Authored by Dave DeCamp via AntiWar.com,

A Kyiv court on Saturday ordered the house arrest of Metropolitan Pavel, a Ukrainian Orthodox bishop who is the head monk at the historic Pechersk Lavra Monastery.

Pavel is suspected of justifying Russia’s invasion, which is a criminal offense in Ukraine. He has denied the allegations, saying he had “never been on the side of aggression.”

After a court hearing on Saturday, a monitoring bracelet was placed on Pavel’s ankle despite his objections. The allegations against him were made by the Security Service of Ukraine (SBU), and SBU agents raided Pavel’s home.

The arrest is part of a broader crackdown against the Ukrainian Orthodox Church (UOC) by the government of Ukrainian President Volodymyr Zelensky. The UOC has historic ties to Russia but denounced the war and distanced itself from Moscow following the invasion.

The UOC’s steps weren’t enough for the Ukrainian government, as other priests have been arrested and sanctioned as part of the crackdown.

Pavel’s house arrest comes as Kyiv is trying to evict UOC priests from the Pechersk Lavra, known as the Monastery of the Caves in English.

Ukrianian Christains and believers are praying outside the Lavra Caves, protecting the Holy Site as Ukraine and radical groups threaten a forced eviction of monks and seminarians. pic.twitter.com/v5pypgGJye

— Live Not by Lies (@Dana35300026) March 31, 2023

The Ukrainian government owns the Pechersk Lavra and claims the priests living there have violated their lease by making alterations to the historic monastery. But the UOC priests say the accusations are just a pretext to kick them out. The priests at the Pechersk Lavra have refused to leave, and it has been a few days since Ukraine’s deadline for them to be evicted.

The decision by Italy’s data protection authority to block access to Microsoft-backed OpenAI’s ChatGPT last Friday, citing alleged privacy violations, may have kicked off a trend of European countries banning the AI chatbot. 

Reuters reports a spokesperson for the German Federal Data Protection Commissioner told the German-language business newspaper Handelsblatt that temporarily blocking the use of ChatGPT in Germany due to data security concerns could be possible. 

“In principle, such action is also possible in Germany,” Ulrich Kelber said. He mentioned that data security issues could be subject to state jurisdiction but did not elaborate on immediate plans to ban ChatGPT.

Kelber said German officials requested further information from Italy on its ban. Officials in France and Ireland have already contacted Italy about their findings. 

“We are following up with the Italian regulator to understand the basis for their action and we will coordinate with all EU data protection authorities in relation to this matter,” said a spokesperson for Ireland’s Data Protection Commissioner. 

On Friday, the Italian National Authority for Personal Data Protection said ChatGPT violated the EU’s General Data Protection Regulation in multiple ways, including unlawfully processing people’s data and failing to prevent minors from accessing the AI chatbot. 

Calls to suspend new ChatGPT-4 have been increasing by the week. Last week, the tech ethics organization Center for Artificial Intelligence and Digital Policy filed a complaint with the Federal Trade Commission, asserting the new chatbot violates federal consumer protection law and asked for future chatbot releases to the public to be halted. 

The FTC complaint comes days after Elon Musk, Steve Wozniak, AI pioneer Yoshua Bengio and others signed an open letter calling for a six-month pause of new AI chatbots more powerful than ChatGPT-4. 

As of writing this, Italian users don’t have access to ChatGPT. 

A European crackdown on AI chatbots is in progress. 

Authored by Thomas Brooke via Remix News,

It’s the latest in a long line of PR disasters for President Macron’s government…

A French government minister has been scolded by members of her own party after posing for a photoshoot for the cover of Playboy magazine during a time of deep civil unrest following the government’s controversial pension reforms.

In another government faux pas, Marlene Schiappa, who serves as minister for the social economy, will become the first female politician to appear on the front cover of the magazine when the April edition is published.

The 40-year-old minister was fully clothed for the shoot with leaked photos showing her posing in a bow-tied white dress, and another with her wrapped seductively in the French flag. The headline on the front cover reads: “A liberated minister.”

The photo shoot is accompanied by a 12-page interview in which she talks about women’s and LGBT rights.

Political opponents and allies alike have criticized Schiappa for the move, questioning both the timing and its appropriateness.

Prime Minister Elisabeth Borne reportedly scolded the minister for her decision to appear on the magazine cover, telling her it “was not at all appropriate, especially in the current period,” according to BFMTV citing government sources.

