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People who study the origins of civil wars see "indicators" the US is on the brink of conflict, Yale historian says

Yale history professor Timothy Snyder cited the high degree of polarization, beliefs in alternative realities, and the celebration of violence. An explosion caused by a police munition is seen while supporters of U.S. President Donald Trump gather in front of the U.S. Capitol Building in Washington, U.S., January 6, 2021.Photo by Leah Millis/Reuters Yale history professor Timothy Snyder spoke with Insider about the future of American democracy. Snyder said factors like polarization and alternative realities indicate the US is close to conflict. But Snyder said he thinks it's even more likely that the US could cease to exist. Though the idea of another civil war in the near future seems far-fetched to many Americans, people who study such conflicts might disagree, according to Timothy Snyder, a history professor at Yale University.Snyder, an expert on the rise of authoritarianism, discussed the future of American democracy in an interview with Insider during which he said he fears the US might not survive if former President Donald Trump runs again in 2024.Insider asked Snyder how he feels about people invoking the Civil War when discussing the current state of affairs."First of all, I just want to say that, for the people who actually study the origins of civil wars, not just in the US, but as a class of events, America doesn't look good right now," Snyder said.He cited the high degree of polarization, beliefs in alternative realities, and the celebration of violence, pointing to some who praised the actions of Kyle Rittenhouse, the teen who killed two people at a racial justice protest in Wisconsin in 2020. (A jury acquitted Rittenhouse, who said he acted in self-defense.)"Those social scientists who actually work on this topic — neutrally — see indicators in the United States, which suggests that we are on the brink of some kind of conflict," Snyder said.Snyder said it is "very possible" that the US could install a president in 2025 who technically loses the election by a clear margin. He said with "a few gimmicks" a candidate that loses the popular vote and loses the electoral college could become president."A few states just have to withhold their electoral votes; the House of Representatives then votes, according to state delegations; the Supreme Court then blesses the whole configuration; and then all of a sudden you have an installed president of the United States," Snyder explained.In that scenario, it's possible the US ends up with a civil war. But Snyder said he thinks that scenario would more likely lead to the dissolution of the US."It's a kind of conflict that ends with governors seeking some kind of safe haven for their states. It's a kind of conflict that ends with Americans moving from one part of the country to another to be with people with whom they feel safer," he said."It's the kind of conflict that ends with some kind of basic political reconstruction, where the US as we know it doesn't have to exist."Read Insider's full interview with Snyder here.Read the original article on Business Insider.....»»

Category: dealsSource: nytJan 15th, 2022

Yale history professor Timothy Snyder told Insider he fears American democracy may not survive another Trump campaign

Author and historian Timothy Snyder thinks the 2024 campaign could end with the loser claiming power — and that could break up the United States. Timothy Snyder, Professor of History at Yale University specializing in the history of Central and Eastern Europe and the Holocaust, speaks at Oslo Freedom Forum 2019 on May 27, 2019 in Oslo, Norway.Julia Reinhart/Getty Images Timothy Snyder is a history professor at Yale University and an expert on the rise of authoritarianism. Snyder is the author of "The Road to Unfreedom: Russia, Europe, America," among other books. He spoke to Insider about what he sees as grave threats to democracy in the United States. Timothy Snyder does not want to be a downer, he says, but he is not feeling too optimistic about America these days. A history professor at Yale University, and the author of a series of books on authoritarianism and the road to tyranny, he looks at the United States these days and wonders if the country as we know it will still exist in a few years.In a recent article — marking one year since a former president, who lost an election, sought to thwart the peaceful transfer of power — Snyder painted a grim scenario where something like the January 6 insurrection had succeeded. How would the country, and the rest of the world, react to the installation of a leader who clearly did not win?In an interview with Insider, Snyder discussed Donald Trump, democracy, and what he fears could happen come 2024.It's been a year now since the January 6th insurrection. What do you think the state of American democracy is? Are we on firmer ground now, a year out?Well, I mean, obviously things could be worse. The January 6th insurrection a year ago could have succeeded. We could be living in a country that is wracked by civil and indeed violent conflict after Donald Trump succeeds in, at least temporarily, staying in power, thanks to some kind of conspiracy of his supporters, the Department of Justice, supporters in Congress and so on, right? So things could be worse. And I wouldn't wanna deny that.Unfortunately, that scenario is not one that is just in the rearview mirror. It's also one that is right in front of us. The problem with a failed coup, which is what January 6th, 2021, is, is that it is practice for a successful coup. So what we're looking at now is a kind of slow-motion practice for a repetition of all of that, but this time with the legal parts of it more fully prepared. What I'm afraid of is that now, in the shadow of a big lie — namely, that Trump actually won — the states are preparing the legal steps that will enable Trump to be installed as president the next time around. And that in turn will lead to a terrible sort of conflict, the kind that we haven't seen before. Some people look at January 6th and they see that — as bad as it was — it did not succeed, obviously. And, in fact, the leading players were kind of bumbling, right? I think that some have dismissed January 6th as a foolish stunt that got out of hand, but that never stood a chance of succeeding. I guess maybe you could both agree with that, but also think that's something that could be a lesson for them going forward.Let me try a comparison. If you think that democracy just succeeded on January 6th, sort of on its own strength, then you're missing the backdrop. In the course of the year 2020 there were a lot of important individuals and institutions, ranging from civil society to business, who were aware that there was some possibility that Trump would go for it, even if he lost, and were making preparations for that all year long. Without those preparations, it's very likely that Trump would have succeeded, or at least he would've come close enough to succeeding that we would be in terrible, bloody chaos for a very long time. It's like you're imagining an athlete winning a gold medal in the Olympics and thinking, 'Okay, that guy never actually practiced. He just showed up that day, in Tokyo, and won the medal'. The reason why democracy succeeded in 2021 is that a lot of people put in a lot of hard work ahead of time. And if it's going to keep succeeding, a lot of people are going to have to keep doing a lot of hard work. That attitude, that things just kind of happened because they happened — if we have that attitude, we're not going to put in the work and we're going to have this problem a second time around. The second thing to say about that is that, sure, sometimes coups fail, and when they fail the people who carry them out look foolish. But we're kind of in a strange spot in the US. Normally when you try a coup and you fail, you face some kind of consequence, right? In an authoritarian regime, your political life is terminated in some unpleasant way. In a democratic regime with a rule of law, you face legal consequences. We in the US are in this weird middle state, where you can try to carry out a coup, and pretty obviously break the law in all kinds of ways, and nevertheless, you can kind of just hang out and remain in politics. We're in a very awkward place, a strange place, where this sort of thing can repeat itself,Are you encouraged at all by the work of the January 6 committee and also the charges that the Department of Justice unveiled, where they've actually started charging people with seditious conspiracy?I hate to always be negative, and I won't be, but let me just start with a proviso. It's really too bad that, thanks to the archaic institution known as the filibuster, we don't have a bipartisan January 6th committee. We did have majorities in both the house and the Senate for something like that, but nevertheless, it doesn't exist. And that's a shame because democracy depends upon reflection and self-correction, and the January 6th committee is about reflection and self-correction, and so it's too bad that it couldn't have been done in the broadest way possible.That said, the work that it's doing is incredibly important. Democracy depends upon facts. Democracy depends upon knowing what's going on, operating in the shadow of a big lie, as a lot of us are doing — and even those of us who don't believe in the lie have to deal with it all the time — is incompatible with democracy. Myths and personality cults, and massive doses of self-deception, are incompatible with democracy. Figuring out just what happened, step by step, is compatible because it gives us that chance to reflect and to improve and to move on. So the work that the January 6th committee is doing is absolutely indispensable.I was going to ask you about the Democrats' response in January 6th, but actually your response there makes me want ask you about the Republicans' response. Because does the Democrats' response even matter if one of the major political parties is completely behind what you call 'the big lie'? There was a brief moment, after January 6th, where it seemed like the leading members of the Republican Party were going to break from Donald Trump and his claims. But it definitely seems like that's a way to get yourself kicked out of the party these days.To answer your literal question, it does of course matter what the Democrats do. It matters whether they try to figure out the truth. It matters whether they dig in and do the hard work of having to challenge their colleagues in the Senate, in the House, which of course is not that pleasant for the Democrats. That all matters very much because, without a legal and historical sense of the events of January 6th, we're not going to be able to keep going as a democracy. All of that baggage, from the Civil War forward that we don't clean up, just stands in the way of a democratic future. So it does matter what the Democrats are doing.The Republicans are facing a different kind of problem than the Democrats. Their problem is that, if they don't stand up to the big lie, and to the big liar himself, then they are doomed to become an authoritarian party. The logic of the big lie is such that, since you're claiming that the other side cheated you are then going to cheat yourself. You're basically promising your supporters that you're going to cheat. You're telling your supporters that a vote for us is not really a vote to try to win an election, a vote for us is just to kind of get us vaguely close enough that we can then fix the election, thanks to voter suppression and voter subversion and all the things that we're preparing now. So the Republicans face this very different ethical situation, which is that the longer they operate within the shadow of the big lie, the more they're gonna be remembered by posterity as a party that became authoritarian and possibly broke the system.I think, by the way, that a good number of them realized that. I think, by the way, that a good number of them are trying to find some way to get out from under this. And I hope that I hope that more of them find the courage to try to do so.Do you agree with the assessment that this is the worst crisis for democracy since the Civil War?I think we're in the same territory as the Great Depression and the Civil War. And those were moments when the United States was very lucky with its leaders. I mean, it's no coincidence that we tend to remember Lincoln and Roosevelt as the presidents that stand out. I would add the Great Depression to that because I think the Great Depression was also a moment when it could have all gone south. But yes, we're on historically dangerous territory.Obviously, when people refer to the Civil War, I mean, one response to that can be that that's, you know, hysterical, right? We don't appear to be on the verge of a violent conflict between two heavily armed sides. So how do you see that playing out? Where could this lead?First of all, I just want to say that, for the people who actually study the origins of civil wars, not just in the US, but as a class of events, America doesn't look good right now, with its high degree of polarization, with its alternative reality, with the celebration of violence — the example of Kyle Rittenhouse. Those social scientists who actually work on this topic — neutrally — see indicators in the United States, which suggests that we are on the brink of some kind of conflict.You're asking me about my scenario? My scenario is not very complicated. My scenario is that if, as is very possible, we install a president in January 2025 who has lost by a clear margin — let's say 10 million popular votes, and let's say 89 electoral votes — it's not very difficult in that situation for the loser to become the winner, thanks to just a few gimmicks. A few states just have to withhold their electoral votes; the House of Representatives then votes, according to state delegations; the Supreme Court then blesses the whole configuration; and then all of a sudden you have an installed president of the United States.I think by 2025 it's going be very hard for a lot of Americans to accept something so blatantly undemocratic, the more so since people will have known that this kind of plot was in the works for several years. So my scenario is at that point you would then have uncertainty as to who the President of the United States actually was — uncertainty among the population and also uncertainty within the institutions of government, both bureaucracy, the civil administration, but also unfortunately the armed parts of the government: the armed forces, the national guard.So that's the scenario. It's not very complicated. And unfortunately, it's the kind of thing that one has seen in other countries. And it's not really all that implausible.Speaking of other countries, what parallels can you draw, with the caveat that we know history doesn't repeat, exactly? What do you see as analogous to the situation that the United States finds itself in today?There are all kinds of comparisons. History doesn't repeat, but it does instruct. And it also instructs the people who are trying to undermine the rule of law. An easy, contemporary example is Hungary. Hungary is a place where, legalistic step by legalistic step, the spirit and reality of democracy and the rule of law were removed, such that Hungary, although it still has elections, is a country, which you can't really characterize as a functioning democracy. That is the road that we are on. And that is a model, not a historical one, but a contemporary one for a lot of Republicans right now.  Hungary's going to be more and more present — in fact, it's already been present, for example, on Tucker Carlson — as a kind of positive ideal for rule: an authoritarian regime, on the basis of a minority and kind of ritual elections.Going back a few years: Russia. Russia pioneered what's called the 'administrative resource.' That is, you have elections, but the elections are arranged in such a way that you know who's going to win. And you can't really point to exactly where things went wrong because they went wrong at a whole bunch of different levels at the same time. But nevertheless, your guy always wins. We're moving in that direction. We're moving towards the administrative resource.A more distant historical parallel: the failed democracies of the 1920s and 1930s. A similarity there is that, thanks to obstreperousness and complicated parliamentary rules, laws weren't passed and people all over Central and Eastern Europe began to think that parliament, or what we call Congress, is just not very important. It would be better to have a strong leader. Someone who at least reflects our mood. Someone who can get things done. As it becomes difficult for our Congress to pass laws, and as Republicans deliberately, of course, make it difficult for our Congress to pass laws, that kind of sentiment is also building in the US.Where do you trace the beginnings of guess what you would call the Republicans' weakening commitment to democracy? Is it the rise of Donald Trump and his personality call and his unique characteristics? Is he a product of a conservative movement that had been, for years, kind of slowly moving away from the idea of democracy as a value?You have to go way back in US history. There's always been a party which wanted to suppress the votes of all of Black people and call that democracy. For a long time, that was the Democratic Party. They switched, after civil rights in the sixties, and it became the Republican party. But this is kind of the original sin of American democracy — that we've always had a political party which wants to suppress votes and game the system.I think there are three recent developments, though. One is the surgical precision by which we now carry out gerrymandering, which means that the Republican Party, in particular, is playing only to the loudest voices in its own choir and is ever less representative of the general public. The second change is social media, within which I would include also foreign interventions in our social media. Social media is a bit like a gerrymandering of the brain. It allows voters to collect themselves into clusters and not have contact with anyone else. And that radicalizes things.And then the third is, I mean, give credit where credit is due: the personality cult of Donald Trump. The Republicans have not had a figure like this before, who is willing to call them out on their own hypocrisies, basically to expose them nakedly for the worst things that they do, as opposed to the values that some of them still would like to express in politics. They've never had a kind of cult of personality like this, where everything was out in the open. That creates a new kind of popularity. I think it'll be hard for Republicans to rally around, at this point, someone else to carry out a second coup, partly because I think no one has both the combination of a sheer indifference to ethics and the popularity that Mr. Trump has at this moment.It sounds like you're saying if in 2024 the Republican nominee were Ron DeSantis or Tucker Carlson, who seem to have the same political values — Tucker Carlson, as you mentioned, openly admires [Hungary's] Viktor Orbán — that the threat to democracy would be greatly diminished, which seems to reduce the threat to the person of Donald Trump.I wouldn't want to say it's a good situation to have a whole cast of characters who want to come to power under the cover of a big lie, using non-democratic means. That's still not a good situation that we have a DeSantis or a Carlson or a Josh Hawley or possibly a Ted Cruz — that we have a whole list of people who'd be willing to come to power that way. That's not a good situation. But, at the moment, it's Mr. Trump who captures the imagination of a lot of the American electorate. To carry out a coup of this kind, you've gotta get close enough to make it plausible. And you have to have somebody who's absolutely ruthless. And I think he remains, therefore, the best of the worst, or the worst of the worst, depending upon how you want to look at it.I want to ask you about President Biden. Obviously, he's given a couple of speeches recently that have explicitly labeled not just Donald Trump but the Republican Party as a threat to democracy. How do you grade his response to January 6th?It's a tough time right now for Mr. Biden in public opinion. I think he has been put in a very difficult situation — in a way, an historically unprecedented situation. With the exception, we just don't have presidents coming to power at a time when the existence of the republic has been challenged. And unlike Lincoln, Biden, can't begin from the position of some kind of clear victory. That is to say, the people who oppose American democracy are still out there in the field. Mr. Trump is in Florida doing his thing, every day. And there's no clear way to remove them from the picture.So he has to be president, and he has to do the normal things that a president does, which is try to get laws passed. And he has to, simultaneously, embody the values of our democratic Republic. It's a tough combination. Because he'd like to be able, I think, to stand above all of this. And then, after a year, it's become clear that he just can't. I think all of these attitudes have been correct. I just think it's unfortunate — going back to the comparison to FDR, unlike FDR he doesn't have big majorities in his first term. If he had big majorities, a lot of the stuff that we're talking about would be moot. We would have a bipartisan investigation. A lot more laws would've been passed.And above all, we'd already have electoral reform, which is the single most important thing: making it easier for Americans to vote would be good, not only for the whole system, it would also be good for the Republicans because it would force the Republican closer into the role of being a party which has to seek votes, has to care about public opinion, has to represent people, rather than the worst parts of a system. If Biden had a bigger majority, then all that stuff would've already happened. I think he's come to power at a really uninviting time. His first year has been, let's say a lot better than we think — it's been a lot better than the atmospherics would suggest.President Biden's approval rating, some polls suggest, is in the 30s and Democrats look like they're on the verge of losing their majority in the House and their 50-50 control of the Senate. Polls also suggest that a large majority of the public is concerned about the state of democracy. They do not particularly like Donald Trump. Yet they seem ready to return the Republican Party — a party that's committed to Donald Trump and his lies about the 2020 election — to power. How do you reconcile all that?I think there are several things going on there. One, just lots of people, regardless of party commitment, don't see the kind of legalistic threat building up to a second coup attempt or an installation of a president. In early 2020, and this is perfectly understandable, people don't necessarily see that the combination of voter suppression and vote subversion and a candidate who's going to break all the rules in a few years that this — that this combined with Republican victory in both the House and the Senate makes the end of democracy in the US, unfortunately, conceivable. People don't see that because it's a complicated institutional story and people would prefer to vote in 2022 on the stuff they're thinking about in 2022. That's understandable, but it's really unfortunate.The second thing, which is going on here, is that there's a kind of irony in our system, which is that Democrats tend to trust the very institutions that Republicans are corrupting. Republicans are the ones who, if you poll them, are more likely to say somebody's gonna fix the election. Democrats just aren't worried enough about this because they tend to believe the institutions are going to work, that everybody will come together, etcetera. And so I think it's hard in particular for Democrats to think, okay, it's 2022, we have to vote like hell because otherwise we're going to have Trumpland — in a worse version — two years down the line.And then the third thing that's going on is just people are sick of COVID. People are sick of living unusual lives. People are sick of all these restrictions on them, understandably. And people are going to vote their mood. That's just the way democracy is.The things that we're talking about, we should talk about and try to get them across, but there's also just this basic matter that people are unsatisfied with COVID. And Republicans know this and they're trying to keep COVID going as long as possible because they think it favors them. And they're probably right. People want to go back to normal life and until they go back to normal life, it's hard to have a normal election where the kinds of things we're talking about will get to the surface.Let's revisit this scenario where Trump and the Republican Party have claimed victory and have had some legal cloaking of this claim that has installed the loser of the election in power. You talked about competing allegiances among, perhaps, different branches of the military. It would be a very unclear situation of who, legally, different institutions in the United States should be pledging allegiance to. How do you see that playing out a year later? If Trump is in there as a minority, loser-president, seen as illegitimate by 55% of the American public, what's that look like for him and for the rest of the country?I mean, look, god forbid, I don't want all this to happen. And I think there's time to prevent it from happening. But I don't think the scenario that you're talking about is the one that we have to worry about. I think the scenario we have to worry about is that there isn't a US at that point. The kind of conflict that begins January 20, 2025, isn't the kind of conflict that ends with one president being just unpopular, or even seen as illegitimate. It's a kind of conflict that ends with governors seeking some kind of safe haven for their states. It's a kind of conflict that ends with Americans moving from one part of the country to another to be with people with whom they feel safer. It's the kind of conflict that ends with some kind of basic political reconstruction, where the US as we know it doesn't have to exist.That's the thing I think that people have the hardest time getting through their minds. Like the US, as we know it, doesn't have to exist. It's built upon these constitutional foundations, which are very flawed and which are now being intensely abused. If those constitutional foundations lead to something which is broadly unacceptable, we're going to be in unknown territory, which can go to unknown places. But it's very often the thing that you take for granted the most, like the existence of your own country, which is the thing that you should be paying the most attention to.That's a lesson which the Soviets learned in 1991, right? It's 30 years since the Soviet Union came to an end. We can look back at that and say, 'aha, it came to an end because it was a flawed communist system.' And sure, that's true. But we didn't expect it to come to an end, and they didn't expect it to come to an end. The fundamental lesson there is that big, powerful systems that you don't think can come to an end can come to an end if you don't get a hold of the internal problems — what they used to call the internal contradictions. We have some internal contradictions. We say we're a democracy, but we're becoming ever less so in practice. And if we don't get a hold of that, the system as we know it may not continue at all.That's what I'm worried about, sincerely. And I like to think — maybe I'm naive — that if folks on both sides of the aisle, Republicans, Democrats, and others, could imagine themselves into a 2025 where the existence of the country is actually in doubt, if we could think ourselves forward to that, and then think back to where we are now, it might moderate things that we're doing.My basic feeling is that the Republicans are right to think they can game their way to power. But by the time they game their way to power, it's not clear that there will be anything to have power over. And I don't think they've thought their way through to the end of that. And I think they need to, and everyone needs to, so that we can, you know, so that we can operate in such a way where at least our republic is still around a few years from now,To clarify that: you're thinking less that scenario where it's a shooting war between the army and the navy or competing factions in the military, and more like what we've kind of seen with blue states and climate change, for example, under Trump, where they kind of announce we have our own foreign policy, and we're actually going to band together and pursue our own policies. Speak directly to us, not Washington, DC. That's not America.I think some combination of that is what we're talking about. The more you get into details, the more you're going to be wrong, because the details won't be exactly what we think. In that scenario, I think Trump is president of something, but I'm not sure he governs from Washington, DC, and I'm not sure the thing that he runs is called the United States of America.In that scenario, he and the Supreme Court get to get to run something, but I'm not sure it's most of the country at that point. The military, you know, is subordinate to civilian command, which is a proud tradition that we have, but it's not clear who the civilian commander actually is, that's a real problem. And if there are conflicting orders coming down, or if different commanders within our armed forces are giving conflicting orders, then you have a situation where either you're going to have a literal civil war or people are going say, 'Hey, the way to prevent violent conflict is to have some kind of peaceful separation along some kind of lines.' That will suggest itself. The model that I have in mind now is Yugoslavia.It all seems wild and science-fictiony at this point, but if you reason your way through to 2025 with an installed president, and you don't see some scenario like this, you must be thinking, 'Okay, Trump can get installed and nobody will care.' And I just don't think that's plausible. I just don't think the combination of Trump himself — who's wildly unpopular along among a lot of people and who has already effectively announced that his policies next time around will be still more radical — and installation will be accepted by Americans and American institutions. That's a step that I can't make mentally. I don't see how installing Trump won't lead to a major challenge to the existence of the republic.Read the original article on Business Insider.....»»

Category: personnelSource: nytJan 14th, 2022

Modern American Policy: Stupid Or Sinister?

