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Falling From Grace

Falling From Grace

Years ago, Doug Casey mentioned in a correspondence to me, “Empires fall from grace with alarming speed.”

Every now and then, you receive a comment that, although it may have been stated casually, has a lasting effect, as it offers uncommon insight. For me, this was one of those and it’s one that I’ve kept handy at my desk since that time, as a reminder.

I’m from a British family, one that left the UK just as the British Empire was about to begin its decline. They expatriated to the “New World” to seek promise for the future.

As I’ve spent most of my life centred in a British colony – the Cayman Islands – I’ve had the opportunity to observe many British contract professionals who left the UK seeking advancement, which they almost invariably find in Cayman. Curiously, though, most returned to the UK after a contract or two, in the belief that the UK would bounce back from its decline, and they wanted to be on board when Britain “came back.”

This, of course, never happened. The US replaced the UK as the world’s foremost empire, and although the UK has had its ups and downs over the ensuing decades, it hasn’t returned to its former glory.

And it never will.

If we observe the empires of the world that have existed over the millennia, we see a consistent history of collapse without renewal. Whether we’re looking at the Roman Empire, the Ottoman Empire, the Spanish Empire, or any other that’s existed at one time, history is remarkably consistent: The decline and fall of any empire never reverses itself; nor does the empire return, once it’s fallen.

But of what importance is this to us today?

…click on the above link to read the rest of the article…

Russia To Seize $440 Million From JPMorgan

Russia To Seize $440 Million From JPMorgan

Seizing assets? Two can play at that game…

Just days after Washington voted to authorize the REPO Act – paving the way for the Biden administration confiscate billions in Russian sovereign assets which sit in US banks – it appears Moscow has a plan of its own (let’s call it the REVERSE REPO Act) as a Russian court has ordered the seizure of $440 million from JPMorgan.

The seizure order follows from Kremlin-run lender VTB launching legal action against the largest US bank to recoup money stuck under Washington’s sanctions regime.

As The FT reports, the order, published in the Russian court register on Wednesday, targets funds in JPMorgan’s accounts and shares in its Russian subsidiaries, according to the ruling issued by the arbitration court in St Petersburg.

The assets had been frozen by authorities in the wake of the western sanctions, and highlights some of the fallout western companies are feeling from the punitive measures against Moscow.

Specifically, The FT notes that the dispute centers on $439mn in funds that VTB held in a JPMorgan account in the US.

When Washington imposed sanctions on the Kremlin-run bank, JPMorgan had to move the funds to a separate escrow account. Under the US sanctions regime, neither VTB nor JPMorgan can access the funds.

In response, VTB last week filed a lawsuit against the New York-based group to get Russian authorities to freeze the equivalent amount in Russia, warning that JPMorgan was seeking to leave Russia and would refuse to pay any compensation.

The following day, JPMorgan filed its own lawsuit against the Russian lender in a US court to prevent a seizure of its assets, arguing that it had no way to reclaim VTB’s stranded US funds to compensate its own potential losses from the Russian lawsuit.

…click on the above link to read the rest of the article…

Houthis Launch Attack On US Cargo & Navy Ships Following Two Weeks Of Quiet

Houthis Launch Attack On US Cargo & Navy Ships Following Two Weeks Of Quiet

Yemen’s Iran-linked Houthis have announced new aggressive actions in the Gulf of Aden and Red Sea regions, saying late Wednesday that projectiles were launched against more US and Israeli-owned commercial vessels, and that a US warship was also targeted. This follows a period of relative quiet this month.

Houthi military spokesman Yahya Saree said in a video address that an antiship ballistic missile was launched against the Maersk Yorktown cargo ship in the Gulf of Aden, resulting in a direct hit.

The US military subsequently confirmed the fresh attack on the “US-flagged, owned, and operated vessel with 18 US and four Greek crew members”; however, the statement indicated no casualties or damage. The projectile may have exploded near the ship without hitting it.

File image, Maritime Executive

“There were no injuries or damage reported by US, coalition, or commercial ships,” US Central Command (CENTCOM) said in the statement, without indicating whether there was any level of an actual direct strike on the ship. Commenting further, Maritime Executive details:

They received a report from a vessel of an explosion in the water approximately 72 nautical miles southeast of the port of Djibouti. The statement only said that there had been an explosion “at a distance,” and that the crew and vessel were reported safe. 

