All posts by admin46x

Trade War May Push China To Russian Energy

Via Global Risk Insights,

Although China has backpedaled on proposed tariffs on U.S. crude imports, the move is indicative of its need to diversify sources and steps may now be taken to enable China to play the oil card in the future – including imports from Iran despite sanctions, and drawing closer to Russia.

A reshuffle of crude oil exports to Asia

Asian oil refiners have been rushing to secure crude supplies in anticipation of an escalating trade war between the United States and China. Last week, Dongming Petrochemical, an independent Chinese refiner, said it has halted crude purchases from the U.S. and turned to Iranian imports amid escalating trade tensions between Beijing and Washington. U.S. crude oil exports to China reached 400,000 barrels per day (bpd) at the beginning of this July, but Beijing has recently threatened a 25 percent duty on imports of U.S. crude as part of its retaliation for Trump’s latest round of tariffs on US$34 billion worth of Chinese goods. In addition, Iran’s foreign minister said on 3 August that China was “pivotal” to salvaging a multilateral nuclear agreement for the Middle Eastern country after the United States pulled out. A reshuffle of crude oil exports to Asia is possible, with China vacuuming up much of the Iranian oil that other nations won’t buy because of the threat of U.S. sanctions. 

China, India, Japan and South Korea together account for almost 65 percent of the 2.7 million barrels a day that Iran exported in May. The U.S. has been lobbying these countries and other multinational oil giants to cut crude purchases from Iran to zero by November, the deadline for re-imposition of the secondary sanctions. In view of the current trade disputes with the U.S., China has reacted defiantly to U.S. sanctions banning business ties with the Islamic republic. This could be the determining factor in helping Tehran withstand the sanctions on its vital energy industry.

With China turning to Iran, U.S. oil would start flowing in greater amounts to other leading importers in the region, such as Japan and South Korea. In Japan, the oil industry has yet to respond to this issue publicly. The Petroleum Association of Japan previously warned refiners that they will have to stop loading Iranian crude oil from October onward if Tokyo doesn’t win an exemption on U.S.-Iran sanctions. However, this past weekend, South Korea’s embassy in Iran rejected media reports that the country had suspended oil purchases from Iran under pressure from the U.S. Whether Japan and South Korea would seek more crude imports from the U.S. remains to be seen.

China may have Russia on its side

The sanctions imposed on Russia from the West, as well as the trade tensions between China and the U.S., may provide even more room for energy cooperation between China and Russia. Russia’s sour relationship with the West forces it to look for new trade and investment partners, which could include China and countries in the Middle East. Russia has already become Beijing’s single largest crude oil supplier, exporting crude oil worth US$23.7 billion to China in 2017. Now with Beijing possibly cutting imports from the U.S., Russia may seek to export even more crude oil to China.

On 19 July, China received the first ever liquefied LNG cargo from Russian natural gas producer Novatek via the Northern Sea Route (NSR) alongside the Arctic coast. The $27 billion Yamal project is the world’s largest Arctic LNG project and the first large-scale energy cooperation project to be implemented in Russia after the “Belt and Road” initiative. China’s National Energy Administration said China National Petroleum Corp (CNPC) will start lifting at least 3 million tonnes of LNG from Yamal starting in 2019. Therefore, it’s highly possible that China and Russia will deepen their cooperation in liquefied natural gas (LNG) trade despite U.S. sanctions.

In addition, according to an anonymous Russian government official, Russia is ready to invest US$50 billion in Iran’s oil and gas sector amid mounting pressure from the U.S. to economically and diplomatically isolate Tehran. Russia’s energy minister Alexander Novak said that Moscow was interested in developing an oil-for-goods program that would allow Iranian companies to buy Russian products in exchange for oil contracts to be sold to third world countries. This was evidence of Russia’s consistent strategy of using its strong oil and gas industry to meddle in Middle East issues. Under the current situation, even though China may somehow reach an agreement with the U.S. promising that it will cut oil imports if the U.S. is willing to reduce the trade tariffs, in the short-term China is still likely to get Russia on its side in defiance of the U.S. oil campaign.

Average Pay Gap Between CEOs and Ordinary Workers Hits 312x

The pay gap between the CEOs of major corporations and their rank and file workers has continued to widen, maintaining a trend of inequitable wage growth that has been ongoing since the 1990s.  A new Economic Policy Institute report showed CEOs of America’s top 350 companies earned 312 times more than their rank and file workers.