Modern American Policy: Stupid Or Sinister? Authored by Matthew Piepenburg via GoldSwitzerland.com, American policy has been acting in ways which suggest either a desperate ignorance or a sinister restructuring of the national narrative. Surveying the Senseless The USA is now staring down the barrel of four-decade high inflation, an inverted yield curve and the highest debt levels in its history as Wall Street recently enjoyed the strongest relief rally since 2020 on the bad news of yet another Fed rate hike (75bp) into a percolating liquidity crisis. Huh? In a Fed-led dystopia marked by years of printed rather than earned liquidity, bad news is now good news to markets who nervously seek pretexts for central bank stimulus rather than actual earnings or GDP. In such distorted landscapes, positive jobs data creates sell offs and crippling rate hikes induce rising stocks. For almost 2 years, while we and other candid market observers were warning of crippling inflation, our central bankers were describing it as “transitory” with a dishonesty similar to the current recession is not a recession meme. Huh? Meanwhile in DC, we see growing signs of a political culture less about public service and more about self-service. Wealth disparity in the home of the brave has passed the highest levels ever recorded and points directly to the slow and empirical death of the American middle class. The suburbs around DC are growing richer with lobbyist and polo-playing defense contractors buying concessions and second homes from politicians who openly sell votes for reelection in a democracy that more resembles an auction house than a house of representation. A former tobacco tsar at the FDA, for example, recently took an executive role at Phillip Morris while an executive at Raytheon (America’s second largest defense contractor) just took a key post at the Department of Defense. Alas, the foxes not only guard the hen house, they run it. The Land of the Free? If fascism is defined as “the perfect merger of the state and corporate powers” (See Mussolini circa 1936), then the USA may still be the land of the brave, but it no longer resembles the land of the free. JP Morgan, led by a $35M/year Jamie Dimon, just paid a $96M “fine” for a $20B profit garnered from openly manipulating the gold market. Huh? At the same time, once great (and now police-defunded) cities like Chicago, NYC, and San Francisco are seeing tumbleweeds blowing past office vacancy rates as high as 40% following an historically disastrous COVID lockdown policy which did far more psychological, criminal and financial damage ($7T and counting) to America than a flu with less than a 1% Case Fatality Rate. Huh? Turning to foreign policies, having failed to deliver “freedom and democracy” to Vietnam, Iraq, Libya, Syria, and Afghanistan at the cost of America’s best sons and daughters, one wonders why the US has spent another $60B to bring “freedom” to the Ukraine when millions of US children live in poverty. All Americans hate to see civilians suffer in needless wars. But many who blindly wave Ukrainian flags in moments of ad-water, instant-virtue signaling from a government-led media can’t place Ukraine on a map nor bother to examine the complex history of its Russian tensions which date back to the 1750s. Furthermore, sending an IQ, history and geography challenged Kamila Harris to pre-war Ukraine with a NATO narrative only accelerated the February drums of war (and the financially disastrous sanctions that followed) in the same way that Pelosi’s recent trip to Taiwan seems to be more about flaming rather than cooling the war hawks. Does the US, with over 800 military bases in 70 countries actively seek war, or does it seek peace? Thousands are dying in the East for what many professional US statesmen believe was an easily avoidable war. Has the military industrial complex, against which Eisenhower (no stranger to war) warned in January of 1961, hi-jacked American politics? Meanwhile, as American monetary and fiscal policy reached new levels of open insanity in the seemingly deliberate fear-campaign led by “experts” like Fauci in the dramatically-described “war against COVID,” the latest boogieman out of DC is an equally unaffordable war against an equally-hyped climate change. If passed, “The Inflation Adjustment Act of 2022,” now sitting on Biden’s desk (or pillow), seeks further dollars that America does not earn yet which the White House assures won’t be inflationary. Huh? Do the foregoing samples of questionable policy failures evidence open stupidity, or is there something more systemic at play? The Fed: “Advancing the Few at the Expense of the Many” My take on the Fed is only that: My take. It is based upon the premise (and bias) that the Fed is driven, as Andrew Jackson warned, to serve the few and not the many. This presumption comes not only from personal observations, but a careful study of the Fed’s illegitimate practices and origins, far too complex to unpack here but detailed in Gold Matters. The Ongoing Inflation Lie As I’ve been writing and saying for months, the Fed’s current inflation narrative as well as “solution” is as openly bogus as a 42nd Street Rolex. There is little about the current inflation narrative that compares to the 1970’s, and hence little about Powell’s current policies which remotely compare to the so-called Volcker era of 1980, which ended, by the way, in a recession. Nevertheless, I am fascinated by the extensive time, brain-power and pundit attention given to explaining current inflation. Fancy concepts from “demand-pull” to “supply shocks,” or “extraneous shocks” and “accelerants” to even “black swans” are used to explain a 9.1% CPI inflation scale (which, if DC truly wishes to be “Volcker-like,” is closer to 18% using the metrics of his era…). The Simple Inflation Truth Inflation, which was already steadily rising pre-Putin and percolating pre-COVID, is nothing more than the direct consequence of USD debasement driven by: 1) years of openly addictive mouse-click money (>10X since 2008) from the Eccles Building and, 2) fatal fiscal spending from the White House, be it red or blue. In just the last 24 months, the Fed created 50% more mouse-click money than all the money that ever existed in the 256 years of its national existence. Such numbers are a tad “inflationary,” no? Alas, costs are rising because our grotesquely inflated/de-valued dollar is tanking. Between 1776 and the un-immaculate conception of the Fed in 1913, a USD was once a USD. Since 1913, however, a USD is really (worth) nothing more than a Nickle. Why? Broken Faith vs. Store of Value Because when a central bank creates trillions of those dollars out of thin air with no link to an underlying real asset or an equivalent exchange for a good or service (as Germans like Alfred Lansburgh, Austrians like von Mises and Americans like Andrew Dickson White argued), that dollar is nothing more than a symbol of broken faith rather than a store of genuine value. Like a glass of wine filled with a swimming pool of water, the dollar is diluted; it’s flavor, color and value ruined. Since 1971, and when measured against a single milligram of gold, the USD, like all other fiat currencies, has lost greater than 95% of its value. The Fed: Blaming vs. Accountability Rather than confess the toxic reality (and complicity) of the fatal and inflationary expansion of the broad money supply, the DC elites first tried to call it “transitory,” and when that failed, they tried to call it “Putin’s inflation.” Really? There’s no doubt that the sanctions against Putin sent gas prices and the CPI higher—especially in Europe. And there’s also no doubt that the trillions of fiscal and monetary dollars used to “fight” COVID were CPI tailwinds. But a tailwind does not mean a cause. Take the “war on COVID” and the $7T+ in combined fiscal and monetary dollars used to combat it. I’m not here to end the COVID debate with medicine or science, of which I’m clearly no expert. But many of us (including Rand Paul or Christine Anderson) would agree that neither was Fauci, the CDC, the WHO or the NIH. Almost everyone (vaxed or un-vaxed, masked or un-masked) has already caught the virus; it’s fairly clear that locking the country down for well over a year did nothing but cost money and freedoms while destroying businesses who deserved to choose for themselves whether to stay open or shut. There will be others who disagree, but in my legally, historically and financially educated mind, not since the oxy-moronic Patriot Act have I seen a greater crime (or psy op) against a nation’s own citizens and their once inalienable rights and civil liberties as that which was embodied by the 2020 lockdowns. As Ben Franklin warned, a nation which surrenders its freedoms in the name of security deserves neither. Critical Thinking Locked Down As a kid who won athletic scholarships to some of the finest schools (from Choate to Harvard) in America, I learned the trade of critical thinking, which any of us can acquire, with or without a shiny diploma. What particularly sickened me, however, was that the very schools (prep to grad level) who taught me the history, laws and methods of thinking critically, independently and openly, were the same knee-bending schools who collectively insulted those same principals by shutting their doors to the un-vaxed and censoring alternative views from professors and students who thought differently. Were these lockdowns proof of humanitarian concern or were they test-drives for increasingly centralized control over national and international markets, currencies and populations? From the very beginning of the pandemic, expert virologists, physicians and even vaccine creators (as evidenced by the meetings at the AIER in Great Barrington) with equal if not far superior credentials than Dr. Fauci, were openly censored, gas-lighted and criminalized by the media as flat-earth “conspiracy theorists”—the now favorite term of art for anyone who disagrees with DC’s often comically official narrative on anything from WMD to the current definition of a recession. Thus, when considering the current inflation narrative and its causes, was the US merely stupid in imposing financially crippling lockdowns or were there sinister forces engineering fear as a means of pushing the masses into dependency while the Fed printed more dollars for the repo and bond markets (a hidden “bailout’) than for Main Street? Saudi Did It? Others may want to blame the Saudis and the high oil prices for the inflation we see today. It’s worth reminding, however, that today’s oil price is roughly the same as it was in April of 2020. The Solution Narrative As far as combatting inflation, that too creates a great deal of space for debate, error and comedy. Many, including the Fed’s James Bullard, Lael Brainard or Neel Kashkari have been arguing for aggressive rate hikes to kill inflation. But with inflation already at 9.1%, such “above-neutral” would require the Fed to follow the IMF’s recommendation that interest rates be at least 1% above inflation rates. In an honest world, that would require a 10.1% interest rate policy, which would immediately bankrupt Uncle Sam. Instead, Powell is boasting of an “aggressive” 2.25-50% Fed Fund Rates to fight 9.1% inflation, the policy equivalent of storming the beaches of Normandy with squirt-guns. Meanwhile, the Cleveland Fed, as per my recent articles, is using dishonest math to publicly claim positive 1% real rates despite the fact that when measuring even a 3% yield on the 10Y UST against a 9.1% inflation rate, the USA is in fact living in a world of at least -6% rather than +1% real rates. Like the CPI scale itself, the Fed is openly lying about negative real rates. Sadly, such clever math is now the new DC normal. The Fed won’t say what the rest of us know, namely: The only tool to fight Fed-made inflation is a Fed-made recession, which they will deny in plain sight. The Recession Narrative The latest lie from on high, of course, is the valiant attempt by Powell, Biden and Yellen to downplay 2 consecutive quarters of negative GDP as a non-recessionary “transition” despite such data effectively confirming the very definition of a recession. Instead, DC would now have us believe that positive labor and unemployment data is non-recessionary. In particular, the BLS is boasting 528,000 newly created jobs in July (and 2M year-to-date), which places US unemployment at an admirable 3.5%, the lowest level seen in 50 years. Unfortunately, a little bit of honest math indicates that those “new jobs” don’t represent new folks finding work, but sadly, just folks already-employed who are taking on second or third jobs to survive rising inflation costs. The July labor force participation rate actually went down, which means there are less not more people in the work force. In April of 2019, I did a more extensive report on the DC math used to artificially puff US labor data (U3 and U6) which is far worse than officially reported. But who needs real math or honest data when DC’s comforting words feel so much better? Such consistent trends of sanctioned dishonesty, however, force us to question the intelligence and desperation of our so-called “leadership.” From Fake Math to Real Wars I’ve written and spoken extensively about the avoid-ability of the war in Ukraine as well as the foreseeable stupidity of the Western sanctions against Putin, all of which have empirically backfired at every level– from the slow collapse of the petrodollar (and hence USD) to the slow rise of a stronger, Eastern-lead trading block among the BRICS. The petrodollar is no laughing matter. Since de-coupling from the gold standard, the US relies on the forced global purchase of oil in US Dollars to prevent this already debased currency from losing even more demand, and hence value and power. Only two global leaders have since tried to stand up to the petrodollar power in the past. Saddam Hussein wanted to buy oil in euros and Khaddaffi wanted to buy oil in gold; and just look what happened to them… Unfortunately for the US, both China and Russia have nuclear weapons. Hence, the US playbook of fighting wars or indirectly eliminating leaders to keep its financial interests secure got a little bit messier this February when poking at Putin. The Dollar Fairytale: Another Open Lie from On High Despite openly objective evidence of an increasingly unloved USD, DC continues to boast of the relative strength of the USD on the DXY. What DC won’t say, however, is that this “strength” is only measured against a tanking yen and euro, two debt-soaked currencies who don’t have enough reserve currency clout to afford a currency-boosting rate hike. Against the Chinese Yuan, however, the US has less of which to boast… In short, the USD is anything but strong. As discussed above, its inherent purchasing power has been neutered by over a century of devaluation and is little more than the best horse in the Western glue factory. Profitable War Drums Given the failings and open lies above, from inflation realism and recessionary word-smithing to dying currencies and rising, unpayable debts, why on earth would the US now be saber rattling over the Ukraine or pinching the Chinese bear over Taiwan? Is it to spread democracy and freedom by helping the underdog, whatever the sacrifice? Well, one of our most famous underdogs, military generals and presidents, George Washington, warned over 2 centuries ago to precisely avoid such foreign entanglements. “Truly enlightened and independent patriots,” he argued, focused on prosperity within their borders not peripheral wars outside them. Despite such warnings, the US has spent a lot of time fighting outside its borders rather building unity within them. Why? One sad but empirically proven argument is that war is historically good for tanking GDP and struggling stock markets. In March of 2018, I penned an eerily prescient analysis of how US stocks love global war, and warned of escalations against Russia and China. In particular, I addressed the historical data of the “war dividend,” which tracked US markets reacting favorably to de-stabilization outside its borders. Thus, even if Generals Washington and Eisenhower warned against such conflicts, Wall Street and the defense contractors who lobby DC love a good war. Why? Because war feeds US markets. Conflicts overseas create massive capital flows into the relative safety of the US. During the Iraq War, hundreds of billions in Middle Eastern assets rushed into US markets while NATO bombs landed in Iraq. Between 2003 and 2008, the Dow rose steadily upwards. During the Vietnam War (which killed 58,000 Americans and 1.2 million Vietnamese), the Dow gained 53%. When the war ended, the markets promptly fell, and fell hard. During the Great War of 1914-1918, the Dow nearly doubled. As for WW2, the Dow rose by 164% between Pearl Harbor in 1941 and VJ day in 1945. Given such numbers, was the recent idea of sending a kindergarten-level intellect like Kamila Harris to negotiate peace (?) with Putin in early 2022 deliberately set up to fail? Was Pelosi’s recent flight to Taiwan a commitment to ensure freedom? Or is there a more sinister, yet hidden, motive to push for war in a time of economic disaster at home? Is America Heading in the Opposite Direction of Its Founding Fathers? History confirms that every debt crisis leads to a financial crisis, a market crisis, a currency crisis, social unrest, a political crisis, and ultimately extreme authoritarian and centralized control from the far political left of right. Given how increasingly centralized our openly broken yet centrally controlled markets, economies and politics have become, and given the acceleration and scope of the open lies, backfiring polices and unpayable costs and debts which have emerged in the post-COVID and post-sanction new normal, is it possible that the USA is headed toward a similarly authoritarian fate? Is it possible that the by ignoring the clear warnings of figures like George Washington, Thomas Jefferson, Andrew Jackson, Benjamin Franklin and Dwight Eisenhower, that America is heading in the opposite direction of its founding principles? Is it possible that the openly failing inflation, recessionary, domestic and foreign polices listed above are more than just a list of stupid mistakes, but indicators of a set-up for something more sinister? Are our markets, economies, currencies and individual freedoms being sacrificed to the altar of order, control, safety and security? Is DC creating an intentional class of American lords and serfs, in which the former hand out stimulus checks to prevent the later from reaching for pitch forks? As we learned in the Europe of the 1930’s or the lockdowns of the 2020’s, fear (be it viral, militant or economic) is a potent tool of control—it turns revolutionary anger into malleable subservience. Just a thought. Tyler Durden Thu, 08/11/2022 - 23:00.....»»

Category: blogSource: zerohedgeAug 12th, 2022

US is "closer to civil war than any of us would like to believe," a leading expert on civil wars says in a new book

In her new book, "How Civil Wars Start," Barbara F. Walter writes that the US exhibits the key warning signs that precede armed conflict. Violent protesters, loyal to President Donald Trump, storm the Capitol, Wednesday, Jan. 6, 2021, in WashingtonAP Photo/John Minchillo, File Barbara F. Walter, a civil war expert, said the US is closer to violent conflict than many think. In her new book, Walter identifies three factors that increase the likelihood of a civil war. Her book, "How Civil Wars Start: And How to Stop Them," was released earlier this month. Barbara F. Walter has spent more than 30 years studying civil wars around the globe and, according to her new book, the US is a lot closer to one than most people think.Walter – a political scientist and professor at the University of California, San Diego – is one of the world's leading experts on civil wars. She's a member of the Political Instability Task Force, a group of analysts that study data to predict where volatility and violence is most likely to break out.In her new book, "How Civil Wars Start: And How to Stop Them," which came out this month, Walter outlines three factors researchers have identified that presage civil conflict and explains in detail the ways in which the US exhibits those warning signs."Civil wars ignite and escalate in ways that are predictable; they follow a script," Walter writes, adding that the same patterns have emerged in Bosnia, Ukraine, Iraq, Syria, Northern Ireland, and Israel.She said one of the best predictors of civil war is if a country is moving towards or away from democracy. If a country is an "anocracy" – a term used to refer to countries that are not fully democratic or fully autocratic but somewhere in between – they are more likely than both full autocracies or democracies to experience violence.Today, the US is an anocracy for the first time in more than two hundred years, according to Walter, who cites the Polity Project, a nonprofit that measures how democratic or autocratic a country is. Walter said the country's recent slip on the democracy scale started with the 2016 election, which observers said was marred by politically driven rules and Russian interference.The US slipped further on the scale during President Donald Trump's term, when executive powers expanded and the president refused to cooperate with Congress's first impeachment inquiry, Walter said. And then it slipped again, after the January 6 insurrection.Another warning sign Walter points to is "factionalism," a specific kind of political polarization."Countries that factionalize have political parties based on ethnic, religious, or racial identity rather than ideology, and these parties then seek to rule at the exclusion and expense of others," she writes, adding that Trump especially catered to Americans along ethnic and religious lines with a focus on white evangelical Christians.Finally, Walter points to a phenomenon known as "downgrading" as another predictive measure. Downgrading refers to a dominant group's loss of status in society. She said researchers have found the "trajectory of a group's political status" was the "most powerful determinant of violence.""People were especially likely to fight if they had once held power and saw it slipping away," she writes.Walter said downgrading can apply to all kinds of groups, "rich or poor, Christian or Muslim, white or Black," but the key is that the group feels a "status reversal," not just a political defeat.She cites racial resentment among whites who believe Black Americans or other minority groups are now getting unfair special treatment. She also points to Trump's focus on the grievances of working-class white people and his attempts to appeal specifically to those who feel they have lost something, as evidenced by his slogan "Make America Great Again.""Where is the United States today? We are a factionalized anocracy that is quickly approaching the open insurrection stage, which means we are closer to civil war than any of us would like to believe," Walter concludes.Walter explains that a civil war today might look different than in the past. She points to specific examples of violence, like the extremist plot to kidnap Michigan Gov. Gretchen Whitmer and the insurrection at the Capitol as indicators that at least some groups are already willing to move towards violence.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 22nd, 2022

Defense Experts Game Out US-China War Over Taiwan; Dalio Warns Escalations "Very Dangerous"

Defense Experts Game Out US-China War Over Taiwan; Dalio Warns Escalations 'Very Dangerous' A group of American defense experts operating out of a 5th floor suite in Washington DC have been mapping out a hypothetical war between the United States and China over Taiwan. "The results are showing that under most — though not all — scenarios, Taiwan can repel an invasion," said Mark Cancian, a senior adviser at the Center for Strategic and International Studies, which has been simulating various war scenarios. "However, the cost will be very high to the Taiwanese infrastructure and economy and to US forces in the Pacific." In sessions that will run through September, retired US generals and Navy officers and former Pentagon officials hunch like chess players over tabletops along with analysts from the CSIS think tank. They move forces depicted as blue and red boxes and small wooden squares over maps of the Western Pacific and Taiwan. The results will be released to the public in December. -Bloomberg The base assumption is that China invades Taiwan to force unification, which the US responds to with its military. Another assumption (that's 'far from certain') is that Japan would grant 'expanded rights' to use US bases on its territory - but wouldn't intervene directly unless Japanese land is attacked. Nuclear weapons are not part of the scenarios, and the weapons used in the simulation are the most likely to be deployed based on current capabilities of the nations involved. News of the war game simulations come as China began test-firing missiles in recent days following House Speaker Nancy Pelosi's (D-CA) visit to Taiwan.So far, 18 of 22 rounds of the simulation to date have resulted in Chinese missiles sinking a large part of the US and Japanese surface fleet, and would destroy "hundreds of aircraft on the ground," according to Cancian, a former White House defense budget analyst and retired US Marine. "However, allied air and naval counterattacks hammer the exposed Chinese amphibious and surface fleet, eventually sinking about 150 ships," he added. "The reason for the high US losses is that the United States cannot conduct a systematic campaign to take down Chinese defenses before moving in close," Cancian continued. "The United States must send forces to attack the Chinese fleet, especially the amphibious ships, before establishing air or maritime superiority." "To get a sense of the scale of the losses, in our last game iteration, the United States lost over 900 fighter/attack aircraft in a four-week conflict. That’s about half the Navy and Air Force inventory." According to the simulations, the Chinese missile force "is devastating while the inventory lasts," which makes US subs and long-range-capable bombers "particularly important." Also key, is Taiwan's defense capabilities, because its forces would be primarily responsible for countering Chinese landings from the South. "The success or failure of the ground war depends entirely on the Taiwanese forces," said Cancian. "In all game iterations so far, the Chinese could establish a beachhead but in most circumstances cannot expand it. The attrition of their amphibious fleet limits the forces they can deploy and sustain. In a few instances, the Chinese were able to hold part of the island but not conquer the entire island." "For the Taiwanese, anti-ship missiles are important, surface ships and aircraft less so," because surface ships "have a hard time surviving as long as the Chinese have long-range missiles available." There have been no estimates so far on lives lost, or the sweeping economic impact of such a conflict between the US and China. As Bridgewater's Ray Dalio notes, "The US-China Tit-For-Tat Escalations Are Very Dangerous." Unfortunately, what is happening now between the US and China over Taiwan is following the classic path to war laid out in my book "Principles for Dealing with the Changing World Order.” If events continue to follow this path, this conflict will have a much larger global impact than the Russia-Ukraine war because it is between the world's leading superpowers that are economically much larger and much more intertwined.   For reasons previously explained, the Russia-Ukraine war is minor by comparison, though the two conflicts are related and the Russia-Ukraine war, like all wars, is having terrible consequences. For example, consider that China's share of world trade is over seven times larger than Russia's [1] and constitutes about 19% of all American manufactured goods imports. [2] Imagine if importing goods from China and doing business with China became the same as they are with Russia now. Imagine what the supply chain and economic impacts on the world would be. Imagine what sanctions on China would be like for the world. Supply chains would collapse, economic activity would dive, and inflation would soar. And that’s just what would happen to economies due to economic warfare which would pale in comparison to the impact that military warfare, which we are obviously dangerously close to, would have. For reasons explained in my book, the situation that now exists between the United States and China is very similar to that which existed between powers immediately prior to World Wars I and II and many other immediate prewar periods. The chart below shows my US-China conflict gauge since 2000. As you can see, the readings for conflict between the US and China are the highest ever. This index is composed of many indicators such as changes in military spending, personnel, and deployment; sentiment of each country's people about the other country; media attention given to the conflict, etc. The combination of military spending and attitudes toward each rival country has been particularly indicative. The chart below shows the shares of global military spending for the US and China which significantly understates China’s military spending because much government spending that supports the military is not included as direct military spending. Also, American military spending covers the world while Chinese military spending is more focused in the region. Knowledgeable parties tell me that China has significant military superiority around Taiwan. The chart below plots recent Gallop poll data and shows that 80% of Americans now have an unfavorable view of China—which is now on par with how Americans view Russia (and is up meaningfully over the past few years).   To put the existing level of conflict between China and the US in perspective, the table below compares the current US-China conflict gauge reading to past readings of other great conflicts. As shown, the current reading for the US and China is nearly 1.2 standard deviations above the average, which is a reading in the high end of the range of major conflicts. While this conveys a high level and risk of conflict, it should not be misinterpreted to mean that a worsening is to come. Sometimes, these moments of heightened conflict are followed by a stepping back from war. For example, the period leading into the Cuban Missile Crisis had a relatively high reading of 0.9, but wise heads prevailed, so a potential disaster was avoided. There are many more measures that convey the changing picture that are explained in my book which I don’t have the space to show you here, but will continue to plot along with the historical analogies I outlined in the book.   I will use them to paint as accurate a picture as I can about what's happening and put it into an historical context. The dot plot will speak for itself as to which path we are on. As for what's now happening, the Chinese are responding to Nancy Pelosi’s visit by cutting off most relations and demonstrating that they can militarily control the area around Taiwan, which implies that China could shut Taiwan off from the rest of the world. Imagine that and its implications, e.g., imagine if semiconductor chips couldn't get out of Taiwan. China is also displaying its military power and it is crossing previously uncrossed lines of demarcation, thus closing in on Taiwan. [7] Pelosi's visit was perceived by China as a move in favor of Taiwan's independence rather than toward one China with Taiwan part of China, and it is essentially challenging the US to stop it from doing what it is doing. The question is whether the US will respond with another escalation that will prompt another Chinese response, in the classic tit-for-tat acceleration into war, or if the sides will step back. To gain a picture of the past and the forces that are driving the evolution of the US and China toward war (i.e. the Big Cycle) I suggest that you review Chapter 13 "US-China Relations and Wars." I suggest that you pay particular attention to my explanation of previous Taiwan Straits crises and why I said I would worry if we had a "Fourth Taiwan Crisis" which is the crisis that we are now having. To understand what is happening you must understand these things.   As I summarized on page 455 of that Chapter in the section "The Risk of Unnecessary War:" Stupid wars often happen as a result of a tit-for-tat escalation process in which responding to even small actions of an adversary is more important than being perceived as weak, especially when those on both sides don’t really understand the motivations of those on the other side. History shows us that this is especially a problem for declining empires, which tend to fight more than is logical because any retreat is seen as a defeat. Take the issue of Taiwan. Even though the US fighting to defend Taiwan would seem to be illogical, not fighting a Chinese attack on Taiwan might be perceived as being a big loss of stature and power over other countries that won’t support the US if it doesn’t fight and win for its allies. Additionally, such defeats can make leaders look weak to their own people, which can cost them the political support they need to remain in power. And, of course, miscalculations due to misunderstandings when conflicts are transpiring quickly are dangerous. All these dynamics create strong pulls toward wars accelerating even though such mutually destructive wars are so much worse than cooperating and competing in more peaceful ways. There is also risk of untruthful, emotional rhetoric taking hold in both the US and China, creating an atmosphere for escalation. While the power of the forces behind the Big Cycle explained in "Principles for Dealing with the Changing World Order” can be overwhelming, people still have choices that will affect the outcomes. This conflict is still a low-grade military conflict (which I call a Category 2 military conflict) because 1) it has not yet produced an exchange of bloodshed of people from the two major sides i.e., Chinese and/or Americans and 2) it is not taking place on either country’s homeland (though the Chinese would say Taiwan is part of their homeland even though it’s not part of mainland China). If either of these were to change, that would be the next big step up toward unimaginable all-out war which I still consider improbable. A good thing is that sensible people on both sides are scared of war even though they don’t want to look like they are. A bad thing is that some people on both sides want to intensify the fight because to not do so in the face of the provocation wound be perceived as a sign of weakness. That dynamic of upping the ante to avoid looking like one is backing down has throughout history been shown to be a very dangerous dynamic. We have seen many historic cases which have led to terrible wars because neither side wanted to back down and only few in which sensible people stepped back from the brink when faced with the prospect of unacceptable destruction.  My hope is that China’s escalation will not lead to the next US escalation which will lead to the next Chinese escalation which, despite the strong desire of sensible people on both sides to avoid war, would lead to a war. But hope is not a strategy, so I will try to be as realistic as possible, navigate accordingly, and communicate well with you. Tyler Durden Tue, 08/09/2022 - 23:05.....»»

Category: smallbizSource: nytAug 10th, 2022

Expert on civil wars says the US is heading toward insurgency — the 21st-century version of civil war

Barbara F. Walter told The Washington Post that the US is exhibiting the two most common predictive behaviors of countries at risk of civil war. Trump supporters clash with police and security forces as in the US Capitol on January 6, 2021.Brent Stirton/Getty Images An expert on political violence warned the US could be headed toward a modern-day civil war. Barbara F. Walter told The Washington Post the US is displaying predictive behaviors for conflict. She said the US is poised for an insurgency, which is more decentralized. An expert in political violence says extremists could be leading the US toward a modern-day civil war.Barbara F. Walter, a political science professor at the University of California at San Diego, spoke to The Washington Post earlier this year about the perilous state of American democracy in a far-ranging interview that trended on social media this week.Walter, the author of "How Civil Wars Start: And How to Stop Them," has spent years studying civil wars, investigating risk factors, the difficulties of resolution, and approaches to ending the conflicts.Experts long believed each civil war was caused by its own unique set of factors, resistant to parallels or comparisons. But as methodology and technology improved, Walter told The Post that several patterns began to emerge, two of which proved to be highly predictive.The first, she said, is a variable called anocracy. The term is a measurement used to describe several factors related to a country's government, including how autocratic or democratic that country is. Anocracy is measured using a scale of negative 10 to positive 10, with the former being the most authoritarian and the latter being the most democratic.  Scholars ultimately found that the anocracy variable could accurately predict which countries were prone to civil wars. Neither full democracies, nor full autocracies are at a high risk of civil war. Instead, it's the middle zones that are susceptible to instability and violence, Walter said, possibly due to weaker governments that can more easily be challenged.The US boasted a positive 10 rating for several years, Walter said, but was briefly downgraded to a 5. It's since been boosted to an 8.The second risk factor, according to Walter, is when people in these unstable democracies begin to organize political parties along the lines of racial, religious, or ethnic identity, not completely dissimilar from many members of the Republican Party's stoop toward embracing white supremacy in recent years. "Watching what happened to the Republican Party really was the bigger surprise — that, wow, they're doubling down on this almost white supremacist strategy," she said.During the Trump administration, Walter delivered a campus talk, in which she discussed the ways in which the US seemed to be priming itself for civil conflict. She said she left "despondent," as attendees accused her of fearmongering."When people think about civil war, they think about the first civil war," she said. "And in their mind, that's what a second one would look like. And, of course, that's not the case at all."The US isn't headed toward a North versus South war with countrymen fighting one another in the fields, she said. Instead, the country is at risk of insurgency, a form of civil war, according to Walter. "That is the 21st-century version of a civil war, especially in countries with powerful governments and powerful militaries, which is what the United States is," Walter said.Insurgencies tend to be more decentralized and are often fought by multiple, sometimes competing, sometimes coordinating groups. These extremists historically target infrastructure and civilians, using domestic terror and guerrilla warfare, Walter said.Her expertise in the ways of insurgents helped lessen the shock of the January 6, 2021 Capitol riot, she said."People who study this, we've been seeing these groups have been around now for over 10 years," Walter told The Post. "They've been growing. I know that they're training. They've been in the shadows, but we know about them. I wasn't surprised."The biggest emotion she felt following the siege was relief, she said. Walter called the attack a "gift," and said the public nature of the destructive insurrection brought "this cancer" to the forefront of society. Just because the US is exhibiting these predictive patterns, however, doesn't necessarily mean the country is headed for all-out chaos, Walter said. But the threat grows stronger with each passing day. "I think it's really important for people to understand that countries that have these two factors, who get put on this watch list, have a little bit less than a 4 percent annual risk of civil war," she told The Post. "That seems really small, but it's not. It means that, every year that those two factors continue, the risk increases."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 11th, 2022

Ray Dalio Releases Inaugural Edition Of Annual Global “Power Score” Index

The “Power Score Index” for Countries Shows 18 Measures of Strength & Provides an Aggregate Power Reading for 24 Countries Based on the Research Shown in Dalio‘s Latest Bestseller, the Changing World Order Ray Dalio Releases Inaugural Edition Of Annual Global “Power Score” Index Based on the research described in his recently released and latest […] The “Power Score Index” for Countries Shows 18 Measures of Strength & Provides an Aggregate Power Reading for 24 Countries Based on the Research Shown in Dalio‘s Latest Bestseller, the Changing World Order Ray Dalio Releases Inaugural Edition Of Annual Global “Power Score” Index Based on the research described in his recently released and latest New York Times Bestseller — Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail (Changing World Order) — famed investor and author Ray Dalio today announced the release of the inaugural edition of his new Country Power Score Index (“Power Score”). The index shows levels of 18 different types of strengths and combines them into an aggregate measure of power for the top 24 countries. Besides being able to compare countries’ strengths and watch them evolve over time, one can use the Power Score as a good leading indicator of future conditions. Due to the scores being an objective measure of health that are leading indicators of future well-being, they also provide a guide for producing improved outcomes for policy makers and can serve as a tool for individuals for anticipating conditions. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more The index was crafted in a way that only Dalio can do because of his experience as a global-macro investor and student of history for more than 50 years. To do his job well, Dalio has spent decades studying what makes countries and their markets rise and decline. He and his Bridgewater research team converted his learnings into the 18 different determinants of power -- including education, innovation and technology development, civility of people, economic output, incomes and balance sheets, reserve currency status, military, etc. -- to generate readings that measure countries' strength in these areas and serve as indicators. Weighing different quantitative indicators and drawing from hundreds of data series, the indices convey pictures for 24 countries that are helpful in decision making. The whole process, including writing the text descriptions of what is happening, has been computerized so that the index will continue independently and beyond Dalio. "As a global-macro investor, I discovered early on that I needed to understand the cause-effect relationships that drive conditions and market movements, and that I needed to study many cases through history in order to gain that understanding. That's because many circumstances that I encountered never happened in my lifetime but happened many times before," said Dalio. "Over many years, I studied the drivers that cause countries, empires and world orders to rise and fall to help me deal with what was coming at me. That created a roadmap that actual events have by and large followed and are still following. When I started doing this and put out the research, the changing conditions painted by this process were highly controversial, but since then, events that have transpired have been consistent with this template, so these changes are now fairly obvious to most. However, the pictures they paint still remain non-conventional. My reason for putting out this index is to show these things for others, so they can evaluate them for themselves and to help policy makers and average people have better understandings, which they can use to make better decisions that can produce better outcomes." The index is available at www.economicprinciples.org and will be updated annually. The readings shown in the indices paint very rich pictures of each country's various styles of strengths and weaknesses and whether they are improving or deteriorating. A very superficial summary of the key findings at this time shows: The United States ranks at the top in terms of overall power due to its relatively high level of education, military strength and technology capability, but it is in relative decline predominately due to relative weakening in these areas, unfavorable financial and economic conditions, and high levels of domestic and external conflicts; The aggregate power rating for China shows it to be the second most powerful country and rising due to improving financial and economic conditions; rapid improvements in infrastructure, investment, innovation and technology; and its rising share of global trade. Notably, there has been a sharp rise in the U.S. conflict gauge that has tracked the archetypical cycle of great power conflicts when two leading world powers become comparable. These last three conditions together combined with rises in military expenditures have been leading indicators of wars; Europe ranks third and has been in relative decline due to low productivity gains in its labor markets and inefficient allocation of labor and capital; Several countries follow for various reasons that are shown and explained in the body of the report; and At the bottom of the list are Argentina (lowest), South Africa (second lowest) and Mexico (third lowest) for reasons explained in the sections devoted to them. The full analyses and Power Score Index can be viewed at: www.economicprinciples.org. Watch the animated video of Principles for Dealing with The Changing World Order, which distills the key concepts of the book by the same name and which the index is based on below. About Ray Dalio Dalio is the founder, Co-Chief Investment Officer and board member of Bridgewater Associates, a global leader in institutional portfolio management, and the largest and most successful hedge fund in the world with approximately $150 billion in assets under management. Dalio started Bridgewater out of his two-bedroom apartment in New York in 1975 and over the course of its 45+ year history grew it into the 5th most important company in the U.S. according to Fortune Magazine. For his innovative work, Ray has been called the "Steve Jobs of Investing" by Wired Magazine and named one of the 100 Most Influential People in the World by TIME Magazine. Dalio is also a long-running New York Times bestselling author, with notable work including Principles: Life and Work and Principles for Dealing with the Changing World Order. Due to its success, the first has been distilled into an easy-to-read, illustrated book, Principles for Success. He is also the author of Principles for Navigating Big Debt Crises. Additionally, Dalio has published several studies on his economic views, including "Why and How Capitalism Needs to be Reformed." Updated on May 25, 2022, 12:07 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkMay 25th, 2022

