addition, because individual investment demand is an important component of China’s gold reserve system, we should encourage individual investment demand for gold. Practice shows that gold possession by citizens is an effective supplement to national reserves and is very important to national financial security. … We should advocate to ‘store gold among the people’ [“People’s Gold”] and guide a healthy positive development in this segment. … This is the objective under our gold strategy. 

The world economy faces new changes, new challenges and new opportunities. Therefore, we must relook the status and function of gold from a strategic height, and create and implement a national gold strategy, to strengthen our country’s ability to counter complex situations.

Several national central banks in Europe will agree with Sun Zhaoxue, as they’re slowly preparing for Plan B: gold.

In 2016 the SGE launched a smartphone application called “Yijintong” to further ease gold trading for everyone. Note, the government has mainly facilitated the infrastructure for gold trading in China. Nobody forces Chinese citizens to buy gold. “China has been infatuated with gold for thousands of years,” according to former Managing Director of the Far East for the World Gold Council, Albert L.H. Cheng.

When the Chinese population had an opportunity to buy gold, so they did. According to my estimates, there are currently 20,398 metric tonnes owned by the private sector in China. The People’s Bank of China (PBoC) holds 1,948 tonnes, bringing the total to 22,346 tonnes. Up 230% from 2009.

Since the GFC, China has net imported 12,000 tonnes of gold. The gold came from the rest of the world, where the price is set in the short and medium-term. At this stage, it’s prohibited by the PBoC to export gold from the Chinese domestic market—all 20,398 tonnes of it. Gold owned by the Chinese is in strong hands. The fact the market in the West has become tighter can make gold go up faster than expected, according to my analysis. Needless to say, when sovereign bonds are downgraded (rated as riskier), the dynamic between real rates and gold will change too.

From industry insiders and circumstantial evidence, I believe the PBoC holds at least twice the amount of gold officially disclosed. Underreporting their gold reserves allowed the PBoC to accumulate at lower prices. Metal held by the PBoC, in addition to officially reported, was bought abroad and would add another 2,000 tonnes to China’s net import since the GFC. But I will leave this subject for a forthcoming article. I exclude speculative data in the paragraphs and charts above.

One reason for the gold price to rise is because the global debt-to-GDP ratios are excessive, and will be lowered, partially, through inflation. Debt in moderation can cause real economic progress. However, debt in excess can cause bubbles, stagnation, or depressions; too much debt caused the GFC. Unfortunately, the medicine we took was more debt. Last week, the World Bank warned the current debt wave is “the largest, fastest, and most broad-based wave of debt accumulation in advanced economies as well as in emerging and developing economies” since the 1970s.

NEW TODAY | Global debt reached a new all-time high of 322% of GDP in Q3 2019, with total debt nearing $253 trillion.


Access the Global Debt Monitor report and database here: https://t.co/UyFYqwNRPx pic.twitter.com/jhEGoD1evz

— IIF (@IIF) January 13, 2020

Since the GFC, central banks have embarked on unconventional monetary policy. Through Quantitative Easing, i.e., printing money and ultra-low interest rates, initially, some economic pain was avoided, but the underlying problem got worse. Across the board, debt-to-GDP levels have gone up (world debt is now at a record 322% of GDP). It seems to me that unconventional monetary policy is counterproductive, and not just because debt has expanded. Consider some of the unintended consequences: Stock markets are addicted to the printing press, asset bubbles are everywhere, and inequality is rising. So-called zombie companies (kept alive through artificially low interest rates) decrease productivity. Instead of spending more, consumers are spending less because the low-interest rates policy makes them feel insecure about the future. How to get out of this situation?

Ever lower rates encourages the taking on of ever more debt which then can't be serviced with higher rates requiring even lower rates which then encourages the taking on even more debt which then can't be serviced by even lower highs in rates requiring even lower rates...etc.. pic.twitter.com/ZaQWJAeuqr

— Sven Henrich (@NorthmanTrader) January 6, 2020

In the stalemate, Christine Lagarde, the new head of the European Central Bank, is urging the few countries with relatively low debt levels, to “stimulate” the economy by borrowing and spending. Meanwhile, she holds key interest rates below zero and the printing press active. The Federal Reserve has reignited its printing press last September, which gave the US stock market another catalyst. When push comes to shove, our monetary “leaders” will always revert to printing money. There is a sense of logic in this, as to not intervene would undermine a central banks’ right to exist.

My concern is that money printing and more government-induced debt will ultimately lead to high inflation. Central banks will be reluctant to raise interest rates when that happens, as it would make the debt unserviceable. A “side effect” of high inflation, is that it reduces the debt burden. (Debt is fixed in nominal terms, of which the real value is eroded through inflation.) It’s an old trick to get out of debt through inflation, and governments are likely to choose this route.

In the scenario described above real rates will fall, and the price of gold will go up.

Hedge fund manager and debt cycle expert Ray Dalio stated in July 2019:

Governments are likely to continue printing money to pay their debts with devalued money. That’s the easiest and least controversial way to reduce the debt burdens and without raising taxes. 

In a leading financial journal, The Economist, the same solution was presented:

good old fashion currency debasement [/inflation] and the annihilation of nominal creditors (most of which reside outside the US). We have done this before in our 200+ year history and we will surely do it again.

Ole Hansen, head of commodity strategy at Saxo Bank, noted on January 9, 2020, “The story for gold is still there…. the United Nations food agency reported Thursday that its global food price index rose to a five-year high in December to 181.7 points. We expect the inflation story to unfold throughout the year.” Just because we haven’t seen staggering inflation numbers in developed nations for forty years, doesn’t mean it’s not on the table.

Like I said before, I think in the current environment, the gold price can rise faster than expected. Aside from the speed with which the gold price can rise—in a debt-based monetary system, the gold price is guaranteed to rise in the long run—equally important is that inflation will create winners and losers. If your savings are in fiat money and you own debt, you will lose. If you own hard assets, such as gold, and you are in debt, you will win. Perhaps this is why Sun Zhaoxue wrote, “The world economy faces new changes, new challenges and new opportunities. Therefore, we must relook the status and function of gold from a strategic height, and create and implement a national gold strategy.” Having 22,346 tonnes of gold within Chinese borders will protect against currency depreciation.

Ms. Lagarde confirmed she aims for currency depreciation when last November, she said, “We should be happier to have a job than to have our [fiat] savings protected.” Fortunately, there is gold in Europe too.

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"Following many months of conversations and more recent discussions, I am pleased that together we have found a constructive and supportive way forward for my grandson and his family," Queen Elizabeth II said in a statement.

"Harry, Meghan and Archie will always be much loved members of my family," she said. " I recognize the challenges they have experienced as a result of intense scrutiny over the last two years and support their wish for a more independent life."

HUGE NEWS in statements from Her Majesty the Queen and Buckingham Palace tonight #HarryandMeghan pic.twitter.com/Fcbc4Xk7oj

— Roya Nikkhah (@RoyaNikkhah) January 18, 2020

As disclosed in the agreement, Harry and Meghan "understand that they are required to step back from Royal duties, including official military appointments. They will no longer receive public funds for Royal duties."

They also shared their wish to repay Sovereign Grant expenditure for the refurbishment of Frogmore Cottage, which will remain their UK family home.

With Brexit no longer dominating the British press, the announcement that the couple wished to step back back from the royal family had thrown Britain’s monarchy into turmoil and dominated the headlines. Even though Harry has only a remote prospect of becoming king - he’s sixth in line, behind his father, brother, and nephews and niece - there was outrage that, with his wife, he wanted to become financially independent and "carve out" a "progressive new role."

Still, as the following chart summarizing the net worth of UK's royalty shows, the former "Duke and Duchess" should be just fine.

According to Statista, Prince William and Prince Harry have similar incomes and net worth, and reportedly earn $6.6 million annually from the Sovereign Grant, which they split, and each have an estimated net worth that ranges around $40 million. Prince Harry’s income could fluctuate once his title is renounced. Rumors claimed Markle, who had a net worth of about $5 million before marrying Harry thanks to her acting career, was already inking up a deal with Disney to do voiceovers for future projects, though the money will reportedly go to charity.

