The Foreign Holders of the Ballooning US Debt: They’re Buying, But Don’t Keep Up thumbnail

The Foreign Holders of the Ballooning US Debt: They’re Buying, But Don’t Keep Up

By Wolf Richter

Estimated Reading Time: 2 minutes

China dumps Treasury securities, the Euro Area, Canada, and financial centers load up with immense appetite.

The question that’s on everyone’s mind is how long foreign investors will continue to support the US Treasury debt that has now ballooned to $34.75 trillion and will nail $35 trillion over the next few months. These securities are all held by someone, and a portion of them are held by foreign entities.

So far, demand for these Treasury securities from all directions has been huge, as documented by the 10-year yield that should be above 5%, given where inflation is (3.4% core CPI with lots of uncertainty surrounding it), and where short-term yields are (5.5%). But the 10-year yield is just 4.2%.

The share of foreign holdings.

Foreign investors have continued to add to their holdings of Treasury securities over the years, but the US debt has grown far faster, and so the share of the debt that is held by foreign entities has been declining for many years. In 2014-2016, foreign investors held over 33% of the debt. Their share is now down to 22.9%.

In other words, the US debt financing has become far less dependent on foreign holders – and as we’ll see in a moment, even less dependent on China and Japan.

In dollar terms, Treasury debt held by foreign entities rose to an all-time high in March, and in April dipped a tad, to $7.92 trillion, which was up by $468 billion year-over-year, or by 6.3%, according to Treasury Department data on Tuesday (red line in the chart below).

  • Top six financial centers (London, Belgium, Luxembourg, Switzerland, Cayman Islands, Ireland): $2.3 trillion (blue), +9.2% year-over-year, despite a dip in April from the all-time high in March.
  • Japan, #1 US creditor: $1.15 trillion (green), +2.2% from a year ago. Over the past 12 years, Japan’s holdings have remained in the same range between $1.0 trillion and $1.3 trillion, hitting the low end of the range in 2011 and 2018.
  • China and Hong Kong combined: -9.1% year-over-year, to $992 billion (purple), up a tad in April from the lowest in many years.

China + Hong Kong v. the Euro Area.

China and Hong Kong whittled down their combined holdings from over $1.4 trillion in 2012-2017 to $992 billion now (blue). During the capital-flight panic in 2016, China’s holdings of Treasury securities fell sharply as it tried to prop up the RMB. It increased its holdings again, but never all the way back to the prior level, and holdings have declined from then on.

The countries of the Euro Area piled into US Treasury securities at a furious rate, expanding their holdings from $500 billion in 2011 to $1.58 trillion now (red), and increase of over $1 trillion. Year-over-year, the Euro Area’s holdings surged by $202 billion, or by 14.6%!

The six largest financial centers – the UK (the City of London), Belgium, Luxembourg, Switzerland, Cayman Islands, and Ireland: +9.2% year-over-year to $2.31 trillion, the second-highest level ever, just behind March, having more than tripled since 2011!

*****

Continue reading this article at Wolf Street.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

Poll: Nearly Half Of Americans Struggling Because Of Higher Prices

By Casey Harper

Estimated Reading Time: 2 minutes

Nearly half of Americans report that the recent spike in inflation is making it harder to make ends meet, according to a new poll.

Monmouth University released a poll Wednesday showing 46% of Americans are “currently struggling to remain where they are financially.”

That figure is the highest point recorded by this pollster since President Joe Biden took office and far higher than during his predecessor’s term.

“In polls conducted between 2022 and 2023, this number ranged between 37% and 44%,” Monmouth said in its report. “In prior polls from 2017 to 2021, this sentiment was much lower at 20% to 29%.”

Prices have risen about 20% since Biden took office, a huge increase across all kinds of goods and services. Now, inflation is rising much slowly than the breakneck pace earlier in Biden’s term.

“Even with a declining inflation rate, prices continue to be much higher than they were four years ago,” Patrick Murray, director of the independent Monmouth University Polling Institute, said in the report. “That’s the metric that has really mattered to many Americans over the past two years. Economic concerns may not be the top motivating factor for all voters but it defines the contours of this year’s election.”

However, prices continue to rise faster than economists would like. Inflation slowed last month, a reprieve after months of elevated inflation. Whether that slowing is a blip on the radar or a turning point remains to be seen.

For now, Biden has to grapple with the major price increase during his term this election cycle.

The polling does show an equal percentage of Americans think either Biden or Trump cares about their economic woes.

The overwhelming narrative is that a large segment of the American public feels it is financially behind the eight ball,” Murray said. “It is true that voters who feel more comfortable with their economic situation are likely to support Biden. But despite continued Democratic efforts to tout rosy economic indicators, the tactic of telling financially pessimistic voters they should feel differently does not appear to be working.”

The poll surveyed 1,106 adults from June 1 to June 6.

*****

This article was published by The Center Square and is reproduced with permission.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

The Long and Winding Road to Socialism

By Gabriel Gasave

Estimated Reading Time: 3 minutes

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Friedrich August von Hayek

First released in 1944, Friedrich August von Hayek’s The Road to Serfdom serves as a powerful cautionary tale against totalitarianism while also presenting a robust advocacy for individual freedom and market economics. Beyond being merely a political thesis, the book meticulously examines the practical ramifications a socialist economy would encounter in addressing economic and social obstacles.

It’s crucial to recognize that during that period, Hayek was formulating his intellectual ideas amidst the backdrop of two devastating World Wars, a rising enthusiasm for socialism within academic circles, and continual predictions proclaiming the imminent collapse of capitalism.

Like the saying “The road to hell is paved with good intentions,” attributed to the French saint Bernard of Clairvaux, the book begins by analyzing how ideas that promote collectivism, while they may be laced with the noble intentions of creating a more just and equitable society, inevitably end up leading to tyranny and oppression by concentrating both economic and political power.

This is why Hayek emphasizes the indivisibility of freedom and the close relationship between economic freedom and political freedom, pointing out that any attempt to restrict the former eventually leads to the suppression of the latter.

Hayek imparts a crucial lesson on how centralized planning inevitably results in the inefficient allocation of scarce resources, leading to widespread hardship and a diminished standard of living. He warns that no one can possess omniscient awareness of all societal needs and preferences. With millions of individuals each holding only fragmented knowledge, Hayek underscores that a society built on principles of individual freedom, private property, and market economics—guided by the information conveyed through relative prices—is the true safeguard of prosperity and progress.

In his own words:

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these ‘data.’ It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

He continues that individuals respond to these price signals by making decisions in a dispersed manner. Thus, Hayek contrasts centralized planning with the concept of spontaneous order. Only, he tells us, free markets generate more efficient and adaptive outcomes than any well-intentioned decision by a mastermind.

In a 1977 interview with Thomas W. Hazlett for Reason Magazine, Hayek expands on this point 33 years later:

I’ve always doubted that the socialists had a leg to stand on intellectually. They have improved their argument somehow, but once you begin to understand that prices are an instrument of communication and guidance which embody more information than we directly have, the whole idea that you can bring about the same order based on the division of labor by simple direction falls to the ground.

As for competition, Hayek sees it as an efficient mechanism for allocating resources and stimulating innovation while understanding that state intervention in the economy distorts this process and generates inefficiencies. Hayek also analyzes the role of government and the purpose of laws in society, advocating the establishment of a limited government whose main function is to protect individual rights and enforce public order, that is, to impart justice, as opposed to one that seeks to direct the economic and social life of citizens in an authoritarian manner and opposed to a genuine rule of law.

In the interview where reference is made to his book, which Hayek genially dedicated “To Socialists of All Parties,” and his interlocutor questions him about whether Britain at that time was inevitably on the road to serfdom, Hayek responded, “No, not irrevocably. That’s one of the misunderstandings. The Road to Serfdom was meant to be a warning: ‘Unless you mend your ways, you’ll go to the devil.’ And you can always mend your ways.”

Eighty years later, The Road to Serfdom remains as relevant as ever. Its warnings about the dangers of centralized planning, the vital significance of individual freedom, and the advantages of the free market still resonate in discussions about the role of the state and the economy. Let us remember the cautionary message Hayek imparted and persist in our efforts to ensure that all paths lead to one destination: freedom.

*****

This article was published by The Beacon, a publication of the Independent Institute, and is reproduced with permission.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

DEFEND AMERICA: DEI Companies are destroying the psyche of our youth thumbnail

DEFEND AMERICA: DEI Companies are destroying the psyche of our youth

By Graham Ledger

The racial majority in the United States is under attack by DEI-driven corporations.

Truth is, according to recent research, while the Black population in America is only 12%, Blacks are in 94.3% of TV commercials. 94.3%!

And White males – if they appear at all in advertisements – are seen only 4% of the time.

This is not an accident.

This is a psychological assault on the very underpinnings of our culture and society.

So, what can we do about it?

Boycott? Unfortunately, if you boycott all these companies – because this psychosocial warfare is so broad – you’d only be hurting yourself.

However, you can fight back another way. Graham Ledger shows you how both in this video and on his website, GrahamLedger.com, where he details the assault on our racial, religious & sexual orientation majorities and the companies that are promoting this inaccurate reflection of our society and culture.

Demand commercials/ads from companies that reflect racial majority, the religious majority, and the sexual orientation majority in the United States. Below is a list of companies (and their corporate phone numbers) whose advertisements often do not reflect the statistical, cultural, historical, & constitutional majorities of this Republic.

If you would like to include a company that is participating in this psychological assault on this webpage, please email Graham at: grahamledger411@gmail.com. Simply include the company’s name and the CORPORATE phone number (not customer service phone number).


BetterHelp. (888) 688-9296

Carshield. (303) 420-7488

Chevrolet. (313) 567-3126

Chewy. (786) 320-7111

Grainger. (847) 535-1000

Nature Made. (818) 221-6200

Quicken. (650) 564-3399

Safelite. (614) 210-9000

UpWork. (650)316-7500


A STUDY IN BRAINWASHING

The Demographics:

The US population is 334 million consisting of 57.8% White, 18.7% Latino, and 12.1% Black.

About 10% of all existing marriages are interracial including those of all races, and only 5.6% of the population identifies as LGBTQ.

The Study:

A study of TV commercials over a 4-month period in 2023 found that White men have all but disappeared. And, when they are in commercials, they are old, ugly, stupid and/or sick, or they are the partner of a Black woman and have no speaking part.

While the Black population in America is only 12% Blacks were in 94.3% of the commercials. Black males are only 5% of our population yet were in 89.7% of the ads. White males were in only in 4% of the TV commercials!

There were zero commercials of White fathers and sons. The truth is that while 75% of White children live with both their parents including their fathers, fully 62% of Black children do not live in a two-parent household.

The study found that a majority of the children were White girls with a Black “brother” even though this represents a tiny percentage of the population.

The MAJORITY of TV commercial couples consist of a White woman with a Black man, when in reality these make up about about 2% of the population.