Gave: The End Of The Unipolar Era

Gave: The End Of The Unipolar Era Authored by Louis-Vincent Gave via Gavekal Research, Investors today must deal with the effects of not one, but two wars, as my Gavekal-IS colleague Didier Darcet pointed out in April (see Tick,Tock Tick,Tock). The first is the one we can see playing out each day on our television screens, with all the tanks, deaths and human suffering. The second is a financial war, with the unprecedented weaponization of the Western banking system and Western currencies aimed at bringing Russia to its financial knees (see CYA As A Guiding Principle (2022)). To the surprise of most people in the West, resistance against both of these war efforts has proved far stronger than expected. Almost 11 weeks into the war on the ground in Ukraine, Russian troops still seem to be taking heavy losses for relatively small territorial gains. And a little over six weeks after US president Joe Biden boasted that the ruble had been “reduced to rubble” by Western sanctions, the Russian currency is close to a two-year high against the US dollar and near a post-Covid high against the euro. At this point, both the euro and the yen appear to be bigger casualties of the Ukraine war than the ruble. The US boast that the ruble had been “reduced to rubble” is looking premature  In this paper, I shall review the implications of this stronger-than-expected resistance - both on the battlefield and in the financial markets - and attempt to draw some salient conclusions for investors. The evolution of warfare In October 1893, some 6,000 highly-disciplined warriors of King Lobengula’s Ndebele army launched a night-time attack on a camp occupied by 700 British South Africa Company police near the Shangani river in what is now Zimbabwe. It was a massacre. The BSAC “police” killed more than 1,500 Ndebele for the loss of just four of their own men. A week later, they did it again, killing some 3,000 Ndebele warriors for just one policeman dead. These one-sided victories were not won by courage or superior discipline, but because the British were armed with five machine guns and the Ndebele had none. As Hillaire Belloc wrote in The Modern Traveller: “Whatever happens, we have got / The Maxim gun, and they have not”. The technological superiority of the machine gun allowed Britain, and France, Germany and Belgium, to subjugate almost all of Africa, even though outnumbered by the Zulu, Dervish, Herero, Masai and even Boer forces they opposed. All were rendered helpless by the machine gun’s firepower. I revisit this ancient history to illustrate how military technology is a lynchpin of the geopolitical balance. Dominance of military technology is also a key factor underpinning the strength and resilience of a reserve currency. Today, one of the main reasons why Taiwan, South Korea, Japan, Saudi Arabia, the United Arab Emirates and others keep so much of their reserves in US dollars is that the US is widely regarded as being a generation (if not more) ahead of the competition in the design and production of smart bombs, anti-missile systems, fighter jets and naval frigates. In short, the superiority of US weaponry has been one of the principal factors underpinning the US dollar’s status as the world’s reserve currency. However, recent events raise important questions about whether the US can retain this superiority. In September 2019, drones allegedly deployed by Yemeni Houthi forces took out the Saudi Aramco oil processing facilities at Abqaiq. Between late September and early November 2020, Armenia and Azerbaijan fought a war over the Nagorno-Karabakh region. The conflict ended in near-total victory for the Azeris. This result stunned the military world. Observers had assumed that Armenia, with a bigger army, larger air force, more up-to-date anti-aircraft and anti-missile systems, and a history of Russian support, would easily triumph. But all Armenia’s expensively-acquired military “advantages” were quickly taken out in the early days of the fighting by Azerbaijan using Turkish-made drones costing no more than US$1mn each. On successive occasions between March 2021 and March 2022, Houthi drones attacked Saudi Arabian oil facilities, notably the giant terminal at Ras Tanura on the Persian Gulf. In December 2021, Turkish-made drones allowed the Ethiopian government to tip the balance in a civil war that until then had been going badly for government forces. In January 2022, Houthi drones hit oil facilities in the UAE.  Now, imagine being Saudi Arabia or the UAE. Over the years you have spent tens, if not hundreds, of billions of US dollars purchasing anti-missile and anti-aircraft systems from the US. Now, you see relatively cheap drones penetrating these defense systems like a hot knife through butter. This has to be frustrating. What is the point of spending up to US$340mn on an F-35c (and US$2mn on pilot training), or US$200mn on an anti-aircraft system, if these can be taken out by drones at a fraction of the cost? This evolution in warfare may help to explain the impressive resilience of the Ukrainian army in the face of Russia’s onslaught. When the Russian troops marched into Ukraine, consensus opinion was that the Ukrainian forces would crumble before the Russian military juggernaut. It is always hard to know what is happening on the ground amid the fog of war. But judging by the number of tanks destroyed, warships sunk and the apparent failure of the Russian air force to establish control over Ukraine’s skies, it seems the invasion of Ukraine is proving far more costly in terms of blood and treasure than Russian president Vladimir Putin had imagined. Could this be because Putin failed to factor the impact of drones into his military outlook? It may be premature to jump to that conclusion. But judging from afar, it appears inexpensive Turkish drones have helped level the battlefield in the Ukrainian-Russian David versus Goliath confrontation— the biggest and bloodiest on European soil since World War II. This helps to explain why the US military assistance package for Ukraine Biden announced this month included 700 Switchblade drones. These are surprisingly cheap—the Switchblade 300 reportedly carries a price tag as low as US$6,000—yet highly effective. In essence, they are single-use kamikaze drones. Apparently, they fly faster than the Turkish Bayraktar TB2 drones that the Ukrainians, like the Azeris before them, have used to such devastating effect. This suggests the Switchblades should be able to evade the air defenses that Russia has attempted to maintain over its troops. The US military deployed Switchblades sparingly in Afghanistan, so it is hard to know whether these will perform as billed in combat conditions. But before this shipment to Ukraine, only the UK was permitted to purchase Switchblades. This implies that the Pentagon considers the Switchblade a valuable and potent weapon. David Petraeus, the former Central Intelligence Agency director who, as a four star general, commanded the US campaigns in both Iraq and Afghanistan, singled out the weapon in a recent interview with historian Niall Ferguson: “I’ll mention one item in particular: the Switchblade drone. It’s a loitering munition that takes a one-way trip. The light version can loiter for 15 to 20 minutes. Heavy version, 30 to 40 minutes with a range of at least 40 km. The operator selects a target, it locks on and it follows. Then it strikes when the operator gives that order. This is extraordinarily effective because you can’t hear it on the ground. The first time the enemy knows it’s there is when it blows up. If we can get enough of those into Ukraine, they could be a true game-changer.” However, I digress. Returning to the discussion about why drones might matter for financial markets: 1) If ever-cheaper and more readily available drones are going to revolutionize war, much as the Maxim gun did 140 years ago, then it is questionable whether it still makes sense to invest in tanks, airplanes, anti-aircraft and anti-missile systems. If it does not, what does this mean for the value of the large, listed death-merchants? Cheap drones are bad news for the stocks of defense giants Historically, buying the merchants of death after a big rally in oil made sense, if only because so much of the world’s high-end weapon consumption occurs in the Middle East. But in the world of tomorrow, will Middle Eastern oil kingdoms still line up to buy multibillion US dollar systems from Raytheon, Boeing, Lockheed and the like, if those systems are vulnerable to attacks from relatively cheap drones? 2) Talking of Middle Eastern regimes, the deal prevailing in the Middle East for the past five decades has been that oil would be priced in US dollars, and that the oil-exporting regimes in Saudi Arabia, the UAE or Kuwait would use these US dollars to buy US-made weapons (and US treasuries). With this bargain, the US implicitly guaranteed the survival of the Gulf Arab regimes. Fast forward to 2022, and following the invasion of Ukraine, countries such as Saudi Arabia and the UAE have failed to condemn Russia. What’s more, Saudi Arabia let it be known that it might start to accept payment for its oil in renminbi. Perhaps this makes sense if Saudi Arabia feels it no longer needs US$340mn F-35s, but instead more US$1mn Turkish-made drones? 3) If, as the Azeri-Armenian and the Ukrainian-Russian wars suggest, drones have radically leveled the battlefield in war, this profound development has a multitude of implications. Does it undermine the long-held superiority of vastly expensive armament systems, tilting the balance in favor of much cheaper and much more widely-available weapons? If so, does this mean another pillar supporting the US dollar’s reserve currency status is crumbling in front of our eyes? In a world where military might is no longer the monopoly of a single superpower, or the duopoly of two, does the world become, de facto, multipolar? In such a world, would there still be a compelling reason for trade between Indonesia and Malaysia to be settled in US dollars, rather than in their own currencies? Wouldn’t trade between China and South Korea now be settled in renminbi and won? Drone tactics are a radically different form of warfare, and they are evolving fast. So, it would be premature to offer any definitive conclusions about the extent to which drones will dominate warfare in the future. However, their recent use in Ukraine (and Yemen, Azerbaijan and Ethiopia) means that investors have to be open to the idea that drones will change the battlefield of the future. Because if they are going to change the battlefield of the future, then they will also change the economic and financial realities of today. In this sense, drones might well be the modern-day equivalent of aircraft carriers. In World War II, aircraft carriers made big-gun battleships and other traditional naval warships obsolete, or at least highly vulnerable. Two early Pacific battles proved the point. The Battle of the Coral Sea in May 1942, generally considered by historians to have been a draw, was the first naval engagement ever fought in which the opposing fleets never made visual contact with each other. Carrier-based aircraft drove the action. A month later, the far more consequential Battle of Midway established the new reality beyond all doubt. The Imperial Japanese Navy was ambushed northwest of Hawaii and lost the bulk of its carrier force in a single action. It would be on the defensive for the rest of the war. With hindsight, Midway marked the start of US dominance over the world’s oceans. In short order, this translated into US dominance over global trade. But with the nature of warfare again changing, is this dominance of the oceans and of other battlefields guaranteed to last? Investors need to consider the uncomfortable possibility that it might not. The dramatic shift in the global financial landscape We are all the offspring of our own experiences. One important formative event in my own modest career was the Asian financial crisis of 1997-98. Witnessing how quickly things could unravel left a deep mark. I highlight this because I am not alone in having lived through the shock of 1997-98. Pretty much every emerging market policymaker aged 50-75 (which is most of them) went through a similar trauma. Seeing your country’s entire middle class wiped out in the space of a few weeks—which is what happened in Thailand, Indonesia, Russia, Argentina and others in the period from 1997 to 2000—is bound to leave a few scars. Among emerging market policymakers these scars took the form of a deepseated conviction of “never again” (see Our Brave New World). To ensure their countries’ middle classes were never again wiped out, they adopted a straightforward set of policy prescriptions that in the early 2000s Gavekal dubbed the The Circle Of Manipulation. It went something like this: 1) To avoid a future crisis, your central bank needs to maintain a healthy safety cushion of hard currency bonds, mostly US treasuries and bunds.   2) The more you become integrated with the global economy, the larger this cushion should be. 3) To build up this safety cushion, you need to run consistent and large current account surpluses. 4) To run consistent large current account surpluses, you need to maintain an undervalued currency. Among the results of these policy prescriptions were charts looking like this: By all previous standards, this was an odd state of affairs: an economic arrangement under which poorer countries with high savings rates and vast infrastructure investment needs ended up subsidizing consumption in rich countries with low savings rates and ever-accelerating twin deficits. To cut a long story short, for the last 25 years, we have lived in a world in which undervalued currencies in emerging markets allowed Western consumers to buy attractively priced goods and services imported from developing countries. Meanwhile, the individuals, companies and governments in the emerging markets which earned capital from these sales largely recycled their earned capital into Western assets—because Western assets were perceived to be “safe.” But this perception of safety may now be changing in front of our eyes. Consider the following changes: 1) Developed economy government bonds have proved anything but safe. As stresses of increasing severity have affected the world economy over the last 12 months, investors in local currency Indonesian and Brazilian government bonds and in gold have generated positive returns of between 3% and 4% in US dollar terms. Chinese government bonds are up by just over 1.5%. Meanwhile, Indian and South African government bonds have lost -4%. These performances contrast with US treasuries, which have lost -9%, and the train wrecks suffered by investors in eurozone bonds and Japanese government bonds, which are down anywhere between -17% and -23%. Of these, which can be considered the safest? 2) The confiscation of Russia’s reserves. I will not repeat here arguments I have made at length elsewhere (see What Freezing Russia’s Reserves Means). But in a nutshell, the decision to freeze Russia’s central bank reserves has been the most important financial development since US president Richard Nixon closed the gold window in 1971. From now on, any country that is not an outright US ally—China, Malaysia, South Africa and others—and even some historical friends—Saudi Arabia? The UAE? India?—will think twice before reflexively accumulating US treasuries from fear they may get canceled. Over the course of a weekend, with no discussion in the US Congress, and no discussion with the Federal Reserve, the US administration unilaterally turned the US treasury market on its head. From that moment on, the whole nature of a US treasury security would depend entirely on who owned it. 3) Running roughshod over property rights. It is hard to pin down what the West’s single most important comparative advantage might be. Having the world’s strongest military? Being the seat of almost all the world’s greatest universities? Issuance of the world’s reserve currencies? The list goes on. But surely somewhere near the top of the list should be the sanctity of property rights, guaranteed by rock-solid “rule of law.” The main reason Chinese tycoons for years purchased Vancouver real estate, the Emirati central bank bought US treasuries and Saudi princes parked their wealth in Zurich was the knowledge that, whatever happened, and wherever you came from, you were guaranteed property rights, and a fair trial to ascertain those rights, in any courtroom in New York, London, Zurich or Paris. Better still, since the implementation over the last 850 years in the West of habeas corpus and various bills of rights, you have been able to have confidence that you would be judged as an individual. One of the fundamental tenets of Western democracies’ legal systems is that there is no such thing as a collective crime—or collective punishment. You can only be held responsible and punished for what you have done as an individual. Unless - all of a sudden - you are a Russian oligarch. This is a dramatic development, if only because every Chinese tycoon, Saudi prince, or emerging market billionaire will now wonder whether he will be next to get canceled. If the wealth of Russian oligarchs can be confiscated so abruptly, then why not the assets of Saudi princes? Stretching this a little further, maybe it shouldn’t just be Saudi princes or Chinese billionaires who should be worried. If wealth can be seized without any trial, but simply because of guilt by association, maybe in the not-too distant future Western governments could confiscate the wealth of anyone who mined coal or pumped oil out of the ground. Don’t they have blood on their hands for causing tomorrow’s climate crisis? And while we are about it, perhaps we should also confiscate the wealth of social media barons for failing to prevent a mental health crisis among our youth? 4) Russia’s counter-attacks. Older readers may remember how in the days that preceded the Lehman bust, US Treasury secretary Hank Paulson walked around proclaiming that he had “a big bazooka,” and that if the market pushed too hard, he would fire this bazooka and blow shortsellers out of the water. Unfortunately, with Lehman it became obvious to all and sundry that Paulson’s bazooka was firing blanks. Today’s situation is similar. In the wake of the Russian invasion of Ukraine, the US decided to go for full weaponization of the US dollar, proclaiming the ruble had been turned to rubble. Last week, the ruble hit two-year highs against both the US dollar and euro. Biden’s financial bazooka seems to have been no more potent than Paulson’s. Why? Because Russia decided to fight back, requiring buyers from “unfriendly” countries to pay for their purchases of Russian commodities in rubles. And in effect, the only way unfriendly customers can acquire rubles is by offering gold to the Russian central bank (see The Clash Of Empires Intensifies). This has created a sudden and profound shift in the global trading and financial architecture. For decades, global trade was simple. If Russia produced commodities that China needed, then China first had to earn US dollars by selling goods and services to the US consumer. Only in this way could it acquire the US dollars it needed to purchase commodities from Russia. But what happens now that China or India can purchase their commodities from Russia or Iran for renminbi or Indian rupees? Obviously, their need to earn and save US dollars is no longer so acute. Conclusion Warfare is changing and the financial system has been weaponized like never before. However, the weaponization of the financial system has so far failed to deliver the intended results. At this point, investors can adopt one of two stances. The first might be described as “nothing to see here; move along.” The second is to accept that the world is changing rapidly, and that these changes will have deep and lasting impacts on financial markets. Different war, different world, different consequences For now, there are some clear takeaways. 1) The Ukraine war may be telling us that modern history’s unipolar age is now well and truly over. As big as the Russian army is, and as powerful as the US Treasury might be, the current crisis has demonstrated that neither is powerful enough to impose its will on its perceived enemies. This includes even relatively weak enemies; Ukraine’s army was hardly thought of as formidable, while Russia was supposed to be a financial pygmy. 2) This is a very important message. In an age of drones and parallel financial arrangements, there is no longer such a thing as absolute power—nor even the perception of absolute power. The pot has been called, each player has had to show his cards, and all are sitting with busted flushes! The fact that military and financial dominance may be harder to assert in the future opens the door to a much more multipolar world. 3) For 25 years, emerging market workers have subsidized consumption in developed markets, as emerging market policymakers kept their currencies undervalued and recycled their current account surpluses into “hard” currencies. If this arrangement now comes to an end, then the developed market consumer will struggle while the emerging market consumer will thrive. 4) Much consumption in emerging markets tends to occur at the “low end” of the product chain. This plays into a theme I have been harping on about for the last year: that investors should focus on companies that deliver products that consumers “need to have” rather than products that are “nice to have.” 5) Over the last two years, US treasuries and German bunds have failed in their job of providing the antifragile element in portfolios. There are few reasons to think that this failure is about to reverse any time soon. Today, investors need to look elsewhere for antifragile attributes. Precious metals, emerging market government bonds, high-yield energy assets and foodstuffs are all leading candidates. 6) High-end residential real estate in Western economies will lose the emerging market money-recycling bid and will struggle. 7) New safe destinations for emerging markets’ excess capital will emerge. Obvious candidates include Dubai, Singapore, Mauritius, and perhaps even Hong Kong (should China eventually decide to follow the rest of the world and to live with Covid). It is hard to be too bullish on these destinations. They are so small that even a marginal, influx of financial and human capital will have a disproportionate impact. The world’s unipolar era is over. Few portfolios reflect this reality - and definitely not the indexed portfolios that are today massively overweight an overvalued US and a desperately ill-omened Europe. Tyler Durden Sun, 05/22/2022 - 23:50.....»»

