It’s deja vu all over again as various local news outlets report that traffic on the Russian-built Crimean Bridge – linking the Crimean peninsula to the Russian region of Krasnodar – was stopped due to an emergency.

Traffic jam of cars trying to cross into Crimea pic.twitter.com/RbbHgep6V8

— Dmitri Alperovitch (@DAlperovitch) July 17, 2023

The head of the Crimea Sergey Aksyonov made the statement on his Telegram channel, but did not specify the nature of the incident:

“Traffic was stopped on the Krymsky Bridge: an emergency occurred in the area of ​​the 145th support from the Krasnodar Territory. Law enforcement agencies and all responsible services are working. I spoke with the Minister of Transport of the Russian Federation Vitaly Gennadyevich Savelyev, measures are being taken to restore the situation. We keep in touch with colleagues from Krasnodar Territory,” Aksenov wrote.

It was early in the morning and so there are few images available due to the darkness, but there are some video clips that reportedly of the scene:

⚡️Unverified video reportedly showing damage to the Crimean bridge now pic.twitter.com/mJAQknX1XE

— War Monitor (@WarMonitors) July 17, 2023

⚡️Situation at the Kerch bridge, traffic is suspended pic.twitter.com/juBjrfGzBu

— War Monitor (@WarMonitors) July 17, 2023

⚡️Ambulances now arriving at the Crimean bridge after explosions were heard.

Reminder, traffic is blocked. pic.twitter.com/YnyPWPTii7

— War Monitor (@WarMonitors) July 17, 2023

⚡️Video from the Crimean bridge moments ago after explosions were heard pic.twitter.com/GzhOUg4ecm

— War Monitor (@WarMonitors) July 17, 2023

The RBC-Ukraine news agency reported that explosions were heard on the bridge.

⚡️Smoke can be seen on the Kerch bridge now pic.twitter.com/irUipvdyXE

— War Monitor (@WarMonitors) July 17, 2023

Russia’s Grey Zone channel, a heavily followed Telegram channel affiliated with the Wagner mercenary group, reported that there were two strikes on the bridge at 03:04 a.m. and 03:20 a.m.

The Wagner affiliated Gray Zone channel claims that AFU hit the Kerch Bridge two times pic.twitter.com/7JadFmtfuC

— Giorgi Revishvili (@revishvilig) July 17, 2023

There has been no official comment from Ukraine or Russia as yet.

China’s economy lost momentum in the second quarter with GDP growing just 6.3%, well below the 7.1% expectation.

The statistics bureau’s press briefing begins with its spokesman, Fu Linghui, proudly proclaimed that China’s economy improved in the first half despite the grim and complex international environment.

However, bear in mind that the 6.3% YoY growth rate – already quite a bit less than economists estimated – is less impressive when you consider it compares to a quarter in 2022 when Shanghai was under lockdown and other cities faced severe Covid-related restrictions.

The rest of the major macro data was more mixed (though with a downside bias):

• China June Industrial Output Rises 4.4% Y/Y; Est. 2.5% – BEAT (and improved from prior month)

• China June Retail Sales Rise 3.1% Y/Y; Est. 3.3% – MISS (and slowed from prior month)

• China Jan.-June Fixed Investment Rises 3.8% Y/Y; Est. 3.4% – BEAT (but slowed significantly)

• China End-June Surveyed Jobless Rate Stands at 5.2% (flat from prior month)

The growth of China’s home sales slowed, while property investment and new construction fell deeper, official data showed.

• Home sales by value rose 3.7% from a year earlier in the first half of the year, slowing from an 11.9% increase in January to May, the National Bureau of Statistics said Monday.

• Property investment fell 7.9% in the first half, compared with a 7.2% decline in the first five months.

• New construction starts dropped 24.3% in the first six months, compared with a 22.6% fall in January to May.

With China’s extreme Zero-COVID policies now in the distant past, the difficulties facing the world’s second-largest economy will further increase global growth fears and lead to increasing calls for Beijing to do more to shore up confidence (i.e. unleash broader stimulus measures).