CENTCOM further described that within hours of the attack on the Maersk Yorktown, US forces “successfully engaged and destroyed” four drones over Yemen.

The government of Greece this week also said it has been engaged in fresh counter-Houthi actions:

The Greek Ministry of National Defense said on Thursday that one of the country’s military ships serving in the European Union’s naval mission to counter the Houthis in the Red Sea intercepted two drones launched towards a commercial ship from Yemen.

…click on the above link to read the rest of the article…

America’s plastic catastrophe

America’s plastic catastrophe

China stopped taking our plastic waste. Now we’re drowning in it.

A globe wrapped in plastic
Americans produce 40 million tons of plastic waste each year. And it has to go somewhere. Carl Godfrey for BI

America has long had a plastic problem. It’s an urgent question — what do we do with the 40 million tons of plastic waste we produce annually? One year of plastic waste is roughly enough to smother the entirety of Manhattan a meter deep, and it has to go somewhere. For years, the answer was simple: Make a lot of it, dump most of it in the landfill, and make the rest of it someone else’s problem — the US regularly exported 7 million tons a year to China alone. Some of it was melted into lesser plastic; the rest was incinerated or buried.

But then, in 2018, China cut off plastic imports.

Now, America is coming to terms with a hard truth: Plastic was never designed to be recycled and there’s no profitable way to recycle 91% of it. The environmental impacts have been disastrous. About 430 million tons of plastic are produced globally every year, accounting for 14% of global oil demand. The refinement of plastic alone emits up to 235 million tons of greenhouse gases a year. Most of that plastic breaks down into microplastics that make their way into the air, rain, and our bodies. Almost 95% of America’s water supply contains plastic fibers.

While the US, the UK, and other European countries responded to China’s ban by sending their waste to places like Thailand and Malaysia, those countries then followed China in cutting off waste imports. The message was clear: The Global South would no longer be a dumping ground for the West.

A scavenger drinks water while collecting plastic waste to sell to a recycling center at a landfill in Medan, North Sumatra, Indonesia in March 2024
For decades, America sent its plastic waste to countries like China and Indonesia. Kartik Byma/AFP/Getty Images

…click on the above link to read the rest of the article…

US fertility rate dropped to lowest in a century as births dipped in 2023

The teen birth rate reached another record low in the US in 2023, while women ages 30 to 34 had the highest birth rate, according to provisional data from the CDC.

The fertility rate in the United States has been trending down for decades, and a new report shows that another drop in births in 2023 brought the rate down to the lowest it’s been in more than a century.

There were about 3.6 million babies born in 2023, or 54.4 live births for every 1,000 females ages 15 to 44, according to provisional data from the US Centers for Disease Control and Prevention’s National Center for Health Statistics.

After a steep plunge in the first year of the Covid-19 pandemic, the fertility rate has fluctuated. But the 3% drop between 2022 and 2023 brought the rate just below the previous low from 2020, which was 56 births for every 1,000 women of reproductive age.

“We’ve certainly had larger declines in the past. But decline fits the general pattern,” said Dr. Brady Hamilton, a statistician with the National Center for Health Statistics and lead author of the new report.

The birth rate fell among most age groups between 2022 and 2023, the new report shows.

The teen birth rate reached another record low of 13.2 births per 1,000 females ages 15 to 19, which is 79% lower than it was at the most recent peak from 1991. However, the rate of decline was slower than it’s been for the past decade and a half.

“The highest rates have, over time, been shifting towards women in their 30s whereas before it used to be with women in their 20s,” Hamilton said. “One factor, of course, is the option to wait…

…click on the above link to read the rest of the article…

The Politics and Policy of a National Climate Emergency Declaration

The Politics and Policy of a National Climate Emergency Declaration

If climate and energy policy matter, then here are the three questions to ask instead

Yesterday, Bloomberg reported that the Biden Administration is once again considering declaring a national “climate emergency,” explaining that such a declaration could be used to “halt [fossil fuel] exports, drilling.” Today, I have extensively updated a 2022 piece I wrote on such a declaration. The consideration of such a declaration reveals a stark divergence between election-year politics and effective climate and energy policies. Rather than asking whether a “climate emergency” declaration makes sense, I recommend the three other questions to ask instead. Comments welcomed!

