Joshua Powell, former operations director of the National Rifle Association (NRA), has reached a settlement with the New York attorney general’s office over civil claims of fraud and abuse.
Mr. Powell was employed by the NRA between 2016 and January 2020.
The lawsuit brought by Letitia James, New York attorney general, alleged that Mr. Powell breached his fiduciary duties and failed to administer the charitable assets entrusted to his care by using his powers as an officer and senior executive of the NRA to covert charitable assets for the benefit of himself and his family members.
He admitted the alleged wrongdoing and agreed to pay $100,000 to the NRA, to not serve as an officer in a nonprofit or charitable organization, and to testify against the NRA at the demand of Ms. James’s office, according to the settlement.
Mr. Powell’s settlement was filed on the same day as the resignation of Wayne LaPierre, the longtime head of the NRA.
“Joshua Powell’s admission of wrongdoing and Wayne LaPierre’s resignation confirm what we have alleged for years: the NRA and its senior leaders are financially corrupt,” Ms. James said in a statement. “More than three years ago, my office sued the NRA and its senior management for financial abuse and mismanagement. These are important victories in our case, and we look forward to ensuring the NRA and the defendants face justice for their actions.”
NRA officials didn’t respond by press time to a request by The Epoch Times for comment.
Ms. James sued Mr. LaPierre and three co-defendants—NRA general counsel John Frazer, retired finance chief Wilson Phillips, and Mr. Powell—in 2020, alleging that they cost the organization tens of millions of dollars from questionable expenditures that included lucrative consulting contracts for ex-employees and gifts for friends and vendors.
Mr. LaPierre is accused of setting himself up with a $17 million contract with the NRA if he were to exit the organization and spending NRA money on travel consultants, luxury car services, and private flights for himself and his family—including more than $500,000 on eight trips to the Bahamas over three years.
As punishment, Ms. James is asking that Mr. LaPierre and the other defendants be ordered to reimburse the NRA and that they be banned from serving in leadership positions of any charitable organizations conducting business in New York, which would bar them from any NRA involvement.
The trial is scheduled to start on Jan. 8.
LaPierre Resigns
Mr. LaPierre, the NRA’s executive vice president and CEO, announced on Jan. 5 that he’s resigning, just days before the start of the trial over allegations that he treated himself to millions of dollars in private jet flights, yacht trips, African safaris, and other extravagant perks at the powerful gun rights organization’s expense.
“With pride in all that we have accomplished, I am announcing my resignation from the NRA,” Mr. LaPierre said in a statement released by the organization, which he said he was exiting for health reasons. “I’ve been a card-carrying member of this organization for most of my adult life, and I will never stop supporting the NRA and its fight to defend Second Amendment freedom. My passion for our cause burns as deeply as ever.”
Andrew Arulanandam, a top NRA lieutenant who has served as Mr. LaPierre’s spokesperson, will take on his roles on an interim basis, according to the organization.
Israel Begins To Scale Back Gaza War, But Still Expects Fighting To Continue All Year
Israel is again welcoming US Secretary of State Antony Blinken for an official visit, but this time with a key announcement indicating its forces have “shifted” to a new, scaled-back phase of the war, in line with the Biden administration’s wishes. Blinken is in the region with a message to ‘limit’ the spread of war.
“The war shifted a stage,” IDF spokemsan Admiral Hagari told The New York Times, describing a planned reduction in both ground troops and airstrikes. “But the transition will be with no ceremony,” he said. “It’s not about dramatic announcements.”
Gaza’s Health Ministry has lately said the death toll after months of the Israeli military’s operation in response to Oct.7 has surpassed 23,000 – mostly civilian deaths. International outrage, particularly among Global South countries, has been steady. The White House has for weeks behind the scenes pressed Israeli officials to scale-back the mass killing, and to launch a more targeted campaign.
A big part of the pressure comes from the genocide case brought against Israel by South Africa at the International Court of Justice in The Hague. To review of hearings which are set to be held Jan.11 and 12:
South Africa alleges Israel’s actions in Gaza “are genocidal in character because they are intended to bring about the destruction of a substantial part” of the Palestinian population in the enclave.
Israel immediately rejected the case as “baseless,” but — unlike in previous cases at international tribunals — it decided to appear in front of the court because it’s a signatory to the Genocide Convention. Israel will be represented at the ICJ by the British barrister Malcolm Shaw.
Hagari said that operations in the northern half of the Strip have already begun to ebb, and that troop and reserve force reductions from the battlefield would continue. He also vowed the allowance of more humanitarian aid to enter Gaza from Egypt.
But amid the mass Palestinian suffering, he emphasized, “We were the ones who were butchered,” on Oct.7 – in reference to the about 1,200 people, mostly civilians, slaughtered by Hamas.
