Via SchiffGold.com,

Proving that most people have no idea what causes inflation, the majority of Americans in a recent poll said they want the federal government to hand out stimulus checks to combat inflation.

In the poll commissioned by Newsweek, 63% of the respondents said they agreed that the feds should issue new stimulus checks to tackle inflation. Forty-two percent said they “strongly agree” while only 18% disagreed. Fifteen percent said they neither agreed nor disagreed.

The results of this poll reveal the effects of redefining “inflation.”

Properly defined, inflation is an increase in the money supply. Rising consumer prices are one symptom of inflation. But the government has effectively redefined inflation as “rising prices.” In effect, most people think a symptom of inflation is inflation. As a result, most people have no clue where inflation comes from.

This was on purpose.

Of course, when you accurately define inflation, it becomes crystal clear who is to blame — the Federal Reserve and the US government.

Economist Ludwig von Mises explained exactly why this redefinition of inflation is so pernicious.

People today use the term `inflation’ to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation.”

Today, people aren’t even asking the government to fight inflation. They just want Uncle Sam to hand them money in order to mitigate the pain of rising prices.

Ironically, stimulus during the pandemic is one of the factors causing the high prices today.

The Federal Reserve pumped over $3 trillion into the economy after the 2008 financial crisis through quantitative easing.

It also stimulated credit creation with 0% interest rates that lasted more than a decade. During the pandemic, the Fed doubled down, pumping nearly $5 trillion more into the economy and dropping rates to zero again.

The federal government exacerbated the situation during the pandemic by handing out three rounds of stimulus money, along with trillions in other aid.

This enabled consumers to keep spending even though they were sitting at home playing Xbox and not producing anything. With more dollars chasing fewer goods and services, a massive spike in consumer prices was entirely predictable.

And that’s exactly what we got. And it hasn’t abated. October CPI came in at 8.2% on an annual basis.

Meanwhile, wages aren’t keeping up with rising prices. Real average hourly earnings decreased by 3.0% from September 2021 to September 2022.

It’s no wonder people are clamoring for more stimulus. But it will only make the situation worse. In the first place, it will put more dollars in consumers’ hands without any corresponding increase in the supply of goods and services. That’s a recipe for even more price increases.

Furthermore, the US government doesn’t have any money to hand out. It just ran a $1.3 trillion budget deficit. In order to give everybody stimmy checks, the government would have to borrow more money. The Treasury market is already reeling due to rising interest rates. Ultimately, the Federal Reserve would almost certainly have to monetize that new debt with more quantitative easing. The only other alternative would be to let interest rates soar, making the interest payment on the debt even higher.

Stimulus checks might provide a little temporary relief, but they would ultimately make inflation worse and prices would rise even higher in the future. But most Americans don’t understand that. They don’t understand inflation. They just know they’re struggling and they want government to “make it better.”

The problem is the government never makes it better. It always makes things worse. And it’s important to remember you never get more government for free. You always pay.

You’re paying for your COVID stimmy checks today through the inflation tax. If you get another stimmy check tomorrow, that will mean an even bigger inflation tax increase down the road.

With Twitter set to Thanos half its employees tomorrow, the axe is now swinging hard across Silicon Valley, where moments ago Bloomberg reported that one of the world’s most valuable startups, Stripe, will cut 14% of its entire workforce, some 1000 jobs returning headcount to the almost 7,000 total from February, as the company seeks to slash costs during the coming recession. The news was shared with the rest of the company in an email from co-founders Patrick and John Collison who vowed to trim expenses more broadly as they prepare for “leaner times.”

“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” the Collison brothers said in the email. “We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”

The Collisons said the headcount changes wouldn’t evenly impact the business, noting that the recruiting business would be disproportionately impacted since the company plans to hire fewer people next year. Departing employees will receive at least 14 weeks of severance, and the brothers vowed to pay annual bonuses and unused paid time off for all workers affected by the cuts.