Virtually every ad campaign for new cars featured a woman driver except for Lincoln. In these commercials for automobiles there were more Black women drivers than White women.

The Conclusion:

The results of this brainwashing are dramatic and very successful. For example, according to polling, millions of Americans have been brainwashed into believing that 24% of all Americans are LGBTQ.

In fact, if you were an alien dropped down on earth from Planet Z and your job was to study the U.S. population by watching network television, you would conclude that Black females are the smartest, most successful of the species and that White males are the minority and on the road to extinction based on their stupidity and lack of critical thinking.

No matter your ethnic background, do you approve of this?

EDITORS NOTE: This Ledger Report is republished with permission. ©All rights reserved.

WEEKEND READ: Don’t Let a Crisis Go to Waste in 2025

By Vance Ginn

Estimated Reading Time: 4 minutes

As 2025 draws near, America teeters on the brink of a fiscal abyss. This impending fiscal cliff, marked by the end of tax cut provisions and a spending crisis, calls for immediate and decisive action by Congress to avert a worse economic situation than the one Americans feel today.

The national debt from excessive government spending is on track to surpass $35 trillion soon, a stark increase of nearly $10 trillion since 2020. This level of debt per citizen exceeds $100,000; per taxpayer, it is nearly $267,000. 

Such figures are not just numbers but represent a looming burden that future generations will bear — a burden that transcends mere fiscal policy and ventures into the realm of ethical responsibility. The gravity of this debt is exacerbated by the interest payments it necessitates, which have soared to over $1 trillion annually, surpassing what the country spends on national defense.

This situation illustrates a troubling scenario where the government, to manage its debt, resorts to issuing more debt, a practice unsustainable by any standard measure of sound budgeting. The economic repercussions of this cycle of debt are profound, leading to higher interest rates, likely increased inflation, and a misallocation of resources that stifles productive private sector activity.

Amidst these challenges, the Tax Cuts and Jobs Act (TCJA) provisions, set to expire in 2025, play a pivotal role.

These tax cuts have been instrumental in supporting economic activity across all income brackets by reducing their tax burden. If these cuts expire, they could reverse the economic gains achieved, reducing disposable income, dampening savings and investment, and contributing to an economic downturn in an already fragile economy.

The cessation of these benefits would particularly impact families who have benefited from the near doubling of the standard deduction and enhancements to the child tax credit. Furthermore, the expiration of the $10,000 cap on state and local tax (SALT) deductions could have mixed effects; while it may benefit taxpayers in primarily blue, high-tax states, it complicates the fiscal landscape significantly.

A balanced approach would be to maintain the increased standard deduction while simplifying the tax code further by eliminating complex provisions like the SALT deduction and the child tax credit, promoting a flatter, more equitable tax system with one low tax rate for everyone. This would also support more economic growth that, combined with spending less, can quickly get our fiscal house in order.

This fiscal predicament is further complicated by President Biden’s commitment not to raise taxes on those earning less than $400,000 annually. This promise will be difficult to keep if the TCJA provisions expire without appropriate legislative adjustments, further imperiling his dwindling reelection hopes in November. This situation and recent tariff impositions that affect all income levels would represent a double blow to American taxpayers, dampening economic prospects.

As we face these fiscal upheavals, the discretionary spending caps and the debt ceiling, due to expire in 2025, add complexity to an already challenging budgetary environment. The US risks a severe budgetary crisis without thoughtful reform, particularly in the so-called “entitlement programs” like Social Security and Medicare, which consume a substantial portion of the federal budget. These areas must be addressed because both will be essentially bankrupt over the next decade, and millions of recipients will face substantial cuts in benefits.

Given all these challenges, fiscal and monetary rules are paramount.

Congress should implement a fiscal rule after cutting federal spending to at least the pre-lockdown level in 2019. Implementing rules like the Sustainable American Budget, which caps federal spending based on population growth plus inflation, could provide a sustainable path forward. This approach, supported by Americans for Tax Reform along with the economic insights of Alberto Alesina and John Taylor, advocates for austerity focused on spending restraint and economic growth rather than tax hikes, as some on the “new right” have recently advocated.

Regarding a monetary rule, the Fed should return to a single mandate of price stability, cut its bloated balance sheet to at least the pre-lockdown level in 2019, and adopt a strict rule that ideally would be on the growth of its monetary base. These steps would help reduce persistent inflation and remove the extraordinary distortions throughout asset prices and the production process because of years of quantitative easing and low interest rates. 

Combining these monetary and fiscal rules would provide the necessary checks and balances to give the economy time to heal from massive government failures and help support a stronger institutional framework for economic growth and individual flourishing.

Moreover, the regulatory environment has grown increasingly burdensome under the Biden administration, with an estimated $1.6 trillion in new final rules imposed since President Biden took office through May 2024. These rules have been applied across the economy, including financial decisions based on ESG factors influencing the energy sector to increase car emission standards influencing the auto sector. But these ultimately influence producers’ and consumers’ costs of many goods and services. Removing the burden on Americans would unleash economic growth, helping with the fiscal and economic headwinds.

The bad policies out of DC have created a dire fiscal and economic situation moving into 2025. If the Trump tax cuts expire, excessive spending will continue unabated, and corrective monetary policy will not happen. Uncertainty and expectations alone will result in a hard landing in the economy, job losses, and elevated inflation. Given the last four years of declining purchasing power for millions of Americans, this result is unacceptable, and the idea of raising taxes to attempt to solve this is naive.

Instead, the US must leverage this crisis as an opportunity for sweeping reforms. By returning to principles of fiscal responsibility and market-driven activity, America can navigate away from the fiscal abyss and toward a future of economic stability and prosperity. Though fraught with challenges, this moment offers an unparalleled chance to reshape America’s fiscal landscape, ensuring a legacy of growth and stability for future generations.

*****

This article was published by AIER, American Institute for Economic Research, and is reproduced with permission.

Image credit: screenshot of US Debt Clock

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

UGG Chooses Pride, Customers Choose to Boycott thumbnail

UGG Chooses Pride, Customers Choose to Boycott

By Family Research Council

“My hope,” said comedian and commentator Alok Vaid-Menon, “is that Pride can be experienced by everyone, everywhere, every day.” Vaid-Menon, more commonly referred to as Alok, is the transgender-identifying man UGG, the widely known boot company which chose to partner with for their URSeen Pride line. In an Instagram post, he said he was “thrilled” to partner with UGG and can be seen twirling around in a pink dress in his video ad for the campaign. “I really wanted my UGG Pride collaboration to be an unapologetic embrace of vibrancy and color.”

The campaign has been met with the call for boycotts, which some have described as “deja vu” in reference to the 2023 boycotts Bud Light experienced when they hired trans-identifying influencer Dylan Mulvaney to represent the brand. According to CNN, the beer giant saw a $1.4 billion drop in sales on account of the backlash. Following the trend, UGG now faces the response of frustrated consumers.

Alok’s role in the UGG Pride line alone is upsetting Americans. As the conservative X account Libs of TikTok shared, “Alok is a radical trans activist who said ‘little girls are k*nky’ and suggests it’s their fault if a male uses the bathroom with them.” But in addition to the disfavor over a biological male parading around as a woman, many have pointed out how UGG’s rainbow line has geared their ideological merchandise toward children.

The URSeen Collection involves various rainbow themed clothing and accessories. Notably, the company included child sized slip-ons and merchandise in this line. Breitbart reported that much of the criticism is centered on the fact that UGG is “exposing children to the transgender and gay agenda” through these products. For many, the irritation seems to stem from consumers who feel that brands are not heeding to the desires of their audience. But as Family Research Council’s Senior Fellow for Education Studies Meg Kilgannon pointed out, this behavior isn’t ultimately surprising.

She commented to The Washington Stand, “UGG tells you on their website they care ‘deeply about doing business the right way,’” which apparently takes shape in promoting someone like Alok, “a male who checks his oppression boxes by being queer from Texas.” Considering the ideological push, Kilgannon asked, “Do the women who wear these boots care about any of this?” Or rather, she added, “Do they just like the boots because they are easy to put on and ugly enough to match any outfit? Are they interested in whether or not UGG is ‘driving positive change in the world’”?

Kilgannon continued, “It’s worth noting that corporations that make politics part of the business model may not be great investments as the public grows increasingly tired of the lectures and posturing.”

This concept is something other brands seem to be catching on to. For instance, this year’s Pride Month has witnessed a significant decrease in the amount of professional sport’s teams repping the rainbow gear and showing their support for the LGBT agenda. Considering this, Kilgannon added that this “toned-down Pride Month” we’re seeing is likely “a function of election year politicking.”

She continued, “Political campaign consultants and corporate executives know that topless cavorting on the White House lawn is bad for business, no matter what business you are in.” Ultimately, Kilgannon concluded, “We will all be better off when globalization isn’t the driving factor in fashion.”

AUTHOR

Sarah Holliday

Sarah Holliday is a reporter at The Washington Stand.

RELATED ARTICLE‘Pride Is Not the Answer, Love Is’: Join ‘See You at the Library’ August 24

EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2024 Family Research Council.


The Washington Stand is Family Research Council’s outlet for news and commentary from a biblical worldview. The Washington Stand is based in Washington, D.C. and is published by FRC, whose mission is to advance faith, family, and freedom in public policy and the culture from a biblical worldview. We invite you to stand with us by partnering with FRC.

The Dollar And Its Domestic Enemies

By Peter C. Earle

Estimated Reading Time: 6 minutes

Upping the ante following the initial weaponization of the dollar in 2022, the United States and a number of allied nations have agreed in principle to begin distributing profits on seized Russian assets to Ukraine. Interest payments on securities in which hundreds of billions of dollars worth of Russian foreign exchange reserves were invested, including US, European, and other sovereign bonds, would thus be transferred into a trust account accessible to the Ukrainian government. The US assertion of this undertaking was codified as the Rebuilding Economic Prosperity and Opportunity (REPO) for Ukrainians Act, signed into law by President Biden on April 24, 2024.

It is another in a series of unprecedented actions not only intensifying economic pressure on Russia but also signaling a shift in the economic dimension of current geopolitical conflicts. And it raises questions as to whether the entirety of those seized assets might be turned over to Kyiv should their reportedly declining war effort continue to weaken. (The legality of such a measure is beyond the scope of this writing, but discussed in full here.)

Expanding legal justifications for foreign asset confiscation, in addition to currency militarization, is accelerating an intense search for dollar alternatives among US rivals and certainallies as well. Recent data indicates that the process of dedollarization is occurring, albeit at a very gradual rate. The lethargy is to be expected given the global economy’s long standing reliance on the US dollar for international commerce. Barriers to transitioning away from the dollar are considerable owing to deeply entrenched financial infrastructures including technology, accounting systems, long-established settlement practices, and ingrained customs. Those factors collectively reinforce dollar dominance in global trade networks. Unsurprisingly, innovation is underway. Also, global reserve currencies have historically been subject to change. The US dollar supplanted the British pound sterling, which displaced the Dutch guilder, which replaced the Spanish real (‘piece-of-eight’), and so on.

