Sator Tenet
7/17/2020 05:02:00 PM
Tyler Durden Fri, 07/17/2020 - 19:25 Authored by Walter Williams, op-ed via Townhall.com,The Michigan State University administration pressured professor Stephen Hsu to resign from his position as vice president of research and innovation because he touted research that found police are not more likely to shoot black Americans. The study found:"The race of a police officer did not predict the race of the citizen shot. In other words, black officers were just as likely to shoot black citizens as white officers were."For political reasons, the authors of the study sought its retraction.The U.S. Department of Education warned UCLA that it may impose fines for improperly and abusively targeting white professor Lt. Col. W. Ajax Peris for disciplinary action over his use of the n-word while reading to his class Rev. Martin Luther King Jr.'s "Letter from Birmingham Jail" that contained the expressions "when your first name becomes "n----r," your middle name becomes "boy" (however old you are). Referring to white civil rights activists King wrote, "They have languished in filthy, roach-infested jails, suffering the abuse and brutality of policemen who view them as 'dirty n----r-lovers.'"Boston University is considering changing the name of its mascot Rhett because of his link to "Gone with the Wind." Almost 4,000 Rutgers University students signed a petition to rename campus buildings Hardenbergh Hall, Frelinghuysen Hall, and Milledoler Hall because these men were slave owners. University of Arkansas students petitioned to remove a statue of J. William Fulbright because he was a segregationist who opposed the Brown v. Board of Education that ruled against school segregation.The suppression of free speech and ideas by the elite is nothing new. It has a long ugly history. Galileo Galilei was a 17th-century Italian astronomer, physicist, and engineer, sometimes called "father of modern physics." The Catholic Church and other scientists of his day believed that the Earth was the center of the universe. Galileo offered evidence that the Earth traveled around the sun -- heliocentrism. That made him "vehemently suspect of heresy" and was forced to recant and sentenced to formal imprisonment at the pleasure of the Inquisition and was later commuted to house arrest for the rest of his life.Much of today's totalitarianism, promotion of hate and not to mention outright stupidity, has its roots on college campuses. Sources that report on some of the more egregious forms of the abandonment of free inquiry, hate, and stupidity at our colleges are College Reform and College Fix.Prof. William S. Penn, who was a Distinguished Faculty Award recipient at Michigan State University in 2003, and a two-time winner of the prestigious Stephen Crane Prize for Fiction, explained to his students, "This country still is full of closet racists." He said:"Republicans are not a majority in this country anymore. They are a bunch of dead white people. Or dying white people."The public has recently been treated to the term -- white privilege. Colleges have long-held courses and seminars on "whiteness." One college even has a course titled "Abolition of Whiteness." According to some academic intellectuals, whites enjoy advantages that non-whites do not. They earn a higher income and reside in better housing, and their children go to better schools and achieve more. Based on that idea, Asian Americans have more white privilege than white people. And, on a personal note, my daughter has more white privilege than probably 95% of white Americans.Evidence of how stupid college ideas find their way into the public arena can be seen on our daily news. Don Lemon, a CNN anchorman, said, "We have to stop demonizing people and realize the biggest terror threat in this country is white men, most of them radicalized to the right, and we have to start doing something about them." Steven Clifford, a former King Broadcasting CEO, said, "I will be leading a great movement to prohibit straight white males, who I believe supported Donald Trump by about 85 percent, from exercising the franchise (to vote), and I think that will save our democracy."As George Orwell said, "Some ideas are so stupid that only intellectuals believe them." If the stupid ideas of academic intellectuals remained on college campuses and did not infect the rest of society, they might be a source of entertainment -- much like a circus.Full Post Here - Walter Williams Blasts The Despicable Behavior Of Today's Academicians
Tyler Durden Thu, 07/16/2020 - 20:50 Submitted by Luke Eastwood,Since the crash of 2008 much has been made of the fact that the world did not end or the sky fall in on us – unless of course you are one of the people who have been touched by bankrupcy, homelessness, addiction or even suicide as a result of the crash. The truth is that, since the financial collapse, life has not improved, improved very little or even got worse for a huge number of individuals around the world.Many political and financial pundits have highlighted the fact that the problems that caused the sub-prime crisis and subsequent bank collapses around the world are in fact a systemic problem. However, it appears that very little has been done to remedy the situation. The basic problem is not complex at all – it is very simple in fact: All closed systems have limits and the economic and ecological world system is nearing the limits of tolerance. The main beneficiaries of the current system are a tiny minority (often referred to as the 1%), which is in fact growing smaller, further exacerbating imbalance. No attempt has been made to address a flawed system that is ultimately unsustainable – papering of the crack is all that has occurred. If you accept the 3 points above then it is easy to see that we are not in fact headed anywhere better in the short or medium term. If no attempts are made to deal with the distribution of capital, the availability of financially meaningful employment, the facilitation of resources and investment in genuinely productive and beneficial enterprises then circumstances will continue to deteriorate.The short to medium term solution to the 2008 crisis was quantitative easing, or stimulus, however many would argue that the stimulus was given to the arse when it needed to be given to the brain of the patient. Stimulus in the wrong place is of no benefit if the system remains unchanged, or if the beneficiaries only gain more from maintaining the status quo, instead of engaging in reform.So here we are in 2020, QE or stimulus never ended, although somewhat declining in recent years, it has now been ramped up again to frightening levels. We now have a situation where the broken system of 2008 is still broken but now with a level of leveraging across countries and corporations that is eye-wateringly catastrophic. If this is not a black swan moment in itself, the fact that we have to contend with COVID19, political and social unrest, locust plagues in Africa and Asia, increased threat of war, plus increased protectionism and nationalism should be ringing everyone’s alarm bells.There is a significant drag in the system, a time delay or delayed reaction if you will. I personally regard this as being about 6 months lag between disaster A and full comprehension of the impact of disaster A. This is then followed by the repercussions of this new understanding, which is from that point onwards is reflected in financial markets, on main street, employment levels, the media and in every day life. At this moment we are seeing or are about to see Q2 figures from across the world, which is the beginning of the comprehension of disaster A, and a growing awareness that disasters B, C, D and E are in progress right now.Preppers have long been derided as maniacs who see doom and gloom and impending disaster around every corner. While many of these people and social/financial commentators may have been wrong about the timing, they have been right all along about the systemic weakness and the strong likelihood of an implosion that could gut societies all across the world. It may have been fun to have a good laugh at ‘Johnny no mates’, filling his plastic bins with non-perishable foods and buying gold coins, but now Johnny is not look so stupid any more.The full impact of the coming financial devastation is a long way off, what we have seem this year is just the entré, a small taste of what is to come. I would suggest that Q3 and Q4 will yield results of unprecedented disaster that will lead to a mass exodus from financial markets, a collapse of the derivatives market, commercial and domestic property collapse and possibly the insolvency of many large financial institutions and corporations across the world.For those who have not prepared at all for the coming economic and social chaos, I would to suggest that right now is a good time to start – as soon as you have finished reading this article! Those with a high level of debt would be wise to pay it off if they have the ability to do so. Those with financial assets likely to be devalued by a stock market slide, derivatives collapse etc would be wise to get out while the getting is good. Those that have property that is expensive, costly to maintain and not generating income would also be wise to sell it while it still retains any quantifiable value.In my own case, I have sold my home which had an unsustainable mortgage and cleared that debt. I have made arrangements to settle all other borrowings within the next 12 months. I have relocated to a low population area, living in a very affordable rented home. I have changed job and now work part-time as a government employee in a pensionable job. I also have a supply of non-perishable food that will last 3-6 months, tools and equipment to deal with lack of supply and a shared ‘allotment’ near by, to grow food. I also have a reasonable supply of 1oz silver coins and bars, which should hopefully retain some purchasing value when the hyperinflation eventually hits.My own prepping is fairly minor, compared to some, however I feel adequately prepared to ride out the inevitable storms that are coming our way. I would not have revealed these steps in the past, given the general derision of most people towards those preparing for disaster. I would most likely be lumped in with the ‘tin foil hat’ conspiracists for taking steps to avoid destitution, hunger and the disintegration of my personal situation, brought on by events beyond my control. Now that we have finally arrived at the ‘perfect storm’ people like me are not looking like fools any more.In truth it is the people with zero vision, foresight and planning who are going to look stupid. It is those who have sleep-walked through the last decade and done nothing to safeguard their own future who will be feeling stupid very soon. However, total disaster is not upon us just yet – it is still in the post. There is still time to sell up, move house, change career, pay off debt. If you have not already analysed your life and its future viability, in the face of unprecedented change, now would be a very good time to start.* * *Luke Eastwood is a horticulturist and writer, living in Ireland. He has formerly worked in the financial industry in UK, journalism, publishing, design, advertsing and marketing. You can read more of his work at lukeeastwood.com