Ho Woei Chen, economist at United Overseas Bank says the GDP is “a big disappointment”:

“But June data is still mixed. The industrial production was better than expected and picked up from May. The weak domestic demand will be of great concern and this will be the target for its monetary and fiscal stimulus.”

The problem with those demands is that credit (stimulus) actually rose more than expected…

Finally, and in fact probably even more critical than the actual GDP print, China’s youth unemployment rate rose to another new record high of 21.3% in June (dramatically worse than the 5.2% nationwide surveyed jobless rate)…

Source: Bloombrg

Of course, China does have a simple solution for this record youth unemployment… “it is becoming increasingly uncomfortable that the world’s concerns of a coming war in Taiwan are intensifying at the very same time that China’s youth unemployment is surging.”

Meat is always on the menu in many parts of the world, as we can see when we map out meat consumption by country.

How do countries differ in how much, and what type of meat, they eat? In this colorful graphic, Visual Capitalist’s Pallavi Rao discusses creator theWORLDMAPS; breakdown of the most consumed type of meat in every country in the world, using data from the UN’s Food and Agriculture Organization (FAO).

Each color denotes a different category of meat – beef, pork, mutton, poultry, seafood, or other – with annual consumption calculated per capita in kilograms (kg).

Let’s dig in to the data.

Is Fish Considered Meat?

Since meat is normally defined as the flesh of any animal (with the primary components being water, fat, and protein), that includes fish and other seafood.

But whether fish is considered “meat” or not depends a lot on cultural practices and dietary preferences, and has varied throughout history. Some earlier definitions of meat focused only on mammals, for example.

In Christianity for example, many denominations allow eating fish on fasting days when abstaining from meat. This was both due to distinctions between meat from warm-blooded land animals and cold-blooded animals (like fish), as well as the importance of fish consumption in parts of Europe where Christianity flourished.

To account for both sides of the debate, we’ll cover meat consumption by country both with and without fish and seafood.

The Most Consumed Meat by Country (Including Seafood)

Just by glancing at the map and the below table, poultry stands out as the most popular meat by weight consumption in 70 countries, or about 40% of the entire database.

Note: Other meat includes less frequently farmed animals like rabbit, horse, and camel, as well as game—meat from wild animals.

Fish & Seafood ranks as the second most popularly consumed meat in 56 countries, most of them with significant coastlines.

Here’s a breakdown of how much of each type of meat is eaten per capita in each country, measured in kilograms.

The world’s largest consumers of meat per capita? Hong Kong, Iceland, and Macao have the highest total meat consumption, all above 170 kg (370 lbs) per capita.

We take a brief look through the biggest consumers of each type of meat below.

Who Eats the Most Poultry?

While the U.S. and China eat the most chicken by absolute numbers, the countries rank 7th and 112th respectively when it comes to poultry consumption on a per capita basis.

Several island nations—St. Vincent and the Grenadines, Trinidad & Tobago, Samoa—along with Israel eat more than 60 kilograms of poultry meat (about 15 large birds) per person on an annual basis.

Regionally, poultry consumption can be seen spanning almost all of the Americas, as well as in the UK and former British colonies Australia and South Africa, and in the Middle East.

Who Eats the Most Pork?

Despite eating more seafood and poultry, Hong Kong leads the world in pork consumption per capita annually at 55 kg (121 lbs). This is almost equivalent to the average amount of retail pork harvested from a single 250 lb pig.

Poland and Spain—who are also top pork producers—rank close behind Hong Kong with similar pork consumption numbers. Indeed, we can see pork as the most consumed meat in many European countries with local histories of pork foods, as well as in a few countries in Africa including Burkina Faso and one Southeast Asian country, Timor-Leste.

Who Eats the Most Fish and Seafood?

In the middle of the North Atlantic ocean, Iceland eats the most fish and seafood in the world, at a staggering 90 kg (nearly 200 lbs), per person per year. That also gives Iceland the crown for the highest per-capita consumption of any single type of meat.

Behind Iceland are other island and high coastline nations, including the Maldives, Hong Kong, Macao, and Portugal. Regionally we can see the importance of seafood reflected in East and South Asia, the Atlantic coastline of Africa, and the Nordic countries in Europe.

