Weakness in existing home sales was swamped by surprising strength in new home sales (largely skewed by dramatic incentives from builders) and today Pending home sales breaks the tie (expected to show a small 0.8% MoM rise in sales). Instead, pending home sales tumbled 5.2% MoM, dragging the YoY sales down 23.26%…

Source: Bloomberg

The pending home sales report is often seen as a leading indicator of existing-home sales, given homes typically go under contract a month or two before they’re sold.

“The lack of housing inventory is a major constraint to rising sales,” said NAR Chief Economist Lawrence Yun.

There are pockets where demand remains strong. Yun said about a third of all listings are receiving multiple offers, and a similar share are selling above list price.

“Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally.”

None of this should come as a surprise since as we perfectly predicted the resurgence of mortgage rates led to a resumption of the slump in sales…

Source: Bloomberg

Which apparently is what Powell wants.

Fed Chairman Jerome Powell made several bizarre, if not shocking, admissions during a prank call with two Russians posing as Ukrainian President Volodomyr Zelensky, where they discussed topics ranging from inflation, to the Russian central bank, to joking about having a ‘printing press’ in the basement and possibly setting up a federal reserve bank in Kiev.

More interesting was Powell’s admission, thinking he was speaking with Zelensky, during the call (which reportedly took place in January) that the Fed would hike rates two more times – a topic on which he has been far more circumspect even when giving testimony before Congress.

“The market is already pricing in two more quarter percentage point rate hikes. We’ll look around after we make those two and we’ll say should we do any more, and then the question will be how long do we keep rates at this level – and I think we’ll keep them there for quite some time,” said Powell, roughly two minutes into the clip below.

In retrospect, this is precisely what happened, with the Fed hiking twice in 2023, prompting some to wonder if we are now in the “and done” phase once we get through the May rate hike…

… and if indeed Powell is led by the market – as he hinted during the call – does that mean that the Fed will soon be forced to reverse its tune and find reasons to cut aggressively, as markets are now expecting.

Powell also said that the US economy will grow ‘at a subdued level,’ and that a recession is “almost as likely as very slow growth,” and that it was because the Fed ‘raised rates quite a bit,’ which he defended as necessary to tame inflation.

“What we need is a period of slower growth so that the economy can cool off, so the labor market can cool off, so that wages can cool off. That’s how inflation comes down. That’s the only way we know to bring inflation down. And it can be painful, but we don’t know of any painless way for inflation to come down.“

“Chair Powell participated in a conversation in January with someone who misrepresented himself as the Ukrainian president,” a Fed spokesperson said Thursday. “It was a friendly conversation and took place in a context of our standing in support of the Ukrainian people in this challenging time. No sensitive or confidential information was discussed.”

As Bloomberg notes, the pranksters – Vladimir Kuznetsov and Alexei Stolyarov, who go by the nicknames Vovan and Lexus – have for years succeeded in tricking foreign politicians into talking to them despite their sometimes-crude impersonations.

The duo are supporters of President Vladimir Putin. Back in 2018, the UK said it believed the Kremlin was behind a hoax call to then Foreign Secretary Boris Johnson. The pranksters often post the videos with the intention to embarrass Western policymakers.

Earlier this year, the two shared a conversation with European Central Bank chief Christine Lagarde, also impersonating Zelenskiy.

The pranksters have also tricked Polish President Andrzej Duda into thinking he was speaking to his French counterpart Emmanuel Macron, as well as former German chancellor, Angela Merkel, who appeared to be suspicious during the call.

Another day, another example of the White House managing down to President Biden’s sagging capability for extemporaneous thought and speech. This example comes via the New York Post. 

At a Wednesday press conference with South Korean President Yoon Suk Yeol, a photographer captured Biden holding a cheat sheet that gave him the full text of a question he would be asked by Los Angeles Times reporter Courtney Subramanian: 

“How are YOU squaring YOUR domestic priorities — like reshoring semiconductors manufacturing — with alliance-based foreign policy?”

To ensure he called on Subramanian, the cheat sheet also included her photograph. Even the sequence of questioning was choreographed, as the paper indicates she was assigned “Question #1.”  

The all-caps YOU and YOUR echoes another pathetic cheat sheet captured last summer. Sounding as if the staffers were yelling at someone who’s slow-functioning and hard of hearing, it read, “YOU enter the Roosevelt Room and say hello to participants. YOU take YOUR seat…YOU give brief comments…YOU ask Liz Shuler, President, AFL-CIO a question.” 