Category: blogSource: zerohedgeMay 23rd, 2022

Gordon Chang: What To Do About China

Gordon Chang: What To Do About China Authored by Gordon Chang via The Gatestone Institute, Since about 2018, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory, part of the People's Republic of China. This means that China considers those heavenly bodies to be like the South China Sea. This also means that China will exclude other nations from going to the moon and Mars if they have the capability to do so. We do not have to speculate about that: Chinese officials say this is what they are going to do. [W]hen Biden says, "Oh, the Chinese just want to compete with us," he is wrong. They do not want to "compete" within the international system. They do not even want to change that system... They want to overthrow it altogether, period. Is Xi Jinping really that bold... to start another war? ... First, China considers the United States to be its enemy. Second the United States is no longer deterring China. China feels it has a big green light to do whatever it wants. We Americans don't pay attention to propaganda... After all, these are just words. At this particular time, these words... [suggest] to me that China is laying the justification for a strike on the United States. We keep ignoring what Beijing is saying. We kept ignoring what Osama bin Laden was saying. We have to remember that the Chinese regime, unlike the Japanese, always warn its adversaries about what it is going to do The second reason war is coming is that America's deterrence of China is breaking down. Di's message was that with cash, China can do anything it wants, and that all Americans would take cash. He mentioned two words in this regard: Hunter Biden. In February, [Biden] had a two‑hour phone call with Xi Jinping. By Biden's own admission, he didn't raise the issue of the origins of COVID‑19 even once. If you are Xi Jinping, after you put down the receiver, your first thought is, "I just got away with killing hundreds of thousands of Americans." We have news that China is building something like 345 missile silos in three locations: in Gansu, Xinjiang, and in Inner Mongolia. These silos are clearly built to accommodate the DF‑41. The DF‑41 has a range of about 9,300 miles, which means that it can reach any part of the United States. The DF‑41 carries 10 warheads. This means that China could, in about two years..., have a bigger arsenal than ours. ...we have to assume the worst because Chinese leaders and Chinese generals, on occasion, unprovoked, have made threats to nuke American cities. In July, 2021 China tested a hypersonic glide warhead, which circled the world. This signals China intends to violate the Outer Space Treaty, to which China is a party. As of today, more than eight million people have died outside China. What happened? No one imposed costs on China. For at least a half‑decade, maybe a little bit longer, Chinese military researchers have been openly writing about a new type of biological warfare....They talk about a new type of biological warfare of "specific ethnic genetic attacks." In other words, pathogens that will leave the Chinese immune but sicken and kill everybody else, which means that the next disease from China can be a civilization killer. A lot of military analysts talk about how the first seconds of a war with China are going to be fought in outer space. They are going to blind our satellites, take them down, do all sorts of stuff. Those statements are wrong. The first day of war against the United States occurs about six months earlier, when they release pathogens in the United States. Then we are going to have that day in space. The war starts here, with a pathogen ‑‑ a virus, a microbe, a bug of some kind. That is where it begins. The One‑China policy is something many people misunderstand. Probably because Beijing uses propaganda to try to fuzzy up the issue.... China has a One‑China principle: that Taiwan is part of the People's Republic of China, full stop. We have a One‑China policy..., that the status of Taiwan is unresolved.... that the resolution of the status of Taiwan must be with the consent of people on both sides of the Strait. We need a policy of "strategic clarity," where we tell China that we will defend Taiwan. We also say we will extend a mutual defense treaty to Taiwan if it wants it, and we will put American troops on the island as a tripwire. We are Americans. We naturally assume that there are solutions, and good solutions, to every problem. After three decades of truly misguided China policy, there are no ... solutions that are "undangerous." ...The current trend of policy is unsustainable. There will be no American republic if we continue to do what we are currently doing and if we continue to allow China to do what it does. I do not think that enforcing a trade deal will start World War III. China has not met its obligations. As of a few months ago, China had met about 62% of its commitments..... We should be increasing the tariffs that President Trump imposed under Section 301 of the Trade Act of 1974. Remember, those tariffs are meant to be a remedy for the theft of US intellectual property. China has continued to steal US IP. As matter of fact, it has gotten worse... I do not think that we should be trying to foster integration of Wall Street into China's markets.... Do not take it from me, just look at their failure to comply with very simple, easy‑to‑comply-with requirements. It was a mistake. The best response would be if we hit them with everything at once because China right now is weak. If we were going to pick the number one thing to do, I would think trade. China now has a debt crisis, so they are not going to invest their way out of this crisis, which means the only way they can save their economy is net exports. We should stop buying their stuff. China has bought the political establishment in the Solomon Islands, except for one brave man named David Suidani. Recently, somebody got the bright idea of publishing all of the specific payments that Beijing has made to Solomon Islands politicians.... We should be doing this with payments to American politicians, we should be doing this across the board. What bothers me is that, although their assumptions about China have demonstrably been proven wrong, American policymakers still continue with the same policies. There is, in some people's mind, an unbreakable view that we have to cooperate with China.... This is what people learn in international relations school when they go to Georgetown, and they become totally stupid. Clearly, Nike and Apple and other companies are now, at this very moment, trying to prevent Congress from enacting toughened rules on the importation of forced‑labor products into our country. Moreover, the Chinese regime is even more casualty‑averse than we are. Even if Beijing thinks it can take Taiwan by force, it is probably not going to invade because it knows an invasion would be unpopular with most people in China. It is not going to risk hundreds of thousands of casualties that would result from an invasion. Unfortunately..., we taught the Chinese that they can without cost engage in these dangerous maneuvers of intercepting our planes and our ships. That is the problem: because as we have taught the Chinese to be more aggressive, they have been. [W]e should have made it clear to the Chinese leadership that they cannot kill Americans without cost. Hundreds of thousands Americans have been killed by a disease that China deliberately spread. From October 2020 to October 2021, more than 105,000 Americans died from fentanyl -- which China has purposefully, as a matter of state and Communist Party policy -- sold to Americans... we have to change course. I would close China's four remaining consulates. I would also strip the Chinese embassy down to the ambassador and his personal staff. The thousands who are in Washington, DC, they would be out. I would also raise tariffs to 3,600%, or whatever. This is a good time to do it. We have supply chain disruptions. We are not getting products from China anyway. We can actually start to do this sort of stuff. I would... just hammer those guys all the time verbally. People may think, "Those are just words." For communists, words are really important, because they are an insecure regime where propaganda is absolutely critical. I would be going after the Communists on human rights, I would be going after them on occupying the South China Sea, on Taiwan, unrelentingly -- because I would want to show the world that the United States is no longer afraid of China.... State Department people, they are frightened. We need to say to the Chinese regime, like Dulles, "I'm not afraid of you. I'm going after you, and I'm going to win." Is Xi Jinping really that bold... to start another war?... First, China considers the United States to be its enemy. Second the United States is no longer deterring China. China feels it has a big green light to do whatever it wants. All the conditions for history's next great war are in place. Jim Holmes, the Wiley Professor at the Naval War College, actually talks about this period as being 1937. 1937 was the year in which if you were in Europe or America, you could sense the trouble. If you were in Asia in 1937, you would be even more worried, because that year saw Japan's second invasion of China that decade. No matter where you lived, however, you could not be sure that the worst would happen, that great armies and navies around the world would clash. There was still hope that the situation could be managed. As we now know, the worst did happen. In fact, what happened was worse than what anyone thought at the time. We are now, thanks to China, back to 1937. We will begin our discussion in Afghanistan. Beijing has had long‑standing relations with the Afghan Taliban, going back before 9/11, and continuing through that event. After the US drove the Taliban from power and while it was conducting an insurgency, China was selling the group arms, including anti‑aircraft missiles, that were used to kill American and NATO forces. China's support for killing Americans has continued to today. In December 2020, Indian Intelligence was instrumental, in Afghanistan, in breaking up a ring of Chinese spies and members of the Haqqani Network. The Trump administration believed that the Chinese portion of that ring was actually paying cash for killing Americans. What can happen next? We should not be surprised if China gives the Taliban an atomic weapon to be used against an American city. Would they be that vicious? We have to remember that China purposefully, over the course of decades, proliferated its nuclear weapons technology to Pakistan and then helped Pakistan sell that Chinese technology around the world to regimes such as Iran's and North Korea's. Today, China supports the Taliban. We know this because China has kept open its embassy in Kabul. China is also running interference for the Taliban in the United Nations Security Council. It is urging countries to support that insurgent group with aid. It looks as if the Taliban's main financial backers these days are the Chinese. Beijing is hoping to cash in on its relationship in Central Asia. Unfortunately, there is a man named Biden, who is helping them. In early August, Biden issued an executive order setting a goal that by 2030, half of all American vehicles should be electric‑powered. To be electric‑powered, we need rare earth minerals, we need lithium. As many people have said, Afghanistan is the Saudi Arabia of rare earths and lithium. If Beijing can mine this, it makes the United States even more dependent on China. It certainly helps the Taliban immeasurably. Unfortunately, Beijing has more than just Afghanistan in mind. The Chinese want to take away our sovereignty, and that of other nations, and rule the world. They actually even want to rule the near parts of the solar system. Yes, that does sound far‑fetched, but, no, I'm not exaggerating. Chinese President Xi Jinping would like to end the current international system. On July 1, in a landmark speech, in connection with the centennial of China's ruling organization, he said this: "The Communist Party of China and the Chinese people, with their bravery and tenacity, solemnly proclaim to the world that the Chinese people are not only good at taking down the old world, but also good in building a new one." By that, China's leader means ending the international system, the Westphalian international system. It means he wants to impose China's imperial‑era notions of governance, where Chinese emperors believed they not only had the Mandate of Heaven over tianxia, or all under Heaven, but that Heaven actually compelled the Chinese to rule the entire world. Xi Jinping has been using tianxia themes for decades, and so have his subordinates, including Foreign Minister Wang Yi, who in September 2017 wrote an article in Study Times, the Central Party School's influential newspaper. In that article, Wang Yi wrote that Xi Jinping's thought on diplomacy ‑‑ a "thought" in Communist Party lingo is an important body of ideological work ‑‑ Wang Yi wrote that Xi Jinping's thought on diplomacy made innovations on and transcended the traditional theories of Western international relations of the past 300 years. Take 2017, subtract 300 years, and you almost get to 1648, which means that Wang Yi, with his time reference, was pointing to the Treaty of Westphalia of 1648, which established the current system of sovereign states. When Wang Yi writes that Xi Jinping wants to transcend that system, he is really telling us that China's leader does not want sovereign states, or at least no more of them than China. This means that when Biden says, "Oh, the Chinese just want to compete with us," he is wrong. They do not want to "compete" within the international system. They do not even want to change that system so it is more to their liking. They want to overthrow it altogether, period. China is also revolutionary with regard to the solar system. Since about 2018, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory. In other words, as part of the People's Republic of China. This means that China considers those heavenly bodies to be like the South China Sea: theirs and theirs alone. This also means that China will exclude other nations from going to the moon and Mars if they have the capability to do so. We do not have to speculate about that: Chinese officials say this is what they are going to do. Let us return to April 2021. Beijing announced the name of its Mars rover. "We are naming the Mars rover Zhurong," the Chinese said, "because Zhurong was the god of fire in Chinese mythology, " How nice. Yes, Zhurong is the god of fire. What Beijing did not tell us is that Zhurong is also the god of war—and the god of the South China Sea. Is Xi Jinping really that bold or that desperate to start another war? Two points. First, China considers the United States to be its enemy. The second point is that the United States is no longer deterring China. China feels it has a big green light to do whatever it wants. On the first point, about our enemy status, we have to go back to May 2019. People's Daily, the most authoritative publication in China, actually carried a piece that declared a "people's war" on the US. This was not just some isolated thought. On August 29th 2021, People's Daily came out with a landmark piece that accused the United States of committing "barbaric" acts against China. Again, this was during a month of hostile propaganda blasts from China. On the August 29th, Global Times, which is controlled by People's Daily, came right out and also said that the United States was an enemy or like an enemy. We Americans don't pay attention to propaganda. The question is, should we be concerned about what China is saying? After all, these are just words. At this particular time, these words are significant. The strident anti‑Americanism suggests to me that China is laying the justification for a strike on the United States. We keep ignoring what Beijing is saying. We kept ignoring what Osama bin Laden was saying. We have to remember that the Chinese regime, unlike the Japanese, always warn its adversaries about what it is going to do. Jim Lilley, our great ambassador to Beijing during the Tiananmen Massacre, actually said that China always telegraphs its punches. At this moment, China is telegraphing a punch. That hostility, unfortunately, is not something we can do very much about. The Chinese Communist regime inherently idealizes struggle, and it demands that others show subservience to it. The second reason war is coming is that America's deterrence of China is breaking down. That is evident from what the Chinese are saying. In March of 2021, China sent its top two diplomats, Yang Jiechi and Wang Yi, to Anchorage to meet our top officials, Secretary of State Antony Blinken and National Security Advisor Jake Sullivan. Yang, in chilling words, said the US could no longer talk to China "from a position of strength." We saw the same theme during the fall of Kabul. China then was saying, "Look, those Americans, they can't deal with the insurgent Taliban. How can they hope to counter us magnificent Chinese?" Global Times actually came out with a piece referring to Americans: "They can't win wars anymore." We also saw propaganda at that same time directed at Taiwan. Global Times was saying, again, in an editorial, an important signal of official Chinese thinking, "When we decide to invade, Taiwan will fall within hours and the US will not come to help." It is probably no coincidence that this propaganda came at the time of incursions into Taiwan's air-defense identification zone. We need to be concerned with more than just the intensity and with the frequency of these flights, however. We have to be concerned that China was sending H‑6K bombers; they are nuclear‑capable. Something is wrong. Global Times recently came out with an editorial with the title, "Time to warn Taiwan secessionists and their fomenters: war is real." Beijing is at this moment saying things heard before history's great conflicts. The Chinese regime right now seems to be feeling incredibly arrogant. We heard this on November 28th in 2020, when Di Dongsheng, an academic in Beijing, gave a lecture live-streamed to China. Di showed the arrogance of the Chinese elite. More importantly, he was showing that the Chinese elite no longer wanted to hide how they felt. Di, for instance, openly stated that China could determine outcomes at the highest levels of the American political system. Di's message was that with cash, China can do anything it wants, and that all Americans would take cash. He mentioned two words in this regard: Hunter Biden. Unfortunately, President Joe Biden is reinforcing this notion. China, for instance, has so far killed nearly one million Americans with a disease that it deliberately spread beyond its borders. Yet, what happened? Nothing. We know that China was able to spread this disease with its close relationship with the World Health Organization. President Trump, in July of 2020, took us out of the WHO. What did Biden do? In his first hours in office, on January 20th, 2021, he put us back into the WHO. In February, he had a two‑hour phone call with Xi Jinping. By Biden's own admission, he didn't raise the issue of the origins of COVID‑19 even once. If you are Xi Jinping, after you put down the receiver, your first thought is, "I just got away with killing hundreds of thousands of Americans." Then there's somebody named John Kerry. Our republic is not safe when John Kerry carries a diplomatic passport, as he now does. He is willing to make almost any deal to get China to sign an enhanced climate arrangement. Kerry gave a revealing interview to David Westin of Bloomberg on September 22, 2021. Westin asked him, "What is the process by which one trades off climate against human rights?" Climate against human rights? Kerry came back and said, "Well, life is always full of tough choices in the relationship between nations." Tough choices? We Americans need to ask, "What is Kerry willing to give up to get his climate deal?" Democracies tend to deal with each other in the way that Kerry says. If we are nice to a democracy, that will lead to warm relations; warm relations will lead to deals, long‑standing ties. Kerry thinks that the Chinese communists think that way. Unfortunately, they do not. We know this because Kerry's successor as Secretary of State, Hillary Clinton, in February 2009, said in public, "I'm not going to press the Chinese on human rights because I've got bigger fish to fry." She then went to Beijing a day after saying that and got no cooperation from the Chinese. Even worse, just weeks after that, China felt so bold that it attacked an unarmed US Navy reconnaissance vessel in the South China Sea. The attack was so serious that it constituted an act of war. The Chinese simply do not think the way that Kerry believes they do. All of this, when you put it together, means that the risk of war is much higher than we tend to think. Conflict with today's aggressor is going to be more destructive than it was in the 1930s. We have news that China is building something like 345 missile silos in three locations: in Gansu, Xinjiang, and in Inner Mongolia. These silos are clearly built to accommodate the DF‑41. The DF‑41 has a range of about 9,300 miles, which means that it can reach any part of the United States. The DF‑41 carries 10 warheads. This means that China could, in about two years, as some experts think, have a bigger arsenal than ours. China has built decoy silos before. We are not sure they are going to put all 345 missiles into these facilities, but we have to assume the worst because Chinese leaders and Chinese generals, on occasion, unprovoked, have made threats to nuke American cities. This, of course, calls into question their official no‑first‑use policy, and also a lot of other things. China will not talk to us about arms control. We have to be concerned that China and Russia, which already are coordinating their military activities, would gang up against us with their arsenals. In July, 2021 China tested a hypersonic glide warhead, which circled the world. This signals China intends to violate the Outer Space Treaty, to which China is a party. It also shows that in hypersonic technology, which was developed by Americans, China is now at least a decade ahead of us in fielding a weapon. Why is China doing all this now? The country is coming apart at the seams. There is, for instance, a debt crisis. Evergrande and other property developers have started to default. It is more than just a crisis of companies. China is basically now having its 2008. Even more important than that, they have an economy that is stumbling and a food crisis that is worsening year to year. They know their environment is exhausted. Of course, they also are suffering from a continuing COVID‑19 epidemic. To make matters worse, all of this is occurring while China is on the edge of the steepest demographic decline in history in the absence of war or disease. Two Chinese demographers recently stated that China's population will probably halve in 45 years. If you run out those projections, it means that by the end of the century, China will be about a third of its current size, basically about the same number of people as the United States. These developments are roiling the political system. Xi Jinping is being blamed for these debacles. We know he has a low threshold of risk. Xi now has all the incentive in the world to deflect popular and regime discontent by lashing out. In 1966, Mao Zedong, the founder of the People's Republic, was sidelined in Beijing. What did he do? He started the Cultural Revolution. He tried to use the Chinese people against his political enemies. That created a decade of chaos. Xi Jinping is trying to do the same thing with his "common prosperity" program. The difference is that Mao did not have the means to plunge the world into war. Xi, with his shiny new military, clearly does have that ability. So here is a 1930s scenario to consider. The next time China starts a conflict, whether accidentally or on purpose, we could see that China's friends -- Russia, North Korea, Iran, Pakistan -- either in coordination with China or just taking advantage of the situation, move against their enemies. That would be Ukraine in the case of Russia, South Korea in the case of North Korea, Israel in the case of Iran, India in the case of Pakistan, and Morocco in the case of Algeria. We could see crises at both ends of the European landmass and in Africa at the same time. This is how world wars start. *  *  * Question: Why do you believe China attacked the world with coronavirus? Chang: I believe that SARS‑CoV‑2, the pathogen that causes COVID‑19, is not natural. There are, for example, unnatural arrangements of amino acids, like the double‑CGG sequence, that do not occur in nature. We do not have a hundred percent assurance on where this pathogen came from. We do, however, have a hundred percent assurance on something else: that for about five weeks, maybe even five months, Chinese leaders knew that this disease was highly transmissible, from one human to the next, but they told the world that it was not. At the same time as they were locking down their own country ‑‑ Xi Jinping by locking down was indicating that he thought this was an effective way of stopping the disease -- he was pressuring other countries not to impose travel restrictions and quarantines on arrivals from China. It was those arrivals from China that turned what should have been an epidemic confined to the central part of China, into a global pandemic. As of today, more than eight million people have died outside China. What happened? No one imposed costs on China. For at least a half‑decade, maybe a little bit longer, Chinese military researchers have been openly writing about a new type of biological warfare. This was, for instance, in the 2017 edition of "The Science of Military Strategy," the authoritative publication of China's National Defense University. They talk about a new type of biological warfare of "specific ethnic genetic attacks." In other words, pathogens that will leave the Chinese immune but sicken and kill everybody else, which means that the next disease from China can be a civilization killer. Remember, Xi Jinping must be thinking, "I just got away with killing eight million people. Why wouldn't I unleash a biological attack on the United States? Look what the virus has done not only to kill Americans but also to divide American society." A lot of military analysts talk about how the first seconds of a war with China are going to be fought in outer space. They are going to blind our satellites, take them down, do all sorts of stuff. Those statements are wrong. The first day of war against the United States occurs about six months earlier, when they release pathogens in the United States. Then we are going to have that day in space. The war starts here, with a pathogen ‑‑ a virus, a microbe, a bug of some kind. That is where it begins. Question: You mentioned 1939. Taiwan is the Poland of today. We get mixed signals: Biden invites the Taiwanese foreign minister to his inauguration, but then we hear Ned Price, his State Department spokesman, say that America will always respect the One‑China policy. Meaning, we're sidelining defending Taiwan? Chang: The One‑China policy is something many people misunderstand. Probably because Beijing uses propaganda to try to fuzzy up the issue. China has a One‑China principle: that Taiwan is part of the People's Republic of China, full stop. We have a One‑China policy, which is different. We recognize Beijing as the legitimate government of China. We also say that the status of Taiwan is unresolved. Then, the third part of our One‑China policy is that the resolution of the status of Taiwan must be with the consent of people on both sides of the Strait. In other words, that is code for peace, a peaceful resolution. Our policies are defined by the One‑China policy, the Three Communiques, Reagan's Six Assurances, and the Taiwan Relations Act. Our policy is difficult for someone named Joe Biden to articulate, because he came back from a campaign trip to Michigan, and he was asked by a reporter about Taiwan, and Biden said, "Don't worry about this. We got it covered. I had a phone call with Xi Jinping and he agreed to abide by the Taiwan agreement." In official US discourse, there is no such thing as a "Taiwan agreement." Some reporter then asked Ned Price what did Biden mean by the Taiwan agreement. Ned Price said, "The Taiwan agreement means the Three Communiques the Six Assurances, the Taiwan Relations Act, and the One‑China policy." Ned Price could not have been telling the truth because Xi Jinping did not agree to America's position on Taiwan. That is clear. There is complete fuzziness or outright lying in the Biden administration about this. Biden's policies on Taiwan are not horrible, but they are also not appropriate for this time. decades, we have had this policy of "strategic ambiguity," where we do not tell either side what we would do in the face of imminent conflict. That worked in a benign period. We are no longer in a benign period. We are in one of the most dangerous periods in history. We need a policy of "strategic clarity," where we tell China that we will defend Taiwan. We also say we will extend a mutual defense treaty to Taiwan if it wants it, and we will put American troops on the island as a tripwire. Question: You think he is not saying that because he has no intention of actually doing it, so in a way, he is telling the truth? Chang: The mind of Biden is difficult to understand. We do not know what the administration would do. We have never known, after Allen Dulles, what any administration would do, with regard to Taiwan. We knew what Dulles would have done. We have got to be really concerned because there are voices in the administration that would give Taiwan, and give other parts of the world, to China. It would probably start with John Kerry; that is only a guess. Question: You mentioned earlier the growing Chinese economic problems. Would you use taking action on the enormous trade deficits we run with China to contribute to that problem? Chang: Yes, we should absolutely do that. Go back to a day which, in my mind, lives in infamy, which is January 15th, 2020, when President Trump signed the Phase One trade deal, which I think was a mistake. In that Phase One trade deal, it was very easy for China to comply, because there were specific targets that China had to meet in buying US goods and services. This was "managed trade." China has not met its obligations. As of a few months ago, China had met about 62% of its commitments. That means, they have dishonored this deal in a material and significant way. If nothing else, China has failed to meet its Phase One trade deal commitments. We should be increasing the tariffs that President Trump imposed under Section 301 of the Trade Act of 1974. Remember, those tariffs are meant to be a remedy for the theft of US intellectual property. China has continued to steal US IP. As matter of fact, it has gotten worse: for instance, these Chinese anti‑lawsuit injunctions, which they have started to institute. We need to do something: China steals somewhere between $300 to $600 billion worth of US intellectual property each year. That is a grievous wound on the US economy, it is a grievous wound on our society in general. We need to do something about it. Question: As a follow‑up on that, Japan commenced World War II because of the tariffs Roosevelt was strapping on oil imports into Japan, do you think that might well have the same effect on China, where we do begin to impose stiffer tariffs on American imports? Chang: That is a really important question, to which nobody has an answer. I do not think that China would start a war over tariffs. Let me answer this question in a different way. We are Americans. We naturally assume that there are solutions, and good solutions, to every problem. After three decades of truly misguided China policy, there are no good solutions. There are no solutions that are "undangerous." Every solution, going forward, carries great risk. The current trend of policy is unsustainable. There will be no American republic if we continue to do what we are currently doing and if we continue to allow China to do what it does. I do not think that enforcing a trade deal will start World War III. The point is, we have no choice right now. First, I don't think the Chinese were ever going to honor the Phase One agreement . This was not a deal where there were some fuzzy requirements. This deal was very clear: China buys these amounts of agricultural products by such and such date, China buys so many manufactured products by such and such date. This was not rocket science. China purposefully decided not to honor it. There are also other issues regarding the trade deal do not think that we should be trying to foster integration of Wall Street into China's markets, which is what the Phase One deal also contemplated. Goldman Sachs ran away like a bandit on that. There are lot of objections to it. I do not think we should be trading with China, for a lot of reasons. The Phase One trade deal, in my mind, was a great mistake. Do not take it from me, just look at their failure to comply with very simple, easy‑to‑comply-with requirements. It was a mistake. Question: Concerning cybersecurity, as we saw in the recent departure of a Pentagon official, ringing the alarm on how we are completely vulnerable to China's cyberattacks. From your perspective, what would an attack look like on China that would hurt them? What particular institutions would be the most vulnerable? Is it exposing their secrets? Is it something on their financial system? Is it something on their medical system or critical infrastructure? What does the best way look like to damage them? Also, regarding what you mentioned about Afghanistan, we know that China has been making inroads into Pakistan as a check on American hegemony in relationships with India and Afghanistan. Now that the Afghanistan domino is down, what do you see in the future for Pakistan's nuclear capability, in conjunction with Chinese backing, to move ever further westward towards Afghanistan, and endangering Middle East security? Chang: Right now, India has been disheartened by what happened, because India was one of the main backers of the Afghan government. What we did in New Delhi was delegitimize our friends, so that now the pro‑Russian, the pro‑Chinese elements in the Indian national security establishment are basically setting the tone. This is terrible. What has happened, though, in Pakistan itself, is not an unmitigated disaster for us, because China has suffered blowback there. There is an Afghan Taliban, and there is a Pakistani Taliban. They have diametrically‑opposed policies on China. The Afghan Taliban is an ally of China; the Pakistani Taliban kill Chinese. They do that because they want to destabilize Pakistan's capital, Islamabad. Beijing supports Islamabad. The calculation on part of the Pakistani Taliban is, "We kill Chinese, we destabilize Islamabad, we then get to set up the caliphate in Pakistan." What has happened is, with this incredible success of the Afghan Taliban, that the Pakistani Taliban has been re‑energized -- not good news for China. China has something called the China‑Pakistan Economic Corridor, part of their Belt and Road Initiative. Ultimately that is going to be something like $62 billion of investment into Pakistani roads, airports, electric power plants, utilities, all the rest of it. I am very happy that China is in Pakistan, because they are now dealing with a situation that they have no solutions to. It's like Winston Churchill on Italy, "It's now your turn." We should never have had good relations with Pakistan. That was always a short‑term compromise that, even in the short term, undermined American interests. The point is that China is now having troubles in Pakistan because of their success in Afghanistan. Pakistan is important to China for a number of reasons. One of them is, they want it as an outlet to the Indian Ocean that bypasses the Malacca Strait -- a choke point that the US Navy ‑‑ in their view ‑‑ could easily close off, which is correct. They want to bypass that, but their port in Gwadar is a failure in many respects. Gwadar is in Pakistan's Baluchistan. The Baluchs are one of the most oppressed minorities on earth. They have now taken to violence against the Chinese, and they have been effective. Pakistan is a failure for China. The best response would be if we hit them with everything at once because China right now is weak. If we were going to pick the number one thing to do, I would think trade. Trade is really what they need right now. Their economy is stalling. There are three parts to the Chinese economy, as there are to all economies: consumption, investment, and net exports. Their consumption right now is extremely weak from indicators that we have. The question is can they invest? China now has a debt crisis, so they are not going to invest their way out of this crisis, which means the only way they can save their economy is net exports. We should stop buying their stuff. We have extraordinary supply chain disruptions right now. It should be pretty easy for us to make the case that we must become self‑sufficient on a number of items. Hit them on trade. Hit them on investment, publicize the bank account details of Chinese leaders. All these things that we do, we do it all at the same time. We can maybe get rid of these guys. Question: In the Solomon Islands, they published China's under-the-table payments to political figures. Should we do the same thing with China's leaders? Chang: Yes. There is now a contest for the Solomon Islands, which includes Guadalcanal. China has bought the political establishment in the Solomon Islands, except for one brave man named David Suidani. Recently, somebody got the bright idea of publishing all of the specific payments that Beijing has made to Solomon Islands politicians. This was really good news. We should be doing this with payments to American politicians, we should be doing this across the board. Why don't we publish their payments to politicians around the world? Let's expose these guys, let's go after them. Let's root out Chinese influence, because they are subverting our political system. Similarly, we should also be publishing the bank account details of all these Chinese leaders, because they are corrupt as hell. Question: Could you comment, please, on what you think is the nature of the personal relationships between Hunter Biden, his father, and Chinese financial institutions. How has it, if at all, affected American foreign policy towards China, and how will it affect that policy? Chang: There are two things here. There are the financial ties. Hunter Biden has connections with Chinese institutions, which you cannot explain in the absence of corruption. For instance, he has a relationship with Bohai Harvest Partners, BHR. China puts a lot of money into the care of foreign investment managers. The two billion, or whatever the number is, is not that large, but they only put money with people who have a track record in managing investments. Hunter Biden only has a track record of being the son of Joe Biden. There are three investigations of Hunter Biden right now. There is the Wilmington US Attorney's Office, the FBI -- I don't place very much hope in either of these – but the third one might actually bear some fruit: the IRS investigation of Hunter Biden. Let us say, for the moment, that Biden is able to corrupt all three of these investigations. Yet money always leaves a trail. We are going to find out one way or another. Peter Schweizer, for instance, is working on a book on the Biden cash. Eventually, we are going to know about that. What worries me is not so much the money trail -- and of course, there's the art sales, a subject in itself, because we will find out. What worries me is that Hunter Biden, by his own admission, is a troubled individual. He has been to China a number of times. He has probably committed some embarrassing act there, which means that the Ministry of State Security has audio and video recordings of this. Those are the things that can be used for blackmail. We Americans would never know about it, because blackmail does not necessarily leave a trail. This is what we should be most concerned about. Biden has now had two long phone calls with Xi Jinping. The February call, plus also one a few months ago. We do not know what was said. I would be very worried that when Xi Jinping wants to say something, there will be a phone call to Biden, and it would be Xi doing the talking without note takers. Question: Please tell us about the China desk over the 30 years, the influence of the bureaucracy on politics; what can they affect? Chang: I do not agree with our China policy establishment in Washington, in general, and specifically the State Department and NSC. This a complicated issue. First, there is this notion after the end of the Cold War, that the nature of governments did not matter. You could trade with them, you could strengthen them, and it would not have national security implications. That was wrong for a number of reasons, as we are now seeing. What bothers me is that, although their assumptions about China have demonstrably been proven wrong, American policymakers still continue with the same policies. There is, in some people's mind, an unbreakable view that we have to cooperate with China. You hear this from Blinken all the time: "We've got to cooperate where we can." It is this formulation which is tired, and which has not produced the types of policies that are necessary to defend our republic. That is the unfortunate thing. This is what people learn in international relations school when they go to Georgetown, and they become totally stupid. We Americans should be upset because we have a political class that is not defending us. They are not defending us because they have these notions of China. George Kennan understood the nature of the Soviet Union. I do not understand why we cannot understand the true nature of the Chinese regime. Part of it is because we have Wall Street, we have Walmart, and they carry China's water. There are more of us than there are of them in this country. We have to exercise our vote to make sure that we implement China policies that actually protect us. Policies that protect us are going to be drastic and they will be extreme, but absolutely, we have now dug ourselves into such a hole after three decades of truly misguided views on China, that I don't know what else to say. This is not some partisan complaint. Liberals and conservatives, Republicans and Democrats, all have truly misguided China policies. I do not know what it takes to break this view, except maybe for the deaths of American servicemen and women. Question: Is the big obstacle American businesses which, in donations to Biden, are the ones stopping decoupling of commerce, and saying, "Do not have war; we would rather earn money"? Chang: It is. You have, for instance, Nike. There are a number of different companies, but Nike comes to mind right now, because they love to lecture us about racism. For years they were operating a factory in Qingdao, in the northeastern part of China, that resembled a concentration camp. The laborers were Uighur and Kazakh women, brought there on cattle cars and forced to work. This factory, technically, was operated by a South Korean sub‑contractor, but that contractor had a three‑decade relationship with Nike. Nike had to know what was going on. This was forced labor, perhaps even slave labor. Clearly, Nike and Apple and other companies are now, at this very moment, trying to prevent Congress from enacting toughened rules on the importation of forced‑labor products into our country. One of the good things Trump did was, towards the end of his four years, he started to vigorously enforce the statutes that are already on the books, about products that are made with forced and slave labor. Biden, to his credit, has continued tougher enforcement. Right now, the big struggle is not the enforcement, but enhancing those rules. Apple and all of these companies are now very much trying to prevent amendment of those laws. It's business, but it's also immoral. Question: It is not just big Wall Street firms. There are companies that print the Bible. Most Bibles are now printed in China. When President Trump imposed the tariffs, a lot of the Bible printers who depended on China actually went to Trump and said, "You cannot put those tariffs in because then the cost of Bibles will go up." Chang: Most everyone lobbies for China. We have to take away their incentive to do so. Question: What are the chances that China's going to invade Taiwan? Chang: There is no clear answer. There are a number of factors that promote stability. One of them is that, for China to invade Taiwan, Xi Jinping has to give some general or admiral basically total control over the Chinese military. That makes this flag officer the most powerful person in China. Xi is not about to do that. Moreover, the Chinese regime is even more casualty‑adverse than we are. Even if Beijing thinks it can take Taiwan by force, it is probably not going to invade because it knows an invasion would be unpopular with most people in China. It is not going to risk hundreds of thousands of casualties that would result from an invasion. The reason we have to be concerned is because it is not just a question of Xi Jinping waking up one morning and saying, "I want to invade Taiwan." The danger is the risk of accidental contact, in the skies or on the seas, around Taiwan. We know that China has been engaging in hostile conduct, and this is not just the incursions into Taiwan's air-defense identification zone. There are also dangerous intercepts of the US Navy and the US Air Force in the global commons. One of those accidents could spiral out of control. We saw this on April 1st, 2001, with the EP‑3, where a Chinese jet clipped the wing of that slow‑moving propeller plane of the US Navy. The only reason we got through it was that George W. Bush, to his eternal shame, paid China a sum that was essentially a ransom. He allowed our crew to be held for 11 days. He allowed the Chinese to strip that plane. This was wrong. This was the worst incident in US diplomatic history, but Bush's craven response did get us through it. Unfortunately, by getting through it we taught the Chinese that they can without cost engage in these dangerous maneuvers of intercepting our planes and our ships. That is the problem: because as we have taught the Chinese to be more aggressive, they have been. One of these incidents will go wrong. The law of averages says that. Then we have to really worry. Question: You don't think Xi thinks, "Oh well, we can sacrifice a few million Chinese"? Chang: On the night of June 15th, 2020, there was a clash between Chinese and Indian soldiers in Ladakh, in the Galwan Valley. That was a Chinese sneak attack on Indian-controlled territory. That night, 20 Indian soldiers were killed. China did not admit to any casualties. The Indians were saying that they killed about 45 Chinese soldiers that night. Remember, this was June 15th of 2020. It took until February of 2021 for China to admit that four Chinese soldiers died. TASS, the Russian news agency, recently issued a story reporting that 45 Chinese soldiers actually died that night. This incident shows you how risk‑averse and casualty‑averse the Chinese Communist Party is. They are willing to intimidate, they are willing to do all sorts of things. They are, however, loath to fight sustained engagements. Remember, that the number one goal of Chinese foreign policy is not to take over Taiwan. The number one goal of Chinese foreign policy is to preserve Communist Party rule. If the Communist Party feels that the Chinese people are not on board with an invasion of Taiwan, they will not do it even if they think they will be successful. Right now, the Chinese people are not in any mood for a full‑scale invasion of Taiwan. On the other hand, Xi Jinping has a very low threshold of risk. He took a consensual political system where no Chinese leader got too much blame or too much credit, because everybody shared in decisions, and Xi took power from everybody, which means, he ended up with full accountability, which means -- he is now fully responsible. In 2017, when everything was going China's way, this was great for Xi Jinping because he got all the credit. Now in 2021, where things are not going China's way, he is getting all the blame. The other thing, is that Xi has raised the cost of losing a political struggle in China. In the Deng Xiaoping era, Deng reduced the cost of losing a struggle. In the Maoist era, if you lost a struggle, you potentially lost your life. In Deng's era, if you lost a struggle, you got a nice house, a comfortable life. Xi Jinping has reversed that. Now the cost of losing a political struggle in China is very high. So there is now a combination of these two developments. Xi has full accountability. He knows that if he is thrown out of power, he loses not just power. He loses his freedom, his assets, potentially his life. If he has nothing to lose, however, it means that he can start a war, either "accidentally" or on purpose. He could be thinking, "I'm dying anyway, so why don't I just roll the dice and see if I can get out of this?" That is the reason why this moment is so exceedingly risky. When you look at the internal dynamics inside China right now, we are dealing with a system in crisis. Question: China has a conference coming up in a year or so. What does Chairman Xi want to do to make sure he gets through that conference with triumph? Chang: The Communist Party has recently been holding its National Congresses once every five years. If the pattern follows -- and that is an if -- the 20th National Congress of the Communist Party will be held either October or November of next year. This is an important Congress, more so than most of them because Xi Jinping is looking for an unprecedented third term as general secretary of the Communist Party. If you go back six months ago, maybe a year, everyone was saying, "Oh, Xi Jinping. No problem. He's president for life. He's going to get his third term. He will get his fourth term. He will get his fifth term, as long as he lives. This guy is there forever." Right now, that assumption is no longer valid. We do not know what's going to happen because he is being blamed for everything. Remember, as we get close to the 20th National Congress, Xi Jinping knows he has to show "success." Showing "success" could very well mean killing some more Indians or killing Americans or killing Japanese or something. We just don't know what is going to happen. Prior to the National Congress, there is the sixth plenum of the 19th Congress. Who knows what is going to happen there. The Communist Party calendar, as you point out, does dictate the way Xi Jinping interacts with the world. Question: Going back to the wing-clip incident, what should Bush have done? Chang: What Bush should have done is immediately demand the return of that plane. What he should have done was to impose trade sanctions, investment sanctions, whatever, to get our plane back. We were fortunate, in the sense that our aviators were returned, but they were returned in a way that has made relations with China worse, because we taught the Chinese regime to be more aggressive and more belligerent. We created the problems of today and of tomorrow. I would have imposed sanction after sanction after sanction, and just demand that they return the plane and the pilots. Remember, that at some point, it was in China's interests to return our aviators. The costs would have been too high for the Chinese to keep them. We did not use that leverage on them. While we are on this topic, we should have made it clear to the Chinese leadership that they cannot kill Americans without cost. Hundreds of thousands Americans have been killed by a disease that China deliberately spread. In one year, from 2020 to 2021, nearly 80,000 Americans died from fentanyl, which China has purposefully, as a matter of state and Communist Party policy -- sold to Americans. China is killing us. We have to do something different. I'm not saying that we have good solutions; we don't. But we have to change course. Question: Biden is continuing this hostage thing with Huawei, returning the CFO of Huawei in exchange for two Canadians. Have we taught the Chinese that they can grab more hostages? Chang: President Trump was right to seek the extradition of Meng Wanzhou, the chief financial officer of Huawei Technologies. Biden, in a deal, released her. She did not even have to plead guilty to any Federal crime. She signed a statement, which I hope we'll be able to use against Huawei. As soon as Meng was released, China released the "two Michaels," the two Canadians who were grabbed within days of our seeking extradition of Meng Wanzhou. In other words, the two Michaels were hostages. We have taught China that any time that we try to enforce our own laws, they can just grab Americans. They have grabbed Americans as hostages before, but this case is high profile. They grabbed Americans, and then they grabbed Canadians, and they got away with it. They are going to do it again. We are creating the incentives for Beijing to act even more dangerously and lawlessly and criminally in the future. This has to stop. Question: On the off-chance that the current leader does not maintain his position, what are your thoughts on the leaders that we should keep an eye on? Chang: There is no one who stands out among the members of the Politburo Standing Committee. That is purposeful. Xi Jinping has made sure that there is nobody who can be considered a successor; that is the last thing he wants. If there is a change in leadership, the new leader probably will come from Jiang Zemin's Shanghai Gang faction. Jiang was China's leader before Hu Jintao, and Hu came before Xi Jinping. There is now a lot of factional infighting. Most of the reporting shows that Jiang has been trying to unseat Xi Jinping because Xi has been putting Jiang's allies in jail. Remember, the Communist Party is not a monolith. It has a lot of factions. Jiang's faction is not the only one. There is something called the Communist Youth League of Hu Jintao. It could, therefore, be anybody. Question: Double question: You did not talk about Hong Kong. Is Hong Kong lost forever to the Chinese Communist Party? Second question, if you could, what are the three policies that you would change right away? Chang: Hong Kong is not lost forever. In Hong Kong, there is an insurgency. We know from the history of insurgencies that they die away -- and they come back. We have seen this in Hong Kong. The big protests in Hong Kong, remember, 2003, 2014, 2019. In those interim periods, everyone said, "Oh, the protest movement is gone." It wasn't. China has been very effective with its national security law, but there is still resistance in Hong Kong. There is still a lot of fight there. It may not manifest itself for quite some time, but this struggle is not over, especially if the United States stands behind the people there. Biden, although he campaigned on helping Hong Kong, has done nothing. On the second question, I would close China's four remaining consulates. I would also strip the Chinese embassy down to the ambassador and his personal staff. The thousands who are in Washington, DC, they would be out. I would also raise tariffs to 3,600%, or whatever. This is a good time to do it. We have supply chain disruptions. We are not getting products from China anyway. We can actually start to do this sort of stuff. The third thing, I would do what Pompeo did, just hammer those guys all the time verbally. People may think, "Those are just words." For communists, words are really important, because they are an insecure regime where propaganda is absolutely critical. I would be going after the Communists on human rights, I would be going after them on occupying the South China Sea, on Taiwan, unrelentingly -- because I would want to show the world that the United States is no longer afraid of China. We have taught the world that we are afraid of dealing with the Chinese. State Department people, they are frightened. We need to say to the Chinese regime, like Dulles, "I'm not afraid of you. I'm going after you, and I'm going to win." Tyler Durden Sun, 05/01/2022 - 23:20.....»»

