US equities were set to end the Thanksgiving week higher, propelled by expectations that the Fed will ease off on its pace of monetary tightening following Wednesday’s dovish minutes while an 25bps RRR cut out of China sparked hope that Beijing will stimulate the world’s 2nd largest economy.

S&P 500 were higher by 0.1%, trading at 4038 after rising just shy of 4,050 overnight after the underlying gauge gained 1.6% this week. Nasdaq 100 futures dipped 0.1%, amid much lighter than usual trading volumes in a week shortened by the Thanksgiving holiday on Thursday. The US stock market will close early today.

As noted earlier, China’s central bank on Friday cut the amount of cash lenders must hold in reserve for the second time this year, an escalation of support for an economy racked by surging Covid cases and a continued property downturn.

“How effective that will prove to be when cities are seeing restrictions and effective lockdowns reimposed is hard to say,” said Craig Erlam, senior market analyst at Oanda. “But combined with other measures to boost the property market and ease Covid curbs, the cut could be supportive over the medium term when growth remains highly uncertain.”

In premarket trading, Activision Blizzard fell after a report that the US Federal Trade Commission is likely to file an antitrust lawsuit to block Microsoft’s deal to buy the video-game maker. Apple shares dipped after a report that production of iPhones in November could fall by at least 30% at Foxconn Technology Group’s Zhengzhou plant amid worker protests. Energy companies gained with the price of Brent crude rising as the European Union considers a higher-than-expected price cap on Russian crude. Brent trades above $86/barrel, though is on track for a slight loss this week amid worries over its demand outlook as Covid infections rise in China. Exxon +0.9%, Petroleo Brasileiro ADRs +2.7%, Schlumberger +1.2% in US premarket trading. Here are some other notable premarket movers:

• Coupa Software shares are up 3.2% in premarket trading on Friday, as analysts digested a Bloomberg News report that Vista Equity Partners is exploring an acquisition of the expense management software company. Firms wrote that the report points to greater private equity appetite for deals.
• Manchester United shares jump 7.9% in premarket trading after Saudi Arabia’s sports minister Prince Abdulaziz bin Turki Al-Faisal told BBC Sport that its government would support private sector bids for the team, as well as Liverpool football club.
• Activision Blizzard shares fall 3.4% in US premarket trading on a media report that the US Federal Trade Commission is likely to file an antitrust lawsuit to block Microsoft’s $69b deal to buy the video-game maker.
• Apple shares fall 0.8% in US premarket trading on a report that production of iPhones could fall by at least 30% in November at Foxconn’s Zhengzhou plant where worker protests have disrupted operations.
• US-listed Chinese stocks fall in premarket trading and are set for their first weekly decline in four weeks, with surging Covid cases and increasing curbs across the country hurting optimism that the country will reopen soon

Fed minutes published on Wednesday showed that officials concluded the central bank should soon moderate the pace of interest-rate hikes to mitigate overtightening risks. That pushed the VIX Index to its lowest close in more than three months that day, and was last seen about to drop below 20 – the last time VIX was a teenager was during the bear market rally in August. Investors will now closely monitor economic data ahead of the final Fed decision of 2022 to assess the impact of previous rate hikes, and for clues whether the Fed will hike 50 or 75 in December.

“The Fed needs to continue to hike rates reasonably to the 5% to 5.25% levels, so there are still some rate hikes to come, so markets are a little bit optimistic right now,” said Stephane Monier, chief investment officer at Banque Lombard Odier & Cie SA. He expects to see a small US recession in 2023, but it will be “nothing to compare to the crisis of 2008 and 2009.”

Meanwhile, Barclays Plc strategists led by Emmanuel Cau said the rally in equities is mainly due to short covering by macro hedge funds and CTAs, warning against extrapolating the move into the new year.

European energy stocks were higher too, helping to keep the Stoxx 600 Index on course for a sixth week of gains, the longest winning streak in a year. Credit Suisse Group AG fell to a fresh record low in the wake of massive outflows the bank reported this week. The Stoxx 50 was little changed after China’s latest effort to stimulate its economy, while volume on the Stoxx 600 was 38% below 100-day average. FTSE 100 outperforms peers, adding 0.3%, CAC 40 is flat but underperforms peers. Besides energy, health care and construction were the strongest performing sectors. Here are the biggest European movers:

• Truecaller rose as much as 8.4% after Citi upgraded its rating on the caller ID software maker to buy from neutral, citing “significant upside” after recent declines and noting good 3Q results.
• Elia Group shares jumped as much as 4.8% after the transmission system operator boosted its financial outlook for 2022.
• Rockwool gained as much as 4.4%. 3Q results should mark a trough for margins for the Danish insulation supplier, Handelsbanken wrote while upgrading its short-term rating to hold from sell.
• Intrum fell as much as 18% after the Swedish debt collection group said it needs to make negative adjustments of SEK4.3 billion in its jointly-owned Italian SPV, according to a statement.
• Fielmann shares fell as much as 6.3% after Berenberg said margin recovery is still not in sight for the eyewear retailer.
• Man Group fell as much as 5.7%, before paring the decline, after UBS cut its rating to neutral from buy. The market is underestimating the effect of an upcoming pension fund de-risking process on the firm’s liquid total and absolute return products, the bank says.
• Credit Suisse shares dropped as much as 2.3%, to a new record low, after Vontobel cut its price target, saying the Swiss lender “urgently” needs to halt net outflows in its core wealth management business

JPMorgan quantitative strategist Khuram Chaudhry said the recent rebound in European equities driven by expectations of peaking inflation and bond yields is nothing but a bear market rally and that investors are “jumping the gun.” He forecasts euro-area equities will eventually recover “later in 2023.”

Asian stocks declined, with Chinese technology shares retreating amid concerns about growing mainland Covid cases.  The MSCI Asia Pacific Index lost as much as 0.5%, on course to snap a three-day advance, with Tencent and Alibaba the biggest drivers of losses. The measure was still poised for its fourth weekly gain, the longest such streak since August. Trading volumes were thinner than usual in some markets following the US Thanksgiving holiday. Benchmarks in Hong Kong were among the biggest decliners, with the Hang Seng Tech Index closing down more than 2% before Meituan’s earnings release. Virus cases surged in Chinese cities including the capital Beijing, testing authorities’ resolve to ease their strict Covid Zero policy. Hopes for reopening had fueled a recent equity rally after a four-month selloff. “We think the Chinese markets are going through a volatile bottoming process,” Eli Lee, chief investment strategist at Bank of Singapore, said in an interview with Bloomberg TV. “The capitulation that we saw in late October likely is the worst we’ll see. So I think investors should be gradually adding exposure to Hong Kong and China.” Malaysia’s benchmark dropped, paring Thursday’s surge after Anwar Ibrahim was appointed prime minister. Stocks also fell Friday in Singapore, Thailand and Indonesia, while Vietnam’s key share gauge rose more than 2%.  