What’s more pathetic — the degree to which Biden’s handlers control the White House press corps, or the rarity with which presidential press conferences happen at all under this president? As the New York Times put it last week: 

“In the 100 years since Calvin Coolidge took office, only Richard Nixon and Ronald Reagan held as few news conferences each year as the current occupant of the Oval Office.”

This latest source of exasperation comes the same week it was reported that the Democratic National Committee will not conduct any primary debates, in what’s obviously another effort to keep Biden’s cognitive deficit from being showcased on national television. That sheltering is all the more urgent now that the sharp-tongued Robert F. Kennedy, Jr has announced his candidacy.  

As you contemplate this oldest of US president’s declining faculties, it’s worth noting that a key theme of Biden’s meeting with the South Korean president was the threat of nuclear war. 

If I’m the nominee I fully expect the regime media will do something similar to give him an edge before our debates.

Won’t matter.

I’ll even let him keep the earpiece if he wants & do a line at halftime. Nothing will save him. https://t.co/TyiANMchmk

— Vivek Ramaswamy (@VivekGRamaswamy) April 27, 2023

Whether the conversations have been about Chinese spy balloons or AI breakthroughs, Western nations and China are increasingly ramping up a “tech war.” The latest development emerges from Germany, as Berlin contemplates restricting exports of chemicals to Chinese firms, which are essential for producing advanced semiconductors. 

Bloomberg reports that Chancellor Olaf Scholz’s government is considering new measures that would restrict German companies like Merck KGaA and BASF SE from exporting some of their chemicals to China for advanced semiconductor production. 

Scholz and Economy Minister Robert Habeck are falling in line with other European countries, such as the Netherlands, to ensure Beijing’s development of advanced chip technology is halted. 

In March, the Netherlands became embroiled in political tensions between the US and China by announcing plans to move ahead with export controls on “advanced” semiconductor manufacturing equipment. The tiny European nation is home to ASML, one of the world’s top manufacturers of semiconductors machines.

Bloomberg said talks concerning German export controls are still in the early stages, and lawmakers understand any final decision could severely damage relations with Beijing. 

“Habeck, who is also the vice-chancellor, has advised officials in his department to work on a toolbox of measures to strengthen Germany’s economic resilience in certain areas and reduce one-sided dependencies on China. The idea of imposing export controls on chip chemicals is part of these deliberations,” sources said. 

“The quickest and most practical way to implement such export controls would be to put the respective goods and services on Germany’s national dual-use list,” the sources continued, adding that other approaches via international lists and treaties would probably take too long.

Export restrictions could be imposed on goods that have the potential to be used for both civilian and military purposes. The purpose of these dual-use lists is to prevent China from making advanced weaponry with Western materials or chip technology. 

Bloomberg pointed out that export controls on supplies from Merck and BASF could disrupt Chinese supply chains for developing advanced chip technologies. 

It appears now the Biden administration is pressing numerous European countries to help stop China from further developing its chip industry. In October, the US unveiled export curbs, blocking multiple chip technologies from being acquired by Chinese companies. 

Washington prohibited US companies Applied Materials Inc., Lam Research Corp., and KLA Corp from exporting some chips to China. Japan’s Tokyo Electron Ltd. and ASML would be critical in the West’s move to restrict chip products to China.

The technology war between the US and China is heating up as numerous European countries are aligning with Washington to ensure the West maintains its supremacy in global technological developments. 

And by the way, China is beginning to hit back. 

Authored by Matthew Piepenburg via GoldSwitzerland.com,

From oil markets to treasury stacking, backdoor QE, investor fantasy and hedge fund prepping, it’s becoming more and more clear that the big boys are bracing for disaster as gold stretches its legs for a rapid run north.

Recently, I dove into the cracks in the petrodollar as yet another symptom of a world turning its back on USTs and USDs.

Gold, of course, has a role in these headlines if one looks deep enough.

So, let’s look deeper.

Diving Deeper into the Oil Story

The headlines of late, for example, are all about “surprise” OPEC production cuts.

Why is this happening and what does it say about gold down the road?

First, let’s face the politics.

As noted many times, it seems US policy, on everything from short-sighted (suicidal?) sanctions to the “green initiative” makes just about zero sense in the real world, which is miles apart from the “keep-me-elected” fantasy-world of DC.

