Zero Hedge

Krugman & The Goldbugs

Authored by via The American Institute for Economic Research,

The announcement that President Trump would nominate Judy Shelton, a long-time advocate of the gold standard, for a seat on the Federal Reserve’s Board of Governors got Paul Krugman thinking: why do some economic commentators become goldbugs?

Krugman offers a rather cynical view. It is difficult “to build a successful career as a mainstream economist,” he writes.

Parroting orthodox views definitely won’t do it; you have to be technically proficient, and to have a really good career you must be seen as making important new contributions — innovative ways to think about economic issues and/or innovative ways to bring data to bear on those issues. And the truth is that not many people can pull this off: it requires a combination of deep knowledge of previous research and the ability to think differently. 

So what’s an aspiring if not so smart or creative economist to do?

“Heterodoxy,” Krugman writes, “can itself be a careerist move.”

Everyone loves the idea of brave, independent thinkers whose brilliant insights are rejected by a hidebound establishment, only to be vindicated in the end. And such people do exist, in economics as in other fields.… But the sad truth is that the great majority of people who reject mainstream economics do so because they don’t understand it; and a fair number of these people don’t understand it because their salary depends on their not understanding it.

In other words, Krugman suggests most gold standard advocates are either ignorant or disingenuous - and, in some cases, both.

According to Krugman, “events of the past dozen years have only reinforced that consensus” view that “a return to the gold standard would be a bad idea.” 

[T]he price of gold soared from 2007 to 2011; if gold-standard ideology had any truth to it, that would have been a harbinger of runaway inflation, and the Fed should have been raising interest rates to keep the dollar’s gold value constant. In fact, inflation never materialized, and an interest rate hike in the face of surging unemployment would have been a disaster.

Is that so?

Krugman commits two mistakes here.

First, he implicitly assumes that the data-generating process for the dollar price of gold would have been the same if, over the period in question, the U.S. had been on a gold standard. Robert Lucas famously warned against such an assumption. The argument is straightforward. Individuals do the best they can given their institutional constraints. If those institutional constraints change, so too will the decisions individuals make and, hence, the data generated by those decisions.

Consider that many see gold as a hedge against inflation today. But there would be no scope for gold to serve as an inflation hedge under a gold standard. In other words, the decision to hold gold under a gold standard would be fundamentally different from the decision people face today.

The second error concerns Krugman’s characterization of the gold standard. The gold standard is not a system where the price of gold is fixed. Rather, it is a system where the dollar is defined as a particular weight of gold. Under a gold standard, the dollar price of gold cannot change because the dollar is gold.

Krugman’s mischaracterization of the gold standard as a system where the price of gold is fixed leads to a fundamental misunderstanding about how a gold standard operates. The gold standard does not require a central bank to raise or lower rates “to keep the dollar’s gold value constant,” as Krugman claims. Indeed, a central bank is wholly unnecessary. 

Under a gold standard, the purchasing power of gold is determined by the ordinary forces of supply and demand. If the demand for gold coins increases, the purchasing power of gold will rise (i.e., dollar coins buy more goods and services). Miners respond to the higher purchasing power by digging up more gold and hauling it off to the mint to be coined. And, as the supply of monetary gold expands, the purchasing power gradually falls back to its long-run level. Likewise, if the demand for gold coins falls, less gold is mined and some existing coins are melted down and repurposed for nonmonetary ends. This automatic mechanism meant that the price level was much easier to forecast under the gold standard.

What about Krugman’s claim that the gold standard would have required contractionary monetary policy from 2007 to 2011, when many economists would have called for expansionary monetary policy? Wrong and wrong. It would not have called for any kind of policy — just individuals pursuing their own interests, as usual. And, since the purchasing power of gold was increasing over the period, it would have set in motion an expansion in the supply of money — not a contraction, as Krugman claims.

We won’t take issue with Krugman’s working model of the economics profession. No doubt many drift to unconventional views because they do not understand mainstream economics or find it in their interest to hold unconventional views. Advocacy of the gold standard, an unconventional view, is no exception. 

Unlike Krugman, however, we do not believe the problem is limited to those holding unconventional views. Many economists have strong opinions about the gold standard. Few seem to understand how a gold standard functions and how such a system performed historically relative to modern fiat-money regimes. Krugman provides a case in point.

Hong Kong Riot Police Beat Protesters; 'Smart Lampposts' Destroyed

Hong Kong riot police unleashed on protesters Saturday after a tense standoff resulted in beatings and the deployment of tear gas for the first time in over a week, according to CNA. 

In Kowloon Bay, police charged protesters who were not in pre-approved rally areas for what is now the city's 12th week of protests. 

Around mid-afternoon, protesters at a police station used bamboo rods and plastic traffic barriers to build barricades, while other set things on fire in the street. 

Photo: May James/HKFP

"Protesters are simply not able to defend themselves. Police are abusing their powers," one man told The Guardian. 

Down with 'smart lampposts' 

The central theme of this weekend's protests is widespread opposition to the city's installation of so-called 'smart lampposts' which are equipped with censors, closed-circuit cameras, and are connected to the net. While the government says they are only for the collection of air quality, traffic and weather data, protesters say they're part of the state surveillance apparatus. 

Protesters used an electric saw to cut down one such lamppost - with others pulling at it with ropes. The demonstrators shielded their faces with masks and umbrellas to avoid facial recognition. 

The ongoing demonstrations are aimed at pressuring Hong Kong leadership to respond to their political demands - namely, the complete withdrawl of a controversial extradition bill which allows mainland China to pluck Hong Kong residents out of the country for trial. Protesters are also demanding the establishment of an independent body to investigate police violence, and finally - the free election of Hong Kong's leaders and legislature. 

On Friday night, protesters formed a 28-mile-long human chain as people turned out for a peaceful demonstration similar to 1989 anti-Soviet protests in Estonia, Latvia and Lithuania.

There have been numerous skirmishes between riot police and protesters since the protests began, as one of the world's "safest" financial hubs has become a battle zone. 

Kunstler: The "Resistance" Ship Is Lost At Sea

Authored by James Howard Kunstler via Kunstler.com,

In these horse latitudes of late summer, with the seas becalmed and the riggings a’creak, the Resistance’s ship-of-the-line (a.k.a. the Democratic Party) drifts ever further out of sight of land. Even so, a few of its crew members have jumped ship:

  • New York’s mayor, stowaway Bill de Blasio, may have been shoved overboard.

  • Former Colorado Gov. Hickenlooper walked the plank clutching the lifebuoy of a sure-thing senate seat.

  • Washington State Gov. Jay Inslee went mad drinking seawater and dove in after hallucinating a school of beckoning mermaids.

Months from now, the accursed vessel may be discovered mysteriously deserted, prompting tales of mutiny and cannibalism, like the brigantine Mary Celeste of legend.

That’s how lost and far out the Party looks more than a year from the general election. Back on dry land, the resourceful Golden Golem of Greatness made another flanking maneuver around the Resistance’s left, disarming the so-called Flores Rule from 1994 that underlay the racket of using children to evade the immigration laws. Now the kids can remain with their parents awaiting deportation, which is the natural consequence of sneaking across the border illegally. The Resistance cannot grok the reality that federal law actually applies in cases of border-jumping. Shrieks of “racism” rise from coastal yoga studios and cappuccino bars. Uncle Sam is racist through and through, from his run-down boot-heels to his chin-whiskers.

The New York Times, America’s journal of double-plus good-think, is proving this week with its “1619 Project,” that the NBA is actually the legitimate governing body of this land, contrary to the racist document purporting to be the “constitution.” How many three-pointers could that roly-poly little math freak, Ben Franklin, shoot? Don’t you understand that the Civil War was fought over the attempt by damnable whites to suppress basketball, The Times imputes. Can’t anybody play The Star-Spangled Banner blues anymore in its original form as a field holler, before that cad Francis Scott Key stole it and quashed all the flatted notes?

Elizabeth Warren set the stage for anointing herself America’s Race Hustler-in-Chief by addressing the niggling matter of her former claim to be a Cherokee Indian, since disproven by a DNA test. There was loose talk, you see, that she used the Cherokee ruse to bamboozle her overseers on the Harvard Plantation, where she got to work in the Big House known as the Harvard Law School based on her “diversity” bona fides — a “minority hire!” The claim was so transparently idiotic and dishonest that she was desperate to walk it back as delicately as possible, in order to keep up with the race hustling of her fellow pols chasing the nomination. A rain dance was arranged in the aptly-named heartland town of Sioux City.