In a separate statement, earlier this week the queen discussed the wishes of Harry and Meghan, a former actress, with her immediate family. The queen at the time described the talks as “very constructive.”

The Queen said the recent discussions led to a "supportive way forward for my grandson and his family." She said she was "particularly proud of how Meghan has so quickly become one of the family."

It now appears that it took Meghan even less time to leave the family.

"A lot of people don’t really understand assault weapons and how complicated the issue really is," said Democratic Sen. John Edwards. "It’s going to be very difficult to figure out a way to do it. But we’re studying it, that’s all I can say."

And yet, lawmakers are pressing ahead, prompting a vicious backlash that has even prompted Gov. Northam to declare a state of Emergency because armed militia groups planned to storm the capitol.

As the gun-control debate rages, thousands of Virginians have been rushing to gun stores across the state to buy up firearms before it's too late.

Per Fox 5 Washington DC:

"Business has been absolutely crazy," explained Jerry Rapp, owner of SpecDive Tactical in Alexandria. Rapp said business has increased by 200 to 300 percent since the last election, although that doesn’t mean the news is all good for the gun shop owner and his customers. "People are really on edge. They’re worried about their Second Amendment rights. They’re worried about the future of what you can and cannot have as a firearm."

As one gun buyer put it, since Democrats have expressed open hostility to the 2nd Amendment, it makes more sense to just be prepared.

"If they’re willing to make laws that will strip your second amendment right, I mean who’s to say what could happen, so yeah, I’m gonna get it while I can," Roberson said.

According to FBI data, the number of firearm background checks ballooned in Virginia last month to nearly 77,000, up from 53,000 a year before. That's an increase of roughly 45%. That's in keeping with a national trend that we highlighted earlier this month.

President Trump has even chimed in, warning that your "2nd Amendment is under very serious attack".

Your 2nd Amendment is under very serious attack in the Great Commonwealth of Virginia. That’s what happens when you vote for Democrats, they will take your guns away. Republicans will win Virginia in 2020. Thank you Dems!

— Donald J. Trump (@realDonaldTrump) January 17, 2020

Meanwhile, communities across Virginia are already looking into ways to sidestep any new state laws. The map below shows the counties that have enacted, or are considering, "Second Amendment Sanctuary" legislation.

The gun control debate has already ratcheted up tensions across the state. And things are only just getting started.

None of which turned out to be true. While all nation-states harbor multitudes of sins, the Soviet Empire was unique in its mass suppression of basic human rights, its economic failure to better the lives of its imprisoned populations while its military might soared, and the perverse union of a Kafkaesque bureaucracy and an Orwellian propaganda machine epitomized by the old Soviet-era joke that "we pretend to work and they pretend to pay us."

Fast-forward to today's USA where soaring wealth and income inequality is making a social breakdown all but inevitable. Wages for the majority of households have gone nowhere for the past two decades, while the incomes of the top 5% have skyrocketed, with the majority of the gains flowing to the top 0.1%. (See charts below.)

History shows that fast-widening gaps between the super-wealthy / top 5% and the rest of the citizenry inevitably generate social disorder and breakdown. This dynamic is already painfully visible in rising homelessness, suicide rates, opioid addictions, burnout, intolerance, etc.

While there are many dynamics in play that exacerbate wealth / income inequality, the primary driver is the Federal Reserve's near-infinite giveaways to the financial and corporate elites. If we examine why our economy has become a winner take most casino, we find the gaming tables are rigged to favor the few closest to the Fed's money spigots: when JP Morgan gets in trouble by leveraging socially parasitic bets, the Fed steps in and saves their gambles by printing hundreds of billions of dollars in repos.

As a result of the Fed backstop, JP Morgan reported blow-out earnings.

The net result of the Fed's goosing the stock market ever higher is soaring wealth inequality as the average US household gains precious little from record highs, and whatever gains they might have are sequestered in 401Ks and IRAs until they retire.

The Fed justifies its enrich the already rich policies by claiming some of this newly created wealth will trickle down to the masses via walking the wealthy's dogs, polishing their Mercedes, tutoring their over-scheduled kids, busing their tables at $100 per plate bistros and so on.

The stagnant wages of the masses are the trickle down. Average Carlos and Carlita don't get an unlimited line of credit from the Fed; only bankers, financiers and corporations get an unlimited line of credit from the Fed.

If an alien force was purposefully widening America's wealth / income gap to destabilize the nation's social order, would we hesitate to call this force evil? Would we rationalize this force as "no worse than any other force" and an "alternative system" with the same moral standing as free markets and democracy?

Ours is a moral universe, and the first necessary step is to call things by their real name: the Fed is evil. Any force that relentlessly promotes fast-widening wealth / income inequality, knowing full well that the inevitable result is social breakdown, is evil.

If this force were external, its evil nature would not be denied or defended. But because the Fed favors the wealthy and powerful, it masks its evil behind an Orwellian cloak of PR much like the former USSR.

The parallels with the Evil Empire don't stop there. While the Fed pillages the vast majority of Americans and diverts the nation's wealth to the top 0.1%, it claims, absurdly and speciously, to be "helping the commoner." This is as Orwellian as it gets.

The Fed will destroy the nation by widening the wealth/income inequality that is breaking down the nation's social order.

 Let's call things by their real name: the Fed is evil.

*  *  *

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But, the result in Umbria was important because it showed Lega’s ability to turn a center-Left stronghold against history. The Democrats (PD) had held sway there for over fifty years. But no longer.

The result showed that even though Salvini was no longer in a governmental office in Rome, his popularity hadn’t waned. It’s clear that polling since then has seen Lega hold its position as the dominant party in Italy, which has Lega commanding 31-33% of the vote.

The real story, however, is the surge of the Brothers of Italy (FdL) who are picking up disaffected Forza Italia voters and held them for months now, continuing to hold a solid 10%.

In short, Italian polls haven’t moved much in months despite Salvini and Lega being ousted from the ruling coalition when coalition partner Five Star Movement (M5S) made a backroom deal with PD which has only accelerated M5S’s slide in the polls. Remember, M5S was formed to stop PD from holding onto power and challenging them on EU membership and continued adoption of the euro as Italy’s currency.

Making that deal with the establishment like that has alienated a lot of M5S’s base and it’s support is now threatening to collapse below the all-important 16% level, which once breached to the downside opens the door for someone else to gain dramatically.

And that is the backdrop against which the PD/Five Star Movement (M5S) government is dealing with.

Lega alone polls close to or better than PD/M5S together nationally. And it is the upcoming state election in Emilia-Romagna on January 26th that is their next headache. As the Financial Times pointed out in a recent article, Salvini and Lega have made serious inroads in what is a traditionally heavily left-leaning area.

Giorgio Bennetti, a 35-year-old sweets seller with a stall in Ferrara’s centre, believes that many voters are willing to switch to the right to express a general political dissatisfaction. Local issues, such as the collapse of the Ferrara savings bank — 130,000 investors lost their savings — have also given voters reason to want to punish the PD, which was in charge both locally and nationally when the rescue happened in 2015.

“This is a protest vote; people don’t believe that the left is working for them any more,” Mr Bennetti says. “My grandmother used to say that people have no problem changing their shirts from red to black if they need to.”

But similar to what Donald Trump did in 2016 and Boris Johnson just pulled off in the U.K. these nominally right-wing candidates became the champions of domestic working middle class.

In Italian political terms, the former Communists in Emilia-Romagna now firmly trust Salvini to protect their futures and the jobs rather than the traditional left parties.

Current polling there has Lega with 31% of the vote, a massive 12-point rise over the last election while PD has lost even more down 20 points.