Tyler Durden Thu, 07/16/2020 - 20:10 Submitted by Mark Glennon of WirepointsClaiming ‘Unique Opportunity to Lead the Nation,’ Parents Ask High School to Adopt ‘Freedom of Expression Resolution’ Has the cancel culture infected your kids’ school? A parent group may have a partial remedy. A resolution submitted to the New Trier High School board in north suburban Chicago would, if adopted, assure:New Trier High School’s fundamental commitment is to the principle that debate or deliberation may not be suppressed because the ideas put forth are thought by some or even by most members of the New Trier High School community to be offensive, unwise.It would guaranty all members of the school community “the broadest possible latitude to speak, write, listen, challenge, and learn.”The resolution apparently would be the first of its kind in the nation at the high school level. It is modeled on The Chicago Statement, which was adopted by the University of Chicago in 2015 in response to the illiberal trend of free speech intolerance on college campuses. The full resolution appears below.It was drafted by New Trier Neighbors, a parent group that grew out of opposition to what was criticized as one-sided content in the school’s “Seminar Day” in 2017, which a Wall Street Journal article called “Racial Indoctrination Day.”The seminar received extensive, national media attention because of its exclusive focus on topics like systemic racism, implicit bias and, as the Journal put it, the “divisive view of race as a primordial fact, the essence of identity, a bright line between oppressed and oppressor.”We wrote about it here at the time. My son attended the school then. I was among the critics who asked for a broader range of viewpoints like those of Robert Woodson, Shelby Steele, Thomas Sowell, John McWhorter and Corey Brooks. The school rejected our requests.New Trier High School in Winnetka, Illinois Since then, the school has only broadened what it describes as its “equity initiative,” expanding what dissenting parents regard as authoritarian imposition of the far left’s single-minded views on race – as well as other topics. Last year, the school moved to infuse its administration’s views on “equity” into virtually all subject areas including math, science, sports, language and more, which you can see in the memo linked here.Some right-of-center students have spoken up about having their viewpoints squelched, and even being penalized on grading for their views. My kids reported the same things when there.New Trier is hardly alone. Similar stories from high schools and even grade schools around the country are now common.The resolution presents the school with an opportunity to move in a more balanced direction that respects diversity of opinion and returns the school to a focus on critical thinking skills. New Trier Neighbors drafted the resolution in consultation with the K-12 policy experts at the Foundation for Individual Rights in Education.No word yet on how or when the school board will act on it.We often receive emails at Wirepoints from ordinary citizens asking “What can I do? How can I get involved to stop what’s happening?”This resolution is one answer. Push for a similar one in your school districts.The cancel culture that now plagues the nation has its roots where it should have no place whatsoever – schools. That’s especially true about the disastrously counterproductive orthodoxy on systemic racism, implicit bias and the like. Its easily predictable consequences are now apparent across the nation – more racism and division. Race relations have been set back by fifty years.For those reasons, what New Trier itself does with the resolution is actually secondary. While we hope it will adopt the resolution, it’s far more important that its introduction set a trend for districts around the nation.Indoctrination long ago replaced education on most college campuses. Freedom of expression resolutions might help save high schools from the same fate.Parents, it’s in your hands.*Mark Glennon is founder of Wirepoints.*******************The New Trier High School Freedom of Expression Resolution, presented to the Board for adoption in its entirety, and based on The Chicago Statement:Because New Trier High School is committed to free and open inquiry in all matters, it guarantees all members of the New Trier High School community the broadest possible latitude to speak, write, listen, challenge, and learn. Except insofar as limitations on that freedom are necessary to the functioning of New Trier High School, New Trier High School fully respects and supports the freedom of all members of the New Trier High School community “to discuss any problem that presents itself.”Of course, the ideas of different members of the New Trier High School community will often and quite naturally conflict. But it is not the proper role of New Trier High School to attempt to shield individuals from ideas and opinions they find unwelcome, disagreeable, or even offensive. Although New Trier High School greatly values civility, and although all members of the New Trier High School community share in the responsibility for maintaining a climate of mutual respect, concerns about civility and mutual respect can never be used as a justification for closing off discussion of ideas, however offensive or disagreeable those ideas may be to some members of our community.The freedom to debate and discuss the merits of competing ideas does not, of course, mean that individuals may say whatever they wish, wherever they wish. New Trier High School may restrict expression that violates the law, that falsely defames a specific individual, that constitutes a genuine threat or harassment, that unjustifiably invades substantial privacy or confidentiality interests, or that is otherwise directly incompatible with the functioning of New Trier High School.In addition, New Trier High School may reasonably regulate the time, place, and manner of expression to ensure that it does not disrupt the ordinary activities of New Trier High School. But these are narrow exceptions to the general principle of freedom of expression, and it is vitally important that these exceptions never be used in a manner that is inconsistent with New Trier High School’s commitment to a completely free and open discussion of ideas.In a word, New Trier High School’s fundamental commitment is to the principle that debate or deliberation may not be suppressed because the ideas put forth are thought by some or even by most members of the New Trier High School community to be offensive, unwise, immoral, or wrong-headed. It is for the individual members of the New Trier High School community, not for New Trier High School as an institution, to make those judgments for themselves, and to act on those judgments not by seeking to suppress speech, but by openly and vigorously contesting the ideas that they oppose. Indeed, fostering the ability of members of the New Trier High School community to engage in such debate and deliberation in an effective and responsible manner is an essential part of New Trier High School’s educational mission.As a corollary to New Trier High School’s commitment to protect and promote free expression, members of the New Trier High School community must also act in conformity with the principle of free expression. Although members of the New Trier High School community are free to criticize and contest the views expressed on campus, and to criticize and contest speakers who are invited to express their views on campus, they may not obstruct or otherwise interfere with the freedom of others to express views they reject or even loathe. To this end, New Trier High School has a solemn responsibility not only to promote a lively and fearless freedom of debate and deliberation, but also to protect that freedom when others attempt to restrict it.”
Tyler Durden Thu, 07/16/2020 - 19:50 A bombshell new investigative report in Yahoo News could shed light on the recent spate of 'mystery' blasts rocking strategic Iranian sites like Natanz nuclear plant and ballistic missile bases. The report details that in 2018 President Trump issued a 'secret authorization' essentially allowing a 'gloves off' approach by US intelligence agencies in conducting cyber warfare against Iran and other so-called rogue states:The Central Intelligence Agency has conducted a series of covert cyber operations against Iran and other targets since winning a secret victory in 2018 when President Trump signed what amounts to a sweeping authorization for such activities, according to former U.S. officials with direct knowledge of the matter.File image via Outside the BeltwayIt appears the kind of hidden 'dirty war' operations which accompanied the Washington's long-running proxy war against Assad in Syria. This amid a broader Iran policy spanning across administrations - through at least the Bush years - targeting Tehran for regime change. "The secret authorization, known as a presidential finding, gives the spy agency more freedom in both the kinds of operations it conducts and who it targets, undoing many restrictions that had been in place under prior administrations," the report continues. "The finding allows the CIA to more easily authorize its own covert cyber operations, rather than requiring the agency to get approval from the White House."But it's not just Iran, according to the report, but other 'official enemies' and so-called rogue states like North Korea, and including Russia and China.This also as both Russia and China have this week stood accused of attempting to hack US labs and pharmaceutical companies to gain valuable coronavirus research and vaccine development information. The Yahoo News report continues: The “very aggressive” finding “gave the agency very specific authorities to really take the fight offensively to a handful of adversarial countries,” said a former U.S. government official. These countries include Russia, China, Iran and North Korea — which are mentioned directly in the document — but the finding potentially applies to others as well, according to another former official. “The White House wanted a vehicle to strike back,” said the second former official. “And this was the way to do it.”Trump authorized covert ops when Pompeo was director of CIA, then made him Secretary of State. One goal of operation is *destabilizing*
