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

The nation’s top public health agency did not send an alert on COVID-19 vaccines and heart inflammation because officials were concerned they would cause panic, according to an email obtained by The Epoch Times.

The U.S. Centers for Disease Control and Prevention (CDC) in 2021 drafted an alert for heart inflammation, or myocarditis, and the Pfizer-BioNTech and Moderna COVID-19 vaccines. Officials prepared to release it to the public, taking steps including having the agency’s director review the language, internal documents show.

The alert would have been sent through the CDC’s Health Alert System (HAN) network, which goes to state and local officials, as well as doctors, across the country.

The alert was never sent.

In the May 25, 2021, email, exclusively obtained by The Epoch Times, a CDC official revealed why some officials were against sending the alert.

“The pros and cons of an official HAN are what the main discussion are right now,” Dr. Sara Oliver, the official, wrote in the missive. “I think it’s likely to be a HAN since that is CDC’s primary method of communications to clinicians and public health departments, but people don’t want to appear alarmist either.”

Dr. Oliver was corresponding with an employee of either Pfizer or Moderna. The employee’s name and email were redacted in the copy obtained by The Epoch Times.

Dr. Oliver did not respond to a request for comment. Asked about the email, the CDC did not address Dr. Oliver’s statement.

The “CDC’s apparent decision to not immediately issue a formal alert to clinicians warning them about the increased risk of myocarditis and pericarditis in vaccinated individuals is not only inexcusable, it’s malpractice,” Sen. Ron Johnson (R-Wis.), the top Republican on the Senate Homeland Security and Governmental Affairs Committee’s Permanent Subcommittee on Investigations, told The Epoch Times in an email.

“CDC should never prioritize its own public perception over the public’s health, and those who made the decision to do so must be held fully accountable,” he added.

It remains unclear which official or officials decided not to send the alert at a time when doctors across the country were seeing patients with myocarditis report to emergency rooms with chest pain and other symptoms.

Kim Witczak, a drug safety advocate who helped convince regulators to add a suicide warning to antidepressants, said the CDC’s move to downplay heart inflammation fits into a longstanding pattern of transparency issues with agencies and drug companies.

“I can’t even believe that this was even a discussion where they’re like, ‘We don’t want to alarm them.’ We do need to alarm people. We need people to be aware that this is a real potential [problem] that could happen,” Ms. Witzcak told The Epoch Times.

Those kinds of choices have helped erode consumer confidence in public health, she added.

Dr. Tom Frieden, a former CDC director who now serves as president and CEO of the global health project Resolve to Save Lives, also reviewed the messages.

“It is important to carefully weigh the risk of COVID-19 against the risk and benefit of any treatment, including the vaccine. The vaccine safety systems worked—they found a very rare but real signal of myocarditis soon after distributing vaccines that were administered to adolescents,“ Dr. Frieden told The Epoch Times via email. ”When public health officials see a safety signal, they must investigate whether it is ‘true’ or ‘random.’ It is important to consider multiple data angles and gather evidence from partners on the ground, including clinicians. This needs to be done quickly but carefully and thoroughly.”

Moderna, Pfizer Given Heads Up

U.S. authorities identified myocarditis and a related condition, pericarditis, before the vaccines were cleared as events that could be caused by the vaccines. People who received the Moderna and Pfizer vaccines began reporting myocarditis and pericarditis to health authorities and the vaccine manufacturers shortly after the vaccines were rolled out in December 2020.

A signal in the Vaccine Adverse Event Reporting System (VAERS), which the CDC helps manage, triggered in February 2021, the same month Israel warned the CDC and U.S. drug regulators of a “large number” of cases, primarily among young males.

Dr. Rochelle Walensky, the CDC’s director at the time, first addressed the issue publicly in April 2021. She falsely said the agency had seen no reports and that no signal had triggered, while disclosing the CDC was in touch with U.S. military officials on cases among service members.

In reality, hundreds of cases had been reported to the CDC, including some that resulted in death; the CDC either missed or ignored the signal in VAERS; and the CDC helped hide a signal that emerged from a Department of Veterans Affairs system, internal documents and other data reviewed by The Epoch Times show.

The CDC did communicate to certain state officials about myocarditis issues starting in April 2021 and told some doctors in a May 14, 2021, email that the agency was monitoring reports of the inflammation following Pfizer and Moderna vaccination.

Shortly after that missive was sent, the CDC began considering next steps, according to the newly obtained documents.

Dr. Oliver on May 21, 2021, emailed representatives of Moderna and Pfizer to warn them that the CDC was planning to go public with information on the myocarditis cases.

“Wanted to make sure you were aware before anything was made public,” Dr. Oliver wrote in one of the messages, which were obtained by The Epoch Times and are being reported in this story for the first time. “You may be aware, but there have been concerns for myocarditis seen in adolescents and young adults after receipt of the mRNA vaccines. Thankfully, the cases appear relatively mild, but there is concern that we need to make providers aware of this issue. CDC is discussing communication options, and we may have more information tomorrow.”

Cardiologists say there’s no such thing as a mild case of heart inflammation and research has since shown that a number of cases don’t resolve for months, if at all.

The Moderna and Pfizer vaccines both use modified messenger RNA (mRNA) technology.

Moderna and Pfizer did not respond to requests for comment.

One representative from Pfizer sent information to Dr. Oliver and colleagues ahead of a planned meeting, the emails show. The information was redacted.

Moderna officials met with the CDC on May 22, 2021. The discussion covered how the CDC was considering saying there was a “possible causal relationship,” or that the vaccines might be causing the inflammation, according to the emails.

Moderna asked how government officials thought the myocarditis was being caused, or the mechanism of action.

“My current understanding is that it isn’t necessarily a defined mechanism, but that we’ve seen very similar/consistent findings where mRNA vaccines have been used all occurring within days of receipt of an mRNA vaccine (although it could be that systemic inflammation plays a role),” Dr. Oliver wrote.

A representative with one of the companies then checked in on May 25, 2021, asking if the CDC had decided how to communicate to the public about myocarditis.

“Apologies that there hasn’t been more solid communication on this. Unfortunately, I still don’t have a firm update to share. Things have been changing rapidly here,” Dr. Oliver wrote. In the next email, she wrote that some officials did not want to cause panic.

“I am not trying to be vague on purpose- I really don’t know,” she said. “If I had to guess, I would think it’s likely to be a HAN, but can’t say for sure yet. I anticipate there will be firm decisions within the next 24 hours so I’ll let you know.”

Scaled-Down Response

A two-page draft of the alert obtained by The Epoch Times was completely redacted. The Epoch Times is working on acquiring an unredacted copy.

The draft was circulated internally, including to Dr. Walensky, emails show. The messages indicated the CDC chose not to send the alert after consulting with the U.S. Food and Drug Administration (FDA).

The CDC said on its website on May 20, 2021, that a review of post-vaccination myocarditis found “relatively few reports” and that rates of myocarditis “have not differed from expected baseline rates.”

Instead of the alert, the CDC decided to post another webpage called clinical considerations. The page, posted on May 27, 2021, said that “increased cases of myocarditis and pericarditis have been reported in the United States after mRNA COVID-19 vaccination (Pfizer-BioNTech and Moderna)” since April 2021.

The page also said the CDC and the agency’s partners were investigating the issue before recommending COVID-19 vaccination for everyone aged 12 and older.