Who Eats the Most Beef?

Argentina’s 46-million-strong population eats nearly 47 kg (103 lbs) of bovine meat per person per year, the most by any country in the UN’s database.

The South American country has a rich culinary history with beef, as cattle brought by Spanish settlers flourished on the grassy plains of the region. Such is cattle’s importance on the continent that the gaucho—a horseman engaged in cattle work—is a folk symbol in Argentina, Uruguay and parts of Brazil (which ranks 5th in beef consumption).

The map of beef consumption highlights Central Asian countries including Uzbekistan and Eastern African countries including Ethiopia.

Who Eats the Most Mutton & Other Meat?

The people of Mongolia are unrivaled in their consumption of mutton and goat meat, devouring an impressive 66 kilograms (145 pounds) per capita annually. This voracious appetite for meat is deeply rooted in their heritage as a nation of skilled shepherds.

Papua New Guinea, meanwhile, tops the “other meat” consumption rankings. The country is the largest producer of game meat in the world, due to its mostly rural and indigenous population relying on hunting. One 2023 study found that a sample of villages in the country primarily hunted wild deer and boar for meat, although marsupials like bandicoots, tree-kangaroos, and cuscus were occasionally hunted and consumed as well.

Mongolia also ranks highly in consumption of other meat per capita, likely due to their traditional consumption of horse meat. The country produced just over 100,000 tons of horse meat in 2020, one-sixth of the country’s total meat production that year.

Mapping Meat Consumption By Country, Without Seafood

What happens to each country’s meat consumption habits if we remove fish and seafood from the dataset? The map, and the rankings change quite a bit.

Most of the blue on the map is replaced with a wash of yellow, indicating the global popularity of poultry meat as a cheap and efficient source of protein. However, much of East Asia including China and European countries like France and Sweden consume more pork.

The rankings for total meat consumption also shuffle.

Hong Kong remains at the top, but the U.S. jumps up three spots to second place, with annual per capita meat consumption at 128 kg (282 lbs) when seafood isn’t included.

Iceland and Macao drop to the top 15, while Australia, Mongolia, and Argentina climb into the top five. Other countries that preferred seafood dropped a lot lower, such as Japan, which fell 40 spots in the total consumption rankings when fish was removed.

Authored by Mimi Nguyen Ly via The Epoch Times,

The weapons stockpile of the United States and its North Atlantic Treaty Organization (NATO) allies are becoming “dangerous low” with no “short term” solutions, according to a top U.S. Air Force commander.

Gen. James Hecker, the commander of U.S. Air Forces Europe and Air Forces Africa, made the remarks at the Chief of the Air Staff’s Global Air & Space Chiefs’ Conference in London, reported Breaking Defense.

The air force general urged NATO allies to think seriously about their stockpiles.

“I think it’s very important that we kind of take stock of where we are in our weapons state across the 32 nations of NATO, and we’re getting way down compared to where we were,” Gen. Hecker said on a panel with the air chiefs of the United Kingdom and Sweden at the conference, reported the outlet.

“And it’s probably not going to get better—well, it’s not in the short term—but we’ve got to make sure in the long term we have the industrial base that can increase what we have,” he said at the July 12-13 event, urging all NATO nations to start making deeper investments.

The United States is at “roughly half the number of fighter squadrons” it had compared to when it engaged in Operation Desert Storm, a U.S.-led operation that started in January 1991 as part of a response to the Iraqi invasion of Kuwait, the general said. He added there’s been a similar decrease in fighter squadrons for the UK.

“So we don’t have nearly what we had at the heart of the Cold War,” he continued.

“Now you add that we’re giving a lot of munitions away to the Ukrainians, which I think is exactly what we need to do, but now we’re getting dangerously low and sometimes, in some cases even too low, that we don’t have enough. And we need to get industry on board to help us out so we can get this going.”

The United States has provided Ukraine over $41.3 billion in security assistance since Russia invaded Ukraine in February 2022, according to the U.S. State Department as of July 7. This encompasses more than $15 billion in weapons and equipment taken from U.S. military stocks to Ukraine since the Russian invasion.

