December Payrolls Unexpectedly Surge As Wages Jump, Unemployment Remains Low
So much for a March rate cut.
In our preview of today’s jobs report we quoted Goldman trader John Flood who said that a “hot print was the worst case scenario” (with the whisper number around 190K also well above consensus of 175K), and as if hearing that and eager to make an already ugly week even more painful for traders, moments ago the BLS reporter that in December the US added a whopping 216K jobs, smashing estimates of 175K and coming above all but two of the 67 Wall Street estimates that make up the Bloomberg survey.
That said, we are comfortable with predicting that next month today’s print will be revised sharply lower (perhaps even below 175K, meaning today was a miss). Why do we say that? Because once again the BLS revised not just one but both previous months sharply lower:
October revised down 45K from 150K to 105K
November revised down 26K from 199K to 173K
This means that ten of the past 11 jobs reports have been revised substantially lower.
And as if the BLS got not a tap on the shoulder, but was being literally Corn-popped by Biden, every other metric came in laughably strong in December, starting with unemployment which remained at 3.7%, missing estimates of a rise to 3.8%. Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.3 percent), teenagers (11.9 percent), Whites (3.5 percent), Blacks (5.2 percent), Asians (3.1 percent), and Hispanics (5.0 percent) showed little change in December.
Confirming the political nature of today’s report, the unemployment rate among Black workers actually tumbled last month, to 5.2%, down some 0.6 percentage point. White unemployment rose, to 3.5%, up 0.2 percentage point. The usual narrative is that when the labor market starts turning, late in the economic cycle, the Black community is the first and hardest hit. No such indication here.
There was some unexpectedly weakness in the labor force participation rate which dropped to 62.5% from 62.8%, missing expectations of an unchanged print. That’s because the number of people not in the labor force soared from 99.695MM to 100.540MM, an 845K increase largely due to a change in historical “data.”
Even more remarkable was that wages, which were expected by many to drop (not us – thank you crazy labor union negotiations), actually came in red hot, as average hourly earnings rose 0.4%, above the 0.3% estimate, and rose to 4.1% from 4.0%, and negating expectations of a decline to 3.9%, as wage growth it appears is here to stay.
Of course, digging a little deeper in today’s report reveals the usual BLS bullshit – besides just the endless downward revisions of course: consider the usual split between the Household and Establishment surveys: here, while payrolls reportedly increase by 216K (at least until they are revised lower next month), the Household Survey showed a plunge in employment of 683K!
Some more details from the report:
The number of persons employed part time for economic reasons, at 4.2 million, changed little in December but was up by 333,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.
The number of persons not in the labor force who currently want a job edged up to 5.7 million in December and was up by 514,000 over the year. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.
Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force changed little at 1.6 million in December but was up by 306,000 over the year. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, at 346,000, was little changed in December and over the year.
Drilling deeper into the breakdown by segment, we find that the now traditional growth led by government, leisure and healthcare…
… continued apace:
Government employment increased by 52,000 in December. Employment continued to trend up in local government (+37,000) and federal government (+7,000). Government added an average of 56,000 jobs per month in 2023, more than double the average monthly gain of 23,000 in 2022.
In December, health care added 38,000 jobs. Employment continued to trend up in ambulatory health care services (+19,000) and hospitals (+15,000). Job growth in health care averaged 55,000 per month in 2023, compared with the 2022 average monthly gain of 46,000.
Employment in social assistance rose by 21,000 in December, mostly in individual and family services (+17,000). Social assistance employment rose by an average of 22,000 per month in 2023, little different than the average increase of 19,000 per month in 2022.
In December, construction employment continued to trend up (+17,000). Employment in nonresidential building construction increased by 8,000. Construction added an average of 16,000 jobs per month in 2023, little different than the 2022 average monthly gain of 22,000.
Employment in transportation and warehousing declined by 23,000 in December. Couriers and messengers lost 32,000 jobs, while air transportation added 4,000 jobs. Since reaching a peak in October 2022, employment in transportation and warehousing has decreased by 100,000.
Employment in leisure and hospitality continued to rise (+40,000). The industry added an average of 39,000 jobs per month in 2023, less than half the average gain of 88,000 jobs per month in 2022. Employment in the industry is below its pre-pandemic February 2020 level by 163,000, or 1.0 percent.