Australian stocks gained for a fourth day to close the week at May-highs: The S&P/ASX 200 index rose 0.3% to close at 7,259.50, its highest since May 30, boosted by banks and consumer discretionary stocks. The benchmark gained 1.5% for the week.  Nanosonics, which rallied after an upgrade at JPMorgan, was the top performer. Meanwhile, shares of lithium-related companies were the worst performers on the benchmark after news that battery electric vehicle registrations in China fell 20.9% in October from a month earlier.   In New Zealand, the S&P/NZX 50 index rose 0.5% to 11,382.56

In FX, the Bloomberg Dollar Spot Index rose for the first day in four as the greenback advanced against all of its Group-of-10 peers. Treasuries were steady to a tad lower.

• Antipodean currencies and the yen were the worst performers. New Zealand’s consumer confidence index fell to 80.7 in November from 85.4 in October, according to ANZ Bank
• The yen dropped alongside Japanese bonds after data show faster-than-expected inflation in Tokyo. Tokyo consumer prices excluding fresh food rose 3.6% y/y this month, the most since 1982 and faster than the 3.5% increase estimated by economists in a Bloomberg survey. The yen heads for a weekly gain
• The euro pared a decline to trade around $1.04. Bunds and Italian bonds fell, led by the belly, and paring some of the recent gains. Money markets added slightly to ECB tightening wagers ECB’s Chief Economist Philip Lane said long-term inflation expectations appear well anchored
• The pound retreated, but was still near a three-month high against the dollar. Gilt outperformed bunds

In rates, Treasuries were modestly weaker Friday, led by the belly where rates are near their cheapest levels of the day into early US session. The 10-year rate is up around 4bp at ~3.73%. Bunds and gilts yields trade heavier and the selloff in European debt helped reverse early gains in Treasuries during the London session. US trading session is expected to be quiet after Thanksgiving holiday with an early close recommended for Friday at 2pm ET. The move in Treasury 10-year yields lags increase in comparable bund yields, which are more than 9bp higher on the day. Front-end of the Treasuries curve is steady, steepening 2s10s spread by ~2.4bp on the day. Peripheral spreads are mixed to Germany.

In commodities, oil rebounded throughout the European morning, with WTI crude close to $80 a barrel as the European Union weighed a higher-than-expected price cap on flows of Russian crude and slowdown concerns threaten the outlook for energy demand. The rise occurred despite a modest revival in the DXY’s fortunes to back above 106.00 and further China COVID woes. EU talks on the oil price cap look like they will resume later today, via WSJ’s Norman. Spot gold and silver have succumbed to the mentioned USD upside, with the yellow metal probing USD 1750/oz to the downside while metals are incrementally firmer given China stimulus.

Looking to the day ahead now, and data releases include the GfK consumer confidence reading from Germany, as well as consumer confidence releases from France and Italy. Otherwise, we’ll hear from the ECB’s Muller and Visco.

Market Snapshot

• S&P 500 futures up 0.2% to 4,040.50
• STOXX Europe 600 down 0.1% to 440.36
• MXAP down 0.4% to 154.28
• MXAPJ down 0.2% to 494.58
• Nikkei down 0.4% to 28,283.03
• Topix little changed at 2,018.00
• Hang Seng Index down 0.5% to 17,573.58
• Shanghai Composite up 0.4% to 3,101.69
• Sensex little changed at 62,287.70
• Australia S&P/ASX 200 up 0.2% to 7,259.48
• Kospi down 0.1% to 2,437.86
• German 10Y yield up 3.7% to 1.92%
• Euro down 0.2% at $1.0387
• Brent Futures up 1.5% to $86.64/bbl
• Gold spot down 0.3% to $1,749.68
• U.S. Dollar Index down 0.19% to 105.88

Top Overnight News from Bloomberg

• ECB Governing Council member Madis Muller warned that the main risk in the battle with record inflation is halting increases in interest rates too early
• Beijing’s streets are deserted and grocery delivery services are running out of capacity as rising Covid cases trigger lockdown-like restrictions across swathes of the Chinese capital
• German Chancellor Olaf Scholz doesn’t want to start a new transatlantic trade war and he’s worried France’s Emmanuel Macron may be stoking one
• Germany’s economy proved more resilient in the third quarter than initially reported, growing 0.4% on strong consumer spending. An initial reading of 0.3% already had been a positive surprise, defying the country’s struggles with surging energy costs and uncertainty stoked by Russia’s war in Ukraine
• Sweden’s household lending grew last month at the slowest pace in a decade as interest rates are soaring and the Nordic nation’s home prices are in their worst slump since the 1990s

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks traded mixed with price action mostly rangebound amid the lack of any significant news catalysts to spur markets and the absence of a lead from Wall St due to the Thanksgiving holiday. ASX 200 gained with the index lifted by strength in the consumer-related and defensive sectors but with upside limited by losses in the commodity-related industries. Nikkei 225 was lacklustre amid pressure in bonds and as participants digested firmer-than-expected Tokyo inflation data in which Core CPI rose to its highest in four decades. Hang Seng and Shanghai Comp were mixed with underperformance in Hong Kong after the  government extended social distancing measures through to December 14th, while the mainland bourse was kept afloat despite the deteriorating COVID situation with sentiment helped by ongoing hopes of monetary policy easing.

Top Asian News

• China RRR cut for all banks is seen as likely, according to China Securities Journal. Subsequently, PBoC cuts banks Reserve Requirement Ratio (RRR) by 25bp, to keep liquidity ample. Effective from December 5th. Will strengthen the implementation of prudent policy. Focus on supporting the real economy and preventing flood-like stimulus. To release circa. CNY 500bln in long-term liquidity.
• UK Cabinet Office instructed central government departments to stop installing Chinese-made surveillance systems in sensitive sites due to security risks, according to FT.
• Beijing City reports 1,119 (prev. 863) COVID infections on November 24th as of 3pm, according to a health official; Guangzhou, China will not be put into lockdown, according to an official; the coming week will be key for COVID control; Nanjing City, China is to conduct mass COVID testing for five days from November 26th

European bourses are little changed but experienced a very modest negative bias initially, Euro Stoxx 50 Unch, in limited holiday-sapped trade. Stateside, futures are similar to European peers in terms of both the direction and magnitude of trade thus far, ES
+0.2. UK Black Friday volume of payment transactions have thus far been consistent with 2021, via Barclaycard Payments.

