Blogs y opiniones de economia en ingles

Record High Directs, Record Low Dealers In Blockbuster 20Y Auction

Coming several days after the trifecta of benchmark auctions when both the 10Y and 30Y auctions demonstrated solid demand despite a blistering hot CPI print, moments ago the Treasury sold another $24BN in 20Y paper in the form of a 19Y-11M reopening of Cusip SY5 which, too, was greeted with stellar demand.

The high yield of 2.12% was not only far below last month's 2.286% but was also the lowest since February's sub-2% auction; it also stopped 1.7bps through the When Issued, the biggest stop through since March's 2.0bps.

The bid to cover of 2.40 was also a solid improvement to the 2.24 in May and the 2.33 6-auction average, while the internals were perhaps the most impressive, with Indirects taking down 62.1%, the highest since October and far above the 58.0% recent average, and with Directs taking down 20.4%, or the most since the 20Y auction restarted in May, Dealers were left with just 17.5%, the lowest Dealers takedown on record.

Overall, a stellar 20Y auction which despite the lack of concession saw tremendous buyside demand.  Yet despite the blockbuster result there was barely a move in the curve, with the 10Y trading virtually unchanged from before the 1PM deadline.

Tyler Durden Tue, 06/15/2021 - 13:41

Pfizer, Moderna Jabs Cause Heart Inflammation In Some Young Men, CDC Finds

As American public health officials and political leaders struggle to entice more young adults to accept the COVID-19 vaccine, researchers have just discovered a disturbing side effect of the Pfizer and Moderna jabs, which rely on new mRNA technology to program the body to fight the virus. While the adenovirus-vector jabs like the AstraZeneca shot have been tied to dozens of fatal cerebral blood clots, the mRNA vaccines have now been found to cause heart inflammation in some patients.

We first caught wind of this late last week when the CDC announced it would hold an "emergency meeting" about the rising number of heart inflammation cases in the US VAERs database.

YOU STUPID, STUPID STUPIDS.

This was so predictable. pic.twitter.com/oHKFgR9vF4

— Alex Berenson (@AlexBerenson) June 10, 2021

According to Reuters, the CDC started investigating after Israel's Health Ministry reported that it had discovered a likely link to the condition in young men who received the Pfizer jab. Although some patients were hospitalized, most recovered on their own and (most importantly) nobody died.

The CDC told Reuters that it's still assessing the risk from the condition and has not yet concluded that there was a causal relationship between the vaccines and cases of myocarditis or pericarditis. Still, there are some lingering signs that the potential side effects from the vaccines is higher for young people. More than 50% of the cases reported to the US Vaccine Adverse Event Reporting System - better known as VAERS - after people had received their second dose of the jab were in people between the ages of 12 and 24, the CDC said. Those age groups accounted for under 9% of doses administered.

"We clearly have an imbalance there," said Dr. Tom Shimabukuro, deputy director of the CDC's Immunization Safety Office, during a presentation to an advisory committee to the agency on Thursday. The bulk of these cases have emerged within a week of vaccination. Shimabukuro added that doctors saw a "preponderance" of young white men. This contrasts with the AstraZeneca brain clots, which overwhelmingly afflicted women. Just under 80% of all of these cases were found in men.

Scientists knew something was wrong because, according to VAERS, there were 283 observed cases of heart inflammation after the second vaccine dose in patients aged 16 to 24. That's compared with an expectations of 10-to-102 cases tally for that age group based on demographic data.

Another database, the Vaccine Safety Datalink, also showed a jump in incidents of heart inflammation in younger men after their second shot when compared to the rate seen after jab 1.

Meanwhile, Pfizer said it supports the CDC's assessment of the heart inflammation cases, noting that "the number of reports is small given the number of doses administered." Already 130MM Americans have already received both of the Pfizer, or both of the Moderna, jabs. Moderna spokespeople cautioned that consumers shouldn't jump to conclusions before scientists have had time to further study this issue. At this point, health authorities officially consider both vaccines to be "safe" for public use. Moderna also claimed that researchers hadn't established a "causal" relationship between the jabs and the heart complications.

OF course, it's just the latest reminder of the drawbacks when authorities take short cuts to approve vaccines.

Tyler Durden Tue, 06/15/2021 - 13:39

Charts That Should Scare The Pants Off The Fed (And Probably Do)

Authored by Mike Shedlock via MishTalk.com,

Let's investigate the relationship between the Fed's QE program, bank lending, and alleged stockpiling of cash...

In an effort to stimulate bank lending and thus the economy, the Fed launched a  massive QE program that lowered interest rates and crammed money into banks.  

Let's take a look at some numbers.

January 1973 Numbers

• Commercial and Industrial Loans: $135 Million

• Fed's Balance Sheet: $0

• Bank Deposits: $599 Million 

• Bank Loans and Leases: $405 Million

May 2021 Numbers

• Commercial and Industrial Loans: $2.547 Trillion

• Fed's Balance Sheet: $7.867 Trillion

• Bank Deposits: $17.079 Trillion

• Bank Loans and Leases: $10.342 Trillion

Commercial and Industrial Loans, Bank Deposits, Bank Loans and Leases Percent Changes

Year-over-year commercial and industrial loans are down 16.22%, loans and leases are down 4.53%, and deposits are up 11.57%.

The last time year-over-year commercial loans and loans and leases were negative for two consecutive months (as they are now) was August 2010. 

However, these are distorted figures. 

Notice the big 30% year-over-year spike in commercial and industrial loans in May of 2020. Year-over-year loans and leases also surged 11.12%. Those surges were artificial and related to government programs and guarantees. 

The best way of looking at things is a month-by-month take since the beginning of the recession.

 Loans, Bank Deposits, and the Fed's Balance Sheet Details

Since May of 2020, bank loans and leases, and commercial loans have shrunk in a continuous fashion. Both are barely above where they were pre-Covid-19.

Pre-Covid-19 to May of 2021

• Bank Deposits: +3.7 Trillion 

• Fed's Balance Sheet: +3.7 trillion

• Bank Loans and Leases: +0.3 Trillion

• Commercial and Industrial Loans: +0.2 Trillion

Is this all we get out of expansion of the Fed's balance sheet by $3.7 trillion, from $13.4 trillion to $17.1 trillion coupled with trillions of dollars of stimulus from Congress?

I am afraid so. And it means businesses just do not want to expand. 

Corporations are borrowing, but from the corporate bond market, not banks, and just to have money, not to expand. 

Small to mid-sized businesses that depend on banks are not borrowing at all.

What About Jamie Dimon?

Good question. Please recall Jamie Dimon Stockpiles Cash, Thinks Inflation is Here to Stay, Fears PayPal

“If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates,” Dimon said. “I do expect to see higher rates and more inflation, and we’re prepared for that.”

I commented:

Even if Dimon believes the inflation setup, I do not buy his story as he presents. He could have and should have mentioned the QE aspect as to why banks are sitting on cash.

Stockpiling Cash?

Dimon is not really stockpiling cash. Rather, Banks are So Stuffed With Cash They Tell Companies: No More Deposits

Since March of 2020, the Fed's balance sheet is up by $3.7 Trillion and bank deposits are also up by $3.7 trillion. 

This we call "stockpiling cash" or (Dimon talking trash), take your pick.

Amazingly,

1. The Fed crams trillions of dollars down banks' throats.

2. Banks tell corporations no more deposits because they are losing money on them. Alternatively banks have to raise capital.

3. So corporations turn to money market funds.

4. The money market funds do not know what to do with the cash either.

5. So the Fed is forced to take a half trillion dollars back.

6. The Fed said this was expected and is working exactly as designed.

Thank You Fed!

Tyler Durden Tue, 06/15/2021 - 13:17

Corn, Soy Futures Slump As Weather Models "Flipped Cooler" 

Corn and soybean futures started the week off on the wrong foot after weather forecasts improved crop conditions in the Midwest, including cooler temperatures and the possibility for rain later this week, according to Refinitiv's commodity desk. 

On Monday, it was a slaughterhouse for corn and soybean futures, Chicago Board of Trade (CBOT) July corn futures settled down 3.7% at $6.59-1/4 per bushel, and CBOT July soybeans were down 2.4%, at $14.72-1/4 a bushel. By Tuesday morning, corn futures are lower by half a percent, and soybeans are up by half a percent.  

Source: Refinitiv 

"The ags sold off with gusto overnight after weekend weather models flipped cooler and wetter for many key crop production areas of the United States," Arlan Suderman, StoneX chief commodities economist, wrote in a note. 

Source: Refinitiv 

Cooler weather models signify relief after we showed weather forecasts that suggested dryness and heat across the corn belt. Still, threats of a megadrought linger for the western half of the country as surface soil moisture for early June is the worst in two decades. 

Last week, the USDA progress report rated 68% of the corn crops as good to excellent, down four percentage points from the prior week, and 62% of the soy crop was good to excellent, down five percentage points. The downward rating has to do with the dryness of surface soil moisture. 

"Early planted crops are starting to show moisture stress," Iowa Secretary of Agriculture Mike Naig said in a statement. Iowa is the top producing state for corn production and number two in soybeans. 

In a completely separate fundamental driver, corn and soybeans prices slumped the last week after the Biden administration may consider scaling down biofuel blending in fossil fuels and provide assistance to oil refiners.

S&P GSCI Agriculture Index is down more than 13% in 23 trading sessions from its all-time-high in early May of $474.  

Peak ag prices? 

Tyler Durden Tue, 06/15/2021 - 13:00

Supply-Chain Chaos: Container Rates Skyrocket Even Higher... And There’s No End In Sight

By Greg Miller of FreightWaves,

Another week, another record for container shipping spot rates. And alarmingly for shippers, upward rate momentum is accelerating.

Container ships unloading in Oakland (Photo: Shutterstock/Sheila Fitzgerald)

Different indexes come up with different numbers, and the premium charges on top of spot rates are now so high that index rates no longer capture the true cost of ocean shipping. However, when various indices all move in the same direction, it does reflect changes in the supply-demand balance. That balance is tipping more to the detriment of cargo shippers with each passing week.

“We haven’t seen the worst of it — $20,000 [per FEU] all-in rates to the East Coast are coming,” predicted Steve Ferreira, CEO and founder of Ocean Audit.

Peak season is just around the corner and supply chain disruptions remain widespread. COVID-disrupted ports in China and Malaysia are the latest hot spots. “It clearly appears that supply chain problems are worsening and not improving,” warned Lars Jensen, CEO of Vespucci Maritime.

Asia-East Coast rates jump

The Freightos Baltic Daily Index for Asia-East Coast surged by around 20% in just the past few days. As of Thursday, the Freightos rate reached $9,317 per FEU, its highest point ever and up 224% year on year (y/y).

The Drewry weekly assessment for the Shanghai-New York route was $8,251 per FEU, up 9% week on week (w/w) and 203% y/y.

Rates in dollars per FEU. Green line = Drewry weekly Shanghai-New York. Blue line = Freightos daily Asia-East Coast. Chart: FreightWaves SONAR (To learn more about FreightWaves SONAR, click here.)

S&P Global Platts provides daily assessments of Freight All Kinds (FAK) rates. Its North Asia-East Coast FAK assessment, as of Thursday, was $6,800 per FEU, up 152% y/y.

Asia-West Coast rates also jump

There have recently been big moves up for rates to West Coast ports, as well.

Freightos put Thursday’s Asia-West Coast spot rate at a record-high $6,341 per FEU, up 194% y/y. Drewry’s weekly Shanghai-Los Angeles index is at $6,313 per FEU, up 6% w/w and 199% y/y.