"Like anyone who’s being honest with themselves, I know that I have made mistakes,” said Ms. Warren, who was met with a standing ovation when she took the stage [The Times reported]. “I am sorry for harm I have caused. I have listened and I have learned a lot, and I am grateful for the many conversations that we’ve had together.”

Was a more disingenuous political statement ever contrived? A bundle of devious platitudinous promises of the sort that white people always offered the indigenous folk at a thousand crooked treaty councils? It would have been a little more satisfying, perhaps, if Ms. Warren had specified the mistakes made, e.g. I was falsely claiming a racial identity for career advancement. Now that’s an apology! “Listening and learning?” I dunno… sounds a little like groveling and pandering. Anyone can choke down a few bites of humble pie but please don’t make me eat that shit sandwich!

The Democratic contest may be peaking way too early. And Joe Biden hasn’t even had a chance to claim he is the out-of-wedlock grandson of W.C. Handy. There are indications that the political center is already a little tired of the Everything-Is-Racist trope that the party ran up the flagpole this summer. For The New York Times, it became the publicly acknowledged official editorial slant when newsroom chief Dean Baquet announced that the paper needed a replacement for the shredded gonfalon of RussiaGate.

That move by Mr. Baquet has more than a little quality of whistling past the graveyard. When the summer is over, ill winds will be blowing the SS Resistance close to the Reefs of Durham and Barr, when many of the ship’s officers — Ensigns Brannen, Clapper, Comey, Lynch, McCabe, and many others, perhaps even Admiral Obama — start perp-walking around the deck. What a mighty embarrassment that will be. The cry that “mistakes were made” won’t salvage party’s reputation as it founders and sinks. Glug glug.

China Responds To Trump's "Barbaric" Tariffs: Vows To Fight "Until The End" And Have "The Last Laugh"

After Friday's blitz of reciprocal trade war escalations, which saw a furious Trump slam the two "enemies of the state", Fed Chair Powell and China president Xi, following China's widely expected tariff hike retaliation and Powell's uneventful Jackson Hole speech, and further raise tariffs on virtually all Chinese imports after stocks suffered another major selloff, we said that the next steps were clear.

Sure enough, in response China said it would continue fighting the trade war with the US "until the end" as tit-for-tat escalation is now virtually assured with no end in sight.

On Saturday, China's commerce ministry issued a statement calling on Washington not to "misjudge the situation and underestimate the determination of Chinese people" after US President Donald Trump announced new tariffs on Chinese imports.

"The US should immediately stop its wrong action, or it will have to bear all consequences,” the statement said.

At the same time, a sharply worded commentary in the official party mouthpiece, People’s Daily, said China had the strength to continue the dispute and accused Washington of sacrificing the interests of its own people. Published under the pseudonym “Wuyuehe”, the piece described the latest tariff measures by the US as “barbaric”. The op-ed said China’s own tariffs on $75 billion worth of American products, announced late on Friday, were a response to America’s unilateral escalation of the trade conflict, and vowed that China was determined to fight back “until the end”.

“China’s will to defend the core interests of the country and the fundamental interests of the people is indestructible, and will not fear any challenge,” the author wrote, promising that "history will prove that the side on the path of fairness and justice will have the last laugh."

Predictably, China also took offense by Trump's characterization of Chinese President Xi Jinping as an "enemy" and his "order" to American companies "to immediately start looking for an alternative to China."

Already a sad, toothless sideshow which will culminate without an official communique due to disagreements among the participants, this weekend's G7 summit in Biarritz will be upstaged by the intensifying trade war between the two nations, with analysts warning Trump may pressure other Western leaders to toughen their stance against Beijing. Meanwhile, French President Macron is expected to simply focus on Brazil’s handling of the Amazon rainforest fires - fires which take place every year to a lesser or greater extent - and climate change during the gathering from Saturday to Monday.

(Lack of) diplomacy aside, the hit to China will be profound: according to China’s Customs Tariff Commission, a total of 5,078 US products would be subject to additional tariffs of 10% or 5%, as the duties are implemented in two batches – the first from September 1 and the second from December 15.

As the SCMP notes, an earlier commentary from Taoran Notes, a social media account affiliated with official newspaper Economic Daily, said China’s countermeasures were akin to a “precision instrument”, targeting industries such as US soybeans, crude oil and cars.

Meamwhile, Brian Dodge, chief operating officer of the Retail Industry Leaders Association, said Trump’s continued escalation of tariffs had already rattled the US market.

“Mr President, we implore you to end this trade war before the damage is irreversible,” he said. “If uncertainty spreads from Wall Street to Main Street, the record expansion we’re enjoying will undoubtedly come to an end and it will be the American consumer, not China, who will suffer.”

However, as Bill Reinsch, senior adviser at the Washington-based think tank Centre for Strategic and International Studies, correctly assesed, a de-escalation in the trade hostilities was unlikely because neither side saw any political upside to offering concessions. Trump "wants to keep bullying China and China wants to keep telling the rest of the world that they are the good guy here," Reinsch said.

At the same time, picking up on what we said in "Mr. President, This Is How To Get The Fed To Launch Quantitative Easing", Eurasia Group's Ian Bremmer said that “Trump really doesn’t want the economy to tank... but if he’s headed for confrontation with China anyway (and he is), he’d rather take the hit way before elections. Implies escalation from US soon."

More importantly, it also means that the Fed will be under increased pressure to not only cut rates, but launch "some quantitative easing" as Trump demanded on August 19. As a reminder, at the end of the day, Trump sees the Fed's actions - or lack thereof - as far more important to the US economy than the outcome of the trade war, which explains hiw question "who is our bigger enemy, Jay Powell or Chairman Xi?"

To answer, and provoke Powell into conceding, Trump is now willing to take the US, and global, economy to the edge of recession. It's a big gamble, although Trump's position got an unexpected supporter late on Friday, when none other than BOE head Mark Carney effectively endorsed Trump's destabilizing policies by saying that the time of the US Dollar as the world's reserve currency is now over.

Is The US Becoming A Third World Nation?

Authored by Charles Hugh Smith via OfTwoMinds blog,

This is a chart of an informal kleptocracy which cloaks itself in the faux finery of democracy and a (rigged) "market" economy.

Back in the day, nations that didn't qualify as either developed (First World) or developing (Second World) were by default Third World, impoverished, corrupt and what we now refer to as failed states--governments that were incapable of improving the lives of their people and the machinery of governance, generally as a result of corruption and self-serving elites, i.e. kleptocracies.

Is the U.S. slipping into Third World status? While many scoff at the very question, others citing the rise of homelessness, entrenched pockets of abject poverty and the decaying state of infrastructure might nod "yes."

These are not uniquely Third World problems, they're symptoms of a status quo that's fast losing First World capabilities. What characterizes Third World/Failing States isn't just poverty, crumbling infrastructure and endemic corruption; at a systems level these are the key dynamics in Third World/Failing States:

1. The status quo protects insiders at the expense of everyone else.

2. There is no real accountability; failure has no consequences, bureaucrats are never fired for incompetence, reforms are watered down or neutered by institutional sclerosis.

3. Pay-to-play is the most cost-effective way to influence policy or evade consequences.

4. The status quo is incapable of differentiating between complexity that serves the legitimate purposes of transparency and accountability and complexity that serves no purpose beyond guaranteeing insiders' paper-shuffling jobs. As a consequence, complexity that adds no value chokes the economy and the government.

5. There are two sets of laws: one for insiders and the super-wealthy, and another harsher set for everyone else.

6. The super-wealthy fear nothing because the system functions to serve their interests.

7. The super-wealthy and state insiders control the media's narratives and the machinery of governance to serve their interests. Reforms are in name only; the faces of elected officials change but nothing changes structurally.

8. Insiders, well-paid pundits and the technocrats serving the corporate and state elites believe the status quo is just fine because they're doing fine; they are blind to the soaring inequality, systemic corruption, stupendous waste and the impossibility of real reform.