Tyler Durden Thu, 07/16/2020 - 19:30 Authored by McKenna Dallmeyer via Campus Reform,Even after the police chief at West Virginia University publicly apologized for a “Thin Blue Line” flag displayed in his home during a Zoom meeting, professors at the university are still demanding his resignation. In response to George Floyd’s death, West Virginia University’s Vice President for Diversity, Equity and Inclusion Meshea Poore and W.P. Chedester, chief of University Police, sent out a letter to the students and faculty of WVU.“We stand united against the violence and racism, discrimination or bias towards Black people that has plagued our country for so many years,” the letter read.“And by recognizing there is a systemic problem in many law enforcement agencies across the U.S. and taking a stand against injustice, we can begin the process of rebuilding trust within our communities.”In order to discuss “how we can work together to foster a safe, diverse, and inclusive culture,” West Virginia University hosted a virtual Campus Conversation over Zoom. The format of the call allowed students to ask questions to university officials regarding race relations on campus.Visible during the video conference was a hand-carved Thin Blue Line flag on Chedester’s wall. The Thin Blue Line flag is viewed by many as a symbol of “honor and respect” for law enforcement. According to Flags of Valor, “the Thin Blue Line embodies the unbreakable component of law enforcement standing as a safety barrier between the law-abiding citizens of America and the criminally inclined.”Students and faculty were outraged by the chief’s choice of wall decor and expressed their grievances with WVU immediately.Within hours, Chedester issued a letter of apology for the pro-law enforcement flag being displayed behind him during the virtual conference. He said that the flag always symbolized “a way to honor the commitment I made as a first responder to protect our community,” adding “I understand now that it represents something else to many others; something that I now know was traumatic to some of our community tuning in for our Conversation.”“I sincerely did not have any intent to suggest that police lives matter more than Black lives nor was I intentionally trying to cause any harm or offense,” Chedester continued.Chedester then promised to remove the flag from his office. “I am committed to rebuilding that trust beginning today. I am taking the flag down from my office wall,” he concluded.Some WVU facuty members were still not satisfied with these sentiments. On WVU’s tweet linking Chedester’s apology, assistant professor in WVU's Department of English Rose Caseyreplied thanking Chedester and explaining that “the Blue Lives Matter flag is associated with white supremacy.” She then linked a Politico article conflating the flag with racism because it was spotted beside a Confederate flag at the 2017 "Unite the Right" rally in Charlottesville, Virginia. The same article quotes Arizona State University professor of criminology Michael White who said the flag"fosters this ‘us versus them’ mentality.’”WVU Associate Professor of Biochemical Genetics Vagner Benedito called for Chedester’s resignation on Twitter in reply to the chief’s apology letter: “The only way forward is with his resignation. Why is it so difficult to comprehend?"The only way forward is with his resignation. Why is it so difficult to comprehend?— Vagner Benedito (@vabenedito) June 11, 2020Thank you. The Blue Lives Matter flag is associated with white supremacy. Given the racism that the country is grappling with, which this talk was meant to address, UPD Chief Chedester’s apology is welcome. Let’s continue to be talk honestly about what we’re addressing: racism.— Rose Casey (@ARoseCasey) June 11, 2020Benedito commented again on Twitter demanding Chedester’s resignation. “Campus police chief is a position we all should trust. POC will not be trusting his leadership. Moving forward, he must resign to make sure there is inclusions and equality regarding the police actions on campus!” Benedito wrote.Benedito told Campus Reform that it while it would be “ludicrous” to expect Chedester to remove the flag from his office, he does “expect the police on campus to defend everyone, including minorities,” and believes that Chedesters’ possession of the flag demonstrates his unwillingness to do so. “As you already know, that flag was crafted to oppose the Black Lives Matter movement, even though historically police lives have always mattered while black lives have been taken away by systematic police brutality over and over again,” Benedito said.Benedito added that he did not find Chedester’s apology letter “convincing.”“If he was indeed ignorant about its meaning, he should not be in a position of so much power for being so much misinformed about the current situation of the country, especially in matters involving the police,” Benedito told Campus Reform.“To be clear, the diverse community at WVU and allies are demanding the replacement of WVU Chief Police moving forward,” Benedito said.
Tyler Durden Thu, 07/16/2020 - 19:10 A major Chinese state-run pharmaceutical company is going to extreme, and some might say dangerous, lengths to develop a coronavirus vaccine at a moment the global race is on to get one safely out. The company announced this week that its Chinese employees and even top executives stood in as guinea pigs for a "pre-test" of its potential new vaccine. SinoPharm said that 30 of its own "special volunteers" had the experimental vaccine administered to them prior to it going through a rigorous regulations and official approval process. It's bringing up serious ethical questions over to what degree state-linked Chinese firms are coercing their employees into participating in unregulated and experimental pharmaceutical tests.SinoPharm boasts that its workers are "Giving a helping hand in forging the sword of victory." Via APThe Associated Press reported of the company statements: SinoPharm’s claim that 30 “special volunteers” rolled up their sleeves even before the company got permission for its initial human study raises ethical concerns among Western observers. The company’s post cites a “spirit of sacrifice” and shows seven men in suits and ties — a mix of scientists, businessmen and one Communist Party official with a background in military propaganda.The SinoPharm statement touted that its employees were “giving a helping hand in forging the sword of victory.”China's state media propagated the firm's statement via English language outlets:Top Chinese executives at SinoPharm say they are proud to receive experimental shots ahead of government approved testing in people. The online post “giving a helping hand in forging the sword of victory,” highlights the world’s race to find a vaccine for
Tyler Durden Wed, 07/15/2020 - 19:50 Authored by Nicholas Bailey via JustTheNews.com,Philadelphia Democratic Mayor James Kenney says his city-wide ban on large events and gatherings through February 2021 does not apply to protests."The city's office of special events will not accept, review, process or approve applications, issue permits or enter into agreements for special events or public gatherings of 50 people or more on public property through the end of February. The moratorium will apply to special events and public gatherings, including but not limited to festivals, parades, concerts, carnivals, fairs and flea markets," Kenney said during a coronavirus video update on Tuesday."In addition, permit applications for residential block permits will not be accepted until further notice. The timeline when such activities may resume will be communicated as soon as possible. To be clear, this hold on large public events does not, does not apply to demonstrations and First Amendment protected activities," he added.Just the News reached out to the mayor's office to learn whether the city will issue formal permits for protests or demonstrations on municipal property during the large-event ban. The office did not respond before publication.There have been many Black Lives Matter protests taking place in cities across the U.S. during the pandemic since the May 25 death of George Floyd while in the custody of Minneapolis police. Some demonstrations have resulted in destructive protests marked by looting, vandalism and removal of statues from public grounds. According to local media reports, Kenney recently waived "all protest-related code violations that were issued over the last month of protests in Philadelphia against systemic racial injustice."“My decision to waive these violations is not a statement on the validity of the individual citations,” Kenney said in a statement.“Rather, it is a recognition of the core concerns that caused thousands to demonstrate on the streets of Philadelphia. In waiving these notices, I recognize that those issues are vitally important, that the pain of those marching is very real, and that their message – Black lives matter – needs to be heard every day until systemic racism is fully eradicated from this city and nation.”