Rates in dollars per FEU. Green line = Drewry weekly Shanghai-Los Angeles. Blue line = Freightos daily Asia-West Coast.

S&P Global Platts’ North Asia-West Coast North America FAK rate was $4,200 per FEU on Thursday, almost triple the FAK rate a year ago. 

Panama spread keeps widening

Asia-East Coast rates have been rising faster than Asia-West Coast rates, according to Freightos’ data.

As a result, Freightos’ East Coast-West Coast spread — the premium importers pay to take the long route via the Panama Canal — hit $2,976 per FEU on Thursday, a record high. It has spiked in recent days.

Rates in dollars per FEU. Blue line = Premium of Freightos daily Asia-East Coast over Freightos daily Asia-West Coast. Trans-Atlantic westbound rates keep rising

At first, the trans-Atlantic westbound route from Europe to the East Coast averted the massive rate inflation seen on other lanes. That reprieve ended in April. Freightos’ Europe-East Coast assessment for Thursday was $5,193 per FEU, a new record and up 164% y/y. 

Underscoring how different indexes come up with different figures, Drewry’s number is much lower than Freightos’. Drewry put Rotterdam-New York rates at $3,988 per FEU, up 66% y/y.

Rates in dollars per FEU. Green line = Drewry weekly Rotterdam-New York. Blue line = Freightos daily Europe-East Coast.

During an interview last month, Nerijus Poskus, Flexport’s vice president of global ocean, told American Shipper, “The most interesting to me is the trans-Atlantic, where prices have hit over $5,000 [per FEU, westbound]. It is quite balanced between imports and exports and while eastbound pays less than westbound, it still pays well. So, in my opinion, the trans-Atlantic is the best money-maker for shipping lines these days.”

Trans-Pacific exports: Full and empty

Rates for U.S. exports out of the West Coast to Asia have also jumped, albeit off a far lower base. Freightos assessed rates on this route at $1,208 per FEU on Thursday, up 154% y/y. Drewry’s weekly rate is lower: $808 per FEU, up 61% y/y.

Rates in dollars per FEU. Green line = Drewry weekly Los Angeles-Shanghai. Blue line = Freightos daily West Coast-Asia.

The trans-Pacific has always been much less balanced than the trans-Atlantic — and is now even more so. There is a scramble to get empty containers to West Coast ports so they can be returned to Asia and used for U.S. imports. This is leading to never-before-seen patterns in rail data.

FreightWaves SONAR has proprietary data on a portion of movements of loaded and unloaded international containers by rail, including 20- and 40-foot units.

Usually, loaded inbound international containers to Los Angeles/Long Beach carrying export cargoes are around double the volume of empty containers arriving at the ports.

The spread between the two narrowed at the beginning of the year, and since April, international rail empties covered by the dataset arriving in Southern California have exceeded loaded inbound boxes. The gap is widening. On Thursday, the volume of inbound empties arriving in Los Angeles/Long Beach was 46% higher than the loaded rail volume.

Blue line = loaded international containers inbound to Los Angeles by rail included in dataset. Green line = empty international containers.

Another highly unusual pattern has emerged in Chicago, yet another indicator of the rush to get empties back to Asia.

Last year, the number of loaded international containers included in the proprietary dataset leaving Chicago by rail was around double the outbound empty units. But this month, outbound empties surpassed outbound loaded international boxes.

Blue line = loaded full international containers outbound from Chicago by rail included in dataset. Orange line = empty international containers

On a relative basis, the shift is even clearer. The number of loaded full containers covered by the dataset that were leaving Chicago on Thursday was down 4% y/y, while empties were up 62% y/y.

Blue line = change in full international containers outbound from Chicago by rail included in dataset versus June 11, 2020. Green line = change in empty international containers

According to FreightWaves Maritime Expert Henry Byers, “The situation with international containers in Chicago is yet another major indicator of how severe the supply side problems are.”

Tyler Durden Tue, 06/15/2021 - 12:40

Wall Street Goes Full Fed Groupthink: 72% Think Inflation Is "Transitory"

We have previously slammed the Bank of America Fund Manager Survey which over the past two years lost all "signal" and mutated into a noisy exercise of virtue signaling and meaningless posturing, where the respondents say not what they actually think or do, but merely regurgitate trite convention goalseeking what they think the "right answer" should be so they aren't ostracized by their peers. Worse than that, the survey now simply reflects whatever prevailing prices telegraph, and instead of seeking to predict or discount the future, Wall Street best (paid) and brightest have become a herd of mindless cattle, swaying in the wind from one liquuidity injection to the next, without every formulating an opinion (one can't really blame them for this though, if anyone is to blame, it's the Fed for destroying what little market efficiency remained).

The release of today's latest FMS (in which BofA CIO Michael Hartnett polled 224 panelists managing $667BN between June 4 and 10th), was a case in point: the punchline of the report that the vast majority of Wall Street pros now siding with the Fed (and taking the other side of the trade to such luminaries as Paul Tudor Jones and Kyle Bass), as 72% said inflation is "transitory", while less than a quarter, or 23% view inflation as permanent.

And just to cement their laughable view, a record 76% says that the US economy - with its $24 trillion in debt - is currently "early cycle", i.e. a boom.

Hilariously, and a testament to just how little said "fund managers" believe their own BS, the biggest tail risk according to the same sample of respondents was... inflation.

But why, if it' transitory? Actually, ignore that: such rhetorical questions that seek to maintain some intellectual consistency within the Fund Manager Survey - which just last month saw bitcoin as the "most crowded trade" even though virtually none of the respondents are actually allowed to trade it - are a total waste of time, as is trying to divine some predictive signal out of the survey which is impossible as it has devolved into a worthless snapshot of goupthink, and if anyone wants to get the right trade, our advice is just to do what the majority on Wall Street pretends to do or believe.... especially when said fake conviction is on the same side as the Fed.

So with that in mind, and with the clear understanding that the only way to use any of this data is to take the other side of the trade, here are some other findings from the latest FMS (which really should rename itself FBS):

63% expect Fed to signal taper Aug/Sept, with virtually nobody expecting the Fed to even so much as hint at tapering tomorrow or July. Translation: it will be a very boring summer.

One reason for the pullback in inflationary expectations is the pessimism that Biden can get any more stimmies done, and as the next chart shows, US infrastructure hopes dip to $1.7tn from $1.9tn...

... which has also pushed expectations for a steeper yield curve to the lowest since Aug’20 (i.e. the flattening is about to come back).

Meanwhile, the red-line in 10Y yields that will spark a stock selloff keeps rising: as BofA notes, ";Nobody believed that rates at 1.5% would cause an equity correction. But the move from 1.5% to 2% is critical as a large majority of investors now think rates >2% would be detrimental for stocks. "

In addition to enjoying the safety of the herd and lack of original groupthink, the surveyed wall street pros also tend to be quite optimistic, and while few expect any economic turmoil any time soon, only 2% expect a bear market in the next 6 months: "Asked how big an equity correction will be likely in the next 6 months, FMS investors say <5% (10%), <10% (47%), <15% (29%), <20% (6%), bear market (2%)."

Some other observations: the survey found that cash levels are down to 3.9% from 4.1% last month...

... while allocation to bonds fell to 3-year low at net -69%, and stocks allocation back up to YTD highs at 61%.  This means that we are going to see another major bond short squeeze in the comings days.

And speaking of projecting, for the first time in BofA survey history, commodities is now the top most crowded trade, as it overtakes "long Bitcoin" as most “crowded trade.”

Meanwhile, since nobody can trade it and everyone has missed the move higher, 81% of jealous jaded investors still think Bitcoin is a bubble despite the price pullback. Well, good luck getting rich daytrading AMC.

Finally, some views on positioning: Hartnett says that based on survey responses, banks are now the biggest sector overweight at 30%, while “chunky” cyclical positioning persists on materials at 23%, industrials, U.K., euro area. Allocation to euro area stocks increased 6ppt MoM to net 41% overweight, highest since January 2018, while allocation to U.K. equities increased 2ppt to 4% overweight, highest since March 2014.

And while tech saw largest jump in exposure from 11% to 22% (after being massively shorted several weeks earlier), defensives exposure was cut again, with underweight in utilities largest since February 2017.

Tyler Durden Tue, 06/15/2021 - 12:20

Buchanan: All Is Hype For The Biden-Putin Summit

Authored by Pat Buchanan,

History repeats itself, first as tragedy, then as farce.

Karl Marx’s comment came to mind as President Joe Biden and Prime Minister Boris Johnson sought to equate their tete-a-tete at the G7 confab in Cornwall, England, to the Atlantic Charter conference of 80 years ago.

Those were historic days, to which these days cannot compare.

In August 1941, Prime Minister Winston Churchill and President Franklin D. Roosevelt met secretly on warships off Newfoundland to confer and commit to a set of principles that were to govern the world after the defeat of a then-triumphant Nazism.

Aboard HMS Prince of Wales, the battleship that brought Churchill across the Atlantic, Americans and British sang together, defiantly and movingly, an old and venerable hymn.

“Onward, Christian Soldiers!

Marching as to War,

With the Cross of Jesus,

Going on Before.”

Four months later, hours after the attack on Pearl Harbor, Prince of Wales would be sunk by Japanese fighter-bombers along with its sister ship, the battlecruiser Repulse, in the South China Sea.

When Churchill arrived in Placentia Bay off the Canadian coast, the Battle of Britain had been won, Adolf Hitler had turned on his former ally Joseph Stalin, and German armies were advancing from victory to victory in the USSR.

The danger then was that the Nazis might win the war.

And what did Biden, landing at Royal Air Force Base Mildenhall, identify for the U.S. troops there as the “existential threat” facing today’s world?

Said Biden: “When I first was elected vice president with President Obama, the military sat us down to let us know what the greatest threats facing America were — the greatest physical threats. … You know what the Joint Chiefs told us the greatest threat facing America was? Global warming.”

“This is not a joke,” Biden assured the troops.

Chairman of the Joint Chiefs Army Gen. Mark Milley told Congress the following day that, over at the Pentagon, they had a somewhat different ranking of threat assessments.

Said Milley: “Climate change does impact, but the president is looking at a much broader angle than I am … from a strictly military standpoint, I’m putting China, Russia up there.”

Kicking off the first day’s discussion of the seven leaders from the U.S., U.K., Canada, France, Germany, Italy and Japan, Johnson laid out his vision for the post-COVID-19 world.

Building on Biden’s theme to “build back better,” Johnson said that we should ensure that “we’re building back better together. And building back greener. And building back fairer. And building back more equal … perhaps in a more feminine way.”

Johnson knows his media audience.

In the 12,400-word closing communique, the G7 accused Russia of threatening Ukraine while China was guilty of human rights abuses in Xinjiang and Hong Kong. The anti-China commentary was said to have been inserted at the request of President Biden.

But no concrete action was agreed upon in the communique that would unduly upset either Chinese President Xi Jinping or Russian President Vladimir Putin.

Indeed, the Chinese embassy in London dismissed the whole G7 exercise, with Reuters quoting a spokesman as saying, “The days when global decisions were dictated by a small group of countries are long gone.”

That Chinese diplomat came as close to describing the reality at the Cornwall confab as anyone present.

For the G7 meeting — of the heads of government of seven of the world’s 10 largest economies — and the gatherings this week of NATO and the European Union in Brussels appear designed more to send messages than to portend action.

What are those messages?

“America is back!” The prodigal son has come home. The bad old days of The Donald are over. We are united again and agreed we must stand together and raise our differences behind closed doors, not raucously in open forums.