Top European News

• Spanish windfall tax on banks and large energy companies cleared the first hurdle, according to Reuters.
• ECB’s Lane says following a meeting-by-meeting approach to setting monetary policy will help ensure that our decisions are responsive to the evolving forward-looking assessments of the medium-term inflation outlook
• ECB insider says they see no realistic scenario where we reduce the balance sheet by much next year, via Econostream.

FX

• DXY lifted to a 106.20 peak at best, with much of the action occurring prior to the PBoC RRR cut.
• A cut which has applied further modest pressure to the Yuan, though it was already sensitive to the latest COVID controls/cases.
• Antipodeans are towards the bottom of the pile despite domestic data in a paring of the week’s RBNZ induced upside.
• At the other end of the spectrum, the EUR is the incremental outperformer though has made little ground above Unch. and is currently pivoting 1.04

Fixed Income

• Core benchmarks have slipped throughout the morning, with Bunds moving below yesterday’s trough though retain the 141.00 handle.
• EGBs were seemingly unaffected by ECB’s Lane who reaffirmed a meeting-by-meeting approach to policy.
• USTs in-fitting directionally but with magnitudes less pronounced given the shortened session for Thanksgiving.

Commodities

• WTI and Brent Jan’23 have exhibited grinding upside throughout the European morning, upside that has occurred despite a modest revival in the DXY’s fortunes to back above 106.00 and further China COVID woes.
• Saudi and Iraqi Energy Ministers stressed the importance of working within the OPEC+ framework and reiterated further measures to ensure stability of the oil market if necessary, according to a statement.
• EU talks on the oil price cap look like they will resume later today, via WSJ’s Norman.
• German Energy Regulator says he will consider gas storage levels to be critical if they are sub-40% on February 1st, currently all indicators are stable re. gas supply.
• Spot and have succumbed to the mentioned USD upside, with the yellow metal probing USD 1750/oz gold silver to the downside while metals are incrementally firmer given China stimulus

US Event Calendar

• Nothing scheduled

DB’s Jim Reid concludes the overnight wrap

The day after Thanksgiving always seems to mark the start of the home stretch towards Xmas in markets and even more today given it’s now only exactly a month away. If you can make it through today without getting a single Black Friday never-to-be-repeated sales offer then congratulations. Already this morning I’ve been offered on email a new bargain TV, cheap golf balls, knockdown outdoor winter clothing, 50% off panto tickets (I wouldn’t go if you paid me), and a big discount off an indoor golf simulator. I must admit the last of these held my interest for a bit longer than the others! On a more serious note, watch out for the usual Black Friday estimated US retail sales figures that will come out over the weekend. S&P have predicted that this year will see the first real adjusted fall in sales since 2009.

Unsurprisingly, it’s been a pretty subdued 24 hours for markets, with much lower volumes than usual due to the US holiday. Nevertheless, there were fresh signs elsewhere that risk appetite was continuing to grow among investors, aided by some positive data releases and further signals that central banks might not end up hiking as aggressively as feared. That was evident across multiple asset classes, and yesterday saw the STOXX 600 (+0.46%) advance to a 3-month high, yields on 10yr bunds (-7.9bps) fall to a 2-month low, whilst the dollar index (-0.23%) weakened to a 3-month low this morning as the risk premium buoying the greenback unwound yet further.

This more constructive tone was supported by more positive data releases from Europe that built on the upside data surprises of late. In particular, the release of the Ifo’s business climate indicator from Germany surprised on the upside with an 86.3 reading (vs. 85.0 expected), as did the expectations component at 80.0 (vs. 77.0 expected). That marks the second consecutive monthly improvement for both measures, and comes on the heels of the better-than-expected numbers from the flash PMIs and consumer confidence in recent days. Admittedly, none of these numbers are great in absolute terms, but given some of the fears for the European economy this winter after the Russian gas cut-off, they’re a lot better than many had expected until fairly recently.

Yesterday also saw the release of the latest ECB account from their October meeting. In their recap (link here), our European economists write that the accounts push back on an overly dovish interpretation to the October meeting, which is also supported by recent data outturns, along with public comments from Governing Council members. The minutes did say that “a few members expressed a preference for increasing the key ECB interest rates by 50 basis points” at the last meeting, but ultimately “a 75 basis points increase was judged to be an appropriate response in view of the protracted period of excessively high inflation and the risk that this might add to medium-term price pressures”. As a reminder, our economists expect the ECB to slow the pace of hikes to 50bps in December, following the 75bps pace in September and October, but it’s a close call.

European sovereign bonds rallied strongly against this backdrop, having also got a lift from the release of the Fed minutes the previous evening as well. Yields on 10yr bunds came down by -7.9bps to 1.84%, marking their lowest level in 2 months, just as yields on 10yr OATs (-9.4bps) and BTPs (-13.9bps) also fell. Those moves occurred in spite of remarks from ECB Executive Board member Schnabel, who said that “incoming data so far suggest that the room for slowing down the pace of interest rate adjustments remains limited”. Indeed the front end in Europe didn’t rally as much meaning a deeper inversion for the German curve. Given the debate between 50bps and 75bps, the flash CPI reading for November out on Wednesday will be particularly important.

Equities rallied alongside bonds yesterday, and the STOXX 600 (+0.46%) hit a 3-month high after every sector group except tech moved higher on the day. The DAX (+0.78%) was a particular outperformer, hitting a 5-month high, and the CAC 40 (+0.42%) hit a 7-month high. Meanwhile in the US, markets were closed given the Thanksgiving holiday, but futures were open and remained in positive territory throughout the day, pointing to further gains for the S&P 500 from its 2-month high in the previous session. As we type this morning, contracts tied to the S&P 500 and the NASDAQ 100 are +0.25% and +0.44% higher, respectively. Meanwhile, yields on the 10yr UST (-3.69 bps) have dipped to 3.66% in Asia trading after resuming trading with the 2yr yield slipping (-5.15 bps) to a one week low of 4.43%. A rare recent (albeit small) steepening.

Asian equity markets are struggling to end the week on a positive note as ongoing concerns over China’s daily Covid cases is hurting. They reported a record number of 31,987 new infections for Thursday surpassing Wednesday’s record of 29,754 cases thus increasing pressure on Beijing’s zero-tolerance approach to the virus as the outbreak worsens. The country is persistently registering high caseloads despite authorities implementing several restrictions across its major cities.

As I type, the Hang Seng (-0.86%) is leading losses with the Nikkei (-0.30%) and the KOSPI (-0.12%) also trading in negative territory. Bucking the trend this morning are ironically Chinese stocks with the Shanghai Composite (+0.39%) and the CSI (+0.45%) trading up.