Category: blogSource: zerohedgeMay 2nd, 2022

Von Greyerz: "There Is Going To Be A New World Disorder"

Von Greyerz: "There Is Going To Be A New World Disorder" Authored by Egon von Greyerz via GoldSwitzerland.com, “There is gonna be a new world order out there and we’ve gotta lead it! And we gotta unite the rest of the world in doing it!” That is what Biden proclaimed in a recent speech. But since Biden has a tendency to get his speeches wrong, what he meant to say was: “There is gonna be a new world DIS-order out there and we’ve gotta lead it! Sadly, as the world has heard in many speeches by the US president, he hasn’t got a clue that his “empire” is collapsing around him. But regrettably for Biden, the US isn’t an empire at all but a bankrupt nation without leadership. But even worse, the US has just in a final act of desperation not just shot itself in the foot but in the head. CONSEQUENCES Very few, if any, of today’s world leaders understand the consequences of their actions and clearly not Biden. As the world is experiencing the end of an economic era, we are getting the leaders that we deserve and thus the appropriate ones to take the world to Armageddon. So the world is now entering the final battle, a battle with totally incompetent heads of state which will lead to everyone losing. The route to Armageddon will be disastrous for the world. Distressed leaders will take calamitous actions, exacerbating not only their own country’s problem, but also the rest of the world’s. And that is exactly what we are seeing now with the worst possible concoction of debt deficits, currency debasement and decadence. The consequences were of course always predictable based on history. But no leader in the current era is a real student of history. And that is why the world is in such a mess. HYPERINFLATION FOLLOWED BY A DEFLATIONARY DEPRESSION I have in many articles outlined the course of events that I see from here – inflation, hyperinflation, debt collapse, asset collapse, leading to economic misery and eventually to a deflationary depression. “All Hell Will Break Loose for Humanity” as I wrote in a recent article. There will be continued migration, but probably to a lesser extent since there will be no promised lands which will offer the migrants a better life. There will be isolationism and many countries will try to close their borders. Sadly there will also be wars, cyber, civil and even major military wars. Mankind has never for any longer period stayed away from wars and especially not in periods of economic depression and high debts. Wars are such a wonderful excuse for poor leaders both to print more money and as a blame for the misery that the people suffer. Western dominated media and propaganda are naturally blaming Putin for the war. And many leaders including Biden want him gone. WARS HAVE BUILT THE WORLD Wars are of course terrible whoever starts them but as I just said, the history of the world is very much based on wars and empire building whether we talk about Persian, Roman, Han, Mongol, Ottoman, Spanish, Russian, or British empires. Many of these empires have been revered for what they achieved and still are today whilst some like the Mongol left very little positive traces for posterity. The British Empire for example was remarkable. A small island created the biggest empire in history lasting for over 300 years and covering 26% of the world. The cultural and language influence is still significant. Very few voices are heard today requiring that the kings or emperors of those eras to be convicted for war crimes posthumously. The US never created an empire but unprovoked attacked countries like Vietnam, Iraq, Libya and Syria. Over 300,000 civilians have been killed in these wars led by the US. Whilst virtually the whole Western world considers Putin to be a war criminal, we have not heard similar attacks on the US, UK or French leaders who were involved in the above recent wars. Without intending to take sides, why should we have different rules or laws for different war criminals? There is clearly not a level playing field. CORNERING A RUSSIAN BEAR HAS CONSEQUENCES Coming back to consequences, any intelligent Western leader could have predicted Russia’s recent actions since the Maidan Revolution in Ukraine in 2014. This was when a US and Western led coup ousted the elected Ukrainian leader and government and installed a Western friendly leadership. This coup, combined with new Nato members surrounding Russia, was such a clear threat to Russia that Putin’s reaction was obvious. Cornering a Russian bear is very dangerous. A strong Western leader and Statesman would have foreseen this and taken up negotiations with Russia. But Western leaders totally ignored all the warnings from Putin and Russia and that is why the world is not just in a mess but in a situation that is geopolitically very dangerous. Some observers argue that the current situation has been engineered by US Neocons in order to start a conflict/war with Russia. SANCTIONS HAVE CONSEQUENCES The Roman Empire prospered for centuries due to free trade within and outside. But to sanction a country like Russia which has the world’s greatest natural resources to the extent of $75 trillion is total madness. Even worse when this sanctioned country supplies the energy of almost half of Europe, this is not just shooting yourself in the foot but in the head. See my article “A Global Monetary Inferno of Nuclear proportions”. This will not just lead to energy and food shortages in the West but also a massive decline in world trade as well as GDP. The CEO of BASF, the world’s largest chemical producer, said recently: “Cutting off energy from Russia will spiral Germany into its most “catastrophic economic crisis going back to the end of WWII!” But this should not come as a surprise for students of history. At the end of major economic cycles, countries get the abysmal leaders they deserve and these leaders will show a total lack of both intelligence and statesmanship. So sadly there is not even one leader who is capable of negotiating with Putin. As a matter of fact, the US doesn’t seem to have a leader at all. And Germany’s new leader Scholz had hardly got his feet under the table before he was landed with the small problem that his country gets 55% of its natural gas from its enemy Russia. How inconvenient. Germany clearly never learnt the expression “Don’t bite off the hand that feeds you”. Both Britain’s Boris “Partygate” Johnson and France’s “Manu” Macron can count themselves lucky that the war took the attention away from their domestic problems. THE US FINANCIAL EMPIRE ON THE ROAD TO PERDITION The US used to be a financial empire but sadly now the country is on the road to perdition. As I have pointed out many times, with the following abysmal figures the US can neither be an economic nor a moral leader of the world: Federal debt & deficit growing every year since 1930 (with 4 minor exceptions) Since 1971 Federal debt is up 60X from $500billion to $30 trillion Total country debt up 53X since 1971 to $90 trillion with GDP up only 22X Balance of payment in deficit since early 1970s It is really astounding that the rest of the world accepts being dictated to by a country that is way past its sell-by date and can only generate false growth by printing endless amounts of worthless money. Before the 1970s the US had a strong economy with a respected currency. But since Nixon closed the gold window in 1971, the US has been on a slippery slope with debt exploding and the currency collapsing. As the chart below shows, the dollar has lost 88% in real terms (gold) since 1999 and 98% since 1971 (not shown). The fall to ZERO is guaranteed since all currencies, without exception, have become extinct throughout history. But have we ever heard a central bank head or a president telling their people that the currency is going to become worthless due to their reckless actions? No, of course not. Firstly they don’t understand or study history and secondly no elected politician can ever tell the truth because if they did, they would never be elected. Just remember “Tricky Dick” Nixon: Clearly, Nixon had no understanding what happens to money when debt backs the currency rather than gold. Or did he just lie as he had the custom of doing? Regardless, he orchestrated a dollar fall (off the Matterhorn as illustrated above) of 98% with the remaining couple of percent loss down to a 100% happening in the next few years. Biden has with his current disastrous actions created the perfect climate for achieving the final 2% fall of the dollar. But remember that is a 100% fall from here. FREEZING ASSETS HAS CONSEQUENCES By demonstrating to world central banks that the US can freeze any country’s foreign exchange reserves held outside their country, the world financial system and central bankers have learnt a lesson that will permanently change the way they do business. No sane country will ever hold their reserves in US dollars or other currencies at a bank that the US government can directly or indirectly control. Nor will countries trust the Swift system which the US can unilaterally manipulate. The flight from the US dollar will not happen overnight but it will be more rapid than anyone can imagine. No judicious central bank chief will ever consider handing their forex reserves to the US, a bankrupt nation, with a collapsing currency which at a whim can confiscate other countries’ reserves. But not only that, who would ever put their money into US treasuries. Investors would not only lose their total investment on the falling value of the dollar but also on the US as a dodgy debtor which could easily default by debasing the currency to ZERO or extinguish the debt. Russia saw this coming already some years ago and thus liquidated all their US treasuries. Instead they wisely bought gold. US debt is now entering the Pass The Parcel Game with NO investor wanting to be left holding the parcel. Consequences our US friends, Consequences! Do you now see that your government has not just shot yourself in the foot but has inflicted your country with a lethal head wound. The collateral damage will clearly lead to a distrust not only in the US but in all governments and all currencies. Globalism is now turning into isolationism. AND THE OBVIOUS CONSEQUENCE OF THAT WILL BE A FLIGHT TO COMMODITIES AND ESPECIALLY PHYSICAL GOLD AND SILVER HELD IN A VERY SAFE PLACE. Tyler Durden Thu, 04/07/2022 - 06:30.....»»

Category: blogSource: zerohedgeApr 7th, 2022

A return to Cold War levels of Pentagon funding would actually require reducing the US defense budget

Opinion: Before Washington embarks on a new Cold War, it's time to remind ourselves of the global consequences of the last one. President John F. Kennedy looks over the Berlin Wall near Checkpoint Charlie, June 26, 1963.Anonymous/AP Pundits and policymakers are saying Russia's invasion of Ukraine marks the beginning of a new Cold War. There are also more calls for higher defense spending, but the US already spends more than it did during the first Cold War. Embracing competition and confrontation with Russia and China will have global consequences — just like the last Cold War. A growing chorus of pundits and policymakers has suggested that Russia's invasion of Ukraine marks the beginning of a new Cold War. If so, that means trillions of additional dollars for the Pentagon in the years to come coupled with a more aggressive military posture in every corner of the world.Before this country succumbs to calls for a return to Cold War-style Pentagon spending, it's important to note that the United States is already spending substantially more than it did at the height of the Korean and Vietnam Wars or, in fact, any other moment in that first Cold War.Even before the invasion of Ukraine began, the Biden administration's proposed Pentagon budget (as well as related work like nuclear-warhead development at the Department of Energy) was already guaranteed to soar even higher than that, perhaps to $800 billion or more for 2023.Here's the irony: going back to Cold War levels of Pentagon funding would mean reducing, not increasing, spending. Of course, that's anything but what the advocates of such military outlays had in mind, even before the present crisis.Some supporters of higher Pentagon spending have, in fact, been promoting figures as awe inspiring as they are absurd.Rich Lowry, the editor of the conservative National Review, is advocating a trillion-dollar military budget, while Matthew Kroenig of the Atlantic Council called for the United States to prepare to win simultaneous wars against Russia and China. He even suggested that Congress "could go so far as to double its defense spending" without straining our resources. That would translate into a proposed annual defense budget of perhaps $1.6 trillion.Neither of those astronomical figures is likely to be implemented soon, but that they're being talked about at all is indicative of where the Washington debate on Pentagon spending is heading in the wake of the Ukraine disaster.Ukrainian troops load US-made Javelin anti-tank missiles at Kyiv's Boryspil airport, February 11, 2022.SERGEI SUPINSKY/AFP via Getty ImagesEx-government officials are pressing for similarly staggering military budgets. As former Reagan-era State Department official and Iran-Contra operative Elliott Abrams argued in a recent Foreign Affairs piece titled "The New Cold War": "It should be crystal clear now that a larger percentage of GDP [gross domestic product] will need to be spent on defense."Similarly, in a Washington Post op-ed, former Defense Secretary Robert Gates insisted that "we need a larger, more advanced military in every branch, taking full advantage of new technologies to fight in new ways." No matter that the US already outspends China by a three-to-one margin and Russia by 10-to-one.Truth be told, current levels of Pentagon spending could easily accommodate even a robust program of arming Ukraine as well as a shift of yet more US troops to Eastern Europe.However, as hawkish voices exploit the Russian invasion to justify higher military budgets, don't expect that sort of information to get much traction. At least for now, cries for more are going to drown out realistic views on the subject.Beyond the danger of breaking the budget and siphoning off resources urgently needed to address pressing challenges like pandemics, climate change, and racial and economic injustice, a new Cold War could have devastating consequences.Under such a rubric, the US would undoubtedly launch yet more military initiatives, while embracing unsavory allies in the name of fending off Russian and Chinese influence.The first Cold War, of course, reached far beyond Europe, as Washington promoted right-wing authoritarian regimes and insurgencies globally at the cost of millions of lives. Such brutal military misadventures included Washington's role in coups in Iran, Guatemala, and Chile; the war in Vietnam; and support for repressive governments and proxy forces in Afghanistan, Angola, Central America, and Indonesia.Pro-Shah demonstrators burn a newspaper kiosk in Tehran during a Western-backed coup against Iranian Premier Mohammad Mossadeq, August 19, 1953.APAll of those were justified by exaggerated — even at times fabricated — charges of Soviet involvement in such countries and the supposed need to defend "the free world," a Cold War term President Joe Biden all-too-ominously revived in his recent State of the Union address (assumedly, yet another sign of things to come).Indeed, his framing of the current global struggle as one between "democracies and autocracies" has a distinctly Cold War ring to it and, like the term "free world," it's riddled with contradictions.After all, from Egypt to Saudi Arabia, the United Arab Emirates to the Philippines, all too many autocracies and repressive regimes already receive ample amounts of US weaponry and military training — no matter that they continue to pursue reckless wars or systematically violate the human rights of their own people. Washington's support is always premised on the role such regimes supposedly play in fighting against or containing the threats of the moment, whether Iran, China, Russia, or some other country.Count on one thing: the heightened rhetoric about Russia and China seeking to undermine American influence will only reinforce Washington's support for repressive regimes. The consequences of that could, in turn, prove to be potentially disastrous.Before Washington embarks on a new Cold War, it's time to remind ourselves of the global consequences of the last one.Cold War I: the coupsUS Army tanks on Pennsylvania Avenue during for President Dwight D. Eisenhower's inaugural parade, January 21, 1953.AP PhotoDwight D. Eisenhower is often praised as the president who ended the Korean War and spoke out against the military-industrial complex. However, he also sowed the seeds of instability and repression globally by overseeing the launching of coups against nations allegedly moving toward communism or even simply building closer relations with the Soviet Union.In 1953, with Eisenhower's approval, the CIA instigated a coup that led to the overthrow of Prime Minister Mohammed Mosaddeqh. In a now-declassified document, the CIA cited the Cold War and the risks of leaving Iran "open to Soviet aggression" as rationales for their actions.The coup installed Reza Pahlavi as the Shah of Iran, initiating 26 years of repressive rule that set the stage for the 1979 Iranian revolution that would bring Ayatollah Ruhollah Khomeini to power.In 1954, the Eisenhower administration launched a coup that overthrew the Guatemalan government of President Jacobo Arbenz. His "crime": attempting to redistribute to poor peasants some of the lands owned by major landlords, including the US-based United Fruit Company. Arbenz's internal reforms were falsely labeled communism-in-the-making and a case of Soviet influence creeping into the Western Hemisphere.Of course, no one in the Eisenhower administration made mention of the close ties between the United Fruit Company and both CIA Director Allen Dulles and his brother, Secretary of State John Foster Dulles. Such US intervention in Guatemala would prove devastating with the four decades that followed consumed by a brutal civil war in which up to 200,000 people died. In 1973, Richard Nixon and Henry Kissinger followed Eisenhower's playbook by fomenting a coup that overthrew the democratically elected socialist government of Chilean President Salvador Allende, installing the vicious dictatorship of Gen. Augusto Pinochet.That coup was accomplished in part through economic warfare — "making the economy scream," as Secretary of State Henry Kissinger put it — and partly thanks to CIA-backed bribes and assassinations meant to bolster right-wing factions there.Kissinger would justify the coup, which led to the torture, imprisonment, and death of tens of thousands of Chileans, this way: "I don't see why we need to stand by and watch a country go Communist due to the irresponsibility of its own people."Vietnam and its LegacyA napalm erupts after an airstrike near US troops on patrol in South Vietnam in 1966.Associated PressThe most devastating Cold War example of a war justified on anti-communist grounds was certainly the disastrous US intervention in Vietnam.It would lead to the deployment there of more than half a million American troops, the dropping of a greater tonnage of bombs than the US used in World War II, the defoliation of large parts of the Vietnamese countryside, the massacre of villagers in My Lai and numerous other villages, the deaths of 58,000 US troops and up to 2 million Vietnamese civilians — all while Washington systematically lied ;to the American public about the war's "progress."US involvement in Vietnam began in earnest during the administrations of Presidents Harry Truman and Eisenhower, when Washington bankrolled the French colonial effort there to subdue an independence movement. After a catastrophic French defeat at Dien Bien Phu in 1954, the US took over the fight, first with covert operations and then counterinsurgency efforts championed by the administration of John F. Kennedy. Finally, under President Lyndon Johnson Washington launched an all-out invasion and bombing campaign.In addition to being an international crime writ large, in what became a Cold War tradition for Washington, the conflict in Vietnam would prove to be profoundly anti-democratic. There's no question that independence leader Ho Chi Minh would have won the nationwide election called for by the 1954 Geneva Accords that followed the French defeat.Instead, the Eisenhower administration, gripped by what was then called the "domino theory" — the idea that the victory of communism anywhere would lead other countries to fall like so many dominos to the influence of the Soviet Union — sustained an undemocratic right-wing regime in South Vietnam.That distant war would, in fact, spark a growing antiwar movement in this country and lead to what became known as the "Vietnam Syndrome," a public resistance to military intervention globally. While that meant an ever greater reliance on the CIA, it also helped keep the US out of full-scale boots-on-the-ground conflicts until the 1991 Persian Gulf War. Instead, the post-Vietnam "way of war" would be marked by a series of US-backed proxy conflicts abroad and the widespread arming of repressive regimes.The defeat in Vietnam helped spawn what was called the Nixon Doctrine, which eschewed large-scale intervention in favor of the arming of American surrogates like the Shah of Iran and the Suharto regime in Indonesia. Those two autocrats typically repressed their own citizens, while trying to extinguish people's movements in their regions.In the case of Indonesia, Suharto oversaw a brutal war in East Timor, greenlighted and supported financially and with weaponry by the Nixon administration.'Freedom fighters'President Ronald Reagan meeting members of the Afghan mujahideen in the White House Oval Office in 1983.Reagan Library/Wikimedia CommonsOnce Ronald Reagan was elected president in 1981, his administration began to push support for groups he infamously called "freedom fighters." Those ranged from extremist mujahideen fighters against the Soviets in Afghanistan to Jonas Savimbi's forces in Angola to the Nicaraguan Contras.The US funding and arming of such groups would have devastating consequences in those countries, setting the stage for the rise of a new generation of corrupt regimes, while arming and training individuals who would become members of al-Qaeda.The Contras were an armed right-wing rebel movement cobbled together, funded, and supplied by the CIA. Americas Watch accused them of rape, torture, and the execution of civilians. In 1984, Congress prohibited the Reagan administration from funding them, thanks to the Boland amendment (named for Massachusetts Democratic Rep. Edward Boland).In response, administration officials sought a work-around. In the end, Lt. Col. Oliver North, a Marine and member of the National Security Council, would devise a scheme to supply arms to Iran, while funneling excess profits from the sales of that weaponry to the Contras.The episode became known as the Iran-Contra scandal and demonstrated the lengths to which zealous Cold Warriors would go to support even the worst actors as long as they were on the "right side" (in every sense) of the Cold War struggle.Chief among this country's blunders of that previous Cold War era was its response to the Soviet invasion of Afghanistan, a policy that still haunts America today. Concerns about that invasion led the administration of President Jimmy Carter to step up weapons transfers through a covert arms pipeline to a loose network of oppositional fighters known as the mujahideen. Reagan doubled down on such support, even meeting with the leaders of mujahideen groups in the Oval Office in 1983.That relationship would, of course, backfire disastrously as Afghanistan descended into a civil war after the Soviet Union withdrew. Some of those Reagan had praised as "freedom fighters" helped form al-Qaeda and later the Taliban. The US by no means created the mujahideen in Afghanistan, but it does bear genuine responsibility for everything that followed in that country.As the Biden administration moves to operationalize its policy of democracy versus autocracy, it should take a close look at the Cold War policy of attempting to expand the boundaries of the "free world." A study by political scientists Alexander Downes and Jonathon Monten found that, of 28 cases of American regime change, only three would prove successful in building a lasting democracy.Instead, most of the Cold War policies outlined above, even though carried out under the rubric of promoting "freedom" in "the free world," would undermine democracy in a disastrous fashion.A new Cold War?US Navy officers monitor Chinese ships from the guided-missile destroyer USS Mustin in the Philippine Sea, April 4, 2021.US Navy/MCS3 Arthur RosenCold War II, if it comes to pass, is unlikely to simply follow the pattern of Cold War I either in Europe or other parts of the world. Still, the damage done by the "good vs. evil" worldview that animated Washington's policies during the Cold War years should be a cautionary tale.The risk is high that the emerging era could be marked by persistent US intervention or interference in Africa, Asia, and Latin America in the name of staving off Russian and Chinese influence in a world where Washington's disastrous war on terrorism has never quite ended.The United States already has more than 200,000 troops stationed abroad, 750 military bases scattered on every continent except Antarctica, and continuing counterterrorism operations in 85 countries.The end of US military involvement in Afghanistan and the dramatic scaling back of American operations in Iraq and Syria should have marked the beginning of a sharp reduction in the US military presence in the Middle East and elsewhere. Washington's reaction to the Russian invasion of Ukraine may now stand in the way of just such a much-needed military retrenchment.The "us vs. them" rhetoric and global military maneuvering likely to play out in the years to come threaten to divert attention and resources from the biggest risks to humanity, including the existential threat posed by climate change. It also may divert attention from a country — ours — that is threatening to come apart at the seams.To choose this moment to launch a new Cold War should be considered folly of the first order, not to speak of an inability to learn from history.Nick Cleveland-Stout is a researcher at the Quincy Institute.Taylor Giorno is a researcher at the Quincy Institute.William D. Hartung, a TomDispatch regular, is a Senior Research Fellow at the Quincy Institute for Responsible Statecraft, and the author most recently of the Quincy Institute Issue Brief "Pathways to Pentagon Spending Reductions: Removing the Obstacles." His most recent book is Prophets of War: Lockheed Martin and the Making of the Military Industrial Complex.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMar 30th, 2022

Texas secession? Civil war? Threats of violence — or worse — loom over the 2022 midterm elections

The government is on alert ahead of the 2022 midterms. Experts say the possibility of the political climate igniting a civil war is remote — but not off the table. iStock; Rebecca Zisser/Insider As the threat of domestic terrorism grows, experts are not ruling out a possible civil war. At minimum, there are concerns over violence at polls during the 2022 midterm elections. Republican in a few states, including Texas, have raised the prospect of secession. SAN ANTONIO — Among the worst case scenario: Political violence escalates ahead of the 2022 midterm elections. Lawmakers in several states vote to secede from the United States. The federal government refuses to let them go. Armed conflict erupts.The notion of political divisiveness causing a full-blown civil war might seem unlikely, even unthinkable. But some political scientists say they are not ruling it out entirely.The heightened political tension between Democrats and Republicans ahead of the 2022 midterm elections, coupled with the rise of far-right extremism that's manifested itself in flashpoints such as the January 6, 2021, attack on the US Capitol, could create more violence in the upcoming months and change the country as we know it."It is possible that there will be other instances of violence like we saw on January 6," said Carole Emberton, a history professor at the University at Buffalo who specializes in the American Civil War. "When you have politicians who are riling everyone up and law enforcement that is sort of wishy-washy or weak in its response, then I think you have a really volatile mix that emboldens these kinds of groups to continue with what they're doing."Over the past few months, several Republican lawmakers have advocated their states seceding from the United States. Some voters also have secession on their minds. "We should secede," Don Rhodes, a 63-year-old veteran, told Insider, referring to Texas becoming a sovereign nation — as it was before its annexation in 1845.Rhodes, a San Antonio resident, said he did not, for example, agree with the way President Joe Biden halted the Keystone XL pipeline. Daniel Miller, president of the Texas Nationalist Movement, an organization that advocates for Texas to become a sovereign nation, says that that idea of Texas seceding is not new."Let's be honest, Texas has pretty much been keeping one eye on the exit sign since we joined the union in 1845," he said. "When people say that Texas couldn't make it as an independent nation, well look at all the natural advantages that we have, we're the ninth largest economy in the world. Our economic power globally is stronger than that of Russia," he said.He continued: "Look at not just our economic power, but look at our natural resources. And  look at the independent spirit of Texans who believe that there really is no one better to govern us than us?"Law enforcement officers respond to a bomb threat in Washington, DC.Drew Angerer/Getty ImagesDomestic terrorism on the riseA 2021 poll by Bright Line Watch and YouGov found that 37% of respondents expressed a "willingness to secede" from the union. People living in the South were most likely to indicate secessionist leanings, although the study's authors acknowledged that this is "an issue that they are very unlikely to have considered carefully."Political scientists fear that secession-centric sentiment will only grow stronger as the 2022 midterm elections approach. The threat of violence is real, said Mary McCord, executive director of the Institute for Constitutional Advocacy and Protection at Georgetown Law."There are dangerous individuals out there who are connected to extremist ideology and who law enforcement and the public do have to worry about committing acts of violence, either individually or in groups, particularly against the government," she said.The Biden administration has made several public pronouncements about mitigating domestic-terrorism threats. The Homeland Security Department issued a warning in February that the country "remains in a heightened threat environment fueled by several factors, including an online environment filled with false or misleading narratives."The department said that one of the main contributing factors creating this kind of environment is the continued "calls for violence directed at US critical infrastructure."Rep. Marjorie Taylor Greene, a Republican from Georgia, attended a White nationalist conference.Tom Williams/CQ-Roll Call, Inc via Getty ImagesSome Republicans embrace extremist views Political scientists told Insider that these extremist groups are encouraged by the mainstream Republican Party that has come to adopt rhetoric similar to that of far-right groups. After the 2020 presidential election, some Republican lawmakers carried on with claims of election fraud.Reps. Marjorie Taylor Greene of Georgia and Paul Gosar of Arizona have even taken it a step further and attended a fringe right-wing conference with ties to white nationalists. Footage of the event showed attendees cheering for Russian President Vladimir Putin and applauding comparisons between Putin and Adolf Hitler.House Minority Leader Kevin McCarthy called the gathering "appalling and wrong" and said he would talk to both members of Congress about the issue. But later on, he said he still stood by the pledge he made last November that if Republicans were to take back control of the House, both Greene and Gosar would have "better committee assignments" than they previously had. Jay Ulfelder, a political scientist who studies civil wars and previously served as research director of the Political Instability Task Force, said Republicans have "normalized" extremist rhetoric."When that gets normalized, then it's much easier to recruit people into those organizations … that would have been considered extreme or have radical views," Ulfelder said. "Those extremist groups are pulling the GOP party further right and further towards their extremist goals." Far-right groups have become more active at the local level, with groups such as the Proud Boys participating in school board and town council meetings. Members of militia groups and January 6 insurrectionists are even running for, and in some cases winning, local office. On March 22, for example, a judge convicted a member of the Otero County Commission in New Mexico for his role in the January 6 attack on the US Capitol.Georgia election officials counting ballots.Jessica McGowan/Getty ImagesThis comes as election and school-board officials have endured harassment or threats of violence. Reuters documented 220 incidents across the country of local school officials being harassed or receiving violent threats. The collective effect could damage public institutions: The Brennan Center for Justice released a poll that found that one in five election officials plan to leave the field before 2024.There are real fears that election workers will be physically assaulted or even die during the 2022 general elections, said Adrian Fontes, the former recorder of Maricopa County in Arizona."I'm concerned that it will cost human lives just to have elections in America," he said. "Elections administration is the one piece of critical infrastructure in the United States that cannot be skipped. We cannot underfund it, we cannot understaff it. And we have to make sure that it's protected."With more election workers leaving, there's more room for those with extremist ties to take their place, which could create more chaos, McCord said. "It's really a threat to democracy," she said, "we could be in a situation where election deniers are now in the positions where they have responsibility for tabulating the votes and accurately reporting the results of elections."Armed members of the Boogaloo militia stand holding a flag in front of the State Capital in Concord, New Hampshire on January 17, 2021, during a nationwide protest called by anti-government and far-right groups supporting US President Donald Trump and his claim of electoral fraud in the 2020 presidential election.Joseph Prezioso/AFPStates taking matters into their own handsThe nation's political and ideological divisions have prompted a small but vocal group of lawmakers and political activists to suggest, support, or otherwise espouse secession — an act that, in 1861, triggered perhaps the darkest period in US history: the Civil War itself.Governor of Texas, Rick Perry flirted — not very seriously, some say — with the idea of Texas leaving the United States and recapturing its status, however brief, as an independent republic. It never happened, of course. But the idea, though, has lived on, with one Texas state lawmaker last year introducing legislation to conduct a referendum on whether the Lone Star State should create a joint legislative committee "to develop a plan for achieving Texas independence," The Texas Tribune reported.  Other parts of the United States, including Alaska and California, have to some degree considered the idea of being independent from the country. In 2017, Puerto Rico conducted a nonbinding referendum to determine whether to remain a territory, push for statehood, or break away completely. The vast majority of voters backed statehood, though many who preferred the status quo or independence boycotted the vote.North of the mainland, there's a small movement in Québec to secede from Canada and become the United States' 51st state — something that could conceivably lead to hostilities on both sides of the border if it ever happened, which is most unlikely.To be clear: There is no formal pathway to secede from the United States. States and commonwealth territories can conduct referendums or vote on legislative measures to secede, but that's about it. The response from the federal government of a state successfully voting to secede from the US could vary depending on how the state got to the point of passing that kind of legislation, said Jay Ulfelder, a political scientist who studies civil wars and previously served as research director of the Political Instability Task Force."If the people pushing secession were using violence, intimidation, terrorism to get there then I think you'd get the military response from the federal government," he said. "But the chances of that are less if they really got there by what appeared to be a genuine democratic process."Meanwhile, in New Hampshire, 13 Republicans voted earlier this month in support of a measure that would require the state to amend its constitution, declare itself independent from the United States, and become a sovereign nation. The measure did not garner enough votes to pass the state House of Representatives, failing by a 323-13 vote.But in New Hampshire, the vote did make a statement that secession is on the minds of some residents of a state that features the official motto: "Live free or die.". Republican State Rep. Matthew Santonastaso told Insider it was just a matter of time before states begin to secede."A national divorce is inevitable," Santonastaso said. "The government is nothing but an illusion we all hold in our minds. If the people decide to reject their government, then there is little the federal government can do to stop it."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMar 29th, 2022