Tyler Durden Wed, 07/15/2020 - 19:30 At first, it was an unthinkable taboo - after all with a banking system that's twice as large as that of the US, the last thing Beijing wanted (or could afford) was doubts that the people's trillions in savings were safe as the alternative was not just a collapse of the financial sector but a breach of China's capital controls firewall as tens of millions scrambled to move their savings abroad, in the process obliterating the yuan. Then, starting in early 2019 after several banks quietly failed or were not so quietly nationalized...... most notably the inner-Mongolia-based Baoshang Bank which was seized in the first state takeover since 1998, domestic confidence in China's banking system was suddenly - and perhaps irreparably - shaken, leading to scattered scenes such as these as depositor runs hammered several Chinese banks , forcing Beijing to unleash unprecedented damage control (and internet censorship) to keep the illusion that all is well.Customers form lines in front of Yichuan bank; photo: WSJ Zhang Yanting, a 51-year-old farmer, walked away with a wad of cash from his savings account at Yichuan Bank Fast forward to today, when a confluence of the adverse trends that emerged in 2018 and 2019, coupled with the historic economic slowdown in China's economy, and accelerated by social media-fueled rumors about collapsing banks have sparked what Bloomberg called an "unprecedented" surge of bank runs, forcing regulators and even the police to step in to calm depositors.According to Bloomberg, in just the past few weeks, worried savers have descended on three banks to withdraw funds amid rumors of cash shortages that were later dismissed as false. Over the weekend customers rushed to a bank in the northern Hebei province to take out money, prompting local regulators to publicly vouch for the soundness of its lenders as the police halted the run.Indeed, as Bloomberg adds, "after several bailouts and the first bank seizure in more than two decades last year, the coronavirus outbreak and its economic fallout have exacerbated an already shaky situation in the world’s largest banking system" leading to a sharp erosion of confidence in the $43 trillion banking system among the nation’s more than 1 billion account holders, threatening a cornerstone of China’s rise into an economic powerhouse."The perception Chinese savers had of banks being risk free is changing even though in nearly all recent cases their deposits have been protected," said China International Capital Corp analyst Zhang Shuaishuai."Once a rumor like this spreads, it brings immediate liquidity risk to a bank."There is probably a reason for why these "rumors" have led to such a dramatic response: they merely bring to the surface whatever most already know, namely that behind its sterling facade, China's banking system is rotten to the core, with lies upon lies about trillions in non-performing loans..... coupled with growing risks from billions parked at China's unregulated and unstable shadow banking system (best known recently for stories such as this one "Anxin Trust’s $7 Billion Investment Black Hole")While regular readers are all too familiar with the story, Bloomberg recaps quickly why it is so crucial for Beijing to preserve the illusions that Chinese savings are sacrosanct and why bank runs can never take hold:For decades, deposit-taking has provided a stable and low-cost funding base for China’s financial market, playing a key part in the rise of its economy to the second largest in the world. Chinese households hold about 90 trillion yuan ($13 trillion) of bank deposits, more than anywhere else in the world. China's increasingly shaky banking system has also been cited as one of the reasons why Beijing has been aggressively seeking to blow another stock market bubble in hopes it leads to fund flows away from bank savings accounts: after all, it's politically safer and more palatable to store funds in capital markets rather than in banks, which are looking increasingly shaky by the day. Ultimately, if faced with a decision between another stock bubble-bust cycle, or a loss of confidence in its banks, Beijing will always pick the former.In any case, regulators are now not only seeking to soothe nerves publicly, but are also raising the protection to preserve this cushion for banks. The run in Hebei came after authorities kicked off a pilot program to limit large transactions in the province. The two-year program, which Bloomberg explains is set to be expanded to Zhejiang and Shenzhen in October to encompass 70 million people, would require retail clients to pre-report any large withdrawals or deposits of 100,000 yuan ($14,000) to 300,000 yuan.That could be problematic to say the least in a country whose own banking regulator, the China Banking and Insurance Regulatory Commission, on Saturday again warned that lenders are facing a surge in bad debt as the economy sputters at its slowest pace in four decades.While stopgap measures, which have included rolling over debt and delaying loan payments, have limited an immediate surge in bad debt, the regulator said the fundamental issues of poorly managed banks and the deteriorating ability of companies and individuals to repay loans are still far from solved. They are also asking banks to forgo 1.5 trillion yuan in profit this year by offering lower lending rates, cutting fees, deferring loan repayments, and granting more unsecured loans to small businesses to help the economy.Alas for China's regulators, they are facing an uphill battle: with authorities overseeing more than 3,000 banks, most of which are small, rural entities without ready access to capital, their job equates to whack-a-mole - the moment they stop one bank run, several new ones take its place. And so, in another unprecedented move, China now plans to allow local governments to use about 200 billion yuan from bond sales to help smaller banks replenish their capital.It gets worse.According to S&P, China's industry may suffer a whopping 8 trillion yuan increase in bad debt this year. Even without this balance sheet "neutron bomb" small banks are facing a $349 billion shortfall in capital, according to UBS analysts, leading to even more small bank failures. Putting that figure at only $50 billion, the regulator said the shortfall could mean slower profit growth or even sliding profits at some institutions.Meanwhile corporate bonds are also suffering, adding further pressure on banks and hurting corporate funding. According to Bloomberg data, about 80 billion yuan worth of Chinese bonds defaulted on and offshore so far this year, the most in at least three years.The result of all this, predictably, has been a collapse in confidence in Chinese banks and its logical next step: bank runs.In the most recent episodes, authorities stepped in last month to halt banks runs at two local lenders in Hebei and Shanxi. On July 11, savers rushed to withdraw money from Hengshui Bank, also based in Hebei, before the police put a stop to it.In response, the local offices of the People’s Bank of China and the CBIRC did what China does best: they scrambled to preserve confidence in the system, saying in a joint statement that Hengshui Bank and its branches are legitimate financial entities where any savings under half a million yuan are protected under China’s deposit insurance regulation. They also reassured depositors that their money is safe and urged them not to “blindly” withdraw savings.In fact, they also urged them not to withdraw savings at all.When that did not work, police took people into custody, issuing reprimands to those spreading rumors, according to the statement. Meanwhile, as Bloomberg adds, Hengshui Bank said in an emailed reply on Wednesday that the city government is actively dealing with the issue and called for less publicity for fear the incident leads to regional systemic risks. In other words, China is now aggressively censoring any online media that discusses China's questionably solvent banks.Knowing this won't work, regulators have been working on a plan since last year that would see more small banks merge to shore up their strength, but so far little of that effort has come to fruition."China has too many banks," said Zhang. "Quite a few of them are weak in corporate governance and earnings capacity. A better option is to take a more proactive approach to restructuring those regional banks." He is, of course, correct, however any restructuring would require taking a very risk first step of admitting banks have a big problem, and with China having swept up its bank problems under the rug for years, it is anybody's guess how the world's largest depositor base reacts on learning that its money resides in the world's biggest house of cards.
Tyler Durden Wed, 07/15/2020 - 19:10 Picking up on what Russell Napier said recently, when the formerly iconic deflationist threw in the towel and now expects inflation because "control of money supply has permanently left the hands of central bankers", a fund manager who returned 47% this year by betting heavily on gold and Treasuries says the next decade is going to be marked by inflation that central banks are powerless to control.Diego Parrilla, who heads the $450 million Quadriga Igneo fund dubbed "Doomsday" by Bloomberg, perhaps because unlike most of his peers he refused to buy into the biggest groupthink trade ever namely FAAMG stocks, said unprecedented monetary stimulus is fueling asset bubbles and corporate debt addiction, which renders rate hikes impossible without an economic crash. In the ensuing market mania, the manager whose portfolio is loaded up with cross-asset hedges says gold could rise as high as $5,000 an ounce in the next three to five years, more than doubling from its current price of $1,800 which is just shy of all time highs."What you’re going to see in the next decade is this desperate effort, which is already very obvious, where banks and government just print money and borrow, and bail everyone out, whatever it takes, just to prevent the entire system from collapsing," Parrilla told Bloomberg in an interview from Madrid.Actually, we get why Quadriga Igneo was called "Doomsday": it does not shy away from the truth that the Fed has pushed the financial system into a corner where any deviation from massive money injections would lead to catastrophe. Also, unlike most hedge funds - which as we noted earlier no longer function as they should due to central bank interventions - and whose job is to compound steady returns over time, Parrilla’s fund is similar to a "black swan" fund in that it tends to hedge the next big crash while generating capital over time. Managers with a tail-risk bias position for extreme market events, typically bucking mainstream views on Wall Street.While calls for surging inflation have been often made in the past decade, yet were confined to financial assets while the broader economy suffered from lack of aggregate demand, Parrilla believes that the stimulus packages have exacerbated deeper issues within the financial system, "such as central banks who have kept interest-rates near zero for more than a decade and are willing to re-write the policy rulebook in a crisis."While the jury is still out on if and when soaring inflation will hit - although we should note that in recent weeks such prominent deflationists as Albert Edwards, Russell Napier and Horseman's Russell Clark have all shifted to expecting runaway inflation in the coming year - Parrilla may be on to something if only based on the soaring value of his asset portfolio which soared as virus-fueled fear ripped through markets in February and March. The fund is about 50% invested in gold and precious metals, 25% in Treasuries and the rest in options strategies that profit from market chaos, such as calls on gold and the U.S. dollar. “This is the part that makes us super explosive,” he said.Quoted by Bloomberg, Parrilla, who previously ran the commodities department for Old Mutual Global Investors, described his investment process as search for anti-bubbles: unusually cheap assets that do well when bubbles burst. It had to wait patiently until its moment came: the Quadriga Igneo fund was launched in 2018 and had returned 10% by the end of the year. Performance was flat in 2019 before exploding by 50% in 2020."What we’ve seen over the last decade is the transformation from risk-free interest to interest-free risk, and what this has created is a global series of parallel synchronous bubbles," said the fund manager, who is also the author of a book called “The Anti-Bubbles: Opportunities Heading into Lehman Squared and Gold’s Perfect Storm.”“One of the key bubbles is fiat currency, and one clear anti-bubble in this system is gold,” he said, adding that other examples are volatility, correlations and inflation. “It’s a case of when, not if, they will reprice significantly higher." We, and many others agree.Parrilla is on a good start: gold has rallied 19% this year and captivated some of the world’s most prominent investors this year, who argue that the rapid expansion of central bank balance sheets will reduce fiat currency values and drive demand for hard assets."The bubbles are too big to fail and mommy and daddy will do whatever it takes to prevent this," said Parrilla, referring to central banks who now step in and prop up capital markets after even a modest drop.The 2018 Realvision clip below captures some of Parrilla's core views.