The Chinese renminbi is not a feasible substitute for the dollar for several reasons. Yet a significant movement away from dollar and dollar-denominated exposure is underway. In the first quarter of 2024 China sold a record $53.3 billion in US Treasurys and agency bonds. Explanations for the declining appetite for US debt include attempting to bring balance between the weakening renminbi and the strengthening dollar, which has surged owing to aggressive US monetary policy. Another is risk mitigation, as China (like all other nations) needs to balance its own foreign policy interests against the growing vulnerabilities associated with US dollar use.

But today the dollar’s centrality is threatened as much, if not more, by domestic than foreign actors. One cause can be found in the Biden administration’s March 11, 2024 General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals. A notable footnote on page 80 contains the following statement:

A separate proposal would first raise the top ordinary rate to 39.6 percent (43.4 percent including the net investment income tax). An additional proposal would increase the net investment income tax rate by 1.2 percentage points above $400,000, bringing the marginal net investment income tax rate to 5 percent for investment income above the $400,000 threshold. Together, the proposals would increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent.

Currently, the top marginal US long-term capital gains tax rate ranges from 20 to 33 percent when combining state and federal taxes. The FY 2025 budget proposal would increase this combined tax burden to over 50 percent in many states. This would significantly raise, and in some cases double, the tax rates in key corporate hubs such as California (to nearly 60 percent), New Jersey (to over 55 percent), and New York (to over 53 percent). It would establish the highest US capital gains tax in US history.

An intrinsic part of the dollar’s appeal as a reserve currency owes to liquid, deep, and broad capital markets including government securities, equities, corporate bonds, and a vast array of other investment vehicles. Governments and large corporations with substantial dollar holdings abroad frequently invest them in US Treasury bills and notes to earn a return on those reserves. The current weighted average maturity of US Treasury debt is approximately 71 months (5.9 years). Significantly altering the tax code for long-term investments is likely to impact investor behaviors; the imposition of the highest capital gains taxes in over a century conveys an unequivocally hostile stance toward investors.

On the other side, the dollar faces threats from economic advisers to former President Trump, who have reportedly discussed punitive measures against nations moving away from using the US dollarSaleha Mohsin of Bloomberg reported last week that discussions have included imposing trade restrictions, tariffs, and penalties typically associated with currency manipulation against dollar defectors. Like proposals for soaring capital gains taxes, an open discussion of punitive measures against nations increasingly wary of dollar-based commerce suggests a troubling and profound lack of awareness.

Recent revelations pertaining to Biden advisor Jared Bernstein reinforce the view that the dollar has internal as well as external enemies. In op-eds as far as a decade back and recent presentations, Bernstein has hinted at purposeful dedollarization policies as a means of fostering reindustrialization within the United States. The purpose would be to reverse the nearly five decades in which China transformed into a manufacturing behemoth, a period during which the US deindustrialized, offshoring most of its industrial economy to become an uber-financialized, service-based economy. It is an objective facilitated in part by taking weak dollar policies to an extreme. 

Even setting aside the vast ideological (and practical) gulf between spending lavishly on green energy projects while pursuing a return to a smokestacks-and-ironworks America, it is a shift more easily envisioned than accomplished. Rebuilding America’s manufacturing base, whether accomplished via programs associated with the left (collectivism), the incipient right populism (National Industrial Policy), or a not-at-all inconceivable marriage of the two would quickly result in significant misallocations and crowding-out alongside cascading opportunity costs. But all of that would come only after an all-out assault on the dollar’s value was joined. Or rather, continued; the most facile means of eroding the dollar’s exchange value are stalwarts of the current and recent policy agendas: an inflation biasdebt accumulationwidening deficitstrade interventionism, and so on.

As both sides of the proverbial aisle have made abundantly clear for several decades, incentives for curtailing spending have fled Washington DC altogether. But as with a vision of America’s industrial future that seems to feature higher inflation in the service of wind farms atop coal-fired power plants, here too is a hitch. Ratcheting up Federal spending requires issuing more US government debt, which pushes Treasury yields higher. But if dedollarization becomes a policy goal, falling use of dollars saps a portion of the demand for US Treasuries, reducing the US government’s borrowing capacity. And this, as debt service costs steadily ascend.

The oft-heard argument that there are no substitutes for the dollar echoes hollowly in an era of stablecoins, cryptoassets, expanding commodity markets, and central bank digital currencies. The recent bull market in gold has largely been driven by central banks diversifying away from the dollar and bracing for geopolitical uncertainty.

Russian commodity dealers are increasingly turning to stablecoins, such as Tether (USDT), to execute financial transactions with Chinese counterparties in circumvention of traditional payment systems. At least two major unsanctioned metals producers have started using stablecoins and other cryptocurrencies for cross-border transactions, with settlements often processed through Hong Kong. The transition highlights the lasting impact of international restrictions following the 2022 invasion of Ukraine on the Russian economy, especially for companies trading commodities like metals and timber, which have faced challenges in receiving payments and purchasing equipment despite not being sanctioned.

The increased use of cryptocurrencies underscores the complications even in countries like China, which did not join international sanctions but have tightened compliance measures due to threats of secondary sanctions from the US Treasury. Stablecoins offer a quick and cost-effective alternative to currency-based cross-border transactions, reducing the risk of frozen or seized bank accounts. This trend reflects a broader adaptation within Russia, with the central bank showing a more open stance towards crypto in international transactions and lawmakers considering fully legalized stablecoin use. Additionally, some Russian commodities firms–in a throwback to methods employed by the Council for Mutual Economic Assistance (CMEA) during the Soviet era–have resorted to barter deals, circumventing international financial transfers altogether.

China is increasing its gold reserves, which now comprise roughly 5 percent of its total reserves. This is gold’s highest share of the Chinese reserve base since 2015. That accumulation reflects not only a response to dollar strength and trade tensions, including new tariffs on Chinese goods, but also a broader effort to diversify away from dependence on the dollar. Central banks worldwide have been purchasing gold and opening foreign currency accounts in local/regional banks which heretofore they have not, insulating themselves from the prospect of monetary predation.

The greatest threat to the soundness and utility of the US dollar, and in turn to the financial health and prosperity of American civil and commercial life, comes not from shadowy figures in faraway lands, but from unremarkable apparatchiks carrying out the edicts of US officialdom. Political capacities for destroying monetary fundamentals in the pursuit of short sighted, ill-conceived and self-serving policies dwarf what elites in outlying capitals dare dream of, let alone accomplish. The flight from the dollar–still in its nascent stages, and likely reversible with economically coherent, consistently applied policies — was spurred on by poor judgment, opportunism, and arrogance. Slower and at times quickly, dedollarization will proceed until the fundamental values and policies that positioned the dollar as the anchor and lodestone of global commerce are restored.

*****

This article was published by AIER and is reproduced with permission.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

Two Obscure Stories Of Long Term Importance

By Neland Nobel

Estimated Reading Time: 5 minutes

Two stories that we have chronicled before have come together in the past week in spooky juxtaposition. We readily admit the stories are somewhat “wonkish”, and have not gotten much press coverage or analysis. The two stories are related to the seizure of Russian assets, as part of the sanctions against Russia several years ago, and the sunsetting of the 50-year-old “petrodollar agreement” with the Kingdom of Saudi Arabia.

We can assure you that both these stories will be important in the longer term, even if they seem arcane in the present.

As to the first, the seizure of Russian assets, we said at the time that such an illegal taking was a bad idea.  It proved that keeping international monetary reserves in dollars and the Western banking system was now hazardous.  Without any legal proceedings, the US and its allies froze the monetary reserves of another sovereign country.  Other countries we said, including China, India, Indonesia, and Saudi Arabia, now must think again about current financial procedures.  If they are at risk of the changing political whims of the US, then the dollar and Western banks are not safe places to put your money.

After that seizure, the discussion eventually evolved to the idea of not just freezing the assets, but using them against Russia in the war in Ukraine.  Many countries were not willing to go so far as to seize and liquidate the assets outright to be given to Ukraine because of the bad precedent it would set.  This past week they came up with a clever twist.  What the West will now do is keep the frozen assets but give the interest it has earned as a “loan” to Ukraine.

This is too clever by half, as they say.  It still sets a bad precedent because if you steal the income from my property, you are still stealing my property.

So, Russia’s some $300 billion in assets will stay “frozen” while the $50 billion earned”interest” will be “loaned” to Ukraine. How good of a credit is Ukraine?

We can’t see how this clever scheme would make any other major country likely to have disputes with the US feel any better about the state of the current international economic system.  They will see this as simply a clever ruse. It still erodes confidence in the system but does not provide enough money to win the war. The message to others is the same:  don’t keep your international reserves in dollars or our banks.

It also creates a revenue source outside of democratic control.  Now the debate about the merits of aid to Ukraine aside for a moment, if the argument is valid, then representatives of the people of various nations should openly assess the costs and benefits, and charge the appropriate taxpayer for the policies undertaken.  It is not a good idea to wage war with a special piggy bank outside of the control of the democratic system.  But, that is what they have done.

One of the reasons countries are hesitant to go to war is that it is always costly.  This new funding gimmick seems like a moral hazard, making it easier to go to war without the broad consent of the populace.

The other story is that a 50-year agreement or “understanding” with Saudi Arabia has been sunsetted because the Kingdom no longer felt the agreement useful.  What was the agreement?  It was not a ratified treaty but more of a diplomatic understanding.

This so-called agreement is a matter of some controversy since it was never codified as a treaty.  However, secret deals and practices over many years are often just as important, or more so, than a piece of paper.

The US  promised military aid to the Kingdom as far back as 1933 when the Kingdom was formed.  After the 1973-74 Mid-East War, these ties were strengthened.  Whether by treaty or by practice, the US began widespread training and supply of the Saudi military, and they correspondingly started pricing oil in the dollar, settling payments in dollars, and reinvesting oil revenue into US Treasury bonds.  We saw military cooperation in the recent Gulf Wars where Saudi Arabia allowed US military assets to be located in their territory and they contributed significantly to the necessary fuel supply for the attack on Iraq.

In short, the argument about the absence of documents is a bit silly.  The actual behavior of nations is more important, and clearly, the US and Saudi Arabia have had a special relationship going back many years.

After the devaluation of the dollar in 1971, and the 1973 Arab-Israeli War,  Henry Kissinger struck a deal with Saudi Arabia to stabilize the price and availability of oil.  Certainly, the diplomatic background is known and it appears in Kissinger’s book, Years of Upheaval.

You might recall the 1973 oil embargo which caused a severe shortage of oil and gasoline in the US.  One could get gasoline only on odd or even days, based on your license plate.  Everyone drove around with spare gas cans in the car and had locking gas caps. Word spread quickly if you knew a place to find gas.  It was a terrible mess.