Does America's status quo protects insiders at the expense of everyone else? Yes. As for the other seven characteristics: yes, yes, yes, yes, yes, yes and yes.

And lets' not forget #9: the vast majority of the economic gains flow to the elite at the very top of the wealth-power pyramid: is this true in the U.S.? Definitively yes. Just look at this chart: this is a chart of an informal kleptocracy which cloaks itself in the faux finery of democracy and a (rigged) "market" economy.

That's the very definition of a Third World failed state.

*  *  *

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Biden Asks Town Hall: What If Obama Had Been Assassinated?

More weirdness from "Creepy Uncle Joe" just days after it was revealed that Obama himself once in a fit of anger said "how many times is Biden gonna say something stupid!"...

Well Mr. Obama, here's the latest per CNN: "During a town hall Friday afternoon, former Vice President Joe Biden asked a New Hampshire audience to imagine what it would have been like if Barack Obama had been assassinated...".

That's right, at the end of a summer that's witnessed a string of some of the worst mass shootings in American history, Democratic nominee hopeful Joe Biden thought it would be a good idea to imagine a hypothetical presidential assassination scenario. 

Biden asked his New Hampshire audience to imagine how it would have affected the country at such a pivotal moment as the nation was witnessing the first black president come to office. 

Biden introduced the hypothetical by recalling, "My two political heroes were MLK and Bobby Kennedy. My senior semester, they were both shot and killed."

He continued during what was billed a 'health care town hall' at Dartmouth College: 

"Imagine if, God forbid, Barack Obama had been assassinated after becoming the de facto nominee. What would have happened in America?"

And in another of his now well-known habit of gaffes, he went on to talk about the 1970 shootings at Kent State University where he claimed "over 40 kids were shot."

Of course, in reality it was four students killed and nine people wounded at Kent State. He had called this and the previously reference political assassinations of the period "pivotal moments" in his life. 

    Though he was using the hypothetical "what if" about an Obama assassination in an attempt to connect the audience emotionally to the 1960's turmoil, it remains simply awkward for Obama's former running mate and Vice President to paint such a scenario involving a still living and politically active former president — especially in the context of Biden's running for president, where everything a candidate says is ultimately to gain political capital. 

    California Governor Blames Texas For California's Policies That Caused The Homeless Crisis

    Authored by Mac Slavo via SHTFplan.com,

    California’s authoritarian governor, Gavin Newsom, blamed the state of Texas for California’s homeless crisis. Rather than put the blame directly on the policies California has instituted that stifle free enterprise and punish heavily those who produce, Newsom said it’s the fault of Texas.

    Newsom said many homeless people on the streets of San Francisco are from Texas. in an attempt to shift the blame from himself and the polices of socialists (who get rich peddling socialism to the masses as everyone else becomes impoverished.)

    Former California assemblyman turned Texas resident Chuck DeVore reacted to Newsom pushing the blame onto others. The vice president of the Texas Public Policy Foundation, Chuck DeVore, said Wednesday that Gavin Newsom is “responsible for the policies that have created California’s homeless crisis,” in the wake of the governor blaming Texas for San Francisco’s homeless crisis.

    “What you’re seeing here are the words of a desperate man that we should almost feel sorry for,” DeVore, who served as a California assemblyman for six years, told “Fox & Friends.”

    “Governor Gavin Newsom has been in office now for 22 straight years, starting at the San Francisco board of supervisors,” DeVore added. Homelessness has been rampant across the state of California in the past few years and merchants and homeowners have become increasingly vocal and incredibly irate at how things are going in the socialist dystopia.

    Though San Francisco has more billionaires per capita than anywhere else in the world, its homeless problem has rivaled third-world nations, according to Fox News.  So much for all that “wealth inequality” the socialists are constantly pushing down the throats of the ignorant.  Government policies are the most to blame for San Francisco’s wealth inequality.

    DeVore doubled down on this, saying that the government’s enslavement of the people of Californian is exactly why he left. He decided to leave California because of its “high cost of living [and] very burdensome regulations and taxes.”

    “There’s more freedom in places like Texas, more opportunity to do what you want to do,” he said.

    The sad truth is that socialism doesn’t work and it never has in all the times it’s been tried.  Humans are not meant to be slaves and eventually, they figure out that no one has a higher claim over their lives than they do.

    US Officials Confirm Israel Behind Unprecedented Airstrikes On Iraq

    In an unprecedented escalation which could reshape alliances in the Middle East, American officials have confirmed that Israel was behind an airstrike on an Iraqi ammunition depot operated by a pro-Iran militia last month, according to The Associated Press:

    Two American officials said Israel carried out an attack on an Iranian weapons depot in July that killed two Iranian military commanders. The U.S. officials spoke on condition of anonymity because they were not authorized to discuss the matter with the media.

    The admission comes after two more mystery explosions rocked paramilitary bases in and around Baghdad within the last two weeks, resulting in multiple paramilitary members killed, at least one civilian death, and dozens of injured, and which prompted Iraq's Prime Minister Abdul-Mahdi to close the country's airspace to all “unauthorized flights”.

    Aftermath of the recent 'mystery explosion' at a military base southwest of Baghdad, Iraq. Image source: AP

    Baghdad has threatened "strong response" if it is confirmed Israeli drones or jets are behind the attacks, and further the military is ready to shoot down any unauthorized aircraft over Iraqi soil. 

    Amid the spate of 'mystery explosions' recently rocking the Iraqi capital, Israeli Prime Minister Benjamin Netanyahu on Monday of this week actually seemed to positively boast that the Israeli Air Force was behind airstrikes on pro-Iran militia bases in Iraq, saying that Israel will "continue to act militarily" to curtail Iranian expansion in the region, according to The Times of Israel.

    “Iran has no immunity, anywhere,” he told reporters while on a state visit to Kiev early this week. He was responding to a specific question about the mystery attacks on Iraq. “We will act — and currently are acting — against them, wherever it is necessary,” he declared.

    "We act in many arenas against a country that desires to annihilate us. Of course I gave the security forces a free hand and the instruction to do what is needed to thwart these plans of Iran," Netanyahu said.

    Both Israeli and Arabic media took it as a tacit admission that Israel is now conducing air raids over Iraqi soil — which if confirmed would mark a huge escalation following repeat airstrikes on Syria of the past couple years.

    Footage showing the August 12th arms depot blast, also widely blamed on Israel:

    The specific attack US officials have now admitted was carried out by Israel occurred on July 19. The AP described it as follows:

    The July 19 attack struck a militia base in Amirli, in Iraq's northern Salaheddin province, causing a huge explosion and fire. A senior official with the Shiite militias at the time told The Associated Press that the base hit housed advisers from Iran and Lebanon — a reference to the Iranian-backed Lebanese Hezbollah group. He said the attack targeted the headquarters of the advisers and a weapons depot.

    Iranian media reported a funeral for a "shrine defender" named Abolfazl Sarabian on the next day, which typically denotes someone fighting in Iraq and Syria.

    The last base to be hit, on August 20, was Balad airbase, which actually hosts US forces and contractors, according to Reuters. The installation also hosts US-supplied Iraqi F-16 fighter jets.

    Thus far Israel has neither explicitly confirmed nor denied having any role in either attacks - Netanyahu's strong hinting during his comments notwithstanding; however, with Iraqi military commanders and government officials already denouncing Israel over the repeat strikes and violation of its sovereignty, this is sure to hasten growing demands from Iraqi parliament for a hasty US troop exit from the country. 

    Is Greenland The Last Chance To Make America Great Again?

    Authored by Tim Kirby via The Strategic Culture Foundation,

    Donald Trump as a non-politician who immediately made the jump to politics winning the highest office in the land is abnormal and this abnormality in his background certainly makes him a more unpredictable and refreshing leader, even if some of his musings are a big odd or out of left field. This time it’s Trump’s desire to up and buy Greenland out right, that is making American and global headlines. But why is he trying to do this, would a virtually unpopulated 51 state do anything for America and is this all even possible to do?

    Of course since Trump thinks grabbing some Greenland is a good idea the Mainstream Media must immediately denounce it even if they are not quite sure how to do so.

