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Satchu's Rich Wrap-Up
Tuesday 19th of April 2022

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War and stagflation threaten global economy as pandemic recovery slows @FT
World Of Finance

The twin perils of slowing growth and high inflation, or stagflation, will hit the global economy this year as Russia’s war against Ukraine exacerbates a slowdown in the recovery from the coronavirus pandemic, according to Financial Times research.
Mounting price pressures, slipping output expansion and sagging confidence will all pose a drag for most countries, according to the latest Brookings-FT tracking index.
As a result, policymakers will be left with “grim quandaries”, said Eswar Prasad, senior fellow at the Brookings Institution.
The IMF is this week expected to downgrade its forecasts for most countries as finance ministers and central bankers convene at the spring meetings of the fund and the World Bank to discuss how to respond to the darkening economic outlook.
Policymakers must work out how to address rapidly rising prices and the dangers of raising interest rates when debt levels are already high.
Kristalina Georgieva, IMF managing director, on Thursday called the war in Ukraine a “massive setback” for the global economy.

Prasad said there was a risk that 2022 could become “a fraught period of geopolitical realignments, persistent supply disruptions and financial market volatility, all against the background of surging inflationary pressures and limited room for policy manoeuvre”.

The Brookings-FT Tracking Index for the Global Economic Recovery (Tiger) compares indicators of real activity, financial markets and confidence with their historical averages, both for the global economy and individual countries, capturing the extent to which data in the current period is better or worse than normal.
In the twice-yearly series, the composite index shows a marked loss of growth momentum since late 2021 in advanced and emerging economies, with confidence levels also dropping from their peaks and financial market performance taking a dip more recently.
Each of the world’s three big economic blocs faces considerable difficulties, Prasad said. 

While spending remains strong in the US and the labour market has returned to pre-pandemic conditions, inflation poses severe difficulties for the Federal Reserve’s mandate of price stability. The pace of price growth surged to a 40-year high of 8.5 per cent in March.
“The Fed is at real risk of losing control of the inflation narrative and could be forced to tighten even more aggressively than it has signalled, raising the risk of a marked slowdown in growth in 2023,” Prasad said.

China’s problems stem from its desire to stick with its zero-Covid strategy after a surge in cases of the more infectious Omicron coronavirus variant. Lockdowns, such as the severe restrictions in Shanghai, threaten consumer spending, investment and production, while the potential to ease monetary policy again will amplify longer-term risks to financial stability.

China is set to report first-quarter gross domestic product figures on Monday and they are widely expected to show that Beijing faces a tough challenge in meeting its 5.5 per cent growth target over the course of this year.
For Europe, most exposed to the Ukraine conflict and struggling to reduce reliance on Russian energy imports, confidence levels have declined sharply.

Prasad said there were no easy policy solutions and willingness to act appeared in short supply.

“Keeping the global economy on a reasonable growth track will require concerted actions to fix the root problems, including measures to limit pandemic-induced disruptions, steps to tamp down geopolitical tensions and targeted measures such as infrastructure spending to boost long-term productivity rather than just fortify short-term demand,” he said.

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Fed has two options: @IliaSakowski
World Of Finance

1) soft landing: let inflation run, yields rally and gold replaces treasuries as world reserve asset (good for RU, CN, IN)

2) shock and awe: crash housing and FX market with QT and reset system (IMF's "new Bretton Woods moment")

Nobody said it was easy...


Its a Wizard of Oz moment  

we have reached the point when the curtain was lifted in the Wizard of Oz and the Wizard revealed to be ‘’an ordinary conman from Omaha who has been using elaborate magic tricks and props to make himself seem “great and powerful”’’ 

The Curtain has been lifted and Mr. Powell has now arrived at his Volcker moment 

Deutsche Bank's Jim Reid notes that yesterday's surge in the 2-year US Treasury yield was, by one measure, "the biggest "shock" since October 1979 when Volcker announced his intentions on the world @ReutersJamie
The last time inflation was here, February 1982 - the Fed Funds Rate was 15%. @Convertbond
Dartmouth economist and former Fed adviser Andrew Levin says the Fed needs to get rates to a neutral setting within a year or so, and that the means getting the Fed Funds rates up to 4% or 5%

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World Of Finance

There is no training – classroom or otherwise.. that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. 
There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. Paul Tudor-Jones

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Exorbitant privilege that King Abdul Aziz Ibn Saud of Saudi Arabia gave President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake in February 14, 1945 when the petro dollar economy was symbolically born.
World Of Finance

Russia essentially gave the $ and the Euro the very same exorbitant privilege that King Abdul Aziz Ibn Saud of Saudi Arabia gave President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake in February 14, 1945 when the petro dollar economy was symbolically born.

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Apocalypse Now
World Of Finance

The Violence of the Sanction warfare imposed on Russia has been noteworthy and I reference the below captioned @NewYorker article
The @POTUS Official Who Pierced Putin’s “Sanction-Proof” Economy
Singh said, “We’ve made him stare into an economic abyss. But he could choose to pull back.”
The markets are where these two systems touch—the supply of buckwheat, the joint energy ventures, the price of the ruble—and within this arena the sanctions were a demonstration that Washington still had levers to pull. “You know, we can play chess, too,” Singh said. “It was important for us to show that the fortress could come crumbling down.”
The Sanction warfare program is a reiteration of the @BarackObama 2014 version but then Oil was dropped to $20.00 and today its trading at $97.56 a barrel. This is the first flaw in the sanction warfare effort.
‘’You can print money, but not oil to heat or wheat to eat’’ wrote @CreditSuisse’s Zoltan Pozsar.
Russia essentially gave the $ and the Euro the very same exorbitant privilege that King Abdul Aziz Ibn Saud of Saudi Arabia gave President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake in February 14, 1945 when the petro dollar economy was symbolically born.
By insisting payments are made in Russian Rubles for Russian commodities Vladimir Putin has withdrawn that exorbitant privilege.
The Russian Ruble rally is real and has much further to go.
if you believe that the West can craft sanctions that maximize pain for Russia while minimizing financial stability risks and price stability risks in the West, you could also believe in unicorns. #Zoltan
The democratization of authority spurred by the digital revolution has flattened cognitive hierarchies along with other hierarchies, and political decision-making is now driven by often weaponized babble. @FukuyamaFrancis
It’s a seismic geoeconomic development whose consequences will hurt the value of $ and the Euro and burst the G7 Bond Bubble.
G7 bonds which have been on the slide are poised at the very precipice and I expect a further and exponential downside move.