“A significant feature of American government during the last fifteen years is the expansion of governmental activity on the basis of emergency.” That is the opening line in a 1949 academic paper on “Emergencies and the Presidency.” The role of the president in declaring a state of emergency to achieve policy goals has been a policy issue that dates back at least to President Abraham Lincoln.

Today, President Biden is once again being called upon by his supporters to declare a national emergency on climate change. Rather than argue for or against it, in this post I’m going to explain the history of such declarations, what recent experience says about their effectiveness in policy, and suggest the three questions we should be asking instead.

A national emergency declaration may be a political end, but it is also supposed to be a policy means — a mechanism intended to achieve certain outcomes in the national interest. Apart from the politics of using an emergency declaration to signal affinity with certain political interests, below I recommend the policy questions that we should be asking instead.

…click on the above link to read the rest of the article…

The Ghetto-ization of American Life

The Ghetto-ization of American Life

Behind the facade of normalization, even high-income lifestyles have been ghetto-ized.

Consider the defining characteristics of a ghetto:

1. The residents can’t afford to live elsewhere.

2. Everything is a rip-off because options are limited and retailers / service providers know residents have no other choice or must go to extraordinary effort to get better quality or a lower price.

3. Nothing works correctly or efficiently. Things break down and aren’t fixed properly. Maintenance is poor to non-existent. Any service requires standing in line or being on hold.

4. Local governance is corrupt and/or incompetent. Residents are viewed as a reliable “vote farm” for the incumbents, even though whatever little they accomplish for the residents doesn’t reduce the sources of immiseration.

5. The locale is unsafe. Cars are routinely broken into, there are security bars over windows and gates to entrances, everything not chained down is stolen–and even what is chained down is stolen.

6. There are few viable businesses and numerous empty storefronts.

7. The built environment is ugly: strip malls, used car lots, etc. There are few safe public spaces or parks that are well maintained and inviting.

8. Most of the commerce is corporate-owned outlets; the money doesn’t stay in the community.

9. Public transport is minimal and constantly being degraded.

10. They get you coming and going: whatever is available is double in cost, effort and time. Very little is convenient or easy. Services are far away.

11. Residents pay high rates of interest on debt.

12. There are few sources of healthy real food. The residents are unhealthy and self-medicate with a panoply of addictions to alcohol, meds, painkillers, gambling, social media, gaming, celebrity worship, etc.

13. Nobody in authority really cares what the residents experience, as they know the residents are atomized and ground down, incapable of cooperating in an organized fashion, and therefore powerless.

…click on the above link to read the rest of the article…

Congress Just Supercharged the Dollar’s Downfall

Congress Just Supercharged the Dollar’s Downfall

Confiscation, Weaponization, and De-Dollarization

“The dollar’s role as the world’s primary reserve currency is a boon for the United States but a bane for the rest of the world.”

~ Barry Eichengreen

The U.S. Senate has predictably voted to give $95 billion to Ukraine, Israel, and Taiwan, just three days after the House of Representatives green-lit the assistance in a rare Saturday session.

But beyond the big spending, there was a little something tucked into the Ukrainian aid bill that’ll have major implications for you as an American: the confiscation of Russian dollar assets.

The passage of the Rebuilding Economic Prosperity and Opportunity (REPO) Act, as it’s called, adds a whole new dimension to the story that Matt Smith brought to your attention on Monday.

The Dollar Weapon

Once President Biden signs it into law, he’ll gain the authority to seize more than $6 billion in Russian assets held by U.S. institutions.

Now, in case you’re wondering why Russia held these billions of dollars outside of Russia, it’s because that’s what countries do when they have surplus dollars; they put them to work in the safe and trustworthy nation of America.

The joke’s on you, Russia…

But the $6 billion is just the tip of the iceberg.

You see, it’s not about the amount; it’s about how the U.S. sets a precedent for other Western countries to confiscate the nearly $300 billion in Russian state assets currently frozen under their jurisdiction.