After all, energy, matters, which means oil matters.

But the current regime in DC has been losing friends in Saudi Arabia and cutting its prior and once admirable shale production outputs (think 2016-2020) in the US despite a world that still runs on black gold fighting against green politics.

The DC attack on shale may make the Greta Thunbergs happy, but let’s be blunt: It defies economic common sense.

Saudi, by cutting production, is now showing a still very much oil-dependent world it is not afraid of losing market share to the USA in the face of rising oil for the simple reason that the USA just aint got enough oil to fill the gap or flex its energy muscles.

In the meantime, Chinese demand for crude is peaking while Russian oil flows to the east (including to Japan) are hitting new highs at prices above the US-led price cap of $60/barrel.

If DC has any blunt realists (wrongly castigated as tree-killers) left, it will have to re-think its anti-oil policies and get back toward that recent era when US shale was responsible for 90% of total global oil supply growth.

If not, oil prices can and will spike, making Powell’s war on inflation even more of an open charade.

Speaking of inflation…

Ghana Oil-for-Gold Beats Inflation

When it comes to oil and the decades-long bully-effect of a usurious USD (See: Confessions of an Economic Hitman), we have argued countless times that a strong USD and an imposed petrodollar was gutting developing economies around the world.

We also warned that developing economies (spurned by global distrust of the Greenback in a post-Putin-sanction era of a weaponized reserve currency) would respond by turning their backs on US policies and its dollar.

In the old days, the US could export its inflation abroad. But those days, as we warned as early as March 2022, would be slowly but steadily coming to a hegemonic end.

Again, this does not mean (nod to the Brent Johnson) the end of the USD as a reserve currency, just the slow end of the USD as a trusted, used or effective currency.

Toward that slow but steady end, it’s perhaps worth noting that Ghana’s inflation rate has fallen from 156% to just over 60% since it began trading oil for gold rather than weaponized USDs.

Hmmm.

Gold Works Better than Inflated Greenbacks

The most obvious conclusion we can draw from such a predictable correlation is that gold seems to be working better than fiat dollars to fight/manage inflation, a fact we’ve been arguing for well…decades.

From India to China, Ghana, Malaysia, China and 37 other countries engaged in non-USD bilateral trade agreements, the inflation-infected USD is losing its place in more than just the critical oil trade.

Nations trapped in USD-denominated debt-traps (thanks to a rate-hiked and hence stronger and more expensive USD) are now finding ways to tie their exports (i.e., oil) to a more stable monetary asset (i.e., GOLD).

This, of course, makes me that much more confident that as the world moves closer to its global (and USD-driven) “Uh-Oh” moment, that the already-telegraphed Bretton Woods 2.0 will have to involve a new global order tied to something golden rather than just something fiat.

This, again, explains why so many of the world’s central banks are loading up on gold rather than Uncle Sam’s IOUs.

Gosh. Just see for yourself:

Ouch.

Uh-oh?

US Investors: Still High on Past Fantasy Rather than Current Reality

Sadly, however, the US in general, and US investors in particular, remain trapped in a spiral of cognitive dissonance and still believe today and tomorrow’s America is the America of magical leaders, deficits without tears and the balanced-budget honesty of the Eisenhower era.

That’s why the vast majority (and their consensus-think, safety-in-numbers advisors) are still huddling in correlated 60/40 stock bond allocations rather than physical gold according to a recent BofA survey of wealth “advisors.”

This always reminds me of a phrase circling around Tokyo just before the grotesquely inflated Nikkei bubble lost greater than 80% of its hot air in the crash of 1989, namely: “How can we get hurt if we’re all crossing the road at the same time?”

Well, a large swath of US investors (and their “advisors”) is about to find out how.

Doubling Down on Return Free Risk

This may explain why US households (a statistical term of art which includes hedge funds) have upped their allocations to USTs by 165% ($1.6T) since Q4 of 2022 at the same time that the rest of the world (see above) has been dumping them.

But in all fairness, this does make some sense, as higher rates in the US give investors in USTs (especially in short-duration/money market securities) a greater return than their checking or savings accounts.

Unfortunately, where the masses go is also where bubbles go; but as I like to remind: All bubbles pop.

Of course, when adjusted for inflation, these poor US investors are still getting a negative return on USTs.