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The Big $hort @CreditSuisse Zoltan Pozsar
World Of Finance

The pattern is bleak. The future does not look bright.

The Great Financial Crisis was then followed by the European debt crisis, which was the genesis of the European version of QE. Then nothing for a while, until September 2019...

The pattern of the three big crises since 1997 are similar: first a liquidity event, then a backstop at a steep price, and then a lasting impact in financial markets:

in 1997, a sudden stop, the sale of national assets, and FX reserve accumulation; in 2008, a sudden stop, a fire sale of mortgages, and reserve printing (QE); in 2020, a sudden stop, a fire sale of Treasuries, and reserve printing again.

Today, shadow banking is “money market funding of commodity trading”. Commodity traders guarantee price stability, not central banks

...it’s important to emphasize that since the 1990s, we’ve been dealing with crises that had to do with par, interest, and FX pegs, which are all nominal variables that central banks can fix easily. 

You just pour money at the problem (QE), and the problem goes away quickly. The price level is a different ballgame – you cannot print oil to heat or wheat to eat, or print VLCCs and other things that will soon give central banks a headache and test the notion of credibility...

We usually think of money and its hierarchy in terms of instruments, prices, and intermediaries (gold, reserves, and deposits; secured, unsecured, and FX swaps; central banks, banks, and dealers, respectively), not in terms of money and state.
But it’s now time to bring the state in as an extra layer in the hierarchy of money...

The state does what the state does, and the FOMC will have to clean up the inflation that comes next. 

The state (power) is de-stabilizing the pillar of the Bretton Woods II system (the U.S. dollar) by creating risks to the price level. 

Once again, the White House and the deputy national security adviser wield far more power over interest rates and foreign exchange rates than the FOMC.

The legacy of the unfolding commodity crisis will be long-lasting. This crisis is another crisis of shadow banking – the fourth crisis of shadow banking and a crisis of the fourth price of money. 

Recall that it is easy to deal with crises of the first three prices, but central banks cannot do anything about the fourth, and without price stability, there is no exorbitant privilege or dollar supremacy.
If Francis Fukuyama was wrong about the end of history, so will be anyone who thinks the U.S. dollar will come out unscathed from all this: if control over the price level is lost, interest rates and the value of the U.S. dollar will suffer too.
It’s inevitable...
The pattern of crises since the 1990s is obvious. So is the list of prices that these crises have tested so far. There remains one last price, the fourth price of money – the price level – to test, which will be the main test of the dollar’s post-WWII supremacy: 

the current crisis will test the Fed’s credibility to deliver price stability, and as the theme of “our commodity, your problem” suggests, there is a risk that the Fed won’t be able to deliver on its price stability mandate successfully.
Paraphrasing Herodotus...
...”circumstances rule central banks; central banks do not rule circumstances”.
Inflation is a complex phenomenon, and it has nothing to do with DSGE models. 

Free-flowing commodities and commodity traders guarantee price stability, not central banks, and deflationary impulses coming from globalization shouldn’t be mistaken for central banks’ communication skills as anchors of price stability.
Luck is luck. Luck isn’t structural...
Luck is running out; central banks were lucky to have price stability as a tailwind when they had to fight crises of FX pegs, par, repo, and the cash-futures basis. Those were the easy crises. The ones you can print your way out of with QE.
But not this time around...

Inflation borne of shortages (commodities [due to Russian sanctions], goods [due to zero-Covid policies], and labor [due to excessive positive wealth effects]) is a whole different ballgame. You can’t QT or hike your way out of it easily...
...and if you can’t, credibility gets damaged, a decline of the U.S. dollar is inevitable, and shorting U.S. rates, the U.S. dollar, and some FX pegs make logical sense.

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14-FEB-2022 :: the greatest macro trading opportunity to reset shorts in the US 10 and Ultra Bond. We can look across all G7 Bonds because this is a Super Bubble that is going to burst big.
World Of Finance

Friday's action and next immediate sessions might afford us the greatest macro trading opportunity to reset shorts in the US 10 and Ultra Bond. We can look across all G7 Bonds because this is a Super Bubble that is going to burst big. There is no way out now.

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Jack Dorsey sold his 1st-ever tweet as an NFT last year. It was bought for $2.9 million last week, the buyer relisted it for $48 million & the auction ended with a top bid of just $280. @JoePompliano
World Of Finance

It was bought for $2.9 million, which he converted to Bitcoin & donated to COVID-19 relief in Africa.
But last week, the buyer relisted it for $48 million & the auction ended with a top bid of just $280.
(h/t @CoinDesk)

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Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. Und wenn du lange in einen Abgrund blickst, blickt der Abgrund auch in dich hinein. Friedrich Nietzsche

“He who fights with monsters should look to it that he himself does not become a monster. And when you gaze long into an abyss the abyss also gazes into you.

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24-JAN-2022 :: The Charge of the Light Brigade
Law & Politics

The Charge of the Light Brigade was a failed military action involving the British light cavalry led by Lord Cardigan against Russian forces during the Battle of Balaclava on 25 October 1854 in the Crimean War.

The Charge of the Light Brigade BY ALFRED, LORD TENNYSON
Half a league, half a league, Half a league onward,
All in the valley of Death
Rode the six hundred.

 “Forward, the Light Brigade! Charge for the guns!” he said. Into the valley of Death
Rode the six hundred.
“Forward, the Light Brigade!” Was there a man dismayed? Not though the soldier knew
Someone had blundered. Theirs not to make reply, 

Theirs not to reason why, 

Theirs but to do and die.

Into the valley of Death Rode the six hundred.

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Is it Possible to Actually Know What Has Been And is Going on in Ukraine? @UnzReview Jacques Baud
Law & Politics

Part One: The Road To War 

For years, from Mali to Afghanistan, I have worked for peace and risked my life for it. It is therefore not a question of justifying war, but of understanding what led us to it. 

Let's try to examine the roots of the Ukrainian conflict. It starts with those who for the last eight years have been talking about "separatists" or "independentists" from Donbass. This is a misnomer. 