A draft of the page was shared with Moderna and Pfizer at least several hours before publication, according to the emails.

A CDC spokeswoman said that safety data prompted the CDC to post information on myocarditis online “for public awareness and to provide guidance to clinicians.” She said the clinical considerations reached the same 300,000 provider recipients a HAN alert would have.

“A clinical consideration is useful when information needs to be updated as circumstances evolve, and more data is collected and evaluated,” the spokeswoman said.

In a separate email, she said that “CDC’s focus and concern on myocarditis after COVID-19 vaccination is well known and documented.”

An FDA spokesperson declined to detail its influence on the shelved alert.

“The FDA continues to work collaboratively with the CDC to monitor for known safety risks related to vaccines and determine how best to ensure any relevant safety information is conveyed to the public, health care providers and clinicians,” the spokesperson told The Epoch Times in an email. “After thorough assessment and when the potential risk was clear, the FDA updated the fact sheets for the COVID-19 vaccines and communicated with the public in a manner that was determined to be appropriate for the assessed risk.”

Federal rules require the FDA to add a warning about a “a clinically significant hazard as soon as there is reasonable evidence of a causal association with a drug; a causal relationship need not have been definitely established.”

The FDA on June 25, 2021, added warnings about myocarditis to the labels for the Pfizer and Moderna vaccines.

It’s not just the US that is in desperate need of refilling its strategic oil reserve after Biden drained it to score some quick political points ahead of the 2022 midterms. China also needs to refill its oil tanks after steadily drawing on those stockpiles for much of 2023… but like in the US, don’t expect a massive buying spree that will send global prices rallying.

According to data from Vortexa, onshore inventories in the world’s biggest crude importer fell to an eight-month low at the start of the year. That’s likely to trigger more purchases on an international market which has been balanced between Middle East tensions and a transitory surge in US supply (which grinds to a halt the second the shale M&A wave is over).

As readers are well aware, China’s oil consumption – and estimates of how much it’s holding in reserve – are crucial to the trajectory of world prices. All the extra fuel consumed after Beijing abandoned its Covid Zero travel restrictions helped lift global benchmark Brent crude above $95 a barrel in September. But that pent-up demand now looks spent and China’s economy is struggling, suggesting that restocking by refineries this year will be moderate unless of course Beijing follows through with its intentions of aggressively restarting growth and halting the plunge in the local market.

Similar to the US, with oil prices now around $80 a barrel, that might not be low enough to tempt the government to add to its strategic reserves, although there is the risk that prices may rise much more if the Red Sea situation escalates, forcing both China and the US to miss their refilling window.

Although China’s crude imports hit an annual record in 2023, the peak came in the summer. And even though stockpiles have been depleted, they’re still running above their five-year average, as the Bloomberg chart below shows.

China’s been buying too much crude for years, at least in relation to the growth it’s seen in downstream consumption, and that was particularly true in 2023, said Emma Li, an analyst with Vortexa Ltd. “The nation could be looking to restock some inventories this year, but mostly for refinery use, with active buying for April to May arrival, as refiners prepare to boost runs post seasonal maintenance.”

Unlike the US, Beijing doesn’t publish official inventory data and is especially secretive about its strategic oil reserves. Chinese stockpiles – encompassing onshore commercial holdings and the government’s reserves — have dropped around 9% from a peak in late July, according to the Vortexa figures. They’re currently at 934 million barrels, compared with a five-year average of 920 million but of course that average also captures such slow growth outlier years as 2018 and 2020. Realistically, China’s reserve should be at or near all time highs to keep in lockstep with growth.

Chinese crude stockpiles will likely build this quarter, with “restocking demand from majors,” said Jianan Sun, an analyst at Energy Aspects; he predicts that inventories will likely increase by more than 60 million barrels through this year.

All-told, Chinese demand related to refilling reserves in the first half is likely to be cautious, and a disappointment for oil market bulls.    

Authored by James Rickards via DailyReckoning.com,

I’ve covered a wide variety of potential crises over the years.

These include natural disasters, pandemics, social unrest and financial collapse. That’s a daunting list.

One thing I haven’t done is to cover the greatest potential calamity of all — nuclear war. For the reasons explained below, now is the time to consider it.

Nuclear warfighting is back in the air. The subject is receiving more attention today than at any time since the Cuban Missile Crisis of 1962 and its aftermath. There are three reasons for this.

The first is American accusations that Russia would escalate to use nuclear weapons as it grew more desperate in its conduct of the war in Ukraine. These accusations were always false and are risible now that Russia is clearly winning the war with conventional arms.

Still, the threats and counter-threats were enough to put the topic in play.

The second reason is the war between Israel and Hamas. Again, escalation is the concern. One not implausible scenario has Hezbollah in southern Lebanon opening a second front on Israel’s northern border with intensive missile bombardment.

Houthi rebels in Yemen would join the attack. Since Hezbollah and the Houthis are both Shia Muslims and Iranian proxies, Israel could attack Iran as the source of the escalation.

Israel is a nuclear power. With a U.S. aircraft carrier battle group and a nuclear attack submarine in the region, and with nuclear powers Russia and Pakistan standing by to assist Iran, the prospect of escalation to a nuclear exchange is real.

The escalating tensions between Iran and Pakistan just this week add even more fuel to the fire.

The third reason is artificial intelligence and GPT output. Although artificial intelligence can provide profitable opportunities for investors in many sectors of the market, AI/GPT may also be the greatest threat to nuclear escalation because it has an internal logic that’s inconsistent with the human logic that has kept nuclear peace for the past 80 years.

I’ve covered Ukraine and Israel extensively, and they’re widely covered in the news. But today,  I’m addressing the risks of nuclear war from AI/GPT. It’s a threat you’re not hearing anything about, but it needs to be addressed.

Let’s start with a fictional movie. The paradigmatic portrayal of an accidental nuclear war is the 1964 film Fail Safe. In the film, U.S. radar detects an intrusion into U.S. airspace by an unidentified but potentially hostile aircraft.

The U.S. Air Force soon determines that the aircraft is an off-course civilian airliner. In the meantime, a computer responding to the intrusion erroneously orders a U.S. strategic bomber group led by Col. Jack Grady to commence a nuclear attack on Moscow.

U.S. efforts to rescind the order and recall the bombers fail because of Soviet jamming of radio channels. The president orders the military to shoot down the bombers and fighter jets are scrambled for that purpose.

The fighters use afterburners to catch the bombers, but they fail, and the increased fuel consumption causes them to plunge into the Arctic Sea.

The president next communicates with the Soviet premier who agrees to stop the jamming. The president speaks with the attack bomber group leader to call off the attack, but the crew has been trained to disregard such pleas as a Soviet ploy.

The U.S. then offers the Soviets’ technical assistance in helping to shoot down the bombers. The planes are almost all shot down, but one makes it through. The president puts Col. Grady’s wife on the radio; he hesitates but is soon preoccupied with evading Soviet missiles. He then decides his wife’s voice is another deception.

Anticipating the worst and seeking to avoid a full-scale nuclear war, the president orders a U.S. nuclear bomber to fly over New York City knowing the first lady is in New York.

In the end, Moscow is destroyed by a U.S. nuclear weapon and the president orders a nuclear bomb to be dropped on New York City using the Empire State Building as ground zero. The expectation is that the sacrifice of New York in exchange for Moscow will end the escalation, but that is not portrayed in the film.

