With 'Halving' Imminent, Peter Schiff Says 'Bitcoin Has No Value'

Via SchiffGold.com,

Peter recently appeared on Market Overtime with Oliver Renick for an interview. In their wide-ranging discussion, Peter speaks on monetary policy, the reliability of inflation data, and reasons to avoid Bitcoin.

Contrary to the popular narrative, gold’s recent rise is not because of world conflicts. Inflation is the driving force behind the metal’s price action:

“This is just the beginning of a massive re-pricing of gold, and people aren’t even buying it yet. You have central banks buying, but investors aren’t even buying gold. Retail investors, the institutions— they’re not in the market at all. They don’t even understand why gold is rising. They’re attributing it to geopolitical risks, but it’s all about inflation. The key is that the markets have the inflation story wrong. The Fed rate hikes up to five and a quarter, five and a half, have not been nearly enough to put the inflation genie back in the bottle.”

As the media and policymakers begin to question the feasibility of a 2% inflation target, their preferred measures of inflation are probably not as accurate as they should be:

“I’d say [inflation’s] at least double what the CPI is. So if the government claims inflation is two, it’s four. And when they claimed it was nine, it was probably 18. People are struggling. It’s a lousy economy. People’s real incomes have been eviscerated by inflation. They’re forced to work multiple jobs. They’re drowning in a mountain of debt, and we’re headed for a major disaster.”

Lurking under the economy’s surface are decades of residual damage from artificially low-interest rates, especially in the housing and banking sectors:

“The entire banking system is insolvent. That’s the big problem— when interest rates were kept at zero, and all these homeowners were refinancing their mortgages at 3%. The banks own all that paper. They’re insolvent now! They own all these treasuries. Thanks to the government— the Fed— the entire US banking system is insolvent. And if the Fed actually raised interest rates to an appropriate level, all the banks would fail, including all the too-big-to-fail banks.”

The omens of economic disaster remind Peter of warnings he made in the early 2000s:

“I kept warning about the mistakes the Fed was making, and the housing bubble, and the financial crisis that was going to hit when the bubble popped. People would say, ‘When, when, when?’ Well, I don’t have a date. I just know that it’s going to happen. I can’t tell you exactly when. It’s the same thing now. But a lot of things have happened now, just like they did in 2007, that indicated that the day of reckoning was getting closer.”

Pivoting to the crypto vs. gold debate, Peter argues gold’s value stems from non-monetary uses that Bitcoin lacks:

“They say, ‘Bitcoin is a store of value,’ but it doesn’t have any value. You can’t store what you don’t have. The reason gold is a store of value is I can take the gold that I have and in a hundred years, I can make a watch with it. I can conduct electricity with it. I can use it in medicine, in dentistry. Gold has a real purpose in the world. It is a commodity that is used throughout industry.”

He thinks Bitcoin’s recent highs are driven by ETF hype, perhaps a prime example of the “greater fool” theory:

“The public was dumping their gold stocks to put their money into these ETFs. But the problem is, when the people who bought these ETFs want to get out, it will be impossible. … There won’t be enough demand for the people who bought to get out. The price is going to crash. We’re going to see the biggest Bitcoin crash we’ve ever seen. … These are paper hands. They’re not diamond hands.”

Bitcoin and gold are categorically different assets, and investing in Bitcoin is a risky bet:

“Look, if you want to go in Bitcoin, take the money that you would have used to buy lottery tickets or if you’re planning a trip to Vegas, instead of playing craps or roulette, you can gamble with Bitcoin. But don’t confuse it with an investment. It’s not even a legitimate speculation. It’s just pure gambling.”

Be sure to check out Peter’s other recent interview on Fox Business, and stay tuned for Peter’s response later this week to Jerome Powell’s remarks made on Tuesday, April 16th.

Tyler Durden Fri, 04/19/2024 - 09:00

Economic Warning From The NFIB

Authored by Lance Roberts via RealInvestmentAdvice.com,

The latest National Federation of Independent Business (NFIB) survey was an economic warning that departed widely from more robust governmental reports. In a recent analysis of small businesses, we discussed the importance those business owners play in the economy.

“It is crucial to understand that small and mid-sized businesses comprise a substantial percentage of the U.S. economy. Roughly 60% of all companies in the U.S. have less than ten employees.

Small businesses drive the economy, employment, and wages. Therefore, the NFIB’s statements are highly relevant to the economy’s current state compared to the headline economic data from Government sources.”

While recent government data on economic growth and employment remain robust, the NFIB small business confidence survey declined in its latest reading. Not only did it fall to the lowest level in 11 years, but, as far as an economic warning goes, it remained at levels historically associated with a recessionary economy.

The decline in confidence should be unsurprising given the largest deviation of interest rates from their 5-year average since 1975. Higher borrowing costs impede business growth for small businesses, as they don’t have access to the bond market like major companies.

Therefore, as the economy slows and interest rates rise, small business owners turn to their local banks for operating loans. However, higher rates and tighter lending standards make access to capital more difficult.

Of course, given that capital is the lifeblood of any business, decisions on hiring, capital expenditures, and expansion hang in the balance.

Economic Warning – Capital Expenditures

It should be unsurprising that if the economy were expanding as quickly as headline data suggests, business owners would be expending capital to increase capacity to meet rising demand. However, in the most recent NFIB report, the percentage of business owners planning capital expenditures over the 3-6 months dropped to the lowest level since the pandemic-driven shutdown.

Again, given that small businesses comprise about 50% of the economy, there is more than just a casual relationship between their capital expenditure plans (CapEx) and real gross private investment, which is part of the GDP equation.

In other words, if small businesses cut back on CapEx, this will eventually translate into slower rates of private investment and, ultimately, economic growth in coming quarters.

As shown, the correlation between small business CapEx plans and economic growth should not be dismissed. While mainstream economists are becoming increasingly optimistic about an “economic reflation,” the economic warning between real GDP and CapEx suggests caution.

Of course, if small businesses are unwilling to increase CapEx, it is because there is a lack of demand to justify those expenditures. Therefore, if CapEx is falling, we should expect economic warnings from employment and sales.

Something Amiss With Sales

Many reasons feed into a small business owner’s decision NOT to invest in their business. As noted above, tighter bank lending standards and increased borrowing costs certainly weigh on that decision. However, if “business is booming,” business owners will find the capital needed to meet increased demand. However, looking deeper into the NFIB data, we find rising concerns about the “demand” side of the equation.

The NFIB publishes several data points from the survey concerning the “concerns” small business owners have. These cover many concerns, from government regulations to taxes, labor costs, sales, and other concerns confronting business owners. When it comes to the “demand” side of the equation, there are three crucial categories:

1. Poor sales (demand),

2. Cost of labor (the most significant expense to any business), and

3. Is it a “Good time to expand?” (Capex)

In the chart below, I have inverted “Good time to expand,” so it correlates with rising concerns about the cost of labor and poor sales. What should be obvious is that the average of these concerns escalates as economic growth weakens (recessionary periods) and falls during economic recoveries. Currently, these rising concerns should provide an economic warning to economists.

Examining sales and employment figures can help us understand why business owners remain pessimistic about the overall economy. The chart below shows the NFIB members’ sales expectations over the next quarter compared to the previous quarter. The black line is the average of both with a long-term median.

Unsurprisingly, business owners are always optimistic that sales will improve in the next quarter. However, actual sales tend to fall short of those expectations. The two have a very high correlation, which is why the average of both provides valuable information. Sales expectations and actual sales are well below levels typically witnessed during recessions. With sales (demand) weak, there is little need to increase production (supply) substantially.

Here is the economic warning to pay attention to. Real retail sales comprise about 40% of personal consumption expenditures (PCE), roughly 70% of the economic growth rate. The decline in the average of actual and expected sales of small businesses suggests weaker retail sales and, by extension, a slower economic growth rate.

Employment Warning

The demand side of the economic equation is crucially important. If the demand for a business owner’s products or services declines, there is little need to increase employment. Therefore, if economic growth was as robust as headlines suggest, why are small businesses’ plans to increase employment declining sharply?

Furthermore, when demand falls, business owners look to cut operating costs to protect profitability. While cutting future employment is part of that equation, so are plans to raise worker compensation.

The last chart is crucial. The U.S. is a consumption-based economy. However, consumers can not consume without producing something first. Production must come first to generate the income needed for that consumption. The cycle is displayed below.

As employees receive fewer compensation increases (raises, bonuses, etc.) amid rising living costs, they cut consumption, which translates into slower economic growth rates. In turn, business owners cut employment and compensation further. It is a virtual spiral that historically ends in recession.

While this time could certainly be different, the economic warnings from the NFIB survey should not be dismissed. The data could explain why the Fed is becoming more adamant about cutting rates.

Tyler Durden Fri, 04/19/2024 - 08:20

Today, in the CalculatedRisk Real Estate Newsletter: NMHC: "Apartment Market Continues to Loosen"

Excerpt:

From the NMHC: Apartment Market Continues to Loosen Amidst Worsening Financing Conditions

Apartment market conditions continued to weaken in the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions for April 2024. With the exception of Sales Volume (52), which turned positive this quarter, the Market Tightness (41), Equity Financing (49), and Debt Financing (44) indexes all came in below the breakeven level (50).
...
"[T]he U.S. apartment market continues to absorb historic levels of new supply, resulting in rising vacancy rates and decreasing rent growth.”
...

• The Market Tightness Index came in at 41 this quarter – below the breakeven level (50) – indicating looser market conditions for the seventh consecutive quarter. That said, a plurality of respondents (42%) thought market conditions were unchanged compared to three months ago, while 37% thought markets have become looser. Twenty percent of respondents reported tighter markets than three months ago, up from 5% in January.

The quarterly index increased to 41 in April from 23 in January. Any reading below 50 indicates looser conditions from the previous quarter.

This index has been an excellent leading indicator for rents and vacancy rates, and this suggests higher vacancy rates and a further weakness in asking rents. This is the seventh consecutive quarter with looser conditions than the previous quarter.

There is much more in the article.

Futures Reverse All Losses, Oil Slides After Iran Plays Down Israeli Attacks, Signals No Retaliation

While US futures are still modestly in the red, they are not only well off the worst overnight levels, but they are almost unchanged since yesterday's close following a performative Israeli retaliation. which followed a performative Iranian attack, which appears to be the end of the story. For those who missed it, early on Friday local time, explosions echoed over an Iranian city on Friday in what sources described as an Israeli attack, but Tehran played down the incident and indicated it had no plans for retaliation - a response that appeared gauged towards averting region-wide war. The limited scale of the attack and Iran's muted response both appeared to signal a successful effort by diplomats who have been working round the clock to avert all-out war since an Iranian drone and missile attack on Israel last Saturday. And so, after a whole lot of nothing overnight, as of 730am, S&P futures are practically unchanged at 5,045, Brent is actually lower compared to Thursday's close after briefly rising above $90 earlier, gold is unchanged, bonds are modestly firmer though have pared the majority of the overnight advances, and bitcoin is higher after aggressively dumping late on Thursday. There is nothing of significance on today's calendar.

Premarket, megacap tech are mostly lower: TSLA -1.8%, NVDA -1.1%, AMZN -95bp, META -91bp. NFLX tumbled fall 6.6% after the streaming-video company reported its first-quarter earnings. While the results were better than expected, with customer additions especially strong, its second-quarter revenue forecast was a slight disappointment. Here are some other notable premarket movers:

• First Solar shares gain 1.8% after an upgrade to overweight at Wells Fargo.
• Intuitive Surgical shares climb 2.2% after the medical equipment manufacturer reported adjusted earnings per share for the first quarter that beat the average analyst estimate.
• ON Semi shares slip 3.1% after a downgrade to underperform at BNPP Exane.
• Paramount shares jump 11% as Apollo Global and Sony are said to be considering a joint offer for the media company.
• Shopify advances 3.2% after the e-commerce company was upgraded to overweight from equal-weight at Morgan Stanley, which said upmarket share gains “support confidence in the durability of growth against tempered consumer-spending expectations.”