Foreigners, of course, have stopped falling for this, but when Americans themselves get suckered en masse into this same bond-trap, they’re basically just paying an invisible tax while chipping away at GDP growth and unknowingly helping Uncle Sam finance his debt for free (namely: at a loss to themselves).

Crazy?

Yep.

Negative Returning IOUs—The Lesser of Evils

But why are hedge funds (i.e., the “smart money”) falling for this? Why are they loading up on USTs?

Because they see trouble ahead, and even a negative returning UST is safer (less evil) than a tanking S&P–and that’s exactly what the pros are bracing for/anticipating.

Waiting for a Market Bottom

In short: The big-boys are safe-havening today in negative-USTs so that they’ll have dry powder at hand to buy a pending and massive market bottom tomorrow.

Once they can buy a bottom, they too will dump Uncle Sam’s IOUs as the QE (along with inflation) kicks back to new highs thereafter.

And speaking of QE…

Backdoor QE: Coordinated and Synthetic Liquidity by Another Name

I have always endeavored to simplify the complex with big-picture common sense.

Toward this end, let’s keep it simple.

 And the simple truth is this: With US debt at unprecedented and unsustainable levels, it is a matter of national survival to prevent bond yields—and hence bond-driven rather than Fed- “set” interest rates–from spiking.

Such a natural, and bond-driven spike, after all, would make Uncle Sam’s embarrassing debt too expensive to function.

Survival vs. Debate

Thus, and to repeat: Keeping bond yields controlled is not a matter of pundit debate but national survival.

Since bond yields spike when bond prices fall, it is thus a matter of sovereign survival to keep national bond prices at reasonably high levels.

This, however, is naturally impossible when bond demand (and hence price) is naturally sinking.

This natural reality opens the door to the un-natural “solution” wherein central banks un-naturally print trillions (“synthetic demand”) to buy their own bonds/debt.

Of course, this game is otherwise known as QE, or “Quantitative Easing”–that ironic euphemism for un-natural, anti-capitalist, anti-free market and anti-free-price-discovery Wall Street socialism whose inflationary consequences cause Main Street feudalism.

In short: QE has backstopped a modern system of central-bank-created lords and serfs.

Which one are you?

See why Thomas Jefferson and Andrew Jackson feared a Federal Reserve, which is neither “federal,” nor a solvent “reserve.”

The ironies, they do abound…

How Can there be QE if the Headlines Say QT?

But the official narrative and headlines are still telling us only stories of QT (Quantitative Tightening) rather than QE, so what’s the problem?

Well, as with just about everything from CPI data and transitory inflation memes to recession re-defining, the official narrative is not always the truthful narrative…

In fact, back-door or “hidden QE” is all around us, from the Fed bailing out/funding repo markets and dead regional banks to central banks making secret deals behind the scenes.

Although it’s not officially QE when the central bank of one country is buying the IOUs (bonds) of another country, it is more than likely that leading central banks are acting in a coordinated way to “QE each other’s debt,” a system which former Fed official, Kathleen Tyson, describes as a “Daisy Chain.”

And if we look at the IMF’s own data, we can connect the dots of this Daisy Chain with relative (rather than tin-foil-hatted) clarity.

Since Q4 of 2022, for example, overall FX reserves are now up by over $340B, the equivalent of over $100B per month of central bank QE by another name.

Toward that end, the math is simple, with: 1) GBP reserves up 10% (no surprise given the gilt implosion of Oct. 2022), JPY reserves up nearly 8%, EUR reserves up 7% and USD reserves only up only 0.5%.

Not only does this look like backdoor QE masquerading as “building excess reserves,” it looks to me, at least, like a coordinated attempt by DXY central banks to collectively weaken the 2022 USD which Powell’s rate hikes had made painfully too high for the rest of the world, a fact/pivot of which we warned throughout 2022.

Since the above G7 policies kicked in, the USD has fallen 11% into 2023 as the other DXY currencies (JPY, EUR and GBP) gave themselves a little backdoor/QE boost.

It seems, in short, that the need for artificial liquidity in a world thirsty for USDs found a clever way to weaken the relative strength (and cost) of that USD (and confront/tame skyrocketing volatility in USTs) without overtly requiring Powell to mouse-click dollars from his own laptop.

Why Markets Rise into a Recession

This unofficial but likely coordinated play to constructively weaken the USD among the big boys helps explain why the S&P has been rising into 2023 despite open indicators that the country is itself marching toward a recession.