Retail trade employment changed little in December (+17,000). Over the month, employment increased in warehouse clubs, supercenters, and other general merchandise retailers (+14,000); building material and garden equipment and supplies dealers (+8,000); and automotive parts, accessories, and tire retailers (+4,000). These job gains were partially offset by a job loss in department stores (-13,000).
In December, employment in professional and business services changed little (+13,000). Employment in professional, scientific, and technical services continued to trend up (+25,000); this industry added an average of 22,000 jobs per month in 2023, about half the average monthly gain of 41,000 in 2022. In December, employment in temporary help services continued its downward trend (-33,000) and has fallen by 346,000 since reaching a peak in March 2022. Overall, employment in professional and business services changed little in 2023.
Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; information; financial activities; and other services.
But the biggest shocker, and one you won’t hear about anywhere else, is that the number of full-time jobs actually plunged by 1.5 million in December to the lowest since Feb 2023, while part-time jobs exploded higher by 762K to the highest on record. And there was another record: in the number of multiple jobholders. We will shortly have a post breaking all of this down.
Looking at the market reaction, Bloomberg notes that bond investors got what they were looking for today: a stronger-than-forecast report — including the headline number and a drop in the unemployment rate. Investors are not willing to fade the downtick and instead are sticking with the bearish bias. Yields on 10s traded as high as 4.097% after the data and are not seeing much of a retracement lower. That’s because, with the data in hand, rate-cut odds for March are declining and there is a ton of supply coming. As mentioned Thursday, $110 billion in long-end loaded Treasury supply is slated for the week ahead. Plus, consensus for monthly corporate supply centers on about $160 billion. About $57 billion has already priced. That leaves a lot of supply yet to absorb.
That said, once we show just how ugly today’s report actually is, we wonder how long the hawkish reaction will sustain.
Authored by Simon White, Bloomberg macro strategist,
Despite leading data pointing to a positive skew for today’s jobs numbers, yields are back towards their “fair value,” meaning it would likely take a big miss in payrolls or unemployment to see a significant move higher.
Recent labor-related data such as ADP and the employment component of the manufacturing ISM surprised to the upside, but it is unemployment claims that has the strongest leading relationship with payrolls.
The recent inflection lower in claims (inverted in the chart below) inversely leads payrolls growth by about three-to-six months.
The annual growth in payrolls has been steadily falling, but the recent move in claims suggests at least a short-to-medium term bounce, which if it manifests should soon be reflected in the monthly payrolls numbers.
This would further challenge the five-plus rate cuts priced in for this year, and be supportive for longer-term yields. Nonetheless, after the assertive bond rally prompted by the Federal Reserve’s unexpected dovish backflip in December, bonds are back to trading to close to fair value.
This is based on a model for US 10-year yields which includes global central bank rates, the yield curve, oil prices and the lagged value of the 10-year yield.
The model initially had yields ~50 bps too low in the wake of the Fed’s pivot, but with the 10-year back to ~4.04%, that is very close to the model’s estimate of fair value.
Stronger-than-expected jobs or earnings data today would likely prompt bond selling. This tallies with Ian Lyngen and Ben Jeffery of BMO’s payrolls survey of bond-market participants, which sees a bias to selling (if the market trades higher or lower after the data, more than average plan to sell).
However, if yields are close to some approximation of fair value, it could take significantly stronger or weaker data than expected to sustainably move the 10-year away from ~4%.
The market picture (MKTP on the terminal) gives another perspective. The diagram below (click to enlarge) shows the 10-year over the last 30 days. The blue bars show where it has traded most, with the two bulges around 3.90% and 4.20/4.25%. The thinking behind market picture is that markets tend to settle around where the bulges are, and not where the blue bars are smallest.
That would mean if the market can trade through 4.10%, then the next stop could be 4.20/4.25%. Or a lower move could see it settle back towards ~3.90%.
Additionally, Goldman’s forecast reaction matrix for stocks is as follows:
>250k S&P sells off at least 150bps
200k – 250k S&P sells off 75 – 150bps
150k – 200 S&P + / – 50bps
50k – 150k S&P rallies 50 – 100 bps
<50k S&P sells off at least 75bps
That’s the theory anyway. Let’s see what January’s job jamboree actually brings.
The gold market is poised to make history in 2024. It enters the New Year within striking distance of new all-time highs.