Italy (Emilia-Romagna regional election), SWG poll:


LEGA-ID: 31% (+12)

PD-S&D: 25% (-20)

BP-S&D|RE|G/EFA: 13% (new)

FdI-ECR: 8% (+4)

M5s-NI: 6% (-7)

FI-EPP: 4% (-4)

...


+/- vs. 2014 election


Fieldwork: 7-9 January 2020

Sample size: 1,000


Election: 26 January 2020 pic.twitter.com/H3kgkfMYmk

— Europe Elects (@EuropeElects) January 10, 2020

Since parties can campaign in coalitions in Italy the current center-left versus center-right numbers in Emilia-Romagna are within a couple of points. But Salvini’s guys are rising fast and it’s very possible that the polls haven’t quite caught up to the shift in sentiment leading into the election.

This happened in 2018 where Lega was polling behind Forza Italia by a couple of points and would up coming out of the election four points up and the dominant player in the center-right coalition. That paved the way for the scenario that led to the short-lived Euroskeptic coalition between Lega and M5S.

So, the probability of a center-right government coming into being in Emilia-Romagna is growing by the day. And that puts the national coalition at serious risk.

 “This coalition is already so fragile that the only thing gluing it together is their fear of Salvini,” says Erik Jones, professor of European studies and international political economy at the Johns Hopkins School of Advanced International Studies in Bologna. “If they lose it is hard to see how they make it through the spring.”

This fear is well-founded and no matter how hard they try and hold it together political forces within Italy will ultimately tear it apart. Losing Emilia-Romagna would create serious panic in the ranks of both ruling parties.

But the political establishment in Rome is dead set on keeping Salvini out of power for as long as possible. And that goes double for the traditional EU leadership in Brussels. But one thing working in Salvini’s favor here is that it has been German Chancellor Angela Merkel pulling the strings in Rome to keep the Italians in sync with German fiscal and monetary demands.

But Merkel is on the way out and there is a concerted challenge to German rule coming from French President (for now) Emmanuel Macron. Macron wants fiscal integration and the euro-zone is suffering from Merkel’s insistence on punitive austerity.

I expect the next leadership challenge in Italy will not be fought nearly as hard as in the past by the EU. Salvini either wants a stronger seat at the decision-making table for EU fiscal policy for Italy or be let out of the monetary union. In that sense Salvini is a future ally for Macron against Merkel and her successor.

I can see Macron and new ECB President Christine Lagarde not fighting Salvini’s rise to power to help them remake the EU’s fiscal structure, prevailing upon the Italian old guard like President Sergio Mattarella to allow the government to collapse and not fight new elections, which Salvini will win in a walk, likely with just the Brothers of Italy as his coalition partner depending on how the vote lays out.

At that point things get really hairy for Merkel as a Salvini as Prime Minister will be in the position to dictate terms to Germany having Lagarde and Macron on his side, tacitly.

Because, remember folks, when you owe the bank a thousand dollars it’s your problem. When you owe the bank a few hundred billion dollars it’s the bank’s problem, in this case, specifically German banks.

That’s where Salvini’s leverage lies and he knows it. But with the changing of the guard in Brussels and Strassbourg, he would finally be in a position to use it.

According to the report "the headwear often stays on even when all the other garments have been taken off."

The majority of refugee porn titles depict female protagonists in subjugated roles, who are often made to look like they have Middle Eastern origins. In explicit scenes, they are often shown as being dominated sexually by white males. A main feature in many of these adult film productions is the wearing of the hijab — the Islamic head covering used by many Muslim women; the religious headwear is frequently fetishized as a symbol representing female migrants as a whole, and only in the rarest of cases is it taken off at all — even if all other garments have been removed in the depicted scenes.

Some of the refugee porn movies also feature the Arabic language or other foreign tongues as part of their narratives in a further attempt to present migrants as mysterious, out-of-place objects of sexual desire. -InfoMigrants

According to the report, Google searches for said porn have skyrocketed over the past four years, while major porn websites host hundreds of refugee / hijab videos.

In the weeks leading up to the Austrian parliamentary elections in September of 2019, the phrase "refugee porn" high a two-year high. During the 2017 Austrian election, searches for the term had nearly doubled vs. a month earlier. Meanwhiule, German searches for "refugee porn" spiked in Saxony leading up to the September election as well.

Adding a dash of legitimacy to Germany's newfound obsession is Professor Jakob Pastötter, a sexual scientist and cultural anthropologist, who told InfoMigrants in October that "Sexuality is a means to familiarize yourself with things that are alien to you. By approaching new phenomena from a sexual angle we get to understand these things better," and that "Pornography doesn't simply just show sex. People want to experience at the very least a rudimentary link between the sexual acts they view and themes from everyday life, as is the case with refugee porn."

That said, InfoMigrants suggests that the porn genre objectifies migrants with violent narratives that promote rape and sex trafficking.

"(Pornography) is the public face of a larger network of sexual exploitation which deliberately recruits from foster homes, shelters serving various desperate populations and otherwise seeks out poor people from across the world to feed a supply chain with a constant need for fresh bodies," said Jennifer Johnson, Associate Professor and Chair of Sociology at Virginia Commonwealth University.

Pastötter disagrees - saying that "Only a small minority of so-called refugee porn films focus on aspects like humiliation. I believe that those more violent films are mainly addressed at an audience who like to watch porn, in which domination always plays a key role anyway."

"Think about the likelihood of actually meeting a refugee woman, let alone having sex with one against the backdrop that the majority of migrants to Europe are men. It's even less likely to actually happen than that common porn cliché about the pizza delivery boy who happens to also offer sexual services for a tip. This is all just about fulfilling fantasies, and should really be communicated as such."

That’s because both types of experiences taught me how to better defend my beliefs as I enter the next stage in my life: real life.

As I consider law school, I know that my potential future career as an attorney would be built upon defending my stances with wisdom and logic. With that, I appreciate the tutelage the intellectual sparring on campus gave me. It toughened me up, taught me how to argue the facts.

That’s not to say that I support professors who shut down their students’ thoughts and opinions. Nor did I enjoy being condescended to as an undergrad.

But looking back, in hindsight, it did help me grow.

Prior to my university experience, I was home-schooled from first grade through twelfth grade. I felt this non-traditional start to my educational journey might put me at a disadvantage, or at least at a different starting point, than some of my classmates. What I came to discover after some time in the classroom was that I was well-prepared to defend my beliefs.

Often I was the only conservative student to speak up in class, and I did have my fair share of leftist professors who badgered me over my opinions on abortion, immigration and economics.

For example, one professor my sophomore year labeled me “anti-choice” in front of the class when I expressed that the government should have a Constitutional responsibility to protect pre-born children.

But there’s another side to this story, too. I also had some professors who heard me out when I questioned their political views.

I can still recall the time I challenged one of my professor’s anti-capitalism opinions during a lecture. After class he walked up to me, and my stomach was gripped with tension of the unknown. Yet to my pleasant surprise, he offered me an extra credit opportunity to write an essay on why I believe capitalism is the best economic system.

This teaching opportunity strengthened my ability to articulate my opinions and gave me a chance to practice my writing skills.

I am grateful to say I had other professors who, although they disagreed with me, did not shut me down or insult me because of it. These select few professors were the highlight of my college experience, educators who prioritized teaching over indoctrination. They are a powerful reminder that some scholars still allow the Socratic method in their classrooms. They offer a chance for their students — both conservative and liberal — to grow as individuals and intellectuals.

Let me speak for my peers when I say “thank you” to all those professors out there who honor their call to educate. You help make our experiences on campus not only tolerable, but enjoyable.

Students in the university system in America shouldn’t be afraid to express their different views. They should be encouraged to express dissent and be taught how to defend their ideas and build arguments using reason and logic.

Unfortunately, far too often, leftist indoctrination is the lesson of the day. And not all students take it well, namely conservative freshmen who were not taught by their parents or high school teachers counter-arguments to liberal tropes. I’ve seen it happen first hand. They know capitalism is the only system that has lifted the most out of poverty, but they stumble on citing specifics. All too often they get devoured by their left-leaning professors and peers, and end up feeling bullied and belittled. They then go silent, or even worse, buy into the progressive dogma that socialism is the solution to all of the world’s evils.