Elsewhere in Asia, early morning data showed that core consumer prices in Japan’s capital rose +3.6% y/y in November (v/s +3.5% expected & October’s +3.4%), its fastest annual pace in 40 years driven mostly by electricity bills and food prices with a weak yen pushing the cost of imports higher. Overall Tokyo CPI inflation rose +3.8% y/y in November, up from last month’s +3.5% and also at its fastest pace in 40 years. With the city’s inflation staying above the BOJ’s 2% target for the 6th straight month, the data is signalling broadening inflationary pressure.

Back to yesterday and here in the UK, gilts noticeably underperformed after a couple of BoE officials made some hawkish remarks on policy, with the 10yr yield up by +2.3bps on the day. First, Deputy Governor Ramsden said that he was “materially less confident” that unemployment would rise as fast as the Monetary Policy Report forecasts by end-2023, which would suggest that inflationary pressures would therefore be stronger. Furthermore, he pointed out that most of the fiscal tightening measures in last week’s Autumn Statement didn’t come into effect until April 2025, so would have little effect on inflation over the MPC’s three-year forecast horizon. Then we heard from Catherine Mann, who’s also one of the more hawkish MPC members, who said that “it is more costly to get inflation down once medium-term inflation expectations have become out of control”. Sterling continued to advance against that backdrop, surpassing the $1.21 mark in trading yesterday for the first time since August.

Staying on central banks, Sweden’s Riksbank delivered a 75bps hike as expected, taking the policy rate up to a post-2008 high of 2.5%. In their forecast, they showed further rises in the policy rate at the start of 2023 that took it to just beneath 3%, and their statement said that the risk that “current high inflation will become entrenched is still substantial”. The Swedish Krona ended the day up +0.4% against the US Dollar, although this was aided in part by dollar weakness.

To the day ahead now, and data releases include the GfK consumer confidence reading from Germany, as well as consumer confidence releases from France and Italy. Otherwise, we’ll hear from the ECB’s Muller and Visco.

Confirming recent rumors and media speculation, late on Fruday after the close of markets, China’s central bank announced it cut the amount of cash that banks must hold in reserve for the second time this year on Friday to shore up the coronavirus-hit economy, a move which analysts said is “not too late”, but also that Beijing needs to roll-out much more supportive policies to kick start to contracting economy.

The People’s Bank of China (PBOC) said the 0.25% cut of the reserve requirement ratio (RRR) to 7.8% will take place on December 5 and inject around 500 billion yuan (US$70 billion) in long-term liquidity.

The PBOC last cut the RRR in April when the central bank announced a 0.25% point reduction following 0.5% points cuts in both July and December last year. Friday’s announcement followed a State Council meeting on Tuesday chaired by Premier Li Keqiang, who said that it was a “critical time” to consolidate the economic recovery for the fourth quarter.

The PBOC said that the move was aimed at maintaining “reasonable and sufficient liquidity” to support the economy at a “reasonable” growth rate, while reiterating that it would not engage in “flood-like” stimulus.

“[The RRR cut will] increase the long-term stable funding sources of financial institutions, enhance the capital allocation capabilities of financial institutions, and support industries and small, medium and micro enterprises that have been severely affected by the epidemic,” the central bank added.

The widely telegraphed (and in some cases, mocked) decision, comes at a time when the world’s second-largest economy is on the verge of contraction and is facing a new round of coronavirus disruptions, with daily infections having already jumped to more than 31,000.

“The impact of the Covid-19 outbreaks is already quite damaging. The RRR cut is reasonable,” said Iris Pang, chief economist for Greater China at ING, quoted by SCMP. She added that the RRR cut was “not too late”, but that it needs to be accompanied by other less conventional monetary policy to boost its effectiveness, especially when it comes to tackling financing problems for small retailers and companies operating in the catering sector. Pang added that the PBOC could instruct banks to lend more, while the central bank could also increase loan to banks via relending programmes to boost funding to small- and medium-sized firms.

Others were more skeptical: efforts by the Chinese government to support the economy will be encouraging in the short-term for equities as it shifts “expectations in a positive direction,” even though the outlook is cloudy beyond that, said Peter Garnry, head of equity strategy at Saxo Bank.

Chinese central bank’s decision to reduce the reserve requirement ratio for most lenders by 25 basis points will have limited impact on the economy, because it will not be as easy as in the past with the Chinese economy in a “different place” structurally
“The credit impulse does not have the same impact as before because the typical receiver  — real estate — is dealing with financial stress.”

China’s economy has been under pressure since October as exports and retail sales fell amid weak business and consumer confidence. “Epidemic prevention is now the biggest constraint on the economy,” said Larry Hu, chief China economist at Macquarie Group. “But the RRR cut is better late than never. The move may now also encourage banks to lend to the real estate sector.”

The cut will also save around 5.6 billion yuan per year for banks in terms of their funding costs, the PBOC added. But Zhang Zhiwei, chief economist at Pinpoint Asset Management, said the size of the cut shows that China’s monetary policy has been constrained by the US Federal Reserve’s interest rate increases, which have weakened the yuan significantly since the start of the year.

“[The RRR cut] helps marginally, but the main problem for the economy is not the monetary policy,” Zhang said, adding that more action is needed to minimise the impact of China’s virus control measures.

China has eased its containment measures, including cutting quarantine requirements for international arrivals, but there is still no timetable for a complete exit from Beijing’s zero-Covid policy.

“The reduction in the required reserve ratio that the PBOC just announced will help banks follow through on a directive to defer loan repayments from firms struggling with widening lockdown restrictions,” said Mark Williams, chief Asia economist at Capital Economics.

“Market interest rates may also edge down as a result, even if that’s not the main goal. But few firms or households are willing to commit to new borrowing in this uncertain environment. A small fall in interest rates wouldn’t make a difference.”

Authored by Michael Washburn via The Epoch Times (emphasis ours),

The collapse of cryptocurrency exchange FTX, and the worldwide outcry over the billions of dollars wiped off the platform, are likely to trigger a massive regulatory reaction that would further erode citizens’ economic freedoms without addressing the issues that fostered demand for an alternative to the fiat dollar, economists have told The Epoch Times.

An international scandal has embroiled FTX and its founder, 30-year-old Sam Bankman-Fried, in the wake of the firm’s crash earlier this month precipitated by a run on the exchange. Since then, reports have emerged that Alameda Research, a crypto hedge fund established by Bankman-Fried, was trading billions of dollars from FTX accounts without clients’ knowledge.

FTX has filed for bankruptcy protection, Bankman-Fried has stepped down from his role as CEO, and John J. Ray III, the former CEO of Enron, has taken over the insolvent company with a plan to sell it off if a successful restructuring is impossible. An estimated 1 million customers and other investors are facing total losses of billions of dollars.