France’s moronic government strikes again:

Marlène Schiappa, 🇫🇷 Secretary of State to the Prime Minister, in charge of the Social and Solidarity Economy and Associative Life, poses on the front page of Playboy. pic.twitter.com/Jdp5CVag2y

— Daniel Foubert 🇵🇱 (@d_foubert) April 2, 2023

“I thought it was April Fool’s Day in advance,” added Ludovic Mendes, a Renaissance party colleague of Ms. Schiappa’s.

“I can understand the feminist fight, but I don’t see why we would do it in Playboy. There are other ways to do it,” he added.

Sandrine Rousseau, a Green Party politician, questioned the timing of the stunt and suggested it was being used to detract from the headlines on the ongoing mass protests across the country over the French government’s decision to bypass a parliamentary vote on its controversial pension reform.

“We are in the middle of a social crisis, there is the issue of policing, there are people between life and death; it mostly strikes me as a smoke screen,” she told BFMTV on Friday.

Left-wing radical and former presidential candidate, Jean-Luc Mélenchon, said that “France is going off the rails” making reference to Schiappa’s Playboy appearance and President Emmanuel Macron’s decision to give an interview to children’s magazine Pif Gadget despite avoiding the media for weeks.

“In a country where the president expresses himself in Pif and his minister in Playboy, the problem would be the opposition. France is going off the rails,” Mélenchon tweeted on Saturday.

Schiappa took to the social media platform herself over the weekend to defend her decision.

“Defending the right of women to exercise control over their bodies is everywhere and all the time. In France, women are free. With all due respect to the backsliders and the hypocrites,” she wrote.

Authored by CJ Hopkins via The Consent Factory,

So, I went to London to speak to the Left … no, not “the Left” you’re probably thinking of.

Not the mask-wearing, Ukrainian-flag-flying Left. Not the pronoun-using, segregationist Left. Not the WEF, WHO, FBI, CIA, DHS, and MI6-loving Left. Not the global-capitalist New Normal Left.

The other Left. The old-school Left. The “Covid-denying, conspiracy-theorizing, Putin-loving, far-right-extremist” Left.

There were approximately 150 of us, and we gathered in a “homophobic church” in Islington. Yes, Islington, which is more or less the British headquarters of the New Normal Left.

We did not care.

“Let them come for us,” we said.

They didn’t. It was a Saturday. They were probably out shopping or hunting down imaginary anti-Semites.

So, we went ahead and did our thing.

Our “thing” was a conference loosely based on leftist opposition to the WEF and its assorted dystopian visions for our future … you know, eating the bugs, owning nothing, being happy, that kind of stuff. I was invited by this group called Real Left to speak on a panel with Fabio Vighi, a professor of Critical Theory at Cardiff University. We didn’t talk about the WEF very much. We mostly talked about global capitalism, totalitarianism, and “the New Normal Left.”

Here are the broad strokes of what I said the conference.

*  *  *

In order to understand what happened to the Left (i.e., how it became the New Normal Left), you have to understand the history of global capitalism over the last 30 years or so. Actually, you have to go back a bit farther, back to the early 20th Century, when the Great Ideological Game was still afoot. Back then, capitalism, having overthrown the aristocracies, was on the march, transforming the world into one big marketplace. It was challenged by two opposing ideologies, fascism and communism. They fought it out. Long story short, capitalism won.

Global capitalism (“GloboCap”) was born. It’s one big global-capitalist world now. It has been since the early 1990s. GloboCap has no external adversaries, so it has nothing to do but Clear and Hold, i.e., wipe out pockets of internal resistance and implement ideological uniformity. Which is what it has been doing for the last 30 years, first, in the former Soviet bloc, then, in “The Global War on Terror,” and finally, in our so-called “Western democracies,” as we have just experienced up close and personal during the shock-and-awe phase of the rollout of the New Normal, and are continuing to experience, albeit somewhat less dramatically.

In other words, GloboCap is going totalitarian. That is what the New Normal is. It is not your granddad’s totalitarianism. It is a new, global-capitalist form of totalitarianism. It displays a number of familiar features — suspension of constitutional rights, official propaganda, goon squads, censorship, ubiquitous symbols of ideological conformity, gratuitous restrictions of freedom of movement and other aspects of everyday life, hatred and persecution of official “Untermenschen,” segregation, criminalization of dissent, mob violence, book burning, show trials, etc. — but there won’t be anyone goose-stepping around in jackboots shrieking about “the master race.” It’s not that kind of totalitarianism.