The next step is left in doubt.

Although Fail Safe is 60 years old, the issues it raises and some of the plot twists are strikingly contemporary. The computer error that caused the attack in the film is never explained technically, yet that’s not highly relevant.

Computer errors occur all the time in critical infrastructure and can cause real harm including power blackouts and train wrecks. Such computer errors are the essence of the debate over AI in strategic systems today.

Read on to see why…

Could AI Start a Nuclear War?

AI in a command-and-control context can either malfunction and issue erroneous orders as in Fail Safe or, more likely, function as designed yet issue deadly prescriptions based on engineering errors, skewed training sets or strange emergent properties from correlations that humans can barely perceive.

Perhaps most familiar to contemporary audiences are the failed efforts of the president and Col. Grady’s wife to convince the bomber commander to call off the attack. Grady had been trained to expect such efforts and to treat them as deceptions.

Today, such deceptions would be carried out with deepfake video and audio transmissions. Presumably, the commander’s training and dismissal of the pleas would be the same despite the more sophisticated technology behind them. Technology advances yet aspects of human behavior are unchanged.

Another misunderstanding, this one real not fictional, that came close to causing a nuclear war was a 1983 incident codenamed Able Archer.

The roots of Able Archer go back to May 1981 when then General Secretary of the Communist Party of the Soviet Union Leonid Brezhnev and KGB head Yuri Andropov (later general secretary) disclosed to senior Soviet leaders their view that the U.S. was secretly preparing to launch a nuclear strike on the Soviet Union.

Andropov then announced a massive intelligence collection effort to track the people who would be responsible for launching and implementing such an attack along with their facilities and communications channels.

At the same time, the Reagan administration began a series of secret military operations that aggressively probed Soviet waters with naval assets and flew directly toward Soviet airspace with strategic bombers that backed away only at the last instant.

These advances were ostensibly to test Soviet defenses but had the effect of playing to Soviet perceptions that the U.S. was planning a nuclear attack.

Analysts agree that the greatest risk of escalation and actual nuclear war arises when perceptions of the two sides vary in such a way as to make rational assessment of the escalation dynamic impossible. The two sides are on different paths making different calculations.

Tensions rose further in 1983 when the U.S. Navy flew F-14 Tomcat fighter jets over a Soviet military base in the Kuril Islands and the Soviets responded by flying over Alaska’s Aleutian Islands. On Sept. 1, 1983, Soviet fighter jets shot down Korean Air Lines Flight 007 over the Sea of Japan. A U.S. Congressman was onboard.

On November 4, 1983, the U.S. and NATO allies commenced an extensive war game codenamed Able Archer. This was intended to simulate a nuclear attack on the Soviet Union following a series of escalations.

The problem was that the escalations were written out in the war game briefing books but not actually simulated. The transition from conventional warfare to nuclear wargame was simulated.

This came at a time when the Soviets and the KGB were actively looking for signs of a nuclear attack. The simulations involving NATO Command, Control and Communications protocols were highly realistic including participation by German Chancellor Helmut Kohl and UK Prime Minister Margaret Thatcher. The Soviets plausibly believed that the war game was actually cover for a real attack.

In the belief that the U.S. was planning a nuclear first-strike, the Soviets determined that their only course to survive was to launch a preemptive first strike of their own. They ordered nuclear warheads to be placed on Soviet Air Army strategic bombers and put nuclear attack aircrafts in Poland and East Germany on high alert.

This real life near nuclear war had a backstory that is even more chilling. The Soviets had previously built an early warning radar system with computer linkages using a primitive kind of AI codenamed Oko.

On September 26, 1983, just two months before Able Archer, the system malfunctioned and reported five incoming ICBMs from the United States. Oko alarms sounded and the computer screen flashed “LAUNCH.” Under the protocols, the LAUNCH display was not a warning but a computer-generated order to retaliate.

Lt. Col. Stanislov Petrov of the Soviet Air Defense Forces saw the computer order and had to immediately choose between treating the order as a computer malfunction or alerting his senior officers who would likely commence a nuclear counterattack.

Petrov was a co-developer of Oko and knew the system made mistakes. He also estimated that if the attack were real, the U.S. would use far more than five missiles. Petrov was right. The computer had misread the sun’s reflection off some clouds as incoming missiles.

Given the tensions of the day and the KGB’s belief that a nuclear attack could come at any time, Petrov risked the future of the Soviet Union to override the Oko system. He relied on a combination of inference, experience, and gut instinct to disable the kill-chain.

The incident remained secret until well after the end of the Cold War. In time, Petrov was praised as “The Man Who Saved the World.”

The threat of nuclear war due to AI comes not just from the nuclear-armed powers but from third parties and non-state actors using AI to create what are called catalytic nuclear disasters. The term catalytic refers to chemical agents that cause volatile reactions among other compounds without themselves being part of the reaction.

As applied in international relations, it refers to agents who might prompt a nuclear war among the great powers without themselves being involved in the war. That could leave the weak agent in a relatively strong position once the great powers had destroyed themselves.

AI/GPT systems have already found their way into the nuclear warfighting process. It will be up to humans to keep their role marginal and data oriented, not decision oriented. Given the history of technology in warfare from bronze spears to hypersonic missiles, it’s difficult to conclude AI/GPT will be so contained. If not, we will all pay the price.

Ukraine, Gaza, and AI all raise the odds of a nuclear war considerably. The financial implications of this for investors are simple. In case of nuclear war, stocks, bonds, cash and other financial assets will be worthless. Exchanges and banks will be closed. The only valuable assets will be land, gold and silver.

It’s a good idea to have all three — just in case.

Mark Epstein, the brother of elite sex trafficker Jeffrey Epstein, says his brother was murdered, and the Justice Department (DOJ) report concluding suicide is “bullshit.”

“I would like a full investigation of his death. If you look at all the evidence, including the autopsy, the photographs of his body, the bullshit DOJ report that is filled with inaccuracies, you would never come up with the conclusion that this was a suicide – but based on what,” he told The Guardian.

Epstein thinks another prisoner could have gotten into his brother’s cell and killed him on August 10, 2019, and he says he’s been told that not all the cell doors were locked that night.

Most notably, a camera pointing at Epstein’s door was not recording the night of his death. According to the DOJ, however, cellmates who might have had a view of Epstein’s door said they didn’t see anyone go in.

“The question is, who had him killed?” Mark Epstein asked.

In 2020, ’60 Minutes’ revealed several details in Epstein’s death which raised more questions than they answered – and suggested that the financier did not kill himself. In the interview, a forensic pathologist who observed the four-hour autopsy on behalf of Mark Epstein concluded that the evidence pointed to murder more than suicide – particularly due to unusual fractures present in Epstein’s neck that are not consistent with suicide by hanging.

While we’ve heard all sorts of theories about the improbabilities of the force required by the nearly 6 foot tall Epstein to successfully hang himself while breaking an unusual three bones in his neck usually seen in strangulations, that’s nowhere near the most peculiar part of Epstein’s demise.

Then there’s the noose itself… Photos admitted as evidence reveal a clean cloth with no blood, despite Epstein’s clearly bloody neck. Moreover, both ends of the noose were hemmed, not cut – while the guard who found Epstein reportedly cut him down.