FTX, in a recent court filing, said it owes $3.1 billion to its top 50 creditors, and its collapse has rocked the $839 billion global crypto market. On Nov. 22, the trading value of bitcoin tumbled to $15,480, a two-year low, before edging up slightly to $15,909.

Ray has claimed that subsidiaries of FTX in the United States and abroad “have solvent balance sheets, responsible management and valuable franchises,” but so far the shock and alarm over the exchange’s implosion have shown no sign of abating.

Meanwhile, a number of big names in sports and entertainment, such as comedian Larry David, NBA star Stephen Curry, and quarterback Tom Brady, have become the subject of a probe by the Texas State Securities Board over their public endorsements of FTX. The celebrities have also become the targets of class action lawsuits filed by disgruntled investors, with more expected in the days to come.

Madoff’s Heirs

Observers of the FTX blowup are extremely candid about the severity of the exchange’s mismanagement and the recent historical analogs for its unraveling.

Wayne Davis, a partner at the law firm Tannenbaum Halpern Syracuse & Hirschtritt in New York, drew a parallel with one of the most notorious cases of fraud in the history of finance, that of the Bernard L. Madoff, whose Ponzi scheme bilked some 4,800 clients of $64.8 billion. In both cases, clients were insufficiently attentive to the lack of internal controls, he suggested.

“Madoff comes to mind. Perhaps not the same criminal intent components, but there are certainly similarities as far as investor/customer enthusiasm notwithstanding signs of lax compliance and risk management engagement,” Tannenbaum told The Epoch Times.

Other observers see parallels in earlier events in the development of banking and currencies. Charles Steele, chair of the department of economics, business, and accounting at Hillsdale College in Michigan, said that the blow-up of FTX reminds him of the first stock market bubble and financial crisis to afflict the world, namely the collapse of France’s Banque Royale in 1720.

“Scotsman John Law set up a central bank for the French monarchy that began paying enormous returns on its shares and its sister Mississippi Company. It was heralded as a great triumph of new financial technology, a nearly miraculous breakthrough, but in fact, it was effectively what we now call a Ponzi scheme,” Steele told The Epoch Times.

“In the case of FTX, it appears that Samuel Bankman-Fried was heralded as a crypto genius, but was simply engaged in a lot of shady business disguised as ‘philanthropy,’ using other people’s money. He was apparently the second-largest donor to the Democrat Party campaigns in the 2022 elections, and also was positioning himself to be a major player in the design of federal regulations for cryptocurrency,” Steele added.

The Likely Reaction

The magnitude of the FTX scandal—the amounts of money involved and the number of people suffering possibly permanent financial harm—means that its ramifications are likely to continue to affect all players in the crypto space in coming weeks and months, said Jeffrey Guernsey, a professor of economics at Cedarville University in Ohio. The very lack of a fixed value that made crypto investing exciting for some people may also be among its singular vulnerabilities in the face of emboldened regulators, he suggested.

“While this thought does not originate with me, it is clear that crypto is not a currency, if one attribute of a currency is a stable value. The collapse of FTX certainly puts the entire asset class under review and question and may lead to calls for governmental regulation,” Guernsey said.

Given the priorities of the Biden administration, the notably harsher tone of federal guidance and rulemaking since he took office, and officials’ well-documented hostility to financial innovation and decentralization, the reaction from regulators is likely to be extremely draconian and may even cross lines that the regulators have hitherto respected, observers say. But whether the coming crackdown will address concerns of fiat currency that helped feed demand for alternative exchanges, platforms, and markets is a different question.

“I expect that this debacle will lead to greatly increased federal regulation of cryptocurrencies,” Steele said.

In Steele’s view, the fiasco is likely to speed up the crafting and implementation of central bank digital currencies (CBDC). Steele noted that the Federal Reserve Bank of Boston is collaborating with the Massachusetts Institute of Technology on a joint study, Project Hamilton, whose objective is to devise a CBDC for the United States.

While ignored by many people, this is one of the most potentially concerning recent developments given the unprecedented powers that it stands to place in the hands of a central regulatory authority, he said. While some might initially welcome a CBDC, it could have unforeseen consequences and ultimately could help extend the role of government into people’s lives in ways to which they are so far unaccustomed.

“I think a CBDC is very dangerous, because it would enable a central bank or government to monitor, control, and record every exchange made with the currency. If, for example, a government decided it did not want citizens buying, say, firearms, or perhaps donating funds to a political candidate, the central bank could prevent the transaction. Alternatively, it could have a permanent record of a citizen’s purchases and use these to establish a social credit score for the person,” Steele said.

“In this way, a CBDC could become the ultimate tool of social engineering and tyranny. A true cryptocurrency keeps transactions anonymous, which is one of its great benefits. Governments tend to dislike tools that give citizens such privacy,” he added.

Legitimate Demand

The tragedy of the FTX scandal and the possible meltdown of other crypto entrepreneurs as more and more people panic and seek to redeem their assets is that such platforms arose partly in response to an understandable demand for alternatives to the fiat dollar, or a dollar whose value and use flow from government dictates and are unrelated to any external commodity or asset such as gold. The heavy-handed reaction expected in the coming months as a consequence of FTX’s blow-up is unlikely to take account of this truth.

That’s the view of Brian Domitrovic, a professor of economic history at Sam Houston State University, who sees negative long-term consequences to the country’s abandonment of the gold standard in 1971.

“I don’t think there’s any kind of broad popular support for a fiat dollar, a non-gold dollar. There hasn’t been since 1971. A lot of popular dissatisfaction with this has been very clearly expressed,” Domitrovic told The Epoch Times.

“The Federal Reserve is not a popular institution at all. I think there’s just a general sense on the part of the public that we should have something more like the classical monetary system that we used to have. And I think crypto has tapped into that more effectively than anything since the end of the gold standard,” he added.

The New Non-Fiat

From a certain standpoint, cryptocurrencies took over where gold left off following the shift away from the gold standard, Domitrovic said. Like gold, it is limited in supply and requires mining, though of course not the same kind of mining. In the case of the former commodity, the mining is a process of physical extraction of a substance from the earth, and in the latter, it is mathematical and theoretical in nature.

Despite the differences, both currencies have the effect of eroding centralized power and oversight by making institutions such as the Federal Reserve less integral to the functioning of the economy, Domitrovic said.

“Bitcoin aspires to mimic gold in many respects. This is what you had when money was not a creation of the Federal Reserve,” he added.

Much of today’s demand for bitcoin and kindred currencies flow from a widespread desire to go back to how things were before 1971, Domitrovic argued.

“Before 1971, the United States led the world in becoming the greatest economy ever, with hundreds of millions of people living at high levels of prosperity. There is a very strong reason why people associate the pre-1971 period with a magnificent achievement economically,” he added.