It comes after the Biden administration last week announced it would send to Ukraine the controversial cluster munitions, which have since arrived in the country.

The cluster munitions, after they are fired, open in midair and release bomblets over a wide area to strike several targets simultaneously. They can be delivered by planes, artillery, and missiles. More than 100 countries, including two-thirds of NATO allies, have banned such weapons because they can cause many civilian casualties.

Cluster munitions can be fired using artillery that the United States has provided to Ukraine, and the Pentagon has a large stockpile of them that were facing decommissioning if it wasn’t for Ukraine’s voiced need for more ammunition.

A man standing next to the remains of a missile that dropped cluster bombs in a residential housing complex in Sloviansk, Ukraine, on June 27, 2022. (Scott Olson/Getty Images)

The Biden administration said the cluster munitions will enable the Ukrainians to continue their war effort with the ordnance they need, while the United States and others who supply Ukraine ramp up their production of artillery shells to further assist Ukraine’s defense.

“We don’t see this as a permanent solution but rather a bridge,” Colin Kahl, Under Secretary of Defense for Policy, said at a July 7 press briefing.

National security adviser Jake Sullivan said at a separate briefing: “We are reaching a point in this conflict, because of the dramatically high expenditure rates of artillery by Ukraine and by Russia, where we need to build a bridge from where we are today to when we have enough monthly production of unitary rounds that unitary rounds alone will suffice to give Ukraine what it needs.

“So, as a result, this is the moment to begin the construction of that bridge so that there isn’t any period over this summer or heading into this fall when Ukraine is short on artillery and, being short on artillery, it is vulnerable to Russian counterattacks that could subjugate more Ukrainian civilians.”

Mr. Sullivan stopped short of saying there was a shortage of artillery shells.

Heidi Grant, Boeing’s director of business development, who was a former top official for the Pentagon’s weapons sales, told the panel in London that in order to start production lines, industry needs a “written, on-paper request” of what’s required, reported Breaking Defense.

“It’s hard for us to make the investment unless we know that [the demand is] really there,” Ms. Grant added.

Treasury Secretary Janet Yellen may have been tripping balls when she fervently bowed before a Chinese official last week, after the 76-year-old ate four portions of jian shou qing, a type of wild mushroom with unpredictable psychedelic effects.

According to CNN, citing Chinese state media,Yellen nipped into a casual Beijing restaurant right after landing on July 6, where she apparently exhibited excellent skills with her chopsticks.

Then she did this:

Janet Yellen keeps bowing repeatedly to the Chinese vice premier, who does not reciprocate even once.
What an anti-American disgrace this administration is.pic.twitter.com/8vCaIIv6de

— Rising serpent 🇺🇸 (@rising_serpent) July 9, 2023

 “You thought you were walking straight but you just fell sideways,” one food expert told the Xinhua state news agency in a report about the mushroom’s potent powers, published after Yellen left the country.

“I have a friend who mistakenly ate them and hallucinated for three days,” Dr. Peter Mortimer, a professor at Kunming Institute of Botany, told CNN.

Yellen’s stop at an outlet of the Yi Zuo Yi Wang restaurant chain — the name means “In and Out” in English — sparked a flurry of posts on the Chinese social media network Weibo and a deluge of reservations, staffers said.

“It was an extremely magical day,” the restaurant said of the secretary’s visit. –NY Post

About that bow…

“Never, ever, ever – An American official does not bow,” said former George W. Bush White House senior staffer Bradley Blakeman in response. “It looks like she’s been summoned to the principal’s office, and that’s exactly the optics the Chinese love.”

After a recent clear uptick in provocative North Korean missile launches, itself a response to increased joint US-South Korean military drills on the peninsula, national security adviser Jake Sullivan has said the Biden White House is ready to negotiate with Pyongyang “without preconditions” about its nuclear program.  

“We have indicated to North Korea that we’re prepared to sit down and talk without preconditions about their nuclear program,” Sullivan told “Face the Nation” on Sunday, in comments coming just days after the north test launched an ICBM.

For months, South Korean and Western officials have expressed alarm over what they see as a potential North Korean nuclear test happening soon. But Sullivan in his own fresh remarks said he’s not seen “any immediate indications” of this happening imminently.