The latest fake escalation cap a dismal week for markets after solid economic readings and hawkish Fedspeak that have overturned Powell's December pivot and have forced investors to revise the timing of a keenly anticipated pivot to easier policy and the scale of potential rate cuts.

“With inflation sticky, central banks don’t have the option to look through spikes in oil prices, should they happen,” said Rajeev De Mello, a global macro portfolio manager at GAMA Asset Management. “They will have to revert to higher for longer rates which at this stage will be a shock to all markets.”

The latest the spook the market was NY Fed President John Williams who said while it isn’t his baseline expectation, even a rate hike is possible if warranted. His Atlanta counterpart Raphael Bostic said he doesn’t think it will be appropriate to ease until toward the end of 2024. The Fed may hold rates steady all year, Minneapolis Fed chief Neel Kashkari told Fox News Channel.

Meanwhile, on the geopolitical front, an Iranian military official signaled Tehran doesn’t feel compelled to react to the blasts which US officials say were caused by Israeli strikes, with semi-official Mehr agency quoting Army Commander-in-Chief Abdolrahim Mousavi saying Tehran has already reacted to Israeli threats. Despite Friday’s moves to allay fears of a wider war in the Mideast, the events are unsettling and will keep investors from taking bold bets, according to Michael Brown, strategist at Pepperstone Group Ltd. in London.

“No one will want to be short of crude and the havens ahead of the weekend,” he said. “From a risk-management perspective you can’t say definitively that geopolitical risk is done and dusted. So we may see another bout of de-risking. Ultimately it’s a case of people being reluctant to take on too much exposure.”

Europe's Stoxx 600 is down 0.4%, but it too reversed most of the overnight losses.  The food, beverage and tobacco sub-index leads gains whlie retail stocks decline the most. In company news, L’Oreal surged after better-than-expected quarterly sales. Here are the most notable European movers:

• L’Oreal (OR FP +4.3%) rises after the cosmetics maker’s like-for-like sales beat in the first quarter, quelling worries over a slowdown in the beauty market
• Royal Unibrew (RBREW DC +12%) soars after the brewer reported preliminary net revenue and Ebit that came ahead of consensus expectations
• Warehouses De Pauw (WDP BB +4.2%) rises after releasing 1Q earnings, with Oddo BHF seeing results broadly in line with expectations
• Sodexo (SW FP +1.9%) advances after the food services firm reported an organic revenue growth beat for the first half and raised its sales growth guidance
• Suess MicroTec (SMHN GY +4.4%) gains after Stifel upgraded its view on the semiconductor equipment maker to buy on its strong preliminary first-quarter
• Volvo (VOLVB SS -4.6%) falls after holder Geely sells the entirety of its class B shares in the truckmaker. Kepler Cheuvreux says the move is not much of a surprise
• Man Group (EMG LN -5.3%) falls after first quarter results showed net outflows of $1.6 billion in the period, mainly from the hedge fund firm’s alternative money pools
• Sartorius Stedim (DIM FP -4.8%) drops following results that disappointed investors. Intron Health cut its price target to the lowest among analysts tracked by Bloomberg
• EssilorLuxottica (EL FP -1.5%) falls after the glasses manufacturer reported revenue for the first quarter broadly in line with market expectations
• Schneider Electric (SU FP -2.6%) falls after announcing discussions with Bentley Systems on a potential strategic transaction. Oddo says it would be a good fit, but flags some questions surrounding the valuation
• Eurocash (EUR PW -4.8%) drops as the food retailer and wholesaler reported a 16% Ebitda deterioration in 1Q due to higher wages and a price war between discounters

In FX, the Bloomberg Dollar Spot Index is little changed while the Swiss franc remains the best performer among the G-10’s, rising 0.4% versus the greenback. The pound gains 0.1% with little reaction shown to weaker-than-expected UK retail sales data.

In rates, treasuries remain richer across the curve after paring the Asia-session advance sparked by reports Israel launched retaliatory strike on Iran. Yields lower by 4bp to 6bp as US trading gets under way, back toward middle of day’s range.  US 10-year yields around 4.58% after briefly dropping below 4.50% during Asia session; inverted 2s10s spread remains near lows of the day as intermediates outperform, flatter by around 2bp.  Fed rate-cut expectations edged higher, with OIS pricing in 41bp of easing by year-end vs 38bp at Thursday’s close. Treasury coupon auctions next week — final ones of the February-to-April financing quarter — include 2-, 5- and 7-year notes Tuesday to Thursday.

In commodities, WTI crude oil futures are down ~1% near $82/bbl after erasing a more than 4% surge above $86/bbl as media in both countries appeared to downplay the severity of the incident. Gold is unchanged around $2377.

Bitcoin rises 2% ahead of the halving event expected later Friday.

US economic data slate empty for the session; Fed speakers include Goolsbee at 10:30am, and Fed releases Financial Stability Report at 4pm.

Market Snapshot

• S&P 500 futures down 0.5% to 5,024.25
• MXAP down 1.7% to 167.50
• MXAPJ down 1.6% to 514.79
• Nikkei down 2.7% to 37,068.35
• Topix down 1.9% to 2,626.32
• Hang Seng Index down 1.0% to 16,224.14
• Shanghai Composite down 0.3% to 3,065.26
• Sensex up 0.7% to 73,010.87
• Australia S&P/ASX 200 down 1.0% to 7,567.28
• Kospi down 1.6% to 2,591.86
• STOXX Europe 600 down 0.7% to 496.11
• German 10Y yield little changed at 2.47%
• Euro little changed at $1.0647
• Brent Futures little changed at $87.12/bbl
• Gold spot up 0.1% to $2,382.51
• US Dollar Index little changed at 106.10

Top Overnight News

• Israel launched a retaliatory strike on Iran less than a week after Tehran’s rocket and drone barrage, according to two US officials. Iran downplayed the incident and said an attack by Israeli drones failed. The IAEA said no nuclear sites were damaged. Iran said it has no plans to retaliate immediately. BBG
• China ordered Apple to remove some of the world’s most popular chat messaging apps from its app store in the country, the latest example of censorship demands on the iPhone seller in the company’s second-biggest market. “We are obligated to follow the laws in the countries where we operate, even when we disagree,” an Apple spokesperson said. WSJ
• China to impose increased fees on imports of propionic acid from the US, a move that comes just days after Biden called for higher tariffs on Chinese steel/aluminum imports. WSJ
• Japan’s national CPI undershoots the Street in Mar, coming in at +2.9% (ex-food/energy) vs. the Street’s +3% forecast (and down from +3.2% in Feb). RTRS  
• Raphael Bostic reiterated his view that the Fed shouldn’t lower rates until closer to the end of the year, while Neel Kashkari raised the prospect of holding all year. BBG
• A full panel of 12 jurors has now been selected to decide Donald Trump’s criminal trial in Manhattan, the first for a former American president and a crucial challenge to his bid to regain the Oval Office. Several more alternate jurors still need to be chosen, but the judge overseeing the case indicated that opening statements could begin on Monday. NYT
• NVDA is the subject of a somewhat cautious cover story in Barron’s, with the article focused on the intense competition facing the company, from both 3rd parties (like AMD) and some of its largest customers. Barron's
• US bank reserves fell by $286 billion in the week through Wednesday — the largest drop in two years — as Americans paid income tax, Fed data show. Total holdings in the banking system were $3.33 trillion, a level Fed officials weighing the path for QT may characterize as abundant, though reserves are pushing nearer to scarcity. BBG
• Tesla recalled 3,878 Cybertrucks, an NHTSA notice showed. It said the accelerator pedal pad may dislodge and become trapped, causing the vehicle to accelerate unintentionally and increasing the risk of a crash. BBG

Earnings

• Netflix Inc (NFLX) Q1 2024 (USD): EPS 5.28 (exp. 4.52), Revenue 9.37bln (exp. 9.28bln), Q1 Subscriber Additions 9.33mln (exp. 5.11mln). Guides Q2 EPS USD 4.68 (exp. 4.54). Guides Q2 revenue USD 9.49bln (exp. 9.51bln). Guides Q2 Subscriber Additions to be lower in Q2 vs Q1 due to typical seasonality (exp. 3.51mln). Guides Q2 operating margin 26.6% (exp. 25.4%).Will stop reporting quarterly member ship number and ARM starting from Q1 2025 earnings. Shares -6.1% pre-market
• L'Oreal shares gained as much as 4.2% in the European session after strong results and making note of strong growth in China.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were lower across the board as the initial tech-related selling stemming from Wall St was exacerbated by reports of explosions in Iran following an Israeli operation although stocks are off today's worst levels as Iran downplayed and later denied the attack. ASX 200 was pressured with losses led by underperformance in tech and amid the bout of geopolitical-related turmoil. Nikkei 225 suffered intraday losses of around 3% and briefly dipped beneath the 37,000 level.
Hang Seng and Shanghai Comp. were lower but with losses only mild compared to the regional counterparts

Top Asian News

• BoJ Governor Ueda said there is a chance weak Yen may affect trend inflation and if so, could lead to a policy shift.
• Nissan (7201 JT) downgrades guidance: revises 2023/24 forecasts (JPY): Net 370bln (prev. 390bln), Operating 530bln (prev. 620bln); revision lower due to lower sales volume from and various cost reliefs made to suppliers e.g. inflation & other factors.
• Japanese Cabinet Secretary Hayashi says continue to closely monitor impact from oil prices on Japanese economy with a sense of urgency.
• South Korean regulator chief says will closely monitor markets and prepare to deploy market stabilising measures as needed

European bourses, Stoxx600 (-0.6%) are entirely in the red, with sentiment hit after Israel conducted an operation against Iran on a military airbase near Isfahan; though Iran later downplayed the attack, which helped to lift sentiment off worst levels, with contracts continuing to pare losses in otherwise quiet newsflow. European sectors hold a strong negative tilt; Industrials is found at the foot of the pile, with Schneider Electric (-1.9%) leading the losses. Autos are also lagging, after Nissan downgraded its guidance citing lower sales volume. US Equity Futures (ES -0.6%, NQ -0.8%, RTY 0.7%) are entirely in the red, though very much off worst levels seen overnight, sparked by the Israeli attacks on Iran. As for stock specifics, Netflix (-6.1%) is lower in the pre-market despite reporting strong headline metrics; however, the Co’s Q2 guidance fell short of expectations.

Top European News

• ECB's Vujcic said so far FX market has been very calm about the risk of Fed-ECB divergence.
• ECB's Kazaks says it is too soon to declare victory on inflation, economy isn't strong by confidence is improving. ECB takes the Fed into account.
• German government expects GDP to grow 0.3% in 2024 (prev. forecast of 0.2%), according to Reuters sources; sees inflation at 2.4% (prev. 2.8%).
• US President Biden weighs more than USD 1bln in new arms for Israel; Considering supply tank shells, mortars and vehicles, via WSJ

FX

• USD is mixed vs peers, with the Dollar softer against safe-havens JPY and CHF but out-muscling risk-sensitive AUD and NZD. DXY went as high as 106.35 before scaling back gains.
• EUR is firmer vs. the USD after recovering geopolitically-inspired losses overnight which dragged the pair to a 1.0611 trough; currently off lows at 1.065.
• Yen slightly firmer vs. the USD despite softer-than-expected Japanese inflation metrics overnight. Safe-haven status is likely playing a role here but ultimately the pair remains on a 154 handle after delving as low as 153.60.
• Antipodeans are both lower vs. the USD and suffering in the current risk environment. AUD/USD printed a fresh YTD trough at 0.6362, though has since pared.
• CBRT Survey: End 2024 CPI 44.16% (prev. 44.19%), 12-month CPI 35.17% (prev. 36.7%), 2024 GDP 3.3% (prev. 3.3%), end-2024 USD/TRY 40.0098 (prev. 40.5344). 12-month Repo Rate 38.18% (prev. 36.96%)

Fixed Income

• USTs have pulled back from overnight geopolitics-induced highs of 108-22+ with newsflow otherwise limited and the docket sparse as we approach the Fed blackout. USTs climbed over 20 ticks during the initial reporting of an Israel strike on Iran, before peaking and beginning to pullback as Iran downplayed the attacks.
• Gilts gapped higher by 20 ticks as the benchmark reacted to overnight developments, though USTs had already pared much of their move by this point hence the somewhat modest open. Further dovish-impetus drawn from another broadly unchanged UK Retail Sales M/M print. Gilts currently around the mid-point of 96.68-97.01 parameters.
• Bund price action has mimicked that of USTs, with little regional catalysts to spark a reaction. Currently just into the green and at the mid-point of the week's 130.97-132.55 range with the 10yr yield similarly holding a few bps shy of the 2.50% mark.