Tyler Durden Wed, 07/15/2020 - 18:50 NYC is slowly emerging from its COVID-19-induced shock, and as politicians clash over what NYC's classrooms will look like next fall (or whether they will reopen at all), thousands of New Yorkers are trying to ditch their city digs and move on out to the suburbs.Various real estate brokers and market analysts compile data on all aspects of the NYC real estate market. And a recently released survey by Property Shark found that, YoY, sales volume in the city declined by 25%.But the details of the report are more interesting. As one might expect given its cosmopolitan reputation, Manhattan was the hardest hit of all 5 boroughs. Queens saw its median sales price climb by 10%, while Brooklyn sales activity saw the smallest contraction.As more signs of life begin to emerge, here's the rest of the report, courtesy of PropertyShark.With NYC now in Phase Three of reopening and the rest of the state in Phase Four, the residential market’s performance is of heightened interest, after a tumultuous first half of the year.The year started off promising increased sales activity, only for projections and expectations to be shattered by the uncertainty and upheaval of March, followed by an April marked by historical lows in sales activity and the strongest pricing trends of 2020 by that point.As the curve flattened and the general public started becoming accustomed to the new normal, the state started slowly reopening and brought a tentative return of transactional activity in May. June, however, presented a whole new picture with strengthening sales trends and the first significant year-over-year price drop, despite recording the highest median sale price this year at $717,733.Transactional activity, of course, has trended negative since the start of the crisis. Marched kicked off with sales activity in its first week 15% higher than the same period last year, only to see it drop 36% year-over-year by the end of the month. Sales activity bottomed out in April at 61% below April 2019, with a mere 1,549 deals recorded in the four boroughs in the entire month.May, however, brought a tentative return of transactional activity, with a total of 1,337 sales recorded. While that figure may have been lower than April’s 1,549 deals, year-over-year, May marked a 52% drop in sales activity, as opposed to April’s 61%. June saw sales trends strengthen further, with its monthly sales activity the highest since the start of the crisis in March, coming in just 41% lower year-over-year.It must be noted that June 2020 figures are skewed beyond the pandemic’s effects, since sales activity and the median sale price surged artificially in June 2019 as NYC buyers and sellers rushed to close deals before the new mansion tax went into effect in July 2019. All in all, 1,670 residential sales were recorded between June 1 and June 28, 2020. Of this, 476 were recorded in the third week of the month, marking the strongest week of sales since late March.Overall, May 2020 kept up with that trend too, with the exception of one week, which came in a -3% year-over-year. Despite that, May closed with a median sale price of $705,000, marking a 4% gain over May 2019. Additionally, this also made May the second-most expensive month in NYC up to that point, surpassed only by April’s $712,000 median.June kicked off with the strongest pricing trends so far this year, posting a median sale price of $743,000, surpassing May figures. That represented a 2% gain over year-ago figures, a notable achievement considering June 2019 featured the strongest pricing trends of H1 2019. The rest of the month however, consistently posted weekly median sale prices lower than their year-ago correspondents – again due to the artificially strengthened pricing trends of 2019.* * * *Source: PropertyShark.com
Tyler Durden Wed, 07/15/2020 - 18:30 Via AlMasdarNews.com,Lebanon is turning east for economic support after the lack of progress in talks with Western and Arab states. According to the Associated Press, Lebanon is seeking to secure investments from China, while dwindling its chances of obtaining the support from the West and the Arab states to overcome its financial crisis.The agency said in a report published Wednesday that Lebanon, which had long been an area of competition between Iran and Saudi Arabia, is now at an important point in the escalation of tensions between China and the West, noting that the government of Hassan Diab, is currently seeking for Chinese support.The AP noted that Diab received the Chinese ambassador to Lebanon, Wang Qijian, earlier this month, and after that the Lebanese Minister of Industry, Imad Hoballah, was instructed to study cooperation opportunities with Beijing.The AP report begins:Facing a worsening economic crisis and with little chance of Western or oil-rich Arab countries providing assistance without substantial reforms, Lebanon's cash-strapped government is looking east, hoping to secure investments from China that could bring relief.But help from Beijing risks alienating the United States, which has suggested such a move could come at the cost of Lebanese-U.S. ties.“We have moved very seriously towards China, but we are not turning our backs on the West… we are going through exceptional circumstances, and we welcome everyone who intends to help us,” the agency quoted a ministerial official, who asked not to be named, as saying.The official pointed out that China has proposed to contribute to ending the decades-old energy crisis in Lebanon through its government companies, stressing that the Beirut government is currently studying this proposal.The aforementioned and economic official, Hassan Muqalled, assured the agency that Beijing also offered to establish a network of power stations and a tunnel linking Beirut and the Beqaa Valley, and a railway along the coast of Lebanon.There have been multiple high level meetings between Lebanese leaders and Chinese diplomatic officials of late, file image.Muqallah, who visited China several times in 2018 and 2019, estimated the value of the projects proposed by Beijing at $12.5 billion.The report pointed out that these investments may bring benefit to both parties, pointing out that China may benefit from improving its relations with Lebanon as this country is a springboard for the reconstruction of neighboring Syria.The report also suggested that the Lebanese port of Tripoli, which has been expanded in recent years, may become an important point in the Chinese “Silk Road” project.Lebanon is what happens when you create a neoliberal paradise where bankers run the show. https://ift.tt/32lxnoM can’t blame the collapse on socialism, so expect to see the west fault Hezbollah rather than the handful of elites who ran a decades long Ponzi scheme government— Rania Khalek (@RaniaKhalek) July 6, 2020For its part, the American ambassador to Lebanon, Dorothy Shea, warned the Lebanese government against rapprochement with Beijing, as she said that turning towards the East will not solve all the country’s problems, warning that this rapprochement may take place at the expense of the prosperity, stability and financial sustainability of Lebanon, not to mention its long relations.
Tyler Durden Wed, 07/15/2020 - 17:50 Authored by John Solomon via JustTheNews.com,As President Obama aggressively pursued a nuclear deal with Iran, the FBI used an operative who worked undercover for years inside Vladimir Putin’s nuclear empire to investigate and raise alarm that Russia was aiding Tehran’s nuclear ambitions.The undercover work on Iran by William Douglas Campbell was overshadowed by his effort to help the FBI successfully prove that an executive at Rosatom, Russia’s state-owned nuclear energy company, was engaged in kickbacks, bribery and other crimes on U.S. soil and had compromised a U.S. uranium trucking company.Campbell’s harrowing work posing as a consultant while informing for the FBI inside Rosatom’s Tenex subsidiary from 2007 to 2014 led to the successful prosecution of several players in the kickback scheme, including Russia’s top American nuclear executive, Vadim Mikerin.The FBI warned the Nuclear Regulatory Commission and other major federal agencies in August 2010 that Campbell had uncovered significant evidence of wrongdoing inside Rosatom’s Tenex agency. But the Obama administration nonetheless proceeded to approve billions of dollars in nuclear fuel contracts and Moscow’s purchase of a large swath of U.S. uranium through a company known as Uranium One.But Campbell’s efforts to uncover the nuclear alliance between Tehran and Moscow raised similar concerns inside the FBI and are chronicled in the new book Fallout: Nuclear Bribes, Russian Spies and the Washington Lies that Enriched the Clinton and Biden Dynasties.Agents actually pressed Campbell so hard to get more intelligence on Iran from his Russian contacts that it ultimately blew his cover, the books reveals.Campbell began providing evidence of the Russia-Iran nexus starting in 2010, including a memo he intercepted inside Rosatom written by an American adviser, Cheryl Moss Herman, who later would go to work in a senior nuclear energy policy job inside the Obama Energy Department.Herman’s 11-page report, titled “Policy/Legislative Issues Affecting the Business Climate in the U.S. for TENAM/Tenex,” warned there was a growing concern inside Congress that Russia’s determined march into new U.S. uranium business conflicted with Western intelligence that Moscow was still aiding Iran’s illicit nuclear program.“There are some in Congress who believe that Russia is providing Iran with sensitive nuclear technology as well as the nuclear know-how that will allow it to proliferate a nuclear weapons program, despite Russian Government statements to the contrary,” the report told the Russians.The FBI had similar concerns. Here are excerpts from the books that reveal just how extensive those concerns were.In one debriefing, for instance, Campbell related to his handling agents that Mikerin had identified a specific Russian company that was facilitating business between Iran and Tenex.“As I have mentioned previously they do all the uranium business between Russia and Iran,” Campbell wrote of the intermediary. “Vadim is involved in the process under the same kind of payment network between Iran and the special TENEX group.