“But it would not come as a surprise that North Korea moved forward with another nuclear test,” he said.

“With respect to its intercontinental ballistic missile capability, this is a capability they began testing several years ago,” Sullivan continued. “They have continued to test it. We watch all of those tests very closely to see how it is developing and we could coordinate extremely closely with our allies — with Japan and Korea —  to make sure that we are responding in lockstep to this threat.” 

Sullivan called out China as well, warning of a regional escalation in nuclear build-up activities…

“We’ve also made clear to China that it is the United States who is ready for diplomacy and North Korea who was not,” Sullivan said.

“So from our perspective, China has a role to play here too, given its relationship with North Korea, to indicate to the North Koreans that its continued testing is destabilizing, and, frankly, is in fact only creating circumstances in which the United States our allies and partners have to step up our activities and posture to respond to the threat.” 

The US, South Korea and Japan hold trilateral missile defense exercise in international waters off the Sea of Japan, just days after North Korea launched new-generation intercontinental ballistic missile (ICBM)https://t.co/M443hnBAZt

— DAILY SABAH (@DailySabah) July 16, 2023

In recent years, the US and Japan began issuing joint affirmations of common nuclear defense.

A White House statement in April 2021 for example spelled out: “The United States restated its unwavering support for Japan’s defense under the U.S.-Japan Treaty of Mutual Cooperation and Security, using its full range of capabilities, including nuclear.”

So given this, Beijing is unlikely to quickly heed Washington’s call to rush to be direct mediator with the Kim Jong Un government.

The 2024 presidential campaign of Ron DeSantis (R) has fired roughly a dozen staffers, with more ‘expected in the coming weeks,’ after the Florida governor has failed to gain ground on former President Donald Trump less than two months after he entered the race.

According to NBC News, those who were let go were described as mid-level staffers across several departments whose firings were related to cutting costs. The downsizing comes after the departures of David Abrams and Tucker Obenshain, veterans of DeSantis’ political orbit, as first reported by Politico.

Sources from within the DeSantis campaign say that there’s an internal assessment that they hired too many staffers too early despite a $20 million haul during the first six weeks, and that costs needed to come down.

Others within DeSantis’ political orbit have laid the blame at the feet of campaign manager Generra Peck, who spearheaded the governor’s 2022 midterm reelection bid.

“She should be,” said one DeSantis donor.

“They never should have brought so many people on, the burn rate was way too high,” said one GOP source familiar with the campaign’s thought process. “People warned the campaign manager but she wanted to hear none of it.”

“DeSantis stock isn’t rising,” added the donor. “Twenty percent is not what people signed up for.”

The person noted that DeSantis has a penchant for switching out staff, which means that he has no core team that has worked together before. DeSantis had three different campaign teams for each of his three runs for Congress, and notably had a huge campaign shakeup during his first run for governor in 2018. –NBC News

In response, DeSantis campaign spokesman Eric Romeo told NBC News; “Americans are rallying behind Ron DeSantis and his plan to reverse Joe Biden’s failures and restore sanity to our nation, and his momentum will only continue as voters see more of him in-person, especially in Iowa. Defeating Joe Biden and the $72 million behind him will require a nimble and candidate driven campaign, and we are building a movement to go the distance.”

According to campaign finance reports filed Saturday, the DeSantis campaign had 92 people listed as being on the payroll for at least some period of time during the first fundraising period – the most of any GOP presidential candidate. This comes amid ‘huge payroll expenses’ and ‘fewer resources than originally thought.’

As of now, DeSantis has $12 million in the bank – of which just $3 million can be used during the general election. Around $14 million of his Q2 haul came from donors who contributed the maximum legal amount. This means that around 2/3 of his early donors will be barred from giving directly to his campaign for the remainder of the race.

Never Back Down, the pro-DeSantis super PAC, has said it will spend up to $200 million to boost the governor’s White House bid and has a significantly larger staff than the official campaign.

The moment of potential reset comes ahead of a national finance committee meeting for DeSantis’ campaign Sunday in Tallahassee, which will bring the campaign’s brain trust together as they try to figure out how to chip into Trump’s massive GOP primary lead.