As mentioned before, the essence of the “understanding” was the US would protect the Kingdom of Saudi Arabia, and the Saudis would, in turn, only price and allow payment for oil in US dollars.  Since the dollar no longer had any gold backing, it would now be indirectly supported by oil. The reason is if nations could only buy Mid-East oil in dollars, they needed to hold a lot of dollars.  Since few just held noninterest-bearing “dollars”, but rather US dollar-denominated bonds, this created an artificial demand both for dollars and US Treasury debt.

So, the Saudis agreed to price and settle in dollars, invest in dollars, and help coerce the rest of the world to seek dollars if they wanted Mid-East oil.  That has been established practice for about 50 years, the existence of documents notwithstanding.

This substantial increase in the demand for dollars made the dollar stronger than it otherwise would have been,  and deepened the market for US Treasuries, allowing the US government to fund its trade and fiscal deficits more easily and at a lower cost.

After the key part of Bretton Woods was broken (the settlement of foreign claims in gold), nevertheless the basic structure of the treaty was maintained in practice.  As the largest economy and the world’s greatest military power, the dollar maintained its role as the reserve currency of the world.  The US became the only country that could settle both its internal and external debts with money it could print.  No other country had such a privilege.

The French said it was “an exorbitant privilege”, allowing the US to finance deficits “without tears.” We could even print money and use that to buy oil.  Other countries had to produce something in trade, to get a trade surplus, to acquire dollars needed to buy oil.  This combination of reserve status and petrodollar arrangements made the dollar the king currency of the world.

While it has not gotten much press, the whiz kids in the Biden Administration seem to have quietly blown up the international monetary system, the petrodollar, and the privileges attached thereto.

Over time, it means less energy security, a weaker dollar (which will cause the cost of all imports to go up), and higher US interest rates than would otherwise be the case.

In a sense, the relationship with Saudi Arabia is like dating a girl seriously for a long time and then having that awkward conversation where both parties agree to see other people.  The special relationship has changed and no documents were either abrogated or signed.  The Saudis are now attracted to the Chinese and have formed a new relationship with the BRIC nations. They will no longer be dating the dollar exclusively. 

The Biden Administration has given the world’s financial community two good reasons not to own the dollar and not to own our dollar-denominated bonds.  International reserve deposits are subject to seizure without due process and the dollar is not backed by gold, or required for oil.  Rather, the dollar is backed by the full faith and credit of a geriatric imbecile. It is pure fiat money…Bidenbucks.

This will cost all of us dearly in the years to come.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

Seizing Assets and Sunsetting Deals: Long-Term Implications

By Neland Nobel

Estimated Reading Time: 5 minutes

Two stories that we have chronicled before have come together in the past week in spooky juxtaposition. We readily admit the stories are somewhat “wonkish”, and have not gotten much press coverage or analysis. The two stories are related to the seizure of Russian assets, as part of the sanctions against Russia several years ago, and the sunsetting of the 50-year-old “petrodollar agreement” with the Kingdom of Saudi Arabia.

We can assure you that both these stories will be important in the longer term, even if they seem arcane in the present.

As to the first, the seizure of Russian assets, we said at the time that such an illegal taking was a bad idea.  It proved that keeping international monetary reserves in dollars and the Western banking system was now hazardous.  Without any legal proceedings, the US and its allies froze the monetary reserves of another sovereign country.  Other countries we said, including China, India, Indonesia, and Saudi Arabia, now must think again about current financial procedures.  If they are at risk of the changing political whims of the US, then the dollar and Western banks are not safe places to put your money.

After that seizure, the discussion eventually evolved to the idea of not just freezing the assets, but using them against Russia in the war in Ukraine.  Many countries were not willing to go so far as to seize and liquidate the assets outright to be given to Ukraine because of the bad precedent it would set.  This past week they came up with a clever twist.  What the West will now do is keep the frozen assets but give the interest it has earned as a “loan” to Ukraine.

This is too clever by half, as they say.  It still sets a bad precedent because if you steal the income from my property, you are still stealing my property.

So, Russia’s some $300 billion in assets will stay “frozen” while the $50 billion earned”interest” will be “loaned” to Ukraine. How good of a credit is Ukraine?

We can’t see how this clever scheme would make any other major country likely to have disputes with the US feel any better about the state of the current international economic system.  They will see this as simply a clever ruse. It still erodes confidence in the system but does not provide enough money to win the war. The message to others is the same:  don’t keep your international reserves in dollars or our banks.

It also creates a revenue source outside of democratic control.  Now the debate about the merits of aid to Ukraine aside for a moment, if the argument is valid, then representatives of the people of various nations should openly assess the costs and benefits, and charge the appropriate taxpayer for the policies undertaken.  It is not a good idea to wage war with a special piggy bank outside of the control of the democratic system.  But, that is what they have done.

One of the reasons countries are hesitant to go to war is that it is always costly.  This new funding gimmick seems like a moral hazard, making it easier to go to war without the broad consent of the populace.

The other story is that a 50-year agreement or “understanding” with Saudi Arabia has been sunsetted because the Kingdom no longer felt the agreement useful.  What was the agreement?  It was not a ratified treaty but more of a diplomatic understanding.

This so-called agreement is a matter of some controversy since it was never codified as a treaty.  However, secret deals and practices over many years are often just as important, or more so, than a piece of paper.

The US  promised military aid to the Kingdom as far back as 1933 when the Kingdom was formed.  After the 1973-74 Mid-East War, these ties were strengthened.  Whether by treaty or by practice, the US began widespread training and supply of the Saudi military, and they correspondingly started pricing oil in the dollar, settling payments in dollars, and reinvesting oil revenue into US Treasury bonds.  We saw military cooperation in the recent Gulf Wars where Saudi Arabia allowed US military assets to be located in their territory and they contributed significantly to the necessary fuel supply for the attack on Iraq.

In short, the argument about the absence of documents is a bit silly.  The actual behavior of nations is more important, and clearly, the US and Saudi Arabia have had a special relationship going back many years.

After the devaluation of the dollar in 1971, and the 1973 Arab-Israeli War,  Henry Kissinger struck a deal with Saudi Arabia to stabilize the price and availability of oil.  Certainly, the diplomatic background is known and it appears in Kissinger’s book, Years of Upheaval.

You might recall the 1973 oil embargo which caused a severe shortage of oil and gasoline in the US.  One could get gasoline only on odd or even days, based on your license plate.  Everyone drove around with spare gas cans in the car and had locking gas caps. Word spread quickly if you knew a place to find gas.  It was a terrible mess.

As mentioned before, the essence of the “understanding” was the US would protect the Kingdom of Saudi Arabia, and the Saudis would, in turn, only price and allow payment for oil in US dollars.  Since the dollar no longer had any gold backing, it would now be indirectly supported by oil. The reason is if nations could only buy Mid-East oil in dollars, they needed to hold a lot of dollars.  Since few just held noninterest-bearing “dollars”, but rather US dollar-denominated bonds, this created an artificial demand both for dollars and US Treasury debt.

So, the Saudis agreed to price and settle in dollars, invest in dollars, and help coerce the rest of the world to seek dollars if they wanted Mid-East oil.  That has been established practice for about 50 years, the existence of documents notwithstanding.

This substantial increase in the demand for dollars made the dollar stronger than it otherwise would have been,  and deepened the market for US Treasuries, allowing the US government to fund its trade and fiscal deficits more easily and at a lower cost.

After the key part of Bretton Woods was broken (the settlement of foreign claims in gold), nevertheless the basic structure of the treaty was maintained in practice.  As the largest economy and the world’s greatest military power, the dollar maintained its role as the reserve currency of the world.  The US became the only country that could settle both its internal and external debts with money it could print.  No other country had such a privilege.

The French said it was “an exorbitant privilege”, allowing the US to finance deficits “without tears.” We could even print money and use that to buy oil.  Other countries had to produce something in trade, to get a trade surplus, to acquire dollars needed to buy oil.  This combination of reserve status and petrodollar arrangements made the dollar the king currency of the world.

While it has not gotten much press, the whiz kids in the Biden Administration seem to have quietly blown up the international monetary system, the petrodollar, and the privileges attached thereto.

Over time, it means less energy security, a weaker dollar (which will cause the cost of all imports to go up), and higher US interest rates than would otherwise be the case.

In a sense, the relationship with Saudi Arabia is like dating a girl seriously for a long time and then having that awkward conversation where both parties agree to see other people.  The special relationship has changed and no documents were either abrogated or signed.  The Saudis are now attracted to the Chinese and have formed a new relationship with the BRIC nations. They will no longer be dating the dollar exclusively. 

The Biden Administration has given the world’s financial community two good reasons not to own the dollar and not to own our dollar-denominated bonds.  International reserve deposits are subject to seizure without due process and the dollar is not backed by gold, or required for oil.  Rather, the dollar is backed by the full faith and credit of a geriatric imbecile. It is pure fiat money…Bidenbucks.

This will cost all of us dearly in the years to come.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

Fitch Doesn’t See Bottom of Office CRE Mess, Sees CMBS Delinquency Rates Spike Way Past Financial Crisis Peak in 2025 thumbnail

Fitch Doesn’t See Bottom of Office CRE Mess, Sees CMBS Delinquency Rates Spike Way Past Financial Crisis Peak in 2025

By Wolf Richter

Estimated Reading Time: 2 minutes

A big driver is the “secular decline in the office market” that even slashed interest rates would not end.

There has been a recent flurry of declarations by big fund managers with exposure to the office sector of commercial real estate that office CRE has “bottomed out,” or is “near bottom,” or that “we can at least now see the bottom,” or that “while we might not be at the bottom just yet, we’re close to it,” etc.

But Fitch Ratings has come out with an updated analysis of the US office market, and it doesn’t see the bottom just yet. Far from it.

“CRE office loan performance will continue to weaken as market pressures build,” it said about office loans backing the Commercial Mortgage-Backed Securities (CMBS) it rates.

It maintains its “’deteriorating’ outlook” on the office sector through 2024, citing:

  • “Sustained higher interest rates” (buying into the Fed’s higher-for-longer)
  • “Slower U.S. economic growth”
  • “A tighter lending environment” (banks, up to the gills in iffy CRE debt, have severely restricted CRE lending, and so refinancing maturing CRE loans can be difficult to impossible).
  • “And a secular decline in office demand” (as documented by the astronomical mindboggling amounts of office space that’s on the market for lease).

This “secular decline in the office market” has turned into a flood of office space that is vacant and on the market for lease, as companies have discovered that they don’t need this vast amount of office space, with availability rates in many big office markets at around 30%, topped off by 36% in San Francisco, which was a few years ago the hottest office market in the US (availability rates by Savills):

“These factors will exacerbate refinancing challenges, leading to rising loan delinquencies and transfers to special servicing for potential workout or modification,” Fitch said.