    It seems that the primary form of poo-pooing the idea is to loudly imply that since it is an unusual idea, it must therefore somehow be impossible. Essentially their logic is that since large territories are not bought and sold on a regular basis then it should be somehow absurd for Trump to think he could do this. Apparently many of these American “journalists” forget that The Donald is President of a country that bought Alaska and a huge part of its territory from the French. America looks the way it does today on a map partially due to large land purchases from foreign powers. Everyone who passes 2nd grade social studies in the US should know this.

    There is another argument that since Greenland is already populated by people that makes it impossible to buy from Denmark. This talking point makes no sense as the Louisiana Purchase’s territory (although sparsely populated) was nowhere near being devoid of people (same with Alaska) both native and of European origin. So, is there US historical precedent for buying large pieces of land from foreign governments – yes. Therefore, theoretically it should be possible to do again. This is nothing new, just something not done on a massive scale for many generations.

    So it is possible to buy Greenland, but the question is why even bother? It is cold, isolated, relatively far from the rest of America and has seemingly little to offer economically.

    Well first off if you look at a globe, parts of Greenland are as close to Moscow as a few NATO member states like Portugal and Spain. In face Greenland kind of sits nicely between the Land of Opportunity and the Snow Bad Guys.

    We shouldn’t forget that Trump has been critical of NATO from the beginning of his campaign and continues to be so. He also chose to get the US out of the Intermediate-Range Nuclear Forces (INF) Treaty. The President seems open to a bit of defense restructuring and Greenland could be a good “launching pad” for a different US military strategy in a post-NATO and renegotiated INF Treaty world.

    Europe is starting to get uppity and taking complete and total control of Greenland is a lot easier than taking territory on the continent. Even if Denmark protests, (which they are) it is very hard to say “no” to the United States in the long term and very bad for your health. If the US is willing to openly threaten NATO member Turkey with sanctions for daring (as a sovereign nation) to buy tech from the Russians, then one could imagine that the Danes could be easily made to suffer for not giving up their very large future US Air Force Base for some nice beads and a few empty promises.

    Greenland also offers the fact that it is sitting on lots of lovely natural resources that would allow America to dig for what it wants instead of possibly buying it from Moscow. The purchase of the island is a win-win for America’s future from both a Hard Power and Economic Soft Power perspective. Trump is a businessman first and he can obviously see the logic in grabbing the “means of production” rather than just buying from a foreign power that sometimes challenges the US.

    Many would argue that the 50,000 inhabitants of Greenland would either protest or just not accept being bought. This is true, there would be mass protests and the populace wouldn’t approve of this, but so what? What can they do about it? They can march around with signs all the want, it will change nothing. The Lakota Indians have been begging and protesting for independence (as have Hawaiians) for some time, and how’s that going for them?

    The Mainstream Media won’t cover the inevitable protests thus the “poor Greenlanders” narrative will never come into the global consciousness and their pleas will be heard only by God. The Russians will probably send two reporters to shoot a very official documentary movie about them, that the world will ignore, because some White celebrity is wearing dreadlocks and that is harmful to somebody somehow.

    Furthermore, Greenland is a poor location, the US could simply bribe the entire populace with $10,000 each for a total sum of $500,000,000, which in terms of Washington’s budget is peanuts. Hearts and minds have to be won but often they can just be bought. Materialism is one of the greatest means of repression we have ever known, it simply works so a little bribery and the promise of nice roads should work to coerce the population, it certainly did in Eastern Europe in the 90’s,

    If Trump can make or force the deal, taking Greenland would be a massive win for the future of America.

    • It would give America access to resources freeing it from having to buy them from Russia.

    • It would block any further (alleged) developments on the territory by the Chinese.

    • It would give America an expendable piece of territory just as close to Moscow as some NATO member states, which could be critical when/if NATO dissolves.

    • The island has a tiny population. Assimilating millions takes time, but providing for and assimilating 50,000 humans is no problem whatsoever for the USA.

    • Bribing the locas into submission would be cheap, and Greenland is far away enough to stay off the Mainstream Media radar. What happens in Greenland stays in Greenland, so no uprising could occur no matter what the US buys or does there.

    • What can Denmark do to resist other than stalling till a more mainstream US President comes to power?

    “Make America Great Again” is Trump’s slogan on his red hat and when nations are at their “greatest” they are more often than not – expanding. Those 50 perfectly organized stars on the flag were getting boring anyways.

    Macron Warns UK Could Become US Vassal State...

    Authored by Simon Rite,

    France’s president warned Boris Johnson that Britain risks becoming a vassal state of Washington after Brexit. It was a low blow, and hardly news to anyone in London, the capital of the 51st state.

    Of course, what Emmanuel Macron didn’t admit during his meeting with the PM in Paris is that the situation is little better for him. Neither Britain nor France really has the luxury of avoiding vassalisation of some description; all they can do is pick a master. Or meister.

    It really does take some cheek for Macron to warn about the threats of becoming a vassal state to a leader who is in the process of begging for permission to reclaim control of his own country.  

    He had the Gallic gall to claim that relying on a future US trade deal to soften the impact of Brexit, means Britain will merely end up being a client state of the US saying:

    “Can the cost for Britain of a hard Brexit – because Britain will be the main victim – be offset by the United States of America? No... Even if it were a strategic choice it would be at the cost of a historic vassalisation of Britain... I don’t think this is what Boris Johnson wants. I don’t think it is what the British people want.”

    Well, we know what the British people want, getting it is something very different altogether.

    This idea of foreign domination seems to play on the mind of Macron. Just last year he was at pains to point out that France is an “ally” of the US and not a “vassal state.” Methinks Monsieur Macron doth protest too much.

    As he’s so adamant about France’s independence from the whims of Washington, it would be interesting to hear his views on the role Berlin plays in the running of France.

    Being a member of the EU is in itself an exercise in handing over sovereign power to the other members of the union – more specifically, handing it to Germany. Macron’s France is proud and delusional enough to believe it’s big enough to act as a counter-balance to the Germans, but it’s not.

    When the ‘merde’ or the ‘sheisse’ hits the fan, Germany makes sure it’s derriere is covered. Just ask the Greeks what happened when they needed their European brothers and sisters to show some solidarity during the financial crisis. They were forced to accept harsh austerity which turned out to be quite advantageous to Berlin.  

    Britain’s Brexiteers see membership in the EU as ceding sovereignty to bureaucrats in Brussels, and foreign courts, and ultimately to Berlin via Paris.  

    It’s a harsh reality that in its decline, there really isn’t very much London can do to avoid being a client state of someone, and at least there is some pragmatism in the UK’s targeting of a trade deal with Washington. 

    Brits have long had to live with the tag of being America’s 51st state, so why not take advantage of being Washington’s… erm...  junior partner, which is the kind way of describing the so-called special relationship?

    The British get dragged along on America’s ill advised wars and questionable foreign policy adventures all the time anyway; why not see if Washington is willing to throw a free-trade bone at its favourite lap dog in return?

    Macron’s warning to Boris Johnson came from the leader of a proud and independent nation, but I bet he asked Angela Merkel if it was alright first. 

    I could also mention NATO (the mechanism by which the entire EU outsources its defence to the US) but that’s another story.

    US Slams China's Escalating Oil & Gas 'Interference' In Vietnam Recognized Waters

    Late this week, the US State Department accused China of escalating its coercive actions against Vietnam in the South China Sea. 

    A spokesman said the US is "deeply concerned" China is continuing its interference with Vietnam's longstanding oil and gas activities in the Vietnamese Exclusive Economic Zone (EEZ) claim.

    "This calls into serious question China’s commitment, including in the ASEAN-China Declaration on the Conduct of Parties in the South China Sea, to the peaceful resolution of maritime disputes," the statement said. 

    Military officers of the Vietnamese Navy's Second Regional Command signalling territorial claims. Source: Viet Nam News

    This week the National Interest described in detail the worsening situation in a piece aptly titled South China Sea Showdown: China vs. Vietnam (Round 2).

    The report described a Chinese survey vessel dispatched inside the Vietnam claimed EEZ accompanied by Chinese Coast Guard military vessels:

    The Haiyang Dizhi 8, a survey vessel belonging to a Chinese government-run corporation, began surveying a large swath of seabed on 3 July northeast of Vanguard Bank, which falls within Vietnam’s exclusive economic zone. The ship has been escorted by other vessels, including from the China Coast Guard and maritime militia. At the same time, China Coast Guard ships have been harassing Vietnamese drilling operations to the south.