To understand it (which it would behoove us to do), we need to understand global-capitalist ideology, which isn’t as easy as it sounds. Global capitalism has no ideology … or, rather, its ideology is “reality.” When you have no ideological adversaries, you don’t need an ideology. You’re basically God. “Reality” is whatever you say it is, and whoever disagrees is a “science denier,” or a “conspiracy theorist,” or a “malinformationist,” or some other type of deluded “extremist.” You don’t need to argue ideology with anyone, because you have no ideological opponents. Society is divided into two fundamental groups, (a) “normal people,” who accept “reality,” and (b) the “deviants” and “extremists,” who do not. Your political and ideological opponents are pathologized, preemptively delegitimized. After all, who would argue against “reality” except liars and the clinically insane?

Yes, of course, there is intramural political and ideological conflict within the confines of so-called “normality,” just as there is intramural competition between global corporations, but challenging the ideological system itself is impossible, because there is no ground outside it from which to mount an attack. This is probably the hardest thing for most of us to come to terms with. There is no ideological territory outside global capitalism. There is no “outside.” There are no external adversaries. There are only insurgencies, and counterinsurgency ops.

The rest is intramural competition.

And here’s another thing that we need to understand about global-capitalist ideology, and it isn’t going to make my conservative readers, or my libertarian readers, or my leftist readers, happy. But it is essential to understanding the New Normal Left and the shape of the current ideological landscape. I’m going to try to keep this as simple as possible and not get lost in a bunch of post-structuralist mumbo jumbo.

Ready? OK, here we go.

Capitalism is a values-decoding machine. It decodes society of despotic values (i.e., religious values, racist values, socialist values, traditional values, any and all values that interfere with the unimpeded flows of capital … capitalism does not distinguish). This is how capitalism (or democracy if you’re squeamish) freed us from a despotic “reality” in which values emanated from the aristocracies, kings, priests, the Church, etc. Basically, it transferred the emanation and enforcement of values from despotic structures to the marketplace, where everything is essentially a commodity.

So, hurrah … capitalism freed us from despotism! I’m grateful. I’m not a big fan of despotism. The problem is, it’s just a machine. And it has no off-switch.

And now it dominates the entire planet unopposed or restricted in any meaningful way.

So it’s doing what it is designed to do, stripping societies of their despotic values, rendering everything and everyone a commodity, establishing and enforcing ideological uniformity, neutralizing pockets of internal resistance.

The vast majority of that resistance is reactionary. I do not mean that in the pejorative sense.

Most of the opposition to the New Normal has come from the traditional political right, from folks who are trying to preserve their values, i.e., to prevent them from being decoded by the GloboCap values-decoding machine. A lot of these folks don’t see it that way, because they do not want to face the fact that what they are resisting is global capitalism, so they call it other names like “crony capitalism,” “corporatism,” or “cultural Marxism.” I don’t really care what they call it, except when they call it “communism,” which just makes them sounds extremely silly.

The point is, these folks comprise a reactionary force that is pushing back against the advance of global-capitalism and its ideology, whether they know what they are resisting or not. Russia is another such reactionary force, at least insofar as it is attempting to defend what remains of its national sovereignty. Syria and Iran are two other examples. All of these reactionary forces are integrated within the GloboCap system and at the same time are resisting their absorption by it. The dynamics are complex. It isn’t a cartoon or a Hollywood movie with “good guys” and “bad guys.”

Anyway, the battlefield looks like this … you’ve got GloboCap conducting its Clear-and-Hold op, and you’ve got the reactionary (“populist”) backlash against it. And that’s it.

Those are the only significant forces on the battlefield, currently.

Which brings us to the miserable state of the Left.

The Left – and I mean “the Left” broadly, so liberals, and both serious and Brooklyn leftists – are in an ideological double-bind.

Either they align with an increasingly totalitarian GloboCap or they align with the reactionary backlash against it.

They can’t align with the reactionaries, because a lot of them are … well, you know, somewhat bigoted, or they believe in God, or they object to drag queens rubbing themselves all over kids. Many of them own multiple firearms (i.e., the reactionaries, not the drag queens) and fly giant American flags outside their homes (or whatever flags they fly in Great Britain). Many of them voted for Donald Trump, or Brexit, or the AfD here in Germany, or the National Rally in France, or The Brothers of Italy. These are not BBC/NPR-listening people. These are not pronoun-using people. These are scary working-class people.