Stripe and its money-losing publicly traded peers have seen their valuations crater as the growth in online spending slowed in the aftermath of the pandemic, just as supply-chain disruptions and once-in-a-generation inflation also hurt activity. According to Bloomberg, the company in July told staffers that an internal valuation for the company dropped to about $74 billion, compared to the $95 billion it received in its most recent fundraising.

“Stripe is not a discretionary service that customers turn off if budget is squeezed,” the Collisons said. “However, we do need to match the pace of our investments with the realities around us. Doing right by our users and our shareholders (including you) means embracing reality as it is.”

Translation: here’s a pink slip, consider it for the “greater good”. As for the November and December payrolls report, it will take some seriously seasonal adjustment magic to avoid a -200K (or worse) print.

There’s no more fitting forum for Elon Musk to be trolling Rep. Alexandria Ocasio-Cortez than his newly purchased social media platform, Twitter. 

Yesterday, AOC took to the platform (ironic, right?) to voice her opinion about Musk’s planned changes to the company’s business model. Putting aside the fact that Twitter is now a private company and AOC has both zero knowledge of the laws of economics as well as zero say on how the business can and should operate, new “Chief Twit” Elon Musk decided to entertain her critiques nonetheless. 

The beef started Tuesday, when AOC Tweeted in response to Elon Musk’s plan to charge $8 per month for Twitter Blue. “Lmao at a billionaire earnestly trying to sell people on the idea that “free speech” is actually a $8/mo subscription plan,” she wrote.

To which Musk, whose Twitter bio has now labeled him as “Twitter Complaint Hotline Operator” and his location as “Hell”, dryly responded: “Your feedback is appreciated, now pay $8.”

Twitter will still be free for most users, but Musk is implementing changes (among massive layoffs) that will see customers charged the monthly fee in order to maintain the current benefits of Twitter Blue and keep their blue “verification” checkmarks.

“One guy’s business plan for a $44 billion over-leveraged purchase is apparently to run around and individually ask people for $8. Remember that next time you question yourself or your qualifications,” AOC Tweeted out yesterday in response to Musk.

Musk then took a jab at AOC for selling $58 sweatshirts on her campaign website. 

🤔 pic.twitter.com/XuJdfMTTi1

— Elon Musk (@elonmusk) November 2, 2022

AOC responded: “Proud of this and always will be. My workers are union, make a living wage, have full healthcare, and aren’t subject to racist treatment in their workplaces. Items are made in USA.”

Shortly thereafter, AOC complained about her Twitter notifications “conveniently” not working: “Also my Twitter mentions/notifications conveniently aren’t working tonight, so I was informed via text that I seem to have gotten under a certain billionaire’s skin.”

“Just a reminder that money will never by [sic] your way out of insecurity, folks,” she wrote shortly thereafter.

We think this one Musk response says it best…

pic.twitter.com/kGncG7Hs3M

— Elon Musk (@elonmusk) November 2, 2022

Authored by Charles Hugh Smith via OfTwoMinds blog,

Central bank gaming of Finance is the source of instability.

The era of all-powerful central banks is over for a simple reason: they failed: they failed their citizens, their nations, and they failed the world.

Their policies have pushed wealth and income inequality to extremes that have destabilized the planet’s social, political, economic and environmental spheres.

As I have endeavored to explain for many years, this is the only possible outcome of central bank dominance. 

Once Finance becomes the primary mover of everything else, then it distorts everything into a skimming machine that benefits the few with access to central bank funding at the expense of everyone else.

Once finance dominates, then both the “market” and government become servants of finance. 

I say “markets” because once markets have been financialized, they serve the interests of cartels and monopolies and cease to be markets at all.

Government, regardless of the advertised “brand”, becomes an auction where the highest bidder gains control of governance and regulation, which are bent to serve the interests of the few with access to central bank largesse.

As the charts below illustrate, this is the top 0.1%, with a substantial “trickle down” to the top 1% and top 10%.