Jeff Bezos eating an iguana

According to a report summary in The Guardian, CEOs of major corporations got an average pay rise of 17.6% over the last year while rank-and-file employee compensation rose just 0.3% over the same time. The latter saw their wages stall, for the most part, while CEOs took home an average of $18.9 million in compensation, according to the report.

Not surprisingly, this divergence in pay is the continuation of a trend that started back in the 90s:

The pay gap has risen dramatically, with some fluctuations, since the 1990s. In 1965 the ratio of CEO to worker pay was 20-to-one; that figure had risen to 58-to-one by in 1989 and peaked in 2000 when CEOs earned 344 times the wage of their average worker.

CEO pay dipped in the early 2000s and during the last recession but has been rising rapidly since 2009. Chief executives are even leaving the 0.1% in the dust. The bosses of large firms now earn 5.5 times as much as the average earner in the top 0.1%.

Recently there has been added visibility on this pay gap since companies have been forced to report it in their financials. This has highlighted some extraordinarily egregious pay gaps, such as at those at McDonald’s and Walmart:

The astronomical gap between the remuneration of workers and bosses has been brought into sharper focus by a new financial disclosure rule that forces companies to publish the ratio of CEO to worker pay. Last year McDonald’s CEO Steve Easterbrook earned $21.7m while the McDonald’s workers earned a median wage of just $7,017 – a CEO to worker pay ratio of 3,101-to-one. The average Walmart worker earned $19,177 in 2017 while CEO Doug McMillon took home $22.8m – a ratio of 1,188-to-one.

It’s not just the pay difference with the rank and file that has exploded: the average pay gap between CEOs and other very high wage earners has also grown substantially, and CEOs in large companies making 5.5x more than the average earner in the top 0.1%

The self-fulfilling prophecy of rising CEO compensation, which is estimated to partly be a result of the stock market’s rise and “everybody thinking their CEO is better than the next one”, according to Lawrence Mishel, a distinguished fellow at the Economic Policy Institute, has now pushed the rising compensation rate to outgrow the rise in the stock market.

Between 1978 and 2017 CEO compensation has increased by 979%. Over the same period the S&P 500 Index of the US’s largest companies grew 637%.

At the same time, the Guardian article notes, while the S&P 500 index was up 637% from 1978 to 2017, the typical rank and file worker only saw their pay package rise just 11.2%.

The report fails to discuss the role monetary policy has had in creating this enormous pay gap; it also ignores the “virtuous circle” of stock buybacks and executive compensation, which is usually pegged to stock price milestones, incentivizing the C-suite to lever up the company just to achieve a faster cash out while burdening what’s left of the company with excess debt that could lead to an accelerated bankruptcy during a recession or when rates spike. By then, of course, the CEO – sporting an overflowing bank account – will be long gone.

Meanwhile, as the government selectively chooses to bail out those that are “too big to fail”, the average rank-and-file worker sees little to no benefits of such a policy. Under the selective bailout, crony-capitalist Keynesian system as it exists today, this data just continues to prove that it is easier for the rich to keep getting richer while ordinary workers remain stuck unable to reap any benefits.

Nomi Prins: Your Should Fear The Emerging Market Debt Bubble

Authored by Nomi Prins via The Daily Reckoning,

Global debt has ballooned since the financial crisis as central banks have distorted markets and fueled debt bubbles in particular.

A lot of the increase in global debt has come from emerging market (EM) economies, especially China. In fact, a record amount of EM debt has accumulated during the past decade, mostly in dollars. A large portion of that debt is therefore denominated in U.S. dollars.

That’s why I’ve long argued that the first shoe to drop in the next crisis would likely be EM debt.

Borrowing is not a problem when dollars are cheap. Low interest rates mean the cost of servicing that debt is low.

The problem starts when the Fed raises rates or the dollar strengthens, even temporarily. The more the dollar rises, the more EM currencies and related markets fall. Dollar-denominated debt then becomes too expensive to repay or service as the dollar rises relative to EM currencies. Before long default becomes the only viable option.

This situation becomes more dangerous than even asset bubbles because debt is required to be repaid on a set schedule. If a country misses a debt payment, it could set off a chain reaction of defaults.

That’s why an EM crisis could quickly become a global crisis. In today’s world of financial globalization, any remote crisis can become an international problem in seconds. That’s the reality of today’s markets. Obviously, it could also have major ramifications for your own finances and investments.

How did we get here?

Because of the Fed’s rate hike cycle and quantitative tightening (QT) stance, the dollar has become much stronger. The dollar has risen 6.8% since late January alone. And that’s put emerging markets under considerable pressure.