How high will gold go? Much depends on how low interest rates and the U.S. dollar go.
The Federal Reserve ended its rate hiking campaign last fall. It is expected to pivot toward monetary easing later this year.
That should work to the benefit of gold and other hard assets.
Of course, there remains much uncertainty surrounding the economy, inflation, and interest rates. If persistent inflation pressures force central bankers to keep rates elevated, then stock and bond markets could tank – possibly taking down precious metals markets with them at least temporarily.
Market volatility could also ramp up later in the year around the presidential election.
With partisan prosecutors and judges threatening to jail the leading rival to incumbent President Joe Biden, and some state election officials moving to remove former President Donald Trump from the ballot, questions about the legitimacy of the election are already being raised.
Some pundits are warning that something akin to a civil war could break out if the declared winner of the election is perceived to have stolen it.
Regardless of the outcome, larger questions loom about the ability of the political system to deal with the mounting debt crisis. Neither Republicans nor Democrats in positions of power have any realistic plans to get spending under control, balance the budget, or pay down the debt.
It will cost the government more than $1 trillion in 2024 just to make interest payments on the debt.
As the national debt crosses the $34-trillion mark, Social Security and Medicare are rapidly heading toward insolvency and represent trillions more in unfunded liabilities.
Taxes can never be raised high enough to cover these massive obligations. And the political reality is that spending will never be cut and promised benefits will never be taken away either.
An inflection point is nearing. The U.S. government’s credit rating was twice downgraded by ratings agencies in 2023.
Under our fiat monetary system, however, the Treasury Department can always “borrow” more dollars into existence by dumping bonds onto the balance sheet of the Federal Reserve in exchange for cash created out of nothing.
Inflating the currency supply is the way the government will manage to keep paying its bills.
The way to preserve purchasing power amid rampant currency depreciation is to hold physical gold and silver.
Unlike fiat Federal Reserve notes, precious metals are scarce. In fact, they face widening supply deficits in 2024.
Major gold, silver, copper, platinum, and palladium mines are struggling with rising operations costs and degrading reserves.
As mining output hits a ceiling, demand for metals among industries, consumers, and investors continues to grow.
Investment demand is a wild card for gold and silver markets. It surged following the COVID-19 outbreak but softened in 2023 as higher interest rates lured savers into money market funds and rising equity markets diminished the perceived safe-haven appeal of bullion.
That could change in 2024. The prospect of Fed rate cuts, election uncertainty, and a gathering debt storm makes holding physical precious metals mandatory for those who seek to protect their wealth.
Largest French Supermarket Chain Boycotts PepsiCo Due To “Unacceptable Price Increases”
The global consumer is so tapped out, it’s becoming virtually impossible to pass on constant price increases.
France’s largest supermarket chain, Carrefour, is boycotting food and drinks manufacturing giant PepsiCo, pulling the company’s snacks and soft drinks from store shelves due to recent price increases in the latest flare-up of a long-running clash between retailers and food companies over the cost of popular items.
Starting Thursday morning, the chain has removed PepsiCo items from supermarkets in France, and is placing banners in aisles for PepsiCo products such as Lay’s and Doritos crisps, and 7Up drinks and Lipton tea, advising customers: “We are no longer selling this brand due to unacceptable price increases,” a Carrefour spokesperson confirmed to news agency Reuters, adding the veto only applies to stores in France.
The supermarket giant’s latest backlash to consumer products manufacturers follows a ‘shrinkflation’ campaign launched in September, when PepsiCo was also targeted, along with Nestlé, Unilever and Lindt & Sprüngli. However, the US-based food and beverages producer has been singled out this time around, although as Just Food reports, it is unclear whether PepsiCo has been trying to force through further price increases for products sold in France.
The dispute with PepsiCo coincided with the issuance today of France’s latest inflation figures, which, while preliminary numbers for December, show food prices continue to rise at a faster pace than those in the wider economy. France’s national statistics body, Insee, said food prices likely rose at an annualised rate of 7.1% last month, easing slightly from 7.7% in November. That compares, for instance, to 12.1% in December 2022.
Nevertheless, food inflation remains at almost twice the rate of the government’s headline measure.
The French consumer price index increased 3.7% in the 12 months through December, up from 3.5% in November, Insee reported today for its provisional figures. In December 2022, the annualised rate stood at 5.9%. Month-on-month, overall inflation rebounded to a positive 0.1%, from a 0.2% decline in November, the statistics agency noted.