The bottom 90% have lost ground not just economically but also politically and socially.

The way central banks create and distribute credit/money results in the dominance of Finance and this dominance has led to the distortion and ruination of the economy and society. 

Vast inequality is the norm everywhere, because the central bank system is everywhere.

Central banks are the source of destabilizing inequality; they can’t fix inequality. 

As long as Finance dominates “markets” and governments, they won’t be able to fix inequality, either.

Central bankers and government authorities are aware that the system is unraveling due to the extremes of inequality they’ve created. They are attempting to to reconcile this contradiction– Finance turns the entire world into a skimming machine that can only exacerbate inequality–with, yes, what else? Finance.

So central banks are preparing to deposit new “money” directly into checking accounts and governments are pondering windfall taxes, wealth taxes, etc. to claw back some of the wealth that accumulated in the top tier to fund social programs designed to keep the masses compliant.

Central bank gaming of Finance is the source of instability. 

Reining in central banks’ free money for financiers and cronies is the necessary first step to unseating Finance as the dominant force in markets, governance and the planetary skimming machine Finance has created.

Either power is taken from central banks or the vast inequality that is the result of central bank dominance will unravel the entire system. Take your pick, but the distortions are accelerating, and time is running short.

*  *  *

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century. Read the first chapter for free (PDF)

Become a $1/month patron of my work via patreon.com.

US Productivity growth barely rebounded in Q3 (+0.3% QoQ vs -4.1% QoQ in Q2), but this was slower than the 0.5% QoQ expected, after two quarters of huge weakness…

Source: Bloomberg

On a YoY basis, US Productivity is down for the 3rd straight quarter (and 4th quarter of the last 5)…

Source: Bloomberg

On the mirror image of productivity, unit labor costs rose 3.5% QoQ (a notable slowing from the 8.9% QoQ growth in Q2). This was the 6th quarter in a row of rising unit labor costs (but was less than the +4.0% QoQ expected)…

However, on a YoY basis, that is the fastest growth since Q3 1982…

Source: Bloomberg

Simply put, we can’t have job growth and solid productivity when you make up numbers all the time.

Authored by Tsvetana Paraskova via OilPrice.com,

• Large nickel producer Indonesia sees merit in the formation of an OPEC-like cartel for battery metals.

• Indonesia has not yet contacted other nickel-producing countries to discuss the idea of a cartel.

• An Indonesia-led cartel for battery metals would likely face opposition from the EU, and the U.S.

The world’s largest nickel miner, Indonesia, is considering the idea of forming a cartel to manage the supply of nickel and some other key battery metals, similar to what OPEC does for oil.   As demand for battery metals such as nickel, lithium, copper, and cobalt is expected to soar in the coming decades to meet the surge in battery demand for electric vehicles and energy storage, the idea that some resource-rich countries would take advantage of their mineral deposits and look to control part of the future market doesn’t sound outrageous. 

“I do see the merit of creating Opec to manage the governance of oil trade to ensure predictability for potential investors and consumers,” Indonesia’s Investment Minister Bahlil Lahadalia told the Financial Times in an interview published this week. 

“Indonesia is studying the possibility to form a similar governance structure with regard to the minerals we have, including nickel, cobalt and manganese,” Lahadalia added. 

Indonesia has not yet contacted other nickel-producing countries to discuss the idea of a cartel, the investment ministry told FT, adding it was still working on a governance structure of a future alliance that it could propose to other producers. 

Easier Said Than Done 

Yet, replicating an OPEC-like cartel for the so-called energy transition metals is easier said than done. Unlike the oil resources of OPEC’s producers, the mining operations in Indonesia and other major nickel producers are controlled by various private companies or Chinese entities. Moreover, the biggest producers and holders of nickel deposits are a diverse group of countries with very different political and market conditions and unlikely to have common ground and interests in forming a cartel. Apart from Indonesia, producers of nickel include Russia, Canada, Australia, and the United States, although the U.S. doesn’t have a lot of resources or output compared to Indonesia, the Philippines, Russia, or Australia.   