    Western analysts see Beijing's expansion in regional waters as part of a broader campaign of natural resource exploitation, with the ultimate goal of forcing rival countries into 'joint exploration' partnerships, even in undisputed waters. 

    According to the report, the current crisis is the most serious tensions have been between China and US ally Vietnam in years: 

    Chinese incursions into Vietnam’s EEZ are by no means a new phenomenon. The most serious recent incident occurred in 2014, when China deployed an oil rig into Vietnam’s EEZ, sparking a diplomatic crisis between the two neighbors. The current situation near Vanguard Bank, however, represents a more serious challenge on several levels.

    Early this week the US State Department issued a comprehensive press report alleging "China’s interference with oil and gas activities in the South China Sea (SCS), including Vietnam’s long-standing exploration and production activities." 

    China has repeatedly sent survey vessels into waters outside its recognized EEZ.

    It condemned Beijing's "repeated provocative actions aimed at the offshore oil and gas development of other claimant states," which the statement further described as threatening "regional energy security and undermine the free and open Indo-Pacific energy market."

    G7: An Obsolete, Useless Talking Shop

    Authored by Finian Cunningham via The Strategic Culture Foundation,

    The Group of Seven (G7) self-declared advanced nations meet this weekend in France for their 45th annual summit. US President Donald Trump caused a stir ahead of the gathering in Biarritz when he remarked that Russia should be included in the format, thereby making it a G8 summit.

    “Russia should be at the negotiating table,” said Trump, in a rare moment of lucidity.

    His view of including Moscow appears to be shared by France’s President Emmanuel Macron who hosted Russian counterpart Vladimir Putin in southern France earlier this week, only days before the G7 summit.

    Of course, Russia should be at the table to discuss resolving global economic problems. Not just Russia, but China, India and a few others as well.

    Since the G7 club was created in 1975 during the Gerald Ford administration the world has undergone transformative changes from the days when the US, (West) Germany, Britain, France, Italy, Canada and Japan were deemed then to be the most powerful national economies.

    Today, China is second to the US in terms of its economic size. The top 10 national economies have various ranking iterations, depending on which yardstick is used to compare.

    In nominal Gross Domestic Product (GDP) measurement, the top 10 nations, according to the International Monetary Fund, are: US, China, Japan, Germany, India, France, Britain, Italy, Brazil, Canada. In this ranking, Russia is 12th listed after South Korea.

    But if national economies are rated by Purchasing Power Parity (PPP), which takes currency exchange factors into consideration, then the top 10 national economies are: China, US, India, Japan, Germany, Russia, Indonesia, Brazil, Britain, France.

    In other words the present G7 line-up is an arbitrary listing. Indeed, its exclusivity is something of an anachronism in today’s world. It’s a throwback to a bygone era when Western nations were more dominant (save for Japan’s inclusion in the original club). The contours of the world have become more multilateral and multipolar. The exclusion of China from the G7 is perhaps the most glaring anomaly.

    In a tacit admission of the changed global reality that’s why there is the larger format of the G20 (formed in 1999) which in addition to the G7 includes China, India, Russia, Brazil, South Africa, South Korea, Turkey, Saudi Arabia, and others.

    The so-called BRICS (Brazil, Russia, India, China, South Africa) is another sign of changed times, as are numerous other economic fora such as the Association of Southeast Asian Nations (ASEAN), the Asia Pacific Economic Cooperation (APEC), the Eurasian Economic Union (EEA), and the Latin American bloc Mercosur.

    Given that the G7 is supposed to be a forum for coordinating macroeconomic policies to enhance global economic growth, one would think that the logical requirement would therefore be for inclusion of more nations in order to more effectively address the ostensible purpose.

    As it stands, the limited G7 club is a rather clapped-out vehicle. It’s a bit like a broken down auto with flat tires, a blown gasket and crankshaft missing. Does anyone seriously think that Italy in its present political meltdown is in a position to boost the world economy?

    It’s also incongruous that the biggest member of the club, the United States, has no interest in coordinating policy with anyone else. President Trump’s trade war with China, the Europeans and the rest of the world is more akin to the 1930s practice of go-it-alone mercantilism and predatory capitalism. We know how disastrous that turned out with global depression and world war.

    Trump’s reckless gung-ho “America First” policy (and to hell with everyone else) is casting a dark cloud on the world economy from China’s output slumping and Germany’s exports plummeting. Ironically, “business genius” Trump seems to be dimly realizing that the inevitable repercussions are rebounding like a boomerang with harmful impact on the US economy. Yet he says he’s not letting up on his America First drive to the abyss.

    So, sure, if there were a genuine commitment to improve global economic outlook and uplift the wellbeing of ordinary people around the world then the leading nations should be working together in a collegiate planned fashion, and with as much outreach to others as possible.

    Thus, without doubt, the leaders of China, Russia, India and others should be in attendance at the summit in France this weekend. Then it would supposedly turn into a forum not unlike the G20. Which makes the point: why is the G7 even continuing to exist?

    There is an analogy with the US-led NATO military alliance. That organization was formed in a very different geopolitical world compared with the present. Why does NATO continue to exist? It’s putative security function is redundant.

    So too it could be argued is the United Nations Security Council redundant with its five permanent members of US, Russia, China, France and Britain. Surely that forum should be overhauled too reflect a contemporary multipolar world. In short, the world, like history changes, and so too should mechanisms of governance.

    Arguably, however, the G7 is not an economic forum, despite its public image. It’s an arbitrary political clique aimed at reinforcing a presumed Western dominance. A sign of this caprice was when the Russian Federation was admitted to the G7 in 1997 which was then renamed the G8. The admission of former President Boris Yeltsin was permitted because he was feckless towards Western strategic demands. Russia remained a G8 member for 17 years until the Ukraine conflict erupted and President Vladimir Putin was accused of “invading” that country and “annexing” Crimea. Those Western allegations are easily countered with evidence of NATO subversion of the elected government in Kiev in order to prize the former Soviet republic away from Moscow’s orbit.

    Russia’s exclusion from the G8, which then reverted back to the G7, has been a political punishment to bolster a propaganda narrative for undermining and isolating Russia internationally. This is again why the G7 is no longer a viable forum for its stated purpose of advancing the global economy. It’s a useless talking shop in an utterly changed world.

    'This Is An Appalling Kowtow To Beijing' - Hong Kong Workers Fired For Supporting Protests

    They're calling it the "white terror".

    Employees at Hong Kong-based companies, most notably the airline Cathay Pacific, are being fired or otherwise dismissed for supporting the anti-extradition bill (now pro-democracy) protests. On Friday the head of Cathay's Flight Attendants’ Association said she was fired, without explanation, after managers saw what was apparently a pro-democracy Facebook post (the company later clarified that her firing had nothing to do with her role as a union leader).

    According to Reuters, workers in other sectors, particularly in the financial industry, have said they are afraid to even talk about the protests among colleagues or in group chats for fear that they might be snitched out to management.

    "Now the best way is to keep silent, because people could back-stab you for no obvious benefits," said one individual who said he was reported to management. Reuters found one case where an individual received a call from Chinese authorities after posting pro-protest comments on Facebook.

    One Hong Kong-based executive compared the current atmosphere to "the Cultural Revolution."

    "It feels like we’re back to the era of Cultural Revolution," said the executive of a large corporate, referring to the decade-long campaign unleashed by Mao Zedong on China in 1966, which encouraged people to inform on friends, colleagues and family members who did not follow the Communist Party line.

    One pro-Beijing lawmaker in HK said in Hong Kong, politics and business are inseparable.

    "The Cathay incident shows that when doing business in Hong Kong, politics and business are inseparable...it’s quite an alarming message," said a senior pro-Beijing politician.

    Speaking about the resignation of former Cathay Pacific CEO Rupert Hogg, one activist investor questioned whether every CEO of every HK-traded company should resign, according to Bloomberg.