The event will include a briefing at the campaign’s Tallahassee headquarters followed by a barbecue at the governor’s mansion, according to an invite reviewed by NBC News.

Despite being on the campaign trail for nearly two months, DeSantis has been frustrating some supporters for his failure to make up ground against Trump.

“Yeah, there are people grumbling about it, no doubt,” said one DeSantis donor. “There is an overall sense, including with me, that he just has not ignited the way we thought he would.“

Authored by Jonathan Turley,

A recent survey by Redfield & Wilton Strategies for Newsweek, found that 44 percent  of millennials (between ages 25-34) favor criminal charges for people who use the wrong pronouns for others or so-called “misgendering.” 

We have previously discussed how misgendering is now a crime in countries like Great Britain.

Misgendering has been referred to as an “act of violence” at some U.S. universities.

There has been a concern that we are seeing the rise of a generation of censors, who have been taught since a young age that speech is harmful and even violent.

Yet, hate speech is protected in the United States.

Given that fact, it is astonishing to claim that a pronoun violation could lead to incarceration. Only 31 percent of the millennials disagreed with the proposition.

They are not alone.

Recently, Sen. Ben Cardin (D-Md.), who is a lawyer, said that “if you espouse hate … you’re not protected under the First Amendment.”

Former Democratic presidential candidate Howard Dean declared the identical position: “Hate speech is not protected by the First Amendment.”

Even some dictionaries now espouse this false premise, defining “hate speech” as “Speech not protected by the First Amendment, because it is intended to foster hatred against individuals or groups based on race, religion, gender, sexual preference, place of national origin, or other improper classification.”

If hate speech is constitutionally protected, pronoun use or misuse is also protected as a criminal matter.

(There is ongoing litigation of the protection in an employment setting for civil liability or disciplinary action).

Yet, the most serious concern is the inclination of this generation to use criminal laws to police such questions. 

It reflects the erosion of free speech principles with younger generations. 

That crisis of faith could prove disastrous with free speech in a virtual free fall in Europe.

The IRS on Friday announced that it’s planning on pursuing “high-income individuals evading taxes,” and says it’s made millions in recoveries from such individuals despite coming under fire for targeting a higher percentage of lower-income Americans as part of its tax audits.

“The IRS is working to ensure [that] high-income filers pay the taxes they owe,” the agency said in a Friday press release. “Prior to the Inflation Reduction Act (IRA), more than a decade of budget cuts prevented IRS from keeping pace with the increasingly complicated set of tools that the wealthiest taxpayers use to hide their income and evade paying their share. The IRS is now taking swift and aggressive action to close this gap.”

“In recent months, our Criminal Investigation team has closed a lengthy list of cases where wealthy taxpayers have been sentenced for tax evasion, money laundering and filing false tax returns.

“Instead of paying taxes, these evaders spent money owed to the government on gambling at casinos, vacations and the purchase of luxury goods. For example, in one case alone, the person was ordered to pay more than $6 million in restitution.”

The IRS says it’s closed around 175 delinquent tax cases regarding millionaires in the past few months, raising some $38 million in recoveries.

“This is just the start. We will continue to go after delinquent millionaires as we ramp up enforcement capabilities through the IRA,” the agency statement continues.

The IRS claims it has recently identified around 100 high-income individuals who were living in Puerto Rico without real residency for the purpose of securing potential tax breaks. The agency is also looking into taxpayers making use of Washington’s treaty with Malta to “improperly” claim tax exemptions.

“The IRS of today is laser-focused on holding our highest-wealth filers, millionaires and billionaires, accountable for what they owe,” Commissioner Danny Werfel told reporters in a briefing.

The Inflation Reduction Act, passed last August, had set aside $80 billion for the tax agency over a period of ten years to boost enforcement as well as improve operations and service. –Epoch Times

The IRS has come under scrutiny for allegedly focusing more on lower-income families vs. wealthy ones, who will typically use complicated structures involving trusts and LLCs in order to minimize or avoid paying taxes.