Meanwhile, controversy has abounded after more videos from the battlefield have been leaked, such as the following:
Israel’s military releases footage of its soldiers detaining men from Gaza after stripping them off and forcing them to insult Hamas. pic.twitter.com/zLwHKznftm
Channel 12 airs a video ostensibly leaked by an IDF source showing a group of Palestinians stripped and bound after being detained by the Israeli military in northern Gaza.
One of the detainees is heard telling the troops, “For 17 years, we’ve lived under tyranny,” ostensibly referring to Hamas.
“When you arrived, we remained in our homes because we live in peace and love peace. If we were guilty of something, we would have left our homes and fled, but we live in our homes in peace,” he says.
And on the other side, Palestinian Islamic Jihad has released a new hostage ‘proof of life’ video, which Israeli officials say is part of their ongoing psychological warfare efforts…
🔴Palestinian Islamic Jihad releases proof of life video of Israeli hostage, Elad Katzir, as part of its psychological warfare pic.twitter.com/ye4M2h1NmV
On Sunday, the head of the Israeli Defense Forces (IDF) said he foresees a fight in Gaza that will continue through the entire year.
“The year 2024 will be challenging. We will be at war in Gaza,” IDF Chief of Staff Herzi Halevi said. “I don’t know if it will be all year long. We will be fighting in Gaza all year, that’s for sure, and this will also hold the other arenas, certainly in [the West Bank], to a certain state of alertness,” he added.
On Monday night, January 8, the University of Michigan and the University of Washington football teams will vie for the collegiate national championship.
While championships always bring excitement to fans and participants alike, this year’s game brings attention to major changes that have occurred in the National Collegiate Athletic Association Division I in the past few years involving both monetary payments and mobility for athletes.
While there is excitement for the game, we are seeing undercurrents that some claim will “destroy college football” as we have known it. The major changes involve athletes being able to gain product endorsements or make money off their likeness (Name, Image, and Likeness, or NIL) as well as being able to transfer one time via the NCAA Transfer Portal with no restrictions and no waiting for a year. Lou Holtz, a Hall-of-Fame college football coach, voiced his own concerns:
The NIL and the transfer portal are both terrible for college athletics…I think that you go to school to get an education and to have that school be part of your diploma. … Why do we have athletics as part of college? Because you learn more lessons on a football field than you ever learn in a college classroom. You learn perseverance, you learn teamwork, you learn to wait your turn, you learn improvement. When you transfer, all you do is change the address of your problems. The problem’s with you.
Before going further, I will explain how previous rules affected collegiate athletes, having been a scholarship D-I athlete a half-century ago (track, University of Tennessee). For the most part, the rules that governed us have remained in place with some small changes here and there.
When I signed my athletic scholarship papers in 1971, I also signed the National Letter of Intent which bound me to the UT track program as long as I was enrolled there, much like the old Reserve Clause bound major league baseball players to their teams “in perpetuity” until they either were traded or released by their teams. If I had wanted to transfer to another program elsewhere, my coach would have to release me from my letter of intent before I could leave. Furthermore, if I went elsewhere, I’d not be able to compete in collegiate track until I had waited a year. (If I wanted to go to another program in the Southeastern Conference, I would have to sit out two years.)
While athletes did transfer even under those rules, it imposed high costs on those that left their university for another team and the terms made transferring unappealing. There was the loss of a scholarship as well as the problem of having to sit out of intercollegiate competition for a year, which for a competitive athlete is an eternity.
There were other major controls as well, which mirrored the kinds of restrictions that one might see in a regulated industry, and especially in the kind regulation that effectively turned industries into cartels. Until about the early 1980s, for example, the NCAA permitted only one collegiate football game to be broadcast each week, quite the contrast to today in which numerous games can be seen on television. Certainly, a true championship game like what college football fans can see Monday night would not have been remotely possible in an earlier era.
But, as Holtz and others have claimed, are the transfer portal (which essentially makes collegiate athletes one-time free agents) and the ability of athletes to now make money via endorsements or through social media threats to college sport? They certainly have not diminished interest in college football, which enjoys more television viewership today than it did a decade ago despite the fact that overall live TV viewership is down.
Certainly, the presence of both NIL and the Transfer Portal have changed the responsibilities of the coach, at least when it comes to retaining scholarship athletes. It is not just malcontents that might want to switch programs; there are times when another program may be a better fit for an athlete’s skill set.
Take Michael Penix, Jr., the quarterback of the University of Washington’s football team, for example. Penix played three seasons for Indiana University, much of it in futility for a lower-tier program. At Washington, he is the leader of a team playing for a national championship. The Transfer Portal made this transition possible.