Also odd is that Epstein’s ligature wound, allegedly left by said bloodless noose, is fairly low on his neck.

“I have never seen three fractures like this in a suicidal hanging.”

Dr. Michael Baden lays out the forensic reasons why he’s skeptical of the medical examiner’s ruling that Jeffrey Epstein killed himself. **This video contains graphic images.** https://t.co/rZDRtPchod pic.twitter.com/sAkIch7sBF

— 60 Minutes (@60Minutes) January 6, 2020

The photos also reveal other potential nooses – none of which are bloodied, as well as orange sheets strewn around the room.

“There were fractures of the left, the right thyroid cartilage and the left hyoid bone,” said Baden. “I have never seen three fractures like this in a suicidal hanging.”

“Going over a thousand jail hangings, suicides in the New York City state prisons over the past 40-50 years, no one had three fractures,” he added.

Other irregularities include Epstein being taken off suicide watch, broken cameras which didn’t record the front of his cell during the cruicial period, and of course, the fact that his guards failed to check on perhaps the most high-profile inmate in modern history – and were instead browsing the web and sleeping.

Earlier this month, Mark told Tucker Carlson that he’s hit nothing but roadblocks trying to obtain basic documents related to his brother’s death in federal custody.

Ep. 59 Most people understand that Jeffrey Epstein didn’t kill himself. But the attorney general of the United States helped cover up his murder? That’s a different thing entirely. Epstein’s brother Mark explains. pic.twitter.com/aP6EjURJmL

— Tucker Carlson (@TuckerCarlson) January 4, 2024

On Wednesday the US Navy attempted to escort two US owned and flagged container carriers through the Bab el-Mandeb Strait into the Red Sea, but they turned around after coming under Houthi ballistic missile fire.

A we detailed earlier, two contradictory narratives soon emerged: namely the Houthis said they scored a direct hit on one of the US ships, while the Pentagon flatly rejected the claim as nonsense. US CENTCOM said the missiles were intercepted, with one falling into the sea. But this has given rise to many more questions than answers, and some analysts are calling the hostile encounter a clear “loss” for the US Navy and the no less than three well-armed warships attempting to keep the commercial vessels safe. 

The seriousness of the new US war in the Red Sea and with Yemen has been vastly understated and under-covered.

The Houthi are doing far more damage than the US and its media acknowledges, all over Israel/Gaza. Read this great analysis on the last episode: https://t.co/f03mYDrXe7

— Glenn Greenwald (@ggreenwald) January 25, 2024

Below is important commentary from @ArmchairW and raises all of the relevant points, showing that the Pentagon narrative doesn’t fully add up [emphasis ZH]…

* * *

Lost amid all the other news breaking in the last 24 hours is one particularly disturbing story: the United States Navy lost a battle at sea yesterday. CENTCOM put out an anodyne press release yesterday stating that afternoon, “Iranian-backed Houthi terrorists fired three anti-ship ballistic missiles from Houthi-controlled areas of Yemen toward the U.S.-flagged, owned, and operated container ship M/V Maersk Detroit, transiting the Gulf of Aden.

One missile impacted in the sea. The two other missiles were successfully engaged and shot down by the USS Gravely (DDG 107). There were no reported injuries or damage to the ship.” All well and good… but as it turned out there was a lot more to the story.

This engagement occurred while two American merchantmen – the Maersk Detroit and the Maersk Chesapeake – were attempting to run the Bab al-Mandeb from south to north while being covered by the USS Gravely. An AEGIS destroyer’s defensive umbrella should have turned this transit into a milk run – except it didn’t. CENTCOM admits that one of the Houthis’ tactical ballistic missiles – undemanding targets as far as such things go – got through the Gravely’s interceptors.

What they neglected to mention was that it struck about a hundred meters from the Maersk Detroit, and that after the attack the convoy aborted the transit and retreated back into the Arabian Sea rather than press on into enemy fire. Was retreat the correct decision at the moment? Probably, the Gravely was shepherding two lumbering merchantmen and facing unsuppressed shore batteries of unknown strength and capability in broad daylight, quite possibly without adequate air cover given the ambiguities of the Eisenhower’s exact station in the Red Sea and the limited combat radius of its air wing.

Was this operational plan inadequate? Almost certainly – reading between the lines, it reeks of a complacent assumption that Houthi missile batteries had actually been suppressed by a few rounds of air raids and that a single AEGIS destroyer could handle anything the Houthis could throw at them with no need for additional contingency planning.

In the event neither of these assumptions were correct – and because of it a convoy covered by one of the US Navy’s premier warships retreated from a battle that was going badly. Perhaps the Task Force command should stop trying to shape narratives on this website and get to work on getting the Bab al-Mandeb back open to Western shipping, because right now that particular pool looks very closed.

Authored by Lee Fang,

The year is 2028, and a new and highly infectious coronavirus has struck the sailors of the U.S. Pacific Fleet stationed in the South China Sea. As the world grapples with this emerging pandemic, confusion runs rampant among officials at the CIA, CDC, and DOD, who bicker over the most effective response strategies. 

Meanwhile, China, seemingly immune to the novel virus, seizes the opportunity to launch a full-scale assault on Taiwan, capitalizing on the global chaos. 

While the World Health Organization praises China’s successful social distancing measures, little do they know that the Chinese government had covertly vaccinated its military and essential workers under the guise of a standard COVID-19 booster campaign.

This scenario, initially conceived by Pentagon researchers, may sound like science fiction, but military strategists believe that a “coronavirus bioweapon” may lurk on the horizon. This possibility is one of several outlined in a new report sponsored by the Office of the Secretary of Defense. The report “Plagues, Cyborgs, and Supersoldiers: The Human Domain of War Research” delves into how CRISPR gene-editing technology, mRNA vaccines, brain networking, and other technological advancements could unleash new forms of military conflict.

Released earlier this month and reported here for the first time, this provocative report, conducted within the Acquisition and Technology Policy Program of the RAND National Security Research Division, offers futuristic scenarios that military planners should consider.

“We see a complex, high-threat landscape emerging where future wars are fought with humans controlling hyper-sophisticated machines with their thoughts” and “synthetically generated, genomically targeted plagues” that cripple the American military-industrial base,” the report warns.

In another intriguing scenario, seemingly inspired by the decline of Sen. Dianne Feinstein, and this time set in a more distant future, the report suggests that elderly congressional leaders, desperate to retain power, secretly install state-of-the-art Brain-Computer Interface devices. These devices, commonly used among wealthy senior citizens in the scenario, initially help the senators regain mobility and speech after years of clear cognitive decline. However, when the brain implants malfunction, causing erratic and belligerent behavior, foreign allies begin to distance themselves from the U.S., damaging national security.

The report further highlights the potential hacking vulnerabilities associated with BCI implants, which, while promising for patients with neuromuscular impairments, could be exploited to inject fear, confusion, or anger.

Additionally, the authors caution against the possibility of government employees replacing their natural eye lenses with artificial ones containing tiny cameras connected to micro-storage devices. The small cameras could collect classified intelligence and leak it to foreign adversaries.

However, not all aspects of the report focus on vulnerabilities. In a section discussing human genomic editing, the researchers explore the potential for creating “supersoldiers” through genetic modifications that enhance physical and psychological capabilities. Despite their vulnerabilities, BCI devices could also serve as a means for commanders to communicate swiftly with their forces during military operations.