Indonesia and Australia hold the world’s largest nickel reserves, each with around 21 million tons, according to the U.S. Geological Survey. Indonesia, however, is the top nickel producer, followed by the Philippines and Russia. 

But Russia accounts for almost 20% of the global supply of Class 1 nickel, which is the grade needed for batteries, according to the International Energy Agency (IEA).  

Nickel is found primarily in two types of deposits – sulphide and laterite. Sulphide deposits – mainly located in Russia, Canada, and Australia – typically contain higher-grade nickel which is more easily processed into Class 1 battery-grade nickel. Indonesia, as well as the Philippines, have the laterite deposits of nickel, which is lower-grade and requires additional energy-intensive processing to become battery-grade nickel, the IEA said in a July 2022 report, Global Supply Chains of EV Batteries. 

“Although Indonesia produces around 40% of total nickel, little of this is currently used in the EV battery supply chain. The largest Class 1 battery grade nickel producers are Russia, Canada and Australia,” the IEA said. 

Indonesia aims to develop its downstream nickel industry and banned exports of nickel ore in 2020. This move prompted an EU complaint with the World Trade Organization (WTO) against Indonesia’s decision to ban exports of raw materials used in the production of stainless steel.  

Imagine what reaction an Indonesia-led cartel for battery metals would receive in the EU, the U.S., Canada, and Australia, for example. 

The Indonesian ban has also prompted Chinese firms to invest in Indonesia’s nickel supply chain. Chinese companies have invested and committed some $30 billion in the Indonesian nickel supply chain, with Tsingshan’s investments in the Morowali and Weda Bay industrial parks being the most prominent examples, the IEA said in a report on the role of critical minerals in the energy transition. 

Unlike OPEC producers, it’s not one state-owned entity in Indonesia that controls the production of nickel. Tsingshan of China and Brazil’s Vale are major producers of nickel in Indonesia.  

Moreover, a unit of China’s battery giant CATL signed earlier this year a $6 billion agreement with Indonesian firms to cooperate on the Indonesia EV Battery Integration Project, which includes nickel mining and processing, EV battery materials, EV battery manufacturing, and battery recycling. 

Environmental Concerns

Indonesia and its policies will be pivotal for the quality and quantity challenges in nickel supply, according to the IEA. 

Most of the nickel production growth in the coming years is set to come from the regions with vast amounts of laterite resources, such as Indonesia and the Philippines, according to the IEA. These resources need more energy and emission-intensive processed to produce battery-grade nickel. High Pressure Acid Leach (HPAL) is gaining traction as a way to produce Class 1 products from laterite resources, and several such projects are being developed in Indonesia. But such projects have track records of large cost overruns and delays and require additional costs for acid production facilities. 

There are also concerns about the environmental impact of HPAL as it often uses coal or oil-fired boilers for heat, thus emitting up to three times more greenhouse gas emissions than production from sulphide deposits, the IEA says. 

Due to concerns over the environmental impact of the nickel industry in Indonesia, dozens of U.S. and Indonesian environmental organizations sent in July an open letter to Elon Musk and the shareholders of Tesla, urging them to “Terminate Tesla’s planned investment plan in Indonesia’s nickel industry due to potentially devastating impacts on the environment and the lives of Indonesian people.”  

Suitcases full of cash being flown around the world...stop us if you’ve heard this one before. 

Officials for commodity mining and trading giant Glencore were found to have been involved in a “web of bribery and corruption” orchestrated by the company’s London oil trading desk, wherein company representatives boarded private jets to deliver cash to officials in West Africa, a new report by Bloomberg BNN reveals. 

The company has admitted to seven counts of bribery, the report says. An investigation found that more than $28 million in bribes were paid to secure access to oil cargoes. Bribes were paid to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and Republic of Congo. 