If one sees the Transfer Portal as an open market for labor, it is easier to see how it would benefit both athletes and coaches. Michael Penix is not the only success story of the Portal. For every J.T. Daniels, the quarterback who used the Portal three times trying to find a good fit, there is a Hendon Hooker, who transferred to Tennessee after languishing at Virginia Tech and was named the Southeastern Conference’s Offensive Player of the Year in 2022.
While it is true that the Portal takes away some leverage that coaches might have over their athletes, it also helps level the recruiting playing field. Historically, teams have had to depend solely on their recruiting classes. Unlike professional sports in which championship teams get the last picks in the draft, championship collegiate teams generally get the best recruits year after year, the University of Alabama and the University of Georgia, two perennial powers, rake in top recruiting classes.
Lane Kiffin, football coach at the University of Mississippi, knows he cannot recruit at the level that Alabama’s Nick Saban and Georgia’s Kirby Smart, but he has brought in the top-rated transfer class that likely will make Ole Miss a contended in 2024. Far from “destroying” college football, the Portal is making it more competitive and more balanced.
In women’s sports, LSU won last year’s NCAA basketball tournament thanks in large part to transfer Angel Reese (from the University of Maryland). Since then, Reese has been able to parlay her fame into NIL deals and even appeared in the famous Sports Illustrated Swimsuit Edition.
The NIL world might be more controversial, given the huge differences in money paid to athletes. Tennessee’s freshman quarterback Nico Iamaleava is rumored to be tied to an $8 million NIL deal while most athletes at Tennessee probably will receive little to nothing. The University of Iowa’s Caitlin Clark, considered the best collegiate basketball player this year, has close to a million dollars in endorsement, but most players are not going to be anywhere close to that category.
Will “create an uneven playing field” that will benefit some programs more than others.
Some athletes will place a higher priority on their NIL deals than their academic studies and loyalty to their teams.
It will “blur the line” between amateur and professional sports.
These are many of the issues brought up when I was wearing my college team’s jersey and most likely these issues were at the fore when Knute Rockne stalked the sidelines at the University of Notre Dame a century ago. But as we have seen in recent years, college sports have not undermined the mission of American higher education. Instead, the leftist capture of US colleges and universities driven by identity politics has inflicted infinitely more damage than all of the college sports scandals combined.
Instead, we should see the opening of the Transfer Portal and the establishment of NIL as the redirection of resources and factors of production that in the long run will make college sports more interesting and more enjoyable. Contra Lou Holtz and others, the trappings of a free market will not “ruin” college sports.
United Finds “Loose Bolts” On 737 Max Doors After Emergency Inspection
Update (1722ET):
Sources tell the aviation blog The Air Currentthat “loose bolts and other parts on 737 Max 9 plug doors” have been found after inspections following the Alaska Airlines mid-air mishap when a door ripped off the plane over Portland on Friday.
BREAKING: United has found loose bolts and other parts on 737 Max 9 plug doors as it inspects its fleet of Boeing jets following the rapid depressurization aboard an Alaska jet, according to three people familiar with the findings. https://t.co/pcPx9I8Z0l (via @theaircurrent)
“The discrepant bolts and other parts on the plug doors have been found on at least five aircraft,” the source said.
Following @jonostrower‘s scoop on United finding 737-9s with loose door plug screws, a source sent this image of one of the door plug’s lower hinge bracket with a note that 2 screws are not screwed all the way in. https://t.co/sz1d997PdLpic.twitter.com/d6hgHAEb2u
The Air Current noted, “The findings aboard the five United aircraft will likely significantly widen the fall-out from the grounding, intensifying the focus on Boeing and Spirit AeroSystems. The pair together is responsible for the assembly, installation and quality checks of the aircraft structure.”
A United spokesperson confirmed the findings:
“Since we began preliminary inspections on Saturday, we have found instances that appear to relate to installation issues in the door plug – for example, bolts that needed additional tightening.
“These findings will be remedied by our Tech Ops team to safely return the aircraft to service.”
There are 215 737 Max 9s in service across 11 major airlines.
“Not sure that can be attributable to just one line. Might have to ground all Boeing aircraft delivered in a given window of time?” one X user said.
* * *
National Transportation Safety Board (NTSB) chair Jennifer Homendy said cockpit recording data on the Alaska Airlines Boeing 737 MAX 9 jet, which lost a fuselage panel that triggered a sudden decompression event near Portland on Friday, won’t be retrieved because the data was erased.
On Sunday, Homendy told reporters that after Alaska Airlines Flight 1282 made an emergency landing at Portland International Airport – the ground crew did not pull the circuit breaker on the cockpit voice recorder, or black box, to preserve the audio, which only holds two hours or data, as required by federal law.
“There was a lot going on, on the flight deck and on the plane. It’s a very chaotic event. The circuit breaker for the CVR (cockpit voice recorder) was not pulled. The maintenance team went out to get it, but it was right at about the two-hour mark,” Homendy said.