Bitcoin Is Peace For The 9/11 Generation, Part 2: Wars On The Abstract

Bitcoin Is Peace For The 9/11 Generation, Part 2: Wars On The Abstract Authored by Joe Consorti via Bitcoin Magazine, A society built on endless war is only possible given the power to print endless money to finance it... For full context, make sure you read Part One of this two-part series before continuing. In it, we discussed how the United States’ irresponsible spending stems from the fiat money system, which allows them to engage in continual abstract wars (such as “the war on drugs”) and how a return to a sound monetary standard through bitcoin would stop the endless conflict we’ve experienced over the last century. WAR ON POVERTY The War on Poverty — the granddaddy of the United States' poor spending habits. 58 years ago, former President Lyndon B. Johnson launched a war which would eat into people’s wealth all while trying to cure wealth inequality — a contradiction for the ages. Nevertheless, good intentions birthed this series of legislative actions. At the time, more than 20% of Americans were considered poor and Johnson was convinced that state intervention was the most viable way to bring the country back to its feet. While it was supposed to be “a hand up, not a handout,” Johnson’s legislation couldn’t be further from that ideal. Over $800 million has been spent to eliminate poverty since his series of initiatives came to pass. What do we have to show for it? Welfare rolls have expanded, as the horrifying truth of government dependence has come to fruition for many. The notion of equal opportunity is phenomenal, but rather than cutting red tape and encouraging job creation, wealth was taken from those with more and given to those with less. Some of those on the program leveraged the government assistance to build a life for themselves but given the increase in welfare dependency over the last half cntury, more people have structured their lives around the system instead of using it as it was intended, as a “hand up.” It’s safe to conclude that the “handouts” which Johnson was so adamant about excluding have become the hallmark of modern welfare programs. The War on Poverty is a stain on the American track record of raising those with nothing to prosperity – providing equal opportunity for all who reside “from sea to shining sea” to work or to innovate their way to prosperity. Funding for such programs would have to become almost entirely voluntary under a bitcoin standard, as taxes could never be high enough to replace the U.S.’s decades-long penchant for money printing. Any functional and accepted state program would be funded by those philanthropists who want to contribute to the cause, and due to this limited available funding, decision-making would be more precise by necessity. When scarcity is a factor in any decision, capital allocation is naturally done in such a way that leads to the optimum outcome. Under fiat, money can be created and seized at any given moment, so the concept of scarcity never plays a hand in decisions — hence why government programs often resemble inefficient money vacuums more than they do functional value-adds. While the War on Poverty was the first case study in the inefficiency of government capital allocation, it wouldn’t be the last. Once they discovered their universal solution, the money printer, the necessity for sound money would become even more apparent to the American people. WAR ON DRUGS The string of government initiatives beginning in the 1970s to end drug usage was the second of four periods of “war on the abstract” that the U.S. has engaged in over the last century. Starting as far back as 1914, the regulation of opiates and cocaine began passing in the halls of Congress, followed by Prohibition, followed by the introduction of a heavy marijuana tax in 1937, as well as imprisonment and fines for possession. This was just the beginning of something far more concerted and targeted in the United States — the war on drugs. In 1970, the Controlled Substances Act (CSA) was signed into law by President Richard Nixon, introducing an arbitrary “schedule” to classify drugs and ascribe criminal punishment to them. And in June of the following year, Nixon declared a war on drugs, citing drugs as “public enemy number one.” Ironically enough, Nixon suspended the convertibility of dollars to gold in August just two months later; his money-sucking initiative was followed by the nail in the coffin for the dollar as a sound representation of gold. Ultimately, this was necessary: To pursue these lofty public initiatives while continuing to finance the war in Vietnam, something had to give. Was the United States going to levy a higher tax burden on its citizens? No. As we discussed earlier, this would be a death sentence for any sitting president. The easy solution would be to quietly disconnect the currency from the value it was supposed to represent, despite meaning that this made the dollar a promissory note which promised nothing. That is how you finance government expenditure, they learned. And boy, oh boy, did it feel good. In 1973, the Drug Enforcement Administration (DEA) was created, still receiving an annual budget of $2.03 billion in 2022. The 1980s saw then-President Ronald Reagan introduce many “Just Say No To Drugs” campaigns – such as the elementary-school-targeted D.A.R.E. programs? The crackdown on even the phrase “drugs” was now underway. The cost of this endeavor has been an estimated $1 trillion as of 2015. That’s a hefty tag to pay for an arguably failed attempt at eradicating drugs from the American paradigm (remember this theme for later). Fiscal irresponsibility was sparked by the legally-recognized ability to magically create dollars out of thin air. And this was just the beginning. WAR ON TERRORISM Now we arrive at the main subject matter of this article, the Global War on Terrorism (GWOT) much more popularly known as “the war on terror,” a term coined by then-President George W. Bush. It was meant to be a catch-all term for war against all terrorist groups (not just Al-Qaeda who claimed responsibility for the 9/11 attacks) which should have been the first signal that perhaps the United States was biting off more than it could reasonably chew. Al-Qaeda was allowed to operate with impunity under the protection of the Taliban regime, so the idea was simple: move into Afghanistan to destroy Al-Qaeda, kill Osama bin Laden and remove the Taliban from power. However, the war on terror in the Middle East did not stop here. Bin Laden fled to Pakistan, and in 2003 the United States invaded Iraq, with George W. Bush infamously claiming that we needed to remove a regime of terrorists which (allegedly) held weapons of mass destruction. After capturing Saddam Hussein in 2003, and executing him in 2006, the war persisted in Iraq for another four years. The United States reportedly killed Osama bin Laden on May 2, 2011, but the war in Afghanistan wouldn’t wrap up in its entirety for nearly another decade. The full withdrawal of U.S. troops was meant to have been completed by 2014, but in 2014 it was announced that over 10,000 troops would remain in Afghanistan. To many this was an indication that this “war on terror,” like the “wars” on poverty and drugs which preceded it, would have no logical and definitive end. For now, President Joe Biden has removed American troops from Afghanistan, but he still “didn’t end the ‘forever war.’” Like our first two wars on the abstract and indefinable, the Global War on Terrorism brought with it an ambiguous and subject-to-change price tag. The powers that be hold the baton for the entire race, so they decide when and where money is spent. Under a bitcoin standard, decision-making is forcibly prudent — you wouldn’t throw money at missions and objectives that do not provide real value, as it would be wasteful. But enabled by the reckless spending of fiat money, the war on terror incurred a heavy price: Over 7,000 U.S. service members were killed in action during post-9/11 war operations, not to mention the tragedy of well over four times that number of soldiers who have committed suicide in that same time period. Their lives weren’t the only price to pay for the American people. For the post-9/11 wars, the total U.S. budgetary costs and obligations totalled more than $6.4 trillion through 2020. That’s trillion (with a “t”) representing over 20% of our current national debt. What do we have to show for it? While we’ve left our mark by executing some of the worlds most reviled terrorists, the people of Afghanistan are still subjugated by the Taliban, who have regained control of Afghanistan as of 2021. Perhaps within a system that holds the spenders’ feet to the fire, our actions would have been swifter and more decisive. Maybe if the money was scarce and it came directly from the citizens through explicit taxes, we would have tactically moved in to execute those who wronged us on 9/11. Instead of learning our lesson of avoiding any war with an unclear goal, as we should have from Vietnam, the United States continued our abuse of the money printer by going to war for nearly two more decades with an unclear end goal. But unnaccountable control of the money supply means control of the firepower. The war on terror was a lengthy, costly, and tiresome endeavor. It was a failed attempt at eradicating a concept so decentralized and hostile that the chances of success at the outset were slim to none. And after twenty years, thousands of American soldiers dead, and nearly $7 trillion in spending, the grand finale was a hasty retreat from Kabul, leaving hundreds of Americans stranded after the embassy was abandoned. The Taliban now run Afghanistan; for all those dollars printed and all that bloodshed, we’re back at square one. The only measurable outcomes (and they’re not good ones) were the lives lost, and the trillions of dollars added to the balance sheet of the United States government — a debt burden that has yet to be, and likely will never be, serviced. The honest and good-natured spirit of defeating those who stole our dignity on September 11, 2001, has completely dissipated two decades into the conflict. That fire from the American people has been replaced by a generation of adults who haven’t been alive in a time where the United States hasn’t been involved in the Middle East. These adults have grown to see the massive and ever-expanding debt bubble as a necessity, just a normal part of life – when this same debt bubble is what’s pricing them out of a job, pricing them out of purchasing a house, and pricing them out of raising a family. This is not normal. The United States made a triumphant effort to end terrorism globally and came up short. But just 19 years after 2001, they’d ask us once again to suspend our disbelief, and put our money and decision-making ability into their hands. We were going to war, again. WAR ON HEALTH What do you do when there’s no war to be had? Health crisis, enter stage left. This article is not going to argue the origins of COVID-19, that’s not what it’s here to do. We’re trying to draw the connections between the incentive structures of massive spending and those who aim to gain from it. And one thing is for certain — if you can’t engage in a foreign war, a crisis at home is the next best thing. In March 2020, I was running my own small business at the time. Nobody wanted to buy anything from me, and mania had set in as COVID-19 made its way into the United States. People were being laid off en masse, necessities were flying off store shelves, some were convinced these were the end of days. Lo and behold, they weren’t. Within a week of the virus moving through Italy it was known and understood that it generally targets those with vulnerable immune systems, namely the elderly and populations with significant comorbidities. Instead of the United States taking the approach of encouraging temporary isolation for those groups while the virus moved naturally through the rest of us, the country was put on full doomsday mode. Everybody was treated not only like they had a high chance of dying from the virus, but also that they would kill everybody they met if they went outside. Businesses were shuttered and the economy sputtered to a halt – but people needed to get paid somehow, even if it was with magically-printed fiat money. M1 Money Supply through 2022 Through February 2022, nearly $4 trillion has been spent in economic packages intended to jog the economy. We’ve propped the system up by flooding it with dollars that do not represent any real earned value. The U.S. debt-to-GDP (gross domestic product) ratio is sitting at 133.46%. Every dollar of productivity is trounced by one dollar and twenty-eight cents worth of debt: Does that sound like a healthy economy? The Federal Reserve Board launched the Municipal Liquidity Facility in April 2020, which was just a mechanism to purchase $500 billion of short-term notes from all 50 states and some of the most productive cities in the country. They also relaunched multiple great recession-era programs to buy assets from United States companies with newly-manifested counterfeit money, adding trillions more to the balance sheet of the government. Despite having more open roles in the workforce than ever before (comparative to unemployment), some families are going to be receiving as much as $14,000 from President Biden’s newest COVID-19 relief bill. Make it make sense. Under the guise of giving money to the people, the Fed (unintentionally or not) has diluted wealth from the people by way of leveraging the COVID-19 pandemic. Everything from asset purchases, to buying notes from the treasury, even literal helicopter money into the hands of every American, three separate times. The Cantillionaires reap the benefit of accessibility to freshly-minted dollars, while the factory workers and schoolteachers had their grocery prices increase, and their lives put on hold. Because of this irresponsible expansion of the money supply, people are working even harder to earn a currency growing ever weaker, while the cost of most goods and services people wish to purchase rises. Under a bitcoin standard, an economic shutdown and the minting of trillions of dollars simply is not possible. With something like bitcoin, you cannot mint new units of the currency at will – value that gets transacted always represents underlying earned value, through labor or the sale of goods and services. Since you cannot mint new units in times of crisis, a bitcoin standard would have forced the United States Congress to think more critically of how best to respond to the pandemic. We discussed earlier about those who are at great risk from the virus. Under a bitcoin standard, the U.S. would’ve had to take a fiscally responsible approach; no longer having access to printed money would mean they’d need to think efficiently. Their efficient response, likely, would have been to encourage isolation for vulnerable populations, mobilize capital collected through taxes to areas with higher densities of these more-susceptible people, and nothing more. Under a bitcoin standard, the government is forced to think efficiently. No helicopter money, no emotionally-charged asset purchases with the fear of total economic collapse, and no shuttering the complex web of relationships that is the U.S. economy. Strategy and prudence naturally froth to the top of the pot using a sound money standard; especially over the fiat response of extravagant spending packages and hastily drawn together decision-making.   A bitcoin standard would disable the government’s ability to inefficiently allocate free, unearned capital in times of crisis. The COVID-19 pandemic should be a shining example of their inability to do so. The free market should allocate capital as it sees fit, maximizing efficiency and prosperity for all. Bitcoin gets out of the way where fiat creates a blockade. THE NEXT WAR At the time of writing, the United States is threatening to take offensive action on Russia following their invasion of Ukraine. Meanwhile, we utter a collective sigh of “here we go again.” But remember why this article is being written, to explain the incentive structures involved in going to war, and why the United States is chomping at the bit to do so. New war means new printing, and the United States is on high alert to gaslight the American public into why this war is an outright necessity. In 2014 The Washington Post published an op-ed opinion piece titled “In The Long Run, Wars Make Us Safer And Richer,” which I believe is filled with uncorrelated statistics to bolster the false claim that war increases long-term domestic productivity for the United States. We should perhaps get ready for more justification, rationalization and outright lies as to why raising the debt ceiling is a national emergency, and printing another $10 trillion will make life better for everybody. They’ll need to lie through their teeth to get away with any more of this, as they always have. Bitcoin fixes this. The only means of funding a war without fiat and/or more taxes (which must be approved by those running for future office) are explicit and voluntary - either through issuing domestic debt (war bonds) or foreign debt, made even more voluntary with bitcoin, given that seizure is difficult. Bitcoin defangs the wretched and sharp fiat teeth out of the government’s maw. Trigger-happy politicians who salivate at the thought of trillion-dollar war spending packages will have their temperament tested; they’ll be made more prudent and strategic by way of bitcoin’s programmatic scarcity. You can’t fight it, but you can use it. FINAL THOUGHTS Endless conflict and strife, whether at home or abroad, is enabled by the ability to create money by decree. Since the United States needs to pay down their debt and is incentivized to retain control over the money, they are never going to switch to a hard money standard with bitcoin. That’s fine, if you cannot convince the country to adopt bitcoin as their monetary standard, buy and hold it yourself. Whenever possible, transact exclusively in bitcoin. Slowly as we create these circular economies, companies will allocate to the asset, goods will start being denominated in bitcoin, and life on a bitcoin standard becomes more and more inevitable. Feedback Patterns in the Bitcoin Economy - Image source Speculatively attack the dollar on an individual level; don’t allow them to tax you even more than they already do. Legally deprive them of spending power, as they can’t inflate away your wealth as much if you minimize your exposure to the dollar. Make it known through your actions that you do not wish to engage in another decades-long war. Have you had enough of them? I know I have. I’d like to know what it’s like to go at least half of a decade without getting frisky for another foreign conflict. Let’s make it happen. *  *  * You can find Joe on Twitter @JoeConsorti, thanks for reading. Tyler Durden Sun, 03/27/2022 - 21:15.....»»

Category: smallbizSource: nytMar 27th, 2022

A Manufactured World Crisis?

A Manufactured World Crisis? Authored by Llewellyn Rockwell via The Mises Institute, Few people today ask the most important question about the conflict between Russia and Ukraine. Many people want America to stay out of the fight, but even they don’t ask the vital question. Why does the world face a crisis today? Why has a border dispute between Russia and Ukraine escalated to the point where people fear nuclear war? The answer is simple. America, under the “leadership” of brain-dead Biden and the forces controlling him, has done this and, by doing so, brought the world to the brink of disaster. As always, the great Dr. Ron Paul gets it right: “Three weeks into this terrible war, the US is not pursuing talks with Russia." As Antiwar.com recently reported, instead of supporting negotiations between Ukraine and Russia that could lead to a ceasefire and an end to the bloodshed, the US government is actually escalating the situation which can only increase the bloodshed. The constant flow of US and allied weapons into Ukraine and talk of supporting an extended insurgency does not seem designed to give Ukraine a victory on the battlefield but rather to hand Russia what Secretary of State Blinken called ‘a strategic defeat.’ It sounds an awful lot like the Biden Administration intends to fight Russia down to the last Ukrainian. The only solution for the US is to get out. Let the Russians and Ukrainians reach an agreement. That means no NATO for Ukraine and no US missiles on Russia’s borders? So what! End the war then end NATO.” Let’s look at an analogy that will help us understand Dr. Paul’s point. For years, the Ukrainian government has attacked an area in the Donbas region that has seceded from Ukraine and formed an independent, pro-Russian, republic. Just before Putin moved against Ukraine, Ukraianians increased the scale and scope of their attack. Rick Rozoff describes what they did: “Two-thirds of Ukrainian army servicemen have been amassed along the Donbas contact line, Eduard Basurin, spokesman for the self-proclaimed Donetsk People’s Republic (DPR) militia, said on Thursday. “Another three brigades are on their way [to Donbas], which is 20,000 to 25,000 troops more. The total number will reach 150,000, not to mention the nationalists. This is about two-thirds of Ukrainian Armed Forces’ personnel,” Basurin said on the Rossiya 1 television channel (VGTRK) on Thursday. Ukrainian troops are stationed along the 320-kilometer front line, he said.” Unlike what has just happened, the Ukrainian attack did not result in US sanctions on Ukraine. There were no meetings of the UN to condemn Ukrainian aggression. There was no talk of world war. On the contrary, Ukraine government used American weapons in its attack and asked America for more weapons to continue their attack. Let’s listen to Rick Rozoff again: “The Armed Forces of Ukraine used the American anti-tank missile system Javelin in the hostilities in Donbas. This was announced by the head of the Main Intelligence Directorate of the Ministry of Defense of Ukraine Kirill Budanov in an interview…. Budanov said that ideally, the U.S. would help deter any Russian incursion, through additional military aid and increased diplomatic and economic pressure, including more sanctions against Russia and the seizure and blocking of Russian banking accounts. Also, in addition to U.S. aid already promised and delivered, including Mark VI patrol boats, Javelin anti-armor systems and AN/TPQ-53 light counter-fire radar systems, Ukraine seeks additional air, missile and drone defense systems and electronic jamming devices, Budonov said. Patriot missile batteries and counter rocket, artillery and mortar systems are on Ukraine’s wish list. The AN/TPQ-53 systems were used to great effect, Ukraine military officials have previously reported. Budanov said the Javelin systems have also been used against Russian forces. Those, along with Turkish-manufactured drones, used against Russian-aligned separatist artillery troops, have a significant psychological deterrent value, said Budanov.” Why the difference? We think that the US should not have shipped arms to Ukraine. Doing this made the situation worse. But for what we’re saying now, it doesn’t matter what you think of the policy. The key point is that because there was no international outcry and no sanctions, the matter remained a local fight. If brain dead Biden and his gang had reacted to the so-called Russian “invasion” in the same way, the matter would have remained a local quarrel. Russia and Ukraine would have made a deal and that would be that. The neocon warmongers and other defenders of “democracy,” who unfortunately include some deluded “libertarians” object. Don’t we have a duty to resist “aggression?” The answer is clear: No, we don’t. We do not have a duty to evaluate every foreign quarrel and assess who is at fault. We do not have a duty to require leaders of regimes we, or rather our masters in Washington, don’t like to accept existing boundaries of countries as unchangeable. We should reject the false doctrine of “collective security,” which makes every border disputes a world war. The great American historian Charles Beard recognized what was wrong with “collective security” in the 1930s. In his article, “Giddy Minds and Foreign Quarrels,” he asked: “On what … should the foreign policy of the United States be based? Here is one answer and it is not excogitated in any professor’s study or supplied by political agitators. It is the doctrine formulated by George Washington, supplemented by James Monroe, and followed by the Government of the United States until near the end of the nineteenth century, when the frenzy for foreign adventurism burst upon the country. This doctrine is simple. Europe has a set of ‘primary interests’ which have little or no relation to us, and is constantly vexed by ‘ambition, rivalship, interest, humor, or caprice.’ The United States is a continental power separated from Europe by a wide ocean which, despite all changes in warfare, is still a powerful asset of defense. In the ordinary or regular vicissitudes of European politics the United States should not become implicated by any permanent ties. We should promote commerce, but force ‘nothing.’ We should steer clear of hates and loves. We should maintain correct and formal relations with all established governments without respect to their forms or their religions, whether Christian, Mohammedan, Shinto, or what have you.” Beard then responded to those who wanted to scrap our traditional policy of non-intervention with “collective security”: “In the rest of the world, outside this hemisphere, our interests are remote and our power to enforce our will is relatively slight. Nothing we can do for Europeans will substantially increase our trade or add to our, or their, well-being. Nothing we can do for Asiatics will materially increase our trade or add to our, or their, well-being. With all countries in Europe and Asia, our relations should be formal and correct. As individuals we may indulge in hate and love, but the Government of the United States embarks on stormy seas when it begins to love one power and hate another officially.” We should heed Beard’s wisdom today. Otherwise, the world may go up in flames. Tyler Durden Sun, 03/27/2022 - 08:10.....»»

Category: blogSource: zerohedgeMar 27th, 2022

Order Out Of Chaos: How The Ukraine Conflict Is Designed To Benefit Globalists

Order Out Of Chaos: How The Ukraine Conflict Is Designed To Benefit Globalists Authored by Brandon Smith via Alt-Market.us, Within the next couple of months it is likely that there will be direct US military involvement in Ukraine, with Russia now openly supporting and recognizing separatist groups in the Donbass region on the eastern edge of the country and apparently moving to aid them militarily in separation. This is not the first time Russia has sent military units into Ukraine, but it is the first time since 2014 and the annexation of Crimea that the threat of military action has been overt rather than covert. When conflict erupts, you are going to see a swarm of media stories in western nations trying to outline the complexity of the relationship between Russia and Ukraine since the fall of the Soviet Union, while ignoring certain inconvenient truths. You will see many of these stories construct a narrative which then oversimplifies the situation and paints Russia as the monstrous aggressor. The goal will be to convince the public that our involvement in Ukraine is a moral and geopolitical necessity. There will be attempts to gain American favor and a call for US boots on the ground. Joe Biden will be at the forefront of this push. The surface trigger for the confrontation is obviously rooted in the 2009 decision by western powers and Ukrainian officials to consider the country for membership in NATO. Most of Russia’s actions when dealing with Ukraine can be owed to NATO involvement in the region, including the Russian invasion of Crimea in 2014. Strategically, it makes sense. Imagine if Mexico suddenly announced it was joining a military alliance with China and that Chinese military assets were going to be transferred near the US southern border? It probably would not end well. To be sure, Russia has a history of hypocritical behavior when it comes to its involvement in the affairs of its neighbors. For example, only a few months ago Kazakhstan was facing mass protests which the government claimed were caused by “foreign manipulation.” Zero proof was presented to justify this assertion. However, the claim was enough to rationalize the deployment of 2300 Russian troops over the border to shut down the protests. In reality, citizens of Kazakhstan were angry over a spike in inflation and high gas prices which continue to grind down the middle class and those in poverty (sound familiar?). In 2019, only 4% of the population lived under the official poverty line. In 2020, that number exploded to 14% of the population. Accurate numbers are difficult to find for 2021, but it is likely that poverty levels are now closer to 16%-20%. The reasons for civil unrest were obvious and justified, but the protesting Kazakhs were accused of being pawns of foreign enemies. As I have noted in many articles lately, this is a typical strategy of corrupt governments trying to retain power when the people rise up and rebel for legitimate reasons. Again, imagine if the Canadian government under Trudeau asked for US military assistance in scattering the trucker protests against his draconian vaccine mandates? We need to look at these decisions in context in order to grasp how insane they really are. Ironically, Russia is happy to support the unrest of separatists in Ukraine while also helping to silence unrest in Kazakhstan. Keep this pattern in mind because it will help in understanding how events surrounding Russia reflect a global trend that might effect Americans in the future. The diplomatic mess between Ukraine and Russia can be blamed in part on both sides, and it’s this kind of historical ambiguity where globalists tend to thrive. The fog of war helps to obscure establishment activities and often it is hard for people to see who is truly benefiting from the chaos until it’s too late. It is my belief that the Ukraine problem is at least partially engineered and that it is designed as a first domino in a chain of intended crises. I don’t think there is anything unique to the Ukraine conflict for the globalists; they could have just as easily tried to initiate a regional war in Taiwan, North Korea, Iran, etc. There are numerous powder keg countries that they have been cultivating for a couple of decades. We should not hyperfocus on who is to blame between Ukraine or Russia, we should focus on the effects that will result from any major regional disaster and how the globalists exploit such catastrophes to further the agenda of total centralization of power. The Ukraine scenario could be easily defused if both sides took some basic diplomatic measures, but this is not going to happen. NATO officials could take a step back from their pursuit of adding Ukraine to the ranks. The US could stop pouring cash and weaponry into Ukraine to the tune of $5.4 billion since 2014. Over 90 tons of military equipment has been sent to the country in 2022 alone. Russia could stop sending covert special operations units into the Donbass and be more willing to come to the table to discuss diplomatic solutions. The reason these things do not happen is because they are not allowed to happen by the power brokers behind the curtain. We are all aware of the globalist influences behind US and NATO leaders, we present the undeniable evidence of this on a regular basis. Biden’s penchant for globalist institutions is well known. But what about Russia? There are some in the alternative media and the liberty movement who falsely believe that Russia is anti-globalist – Nothing could be further from the truth. As with many political leaders Putin will sometimes use anti-globalists rhetoric, but his relationships tell another story. In Putin’s first autobiography, titled ‘First Person’, he discusses with fondness his first encounter with New World Order globalist Henry Kissinger as a member of the FSB (formerly the KGB). As Putin rose through the political ranks he maintained a steady friendship with Kissinger and to this day they have regular lunches and Kissinger has been an adviser to multiple branches of the Kremlin. It doesn’t stop there, though. Putin and the Kremlin have also kept a steady dialogue with the World Economic Forum, the project of the now notorious globalist Klaus Schwab. In fact, only last year Russia announced it was joining the WEF’s “Fourth Industrial Revolution Network” which focuses on economic socialization, Artificial Intelligence, the “internet of things” and a host of other globalist interests which will all lead to worldwide technocracy and tyranny. Again, the Russian government is NOT anti-globalist. This claim is nonsense and always has been. I would attribute the fantasy of Russian opposition to a steady stream of propaganda and what I call the False East/West Paradigm – The fraudulent notion that the globalist agenda is a purely Western or American agenda and that countries like China and Russia are opposed to it. If you look at the close interactions between the east and the globalists, this idea completely falls apart. It’s important to understand that most conflicts between the East and the West are engineered conflicts and the leaders of BOTH SIDES are not really at odds with each other. Rather, these wars are Kabuki Theater; they are wars of convenience to achieve covert ends while mesmerizing the masses with moments of terror and calamity. For anyone who has doubts about this, I highly recommend they read the thoroughly researched and evidenced works of professional historian and economist Antony Sutton, who quite accidentally stumbled onto the facts surrounding the globalist conspiracy and went on to expose their habit of playing both sides of nearly every war over the past century from the Bolshevik Revolution to WWII and onward. The strategy of order out of chaos is nothing new, it’s something the globalists have been doing for a very long time. The number of open revelations post-Covid about the ‘Great Reset’ that globalists have publicly admitted to is so staggering that their plans can no longer be denied. Any skeptics at this point should be suspected of having a single digit IQ. So, now that we have established the reality of globalist involvement in both the west and in Russia, we need to ask ourselves how they benefit from initiating a crisis between these powers over Ukraine? What do they get out of it? As I have noted in recent articles, it appears to me that Ukraine is a Plan B attempt to conjure more smoke and mirrors where the covid pandemic failed to satisfy the Great Reset plan. As Klaus Schwab and the WEF has constantly asserted, they saw the pandemic as the perfect “opportunity” to force the Fourth Industrial Revolution on the world. As globalist Rahm Emanual once opined in the wake of the 2008 economic crash: “You never want a serious crisis to go to waste. And what I mean by that is it’s an opportunity to do things that you think you could not do before.” The WEF is an old hand at this tactic. Klaus Schwab also used the same exact language right after the credit crash of 2008 as he has used after the spread of covid, always trying to sell global governance as the solution to every disaster: “What we are experiencing is the birth of a new era, a wake-up call to overhaul our institutions, our systems and, above all, our thinking, and to adjust our attitudes and values to the needs of a world which rightly expects a much higher degree of responsibility and accountability,” he explained. “If we recognize this crisis as being really transformational, we can lay the fundaments for a more stable, more sustainable and even more prosperous world.” – Klaus Schwab on the Global Redesign Initiative, 2009 Schwab jumped the gun back then just as he jumped the gun in 2020 when he declared the Great Reset an inevitability in the face of covid. The globalists must have expected a much higher death rate from the virus because they were practically dancing in the streets, elated over the amount of power they could steal in the name of “protecting the public from a global health threat.” If you look at the WEF and Gates Foundation simulation of a covid pandemic, Event 201 which was held only two months before the REAL THING happened, they clearly expected covid to do way more damage, predicting an initial death tally of 65 million. This never happened; it isn’t even close. It’s hard to say why an obvious bioweapon like covid failed to do the job. Viruses tend to mutate rapidly in the wild and behave differently than they do in a lab setting. I would even consider the possibility of divine intervention. Whatever the reason, the globalists did not get what they wanted and now they need yet another crisis to oil the gears of the Reset machine. With the already tiny death rate of covid now dropping even further with the Omicron variant and half the states of the US in full defiance of the vax mandates it is only a matter of time before the rest of the world asks why they are still under medical authoritarianism? War in Ukraine and the mere threat of that war expanding beyond the region could accomplish a number of things covid has not. It provides an ongoing cover for the stagflationary collapse which is now in full swing in the US, the supply chain problems that continue globally as well as the destabilization of the European economy. In particular, the EU is strongly reliant on Russian natural gas in order to heat homes and maintain its economy. Russia has strangled natural gas supplies to Europe in the past and they will do it again. Russian oil exports also fill demand gaps globally, and these exports will be strangled by sanctions or by the Kremlin deliberately cutting supplies to certain nations. War is always a distraction from economic sabotage. Even though the seeds of financial crashes are often planted and watered well in advance by central banks, the banks never get the blame because international conflicts conveniently take center stage. By extension, economic crisis causes mass poverty, mass desperation, and mass hysteria, and globalists will say that these dangers require an international solution that they will happily provide in the form of centralization. In the US and in many other western nations which have a large number of people still defending individual freedom, the globalists clearly want to use tensions with Russia as a means to silence public dissent over authoritarian policies. Already I am seeing numerous instances of establishment officials and leftists on social media suggesting that liberty activists are “pawns of the Russians” and that we are being used to “divide and conquer.” This is nonsense backed by nothing, but they are trying out the narrative anyway to see if it sticks. I have no doubt that any rebellion in the US against the globalists will be blamed on foreign interference. As mentioned earlier, the last thing the elites want is movements of free people obstructing the Reset in the name of liberty. We witnessed this in Canada where Trudeau announced unilateral emergency powers against the trucker protests, giving himself totalitarian levels of control. Even the Russian government has intervened in such public actions to prevent any kind of activist momentum. Biden will try to do the same thing, and war, even a smaller regional war, gives him a rationale to oppress dissent in the name of public security. Interestingly, martial law in the US is also much easier to legally and historically justify for the government as long as it is done in response to the invasion of a foreign enemy. The Russian influence narrative may very well be in preparation for martial law within America. Whether or not this actually succeeds is another matter. The consequences of a shooting event in Ukraine will be far reaching well beyond a distraction for the American public; my intent here is not to suggest only Americans will be affected. My point is that there are certain places in the world that are naturally resistant to the globalist scheme, and freedom minded Americans are a primary obstacle. If there is a large scale rebellion against the Great Reset, it’s going to start here. The globalists know this as well, which is why the US will undoubtedly be centrally involved in the Ukraine quagmire. While the event would be disastrous for Ukrainians and probably many Russians, there are deeper and more dangerous underlying threats intended for the US and a war in Ukraine acts as an effective scapegoat for many of them. *  *  * If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE. Tyler Durden Thu, 02/24/2022 - 21:00.....»»