“The taxpayer class with unbelievably high audit rates—five and a half times virtually everyone else—were low-income wage-earners taking the earned income tax credit,” reads a Jan. 4 post by the Transactional Records Access Clearinghouse (TRAC), a nonprofit data research center at Syracuse University. “This credit is provided to offset the taxes for the lowest wage-earners in the country.”

Among the lowest wage earners, the rate of income tax audits per 1,000 filers stood at 12.7 for the lowest income wage earners in FY2022, vs. 2.3% for everyone else.

More via the Epoch Times;

IRS’ Focus On Low-Wage Earners

In a 2021 annual report (pdf) to Congress, National Taxpayer Advocate Erin M. Collins pointed out that in fiscal year 2019, over half the taxpayers that IRS subjected to correspondence audits only had total positive incomes of less than $50,000. “These taxpayers often face particular challenges navigating the correspondence audit process,” the report said.

Low-income wage earners “have historically been targeted not because they account for the most tax under-reporting, but because they are easy marks in an era when IRS increasingly relies upon correspondence audits yet doesn’t have the resources to assist taxpayers or answer their questions,” TRAC said.

TRAC pointed out that the IRS audits of millionaire taxpayers have fallen over the past decade. In 2012, 40,965 such taxpayers were audited by the IRS. By fiscal 2020, the number fell to 7,108.

Meanwhile, the Democrat-backed IRA has faced criticism, with some arguing that the bill will increase IRS’ taxation focus on the middle and lower-income classes.

Before passing the bill in August, an amendment was proposed by Sen. Mike Crapo (R-Idaho) stipulating that none of the $80 billion funds from the IRA set aside for the IRS could be used by the tax agency to audit taxpayers making less than $400,000 annually. The amendment was voted against by all 50 Democrat senators.

In a letter to IRS Commissioner Charles P. Rettig, Treasury Secretary Janet Yellen wrote that the new funding “shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels.”

However, as her directive is not in the bill, Yellen’s words do not have the force of law. “This has no teeth behind it,” said Preston Brashers, a senior tax policy analyst with The Heritage Foundation.

Rep. Kevin Brady (R-Texas) has estimated that the IRA can potentially amount to 1.2 million new taxpayer audits each year, out of which over 710,000 would be Americans making $75,000 or less annually.

By Peter Tchir of Academy Securities

Because this topic is such a major national security and macroeconomic concern, we wanted to follow up on last weekend’s T-Report and our latest SITREP. The change of mindset to one where nations and companies feel the “need” to control processes and inventories much better is real and has only just begun. We will, over time, see much of the “globalization” of the past few decades reversed as nations and companies identify what is critical to their mission and demand more “control” over certain things including rare earths, critical minerals, and chips.

It will be inflationary as the capacity is developed and more of the overall environmental impact is considered, but the cost will be worth it as supplies will be more “secure.”

An Anecdote

I want to start with an anecdote from a participant (ESG specialist) at a recent Academy Geopolitical Summit.

1. Australia mined lithium.

2. Australia shipped the lithium to China to process.

3. China processed the lithium into a form that can be used in batteries and other things.

4. China shipped the processed lithium to Australia.

Just think about some of the risk factors:

• International shipping can be more time consuming and expensive than domestic freight, especially as ports get “backlogged” more frequently. That is a risk at the best of times, let alone when a country refuses access for some reason (like China during COVID).

• International shipping likely requires more energy consumption (relying heavily on fossil fuels), which goes against what many countries and companies are trying to achieve.

• The inability to process means that you are “captive” to a nation (or company) that you have no control over. The processing of this and many other rare earths and critical elements into a useable format is often quite “dirty” (energy and water use, etc.) from an environmental standpoint. If you are truly concerned about the environment, wouldn’t you want more control over the processing and to work with countries and companies that will enforce strict environmental standards?

Now, Australia mines the lithium, processes it domestically, and then uses it in products that it is making domestically.

While possibly more expensive, at least initially, many of the risks (that could not be controlled or hedged against) were eliminated by Australia.

This “anecdote” is happening and will happen 100s of times in the coming years.

Cost and Control

“Cost” is not the only factor.