I’m glad that wasn’t me. As I look back on my experience at the University of North Carolina at Charlotte, I recall professors who challenged my beliefs through bullying tactics and intimidation, as well as professors who challenged me in order to strengthen my arguments and promote my academic success. I grew from both learning experiences.

The professors who tried to silence me taught me the importance of standing up for myself and for those who are voiceless in the face of unreason and unkindness. The professors who challenged my beliefs and encouraged me to work on articulating them in order to build a stronger argument gave me the tools I need to succeed in the decades to come.

Like me, conservative students who have fought bias throughout their education can step into the real world having already faced adversity by surviving a campus where about 80 percent of your peers and nearly 100 percent of your professors disagree with your political views.

While it is disappointing and disheartening that the once-great university system in America is so blatantly biased, and discourages differing viewpoints of students, there is hope in the strong level-headed and determined conservative students who are being shaped by this academic hazing into the future conservative leaders of America.

This is a guest post by permission from Jim Bianco

Jim Bianco at Bianco Research says “Not QE” Looks a Lot Like Y2K

We would argue the special lending facility that started in late 1999 to support the feared Y2K computer glitch offers a historical analogy to the current period.

Stories 20 years ago sound like they are describing what is happening today:

Dow Jones News Service – (December 28, 1999) CASH IS FLOWING LIKE CHAMPAGNE FOR Y2K

The volume of cash that the Federal Reserve has temporarily given to banks to avert potential Year 2000 strains is rising to dizzying levels. Including nearly $20 billion it gave to the banking system in the form of term “repurchase” agreements Monday, the Fed has almost $100 billion in hard currency loans outstanding to banks. That’s the most money lent out through repurchase agreements ever, said Peter Bakstansky, spokesman for the New York Federal Reserve. For some perspective, the Fed had $23 billion in outstanding “repos” in December 1998, and around $9 billion in December 1997.

The Y2K special lending facility had a similar effect on the Fed’s balance sheet. It was also done for “plumbing reasons.”

And, as the [Champagne] story points out, the Fed supplied record amounts of repo never before seen at the time.

In fact, the amount of repo the Fed supplied in late 1999 was significantly more than on 9/11 and on par with the support offered during the financial crisis.

It was not until September 2019 that the Fed’s repo operations finally saw a meaningfully higher level.

Note that the Y2K special lending facility ran from October 7, 1999, to April 7, 2000. And what did stocks do during this period? Below is the NASDAQ.​

The Nasdaq went on a tear rarely seen in American finance, starting literally the day the Fed opened its Y2K lending facility. It crashed 25% the week the facility closed (April 7, to April 14, 2000).

How does this analogy currently compare? The Fed announced it would start buying T-bills on October 11, 2019. Stocks have gone a tear since (clearly the magnitude of the NASDAQ returns above were larger, but the timing of the bottom in each case is similar).

There is no such thing as a one-factor model to explain the stock market. Metrics such as the Fed’s balance sheet, repo, etc. cannot explain the stock market’s movements in isolation.

That said, when the Fed injects money, funds generally flow to the best-returning market. During the financial crisis, it was the bond market. Today, as was the case in 1999, it is the stock market.

There have been indications of how important the Fed’s balance sheet is to financial flows in the recent past.

During the Fed’s Dec 19, 2018 presser, the stock market collapsed when Powell said the balance sheet was on “automatic pilot.” It soared almost a 1,000 DJIA points on January 4 when he said the Fed would be “patient and flexible.” On June 4, when he said the Fed would “act as appropriate,” stocks continued higher. Again, no single measure can predict the stock market, but these were clear signs that the size of the Fed’s balance sheet and policy matter.

The following table highlights this. Through June 5, half the gains to that point came on the two days Powell commented on policy.

Another 9% of the stock market’s gains came after October 11, when the Fed announced its T-bill purchase problem. So, a big part of this year nearly 30% stock market gain has come on the heels of Fed moves, much like last year’s 20% decline was coincident with the Fed’s hawkish rhetoric.

Given all this, the big question is, what happens when the Fed ends T-bill purchases and repo support in Q2 (the current projected end date)? Will the April 2000 analogy apply?

*  *  *

The above was a guest post generously provided by James Bianco.

It was part of his proprietary research.

I asked Bianco if he would make that post public, and he did.

Free Trial

Those wishing a Free Trial to Bianco Research can click on that link.

Although the point about Y2K is clear, I asked Jim explicitly if this was QE.

He replied:

By saying it is “Not QE” they are arguing it is not impacting financial markets. By detailing the Y2K “Not QE” episode, I’m arguing that not only is is QE, but we also have a historical example of how it has worked previously.

In retrospect, it is not important how one labels this.

My friend Pater Tenebrarum at the Acting Man Blog pinged me with this comment on Hussman's thoughts.

Who cares what it is called, the result is an explosive increase in the money supply!! And it's not bank lending that's behind that, because bank lending growth continues to slow down. So the economic effect is exactly the same as with "QE". It walks like a duck, quacks like a duck, guess what: it's a duck!

Thanks to all for the discussion.

Beginning at the 2:15 mark in the following video clip, the money managers demand to know why she’s handing out AAA ratings to clearly high-risk mortgage backed paper. To which she responds,

“If we don’t give them the ratings they’ll go to Moody’s, right down the block. If we don’t work with them they’ll go to our competitors. Not our fault, it’s simply the way the world works. It is not my decision. I have a boss.”

The rating agencies’ blatant corruption contributed to one of history’s biggest bubbles and subsequent multiyear financial crisis. But at least it taught those guys a valuable lesson and led to changes that will prevent a recurrence.

Just kidding. They learned nothing and are already back at it, this time with collateralized loan obligations, or CLOs. From yesterday’s Wall Street Journal:

Fight for Market Share Gives Bond Issuers Pick of Ratings

Last spring, a real-estate lender hired three ratings firms to rate a series of bonds backed by speculative real-estate loans. Only one of the three got to rate all the bonds. Moody’s Corp. said about half were triple-A. Another firm said about 61% merited that grade. DBRS Inc. said two-thirds.

The winner was DBRS, which had just changed its methodology for rating this type of debt. Moody’s was only hired to rate one of the eight bonds in the deal, and rival Kroll Bond Rating Agency Inc. for a handful. DBRS rated all eight.

The ratings-selection wasn’t unusual: It has become standard industry practice. Fierce competition among ratings firms in a fast-growing corner of the bond market is allowing issuers to cherry pick the most favorable ratings. The result is that securities deemed safe by the ratings firms have increasingly smaller cushions against losses.

The security in question is a cross between two of Wall Street’s hottest markets—commercial mortgage bonds, which are backed by mortgage payments on apartment buildings, malls and the like—and collateralized loan obligations, which are pools of bonds backed by payments on corporate borrowings.

Banks sold a record $21.4 billion commercial-real estate CLOs in 2019, according to commercial mortgage tracker Trepp LLC. That was up from less than $1 billion in 2012 and made it one of the fastest-growing segments of the larger market for commercial-mortgage bonds, Trepp data show.

Issuance is soaring because investors are thirsty for financing to fix up buildings, a popular strategy in hot real-estate markets. Known as transitional loans, these mortgages are often based on a borrower’s plan to turn around a struggling property and fetch higher rents. Such plans might not pan out, making the loans riskier than debt that can be paid off with existing rent payments from a property.

The lenders that make the loans often securitize them by packaging them into bonds sold by an investment bank to investors. That means obtaining ratings from firms like Moody’s or DBRS to help investors judge how risky the bonds are. The firms provide bankers initial feedback on how they might grade deals and get hired based on that feedback. The fees are lucrative and can top $1 million, SEC disclosures show.