The report extensively analyzes the technological capabilities of both China and the U.S. in biotechnology and brain technology, highlighting the differences in focus and status between the two nations. It highlights previous reporting on Chinese research into “ethnic-specific genetic weapons” and “purported brain-control weaponry.”

Nevertheless, the report ventures into cultural observations, emphasizing that the U.S. values openness, diversity, and democratic principles. In the face of a more contagious and deadly pandemic, China’s ethnically homogenous and compliant population could give it an advantage in deploying vaccines swiftly. At the same time, authoritarian states might similarly brutally suppress “anti-vaccine populists” and enforce compliance. The report claims this could hinder the U.S. due to its more relaxed regulatory environment that values individual liberties, where such crackdowns and forced vaccinations are more difficult to deploy.

Subscribers to Lee Fang can read the rest here…

The British fuel tanker operated on behalf of trading giant Trafigura, was on fire after it was struck by a missile as it transited the Red Sea, in the most significant attack yet by Yemen’s Houthi rebels on an oil-carrying vessel.

Yemen’s Houthis said on Friday their naval forces carried out an operation targeting “the British oil tanker Marlin Luanda” in the Gulf of Aden causing a fire to break out. They used “a number of appropriate naval missiles, the strike was direct,” the Houthi military spokesperson Yahya Sarea said in a statement.

“Firefighting equipment on board is being deployed to suppress and control the fire caused in one cargo tank on the starboard side,” a Trafigura spokesperson said in a statement. “We remain in contact with the vessel and are monitoring the situation carefully. Military ships in the region are underway to provide assistance.”

The area in question and the southern Red Sea have been the center of multiple attacks on ships by Houthi militants in recent weeks. Since mid-November, the Houthis have launched near daily attacks on vessels transiting the waterway, in an act of solidarity with Palestinians amid the war between Israel and the militant group Hamas. The conflict has rerouted trade flows as some shippers avoid the key waterway.

The tanker, headed toward Singapore, was carrying naphtha, which is used to produce gasoline and plastics. Ironically, the naphtha was of Russian origin, Trafigura said.

“The vessel is carrying Russian-origin naphtha purchased below price cap in line with G7 sanctions,” a spokesperson said, however some have voiced questions about how a venerated Swiss merchant procured the Russian commodity.

Pretty much all origins naphtha is trading below the price cap, but, why would Trafi load from 3 different dark fleet tankers doing STS in Kalamata (GR)? Is more efficient to direct load in Novorossyks… that is if you are legit

— Oil Bandit 🛢️ (@OilCfd) January 26, 2024

The attack, the most serious yet since Houthi militants effectively took control of transit in the Red Sea, will raise fresh questions about whether oil tankers will continue to transit the Red Sea. Since joint US and UK airstrikes on the Houthis earlier this month, tanker traffic in the region has declined, but some vessels have continued to pass through, including those hauling oil from Russia and toward China. Other key oil exporters like Saudi Arabia said this week that they were planning to continue using the route.

As Bloomberg correctly, if unironically, points out, the latest attack suggests that the US and its allies haven’t sufficiently degraded the Houthis’ military capabilities two weeks after launching the first of several airstrikes on the group’s missiles, radars and other assets across Yemen. Of course, it also means that the Biden-spearheaded operation “Prosperity Guardian” which was meant to secure passage of ships in the Red Sea is now literally up in flames.

Last weekend, US Deputy National Security Advisor Jon Finer said military actions to deter the Houthis and other groups backed by Iran would take time.

“Deterrence is not a light switch,” Finer told ABC, trying to explain why nobody takes the US seriously any more. “We are taking out these stockpiles so they will not be able to conduct so many attacks over time. That will take time to play out.”

In its update on the incident, the UK Navy advised ships to transit with caution and said authorities are responding.

Earlier Friday, missiles exploded near a Panama-flagged, India-affiliated ship carrying barrels from Russia, according to Ambrey. Although a Houthi spokesman told the Russian newspaper Izvestia last week that Russian and Chinese ships sailing through the Red Sea would be safe, Friday’s attack was the third in the vicinity of a vessel that had previously called on a Russian port.

Authored by Alasdair Macleod via Substack,

This year is likely to see wealth destruction on a massive scale. The reason this is not widely anticipated in financial markets is due to a mistaken belief that interest rates are at their peak and will decline over the year. The reason interest rates will rise is due to the colossal mountain of government debt to be financed and the restriction of commercial bank credit for non-financial businesses, forcing borrowing rates up and guaranteeing an economic slump.

This article summarises the economic outlook, the consequences for government finances, the fragility of the banking system, and the prospects for financial asset values. All these factors are inter-related to combine in undermining the value of fiat currencies in a widespread flight from credit.

Only direct ownership of gold, which remains legal money despite five decades of US and state-educated economists’ propaganda that it is not, protects citizens from the mounting threat of a collapse in the value of credit.

Introduction

Henceforth, my detailed economic and geopolitical analyses will migrate to my newsletter on Substack.

I will continue to write a summary introduction for Goldmoney’s readers on Thursdays. My market reports for Goldmoney will be published on Fridays as normal.

Accordingly, this is an opportunity to summarise the economic and geopolitical challenges ahead for all Goldmoney readers and how they affect credit and legal money, which always has been and still is gold. There is little doubt now that many of the problems about which I have been warning readers of this column over the years are coming home to roost, and 2024 could go down in history as a year of enormous economic, political, and social change.

Growing instability in the American, European, and Japanese banking systems has encouraged me to emphasise the distinction between money and credit, a topic which is poorly understood even among economists and bankers. Yet growing financial instability is all about the value placed on credit, characterised by obligations which bear a risk of default. And almost the entire Western economic establishment and even its critics mistakenly think that currency is money, having replaced gold. It is an error leading to dangerous misconceptions.

Protecting personal wealth increasingly depends on understanding the distinction between the two, because hoarding real money without counterparty risk is the refuge from an increasingly likely economic crisis, currently facing what we used to call the advanced economies. The economic distinction is no longer appropriate: China is more advanced in terms of consumer goods production than the old school, and India is rapidly catching up. Even the Third World is rapidly evolving. And after multi-decades of socialism, Peronism, and dictatorships Argentina is leading the way back to free markets, a smaller state, and stabilising her currency.

Our governments dare not follow this unexpected change of direction. The legacy of rapid economic development in the nineteenth century and the wealth created have been squandered. Under the accumulating burdens of various socialist delusions, westerners still think someone else owes them a living and that their governments are morally right to rob the rich to keep them in idleness. You can’t blame them for this indolent attitude when the political class thrives on promoting it. But it is our decline and our fall.

The world is bifurcating into two halves — the declining woke old and the dynamic new. While we in the west are declining at an increasing pace, under the influence of our supposed enemies the rest of the world welcomes an escape from our hegemony. Absorbed in our own delusions, our establishments and their media barely recognise this development. And the defeat that looms in Ukraine over Russia and a worsening situation in Palestine hardly disturbs our complacency.

So violent are our economic prospects becoming and the wealth destruction that will follow that we could end up being rescued from our follies by our former empires and spheres of influence. After all, measured by population and GDP we westerners are now in a decreasing minority. Led by the Asian hegemons, the Middle East, Africa, and Latin America will still be there trading with each other and anyone else who can pay for their goods while we go to hell in a handcart. And crucially, Russia, China, members of the Gulf Cooperation Council, and assorted others do understand that gold is money and currencies are merely unbacked credit.