Category: worldSource: nytFeb 24th, 2022

Ending Fiat Money Won"t Destroy The State

Ending Fiat Money Won't Destroy The State Authored by Ryan McMaken via The Mises Institute, A certain meme has become popular among advocates of both gold and cryptocurrencies. This is the “Fix the money, fix the world” meme. This slogan is based on the idea that by switching to some commodity money—be it crypto or metal—and abandoning fiat currency, the world will improve greatly.  Taken in its moderate form, of course, this slogan is indisputably correct. State-controlled money is immoral, dangerous, and impoverishing. It paves the way for government theft of private wealth through the inflation tax, and thus allows the state to do more of what it does best: wage wars, kill, imprison, steal, and enrich the friends of the regime at the expense of everyone else. Privatizing the monetary system and imposing a “separation of money and state” would help limit these activities. But it’s also important to not overstate the benefits of taking money out of the hands of the state. The temptation to push the “fix the world” idea to utopian levels is often seen among cryptocurrency maximalists, and among some gold promoters as well. For example, at least one bitcoin enthusiast thinks bitcoin will bring “the end of the nation states.” And in one particularly over-the-top paragraph from another bitcoin promoter, we’re told that cryptocurrency will essentially cure every ill from poverty to corruption to environmental destruction.  The idea that changing to different money will somehow end theft, poverty, or even war is the sort of messianic thinking that would have given old-school Marxists a run for their money. Yes, we can all agree that if we “improve the money” we also “improve the world.” But removing the state’s money monopoly won’t make states fold up their tents and slink away in the night. (And, needless to say, simply changing the money won’t make bad food or poverty disappear either.) States existed before states took control of the money. And they’ll exist afterward—unless profound ideological changes take place as well. States Predate Fiat Money In a recent essay for mises.org titled “How Governments Seized Control of Money,” I explored the early history of the European state and the long process of how states gradually asserted control over money and the financial system. Significantly, however, we find that state power grew well before states established anything resembling true monopolies over the monetary system—or the power to create fiat money. That is, states long predate the money monopolies they now enjoy. During the sixteenth and seventeenth centuries—without the benefit of fiat currencies—states created enormous standing armies for the first time. They established mercantilist economies. Many rulers managed to assemble large bureaucracies to serve absolutist states. States were centralized to a degree that had not been seen in Western Europe since the Romans. It was a period of enormous gains in state building for princes and their agents. Yet these states could not “print money” nor enjoy the benefits of fiat money except in very short-lived and limited cases. Indeed, this period of immense state growth was also a period of “concurrent” and “parallel” currencies during which a wide variety of gold and silver coins—most of them foreign—competed within the borders of a single state. Many efforts by regimes to issue questionable, debased money failed because there were so many alternatives. But this didn’t stop, say, Louis XIV from hammering together a powerful state. So, when we ask ourselves the question, “Can states survive without fiat currency?” the answer is clearly “All experience points to yes.” States Can Still Tax without Fiat Money The existence and health of the state does not depend on fiat money or monetary inflation. Those things help a state, to be sure, but they’re not critical to the equation. Rather, what really matters is the ability to use the state’s monopoly on the means of coercion to seize resources. The great historian of the state Charles Tilly has noted that “no state lasts long” without the ability to engage in “extraction” or “drawing from its subject population the means of statemaking, warmaking, and protection.”1 “Extraction,” of course, will to most modern readers mean simply “taxation.” But historically it can mean other things as well. States can extract resources by demanding tribute as a payment for the “protection” services a state allegedly provides. This might be payment made by a local government to the central government. States also often own large amounts of land and other property. This means states can extract resources directly through rents, leases, and fees. States also can grant monopolies to nominally “private” organizations which provide both tangible and intangible benefits to the state (this is a common tactic under systems like mercantilism). None of this requires fiat money or a monopoly of the production of money. This all simply requires that states have the coercive force necessary to collect taxes, rents, tribute, and other benefits. Some advocates of cryptocurrencies have nonetheless attempted to claim that when the financial system is decentralized through crypto networks states will somehow be unable to tax. This would work if resources took no form other than money. But that’s not the case. Since human beings are physical beings—with needs for food, water, shelter, heating, and more—the state need only concentrate on taxing and monitoring physical goods. This would certainly shift the tax burden from the financial sector to physical assets, but it wouldn’t end the ability to tax. Rather, if states find themselves with less access to the monetized economy, states will instead increase taxes on real estate, retail trade, fuel, and hard-to-move physical capital. These states could even require that these payments be made in the state’s preferred money, thus ensuring the continuation of state-controlled money, even if that money is a less preferred money within a competitive framework. Those who refuse to comply would see their assets confiscated at the point of a state-wielded gun. War Making: The Key Piece of the Puzzle Finally, we must remember why states need to extract all these resources to begin with. One reason, of course, is that resource extraction begets more resource extraction. Once a state has an army of tax collectors and regulators, it’s easier to expand resource extraction even more. Fortunately—from the state’s perspective—this requires only a fraction of total revenues. Moreover, many taxpayers can be counted on to enthusiastically comply.  An enormous portion of that revenue—virtually all of it in the days before the modern welfare state—has traditionally gone to what Tilly calls a “state’s essential minimum activities.” These are statemaking: attacking and checking competitors and challengers within the territory claimed by the state. warmaking: attacking rivals outside the territory already claimed by the state; protection: attacking and checking rivals of the rulers’ principal allies, whether inside or outside the state’s claimed territory. These activities are the “core competencies” of states, and these activities also constitute—as Rothbard noted—the most high-stakes activities for states. They are high stakes because states that fail to succeed in these activities are generally doomed states. Thus, even if states are forced to scale back their welfare states, they will fight tooth and nail before giving up any of these “minimum activities.“  Historically, of course, states have been able to obtain more than enough when it comes to resource extraction for purposes of war making and ensuring the protection of the their coercive powers. A monopoly over money and fiat currency was never essential to this equation. States have proven to be quite ingenious when it comes to borrowing, threatening, and propagandizing when necessary to carry out wars—whether against foreigners or against a state’s own people.  Ideologically, of course, the origins of the state lie largely in the ability of state agents to promise “protection” from both foreign and domestic threats. And so long as the general public believes the state is necessary in this equation, states will continue to be able to demand tax revenues, obedience, and “unity.” If anyone doubts that such ideas are alive and well, one need only speak in favor of splitting the United States into smaller pieces. One is likely to immediately hear about how this must never be allowed to happen because China (or some other bogeyman of the day) poses too grave a threat to American “national interests.” A “strong America” is necessary, we’re told. This “strength,” of course, is funded by taxes.  The ideological grip states have over the public in this regard is extremely strong. Unless ideologies change in a big way, most people in the world are likely to continue to look to states to offer protection from various perceived evils. Consequently, separating the state from money won’t fundamentally change the world of geopolitics. It won’t change the fact that many states are immensely popular and regarded by the subject population as important and beneficial. Moreover, age-old sources of conflict will remain. Ethnic tensions will endure. Nationalism won’t disappear. Border disputes and fights over who “rightfully” controls some strategic strip of coastline won’t go away. Yes, taking the control of money out of the hands of politicians and bureaucrats is clearly a good thing, and ought to be done quickly and thoroughly. But it won’t “fix the world.” It’s only a piece of a much larger puzzle. Tyler Durden Wed, 01/12/2022 - 17:40.....»»

Category: blogSource: zerohedgeJan 13th, 2022

How Bubbles, Price, & COVID-19 Changed Bitcoin For Me

How Bubbles, Price, & COVID-19 Changed Bitcoin For Me Authored by Joakim Book via BitcoinMagazine.com, Bitcoin is not a bubble. It’s the monetary escape hatch we need now that the COVID-19 cat is out of the bag... I trained as a financial historian. My academic work focused on banks and financial markets in the past, and I was always fascinated by iconic bubbles of financial history — the tulip mania, the financial boom of the 1690s, the South Sea Company and Britain’s many financial panics in the 19th century. I wrote a thesis on the 1847 commercial crisis. I analyzed financial returns on London’s stock market in the Victorian and Edwardian eras, and showed that returns then squared well with the first round of factor analyses developed a century later. I investigated the Bank of England's role in the 1857 crisis, the 1866 Overend, Gurney & Company collapse and the 1890 bailout of Baring Brothers. (If you are under the impression that financial crises, government mismanagement and central bank bailouts only happened in the post-1971 era of modern monetary debasement, you are sorely mistaken). You could, Ray Dalio-style, say that nothing is new under our financial sun: many of these past crises map well onto more modern ones — perhaps, because there are only so many ways to make losses or catastrophically ruin monetary arrangements. While the concept of “bubbles” runs freely across the chronicles of financial history and those who study it, I was less convinced. The hand-waving arrogance with which well-established financial historians would denounce something as a bubble, delusion or financial madness would be familiar to most bitcoiners reading The New York Times or The Economist today. Mostly, these otherwise astute academics meant to launch derogatory remarks on the sorts of people who handled assets, and implied that real-world plebs in trading pits or exchanges couldn’t possibly possess knowledge of the superior kind with which their own university libraries embodied them. Worse, when pushed, the idea of bubbles never seemed to mean much else than “what goes up must come down.” What fascinates me about Bitcoin is the questions it poses for monetary economics — monetary rules, macroeconomic stability, regression theorem, Gresham's law and the classification of fiat-commodity money. When I first heard rumblings of this technological solution to overthrow the state’s monetary monopoly, I mostly denounced it as hopeful technobabble. My orange-pilled friends couldn’t explain why it mattered monetarily, how it improved much on what we had (or with better central bankers, could have). The use value seemed altogether superfluous in a fintech world where moving value was easier than ever and central banks couldn’t even hit their inflation targets, let alone shove us over the brink of hyperinflation. Then, two things changed: price and COVID-19. To many laymen, reasoning from a change in asset price seems like an asinine and bubble-fueled reason to change one’s mind — the quintessential herd mentality. To convince you that it’s not, I return to the idea of bubbles before I argue that Bitcoin is the monetary escape hatch necessary in a less free world. PRICES KNOW SOMETHING YOU DON’T At the base of economics lies an information and calculation argument: real market prices, emerging in trade between willing participants, generate information about the world. It allows us to calculate profits and losses, to see if what we make is worth more than what we put in. It allows market participants (i.e., all of us) to grasp what’s going on — not, mind you, in the news agency way of broadcasting highly-curated pictures from afar, but by informing your economic decisions. Shortages and price declines tell us what’s scarcer and more plentiful, what’s in high demand and what is better used elsewhere. Financial markets and assets do the same thing for society’s current and future allocation of savings. The prices of securities vary more than market prices because the (far-off) future and how to assess it is less knowable than the immediate present or recent past. The “trouble with bubbles” is that nobody knows the future. Asset prices incorporate the knowledge that exists about the present and forecasts the future in the best way that we know how. If owners of securities are wrong about that future, they lose money or miss out on profitable investments. Scott Sumner of the Mercatus Center at George Mason University explains this well for the two most recent bubbles in U.S. financial history: the dot-com bubble in the late ’90s and early 2000s, and the housing bubbles a few years thereafter: “I think asset prices are usually relatively efficient based on fundamentals. I'm very dubious of people who claim that such and such a market is obviously overvalued. Most experts, I think, believe that the tech stocks in 2000 were obviously overvalued, or housing prices in 2006 were obviously overvalued… people [were] saying things like ‘those stock prices only make sense if you think American internet firms will eventually dominate the global economy.’ "Well, they do now. Or the 2006 housing prices would only make sense if you think interest rates will get lower and lower and NIMBY [not in my backyard] regulations will stop new construction. Well, both of those things have happened and we’re now at a new normal of much higher housing prices in America. I think these markets we're picking up some long-term trends that really did change the traditional fundamental price earnings ratio or rent price ratio in housing.” Knowing that something is “obviously overvalued” is the kind of extreme hubris that opponents of Bitcoin suffer from in outsized amounts. The fundamental value is zero, says economist Steve Hanke; as renowned and astute a writer as Nassim Taleb wrote some mathematical equations and proved (“proved”) that bitcoin’s fundamental value was nil. How could they possibly know that? Perhaps they ran a model, mentally or computationally, plugged in some values, and out popped a bubble verdict. Could be, but when you’re testing market (ir)rationality, you’re also implicitly testing the model: “Irrational bubbles in stock prices,” concluded the father of the efficient market hypothesis, Eugene Fama, in the 1990s, “are indistinguishable from rational time-varying expected returns.” Fundamentals, and our confidence in them, change, which is reflected in asset prices moving up or down. Against Taleb, Nic Carter had the pithiest rebuttal: No sir, it’s $34,500 — or whatever the market priced it at when he said it. When prices fall after a rally — say, internet stocks from 200 to 2001, home prices from 2007 to 2009 or bitcoin in April 2021 — laymen and professionals alike say that it’s a bubble. But what if the price increases captured something real, and were then validated by future events? U.S. median house prices recouped their losses four years later, and today stand about 60% higher (that’s nominally; deflated by CPI, house prices are about 16% higher in 2021 than at the peak of 2007). Internet stocks, including some of those ridiculed as hopelessly overvalued in 2001, dominate the U.S. stock market — their products and services have conquered the world. The chattering classes’ case against Netflix, just a few years ago, was similarly overwhelming: This hopeful tech company couldn’t possibly monetize its overextended services. It would have to conquer the world for the stock’s then-valuation to make sense… and then it did exactly that. Netflix expanded services, upped its margins and offered original content. Few are the analysts today yapping about Netflix as an obvious bubble. Bitcoin's scope and promise is larger than any of them. What is its future value? For the next year, I predict that bubble charges against bitcoin, of which we saw plenty this year, will fade away. Both because angry nocoiners tire of making them when they’re received with ridicule, and because the longer something stays alive, expands and flourishes, the less sense the etiquette makes. Nobody calls Amazon a bubble anymore, nor Netflix. Even Tesla’s haters have largely surrendered, accepting that what propelled it to the fifth-largest U.S. company by market capitalization is something other than bubbling madness. No Bitcoiner takes the bubble attack seriously. Price matters, and only bubbles that fail (i.e., don’t recover) are relegated to history’s dustbin as “bubbles”; the successful ones are just promising ventures, deemed as such by a future that has hindsight as a guide. AN ESCAPE TO FREEDOM Every society that collapsed into turmoil — economic, monetary, military, social or other — has had individuals contemplating when to leave. It’s not an easy decision, forecasting doom and deterioration for one’s country of birth. Many are the migrants who can tell painful stories of uprooting their lives, made increasingly impossible by authorities, famine, war or hyperinflation, for an uncertain existence elsewhere. When staring down the "unending path to unfreedom that we’re experimenting with these days" as I argued earlier this year, what else is there but escape? When rule by the people is replaced by ruling the people, escape hatches are crucial. COVID-19 measures all over the world — and the agitated tenacity with which troves of people embodied them — showed me that lines of privacy and tyranny drawn in the sand could be approached, flirted with… and then crossed by about a mile. Seeing the writing on the wall, I, like many others, wanted an out. In an uncertain future, you never know which place becomes a beacon of freedom (two years ago, who would have bet on Sweden? And now that it, too, is conforming — whereto?) and who will confiscate your assets. The idea of a monetary escape hatch clicked with me. "When in doubt,” wrote Ray Dalio in his new book, “get out”: “If you don't want to be in a civil war or a war, you should get out while the getting is good... History has shown that when things get bad, the doors typically close for people who want to leave. The same is true for investments and money as countries introduce capital controls and other measures.” If history is any guide, you won’t be able to peacefully and in organized fashion be able to take your assets with you: “When the flight of wealth gets bad enough,” concluded Dalio, “the country outlaws it.” Plenty of Americans have taken that advice, though so far, only in a regional sense — the exodus from California speaks volumes. Others living under oppressive regimes, in the West and elsewhere, have taken similar actions, departing their domiciles for freer pastures elsewhere. Bitcoin facilitates the monetary component of that shift, to move value from an unfree jurisdiction to a freer one. When fleeing a sinking ship, you need your body, your health and your loved ones. Ideally, you want your most treasured belongings too, which, thanks to bitcoin, you can now carry without anybody knowing. It comes with the more important shift of holding funds outside the purview (and control!) of your invasive government. Dan Held’s Thanksgiving wishes stated it clearest: “With governments restricting more of our rights, what would be our light at the end of the tunnel? And with COVID, this trend has accelerated, with our movement and access to goods and resources diminished all for the sake of public safety.” You never know what you rely on until it’s abruptly taken away. When your assets are confiscated, your money devalued, your transactions declined and your bank decides to freeze your account for whichever made-up reason it’s trumpeting next, it’s too late. Backups and escape hatches must be put in place before they’re needed. I never saw the need for a monetary or financial escape before: I had access to inflation-protection and developed financial markets. I could move my funds wherever I wanted, whenever, for a sliver of what it would have cost just decades ago. Except for the occasional technical glitch or misadventures in poor countries, my transactions were never declined. I had not, to put it bluntly, checked my financial privilege. The last decade or so, culminating with COVID-19, convinced me that the unproblematic and worriless existence I had taken for granted might not always be that way. Measures against this public emergency probably won’t be what ultimately does in freedom, collapses societies and ushers in the authoritarianism of dystopias. But the COVID-19 cat is out of the bag now, and the power play that rulers experimented with this year and the last is from now on available at every political negotiation table like it never was before. With only vague references to public safety and astonishingly low barriers, locking up people in their homes is now a feasible option. The ability to escape — to get out — hasn’t been this important in generations. This time isn’t different, but this time we have Bitcoin. Perhaps that’s enough. Tyler Durden Sat, 01/01/2022 - 16:10.....»»

Category: smallbizSource: nytJan 1st, 2022

A 1997 Prophecy: Bitcoin And The Unfolding Of "The Sovereign Individual" Thesis

A 1997 Prophecy: Bitcoin And The Unfolding Of 'The Sovereign Individual' Thesis Authored by Bob Simon via BitcoinMagazine.com, The following is the written version of a video presentation which can be viewed here. THE WANING OF THE MODERN AGE “In our view, you are witnessing nothing less than the waning of the Modern Age. It is a development driven by ruthless but hidden logic. More than we commonly understand, the next millennium will no longer be ‘modern.’ We say this not to imply that you face a savage or backward future, although that is possible, but to emphasize that the stage of history now opening will be qualitatively different from that into which you were born. Something new is coming. Just as farming societies differed in kind from hunting and gathering bands, and industrial societies differed radically from feudal or yeoman agricultural systems, so the New World to come will mark a radical departure from anything seen before.” –”The Sovereign Individual,” page 53 Published in 1997 from authors James Dale Davidson and Lord William Rees-Mogg, “The Sovereign Individual” can best be described as a guidebook. The authors combine a deep investigation into the history of man with a careful analysis of praxeology, or the study of human action, to come to a startling conclusion: Our civilization is standing at the precipice of radical change. Those who recognize this change and take the proper actions will benefit immensely, while those who remain ignorant will suffer the consequences. The book can also be viewed as a prophecy, making bold predictions about the future of civilization, many of which have already come to pass. A quarter of a century ago, while “experts” such as Paul Krugman were predicting that the internet would have little impact on the economy, Davidson and Rees-Mogg were predicting the emergence of the cybereconomy; non-state digital money; personalized media; the convergence of the telephone, computer and TV into a single device; as well as the record level of public distrust in major institutions currently unfolding before our eyes. THE THESIS OF “THE SOVEREIGN INDIVIDUAL” While religious and allegorical themes are beautifully woven throughout the book, the authors make it very clear that their thesis is rooted in hard logic, specifically a concept they call “the logic of violence.” Throughout all of history, humans have had to deal with the simple truth that taking is often easier than making. Working hard to acquire possessions such as food, shelter and clothing means nothing if they cannot be protected. The available methods by which humans have defended themselves and their property have transformed drastically from the time of hunter-gatherers up until the present day. In the authors’ views, it is this transformation of the logic of violence that is at the root of all major societal change throughout history. The fundamental axiom of the book is this: Human action is guided by incentives. If we can become conscious of the incentives, then we can, to a certain extent, forecast human action. For example, dropping a $100 bill on the ground of any city in the world will produce very predictable results: someone will quickly pick it up. To better understand the origins of these incentives, the authors introduce a concept called “megapolitics.” “The concept of megapolitics helps illuminate some of the major mysteries of history: how governments rise and fall and what types of institutions they become; the timing and outcome of wars; and patterns of economic prosperity and decline. By raising or lowering the costs and rewards of projecting power, megapolitics governs the ability of people to impose their will on others.” –“The Sovereign Individual,” page 65 Unlike manmade political institutions, megapolitics exist outside of the realm of conscious direction. Davidson and Rees-Mogg describe the four basic types of megapolitical forces as being topography, climate, microbes and technology. Of these four, technology is described as “having played by far the largest role in determining the costs and rewards of projecting power during the modern centuries.” CYBERCASH It is the authors’ belief that the emergence of cryptography in conjunction with the borderless jurisdiction of cyberspace was poised to drastically alter the logic of violence, and therefore shift the balance of power from the state to the individual. In the past, massive and expensive armies were needed to secure large amounts of wealth. Today, thanks to the invention of Bitcoin, wealth can be stored in the brain of any human being, simply by memorizing 24 words. Instead of needing to rely upon state-run institutions to uphold property rights, wealth in the 21st century will be protected by unbreakable cryptography, or in other words, pure mathematics. Read as the authors describe in detail the eventual emergence of what they call “cybercash” and keep in mind that all this was first published in 1997: “Now the advent of the Information Age implies another revolution in the character of money. As cybercommerce begins, it will lead inevitably to cybermoney. This new form of money will reset the odds, reducing the capacity of the world's nationstates to determine who becomes a Sovereign Individual. A crucial part of this change will come about because of the effect of information technology in liberating the holders of wealth from expropriation through inflation. Soon, you will pay for almost any transaction over the Net the same time you place it, using cybercash. This new digital form of money is destined to play a pivotal role in cybercommerce. It will consist of encrypted sequences of multihundred-digit prime numbers. Unique, anonymous, and verifiable, this money will accommodate the largest transactions. It will also be divisible into the tiniest fraction of value. It will be tradable at a keystroke in a multi-trillion-dollar wholesale market without borders.”  –“The Sovereign Individual,” page 215 Bitcoin has turned this 1997 prophecy into a reality. Bitcoin will be the most important tool in the arsenal of the 21st century sovereign individual. Impervious to confiscation via theft or inflation, and open to all human beings on earth with access to the internet, the rise of Bitcoin represents the rise of the sovereign individual. THE STRUGGLE FOR SOVEREIGNTY Sovereignty in this context is a zero-sum game. When individuals gain sovereignty, the state necessarily loses sovereignty over them. As citizens continue to take advantage of new technological innovations, institutions will naturally struggle to reclaim power. We are not only seeing this with Bitcoin in the form of propaganda-style attacks launched by many central banks, but we are seeing it in legacy media as well. In the words of “The Sovereign Individual,” “The mass media will become individualized media… No longer will you be at the mercy of Dan Rather or the BBC for the news that reaches you. You will be able to select news compiled and edited according to your instructions.” With the rise of alternative, independent and social media, the mainstream media has never held less power than it does today. Legacy news organizations are so desperate for significance that they do not hesitate to lie, manipulate and sow fear and hatred among its viewers in exchange for cheap clicks and views. So many of the biggest issues in society are kept alive by the mainstream media’s incessant desperation for relevance. CNN’s recent spat with Joe Rogan provides us a real time example of legacy media’s waning influence. Rogan, a single man, was able to expose CNN’s lies about him by the simple virtue of the fact that he, himself, has a larger audience than CNN does. We are entering a world where all voices will have the opportunity to be heard. The internet is providing each human being a chance to live up to their full potential. Geography, social class, gender and other labels are no longer limitations in the new digital world. The internet doesn’t care what you look like. If you are able to provide value, you will be rewarded. A NEW PARADIGM As fascinating and impressive as the authors’ use of logic to accurately predict many aspects of our modern life is, perhaps equally fascinating is their ability to look into the deeper, more mysterious patterns of history. “Giggle if you will, but we do not despise or dismiss intuitive understandings of history. Although our argument is grounded in logic, not in reveries, we are awed by the prophetic power of human consciousness... Understanding the way the world works means developing a realistic intuition of the way that human society obeys the mathematics of natural processes. Reality is nonlinear. But most people's expectations are not. To understand the dynamics of change, you have to recognize that human society, like other complex systems in nature, is characterized by cycles and discontinuities. That means certain features of history have a tendency to repeat themselves, and the most important changes, when they occur, may be abrupt rather than gradual.” –“The Sovereign Individual,” page 49 The pattern they are referring to is a curious 500-year cycle which seems to correlate with paradigm shifting events in Western civilization. Beginning in 500 BC, the emergence of Greek democracy and philosophy laid the foundations of Western civilization. The birth of Christ in 4 BC, during the height of the Roman empire, set the stage for Judeo-Christian values becoming the bedrock of Western culture. Five centuries later, in 500 AD, the fall of Rome would lead to the dark ages in Western Europe, a period of institutional collapse and lawless disarray. 1,000 AD marks the beginning of a period now known as the Middle Ages in which commerce and literacy were rediscovered. In the words of Raoul Glaber, an 11th century historian quoted by “The Sovereign Individual,” the turn of the millennium “shook off the tatters of antiquity.” 500 years later, around the year 1,500, the Renaissance, the Reformation and the discovery of the New World all contributed to what we view as the commencement of the modern era. Now, here we sit 500 years later in the very early stages of the 21st century. Technological advances are being compounded exponentially. The era which gave birth to our modern notion of the nation state around the year 1,500 is coming to an end. As the balance of power shifts from the institutional level to the individual level, we would expect the legacy system to tighten its grip. This is exactly what we’re seeing. Simply questioning the official story given by the state or mainstream media can result in being labeled a dangerous conspiracy theorist. Attempting to create a dialogue about important issues on social media can result in censorship and re-education. Suddenly, the inalienable right of bodily sovereignty encoded at Nuremberg is being revoked by governments throughout the world. Citizens of many countries are literally trapped within the borders, unable to leave unless granted permission by their government. Innocent Australians are being removed from their homes and shipped in buses to internment camps where they are being held in isolation, and then hunted down when they try to escape back to their families. Unable to fund these operations against their citizens via transparent taxation, governments and central banks throughout the world have resorted to printing exorbitant amounts of money resulting in the highest inflation in decades. The mainstream media tells you this is all normal, the government tells you this is all normal, the big tech monopolies tell you this is all normal. However, to anyone paying any attention at all, it is becoming abundantly clear that the emperor has no clothes. As unsettling as all this may be, it is all a part of a natural process. Metamorphosis requires death and rebirth. Old institutions are dying, and the madness we are witnessing all around us is simply evidence of their accelerating decay. Just as Gutenberg's printing press broke the Catholic Church’s monopoly on information five centuries ago, Bitcoin is poised to break the state’s monopoly on money. The stage is already set: Insolvent governments will continue to print money in an effort to maintain control over their subjects. The savings of millions of responsible people throughout the world will be wiped out as the value of paper trends towards zero. Many unwitting people will go down with the ship. But for the rest of us, a bright orange lifeboat awaits. Tyler Durden Mon, 12/27/2021 - 16:20.....»»