So the Left has aligned with GloboCap, which, after all, is still decoding all those nasty despotic values (i.e., racism, and other forms of bigotry), and is opposing dictators and religious zealots, and is spreading “democracy” all across the planet. You might think I am being facetious. I am not. Global capitalism is still doing that. Which I support, as do all liberals and leftists.

The catch is, as global capitalism continues to do that, and makes a big show of doing that, it is also going totalitarian. It is not decoding those despotic values out of the goodness of its heart. What it is doing is establishing ideological uniformity. The problem is, it has no ideology. All it knows how to do is decode values, transforming societies into markets and everything in them into valueless commodities. Which it is doing in totalitarian fashion. The Nazis referred to this process as “Gleichschaltung,” the synchronization of all elements of society according to official ideology. That is what is happening, currently, globally.

GloboCap has begun the transition from a “reality” of competing ideologies, sovereign nation-states, cultures, and values to a new, supranational, post-ideological, eventually trans-human, globalized “reality,” and the message is, “you are either with us or against us.”

The New Normal Left is obviously with GloboCap.

New Normal Leftists will furiously deny this, as they shriek for more censorship of dissent and cheer for actual Sieg-heiling Nazis. Just as the “populist” Right cannot accept the fact that what it is opposing is a form of capitalism, the New Normal Left cannot accept the fact that it is aligned with a new form of totalitarianism. It is literally inconceivable to them.

You can show them screenshots of their posts and Tweets in which they called for “the Unvaccinated” to be locked up in camps, and pictures of when they formed fanatical mobs and threatened people who wouldn’t chant their slogans, and they will look at you as if you are out of your mind.

*  *  *

And so we are in a bit of a fix. Which is basically what I told the conference in London. I wish I had some brilliant plan of action to offer. Sadly, I do not. Probably no one does at this stage of things. After all, the New Normal is just getting started.

That said, one thing I’m sure about is, if you don’t want to end up eating the bugs and owning nothing and being happy in your AI-monitored 15-minute city while you wait for your social-credit app to update your vaccination record so you can access your CBDC account and make another minimum payment on your ever-deepening credit-card debt, it would probably be a good idea to try to understand what is actually happening.

Or maybe not. What do I know? I’m just an old “far-right extremist lefty.”

By Ye Xie, Bloomberg Markets Live reporter and strategist

While the US banking turmoil has eased lately, the economic damage from an inevitable tightening in lending may only be starting.  

In China, the opposite seems to be happening. The latest central bank survey shows that credit demand surged to the highest in more than a decade. That lending boom, though, may overstate the recovery in business and consumer confidence.

On Monday, the US ISM manufacturing index slumped to the lowest level since May 2020. It may be one of the earliest signs of the knock-on effect from bank failures last month. While the deposit outflows at small banks seem to be stabilizing, the underlying issue is far from being resolved. The yield advantage of money-market funds is likely to force banks to raise rates to compete for deposits. The resulting higher funding costs could cap banks’ willingness and capacity to lend.

In China, a different dynamic is on display. The PBOC’s quarterly survey of bankers released Monday showed loan demand surged to the highest in 11 years.

The survey result is in-line with the actual bank lending data, which show long-term corporate loans are shooting through the roof, thanks to lower borrowing costs. It is in sharp contrast with the deleveraging in the household sector amid housing turmoil.

At first glance, strong long-term borrowing seems to suggest a resurgence of business confidence as entrepreneurs expand factories or invest in new businesses.

But the central bank’s surveys of businesses and households cast doubt on this interpretation. The macroeconomic heat index of entrepreneurs only recovered in the first quarter to a level seen a year ago, with domestic and export orders showing only marginal improvement. The profitability index actually fell to the lowest level since March 2020. On the household side, the survey also shows a modest recovery in consumer confidence.

All in all, business and consumer confidence seems to be on the mend, but it’s far from a full recovery. That suggests at least part of the demand for corporate debt may be companies borrowing new money to refinance existing debt, as opposed to expanding their business.

Authored by Philip Wegmann via RealClear Wire,

Donald Trump again made history Thursday evening, this time by becoming the first former president of the United States to be indicted, stemming from charges related to illegal hush money payments made to a porn star in 2016.

And yet even while in legal jeopardy, blindsided by an indictment he hoped to avoid, Trump has tightened his grip on the GOP. His wrongful persecution has become the defining cause of the right. At least that’s how many Republicans see it.