US Manufacturing data (ISM) is now at levels consistent with a recession…

Again: The ironies (and un-natural manipulations) abound.

Meanwhile, the Atlanta Fed’s GDPNow is down 1.5% from March’s 3.2% figure.

But hey, who needs growth, productivity, tax receipts or even a modicum of national economic health to keep a liquidity-supported stock market from defying reality—at least for now…

Waiting to Pay the Debt Piper…

Ultimately, of course, debt will get the last, cruel laugh, and with the US heading toward a deficit that is greater than 50% of GLOBAL GDP (!), I personally believe the Fed will need to return to its own money printer in a big way once this market charade ends in an historical “uh-oh” moment.

This seemingly inevitable return to mouse-click trillions (inflationary) will likely come after a deflationary implosion in equity assets currently supported by the foregoing tricks and fantasy rather than earnings and growth.

In the interim, and like those hedge fund jocks discussed above, we can only wait for things to get S&P ugly as gold, often sympathetic in the first hours of a market crash, rips toward all-time highs thereafter.

On Tuesday, financial services firm Stephens Inc. lowered their rating of Cal-Maine Foods from overweight to equal weight, pointing to concerns about plunging wholesale egg prices as the reason. 

Stephens research analyst covering the consumer staples, food and agribusiness, and grocery/c-store sectors Ben Bienvenu said in a recent conference call with Urner Barry, a market research firm that tracks wholesale food prices, that wholesale egg price trends were “understandably more downbeat.”  

“When considering what’s currently playing out for eggs, we think it is best for us move to the sidelines on Cal-Maine as we think risk/reward is now more balanced,” the analyst said. 

Bienvenu is one of a handful of Wall Street analysts covering Cal-Maine. He said collapsing egg prices threaten to depress the earnings of the egg producer, which recorded revenue last quarter that was more than double the same period last year. Net income for the company jumped more than 700% to $323 million. 

Cal-Maine shares are down 19%, the most significant monthly plunge since September 2008. The analyst lowered his price target to $60 from $67. Shares currently trade around the $49 handle. 

On Feb. 6, we were the first to point out: We’ve Got Great News: Wholesale Egg Prices “Collapse.” At the time, the index of wholesale egg prices plunged from around $4.65 to $2.01. Now the index stands at .887 cents. 

Bienvenu said that a crucial factor for Cal-Maine investors to keep an eye on is the potential re-emergence of bird flu: 

“While there certainly could still be cases that arise, and that would negatively impact production and consequently result in higher prices, we think at this point it is prudent to no longer recommend putting new money to work in the space.”

Retail egg prices at supermarkets have already begun to slide after the worst avian flu outbreak ever devastated domestic egg-laying bird populations last year. 

Now comes egg deflation unless bird flu reemerges.  

A ground attack carried out by the Taliban has killed the Islamic State militant believed to have masterminded the Kabul airport suicide bombing that killed 183 people, including 13 U.S. service members, US officials announced Tuesday. 

The Taliban assault happened earlier this month, and it was only over recent days that US intelligence analysts concluded “with high confidence” that he’d been killed.  

The name of that senior operative of the Islamic State Khorasan Province (ISIS-K) is still classified, and no additional details have been provided about the circumstances of his death.  

The Department of Defense said the United States didn’t coordinate with the Taliban or otherwise aid the assault that killed the senior Islamic State terrorist. ISIS-K is the chief enemy of the Taliban, and has perpetrated an ongoing string of terror attacks. AP reports the group is believed to be 4,000-strong in Afghanistan. 

Earlier this month, the White House released a National Security Council report that blamed the Trump administration for the disastrous exit. In addition to the horrific airport bombing, that exit included Afghanis falling to their deaths from departing Air Force cargo planes — and American taxpayers abandoning 22,000 Hummers, close to a thousand armored vehicles, 64,000 machine guns, 358,000 rifles and almost 200 artillery pieces.   

After the report was released, White House spokesman John Kirby said Biden is “very proud” of how the withdrawal was carried out, and mind-bogglingly denied that the withdrawal was chaotic:

White House spox John Kirby on the disastrous withdrawal from #Afghanistan: “For all this talk of chaos, I just didn’t see it!” 🤣 pic.twitter.com/MCpykrUebb

— Viper (@viper202020) April 7, 2023

The August 2021 bombing occurred as thousands of Afghans mobbed Hamid Karzai International Airport, desperate to leave before the Taliban re-established full control over the country. 