The referendums conducted by the two self-proclaimed Republics of Donetsk and Lugansk in May 2014, were not referendums of "independence" (независимость), as some unscrupulous journalists have claimed, but referendums of "self-determination" or "autonomy" (самостоятельность). 

The qualifier "pro-Russian" suggests that Russia was a party to the conflict, which was not the case, and the term "Russian speakers" would have been more honest. 

Moreover, these referendums were conducted against the advice of Vladimir Putin. 
In fact, these Republics were not seeking to separate from Ukraine, but to have a status of autonomy, guaranteeing them the use of the Russian language as an official language — 

because the first legislative act of the new government resulting from the American-sponsored overthrow of [the democratically-elected] President Yanukovych, was the abolition, on February 23, 2014, of the Kivalov-Kolesnichenko law of 2012 that made Russian an official language in Ukraine. 

A bit like if German putschists decided that French and Italian would no longer be official languages in Switzerland. 
This decision caused a storm in the Russian-speaking population. The result was fierce repression against the Russian-speaking regions (Odessa, Dnepropetrovsk, Kharkov, Lugansk and Donetsk) which was carried out beginning in February 2014 and led to a militarization of the situation and some horrific massacres of the Russian population (in Odessa and Mariupol, the most notable). 
At this stage, too rigid and engrossed in a doctrinaire approach to operations, the Ukrainian general staff subdued the enemy but without managing to actually prevail. 

The war waged by the autonomists consisted in highly mobile operations conducted with light means. 

With a more flexible and less doctrinaire approach, the rebels were able to exploit the inertia of Ukrainian forces to repeatedly "trap" them. 
In 2014, when I was at NATO, I was responsible for the fight against the proliferation of small arms, and we were trying to detect Russian arms deliveries to the rebels, to see if Moscow was involved. 

The information we received then came almost entirely from Polish intelligence services and did not "fit" with the information coming from the OSCE [Organization for Security and Co-operation in Europe] — and despite rather crude allegations, there were no deliveries of weapons and military equipment from Russia. 
The rebels were armed thanks to the defection of Russian-speaking Ukrainian units that went over to the rebel side. 

As Ukrainian failures continued, tank, artillery and anti-aircraft battalions swelled the ranks of the autonomists. 

This is what pushed the Ukrainians to commit to the Minsk Agreements. 
But just after signing the Minsk 1 Agreements, the Ukrainian President Petro Poroshenko launched a massive "anti-terrorist operation" (ATO/Антитерористична операція) against the Donbass. 

Poorly advised by NATO officers, the Ukrainians suffered a crushing defeat in Debaltsevo, which forced them to engage in the Minsk 2 Agreements. 
It is essential to recall here that Minsk 1 (September 2014) and Minsk 2 (February 2015) Agreements did not provide for the separation or independence of the Republics, but their autonomy within the framework of Ukraine. 

Those who have read the Agreements (there are very few who actually have) will note that it is written that the status of the Republics was to be negotiated between Kiev and the representatives of the Republics, for an internal solution within Ukraine. 
That is why, since 2014, Russia has systematically demanded the implementation of the Minsk Agreements while refusing to be a party to the negotiations, because it was an internal matter of Ukraine. 

On the other side, the West — led by France — systematically tried to replace Minsk Agreements with the "Normandy format," which put Russians and Ukrainians face-to-face. 

However, let us remember that there were never any Russian troops in the Donbass before 23-24 February 2022. 

Moreover, OSCE observers have never observed the slightest trace of Russian units operating in the Donbass before then. 

For example, the U.S. intelligence map published by the Washington Post on December 3, 2021 does not show Russian troops in the Donbass. 
In October 2015, Vasyl Hrytsak, director of the Ukrainian Security Service (SBU), confessed that only 56 Russian fighters had been observed in the Donbass. 

This was exactly comparable to the Swiss who went to fight in Bosnia on weekends, in the 1990s, or the French who go to fight in Ukraine today. 
The Ukrainian army was then in a deplorable state. In October 2018, after four years of war, the chief Ukrainian military prosecutor, Anatoly Matios, stated that Ukraine had lost 2,700 men in the Donbass: 

891 from illnesses, 318 from road accidents, 177 from other accidents, 175 from poisonings (alcohol, drugs), 172 from careless handling of weapons, 101 from breaches of security regulations, 228 from murders and 615 from suicides. 
In fact, the Ukrainian army was undermined by the corruption of its cadres and no longer enjoyed the support of the population. 

According to a British Home Office report, in the March/April 2014 recall of reservists, 70 percent did not show up for the first session, 80 percent for the second, 90 percent for the third, and 95 percent for the fourth. 

In October/November 2017, 70% of conscripts did not show up for the "Fall 2017" recall campaign. 

This is not counting suicides and desertions (often over to the autonomists), which reached up to 30 percent of the workforce in the ATO area. 

Young Ukrainians refused to go and fight in the Donbass and preferred emigration, which also explains, at least partially, the demographic deficit of the country. 
The Ukrainian Ministry of Defense then turned to NATO to help make its armed forces more "attractive." 

Having already worked on similar projects within the framework of the United Nations, I was asked by NATO to participate in a program to restore the image of the Ukrainian armed forces. 

But this is a long-term process and the Ukrainians wanted to move quickly. 
So, to compensate for the lack of soldiers, the Ukrainian government resorted to paramilitary militias

In 2020, they constituted about 40 percent of the Ukrainian forces and numbered about 102,000 men, according to Reuters. 

They were armed, financed and trained by the United States, Great Britain, Canada and France. There were more than 19 nationalities. 
These militias had been operating in the Donbass since 2014, with Western support. Even if one can argue about the term "Nazi," the fact remains that these militias are violent, convey a nauseating ideology and are virulently anti-Semitic...[and] are composed of fanatical and brutal individuals. 

The best known of these is the Azov Regiment, whose emblem is reminiscent of the 2nd SS Das Reich Panzer Division, which is revered in the Ukraine for liberating Kharkov from the Soviets in 1943, before carrying out the 1944 Oradour-sur-Glane massacre in France. 
The characterization of the Ukrainian paramilitaries as "Nazis" or "neo-Nazis" is considered Russian propaganda. But that's not the view of the Times of Israel, or the West Point Academy's Center for Counterterrorism. 