“When our justice system is weaponized as a political tool, it endangers all of us,” said Ronna McDaniel, chairwoman of the Republican National Committee. “This is a blatant abuse of power from a DA focused on political vengeance instead of keeping people safe.”

Allies close to the former president previously cautioned him to avoid controversy and to move beyond personal politics to focus on the challenges facing the nation. If he could just do that, Sen. Lindsey Graham predicted in an interview last summer with RealClearPolitics, Trump had “a damn good chance of winning” not just the nomination but once again the White House.

“If it is a grievance campaign,” the South Carolina Republican almost sighed, “then he is gonna have a problem.” Less than a year later, Trump is a candidate again. And Trump is very much aggrieved. But this time, the grievance isn’t exactly by his own invitation. Graham now sees it central to his return to power.

“How does this end, Sean,” the senator told the host of Hannity on Fox News, “Trump wins in court. And he wins the election. That’s how this works.” A loyal surrogate for that presidential campaign, he urged viewers three different times to go donate to the former president because “he has spent more money on lawyers than most people spend on campaigns – they’re trying to bleed him dry.”

Graham isn’t wrong, not just about mounting legal expenses, but more broadly about Trump’s mounting lead in the polls since predicting nearly two weeks ago that he would soon be arrested. He was already the undisputed front runner in the polls before the indictment.

Now defense of the former president is the united cause of the Republican Party. It instantly shifted the 2024 landscape. The scope of the indictment is not known, though some early reporting suggests Trump could face more than 30 counts related to business fraud. Forthcoming legal details, however, were immediately eclipsed by political considerations Thursday evening.

The indictment was just more of the same, Trump said in a statement, likening it to “Russia, Russia, Russia; the Mueller Hoax; Ukraine, Ukraine, Ukraine; Impeachment Hoax 1; Impeachment Hoax 2; the illegal and unconstitutional Mar-a-Lago raid; and now this.”

For Republicans, it was muscle memory to rally to Trump’s defense like they have done so many times before. “Alvin Bragg has irreparably damaged our country in an attempt to interfere in our Presidential election,” House Speaker Kevin McCarthy said in a statement echoed across all corners of the right from old Trump rivals, like Texas Sen. Ted Cruz, who said the indictment signaled “the death of the rule of law,” and new Trump allies, like Ohio Sen. JD Vance who called it “political persecution.”

Trump loyalists seem to have been caught off guard Thursday by leaked news that a grand jury voted to indict the former president. Given that federal prosecutors declined previously to take up the issue of hush payments made ahead of the 2016 election, they had hoped that Bragg wouldn’t ultimately follow through.

Alina Habba, Trump’s attorney, said in an interview with Bret Baier of Fox News that she was “shocked” by the news. She confirmed that a booking at the New York City courthouse, complete with fingerprinting and a mug shot, was soon expected.

If the coming legal wrangling is unprecedented, the political fallout was somewhat familiar. Although Trump’s 2024 rivals were quick to condemn the looming indictment, either by accident or design, the Manhattan district attorney has shifted the national political landscape just 10 months before the Iowa caucuses.

Former Vice President Mike Pence, who is expected to make his own bid for the White House, said the treatment of his old boss was an “outrage” that amounted to “political persecution.” A representative for the Nikki Haley campaign pointed RCP to previous comments the former ambassador made condemning the then still rumored indictment as motivated by “revenge.”

But perhaps the most significant development came from another Florida Republican, the only other potential candidate polling within striking distance of Trump.

That state’s governor, Ron DeSantis, earlier incurred the wrath of Trump and many in his orbit for not speaking out sooner when the former president prematurely predicted his indictment. When first addressing the controversy, DeSantis pledged to avoid “the circus” altogether. Worse in the eyes of MAGA? DeSantis made reference to the underlying facts of the case.

“I don’t know what goes into paying hush money to a porn star to secure silence over some type of alleged affair,” DeSantis said at a press conference. “I just, I can’t speak to that.”

But the governor did not take any shots, veiled or otherwise, at Trump Thursday evening. Instead, DeSantis condemned the indictment as “un-American.” DeSantis vowed that Florida, if it came to that, would not cooperate with forcing the former president from his estate in Mar-a-Lago to face charges in New York.

“Florida will not assist in an extradition request given the questionable circumstances at issue with this Soros-backed Manhattan prosecutor and his political agenda,” he said in a statement.