And the struggle for the future lies in competition, not conflict, between autocrats and democrats, to determine which system works better for its people.

To show solidarity, the G7 agreed to contribute 1 billion COVID-19 vaccine shots to poor and needy nations by the end of 2022. Half will come from the USA.

And what are the geopolitical realities largely left unaddressed?

Russia continues to hold Alexei Navalny in prison, to stand behind the dictator Alexi Lukashenko in Belarus and to support the pro-Russian rebel resistance in the Donbas.

China is not surrendering any of the reefs it claims in the South China Sea. Beijing continues to squeeze the political life out of Hong Kong, and its persecution persists in Xinjiang. And the Chinese military exercises in the Taiwanese waters and air space will continue and grow more aggressive.

Wednesday’s meeting between Biden and Putin is the event toward which these preliminary meetings — the G7, NATO and EU gatherings — have been pointing.

And from the signals Putin has been sending, he intends to disagree firmly and frankly with Biden, who has called him a “killer.”

Following the Putin summit, Biden will hold his own separate press conference, by himself. What, one wonders, are the Americans afraid of?

Tyler Durden Tue, 06/15/2021 - 11:59

Hunter Biden Invested Millions In Chinese Nuclear Plant Operator That Vented Dangerous Buildup Of Gasses

Hunter Biden's private equity firm invested millions of dollars in a Chinese state-owned nuclear power plant operator whose French partner warned the White House that the Taishan Nuclear Power Plant in Guangdong province was in danger of an "imminent radiological threat" due to a build-up of noble gasses in the cooling system of one of the facility's two reactors, according to the National Pulse.

The incident has been downplayed by the Biden administration, which told CNN that the facility is not yet at a "crisis level," and does not  pose a severe safety threat to workers at the plant or Chinese public. But is there more to it?

As the National Pulse's Natalie Winters reported on Monday:

The Biden team’s lack of concern comes as the primary operator of the China-based plant – China General Nuclear Power Corporation (CGN) – counts millions in investment from Hunter Biden.

BHR Partners – the private equity firm where Hunter Biden served as a director since 2013 – was a $10 million cornerstone investor in CGN’s initial public offering. Occurring in 2014, the IPO was the second largest of the entire year, valued at over $3 billion.

The company, which Hunter Biden reportedly retains a sizable stake in, still lists GCN as part of its portfolio on its website.

BHR PORTFOLIO (via National Pulse)

What's more, in 2017 a CGN consultant was sentenced to two years in prison by the DOJ for approaching and enlisting "U.S. based nuclear experts to provide integral assistance in developing and producing special nuclear material in China," and "did so without registering with the Department of Justice as an agent of a foreign nation or authorization from the U.S. Department of Energy."

"Theft of our nuclear technology by foreign adversaries is of paramount concern to the FBI. Along with our local, state and federal partners, we will aggressively investigate those who seek to steal our technology for the benefit of foreign governments," said FBI Special Agent Renae McDermott at the time.

As we noted on Monday, the US government is analyzing a reported leak at a China's Taishan Nuclear Power Plant, after a French company that  co-owns and helps operate it warned of an "imminent radiological threat," according to CNN, citing US officials and documents reviewed by the outlet.

According to AFP, "EDF reported earlier a build-up of noble gases in one of the two reactors' primary circuits, which is part of the cooling system," adding "Noble gases are elements which have low chemical reactivity -- in this case it was xenon and krypton."

#UPDATE A Chinese nuclear company has deliberately released gas from a power plant into the atmosphere within authorised limits, as it seeks to fix an issue at the facility, its French partner EDF said Monday https://t.co/hFaZCnjXaO #Taishan pic.twitter.com/2H8wXvmzt3

— AFP News Agency (@AFP) June 14, 2021

"The gas was released after the coating on some fuel rods had deteriorated, said the spokesman, who asked not to be named."

According to Bloomberg, the French firm has called for an "extraordinary board meeting with majority owner China General Nuclear Power Corp., to discuss the increased concentration of inert gases at the Unit 1 reactor in Guangdong."

Tyler Durden Tue, 06/15/2021 - 11:42

Georgia To Investigate After Fulton County Official Says Election Forms Are 'Missing'

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Georgia’s secretary of state said Monday that his office will probe Fulton County after an election official there said forms verifying the chain of custody for some mail-in ballots went missing.

“New revelations that Fulton County is unable to produce all ballot drop box transfer documents will be investigated thoroughly, as we have with other counties that failed to follow Georgia rules and regulations regarding drop boxes. This cannot continue,” Georgia Secretary of State Brad Raffensperger, a Republican, said in a statement.

An election worker processes absentee ballots at State Farm Arena in Atlanta, Ga., on Nov. 2, 2020. (Megan Varner/Getty Images)

Raffensperger previously announced similar probes in Coffee, Grady, and Taylor counties. In doing so, he alleged that the state’s other 120 counties had properly completed absentee ballot transfer forms.

Earlier Monday, Mariska Bodison with the county’s Board of Registration and Elections told the Georgia Star News that “a few forms are missing” when asked for documentation on approximately 19,000 absentee ballots that were said to have been placed in drop boxes.

The forms that are not available at this time would detail the chain of custody for the ballots. They are required by law.

A Fulton County spokeswoman told The Epoch Times in an email that the county “followed procedures for the collection of absentee ballots from Fulton County drop boxes.”

“We maintain a large quantity of documents and researching our files from last year to produce the ballot transfer forms. We have been in communication with the Secretary of State’s office to update them of our progress on this matter,” she said.

Democrat Joe Biden won Georgia by under 12,000 votes. Biden typically received more mail-in ballots in each state, and Georgia was no exception. While former President Donald Trump received over 254,000 more Election Day votes than Biden, Biden received over 848,000 absentee ballots compared to Trump’s 450,522.

Election workers count Fulton County ballots at State Farm Arena in Atlanta, Ga., on Nov. 4, 2020. (Jessica McGowan/Getty Images)

Trump has said the 2020 election was rife with fraud, particularly in the swing states like Georgia.

“Whether it be voting machines, underaged people, dead people, illegal aliens, ballot drops, ballot cheating, absentee ballots, post office delivery (or lack thereof!), lock boxes, people being paid to vote, or other things, the 2020 Presidential Election is, in my mind, the Crime of the Century,” he claimed in a June 12 statement.

A group of Georgia voters that alleged in a petition last year that they witnessed an “abnormal” increase in Biden’s vote count in Fulton County while performing election observation was slated to obtain images of the county’s absentee ballots late last month.

But the judge overseeing the case decided to delay the visit to the county’s ballot storage warehouse, where the images were to be taken by county workers while petitioners or their representatives watched, until he rules on motions to dismiss filed by the county’s Board of Registrations and Elections and two other county agencies.

Garland Favorito, head of the Voter GA election integrity group, and a petitioner, told The Epoch Times that the new admission of missing forms could be used in the ongoing case at some point, but he would have to discuss that matter with his attorney.

Favorito believes the missing forms “could explain why we saw counterfeit ballots.”

Those ballots “could have originated from these drop boxes that don’t have chain of custody forms,” he added. “So I think there is a connection there.”

Susan Voyles, a poll manager who worked on a recount in November 2020, has said she handled ballots she believes were fraudulent or fabricated. Her affidavit was cited in the Fulton County petition, as were affidavits from others who participated in the recount and said they saw ballots they believe were fake. Voyles was later terminated by the county.

Follow Zachary on Twitter: @zackstieber Follow Zachary on Parler: @zackstieber Tyler Durden Tue, 06/15/2021 - 11:30

Michael "Big Short" Burry: This Is The Greatest Bubble Of All Time In All Things "By Two Orders Of Magnitude"

Earlier this year, none other than Michael 'Big Short' Burry confirmed BofA's greatest fears, as he picked up on the theme of Weimar Germany and specifically its hyperinflation, as the blueprint for what comes next in a lengthy tweetstorm cribbing generously from Parsson's seminal work, warning that:

"The US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket."

#ParadigmShift

 "The life of the inflation in its ripening stage was a paradox which had its own unmistakable characteristics. One was the great wealth, at least of those favored by the boom..Many great fortunes sprang up overnight...The cities, had an aimless and wanton youth"

"Prices in Germany were steady, and both business and the stock market were booming. The exchange rate of the mark against the dollar and other currencies actually rose for a time, and the mark was momentarily the strongest currency in the world" on inflation's eve.

"Side by side with the wealth were the pockets of poverty. Greater numbers of people remained on the outside of the easy money, looking in but not able to enter. The crime rate soared."

"Accounts of the time tell of a progressive demoralization which crept over the common people, compounded of their weariness with the breakneck pace, to no visible purpose, and their fears from watching their own precarious positions slip while others grew so conspicuously rich."

"Almost any kind of business could make money. Business failures and bankruptcies became few. The boom suspended the normal processes of natural selection by which the nonessential and ineffective otherwise would have been culled out."

"Speculation alone, while adding nothing to Germany's wealth, became one of its largest activities. The fever to join in turning a quick mark infected nearly all classes..Everyone from the elevator operator up was playing the market."

"The volumes of turnover in securities on the Berlin Bourse became so high that the financial industry could not keep up with the paperwork...and the Bourse was obliged to close several days a week to work off the backlog" #robinhooddown

"all the marks that existed in the world in the summer of 1922 were not worth enough, by November of 1923, to buy a single  newspaper or a tram ticket. That was the spectacular part of the collapse, but most of the real loss in money wealth had been suffered much earlier."

 "Throughout these years the structure was quietly building itself up for the blow. Germany's #inflationcycle ran not for a year but for nine years, representing eight years of gestation and only one year of #collapse."

His punchline: the above was "written in 1974 re: 1914-1923" and then makes the ominous extrapolation that "2010-2021: Gestation" adding that "when dollars might as well be falling from the sky...management teams get creative and ultimately take more risk.. paying out debt-financed dividends to investors or investing in risky growth opportunities has beaten a frugal mentality hands down."

And, as if reading from the same playbook, Paul Tudor Jones warned yesterday that things are "bat shit crazy" and if Jay Powell

“The idea that inflation is transitory, to me ... that one just doesn’t work the way I see the world."

All of which led to Burry's latest tweet warning this morning...

"People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude. #FlyingPigs360"

People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude. #FlyingPigs360

— Cassandra (@michaeljburry) June 15, 2021

In other words: "Brace!"

So what are you going to do about it?

Tudor Jones had some simple advice: "buy commodities, buy crypto, buy gold."

Tyler Durden Tue, 06/15/2021 - 11:10

Macleod: The End Of The LBMA Is Nigh

Authored by Alasdair Macleod via GoldMoney.com,

Basel 3 is on course to regulate the LBMA out of existence. And with it will go all the associated arbitrage business and position-taking on Comex, because most bullion bank trading desks will cease to exist. The only supply to buy-side speculators of gold and silver contracts will be producer hedging.

In recent months there has been some limited commentary concerning the introduction of Basel 3 regulations and the implications for precious metals trading. These new regulations are scheduled to be introduced for European banks at the end of June — only seven weeks’ time — and in the UK from 1 January next, affecting all LBMA member banks.

This article explains the new regulations and concludes that the recent joint LBMA/WGC consultation paper addressed to the British regulator is unlikely to save London’s unallocated gold trading market. And because Basel 3 regulations are scheduled to be introduced into the UK at the year-end all banks in the London gold market can be expected to wind down their exposure well ahead of the deadline.

The unallocated forward settlement market will effectively be shut down.