In 2014, Newsweek magazine seemed to associate them more with... the Islamic State. Take your pick! 
So, the West supported and continued to arm militias that have been guilty of numerous crimes against civilian populations since 2014: rape, torture and massacres... 
The integration of these paramilitary forces into the Ukrainian National Guard was not at all accompanied by a "denazification," as some claim. 
In 2022, very schematically, the Ukrainian armed forces fighting the Russian offensive were organized as:
The Army, subordinated to the Ministry of Defense. It is organized into 3 army corps and composed of maneuver formations (tanks, heavy artillery, missiles, etc.).
The National Guard, which depends on the Ministry of the Interior and is organized into 5 territorial commands.
The National Guard is therefore a territorial defense force that is not part of the Ukrainian army. 

It includes paramilitary militias, called "volunteer battalions" (добровольчі батальйоні), also known by the evocative name of "reprisal battalions," and composed of infantry. 

Primarily trained for urban combat, they now defend cities such as Kharkov, Mariupol, Odessa, Kiev, etc. 

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Is it Possible to Actually Know What Has Been And is Going on in Ukraine? @UnzReview Jacques Baud [continued]
Law & Politics

Part Two: The War 

As a former head of analysis of Warsaw Pact forces in the Swiss strategic intelligence service, I observe with sadness — but not astonishment — that our services are no longer able to understand the military situation in Ukraine. 

The self-proclaimed "experts" who parade on our TV screens tirelessly relay the same information modulated by the claim that Russia — and Vladimir Putin — is irrational. Let's take a step back. 

1. The Outbreak Of War 

Since November 2021, the Americans have been constantly threatening a Russian invasion of Ukraine. However, the Ukrainians at first did not seem to agree. Why not? 

We have to go back to March 24, 2021. On that day, Volodymyr Zelensky issued a decree for the recapture of the Crimea, and began to deploy his forces to the south of the country. 

At the same time, several NATO exercises were conducted between the Black Sea and the Baltic Sea, accompanied by a significant increase in reconnaissance flights along the Russian border. 

Russia then conducted several exercises to test the operational readiness of its troops and to show that it was following the evolution of the situation. 

Things calmed down until October-November with the end of the ZAPAD 21 exercises, whose troop movements were interpreted as a reinforcement for an offensive against Ukraine. 

However, even the Ukrainian authorities refuted the idea of Russian preparations for a war, and Oleksiy Reznikov, Ukrainian Minister of Defense, states that there had been no change on its border since the spring. 

In violation of the Minsk Agreements, Ukraine was conducting air operations in Donbass using drones, including at least one strike against a fuel depot in Donetsk in October 2021. 

The American press noted this, but not the Europeans; and no one condemned these violations. 

In February 2022, events came to a head. On February 7, during his visit to Moscow, Emmanuel Macron reaffirmed to Vladimir Putin his commitment to the Minsk Agreements, a commitment he would repeat after his meeting with Volodymyr Zelensky the next day. 

But on February 11, in Berlin, after nine hours of work, the meeting of political advisors to the leaders of the "Normandy format" ended without any concrete result: the Ukrainians still refused to apply the Minsk Agreements, apparently under pressure from the United States. 

Vladimir Putin noted that Macron had made empty promises and that the West was not ready to enforce the agreements, the same opposition to a settlement it had exhibited for eight years. 

Ukrainian preparations in the contact zone continued. The Russian Parliament became alarmed; and on February 15 it asked Vladimir Putin to recognize the independence of the Republics, which he initially refused to do. 

On 17 February, President Joe Biden announced that Russia would attack Ukraine in the next few days. How did he know this? It is a mystery

But since the 16th, the artillery shelling of the population of Donbass had increased dramatically, as the daily reports of the OSCE observers show. 

Naturally, neither the media, nor the European Union, nor NATO, nor any Western government reacted or intervened. 

It would be said later that this was Russian disinformation. In fact, 

it seems that the European Union and some countries have deliberately kept silent about the massacre of the Donbass population, knowing that this would provoke a Russian intervention. 

At the same time, there were reports of sabotage in the Donbass. On 18 January, Donbass fighters intercepted saboteurs, who spoke Polish and were equipped with Western equipment and who were seeking to create chemical incidents in Gorlivka. 

They could have been CIA mercenaries, led or "advised" by Americans and composed of Ukrainian or European fighters, to carry out sabotage actions in the Donbass Republics. 

In fact, as early as February 16, Joe Biden knew that the Ukrainians had begun intense shelling the civilian population of Donbass, forcing Vladimir Putin to make a difficult choice: to help Donbass militarily and create an international problem, or to stand by and watch the Russian-speaking people of Donbass being crushed. 

If he decided to intervene, Putin could invoke the international obligation of "Responsibility To Protect" (R2P). 

But he knew that whatever its nature or scale, the intervention would trigger a storm of sanctions. 

Therefore, whether Russian intervention were limited to the Donbass or went further to put pressure on the West over the status of the Ukraine, the price to pay would be the same. 

This is what he explained in his speech on February 21. On that day, he agreed to the request of the Duma and recognized the independence of the two Donbass Republics and, at the same time, he signed friendship and assistance treaties with them. 

The Ukrainian artillery bombardment of the Donbass population continued, and, on 23 February, the two Republics asked for military assistance from Russia. 

On 24 February, Vladimir Putin invoked Article 51 of the United Nations Charter, which provides for mutual military assistance in the framework of a defensive alliance. 

In order to make the Russian intervention seem totally illegal in the eyes of the public, Western powers deliberately hid the fact that the war actually started on February 16. 

The Ukrainian army was preparing to attack the Donbass as early as 2021, as some Russian and European intelligence services were well aware. 

In his speech of February 24, Vladimir Putin stated the two objectives of his operation: "demilitarize" and "denazify" the Ukraine. 

So, it was not a question of taking over Ukraine, nor even, presumably, of occupying it; and certainly not of destroying it. 

From then on, our knowledge of the course of the operation is limited: the Russians have excellent security for their operations (OPSEC) and the details of their planning are not known. 

But fairly quickly, the course of the operation allows us to understand how the strategic objectives were translated on the operational level.

2. Demilitarization 

The Russian offensive was carried out in a very "classic" manner. Initially — as the Israelis had done in 1967 — with the destruction on the ground of the air force in the very first hours. 