As reported previously, the French government has waged a campaign in recent months against both food retailers and their suppliers to bring down prices and ease the burden on consumers.
Authorities are now also joining Carrefour’s fight against shrinkflation, where manufacturers reduce pack sizes without necessarily making a corresponding drop in price. It has emerged that the government has reportedly applied to the EU to clear a move that would oblige grocers to tell consumers if a product has been reduced in size but its price has stayed the same.
Carrefour’s latest agitation against prices and the government’s plans on shrinkflation suggest concerns still remain about the pressures on consumers, despite food prices easing somewhat. Other supermarkets have also occasionally resorted to the more aggressive step of dropping products amid heated price disputes — notably when UK grocer Tesco Plc removed Unilever Plc’s Marmite spread from shelves in 2016. In a more recent price dispute in 2022, Mars Inc. stopped supplying two of its pet food brands to Tesco, while Kraft Heinz Co. withheld ketchup and baked beans.
When food inflation in France was still in double digits last August, Finance Minister Bruno Le Maire held talks with retailers and food producers to press for a reduction in consumer goods prices. The meetings followed a warning by Thierry Cotillard, the boss of the Les Mousquetaires supermarket chain, that people were cutting back on food purchases and shop prices were unlikely to fall until around March 2024.
Meanwhile, Carrefour’s own boss, CEO Alexandre Bompard, said in August consumers were curtailing purchases because of the impact of inflation on their spending power.
Nearly 170 health professionals have signed an open letter to the American Psychiatric Association (APA) condemning its new “gender-affirming” care textbook as “unacceptable, unethical and unsafe.”
Their open letter to the organization appears on the website of the Foundation Against Intolerance and Racism, a free speech and civil liberties watchdog group. The signatories demand that the APA “explain why it glaringly ignored many scientific developments in gender-related care and to consider its responsibility to promote and protect patients’ safety, mental and physical health.”
The letter calls for the APA to suspend publication of the textbook, “Gender-Affirming Psychiatric Care,” released on Nov. 8. The textbook is intended to be used as a teaching tool for doctors in training.
“We seek an unbiased scientific investigation and discussion of the harms and benefits of all types of care offered to those with gender-related distress,” the letter states. “Until those concerns are addressed and the textbook’s errors corrected, we call on the APA for its withdrawal.”
Within 24 hours, more than 700 additional names had been added to the list of signatories.
The APA did not immediately respond to a request for comment by The Epoch Times.
Study Findings In Question
The tome’s foreword declares it to be “the first textbook dedicated to providing affirming, intersectional, and evidence-informed psychiatric care for transgender, non-binary, and/or gender-expansive (TNG) people.”
Its 26 chapters are written by 56 authors, 50 of whom either identify as transgender or don’t identify as male or female, according to the foreword.
But other health professionals are questioning the wisdom of relying on the authors’ personal experiences, just because of their gender identities.
They also object to backing up those testimonies with limited scientific studies, some with heartily disputed results.
The textbook also presents neo-Marxist critical theories focused on calling out the so-called oppression of particular identity groups, critics point out.
Yet the textbook will be seen as a gold standard of care because it comes with the considerable clout of the APA behind it, concerned doctors told The Epoch Times.
That’s despite the fact that the textbook presents as evidence some studies that have come under fire for being flawed.
Those include the famous Dutch protocol study that became the basis for recommending puberty suppression, the use of cross-sex hormones, and other “gender-affirmative” procedures for people who identify as the opposite sex.
Transgender activists say puberty blockers, cross-sex hormones, and surgery can save the lives of gender-confused adults and children who may feel suicidal.
Others dispute that idea. And new research backs up that way of thinking.
A recent Finnish study found that mental health issues for people who medically “transition” continue despite receiving “gender-affirming” care. An analysis of data showed the need for psychiatric care was greater for people with gender dysphoria, both before and after medical transitioning, when compared to a control group.
Millions of Children at Risk
The signature of Dr. Lauren Schwartz, a psychiatrist in Oklahoma, appears first on the letter. She worries that using the textbook to train doctors could lead to harming millions of children, she told The Epoch Times.
She and fellow professionals hope their letter will raise awareness among parents and providers on “how radically the American Psychiatric Association has shifted away from medicine and science in the publication of this book,” she said.