And just like that, with an assist from a local Democratic district attorney in a state no Republican has carried since 1984, it seems that rather than revisiting old grievances, a newly aggrieved Trump has moved one step closer to the Republican nomination. Lindsey Graham seemingly spoke for the GOP, while making little distinction between opposing an allegedly politicized prosecution, supporting Trump, and defending America itself.

“This is the most irresponsible and dangerous decision by a prosecutor in the history of the country,” the South Carolina Republican said. “He’s opened up a Pandora’s box against the presidency itself.”

A bill allowing individuals to carry concealed firearms without a permit was signed into law by Florida Governor Ron DeSantis on Monday.

The governor’s office confirmed DeSantis’ signing in this press release:

Today, Governor Ron DeSantis signed House Bill (HB) 543 which strengthens Floridians’ Second Amendment rights by allowing Floridians to carry concealed weapons without a government-issued permit. HB 543 goes into effect on July 1, 2023, making Florida the 26th state to enact Constitutional Carry legislation.

“Constitutional Carry is in the books,” said Governor Ron DeSantis.

After July 1, concealed carry permits will no longer be required. The measure has received criticism from gun control supporters. Those against the bill have expressed concerns that permitting individuals to carry concealed firearms in public without training and eliminating an extra background check requirement may be disastrous.

Meanwhile, Second Amendment advocates, such as the bill’s sponsor, and State Rep. Chuck Brannan, R-Macclenny, said:

“This bill is a big step, a big step to help the average law-abiding citizen, to keep them from having to go through the hoops of getting a permit from the government to carry their weapon.

 “It is also not going to change who can and who cannot carry a gun. People that are prohibited now are still going to be prohibited.”

However, Luis Valdes, the Florida director of Gun Owners of America, told Tampa Bay Times the bill is a move in the right direction. He said, “permitless concealed carry is a good thing. But it’s not constitutional carry that we were promised.”

The legislation was approved with a 76-32 vote in the House and a 27-13 vote in the Senate, with most of the votes following party lines. The majority of amendments proposed by Democrats were unsuccessful.

“This doesn’t change you into James Bond with a license to kill,” Carey Baker, owner of A.W. Peterson Gun Shop in Mt. Dora and former state lawmaker, told local media outlet Welsh 2. 

By Russell Clark, author of the Capital Flows and Asset Markets substack

A preferred trade for the last few years has been long GLD/short TLT – it represents the trade off facing western central bankers. Either destroy the bond (and assets) market, or face inflationary pressure. I have been surprised at how well this trade has held up in the face of an oil price falling from USD 120 to USD 80.

But the GLD/TLT trade also has a significant political element to it. When we look at the very long graph (replacing TLT with a long dated treasury index), we can see the spike in the late 1970s. The sell off in the 1970s, represented the failure of the US. Its currency was very weak, treasuries had lost significant value, the Vietnam war had been lost, and the preceding decade had seen three major leaders assassinated, JFK, Bobby Kennedy and MLK. Ronald Reagan survived an attempted assassination in 1981. As an old New Yorker told me, in 1970s it felt like the US was a failed state. At that time, in confrontation with the USSR, soaring oil prices was a win for the Soviets and a loss for the US. The best thing about the US (and democracy in general), is that voting public do not like losers and losing policy, and Thatcher and Reagan were elected to change that, and move policy to pro-capital, a policy that is essentially deflationary.

China is not the USSR. China has a functioning stockmarket, has the second most billionaires in the world, and is one of the largest markets globally for luxury goods (all decidedly un-communist features). As the largest importer of oil, rising oil prices are not a win like it was for the USSR. However, it is very much in China’s interest to see treasuries dislodged as the reserve asset for the global monetary system. China has been selling down its treasuries, and after the US froze Russian central bank holdings, who could blame them.

Falling treasury holdings in China could be seen as deflationary. Certainly when total foreign reserves were falling in China in 2015, was a deflationary period that saw treasuries outperform gold. Now we see Chinese foreign reserves hold up, while its treasury holdings are falling.

Another big change in last two years is that US inflation has been much higher that the China.

One of my arguments is that when governments run pro-labor policies, inflation will be much stronger. To keep inflation in check, financial conditions need to be much tighter. Another way to think about it, is that you need to keep rich people spending in check, while the spending of the poor rises. China has been much “better” in making life tougher for rich people. Using USD High Yield indices in Asia and the US, Asian (mainly Chinese) high yield market has been much weaker.