“I have asked him if he visits Tehran and he indicates he will not go because he feels it will cause trouble both for [U.S.] relations as well as his US travel.”Such intelligence was intriguing for FBI counterintelligence, especially as the Obama administration secretly began discussions with Tehran aimed at reaching a deal to delay Iran’s nuclear weapons program.In 2010, Campbell had obtained from his Russian sources a nonpublic report from the International Atomic Energy Agency (IAEA), the UN watchdog that was bird-dogging Iran’s illicit nuclear weapons program. The public version of the May 2010 report identified current enrichment-related activities inside Iran, including evidence that UN inspectors gathered related to a uranium enrichment plant in Natanz.While U.S. officials likely already knew the contents of the report, Campbell’s acquisition had provided valuable insight: an IAEA report marked “restricted” for limited distribution had fallen into the hands of Rosatom’s leadership quickly. The long arm of Putin’s nuclear team knew few bounds.Campbell continued to provide fragmentary intelligence on the Moscow-Tehran nuclear dealings, including additional IAEA reports that the Russians had obtained.But in early 2012, a harbinger arrived that the bureau was preparing to pull out its operative and finally close the counterintelligence gathering part of the probe and transition to criminal prosecutions.Special Agent [Timothy] Taylor contacted Campbell with the most specific instruction the team had ever given him over the years: a detailed list of 15 questions that the bureau wanted asked of Mikerin.The questions were transmitted via the secret Sigma email accounts that the bureau had set up with Campbell. All were about Iran: Is Iran seeking to create a weapon, either through obvious means, or through the design of their nuclear program? Are there any other countries, other than Russia, partnering to help Iran’s nuclear program? If there are other countries participating, what model for security and nuclear power generation is Iran following? What security measures has Iran put in place at nuclear facilities to prevent the computer failures, the failure of automated systems, or a computer virus? What political issues are of concern to Russia if they are to continue to support the Iranian nuclear program? If Iran is seeking to enrich uranium to HEU, what is the timeframe in which they expect to achieve that level? How many Russian employees are currently working on Iranian projects? How many Iranian scientists are currently working on nuclear energy projects? Who are they? What are their specialties? What is the megawatt capacity of Bushehr? What are the long-term goals for the facility? Are there other facilities currently enriching uranium? Have there been requests for assistance or indications of interest in new facilities? How may centrifuges are currently operating at Bushehr? What are the safety standards to which Iranian nuclear facilities are built? IAEA standards? How is Iran prepared to ensure force protection and answer international security concerns? · Are there concealed or restricted areas at Iranian nuclear facilities where Russians are not allowed to visit? Where are they, and what do the Russians feel is going on there? Are there temporary storage facilities where nuclear materials are stored? How are they secured? How is new and used nuclear material moved and stored, and by whom? When Campbell got this list, he joked that the FBI was signing his death warrant. The questions were too specific, the kind only an American spy might ask. Campbell had already been threatened by the Russians with polonium poisoning to ensure that he would not betray their criminal network.The FBI, however, would not back off, insisting that Campbell press ahead and corner Mikerin with the Iran questions. The agents even coached him on how he could put his Russian friend at ease while unloading this barrage of inquiries.“As discussed: You spoke with contacts who understand US policy. After the conversations you wrote down notes and have some ideas. You believe that Russia, Rosatom and Tenex could improve working relations with the US by being transparent about activities in Iran. You believe that it would be easier for Tenex to do business in the US if the US knows that Rosatom and Tenex have their fingers on the pulse of what is going on in Iran and can ensure that the nuclear energy is being produced responsibly and safely,” the agents wrote Campbell in their instructions.It might have sounded good to the agents, but after 30 years in the business of spying, Campbell knew that these questions would blow his cover, or at the very least break the bond of trust that he had built with his Russian targets.Campbell was right.Mikerin refused to provide much in terms of answers, and soon backed away from his longtime Sigma consultant.Campbell’s work for Tenex dwindled, and his access to Rosatom diminished.
Tyler Durden Wed, 07/15/2020 - 17:30 The family of George Floyd filed a lawsuit in federal court against the city of Minneapolis and the four police officers involved in the incident leading up to his death.This is in addition to the $14.6 million raised via GoFundMe, which was established by his brother, Philonise Floyd."It was not just the knee of officer Derek Chauvin on George Floyd's neck for eight minutes and 46 seconds, but it was the knee of the entire Minneapolis Police Department on the neck of George Floyd that killed him," said attorney Ben Crump, adding "The city of Minneapolis has a history of policies and procedures and deliberate indifference when it comes to the treatment of arrestees, especially Black men."Nationwide riots erupted after a video of Chauvin kneeling on Floyd's neck went viral. Bystanders could be seen pleading with the officer, who has been charged in Floyd's death along with three other policemen - Thomas Lane, Tou Thao and J. Alexander Kueng, all of whom have been fired."This is an unprecedented case, and with this lawsuit, we seek to set a precedent to make it financially prohibitive, so police won't ... kill marginalized people, especially Black people, in the future," said Crump, calling it a "tipping point" and a "teachable moment for America," according to USA Today.The lawsuit does not specify a dollar amount but seeks "compensatory, special and punitive damages," attorney fees and the appointment of a "receiver or similar authority" to ensure Minneapolis properly trains its police officers. Attorney Antonio Romanucci, who also represents Floyd's family, said it was unconstitutional that Minneapolis trained its police officers to kneel on the necks of nonviolent, compliant offenders. “If you don’t change the use-of-force policies and train, you will have continued failures, as in the death of George Floyd," Romanucci said. -USA TodayFloyd left behind a six-year-old daughter, Gianna, who was born to his former partner, Roxie Washington.
Tyler Durden Wed, 07/15/2020 - 17:10 Submitted by Right Wire Report,Wealth inequality has become a major talking point for those primarily on the Left who are vehemently against capitalism. Often espoused by leftist professors, lawmakers, and think tanks, the increasing disparity in wealth among Americans has been a growing concern. Many have questioned for years whether the Federal Reserve and their fiat currency monetary system is a fundamental fraud in our economy today. Is the Federal Reserve causing wealth inequality, thereby sowing the seeds of Marxism?Wealth inequality is an issue that both political sides should be willing to tackle because it can cause terrible consequences for a cohesive society. One can easily go off on the issues of personal responsibility and envy politics, but the reality is society must deal with the issue regardless of the morality of the issues – see “Trapped on a Deserted Island with 200 Hungry Savages.” While the Left is correct in their concerns, they are ignoring a major cause of the rampant, growing inequality in America – currency debasement and instead blame capitalism. Let’s take a simple example that demonstrates Fiat Currency Debasement and how it can create wealth inequality mathematically.In our hypothetical example, let’s take a simple real estate rental property asset (there are more sophisticated financial products on the markets that can do the same) vs. a Common person who merely places their money in a bank. Our starting financial position (rounded numbers for ease of explanation):Smart investor:We purchase the property for $100,000. We place a 10% down payment of $10,000. At a 3% mortgage rate with taxes and insurance, we must pay $500 per month. We rent the property for $525 per month for the year.The Common person:Places $10,000 in the bank, and we will give them a full 3% annual return on their money.Results: Our smart investor’s net wealth position after a year is $10,300. The Common person is the same.Now let’s advance the clock one year (normally this period would be longer to not make the scam so obvious) and assume a 50% currency debasement (or 100% price inflation). Here is what the financial position looks like now:Smart investor:Property value is $200,000 – less the original mortgage; the net is $110,000. We now rent the property for $1050 – this yields a net (assuming no increases in tax and insurance) of 6,600 for the year. The Common person:Earns a 3% annual compounded interest return on their money – the investor still has the original $10,000.Results after the two years: Our Smart investor’s net wealth position is $116,600. The Common person now has $10,609. Then we have to adjust downward (50%) for the net inflation-adjusted amounts of: for the Smart investor $58,300 and for the Common person $5,345.Voila … wealth inequality. Note that in both the Smart and Common person investors, starting with the same amount of capital, neither added no value other than capital. One may say, but the Smart investor took risks. Partially true, and would deserve a higher return on capital – but to what extent? The risk should already be built into the asset purchase price, rental market value returns, and the borrowing interest rate within a truly free market. And is it much of a risk to know politicians will debase the currency? Then there is the issue of fractional reserve lending – often called financial leverage. In and of itself this is not necessarily bad. But when combined with the Fiat Currency Debasement, it provides the necessary tools to create this wealth inequality. It borrows money at today’s value and repaying tomorrow with deflated money.Without currency debasement, the Smart investor would have never made the tenfold gains, compared to the Common person. At a greater economic level, those (bottom 50% have nothing) that can not even match the Smart investor’s capital