In this analysis, the federal government has sought to maintain centralized oversight over the economy and the level of prosperity attainable by citizens partly by not allowing crypto to compete with the fiat dollar.

“Even if there is fraud, I’m still going to lay a lot of the blame at the feet of the government and the official definition of policy, because they’re not taking crypto as seriously as they should. They consider it non-money,” he said.

Read more here…

European climate cultists upped the ante in their increasingly deranged war on fossil fuels on Thursday, bringing flight operations at Berlin Brandenburg Airport to a complete standstill for an hour and a half. 

Reuters reports that activists from the Letzte Generation (Last Generation) group entered the airport from both the north and south ends, with some glueing themselves to the tarmac. According to the group, others rode bikes around the taxiways. The trespass began just after 4 pm local time. 

“The plane is not a means of transport for ordinary people,” tweeted the group. “Most people – around 80% – have never flown. One affluent percent of the population is responsible for about half of all flight-related emissions.”

Letzte Generation demanded that the public stop using airplanes to travel, and tweeted video of its members entering the airport through a hole cut in a chain-link fence:

+++ Flugverkehr am BER eingestellt +++

Das Flugzeug ist kein Verkehrsmittel für Normalbürger:innen. Die meisten Menschen – etwa 80% – sind noch nie geflogen.
Ein wohlhabendes Prozent der Bevölkerung verursacht allein etwa die Hälfte der flugbedingten Emissionen. pic.twitter.com/Avfg5tDeqw

— Letzte Generation (@AufstandLastGen) November 24, 2022

Police detained the trespassers, but not before they caused misery for an estimated 3,000 to 4,000 travelers to and from Berlin’s primary commercial airport. In addition to those stuck in the airport or on airplanes awaiting takeoff 15 flights to Berlin were diverted to Düsseldorf, Leipzig/Halle and Dresden. 

The same group is behind many attention-seeking stunts across Europe in recent months, such as throwing food on famed works of art, disrupting a Hamburg orchestra concert by gluing themselves to the conductor’s podium, blocking road traffic, and vandalizing businesses and government buildings with orange paint. 

Letzte Generation activists have covered Monet’s Les Meules in mash potato.

The protestors then glued themselves to the floor at the Barberini Museum in Potsdam. It is unclear if the painting was damaged. https://t.co/Av2TSbR4iI pic.twitter.com/myup95RBtm

— Sky News (@SkyNews) October 23, 2022

Local authorities condemned the latest stunt: 

Brandenburg Interior Minister Michael Stübgen (CDU) described the action as a “dangerous intervention in air traffic.” It was “a serious crime” that “in the worst case even endangers human life. There’s no justification for that.” He called the activists criminals. — German broadcaster RBB

Berlin police said protestors showed “they are ready to commit crimes and that the democratic framework is of no importance to this organization.”

At least one passenger stuck on an airplane maintained his sense of humor: 

Ryanair have also kindly portrayed the harrowing effects of climate change by ensuring the heat on the plane resembles a Mediterranean summer in the year 2050.

— Neil Delaney (@neilpdelaney) November 24, 2022

Authored by Dave DeCamp via AntiWar.com,

A group of bipartisan senators is urging the Biden administration to provide Ukraine with advanced MQ-1C Gray Eagle drones that would give Kyiv longer-range capability.

The Biden administration has been hesitant to send the drones due to the risk of escalation with Russia and concerns that the sensitive technology in the drones could end up in the wrong hands.

The Wall Street Journal recently reported that the Biden administration has decided not to provide the drones, although other reporting disputed that claim and said a final decision hadn’t been made.

In a letter to Secretary of Defense Lloyd Austin, 16 senators expressed “concern” over the reports that said the administration has declined to send the MQ-1C. The senators asked the administration to give “careful reconsideration” to the Ukrainian request.

The letter was led by Sen. Joni Ernst (R-IA) and was signed by many members of the Senate Armed Services Committee, including ranking member James Inhofe (R-OK).

The senators said the MQ-1C and other long-range capabilities would provide “Ukraine additional lethality needed to eject Russian forces and regain occupied territory.”

Providing MQ-1Cs would be a major escalation in US military aid to Kyiv as the drones can be armed with powerful hellfire missiles and can fly for up to 30 hours. The drones would give Ukraine the capability to strike targets inside Russian territory.

The US has provided other long-range arms under the condition they wouldn’t be used to target Russian territory, with the exception of Crimea.

Officials told CNN last week that the US was considering modifying the MQ-1Cs to change the technology of some components so it wouldn’t pose as much of a risk if they end up in Russia’s hands. The report said the effort was being led by the US Army, but any modifications would take time.

Authored by Thomas Brooke via Remix News,

Italians on unemployment benefits who turn down reasonable job offers will have their access to social security payments revoked in new laws expected to be introduced by Giorgia Meloni’s new administration.

In a pledge to clamp down on a relief scheme that Meloni claims rewards laziness and is widely abused, the new Italian prime minister vowed to amend the citizens’ income available across the country, making it conditional upon those who receive job offers while receiving the benefit to take the position.

The citizens’ income is an initiative first introduced by the left-wing Five Star Movement and sees over 3.5 million Italians receive a payment of €780 per month. Receipt of the benefit is widely skewed toward the poorer south of the country where 2.3 million of the recipients reside.

As Meloni announced her first budget on Tuesday, she claimed it was wrong “to put people who can work on the same level as those that can’t.”

“Faithful to our principles, we’ll keep helping those who can’t work. For the others it will be abolished,” she added.

The system is expected to undergo an overhaul at the beginning of 2024.

Meloni’s budget sought to stimulate the economy with €35 billion euros of increased spending or tax cuts.

It introduced tax cuts for the self-employed and employees, and hiked a windfall tax on energy companies from 25 percent to 35 percent, and cut VAT on essentials such as baby and sanitary products,

The new government also lowered the age at which citizens can draw on their pension from 64 to 62, providing they have paid in at least 41 years of contributions.

Two weeks ago Ukrainian President Volodymyr Zelensky issued a “10-point plan” for ending the war, which included the demand that Russian troops depart from all of sovereign Ukrainian territory. However, the recent Russian annexation votes for the absorption of Donetsk, Luhansk, Kherson, and Zaporizhzhia territories make the likelihood of peace talks very distant at this point. 

On Thursday, Russia again sent a resounding message affirming it doesn’t plan to let go of these four eastern oblasts. Moscow confirmed it has issued over 80,000 Russian passports the residents of the territories which were declared part of the Russian federation in September. 

“Since the addition … of the four regions into the Russian Federation, and in accordance with the legislation, more than 80,000 people received passports as citizens of the Russian Federation,” Valentina Kazakova, a top Interior Ministry official said. 