Dollars are fleeing emerging market economies as investors are pouring into dollar assets and U.S. Treasuries.

As the Fed itself has warned about such a scenario, “If these risks materialized, there could be an increase in the demand for safe assets, particularly U.S. Treasuries.”

That starts a vicious cycle that only strengthens the dollar and weakens EM currencies further. In other words, emerging markets are being deprived of dollars at a time when they need them most.

Enter Turkey.

Panic spread throughout global markets last Friday as the Turkish lira plummeted after the Trump administration announced its plan to double tariffs on aluminum and steel imports. Already down substantially this year, the Turkish lira dropped as much as an additional 24% last Friday.

Even though it’s half a planet away from the U.S., the country could have a major impact. Like other emerging markets, Turkey borrowed a lot of money in U.S. dollars after the Federal Reserve initiated its zero interest rates in the wake of the financial crisis.

Turkey borrowed so much that its current foreign currency debt stands at more than 50%. Now, Turkey has a 15% inflation rate and a cratering currency.

As the Fed is raising rates, and the dollar is getting stronger, paying back that money is becoming much harder. The rise in the cost of debt payments means that defaults will become more likely.

Turkey’s central bank will need to raise rates to defend its currency, placing the government and economy in a difficult position.

The lira has been holding its own these past few days, but this dynamic could take a long time to play out. Do not assume the crisis is over, and it may be some time before Turkey recovers.

European banks with exposure to Turkey, along with U.S. banks connected to those European banks could encounter serious headwinds, as will emerging market funds. Weakness in one emerging market economy leads to a loss of investor confidence in others. We’ve seen that movie before.

But what’s happening in Turkey right now shouldn’t be terribly surprising, given Fed chairman Jerome Powell’s attitudes towards emerging markets.

Going back to last October, his words offer a glimpse of what was coming.

Powell was then just the number two guy at the Fed when he publicly articulated his outlook on tightening interest rates, the rising dollar and the impact of both on emerging markets.

He conceded that higher U.S. interest rates and weakening EM currencies “could cause capital to return to advanced economies.” But, unlike those that actually pay attention, Powell was not worried. He believed that the “most likely outcome” of that policy shift for emerging markets “will be manageable.”

Powell’s statement matters. He now commands the central bank with the largest influence on assets in the world. Powell seemed to deny that the Fed is, as Zero Hedge sums it up, the “major determinant of flows of capital into developing economies.”

Later on as Fed chairman, Powell reemphasized that position at an IMF and Swiss National Bank gathering in Zurich. According to Powell:

There is good reason to think that the normalization of monetary policy in advanced economies should continue to prove manageable for EMEs. Markets should not be surprised by our actions if the economy evolves in line with expectations.

But Powell’s argument misses a central point. What he left out was that it was the Fed’s low interest rate policy to begin with that enabled countries to borrow as much as they did.

If money is cheap around the world, higher rates absolutely matter. It appears he simply did not understand the inflows of cash, which explains why he wasn’t concerned about the outflows.

He believes that if the Fed raises rates (“normalizes monetary policy,” which it’s been doing) and causes money to flow away from the emerging-market countries, it’s not his fault.

Powell was not alone in his lackadaisical approach to emerging markets.

Though the International Monetary Fund (IMF) has expressed concerns for years about the impact of a rising dollar and rates on EM markets, it recently said that a reversal of rates would be “orderly and will not take a toll on emerging markets growth.”

Well, ask Turkey how orderly it’s been.

But capital flows won’t be the only negative for emerging markets if the Fed continues hiking rates. We could also see dollar-denominated interest on debt become squeezed if the dollar rises on the back of higher rates.

There’s also considerable reason to remain wary about not just emerging markets, but governments and corporations with too much dollar exposure.

How will the current situation affect Fed policy going forward?

Despite Powell’s previous comments, the current surge in the dollar gives reason to believe that the Fed won’t tighten as quickly as it’s said it would this year. A September rate hike, which seemed all but certain a short while ago, is now in doubt. Another rate hike right now and a stronger dollar would only throw more fuel on the fire.

Ultimately, central banks will intervene with additional easing if the crisis gets worse. That means more “dark money” will become available to prop up markets.

That also means stocks could technically continue soaring on the basis of cash or borrowed cash for an even longer period of time. Don’t be surprised if stocks move higher from here. That’s how dark money works to move markets.

Were UFO Hunters Foiled Again After “Huge Spacecraft” Video Went Viral?

A YouTube video posted earlier this year has gained international attention after it was picked up and reposted last week on UFO and British tabloid websites, said The Charlotte Observer.