Hedging into Comex futures from this source will also cease.

As it is unwound, the withdrawal of synthetic supply has enormous implications for future precious metals prices by transferring pricing power to physical markets, now dominated by China.

Abbreviations in this article

• PRA      Prudential Regulation Authority, the UK financial sector and banking regulator.

• EBA      European Banking Authority, the EU banking regulator.

• LBMA  London Bullion Market Association, the trade body for forward dealings in unregulated, unallocated precious metals in London.

• WGC    The World Gold Council, a trade body based in London which researches and quantifies global gold supply and demand.

• CME    Chicago Metal Exchange, the US-based regulated futures market used by bullion banks around the world.

• BIS       Bank for International Settlements, a sub-committee of which devises the Basel series of rule-based banking regulations. In the wake of the financial crisis of 2007—2009, Basel 3 is being implemented to ensure that banks are adequately capitalised globally to undertake their various lines of business without imparting systemic risk to other banks.

• RSF      Required stable funding, introduced by Basel 3 and is applied to banking assets.

• ASF      Available stable funding, introduced by Basel 3 and is applied to banking liabilities.

• NSFR    Net stable funding ratio, the ratio between ASF and RSF, introduced by Basel 3 and never to fall below 100%.

Introduction

On 4 May, the London Bullion Market Association in conjunction with the World Gold Council submitted a paper to the Prudential Regulation Authority making the case for unallocated gold to be spared a required stable funding factor (RSF) of 85% under new Basel 3 regulations. The new regulations are due to be implemented in Europe by the European Banking Authority at the end of June, to be followed in the UK on 1 January 2022. The paper claims that if the proposed RSF of 85% is imposed on gold and other precious metals it would undermine clearing and settlement, drain liquidity, dramatically increase financing costs and curtail central bank operations.

These are very serious statements to the effect that unless the London bullion market gets a waiver on the net stable funding ratio calculation (NSFR), it may as well shut up shop. And with the LBMA severely curtailed, the CME’s gold and silver futures contracts would lose out badly on both volumes and liquidity as well, with the number of active bullion bank trading desks (the Swaps) reduced to very few at the least.

At first sight it seems crazy that the impact of Basel 3 regulations will be permitted to radically undermine forwards and futures markets, which have been so instrumental to deflecting hoarding demand from physical bullion. It is through paper derivatives that the gold price in particular has been kept suppressed in conjunction with central bank leasing, and therefore prevented from challenging the US dollar’s credibility, following gold’s replacement as the world’s reserve currency fifty years ago.

The disruption to forwards and futures markets from Basel 3 will be a major shock, yet wider markets appear to be blithely ignoring the problem. When it goes ahead, Basel 3 will mean that banks will be forced to wind down their positions in unallocated precious metals, almost certainly causing massive disruption to physical bullion markets as well. If the expansion of paper markets has suppressed the prices of gold and silver for the last fifty years, then a severe contraction of paper equivalents at a time of escalating fiat money inflation could send prices to the moon.

In order to understand the proposed regulations, we need to look at them while taking into account the standard accounting practice of double entry bookkeeping as it is applied to bank balance sheets. There are three new Basel 3 definitions that matter in this regard:

• The Available Stable Funding factor (ASF) is applied to the sources of a bank’s funding on the liability side of its balance sheet. Depending on the liability (shareholders’ equity, customer deposits, interbank loans etc.) they are multiplied by a factor, from 100% for the most stable forms of funding, such as Tier 1 bank equity, to 0% for the least stable. Being on their balance sheets, unallocated gold owed to a bank’s depositing customers is to be given a Basel III ASF of 0%, which means it will not be permitted to be a source of funding for any balance sheet assets, which must therefore be funded from other liabilities.

• The Required stable funding (RSF) is to be applied to a bank’s assets. Unallocated gold positions are to be valued at 85% of their market value. Note that allocated gold, being held in custody, is not on bank balance sheets (except where the bank actually owns physical gold in its own right) and is therefore not involved in the calculation.

• The Net stable funding requirement (NSFR) is the ASF divided by the RSF and must be at least 100% at all times.

The LBMA’s problem with Basel III becomes obvious. Unallocated gold liabilities cannot be used for funding the bank’s assets, and unallocated gold assets take a valuation haircut of 15% of market value as well. In future, the former cannot be simply offset against the latter, but bullion banks in London naturally run unallocated positions on both sides of their balance sheets. Whether the bank owns vaulted allocated gold to offset some of the price risk is immaterial. If this Basel 3 proposal goes through without modification, it will effectively be the end of the LBMA’s forward settlement business, and the end of arbitrage and hedging between LBMA members and the CME’s Comex futures contracts. And the Swaps on Comex, which are the bullion bank trading desks, could be regulated out of existence.

We cannot be sure yet that this will definitely happen, because it was put out for consultation in the UK by the PRA until 3 May. The end-June deadline after which Basel III applies in Europe might be extended again — which seems increasingly unlikely. In a patched-up compromise, unallocated gold could be rescheduled for a higher ASF and/or RSF, though again, that seems unlikely. Furthermore, the LBMA’s plea to the PRA, if successful, would only apply to UK regulated banks, not those in other jurisdictions, unless they set up full-blown London subsidiaries. And even that is unlikely to be acceptable to European and other regulators regulating their parents, because it is normal practice for regulators to look through such arrangements.

The LBMA paper suggests a compromise, that London could follow Switzerland which intends to rely on a clause in the European Banking Authority’s rule book allowing banks to make returns to the regulator instead, and for the regulator to decide stable funding matters. For this to work, the PRA would have to obtain agreement on a common approach with banking regulators in Europe and elsewhere. If that is to be the case, time is running out rapidly.

But the Swiss option only works on the basis that unallocated positions on both sides of the balance sheet are classified as interdependent. Any mismatch between unallocated gold liabilities and assets would not be covered. One assumes that hedging through Comex futures could resolve this issue partially, but that is only an assumption. And even if this get-out is adopted, liquidity will still dry up, because bullion bank trading desks will be given minimal trading discretion, limited to maintaining even books across the markets because of the NSFR issue.

The Swaps category on Comex (the bullion bank trading desks) is currently net short of about $24bn in the GC gold futures contract and $1.6bn in silver futures. Pressure to pare back ownership of these positions to a few genuine market makers and American bank trading desks is bound to increase, because the short positions held by European bullion banks would have to be covered in the next six weeks. And in London, all LBMA banking members will similarly reduce their unallocated activities because unbalanced books would be heavily penalised by the rule changes when they come in for the UK as well. That would make Comex gold and silver contracts entirely dependent on producer hedging.

The Bank of England will almost certainly express a view to the PRA as well as has the LBMA/WGC, not least because through swaps and leases for earmarked central bank gold in its custody it has been instrumental over the years in arranging for physical liquidity to be provided to the market in London. But it behoves the PRA to look more closely at the whole question of trading in unallocated gold, and specifically at the risks to the UK and European banking systems of a daily settlement average of 20 million ounces, or 620 unallocated equivalent tonnes between LBMA members. This does not appear to include additional unallocated tonnages between members and non-members, nor does it include intraday turnover.

The London shell game

In the interests of understanding the London bullion market, it will be helpful to start with definitions of unallocated and allocated gold accounts. According to the LBMA’s own website,

Unallocated accounts

Most bullion in London is traded and settled on an unallocated account basis, where the customer does not own specific bars but has a general entitlement to an amount of metal. It is the most convenient, cheapest and most commonly used method of holding metal. It works very much like a bank currency account.

Note that instead of owning gold, the customer only has a general entitlement. Note also that it works like a normal bank currency account. And bear in mind that not only does a customer with an unallocated account not own gold but is just a creditor of the bank. All unallocated gold obligations appear on the bank’s balance sheet.

Allocated accounts

Allocated accounts are opened when a customer requires title or ownership of specific bars, with the dealer holding them on the client’s behalf. Clients’ holdings are identified in a weight list of bars, showing the unique bar number, gross weight, the assay or fineness of each bar and its fine weight. Credits or debits to the holding are linked to the physical movements of bars to or from the client’s physical holding. In this respect, it is like a safe deposit box with the account operator acting simply as custodian.

This is a completely different type of account, where the bank is a custodian, and holdings do not appear on the bank’s balance sheet. Allocated gold is not at the disposal of the bank and cannot be used for its trading. In practice, banks discourage customers from holding allocated gold through high charges for storage and account maintenance fees. By way of contrast, a customer who maintains an unallocated account is often freed from bank charges entirely. Consequently, the large majority of customer accounts are unallocated.

The LBMA/WGC letter leads its readers to assume the only difference between allocated and unallocated gold is the convenience unallocated gold provides for an efficient market. Nowhere is there any mention of the lack of physical gold backing unallocated accounts. And by ignoring the process of bank credit creation, it panders to the naïve assumption that banks are simply pass-through intermediaries with depositors on one side and loans on the other.

In common with banking regulators, the LBMA and WBC apparently fail to understand that unallocated accounts on bank balance sheets are only created by the process of bank credit expansion and have nothing to do with physical gold. The origin of all unallocated accounts is not the depositing of gold, but credit creation. Figure 1 shows how unallocated gold accounts are created in this way.

Let us say the trading desk has a facility granted to it by the bank to trade unallocated gold, and its account is credited with this facility by its bank to the extent of 10 monetary units. On its books, the bank records an asset in Monetary Units (normally dollars, or sterling, euros etc. depending on the bank’s accounting currency), reflecting the loan created in favour of its trading desk. At the same time, the bank records an equal liability matching the credit to its trading desk to allow the latter to fund its dealing book. It can now deal with other banks in unallocated gold, all of which will have created the facility to deal in unallocated gold by the same process of credit expansion ever since facilities to trade in unallocated gold evolved into existence.

What’s happened is that the dealing desk’s facility has been funded by the expansion of bank credit out of thin air, in the same way that bank credit is expanded by any bank in any other line of banking business. This is standard accounting practice long established by banking law. From it, we derive two important points: the funding of unallocated positions in London is simply through the expansion of credit denominated not in gold, but currency; and with all banks using the same methods no gold is involved at all.

Customers of the bank can, of course, request physical delivery, or delivery into an allocated account at the bank, in which case the trading desk acts as a broker, sourcing physical metal. But this function must not be confused with unallocated dealing by banks acting as principals, or on behalf of their customers with unallocated accounts.

The LBMA/WGC submission claims that gold is vital collateral for central counterparties, which rely on the LBMA system to manage both it “and the physical delivery of precious metals derivative contracts” (page 3). The wording is misleading, because the delivery of a derivate contract is not the same as delivering the precious metal. The only other reference to collateral is in Annex 1, where the WGC trots out the usual stuff about gold having no counterparty risk and is widely accepted as collateral. That is true of physical gold, but is not relevant to unallocated gold, where counterparty risk is the only consideration and is the exclusive business between LBMA member banks.

Unallocated gold is no more than book entries tied to the price of gold, and its origin and continued existence is entirely funded by the creation of bank credit. It is this that Basel 3 recognises.

By introducing the net stable funding ratio, Basle III effectively makes standard banking practice unworkable in the case of unallocated precious metals by not permitting a trading book to net off its long and short positions. The regulators at the Basel Committee will not have jumped down on unallocated gold trading unless, in their opinion, they viewed it as a risk to the global banking system which must be offset by proper funding. Plainly, they understand the unallocated shell game for what it is, and that a failure in this market would be a threat to the entire banking system. Almost certainly, Basel III’s banking experts will have examined the risks in considerable detail before making their decision about the rates of both the ASF and RSF to be applied. And when it comes to cooperation from the European Banking Authority, there is also the additional risk that the UK’s PRA could find itself mired in post-Brexit non-cooperation.