Commodities

• Brent futures rose as much as 4.2% on fears nuclear sites in Iran have been targeted, although as details emerged, the event proved to be much milder than initially reported, and thus crude future backtracked most of the upside. Currently higher by USD 0.50/bbl intraday, with Brent holding around USD 87.60/bbl.
• Precious metals are mixed trade across precious metals with spot gold well off best levels amid an unwind of the geopolitical risk premium after Israel's strike on Iran was found to be limited in nature whilst Iran has no immediate plans to retaliate.
• Base metals are mostly firmer amid the pullback in the Dollar and recovery in risk after Israel's attack on Iran was seemingly non-escalatory. Meanwhile, mainland Chinese markets were somewhat unfazed by geopolitics overnight vs regional peers.
• Commerzbank says for H2, expects Brent price level of USD 90-95/bbl; raises copper, sees year-end USD 9.8k/ton (prev. USD 9.2k).

Geopolitics: Middle East

• IAEA confirms that there was no damage to Iranian nuclear facilities.
• Senior Iranian Official says there is no plan for an immediate retaliation; no clarification on who is behind the incident.
• Israel's Channel 12 says "Army and security services estimate that the attack on Iran is over, but Israel maintains high alert", via Al Jazeera Breaking.
• "Jerusalem Post: Israeli planes fired long-range missiles targeting a facility belonging to Iranian forces in Isfahan", according to Sky News Arabia.
• Israel conducted an operation against Iran which an Iranian official said was on a military airbase near Isfahan. However, Iran's press TV later cited informed sources denying reports of a foreign attack in Iranian cities including Isfahan, according to Reuters.
• Initial reports on social media platform X noted explosions were heard near the city of Isfahan and Natanz in Central Iran where there are nuclear facilities, while Iranian state TV noted 'big explosions' were heard near Isfahan and there were also reports of Israeli strikes in southern Syria and Israeli warplane activity in Iraq. Furthermore, Iran International noted several flights were diverted over the Iranian airspace amid reports of an Israeli attack against a site in Iran and it was also reported that Israel told the US on Thursday it planned to conduct its response against Iran in 24-48 hours. However, it was later reported the explosions in Isfahan were drones being shot down and there were no ground explosions, while a US official noted that Israel conducted a strike on Iran but did not target nuclear facilities.
• Iran's senior commander Mihandoust said 'noise heard in Isfahan overnight was caused by air defence targeting one suspicious object', while he added 'there was no damage caused', according to Reuters.
• Iranian Foreign Minister told the UN Security Council that Iran "had no other option" but to attack Israel, while he added Iran's defence and countermeasures have concluded and Israel must be compelled to stop any further military adventurism against their interests. Furthermore, he warned if there is any use of force by Israel or violation of Iran's sovereignty, Iran's response will be decisive and proper to make Israel regret its actions.
• Senior Iranian Guards Commander said Tehran could review its nuclear doctrine and that nuclear sites are in "total security", while he added "Our hands are on the trigger, Israel's nuclear facilities have been identified". Furthermore, he said they are ready to launch powerful missiles to destroy designated targets in Israel and warned if Israel dares to hit their nuclear sites, they will surely hit back.
• US blocked the Palestinian request for full UN membership, while Israel's Foreign Minister said the 'shameful proposal' was rejected at the UN Security Council and he commended the US for vetoing the proposal. It was also reported that the Palestinian Presidency said it condemns the US veto of full Palestinian membership and Egypt said it regrets the inability of the UN Security Council to pass a resolution enabling Palestine to become a full member of the UN.

Geopolitics: Other

• Ukrainian PM Shmyhal said he welcomes progress on USD 61bln in US aid to Ukraine and is optimistic that the aid bill will soon be supported in the House, while he had important discussions with top US officials about using frozen Russian assets to benefit Ukraine and expect results this year.
• German Chancellor Scholz said NATO partners could deliver a further six patriot systems to Ukraine and Germany at the front.
• FBI Director Wray said Chinese government-linked hackers have burrowed into US critical infrastructure and are waiting for the right moment to deal a devastating blow, according to Reuters.
• North Korea's Deputy Foreign Minister held talks with Belarusian counterparts to improve cooperation, according to KCNA.

US Event Calendar

• Nothing scheduled

Central bank speakers

• 10:30: Fed’s Goolsbee Participates in Q&A

DB's Jim Reid concludes the overnight wrap

Markets are reacting to new developments in the Middle East overnight, as US officials have said that Israel had launched a missile strike against Iran . The news has raised fears that the conflict will escalate further, particularly since Iran had said they would respond to any attack, with the Iranian foreign minister having said they would “give a decisive and proper response” to any further military moves. The full details are still coming through, but Iran’s official news agency IRNA reported that they had activated air defence systems, and that flights in Tehran, Isfahan and Shiraz had been suspended. And the New York Times reported three Iranian officials had said a strike hit a military air base near Isfahan early this morning.

In response, Brent crude oil prices (+2.04%) have spiked up to $88.89/bbl, although they have come down from their peak of $90.75/bbl immediately after the news came through. More broadly, the effects have been clear across global markets, and futures on the S&P 500 are down -0.85% this morning, which would put the index on track for a 6th consecutive decline for the first time since October 2022. In the meantime, investors have moved into safe havens, and the 10yr Treasury yield is down -8.0bps this morning to 4.55%, whilst gold prices are up +0.15%. Asian equities have also seen a decisive move lower overnight, including the Nikkei (-2.37%), the KOSPI (-1.63%), the Hang Seng (-1.23%), the CSI 300 (-0.88%) and the Shanghai Comp (-0.40%).

Before all that, markets followed a familiar pattern yesterday, with an initial stabilisation giving away to further losses once again. That meant the S&P 500 (-0.22%) lost ground for a 5th consecutive session, which hasn’t happened since last October, and the NASDAQ (-0.52%) fell to its lowest level in almost two months. Moreover, the latest declines mean that the S&P 500 is on track to post a third consecutive weekly decline for the first time since September, and the NASDAQ is on track for a fourth consecutive weekly decline for the first time since December 2022. So this marks a big shift from the rapid rally we saw from November up to the end of March, and it now leaves the S&P 500 down -4.63% from its recent peak, even before any moves today that futures are currently indicating.

The selloff wasn’t confined to equities, and before the geopolitical developments overnight, sovereign bonds also fell thanks to strong US data, which led investors to become increasingly sceptical the Fed would cut rates this year. For instance, the weekly initial jobless claims were at 212k (vs. 215k expected) over the week ending April 13, offering further evidence that the labour market was still resilient. Moreover, the Philadelphia Fed’s business outlook moved up to 15.5 in April (vs. 2.0 expected), which is the strongest reading in two years.

That scepticism about rate cuts got added support by comments from New York Fed President Williams, who said “I definitely don’t feel urgency to cut interest rates.” In response to a question, he commented that another rate hike wasn’t his baseline but that “if the data are telling us that we would need higher interest rates to achieve our goals, then we would obviously want to do that”. Meanwhile, Atlanta Fed President Bostic said that “I’m comfortable being patient”, reiterating his view that the Fed “won’t be in a position to reduce our rates until toward the end of the year”. In fact by the close, the amount of cuts priced in by the December meeting fell to 39bps, which is the fewest so far this year, although that’s since risen overnight to 43bps. And in turn, that led to a decent selloff for US Treasuries, with the 10yr yield (+4.6bps) back up to 4.63%, whilst the 2yr yield (+5.4bps) ended the day at 4.99%.

Over at the ECB however, several speakers continued to sound increasingly confident about a June cut. For instance, Finnish central bank governor Rehn said “Provided that we are confident that inflation will continue converging to our 2% target in a sustained way, the time will be ripe in June to start easing the monetary policy stance and to cut rates”. Austria’s Holzmann, one of the most hawkish ECB members, said that “If inflation develops as expected and, above all, the geopolitical problems don’t worsen, there will likely be a majority for an interest rate cut in June”. We also got some hints on what the ECB approach might look like beyond June. Lithuania’s Simkus considered about three rates cut this year as a baseline, while Latvia’s Kazaks saw “no rush in kind of further pace of rate cuts”. By contrast, France’s Villeroy suggested that consecutive rate cuts may be in play, noting that “When we say meeting by meeting, it can be at each following meeting — I don’t think, for example, that we should concentrate our rate cuts at quarterly meetings when we have a new forecast.” All this meant European sovereign bonds saw a smaller rise in yields than US Treasuries, with those on 10yr bunds (+3.1bps), OATs (+2.5bps) and BTPs (+1.4bps) all moving higher.

That backdrop meant that equities had another tough session. Initially they had looked to post a better performance, and the S&P 500 had been up by +0.69% intraday. But that began to reverse around the European close, leaving the index down -0.22%, in its 5th consecutive decline. Tech stocks led the underperformance again, and the Magnificent 7 (-0.49%) lost further ground, led by a -3.55% decline for Tesla . That said, banks (+0.99%) and communication services (+0.66%) outperformed, and over in Europe, which closed earlier in the day, the STOXX 600 advanced +0.24%.

In terms of yesterday’s other data, US existing home sales fell to an annualised rate of 4.19m in March (vs. 4.20m expected). Otherwise, the Conference Board’s Leading Index was down -0.3% in March (vs. -0.1% expected), which took the index down to its lowest level since May 2020. Overnight, we’ve also got the news that Japanese inflation fell to +2.7% in March (vs. +2.8% expected).

To the day ahead now, and central bank speakers include BoE Deputy Governor Ramsden, the BoE’s Mann, the Fed’s Goolsbee, and the ECB’s Nagel. Otherwise, data releases include UK retail sales and German PPI for March.

Tyler Durden Fri, 04/19/2024 - 08:05

The Great Firewall: China Orders Apple To Remove WhatsApp, Threads From App Store

The Cyberspace Administration of China asked Apple on Friday to remove Meta Platforms' WhatsApp and Threads from its App Store in China due to national security concerns. Signal and Telegram—two foreign messaging apps—were also removed from the Chinese App Store. The removal of the four apps comes as elites in Washington, DC, attempt to ban Chinese app TikTok from US phones. 

"We are obligated to follow the laws in the countries where we operate, even when we disagree. The Cyberspace Administration of China ordered the removal of these apps from the China storefront based on their national security concerns," Apple said in a statement, as quoted by Bloomberg. 

Apple continued, "These apps remain available for download on all other storefronts where they appear."

These four messaging apps allow users to bypass China's Great Firewall through virtual private networks. Beijing finds this troubling as citizens could be subjected to disinformation and misinformation content (created by foreign adversaries) that sparks social unrest or discontent with the communist regime. 

Bloomberg said the orders to nuke the four apps follow a prior "cleanup program Chinese regulators initiated in 2023 that was expected to remove many defunct or unregistered apps from domestic iOS and Android stores, including local ones. In August, China asked all mobile app developers to register with the government by the end of March, or cease operating." 

Rich Bishop, co-founder and chief executive officer of AppInChina, expressed concern that Chinese consumers will now be limited to domestic apps, with only a handful of international ones. He warned that this move by Beijing could further isolate Chinese citizens from the rest of the world.

The removals come at a time when Apple is navigating a delicate balance between complying with China's censorship-industrial complex and maintaining iPhone market share in the world's largest handset market. 

Last year, Apple was China's top smartphone maker, commanding over 17% of the market. However, Huawei is now challenging the US brand with new phone lineups, potentially shifting the dynamics. 