She continued: “The cockpit voice recorder was completely overwritten. There was nothing on the cockpit voice recorder.”
Reuters noted US cockpit recorders only need to log two hours of data versus 25 hours in Europe for aircraft made after 2021.
The NTSB head said the audio could have shed more light on the moments leading up to the aircraft’s door ripping off the fuselage at 16,000 feet.
Boeing & Spirit AeroSystems Shares Plunge After Max 737-9 Max Door Blowout Incident https://t.co/8DD60MxY2I
Homendy called on the “FAA to change the rulemaking” on cockpit recorders, extending the recording time from 2 to 25 hours for all aircraft.
“If that communication is not recorded, that is unfortunately a loss for us and a loss for the FAA and a loss for safety because that information is key not just for our investigation but for improving aviation safety,” she said.
During the decompression event, a new-generation Apple iPhone was sucked out of the plane and landed near a road in Portland. An X user named “Seanathan Bates” discovered the device, which did not appear to be damaged.
Found an iPhone on the side of the road… Still in airplane mode with half a battery and open to a baggage claim for #AlaskaAirlines ASA1282 Survived a 16,000 foot drop perfectly in tact!
In a separate report, Bloomberg Intelligence’s George Ferguson and Melissa Balzano believe the in-flight mishap “probably stems from a manufacturing oversight, a sign of deficiency at Spirit AeroSystems, Boeing’s key supplier.”
Diagram of a Boeing 737-9 mid-cabin door plug and components (Source: Boeing) pic.twitter.com/7qPF5MGAOX
The FAA has previously rejected the NTSB’s call to upgrade aircraft with new cockpit voice recorders. That should be reversed since Max jets “designed by clowns who in turn are supervised by monkeys’ continue to fly around.
End The Cuba Embargo? Biden Begs Mexico To Stop Migrant Flows, But There’s A Price
As Joe Biden continues to poll in the toilet – in no small part to the border crisis he created, his administration has resorted to begging Mexico to stem the tsunami of illegal immigrants entering the United States.
In late December, DHS Secretary Alejandro Mayorkas, who has repeatedly maintained that the ‘border is secure,’ traveled to Mexico with Secretary of State Antony Blinken to beg for assistance in what officials called “preliminary” discussions with Mexican President Andrés Manuel López Obrador (AMLO), NBC News reports.
But there’s a price!
On Friday, AMLO laid out his conditions:
US approval for a plan to deploy $20 billion to Latin American and Caribbean countries
Suspend the US blockade of Cuba
Remove all sanctions against Venezuela
Grant at least 10 million Hispanics living in the US the right to remain and work legally
These are tall demands, but the southern border could also tank Biden’s chances of reelection – as the border saw a record 300,000 migrants processed by CBP in December alone.
One Biden official told NBC News that AMLO “has a very ambitious agenda,” and that for some of his requests, the US Congress would need to act.
The two countries are expected to continue talks in Washington later this month. Mexico brings significant leverage to the negotiations, the U.S. and Mexican officials said. López Obrador’s administration would prefer that President Joe Biden win re-election in November, given Donald Trump’s rhetoric and actions during his time in office. But Biden is quickly running out of options to fix a problem that is driving down his poll numbers without increased support from Mexico, three U.S. officials told NBC News.
One Mexican official told NBC News that Mexico is willing to help with enforcement – which US negotiators want to include the capture and deportation of Guatemalans apprehended within the country.
Meanwhile on Capitol Hill, lawmakers continue to negotiate over border security measures after several asylum policies introduced by Biden’s team in May failed to deter migration.
So, I’m getting my German ducks in a row in advance of my appearance in criminal court in Berlin on January 23rd.
As most of my readers know, I am being prosecuted by the German authorities on trumped-up charges of tweeting Nazi propaganda, i.e., these two Tweets from 2022:
I’m not going to rehash all the details of my case again here. I have done that ad nauseam. And at this point it’s been widely reported on, most recently by James Kirchick in The Atlantic …
I’ll be reporting on it more in the coming weeks (and possibly months), including on how the criminalization of dissent is being systematically carried out in Germany, i.e., the governmental, and quasi-governmental, and nominally non-governmental entities involved, and the nuts-and-bolts of how the system functions. For now, though, I just want to clear something up … mostly for my fellow Americans.
Many Americans seem to believe that Germany has no free-speech protections, or at least none comparable to the 1st Amendment.
That is essentially a myth.
Here’s Article 5 of the “Grundgesetz,” i.e., the German constitution.
Article 5 [Freedom of expression, arts and sciences]: (1) Every person shall have the right freely to express and disseminate his opinions in speech, writing and pictures and to inform himself without hindrance from generally accessible sources. Freedom of the press and freedom of reporting by means of broadcasts and films shall be guaranteed. There shall be no censorship. (2) These rights shall find their limits in the provisions of general laws, in provisions for the protection of young persons and in the right to personal honour. (3) Arts and sciences, research and teaching shall be free. The freedom of teaching shall not release any person from allegiance to the constitution.