*****

Continue reading this article at Wolf Street.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

Those Pesky Jobs Numbers thumbnail

Those Pesky Jobs Numbers

By Neland Nobel

Estimated Reading Time: 5 minutes

“The Biden Administration has basically turned the US labor market into a Temp Agency for foreign workers. American workers are not getting jobs… They’re losing them.”

E.J. Antoni, Ph.D, Heritage Foundation

On Friday, June 7, the much-awaited jobs numbers were released and as usual, they can roil the markets for a few days.  Also, select politicians may use the occasion for their own purposes.

From the vantage point of markets, the belief is that “unemployment” numbers, if soft enough, will prompt the FED to relent and start the long-awaited “easing”, while if they are strong, it means such a move will be delayed further. This obsession with “unemployment” and “easing” really does not do justice to the issue of whether the FED is easing or not.  See our recent article, “Are We Back To the Everything Bubble.”

Yahoo Finance showed typical coverage: “The US labor market added more jobs than expected in May, defying previous signs of a slowdown in the economy. Data from the Bureau of Labor Statistics released Friday showed the labor market added 272,000 nonfarm payroll jobs in May, significantly more additions than the 180,000 expected by economists.”

A lot of jobs were created.  Great for Biden! 

While more jobs were created, the unemployment rose to 4%. Huh?  Usually, that is caused by a shift in labor participation.

We begin this journey noting the difference between “The Establishment Survey” and the “Household Survey”.  The Establishment survey is conducted by the BLS (Bureau of Labor Statistics) while the Household survey is conducted by the Census Bureau. One is basically business reporting on the number of jobs and the other is household reporting. Recently, there has been a notable divergence between the job numbers reported by the two surveys.  The difference is large, over 4 million jobs. In part, this may be because the Household survey counts people, not jobs, and thus does not count the same as the Establishment survey does a person who holds multiple jobs.

chart

Sometimes one survey shows gains and the other shows losses. But as noted, The Household survey has recently shown substantially fewer jobs created than the Establishment survey.  the Establishment survey is the one used most often by the media.

Besides these differences, critics point out other things about such numbers.  First, they are subject to revisions and those future revisions are almost always downward.  Secondly,  it becomes a discretionary choice of which numbers to emphasize.  This allows those with a political agenda to make a selective case, knowing full well the majority of the public will never sense the statistical sleight of hand. Just to ensure your eyes glaze over, below is some further detail.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

How to Defeat the CCP

By James E. Fanell and Bradley A. Thayer

Estimated Reading Time: 5 minutes

Embracing Communist China was the U.S.’s greatest strategic failure.

From the U.S.’s disastrous retreat in Afghanistan and the war in Ukraine to the horrific terror attack on October 7 and the subsequent wars in the Middle East, the world has been thrown into chaos. This is to say nothing of the daily threats that the People’s Republic of China (PRC) is making in the Far East.

The causes of these problems are not found in Moscow, Tehran, Tokyo, or Taipei. Rather, they are the result of two fundamental and interrelated grand strategic mistakes made by the U.S.: 1) A failure to perceive the threat from the PRC, and 2) A failure to balance against it to defeat the PRC. As a result of these mistakes, the U.S. is at risk of losing its national security vis-à-vis its dominant position in global politics to an emboldened PRC working in cooperation with Putin’s Russia and the mullahs in Iran.

It is important for Americans to understand how this happened. Why did the U.S. give away its victory in the Cold War to the PRC and then fall into the unsatisfactory strategic condition in which it finds itself today?

First, the U.S. failed to perceive the PRC threat due to the dramatic change in the distribution of power in the U.S.’s favor due to the Soviet Union’s collapse. This left the U.S. without a peer threat, as the PRC was then a minor power. U.S. national security entered a period of what we term “threat deflation,” where year after year U.S. decision-makers dismissed or underestimated the threat from the PRC.

The end of the Cold War yielded triumphalism of the “End of History,” and thus caused the ideological and strategic disarmament of the U.S. as democracy and free market economics were triumphant. The widespread belief among the foreign policy elite was that modernizing states like the PRC were on the path to democratization and free market economics. Consequently, the Department of Defense, the Intelligence Community, and the leadership from successive presidential administrations neglected to sustain a focus on great power threats.

Second, U.S. business interests and financiers consistently and indefatigably sought economic gain from cooperation with the PRC, treating the Chinese people as the source of cheap physical labor for manufacturing and investment, as well as inexpensive intellectual labor for research and development. This facilitated the PRC’s rise as it entered the West’s economic ecosystem, including receiving most favored nation trade status and ultimately admission to the World Trade Organization.

Their influence on the major U.S. political parties and at the highest levels of U.S. politics hindered the U.S. response and promoted the conceit of globalization. Thus emerged the “engagement school,” which asserted that the PRC would become wealthy and in time democratic through partnering with the West. In essence, the U.S. willingly and enthusiastically taught, trained, and even equipped its mortal enemy. Business interests and financiers also funded major PRC national security think tanks and media. In turn, this contributed to a bias toward the engagement school of thought, and thus the consistent underestimation of the PRC threat.

Third, the U.S.’s enemies were the greatest strategists of the twentieth century. Led by Deng Xiaoping and the Chinese Communist Party (CCP), the PRC advanced its political warfare strategy of “elite capture.” Deng profited from studying and improving upon Soviet efforts to penetrate U.S. society, as well as learning key lessons from the Soviet Union’s mistakes in the Cold War. He also leveraged the concept of “threat deflation” within the U.S. national security establishment, which adopted and promoted the CCP’s strategic agenda.

The PRC successfully caused threat deflation by adopting a complex strategy. They partnered with elites in the U.S. and other Western societies, enriching them and shaping their perception of the PRC and of the CCP while using the enticement of a growing market to influence their behavior. For a generation, the PRC masked their intentions and framed their expansion as economic rather than strategic, and an unalloyed good that would benefit the world. The result was that the U.S. did not have an effective balancing campaign until the Trump Administration, a campaign which has unfortunately been reversed by President Biden.

Consequently, the PRC is able to employ its power to the detriment of U.S. national security through its own actions in the South China Sea—and very likely against Taiwan—and also through its proxies in Russia and Iran.

In light of this, we argue that the U.S. national security community should adopt nine specific measures to counter and defeat the PRC threat.

First, American national security elites must now admit that they failed and must throw the rudder of the ship of state hard over to the principles of power politics vis-à-vis the PRC.

Second, Americans must understand that the existing distribution of power within the U.S. national security community is resistant to withdrawing from the engagement school of thought. Their predilection will be to return the rudder of the ship of state to amidships and the course toward engagement with the PRC.

Third, executing this rudder change within the foreign policy community will take years of consistent pressure to reverse—as can already be clearly seen from the sudden resumption of visits to the PRC by senior cabinet level officials from the Biden Administration.

Fourth, while significant challenges have been identified, there is reason to be optimistic because of our Declaration, Constitution, and our 247 years of history.

Fifth, America’s victory over these internal and external forces is only possible if action is taken now. Given the shift in the balance of power toward Beijing and the existence of the CCP’s “timeline” for the Great Rejuvenation within this “Decade of Concern” (2020-2030), concrete action to prevent the destruction of the U.S. must be taken immediately.

Sixth, as in the Cold War, the U.S. needs to create a “Team B” dynamic to address the threat. An independent and dynamic Team B for the PRC is needed that would bring together scientists, negotiators, academics, and government policy analysts to create “quick fixes” to the immediate problems posed by the PRC threat.

Seventh, again, as in the Cold War, the U.S. national security community closely studied Soviet doctrine to discern where they were investing, what they were developing, and the force structure they were creating and the missions that force structure could support. Today, the U.S. needs to have familiarity with the PRC’s doctrine to understand their priorities in those same areas.

Eighth, the U.S. needs to support nuclear proliferation in the case of Japan, South Korea, and Taiwan to complicate the PRC’s strategic calculus. Nuclear proliferation introduces considerable risks, notably the incentive of the PRC to arrest it, including by military action, before the state becomes nuclear. But given the PRC’s overwhelming conventional military advantages in the Far East and the current state of unpreparedness in the U.S. Department of Defense, expanding the nuclear umbrella over these states would provide a strong deterrent against the PRC, and thus increase America’s national security.

Ninth, the U.S. needs to take bold action to target the CCP directlyThis requires a multifaceted approach that will include rolling back the PRC’s gains in the South China Sea and deterring the PRC’s attempted coercion of the Philippines at the Second Thomas Shoal. The U.S. and its allies will have to evict the PRC from facilities in other countries like Djibouti, Ream, and Cambodia as well. Those are important and necessary measures to place Beijing on the strategic backfoot. But the main target is the CCP itself. The U.S. needs to show the global audience that the CCP is illegitimate and that the U.S., working in concert with the Chinese people and our allies, is doing everything it can to evict the CCP from power.

Due to a series of grievous mistakes, the U.S. permitted the rise of its now-enemy. Now Russia and Iran are operating in the space that the PRC provides them. That space and the PRC’s aggression will only increase if the U.S. does not act. It is time for the U.S. to end its threat deflation, break the engagement school’s chokehold on the U.S. foreign policy establishment, and defeat the CCP.

*****

This article was published by The American Mind and is reproduced with permission.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

China and India Report Record Coal Production

By Duggan Flanakin

Estimated Reading Time: 4 minutes

Editors Note: We find it amazing that US policymakers and environmental zealots keep pushing Net Zero policies on America but seem to forget entirely what China and India are doing. The same goes for many coal-using European countries. If you buy into the theory of “global warming,” why are restrictive policies placed selectively and a blind eye turned to the rest of the world? Does global temperature care where the C02 comes from? Well, we don’t buy into the theory, but even if one does, the sacrifice the US is making means nothing if India and China continue using coal at record tonnage. Either environmental policy makers are glaringly ignorant or they are deliberately out to harm the industrial capacity of the US and the economic security of its people.  Neither alternative is cause for comfort.  It is either willful ignorance or malicious intent.  Your pick.

Back in April, the Environmental Protection Agency issued a new final rule that will force U.S. coal-fired power plants to install carbon capture systems or shut down operations. The rule is a key part of President Biden’s pledge to eliminate all energy sources that emit carbon dioxide by 2035 in the electricity sector and by 2050 for home heating, steel production, and all other uses.

But, as Tsvetana Paraskova reported in May, the Biden Administration plan faces insurmountable problems, given that fossil fuels still provide 60 percent of total U.S. electricity generation. Coal’s share has fallen to 16 percent, while natural gas accounts for 43 percent. Coal-fired power generation is highest during summer heatwaves when wind power is intermittent. Thus, coal still supplies more electric power than wind (11 percent), hydropower (6 percent), or solar (4 percent).

The push seeks to eradicate not just coal but all fossil fuels from American society. The fly in Biden’s ointment is more like the elephant in a tiny room. Around the world, countries large and small are far more concerned about providing energy and electricity for their citizens than pursuing a fearmonger-led “crusade” to rid the planet of life-giving carbon dioxide.