As issuance has grown, so has competition to rate the debt. DBRS had the early lead in the sector, rating 10 of 18 deals in 2017. But rival Kroll Bond Rating Agency Inc. began to dominate the sector after it changed its methodology that year. Kroll rated 21 of 25 deals in 2018, according to data from the Commercial Mortgage Alert, which tracks the industry.

A comparison of Kroll’s old methodology and its new one shows that the firm relaxed some rent and occupancy stress tests for mortgages financing multifamily apartment buildings—a big part of the market for these loans. That could yield higher ratings, according to current and former ratings analysts.

So how accurate is the comparison of CLOs with the mortgage bubble? Pretty damn accurate, unfortunately. But not surprising. As expansions enter their latter innings, the people making fortunes by doing various kinds of financial deals realize that the only way to keep the deals (and thus their massive incomes) coming is to relax standards beyond what is normally considered prudent.

So lending standards fall, true risk is hidden in various ways, and hot money pours into ever-less-appropriate places. See, for instance, Signs Of A 2020 Top: “Buyers Return to Riskiest Junk Bonds”.

You see the dilemma here, right? If normal credit standards are maintained, the deal flow ceases and the economy tanks. But if safeguards are corrupted and/or abandoned, the game goes on, and all that capital gravitating towards extreme risk creates a debt bomb that has to blow up eventually. At which point the economy tanks.

In Austrian school of economics terms, over the course of a credit cycle an economy moves from “hedge finance” where debt is used for productive things that actually lower systemic risk, to, eventually, “Ponzi finance” where debt can only be paid off with the proceeds of new, even more risky debt. If past is still prologue, we’re either there or very close.

As Mike Shedlock put it in a recent post, “Fear Has Left The Building.”

But by far the most glaringly egregious assault on the Vermont Senator’s image was when CNN moderator Abby Phillip took a completely evidence-free sexism smear which defies all logic and presented it to the debate audience as an established and undeniable fact. You can watch the exchange here:

Phillip brought up a transparently ridiculous claim that was “leaked” to the press and confirmed by Warren that in 2018 Sanders had told Warren he did not believe that a woman could win a presidential election. It’s a completely unproven allegation about an unwitnessed private conversation, yet Phillip did not ask Sanders if he had said such a thing, she asked him why he said it, presenting it as a given fact.

Sanders explicitly denied ever saying any such thing. He said there’s Youtube footage people can look up of him saying a woman could become president many decades ago, adding that he only ran for president in 2016 because Warren refused grassroots efforts to persuade her to run (efforts which he’d supported).

“So Senator Sanders, I do want to be clear here, you’re saying that you never told Senator Warren that a woman could not win the election?” asked Phillip.

“That is correct,” Sanders replied.

“Senator Warren,” Phillip then asked without missing a beat. “What did you think when Senator Sanders told you that a woman could not win the election?”

It was such a brazen manipulation that even CNN’s heavily pro-establishment crowd audibly reacted. Warren then cooperated with this manipulation by responding as though the allegation was a proven fact, without acknowledging Sanders’ denial or defending her claim.

In CNN’s post-debate analysis, pundits actively reinforced the completely fact-free narrative that this allegation was an established reality, with Van Jones referring to “a banana peel sitting out there for Bernie to slip on when it came to his comments about women,” an idea premised on the position that those comments are known to have actually happened.

CNN’s Jess McIntosh took it even further, overtly dismissing Sanders’ denial and saying, “I think what Bernie forgot was that this isn’t a he said/she said story. This is a reported out story that CNN was part of breaking, so to have him just flat out say no I think wasn’t nearly enough to address that for the women watching.”

“I think what Bernie forgot is that this *isn’t* a he said she said story, this is a reported out story that CNN was part of breaking...”


(WTF!?!) pic.twitter.com/e1DNhQXFMf

— wideofthepost (@wideofthepost) January 15, 2020

Of course, the allegation absolutely is a he said/she said story, per any possible definition: Warren says it happened, Sanders said it didn’t. The fact that CNN “reported out” on that he said/she said story doesn’t magically turn it into a fact, as should be obvious to any grown adult who isn’t suffering from a severe head wound.

More importantly, nobody actually believes that Bernie Sanders told Elizabeth Warren a woman cannot be president. Not Jess McIntosh, not Abby Phillip, not Van Jones, not Elizabeth Warren, not CNN, and not any of the establishment loyalists who are trumpeting this allegation as fact. Anyone who claims to believe that this interaction occurred is simply lying to advance a political agenda, and they know it.

The belief that a woman cannot be elected president in 2020 is not a thing. Nobody believes that, and anyone who pretends to believe that anyone believes that is simply telling you that they are an unprincipled liar who would rather take a nonsense stand on a nonsense issue than promote actual policies and changes. The heavy favorite to win the 2016 election was a woman, and were she not literally in the middle of an FBI investigation during that election she would have overcome the narrow margins she lost by.

It’s been years since anyone has believed that a woman cannot win a US presidential election. If you claim that the one person in the world who does believe this is a senator who’s spent decades advocating for feminism and women in politics, you are a liar. It absolutely is that simple.

Top three US trends right now:

1. #CNNisTrash

2. #NeverWarren

3. #WarrenIsASnake pic.twitter.com/SsuRZbDQWB

— Caitlin Johnstone ⏳ (@caitoz) January 15, 2020

So angry Berners have been rightly decrying the despicable manipulations of CNN, which can only be a good thing. A massively influential news corporation owned by the largest telecommunications company on the planet should not be able to determine who voters select to the highest elected office in the most powerful country in the world.

This is oligarchic election interference, plain and simple. If the US government is going to call a few thousand dollars in Russian facebook memes election meddling, then the billions which get poured into the billionaire media tilting the scale to advantage the billionaire class is far worse by orders of magnitude.

Last May I wrote an article titled “The Worst 2020 Election Interference Will Be Perfectly Legal” saying that the most egregious forms of election meddling we’ll see in this presidential race will not be perpetrated by the Russians, nor by the DNC, nor by sleazy gerrymandering or voter ID requirements, nor by hard vote tally manipulation, but the everyday, in-your-face manipulations of corporate media outlets like CNN. Unsurprisingly, this is already proving undeniably true.

What you just saw tonight IS rigging an election. But go on, CNN, Nancy Pelosi, and corporate dems, do keep telling us how Russia is the real boogie man trying to destroy our democracy. #CNNisTrash

— beth, purity test enthusiast (@bourgeoisalien) January 15, 2020

In fact the power of these vast news media corporations to manipulate the way the populace thinks and votes stretches far beyond the consequences of a mere presidential election. The ability to manufacture consent for the agendas of the plutocratic class which controls these corporations enables war, ecocide, militarism, soul-crushing oligarchic neoliberalism, increasingly Orwellian surveillance programs and an increasingly militarized police force to destroy lives and this very world without it ever occurring to a critical majority that it would be possible for us to use the power of our numbers to force real changes to our advantage.

It is good that people are loudly criticizing this dynamic. It’s important to keep drawing attention to the way we’re being manipulated out of having any control over not just what happens in our world, but over what we think about what happens in our world. Hopefully public trust in the mouthpieces of oligarchy can be weakened to such an extent that people stop buying into their deceptions.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast on either Youtube, soundcloud, Apple podcasts or Spotify, following me on Steemit, throwing some money into my hat on Patreon or Paypal, purchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish or use any part of this work (or anything else I’ve written) in any way they like free of charge.

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The U.S. Army CCDC Ground Vehicle Systems Center and the U.S. Army Next Generation Combat Vehicles Cross-Functional Team awarded QinetiQ North America and Textron last Friday with a contract to build four light (RCV Light) and four medium (RCV Medium) sized robotic tanks.

"The progress that our engineers, scientists, project managers, and leaders around Team Warren and the Army Modernization Enterprise have made in moving the RCV closer to reality is truly a heartening success story for Army modernization," said Jeffrey Langhout, Director, Ground Vehicle Systems Center.