Indebted nations owing dollars could even begin to welcome the collapse of the dollar because it would wipe out their obligations. It would wipe out American hegemony. This was definitely an attraction for supporters of the gold-backed BRICS trade settlement currency which failed to make the agenda in Johannesburg last August.

This is the background we are dealing with for the new year. In our misplaced belief in the fiat dollar and allied currencies, we are rotting from the head down while the rest of the world is rising like a fabled phoenix.

The economic outlook

Investment research echoed by western media has a common theme which runs like this: “The economic outlook is for a mild recession, which will permit interest rates to decline, taking pressure off the financial system.”

The confidence expressed in our economic condition appears to be supported by backward facing statistics. We extrapolate our forecasts from the past, relying on economic models for interpretation. But it is plainly obvious to anyone who is aware of the true economic conditions that non-financial businesses are struggling badly. Bankruptcies in American and European jurisdictions are hitting new highs. Having unexpectedly soared, mortgage expense is leading to personal distress and reducing consumer spending. Small and medium sized enterprises are facing cash flow difficulties at the same time as banks are withdrawing credit facilities. Larger corporations face radical restructuring to deal with their excess debt.

Yet official statistics do not reflect these difficulties.

The current expansion in US and European GDPs relies entirely on excess government spending. We know that the US Government’s budget deficit is probably running at about $3 trillion in the current fiscal year, including interest on its debt. That $3 trillion represents excess government spending being injected almost entirely into the GDP economy. This debasement of the currency amounts to over 10% of nominal GDP, inflating it accordingly. To the extent that nominal GDP does not increase by this amount reflects an underlying contraction of private sector transactions, ex-government.

The next question to address is the consequence of this debasement on the purchasing power of the dollar. Macroeconomists forecasting consumer price inflation currently believe it will decline in the current year to perhaps an average of 3% or even lower. However, after an indefinable time lag currency debasement will almost certainly lead towards a significantly higher than expected CPI figure. The timing difference between currency debasement and its consequence for the general level of prices makes a mockery of the concept of an inflation-adjusted real GDP. This Cantillon effect partly explains why the US economy appeared to resist fears of a recession in fiscal 2023. It was the net result of an indefinable prior debasement, the extra spending from the then $2 trillion budget deficit, and the contraction of private sector activity. These factors are yet to fully catch up with the current situation.

In the same vein, in 2024 the GDP outturn will suggest that the US economy is extraordinarily robust by continuing to grow both nominally and in inflation-adjusted terms. Perhaps the best way to illustrate the falsity of the GDP statistic as a measure of economic activity is to imagine if it had existed to quantify Germany’s economy in the early 1920s. Nominal GDP would have been soaring, while the CPI inflation adjustment lagged, only until the final few months when the paper-mark collapsed in 1923. Yet, at the same time acute poverty by any measure had been growing, and personal wealth completely wiped out.

Today, the US economy faces similar dynamics with the dollar being as fiat as the paper mark, and to think otherwise is delusional. Once this line of reasoning is adopted, it becomes clear that talk of recession is misleading. It is a concept which arose from Keynesianism as a justification for state intervention. Instead, we must consider changes in the levels of economic activity and the long-term legacy of the expansion of non-productive debt. Ignoring the evidence in favour of corrupted macroeconomic statistics not only misleads us all but encourages further destructive monetary and fiscal policies.

You cannot get away from the consequences of budget deficits being currency debasement. Furthermore, anticipation that a recession leads to lower consumption and therefore declining prices makes the fatal mistake of not understanding that production declines first, restricting product supply. The idea that a recession offsets currency debasement with respect to the general price level is simply untrue. We face the naked consequences of currency debasement together with changes in the balance of personal savings and cash retained relative to consumption, and the value imparted to the currency on the foreign exchanges.

Once the enormous distortions of covid had worked out of the system, the drawdown on US savings and the increase in consumer credit have not been significant. If it had, we would expect the purchasing power of the dollar to decline more than it has. For now, the greatest additional risk to the dilution of the dollar’s purchasing power comes from changes in foreigners’ collective valuation of the dollar, to which they are dangerously overexposed. For the moment, they exhibit a complacent attitude, broadly retaining their exposure without adding to it.

It has been changing, particularly when anti-dollar sentiment followed US sanctions against Russia at the start of her “special military operation” in Ukraine. While we in the NATO camp might feel it was justified, the refusal to honour Russian-held dollars is a default by the US Government. It is no different from a common debtor refusing to honour obligations to its creditors, a point which is understood by every nation not allied to the Americans. It is hardly surprising that those at the centre of this maelstrom are reducing their dollar reserves in favour of gold.

Foreign creditors’ loss of faith in the dollar for now is confined to relatively few nations, but it forms the background to prospective US debt funding. While offshore financial centres are prone to continue to accumulate dollars and underlying debt, national central banks and sovereign wealth funds are likely to quietly liquidate positions in US Treasuries and Agency bonds, a trend already reflected in China’s and Japan’s position. As the marginal buyers of US Treasuries, declining foreign appetite for funding the US Government’s budget deficit plus maturing debt together totalling over $10 trillion is bound to drive dollar bond yields higher.

Domestic conditions also indicate that the interest rate outlook is not for lower levels. Being overleveraged in their balance sheet relationships of assets-to-equity, risk-averse commercial banks are reducing their exposure to non-financial borrowers, forcing up their costs of borrowing. Far from the Keynesian’s benign analysis justifying an outlook for lower interest rates, they miss the point. 2024 is not about their textbook recession, it is about the difficulties of refinancing excessive quantities of unproductive debt.

For now, the US Treasury is in a sweet spot, with money funds reducing their deposits at the Fed in favour of Treasury bills yielding 5.4%, and the commercial banking system shifting its combined balance sheet into short-term government debt as well. But this is a one-off adjustment into short-term liquidity which has its limits. And we can then expect funding difficulties to emerge with respect to longer-dated debt.

Meanwhile, the US Government’s debt demands are starving the productive private sector of credit. The consequences are to be found in yet more bankruptcies for want of cash flow and overdraft facilities, and the failure of corporations of all sizes which took advantage of zero interest rate policies for financial engineering purposes. These otherwise stable businesses, even with utility characteristics, will likely follow Silicon Valley Bank into oblivion which similarly believed interest rates would never rise again.

The consequences for government finances

In our western welfare states, there is a common expectation that governments will intervene in order to rescue the economy from the consequences of an economic downturn. They go beyond mandated welfare commitments, being seen as having a democratic duty to intervene and support industries, irrespective of the downturn’s magnitude.

The extent to which these commitments arise will determine the magnitude of additional spending to which governments will be committed. America faces a presidential election this year without a debt ceiling. In a rerun of President Hoover’s failed interventions in the wake of the 1929—1932 Wall Street crash and the associated banking collapse, President Biden has the latitude to increase unfunded support as much as is necessary.

Essentially, this downturn is driven by an emerging debt crisis as described above, which will be worsened by attempts to stop the rot. When one accepts that western capital markets face an immense debt crisis it becomes clear that interest rates are bound to continue rising because lenders are becoming increasingly risk averse in order to avoid their own bankruptcies. The economic consequences for government finances will lead to unexpected increases in mandated welfare obligations, declines in tax revenues, calls to bail out indebted businesses and a further escalation of government debt.