Category: blogSource: zerohedgeDec 27th, 2021

Ted Cruz"s new e-book on Critical Race Theory argues that seeking equity in the US is really calling for "discrimination" against white people

Sen. Ted Cruz, a Republican of Texas, taught school board candidates that Critical Race Theory is "taking our schools by a storm." Now his lecture is being circulated as an e-book among conservatives. Sen. Ted Cruz, a Republican of Texas, published an e-book on Critical Race Theory.Ken Cedeno/AFP via Getty Images Ted Cruz just put out an ebook on how to fight Critical Race Theory in K-12 schools.  The Texas senator says critical race theory concepts have "infiltrated our education system." He said to look out for "buzzwords" words like "white privilege," "systematic racism," and "equity." Sen. Ted Cruz of Texas is on a mission to "defeat" Critical Race Theory, the study of racial bias in US laws that he says is "taking our schools by storm."Though educators say CRT isn't taught in K-12 schools, Cruz argues the concepts have "infiltrated our education system" in a free, downloadable 10-page e-book exploring the origins of the college-level course, and alleging that it's tied to Marxism."Together, I think we can defeat Critical Race Theory in our schools and make sure that students learn the true history of America—the story of American greatness," Cruz says in the e-book.The e-book, based on Cruz's August 9 lecture at the conservative Leadership Institute's School Board Campaign Training, echoes complaints and talking points that other conservatives have used to fuel controversy over the topic. For example, Christopher Rufo, the Manhattan Institute fellow who started the political discussion about CRT in 2020 on Fox News, encouraged conservatives to use the term "race-based Marxism" in a CRT briefing book section on messaging called "winning the language war."Anyone trying to download the book must provide their email and will be met with a request for donations. "Please give today to help train more conservatives to stop Critical Race Theory in its tracks," the request says.Cruz's e-book teaches conservatives how to "spot CRT concepts" in K-12 curricula by looking for "buzzwords" like "white privilege," " systemic racism" and "equity."  He focuses on "equity," a word Merriam-Webster dictionary defines as "fairness or justice in the way people are treated." Cruz argues that CRT rejects equality and instead demands "equity.""You see, to Critical Race theorists, in order to achieve equity, local and federal government policies must dis-criminate so that the same results are achieved by all races," Cruz writes. "If policies don't meet that standard, CRT considers them racist policies."The e-book, promoted through a sponsored tweet Wednesday by the Washington Times, was part of an 11-hour program the Leadership Institute sponsored in August to prepare conservatives to run for local school board seats "against the entrenched left," according to a message that appears when you sign up to download the book. He participated in the program as school board races across the country were heating up over culture war issues in education, including the teaching of race. A study by Ballotpedia identified 272 school districts in 25 states where candidates took a stance on critical race theory, the role of race in curricula or specific equity and diversity plans, Covid-19 responses, and sex education or the use of gender-specific facilities. The most commonly cited issue was "race in education/critical race theory," mentioned in 248 races, according to the study. Meanwhile, bills and laws to restrict discussion about race and gender in classrooms have cropped up in Republican-led states.Cruz, a Harvard-trained lawyer and former solicitor general of Texas, argues that CRT is based on a Marxist view of society as a conflict between oppressors and the oppressed. He adds that "critiques of capitalism and property have been threads in the CRT quilt since the very beginning."He links CRT to the New York Times Magazine's "1619 Project," an accounting of US history with slavery's consequences and Black Americans' contributions to America at the center. Several school districts are teaching the 1619 project using curriculum guides from the Pulitzer Center. Cruz also quotes from a document by the National Education Association, the nation's largest union representing both teachers and college faculty, that says they "oppose attempts to ban critical race theory and/or The 1619 Project," they support an "honest teaching of social studies," and that it's "appropriate for curriculum to be informed by academic frameworks" that include CRT. NEA had no immediate comment.Cruz urged conservatives to stand up and fight, citing a case in Southlake, Texas, where he said conservative parents "rallied together to defeat a ridiculous Critical Race Theory initiative that the local school district's diversity committee" had put forth."The conservative parents were able to band together to fight this, and they got three times as many people to show up and vote in the school board elections than usually vote. And guess what—they won the school board elections about 70 to 30—a huge margin," Cruz wrote. "That's what happens when we have grassroots leaders like you pushing back against Critical Race Theory."Fordham University School of Law professor, Tanya Katerí Hernández, who has taught CRT for 25 years, described the topic to Insider as an analysis of legal jurisprudence that examines how advances in civil rights laws were undermined and have in many ways led to disenchantment with a colorblind approach to dealing with racism. People think "it's part of an anti-whiteness mode of analysis or a racial hate platform," she said, adding that that's "completely untrue."But Morton Blackwell, Leadership Institute president, says in an email that accompanies the e-book that Cruz "helps conservatives understand the ugly truth" about CRT."Please share this e-book with other members of your family and community so they too can learn to spot Critical Race Theory concepts," he writes. "As Senator Cruz makes clear, when conservatives stand up and act, we can defeat leftist indoctrination."Read the original article on Business Insider.....»»

Category: worldSource: nytDec 16th, 2021

We read Ted Cruz"s new e-book on Critical Race Theory. He argues that seeking equity in the world is really calling for "discrimination" against white people.

Sen. Ted Cruz, a Republican of Texas, taught school board candidates that Critical Race Theory is "taking our schools by a storm." Now his lecture is being circulated as an e-book among conservatives. Sen. Ted Cruz, a Republican of Texas, published an e-book on Critical Race Theory.Ken Cedeno/AFP via Getty Images Ted Cruz just put out an ebook on how to fight Critical Race Theory in K-12 schools.  The Texas senator says critical race theory concepts have "infiltrated our education system." He said to look out for "buzzwords" words like "white privilege," "systematic racism," and "equity." Sen. Ted Cruz of Texas is on a mission to "defeat" Critical Race Theory, the study of racial bias in US laws that he says is "taking our schools by storm."Though educators say CRT isn't taught in K-12 schools, Cruz argues the concepts have "infiltrated our education system" in a free, downloadable 10-page e-book exploring the origins of the college-level course, and alleging that it's tied to Marxism."Together, I think we can defeat Critical Race Theory in our schools and make sure that students learn the true history of America—the story of American greatness," Cruz says in the e-book.The e-book, based on Cruz's August 9 lecture at the conservative Leadership Institute's School Board Campaign Training, echoes complaints and talking points that other conservatives have used to fuel controversy over the topic. For example, Christopher Rufo, the Manhattan Institute fellow who started the political discussion about CRT in 2020 on Fox News, encouraged conservatives to use the term "race-based Marxism" in a CRT briefing book section on messaging called "winning the language war."Anyone trying to download the book must provide their email and will be met with a request for donations. "Please give today to help train more conservatives to stop Critical Race Theory in its tracks," the request says.Cruz's e-book teaches conservatives how to "spot CRT concepts" in K-12 curricula by looking for "buzzwords" like "white privilege," " systemic racism" and "equity."  He focuses on "equity," a word Merriam-Webster dictionary defines as "fairness or justice in the way people are treated." Cruz argues that CRT rejects equality and instead demands "equity.""You see, to Critical Race theorists, in order to achieve equity, local and federal government policies must dis-criminate so that the same results are achieved by all races," Cruz writes. "If policies don't meet that standard, CRT considers them racist policies."The e-book, promoted through a sponsored tweet Wednesday by the Washington Times, was part of an 11-hour program the Leadership Institute sponsored in August to prepare conservatives to run for local school board seats "against the entrenched left," according to a message that appears when you sign up to download the book. He participated in the program as school board races across the country were heating up over culture war issues in education, including the teaching of race. A study by Ballotpedia identified 272 school districts in 25 states where candidates took a stance on critical race theory, the role of race in curricula or specific equity and diversity plans, Covid-19 responses, and sex education or the use of gender-specific facilities. The most commonly cited issue was "race in education/critical race theory," mentioned in 248 races, according to the study. Meanwhile, bills and laws to restrict discussion about race and gender in classrooms have cropped up in Republican-led states.Cruz, a Harvard-trained lawyer and former solicitor general of Texas, argues that CRT is based on a Marxist view of society as a conflict between oppressors and the oppressed. He adds that "critiques of capitalism and property have been threads in the CRT quilt since the very beginning."He links CRT to the New York Times Magazine's "1619 Project," an accounting of US history with slavery's consequences and Black Americans' contributions to America at the center. Several school districts are teaching the 1619 project using curriculum guides from the Pulitzer Center. Cruz also quotes from a document by the National Education Association, the nation's largest union representing both teachers and college faculty, that says they "oppose attempts to ban critical race theory and/or The 1619 Project," they support an "honest teaching of social studies," and that it's "appropriate for curriculum to be informed by academic frameworks" that include CRT. NEA had no immediate comment.Cruz urged conservatives to stand up and fight, citing a case in Southlake, Texas, where he said conservative parents "rallied together to defeat a ridiculous Critical Race Theory initiative that the local school district's diversity committee" had put forth."The conservative parents were able to band together to fight this, and they got three times as many people to show up and vote in the school board elections than usually vote. And guess what—they won the school board elections about 70 to 30—a huge margin," Cruz wrote. "That's what happens when we have grassroots leaders like you pushing back against Critical Race Theory."Fordham University School of Law professor, Tanya Katerí Hernández, who has taught CRT for 25 years, described the topic to Insider as an analysis of legal jurisprudence that examines how advances in civil rights laws were undermined and have in many ways led to disenchantment with a colorblind approach to dealing with racism. People think "it's part of an anti-whiteness mode of analysis or a racial hate platform," she said, adding that that's "completely untrue."But Morton Blackwell, Leadership Institute president, says in an email that accompanies the e-book that Cruz "helps conservatives understand the ugly truth" about CRT."Please share this e-book with other members of your family and community so they too can learn to spot Critical Race Theory concepts," he writes. "As Senator Cruz makes clear, when conservatives stand up and act, we can defeat leftist indoctrination."Read the original article on Business Insider.....»»

Category: worldSource: nytDec 16th, 2021

Ferguson: Omicron Sounds The Death Knell For Globalization 2.0

Ferguson: Omicron Sounds The Death Knell For Globalization 2.0 Authored by Niall Ferguson, op-ed via Bloomberg.com, On top of an intensifying cold war between the U.S. and China and other seismic changes, the rapid spread of Covid-19’s newest variant could finish off our most recent phase of global integration. “Somewhere out there,” I wrote here two weeks ago, “may lurk what I grimly call the ‘omega variant’ of SARS-CoV-2: vaccine-evading, even more contagious than delta, equally or more deadly. According to the medical scientists I read and talk to … the probability of this nightmare scenario is very low, but it is not zero.” Indeed. Little did I know, but even as I wrote those words something that appears to fit this description was spreading rapidly in South Africa’s Gauteng province: not the omega variant, but the omicron variant. As I write today, major uncertainties remain, but what we know so far is not good. People are emotionally predisposed to look on the bright side — we are all sick of this pandemic and want it to be over — so it pains me to write this. Nevertheless, I’ll stick to my policy of applying history to the best available data, even if it means telling you what you really don’t want to hear. First the data: South African cases were up 39% on Friday, to 16,055. The test positivity rate rose from 22.4% to 24.3%, suggesting that the true case number is rising even faster. A Lancet paper suggests that Omicron is likely by far the most transmissible variant yet. There are three possible explanations for this: A higher intrinsic reproduction number (R0), An advantage in “immune escape” to reinfect recovered people or evade vaccines, or Both of the above. An important preprint published on Dec. 2 pointed to immune escape. South Africa’s National Institute for Communicable Diseases has individualized data on all its 2.7 million confirmed cases of Covid-19 in the pandemic. From these, it identified 35,670 suspected reinfections. (Reinfection is defined as an individual testing positive for Covid-19 twice, at least 90 days apart.) Since mid-November, the daily number of reinfections in South Africa has jumped far faster than in any previous wave. In November, the hazard ratio was 2.39 for reinfection versus primary infection, meaning that recovered individuals were getting Covid at more than twice the rate of people who had never had Covid before. And this was when omicron made up less than a quarter of confirmed cases. By contrast, the same study found no statistically significant evidence that the beta and delta variants were capable of reinfection. And, crucially, at least some of these new infections are leading to serious illness. On Thursday, the number of Gauteng patients in intensive care for Covid almost doubled from 63 to 106. Data from a private hospital network in South Africa that has over 240 patients hospitalized with Covid indicate that 32% of the hospitalized patients were fully vaccinated. Note that around three-quarters of the vaccinated in South Africa received the Pfizer Inc.-BioNTech SE vaccine. The rest got the Johnson & Johnson vaccine. Yet these are not the data that worried me the most last week. Those had to do with children. Between Nov. 14 and 28, 455 people were admitted to hospital with Covid-19 in Tshwane metro area, one of the largest hospital systems in Gauteng. Seventy (15%) of those hospitalized were under the age of five; 117 (25%) were under 20. And this is not just a story of precautionary hospitalizations. Twenty of the 70 hospitalized toddlers progressed to “severe” Covid. Up until Oct. 23, before experts estimate omicron began circulating, under-fives represented only 1.8% of cumulative Covid hospital admissions in South Africa. As of Nov. 29, 10% of those now hospitalized in Tshwane were under the age of two. If this trend holds as omicron spreads to advanced economies — and it is spreading very fast, confirming omicron’s high transmissibility — the market impact could be much bigger than is currently priced in. Unlike with the delta wave, many schools would return to hybrid instruction, parents would withdraw from the labor force to provide childcare and consumption patterns would again shift away from retail, hospitality and face-to-face services. Hospital systems would also face shortages of pediatric intensive care beds, which have not been much needed in prior Covid waves. South Africa’s top medical advisor Waasila Jassat noted on Dec. 3 that hospitalizations on average are less severe than in previous waves and hospital stays are shorter. But she also noted a “sharp” increase in hospital admissions of under-fives. Children under 10 represent 11% of all hospital admissions reported since Dec. 1. Here’s what we don’t know yet. We do not know how far prior infection and vaccination will protect against severe disease and death in northern hemisphere countries, where adult vaccination rates are much higher than in South Africa (just 24%). And we do not know if omicron will prove as aggressive toward children in those countries, especially the very young children we have not previously contemplated vaccinating. (Because South Africa has limited testing capacity, we do not know the total number of under-fives infected with omicron in Gauteng, so we do not know what percentage of children are falling sick.) We may not know these things for another week, possibly longer. So panic is not yet warranted. Nor, however, is wishful thinking. It may prove a huge wave of mild illness, signaling the final phase of the transition from pandemic to endemic. But we don’t know that yet. Now the history. First, it makes all the difference in the world whether or not children fall gravely ill in a pandemic. Covid has so far spared the very young to an extent rarely seen in the recorded history of respiratory disease pandemics. (The exception seems to be the 1889-90 “Russian flu,” which modern researchers suspect was in fact a coronavirus pandemic.) The great influenza pandemics of 1918-19 and 1957-58 killed the very young as well as the very old. The former also carried off young adults in the prime of life. The latter caused significant excess mortality among teenagers. Up until this point, Covid was the social Darwinist disease: It disproportionately killed the old, the sick and the gullible (the vulnerable people who allowed themselves to be persuaded that the vaccine was more dangerous than the virus). A hundred years ago, many experts would have hailed such a disease for the same reasons they promoted eugenics. We think differently now. However, emotionally and rationally, we still dread the deaths of children much more than the old, the sick and the foolish. The moment children become seriously ill — as has already happened in Gauteng — the nature of the pandemic fundamentally alters. Risk aversion will be far higher in the Ferguson family, for example, if its youngest members are vulnerable for the first time. The second historical point is that this may be how our age of globalization ends — in a very different way from its first incarnation just over a century ago. The first age of globalization, from the 1860s until 1914, ended with a bang, not a whimper, with the outbreak of World War I. Within a remarkably short space of time, that conflict halted trade, capital flows and migration between the combatant empires. Moreover, the war and its economic aftershocks strengthened and ultimately empowered new political movements, notably Bolshevism and fascism, that fundamentally repudiated free trade and free capital movements in favor of state control of the economy and autarky. By 1933, the outlook for liberal economic policies seemed so utterly hopeless that, in a lecture he gave in Dublin, even John Maynard Keynes threw in the towel and embraced economic self-sufficiency. Now, there is an argument (made by my Bloomberg colleague and occasional editor James Gibney) that the pandemic will not kill globalization. I am not so sure. Defined too broadly, to include any kind cross-border interaction, the word loses its usefulness. Yes, there were all kinds of “transnational networks in science, health, entertainment,” as well as increasingly ambitious international agencies between the wars. But the fact that (for example) the Pan European movement was founded by Richard von Coudenhove-Kalergi in the 1920s does not mean that the subsequent decades were a triumph of European integration. There was a great deal of international cooperation and cross-border activity between 1939 and 1945, too. That does not mean that the 1940s were a time of globalization. For the word to be meaningful, globalization must refer to relatively higher volumes of trade, capital flows, migration flows and perhaps also cultural integration on a global scale.   On that basis, globalization peaked — or maybe “maxed out” would be more accurate — in around 2007. Calculate it how you like: Whether the ratio of global exports to GDP, the ratio of gross foreign assets to GDP, global or national migrant flows in relation to total population, they all tell the same story of a sustained rise of globalization hitting a peak around 14 years ago. The economic historian Alan M. Taylor has long argued that we should measure globalization by looking at current account imbalances, which tell us when a lot of trade and lending are happening. On that basis, too, globalization peaked in 2007. Even Before Covid, Trade and Lending Were Trending Down Source: Our World in Data from Maurice Obstfeld and Alan M. Taylor, "Global Capital Markets: Integration, Crisis, and Growth," Japan–US Center UFJ Bank Monographs on International Financial Markets; and International Monetary Fund, World Economic Outlook Database. Note: The data shown is the average absolute current account balance (as a percentage of GDP) for 15 countries in five-year blocks. The countries in the sample are Argentina, Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, U.K., U.S.. Since the financial crisis of 2008-9, however, the volume of world trade has flatlined relative to the volume of industrial production. The U.S. current account deficit peaked in the third quarter of 2006 at -6.3% of GDP. The latest read? -3.3%. The same story emerges when one turns to migration. The foreign-born share of the U.S. population rose rapidly from its nadir in 1970 (4.7%) to a peak of 13.7% in 2019. But the rate of growth clearly slowed after 2012. It remains below its historic peak of 14.7%, back in 1890. Data for net migration similarly point to peaks prior to the financial crisis. Net emigration from South Asia peaked in 2007, for example. So did net immigration to the United Kingdom. Not-So-Open Borders Source: United Nations Population Division What about cultural globalization? My guess is that peaked in 2012, which was the last year that imported films earned more at the Chinese box office than domestic productions. The highest-grossing movie in the history of the People’s Republic is this year’s “Battle of Lake Changjin,” a Korean War drama in which heroic Chinese troops take on the might of the U.S. Army—and win. (Watch the trailer. Then tell me globalization is going to be fine.) What has caused globalization to recede? Let me offer a six-part answer. First, global economic convergence. This may come as a surprise. An influential story over the past two decades was Branco Milanovic’s thesis that globalization had increased inequality. In particular, Milanovic argued in 2016 that “large real income gains [had] been made by people around the median of the global income distribution and by those in the global top 1%. However, there [had] been an absence of real income growth for people around the 80-85th percentiles of the global distribution.” He illustrated this argument with a famous “elephant chart” of cumulative income growth between 1988 and 2008 at each percentile of the global income distribution. On closer inspection, the elephant was a statistical artifact. Strip out the data for Japan, the former Soviet Union and China, and the elephant vanishes. The story Milanovic’s chart told was of the decline of ex-Soviet and Japanese middle-class incomes following the collapse of the USSR and the bursting of Tokyo’s bubble in 1989-90, and the surge of Chinese middle-class incomes, especially after China’s entry into the World Trade Organization in 2001. The real story of globalization turns out to be a sustained reduction in global inequality as Chinese incomes caught up rapidly with those in the rest of the world, combined with big increases in national inequality as the “one percent” in some (not all) countries got a whole lot richer. At the heart of globalization was what Moritz Schularick and I called “Chimerica”—the symbiosis between the Chinese and American economies that allowed American capital to take advantage of low-cost Chinese labor (offshoring or outsourcing), American borrowers to take advantage of abundant Chinese savings, and American consumers to take advantage of cheap Chinese manufactures. It could not last. In 2003 Chinese unit labor costs were around a third of those in the U.S. By 2018 the two were essentially on a par. In that sense, the glory days of globalization were bound to be numbered. For as Chinese incomes rose, the rationale for relocating production to China was bound to become weaker. Secondly, and at the same time, new technologies — robotics, three-dimensional printing, artificial intelligence — were rapidly reducing the importance of human labor in manufacturing. With the surge of online commerce and digital services, globalization entered a new phase in which data rather than goods and people crossed borders, even if the Great Firewall of China partly cordoned off China’s internet from the rest of the world’s. Chimerica, as Schularick and I argued back in 2007, was in many ways a chimera — a monstrous creature with the potential to precipitate a crisis, not least by artificially depressing U.S. interest rates and inflating a real estate bubble. When that crisis struck in 2008-9, it was the third blow to globalization. For those who suffered the heaviest losses in the United States and elsewhere, it was not illogical to blame free trade and immigration. A 2015 study by the McKinsey Global Institute showed clearly that people in the U.S., U.K. and France who saw themselves as “not advancing and not hopeful about the future” were much more likely than more optimistic groups to blame “legal immigrants,” “the influx of foreign goods and services,” and “cheaper foreign labor” for, respectively, “ruining the culture and cohesiveness in our society,” “leading to domestic job losses” and “creating unfair competition to domestic businesses.” The only surprising thing was that these feelings took as long as seven years to manifest themselves as an organized political backlash against globalization, in the form of Britain’s vote to exit the European Union and America’s vote for Donald Trump. Dani Rodrik’s famous trilemma — which postulated that you could have any two of globalization, democracy and sovereignty — was emphatically answered in 2016: Voters chose democracy and sovereignty over globalization. This was the fourth strike against “the globalists,” a term invented by the populists to give globalization a more easily hateable human face. The financial crisis and the populist backlash didn’t sound the death knell for globalization. They merely dialed it back — hence the plateau in trade relative to manufacturing and the modest decline (not collapse) of international capital flows and migration. The fifth blow was the outbreak of Cold War II, which should probably be dated from Vice President Mike Pence’s October 2018 Hudson Institute speech, the first time the Trump administration had taken its anti-Chinese policy beyond the confines of the president’s quixotic trade war (which only modestly reduced the bilateral U.S.-Chinese trade deficit). Not everyone has come to terms with this new cold war. Joseph Nye (and the administration of President Joe Biden) would still like to believe that the U.S. and China are frenemies engaged in “coopetition.” But Hal Brands and John Lewis Gaddis, John Mearsheimer and Matt Turpin have all come round to my view that this is a cold war — not identical to the last one, but as similar to it as World War II was to World War I. The only question worth debating is whether or not, as in 1950, cold war turns hot. There is no Thucydidean law that says this is inevitable, as Graham Allison has shown. But I agree with Mearsheimer: The risk of a hot war in Cold War II may actually be higher than in Cold War I. Nothing would kill globalization faster than the outbreak of a superpower war over Taiwan. (And “The Battle of Lake Changjin” is blatantly psyching Chinese cinemagoers up for such a conflict.) The decoupling of the U.S. and Chinese economies would almost certainly have continued even if the sixth blow — the Covid pandemic — had not struck. It has been astounding how little the Biden administration has changed of its predecessor’s China strategy. However, the pandemic has delivered the coup de grace — “a brutal end to the second age of globalization,” as Nicholas Eberstadt put it last year. True, the volume of merchandise trade has recovered even more rapidly in 2021 than the World Trade Organization anticipated back in March. But the emergence of a new, contagious and lethal coronavirus has caused a collapse of international travel and tourism. The number of passengers carried by the global airline industry plunged by 60% in 2020. It will be not much better than 50% of its pre-pandemic level this year. International tourist arrivals are down by even more this year than last year — close to 80% below their 2019 level. In Asia, international tourism has all but ceased to exist this year. Meanwhile, both the U.S. and the Chinese governments keep devising new ways to discourage their nationals from investing in the rival superpower. Didi Global Inc., the Chinese Uber, just announced it is delisting its shares from the New York Stock Exchange. And the pressure mounts on Wall Street financiers — as Bridgewater Associates founder Ray Dalio discovered last week — to wind up their “long China” trade and stop turning a blind eye to genocide in Xinjiang and other human rights abuses. Next up: the campaign to boycott the 2022 Winter Olympics in Beijing. Strikingly, a growing number of Western sports stars and organizations such as the Women’s Tennis Association are already willing to defy Beijing — in the case of the WTA by suspending tournaments in China in response to the disappearance of the tennis star Peng Shuai, who accused a senior Communist Party official of sexually assaulting her. China’s leaders should be even more worried by a recent Chicago Council of World Affairs poll, which showed that just over half of Americans (52%) favor using U.S. troops to defend Taiwan if China invades the island — the highest share ever recorded in surveys dating back to 1982. Last month I asked a leading American lawmaker how he explained the marked growth in public hostility toward the Chinese government. His answer was simple: “People blame China for Covid.” And not without reason, as Matt Ridley’s new book “Viral” makes clear. For the avoidance of doubt, I do not foresee as complete a collapse of globalization as happened after 1914. Globalization 2.0 seems to be going out with a whimper — or perhaps a persistent cough — rather than with a bang. Income convergence and technological change were bound to reduce its utility. Having overshot by 2007, globalization settled at a lower level after the financial crisis and was less damaged by populist policies like tariffs than might have been anticipated. But the advent of Cold War II and Covid-19 struck two severe blows. How far globalization is rolled back depends on how far the two phenomena persist or worsen. Maybe — let us pray — the alarming data from Gauteng will not imply a major new wave of illness and death in the wider world. Maybe the omicron variant will not, after all, be that nightmare variant I have feared: more infectious, more lethal, vaccine-evading, not ageist. But omicron is only the 15th letter in the Greek alphabet. In all of Africa only 7.3% of the population are fully vaccinated and there are countless immunocompromised individuals with HIV. Even if omicron turns out to be, like delta, a variant we can live with, there is still some non-zero chance that at some point we get my “omega variant.” In that scenario, the pandemic does not oblige us, weary as we are of it, by ending, but recurs in a succession of waves extending for years. One begins to wonder if China will ever lift its stringent restrictions on foreign visitors. Under such circumstances, I see little chance of Cold War II reaching the détente phase earlier than Cold War I.   In addition to applying history, I have come to believe that we should also apply science fiction, on the principle that its authors are professionally incentivized to envision plausibly the impact of social, technological and other changes on the future. (Fact: an Italian sci-film called “Omicron,” in which an alien takes over a human body, was released in 1963.) No living author is better at this kind of thing than Neal Stephenson, whose “Snow Crash” coined the word “metaverse,” and whom I got to know — appropriately via Zoom — through my friends at the Santa Fe Institute. When Stephenson and I met for a late-night Scotch at a bar in Seattle a few weeks back, we swiftly found common ground. Never have I seen a longer list of wines and spirits: We could have scrolled down on the iPad the server handed us for an hour and still not reached the end. Eventually, we found the malt whisky. And immediately we agreed: Laphroaig — the standard 10-year-old version. Stephenson’s latest novel is “Termination Shock.” Buy it. You will be catapulted into a future Texas of intolerable heat, man-eating hogs, and other nightmares, the effect of which will be to make your present circumstances seem quite tolerable. Part of Stephenson’s genius is his use of the throwaway detail. “RVs,” he writes, were “already at a premium because of Covid-19, Covid-23 and Covid-27.” It’s not really part of the plot, but it stopped my eyeballs in their tracks. And remember: He predicted the metaverse. In 1992. Tyler Durden Mon, 12/06/2021 - 05:00.....»»

Category: worldSource: nytDec 6th, 2021