To be fair, it’s not the first instance of the U.S. government’s “weaponization” of the dollar… far from it.

But it has become especially pronounced in recent years, targeting adversaries such as Iran, Cuba, Venezuela, Afghanistan, North Korea, China, and, of course, Russia.

But it never affects just these countries alone…

…click on the above link to read the rest of the article…

Ukrainian Drone Strikes Target Russian Oil Refineries Again Despite White House Pleas

Ukrainian Drone Strikes Target Russian Oil Refineries Again Despite White House Pleas

Just days after the Biden administration signed a new military aid package worth billions of dollars to Ukraine, Kyiv launched a series of suicide drone attacks on Russian oil refineries. Biden’s top officials have pleaded with Kyiv to stop attacks on Russia’s energy infrastructure because of the fears that turmoil in crude markets would send pump prices in the US higher ahead of the presidential elections in November. 

“Our region is again under attack by Ukrainian UAVs,” Smolensk Governor Vasily Anokhin wrote in a post on Telegram on Wednesday. Kamikaze drones damaged oil facilities in western Russia.

Another drone attack hit the Lipetsk region further south, which is home to steel production plants and pharmaceutical sites, Governor Igor Artamonov said.

“The Kyiv criminal regime tried to hit infrastructure in Lipetsk industrial zone,” Artamonov said.

The Moscow Times pointed out:

A source in the Ukrainian defense sector confirmed to AFP on Wednesday that drones in the service of the Security Service of Ukraine (SBU) had carried out the attacks.

The source made no mention of the attack on Lipetsk but claimed two oil depots were destroyed in the Smolensk region.

“Rosneft lost two storage and pumping bases for fuels and lubricants in the towns of Yartsevo and Rozdorovo,” the source said, referring to the Russian state-controlled energy giant.

The Financial Times, citing unnamed US officials, recently said long-range drones have hit at least 20 energy facilities deep within Russia so far this year. Kyiv’s drone attacks on Russia’s energy complex have been frightening for the Biden administration, as Brent prices have risen to the $90/bbl level on higher war risk premiums. Higher energy costs feed into inflation as stagflation concerns mount in the US. Also, gasoline pump prices in the US are inching closer to the politically sensitive $4 level.

…click on the above link to read the rest of the article…

Ukraine War Funding and Failed Russian Sanctions. Is the US Empire Shooting Itself in the Foot?

*** 

This past weekend, April 20, 2024 the US House of Representatives passed a bill to provide Ukraine with another $61 billion in aid. The measure will quickly pass the Senate and be signed into law by Biden within days.

The funds, however, will make little difference to the outcome of the war on the ground as it appears most of the military hardware funded by the $61 billion has already been produced and much of it already shipped. Perhaps no more than $10 billion in additional new weapons and equipment will result from the latest $61 billion passed by Congress.

Subject to revision, initial reports of the composition of the $61 billion indicate $23.2 billion of it will go to pay US arms producers for weapons that have already been produced and delivered to Ukraine. Another $13.8 billion is earmarked to replace weapons from US military stocks that have been produced and are in the process of being shipped—but haven’t as yet—or are additional weapons still to be produced. The breakdown of this latter $13.8 amount is not yet clear in the initial reports. One might generously guess perhaps $10 billion at most represents weapons not yet produced, while $25-$30 billion represents weapons already shipped to Ukraine or in the current shipment pipeline.

In total, therefore, weapons already delivered to Ukraine, awaiting shipment, or yet to be produced amount to approximately $37 billion.

The remainder of the $61 billion includes $7.8 billion for financial assistance to Ukraine to pay for salaries of government employees through 2024. An additional $11.3 billion to finance current Pentagon operations in Ukraine—which sounds suspiciously like pay for US advisors, mercenaries, special ops, and US forces operating equipment like radars, advanced Patriot missile systems, etc. on the ground. Another $4.7 billion is for miscellaneous expenses, whatever that is.

…click on the above link to read the rest of the article…

Taxing Unrealized Gains Would Obliterate The U.S. Economy

Taxing Unrealized Gains Would Obliterate The U.S. Economy

The reasoning is so simple, a fifth grader could understand it – which is probably why the Biden administration doesn’t.