    "This is the most appalling kowtow to Peking," David Webb, a Hong Kong activist investor, wrote on his blog just hours after Chinese state broadcaster, CCTV, broke the news of Hogg’s departure on Aug. 16. "Every substantial employer in Hong Kong, in both the public and private sectors, has employees who have participated in marches that have frequently gone beyond their approved spatial or time limits. Should all the CEOs resign?"

    By kowtowing to the CPC, some worry the airline risks becoming a symbol of subservience to Beijing.

    Chinese officials called for some Cathay workers who had publicly supported pro-democracy protesters to be banned from flying into and over China and asked for the names of all Cathay workers whose jobs take them through Chinese airspace. China also demanded that Cathay draw up a new plan to improve flight safety and security measures. And, in case that pressure wasn’t intense enough, some big state-owned businesses including China Citic Bank International Ltd. and China Huarong International Holdings Ltd. advised employees not to book Cathay flights.

    Ironically, unions in the semi-autonomous city are pleading with the Communist Party to stop pressuring management to employees who support, or have even dared to discuss, the protests. Hong Kong's Confederation of Trade Unions held a press conference on Friday.

    The confederation said 14 people have been fired so far over the protests, something it called a "blatant act of suppression." Meanwhile, Cathay said the firing of Rebecca Sy, the union leader who was fired earlier this week allegedly for posting pro-democracy messages, had nothing to do with her role in the union.

    Red Flag Gun Laws: Connecticut Man's Firearms Seized Because His Son Shared A Meme On Facebook

    Authored by Cat Ellis via The Organic Prepper blog,

    Due to the recent mass shootings, there is a major push for so-called “red flag” gun laws at both the state and federal levels. These laws are the latest tool for gun control advocates to confiscate guns from people based upon only tips and suspicion. No crime has to be committed to trigger an investigation or confiscation.

    Red flag laws violate multiple rights protected by our constitution. The Hill has an excellent article on how red flag laws violate more than the 2nd Amendment, including:

    Hopefully you’ll never commit a mass shooting, murder, or violent assault. But while you might not have a criminal connection to such individuals, you do share at least one thing in common: you both have unalienable rights. The right to face your accuser. The right to due process. The right to protection against unreasonable searches and seizures. Every one of these rights are explicitly violated under red flag laws. (source)

    What could possibly go wrong?

    Just ask Brandon Wagshol and his dad, from the anti-gunner haven state, Connecticut.

    Brandon’s No Innocent Angel

    Before I write anything else, let me be clear. Wagshol is not some squeaky-clean, innocent angel. He wrote some vile racist and transphobic tweets. He also seemed to taunt the FBI in his tweets, which certainly isn’t the smartest thing in the world to do. That being said, holding bigoted views is not the same things as acting on those views. Voicing his bigoted opinions, while disgusting, is not a criminal act. The First Amendment protects his right to voice his hate in the same way that it protects flag burning. No one has to like it, but it’s not a criminal act.

    Wagshol may also have been caught in a few lies made on Facebook. According to Norwalk police Lt. Terry Blake:

    A Facebook page for the younger Wagshol said he was a former U.S. Marine and worked at the Department of Homeland Security as a janitor. Blake said both of these statements on Facebook are untrue. (source)

    Wagshol also admitted to purchasing four 30-round magazines at a Bass Pro Shop in New Hampshire to circumvent Connecticut law limiting magazines to ten rounds. Wagshol is now facing four felony counts for possessing those magazines. Whether or not you support Connecticut’s ban on 30-round magazines, he will be found guilty under current CT law for possessing them.

    Finally, Wagshol did admit to ordering a kit to build an AR.  A lot of preppers and gun enthusiasts have done the exact same thing. That’s more than understandable with the government chomping at the bit to enact more gun control.  Wagshol will likely be in legal trouble in CT for that too.

    Be Careful What You Post on Social Media

    This is where a “concerned citizen” stepped in. Wagshol shared a meme on Facebook that someone found scary.

    According to News12 Connecticut:

    FBI investigators say the Norwalk Police Department received a tip about Wagshol’s activity from a concerned citizen. The joint investigation began after the FBI received a tip that Wagshol was trying to buy high capacity magazines from out of state.

    Police say all the weapons recovered from the home are legally owned and registered to Wagshol’s father, but that the 22-year-old had access to them. Investigators also recovered body armor with a titanium plate, camouflage shirt, pant and belt, ballistic helmet, tactical gloves, camouflage bag and computers. (source)

    That’s right. The confiscated guns belong to his father. The son “had access” to them by living in the same house, but they are his father’s property. His father didn’t do anything wrong, but his property has been seized nonetheless.

    This might be a good time to remind your own kids, both young and adult, to watch what they say on social media because it has real-world implications.

    Let’s take a look at those other confiscated items, shall we? Camouflage clothing, body armor, gloves, bags, and computers are all legal to own. Listing it all, however, sure makes it sound super-scary. But, seriously, how much danger were people facing from that camouflage bag?

    What kind of firearms were confiscated?

    I bet you’re expecting to read a long list of firearms. The media spin has been predictable. CNN said “numerous” firearms were confiscated. The Washington Post described the weapons confiscated as a “cache” However, according to the Hartford Courrant:

    Inside the condominium, authorities reported seizing a .40-caliber handgun, a .22-caliber rifle, a rifle scope with laser, firearm optics and flashlights, along with hundreds of rounds of ammunition. They also found body armor with a titanium plate, and tactical attire, police said.

    So, two firearms. That’s what we’re talking about. And, the rifle takes the smallest rounds possible. It’s the kind of round you use plinking or to shoot squirrels or small pests. Who doesn’t have this stuff kicking around?

    What Kind of Post Gets Your Guns Seized?

    Even though Wagshol has denied having any intent to commit a mass shooting, several news outlets have reported that Wagshol made a Facebook post about wanting to commit a mass shooting, including CNNand The Washington Post.

    So, what was this scary Facebook post that led to Wagshol’s arrest?

    Good question. There doesn’t seem to be one.

    The “concerned citizen” reported a Facebook post regarding buying 30-round magazines. However, no post has surfaced stating Wagshol wanted them for a mass shooting.

    The police claim, however, that Wagshol was indeed planning a mass murder. From the Hartford Courrant:

    Norwalk police Lt. Terry Blake said Wagshol had posted on Facebook that he “was into planning a mass murder.” (source)

    From the CTPost

    Police claimed Wagshol made social media posts showing an interest in mass shootings, but did not specify any particular posts. (source)

    According to Wagshol’s lawyer, Stamford attorney Darnell Crosland, the police failed to cite any actual Facebook posts in the official report.

    Crosland also said the report did not include any of Wagshol’s Facebook posts in question.

    “What I understand is that he didn’t make any comments on Facebook, but there might have been other memes, as they call it, that he might have re-posted, but he didn’t make a statement on Facebook as related to any mass shooting.” (source)

    Some readers here may also be familiar with the Facebook page, Uncle Sam’s Misguided Children. Their page posted an article from their website with the potential offending meme.

    The article goes on to clarify what those terms mean.

    “Boogaloo” – a slang term for shit-hits-the-fan, or government gone bad and they’re coming for you, time to fight back. Boogaloo toys refers to guns. The opposite of “bugging out.”

    “Alphabet bois” – ATF, FBI, DEA, etc.

    “Coat hanger sears” – hand-crafted drop-in auto sears for an AR.

    Could this be the offending post? Maybe, maybe not. The article from Uncle Sam’s Misguided Children also says Instagram has blacklisted the term, “boogaloo”. However, I was able to search Instagram and find both the hashtag and multiple users with “boogaloo” as part of their name. So, that doesn’t seem to be entirely accurate.

    The CTPost stated the “concerned citizen” reported Wagshol’s posts after talking about getting the 30-round magazines from out of state that are illegal in Connecticut.

    Regardless if it was the above-mentioned meme, or a post about magazines which were banned in CT, neither mention mass shootings.

    If it is, how many times have we seen similar memes shared by prepper friends or by fellow members in prepper groups on social media or prepper forums?

    Rights for Some, Or Rights for All?

    Red flag laws are unconstitutional on multiple levels. I know lots of people believe they are necessary. But, we make better decisions when we keep things logical and constitutional, not emotional and reaching.