Currently, as the invasion reaches the full nine-month mark, Russian forces do not yet have hold of 100% of any of the territories. In many areas pro-Kremlin troops have actually been pushed back amid the ongoing Ukrainian counteroffensive. 

The United Nations, as well as the Western allies, have consistently condemned the “attempted illegal annexation” of Ukrainian land. Further they have pressed all global nations “not to recognize any changes announced by Russia to borders.”

The European Union has also recently vowed to never recognize passports issued in the occupied territories, with Kyiv of course also condemning the ‘illegal and invalid’ passports. The European Council said earlier in the month: “This decision is a response to Russia’s unprovoked and unjustified military aggression against Ukraine and Russia’s practice of issuing Russian international passports to residents of the occupied regions.”

Meanwhile, a recent Washington Post report has admitted that in these regions, sympathies for Russia among the local Ukrainian population run deep and are more widespread than previously admitted, complicating matters in places like Kherson city, recently recaptured by Ukraine forces amid a broader Russian withdrawal: 

But in institutions across this regional capital, from the city council to hospitals and schools, newly restored leaders like Ivanovka are facing a double conundrum. How to rebuild without the thousands of Russia sympathizers who fled? And even more vexing, what to do with those who remain? Thousands in the city held an ambivalence toward the Russians, or even an affinity.

Further the report underscored that “Hundreds, perhaps thousands, of people in Kherson accepted Russian passports in the hope of receiving benefits. Many more accepted thick envelopes of Russian rubles on top of their pay as an inducement to stay in their jobs.”

Australian national broadcaster: Ukrainian civilians stripped, tied up and beaten by vigilantes in shocking videos

There have since emerged widespread reports of “revenge” and retribution attacks on suspected ‘Russia-sympathizers’ by reconquering Ukrainian forces. Likely this will continue especially in retaken areas where much of the citizenry accepted Russian passports and participated in the annexation referendum. 

Authored by Dan McKnight via The Libertarian Institute, 

As our government continues to bumble and stumble at full speed towards World War III, the concept of tripwires and the legal authority of Article 5 become required understanding for the vigilant citizen. Last week the American people received the then-breaking news that a missile had landed in Poland and killed two people. Ukraine’s President Volodymyr Zelensky said that this was a purposeful act of war by Russia, and that the West must respond with full kinetic retaliation.

He was joined by his amen corner here in the United States, that group of politicians, regime journalists, and paid lobbyists who have sold out their country for the requisite thirty pieces of silver. The War Party immediately jumped into action: this was what they’ve been waiting, praying for. A catalyst to launch the missiles, and sacrifice the world.

Poland, like the United States and nearly all of Europe, is a member of NATO, the North Atlantic Treaty Organization. (Maybe we should wonder why countries like Poland, Estonia, and Romania are in an “Atlantic” alliance.)

A provision of NATO is Article 5, which popular conception treats as a mandatory obligation to go to war when a member of the alliance is attacked. It’s a one way pass into World War III.

There were just two things wrong with this narrative.

First, as was revealed within forty-eight hours and confirmed by both the Polish government and Biden White House, the missile was Ukrainian, not Russian.

Vladimir Putin had not attacked NATO—purposefully or accidentally. Instead, a Ukrainian air defense missile attempting to intercept a Russian strike went off trajectory killed two Poles across the border.

All of a sudden “collective security” was no longer threatened, and no one on cable news was talking about how this required NATO retaliation on Kiev. (Surprised?)

Secondly, even if it had been a Russian missile, and even if Vladimir Putin himself had aimed directly at that Polish farm, Article 5 obligates the United States to nothing.

The NATO Treaty also has an Article 11, which specifies that the provisions of the alliance will be carried out in accordance with the domestic constitutions and processes of the respective members.

That means a majority vote of the U.S. Senate and House of Representatives on a formal declaration of war. Any member of Congress or news talking head saying Article 5 requires an immediate military response without a debate or vote is either lying or woefully uninformed.

And even if the NATO Treaty didn’t have that provision, we’d still rest our argument of Article I, Section 8 of the United States Constitution, the supreme authority of our laws.

We are a sovereign nation, and the American people always have a choice on whether or not to go to war. Any international piece of paper trying to say otherwise be damned.

Unfortunately, the War Party doesn’t always make that choice easy. They bribe politicians with weapon contract profits, flood the corporate press with propaganda, and instruct the American people that they must either commit to endless war or lose their liberty. They manufacture themselves consent.

This crisis continues to demonstrate why we need Defend the Guard. This legislation would prohibit the deployment of a state’s National Guard units into active combat without a declaration of war by Congress.

It’s the best way to tell Washington DC that they can’t go to war without a debate and a vote by the people’s representatives. And if they try, they won’t have the manpower to fight such a conflict because patriotic state legislators won’t allow their National Guard, the backbone of the U.S. Armed Forces, to participate in an illegal war.

I have worked to introduce this bill in over twenty states in the past, and my team is already preparing for the 2023 legislative session. But to be successful I need your support. Visit DefendTheGuard.US to see if a bill has been sponsored in your state, or if you need to contact your representative and state senator. An American people, active and informed, will not be led into World War III by their irresponsible, stupid leaders.

* * *

Dan McKnight is a 13-year veteran of the military, including service in the United States Marine Corps, United States Army, and the Idaho Army National Guard. He is founder and chairman of Bring Our Troops Home. Follow him on Twitter @DanMcKnight30 and @TroopsHomeUS

Authored by John & Nisha Whitehead via The Rutherford Institute,

“All the time – such is the tragi-comedy of our situation – we continue to clamour for those very qualities we are rendering impossible… In a sort of ghastly simplicity we remove the organ and demand the function. We make men without chests and expect of them virtue and enterprise. We laugh at honour and are shocked to find traitors in our midst. We castrate and bid the geldings be fruitful.”

– C.S. Lewis, The Abolition of Man

There will come a time in the not-so-distant future when the very act of thinking for ourselves is not just outlawed but unthinkable.

We are being shunted down the road to that dystopian future right now, propelled along by politically correct forces that, while they may have started out with the best of intentions, have fallen prey to the authoritarian siren song of the Nanny State, which has promised to save the populace from evils that only a select few are wise enough to recognize as such.

As a result, we are being infantilized ad nauseum, dictated to incessantly, and forcefully insulated from “dangerous” sights and sounds and ideas that we are supposedly too fragile, too vulnerable, too susceptible, or too ignorant to be exposed to without protection from the so-called elite.

Having concluded that “we the people” cannot be trusted to think for ourselves, the powers-that-be have taken it upon themselves to re-order our world into one in which they do the thinking for us, and all we have to do is fall is line.