The Serious Fraud Office alleged that Glencore “paid for preferential access to oil, including increased cargoes, valuable grades of oil and preferable dates of delivery, between 2011 and 2016.”

Prosecutors alleged: “Corruption was condoned at a very senior level within the company generally and the west African trading desk specifically.”

The SFO then detailed a scheme to cover up the payments and “give the illusion” that they were for legitimate services. The company used a “cash desk” in its Swiss headquarters and private jets in Africa to carry out the illicit payments, the report says. 

More than $4 million was found to have been paid and disguised as service fees. As many of 11 of the company’s previous staff are under investigation for wrongdoing, the report notes. 

The company has already disclosed this year that it expects to pay about $1.5 billion to resolve the investigations in the US, UK and Brazil. It has provisioned $410 million for a fine in the UK, the report says. Investigations in Switzerland and the Netherlands are ongoing. 

Authored by ‘Mandiner’ via Remix News,

Organized crime is on the rise in Finland, and there’s a high demand for weapons. Criminal networks have already established weapon smuggling routes between Finland and Poland.

Europol, the European police cooperation organization, is reported to have warned in the summer that armed criminal groups could soon start smuggling weapons from Ukraine to EU member states.

According to Christer Ahlgren, superintendent of the Organized Crime Intelligence Unit of the Finnish National Bureau of Investigation (Keskusrikospoliisi, KRP), Europol’s prediction has already become a reality in Finland:

“We are seeing signs that these weapons are already in Finland, (…) and we have already seen signs that weapons delivered to Ukraine have been found in Finland,” Ahlgren says.

The Finnish law enforcement official said this mostly means handguns and heavier weapons used by the military, such as machine guns. However, they know from their foreign colleagues that there is also great demand for explosive grenades and military drones, and “in other parts of Europe, we have also found anti-tank missiles from Ukraine.”

There are fears that the Javelin anti-tank missile could also make its way into the hands of Europe’s criminals. The missile was one of the keys to the Ukrainians’ successful defense in the early stages of the war, and the U.S. and Britain have been supplying Ukraine with countless quantities of this easy-to-handle weapon, which is highly effective against tanks. The missile reportedly appeared on the dark web for sale this summer, but there is no documented case of it being used in any attack outside of Ukraine.

Rifles, handguns and other weapons from Ukraine are not only landing in Finland, but have also turned up in Sweden, Denmark and the Netherlands

The smuggling routes are set

Ahlgren says that “the routes, processes and connections for the illegal smuggling of weapons from Ukraine to Finland are already in place.” The arms are mostly transported via the country’s international ports, which are considerably less protected than airports, and the smugglers are criminal gangs, such as the big international motorcycle gangs. One of them, Bandidos MC Ahlgren, which is also active in Finland, has branches in all major Ukrainian cities.

Yle reported on Sunday that Europol is already expecting criminal gangs to set up arms depots near Ukraine’s borders; it also knows of Ukrainian refugees who have paid for transportation to the border with weapons rather than money.

According to Ahlgren, the amount of weapons in question is much greater than during the Yugoslav war, when gangs in Sweden stockpiled weapons. Now, as a result of illegal migration, “we have clans based on blood ties and ethnicity that are engaged in criminal activity.”

Ahlgren said he believes that while supplying weapons to Ukraine is the right thing to do, it has consequences.

“Ukraine has received a tremendous amount of arms, and that’s a good thing, but we will be dealing with these weapons for decades, and we are paying the price here,” he said. “The decision-makers have forgotten that the war in Ukraine has also increased the workload of the police.”

Moscow says it has firm evidence that Britain’s military assisted with last weekend’s large-scale drone attack on its Black Sea fleet off Crimea.

Russia said it plans to summon the British ambassador “in the near future” in order to present “evidence” the UK was behind the operation, which had threatened to collapse the UN-brokered Ukrainian grain export deal.