All this costs governments, costs which they must recover through taxes and currency debasement. The government’s funding is either through taxing private sector actors who can ill afford to pay the taxes demanded (and being thrown out of work will be paying less anyway), or through higher prices the consequence of currency debasement. The outlook being for higher, not lower prices, the markets will require higher interest rates to compensate.

In short, major western governments are ensnared in debt traps. And as debt comes due, they end up refinancing it at higher interest costs, never reducing the rate of interest rate cost accumulation. The table below shows the current debt to GDP ratios for some major economies.

Some of these ratios have declined dramatically in the last decade, with Greece being the obvious example. Declining ratios follow from a combination of balanced budgets and economic expansion. Following the Napoleonic Wars, Britain was in a similar debt to GDP position to Greece today, with her ratio estimated by the Bank of England to be 184% in 1816. Without the mandated expense of a welfare state, it was able to control government spending, keeping it low as a portion of total economic activity. Furthermore, by operating a gold standard successfully, the cost of borrowing also remained low. But even then, it took almost a century to reduce the ratio to 28% in 1913.

On the eve of a severe economic downturn debt reduction can be ruled out. Ratios will be rising as further debt accumulates and GDP increases at a lower pace. But the real killer is high interest rates. And any attempt by the Fed to keep them suppressed would simply lead to weakening of the dollar on the foreign exchanges and pressure on the general level of prices to rise even further.

The funding situation is similar to that which faced the UK in the 1970s. Sterling was over-owned by foreigners who were sensitive to the deteriorating economic conditions under the socialist government. Sterling fell from 2.6 dollars to the pound in 1972 to 1.06 in March 1985. Funding dislocation drove gilt coupons to 15 ½% in October 1976.

Furthermore, an IMF loan was required to rescue UK government finances in January 1976. But as a creature of the US Government and its dollar, it is impossible for the IMF to come to the rescue of the US Government. The debt problem will either be solved by the US Government taking remedial action which is politically impossible, or the dollar’s purchasing power must collapse.

The fragility of the banking system

A further colossal difficulty looming for the US Government as well as its European and Japanese allies is banking systems rotten from the central banks down to the entire commercial banking network. Thanks to a previous combination of interest rate suppression and quantitative easing, all the major central banks have substantial losses, which properly accounted for, wipes out their balance sheet equity many times over.

It is a relatively simple matter to recapitalise a central bank. The central bank makes a loan to its shareholder (the government) recording it as an asset. A balancing entry is made on the liability side not as a deposit, but as equity. In most jurisdictions, legislative confirmation can be rapidly obtained. The Fed and the Bank of Japan can be expected to recapitalise themselves this way. The Bank of England has losses on its portfolio specifically underwritten by the UK’s Treasury and will not be required to recapitalise itself, losses simply being added to the national debt.

The problem facing the euro system of the ECB and its national central banks who are its shareholders creates additional difficulties. Theoretically, the ECB can recapitalise itself in the manner described above. But legislative confirmation will almost certainly be required in multiple jurisdictions, not just to recapitalise the ECB but individual national central banks as well. Additional questions over the TARGET2 imbalances are bound to be raised, particularly in Berlin given that the Bundesbank is owed over €1 trillion from other central banks through the TARGET2 system. Unless these thorny issues are resolved, the entire euro system and the currency itself risks collapse.

Another legacy of zero and negative interest rates is that slender credit margins encouraged commercial banks to leverage their balance sheets higher in order to protect bottom line profits. Consequently, they now face capital losses on bonds and higher funding costs than the income from bond coupons. And now that bankers are increasingly aware of the deterioration in business conditions, they are desperate to reduce lending risk. Inevitably, loan losses will mount over the course of this year threatening the equity of all thinly capitalised banking networks, spreading systemic risk globally. In the US, it is estimated that the collapse in commercial real estate values alone will wipe out over half total bank equity.

Even if interest rates and bond yields don’t fall slightly, there are other Silicon Valley Banks likely to fail. Rising interest rates increase the risks facing the entire banking system. Central banks with their respective government treasury departments will be faced with having to ensure that no banks fail. Inevitably, it will mean yet more credit expansion of base money, further undermining currencies’ purchasing power and leading to yet higher interest rates in time.

The consequences for financial asset values

Obviously, higher interest rates lead to higher bond yields, undermining bond values. And the yield on bonds is one of the most important determinants of equity values, the other being prospective earnings.

Clearly, faced with an economic downturn coupled with a developing banking crisis and the contraction of bank credit, equities should be declining on earnings prospects. But the S&P 500 Index has been hitting new highs, despite the rise in bond yields over the last three years. However, the valuation disconnection with bond yields has become extreme as shown in the chart below.

The negative correlation (the 30-year UST yield is inverted) is usually tight. The previous overvaluation for the S&P was the dot-com bubble in 2000. Today, the overvaluation is even more extreme. This suggests that the slightest disappointment over the interest rate outlook could crash the equity market.

This matters particularly for foreigners invested in US equities, which according to the US Treasury amounts to over $14 trillion at risk of a bear market.

Bond yields are already rising again, with the 10-year Treasury Note’s yield having risen from 3.75% to 4.16% — obviously not enough to undermine equities yet. But with a combination of the supply and demand issues described above and Middle Eastern troubles potentially escalating, the chances that yields are going no lower before tracking higher are mounting.

The outlook for gold

Clearly, the risks facing credit valuations are growing and a systemic crisis threatening the entire banking system looks increasingly likely. An expansion of central bank base money through new rounds of QE in an attempt to prevent falling financial asset values from triggering systemic events looks inevitable. The problem is common to the jurisdictions of all the major western currencies: dollar, euro, yen, and sterling.

The deployment of central bank credit in an attempt to secure the entire financial system will simply undermine the purchasing power of these currencies even more, risking yet higher interest rates and bond yields. Inevitably, this valuation crisis will destabilise currency relationships as enormous quantities of credit flees from one perceived risk to a lesser one. But it is here that an understanding is required of the difference between legal money, that is gold bullion and coin where there is no counterparty risk, and fiat-based credit which imparts values to all economic assets.

It is credit, including fiat currencies, which is at risk. Gold has broadly maintained its purchasing power over millennia, even though as explained by Gresham’s law it rarely circulates. It’s not generally realised what this means, but the chart below of major currencies valued in gold illustrates the decline of currencies since President Nixon suspended the Bretton Woods Agreement in 1971.

Note the log scale, which records the percentage loss. In US dollars, the loss is 98.3%, and that is on top of the decline from $20.67 to the ounce which was the rate before 1934. Including that devaluation of the dollar, it has lost 99%. In sterling, the post 1971 decline is over 99%. Longer term it has been even worse, bearing in mind that one pound was exchangeable for a sovereign coin, which is currently valued at £390.

The euro comprised of national currencies before 2000 has declined by 98.7%, and the yen 96%. The lack of awareness that the purchasing power of fiat currencies has declined so much encourages investors to believe that their investments and property are the best hedges against inflation, without realising the true extent of currency value destruction.