“There are so many false, harmful statements—ones rooted not in medicine or science, but in an inconceivable ideological foundation and medical misinformation, both of which will harm patients and their families,” she wrote in a text message.
Other professionals who signed the letter include psychiatrists Miriam Grossman and Az Hakeem. Both have written books denouncing transgender ideology.
Dr. Grossman, a childhood and adolescent psychiatrist, wrote “Lost in Trans Nation: A Child Psychiatrist’s Guide Out of the Madness.” Her book excoriates gender ideology as a repudiation of reality and a mockery of basic male and female biology. She has been outspoken against transitioning children.
Dr. Hakeem, a London psychiatrist, formerly worked at the Tavistock gender clinic. He is the author of “Detrans: When Transition is Not the Solution,” which argues that no one is born in the “wrong body.”
He maintains that transitioning becomes a “false solution to a different problem” at a time of increasing pressure to affirm a person’s belief that he or she was born the wrong sex.
The idea of affirming gender confusion and medically altering a person’s body to fit a new gender identity is under scrutiny from clinicians and scientists worldwide.
Yet, those methods are recommended by the book’s authors.
Critics of the textbook argue in their letter that reviews of gender-affirming care in Sweden and England also did not support the idea that transitioning improves the mental health of patients.
They point out that the textbook relies on“evidence-informed” information, instead of the scientific standard that typically requires evidence-based information.
And they question why the textbook dismisses the idea of scientific neutrality and depends, instead, on the “lived experiences” and “community impact” of authors who identify as transgender.
Dr. Stanley Goldfarb, board chairman of the Do No Harm organization, said he signed the letter because his organization is concerned about potential harm to children.
New evidence out of Europe indicates that medically “transitioning” children to help them try to resemble the opposite sex is doing more harm than good, he told The Epoch Times.
“We don’t have any study that shows that this is long-term beneficial,” he said.
And the Dutch studies finding that “gender-affirming” care helped people with gender dysphoria or confusion were not successfully duplicated by researchers in England, Dr. Goldfarb said.
The newest studies coming out of Europe suggest that what’s best for children with gender dysphoria is intensive, long-term psychiatric care before any medical intervention, he said.
The lack of acknowledgment of the latest scientific research in the textbook is, he said, “quite extraordinary.”
Dangerous Decisions
While adults can make their own decisions, children lack the maturity to make life-altering changes to their bodies, Dr. Goldfarb said. And the risk of harm for children taking puberty blockers and cross-sex hormones is real and serious.
Dr. Stanley Goldfarb, board chairman of Do No Harm. (Courtesy of Do No Harm)
Puberty blockers stop the development of the sexual reproductive system, meaning children who don’t go through puberty would never fully develop sexuality. They’re also likely to lose the ability to have children, he said.
“It sort of depends on how far into puberty they are before they start blocking its progression,” he said. “It depends on how many hormones they take and for how long they take it.”
Dr. Goldfarb and other health professionals objecting to the textbook take issue with the authors’ assertion that puberty blockers for children are “fully reversible.”
And the textbook is “disturbingly nonchalant,” the letter states, about the high rate of mental and behavioral health issues simultaneously affecting people with gender dysphoria. Autism, ADHD, anxiety, depression, obsessive-compulsive disorder, and suicidal thoughts often coincide with gender dysphoria in youths.
The textbook is “disturbing,” said Alan Hopewell, a prescribing neuropsychologist in Texas with experience treating transgender-identifying patients.
He told The Epoch Times, “This is nonsensical gibberish which has no foundation whatsoever in science.”
Old Man Winter To Plunge Europe, US Into Deep Freeze After Mild December
The Lower 48 and Europe enjoyed a mild start to winter but will be transitioning into a period of colder and possibly even snowier conditions through at least the mid-point of January. This will lead to a surge in heating demand on both sides of the Atlantic.
ECMWF and GFS models forecast that after an unusually warm December driven by El Nino, lower 48 temperatures from Thursday through Jan. 15 will trend around a 30-year seasonal average of about 37 Fahrenheit. After the mid-point of the month, the latest GFS Operational model shows a cold snap could be in play.
Talk of a “polar vortex” has been increasing on social media platform X by notable meteorologists.
It’s type to start hyping the “Polar Vortex” again — just like 10-years ago. It’s coming in a week.