Meanwhile, on Capitol Hill, US lawmakers are actively pursuing a bill that would force Beijing-based ByteDance to divest TikTok or face a nationwide ban from app stores. This move underscores the ongoing tech war between the US and China. 

Speaker Mike Johnson plans to include the TikTok divestiture legislation in an aid package for Ukraine and Israel that can be voted on as early as Saturday. 

 

 

Tyler Durden Fri, 04/19/2024 - 07:45

23andMe Saved From Collapse After CEO Floats Private Takeover  

DNA-testing company 23andMe soared in the early cash session in New York on news that Anne Wojcicki, the CEO, plans to take the struggling company private after three years on the public markets. The company once sported a $6 billion valuation and has since collapsed to $235 million. 

Wojcicki's big announcement was made in a public filing late Wednesday. The filing stated that she "is considering making a proposal to acquire all of the outstanding shares of 23andMe." 

The filing noted that she would reject any other buyer taking over the company. Her ownership stake is around 20% of the total outstanding shares. This means she controls 49.99% of the company's voting power, making it impossible for anyone to purchase the human genetics and biopharmaceutical company. 

Around 1030 ET, shares of 23andMe jumped 48% to 53 cents a share. On Wednesday, they were at a record low of $0.36. 

Bloomberg data shows 32 million shares, or 10.77% of the float, is short. This leaves room for squeezes. 

In 2021, 23andMe went public through a special-purpose acquisition company sponsored by Virgin Group founder Richard Branson. At the time, the company's value jumped to $5.8 billion. By 2022, the valuation plunged to as low as $1 billion. 

"As sales of its DNA testing kits have slowed in recent years, 23andMe has pivoted to offering subscription products in hopes of creating repeat customers for its consumer business," Bloomberg pointed out. 

There were fears earlier this year that 23andMe would be sold to an overseas PE firm. Thankfully, this has not happened because it would be a national security risk. 

Tyler Durden Fri, 04/19/2024 - 06:55

What Happened To Bitcoin?

Authored by Jeffrey Tucker via The Brownstone Institute,

Those who involved themselves in Bitcoin markets after 2017 encountered a different operation and ideal than those who came before. Today, no one much cares about what came before, speaking of 2010-2016. They are only watching the upward price momentum and are thrilled for the increase in the asset valuation of their portfolio. 

Gone is the talk of separating money and state, of a market-based means of exchange, of genuine revolution that would extend from money to the whole of politics the world over. And gone is the talk of changing the operation of money as a means of changing the prospects for freedom itself. The enthusiasts around Bitcoin have different goals in mind. 

And during this entire period, the exact time when this digital asset might have protected multitudes of users and businesses from rapacious inflation growing out of the worst and most globalized experience of corporatist statism in modern history, made possible due to the money monopoly of central banks that funded the operation, the original asset that carries the symbol BTC was systematically diverted from its original purpose. 

The ideal was nicely articulated by F.A. Hayek in 1974. Much of his career as an economist was spent arguing for sound monetary policies. At every important turning point, he faced the same problem: governments and the institutions they serve did not want sound money. They wanted to manipulate the currency system to benefit elites, not the public. Finally, he refined his argument. He concluded that the only real answer was a complete divorce of money and power. 

“Nothing can be more welcome than depriving government of its power over money and so stopping the apparently irresistible trend towards an accelerating increase of the share of the national income it is able to claim,” he wrote in 1976 (two years after his Nobel Prize).

“If allowed to continue, this trend would in a few years bring us to a state in which governments would claim 100 per cent of all resources—and would in consequence become literally ‘totalitarian’.”

“It may turn out that cutting off government from the tap which supplies it with additional money for its use may prove as important in order to stop the inherent tendency of unlimited government to grow indefinitely, which is becoming as menacing a danger to the future of civilisation as the badness of the money it has supplied.”

The problem in achieving this ideal was technical and institutional. So long as state money worked, there was no real drive to change it. Certainly the push would never come from the ruling classes who benefit from the present system, which is precisely where every old argument for the gold standard faltered. How to get around this problem?

In 2009, a pseudonymous developer or group released a white paper, written in language for computer scientists and not economists, for a peer-to-peer system of digital cash. For most economists at the time, its functioning was opaque and not quite believable. The proof came in the functioning itself which unfolded over the course of 2010. To summarize, it deployed a distributed ledger, double-key cryptography, and a protocol of fixed quantity to release a new form of money that operationally tied together money itself and a settlement system in one. 

In other words, Bitcoin achieved the ideal about which Hayek could only dream. The key to making it all possible was the distributed ledger itself, which relied on the internet to globalize the nodes of operation, bringing a new form of accountability we had never seen in operation before. The notion of melding together the means of payment plus the mechanisms of settlement on this scale was something that had previously not been possible. And yet there it was, earning its way into the market with ever increasing valuations made possible by the distributed ledger. 

So, yes, I became an early enthusiast, writing hundreds of articles, even publishing a book in 2015 called Bit By Bit: How P2P Is Freeing the World.

I could not have known it at the time, but those were in fact the last days of the ideal and just before the protocol came to be controlled by a consolidated group of developers who jettisoned entirely the idea of peer-to-peer cash to turn it into a high-earning digital security, not a competitor with state-based money but rather an asset designed not to use but hold with third-party intermediaries controlling access. 

We saw all this unfold in real time and many of us were aghast. All that is left to us is to tell the story, which has not been done in a complete form until now. Roger Ver’s new book Hijacking Bitcoin does the job. It is a book for the ages simply because it lays out all the facts of the case and lets readers come to their own conclusion.

I was honored to write the foreword, which follows:

The story you will read here is of tragedy, the chronicle of an emancipationist monetary technology subverted to other ends. It’s a painful read, to be sure, and the first time this story has been told with this much detail and sophistication. We had the chance to free the world. That chance was missed, likely hijacked and subverted.

Those of us who watched Bitcoin from the earliest days saw with fascination how it gained traction and seemed to offer a viable alternative path for the future of money. At long last, after thousands of years of government corruption of money, we finally had a technology that was untouchable, sound, stable, democratic, incorruptible, and a fulfillment of the vision of the great champions of freedom from all history. At last, money could be liberated from state control and thus achieve economic rather than political goals—prosperity for everyone versus war, inflation, and state expansion.

That was the vision in any case. Alas, it did not happen. Bitcoin adoption is lower today than it was five years ago. It is not on a trajectory of final victory but on a different path to gradually increase in price for its earlier adopters. In short, the technology was betrayed by small changes that hardly anyone understood at the time.

I certainly did not. I had been playing with Bitcoin for a few years and was mainly astounded at the speed of settlement, the low cost of transactions, and the ability for anyone without a bank to send or receive it without financial mediation. That’s a miracle about which I wrote rhapsodically at the time. I held a CryptoCurrency Conference in Atlanta, Georgia, in October 2013 that focused on the intellectual and technical side of things. It was among the first national conferences on the topic, but even at this event, I noticed two sides coalescing: those who believed in monetary competition and those whose sole commitment was to one protocol.

My first clue that something had gone wrong came two years later, when for the first time I saw that the network had been seriously clogged. Transaction fees soared, settlement slowed to a crawl, and vast numbers of on-ramps and off-ramps were closing due to high compliance costs. I did not understand. I reached out to a number of experts who explained to me about a quiet civil war that had developed within the crypto world. The so-called “maximalists” had turned against widespread adoption. They liked the high fees. They did not mind the slow settlements. And many were involving themselves in the dwindling number of crypto exchanges that were still in operation thanks to a government crackdown. 

At the same time, new technologies were becoming available that vastly improved the efficiency and availability of exchange in fiat dollars. They included Venmo, Zelle, CashApp, FB payments, and many others besides, in addition to smartphone attachments and iPads that enabled any merchant of any size to process credit cards. These technologies were completely different from Bitcoin because they were permission-based and mediated by financial companies. But to users, they seemed great and their presence in the marketplace crowded out the use case of Bitcoin at the very time that my beloved technology had become an unrecognizable version of itself. 

The forking of Bitcoin into Bitcoin Cash occurred two years later, in 2017, and it was accompanied by great cries and screams as if something horrible was happening. In fact, all that was happening was a mere restoration of the original vision of the founder Satoshi Nakamoto. He believed with the monetary historians of the past that the key to turning any commodity into widespread money was adoption and use. It’s impossible to even imagine conditions under which any commodity could take on the form of money without a viable and marketable use case. Bitcoin Cash was an attempt to restore that. 

The time to ramp up adoption of this new technology was 2013-2016, but that moment was squeezed in two directions: the deliberate throttling of the ability of the technology to scale and the push of new payment systems to crowd out the use case. As this book demonstrates, by late 2013, Bitcoin had already been targeted for capture. By the time Bitcoin Cash came to the rescue, the network had changed its entire focus from use to holding what we have and building second-layer technologies to deal with the scaling issues. Here we are in 2024 with an industry struggling to find its way within a niche while the dreams of a “to-the-moon” price are fading into memory.

This is the book that had to be written. It is a story of a missed opportunity to change the world, a tragic tale of subversion and betrayal. But it is also a hopeful story of efforts we can make to ensure that the hijacking of Bitcoin is not the final chapter. There is still the chance for this great innovation to liberate the world but the path from here to there turns out to be more circuitous than any of us ever imagined. 

Roger Ver does not blow his own trumpet in this book, but he truly is a hero of this saga, not only deeply knowledgeable of the technologies but also a man who has clung to an emancipatory vision of Bitcoin from the earliest days through the present. I share his commitment to the idea of peer-to-peer currency for the masses, alongside a competitive marketplace for free-enterprise monies. This is a hugely important documentary history, and the polemic alone will challenge anyone who believes himself to be on the other side. Regardless, this book had to exist, however painful. It’s a gift to the world.

Does this story seem familiar? Indeed it does. We’ve seen this trajectory in sector after sector. Institutions born and built by ideals are later converted by various forces of power, access, and nefarious intent into something else entirely. We’ve seen this happen to digital tech in particular and the Internet generally, not to mention medicine, public health, science, liberalism, and so much else. The story of Bitcoin follows the same trajectory, a seemingly immaculate conception turned toward a different purpose, and serving again as a reminder that on this side of heaven, there will never be an institution or idea immune to compromise and corruption. 

Tyler Durden Fri, 04/19/2024 - 06:30

Albanian "King Of Instagram" Used Platform To Tell Followers How To Sneak Into Britain, Join The Drug Trade

While we're sure social media sites are busy moderating "misinformation" once again ahead of the all-important 2024 election, one influencer is using Instagram to give his followers tips on sneaking into Britain and making £6,000 a month working illegally in the drug trade.

'You know there are a lot of brothers and sisters in hardship. Can you show how to go there unnoticed, without being detected? How do they do it?' he says in one of his video clips. 

Kozak Braci, an Albanian social media influencer with over 500,000 followers on TikTok and Instagram, has hosted live tours of cannabis farms and offered insights into profiting from criminal activities in the UK during his streams, according to a new profile from the Daily Mail. 

The Daily Mail reported that one image captures Braci standing beside a man in a black SUV, with a house displaying the Union flag in the background. In another photo, the influencer, whose chest and right arm are adorned with tattoos of AK-47s, sports a Chelsea shirt in front of a red Audi.

Braci, who boasts that he earns £25,000 a month from his social media platforms, frequently posts pictures of himself with luxury cars and designer items.

"It's great to stay in the cannabis house. I can live there without a problem," he tells his followers. 

Graham Wettone, an ex-Met Police officer, reacted to the videos shown to him by characterizing them as glorifying drug production in the UK and enticing would-be criminals to come to Britain.

Earlier this year, it was revealed that the Home Office intends to pay Albanian influencers £100,000 to discourage their followers from entering Britain illegally. This modern twist on the public information film aims to reach groups susceptible to traffickers' falsehoods. The initiative, devised by Cass Horowitz of 'Brand Rishi' fame, has been criticized by activists as ineffective 'toy town tinkering.'