Last weekend, the Pentagon started notifying family members of the slain US service members. “Whatever happens, it’s not going to bring Taylor back and I understand that,” Darin Hoover, father of Marine Staff Sergeant Darin Taylor Hoover, told the Associated Press. 

“About the only thing his mom and I can do now is be an advocate for him. All we want is the truth. And we’re not getting it. That’s the frustrating part,” added Hoover, who said that — ever since the explosion — he’s been praying for the Biden administration to be held accountable for mismanaging the withdrawal from Afghanistan. 

That withdrawal capped a pointless 20-year war that killed 2,400 US service members and wounded more than 20,000. Along the way, they fought enemies created by their own government, were ordered to ignore pedophilia perpetrated by Afghan officers, breathed carcinogenic fumes from waste burn pits, and endured long-lasting psychological harm — all while their military and civilian masters lied about the war’s progress.  

No wonder the military is falling far short of its recruiting targets. 

Authored by Grzegorz Adamczyk via Remix News,

Poles are not happy with what the EU is selling…

Poles are opposed to the EU’s policy of banning combustion engine vehicles and to ideas circulating in the EU on forests, meat, clothes and a cashless economy, according to a poll carried out by the European Policy Research Center (CBPE)

The poll reports that 67 percent of respondents are opposed to an EU rule that will ban Europeans from registering combustion engine vehicles starting in 2035. The idea of the EU ban is supported by only 28 percent of Poles. 

The opposition to the EU ban on such vehicles is seen across a broad spectrum of Polish society, including urban and rural inhabitants, as well as both those with higher degrees and those who have only finished high school.

The CPBE survey also asked respondents their views on the idea of transferring the power over forests to the EU, away from the member states. Over half of the respondents, 57 percent, opposed such an idea. Only 34 percent supported it. Once again, the opposition to the idea is similar across all age and socio-economic groups. 

Another idea being discussed in the EU is limiting the consumption of meat to 16 kilograms per person, per year, as well as limiting the sale of clothes to eight new items per person.

Only 21 percent backed the meat consumption reduction target, with 76 percent opposed. The results were similar with regard to the purchase of new clothes, with 23 percent supporting it and 73 percent against. 

Poles are also against a cashless economy. The European Parliament recently recommended that a digital euro be researched but not yet launched. Privacy advocates warn that a cashless society could have grave consequences for personal freedom, with authorities able to track in all transactions in real time. This may be a prerequisite to imposing strict limits on what people can buy, including clothing items and meat products. Digital currencies may also be tied to social credit scores relating to political opinions and social behavior, as they are in China.

Advocates for a cashless society within Brussels argue that digital currencies would limit the black market. However, 81 percent of Poles oppose getting rid of cash, with only 17 percent in favor. 

Similar opposition to a cashless society can be seen in nations such as Austria, Switzerland and Germany. Last year, over 500,000 Austrians signed a petition calling for the right to use cash to be enshrined in the Austrian constitution. As a result, a referendum on the issue will be launched within the country. With a population of 8.9 million, the massive show of support for the right to pay with cash demonstrates the growing movement against digital money, including central bank digital currencies (CBDCs).

As Remix News previously reported, globalist institutions like the World Economic Forum have long lobbied for a cashless society and have routinely run articles such as “Why we should try to make cash obsolete,” “The benefits of a cashless society” and “Should cash be abolished?” Back in 2017, economist Joseph Stiglitz called for banning all paper currency in the United States, a position the WEF also positively reported on. Central banks across the world are also currently “leading the way” in the race to institute digital currencies. Although digital and physical currencies are expected to run in tandem for many, numerous globalist think tanks and economists are pushing for a complete phase-out of cash after an adjustment period.

Italy’s firebrand conservative prime minister Giorgia Meloni is not playing ball with China, throwing a wrench into President Xi Jinping’s efforts to peel a handful of European Union countries away from US policy. 

Bloomberg days ago reported that “Meloni, the right-wing leader who came to power less than a year ago, is leaning toward pulling out of an agreement to join China’s controversial Belt and Road Initiative, which has funded US$900 billion in infrastructure projects globally, according to people familiar with the government’s thinking.”

“Italian officials raised the prospect of withdrawal in talks with Taiwan this week, Bloomberg reported.” Meloni has previously been on record (in 2019) as calling the BRI “a big mistake”. 