Many Americans also believe that displaying swastikas (or other Nazi symbols) — as I did in my two Tweets — is absolutely banned in Germany.
This is also a myth. Here is the relevant German statute (see Subsection 2, emphasis mine).
§ 86 StGB Dissemination of Means of Propaganda of Unconstitutional Organizations
Whoever domestically disseminates or produces, stocks, imports or exports or makes publicly accessible through data storage media for dissemination domestically or abroad, means of propaganda:
of a party which has been declared to be unconstitutional by the Federal Constitutional Court or a party or organization, as to which it has been determined, no longer subject to appeal, that it is a substitute organization of such a party;
of an organization, which has been banned, no longer subject to appeal, because it is directed against the constitutional order or against the idea of international understanding, or as to which it has been determined, no longer subject to appeal, that it is a substitute organization of such a banned organization;
of a government, organization or institution outside of the territorial area of application of this law which is active in pursuing the objectives of one of the parties or organizations indicated in numbers 1 and 2; or
means of propaganda, the contents of which are intended to further the aims of a former National Socialist organization, shall be punished with imprisonment for not more than three years or a fine.
Subsection (1) shall not be applicable if the means of propaganda or the act serves to further civil enlightenment, to avert unconstitutional aims, to promote art or science, research or teaching, reporting about current historical events or similar purposes.
If guilt is slight, the court may refrain from imposition of punishment pursuant to this provision.
For the record, I have no problem with this statute. Actually, I think it’s pretty well-written. I think Germany has sufficient cause to ban Nazis from displaying pro-Nazi symbols. And the exceptions to this ban are clearly articulated. Personally, I have no desire to see neo-Nazis marching through the streets of Germany with Nazi flags or other Nazi insignia. But that has nothing to do with my prosecution.
The point is, my case is not about the law. In this instance, the German constitution and statutes guarantee my freedom of speech no less than the 1st Amendment.
The problem here is not that the German laws are weaker than the 1st Amendment. The problem is that the German authorities are just using the law as a blatant pretext to punish me for publishing political dissent, and to make an example of me (and more famous public persons) to intimidate those who would challenge their power, which has nothing to do with enforcing the law.
In other words, my fellow Americans, the 1st Amendment will not save you.
Yes, that’s right, my fellow Americans, the American authorities will do this to you. They are doing it to you right this minute. The context is different, but the game is the same. A global crackdown on dissent is in progress. A supranational crackdown on dissent. The authorities in countries throughout the West did not coincidentally decide that they needed to wage a war on “disinformation” and “dangerous speech,” and so on. The global-capitalist ruling classes (which own the nominally democratic governments of The Federal Republic of Germany and the United States of America, and every other nominally-sovereign Western country) are going totalitarian on us. I have been pointing this out for several years, which, clearly, they do not appreciate.
I love the 1st Amendment of the Constitution as much as any other American, but it will not save you — no more than the German constitution is saving me — not when the authorities decide to ignore it. Yes, I may ultimately prevail in the appeals courts, but that will not repair the damage already done to my income and reputation.
I don’t mean to imply that fighting this global crackdown on dissent in the courts is futile. On the contrary, it’s one of the only strategies we have, and I will certainly be doing that vigorously here in Germany, and reporting on it as events unfold. I’m just trying to dissuade my fellow Americans from feeling immune or .. well, superior, on account of the US 1st Amendment and misconceptions about Germany and Europe.
Oh, and, speaking of feeling immune or superior, if you happen to be an Elon Musk fan, maybe you can help me out. I need a couple of “Twitter Files” from Elon. I need the “Twitter Files” that document how the German authorities instructed Twitter to censor my Tweets in August of 2022, at the same time that they opened the criminal investigation, and instructed Amazon to ban my book in Germany, Austria, and The Netherlands. Those “Files” shouldn’t be too difficult to locate.
I haven’t heard back from Elon or Linda or any other honchos at X yet, but I assume they just haven’t seen my Tweet, as I am severely “visibility-filtered” by X. So maybe you can help me get through to them. Given Elon’s commitment to free speech, I am sure he will want to make an exception to his cancellation of the “Twitter Files,” and help me defend myself against these trumped-up charges.
Yes, I’ve been a little tough on Elon and his devoted fans in some of my columns, but I’m sure that he (and they) won’t hold that against me.
I mean, we’re all in this free-speech thing together … right?
I think that the Fed is going to be doing everything it can to try to reelect Biden, or whoever may run if Biden does not. I think it’s clear that that’s what’s going to happen.”