And here is the problem, the US is trying defeat China, while not making any true sacrifices. Financial conditions were much tighter through the 1980s than they are today, which is what drove the treasury bull market, and its acceptance as a reserve asset. Now the US is trying to hold on to this privilege while offering negative real interest rates and bail outs.

Perhaps the various trade and technology sanctions that the US has place on China will work, and China will devalue and collapse. But when I look at the recent performance of Chinese luxury consumption stocks like Hermes and Louis Vuitton, I am somewhat unconvinced the China growth model is in decline.

I like GLD/TLT as it represents government policy to favor workers over capital. But it has a geopolitical angle – do foreigners want to keep the USD as the reserve currency? Obviously China and Russia would prefer not. And I wonder whether India would also like to be subject to US control on its trade policy? I doubt it. If the US really wants to retain reserve currency status, its going to have to learn how to make rich people suffer – a tough ask in a political systems where elections cost billions.

Last Wednesday, we advised readers that the shorting of oil among the systematic community (i.e. CTAs) had hit near record levels, and with some $30BN in short positions, the “chase” was about to begin.

CTAs are $30BN short and are about to start chasing https://t.co/Th55TKBgoN

— zerohedge (@zerohedge) March 29, 2023

It wasn’t just CTAs: as we also observed one day prior, on March 28, hedge funds were liquidating exposure in virtually all kinds of petroleum products at the fastest pace in years…

… but then something clicked, and as we discussed last week on our private twitter feed, first Goldman’s FICC desk – which unlike the bank’s sellside research group is spot-on most of the time with its trade recos – said that it was time to pursue “opportunistic upside” in Brent…

… which coupled with the sharp jump in oil prices after falling to a 15 month low in mid-March, led to a painful reversal in positioning as managed money shorts unwound bearish bets on WTI crude by the most since 2016…

…. almost as if they knew something was coming.

Maybe they did, maybe not, but something was indeed coming and on Sunday, OPEC+ stunned the world when it announced its second coordinated output cut in under half a year.

While TS Lombard noted earlier that there was a clear political angle to the timing of this announcement, coming shortly after US officials effectively ruled out new crude purchases to replenish the Strategic Petroleum Reserve in 2023, underscoring the souring of US-Saudi relations, and just days after Riyadh pledged its allegiance to Beijing, the surprise OPEC+ production cut was aimed squarely at one audience: the near record shorts that had pushed oil prices to levels that forced the oil cartel to respond.

According to Bloomberg, it’s a return to the tactic first used by Saudi Energy Minister Prince Abdulaziz bin Salman in 2020, when he famously said he wants “the guys in the trading floors to be as jumpy as possible” and vowed that “whoever gambles on this market will be ouching like hell.”

Of course, as today’s market action clearly showed, the assault on short sellers was successful. Markets were wrong-footed and oil futures surged as much as 8%, repricing assets from equities to bonds. Yet OPEC+ also caught consumers and the global economy in the crossfire, spurring concerns about inflation and prompting bets on further interest rate hikes.

As Bloomberg reports, OPEC+ began to see the need for a change in oil policy on March 20, just days after we first hinted at another OPEC+ output cut…

Who cuts first: OPEC+ or Fed

— zerohedge (@zerohedge) March 15, 2023

… when Brent crude slid to a 15-month low near $70 a barrel as a banking crisis threatened to hobble the economy. The Saudis reflected that short sellers were due a reminder of the pain OPEC+ can still inflict on them, the BBG sources said.

Once the wheels were in motion, the decision to hold back more than 1 million barrels of oil from the market was finalized in just a few days, and in a very tight circle. Some delegates said they found out just a day or two before the announcement. Two officials said they were completely blindsided by the decision which makes sense since most of OPEC+ is leaky like a 50 year old oil barrell and most delegates are quick to spew all secrets to their preferred leggy female media reporters (you’ll never guess what takes place in those glitzy Vienna hotels late at night).

The impact was all the greater because, in the buildup to an OPEC+ committee meeting scheduled for Monday, Prince Abdulaziz had repeatedly said the group would hold output steady for the entire year to keep markets stable.

In the end, the announcement on Sunday in the European afternoon, with markets closed, was chosen for maximum impact, the sources said. Sure enough, Brent jumped more than $6 a barrel when Asia woke up, the biggest move in more than a year.

Explaining the decision, delegates pointed Bloomberg to market data on the build-up in short-selling…. the same market data we shared with readers just one day earlier.