A United Nations report indicates that Albanian criminals now dominate the UK's cocaine market, importing the drug via south-east England's ports with the aid of violent European gangs. Among these, the Hellbanianz gang from East London openly flaunts its criminal endeavors on social media.

Additionally, in the first four months of the year, 80 Albanian migrants were collectively sentenced to 130 years in prison.

Tik Tok commented: "TikTok works closely with UK law enforcement, the National Crime Agency and organisations such as STOP THE TRAFFIK to fight this industry-wide issue, and our steadfast efforts helped reduce the number of small boat crossings last year, according to Border Officials. We continue to strictly maintain a zero tolerance approach to human exploitation and proactively find over 95% of content we remove for breaking these rules."

Meta responded: "We have removed the violating content brought to our attention. Buying, selling or soliciting drugs is not allowed on our platforms; our teams use a mix of technology and human review to remove this content as quickly as possible, and we work with the police and youth organisations to get better at detection."

Tyler Durden Fri, 04/19/2024 - 05:45

Swiss Watch Exports Crash In China & Hong Kong

Fears of a luxury slowdown are materializing. New data from the Federation of the Swiss Watch Industry shows that exports of luxury timepieces tumbled the most since 2020 as demand crashed in Asia. 

Swiss watch exports dropped in March. Their value fell by 16.1% compared with the same month in 2023 to 2 billion Swiss francs ($2.2 billion). Cratering demand in China and Hong Kong caused most of the decline. Weakness was reported across all six main markets. 

Exports to mainland China, the second-biggest market for Swiss watches, plunged 42%, the worst decline since March 2020, when the global economy began seizing up due to government-enforced lockdowns. Shipments to Hong Kong tumbled even more, down 44%. 

"The negative trend is even worse than we expected and the decline in China is really worrying and probably indicates that inventories in the region were once again too high," Jean-Philippe Bertschy, an analyst at Vontobel in Switzerland, told Bloomberg. 

Faltering demand for Swiss watches comes one day after LVMH Moët Hennessy Louis Vuitton, the world's largest luxury group, controlled by the family of billionaire Bernard Arnault, reported that "uncertain geopolitical and economic environment" has weighed on luxury spending. 

LVMH shares in Paris are 10.5% below the peak put in early last year. 

For a broader view of global luxury stocks, the MSCI World Textiles, Apparel & Luxury Goods Index also shows the index well below (-21%) the peak put in at the end of 2021. 

A combination of China's slower-than-expected economic recovery and generational highs in interest rates across the Western world are some of the reasons why a global slowdown in the luxury market has materialized. 

Tyler Durden Fri, 04/19/2024 - 04:15

Borrell Came Up With A Nifty Excuse For Why NATO Won't Shoot Down Russian Missiles Over Ukraine

Authored by Andrew Korybko via Substack,

This is credible enough of a reason to justify a conventional NATO intervention in defense of Israel without giving Ukraine grounds to claim that there are double standards at play.

Ukraine became jealous like never before after NATO members helped shoot down Iranian missiles en route to Israel earlier this month yet won’t lift a finger to help Ukraine shoot down Russian ones.

British Foreign Secretary David Cameron said that “the difficulty with what you suggest (about the UK shooting down Russian missiles) is if you want to avoid an escalation in terms of a wider European war, I think the one thing you do need to avoid is NATO troops directly engaging Russian troops.”

Pentagon spokesman John Kirby responded to a similar question by saying “Look: different conflicts, different airspace, different threat picture. And [President Joe Biden] has been clear from the beginning [of the Ukraine hostilities] that the US is not going to be involved in that conflict in a combat role.” Zelensky’s Chief of Staff Andrey Yermak didn’t buy their explanations, however, and demanded that the West start shooting down Russian missiles just like they shot down Iranian ones.

NATO Secretary General Jens Stoltenberg tried allaying Ukraine’s jealousy by declaring that “if allies face a choice between meeting NATO capability targets and providing more aid to Ukraine, my message is clear: send more to Ukraine.”

Even though he’s telling members to prioritize Ukraine’s interests over their own national ones, Kiev isn’t expected to calm down since it still knows that NATO won’t come to its rescue in this respect like the bloc just did for Israel.

That’s where EU foreign policy chief Josep Borrell’s nifty excuse comes in. As he explained, “Iran’s attacks flew over air bases of the armies of France, the US, the UK and Jordan. They have gone over their bases, which then acted in self-defense. There are no air bases of the UK, or the US, much less Jordan of course, on Ukrainian territory or in the territory Russian missiles fly over. Therefore, the same answer cannot be given because the circumstances are not the same.”

This is credible enough of a reason to justify a conventional NATO intervention in defense of Israel without giving Ukraine grounds to claim that there are double standards at play.

The only way that Kiev could try flipping the tables is in the far-fetched event that it officially admits the presence of NATO troops on its territory, which Polish Foreign Minister Radek Sikorski described as an “open secret” last month, and pinpoints their bases to prove that the bloc does nothing as Russian missiles fly overhead.

That is extremely unlikely to happen, however, since it would represent a major security risk. Ukrainian officials might still hint that this is the case and perhaps leak vague information about it into their national media and/or to international media via their “agents of influence”, but they’re almost certainly not going to cross the red line of disclosing specific details that could put those troops at risk. Borrell, for all his professional faults, knows this and thus crafted his nifty excuse that inspired this analysis.

Giving credit where it’s due, that was a wise move since his explanation is consistent enough to dispel Ukraine’s complaints about NATO’s double standards and consequent perception of being less important to the bloc than Israel is, both of which are true but can now be more plausibly denied. Ukraine should accept that NATO isn’t going to treat it and Israel as equals, with the only consolation being if some members send it more Patriot systems, but that’s not the same as them shooting down Russian missiles.

Tyler Durden Fri, 04/19/2024 - 03:30

Illegal UK Immigrant Who Protested With Sign Saying "Migrants Are Not Criminals" Pleads Guilty To Rape Of 15-Year-Old Girl

Authored by Thomas Brooke via ReMix News,

A Congolese migrant who had his deportation from the U.K. blocked by an airline’s cabin crew and previously campaigned outside a detention center with a sign that read, “Migrants are not criminals,” has pleaded guilty to raping a 15-year-old girl.

Anicet Mayela entered his guilty plea at Oxford Crown Court last Friday for one count of rape of a former economics student.

The court heard how there was a high level of “dangerousness” surrounding the attack, which is understood to have taken place between Dec. 1 and Dec. 31 last year.

The Congolese national had been living in Britain since 2004 when he paid smugglers to help him escape his country of origin where he claimed he was being persecuted.

Several attempts by the U.K. Home Office to deport him were thwarted by feigned injuries and legal challenges, including an incident back in May 2005 when a planned deportation flight was prevented from taking off by Air France cabin crew who claimed public officials had broken Mayela’s hand after handcuffing him.

With the aid of left-wing charities, including the Institute of Race Relations, and immigration lawyers, the Congolese national won leave to remain in Britain later that year after successfully arguing a return to his homeland would be a violation of his human rights.

Mayela used the opportunity to actively campaign against the deportation of illegal migrants, participating in a demonstration near his detention center in Oxford where he spoke to the BBC and hung a sign around his neck that read, “Migrants are not criminals.”

“I am here to support my friends. I have been inside here, and at Colnbrook,” he told the U.K.’s public broadcaster from outside the detention center.

On Friday, Mayela was ordered to remain in custody while a pre-sentencing report was prepared.

He is scheduled to return for sentencing on May 10.

Read more here...

Tyler Durden Fri, 04/19/2024 - 02:45

BRICS - The Project Of The Century

Authored by Peter Hanseler via VoiceOfRussia.com,

The Western media are prioritizing the Ukraine conflict, the green revolution and the woke revolution. In the shadow of this media coverage, BRICS is changing the world.

We bring you the latest figures and place them in the current geopolitical environment. – An analysis.

 

Introduction

One of the main topics of this blog is BRICS. We have written numerous articles, followed and analyzed the development of this organization. Significantly, the first independent post on this blog was dedicated to BRICS on November 18, 2022 “The unstoppable rise of the East“.

Our last dedicated BRICS-only article from 24 September 2023 “BRICS will change the world – slowly” gave an overview of the development and summarized the results of the BRICS summit in South Africa in August 2023. This article was published by ZeroHedge, the GloomBoomDoom report by Dr. Marc Faber and Weltwoche (print and online).

From the density of our coverage, it is clear that we ascribe paramount importance to BRICS for the geopolitical and geo-economic development of the world. Based on the facts, we have come to the conclusion that BRICS will change the world more than all other developments of the last 100 years put together. The developments around BRICS have already triggered a tectonic shift in the geopolitical balance of power; the Ukraine conflict and the accelerating crisis in the Middle East are merely pieces of the mosaic by comparison.

The Western media are setting their priorities differently and focusing on topics that we believe are of lesser importance: Mortal enemy Russia, wokeness and green ideology.

Reporting on BRICS in the West, if it takes place at all, is limited to portraying BRICS either as an instrument of China to achieve world power – as the Financial Times put it,

«How the BRICS nations risk becoming satellites of China»

FINANCIAL TIMES – 26 JULY 2023

or to trivialize the success of BRICS – according to the NZZ,

“We explain in the video why this extension only promises limited success.”

NZZ, 14 DECEMBER 2023

Preliminary remarks on the figures

We proceed as we always do and develop a fact-based foundation for a discussion.

Membership doubled as of January 1

Since January 1, Saudi Arabia, Iran, the United Arab Emirates, Egypt and Ethiopia have joined the existing members (Brazil, Russia, India, China and South Africa) as new members.

Argentina not participating

In August 2023, Argentina was invited to become the sixth member. However, the new president of Argentina, Javier Milei, decided not to accept this invitation and to rely on the USA and Donald Trump to rescue his economy.

It is impossible to judge at this point whether this decision will prove to be the right one. For the second largest country in South America, which was once one of the richest countries in the world, it is to be hoped that Milei can pull the cart out of the deep mire. Milei is fighting against the establishment in Argentina, which has driven the country economically to the wall. These former rulers are serious opponents who are fighting for sinecures that Milei must wrest from them if he wants to save Argentina. We hope that Javier Milei can prevail and wish him every success and good luck. The first signs of success appear to be emerging: The country was able to report a positive budget for the first time last month. It seems to be heading in the right direction.

Saudi Arabia

According to Western media reports, Saudi Arabia is not yet fully on board. South African Foreign Minister Naledi Pandor is reported to have told Reuters that “Saudi Arabia has not yet responded to the invitation to join BRICS. It is still being considered”.

Saudi Arabia, or rather the ruling Saud family, has been an ally of the USA since the end of the Second World War, and this relationship has been further strengthened since the agreement of the ” Petrodollar” in 1974.

Since President Biden has been in power, the relationship with the USA has suffered massively, while at the same time cooperation with China and Russia has strengthened to an unprecedented level.

The problem that Saudi Arabia now has is the gigantic investments that the state and private individuals have made, particularly in the USA and the UK. Government investments in the USA alone amount to over USD 35 billion and investments in the UK are said to be around USD 75 billion. Due to the geopolitical situation in the world and the West’s aggressive sanctions policy, the concerns of Saudi Arabia that these investments could be confiscated in the event of a BRICS accession are definitely justified. As Saudi Arabia is important to BRICS and China has overtaken the US as Saudi Arabia’s largest trading partner, we expect Saudi Arabia to join BRICS as soon as China might make commitments to the Saudis in the event of Western expropriation.

BRICS-10 in numbers Map

Dark green BRICS until August 2023 – light green – the new BRICS members – Source: VoicefromRussia

Numbers

In our figures, we compare the BRICS-10 with the G7 and the world as a whole to give you a feel for the ratios. The parameters we use are population, GDP (adjusted for purchasing power), oil production, gas production and gold production.

We show the gross national product adjusted for purchasing power. If you use the US dollar as a measure of GDP, the economic power of a country is distorted: if you want to measure financial strength realistically, it makes a big difference whether, for example, a Big Mac in US dollars costs twice as much in one place as elsewhere. The so-called Big Mac Index is reason enough to use purchasing power-adjusted figures when comparing GDP figures. The reason why Western media use the unadjusted figures is pure marketing to disguise the devaluation of the US dollar and make it appear stronger than it is.