The footage, recorded May 29 by “Jason Swing,” shows a long tubular object hovering for more than two minutes over North Carolina’s Lake Norman, north of Charlotte.

Swing called the object “a spacecraft” at the beginning of his video.

“It had been raining all morning. Rain finally stopped so we went (to) pick up a boat from Lake Norman,” Swing wrote in the about section of the video. “When (I) came around the corner I saw this thing sitting still very close.”

Swing’s extremely shaky cellphone video went unnoticed for weeks and even months on end but gained international attention after being featured in two British tabloids and Russia’s Sputnik News.

Comments on Swing’s video have ranged from mockery to support for the UFO theory.

According to a Goodyear tweet, the Goodyear blimp was reportedly circling the region on May 29, for NASCAR’s Coca-Cola 600 race.

Wanna see – and hear – what it’s really like to watch the green flag drop from the Goodyear Blimp? This is how our pilots saw the #CocaCola600 start!

— Goodyear Blimp (@GoodyearBlimp) May 27, 2018

🎇🎆🎇 Congratulations @KyleBusch! #CocaCola600

— Goodyear Blimp (@GoodyearBlimp) May 28, 2018

Since the video went viral, social media trolls have not been kind to Swing, with many criticizing his amateurish video work. One user even said it looked like Swing was recording the object “while jumping on a Pogostick.”

“So annoying that people can’t film properly. I get that they are scared, but this is a once in a lifetime opportunity,” user Tom Brown wrote.

“A line in the sky can’t be that scary. [It] wasn’t moving or flashing lights [and] there was no indication that it was alien and not some kind of craft made by humans. Who knows. Wish people would film things properly these days. It’s 2018 and we can’t even get a good UFO video. Ah well until we get true disclosure nothing will ever change.”

Here are some comments from the YouTube video (unedited):

  • “Yes, we have many of them here. Among other things we’ve seen here. There is more going on than you know.”

  • “How difficult it is to stand on an empty road and hold the freakin’ phone right?”

  • “Also known as the Goodyear blimp. Real common to that area — like most anytime there is a game or race at the speedway about thirty miles south of Lake Norman. I, myself, have spoken to blimp aliens. They are an impressive life form, but for some odd reason they refused to take me aboard their mother ship.”

  • “So irritating when someone is incapable of keeping their phone the least bit still. Wish I had the last two minutes of my life back.”

  • “I suspect hoax and a scam due to the SHORT nature of the video and the OVERLY SHAKY cam that can only be intentional.”

  • “It was terrifying. His shaking made me want to call 911 for him.”

  • “Just a passenger jet coming out of Charlotte Douglas Airport. Flying low (below the cloud deck) on northbound track from airport. See this all the time up there. Look at the tops of the trees and bushes each time the video shows the plane and you see that it is steadily moving left to right. Going to look like hovering and slow movement since it is about 4 miles away.”

Twitter Bans Anti-War Activist Caitlin Johnstone For “Abusing” John McCain

Authored by Caitlin Johnstone via,

UPDATE: It looks like the suspension was lifted just after I hit publish on this. A lot of my fans and even a few haters made a big noise in objection to Twitter’s actions, and it worked! As we discussed recently, the plutocratic manipulators work so hard to manufacture our consent because they need that consent, and they can’t act if we don’t give it to them. I’ve left the article as-is below for posterity, and so people can see my experience with #Resistance Twitter’s attempt to silence dissident speech. Never stop fighting.

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I’ve received an email from Twitter which reads as follows:

Hello Caitlin Johnstone,

Your account, caitoz has been suspended for violating the Twitter Rules.

Specifically, for:

Violating our rules against abusive behavior.

You may not engage in the targeted harassment of someone, or incite other people to do so. We consider abusive behavior an attempt to harass, intimidate, or silence someone else’s voice.

Note that if you attempt to evade a permanent suspension by creating new accounts, we will suspend your new accounts. If you wish to appeal this suspension, please contact our support team.

They’re calling it a “suspension”, but nobody can view my page and I can’t perform any activities on it, and it appears to be permanent unless I succeed in going through the anonymous and unaccountable appeals process. Now when people try to access my account, they get a screen that looks something like this depending on what device they’re using:

I haven’t abused anybody, and I’ve been observing extreme caution with my language for the last few days ever since I made a political tweet about John McCain which drew the wrath of #Resistance Twitter. The offending tweet reads as follows:

“Friendly public service reminder that John McCain has devoted his entire political career to slaughtering as many human beings as possible at every opportunity, and the world will be improved when he finally dies.”