As prices slumped with the banking crisis in late March, speculators piled up bearish bets on US crude to the highest in four years and reduced bullish positions to the lowest in more than a decade, according to figures from the CFTC. The financial fears abated toward the end of the month and those short positions were dialed back, but by that point the Saudis were feeling nervous, the people said. The hastily brokered takeover of Credit Suisse Group AG had sparked fears that financial contagion could damage the global economy.

That said, the announcement wasn’t meant to be only a short squeeze trigger: fundamental concerns also emerged, and as the Saudi kingdom grew more concerned about the strength of oil demand, evidence emerged that supply was more than ample. In late March, a key export pipeline from Iraq was halted because of a legal spat between the Kurdish regional government and Baghdad, knocking about 400,000 barrels a day off global supply. Yet crude rose just 4%, strengthening the view that bearish speculators held sway over the market, said one person.

“The market had become a playing field for these shorts” and OPEC+ wanted to drive them out, Amrita Sen, director of research at Energy Aspects Ltd., said in a Bloomberg television interview. The producers group is saying “take us on, but at your own peril.”

The OPEC+ fight with short-sellers also has political implications. It brings most of the group into alignment with Russia, which kicked off the unilateral production cuts in February with a 500,000 barrel-a-day reduction in retaliation for international sanctions. By extension, the output cut also aligns the world’s most powerful oil exporting body squarely against the White House, which was livid after the surprise announcement sent oil – an gasoline – prices sharply higher.

Those curbs haven’t yet fully materialized and their positive impact on prices had been erased by the banking crisis. Now, with OPEC+ members joining in, the oil revenue that feeds the Kremlin’s war machine will be bolstered. Ironically, it comes at a time when the Western anti-Russia alliance is cracking, with the WSJ reporting yesterday that Japan was given an exemption to buy Russian oil above the price cap, a move which most nations will quietly follow.

Last but not least, the Saudis also had to weigh how the decision would affect its relationship with Washington, which has been strained by the kingdom’s repeated refusal to heed American requests for more oil. As Bloomberg puts it, “If the production cuts bring $100 crude back into play, with everything that would mean for high inflation and rising interest rates, US consumers and the White House could join the short sellers in “ouching like hell.“

That’s ok though, at least the Biden admin will have a full SPR to release when times get tough… oh wait.

And speaking of the lowest SPR inventory in nearly 40 years, it’s time to concede that $100 a barrel is finally back into the frame, especially considering that required capex spending to maintain output is woefully inadequate.

“There’s a bullish narrative,” Bob McNally, president of Rapidan Energy Group and a former White House energy official, said in a Bloomberg TV interview on Monday. “If they cut into a bullish narrative, then $100 — we’ll go through it at high speed.”

Beyond the initial market reaction in the hours after the OPEC+ announcement, the key marker for the physical impact of the cuts and the price trends in the coming months will be oil inventories. There had been signs that stockpiles were in decline in recent weeks. In the US where official figures are most visible because they are published weekly, oil stocks dropped by more than 20 million barrels over the last two weeks. Global onshore inventories had fallen in seven of the last nine weeks, according to Vortexa.

But there is still a long way to go. At the start of April, global onshore crude stockpiles were still about 140 million barrels above the level seen a year earlier, Kayrros data show. Taking an extra million barrels a day of supply out of the market in a period when demand should steadily ramp up will erode that surplus.

“The move is extremely bullish as draws on inventories will be immediate,” said Nadia Martin Wiggen, an analyst at Pareto Securities. “This cut proves again that OPEC+ is proactive in managing the supply-demand balance and requires $90 to $100 a barrel.”

Not everyone agreed of course, and as usual, Wall Street’s most vocal oil permabear – who has the lowest oil price targets of all Wall Street analysts – Citi’s Ed Morse said in a Bloomberg TV interview that “there is a scenario for $100 a barrel oil. But I don’t think we’re anywhere near that yet.”

He also wrote in a report overnight that “OPEC+’s actions are clearly focused on shoring up a market that was looking increasingly weaker.” He added that “given market positioning and short covering, a spike now seems inevitable, but could be followed by realization that the market is a lot weaker than people think.”

Or maybe the market is a lot stronger, and China was merely masking its economic recovery precisely to inflict the most damage not only on shorts, but the Biden white house. In a time when the multi-polar world order is breaking down and virtually every nascent superpower (or just plain old “power”) is taking on the senile 80-year-old in the White House, this is certainly a credible scenario.