Here’s what you can do to prepare:
Stock up on wood, toilet paper, and beer.
Make sure your significant other has her snow shovel or snow blower ready to go. pic.twitter.com/B0uF4Ccjdo
Blog now public & it’s a big one! Hard to keep up with all the #PolarVortex tap dancing in the coming days. I try my very best & as I discuss lots of potential of #winter weather in the coming weeks. Had to use the Vulcan mind meld to make sense of it all: https://t.co/Gg8N2KIjJSpic.twitter.com/dbI6a1I1Rr
The Polar Vortex is expected to sink into southern Canada towards the middle of January.
This is something to keep an eye on, as it could mean opportunities for a big cold snap and wintry weather after MLK Day. 🥶☃️🌨️ #txwxpic.twitter.com/ch2Hpr9Nsx
Across North West Europe, Central Europe, and Eastern Europe, ECMWF and GFS models forecast average temperatures will begin to plunge below seasonal norms through the weekend into next week.
“Colder conditions will soon invest Europe more widely, with temperatures steadily dropping later this week into next week,” Andrew Pedrini, a meteorologist at Atmospheric G2, told Bloomberg.
Northwest Europe
Central Europe
Eastern Europe
Maxar Technologies said London is expected to record a low of 19.4 Fahrenheit on Monday. Further north, folks in Stockholm are bracing for single-digit temperatures on Sunday.
The impending cold snap in Europe has led Finland’s transmission system operator to warn customers about using electricity during peak morning and evening hours.
India, a country the United States and allies had hoped would be a bulwark of democracy against China, is becoming a problem.
The South Asian country is desperately poor, at just $2,400 gross domestic product (GDP) per capita in 2022. Yet it seeks to portray itself as an up-and-coming economic powerhouse.
It is increasingly authoritarian. Yet it wants to be seen as all things to all people, including the democracies.
Its prime minister, Narendra Modi, is prideful, highly nationalist, and has superpower aspirations.
That makes India’s relationship with more responsible powers, including the United States, increasingly strained, not least because of New Delhi’s too close relations with the world’s most dangerous dictators, Xi Jinping of China and Vladimir Putin of Russia.
New Delhi is involved in various international initiatives led by Beijing and is financially complicit in Moscow’s war against Ukraine.
The three countries cooperate through joint membership in Beijing-led organizations, including the military-focused Shanghai Cooperation Organization (SCO), which is the closest that the three have to an alliance system such as the North Atlantic Treaty Organization (NATO). All three find ideological common ground in their socialist histories and the promotion of a “new multilateral” international system that they seek to exploit in leading the developing world against “imperialism” and the “West.”
This developing trilateral threat is by no means a done deal because India is still a democracy among the wolves and could turn back from the hunt. While China and Russia have been strong allies for years, there is a crack in their relationship when it comes to India, which still seeks and needs Group of Seven (G7) approval, support, and markets.
Simmering border disputes between India and China in the Himalayas, and New Delhi’s private criticism of Moscow’s war with Ukraine, complicate the threat. Its veto power in the SCO could be useful to the democracies. Russia’s deteriorating international position as a pariah state forces it into the arms of both India and China, with New Delhi distancing itself, at least to some extent, from Moscow. Over the last two years, Mr. Modi has gone so far as to skip his annual in-person meetings with Mr. Putin.
India’s continued complicity with Russia’s war where it counts, however, stems from New Delhi’s violation of G7 sanctions against purchasing Russian oil above a price cap of $60 a barrel agreed in 2022. While the cap cost Russia almost $38 billion, India’s evasions pushed the price to about $70 a barrel. That increases the price of gas globally and gives the Kremlin more cash for killing Ukrainian civilians. The world has New Delhi to thank for its unprincipled position and the global pain it is producing.
India uses the extra money to fund imports of Russian oil, arms, and nuclear power plants. The two countries plan to jointly produce weapons, which means that India is importing Russian military technology that can be used in New Delhi’s border disputes with China. This must irk Beijing, but it likely prefers India to rely on Russian rather than American arms. At least then, if there is a Sino-Indian war, Beijing could lean on Moscow to halt arms exports to India, including critical spare parts.
European sanctions on Russia following the Ukraine war diverted its exports East. Now, approximately 90 percent of Russian oil exports go to China and India, with the former importing as much as 50 percent and the latter 40 percent. Without Indian purchases, China would have much greater trade leverage over Russia. So New Delhi plays a spoiler role for Beijing in the latter’s increasing economic dominance.