The impact on physical precious metals

Asked to estimate the chances that the LBMA will succeed in stopping the imposition of the NSFR in Europe in six weeks’ time, the answer is it will be as likely as a cat in hell’s chance. While the Swiss proposal would provide some easement, it would effectively shut down their trading desks because of the penalties on uneven books. European and Swiss bank memberships of the LBMA are ten out of a total of forty-three, and most of those are UK incorporated subsidiaries. But it is unlikely that the EBA will accept that by sheltering the banking risks in a wholly owned UK subsidiary they can be simply ignored.

A bare quarter of member banks being cut out of unallocated trading may not seem a major disaster for the LBMA. But it is the thin edge of the wedge. From this analysis it seems extremely unlikely that the PRA has any choice but to impose the NSFR calculation method on the London gold market when it adopts the rule, scheduled for 1 January 2022. This means that all UK subsidiaries and branches of foreign and domestic LBMA member banks must comply by then. In practice, all the non-European member banks are bound to cease running unallocated positions as principals and on behalf of customers in advance of the rule change.

The last recorded level of LBMA-member unallocated gold positions was contained in the Bank for International Settlements over the counter derivative statistics for end-June 2020 at $572bn, while at the same time Comex Swap longs and shorts totalled $63bn. Rather like an iceberg, the visible regulated portion on Comex is one ninth of the total hidden derivative mass. If London adopts the Swiss proposal (we don’t yet even know if the EBA will accept it) then banks might be able to continue to run unallocated positions on an even book basis, but without trading income there is little point. Some of the market makers will cease trading and the balance are likely to run smaller books. For all intents, one half of that $500bn+ figure (representing one side of unallocated gold positions at the end of day settlement) will have to close out or be replaced with allocated physical.

The regulatory impact on Comex’s futures contracts differs in that the Basel III treatment of regulated markets with central counterparties is a separate topic, beyond the scope of this article. Nevertheless, the end of furious daily trading activity in gold settling at over 600 tonnes a day in London will eliminate hedging activity into Comex futures.

It would be too much to assume that such a severe contraction of paper market trading will lead to an automatic shift from paper into physical. But undoubtedly, some bank customers holding unallocated gold deposits at bullion banks will find their accounts closed and seek to replace them with physical gold. The full impact can only be guessed. But in the short-term it would appear that the Swaps category on Comex (bullion bank trading desks) have a separate problem closing their short positions. The most recent position derived from the CFTC’s Commitment of Traders Report is shown in Figure 2.

We don’t know how many of the European banks are short on Comex, which is the immediate problem, but the others with London trading desks (nearly all of them) will shortly find themselves in a similar position, if as expected the PRA follows the EBA by introducing the NSFR calculation from 1 January.

Central bank involvement

Central banks may find themselves in a difficult position, because of the unknown quantities of gold leased and swapped into the market. While bullion banks have been playing pass-the-parcel in the unallocated market, over the years they have been forced to deliver physical gold to bar hoarders, ETFs, jewellery fabricators and others. In recent decades these demands have exceeded mine and scrap supply by a fair margin, particularly driven by Asian demand. And while the LBMA has been triumphantly proclaiming 9,461 tonnes of gold are stored in LBMA member vaults, 5,616 of that is held at the Bank of England, almost entirely the earmarked property of central banks or their governments. That leaves 3,845 tonnes, of which about 2,500 tonnes are ETF gold, leaving 1,345 tonnes. Of that, an unknown amount is physical bars held by family offices, high net worth individuals and aggregated pooled accounts, probably leaving a balance of physical liquidity of as little as 500 tonnes. We were reminded recently that much of this physical has been supplied by central bank leasing when the GLD ETF briefly showed the Bank of England as a sub-custodian last year.

We know this leasing of gold to supply the market has been a major factor since the LBMA got going in its current form. A respected analyst, Frank Veneroso, estimated leasing and lending of official reserves to be at least 10,000 tonnes as far back as 2002.[iv] In those days, gold leasing secured a carry trade as the funding basis for US Treasury bills, so much of it was a rolling total. One suspects some of it was delivered into markets and subsequently had to be replaced out of private sector sales. But clearly, if the derivative trade in unallocated dries up, significant quantities of physical gold leased to the bullion banks might have to be found.

Additionally, while Western central banks have been leasing gold into the London market, the central banks and governments which have been adding to their gold reserves are predominently in Asia. In particular, we can be certain that China has substantial physical holdings of gold bullion not declared as gold included in its monetary reserves. The enabling legislation appointing The Peoples Bank sole responsibility for the state’s management of gold and silver bullion dates from June 1983, since when driven by government policy China has become the largest source of mine supply and rigidly controls refining and exports. Between 1983 and 2002, before it was legal for Chinese citizens to own and buy gold, inward capital flows and subsequent export surpluses coupled with a regime of strict exchange controls managed by the PBOC would have permitted the Chinese state to accumulate substantial quantities of bullion at contemporary prices, mostly between $200—$400 per ounce. Only after the state achieved its ownership objectives were citizens then permitted in 2002 to own gold — indeed, encouraged to do so. It is likely that Russia too has undeclared reserves and it is public knowledge she has been replacing US dollar reserves with gold, giving us important evidence of her monetary and strategic approach.

China’s gold policy has extended to the wider control of global trade in physical gold, in cooperation with other Asian centres. So far, China’s control over physical markets has been dwarfed by London’s unallocated trading and the Comex futures market. That will change, handing China and Russia ultimate power over fiat currencies as the dollar’s hegemony is undermined and the gold price rises due to ending of paper market price suppression.

Conclusion

Changes proposed in Basel 3 mark the end of an era for derivative trading, when almost all gold and silver trading has been in unallocated form. The consequences for precious metals markets and prices should not be ignored or underestimated. The implications are understood by the LBMA, and their response to the UK regulator reflects their helplessness in the face of these changes.

The joint submission by the LBMA and the WGC is economical with the facts by avoiding an admission that unallocated and allocated gold accounts are completely separate businesses. The origin of the former is through the creation of bank credit. And with all banks operating through credit expansion no physical gold is involved. Dealings are entirely in unallocated notional bullion, with the gold price serving as a valuation reference point. While the creation of unallocated gold through bank credit is one thing, customer demands for settlement in the physical are another, and generally discouraged. But over the years demand for physical has absorbed physical bullion supply and additional leasing of central bank gold, adding a second but entirely different problem for bullion banks.

The remaining pool of available physical gold is relatively small when central bank, ETF and privately owned bars are allowed for in vaulting totals. True liquidity is not the headline 9,461 tonnes in London vaults, trumpeted by the LBMA, but is minimal — probably just a few hundred tonnes. It is from this small pool that daily imbalances in unallocated settlements which arise from delivery demands are satisfied.

There is never a good time to introduce such radical changes into long-established market practices. But with issuers of fiat currencies debasing them at an accelerating rate, bullion banks face considerable difficulties unwinding their unallocated positions at a time when public demand for physical bullion is increasingly responding to fiat money inflation, spinning out of control.

Tyler Durden Sat, 05/15/2021 - 07:00

Rachel Maddow Says She Will Have To "Rewire" Her Brain To Not View Maskless As A "Threat"

Authored by Paul Joseph Watson via Summit News,

MSNBC host Rachel Maddow reacted to the CDC’s announcement on face coverings by saying she would have to “rewire” her brain in order to not perceive those who don’t wear masks as a “threat.”

The CDC said yesterday that those who had been vaccinated could remove their masks in indoor settings (aside from a bunch of exemptions, including airports, public transport, hospitals and care homes).

This prompted Maddow’s brain to short circuit as she expressed the difficulty she would have in dispensing with the idea of treating those who don’t wear masks as dangerous lepers.

“I’m going to have to rewire my self so that when I see somebody out in the world who’s not wearing a mask, I don’t instantly think ‘you are a threat’ or you are selfish or you are a COVID denier and you definitely haven’t been vaccinated,” said Maddow.

Leftism is a mental disorder. pic.twitter.com/OejLEQAjOi

— Dave Rubin (@RubinReport) May 14, 2021

“We’re going to have to rewire the way that we look at each other,” she added.

Perhaps Maddow is just sad that there’s no longer official justification to intimidate and harass those who choose not to wear masks, something that leftists have enjoyed doing for the best part of a year.

The notion that people who don’t wear masks are a “threat” is of course completely ludicrous since the COVID-19 virus particle is 1,000 times smaller than the holes in the mask anyway.

After Texas ended its mask mandate, COVID cases dropped to a record low and a similar pattern was observed in Florida and South Dakota.

Meanwhile, leftist-controlled areas that had the most draconian mask mandates routinely had the highest COVID infection rates.

Joe Biden yesterday suggested that Americans who don’t take the vaccine will have to mask up indefinitely, although there is no explanation of how this would be enforced.

*  *  *

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Tyler Durden Sat, 05/15/2021 - 06:12

Vaccine Virtue Signaling And The Cult Of Woke

Authored by Brandon Smith via Alt-Market.us,

All tyrannical systems need a large contingent of cheerleaders in order to survive and thrive; a group of exploitable and devout acolytes that will carry the torch and evangelize the masses with the ideology of control. Without this aggressive percentage of the population, totalitarians cannot remain in power. In the US and most of the west, leftist ideologues have filled this role nicely. They claim they are fighting for the rights of the downtrodden but their actions speak much louder than their words.

They have supported and viciously defended nearly every draconian measure that governments and corporate elites have enacted in the past few years. They supported mass censorship of conservatives and moderates by Big Tech companies. They supported national lockdowns which destroyed hundreds of thousands of small businesses and violated the constitutional rights of millions of Americans. They continue to support unscientific mask rules which have been proven to achieve nothing tangible in terms of preventing viral spread. They support the use of “vaccine passports” which would effectively cut non-vaccinated people out of the normal economy and normal society and drive them into poverty. And, now they are all over the web trying to propagandize for the jab.

We know these unhinged creatures by many names, including social justice warriors, snowflakes, puritans, leftists, Marxists, communists, globalists, collectivists, narcissists, etc. Basically, they are some of the worst people on the planet, and while they usually drone on about “institutional racism” that doesn’t exist, or a rape culture that doesn’t exist, or a patriarchy that doesn’t exist (though I’m starting to wonder if maybe we should start one), they have now found a new love in the covid “crisis”.

But before I address the Woke Cult and and their perverse relationship with the establishment, I have to ask a basic question about the “vaccine” which no one in the mainstream seems to be asking:

Why should we take an experimental mRNA vaccine for a virus that 99.7% of people outside of nursing homes will easily survive?

This question alone usually explodes the heads of vaccine cultists. Most of them for some reason still believe the death rate of covid is “3% or more”. Why do they peddle this nonsense? Well, I would note that the mainstream media NEVER discusses the death rate of covid; they instead let people make assumptions based on things they have heard in the past from entities like the World Health Organization or the CDC.

The 3% stat appears to have come from PREDICTIONS made by the WHO in January of 2020 before the virus had fully hit the US, as well as a preliminary study by Lancet. These predictions were pushed forward by the Imperial College of London, a globalist institution which created the complex mandate and lockdown models that nations across the world are now using to control the public. Their models were so utterly wrong that it is bewildering to anyone familiar with statistical theory or medical management.

As it turns out, the death rate for covid is a mere 0.26% of those infected (it was never 3%) and we have known this for quite some time. Nursing home patients with preexisting conditions make up around 40% of all deaths. Over 80% of all deaths were people over the age of 65. And, according to the CDC, at least 30% of all covid hospitalizations were due to complications associated with severe obesity.