Then, we witnessed a simultaneous progression along several axes according to the principle of "flowing water": advance everywhere where resistance was weak and leave the cities (very demanding in terms of troops) for later. 

In the north, the Chernobyl power plant was occupied immediately to prevent acts of sabotage. 

The images of Ukrainian and Russian soldiers guarding the plant together are of course not shown. 

The idea that Russia is trying to take over Kiev, the capital, to eliminate Zelensky, comes typically from the West. But Vladimir Putin never intended to shoot or topple Zelensky

Instead, Russia seeks to keep him in power by pushing him to negotiate, by surrounding Kiev. The Russians want to obtain the neutrality of Ukraine. 

Many Western commentators were surprised that the Russians continued to seek a negotiated solution while conducting military operations. 

The explanation lies in the Russian strategic outlook since the Soviet era. 

For the West, war begins when politics ends. However, the Russian approach follows a Clausewitzian inspiration: war is the continuity of politics and one can move fluidly from one to the other, even during combat. This allows one to create pressure on the adversary and push him to negotiate. 

From an operational point of view, the Russian offensive was an example of previous military action and planning: in six days, the Russians seized a territory as large as the United Kingdom, with a speed of advance greater than what the Wehrmacht had achieved in 1940

The bulk of the Ukrainian army was deployed in the south of the country in preparation for a major operation against the Donbass. 

This is why Russian forces were able to encircle it from the beginning of March in the "cauldron" between Slavyansk, Kramatorsk and Severodonetsk, with a thrust from the East through Kharkov and another from the South from Crimea. 

Troops from the Donetsk (DPR) and Lugansk (LPR) Republics are complementing the Russian forces with a push from the East. 

At this stage, Russian forces are slowly tightening the noose, but are no longer under any time pressure or schedule. 

Their demilitarization goal is all but achieved and the remaining Ukrainian forces no longer have an operational and strategic command structure. 

The "slowdown" that our "experts" attribute to poor logistics is only the consequence of having achieved their objectives. 

Russia does not want to engage in an occupation of the entire Ukrainian territory. In fact, it appears that Russia is trying to limit its advance to the linguistic border of the country. 

Our media speak of indiscriminate bombardments against the civilian population, especially in Kharkov, and horrific images are widely broadcast.

 However, Gonzalo Lira, a Latin American correspondent who lives there, presents us with a calm city on March 10 and March 11. 

It is true that it is a large city and we do not see everything — but this seems to indicate that we are not in the total war that we are served continuously on our TV screens.

 As for the Donbass Republics, they have "liberated" their own territories and are fighting in the city of Mariupol. 

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Is it Possible to Actually Know What Has Been And is Going on in Ukraine?' @UnzReview Jacques Baud cont
Law & Politics

3. Denazification 

In cities like Kharkov, Mariupol and Odessa, the Ukrainian defense is provided by the paramilitary militias. They know that the objective of "denazification" is aimed primarily at them

For an attacker in an urbanized area, civilians are a problem. This is why Russia is seeking to create humanitarian corridors to empty cities of civilians and leave only the militias, to fight them more easily. 

Conversely, these militias seek to keep civilians in the cities from evacuating in order to dissuade the Russian army from fighting there. 

This is why they are reluctant to implement these corridors and do everything to ensure that Russian efforts are unsuccessful — they use the civilian population as "human shields." 

Videos showing civilians trying to leave Mariupol and beaten up by fighters of the Azov regiment are of course carefully censored by the Western media. 

On Facebook, the Azov group was considered in the same category as the Islamic State [ISIS] and subject to the platform's "policy on dangerous individuals and organizations." 

It was therefore forbidden to glorify its activities, and "posts" that were favorable to it were systematically banned. 

But on February 24, Facebook changed its policy and allowed posts favorable to the militia. 

In the same spirit, in March, the platform authorized, in the former Eastern countries, calls for the murder of Russian soldiers and leaders. So much for the values that inspire our leaders. 

Our media propagate a romantic image of popular resistance by the Ukrainian people. 

It is this image that led the European Union to finance the distribution of arms to the civilian population. 

In my capacity as head of peacekeeping at the UN, I worked on the issue of civilian protection. 

We found that violence against civilians occurred in very specific contexts. In particular, when weapons are abundant and there are no command structures. 

These command structures are the essence of armies: their function is to channel the use of force towards an objective. 

By arming citizens in a haphazard manner, as is currently the case, the EU is turning them into combatants, with the consequential effect of making them potential targets. 

Moreover, without command, without operational goals, the distribution of arms leads inevitably to settling of scores, banditry and actions that are more deadly than effective. 

War becomes a matter of emotions. Force becomes violence. This is what happened in Tawarga (Libya) from 11 to 13 August 2011, where 30,000 black Africans were massacred with weapons parachuted (illegally) by France. 

By the way, the British Royal Institute for Strategic Studies (RUSI) does not see any added value in these arms deliveries. 

Moreover, by delivering arms to a country at war, one exposes oneself to being considered a belligerent. 

The Russian strikes of March 13, 2022, against the Mykolayev air base follow Russian warnings that arms shipments would be treated as hostile targets. 

The EU is repeating the disastrous experience of the Third Reich in the final hours of the Battle of Berlin. 

War must be left to the military and when one side has lost, it must be admitted. 

And if there is to be resistance, it must be led and structured. But we are doing exactly the opposite — we are pushing citizens to go and fight, and at the same time, Facebook authorizes calls for the murder of Russian soldiers and leaders. So much for the values that inspire us. 

Some intelligence services see this irresponsible decision as a way to use the Ukrainian population as cannon fodder to fight Vladimir Putin's Russia. 

It would have been better to engage in negotiations and thus obtain guarantees for the civilian population than to add fuel to the fire. It is easy to be combative with the blood of others. 

4. The Maternity Hospital At Mariupol 

It is important to understand beforehand that it is not the Ukrainian army that is defending Mariupol, but the Azov militia, composed of foreign mercenaries. 

In its March 7, 2022 summary of the situation, the Russian UN mission in New York stated that "Residents report that Ukrainian armed forces expelled staff from the Mariupol city birth hospital No. 1 and set up a firing post inside the facility." 