Here at home, five states – North Dakota, Missouri, Kentucky, Wyoming, and West Virginia — still rely on coal for more than half their electricity generation. Data centers, artificial intelligence, and electric vehicles are using greater and greater shares of existing power, taxing utilities struggling to keep energy supply at levels sufficient to meet energy demand.

Over in Europe, where official enthusiasm for ending fossil fuels has at times surpassed that of America’s, even Germany has reopened a coal-fired power plant, and other European countries are pondering their own need for alternatives to Russian natural gas. EU lignite production dropped to 240 megatons in 2020 from over 300 megatons in the 2010s.

Four EU countries mine hard coal, led by Poland and Germany, with annual production at about 150 megatons a year in the recent past. Coal still provides 70 percent of Poland’s electric power, while coal’s share in Germany is well above 25 percent. Coal provides about 11 percent of Russia’s electricity, making it the world’s fifth-largest consumer of coal.

Prior to invading Ukraine, Russian President Vladimir Putin had announced a new national goal to achieve net zero carbon dioxide by 2060 – long after the West’s self-imposed deadline. Other nations outside the globalist cabal based in Doha and Brussels (and Washington, DC) are even less inclined to end coal production; India and China, notably, are moving in the other direction.

Back in April, Indian Prime Minister Narendra Modi was overjoyed to report that his nation had produced over 1 billion metric tons of coal and lignite in the 2023-24 fiscal year, at nearly 100 million tons more than in 2022-23. Modi, whose nation still needs a lot more electric power to meet its first-world goals, lauded the production as “a remarkable feat and a historic milestone toward self-reliance” in a vital sector.

new report from the Centre for Research on Energy and Clean Air (CREA) and the Global Energy Monitor (GEM) says that coal power plant permitting, construction starts, and new project announcements accelerated dramatically in China in 2022, with new permits reaching the highest level since 2015. China’s coal power capacity starting construction was six times as large as that in the rest of the world combined.

National Public Radio’s Julia Simon reports that China’s heat waves increased demand for air conditioning and dried up rivers, forcing Chinese hydropower facilities to shut down. Aiqun Yu, co-author of the CREA-GEM report, noted that high prices for liquefied natural gas due to the Russia-Ukraine war led another Chinese province to turn to coal.

The CREA-GEM report somewhat greenwashes China’s commitment to coal, claiming that the “massive additions of new coal-fired capacity don’t necessarily mean that coal use or CO2 emissions from the power sector will increase in China.” After all, China is also building wind, solar, and nuclear energy facilities, and President Xi has “pledged that China would reduce coal consumption in the 2026-2030 period.”

This, the authors said apologetically, “would mean a declining utilization rate” rather than continued growth in coal-fired power generation. Surely, they say without words, China will phase out these expensive new coal plants within the next eight years. And pigs fly.

Still, the CREA-GEM team found it necessary to include some “policy recommendations” to instruct President Xi in how to stay in the good graces of the Net Zero overlords. First, they said China must impose strict controls on new coal power capacity and reject or revoke permits to projects not necessary for “supporting grid stability” or “supporting the integration of variable renewable energy.”

Way back in 2020, UN Secretary-General Antonio Guterres told India it should commit to carbon neutrality by ending fossil fuel subsidies and investing in solar power. Claiming that investing in coal is “bad economics,” Guterres said India can only become a “true global superpower in the fight against climate change if it speeds up its shift from fossil fuels to renewable energy.”

Did Prime Minister Modi bow and scrape to Guterres?

Guterres, in the same year, went all the way to Beijing to “urge” China to stop funding coal projects because (OMG!) the Paris climate agreement goals will slip out of reach without China’s cooperation. There, too, he begged the “economic superpower” to genuflect, whispering that “the way in which China restores growth will have a major impact on whether we can keep 1.5C within reach” in the post-pandemic world (spoken at the height of the pandemic!).

Was President Xi so flattered by the former Prime Minister of Portugal that he immediately stopped all future plans for new coal-fired power plants in China?

Back in November 2021, forty-something countries, including coal-reliant Poland, Vietnam, and Chile, all committed to shift away from coal. The U.S. and 19 other nations would only pledge to end public financing for “unabated” fossil fuel projects abroad by the end of 2022.

What would happen if only the West and its friends abandoned fossil fuels?

*****

This article was published by CFACT, The Committee For A Constructive Tomorrow, and is reproduced with permission.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

New EPA Rule Is a Death Sentence for American Energy thumbnail

New EPA Rule Is a Death Sentence for American Energy

By The Daily Signal

The Environmental Protection Agency plays judge, jury, and executioner—and its newest-issued rule is a death sentence to American energy and energy-producing states.

Meanwhile, states like Pennsylvania, which will be disproportionately harmed by the rule because of our abundant natural gas production, hold the key to America’s increasing energy needs, generating immense economic development and reducing the very emissions targeted by this heavy-handed agency.

The EPA unilaterally issued a final rule establishing draconian emission standards that target existing coal and new natural gas power plants nationwide. It requires 90% carbon capture for power-generating facilities by 2032.

Aside from its questionable legality, the new rule is unfeasible. The EPA proposed impossible standards. Current carbon-capture technology—a water- and energy-intensive process that filters and sequesters emissions—neither meets this standard nor projects to do so in the next decade.

Research suggests that current technology could achieve, at best, 10% capture, which still doesn’t factor in the immense implementation costs. No utility-scale natural gas carbon capture plant exists today, so forcing a transition to nonexistent technology within a decade is unreasonable.

This egregious federal overreach will not stand in court. In West Virginia v. EPA, the U.S. Supreme Court ruled that the agency lacked the legal authority to devise such emissions caps. As the current legal challenge works through the courts, our highest court will likely strike down this new rule, too.

National energy forecasts show rising demand with a plummeting capacity for our existing energy infrastructure to deliver. Because of bad policies in the name of climate radicalism, early retirements of fossil fuel-based power-generating facilities are already catapulting us to an electrical grid reliability crisis. Meanwhile, utility bills increase as power generators chase federal subsidies to overbuild unreliable, weather-dependent wind- and solar-based electrical generation facilities.

Because of this, two-thirds of the United States risks major blackouts in the next few years. Yet, the EPA doesn’t consider grid reliability when creating its regulations, much less safeguard it.

Per agency protocol, the EPA “does not conduct operational reliability studies,” meaning the agency ignores the widening gap between supply and demand.

The failure to defend grid reliability is a recipe for disaster.

Unfortunately, disaster has already struck. In 2022, a winter storm in Texas caused 4.5 million people to lose power, killing 246 people who couldn’t heat their homes in subzero temperatures. Increased capacity—namely, more natural gas pipelines—could have saved lives in Texas. The North American Electric Reliability Corp. warned lawmakers that the lack of pipelines and infrastructure leaves the country susceptible to similar tragedies.

Natural gas remains the most economically feasible option to meet that demand in time. (Meanwhile, work must continue to leverage other energy sources, such as nuclear, to accommodate our growing need for baseload power, which is the minimum amount needed to maintain and power our grid.)

To understand the benefits of natural gas, Pennsylvania, the second-largest producer of natural gas and the largest energy exporter in the nation, provides ample evidence.

In the last two decades, the Keystone State’s energy generation sector has increased energy production and reduced emissions—all thanks to natural gas.

The share of Pennsylvania’s electricity production that comes from natural gas increased from 5% in 2005 to 59% in 2022. During that same period, overall energy production emissions dropped 46%, including the most significant year-over-year decline on record.

Transitioning to natural gas proved to be a boon to public health in Pennsylvania. This transition removed about 12.5 million tons of nitrogen and sulfur oxides—emissions associated with respiratory ailments like asthma, pneumonia, bronchitis, and lung cancer.

Using the EPA’s methodology for quantifying the health impact of removing these emissions from the atmosphere, Pennsylvania’s increased use of natural gas yielded between $450 billion and $1.04 trillion in public health benefits for residents.

Despite natural gas’ benefits, Pennsylvania still endures the same worrisome trend of pernicious eco-fundamentalist policies. Pennsylvania lawmakers flirt with onerous “cap and trade” schemes, such as the Regional Greenhouse Gas Initiative or the newly proposed Pennsylvania Climate Emissions Reduction Initiative. By slapping a carbon tax on energy production, these two initiatives guarantee increased utility bills for inflation-weary Pennsylvanians.

The EPA’s rule is like these initiatives on steroids. The rule will not only lead to blackouts and brownouts nationwide but also will force the economies of energy-producing states to forego supporting—and benefiting from—our ever-growing energy demands.

Instead, policymakers must remove the regulatory barriers that hamstring energy-producing states and prevent the energy industry from providing reliable, clean power.

Moreover, Congress must advance the Regulations from the Executive in Need of Scrutiny Act, a policy supported by 68% of Americans, to boost accountability and transparency with federal regulators. The act would require Congress to approve administrative rules that would have significant financial impacts before they could take effect.

A future without fossil fuel-generated power is a myth. Almost 80% of the world’s energy comes from fossil fuel sources. Rather than obstruct clean, reliable energy, the EPA must allow natural gas to light the way to American energy independence.

AUTHORS

Andre Beliveau

André Béliveau is the senior manager of energy policy at the Commonwealth Foundation, Pennsylvania’s free-market think tank. On X: @therealbeliveau.

Amy Cooke

Amy O. Cooke is president and chairwoman of the Board of Always on Energy Research. On X: @TheRightAOC.

Chinese Building Is Globalists’ Dystopian Dream for Us All

By Catherine Salgado

Estimated Reading Time: 2 minutes

Globalists like the World Economic Forum (WEF) have a dream to force all of us peasants to live in 15 minute cities—in fact, such experiments have already been launched in Tempe, Arizona, and Oxford, England. You will have your tiny apartment, stores, restaurants, all within a short walk of your home—and George Orwell would tell you to run in the other direction.

A recent article (see below) describes the Chinese version of this dystopia, with everything in one building. By the way, when the article praises how “swanky” the building is, take it with a grain of salt—in China, infrastructure is consistently badly built and the quality is always exaggerated. But even if the buildings were wonderful, happiness isn’t just in having material necessities. Freedom is key.

There’s a reason humans have always romanticized pastoral life, why owning land was a wealth symbol, and why the American dream used to be owning property. Freedom and the space to exercise it—those are things that the Chinese building doesn’t have, and that’s why it’s a dystopian nightmare instead of a utopian paradise.

“[Climate Depot] Thousands of people live in one of China’s largest apartment block which is so well equipped residents never actually have to leave.

This company is able to provide residents with everything they need, so they never have to go outside again…Would that be a utopian dream or a dystopian nightmare?

It seems at least 20,000 people are living that reality regardless in one of China’s largest buildings…[facilities include] a massive food court, barber shops, nail salons, medium-sized supermarkets, swimming pools, and even internet cafes….And if you’re curious about how much it costs to live here, small apartments without windows (yes, you read that correctly) usually go for around 1,500 RMB per month ($210), according to local news outlets.