Having used up all of the rest of the batshit, insane, counterintuitive economic dirty tricks left in the “we’ll literally do anything but cut spending” bag, the Biden administration is pushing what could be the most destructive idea for our country since prohibition: taxing unrealized gains.

As part of its budget proposal for the 2025 fiscal year, the Biden administration is trying to raise an addition $4.3 trillion over 10 years in the worst way possible: imposing a minimum tax equal to 25 percent of a taxpayer’s taxable income and unrealized capital gains less the sum of their regular tax, for taxpayers with wealth over $100 million.

Putting aside the fact that this high-risk idea only amounts to a pittance, $430 billion per year (25% of which we just sent to foreign nations over the weekend in one fell swoop of a pen and it’s only April), the introduction of taxing unrealized gains could be one of the worst slippery slopes we ever dare to roll our country’s economy down.

I mean, shit, we could save $1 trillion just by not sending $100 billion a year to other nations for starters. But I digress. For an outline of exactly what an unrealized gains tax is, here’s the American Institute on Economic Research:

A tax on unrealized capital gains means that individuals are penalized for owning appreciating assets, regardless of whether they have realized any actual income from selling them.

If you purchased a stock for $100 this year, for example, and it increased to $110 next year, you would pay the assigned tax rate on the $10 capital gain. You didn’t sell the asset, so you don’t realize the $10 appreciation, but must pay the tax regardless.

…click on the above link to read the rest of the article…

US To Convert Pacific Oil Rigs Into Military Bases as Part of Anti-China Buildup

US To Convert Pacific Oil Rigs Into Military Bases as Part of Anti-China Buildup

The idea is to create mobile missile defense systems and resupply bases

The US Navy will convert surplus oil rigs in the western Pacific into mobile military bases as part of the US military buildup aimed at China, The Defense Post reported on Tuesday.

The naval engineering firm Gibbs & Cox developed the concept, known as the Mobile Defense/Depot Platform (MODEP), and presented it earlier this month at the Sea Air Space Expo. The idea is to convert oil rigs into mobile missile defense and resupply bases.

“Our target here is to find a solution to help the challenging problem of having capacity issues in the Western Pacific. For not enough cells, not enough missiles, not enough of being able to keep those ships in the forward station,” Dave Zook, an architect at Gibbs & Cox, told Naval News.

Gibbs & Cox claims that the floating bases would be able to hold 512 vertical launch system cells or 100 large missile launchers, which is five times the capacity of a US Navy destroyer. The idea is to counter China’s ballistic missiles that could take out US warships and bases in the region in the event of an open war.

US military officials have been explicit about the fact that they’re preparing for a direct war with China in the region despite the obvious risk of the conflict quickly turning nuclear. The US has been expanding its military footprint in the Philippines and in Pacific island nations to give China more targets that it will have to hit.

Gen. Kenneth Wilsbach, the former head of US Pacific Air Forces who is now the commander of Air Combat Command, made this clear in comments to Nikkei Asia last year.

“Obviously, we would like to disperse in as many places as we can to make the targeting problem for the Chinese as difficult as possible,” Wilsbach said. “A lot of those runways where we would operate from are in the Pacific Island nations.”

Oil prices aren’t the Fed’s biggest problem right now — American demand is, says an economist

Oil prices aren’t the Fed’s biggest problem right now — American demand is, says an economist

Inflation could see a resurgence in 2025, BlackRock strategists warned.
Inflation could see a resurgence in 2025, BlackRock strategists warned. Jonathan Kitchen/Getty Images

“I think what’s difficult for the Fed currently is actually the part of CPI that is being driven by demand, rather than the supply issues or the energy issues, which are perhaps easier to deal with,” Samy Chaar, the chief economist of Lombard Odier, told Bloomberg TV. The Swiss private bank managed 193 billion Swiss francs, or $212.8 billion, in assets at the end of December.

A key inflation metric for the Fed, the Personal Consumption Expenditures Price Index, was little changed in March over its 2.8% reading in February. Federal Reserve chair Jerome Powell highlighted the index earlier this week as he signaled that interest rate cuts may come later, rather than sooner.