Charts

Graphical representation of the figures – Source: VoicefromRussia.

Interim result

All factors show that the BRICS 10 far outstrip the G7 and it seems incomprehensible that the West is simply suppressing this fact. A look beneath the surface reveals facts that reinforce the impression of the bare figures.

Assessment of these figures Oil production

The following additional facts should be taken into consideration when evaluating the oil production figures:

Firstly, although the USA is still the largest oil producer in the world, accounting for around 18% of global production, it also consumes the most oil, with a share of over 20%. This means that the USA is currently not even able to cover its own consumption. This fact alone is a compelling reason for the US to pressure Saudi Arabia not to join BRICS.

Secondly, the major oil-producing members of BRICS have a great deal of influence or even control over OPEC. As BRICS thus also controls OPEC and therefore controls the price and distribution of a large proportion of oil, BRICS can be said to have an (indirect) monopoly position.

Thirdly, the production costs for US oil are around 2.5 times higher than the production costs for Saudi oil.

These factors therefore further strengthen the BRICS’ position of power with regard to oil.

Natural gas

With regard to natural gas, it should be noted that with Iran’s accession to BRICS, the two largest natural gas producers in the world are joint members of BRICS: Russia and Iran.

The largest non-BRICS gas producer is Qatar, which is (still) allied with the USA. BRICS is therefore also a real center of power when it comes to natural gas.

Gold

With regard to gold, it should be briefly mentioned that China and Russia are number 1 and 2 in global gold production respectively. I mention gold here because there is a good chance that gold will again play an important role in future monetary systems at some point – more on this below.

Russia holds the BRICS chairmanship in 2024

Over 220 BRICS conferences will be held in Russia over the course of 2024. The topics are diverse: science, high technology, healthcare, environmental protection, culture, sport, youth exchange and civil society.

President Putin’s statements at the beginning of the year at the opening event of BRICS 2024 in Moscow were interesting. He mentioned several times the closer cooperation between the members on security issues. It seems that BRICS will therefore not only focus on economic aspects, but also on security-related aspects more and more. The apparent coordination of the BRICS states in connection with the Middle East conflict at the UN in New York clearly indicates close cooperation on non-economic issues.

Various non-official sources have reported that the SCO (Shanghai Cooperation Organization) is moving closer to BRICS and may even merge with it. In addition to China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan, Iran has also been a member of the SCO since July 2023.

This is extremely important due to the heightened geopolitical tensions and the two major conflicts in Ukraine and the Middle East. If these two organizations were to merge, there would be a new counterweight to NATO. NATO is already increasingly being characterized by experts as a mere chattering club, particularly due to its performance in the Ukraine conflict, which was not a success. As a result, NATO has almost lost its threatening potential. If the BRICS-SCO merger becomes a reality, NATO would finally degenerate into an empty shell.

Formal applications for admission – BRICS+ Candidates

Algeria, Bahrain, Bangladesh, Bolivia, Kazakhstan, Cuba, Kuwait, Nigeria, Pakistan, Palestine, Senegal, Thailand, Venezuela, Vietnam and Belarus have formally applied for membership.

Green: BRICS 10 (light green Saudi Arabia) – Yellow: formal membership applications

Figures

Charts

Assessment

It should be noted in this list that the formal applicants will probably not all be admitted in 2024. This illustration shows the maximum and the broad formal interest in this organization. The applications for admission from some countries harbor great potential for conflict with the USA.

In my opinion, the greatest potential for conflict from an American perspective is the possible accession of Mexico, Cuba and Venezuela. Mexico’s membership would be seen by the USA in the same way as the Soviet stationing of nuclear missiles in Cuba in 1962 – “enemy on the doorstep of the USA”. This is probably also the reason why it was reported on March 3 that Mexico had not submitted a formal application for membership. Fear is breathing down the necks of the Mexicans and the USA is exerting pressure in the background.

In Venezuela, the country with the world’s largest oil reserves, the US has been trying for years to overthrow President Maduro and install a puppet.
Last August, it was not enough to gain admission and the USA will do everything in its power to prevent this oil giant from joining. However, the USA has a losing hand with the Venezuelan population, as it is imposing sanctions on the beleaguered country to bring about a collapse and accepting that the Venezuelan people are suffering from hunger.

The list of formal applications for admission could therefore change considerably between now and October, when the decisions on who will be invited to Kazan are made. What is certain, however, is that the G7 – especially the United States – is devoting huge energies to slowing down the development of BRICS. In my opinion, however, this organization is already too powerful to be weakened by the West.

BRICS turns its back on the US dollar The petrodollar – US dollar as a reserve currency

The greatest danger of this ever stronger community is to the USA. We have discussed many times that the Petrodollar is the real foundation of American supremacy and not the American armed forces.

It is of existential importance for the USA that international trade, especially commodity trade, is conducted in US dollars. We explain why.

The US dollar as a global trading currency means that practically all countries have to hold US dollars in reserve in order to be able to settle their trade invoices. This makes the US dollar a reserve currency.

However, central banks do not hold the US dollar in cash, but in US government securities in order to earn interest. This makes the world’s central banks the biggest buyers of US government securities, regardless of whether they think they are a good investment. As a result, the US can refinance its debt on terms that are not based on the strength of the US economy, but on these systemic purchases. French President Giscard d’Estaing rightly described the petrodollar in the 1970s as an “exorbitant privilege”, as it leads to the automatic refinancing of the USA.

Abuse of this exorbitant privilege

However, the USA has been abusing this privilege for decades. Whenever a country implements something that the US does not like, it is cut off from the US dollar. The US can implement this without any problems, as all US dollar transactions go through the US. The consequences for the country concerned are catastrophic, as it is effectively banned from the commodities trade.

Theft of Russian central bank reserves

However, by blocking the foreign currency reserves of the Russian central bank in March 2023, the US has overstepped the mark, because now the entire Global South is afraid to hold US dollars, as they may suffer the same fate. Although every legal expert declares that the freeze was already carried out without an international legal basis, the West is about to go one step further and prepare the confiscation. This is the unequivocal statement made by Janet Yellen on February 27:

“I also believe it is necessary and urgent for our coalition to find a way to unlock the value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction.”

JANET YELLEN AT THE PRESS CONFERENCE BEFORE THE G20 ON FEBRUARY 27, 2024

 

The EU under Ms. von der Leyen and even exponents in Switzerland are preparing to put this planned raid into practice and thus not only continue to block these funds, but to steal them.

De-dollarization is already here

Until 2022, Russia conducted 80% of its trade in USD and EUR, 50% in US dollars. Today it is only 13%.

In the same period, Russia’s trade activity in roubles and yuan rose from 3% to 34% for both currencies.

These figures are clearly the result of the sanctions against Russia. However, it is a declared goal of all BRICS countries to no longer trade with each other in US dollars, but in the respective local currencies.

If you look at the current size of BRICS – 36% of global GDP – this will herald a tectonic development away from the US dollar; if you add the formal applicants, this figure rises to 42% of global GDP.

According to Bloomberg, the use of the US dollar as a reserve currency is collapsing.

Source: Bloomberg

Consequences for the US

De-dollarization poses an existential threat to the USA, as it will result in the loss of buyers of US government bonds and thus the USA’s ability to refinance its highly deficit-ridden national budget. As US government bonds are a product like any other, whose price is determined by supply and demand, a collapse in demand also leads to a collapse in the price of US government bonds. As the interest rate on bonds moves inversely to the price, the interest rate on bonds and therefore inflation will rise.

Debt in the USA is currently accelerating at an unprecedented rate. Debt currently amounts to over USD 34 trillion. It will soon take just one month to accumulate the next trillion in debt – apocalyptic. When President Reagan was in power, the total US debt amounted to less than one trillion. It therefore took just under 200 years to build up the first trillion in debt; soon this amount of debt will be a reality within a month.

One of the reasons for this is that the USA will already have to pay one trillion US dollars (1,000,000,000,000) in interest payments on its own debt this year alone. This is more than the USA spends on its entire military expenditure, which is gigantic in itself, as the USA spends more money on its military than the next 13 countries combined.

Source: Wikipedia

If the willingness of the countries of the Global South, and in particular the BRICS members, to buy decreases, the USA will sooner or later find itself in an existentially dangerous situation.

BRICS’ own currency Trading currency

There is a lot of talk about a new currency that would serve as a payment and financing instrument for the BRICS. There were voices – including James Rickards – who were convinced last August that a BRICS single currency would be created as early as 2023. We were skeptical about this timing and took the view that it would take longer, and we were right. However, this does not mean that James Rickards was wrong, he was just a little early.

We have seen above that the BRICS countries are in fact hardly using the US dollar among themselves any more, instead using their local currencies.

Use of local currencies

The consequence of this is that the BRICS members accumulate currencies of their trading partners over the course of a trading year if they sell more goods than they buy. Example: Russia and India use Roubles and Rupees in their trade. Since Russia sells more to India (especially raw materials) than India sells to Russia, the Russians are sitting on large amounts of Rupees at the end of the year. This problem arises regularly throughout the BRICS region among the various members in bilateral trade when deficits or surpluses build up.

Settlement with gold

I believe that the bilateral use of national currencies will continue for the time being, but that the first step will be to look for a mechanism to balance these surpluses or deficits at the end of a trading year.

Gold is an obvious choice here, not gold calculated in US dollars, Rupees or Roubles, but gold in units of weight. The trade differences at the end of a year or month would be settled in gold (kg or tons). Whether in this case the gold is actually physically delivered or merely recorded in a ledger depends on the trust between the parties. I also assume that in such a case, gold warehouses would be opened in various locations in the BRICS region, where the member countries would store their gold and their holdings would be confirmed by a BRICS auditing company.

A final issue would then be to determine the exchange rate of the local currencies. This seems to be one of the major sticking points so far.

Indications that the trend is towards gold

Evidence always comes from the facts. The world produces around 3,000 tons of gold per year.

According to the World Gold Council, central banks have been net buyers of gold since 2010 and the trend in gold purchases has increased steadily in recent years.

The Chinese bought the most gold (225 tons).

Caution is advised with regard to the official reported gold reserves.

It is very possible – and in my opinion probable – that the gold reserves of China and Russia are much larger than officially reported.

It is clear that central banks are buying more gold than they have since the 1960s. This is an indication that they are not only arming themselves against inflation, but also for the settlement of commodities.

It will be interesting to see what exactly will happen this year, but I assume that at the next BRICS summit, which will take place in Kazan in October, announcements will be made that will surprise the West. In addition to new members, I believe that a trade clearing system as described above or even more is within the realm of possibility.

Future of BRICS – many new members Preliminary remarks

Looking to the future, BRICS has the potential to unite many countries of the Global South and completely eclipse the Collective West.

We have compiled the data of those countries that are interested in joining. This is for the future, but in times of geopolitical tensions and military conflicts, history teaches us that a lot can happen in a short time, especially after decades, without major changes. For this reason, we are merely providing a framework below and are not making any predictions regarding the timeline, but rather letting the figures speak for themselves and refraining from commenting at this stage.

Map

Green: BRICS 10 – Yellow: formal requests for membership – Blue: countries that show interest

Numbers Charts

Conclusion

After BRICS became BRICS-10 last August by doubling its membership and thus far outstripping the previous economic colossus G7, the current year is set to continue in giant strides. The gap to the G7 will definitely widen further at the BRICS summit in Kazan. It is still uncertain which of the formal applicants will actually be invited and thus become new members on January 1, 2025.

In my opinion, however, one thing is already a fact: the hegemony of the USA will come to an end as a result of de-dollarization. The combination of astronomical debts, rampant new borrowing and the fact that more and more countries in the Global South are turning away from the US dollar is accelerating the demise of the hegemon that ascended to the throne in 1945 and is increasingly harming itself through its aggressive geopolitics.

No world power has ever left voluntarily and peacefully. The aggressive stance of the USA towards Russia and China and its adherence to the alliance with Israel are de facto proof of the aggressive behavior of the sick hegemon.