This could be a huge blow to Beijing, given Italy had been the very first G-7 country became part of the controversial Chinese initiative, crucial to Xi’s vision for Chinese global expansion.

Italy had formally signed on under then Italian Premier Giuseppe Conte. It’s widely perceived that this triggered greater Washington engagement with Rome, in order to steer the country away from Chinese influence. 

According to analysis cited in the initial Bloomberg report:

“Italy is stuck between a rock and a hard place, and what to do with the cooperation pact is a real diplomatic conundrum for Meloni,” Francesca Ghiretti, an analyst at the Mercator Institute for China Studies research company, said in an interview. “Renewing it would send a very difficult message to Washington, but not renewing it would put a strain in relations with China.”

It remains that Italy’s governing coalition appears split, with Meloni’s Brothers of Italy said to be more in favor of canceling the pact. The PM could have an official statement ready to roll out by the time of May’s G7 summit in Hiroshima, but this remains uncertain. 

Italy isn’t well-connected to China by shipping routes, either, which is probably why Xi in prior years cited improving connectivity and building ports as a key objective of BRI in Italy.

According to priors years’ domestic polling in Italy, most Italians have seen the deal as an opportunity, while a few still see it as a risk.

Authored by Andrew Korybko via The Automatic Earth blog,

The US’ Weaponization Of Anti-Russian Fake News Against Germany

The Washington Post (WaPo) pushed several conspiracy theories in their recent piece alleging that “Kremlin tries to build antiwar coalition in Germany, documents show”. Citing what they claim to be “a trove of sensitive Russian documents largely dated from July to November that were obtained by a European intelligence service”, WaPo reported that elements within Germany’s left-aligned Die Linke and its right-leaning AfD are cooperating due to some shadowy Kremlin plot.

All three parties denied this accusation, which builds upon Reuters’ similarly conspiratorial report from early January alleging that “Pro-Putin operatives in Germany work to turn Berlin against Ukraine”. Taken together, these two articles can be interpreted as part of a wider information warfare offensive aimed at discrediting the natural trend of political forces pragmatically putting aside their differences on specific issues in order to cooperate on shared ones like ending NATO’s proxy war on Russia through Ukraine.

Three Interconnected Conspiracy Theories

This development was first observed over the last decade, during which time three interconnected conspiracy theories were invented by those gatekeepers with a self-interested stake in perpetuating traditional partisan divisions. They claimed that this is all due to the mischievous work of Russian philosopher Alexander Dugin, who supposedly weaponized the so-called “horseshoe theory” in order to assemble what’s been smeared as the “red-brown alliance”.

The first-mentioned forms the basis of countless conspiracy theories due to the false claim that he’s “Putin’s brain”, which preconditioned targeted audiences to extend credence to the wildest claims about him and his work. The second concept, meanwhile, refers to the theory that the far left and far right are secretly aligned. As for the third, those previously mentioned gatekeepers throw this term around in order to discredit all instances of left-right cooperation as supposedly being due to Dugin’s meddling.

Unipolar Liberal-Globalism vs. Multipolar Conservative-Sovereigntism

In reality, the global systemic transition has shattered the previous polarization between the left and right by giving birth to two different diametrically opposed concepts: unipolar liberal-globalism (ULG) and multipolar conservative-sovereigntism (MCS). This analysis here explains the differences between them more at length, but the present piece will now summarize them for the reader’s convenience due to its relevance in debunking the conspiracy theories pushed by Reuters and WaPo.

ULG believe in the “hegemonic stability theory” (unipolarity), are against any restrictions on socio-cultural issues like the aggressive imposition of LGBT+ propaganda onto children (liberalism), and want to force everyone to follow their models (globalism). By contrast, MCS believe in decentralizing International Relations (multipolarity), restricting some socio-cultural issues like the aforesaid example (conservatism), and respect every society’s right to choose their own models (sovereigntism).

The Real Reason For Growing Left-Right Cooperation In Germany

The genuine left and right, and not those ULG gatekeepers who masquerade as either (but mostly as leftists), generally embrace MCS. Even if they differ on economic and socio-cultural issues, they’re united in opposing unipolarity and globalism since those two concepts represent an existential threat to their respective ideological interests. Accordingly, they’re increasingly cooperating on shared MCS interests such as bringing an end to NATO’s proxy war on Russia through Ukraine as soon as possible.