The US economy has been strong, with job growth and retail sales also rising more than expected for the month of March.

“The problem with the US is the sticky part that comes from services. Services is demand, and that demand needs to come from somewhere — and that’s a robust economy,” Chaar told Bloomberg. A gauge from the Institute for Supply Management showed the US service sector expanded moderately in March.

“Consumers are consuming because they have jobs, because they have rising incomes,” Chaar said.

This means inflation is fueled by demand rather than oil supply, even if a rise in energy prices complicates the Fed’s job, he said.

The Fed is now trying to engineer a soft landing for the hot US economy without causing it to tip into a recession.

“I would say the biggest challenge here for the Fed is to manage the demand of the US economy,” Chaar said. “It comes from domestic America, not from the Middle East.”

Russia warns the world is on the brink of a ‘direct military clash’ between nuclear powers

Russia warned Monday that the risk of a “direct military clash” between Russia and nuclear powers in the West is rising.

“Westerners are dangerously balancing on the brink of a direct military clash between nuclear powers, which is fraught with catastrophic consequences,” Russian Foreign Minister Sergey Lavrov said in a video message to the participants of the Moscow Nonproliferation Conference.

The comments come after Russia reacted angrily to the U.S. House of Representatives passing a $61 billion foreign aid package for Kyiv at the weekend.

House lawmakers approved the aid Saturday despite long-standing objections from hardline Republicans; the bill now passes to the Democratic-majority Senate, which is expected to approve the legislation later this week before it’s passed to President Joe Biden to sign it into law.

U.S. President Joe Biden and Ukraine's President Volodymyr Zelenskiy react during a joint press conference at the White House in Washington, U.S., December 12, 2023. REUTERS/Leah Millis
U.S. President Joe Biden and Ukraine’s President Volodymyr Zelenskiy react during a joint press conference at the White House in Washington, U.S., December 12, 2023.
Leah Millis | Reuters

The aid is a lifeline for Ukraine, whose forces in the east of the country have had to ration their usage of shells amid shortages of supplies; Russian forces have been making gains in the Donbas region, with Ukraine pleading for more air defense systems, artillery and ammunition to turn the tide in the war.

Ukrainian President Volodymyr Zelenskyy thanked U.S. lawmakers saying the bill passed by the House “will keep the war from expanding, save thousands and thousands of lives, and help both of our nations to become stronger.” He urged the Senate to pass the bill as quickly as possible.

…click on the above link to read the rest of the article…

A $250 Million War Game and Its Shocking Outcome

A $250 Million War Game and Its Shocking Outcome

Pentagon's largest military simulation

At a cost of $250 million, Millennium Challenge 2002 was the largest and most expensive war game in Pentagon history.

With over 13,500 participants, the US government took over two years to design it.

The exercise pitted Iran against the US military. Washington intended to show how the US military could defeat Iran with ease.

Paul Van Riper, a three-star general and 41-year veteran of the Marine Corps, led Iranian forces in the war game. His mission was to take on the full force of the US military, led by an aircraft carrier battle group and a large amphibious landing force in the Persian Gulf.

The results shocked everyone…

Van Riper waited for the US Navy to pass through the shallow and narrow Strait of Hormuz, which made them sitting ducks for Iran’s unconventional and asymmetric warfare techniques.

The idea is to level the playing field against a superior enemy with swarms of explosive-laden suicide speedboats, low-flying planes carrying anti-ship missiles, naval mines, and land-based anti-ship ballistic missiles, among other low-cost but highly effective measures.

In minutes, Van Riper emerged victorious over his superior opponent and sank all 19 ships. Had it been real life, 20,000 US sailors and marines would have died.

Millennium Challenge 2002 was a complete disaster for the Pentagon, which had spent a quarter of a billion dollars to set up the extensive war game. It produced the exact opposite outcome they wanted.

So what did the Pentagon do with these humbling results?

Like a child playing a video game, they hit the reset button. They then rigged and scripted the game so that the US was guaranteed to win.

After realizing the integrity of the war game had been compromised, a disgusted Van Riper walked out mid-game. He then said:

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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