While Russia has on Wednesday announced it is re-entering the grain deal after receiving “guarantees” from Ukraine and Turkey, it is still pointing the finger at London for sending “specialists” to help Kiev forces launch Saturday’s drone attack.

Kremlin officials have yet to provide proof, but stated the following on Wednesday:

“The U.K. ambassador will be summoned and will be given the appropriate materials,” Foreign Ministry spokeswoman Maria Zakharova said, adding the meeting would take place “in the near future.”

“The basic materials will be handed over as evidence to the British side and will also be shown to the general public,” she added. 

Zakharova then said the evidence will be published for the world to see, following a blistering Saturday statement which alleged the Ukrainian army launched the drone attack “under the leadership of British specialists in the city of Ochakiv” in southern Ukraine. 

As for the major drone operation, which likely damaged multiple Russian Navy vessels, The Guardian described based on videos which emerged of some of the attacks:

Russia’s Black Sea flagship vessel, the Admiral Makarov, was damaged and possibly disabled during an audacious Ukrainian drone attack over the weekend on the Crimean port of Sevastopol, according to an examination of video footage.

Open-source investigators said the frigate was one of three Russian ships to have been hit on Saturday. A swarm of drones – some flying in the air, others skimming rapidly along the water – struck Russia’s navy at 4.20 am. Video from one of the sea drones shows the unmanned vehicle weaving between enemy boats.

Ukrainian officials said it was unclear if the Admiral Makarov was badly crippled, or had escaped with light damage. Unconfirmed reports said its hull was breached and radar systems smashed. Social media recorded loud explosions in the southern part of Sevastopol, in an area known as Riflemen’s Bay. A Russian navy school is located nearby.

Very epic footages from today’s attack by drones on the Port in Sevastopol, Crimea
/1 pic.twitter.com/9kDbDBkWPV

— Special Kherson Cat 🐈🇺🇦 (@bayraktar_1love) October 29, 2022

It should be noted that Russia has also of late accused British special operatives of helping to plan the September sabotage attack on the Nord Stream gas pipelines under the Baltic. The US has rejected these charges as “false claims on an epic scale.” 

Via Eurasianet,

• Krgyzystan’s graveyard of factories is a chemical time bomb. 

• For more than two decades, 80 tons of dangerous chemicals have sat in disused Kristall. 

• The site is now owned by Computer Power Center LLC, a crypto-mining company registered in Kyrgyzstan 2019.

Even after he retired in 2019, chemical engineer Suidumbek Kalmurzayev remained preoccupied by the fate of his former workplace in Tash-Kumyr, a Kyrgyz city that sits at the gateway to Central Asia’s Fergana Valley and is known locally as “the graveyard of factories.”  

“I used to say to him: ‘What’s it to you? Leave that factory well alone’,” Kalmurzayev’s widow Uububyu Kalmurzayeva told Eurasianet during an interview at her home.  

“He would say that Tash-Kumyr was sitting on an ecological time bomb. He tried until the end to find out where all the money went.”

Kalmurzayev died last year after a brief illness, leaving behind a trove of documents and press cuttings connected to the Soviet-legacy Kristall polysilicon factory where he was the last employee. 

But the time bomb he referred to with regularity is still ticking.

For more than two decades, 80 tons of dangerous chemicals have sat in disused Kristall, which once transformed volatile compounds into materials for semiconductors and was slated to become one of the biggest plants in the world of its type. In the age of microchips and solar panels, its output would have been in high demand.  

Instead, neglected and ignored by the government, residents fear these corrosive chemicals are now slowly leaking out into the local environment, spelling ecological catastrophe for both the city and the wider region, including the populous Fergana Valley below.

Kalmurzayev began working at Kristall as a foreman in 1985 and later became a production manager. 

Over the years he saw the site constantly divided into different sections with different companies in charge as Kyrgyzstan’s political tides shifted, with two presidents felled within five years of each other during the second decade of independence.  