Those who do not fall in line with this government-sanctioned group think—who resist, who dare to think for themselves, who dare to adopt views that are different, or possibly wrong or hateful—are branded as extremists, belligerents, and deplorables, and shunned, censored and silenced.

The fallout is as one would expect.

Cancel culture – political correctness amped up on steroids, the self-righteousness of a narcissistic age, and a mass-marketed pseudo-morality that is little more than fascism disguised as tolerance – has shifted us into an Age of Intolerance, policed by techno-censors, social media bullies, and government watchdogs.

Everything is now fair game for censorship if it can be construed as hateful, hurtful, bigoted or offensive provided that it runs counter to the established viewpoint.

In this way, the most controversial issues of our day—race, religion, sex, sexuality, politics, science, health, government corruption, police brutality, etc.—have become battlegrounds for those who claim to believe in freedom (of religion, speech, assembly, press, redress, privacy, bodily integrity, etc.) but only when it favors the views and positions they support.

The latest victim of this rigid re-ordering of the world into one in which vestiges of past mistakes are scrubbed from existence comes from the New York Department of Education, which has ordered schools to stop using Native American references in mascots, team names and logos by the end of the current school year or face penalties including a loss of state aid.

Citing concerns about racism and a need to comply with the state’s Dignity for All Students Act, which requires schools to create environments free of harassment or discrimination, New York officials are telling communities—many of which are named after Native American tribes—that longstanding cultural associations with their towns’ Indian namesakes are offensive and shameful.

More than 100 schools in 60 school districts across New York State have nicknames or mascots that reference Native Americans. The cost to divest their communities of such branded names and images will be significant. One school district estimates that the cost to remove its Indians imagery from the gym floor alone will be upwards of $60,000.

This drive to sanitize New York schools of “offensive” Native American logos and imagery comes on the heels of iconoclastic campaigns to rid the country of anything and anyone that may offend modern-day sensibilities.

Monuments have been torn down, schools and streets have been renamed, and the names of benefactors stripped from prominent signage in the quest for a more enlightened age.

These are not new tactics.

Since the days of the Byzantine Empire, when “Emperor Leo III ordered the destruction of all Christian images on the grounds that they represented idolatry and were heretical,” political movements have resorted to destroying monuments, statues and imagery of the day as a visual means of exerting their power and vanquishing their enemies.

We have been caught in this intolerant, self-righteous, destructive, mob-driven cycle of book-burning, statue-toppling, history-erasing iconoclasm ever since.

As art critic Alexander Adams explains:

“Iconoclasm is an activity evenly distributed between both left and right of the political spectrum, mainly at the extreme ends… The intolerant ideology, which refuses to accept the co-existence of alternative views, takes the stance that…the ideals within the art are no longer utterable or supportable: they are actually injurious and dangerous to the vulnerable… The political activist reserves to himself the right to retrospectively edit our history for his satisfaction by removing monuments, those fixtures of civic life, embedded in the memories of generations… Iconoclasm is an expression of domination and a demonstration of willingness to act—illegally and unethically—to impose the will of one group over an entire population. It asserts control over all aspects of society… The campaigner argues that public art, accumulated piecemeal over 1,000 years of history, must reflect our society and values today—even if that means altering or erasing stories of the values our past society expressed via its monuments, or suppressing evidence of how we arrived at our current situation… The iconoclast believes that it is only the values of today that count—that it is only her values that count. She takes it upon herself to correct history through monstrous acts of egotism. That correction, when it involves destruction, permanently alters the cultural legacy. It shrinks the breadth of human experience available to the generations which follow ours.”

In such a world, there can be no debate, no journey to understanding, no chance to learn from one’s mistakes or even make mistakes that are uniquely your own; there is only obedience and compliance to the government, its corporate overlords and the prevailing mob mindset.

Censorship, cancel culture, political correctness, woke-ism, hate speech, intolerance: whatever label you assign to this overzealous drive to sanitize the culture of anything that might be deemed offensive or disturbing or challenging, be assured they are sign posts on a one-way road to graver dangers marked by “suppression, persecution, expulsion and the massacring of people.”

Whether those smashing monuments and erasing history are doing so for noble purposes or more diabolical reasons, the end results are the same: criminalization, confiscation, imprisonment, exile and genocide.

“Look at mobs which gather to smash monuments,” says Adams. “These monuments may be the statues of deposed dictators who terrorized populations, causing untold death and suffering. They may be monuments to fallen soldiers who died defending causes that are no longer fashionable. The mob’s anger is the same. The viciousness and triumphant celebrations are the same. Only the causes differ in seriousness, topicality and justification.”

Adams continues:

“The Civil War statue destroyers think they are assaulting the posterity of slave owners, but they themselves are in the grip of ideological fervor. They are unaware that they are running a biological code, hardwired in their brains by evolution and activated by political extremists. The activists of today heedlessly erase history they haven’t yet learned to read. They act as the hammer that extremists use to deface the cathedrals and museums our ancestors built.”

What’s different about this present age, however, is the use of technology to censor, silence, delete, label as “hateful,” demonize and destroy those whose viewpoints run counter to the cultural elite.

“In the last few years,” writes Nina Powers for Art Review, “what is understood to be contentious has become increasingly broadly defined… The range of what counts as acceptable gets smaller and smaller… [W]e thus find ourselves… in the midst of a new culture war in which the freedom to think, feel and express ourselves comes at the risk of economic impoverishment, social ostracism and mob justice.”

Where this leads is the stuff of dystopian nightmares: societies that value conformity and group-think over individuality; a populace so adept at self-censorship and compliance that they are capable only of obeying the government’s dictates without the ability to parse out whether those dictates should be obeyed; and a language limited to government-speak.

This is what happens when the voices of the majority are allowed to eliminate those in the minority, and it is exactly why James Madison, the author of the Bill of Rights, fought for a First Amendment that protected the “minority” against the majority, ensuring that even in the face of overwhelming pressure, a minority of one—even one who espouses distasteful viewpoints—would still have the right to speak freely, pray freely, assemble freely, challenge the government freely, and broadcast his views in the press freely.

Freedom for those in the unpopular minority constitutes the ultimate tolerance in a free society.

The alternative, as depicted in Ayn Rand’s novella Anthem, is a world in which individuality and the ability to think for oneself independent of the government and the populace are eradicated, where even the word “I” has been eliminated from the vocabulary, replaced by the collective “we.”

As Anthem’s narrator Equality 7-2521 explains, “It is a sin to think words no others think and to put them down upon a paper no others are to see. . . . And well we know that there is no transgression blacker than to do or think alone.”

As I make clear in Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, we are not merely losing the ability to think critically for ourselves and, in turn, to govern our inner and outer worlds, we are also in danger of losing the right to do so.

The government’s war on thought crimes and truth-tellers is just the beginning.