The conventional approach to wealth preservation is governed by government diktat. The state makes the regulations and educates the compliance officers, now required to be appointed by every financial institution. Any investment manager advising or managing on a discretionary basis who promotes gold has difficulty justifying the case because gold is not a regulated investment. Accordingly, after decades of increasing regulatory intervention, gold is estimated to be represented by less than one percent by value in the estimated $150 trillion equivalent of global investment portfolios.

Before regulatory intervention by governments, as a base case it was generally reckoned that a balanced portfolio should have exposure to gold or related investments of 10%. At current prices, taking average portfolio exposure to just 2% requires the purchase of 23,300 tonnes, or a mixture of mining stocks and bullion to that value.

While it is true to say that the value of gold measured by its purchasing power has been remarkably stable over millennia, it is likely to rise spectacularly in the event of a general credit crisis, because the scale of liquidity to accommodate portfolio adjustment doesn’t exist.

I have been increasingly asked whether governments will deal with the gold question by confiscating and prohibiting ownership of it by their citizens. The first point to note is that by his executive order President Roosevelt did not confiscate gold, only requiring gold and gold notes to be submitted in return for $20.67 dollars per ounce. If Biden or Trump tried that line again, a question arises over the rate of exchange: will it be at the official rate of $42.22, or the market rate?

While there is no knowing the bounds of political stupidity in purely economic terms, we can assume that any move to banning gold ownership would require the agreement at G7 level at the least, which might be difficult to get. And the signal sent to other nations and central banks is likely to drive gold higher and the dollar down. Indeed, instead of putting off Westerners from owning gold, if they think this course of action is a strong possibility they would probably accumulate as much gold as they can.

And finally, the likelihood that a gold backed BRICS currency will make the agenda this year is high, with Russia the rotating chairman and over 200 meetings planned in Russia for existing and prospective members. Russia herself would gain significant advantages from reintroducing the gold standard dropped by Khrushchev in 1961. While the merits already appear to be appreciated at the highest levels in the Russian government, in the face of collapsing credit values in the western alliance Russia, China, and most of the Middle East will have little option to protect their credit markets by anchoring them to gold.

To summarise, we face a strong possibility that a combination of excessive debt, rising not falling interest rates, an extremely fragile banking system and a collapse in financial asset values are in prospect for this year. In these circumstances, only those prescient enough to possess real money, which is gold bullion and coin, will emerge with at least some of their wealth intact.

*  *  *

Dedicated to explaining why gold is money and the rest is credit. Dedicated to explaining economics relevant to the preservation of wealth. And dedicated to explaining geopolitical developments relevant to investors.

Former President Trump has been ordered to pay $83.3 million in E. Jean Carroll’s civil defamation trial.

Trump-@ejeancarroll verdict says Carroll proved more than nominal defamation by Trump.
So Trump has to pay:
$7.3 million for compensatory damages.
$11 million for reputation repair.
$65 million in punitive damages.
Total: $83.3 million.

— Michael Beschloss (@BeschlossDC) January 26, 2024

Carroll accused Trump of having sexually assaulting her in the mid-1990s at a Bergdorf Goodman department store dressing room in Manhattan. While the alleged attack happened decades ago, Carroll sued under New York’s Adult Survivors Act, which allows victims to sue for civil damages beyond the statute of limitations.

“I am filing this on behalf of every woman who has ever been harassed, assaulted, silenced, or spoken up only to be shamed, fired, ridiculed and belittled,” Carrol said last year.

Notably, the judge in the case (Kaplan), forbade Trump or his attorneys from arguing that he didn’t sexually assault Carroll.

The judge reminded the jury to accept the earlier trial’s verdict.

When he noted the trial established Trump “inserted his finger into her vagina,” the former president reportedly jolted from his seat and wore an expression of disgust.

Trump said on the witness stand that he denied Carroll’s claims because he “wanted to defend myself,” which the judge told the jury to ignore.

In closing arguments for Carroll Friday morning, her attorney argued that Trump acted as if he was above the law by lying, saying that the former president “ignored the other jury verdict as if it never happened,” and even repeated the claims at a press conference during the second trial.

“Donald Trump engaged in the very same defamation after the trial,” attorney Roberta Kaplan (no relation) said.

Trump then stood up, buttoned his suit jacket, and stormed out of the courtroom.

After Trump stormed out, Judge Kaplan briefly interrupted the closing argument and said:

“The record will reflect that Mr. Trump just rose and walked out of the courtroom.”

Fuck It

Prior to Friday’s closing arguments, Trump attorney Alina Habba became frustrated after the judge forbade her from including examples of tweets not entered into evidence during the trial.

“No. No. Your honor, I have been—” Habba began to say.

“Ms. Habba, you are on the verge of spending some time in the lockout,” replied the judge, cutting her off. “Now sit down.”

“Fuck it,” Habba muttered upon sitting down.

The jury reached its decision after slightly less than three hours of deliberations.

“My advice to you is that you never disclose that you were on this jury,” the judge said, per Politico.

Carroll’s attorney also Friday asked the jury to order Trump to pay at least $24 million in damages, according to multiple outlets; so $83 million is a huge victory for virtue.

Add that to the $5 million Carroll was awarded in her 2023 case against Trump.

Trump raged against the result on his social media site TruthSocial, calling it “absolutely ridiculous.”

“I fully disagree with both verdicts, and will be appealing this whole Biden Directed Witch Hunt focused on me and the Republican Party,” he said.

Trump has promised an appeal.

Authored by Turner Wright via CoinTelegraph.com,

The Bank of England (BoE) and HM Treasury in the United Kingdom released their response to a consultation on a central bank digital currency (CBDC) launched in February 2023, saying they intended to focus on “privacy and control.”

In a Jan. 25 notice, the BoE said “no final decision has been made” regarding launching a digital pound, but officials would continue to explore CBDC feasibility and designs. Both institutions added they intended to “protect access to cash” should they move forward with a CBDC launch, giving residents an additional payment choice.

“[I]f a digital pound were to be implemented, primary legislation would be introduced, and this would guarantee users’ privacy and control,” said BoE.

“The Bank and the Government would not have access to any personal data and users would have freedom in how they spent their digital pounds.”

The U.K. government has been pushing BoE and HM Treasury to provide greater transparency around the potential expenses of a CBDC launch.

Many U.K. residents have suggested that launching a digital pound could lead to government surveillance of financial transactions and a loss of privacy.

“[W]e would like to see much more detail from the Government and the Bank of England on this important subject including a clearer plan of action and timeline around the next steps for a digital pound,” said a spokesperson for the self-regulatory trade association CryptoUK.

“As the industry continues to evolve and our members demand more certainty from regulators and lawmakers, this current lack of clarity and direction risks creating uncertainty and frustration for crypto digital asset businesses in the UK and those that want to build, invest and grow the industry.”

The BoE and HM Treasury said they expected to launch the digital pound, referred to as ‘Britcoin’ by certain members of the public, no earlier than 2025 should they move forward with the CBDC plan. The U.K. government has undergone several changes in leadership since the digital pound was first proposed, including officials responsible for overseeing economic policy.

Across the pond in the United States, a digital dollar may be on the verge of becoming a campaign issue in the 2024 Presidential Election, scheduled for November. Though Florida Governor Ron DeSantis — a CBDC opponent who vowed to ban the currency if elected — has dropped out of the race, former U.S. President and Republican Party frontrunner Donald Trump said he would “never allow” a digital dollar to “protect Americans from government tyranny.”