On March 8, the independent Russian media Lenta.ru, published the testimony of civilians from Mariupol who told that the maternity hospital was taken over by the militia of the Azov regiment, and who drove out the civilian occupants by threatening them with their weapons. 

They confirmed the statements of the Russian ambassador a few hours earlier. 

The hospital in Mariupol occupies a dominant position, perfectly suited for the installation of anti-tank weapons and for observation. 

On 9 March, Russian forces struck the building. According to CNN, 17 people were wounded, but the images do not show any casualties in the building and there is no evidence that the victims mentioned are related to this strike. 

There is talk of children, but in reality, there is nothing. This does not prevent the leaders of the EU from seeing this as a war crime. And this allows Zelensky to call for a no-fly zone over Ukraine. 

In reality, we do not know exactly what happened. But the sequence of events tends to confirm that Russian forces struck a position of the Azov regiment and that the maternity ward was then free of civilians. 

The problem is that the paramilitary militias that defend the cities are encouraged by the international community not to respect the rules of war. 

It seems that the Ukrainians have replayed the scenario of the Kuwait City maternity hospital in 1990, which was totally staged by the firm Hill & Knowlton for $10.7 million in order to convince the United Nations Security Council to intervene in Iraq for Operation Desert Shield/Storm. 

Western politicians have accepted civilian strikes in the Donbass for eight years without adopting any sanctions against the Ukrainian government. 

We have long since entered a dynamic where Western politicians have agreed to sacrifice international law towards their goal of weakening Russia. 

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There is clearly zero intention to resolve this matter anywhere other than on the battlefield and through an insurgency which will bleed Russia to death and the Ukrainians as well.
Law & Politics

Secretary Blinken has refused to meet Lavrov, Biden calls for ‘’Regime Change’’ on a daily basis and ‘’defensive’’ weapons are being shoveled into Ukraine at an unprecedented speed. 

There is clearly zero intention to resolve this matter anywhere other than on the battlefield and through an insurgency which will bleed Russia to death and the Ukrainians as well.
Xi Jinping rather pithily pronounced
He who tied the bell to the tiger must take it off
It is also clear that Russia took a military ‘’lite’’ approach. This is evidenced by a comparison between the casualty rate over the period so far compared with for example the Iraq war. It looks like Russia will seek to peel off the Donetsk and Luhansk regions and a swathe of access to the Black Sea from Mariupol to Odesa.

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Is it Possible to Actually Know What Has Been And is Going on in Ukraine?' @UnzReview Jacques Baud conclusions
Law & Politics

Part Three: Conclusions 

As an ex-intelligence professional, the first thing that strikes me is the total absence of Western intelligence services in accurately representing the situation over the past year. 

In fact, it seems that throughout the Western world intelligence services have been overwhelmed by the politicians. 

The problem is that it is the politicians who decide — the best intelligence service in the world is useless if the decision-maker does not listen. This is what has happened during this crisis. 

That said, while a few intelligence services had a very accurate and rational picture of the situation, others clearly had the same picture as that propagated by our media. 

The problem is that, from experience, I have found them to be extremely bad at the analytical level — doctrinaire, they lack the intellectual and political independence necessary to assess a situation with military "quality." 

Second, it seems that in some European countries, politicians have deliberately responded ideologically to the situation. That is why this crisis has been irrational from the beginning. 

It should be noted that all the documents that were presented to the public during this crisis were presented by politicians based on commercial sources. 

Some Western politicians obviously wanted there to be a conflict. In the United States, the attack scenarios presented by Anthony Blinken to the UN Security Council were only the product of the imagination of a Tiger Team working for him — he did exactly as Donald Rumsfeld did in 2002, who "bypassed" the CIA and other intelligence services that were much less assertive about Iraqi chemical weapons. 

The dramatic developments we are witnessing today have causes that we knew about but refused to see:
on the strategic level, the expansion of NATO (which we have not dealt with here);
on the political level, the Western refusal to implement the Minsk Agreements;
and operationally, the continuous and repeated attacks on the civilian population of the Donbass over the past years and the dramatic increase in late February 2022.

In other words, we can naturally deplore and condemn the Russian attack. But WE (that is: the United States, France and the European Union in the lead) have created the conditions for a conflict to break out. 

We show compassion for the Ukrainian people and the two million refugees. That is fine. But if we had had a modicum of compassion for the same number of refugees from the Ukrainian populations of Donbass massacred by their own government and who sought refuge in Russia for eight years, none of this would probably have happened. 

Whether the term "genocide" applies to the abuses suffered by the people of Donbass is an open question. 

The term is generally reserved for cases of greater magnitude (Holocaust, etc.). 

But the definition given by the Genocide Convention is probably broad enough to apply to this case. 

Clearly, this conflict has led us into hysteria. Sanctions seem to have become the preferred tool of our foreign policies

If we had insisted that Ukraine abide by the Minsk Agreements, which we had negotiated and endorsed, none of this would have happened. Vladimir Putin's condemnation is also ours. 

There is no point in whining afterwards — we should have acted earlier. However, neither Emmanuel Macron (as guarantor and member of the UN Security Council), nor Olaf Scholz, nor Volodymyr Zelensky have respected their commitments. 

In the end, the real defeat is that of those who have no voice. 

The European Union was unable to promote the implementation of the Minsk agreements — on the contrary, it did not react when Ukraine was bombing its own population in the Donbass. 

Had it done so, Vladimir Putin would not have needed to react. Absent from the diplomatic phase, the EU distinguished itself by fueling the conflict. 

On February 27, the Ukrainian government agreed to enter into negotiations with Russia. But a few hours later, the European Union voted a budget of 450 million euros to supply arms to the Ukraine, adding fuel to the fire. 

From then on, the Ukrainians felt that they did not need to reach an agreement. The resistance of the Azov militia in Mariupol even led to a boost of 500 million euros for weapons. 

In Ukraine, with the blessing of the Western countries, those who are in favor of a negotiation have been eliminated. 

This is the case of Denis Kireyev, one of the Ukrainian negotiators, assassinated on March 5 by the Ukrainian secret service (SBU) because he was too favorable to Russia and was considered a traitor. 

The same fate befell Dmitry Demyanenko, former deputy head of the SBU's main directorate for Kiev and its region, who was assassinated on March 10 because he was too favorable to an agreement with Russia — he was shot by the Mirotvorets ("Peacemaker") militia. 