So, if you are not over 65 and you are not a disgusting fat-body, then you have very little to worry about from covid statistically. If you are over 65 and you are fat, then you have around a 0.26% chance of dying if you become infected. If you are over 65, fat, and live in a nursing home, then maybe you should be worried.

The bottom line is, covid is a non-threat to the vast majority of people, but there is a large group of obsessives out there that seem to want to be afraid of it anyway, or, they just want us to be afraid.

The virtue signaling around the vaccines is growing increasingly bizarre. There are numerous YouTube videos, TikTok videos, articles, and social media posts by people smugly proclaiming their jab status as if they have just been touched by the hand of God as the chosen ones. Furthermore, the idolization of medical frauds like Dr. Anthony Fauci is cringeworthy. If you don’t believe me you can see some examples below:

It appears that the SJWs are trying real hard to normalize covid vaccines by manufacturing a consensus. If everyone is doing it, then you might get left out and isolated from the crowd, and that’s a scary thought, right?

Maybe I’m reading too much into this, but I’m detecting some serious desperation behind this astro-turf movement against “anti-vaxers”. No one listens to the cult of woke, no one likes them and no one trusts them to be informed or honest in their agenda. Yet, they wield considerable power in our society because they are being backed by governments and corporations. Their relationship to the establishment is symbiotic.

This is not to say any of these people are aware of the underlying agenda. The mindset behind vaccine virtue signaling could be attributed to some base frailties the average leftist suffers from:

First, they have a habit of relying on the government and the system in general to provide for their feelings of normalcy. That is to say, they worship the covid vaccine partly because they see it as their ticket to appeasing the government and being given access to certain comforts. Sadly, they don’t realize that those comforts can be taken back anytime they want if they were not so cowardly.

In my county residents here have been ignoring the covid mandates for most of the past year. No one wears the masks. No one is using social distancing. And over 70% of the population is not vaccinated. The consequence? Only 17 deaths in the past year, most of which were people with preexisting conditions, and we have been free the whole damn time because we chose to be.

Second, leftists always argue from a position of “the majority”, even when they are not the majority. Covid is a tool, like a psychological crowbar used to leverage compliance, because the presumption is that it is a threat to everyone. And, if everyone is threatened by the same bogeyman, then everyone is part of the same monolith, the same collective. And if everyone is part of the same collective, then everyone must fight that bogeyman together in unity. If you do not work with the collective, that means you are working against the collective.

“We live in a society”, the leftists arrogantly spit and sneer, “which means you must do what WE say is best for everyone”.

As I already thoroughly outlined above, covid is not a threat to everyone. It’s not even a threat to more than 0.26% of people. We do NOT “live in a society”, at least, we don’t live in their society or under their rules. They don’t care about saving lives, this is just the excuse they need to exert control. Control is what they most desire.

How do I know this? Look at the mania surrounding the very existence of anti-lockdown activists and “anti-vaxers”. Look at how much they talk about us. They can’t stop themselves. Why do these people care so much whether or not we take the vaccine? If it actually works, then they are perfectly safe from us, and when we all die horrible deaths from covid they can say “we told you so”.

What they really fear is that we are right and they are wrong. The science is certainly on our side and has been for the duration of the pandemic. The WHO was wrong, the CDC was wrong, the Imperial College of London was wrong. The anti-lockdown activists were closer to the mark than all of them combined. The masks have been proven to be useless. The lockdowns have been proven to be useless. The death rate predictions were proven to be highly exaggerated. And, now the very need for the vaccines is in question.

In terms of the recent mainstream media narrative, we can draw a couple of conclusions: For one, the vaccine rollout is not going according to plan. Everyday the media is awash in stories about “vaccine hesitancy” and what the government needs to do about it. This tells me that far too many Americans are refusing the shot, so, the propaganda is being turned up to eleven.

I suspect the vaccine virtue signaling is a part of that campaign, or it is at least being encouraged by the establishment. Don’t you want to be on the right side of history? Don’t you want to be on the “side that cares about people”? Or do you want to be on the “selfish side”, the side that wants to kill grandma, the side that is racist and sexist and nasty and icky?

Another easy conclusion we can draw from the media is that this is not going away and the establishment intends to press the issue if we continue to defy them. I have seen the suggestion of “force” only gingerly broached in the past, but recently the narrative is becoming more aggressive. The word “force” is appearing more often. The media seeks to remind us that under that law, the establishment could make us take the vaccine. The message? We might as well get the vaccine now so that we can avoid any unpleasantness later.

We all know this is eventually going to end in war, but the elites need a huge ratio of pro-mandate people to effectively subjugate liberty minded individuals. They don’t have it and it shows.

Woke adherents see all of this same propaganda everyday; they hear the message loud and clear: The system is indicating that the vaccines will be mandatory whether by government declaration or by corporate requirement. So, leftists are scrambling to show their allegiance to their god (the state), and they act as good little foot-soldiers to gain extra virtue points.

There are many reasons not to accept an experimental vaccine, some of them scientific and some of them based on principle. I would simply point out that many virologists have spoken out on the safety of these vaccines including a former VP of Pfizer, Dr. Michael Yeadon, who along with his peers concluded that NO ONE should take the mRNA vaccines until further testing is done, otherwise there is considerable danger of long term health effects including autoimmune disorders and infertility.

The mRNA gene therapy push is at its core a giant experimental trial using the masses as unwitting test subjects. We really have no idea what the consequences will ultimately be, but I have a feeling that within a couple of years we will see the results and it will not be pretty. There is a reason why governments are making it legally impossible to sue vaccine producers for vaccine side effects.

Beyond the many health concerns, there is the problem of incrementalism. One vaccination alone might not be a big threat. Maybe it’s a gamble that doesn’t end in snake eyes for most people. But what about the next one? And the next one? What about the next 20 jabs? There are now half a dozen different mutations of covid being mentioned by the government and the media as being potentially resistant to current vaccines and more dangerous than the first iteration of the virus.

This is surely a lie, but it drives home the reality that the mandates are meant to go on forever. If we accept them now, they will never end. Just because you are vaccinated today does not mean you will be free tomorrow.

And, with each new vaccine there arises the specter of vaccine passports. And with vaccine passports there arises the specter of complete government micro-management of people’s lives. Sure, you can choose to not get vaccinated, but the system is going to make certain you suffer for it until you can’t survive without the jab. The vaccine is a stepping stone to tyranny disguised as empathy and duty to your community.

The woke cult adores this kind of environment, however. This is the type of dark slimy cave they like to nest in. The need to control others is an aberration, a mental deficiency common to psychopaths, but in the new world the control freaks are given justification and free rein. The striking irony here is that these people like to control, but they also like to BE controlled. They find comfort and safety in their chains. The world is a scary place, and being independent within it takes courage, mental fortitude and a willingness to learn from our mistakes so that we gain wisdom and experience in the process.

The platitudes and pontificating of the leftist mob are an attempt to avoid the tribulations of real life; their submission to the state no matter how dubious or evil is an attempt to feel safe from their own irrational fears, their weaknesses and their inadequacies.

As the author Robert Anton Wilson once said:

“The obedient always think of themselves as virtuous rather than cowardly.”

*  *  *

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Tyler Durden Fri, 05/14/2021 - 23:40

Trudeau Begins Planning To Reopen US-Canada Border After More Than A Year

For months now, as most US states have largely reopened their economies (with even hard-hit NYC preparing to be "fully reopened" by July1), Canada has lagged behind, leaving restrictions on travel and businesses in place, while the pace of the country's vaccination campaign has lagged the US.

But apparently all the pressure is finally getting to PM Justin Trudeau, because Bloomberg reported Friday that Trudeau's government has begun preliminary internal discussions about reopening the border with the US, even as COVID cases have been more stubborn up north.

Senior officials have begun to formally talk about options for how to proceed, three people familiar with the matter said, speaking on the condition that they not be identified. One question under consideration is whether to employ a two-track system in which quarantine and testing requirements would be relaxed for vaccinated travelers.

The world’s longest international border has been shuttered since March 2020 to most non-essential travel, dramatically reducing land and air traffic between the two countries. The restrictions have hit the nation’s tourism and airline sectors particularly hard -- one estimate says the measures cost those industries about C$20 billion ($16.5 billion) in revenue last year.

“In the end, it’s a political decision, and at what point does the Canadian side -- and it’s the Canadian side at this point that’s the slowpoke -- decide that they’re ready to receive and what categories of people that they’ll open up to,” Michael Kergin, a former Canadian ambassador to the U.S., said in a phone interview. “A staged reopening would be the logical approach.”

Any reopening of the border would be gradual and contingent on cases continuing to decline in both the US and Canada. The third wave of the pandemic has hit the northern nation harder because of a vaccine rollout that’s been slowed by supply issues and shipment delays.

Many Canadian provinces remain in extended lockdowns even as the country has ramped up its vaccination campaign. Though the pace of new cases has slowed in April and May, the slowdown hasn't been as extreme as what's being seen in the US.

One issue is that the two sides need to agree on a common approach. For example, they would need to agree on a system for verifying vaccine passports, something Trudeau has said Canada is open to doing to help restore cross-border travel, even as President Biden has said he doesn't favor "vaccine passports" .

"It would make sense for us to align with partners around the world on some sort of proof of vaccination or vaccine certification," Trudeau said at a May 4 news conference. "We are looking very carefully at it, hoping to align with allied countries, but I can’t speak for the United States and the choices they might make around who to welcome into their country."

Trudeau is also working with the EU on a bilateral plan. The European bloc has already embraced vaccine passports and will soon begin allowing vaccinated tourists from the US, Canada and elsewhere to start returning to Europe for the summer holidays. As for whether Americans will be able to visit Toronto this summer, that remains unclear.

Tyler Durden Fri, 05/14/2021 - 23:20

American Medical Association Embraces Critical Race Theory, Rejects Meritocracy

Authored by GQ Pan via The Epoch Times (emphasis ours)

Doctors and nurses confer in a hospital in Leonardtown, Md., on April 8, 2020. (Win McNamee/Getty Images)

The American Medical Association (AMA), the largest national organization representing physicians and medical students in the United States, says it will set aside its long-held concept of meritocracy in favor of “racial justice” and “health equity.”

In an 86-page strategic plan released May 11, the AMA set out a three-year road map detailing how the advocacy group will use its influence to dismantle “structural and institutional racism” and advance “social and racial justice” in America’s health care system.

According to its plan, the AMA will be following a host of strategies, including implementing “racial and social justice” throughout the AMA enterprise culture, systems, policies, and practices; expanding medical education to include critical race theory; and pushing toward “racial healing, reconciliation, and transformation” regarding the organization’s own “racially discriminatory” past.

The AMA also makes clear that it now rejects the concepts of “equality” and “meritocracy,” which have been goals in the fields of medical science and medical care.

“Equality as a process means providing the same amounts and types of resources across populations,” the association said. “Seeking to treat everyone the ‘same,’ ignores the historical legacy of disinvestment and deprivation through historical policy and practice of marginalizing and minoritizing communities.”

While the AMA doesn’t run America’s health care system, it holds tremendous influence over medical schools and teaching hospitals that train physicians and other health professionals. Those institutes, the AMA says, must reject meritocracy, which it describes as a harmful narrative that “ignores the inequitably distributed social, structural and political resources.”