This attitude could lead to a war between Russia and NATO in Ukraine, where a local conflict is still taking place, all the more so as the Americans have so far been on the way to inciting France, Great Britain and Germany to wage war against the giant empire.

In the Middle East, the attitude is downright perverse. In order not to alienate the Jewish lobbies in the USA, which traditionally have a major influence on presidential elections, the USA is supporting a genocide that has been clearly designated as such by the International Court of Justice. In addition to purely electoral considerations in the USA, the USA also supports Israel in order not to lose its last power base in the Middle East. These two ends obviously justify the means – and the means is genocide. The Israeli attack on Hezbollah in Lebanon has already begun and so there is ever less in the way of a burning Middle East.

Finally, they are also trying to provoke a conflict over Taiwan – a conflict that would be fought between Chinese and would therefore be a civil war. China’s intention to reach a diplomatic agreement with Taiwan in the next 20 to 30 years – that was the plan – is in jeopardy due to Washington’s aggressive stance.

The behavior of the US is unfortunately typical – the downfall is predetermined, the facts and figures in this article prove it. Whether the smouldering fires already blazing in American society will bring about a change and whether they will be aggressive or more balanced cannot yet be guessed. We will have to wait for the presidential elections in the USA, but a lot can still happen between now and November.

For a geopolitician, the world could hardly be more exciting – but for humanity, a little less tension and pressure would be a blessing. After all, people under pressure, especially politicians, have a tendency to make big mistakes.

Tyler Durden Fri, 04/19/2024 - 02:00

N.Y. Gives Trump The Anne Boleyn Treatment

Authored by Richard Porter via RealClear Politics,

Jury selection is underway now complete in the case of The People of the State of New York vs. Donald J. Trump, which alleges that the defendant lied to his own check register, and lied to the general ledger of his own company, when the invoice given to him by his lawyer was paid and recorded by someone else, and that the misstatement he made to himself in his own records was done “with the intent to defraud and intent to commit another crime and aid and conceal the commission thereof.”

It is often noted that this is the first time that a former U.S. president is being tried for a crime, although Ulysses S. Grant may (or may not) have been cited for speeding in his carriage. The federal government chose not to prosecute Bill Clinton, who lied under oath during a sexual harassment lawsuit and then dissembled again about sex before a grand jury. Clinton lost his law license, settled the case on unfavorable terms, and was sanctioned by both federal and Arkansas state courts.

So, this is a first. And let’s be honest about who is doing what to whom and why.

The prosecutor elected in New York County of New York state indicted Trump, after Trump announced his 2024 run for president, for allegedly violating New York Penal Laws 175.05 and 175.10 seven years ago.

That local prosecutor, Alvin Bragg, is a member of the Democratic Party – and the voters who elected Bragg and from whom the jury will be chosen support the Democratic Party. In 2016, the people of New York County voted 87% for Hillary Clinton and 10% for Donald Trump, and in 2020, 87% for Joe Biden and 12% for Donald Trump. In other words, the jury pool is chosen from one of the most partisan jurisdictions in the country – a place where almost all the judges are Democrats as well.

So the Democratic prosecutor elected in the second most Democratic county in the United States will try the former Republican president and current putative Republican Party presidential nominee before a Democrat-appointed judge and a jury drawn from a pool 87% of whom voted against him (and who are being asked if they watch Fox News or listen to talk radio in the screening process).

One wonders if the law even matters. But let’s review the two statutes at issue to highlight what the law requires the prosecution to prove. First, the prosecutor must prove that Trump violated the relevant statute, which requires a finding that he falsified business records with intent to defraud – that he “makes or causes a false entry in the business records of an enterprise.”

By the way, falsifying business records in the second degree is a misdemeanor, not a felony. Moreover, New York’s statute of limitations requires that misdemeanor prosecutions be commenced within two years of the commission of the act, meaning that under the last provision, this case should never have been filed.

Bragg elevated this misdemeanor into a felony by including New York  Penal Law 175.10 in the indictment – falsifying business records in the first degree. That statute reads this way:

“A person is guilty of falsifying business records in the first degree when he commits the crime of falsifying business records in the second degree, and when his intent to defraud includes an intent to commit another crime or to aid or conceal the commission thereof.”

There are other obvious difficulties with this case beyond the credibility of the witnesses (a porn star who denied any affair numerous times and a disbarred lawyer convicted of perjury).

For example, why does the entry in the check register or the general ledger matter at all? When would those entries, as opposed to the allegedly false invoices, be shown to anyone for any nefarious purpose? And were the entries even false? Was there any intent to fool someone to obtain something in making the entries – who was the target of the allegedly false entry in private books and records? If there’s no mark, no victim, then how could there be an “intent to defraud”? Defraud whom? And what is the other crime that the person making the book entry intended to commit or hide? If the other crime is not a New York crime but a federal crime, does every county prosecutor in the United States, including Alvin Bragg, have the jurisdiction to enforce an alleged federal crime indirectly through a state crime?

We shall see.

The political nature of this trial is obvious, and unprecedented in the United States. Even with irrefutable DNA evidence that Bill Clinton committed perjury, the special prosecutor declined to press criminal charges against him. In America’s recent past, prosecutors tended to exhibit a modicum of restraint. Those days are apparently gone.

I reviewed an interesting law review article of political show trials down through history, from the trial of Socrates in Athens to the famous show trials in the 1930s Stalinist Soviet Union, curious to see if I could find historical precedent for this trial.

The closest precedent is probably Anne Boleyn’s trial for adultery in 1536. It was about sex, the trial was in a hostile jurisdiction controlled by her accuser, and the whole point of the exercise was to lop off the head of someone who stood in the way of the regime’s continuity. But that’s what Democrats have lusted for since Donald Trump first arrived on the scene, isn’t it? They made no secret of it.

Richard Porter is a lawyer in Chicago and National Committeeman to the RNC from Illinois.

Tyler Durden Thu, 04/18/2024 - 23:40

FBI Repatriates Revolutionary War-Era Firearms At Philadelphia's Museum Of The American Revolution

The FBI announced the return of several Revolutionary War-era firearms during a repatriation ceremony at Philadelphia's Museum of the American Revolution last week, according to CBS.

These guns, stolen in the 1960s and 1970s from around Valley Forge Park, were recovered following a lengthy investigation involving the FBI's Art Crime Team, the Department of Justice, and the Upper Merion Township Police Department. The agency is now seeking public assistance to locate more missing artifacts.

Special Agent Jake Archer, a member of the FBI's Art Crime Team said: "We were all committed to seeing justice — not just bringing the objects back home, but seeking a proper prosecution of those who perpetrated these crimes."

CBS reported that in 2009, an investigation was triggered when a tipster informed Upper Merion Township police about a gun, suspected of being stolen, seen at a local antique show. Although it turned out not to belong to the Valley Forge collection, this tip led detectives to probe the thefts more deeply.

They collaborated with the Museum of the American Revolution, which now holds the collections previously managed by the dissolved Valley Forge Historical Society, and obtained a list of missing items.

As the investigation unfolded, Michael Corbett, Scott Corbett, and Thomas Gavin admitted to stealing items from Valley Forge Park and the Valley Forge Historical Society, according to the FBI. They assisted investigators in locating some of the stolen artifacts.

The collaborative effort expanded to include the FBI's Art Crime Team, and together, they pursued leads on the thieves and the artifacts. Currently, the search continues for ten items: four firearms stolen on October 24, 1968, from Valley Forge and six other items taken from different locations.

The museum is actively working to refine the descriptions of the missing objects to include more distinctive details that may jog public memory, hoping that some artifacts might have been inherited unknowingly by individuals. The FBI and other involved agencies are still seeking public assistance to recover these pieces.

Scott Stephenson, president and CEO of the Museum of the American Revolution, concluded: "The fact is, the vast majority of people want to do the right thing."

You can see photos and descriptions of the missing items on the FBI website.

Tyler Durden Thu, 04/18/2024 - 23:10

"This Is Too Stupid For It Not To Be The Plan" Holter Hammers Globalist Agenda 'Driving America Into A Brick Wall'

Via Greg Hunter’s USAWatchdog.com,

Back in February, when everyone was predicting a Fed rate cut, precious metals expert and financial writer Bill Holter said rates would be going up and not down.  Since that call, the 10-Year Treasury is up more than 30 basis points.  It closed today at 4.67%.  Now, Holter is still calling for higher interest rates that will coincide with higher gold and silver prices. 

Why?  It’s called inflation, and it’s not temporary. 

Holter explains, “Foreigners are backing away from buying Treasuries..."

"That is the only thing that has kept the doors open, so to speak, is the fact we are able to borrow an unlimited amount of money because we are the world reserve currency. 

Foreigners backing away from our debt is going to lead the Federal Reserve to be the buyer of last, and then, only resort.  So, you will have direct monetization between the Fed and the Treasury. 

What that will cause is a currency that declines in purchasing power.  It will decline in a big way, and it will decline rapidly. 

So, what I am describing is inflation that turns into hyperinflation.”

But that is not the end of our problems.  Holter points out, “I do think it is going to get worse, and that means interest rates will go higher, and that will put on much more pressure..."

"  We are at 4.65% on the 10-Year Treasury now.  We went from 3.75% to 4.65% (in a short amount of time).  We run through 5% on the 10-year Treasury, and everything blows up. . . . The bottom line here is we are at the end game of a fiat currency.  Young people have never experienced high inflation. . . . Where we are this time around, Paul Volker (Fed Head in 1979) was able to raise rates to 16% or 17% and crush inflation.  He was able to do that because there was not a ton of debt.  The U.S. debt back in 1980 was 35% of GDP.  Now, it is 125% plus debt to GDP.  If you raise rates to 6% to 8%, you will blow up the entire system because much of this debt was put on during the 1% to 3% interest rate time. . . . The inflation is going to push rates higher no matter what the Fed says.”

Gold is hitting one new record high after another.  It’s not greed, but fear, and Holter says:

“Big money is buying gold because they are looking for protection.”  

The other wild card is war, and Holter says, “War is a way to keep the system propped up.”

In closing, Holter contends, what you are seeing is not a series of mistakes by incompetent people.  Holter says,

“This is too stupid for it not to be the plan. . . .This is not a Republican or Democrat thing.  We are being steered directly into a brick wall because the globalists can’t take over the world with the US standing. 

They have to take the US down, and if they take the US down, so will the western financial system fall.  If that happens, the globalists can have their way.”

Bill also added that according to his former business partner, Jim Sinclair (who died in October of 2023) said at some point gold will start a rally that you never sell. 

Holter thinks the rally in gold and silver going on now is the rally Sinclair was talking about years ago.

There is much more in the 46-minute interview.

Join Greg Hunter as he goes One-on-One with financial writer and precious metals expert Bill Holter for 4.16.24.

*  *  *

To Donate to USAWatchdog.com Click Here.

Bill Holter’s new website is still growing, and it is totally free.  It’s called BillHolter.com.

Tyler Durden Thu, 04/18/2024 - 22:40

Moar Power: White House Considers Invoking "Unprecedented" Climate Emergency

How best to grab power when there's no convenient emergency to use as excuse? Invent one!

That's right: if you had 'climate emergency' on your 'list of disasters to prompt mail-in balloting' bingo card, you may soon be able to cross that square off. That's because the Biden administration is reportedly renewing discussions "about potentially declaring a national climate emergency," according to Bloomberg. 

Such an "unprecedented" declaration could "unlock federal powers to stifle oil development", among other things, the report says. 

Bloomberg reports, according to sources who requested anonymity as a final decision has not been reached, top advisers to President Joe Biden are reconsidering the possibility of declaring the emergency.

This action could lead to restrictions on crude exports, a suspension of offshore drilling, and a reduction in greenhouse gas emissions, sources say.

Within the White House, opinions are split on this issue. Some advisers believe that declaring a climate emergency wouldn't grant Biden sufficient new powers to enact significant changes. Others, however, contend that it could energize voters who prioritize climate issues.