This militia is associated with the Mirotvorets website, which lists the "enemies of Ukraine," with their personal data, addresses and telephone numbers, so that they can be harassed or even eliminated; a practice that is punishable in many countries, but not in the Ukraine. 

The UN and some European countries have demanded the closure of this site — but that demand was refused by the Rada [Ukrainian parliament]. 

In the end, the price will be high, but Vladimir Putin will likely achieve the goals he set for himself. We have pushed him into the arms of China. 

His ties with Beijing have solidified. China is emerging as a mediator in the conflict. 

The Americans have to ask Venezuela and Iran for oil to get out of the energy impasse they have put themselves in — and the United States has to piteously backtrack on the sanctions imposed on its enemies. 

Western ministers who seek to collapse the Russian economy and make the Russian people suffer, or even call for the assassination of Putin, show (even if they have partially reversed the form of their words, but not the substance!) that our leaders are no better than those we hate — sanctioning Russian athletes in the Para-Olympic Games or Russian artists has nothing to do with fighting Putin. 

What makes the conflict in Ukraine more blameworthy than our wars in Iraq, Afghanistan or Libya? 

What sanctions have we adopted against those who deliberately lied to the international community in order to wage unjust, unjustified and murderous wars? 

Have we adopted a single sanction against the countries, companies or politicians who are supplying weapons to the conflict in Yemen, considered to be the "worst humanitarian disaster in the world?" 

To ask the question is to answer it... and the answer is not pretty.

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The Price of Hegemony Can America Learn to Use Its Power? @ForeignAffairs By Robert Kagan
Law & Politics

For years, analysts have debated whether the United States incited Russian President Vladimir Putin’s interventions in Ukraine and other neighboring countries or whether Moscow’s actions were simply unprovoked aggressions

That conversation has been temporarily muted by the horrors of Russia’s full-scale invasion of Ukraine. 

A wave of popular outrage has drowned out those who have long argued that the United States has no vital interests at stake in Ukraine, that it is in Russia’s sphere of interest, and that U.S. policies created the feelings of insecurity that have driven Putin to extreme measures. 

Just as the attack on Pearl Harbor silenced the anti-interventionists and shut down the debate over whether the United States should have entered World War II, Putin’s invasion has suspended the 2022 version of Americans’ endless argument over their purpose in the world.

That is unfortunate. Although it is obscene to blame the United States for Putin’s inhumane attack on Ukraine, to insist that the invasion was entirely unprovoked is misleading. 

Just as Pearl Harbor was the consequence of U.S. efforts to blunt Japanese expansion on the Asian mainland, and just as the 9/11 attacks were partly a response to the United States’ dominant presence in the Middle East after the first Gulf War, so Russian decisions have been a response to the expanding post–Cold War hegemony of the United States and its allies in Europe. 

Putin alone is to blame for his actions, but the invasion of Ukraine is taking place in a historical and geopolitical context in which the United States has played and still plays the principal role, and Americans must grapple with this fact.

For critics of American power, the best way for the United States to cope is for it to retrench its position in the world, divest itself of overseas obligations that others ought to handle, and serve, at most, as a distant offshore balancer. 

These critics would grant China and Russia their own regional spheres of interest in East Asia and Europe and focus the United States’ attention on defending its borders and improving the well-being of Americans. 

But there is a core of unrealism to this “realist” prescription: it doesn’t reflect the true nature of global power and influence that has characterized most of the post–Cold War era and that still governs the world today. 

The United States was already the only true global superpower during the Cold War, with its unparalleled wealth and might and its extensive international alliances. 

The collapse of the Soviet Union only enhanced U.S. global hegemony—and not because Washington eagerly stepped in to fill the vacuum left by Moscow’s weakness. 

Instead, the collapse expanded U.S. influence because the United States’ combination of power and democratic beliefs made the country attractive to those seeking security, prosperity, freedom, and autonomy. 

The United States is therefore an imposing obstacle to a Russia seeking to regain its lost influence.

What has happened in eastern Europe over the past three decades is a testament to this reality. Washington did not actively aspire to be the region’s dominant power. 

But in the years after the Cold War, eastern Europe’s newly liberated countries, including Ukraine, turned to the United States and its European allies because they believed that joining the transatlantic community was the key to independence, democracy, and affluence. 

Eastern Europeans were looking to escape decades—or, in some cases, centuries—of Russian and Soviet imperialism, and allying with Washington at a moment of Russian weakness afforded them a precious chance to succeed. 

Even if the United States had rejected their pleas to join NATO and other Western institutions, as critics insist it should have, the former Soviet satellites would have continued to resist Moscow’s attempts to corral them back into its sphere of interest, seeking whatever help from the West they could get. 

And Putin would still have regarded the United States as the main cause of this anti-Russian behavior, simply because the country was strong enough to attract eastern Europeans.

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Ukraine where Володимир Зеленський @ZelenskyyUa is presented as a brave Freedom Fighter facing down a revanchist Vladimir Putin.
Law & Politics

Any argument that seeks to understand Putin’s and Russia’s concerns is shouted down in a barrage of ‘’You are with us or against us’’ 

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The Price of Hegemony Can America Learn to Use Its Power? @ForeignAffairs By Robert Kagan continued
Law & Politics

So in what way might the United States have provoked Putin? One thing needs to be clear: it was not by threatening the security of Russia

Since the end of the Cold War, the Russians have objectively enjoyed greater security than at any time in recent memory. 

Russia was invaded three times over the past two centuries, once by France and twice by Germany. 

During the Cold War, Soviet forces were perpetually ready to battle U.S. and NATO forces in Europe. Yet since the end of the Cold War, Russia has enjoyed unprecedented security on its western flanks, even as NATO has taken in new members to its east. 

Moscow even welcomed what was in many ways the most significant addition to the alliance: a reunified Germany. 

When Germany was reunifying at the end of the Cold War, the Soviet leader Mikhail Gorbachev favored anchoring it in NATO. 

As he told U.S. Secretary of State James Baker, he believed that the best guarantee of Soviet and Russian security was a Germany “contained within European structures.”

Late Soviet and early Russian leaders certainly did not act as if they feared an attack from the West. Soviet and Russian defense spending declined sharply in the late 1980s and through the late 1990s, including by 90 percent between 1992 and 1996. 