“The commonly held narrative of meritocracy is the idea that people are successful purely because of their individual effort,” it states. “Medical education has largely been based on such flawed meritocratic ideals, and it will take intentional focus and effort to recognize, review and revise this deeply flawed interpretation.”

Instead, the AMA suggests, medical schools should incorporate into their programs critical race theory, an offshoot of Marxism that views society through the lens of a power struggle between the race of oppressors and that of the oppressed. As a result, according to the theory, all long-established institutions of Western society are considered to be tools of racial oppression.

“Expand medical school and physician education to include equity, anti-racism, structural competency, public health and social sciences, critical race theory and historical basis of disease,” reads the document, which is loaded with critical race theory vocabulary.

In a statement that accompanied the plan, AMA President Gerald Harmon said he is “fully committed to this cause” and called on the medical community to join the effort.

“We believe that by leveraging the power of our membership, our influence, and our reach we can help bring real and lasting change to medicine,” he said.

The controversy around critical race theory in U.S. institutions gained more attention in 2020, when President Donald Trump banned the use of training materials based on “divisive and harmful sex and race-based ideologies” in federal workplaces. President Joe Biden rescinded the order, instead issuing an order stating that his administration would pursue “a comprehensive approach to advancing equity for all.”

Tyler Durden Fri, 05/14/2021 - 23:00

Biden's Green "No" Deal Exposes Virtue-Signaling Americans' NIMBY Views On Wind Power

The Biden administration's infrastructure proposal layouts 100% carbon-free or clean electricity by 2035. Such an ambitious goal will require a massive new workforce, hundreds of billions of dollars in funding, and community support.

But all is not kosher as wind turbine projects across the country have hit turbulence among local officials and residents. 

President Biden's proposed Energy Efficiency and Clean Electricity Standard calls for tens of thousands of wind turbines. These massive windmill-looking machines destroy any beautiful landscape and are noisy.

WSJ explains since 2015, about 300 government entities across the US have rejected wind farm projects. In Scituate, Massachusetts, people complained to local officials that a wind turbine in the coastal town was noisy and prevented them from sleeping. Officials restricted the operation of the wind turbine to only daytime use. 

On April 7, a proposed wind farm in Foster, Road Island, was rejected by the planning board. Residents heard horror stories from the people of Portsmouth who had turbines installed near their homes resulting in noise disturbances, vibrations, and loss in home values.

With Gallup survey data showing 70% of Americans want "more emphasis" on clean energy such as wind, one would think wind farms would be very receptive in towns and communities. 

What's shocking, as WSJ outlines, "the fiercest fights against Big Wind are happening in the bluest states." These virtue-signaling liberals who oppose wind farms can be characterized as "NIMBY," an acronym for the phrase "not in my back yard," or would rather see green energy developments, not in their community but elsewhere. 

John Riggi, a town councilman in Yates, New York, has been fighting a proposed wind farm project for seven years. He said, "we are fighting to keep our lands free from environmentally destructive, culture-killing, and unwanted industrial renewable-energy projects."

The common theme among municipalities and residents rejecting wind farms is the same. They complain about noise pollution, falling property values, ruined views, and the potential loss of tourism dollars. To fight Big Wind, local officials are implementing noise and height limits, setting zoning setbacks, and even building heliports, preventing the construction of wind turbines within a 1-mile radius of landing pads.

In December, Madison County, Iowa, outright banned new wind turbines. Conflicts among towns and Big Wind bring into question how the Biden administration will install tens of thousands of wind turbines and other green energy systems to fulfill their 100% carbon-free electricity by 2035. 

What's even more mindboggling are blue states filled with virtue-signaling liberals are opposing wind farms the most because they don't want these monstrous turbines in their backyard that create noise pollution, destroy views, and damaged property values. 

Tyler Durden Fri, 05/14/2021 - 22:40

The Age Of Fear: A Graduation Message For Terrifying Times

Authored by John W. Whitehead & Nisha Whitehead via

“Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.”

- Hermann Goering, Nazi leader

With all that is crashing down upon us, from government-manipulated crises to the blowback arising from a society that has repeatedly prized technological expedience and mass-marketed values over self-ownership and individual sovereignty, those coming of age today are facing some of the greatest threats to freedom the world has ever witnessed.

It’s downright frightening.

Young people will find themselves overtaxed, burdened with excessive college debt, and struggling to find worthwhile employment in a debt-ridden economy on the brink of implosion. Their privacy will be eviscerated by the surveillance state. They will be threatened, intimidated and beaten by militarized police. They will be the subjects of a military empire constantly waging war against shadowy enemies and government agents armed to the teeth ready and able to lock down the country at a moment’s notice.

As such, they will find themselves forced to march in lockstep with a government that no longer exists to serve the people but which demands that “we the people” be obedient slaves or suffer the consequences.

It’s a dismal prospect, isn’t it?

Unfortunately, we failed to guard against such a future.

Worse, we who should have known better neglected to maintain our freedoms or provide our young people with the tools necessary to resist oppression and survive, let alone succeed, in the impersonal jungle that is modern America.

We brought them into homes fractured by divorce, distracted by mindless entertainment, and obsessed with the pursuit of materialism. We institutionalized them in daycares and afterschool programs, substituting time with teachers and childcare workers for parental involvement. We turned them into test-takers instead of thinkers and automatons instead of activists.

We allowed them to languish in schools which not only look like prisons but function like prisons, as well—where conformity is the rule and freedom is the exception. We made them easy prey for our corporate overlords, while instilling in them the values of a celebrity-obsessed, technology-driven culture devoid of any true spirituality. And we taught them to believe that the pursuit of their own personal happiness trumped all other virtues, including any empathy whatsoever for their fellow human beings.

We have allowed them to be manipulated by a corporate culture that simply wants money and control. However, as Aldous Huxley warned: “The victim of mind-manipulation does not know he is a victim. To him, the walls of his prison are invisible and he believes himself to be free.”

No, we haven’t done this generation any favors.

Based on the current political climate, things could very well get much worse before they ever take a turn for the better. Here are a few pieces of advice that will hopefully help those coming of age today survive the perils of the journey that awaits:

Be a thinking individual. For all of its claims to champion the individual, American culture advocates a stark conformity which, as John F. Kennedy warned, is “the jailer of freedom, and the enemy of growth.” Worry less about fitting in with the rest of the world and instead, as Henry David Thoreau urged, become “a Columbus to whole new continents and worlds within you, opening new channels, not of trade, but of thought.”

Learn your rights. We’re losing our freedoms for one simple reason: most of us don’t know anything about our freedoms. At a minimum, anyone who has graduated from high school, let alone college, should know the Bill of Rights backwards and forwards. However, the average young person, let alone citizen, has very little knowledge of their rights for the simple reason that the educational system no longer teaches them and spends little time on the rights of the people. So grab a copy of the Constitution and the Bill of Rights, and study them at home. And when the time comes, stand up for your rights before it’s too late.

Speak truth to power. Don’t be naive about those in positions of authority. As James Madison, who wrote our Bill of Rights, observed, “All men having power ought to be distrusted.” We must learn the lessons of history. People in power, more often than not, abuse that power. To maintain our freedoms, this will mean challenging government officials whenever they exceed the bounds of their office.

Resist all things that numb you. Don’t measure your worth by what you own or earn. Likewise, don’t become mindless consumers unaware of the world around you. Resist all things that numb you, put you to sleep or help you “cope” with so-called “reality.” Those who establish the rules and laws that govern society’s actions desire compliant subjects. However, as George Orwell warned, “Until they become conscious, they will never rebel, and until after they rebelled, they cannot become conscious.” It is these conscious individuals who change the world for the better.

Don’t let technology turn you into zombies. Technology anesthetizes us to the all-too-real tragedies that surround us. Techno-gadgets are merely distractions from what’s really going on in America and around the world. As a result, we’ve begun mimicking the inhuman technology that surrounds us and we have lost our humanness. We’ve become sleepwalkers. If you’re going to make a difference in the world, you’re going to have to pull the earbuds out, turn off the cell phones and spend much less time viewing screens. Then, maybe you’ll see the world for what it really is.

Help others. We all have a calling in life. And I believe it boils down to one thing: You are here on this planet to help other people. In fact, none of us can exist very long without help from others. If we’re going to see any positive change for freedom, then we must change our view of what it means to be human and regain a sense of what it means to love and help one another. That will mean gaining the courage to stand up for the oppressed.

Give voice to moral outrage. As Martin Luther King Jr. said, “Our lives begin to end the day we become silent about the things that matter.” There is no shortage of issues on which to take a stand. For instance, on any given night, over half a million people in the U.S. are homeless, and half of them are elderly. There are 46 million Americans living at or below the poverty line, and 16 million children living in households without adequate access to food. Congress creates, on average, more than 50 new criminal laws each year. With more than 2 million Americans in prison, and close to 7 million adults in correctional care, the United States has the largest prison population in the world. At least 2.7 million children in the United States have at least one parent in prison. At least 400 to 500 innocent people are killed by police officers every year. Americans are now eight times more likely to die in a police confrontation than they are to be killed by a terrorist. On an average day in America, over 100 Americans have their homes raided by SWAT teams. It costs the American taxpayer $52.6 billion every year to be spied on by the government intelligence agencies tasked with surveillance, data collection, counterintelligence and covert activities. All the while, since 9/11, the U.S. has spent more than $1.6 trillion to wage wars abroad and police the rest of the world. This is an egregious affront to anyone who believes in freedom.

Cultivate spirituality, reject materialism and put people first. When the things that matter most have been subordinated to materialism, we have lost our moral compass. We must change our values to reflect something more meaningful than technology, materialism and politics. Standing at the pulpit of the Riverside Church in New York City in April 1967, Martin Luther King Jr. urged his listeners:

[W]e as a nation must undergo a radical revolution of values. We must rapidly begin the shift from a “thing-oriented” society to a “person-oriented” society. When machines and computers, profit motive and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.

Pitch in and do your part to make the world a better place. Don’t rely on someone else to do the heavy lifting for you. Don’t wait around for someone else to fix what ails you, your community or nation. As Gandhi urged: “Be the change you wish to see in the world.”

Say no to war. Addressing the graduates at Binghampton Central High School in 1968, at a time when the country was waging war “on different fields, on different levels, and with different weapons,” Twilight Zone creator Rod Serling declared:

Too many wars are fought almost as if by rote. Too many wars are fought out of sloganry, out of battle hymns, out of aged, musty appeals to patriotism that went out with knighthood and moats. Love your country because it is eminently worthy of your affection. Respect it because it deserves your respect. Be loyal to it because it cannot survive without your loyalty. But do not accept the shedding of blood as a natural function or a prescribed way of history—even if history points this up by its repetition. That men die for causes does not necessarily sanctify that cause. And that men are maimed and torn to pieces every fifteen and twenty years does not immortalize or deify the act of war... find another means that does not come with the killing of your fellow-man.

Finally, prepare yourselves for what lies ahead. The demons of our age—some of whom disguise themselves as politicians—delight in fomenting violence, sowing distrust and prejudice, and persuading the public to support tyranny disguised as patriotism and/or keeping us “safe.” Overcoming the evils of our age will require more than intellect and activism. It will require decency, morality, goodness, truth and toughness. As Serling concluded in his remarks to the graduating class of 1968:

“Toughness is the singular quality most required of you... we have left you a world far more botched than the one that was left to us... Part of your challenge is to seek out truth, to come up with a point of view not dictated to you by anyone, be he a congressman, even a minister... Are you tough enough to take the divisiveness of this land of ours, the fact that everything is polarized, black and white, this or that, absolutely right or absolutely wrong. This is one of the challenges. Be prepared to seek out the middle ground ... that wondrous and very difficult-to-find Valhalla where man can look to both sides and see the errant truths that exist on both sides. If you must swing left or you must swing right—respect the other side. Honor the motives that come from the other side. Argue, debate, rebut—but don't close those wondrous minds of yours to opposition. In their eyes, you're the opposition. And ultimately ... ultimately—you end divisiveness by compromise. And so long as men walk and breathe—there must be compromise...