“President Biden has treated the climate crisis as an emergency since day one and will continue to build a clean energy future that lowers utility bills, creates good-paying union jobs, makes our economy the envy of the world and prioritizes communities that for too long have been left behind,” said White House spokesperson Angelo Fernandez Hernandez.

Historically, U.S. presidents, including former President Donald Trump, have declared national emergencies for various reasons. A climate emergency declaration would be unprecedented and likely face legal challenges.

The Biden administration considered this in 2022 amidst a deadlock on clean-energy legislation, but shelved the idea after the Inflation Reduction Act passed. Last year, President Biden said he had effectively used his authority for climate action by imposing conservation and clean-energy measures, and this year he halted new natural gas export licenses.

Environmental groups, however, are pushing for more aggressive actions. Emergency declarations could allow the president to halt crude exports, suspend offshore drilling, and restrict oil and gas transportation.

Youth environmental organizations like the Sunrise Movement, Fridays For Future USA, and the Campus Climate Network are planning Earth Day protests to demand that Biden declare a national climate emergency.

Aru Shiney-Ajay, the Sunrise Movement’s executive director, said Biden must "use every tool at his disposal to tackle the climate crisis and prepare our communities to weather the storm" of "another summer of floods, fires, hurricanes and extreme heat". 

Tyler Durden Thu, 04/18/2024 - 22:10

Conservatives Call For House Hearing On Google Gemini Ahead Of 2024 Election

Authored by Eric Lundrum via American Greatness,

Conservative activists have been calling for the House GOP to hold congressional hearings regarding the threat of Google Gemini, Google’s artificial intelligence (AI) program, and its left-wing biases ahead of the 2024 election.

As reported by Just The News, a letter signed by multiple conservative groups was sent to Congressman Jim Jordan (R-Ohio), Chairman of the House Judiciary Committee, this week demanding that Congress take action to investigate possible collusion between Big Tech platforms such as Google and the Biden White House.

“With President Trump the decisive favorite to win in November, it’s clear that Big Tech giants will try to pull the same tricks as last time to throw the election to the Democrats,” the letter reads in part.

“Unfortunately, as tech giants ramp up their crusade against Trump ahead of the 2024 election, 15 new technologies like generative AI will give them even more powerful tools to boost Democrats’ electoral prospects than four years prior,” the letter continues.

“[I]t’s more important than ever for Republicans in Congress to scrutinize Google’s monopolistic AI efforts, particularly given the threat it could pose to election integrity in 2024 and beyond.”

The letter was signed by the leaders of six conservative groups: The New York Young Republican Club, the Bull Moose Project, the American Principles Project, Citizens for Renewing America, American Accountability Foundation Action, and the National Constitutional Law Union.

Jordan has previously ordered Big Tech companies to hand over documents regarding their communication with the Biden Administration, as well as any influence the White House may have had over Google’s development of Gemini.

In addition, the Biden Administration has been hit with multiple lawsuits over its efforts to coerce social media companies into censoring conservative viewpoints, particularly regarding the Chinese Coronavirus and widespread voter fraud in the 2020 election.

Tyler Durden Thu, 04/18/2024 - 21:40

Biden Wins Endorsement Of Kennedy Family Members

Authored by Emel Akan and Jeff Louderback via The Epoch Times (emphasis ours),

President Joe Biden on April 18 traveled to Philadelphia, the final stop of his three-day tour of the crucial battleground state, where he received the Kennedy family’s endorsement for his reelection campaign.

President Joe Biden speaks during a campaign event at Martin Luther King Recreation Center in Philadelphia, Penn., on April 18, 2024. (Drew Hallowell/Getty Images)

More than 15 members of the Kennedy family, who had previously criticized Robert F. Kennedy Jr.’s independent bid for the White House, endorsed President Biden at a campaign event in Philadelphia.

Speaking at the event, Kerry Kennedy, the sister of RFK Jr. and Robert F. Kennedy’s seventh child, praised President Biden, stating that reelecting him is the best way forward for the country.

“President has been a champion for all the rights and freedoms that my father and uncle stood for. That’s why nearly every single grandchild of Joe and Rose Kennedy supports Joe Biden,” Ms. Kennedy said.

“In 2024, there are only two candidates with any chance of winning the presidency,” she added.

Speaking at the event, President Biden thanked the family members for the endorsement.

Six of RFK Jr.’s siblings stood alongside President Biden on stage at the Martin Luther King Recreation Center in Philadelphia.

“I don’t want to become emotional. What an incredible honor to have the support of the Kennedy family,“ President Biden said. ”Most meaningful introduction I’ve ever gotten in my life.”

RFK, Jr. entered the presidential race in April last year, challenging President Biden for the Democratic Party nomination.

After encountering multiple hurdles by the DNC and accusing the organization of “rigging the primary” and not allowing any candidate to compete against President Biden, Mr. Kennedy announced he would run as an independent in October 2023.

Many believe Mr. Kennedy’s third-party challenge threatens President Biden more than former President Trump.

In the RealClearPolitics average of polls as of April 17, President Trump leads with 41 percent, followed by President Biden (35.7 percent), and Mr. Kennedy (11.7 percent).

Multiple times on the campaign trail, Mr. Kennedy has pointed out that he has more than 100 family members and said that many of them are working on his campaign.

Amaryllis Fox Kennedy, his daughter-in-law, is his campaign manager.

RFK Jr. responded in a social media post to his family members’ endorsement of President Biden.

“I hear some of my family will be endorsing President Biden today. I am pleased they are politically active—it’s a family tradition,” Mr. Kennedy wrote on X on April 18. “We are divided in our opinions but united in our love for each other.”

During a recent interview with CNN, Mr. Kennedy criticized President Biden, saying he is a bigger threat to democracy than President Trump.

“I can make the argument that President Biden is the much worse threat to democracy, and the reason for that is President Biden is the first candidate in history—the first president in history that has used the federal agencies to censor political speech, so to censor his opponent,” Mr. Kennedy said.

In March, the DNC announced the creation of a team to counter third-party and independent presidential candidates.

It hired Lis Smith, a veteran Democrat strategist who managed Pete Buttigieg’s unsuccessful 2020 presidential campaign, to spearhead an aggressive communication plan to combat Mr. Kennedy, independent Cornel West, and Green Party nominee Jill Stein.

In October 2023, Mr. Kennedy’s sister, Rory Kennedy, called her brother’s campaign “dangerous” in a post on X.

“I feel strongly that this is the most important election of our lifetime, and there’s so much at stake. And I do think it’s going to come down to a handful of votes in a handful of states.

“And I do worry that Bobby just taking some percentage of votes from Biden could shift the election and lead to Trump’s election,” she told CNN in March when asked about her comment.

Campaign Events in Pennsylvania

President Biden traveled to Pennsylvania this week for a three-day tour of the battleground state, starting with a campaign event in his hometown of Scranton on April 16.

In Scranton, the president highlighted a contrast between his economic agenda and that of his 2024 presidential rival and predecessor, former President Trump.

He also reiterated his push to raise taxes on the rich and big corporations.

“Folks, where we come from matters. When I look at the economy, I don’t see it through the eyes of Mar-a-Lago; I see through the eyes of Scranton,” President Biden said.

On April 17, President Biden traveled to Pittsburgh, where he announced dramatically higher tariffs on steel and aluminum imports from China, a move likely aimed at pleasing blue-collar voters in the battleground state.

With 19 crucial electoral votes, the state is a key focus for the Biden campaign.

The campaign says it believes it has a clear advantage in Pennsylvania for the 2024 election, and is making significant investments in key voter groups, including black and Latino communities in the state.

Last month, for example, the campaign opened 14 offices in a single week, enlisted 1,700 volunteers, and formed key coalitions around the state to reach out to various demographics.

The campaign has seven offices in Philadelphia to mobilize voters and ensure a high turnout in November.

“In contrast, the Trump campaign still has no public presence—and across Pennsylvania, local media have reported there are no signs of the Trump campaign.

“The RNC was even forced to scrap plans to open a minority outreach office in Allentown, Pennsylvania,” the Biden campaign said in a statement.

Tyler Durden Thu, 04/18/2024 - 19:40

America's Confused Commander-In-Chief Warns Israel Against Attacking Israel

While Democratic strategists have long tried to downplay and dismiss President Biden's obvious age and cognitive issues—which have been on continual display of late—he has just made fresh comments which illustrate the dangers of these persistent issues for the Commander-in-Chief and for the nation at a moment the Middle East stands on the brink of major war.

The 81-year-old president said in an interview with Nexstar Media’s Reshad Hudson that he is urgently trying to de-escalate tensions centering on Gaza and Iran, following Iran's Saturday night unprecedented attack on the Jewish state. That's when he explained that he urged Israel to exercise restraint, and in his words he "made it clear to the Israelis: don’t move on Haifa." Watch below:

According to Biden, he is pressuring the Israelis not to attack “Haifa”. Leader of the free world, ladies and gents pic.twitter.com/SeZJPfaJAS

— Jake Wallis Simons (@JakeWSimons) April 18, 2024

He then began immediately mumbling: "It’s Just Not, I Mean, Anyway..." - and trailed off, apparently losing his train of thought before moving on to speak about the Saturday Iranian ballistic missile and drone attack on Israel.

Biden was apparently intending to refer to Rafah in the comments, which is the Palestinian city in the far southern Gaza Strip, and not the third largest city in Israel. The Netanyahu government has for weeks said it is preparing to move militarily on the refugee-packed enclave. 

The US is worried that an IDF ground offensive will trigger further regional escalation, including the potential for attacks on American bases from Iran-backed militias in Iraq and Syria.

But the obvious question is: will Israeli leaders really taking Washington's stance seriously when they hear the American president, or "leader of the free world," warning Israel not to attack a city in Israel?

If Biden can't distinguish Gaza's Rafah from Israel's Haifa, then certainly we can expect to see many more of these consequential gaffes if he gets into office another four years.

Tyler Durden Thu, 04/18/2024 - 19:20

Soros Nonprofit Gives 8-Figure Sum To Far-Left Super PAC

Authored by Eric Lundrum via American Greatness,

One of the many nonprofits run by far-left billionaire George Soros donated tens of millions of dollars to a major super PAC that funds multiple left-wing groups.

According to Fox News, Federal Elections Commission (FEC) records posted Monday reveal that the Fund for Policy Reform gave $60 million to the Democracy PAC in the first quarter of 2024; the Democracy PAC subsequently sent $21 million to Democratic committees in support of various congressional candidates in both the House and the Senate.

The $21 million was dispersed among a dozen left-wing groups, with $8 million being split two ways between top outside groups in support of House and Senate Democrats.

Additionally, $2.5 million was donated to Planned Parenthood, as well as another $2.5 million to BlackPAC, and $1.8 million to American Bridge, a Democratic opposition research firm.

Other donations included $1 million to the ColorOfChange PAC and $500,000 to Americans for Contraception Victory.

ColorOfChange is one of the most radical groups when it comes to the far-left “defund the police” agenda.

“We know that policing doesn’t keep us safe, communities do,” the group said in a petition demanding that supporters harass politicians to get them to support the defunding movement.

“Policing doesn’t lead to thriving communities, investment does.”

The massive $60 million dump was the second-largest donation in the 2024 election cycle thus far, only surpassed by the $82.6 million that was donated by a state super PAC to Never Back Down, the super PAC that backed the doomed presidential campaign of Governor Ron DeSantis (R-Fla.).

The 93-year-old George Soros recently handed full control of his political empire to his son, Alex, and Alex’s subsequent moves have been watched closely.

The younger Soros shows no signs of slowing down his family’s influence over left-wing politics both in America and globally, continuing to pour millions into far-left causes that undermine the security of the United States of America, including pro-amnesty and pro-open borders groups, as well as backing progressive district attorneys who refuse to enforce basic laws.

In response, Musk is gathering signatures...

Given the relentless attacks on free speech, I am going to fund a national signature campaign in support of the First Amendment

— Elon Musk (@elonmusk) April 18, 2024

Tyler Durden Thu, 04/18/2024 - 19:00