The site is now owned by Computer Power Center LLC, a company registered in Kyrgyzstan 2019.

Its director, Maksat Oskonbayev, confirmed that it now hosts a crypto mining farm, although he claimed that the rigs aren’t currently running.

During a meeting in Tash-Kumyr, Oskonbayev claimed that he is not allowed to access the territory and that the large vats of chemicals are not the company’s responsibility since they are owned by a separate firm called Tash-Kömür Silicon Production CJSC (TSP), from whom Computer Power Center LLC acquired the land and building three years ago. 

“Everybody knows that there is poison in these tankers, residue in the pipes. We raised these questions [with the state property fund] right after we bought the plant. Everyone knows that we won’t get any investors here until the issue is resolved,” said Oskonbayev.

Computer Power Center LLC is Chinese-owned, Oskonbayev said, without providing details.  

The shifting of responsibility for the chemicals has been a pattern at the plant, which has mostly stood idle after being prepped for privatization in the wake of the Soviet Union’s collapse in the early 1990s.

According to a 2012 report by news website 24.kg assets on the territory were from 2007 onwards controlled by Belize-registered companies linked to then-President Kurmanbek Bakiyev’s son Maksim Bakiyev and his business partner and former classmate Alexey Eliseev.

These years were the most productive during independence for the factory, which began producing polycrystalline silicon in line with world standards. 

But at 750 kilograms in 2009, annual output was well short of the 165-200 tons that the new investors were setting as their ultimate target. 

The following year brought bloody revolution, nationalization and accusations of mass embezzlement and worse aimed by the new regime at the fugitive Bakiyevs and their associates.

Kristall was declared bankrupt, placed under external administration and kept in standby mode with a skeleton staff. 

Initially unaddressed was the fate of the large tanks of trichlorosilane, a clear liquid that is both flammable and corrosive enough to separate muscle from bone.

In 2011, the government under Prime Minister Almazbek Atambayev allocated 6.4 million soms ($152,000 at the time) to deal with the problem. A former colleague of Kalmurzaev’s, a scientist who requested anonymity, showed Eurasianet government documents dated from May 23, 2011, that confirmed the order to dispose of the chemicals.

But the money was never used for its intended purpose.  

“The lifespan of the tanks is only 12 months, but they’ve been standing there for 20 years,” the scientist said.

There are “huge risks” of the rusting tanks exploding during the middle of Tash-Kumyr’s summers, when temperatures regularly rise over 40 degrees Celsius, or in winter, when fierce winds batter the area, the scientist added. 

“If that happens, the air, earth and water will be poisoned. There will be tragic consequences not only for Tash-Kumyr and Jalal-Abad, but for the whole region.”

Tash-Kumyr’s new mayor, Kelsinbek Bektemirov told Eurasianet that local authorities are ready to get involved in the waste disposal effort if funds are forthcoming.

During an interview in his office, both Bektemirov and his deputy cast doubt on the crypto mining firm’s claim that the chemicals in the tanks are still the responsibility of TSP – the Bakiyev-linked company that was nationalized. 

Computer Power Center LLC agreed to take on all assets when they concluded the deal, the officials have said.

Leaks at the site – albeit small ones with no visible effects on the surrounding area – have been reported in the past. 

Back in 2017, Tash-Kumyr’s prosecutor received complaints about a leak at the plant and requested government inspections. In response, the Jalal-Abad region Interdistrict Court ordered the destruction of the chemicals under specialist supervision. But no work has taken place to this day.  

Bishkek-based activist and photographer Vlad Ushakov, one of the co-founders of ecomap.kg, a map of environmental stress around Kyrgyzstan, was able to enter the plant in 2020 and document what he said were signs of the leak and a slapdash attempt to fix it.  

“You can see from photos inside the plant the poor condition of the tanks. You can see where somebody tried to caulk the pipes. If the authorities continue to ignore the problem, Tash-Kumyr will face an ecological catastrophe,” Ushakov said.