The President has the power to nominate the Federal Reserve chair, making this authority a crucial factor in shaping the Fed’s decisions. As a result, the Fed chairman, in this case, Powell, is incentivized to align with the President.
This isn’t necessarily a left-wing bias (although, Powell and the left-wing establishment enjoy a cozy relationship). The Fed chairman’s alignment with the President transcends party lines:
It really doesn’t matter the party affiliation of the Fed chairman… What matters is who is in the White House at the time. Because the Fed chairman always wants to play ball with whichever administration is in power.”
That’s just how the game works.
Outside administrations are okay with this, because the quid pro quo relationship benefits the new administrations as well.
Peter calls this the unwritten rule:
And I don’t think outside administrations hold a grudge, because basically what happens is the Fed is going to try to help reelect whoever is in office. And so, if the opposing party wins, now the Fed is on their side. They’re not really going to call them out or get mad at them for helping the past president when now they’re the president and now the Fed has got their back. That’s kind of the unwritten rule. The Fed always favors the incumbent. Now why? It’s the incumbent that can renominate them.”
But this time, Powell is even more likely to support Biden, because there is bad blood between Powell and Trump:
Because even though Trump appointed Powell initially, he criticized Powell repeatedly when he was president…Powell pretty much knows that his job ends with a Trump presidency. Trump is not going to renominate Powell. I think there’s a lot of bad blood there between Powell and Trump. He knows his job is on the line, too, so that’s another reason to really try to help Biden get elected.”
Plus, with the tight race and weak economic conditions, Biden’s success heavily relies on Powell’s support.
I expect the Fed to act in an election year where the basic economy is very weak. And everybody is trying to pretend that it’s great and trying to convince the public that the economy is booming. The Fed is going to be a big part of that deception. The only hope Biden has of pulling this off is with the cooperation of the Fed. If he doesn’t get that cooperation there’s no chance.”
Fed intervention to support a Biden reelection is just one of several other reasons why Peter thinks 2024 could be a horrible year for the dollar.
Consumer Credit Shocker: November Debt Soars After Second Biggest Surge In Credit Card Debt On Record
We, and many others, were wondering how it was possible that US consumers – already tapped out beyond a breaking point, with collapsing savings and declining real wages – were able to push holiday spending which started in November and continued until the end of the year – to record nominal highs. Now we know: according to the latest monthly consumer credit report from the Fed, in November, consumer credit exploded higher by $24.75BN, blowing away expectations of a “modest” $9BN increase after the surprisingly subdued $5.8BN (upward revised from $.5.1BN) in October and the $4.3BN average of the past 6 months. This was the biggest monthly increase since last November, and was the first $20BN+ print since Jan 2023.
When looking into the details we find something remarkable: while non-revolving credit rose a modest $4.6BN…
… in keeping with the subdued increase in recent months as rates on auto loans make them prohibitive for most consumers while student loans are actually shrinking for the 2nd quarter in a row…
… what was the big shock in today’s data was the blowout surge in revolving credit, which in November exploded by a whopping $19.133BN, a record surge from the $2.9BN in October, and the second biggest monthly increase in credit card debt on record!
This, despite the average interest rate on credit card accounts in Q4 flat at a record high 22.75% for the second quarter in a row.
What is especially surprising about this conirmation that the bulk of holiday spending was on credit is that it takes place after several months of relative return to normaly, when consumers appeared increasingly reluctant to max out their credit cards due to record high rates, and at a time when the personal savings rate in the US has collapsed back near multi-decade lows in recent months.
Well, it now appears that Americans have once again done what they do so well: follow in the footsteps of their government and throw all caution to the wind, charging everything they can (and whatever they can’t put on installment plans which also hit a record late last year) including groceries, on their credit card, and praying for the best… or not even bothering to worry about what comes next.
The bad news is that it has taken decades to expose the rot that has been making its way through Ivy League institutions in our country.
The good news is that with such glaring examples as the multiple university presidents who humiliated themselves in front of Congress talking about the response to the Israel-Palestine conflict on their campuses, it is now impossible for even the most lobotomized groupthinkers to ignore said rot.
Bill Ackman has personified the awakening of many. Ackman, a Jewish Harvard alum who leans left, has obviously had enough, openly and publicly waging war not only against Harvard and its former President Claudine Gay, but also against wider diversity, equity, and inclusion (“DEI”) policies that have threaded their way through both universities and corporate America.
While I commend Ackman’s crusade and think he will be on the right side of history, there’s one string I’m sure he won’t pull on: the fact that the universities that have been revealed as pseudo-intellectual circle-jerks, generating little to nothing of value, are the very same institutions that have validated, solidified and legitimized the monetary theory governing how our central bank policies take shape in the United States. You know, the ones that have led us here:
At this point, almost everybody knows that the United States is in a far more precarious fiscal position than it has been at any time in recent history.