The more of a pariah Russia becomes, the more Moscow relies on New Delhi to moderate the power of Beijing, drawing the three ever closer into a more stable threat to the democracies. More fully separating India from China and Russia is thus an important U.S. foreign policy goal, which is why Washington is not more openly critical of the South Asian country. Yet more must be done as India has long been “anti-Western,” is increasingly autocratic, and U.S. business risks becoming reliant on its cheap labor in the pivot away from China. That risks increasing Indian political influence in Washington through the same kind of elite capture that previously insulated Beijing from criticism.
To mitigate these risks, the United States and G7 countries must impose economic penalties on India, as the many incentives of the past, including direct development aid, are underappreciated.
Our attempts at buying friendship apparently failed, and we are finally realizing that India is a fair-weather friend. Sanctions and tariffs will be needed to shift India away from Russia and China. No G7 country, including the United Kingdom, should execute new free trade agreements with India.
This tough-love approach to a fellow democracy should not be directed at India alone. Rather, new such policies should apply to any country that fails to fully cooperate with the United States and allies against existential threats from Russia and China, not to mention the trilateral threats that emanate from the complicity of third countries like India.
* * *
Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.
Russia, Ukraine Conduct Biggest Prisoner Swap Of The War
In a rare bright spot of positive news out of Ukraine, the Russian and Ukrainian governments announced a major prisoner exchange late Wednesdsay, described as the biggest single swap of captives thus far after nearly two years of war.
The two sided exchanged over two hundred captives soldiers each, following talks mediated by the United Arab Emirates. “More than 200 of our soldiers and civilians have been returned from Russian captivity,” Ukraine’s President Zelensky said on Telegram.
Videos of men celebrating and being reunited with friends and family confirmed the major deal. “There was a long pause in the exchanges, but there was no pause in the negotiations,” Zelensky had added.
While there have been many prisoner swaps throughout the war, typically involving dozens at a time, there had not been a successful swap since last August, which is almost five months ago.
Russia’s Defense Ministry specified that 248 of its servicemen were able to be returned home, and they are undergoing “medical and psychological assistance.” As for the Ukrainian side, it received 224 of its soldiers and six civilians back.
The UAE hailed that it maintains “strong friendly relations” with both Russia and Ukraine which made the deal possible. At this moment it remains unknown how many POWs are in each side’s possession, but it’s likely a number at least in the many thousands.
A New York Times report speculates as to why there’s been almost a half-year lull in prisoner swaps:
Direct communications between the countries have been infrequent since the early days of the war, but the two sides have regularly exchanged prisoners of war through deals brokered by a third-party, like the U.A.E. or Turkey. Ukraine’s human rights commissioner, Dmytro Lubinets, said there had been 49 exchanges in total, including Wednesday’s, with 2,828 Ukrainians returned. Russia hasn’t disclosed a total number, but at least 1,000 have been returned, according to statements by the country’s officials.
The rate dropped in 2023, however, after the release in Turkey of five former commanders of Ukraine’s garrison in the Azovstal steel plant angered Moscow. The last exchange of prisoners between the two countries occurred in August, when 22 Ukrainian soldiers were returned.
This new large-scale swap also confirms that both sides are at least keep up negotiations or some level of communications indirectly, via third party mediating countries. Zelensky has consistently refused to enter any negotiations which would result in Ukraine ceding territory; however, Ukraine is having a severe manpower and ammo shortage crisis.
Ukraine and Russia have exchanged hundreds of prisoners of war, in what is being described as the biggest swap of the war.
According to Ukraine, 230 members of the army were liberated from Russian detention. In return, Ukraine released 248 Russian prisoners. pic.twitter.com/m4uxoirSFM
Because of this, most analysts see an eventual negotiated settlement as inevitable. But Kiev wants better leverage, and is still holding out hopes of receiving more defense funding and advanced weaponry from the West.
In a recent episode of “American Thought Leaders,” host Jan Jekielek sits down with Christine Anderson, a member of the European Parliament and of the Alternative for Germany (AfD) party.
Here they discuss the cultural and political threats facing Europe, from surging immigration and antisemitism to the erosion of national identities.