    Here’s what we know:

    • Wagshol is a 22-year old man, attending college, living with his 2A-supporting dad.
    • This 22-year old holds some hostile and bigoted views.
    • He also holds some anti-government views.
    • He has lied about prior military status and employment history.
    • He decided that his state of residence has imposed unconstitutional laws that violate his second amendment rights and chose to ignore them buy buying 30-round magazines from a Bass Pro shop in NH and ordering an AR kit from CA.
    • Someone reported a meme he shared to police under Connecticut’s “red flag law”.
    • An investigation took place without his knowledge, and his father’s firearms have been confiscated along with some clothing and gear.
    • The official report does not include any specific Facebook posts, never mind Facebook posts discussing mass shootings.
    • He has been banned from the college campus he attends until after the investigation.

    I know I’m going to catch some flak for this assessment, and that’s ok. I’m fine with holding unpopular opinions. I try to remain consistent in my libertarian views, regardless of what’s popular or not.

    But, constitutionally-protected rights apply to everyone, even jerks with bigoted views.

    We’ve got an angry, young man who has run his mouth on social media combined with a general atmosphere of fear over mass shootings and firearms in general. Someone got freaked out and reported him under CT’s “red flag” law. Rather than moving to a state where the laws reflect his values, he chose to violate the law and obtain banned magazines and a kit for a banned gun. These were only found during the confiscation, which was the result of a ruling that denied him and his father (who legally owned the guns) due process. The confiscation violated multiple constitutionally-protected rights. Regardless of what is or isn’t constitutional, he’s still in jail. While Wagshol doesn’t sound like someone I would want to spend much time with, he still has civil rights which appear to have been violated.

    Many would say that because of his views toward other races or towards transsexuals, that alone is enough to constitute a credible threat of violence. Except, that it isn’t. There is a difference between saying, “I don’t like you” and “I am personally going to harm you.” Red flag laws are pure “Thought Police” and “Pre-Crime Division” stuff. 1984 and The Minority Report were supposed to be warnings, not blueprints.

    We either have rights for all, or we have rights for none. If we can overlook someone’s rights because we dislike their beliefs or views, then we should have every expectation that our own rights can and will be overlooked as well. groups we dislike, or we will be torn apart from within by our differences.

    I’m hoping it will be the first but preparing for the second.

    Hong Kong Chaos Crashes Earnings, Worst Since 2008

    Hong Kong stocks remain in a bear market (-20% from 1Q18 peak). They're poised to record the worst corporate earnings since at least 2008 as the local political situation and trade war continue to deepen in 2H19.

    Data compiled by Bloomberg show a 19% slump in operating income for Hong Kong stocks, would be the most significant contraction for Hang Seng Index companies since the financial meltdown in 2008.

    Citywide protests, US-China trade war, and a weak yuan are mostly to blame for earnings losses.

    Hong Kong's political turmoil has rattled economic growth citywide, demand for bank loans to real estate loans to automobile loans to even utility gas usage has declined.

    "The third quarter could be even worse given the local political situation and the trade war escalation," said Jackson Wong, asset management director at Amber Hill Capital Ltd. "Potential downside surprises have not been fully reflected in share prices."
    *chart

    Shangri-La Asia Ltd. fell 7.4% on Thursday and 2.7% on Friday after telling investors "political events" in Hong Kong depressed business at its hotels in the city, while a weaker yuan hurt revenues in mainland China.

    Cathay Pacific, the leading airliner in Hong Kong, said political and social turmoil would have a "significant impact" on revenue for August.

    The Hong Kong and China Gas Company has seen its shares dive nearly 10% since Tuesday after it said the local business environment is "full of challenges."

    Last week we reported on a hotel crisis that was developing. Here's what we said:

    "Hong Kong might not be able to avoid a financial crisis this year or next despite possible stimulus packages to shore up its faltering economy amid violent protests across the city. This has led to a rapid decline in tourism, forcing major hotel chains in the city to substantially slash room prices."

    The escalation of the trade war and at least 11 weeks of protest are also damaging the property market and retail sales.

    HSBC Holdings Plc and BOC Hong Kong Holdings Ltd have seen their shares down significantly this month with the risk of capital flight building as there is no end in sight to the turmoil in Hong Kong.

    And perhaps the global economy has opened up a cycle of vulnerability where a shock could trigger a worldwide recession. That shock could be the events playing out in Hong Kong at the moment. Investors should be on high alert for possible spillover effects into international markets in the coming quarters.

    Animation: The 20 Largest State Economies By GDP Over The Last 50 Years

    Submitted by Visual Capitalist

    When it comes to understanding the size and scope of the $18 trillion U.S. economy, it’s sometimes easier to consider that it’s the sum of many parts.

    Many states already have economies that are comparable to some of the world’s largest countries, giving you a sense of what they might be combined.

    And while every state plays a role in the bigger picture, some states such as New York and California have an outsized impact on fueling the country’s overall economic engine.

    The State of State Economies

    Today’s animation comes to us from SavingSpot, and it covers the size of state economies by GDP going back all the way to 1963.

    The video uses inflation-adjusted data from the U.S. Bureau of Economic Analysis, showing how the ranking of top state economies has changed over time as different states have taken advantage of economic booms.

    Let’s dive into the data to see how things have changed.

    Going Back in Time

    The earliest data in the animation comes from 1963, when New York led the pack with a $70.6 billion economy in inflation-adjusted terms.

    State Economies by GDP, Inflation-Adjusted Chained $USD (1963)

    California ($67.8 billion), Illinois ($39.5 billion), Pennsylvania ($34.5 billion) and Ohio ($33.3 billion) round out the top five, and together they added up to 40.5% of the national GDP.

    The Largest State Economies by GDP Today

    Looking at the most recent data from 2017, you can see the ranking changes significantly:

    State Economies by GDP, Inflation-Adjusted Chained $USD (2017)

    California is the largest economy today – it has a state GDP of $2.6 trillion, which is comparable to the United Kingdom.

    Meanwhile, Florida and Georgia are two states that did not crack the top 10 back in the 1960s, while Texas jumped up to become the second largest state economy. It’s actually not a coincidence that all of these states are in the southern half of the country, as air conditioning has played a surprisingly pivotal role in shaping modern America.

    In fact, the share of the nation’s population living in the Sunbelt rose from 28% in 1950 to 40% in 2000, and this increase in population has coincided with economic growth in many of the states that used to be a sweaty mess.

    A Final Look

    Here is a final animated version of the top 10 largest states by GDP, also provided by SavingSpot:

    The 20 Largest State Economies by GDP in the Last 50 Years

    More Wildfires Are Burning In Angola & Congo Than Brazil

    Thanks to a concerted effort by American social media 'influencers', everybody and their grandmother is now aware of the fact that wildfires - many of which were allegedly started illegally by farmers seeking to clear out more land for farming or pasture - are tearing through the Amazon.

    What many don't realize is that the wildfires in the 'lungs of the Earth' - as French President Emmanuel Macron described the Amazon - actually aren't that uncommon. In fact, they're a natural part of the rainforest's process of self-restoration. In total, this year, fires are up by 83% compared with last year.

    And while the rest of the world uses the fires as an excuse to slam Brazilian President Jair Bolsonaro and his environmental policies (some have accused him of tacitly condoning the farmers who set the fires), Bloomberg reports that Brazil is actually third in the world in wildfires over the last 48 hours, citing data from the MODIS satellite analyzed by Weather Source.

    Weather Source recorded 6,902 fires in Angola over the past 48 hours, 3,395 in the Democratic Republic of Congo and 2,127 in Brazil.

    Like in the Amazon and in California, wildfires aren't all that uncommon in Central Africa.

    As for the total number of active wildfires, they're also nowhere near some of the highs recorded in recent years. According to NASA, more than 67,000 fires were reported in a one-week period in June last year, most of which were started by farmers.

    Over the past two days, roughly 16,500 wildfires were recorded in the top 10 countries.

    Actually, as far as wildfires go, 2019 isn't out of the ordinary in any meaningful sense.

    But we're sure the Instagram influencer set will soon clarify all of this in a series of sponsored posts putting the Amazon wildfires in context...right?

    "It's Gone, The Market Has Evaporated:" Maine's Blueberry Industry In Crisis After Trade War Escalation

    If you thought corn and soybean farmers in the Central and Midwest US had it rough, Maine's blueberry industry just witnessed the largest ever collapse in sales to China, because that country imposed a 70% tariff on berries in retaliation to President Trump's tariffs targeting Chinese goods.