This explains the latest trend in Germany that Reuters and WaPo are trying to discredit through their tacit weaponization of those three earlier described interconnected conspiracy theories. Both US-led Western Mainstream Media (MSM) outlets are ULG to the core, which is why they’re waging their information warfare campaign against Germans’ embrace of MCS, especially since its emerging manifestation there could have far-reaching strategic consequences if it fully matures.

The electoral rise of any MCS movement in that country could lead to them recalibrating its foreign policy in a much more strategically autonomous direction exactly of the sort that French President Macron regularly suggests and most recently talked about after his latest trip to China. The consequence of the EU’s de facto leader doing such a thing is that American hegemony over Europe would be immensely weakened if Germany finally began putting its own interests and the continent’s over the US’.

The Patriotic Motivations Driving The Latest Trend

By failing to do so over the past year, Chancellor Scholz and Foreign Minister Baerbock – both of whom are diehard ULG – inflicted crippling damage to their country’s economic model that was responsible for its astronomical rise in the first place. Germany no longer receives affordable energy from Russia, which in turn raises the costs of doing business in all respects, thus eroding its global competitiveness. Die Linke and the AfD are patriotic parties that keenly understand this, unlike the ruling ULG in berlin.

Elements within them are increasingly cooperating precisely because ending NATO’s proxy war on Russia through Ukraine holds the chance of reviving Germany’s prior energy cooperation with Russia and thus restoring its global economic competitiveness. Viewed from this perspective, their motivations are therefore purely patriotic and not due to any shadowy Kremlin plot or so-called “Duginist meddling”. The only people who push those conspiracy theories are ULG gatekeepers in the media and among the left.

Exposing The “Compatible Left”

Regarding the latter, the reader should be informed of the CIA’s decades-long attempt to manufacture a so-called “compatible left”, which is envisaged as doing the US’ bidding in a “plausibly deniable” way by serving as a “controlled opposition”. This mission has made enormous progress over the years and especially since 2016 after Trump’s election. “Sleeper cells” within the left awoke at that time and began actively allying their movements with the US Democrats, who are the standard-bearers of ULG.

This explains why the three interconnected conspiracy theories regarding “horseshoes”, the “red-brown alliance”, and “Duginism” all emerged from superficially leftist figures who are really bonafide ULG in disguise. They receive media approval and sometimes even tangible privileges like academic tenures and book deals from their ideological overlords for pushing Russophobia while simultaneously securing their status as faux leftist gatekeepers by manipulating the dogma of their movements’ members.

Debunking The “Compatible Left’s” McCarthyist Witch Hunt Narratives

To that second-mentioned end, they regularly carry out McCarthyist witch hunts against those genuine leftists who express any foreign policy views similar to those shared by someone who influential figures in their movement earlier smeared as “fascist”. Those gatekeepers “justify” these never-ending purges, which have the effect of pressuring people into self-censoring their views out of fear that they’ll become the next target of their toxic ad hominem attacks, on the basis of ensuring “ideological integrity”.

According to them, “no true leftist would ever have any idea in common with anyone who isn’t an official member of a (ULG gatekeeper-approved) leftist movement”, thus making those who do supposedly “fake leftists” at best or (“Duginist”) “fascist infiltrators” at worst. In reality, most traditional leftist movements (especially in the West) were hijacked by ULG “sleeper cells” after Trump’s election and turned into “compatible leftist” ones, thus dealing unprecedented damage to the genuinely leftist cause.

Germany Might Be Pioneering The Next Pan-Continental Political Trend

Elements within Die Linke realized this and are therefore doing their utmost to liberate the German left from US-controlled ULG for patriotic reasons related to ultimately restoring their country’s strategic autonomy after its current rulers crippled it by capitulating to America’s demands over the past year. For that to happen, however, they must pragmatically cooperate with likeminded MCS elements from movements like the AfD in order to eventually have a chance of changing Germany’s relevant policies.

This isn’t due to the “horseshoe theory”, which is discredited upon reconceptualizing the New Cold War’s ideological dichotomy as being between ULG and MCS instead of left and right like during the Old Cold War, nor is it attributable to the “red-brown alliance” and “Duginist” conspiracy theories either. It’s simple patriotic pragmatism that’s driving those two’s increasing cooperation on issues of shared interests, which is setting a powerful example that might soon be emulated all throughout Europe.

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