Jan Jekielek: Welcome to Washington, D.C. You’ve been speaking about the coronavirus pandemic and the draconian measures associated with it. We have a select subcommittee on the pandemic that has been doing an inquiry. There is similar activity in the European Parliament. Please tell me about that.
Christine Anderson: There was a committee set up in the EU [European Union] Parliament. Unfortunately, it was not an inquiry committee, so we lacked certain competencies to compel someone to show up for the committee. Albert Bourla, the CEO of Pfizer, and Ursula von der Leyen, the president of the EU Commission, didn’t show up.
The title of the committee was “Lessons Learned from COVID.” They weren’t interested in looking at where they went wrong. Was it okay for us to violate fundamental rights? No, what they asked was, “Where did we fail to get people to do what we wanted?”
You can see from the report of that committee, despite all the lies we exposed, they only served one purpose—to force people into compliance. Despite all we uncovered, they repeated every single lie in that report.
At this point, the people aren’t running any show anymore. It’s the governments—but they appear to be puppets for whoever is actually calling the shots. People all over the world are in the same boat. We are up against the same powers trying to infringe on our rights and take away our democratic principles.
Mr. Jekielek: The AfD is often characterized in America and in a lot of media in Europe as a far-right extremist party.
Ms. Anderson:The AfD is not far-right. Any party that criticizes the government or questions the narrative is considered far-right.
As soon as you start advocating for the people, which is the job of elected representatives, the globalitarian misanthropists will throw whatever they have at you to prevent people from listening.
Mr. Jekielek: What would you say is the most controversial position of the AfD?
Ms. Anderson:They’re bashing us for our stance on immigration, which actually isn’t immigration. It’s an illegal invasion of millions of people. They’re saying that it’s all racist.
Mr. Jekielek: The concern is that unless those people assimilate into the culture, that can create a huge problem. There are these huge free-Palestine protests we’ve been seeing since October 7. What do you think about that?
Ms. Anderson: All the elected officials and politicians are now saying, “What? We imported antisemitism?”
This is what has been going on, and now they’re seeing it. If you import millions of people from cultures that have deep-rooted antisemitism, that’s exactly what you’ll get.
We’re overrun, and it’s almost like you have these parallel societies. On top of that, we’re being taught to hate our own way of life and our culture. Why would anyone want to integrate into a society that hates itself? It’s absurd and insane. On the altar of diversity and kindness, we’re destroying our free and liberal societies.
When you look at every single Western democracy, you have the same agendas being pushed. The governments all seem to be reading from the same script: “Build back better. Safe and effective. No one is safe until everyone is safe.” The whole shebang. I consider them to be puppets of whoever is putting forward these agendas.
I don’t know who they actually are, but that’s not the point. The only way I can change anything is by going after the elected officials. I elected these people, and they’re responsible. That’s what I’m interested in. There’s no constitution in the world that would grant me the right to take down the World Economic Forum. I have no connection to the WEF whatsoever. It’s my government that is allowing the World Health Organization to overtake its governing powers. It needs to fix this.
Mr. Jekielek: I keep thinking about this far-right moniker. Today, it’s comical how it’s being used. Elon Musk is far-right.
Ms. Anderson:Everyone who isn’t in support of whatever globalist agenda is being pushed at the moment is given the label far-right.
The mindset is different in Eastern European countries. They’ve lived under totalitarian rule, and it hasn’t been that long ago. They remember and recognize how totalitarian regimes go about doing certain things—the language and the gaslighting. Therefore, it’s not really working in the Eastern European countries.
Mr. Jekielek: You don’t have a lot of hope for Western Europe. What do you see as the path forward if you don’t see a good future?
Ms. Anderson: I wouldn’t go as far as saying I have no hope for Western Europe, but we do have antisemitism by the millions. I don’t see anyone willing to take a hard look at this and say, “What do we need to do to undo this?”
My hope lies with the Eastern European countries, where we will actually have a Europe as we know it. My hope also lies with the American people. Just a couple of nights ago when we had this event, it suddenly hit me. I realized, “This is the United States of America, the land of the free and the land of unlimited possibilities. I am being asked to come here to speak about freedom to Americans.”
It was such an honor that I would be allowed to do that. But we need the American people to uphold that concept of freedom that is deeply rooted within America. We need that if we want to save all the peoples around the world from this tyrannical system that they’re about to impose on us.