"That we can get this far already is a testament to the dedication and passion of the Army to giving our Soldiers the best capabilities possible. This is a great day for our Army, as we make another important step in learning how we can employ robotic vehicles into our future formations," Langhout said.

The light and medium-sized RCVs will be part of the Army's Robotic Campaign of Learning that will test the robots with ground troops. Testing is expected to conclude by the end of 2021 and could enter service by 2023.

"Robots have the potential to revolutionize the way we conduct ground combat operations," said Brig. Gen. Ross Coffman, Director of the Next Generation Combat Vehicles Cross-Functional Team. 

"Whether that's giving increased firepower to a dismounted patrol, breaching an enemy fighting position, or providing CBRNE reconnaissance, we envision these vehicles providing commanders more time and space for decisions and reducing risk to Soldiers," Coffman said. 

The RCVs are the next generation of combat vehicles that will be offered in three variants: the light version will be transportable by rotary wing, and the two medium variants will be transported in C-130 or C-17 aircraft.

Defense Blog notes that RCVs will have artificial intelligence with 25 mm chain gun swiveling on top with sensors that will be used to track and kill enemy forces. The robot will be able to support fire teams and or keep pace with armored convoys. 

"He's better than Trump," said Marcelo Montemayor, 75, who attended a Bloomberg gathering at a Taco restaurant in San Antonio.

Montemayor told Reuters he voted for Trump but worried the president's ultra-conservative appointees to federal courts could threaten abortion rights.

Former NYC Mayor Mike Bloomberg making his pitch to voters in Texas this weekend. He’s on a bus tour making stops in San Antonio, San Marcos, Austin, Waco, and Dallas. Follow @kellyfphares for more! pic.twitter.com/6Xob4fln6W

— Madeleine Rivera (@MRiveraFoxNews) January 11, 2020

Bloomberg's media blitz has dominated television and radio across Texas and the nation in the last several months.

Mark Jones, a political expert at Houston's Rice University, said Bloomberg had spent at least $15 million on ads in Texas through mid-January.

I am Obsessed with the spectacle of these Bloomberg Texas rallies

pic.twitter.com/k9gTWNcgoB

— wearing cowboy hat at Michael Bloomberg rally (@neoliberal_dad) January 12, 2020

Since Bloomberg officially declared his candidacy on Nov. 24, he has already spent more than $37 million on television ads. 

U.S. Senator Elizabeth Warren, a top Democratic presidential candidate, criticized Bloomberg for his media spending and said he's trying to buy the election.

Among the Democratic candidates, Bloomberg ranks fifth in national public opinion polls, despite his massive ad spending that has dwarfed all other campaigns on both political aisles. 

Heading towards the National Football League championship, Bloomberg is expected to drop millions of dollars on a 60-second television ad to reach hundreds of millions of people.

"You can't get to 330 million people by shaking hands. Television is still the magic medium," Bloomberg said.

"If the Super Bowl wasn't a place to get to an awful lot of people, they wouldn't be charging a lot, or nobody would be paying it. This is capitalism at work," he added.

Bloomberg is worth an estimated $58 billion, ranks 6th richest US person and 14th richest in the world. There’s no telling how much Bloomberg will spend ahead of the 2020 US presidential election.

And the company was direct in why it was making the move: it stated this week that its products “are increasingly purchased through e-commerce”.

The company has had a brick and mortar presence since 1993 and has locations across many shopping centers and malls scattered around the U.S. The stores help showcase the company's headphones, speakers and other hardware. But there are usually similar demo areas in stores like Best Buy, which still sells Bose products. 

The company hasn't said exactly how many people would be laid off, stating: 

“Originally, our retail stores gave people a way to experience, test, and talk to us about multi-component, CD and DVD-based home entertainment systems. At the time, it was a radical idea, but we focused on what our customers needed, and where they needed it — and we’re doing the same thing now.”

Colette Burke, vice president of Global Sales, continued:

"It’s still difficult, because the decision impacts some of our amazing store teams who make us proud every day. They take care of every person who walks through our doors – whether that’s helping with a problem, giving expert advice, or just letting someone take a break and listen to great music. Over the years, they’ve set the standard for customer service. And everyone at Bose is grateful.”

The company says it will keep stores open elsewhere:

 “In other parts of the world, Bose stores will remain open, including approximately 130 stores located in Greater China and the United Arab Emirates; and additional stores in India, Southeast Asia, and South Korea.”

The company also says it is offering outplacement assistance and severance to employees.

Meanwhile, the move may not surprise Zero Hedge readers, as we noted just two days ago that mall vacancies are hitting two-decade highs. 

US retailers announced 9,300 store closings in 2019, according to Coresight, indicating that the retail apocalypse and a massacre of malls are far from over. Mall operators saw a surge of store closures in 2H19 and ahead of Christmas despite a relatively stable consumer that has been leveraging up via the use of credit cards. 

Barbara Denham, a senior economist at Reis, said one notable trend during the 2019 holiday season was the shift in spending habits from brick and mortar stores to online. Denham said recent vacancy statistics paint a disastrous picture for shopping malls as vacancy rates have surged to a record high of 9.7%.

Like the many other similarly foolish western nations, China seeks only one path out of this fiscal death spiral, one that will likely spell doom and/or revolution in many countries soon: More debt.

China is becoming increasingly unable to continue to pay into the base of the world’s largest pyramid scheme of an economy and the cracks in the bubble are showing. This past year, saw three of the 4,279 Chinese lenders almost fail, if not for the massive intervention by the People’s Bank of China (PBoC) of immediate liquidity via more debt. The Chinese economic miracle is built on unsustainable debt-based infrastructure projects over the past two decades that have provided China with a face of prosperity to show the world, but this is only a mask to hide the limited countrywide success of the Chinese miracle into the rural areas. The injection of $Trillions in capital has seen China distribute these sums across the base of its economy creating a GDP that hit a high of 14.2 % in 2007 then averaged nearly 9% for the next decade before dropping yearly to 6.1% in 2018. All this growth had produced a personal affluence to a sub-set of Chinese society that has stoked this appearance of a flourishing economy.

This Chinese economic Keynesian trick of interjection of liquidity into national infrastructure is somewhat similar to the TVA and national works projects funded under Roosevelt’s depression-era New Deal. In this approach employment and therefore a growing tax base accelerated year after year as workers and corporations received the short-lived benefits of this massive windfall of available liquidity.

China’s method of stimulus is of course distinguished from today’s American model that merely shovels the injection of its own manufactured $Trillions by using multiple fiscal tricks to by-pass the citizenry and instead shovel the cash straight into the wallets of the already super-wealthy. Meanwhile, the US peasant once again pines in the “Hope” of yet another election.

Many analysts have for nearly a decade opined that China’s belief in national fixed-asset investment, the biggest engine of China’s economy, has long been the fundamental contributor to Chinese GDP growth, which was directly proportional to an ongoing increase in public and private debt. “China has relied on export and debt-financed fixed asset investment for growth for over two decades,” said Ho-Fung Hung, Professor in political economy at the Johns Hopkins University.

But as the world economy slows while the metrics show a recession looming China’s economy is already cooling rapidly. “And as the central government and banking system keeps producing new loans to absorb the debt, it leads to the continuous debt buildup,” Maximilian Kärnfelt, an analyst with the Berlin-based Mercator Institute for China Studies, told news service DW, adding that infrastructure investment still largely drives China’s economic growth since fixed investment contributed to 45 per cent of China’s GDP in 2016.

In a sign of the disaster to come, the first Bank to almost fail was Baoshang Bank Co. in May 2019. In this instance, for the first time in twenty years, the government took over control and seized the bank. This progression next took form when Chinese regulators took a different approach by ordering three state-owned financial institutions to buy significant stakes in Bank of Jinzhou Co. When, Shandong-based Heng Feng Bank, which had failed to disclose its financial statements for two straight years, required a bail-out, the bank sold new shares for about $14 billion to a group of investors including a unit of China’s public sovereign wealth fund and a local government-backed asset management firm.