Meanwhile, some of the larger properties with balconies are on the market for 4,000 RMB per month ($570).”

Note the without windows option. The average monthly salary in China is reportedly around $1300, so $570 a month rent for a windowed apartment isn’t chump change.

Unfortunately, if the Democrats and their globalist buddies get their way, this building plan could be coming soon to a town near you…

*****

Catherine Salgado is an accomplished writer and investigative reporter who publishes daily in her Substack column, Pro Deo et Libertate (For God and Liberty). This superb column provides news and opinion pieces from an honest, common-sense perspective in the spheres of culture, politics, liberal arts, and religion. The Prickly Pear is grateful for her permission to reproduce her public writings and recommends that our readers subscribe to Catherine’s superb Substack column. Please consider a paid subscription for full access to all of her excellent and informative writings.

Follow Catherine Salgado on X (@CatSalgado32). 

Image Credit: Wikimedia Commons

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

Petrodollar deal with Saudi Arabia has expired: What will be the consequences? thumbnail

Petrodollar deal with Saudi Arabia has expired: What will be the consequences?

By Leo Hohmann

The U.S. standard of living has been artificially boosted by the dollar’s status as the global reserve currency, but what happens as that status crumbles?


The 50-year-old petrodollar agreement between the U.S. and Saudi Arabia has been allowed to expire, according to multiple news reports.

The so-called petrodollar refers to the U.S. dollar’s role as the currency used for crude oil transactions on the world market. This arrangement has its roots in the 1970s when the United States and Saudi Arabia struck a deal shortly after the U.S. went off the gold standard that would go on to have far-reaching consequences for the global economy.

Writes Paul Hoffman for MSN.com:

“In the history of global finance, few agreements have wielded as many benefits as the petrodollar pact did for the U.S. economy.”

Hoffman explains that the petrodollar agreement, formalized after the 1973 oil crisis, stipulated that Saudi Arabia would price its oil exports exclusively in U.S. dollars and invest its surplus oil revenues in U.S. Treasury bonds. In return, the U.S. provided military support and protection to the kingdom. This arrangement was a win-win situation for both; the U.S. gained a stable source of oil and a captive market for its debt, while Saudi Arabia secured its economic and overall security.

With the deal now collapsing, the U.S. will no longer have a financial support structure in place to support its massive national debt of $34.5 trillion. The dollar will collapse, it’s just a matter of when not if.

This new economic reality, with the nations of the world turning up their nose at the dollar, represents a tectonic shift in the world economic order. And therein lies the real reason for the Washington establishment’s eagerness to start World War III with Russia. Those who have benefitted most from this arrangement of endless wars financed by endless debt see that their gig is up. Those who are reading the tea leaves can see for the first time the potential end of the American empire coming into focus. Whether it will happen or not remains to be seen, but this much is not in dispute: No empire in history has gone down without a fight.

If you are still living in denial, it’s time to wake up. It’s time to prepare for war. The governments of Germany and Great Britain are already telling their people to prepare for war with Russia, but the corrupt Biden regime has been silent on the matter, even as it continues to poke the bear with more and more armaments sent to kill Russians in Ukraine, and now they’ve even given the green light for Ukraine to use U.S. weapons to strike into the heart of Russia.

No election and no politician is going to save us. So let’s get on our knees and pray for peace, while preparing ourselves and our families for hard times ahead.

Hoffman explains that by mandating that oil be sold in U.S. dollars, the agreement with Saudi Arabia elevated the dollar’s status as the world’s reserve currency, adding:

“This, in turn, has profoundly impacted the U.S. economy. The global demand for dollars to purchase oil has helped to keep the currency strong, making imports relatively cheap for American consumers. Additionally, the influx of foreign capital into U.S. Treasury bonds has supported low interest rates and a robust bond market.”

In his December 2023 book, Bonfire of the Sanities, investment manager David Wright argues that the strength of the dollar has been a key factor behind America’s high standard of living. Wright states that the reason why people in the U.S. enjoy “as high of a standard of living as we do is because the dollar is strong.” And this strength is largely due to a perceived faith in our economy “and because energy can’t be bought without U.S. dollars.”

I concur with Hoffman when he says, “This expiration has far-reaching implications, as it has the potential to disrupt the global financial order.”

The agreement between the U.S. and Saudi Arabia expired on June 9, 2024.

That means the dollar is now going to sink or swim on its own merits. The problem is, it no longer has any merits. Our currency was taken off the gold standard decades ago, and for the first time in more than 50 years it won’t be backed by oil, either. In the meantime, our politicians have recklessly piled up unprecedented debt that can never be paid back. The central bankers will always get theirs. Hence the need for a reset. The new system won’t come into being without birth pains, war being among them. Yes, global resets can be messy, and we’re about to find out just how messy this one will get.

©2024. Leo Hohmann. All rights reserved.

The Contrarians Were Right About Covid Hysteria

By David Harsanyi

Estimated Reading Time: 4 minutes

Editors’ Note: We are quite proud, that in our very early history, The Prickly Pear chose to be a skeptic of the Covid lockdowns and endorsed the Great Barrington Declaration. Having an esteemed physician as one of our editors helped, although our innate suspicion of government overreach and common sense was equally helpful. We chronicled the many errors of the top-down, medical professional panic as well as the national and local initiatives that at the time seemed nonsensical. With the benefit of hindsight, many of these policies look downright sinister. Lockdowns destroyed many small businesses in an arbitrary manner without compensation, destroyed jobs, blew up huge public debt with resulting inflation, sabotaged a Presidency, trampled on civil liberties, and upended the education of our children. Many of the rules were known to be false as they were being promulgated. They did not save lives as evidence shows excess deaths were lower in both countries and U.S. states that had either the lightest lockdown policies or none at all. Major damage was done to the country and the world by a bureaucracy that hatched the idea of “gain of function” virus tinkering and then their lockdown policies that were inflicted on all of us. One final casualty that may never recover is the reputation of our public health authorities. Oh, and Stephen Colbert.

And the fearmongers did irreparable damage.

If you head over to “The Federalist” entry on Wikipedia, you will find, among other smears of our little operation, a “COVID-19 pandemic misinformation” section. It’s a sad reminder of how authoritarians misuse the idea of “misinformation” to quash debate and control the conversation.

“During the COVID-19 pandemic,” Wikipedia contends, “The Federalist published many pieces that contained false information, pseudoscience, and contradictions or misrepresentations of the recommendations of public health authorities.” According to Media Matters for America,” the entry goes on, “The Federalist published articles calling on the government to quickly end social distancing directions, and to open businesses again.”

To begin with, even if Federalist writers had turned out to be completely wrong about lockdowns and social distancing, calculating the tradeoffs of public policy and forming opinions that conflict with public-health officials isn’t any kind of “misinformation.” It’s the way we debate in an open society.

Public-health officials are preternaturally risk averse. They see the world through the prism of safety, often ignoring— among many other factors—personal freedoms, economic consequences, and social disruptions. Safetyism can lead to some of the worst infringements of individual rights. That is why we don’t live in a public-health dictatorship.

Or rather, why we didn’t until Covid.

The thing is, though, most of the time our writers weren’t wrong. It is now indisputable that shutdowns inflicted deep harm on children and destabilized the economy. It is also highly unlikely that, after it was clear Covid variants would continue to spread, keeping businesses closed for months saved lives.

And “social distancing” rules were definitely bunk. Fauci admitted as much in a January interview with the House Select Subcommittee on the Coronavirus Pandemic. “It sort of just appeared, that six feet is going to be the distance,” he explained.

“It sort of just appeared” doesn’t sound like the vigorous inquiry we were promised by the self-ordained pontiff of “science.” Yet anyone who dared to tread within, say, five feet of another person was accused of being in a “death cult” and often censored on social media.

One of the problems was that Fauci could never admit to being unsure of anything. Remember when he told Americans, “There’s no reason to be walking around with a mask,” and then, months later,  he wanted us wearing two of them at the same time. Yet governments almost always enacted his every suggestion.  

Fauci also admitted to lying about the threshold for herd immunity because “polls said only about half of all Americans would take a vaccine.” Worse, when three scientists — Martin Kulldorff of Harvard, Sunetra Gupta of Oxford, and Jay Bhattacharya of Stanford — released the “Great Barrington Declaration,” questioning the efficacy of lockdowns and warning, among other things, about the damaging “physical and mental health impacts” of closing schools, Fauci colluded with others to suppress the document, plotting a “quick and devastating published takedown.” 

Read the declaration. They were right. He was wrong.

In any event, one of Wikipedia’s citations allegedly proving The Federalist spread social-distancing “misinformation” was written by an academic physician from an Ivy League institution who wrestled with ways to help flatten the curve. The piece is logical and cautious. It begins like so:

COVID-19 is severe. There is no doubt about that. We are now also learning that it is not a matter of if but when many of us will get coronavirus, whether we develop symptoms or not. Our only hope is to ‘flatten the curve,’ relieve stress on the medical system, and wait for a vaccine.

That sounds exactly like the framing of public-health officials before “flatten the curve” evolved into “shutter your business and shut up.”

Another Wikipedia footnote regarding “false information” leads to a completely factual opinion piece that points out that Zeke Emanuel, then named to Joe Biden’s Covid task force, had spent years arguing that people older than 75 were a suck on our resources and the elderly should be vaccinated last. Pointing out this person’s ugly positions was well within the norms of debate.

In another instance of alleged misinformation, a Federalist founder is accused of attacking the “prominent analysis from Imperial College London.” More like infamous analysis, as the model turned out to be a dubious guesstimation. Maybe it’s Wikipedia that needs a misinformation entry?

Now, I’m not contending everything The Federalist published about Covid turned out to be correct. But the alleged misinformation articles on the site are normal pieces of contrarianism. We need more of that, not less. Recall that Facebook, pressured by the government, banned any mention of the Chinese lab-leak theory, which is now widely believed to be true.

Sure, there are limits to skepticism. Reflexive disbelief of everything is no better than the opposite. It often manifests in conspiratorial thinking. But it is clear now that no one undermined trust in our public-health institutions like those who used rickety “science” to shut down businesses, churches, schools, and speech.

*****

This article was published by The Federalist and is reproduced with permission.

Image Credit: YouTube screenshot The Late Show on CBS

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

TAKE ACTION AGAINST: Bidenflation and Broke America — Sinking Hearts and Pocketbooks thumbnail

TAKE ACTION AGAINST: Bidenflation and Broke America — Sinking Hearts and Pocketbooks

By ACT For America!

Biden’s War on Energy and Its Catastrophic Impact on America


TAKE ACTION TO MAKE ENERGY AFFORDABLE AGAIN!


Biden’s war on energy is a war on the lower and middle class, who are always the first to feel the pain of high gas prices and the inevitable inflation that follows.