I posted this four days ago when John McCain was trending because Donald Trump didn’t pay him any respect when signing the bloated NDAA military spending bill that was (appropriately) named after him. My reason for doing so was simple: the establishment pundits responsible for manipulating the way Americans think and vote have been aggressively promulgating the narrative that McCain is a hero and a saint, and I think it’s very important to disrupt that narrative. If we allow them to canonize this warmongering psychopath, then they’ll have normalized and sanctified his extensive record of pushing for psychopathic acts of military violence throughout his entire political career. They’ll have helped manufacture support for war and the military-industrial complex war whores who facilitate it. Saying we’ll be glad when he’s gone is a loud and unequivocal way of rejecting that establishment-imposed narrative.

Interestingly, I’ve been saying this exact same thing repeatedly for over a year. An article I wrote about McCain in July of last year titled “Please Just Fucking Die Already” received a far more widespread backlash than this one, with articles published about it by outlets like CNNUSA Today and the Washington Post. Whoopi Goldberg and Joy Behar talked about me on The View. I was never once suspended or warned by any social media outlet or blogging platform at that time; it was treated as the political speech about a public figure that it clearly and undeniably is. The only thing that has changed since that time is the climate of internet censorship.

What does an Assad apologist look like?

It looks like someone who would say John McCain deserves to die for his role in promoting US wars… but that Assad is just a family man who definitely hasn’t slaughtered civilians.

— Caroline O. (@RVAwonk) August 17, 2018


— Patrick (@TrickFreee) August 17, 2018

So anyway, I tweeted the thing about McCain, it was getting some angry backlash, and I received an email that a different tweet I’d made about McCain had been reported, reviewed and found not to be in violation.

Then a popular #Resist account condemned my post and was retweeted by Caroline Orr, a pundit with hundreds of thousands of followers who works with the David Brock propaganda firm Shareblue. Instantly, my Twitter notifications began filling up with comments like these:

To all the people who are reporting @caitoz to the Twitter police, what exactly are you reporting her for? She is not advocating anyone harming #JohnMcCain. She just thinks the world will be better off when he is dead.

If you think her opinions are tasteless, you can block her.

— Luca Clemente (@LucaClemente) August 16, 2018

I also got a bunch of notifications like these from bot accounts as soon as Orr shared the response to my tweet:

And I’ve received furious, vitriolic notifications from Clintonite Twitter accounts ever since, up until my account was shut down.

So it looks like anyone who voices a political opinion that is deemed sufficiently offensive to Centrist Twitter can be purged in this way now. If you can get enough people reporting the same thing over and over again for a few days, one of those reports will eventually land in the lap of an admin whose personal bias allows them to squint just right at political speech about a public figure and see a violation of Twitter policy.

I’ve been writing about the dangers of internet censorship so much lately because this is becoming a major problem. In a corporatist system of government, wherein government power and corporate power are not separated in any meaningful way, corporate censorship is state censorship.

The plutocratic class which effectively owns the US government also owns all the mass media, allowing that plutocratic class to efficiently manipulate the way Americans think and vote so as to manufacture public consent for the establishment status quo upon which those plutocratic empires are built.

Whoever controls the narrative controls the world. The only cracks in plutocratic narrative control have come in the form of alternative media outlets and social media, the access to which is unfortunately guarded by plutocrats with well-documented ties to secretive and unaccountable government agencies. The plutocratic alliance has successfully funneled online audiences into platforms that can be easily regulated, and now they are censoring those platforms.

An ungoverned media landscape would cripple the consent-manufacturing propaganda machine of the ruling oligarchs, making us impossible to manipulate and control. This would give us our only real shot at ending the wars that the John McCains of the world have devoted their lives to facilitating, our only shot at creating true and authentic democracy, and our only shot at turning the world around from the omnicidal, ecocidal trajectory that these sociopathic oligarchs have us on.

They can’t allow that. Their rule depends upon it, and, historically, rulers do not give up power willingly.

The longer we wait to fight this, the more marginalized our voices become, and the smaller our window to escape the cage they are building around us shrinks. Make your voices heard and refuse to consent to allowing a few Silicon Valley plutocrats to manipulate public discourse in their own interest. The time to act is now.

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Internet censorship is closing in, so the best way to make sure you see the stuff I publish is to get on the mailing list for my website, which will get you an email notification for everything I publish. My articles are entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast, throwing some money into my hat on Patreon or Paypalor buying my book Woke: A Field Guide for Utopia Preppers.