Although these were some of the smaller rural banks, as shown this past month in Chinese reports, their economy is following the world in a quantified slowdown that has seen GDP slip yearly since 2012. Making the matter worse a similar world slow-down in purchasing is already affecting China’s manufacturing-based economy. The three bank failures were only the tip of a huge iceberg.

China’s $40 Trillion banking system dwarfs the American system at double the size, with over 4,000 small, medium and massive, state-owned banks. The world’s four largest banks, including behemoth ICBC ($4TN), are all Chinese.

The failure of just three banks was important enough that Chinese regulators submitted Chinese banks to a stress test and the results were shocking. China’s central bank admitted that China’s banking sector is “showing signs of strain.” The stress tests had revealed that over 13% of China’s 4,379 lenders were designated “high risk” by the central bank’s report. With this amounting to over 570 banks, and thus multiplied by the three existing examples of bank bail-out funding, with the Chinese economy following the world into recession, the financial numbers and likelihood of any future series of bail-outs are truly biblical. If not, fiscally impossible.

Separately, the PBOC also stress-tested 30 medium- and large-sized banks in the first half of 2019. In the base-case scenario, assuming GDP growth dropped to 5.3% – or well above where China’s real GDP is now – nine out of 30 major banks failed and saw their capital adequacy ratio drop to 13.47% from 14.43%. In the worst-case scenario, assuming GDP growth of 4.15%, or just 2% below the latest official Chinese GDP report, seventeen out of the thirty of these major banks failed the test. Separately, a liquidity stress test at 1,171 banks, representing nearly three-quarters of China’s banking sector by total assets, showed that ninety failed in the base-case and 159 in the worst-case scenario. The metrics of any collective bail-out indicates that China has upwards of an insurmountable $20 trillion problem rapidly approaching.

In reaction to these first three bank failures, the stress tests and poorer economic news China did what centrally planned economies do: Chinese policymakers focused on strengthening oversight and regulation by the PBoC and gave it authority to write new rules for much of the financial sector. The China Banking Regulatory Commission and the China Insurance Regulatory Commission will now be merged as part of an overhaul aimed at resolving existing problems such as unclear responsibilities and cross-regulation as well as closing regulatory loopholes and curbing risk in the $40-43 trillion (€34.78 trillion) banking and insurance industries.

With the metrics of China’s banking system already cause for considerable concern to the tune of $20 Trillion, this huge obligation is as much a mirage as the economy since it fails to add to the account the very large and un-tabulated Shadow Banking loans which would add $Trillions in debt to China’s already highly leveraged systemic banking risk. The International Monetary Fund (IMF), which provides- despite its predatory legacy- some excellent yearly analysis of worldwide economic developments has warned China’s problems could lead to “financial distress” in the world’s second-biggest economy. China is seen as one of the economies most vulnerable to a banking crisis, although Beijing has repeatedly assured that the risks are under control. In response to the PBoC reports, Chinese Finance Minister Xiao Jie echoed that the situation “was under control.”

As the world economic body politic runs out of any remaining gas to keep a pilot light under the rapidly cooling metrics that show their long forestalled recession is near and certain, China is also contracting.

The national debt of China, which is the total amount of money owed by the Chinese government and all organizations and branches stands at nearly CNY 38 Trillion ( $5.4 TN) and 54.44% of GDP.

Chinese debt has been accumulating ever more rapidly. The Institute for International Finance (IIF) reported that year-on-year, in Q1 of 2019 China’s corporate, household and government debt increased 6% more from 297% of GDP to an incredible 303%. However, this is also more than a 100% increase since 2008 and amounts to 15% of all global debt.

These figures do not include the off-the-books “Shadow Banking loans that some estimates predict would triple that debt percentage to much closer to $16 Trillion. The problems are most serious in China’s rural banking sector where an ever nervous public has reacted with two late-2019 bank runs at China’s Henan Yichuan Rural Commercial Bank and then at Yingkou Coastal Bank.

At the end of 2018, the budget deficit of the Chinese government was close to five per cent. However, if the off-balance-sheet (“shadow”) financing of local governments is taken into consideration, the budget deficit rises to over 11 per cent. However, at the end of 2014, the official government deficit stood at less than one per cent, but an accounting which includes local “shadow” funding was around five per cent.

China’s shadow banking system is so-called since this myriad of endemic lending trickery is believed to be massive in total and kept off the books. These risky, undisclosed loans entered China’s financial system in 2009 throwing open the doors to debt for a Chinese population hungry for investment in order to pay for all those Chinese and internationally made western goods.

The main kind of shadow deposit is generally offered as a wealth management product (WMPs). Chinese banks offer these via aggressive marketing of high-interest-rate accounts as their alternative to savings accounts which are regulated to a maximum return of 3 %. Since these sanctioned shadow loans advertise a return of as much as 8% or more, normal banking customers have been throwing their miraculously large paychecks into these funds by the billions.

One reason WMPs offer higher rates is that they are based on much riskier bank loans, much like the precursor to the late ’80s, early ’90’s American savings and loan meltdown. Incredibly, banks don’t hold these loans on their balance sheets or set aside capital against their potential defaults. Instead, they typically extend this debt via intermediaries called trust companies—firms that are not allowed to accept deposits or formally loan out money but are allowed to manage it. The trust companies create investment products like WMPs, which banks market for them in return for a commission.

With some smaller Chinese banks having already found themselves either getting bailed out or the subject of a bank run, one reason is that, like America, China’s interbank/repo rates have surged amid growing counterparty concerns of the many banks seeking depleting available liquidity. This has forced many banks to rely almost entirely on new deposits to fund themselves, forcing them to hike their deposit rates to keep their funding levels stable. Like any Ponzi trick in banking, new cash is required to sustain these thousands of lending pyramids. With the economy in decline, this need has lead to some desperate regional banks offering incentives for depositor’s cash that would make the long-ago American “free toaster” seem ordinary.

China has a massive pork famine that has seen disease wipe out 40% per cent of its pig population in 2019. With China being the world leader in pork consumption these bank’s desperations have created some interesting incentives to attract depositors. The SCMP reports that new clients who deposited 10,000 yuan (US$1,430) or more in a three-month time deposit at the Linhai Rural Commercial Bank in Duqiao in Zhejiang province were then eligible to enter a lottery to win a portion of pork ranging from 500 grams (18 ounces) to several kilograms. Other rural commercial banks in northern China’s Hebei province and western China’s Guizhou province have also launched similar pork rewards programs. Dushan Rural Commercial Bank, located in the remote mountainous county in Guizhou, offered a coupon for 10 yuan (US$1.4) worth of pork for every 10,000 yuan of new deposits.

This solution has been touted as uniquely beneficial to these banks since, instead of offering higher rates which only accelerate the bank’s insolvency due to requiring higher payouts on deposits, the bank is instead making a one-time payment, and the unusual incentive is enough to garner substantial new deposits.

PBoC cuts in its key lending rates in August ’19 designed to stimulate a slowing economy have only exacerbated net interest margin pressures on these banks. With less income from returns on their loans and without the many funding options available to China’s much larger banks, these increasingly high-interest rates that China’s smaller banks have to offer in order to attract new cash deposits could further lead to their insolvency.

It’s been over four years since the last official Chinese benchmark rate cut. With America leading the way across the globe with rate cuts aplenty and China still having a base rate of far higher than the US rate of < 1.5%, it was only a matter of time for China to also drop rates.

With the new authority given to the PBoC, this key Loan Prime Rate (LPR) has become the new Benchmark Reference Rate to be used by banks for lending. This, like most recent decisions are designed to interject further liquidity in the form of debt once again into a still failing economy by lowering borrowing costs for small businesses. This rate will be now set monthly (20th of every month) and will be linked to the Medium-term Lending Facility rate. The current 1 year LPR stands at 4.15% after its latest cut on Nov 30 versus the Benchmark Rate of 4.35%. This number is sure to continue to shrink and can be considered a key indicator of Chinese frustration at retaining needed annual GDP growth since the result of this one move lowered the costs of the roughly 152 trillion yuan ($21.7 trillion) in yuan-denominated outstanding loans held by financial institutions (that are actually on the books) in a further hopeful attempt to again boost economic growth.