Fox Business reports, “Biden touts cooling inflation, but prices are up nearly 20% since 2021,” compared to the low of 1.4% when Biden first took office. Americans spend over $1,000 more monthly, $12,800 more annually, on necessities than 3 years ago.

The surging prices Americans face at the pump are a direct result of Biden and the Leftists’ unprecedented war on American energy, initiated on his first day in office, including the radical Green New Deal agenda. By 2022, the national average for a gallon of gas exceeded $5 for the first time in history.

By catering to this radical fringe, Biden has turned his back on lower and middle-class Americans, ALL AMERICANS, diminishing their ability to afford housing, groceries, gas, and medicine.

It seems the LEFT isn’t content with just waging an energy war—they’re now launching a full-scale burger war, targeting the fast-food industry while pushing for the consumption of lab-grown meat and insects.

In California, Governor Gavin Newsom, with a stroke of the pen, killed 10,000 jobs overnight with his minimum wage increase, combined with soaring food prices that have devastated many fast-food chains.

Bidenomics is national suicide, jeopardizing the health and survivability of major contributors to the US economy and threatening the job security of millions of Americans! Restaurants alone employed 7.2 million and generated $464 billion in revenue in 2023.

Anyone with a basic understanding of economics understands that policies eroding energy security and punishing fossil fuels would cause prices, and therefore inflation, to soar, impacting certain industries faster and more devastatingly. So why enact policies targeting and discriminating against a vital industry on which lower and middle-class Americans and communities rely?

Considering that 63% of restaurant owners polled preferred a Republican-controlled Congress, despite half identifying as Democrats or Independents, it raises questions. In April 2023, a survey determined that U.S. adults were dining out less than they had six months prior. When looking at the frequency of dining out compared to six months ago, 55% of U.S. adults claimed they were eating out less at full-service restaurants, and 45% claimed they were eating out less at fast food restaurants.

Bidenflation has caused the price for fast food favorites to skyrocket:

  • McDonald’s Medium French Fries is UP 167.6%
  • McDonald’s Big Mac Meal is UP 103.5%
  • McDonald’s 10 Piece Chicken McNuggets Meal is UP 95.5%
  • McDonald’s Hamburger Happy Meal is UP 140.6%
  • McDonald’s 4 Piece Chicken McNuggets Happy Meal is UP 97.3%
  • Taco Bell’s Cheesy Gordita Crunch is UP 111.5%
  • Taco Bell’s Nachos Bell Grande Combo is UP 77.0%
  • Taco Bell’s Beefy 5-Layer Burrito is UP 153.8%
  • Chick-fil-A’s Chicken Sandwich Combo is UP 94.8%
  • Chick-fil-A’s 8 Piece Nuggets is UP 98.2%

Join us in saving America from national suicide caused by Bidenflation!


TAKE ACTION TO MAKE ENERGY AFFORDABLE AGAIN!


Conservatives have always fought for fiscal responsibility and policies that lift all Americans out of poverty to experience the American dream. Tragically, Americans nationwide now face the harsh reality of choosing between eating and filling up their cars with gas, foregoing medicines to pay bills, and depleting their savings or going into debt to pay rent or mortgages.

Biden refuses to take responsibility for destroying our economy and the quality of life of 73% of America’s working class, choosing to blame “greed” and business owners struggling to survive! Shame!

The fastest way to combat soaring inflation is to unleash the power of Trump-era 100% Energy Independence, which would drop gas prices and keep more money in taxpayers’ pockets overnight!

RELATED VIDEO: U.S. Job Gains Are Not Going to American Workers | TIPPING POINT

EDITORS NOTE: This ACT for America column is republished with permission. ©All rights reserved.

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Red-state AGs Sue Blue States For Imposing Climate Extremism Everywhere

By Bonner Cohen

Editors’ Note: For the moment, we will put the questionable science and impractical assertions of the environmental lobby aside. What we see here is another expansion of lawfare, the use of law and the courts to obtain a political or social outcome without the consent of the people or their representatives. It is profoundly undemocratic. In this case, some “progressive” states wish to impose their will on other states so now we will have lawfare among the states. This is not a good development. Secondly, we have a small handful of blue states that could substantially lower the standard of living of the entire nation, endanger national defense, and twist the law into a punitive initiative against corporations conducting perfectly legal business. Again, all of this is done by a small minority of states wishing to get their way without the consent of the people. Bully for the Red State AGs fighting back. It is too bad Arizona has an AG not only sitting this fight out, but actively pursuing her own lawfare agenda against those who want election integrity.

A coalition of 19 state attorneys general, led by Steve Marshall of Alabama, is suing five other states — California, Connecticut, Minnesota, New Jersey and Rhode Island — saying the latter group’s litigation seeking billions of dollars in damages from fossil-fuel companies for their role in the alleged “climate crisis” would undermine U.S. energy security and jeopardize the livelihoods of Americans.

In their May 23 complaint filed with the U.S. Supreme Court, these red-state attorneys general assert that California and its climate allies “are threatening to weaken our national energy system through tort litigation under their state laws and in their state courts.” They add that “attempts by defendant states to impose liability or obtain equitable relief from energy companies for emissions by or in plaintiff states (including by targeting protected speech) is unconstitutional and beyond the competence of defendants to prosecute.”

Far more than a mere shakedown of energy companies by avaricious blue states, the attack on fossil-fuel producers is a scheme to use state tort laws and state courts to regulate out-of-state emissions and thus control energy use nationwide. Rhode Island, for example, seeks compensatory damages for harm from “dire climate-related effects” from certain greenhouse-gas emissions. It doesn’t matter whether emissions come from blue states, Alabama, or across the planet. “The effects are all the same and, as a result, they are seeking to punish energy companies for selling their products anywhere,” the lawsuit argues.

And it’s not just the companies that will bear the brunt of the punishment.

“The theory advanced by these states is truly radical. A small gas station in rural Alabama could owe money to the people of Minnesota simply for selling a gallon of gas. The customer might even be liable, too,” Alabama’s Marshall said in a statement. “These states are welcome to enforce their preferred policies within their jurisdiction, but they do not have the authority to dictate our national energy policy.”

“If the Supreme Court lets them continue, California and its allies will imperil access to affordable energy for every American,” Marshall added. “That would threaten our national security and harm millions of Americans already struggling to pay for gas and groceries. To protect Alabama citizens and constitutional order, we had no choice but to sue.”

The reference to the Constitution is crucial to getting the Supreme Court to step in and put an end to the blue states’ extraterritorial power grab. “While the Constitution preserves as expansive realm of state sovereignty, that authority ends at each state’s borders,” Marshall wrote in The Wall Street Journal. “Alabama doesn’t get to say what law applies to California, and Hawaii can’t regulate conduct in Indiana.”

The case, Alabama v. California, is the latest legal skirmish pitting blue jurisdictions seeking to impose their energy policies on the rest of the nation against red states and fossil-fuel producers opposing those efforts.

Dozens of lawsuits against oil and gas companies (many of them funded by the Rockefeller Family Fund) have been filed in state courts in the last few years. They claim that the companies have violated a variety of state laws, including statutes covering consumer protection, nuisance, failure to warn, fraud, and racketeering — all related to the companies’ emissions of greenhouse gases. In addition to states cited in Alabama v. California, jurisdictions suing the oil and gas companies include Massachusetts, New York, the cities of Chicago, Honolulu, New York, and Boulder, Colo., along with several Native American tribes.

Knowing that climate-obsessed jurisdictions are relishing the home-court advantage provided by state courts, the fossil-fuel companies — now joined by the 19 red-state attorneys general — want the proceedings shifted to federal courts.

So far, their efforts have fallen short. In April 2023, for example, the Supreme Court declined an appeal by ExxonMobil and other oil companies to move most of the cases filed against them from state to federal court. If the Supreme Court continues to remain aloof, these cases — beginning with Massachusetts — will go to trial in a few months, kicking off litigation that could last for years.

All this comes amid mounting concerns over how the nation is to meet its growing energy needs at a time when the Biden administration, deep-blue jurisdiction, and deep-pocketed foundations are undertaking a concerted effort to block access to affordable and reliable energy.

The vaunted (and heavily taxpayer-funded) transition to green energy is colliding headlong with developments that this elite-driven agenda did not foresee. They include consumers shunning EVs, local resistance to wind and solar plantations, threats to grid stability caused by increased reliance on intermittent renewable energy, soaring household energy costs, and skyrocketing demand for power by proliferating, energy-hungry, artificial intelligence-driven data centers.

Another way to put this is to say that the blue states’ assault on the nation’s energy security could not have come at a worse time.

*****

This article was published by CFACT, Committee For A Constructive Tomorrow, and is reproduced with permission.

TAKE ACTION

The Prickly Pear’s TAKE ACTION focus this year is to help achieve a winning 2024 national and state November 5th election with the removal of the Biden/Obama leftist executive branch disaster, win one U.S. Senate seat, maintain and win strong majorities in all Arizona state offices on the ballot and to insure that unrestricted abortion is not constitutionally embedded in our laws and culture.

Please click the TAKE ACTION link to learn to do’s and don’ts for voting in 2024. Our state and national elections are at great risk from the very aggressive and radical leftist Democrat operatives with documented rigging, mail-in voter fraud and illegals voting across the country (yes, with illegals voting across the country) in the last several election cycles.

Read Part 1 and Part 2 of The Prickly Pear essays entitled How NOT to Vote in the November 5, 2024 Election in Arizona to be well informed of the above issues and to vote in a way to ensure the most likely chance your vote will be counted and counted as you intend.

Please click the following link to learn more.

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Israeli Scientists Make Quantum Discovery

By NEWSRAEL Telling the Israeli Story

The discovery sheds light on potential advancements in quantum computing.

WATCH: Israel’s First Quantum Computer – Weizmann Institute of Science

In a turn of events that could have implications for the development of quantum computing, Israeli scientists stumbled upon a new type of vortices formed when photons collide.

Vortices are a well-known physical phenomenon appearing in various contexts, such as the swirling motion of water draining from a bathtub, hurricanes, tornadoes, even galaxies.

They typically form when an area of very fast movement encounters a region of slow movement, creating a circular flow around a stationary focus.

This helps bridge the tension between differing flow velocities in adjacent areas.

A team of scientists from the Weizmann Institute in Rehovot seeking to devise a method for quantum information processing using photons chanced upon the novel vortices during their experiments.

Quantum computing is an advanced field of computing based on the principles of quantum mechanics, which is the branch of physics that deals with phenomena at very small scales, such as atoms and subatomic particles.

Classical computers use “bits” to process information in the binary form of 0s and 1s, but quantum computers use quantum bits or “qubits,” which, due to their extremely small size, behave similar to waves and can exist as 0s and 1s simultaneously.

Because qubits can be in many states at once, a quantum computer can look at many possible solutions to a problem all at the same time. This gives quantum computers the ability to solve problems faster than conventional computers.

EDITORS NOTE: This TPS News Agency column is republished with permission. ©All rights reserved.