commitment, can not even participate in the economy to gain wealth. Obviously, the amount of capital one has is the degree one can participate. Hence, this currency debasement is a distortion in the economy that favors one group over another. This is not a free market with equal opportunity for all. Under a fixed monetary system, this advantage goes away – the rules of the game do matter.One can easily see this expanding wealth inequality that started in the 1970s when the U.S. went from a fixed monetary system to a fiat currency system – which now allows one to debase the currency. President Richard Nixon’s actions in 1971 to end dollar convertibility to gold and implement wage/price controls were intended to address the international dilemma of a looming gold run and the domestic problem of inflation. Many attribute the gold run due to the U.S. expansion of its federal budget, driven by the Vietnam war and the war on poverty expenditures in prior years.How does one calculate the value of money? Has not the Dollar rates been reasonably stable against other major currencies? They have. But this is not the correct measure. For example, the Euro Dollar rate has been oscillating around the same levels for some time now. The issue here is that all central banks are playing the same game, and they are all devaluing mostly at similar rates. In other words, relative to each other, the rates are reasonably stable; most currencies are all falling at near the same rate – giving the appearance of stability. Though there are many issues in the valuation of a currency, here is a very high-level rule of thumb formula:Currency Value = GDP / Money Supply With this simple formula, one can see that if both GDP and Money Supply rise at the same rate, the Currency Value will remain stable. Adjust one side or the other of this equation, will adjust currency valuations accordingly. But one hears that reports like employment, inflation, government budgets, and interest rate movements can affect currency valuations as well. Yes, this is because these reports are early warning signals that can affect the final outcomes of the GDP and Money Supply components of the formula. Take a look at the chart below and see this phenomenon in action. The broader measure of Money Supply growth has been around 5% between 2012 to 2019. With GDP rates of between 2 and 3%, this means about a 2% currency debasement rate – which also just so happens to be the Fed inflation target rate. Since Coronavirus, the measurements have gone whacky. GDP rates have dropped to less than -5%, and as you can see below, the Money Supply growth rate is near 30%. This is horrific, though it may be transitory. A single quarter or even a couple quarters is not the average, and the ship can be righted. But if the current situation is not recovered very soon, do the math – we could be conservatively looking at a dramatic currency debasement in excess of 20% within a year.Listen to the rhetoric of Democrats under Joe Biden. The future could be frightening. Green New Deals, Universal free Health Care, college debt forgiveness, free universities, and a whole host of other Lefty items, would blow out government budgets and increase Money Supply with little GDP growth to show for it. Especially if Democrats hold back GDP growth with endless Coronavirus economic restrictions. Runaway inflation’s ugly head could reemerge after decades of hiding. The sad reality is the Democrat policies would exacerbate wealth inequality, not reduce it. One could assert that “IF” this scenario would occur, be prepared to have a 20 to 50% reduction of your standard of living over the next 2 to 5 years. Then think of the horrors of extending the fertile ground for Marxism to grow.There is an endpoint to all this. Just ask the Romans. Roman officials found a way to make currency debase. By decreasing the purity of their coinage, they were able to make more “silver” coins with the same face value. With more coins in circulation, the government could spend more. And so, the content of silver dropped over the years. By the time of Marcus Aurelius, the denarius was only about 75% silver. Caracalla tried a different method of debasement. He introduced the “double denarius,” which was worth 2x the denarius in face value. However, it had only the weight of 1.5 denarii. By the time of Gallienus, the coins had barely 5% silver. Each coin was a bronze core with a thin coating of silver.The shine quickly wore off to reveal the poor quality underneath. Hyperinflation, soaring taxes, and worthless money created a trifecta that dissolved much of Rome’s trade. The economy was paralyzed. By the end of the 3rd century, any trade that was left was mostly local, using inefficient barter methods instead of any meaningful medium of exchange. The Romans played the game of currency debasement, all the way to the end until their empire collapsed. We have seen this as well with other smaller countries around the world today – Zimbabwe and Venezuela, to name a couple. So the currency debasement trick of many elites and their governments is a well-established method to rob the people for millennia. Solutions? Massive socialist redistribution schemes? No! This would just make it worse via exploding government budgets. Quite simply – return to a fixed monetary system. This does not necessarily mean currencies need to be gold-backed or even a fixed currency that never expands. It merely means that one can not allow the money supply to grow in far excess of GDP growth – which causes the currency debasement in the first place. It also means government expenditures must stay in line with tax revenues. Balanced budgets are something politicians would obviously hate, as they would no longer be able to scheme to buy votes today at the expense of tomorrow.Do elites understand this scheme? Sure they do. Most common people do not. Unfortunately, the common people do not look far enough into the future and focus on today’s money and whatever they can get immediately from the government. Understanding this phenomenon puts today’s events into perspective. As wealth inequality rises, for sure Marxist envy politics can become very attractive to the common people. If we do not fix this problem, for sure, Marxism will take root.Furthermore, instead of wallowing in class warfare, it is better for elites to divert the attention away from the real issues and get people fighting over race. Politically it is not a good argument to attack producers – it is part of the American work ethic. Better to talk about “systemic racism.” It’s an easier sell. This explains why so many elites are Leftists … it is a good scam to keep them in their positions of wealth and power.Remember the legend of Payasam at Ambalappuzha? The king made a deal with the traveling sage that the king thought was a good deal – at least in the short run. It goes something like this – for my payment, give me one grain of rice on the first square of this chessboard, then two grains on the second square, four grains on the third square, eight grains on the fourth square and so on, so that each square contains double the amount of rice of the previous square. The total number of grains of rice needed to fill the chessboard would have been 18 quintillion grains of rice, which would weigh approximately 210 billion tonnes and would be enough rice to cover the entire country of India with a meter high layer of rice. Obviously, the king did not understand the math, and the scheme was not hidden, it was in plain sight.There is a reason when Thomas Jefferson said, “Big banks are more dangerous than standing armies, and the practice of borrowing and spending money to be paid back by the next generation is stealing from their future.” Many are quick to bash banks. Even the Federal Reserve – citing conspiracy theories of the Illuminati, the Rockerfellers, and various other groups. You have heard it before, “There is no Federal in Federal Reserve.” It is a private agency used by the government. All this may be true. But it is also true that central banks, banks, and financial service companies do provide needed services. The scam is not just this – it is rather a small part – it is not just the institution rather its policies. It is the scam right in front of your face that is the most harmful. It is the ignorance of not understanding the basic math of Fiat Currency Debasement. Is the Federal Reserve sowing seeds of Marxism? The simple answer is yes, though one may debate whether knowingly or not. The Federal Reserve is like many organizations, they take on a life of their own and grows, perhaps initially thinking they are doing good. Today their policies could be just one of “extend and pretend” and hope the music does not stop on their watch. Or perhaps it is all nefarious – at least at the top level. Either way, the end results are the same. But the Federal Reserve gets its authority from our politicians and ultimately from those who voted for them.President Trump understands well this monetary system dynamic. After all, he is a real estate magnate. Trump has, in the past, talked about “Sound Money.” Trump has had little to say about sound money since the election. Trump has been focused in his first term on draining the swamp and trade. Perhaps in a second term, this may come into focus. There is a trifecta of economic, moral hazard, Fiat Currency Debasement, trade, and government-corporate corruption. More on these other moral hazard issues in the future.So just how much moral hazard has Fiat Currency Debasement distorted our economy today? This would be a hard number to come by, but using the wealth inequality chart of this article, and just using the gage of your eyes, project a more linear line in terms of wealth inequality (since the mid-1970s) on an more equal basis. One could say that this moral hazard could be as high as 30% – understanding that the growth of wealth inequality is expanding each year. Median family income in inflation-adjusted dollars has not moved a lot in 50 years. Jut think what an additional 30% would do in building the middle class – adding support for free-market capitalism. And yes, the rich would still be rich – just with a narrower gap. Having a more vibrant middle-class would also help all economic classes to move up.A caution to both our major political parties – if Fiat Currency Debasement is not handled in an effective way, the dark cloud of social dis-cohesion and Marxism will lift its ugly head. Once you understand well Fiat Currency Debasement, all the events of today start to fall into place.