• Cost cannot be narrowly defined. Risks (especially unhedgeable risks) need to be factored in better than they are.

  • Attribution, even when the work is done by third parties, is a concern for companies and a lack of control is bad.

• Control. No one wants to feel as handcuffed as they did during COVID. Working with countries and companies that you can trust (or control) is increasingly important. The first time that this breakdown of supply chains occurred, everyone was in the same boat. However, if it happens again, companies (and countries) that are prepared will be in the driver’s seat.

Nations and companies gave up significant control during this period of unprecedented globalization. There will be a slow unwinding of globalization because the “trust” in the system has been broken and will not be mended easily.

Acquisition

Let’s start this section, meant to be about the ability to acquire supplies of rare earths and critical minerals, with a discussion about “blood diamonds.” It isn’t entirely clear how we segue from “cost and control” and “Australian lithium” to “blood diamonds,” but it is worth spending a minute or two on this topic.

Nations and companies want to be able to secure and process the resources.

That sounds simple on the surface (especially the acquisition part). We can extract them ourselves from our own land or we can acquire them from some other country that has access to them.

But let’s just look at something as “obvious” as blood diamonds.

We (in the “West”) can choose to avoid blood diamonds. We can also feel better about ourselves because our jewelry doesn’t come from the horrifying world of blood diamonds (I assume that there is an industrial equivalent to this argument).
But the blood diamonds don’t go away because we won’t buy them.

The Wagner Group allegedly benefits from the blood diamond trade. The Wagner Group offers “protection” and is supposedly paid at least in part with blood diamonds (seems entirely plausible). The West decreases the value of those blood diamonds by not buying them, which ironically (or sadly) probably means that the bad people have to collect more blood diamonds to pay the other bad people for their services.

I am not saying that our stance on blood diamonds is wrong, but so long as a market of sufficient size remains for them, it may be naïve to think that we’ve “solved” anything.

No one in the West wants blood diamonds, but blood diamonds probably helped the Wagner Group (and Russia) in the war in Ukraine. Life is complicated!

I mention “blood diamonds” because unfortunately, in the battle to secure rare earths and critical minerals, countries and companies are likely to face many moral dilemmas. These are dilemmas that our main competitor (China) and our enemies (Russia, Iran) don’t have.

Being brutally honest, we probably had to deal with many moral issues related to petroleum, but over time we have figured out a way to get the resources we need (by having a strong domestic industry for example). However, we will have to deal with these issues again.

It would be nice if the acquisition of rare earths and critical minerals was a “walk in the park” and every source came from an area with an impeccable human rights record, a democratic political system, and a low Gini coefficient (a high Gini coefficient represents wealth inequality). However, they won’t all be found in countries like this and I’m not sure that many such countries even exist. It would also be nice if all the resource could be extracted in an environmentally friendly manner with no impact on the workers or regions from which the resources are being extracted. While that just isn’t likely, we can still make the efforts to make it happen (even if this will likely drive prices higher).

There will be a real challenge for countries and nations to secure resources in a world that isn’t on a level playing field.

We know what we will do when one nation invades another, but do we know what we will do when we lose mineral rights to players that just don’t care about the same things that we value?

I don’t know the answer, but this subject will come up over and over again in many forms, and is something that we will need to grapple with as we try to balance the need for control/security with maintaining our ethical and moral standards.
This is definitely a wildcard in my thought process, but I am optimistic that there are enough “good” sources in “good” countries that we can acquire and process what we need.

Processing

Taking control of the processing seems like a “no-brainer” to me.

While rare earths and critical minerals are important, they are relatively useless compared to the refined products.

• We want the control and security of being able to process them into those refined products.

• We want the control and security to oversee the refining process because then we can control the level of environmental risk associated with that processing.

Seems easy, but there are many things that seem like no-brainers to me that get bogged down in politics or the courts, so one can only hope that we get there.

Bottom Line

• Deglobalization.

• Steady inflation.

• More “security” for us, our allies, and our companies.

It is difficult to put a cost on “control” and “security,” but it is imperative on us (as nations and companies) to be prepared to pay that cost to “win” in the long run.