And I’m sure there will be plenty of time to play the blame game when demand for US treasuries dries up. But it sure would be interesting to examine the theory of who to blame right now, before the storm hits, wouldn’t it?
There are generally two schools of thought in the world of monetary policy. The first is that central banking and the ability to print new money out of thin air, despite it only being backed by confidence, is some type of well thought out, esoteric solution to the economic “problem” of markets having downward cycles. At the same time, this theory of money also allows us to avoid our debt responsibilities, enrich the world’s wealthiest people, bail out bad actors on Wall Street, and generally socialize the losses of whomever the government deems worthy. In other words, it’s the school of thought that we have somehow engineered an academic hack that allows us to usurp and manipulate the natural laws of free markets and economies, sold to the public as a key to leading us towards Utopia.
The second school of economic thought, to quote the parlance of Vincent LaGuardia Gambini, is that everything in the first school of economic thought is “bullshit”.
“Everything that guy just said in that last paragraph is bullshit. Thank you.”
It’s obvious which of these two camps I’m in: I simply believe that the system can’t continue the way that it operates today forever. To me, it appears to be a mathematical impossibility. And as I’ve mentioned many times in previous articles and podcasts, the especially nefarious thing about the first school of thought is that its consequences manifest in the background, cloaked by a global misunderstanding of how the system works and acceptance by the commonfolk — the construction workers, teachers, truck drivers, waiters and small business owners — who are too busy actually generating productivity to fact-check whether or not Jerome Powell is really Bernie Madoff in an intricate disguise.
Despite the fact that adoption of Bitcoin is shoehorning in an understanding of monetary policy that may not have existed otherwise with a younger generation, it still may be years before the moms and pops understand how monetary policy works. By the time they do, it’ll be because it’s too late, and we’ve crossed the point of no return. Even after it happens, many will not believe that the United States has defaulted on its obligations because the disaster will likely take place as a “soft default” — a situation where the country winds up technically meeting all of its financial obligations, but does so via rampant money printing that eventually erodes the purchasing power of the US dollar and causes extreme inflation.
But with our debt to GDP over 120% and interest on the national debt totaling $1 trillion+ – with the Treasury planning to sell nearly twice as much in bonds next year as it did this year – we are quickly accelerating into uncharted, unprecedented, and what I believe to be extremely dangerous territory for our country and its currency.
Gross debt to GDP
Last night, JP Morgan called the U.S.’s $34 trillion in debt a ‘boiling frog’ situation. Another way of saying this is that the U.S. appears to simply have descended into a debt spiral that it won’t be able to legitimately make its way out of. As such, the consequences for money printing over the next decade will likely be the most pronounced that they’ve ever been: an even further widening of the inequality gap, prices moving significantly higher, and the middle and lower class disproportionately bearing the burden and suffering a lower quality of life while the powers that be offer them a $1/hour minimum wage hike and a $500 ‘stimulus’ check as some type of stick consolation prize hush money.
My guess is when this becomes too evident to ignore even to many on the left – just as the comments multiple university presidents made before Congress were – that there is going to be a hell of a lot of finger-pointing to go around. And let me be the first to spoil the party for everybody ahead of time: most of the blame can be placed squarely on academia, which continues to give sustenance to the egregiously toxic ideas that have warped our way of thinking about economics and finance.
Paul Krugman once joked back in 2008 or 2009 that he had a lot of sympathy for Ben Bernanke because they both went to Princeton together. I saved the quote years ago but can’t remember the source, so you have to take me on my word on this one:
“I am entirely sympathetic to the efforts of the Fed, this is a very hard time. But you should know that I am biased, because before he was promoted, Ben Bernanke was the Chairman of the Princeton economics department.” – Paul Krugman
This is a simple example that demonstrates exactly what I’m talking about.
Ben Bernanke failed to see the subprime mortgage crisis when it was waving its schlong directly in front of his face. Rather than Krugman rightfully criticizing his counterpart with whom he shares some dorky Ivy League-crested jacket, he instead chose to give him accolades and “sympathy” simply because they both went to Princeton. The academic world loves both of these “geniuses” and can’t get enough of them – hell, they’ve both even won Nobel prizes. And that wasn’t enough fluffing for Krugman: he took to the New York Times to exclaim his delight on Bernanke sharing the prize with him.
“Fortunately, by then Bernanke was chair of the Federal Reserve,” Krugman gushed about the 2008 housing crisis that Bernanke failed to predict. “He understood what was going on, and the Fed stepped in on an immense scale to prop up the financial system.”
Janet Yellen, our our extraordinarily incompetent Treasury Secretary who is personally overseeing pornographic amounts of spending and can’t figure out why a ratings agency would downgrade the U.S. despite our inability to acknowledge, let alone pay back, debt — and who incorrectly predicted that inflation would be transitory weeks after predicting we wouldn’t see another financial crisis in her lifetime, is a graduate of Yale and Brown, and has worked at Harvard.