Tyler Durden Wed, 07/15/2020 - 16:49 Summary: Alabama hospitalizations hit record high Pennsylvania reinstates state-wide restrictions South African virus cases top 300,000 President Jair Bolsonaro tests positive for the virus (again) California shatters record with 11,142 cases reported Fauci says confident of vaccine by year-end 2021 Rose Bowl Parade on New Year's Day has been canceled Oklahoma Gov. Kevin Stitt tests positive for COVID-19 as cases rise in state The worst appears to be over for Arizona New Florida cases slow as total caseloads top 300,000 Partial lockdowns return across India India nears 1 million case mark The US reports another 60k+ cases Tuesday US total: 3,546,566 Global total: 13,495,134 Tokyo raises alert level to the highest of four * * *Update (1645ET): Dr. Anthony Fauci predicted on Wednesday the country will meet its goal of a coronavirus vaccine by year's end and was unmoved by the prospect that China would get there first.While there are no guarantees, "I feel good about the projected timetable," Fauci told Reuters in an interview.Pennsylvania rolls back re-opening after reporting about 1,000 new infections Wednesday - re-imposes restrictions on bars, restaurants, and gatherings.Gov. Tom Wolf announced broad new statewide restrictions on bars and restaurants and larger indoor gatherings on Wednesday.Wolf and public health officials detailed the new restrictions in a news conference Wednesday, which aired live on WFMZ.Restaurants' indoor capacity is now limited to 25%, Wolf said. Current outdoor dining rules remain in effect. Indoor gatherings will be limited to 25 people or less, Wolf said in the news conference. The limit on outdoor gatherings remains at no more than 250 people.Alabama hospitalizations are at a record, with worryingly, 41% of cases between 25 and 49 ys old* * *Update (15:45ET): South Africa has breached 300,000 COVID-19 cases on Wednesday, the most on the African continent, reported Reuters. Africa's most industrialized nation recorded a rise of 12,757 cases on Wednesday to reach 311,049 confirmed COVID-19 cases, its health ministry said in a late evening statement, a little over four months since the first case was confirmed in the country. It has tested 2,278,127 people so far and has seen a total of 160,693 recoveries and 4,453 deaths, the statement said. - Reuters * * *Update (15:30ET): CNN Brazil reports President Jair Bolsonaro has tested "positive for COVID-19" (again). BREAKING NEWS: Novo exame de Bolsonaro dá positivo para Covid-19 pic.twitter.com/x8PKTRVC5j— CNN Brasil (@CNNBrasil) July 15, 2020CNN Brazil says "the president should also take a third exam to see if he can resume his normal activities." * * *Update (15:23ET): California breaks a new daily case record on Wednesday, reports 11,142 cases, surpassing the previous record of 9,816 on July 9. BREAKING: California reported its largest number of new coronavirus infections in a single day Tuesday, hospitalizations hit a new high and deaths approached record levels as the state continued to lose ground in its battle against COVID-19https://t.co/3gLsLk6gWP— KTLA (@KTLA) July 15, 2020* * *Update (15:05ET): The Pasadena Tournament of Roses Association has announced via Global Newswire, in a corporate press release, that "with reluctance and tremendous disappointment," the 2021 Rose Bowl Parade on New Year's Day will be canceled due to the coronavirus pandemic. "The health and well-being of our parade participants and guests, as well as that of our volunteer members, professional staff and partners, is our number one priority," Bob Miller, 2021 President of the Pasadena Tournament of Roses Association, said in the release."Obviously this is not what any of us wanted, and we held off on announcing until we were absolutely sure that safety restrictions would prevent us from continuing with planning for 132nd Rose Parade," Miller said. "Enjoyed by millions around the world, the Rose Parade is held each January 1 in celebration of the New Year. Since its inception in 1891, the Parade has not occurred only three times – the wartime years of 1942, 1943, and 1945," the release states. All of this suggests large gatherings will be banned in certain states through this year and into next. * * *Update (14:30ET): The Washington Post outlines the top twelve states with highest daily reported cases per capita:* * *Update (14:15ET): Illinois reported 1,187 new COVID-19 cases Wednesday with eight deaths. The state has now reported total cases of around 156,700 and 7,256 deaths. ILLINOIS COVID CASES RISE TO 1,187 WEDNESDAY FROM 707 ILLINOIS POSITIVITY RATE HOLDS AROUND 3%Hospitalization numbers slightly increased, with 1,454 hospitalizations for COVID-19. Of those patients, 324 were in ICUs and 130 were on ventilators, as of Tuesday night. * * *Update (14:02ET): The Oklahoma State Department of Health reported 1,075 new cases on Wednesday, bring the total caseload to 22,813. Tuesday's new cases were 993. Across the state, 561 people are hospitalized for virus-related reasons.* * *Update (12:07ET): AP News reports Oklahoma Gov. Kevin Stitt has tested positive for COVID-19 and is isolating at home. The first-term Republican governor has backed one of the country’s most aggressive reopening plans, has resisted any statewide mandate on masks and rarely wears one himself.Stitt attended President Donald Trump's rally in Tulsa last month, which health experts have said likely contributed to a surge in coronavirus cases there.One of Stitt's cabinet members, David Ostrowe, tested positive for the coronavirus in March. - AP News* * *Update (11:53ET): Despite Moderna shares hitting fresh record highs after promising data from early-stage COVID-19 vaccine, shares of the biotech and Nasdaq futures are selling into lunchtime. * * *Update (11:37ET): The worst appears to be over for Arizona's COVID-19 outbreak. We highlighted this on Tuesday, citing a Goldman Sachs report. On Wednesday morning, Arizona reported virus cases rose 2.5% versus the prior 7-day average of 2.9%, a noticeable slowdown. Virus related deaths also slowed with 97 reported, bringing the total to 2,434. Arizona's confirmed COVID-19 cases by day COVID-19 deaths by day in Arizona Here's the latest COVID-19 snapshot of what you need to know in the southwestern U.S. state. * * *Update (10:56ET): Florida has surpassed 300,000 cases of COVID-19 on Wednesday morning after reporting 10,181 new cases and 112 deaths.FLORIDA COVID-19 CASES RISE 3.5% VS. PREVIOUS 7-DAY AVG. 4.5% FLORIDA POSTS 112 DAILY COVID-19 DEATHS AMONG RESIDENTSDeclining caseloads come after some of the largest totals of the entire pandemic were reported on Sunday (15,300) and Monday (12,624). On Tuesday, a grim reminder the pandemic continues to ravage the Southern part of the US, was when 132 deaths were recorded (highest death toll reported during the pandemic). "Florida currently has 8,324 Covid-19 hospital patients, compared with 8,187 at a comparable time on Tuesday, according to Florida's Agency for Health Care Administration. Three counties in southeast Florida -- Miami-Dade, Broward and Palm Beach -- have the largest numbers of patients with a primary diagnosis of Covid-19, accounting for 3,701 of the total," Bloomberg noted. A top Florida medical expert warned the Sunshine State "is now the epicenter for the virus." "What we were seeing in Wuhan [China] five months ago, we're now seeing here," said Lilian M. Abbo, M.D., an infectious diseases specialist at the University of Miami Health System and the Chief of Infection Prevention for Jackson Health System, was quoted by WPLG Miami. Jackson Health System President and CEO Carlos Migoya blame the exponential rise of COVID-19 cases on people not wearing masks. * * *Update (9:40ET): S&P500 futures near five-month highs on Wednesday as vaccine hopes were headlined on Tuesday. President Trump tweeted ahead of the US cash session, "Great News on Vaccines!" * * *Following in the footsteps of tech hub Bangalore, nearly a dozen Indian states have imposed a partial lockdown in high-risk areas as of Wednesday morning in the US as yet another record jump in new COVID-19 infections pushed India's total number of confirmed cases above 900k, after topping 800k just three days ago.India reported 29,429 new cases on Wednesday, a new record, bringing its total reported cases to 936,181. Of those 24,309 have died, with 582 of those deaths reported over the last 24 hours. The country is on track to pass 1 million cases in the next day or two, which would make India the third country - after the US and Brazil - to confirm more than 1 million cases.Like everywhere else, it's widely suspected that the actual numbers are much higher, as limited testing and poor surveillance has made it difficult to capture every case.In addition to Bangalore, which announced its lockdown plans earlier in the week, the eastern state of Bihar, with a population of 128 million, has imposed a new partial lockdown due to its poor health-care system, along with nearly a dozen other states. Since Saturday, Bihar has recorded 1,000+ cases each day despite the limited number of tests available. In East Asia, South Korea confirmed 39 new cases, up from 33 a day ago: Total infections reached 13,551 with 289 deaths.The US, meanwhile, reported 60k+ infections again on Tuesday as the 7-day average hit a new record high. In total, the US has confirmed 3,546,566 cases and 139,166 deaths, according to Worldometer.Though daily case totals remain near record highs, Goldman warned that Arizona, one of the worst-hit states, might finally be past its peak as ICU capacities remain alarmingly close to 100%.As we reported last night, Tokyo raised its alert for coronavirus infections to the highest of four levels on Wednesday, after new cases spiked to record levels in the Japanese capital. Fearing a second wave of infections, the Japanese government also suspended a travel campaign encouraging domestic tourism (which was widely criticized as irresponsible after it was announced).India isn't the only major hot spot seeing new cases spiral out of control: Brazil recorded 41,857 new cases of the novel coronavirus in the past 24 hours and 1,300 new deaths, according to the Health Ministry. The country now has 1,926,824 confirmed cases and 74,133 deaths, making Brazil a distant second behind the US.Finally, the southern Chinese city of Pingxiang, in southern Chinese province of Jiangxi, has become the latest to warn about coronavirus detected on the packaging and container of imported Ecuador shrimp.This isn't the first time China has accused imported seafood of harboring the virus.