Just mere days after the 20 bps cut the PBoC further highlighted its desperate need for capital, announcing that it will be lowering the required reserve ratio (RRR) – or the amount of money banks are required to have on hand – by 50bps for commercial lenders. Currently, the required reserve ratio is 13% for large banks and 11% for small banks. The cut, which is the first since September, will bring the blended reserve ratio for Chinese banks to the lowest level since October 2007. In doing so PBoC effectively released about 800 billion yuan ($115 billion) in instant liquidity from out of the already cash-strapped financial system.

All these adjustments by China and the PBoC do little to control or pay-off increasing debt and are designed to maintain the Chinese miracle of TVA style infrastructural improvements that has been the employment engine of its economic growth. China’s new development of the Belt and Road Initiative (BRI), although a masterstroke in Eurasian commerce, also serves to continue the illusion.

As traditional monetary policy becomes ineffective to boost the economy, Chinese President Xi has installed twelve former executives at the state-run financial institutions across the country who will support the communist government’s ability to combat banking and debt difficulties, reported Taipei Times.

These appointments are in response to growth collapsing to a three-decade low in 2019. New manufacturing orders did increase but this was in large- and medium-sized enterprises. Small enterprises continued deeper into contraction and new non-manufacturing orders slowed, pushing employment further into quantified contraction.

An easier to understand recessionary metric, passenger car vehicle sales, fell yet again in December, plunging 3.6% to 2.17 million units, according to the China Passenger Car Association. This marks the 18th drop in the past 19 months for the country. Sales fell 7.5% in 2019 and 6% in 2018. GM said that its sales were down 15% in China and said that pressure into 2020 would likely continue.

Meanwhile, local Chinese manufacturers’ numbers are also down. BYD Co. posted an 11% drop in 2019 sales and SAIC Motor reported a “similar decline”.

Worse, exports to the United States were down 23% from the prior year.

But, it seems that China has no choice but to carry on with the façade of financed infrastructure projects as the only path to survival. Said Victor Shih, an associate professor of political economy at the University of California in San Diego;

“Because it [infrastructure investment] already is a large contributor to growth, the slowing investment will substantially reduce growth rates. This is not what the leadership wants.”

Shih’s assertion seemed confirmed when last year, President Xi said Chinese banks would lend 380 billion yuan ($55.09 billion) to support Belt and Road cooperation, and Beijing would also inject 100 billion yuan into a Silk Road Fund. Some observers view the project as an instrument designed to help the Chinese economy, with state-owned companies in specific sectors expected to profit massively from its implementation.

But they still need funding and Chinese banks on their own volition may be reluctant to get involved when already having troubles of their own. Andrew Collier, managing director at Orient Capital Research, says

“The banks [may] remain leery of these projects because they doubt they will be profitable and they will be stuck with bad loan. In the end, we are going to see increasing defaults among smaller institutions, the collapse of private loans via wealth management products, and growing layoffs in areas of the country with less political power.”

Making matter worse, a study conducted by the Center for Global Development estimates that the initiative could increase debt sustainability-related banking problems in eight countries also involved in the BRI.

“I still think that if growth falls below a certain level, the top leadership will order a stimulus, which involves acceleration in debt growth,” said Victor Shih. “That is the only viable tool in China’s arsenal if the economy slows too much.”

As noted in a recent article by University of Helsinki economics professor Tuomas Malinen, China has stimulated its economy aggressively in Q1 and Q3 2019 but interestingly has not continued its past emphasis on infrastructure investments as in 2015/2016. Q3 of 2019 saw record-breaking stimulus programs, however, China concentrated instead on providing loose credit to enterprises through both conventional and “shadow” banks.

As Malinen forewarns:

“What is notable is that even with this record stimulus, China has kept its economy growing barely above the ‘official rate’. This tells us that the Chinese economy has reached or is very close to reaching the point of debt saturation, where households and corporations simply cannot absorb any more debt, and any new debt-issuance fails to stimulate the economy.”

Though a massive infrastructure-spending program could revive growth, the ability of China to issue fiscal stimulus is starting to be seriously limited. This effectively means that China is fiscally unable to underwrite massive infrastructure projects and so any new world-economy-saving stimulus from China, as in 2015/2016, will be practically impossible. New infrastructure initiatives- if recessionary metrics continue to deteriorate- could only be realized if those costs are directly monetized by the PBoC. This would be the weapon of last resort for China but , when considering a declining economy, may soon be inevitable.

China is just one more working example of the failure of the many globalist economies worldwide that are already similarly suffering in the grip of massive unsustainable- if not orchestrated- debt. Which country becomes the first to trigger the almost certainly pending domino effect of global economic collapse, is merely a rhetorical question at this point. As goes China…?

This week in an interview, former Reagan OMB director David Stockman highlighted the global economic link to China, saying,

“The world economy would be not nearly as good as it looks had the Chinese not been borrowing like there’s no tomorrow and building regardless of whether its efficient or profitable.”

Stockman added, in summation,

“The whole global economy is really dependent on China piling even more debt onto the $40 trillion pile they already have.”

China economically continues to play the financial role of Kenneth Lay to its American mentor’s Bernie Madoff. But in the last few months China has shown, like so many other so-called first world economies, that it too is now all-in at the casino and using only borrowed money in a desperate effort to stay at the table…or starve.

Worldwide, many countries already burn in political turmoil of their own debt-ridden making as their own primal forces of nature squeeze their populations with the resultant new mantra of ever increasing austerity while the IMF and World Bank waits in the wings, salivating to gobble-up the carcass.

Alas, when it comes to unsustainable national endemic debt one primal truth is now being heard clearly in China, as in other Central bank boardrooms across the globe, and the empty dinner plates of their public…

When the time comes to pay the piper, that debt will be paid, no matter…but the Piper will take, in lieu of payment, pork, flesh, blood, or… dreams!

"The safety certification of the complete SIG SAUER MG 338 system and delivery of the system to USSOCOM is historically very significant. For the first time in decades the U.S. Military certified a new machine gun, ammunition, and suppressor at the same time, bringing new innovation, portability, and increased lethality to our ground forces, with all components coming from one company," said Sig Sauer CEO Ron Cohen.

Cohen added that "this certification was achieved following the outstanding performance of the complete MG 338 system through the rigors of the extensive function, durability, and safety tests set forth by USSOCOM."

The release notes the new machine gun "bridges the gap" between the current M240 (7.62x51cal) machine gun and the M2 (.50cal). The new weapon is "noticeably lighter, weighing only 20 pounds, and provides significantly more range and lethality." 

The MG 338 is a belt-fed, lightweight medium machine gun weighing about 20 pounds, chambered a 338 Norma Mag. The weapon has a greater range and can breach advanced body armor from extended distances. The weapon can be easily convertible to 7.62x51cal. 

"We are incredibly proud of this historical accomplishment and honored to have received this safety certification by USSOCOM for the performance of the complete MG 338 system," concluded Cohen.

Textron Systems' AAI Corporation delivered their next-generation machine gun to the Army last year that chambers a telescoped round between 6.5mm and 6.8mm and is expected to be the future replacement for the M16 rifle, M4 carbine, and M249 light machine gun.

The Pentagon, flush with new cash from President Trump's $2 trillion military spending spree, is expected to outfit soldiers with modern weapons in the next 2-4 years. Sig Sauer's MG 338 Machine Gun and AAI's next-generation machine gun could be some of the replacement weapons expected to enter service in the near term. With new weapons comes high-tech ammo, the new rounds are expected to penetrate the most advanced body armor Russia and China have to offer.