    Maine's blueberry industry could be on the verge of a crisis, a 70% tariff rate has generated so much confusion and uncertainties that berry farmers are asking for a government bailout to prevent a tidal wave of farm bankruptcies in the state.

    However, what's surprising, is that the US Department of Agriculture (USDA) denied berry farmers government bailouts this summer, which were mostly reserved for corn and soybean farmers in the Midwest.

    "I thought we had a pretty good case," says Nancy McBrady, director of the Department's Bureau of Agriculture, Food and Rural Resources. "There's a demonstrated challenge relative to loss of access to China because of the trade dispute. Its gone, the market has evaporated."

    McBrady told WCSH Maine that exports account for 20 to 25% of sales of Maine blueberries, and China was a massive part of that.

    The Wild Blueberry Commission said Maine sells blueberries to several major international markets, including Japan and Korea, the global trade war has not yet harmed those sales.

    The Commission warned that when President Trump slapped China with tariffs, and China retaliated against US berry producers, it enabled Canadian berry producers to take away Maine's market share into China completely.

    "If Canada is selling berries in China, they are not sending them to the USA, which have a good impact on us," Paul Sweetland, owner of Coastal Blueberry Services, said.

    McBrady said the Commission needs to rework supply chains and increase domestic sales of the berries. But she said President Trump needs to settle trade disputes before more damage tips Maine's berry industry into further crisis.

    "We just hope the trade situation can be stabilized. Ultimately that's where everybody wants to end up, so we don't have to rely on government programs to provide this type of assistance."

    And there's more terrible news for berry farmers, the entire agriculture complex, and quite frankly multinationals in the US on Friday morning.

    China announced it would levy retaliatory tariffs on another $75BN in US goods with rates anywhere between 5 and 10%, with the tariffs set to be implemented in two batches, one at midnight on Sept 1 and another at midnight on Dec 15.

    Additionally, China said it would resume 25% tariffs on US autos, stating that "China's adoption of tariff-adding measures is a forced move to deal with US unilateralism and trade protectionism."

    There was even a headline that stated China would impose an extra 5% tariff on soybeans on Sept.1.

    With that being said, everyone is focused on farmers imploding in the Midwest. Now there's more evidence the farm crisis is spreading.

    First Post-Soviet Luxury Bulletproof Limousine Hits Floor Rooms

    Want to roll like Putin? After a $190 million investment in R&D via a public-private partnership project called "Kortezh," Russia unveiled its first post-Soviet presidential limousine, the Aurus Senat, in a Moscow showroom on Friday, according to Reuters.

    The new presidential limousine was initially designed for Russian President Vladimir Putin, reportedly entered mass production at a factory just a few hours outside of Moscow - with plans to sell the new bulletproof design throughout Asia, Africa, the Middle East, and potentially European markets.

    Priced at $274,000, the Aurus offers a lower cost option for heads of states, presidents, dictators, and budget-conscious evil geniuses of the world. 

    The first publicly available Aurus will roll off the production line in 2020 - built in a factory owned by Russian carmaker Sollers in the economic zone of Alabuga, Tatarstan Republic, according to the Trade Minister Denis Manturov.

    "We expect a similar showroom will appear in China in 2020-2021," Industry and Trade Minister Denis Manturov said during the opening ceremony in Moscow.

    The factory should initially be able to produce around 5,000 of vehicles per year, in both a limo and a sedan model, with an off-road vehicle set to enter production sometime in 2021-2022.

    "The minivan and the SUV Komendant are at the testing stage. I hope to see the latter at the (Moscow International) Automobile Salon in 2020," Manturov said.

    A hybrid or fully electric version of the Aurus could arrive by the mid-2020s.

    "We believe the audience will be quite wide," noted Aurus CEO Adil Shirinov, who added that there's been strong interest from governments and corporations. 

    While introduced at the Manilla International Auto Show several years, the Aurus made its public debut last year when Putin cruised to the Helsinki summit in it last year to meet with President Trump. 


    Japan Requests US Marines Deploy F-35s On Its Largest Warships Over China Incursion Fears

    With the trade war with China turning hotter by the minute, any US troop deployment will be closely scrutinized. And when said deployment takes place close to China, alarm bells are bound to go off. Which is why a Friday report by USNI News that Tokyo officials have requested US Marines deploy F-35B fighters aboard Japan’s largest warships, is especially concerning as it puts in "kinetic" proximity Chinese, Japanese and now US troops.

    According to the report, the Marines are now studying the feasibility of deploying short take-off vertical landing (STOVL) fighters from JS Izumo (DDH-183) and JS Kaga (DDH-184), Japan’s 24,000-ton big deck amphibious.

    Helicopter carrier Kaga (DDH-184) on Aug. 27, 2015. Japan Marine United Photo

    The warships were originally designed to field a fleet of anti-submarine warfare helicopters and respond to humanitarian aid and disaster relief. However, in December Prime Minister Shinzo Abe approved a move to convert the two ships to field the STOVL F-35s in parallel with Japan’s purchase of 42 F-35Bs, reported The Diplomat.

    In March, the Abe government asked then-Marine commandant Gen. Robert Neller if the U.S. would consider deploying Marine F-35Bs from Izumo and Kaga, The Asahi Shimbun reported this week. Prompted by the request, the Marines are now standing up groups to determine the technical feasibility of deploying U.S. F-35s from the two ships ahead of the Japanese Self-Defense Force F-35Bs being fielded.

    While the two ships were built with an eye toward STOVL fighter operations, the U.S. has to make an independent determination if their F-35s can operate on Izumo and Kaga.

    For example, U.S. Wasp-class big deck amphibious ships have to undergo deck strengthening and have new heat resistant flight deck treatments as the Marines replace their AV-8B Harriers with F-35Bs. It’s unclear what additional work would be needed to make the two ships ready for F-35s. The Marines currently have an F-35B squadron forward-deployed to Japan — the “Green Knights” of Marine Fighter Attack Squadron (VMFA) 121 that operate with the Wasp Amphibious Ready Group as part of the 31st Marine Expediniaory Unit.

    The Marines have charted out a similar relationship with the U.K. Royal Navy to deploy a squadron of F-35Bs from the new HMS Queen Elizabeth (R08) carrier for its first deployment.

    What is behind the odd Japanese request? In a word: China.

    As USNI points out, for Japan, the move comes as the Chinese expand their regional naval ambitions.

    “Chinese naval capabilities are growing rapidly in the region and I think this is an important step in strengthening the US-Japanese alliance. The Japanese acquisition of F-35Bs will enhance their maritime and aviation capabilities in the region and will further bolster interoperability between Japanese and U.S. military forces,” Eric Wertheim, author of U.S. Naval Institute’s Combat Fleets, told USNI News, Friday. “It will also help ease the burden on U.S. assets that are stretched thin responding to a long list of global crises.”

    Understandably, Beijing has been extremely critical of Japan’s move to put fighters on the two warships saying that they could be considered an attack platform and a violation of Japan’s pacifist constitution (which PM Abe has been fighting tooth and nail to change).

    The "carefully crafted" semantic answer was simple: the advanced stealth fighters will not be used for offensive purposes. In March, former director of national intelligence and former commander-in-chief of the United States Pacific Command Adm. Dennis Blair wrote that fielding F-35s on Izumo and Kaga could be considered a defensive move.

    “The challenges to defending the Self-Defense fleet against aircraft armed with cruise missiles (or hypersonic glide weapons) underscore the need to upgrade the Izumo-class to operate the F-35B STOVL aircraft, as the average range of ship-killing missiles is in the hundreds of miles while the average range of defensive ship-launched antiaircraft and antimissile missiles is only about 100 miles,” wrote Blair and retired Capt. Christopher Rodeman in Proceedings.

    “Armed with short-range anti-ship missiles, the F-35B would be very effective against ‘swarm tactics’ by patrol craft or maritime militia vessels. In an “island grab” scenario, the F-35B would be invaluable in establishing the local air control required for Japan’s new amphibious regiment to retake remote islands.”

    We doubt that China will be dumb enough to fall for that particular explanation.

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