The Federal Reserve as a whole, which has also been unable to correctly predict inflation and still doesn’t have any idea what the normalized rate of interest should be, employs hundreds of economists with PhDs, many from Ivy League schools.
My prediction is that Jerome Powell is at some point soon about to oversee one of the sharpest declines in the economy and stock market in US history. If I’m right, and that happens, they’re either going to let the economy (1) descend into a deflationary depression or they are going to (2) print tens of trillions of dollars to “fix” it. Either way, just remember that right now the Fed and its hundreds of PhDs are telling you that a soft landing is imminent, and that they are winning, or have won, the fight against inflation. Hell, they’re already talking about rate cuts for next year.
Keeping in mind that…
the subprime housing crisis went exactly the opposite of how Ben Bernanke predicted when he said “subprime is contained”
the Fed caved after hiking rates just ~2% when the market crashed in December 2018
the Fed has often admitted they don’t know what normal interest rates should be, despite being in charge of them
the Fed incorrectly predicted inflation as transitory after overseeing one of the largest expansions of the money supply in history
…maybe when it all goes horribly wrong, people will finally stop and think about the role academia — the sole consistency behind all the decision makers pulling the monetary policy strings — has played in making monetary theory the can of silly string it has become today.
And so, it’s all fun and well to beat up on DEI hires for plagiarism, but the economy and monetary policy are going to show us that the rot in academia goes far deeper – and will have extraordinarily more profound consequences when the shit hits the fan.
Because when the economy and the US dollar don’t wind up doing what our central bank relies on them to do to further 50 years of flawed policy, the problems we’re going to face as a result of these continued economic academic circle jerks are going to make the recent Congressional hearing about the Israel-Palestine protests look like a Caribbean cruise.
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Israeli Airstrike Kills Senior Hezbollah Special Operations Commander
On Monday a high-ranking Hezbollah commander was killed by an Israeli strike on southern Lebanon, the paramilitary group backed by Iran confirmed in a statement.
The slain commander, Wissam Hassan Al-Tawil, was reportedly deputy head of the group’s Radwan elite forces, which is a special operations unit with the mission of infiltrating Israeli territory. His car was reportedly hit in an airstrike as it was traveling in the village of Majdal Selm, Reuters details based on statements.
This is part of a steady and rising escalation and tit-for-tat, given that on Sunday at least seven Hezbollah members were killed as Israel goes after the Radwan unit in particular. The day prior to that, Hezbollah had launched dozens of missiles on an Israeli air force intelligence base and communications monitoring hub.
That large Saturday attack marked what Hezbollah leadership announced as “an initial response” to Israel’s assassination by drone of Hamas deputy chief Saleh al-Arouri, which happened in a south Beirut neighborhood last week.
As for this latest killing of the elite commander Al-Tawil, Middle East Eye predicts assured continued escalation:
Known as “Jawad”, Tawil was a deputy head of a unit in the elite Radwan force and played an important role in Hezbollah’s recent confrontations with the Israeli army.
“This is a very painful strike,” one security source said, while another added, “Things will flare up now.”
The commander played “a leading role in managing Hezbollah’s operations in the south”, according to one unnamed official speaking to the AFP news agency.
This newest assassination could be the final catalyst that forces Israel to open a second front in fighting, as its forces are already bogged down in Gaza.
However, The New York Times has presented IDF leadership as being optimistic and ready:
The Israeli military’s chief of staff, Lt. Gen. Herzl Halevi, said that its forces were determined to keep pressure on Hezbollah and that if those efforts fall short, Israel was ready to fight “another war.”
“We will create a completely different reality, or we will get to another war,” he said on Sunday.
An Israeli government spokesman complained that “Hezbollah is dragging Lebanon into a totally unnecessary war.” The spokesman, Eylon Levy, said in a Monday press briefing, “We are now at a fork in the road.”
A significant escalation in the war in northern Israel (border Lebanon), the IDF just eliminated a senior Hezbollah commander, Wissam Al-Tawil (he was the commander of the Radwan force in the South of Lebanon), a major hit for Hezbollah. Below him pictured with Qasem Soleimani… pic.twitter.com/QXfl9XJabZ
He explained: “Either Hezbollah backs off, hopefully as part of a diplomatic solution, or we will push it away.”
By almost all accounts of military observers and regional monitors, Hezbollah is much more formidable that Hamas, having several times the military capability to sustain a fight with the Israeli army in terms of manpower and weaponry. A full Israel-Hezbollah war would be a nightmare for the whole region, and would also drag the country of Lebanon into further suffering, amid the severe economic crisis of the last few years.