Are you tough enough to face one of the uglier stains upon the fabric of our democracy—prejudice? It's the basic root of most evil. It's a part of the sickness of man. And it's a part of man's admission, his constant sick admission, that to exist he must find a scapegoat. To explain away his own deficiencies—he must try to find someone who he believes more deficient... Make your judgment of your fellow-man on what he says and what he believes and the way he acts. Be tough enough, please, to live with prejudice and give battle to it. It warps, it poisons, it distorts and it is self-destructive. It has fallout worse than a bomb ... and worst of all it cheapens and demeans anyone who permits himself the luxury of hating.”

As I make clear in my book Battlefield America: The War on the American People, the only way we’ll ever achieve change in this country is for the American people to finally say “enough is enough” and fight for the things that truly matter. 

It doesn’t matter how old you are or what your political ideology is. If you have something to say, speak up. Get active, and if need be, pick up a picket sign and get in the streets. And when civil liberties are violated, don’t remain silent about it.

Wake up, stand up, and make your activism count for something more than politics in a world turned upside down.

Tyler Durden Fri, 05/14/2021 - 22:20

Restaurateurs Begin To Automate Amid Labor Shortage 

Restaurant owners are blaming generous unemployment benefits for the current labor shortage. Ahead of the busy summer season, some restaurateurs are warning they might have no other choice but to use robots. 

According to Andrew Gruel, founder and CEO of Slapfish seafood, with 11 locations in the Southwestern US and new ones quickly opening up across the country, if the labor shortage persists, significant changes to the restaurant industry are coming in the form of automation.

"What I fear in terms of the long-term effects of this is that we start to automate and robotize our industry," Gruel told Fox News. "That's the only option if a lot of these businesses are going to continue to try and survive, especially when there's a lack of labor or if the cost of labor is so high that it's prohibitive for anybody to grow."

"It's is a really, really tough and tight labor market," said Gruel. "I've talked to restaurants who are not even opening because they don't have the staff to be able to hit a certain amount of hours."

Slapfish is so desperate for workers that it's offering dishwashers with no experience for $20-$25 per hour. The chain is even offering $500 signing bonuses. 

"We've had to alter our operations. We're limiting hours. My wife, myself, my kids we're in 12, 14, 16 hours a day," he said. "That's really what it's come down to. It's a lot of owner-operators stepping in, scaling back on growth, and getting down in the weeds themselves."

Gruel believes one primary reason for the labor shortage is President Biden's unemployment benefits that disincentivize people to work because they make more money collecting stimulus checks.

In one Jersey Shore restaurant, called Island Grill, the labor shortage is getting so ridiculous that they have already turned to robotic servers. 

"Once we realized that we may not have any servers this summer, we were like, 'Well, we may need to look into this a little more,'" Island Grill owner Andrew Yoa told News12. 

 Yoa said his restaurant is currently leasing the robot, known as "Little Peanut." The robot serves as a food runner and busboy to support server staff.

"It's basically extra arms for them so that they could be getting a drink order for someone and the meals for another table could be coming out or an appetizer could be coming out," he said. "It can do multiple stops so it can stop at one station, drop off an appetizer and go to drop someone's meal off."

A full-blown labor shortage is underway thanks to trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, but to sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world's greatest "under the radar" experiment in Universal Basic Income.

The National Owners Association (NOA), an independent, self-funded advocacy group of McDonald's franchisees, warned earlier this week that an "inflationary time bomb" is being triggered by labor shortages. 

NOA went on to warn that higher wages, signing bonuses, and paid interviews are no longer working as fast-food workers sit at home collecting stimulus checks. 

NOA said franchisees must increase pay and benefits to attract workers. These additional labor costs will be passed onto the consumer in the form of higher Big Mac prices. 

The Federal Reserve's narrative that inflation is "transitory" is a load of crap. Prepare for much higher costs at fast-food joints. 

Bank of America recently warned clients: "Buckle up! Inflation is here." 

As for now, technological unemployment is set to soar as workers are sidelined, showered by free money from the federal government that disincentivizes them from working. By the end of this decade, hundreds of thousands, if not millions, of fast-food workers will be displaced by automation and artificial intelligence. Now is the time to boost automation, get these workers out of crappy jobs and retrain them for the new economy. Or, in Biden's world, keep these people at home on UBI.

Tyler Durden Fri, 05/14/2021 - 22:00

Flaws Found In Australian Electronic Voting Software

Authored by Daniel Teng via The Epoch Times,

Four cyber and electoral system researchers have identified three flaws around the use of electronic voting at the 2020 election for the Australian Capital Territory (ACT) government.

The researchers said the issues did not affect the outcome of the most recent election but warned that the flaws could be exploited in future to sway voting patterns.

“We are not claiming that corruption occurred, nor that the system was designed with that goal in mind. There certainly were errors undetected by Elections ACT; however,” they said in a submission (pdf) to the ongoing Inquiry into the 2020 ACT Election and the Electoral Act.

“It is not good enough that there is no evidence of manipulation—a voting system should offer voters and scrutineers solid evidence that the votes are private, and the announced result is correct.”

The ACT, home to Australia’s capital city Canberra, was the first jurisdiction in the country to use the electronic voting and counting system (EVACS) and has done so in the subsequent 2004, 2008, 2012, and 2016 elections.

In the ACT Electoral Commission’s submission (pdf) to the Inquiry, they noted that the use of electronic voting had increased in the 2020 election to 70 percent, which is more than double the amount from the 2016 election.

Meanwhile, the submission compiled by Andrew Conway, Thomas Haines, Tim Wilson-Brown, and Vanessa Teague, CEO of Thinking Cybersecurity, said, “We found three errors that could potentially change the results of an election, though in 2020—by good luck—they do not seem to have changed the winners.”

The first was that EVACS had issues with how it handled preference votes. The system—which groups votes based on “transfer value”—failed to group certain votes because they acquired their transfer value in different ways.

“In 2020, this caused some tallies to be wrong by more than 20 votes; in general, it could cause much larger divergences,” they said.

A second issue was that the ACT Electoral Act explicitly requires counts to be “rounded down” to 6 decimal places, but EVACS rounded to the “nearest” 6 decimal places.

“This causes errors on the order of millionths of a vote and is very unlikely to change the outcome,” the researchers conceded.

Lastly, EVACS had further inaccuracies with rounding transfer values.

“This is important because a transfer value’s effect may be multiplied by thousands of votes. This causes errors on the order of thousandths of votes and could possibly make a difference in a very close race.”

Voters in the electorate of Eden-Monaro on July 2, 2016, in Canberra, Australia (Martin Ollman/Getty Images)

The researchers recommended the system—including voting code and system documentation—be made available publicly six months before an election so errors or vulnerabilities can be identified.

Further, all system modifications, audits, and declarations should be complete before candidate nominations close.

They also called for onsite e-voting systems to be used in conjunction with paper records that are voter-verifiable. Lastly, they said internet voting needed to be discontinued due to the “high levels” of risk involved in current internet software.

In Australia, similar concerns have been raised around New South Wales’ iVote system in 2019, where Teague, who at the time worked for the University of Melbourne, found an error that could convert valid votes into invalid ones and not be counted.

Scrutiny around voting systems, however, reached fever-pitch during the contentious 2020 U.S. presidential election.

In one instance in Michigan state’s Antrim County, two counts of the same vote—one conducted digitally and the latter via hand recount—revealed vastly different results.

Earlier in 2016, concerns were already being raised around electronic voting systems in the United States, including problems with faulty touchscreens, outdated software, hacking through a local wireless network, and poor encryption.

Tyler Durden Fri, 05/14/2021 - 21:40

Priced Out Of The Newly-Built Housing Market, Millennials Are Turning To "Fixer-Uppers"

What was once a feel-good story about millennials moving out of their parents basements and finally buying houses of their own has now turned into a story about them being priced out of the market. Thanks, Federal Reserve.

The scorching hot price of housing has forced millennials to now turn to fixer-uppers as a "more affordable solution" for homes to buy, a new Business Insider report notes. According to Bank of America Research's sixth annual millennial home improvement survey, 82% of millennials have said they are more likely to buy a fixer-upper than a newly built home.

The U.S. has been underbuilding homes since the Great Recession, the report notes, pushing millennials toward their "second housing crisis in 12 years". Demand from millennials has "only exacerbated the shrinking inventory" and "led to cutthroat competition rife with bidding wars",  BI notes. 

The report points out Instagram pages like Cheap Old Houses, which focuses on historic homes selling for no more than $100,000 that offer fixer-upper opportunities. The account has grown to 1.5 million followers from 750,000 early last year. 

The devil is, of course, in the details. Fixer-upper homes often wind up costing just as much as newly built homes. The B of A survey noted that while many buyers started their projects within 6 months of buying their homes, the larger portions of remodels - like bathroom and kitchen projects - get remanded to the back burner in favor of cheaper fixes like painting and landscaping.

Millennials "feel more at ease painting and wallpapering and upgrading appliances, compared to more complex projects like altering floor plans and roofing," BI notes. As a result, some are now taking out loans to complete larger portions of their remodels. B of A notes that loans are being used more frequently than cash to fund projects over $10,000. 42% of respondents are using debt, versus 34% back in 2017.

Recall, we noted days ago that the Federal Reserve continued to increase its holdings of mortgage-backed securities by the tune of $40 billion per month, fueling a housing bubble with record-low mortgage rates and low inventory. 

Even as the housing sector has more than recovered from the downturn, Chair Jerome Powell continues "pedal to the metal" with MBS purchases. According to the National Association of Realtors (NAR), this has resulted in the median price for a single-family home to soar the most on record in the first quarter. 

"Nationally, the median existing-home sales price rose 16.2% on a year-over-year basis to $319,200, a record high since 1989. All regions recorded double-digit year-over-year price growth, with the Northeast seeing a 22.1% increase, followed by the West (18.0%), South (15.0%), and Midwest (14.4%)," NAR said. 

And as home prices surge, Powell still doesn't have a satisfactory answer for why the Fed continues its massive MBS purchases every month. 

Here's Powell's quote in full from an April press conference:

"Yeah. I mean, we started buying MBS because the mortgage-backed security market was really experiencing severe dysfunction, and we've sort of articulated, you know, what our exit path is from that. It's not meant to provide direct assistance to the housing market. That was never the intent. It was really just to keep that as, it's a very close relation to the Treasury market, and a very important market on its own.

And so, that's why we bought as we did during the global financial crisis. We bought MBS, too. Again, not intention to send help to the housing market, which was really not a problem this time at all. So, and, you know, it's a situation where we will taper asset purchases when the time comes to do that, and those purchases will come to zero over time. And that time is not yet."

Lawrence Yun, NAR chief economist, said, "record-high home prices are happening across nearly all markets, big and small, even in those metros that have long been considered off-the-radar in prior years for many home-seekers." 

Of the 183 metro areas covered by NAR, 163 had double-digit price gains, up from 161 in the fourth quarter. In a separate report, Redfin's monthly data showed that in April, homes sold at their fastest pace on record with nearly half off-market within one week.

Tyler Durden Fri, 05/14/2021 - 21:20