The once formidable Red Army was cut nearly in half, leaving it weaker in relative terms than it had been for almost 400 years. 

Gorbachev even ordered the withdrawal of Soviet forces from Poland and other Warsaw Pact states, chiefly as a cost-saving measure. 

It was all part of a larger strategy to ease Cold War tensions so that Moscow might concentrate on economic reform at home. 

But even Gorbachev would not have sought this holiday from geopolitics had he believed that the United States and the West would take advantage of it.

His judgment was sensible. The United States and its allies had no interest in the independence of the Soviet republics, as U.S. President George H. W. Bush made clear in his 1991 speech in Kyiv, in which he denounced the “suicidal nationalism” of independence-minded Ukrainians (who would declare independence three weeks later). 

Indeed, for several years after 1989, U.S. policies aimed first to rescue Gorbachev, then to rescue the Soviet Union, and then to rescue Russian President Boris Yeltsin. 

During the period of transition from Gorbachev’s Soviet Union to Yeltsin’s Russia—the time of greatest Russian weakness—the Bush administration and then the Clinton administration were reluctant to expand NATO, despite the increasingly urgent appeals of the former Warsaw Pact states. 

The Clinton administration created the Partnership for Peace, whose vague assurances of solidarity fell well short of a security guarantee for former Warsaw Pact members.

It is easy to see why Washington felt no great compulsion to drive NATO eastward. Few Americans at that time saw the organization as a bulwark against Russian expansion, much less as a means of bringing Russia down. 

From the U.S. perspective, Russia was arlready a shell of its former self. 

The question was whether NATO had any mission at all now that the great adversary against which it was aimed had collapsed—and given just how hopeful the 1990s felt to most Americans and western Europeans. 

It was thought to be a time of convergence, when both China and Russia were moving ineluctably toward liberalism. 

Geoeconomics had replaced geopolitics, the nation-state was passing away, the world was “flat,” the twenty-first century would be run by the European Union, and Enlightenment ideals were spreading across the planet. 

For NATO, “out of area or out of business” was the mantra of the day.

But as the West enjoyed its fantasies and Russia struggled to adapt to a new world, the nervous populations lying to the east of Germany—the Balts, the Poles, the Romanians, and the Ukrainians—viewed the end of the Cold War as merely the latest phase in their centuries-old struggle. For them, NATO was not obsolete. 

They saw what the United States and western Europe took for granted—the Article 5 collective security guarantee—as the key to escaping a long, bloody, and oppressive past. 

Much like the French after World War I, who feared the day when a revived Germany would again threaten them, eastern Europeans believed that Russia would eventually resume its centuries-long habit of imperialism and seek to reclaim its traditional influence over their neighborhood. 

These states wanted to integrate into the free-market capitalism of their richer, Western neighbors, and membership in NATO and the European Union was to them the only path out of a dismal past and into a safer, more democratic, and more prosperous future. 

It was hardly surprising, then, that when Gorbachev and then Yeltsin loosened the reins in the early 1990s, practically every current, and soon former, Warsaw Pact member and Soviet republic seized the chance to break from the past and shift their allegiance from Moscow to the transatlantic West.

But although this massive change had little to do with U.S. policies, it had much to do with the reality of the United States’ post–Cold War hegemony. 

Many Americans tend to equate hegemony with imperialism, but the two are different. 

Imperialism is an active effort by one state to force others into its sphere, whereas hegemony is more a condition than a purpose. 

A militarily, economically, and culturally powerful country exerts influence on other states by its mere presence, the way a larger body in space affects the behavior of smaller bodies through its gravitational pull. 

Even if the United States was not aggressively expanding its influence in Europe, and certainly not through its military, the collapse of Soviet power enhanced the attractive pull of the United States and its democratic allies

Their prosperity, their freedom, and, yes, their power to protect former Soviet satellites, when combined with the inability of Moscow to provide any of these, dramatically shifted the balance in Europe in favor of Western liberalism to the detriment of Russian autocracy. 

The growth of U.S. influence and the spread of liberalism were less a policy objective of the United States than the natural consequence of that shift.

Russian leaders could have accommodated themselves to this new reality. Other great powers had adjusted to similar changes. 

The British had once been lords of the seas, the possessors of a vast global empire, and the center of the financial world. Then they lost it all. 

But although some were humiliated at being supplanted by the United States, Britons rather quickly adjusted to their new place in the firmament. 

The French, too, lost a great empire, and Germany and Japan, defeated in war, lost everything except their talent for producing wealth. But they all made the adjustment and were arguably better for it.

There were certainly Russians in the 1990s—Yeltsin’s foreign minister, Andrei Kozyrev, for one—who thought that Russia should make a similar decision. 

They wished to integrate Russia into the liberal West even at the expense of traditional geopolitical ambitions. But that was not the view that ultimately prevailed in Russia. 

Unlike the United Kingdom, France, and to some extent Japan, Russia did not have a long history of friendly relations and strategic cooperation with the United States—quite the contrary. 

Unlike Germany and Japan, Russia was not militarily defeated, occupied, and reformed in the process. 

And unlike Germany, which always knew that its economic power was irrepressible and that in the post–World War II order it could at least grow prosperous, 

Russia never really believed it could become a successful economic powerhouse. 

Its elites thought that the likeliest consequence of integration would be Russia’s demotion to, at best, a second-rank power. 

Russia would be at peace, and it would still have a chance to prosper. But it would not determine the fate of Europe and the world.

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The Power of Pull.
Law & Politics

After all, most of us believe that serendipity is pure luck. How can you shape luck? While chance is an intrinsic element of serendipity, we believe that you can significantly alter the probability and quality of the unexpected encounters in our lives.

Three choices determine how we shape serendipity:

* Where we spend our time. People are spending more time in virtual environments, especially social network platforms, because they instinctively sense that these environments are often rich catalysts for serendipity. At the same time, people are making choices about where they spend their time in physical environments that also shape serendipity. 
While the world is getting flatter due to technology advances, people still move to large urban centers, frequent conferences, and participate in institutions which increase the likelihood of unexpected encounters with people relevant to their interests and needs.
* How we spend our time. These physical and virtual environments attract a large number of people. How do we stand out and get noticed so that we attract unexpected encounters?
* How we maximize the value of the unexpected encounter. If we are not prepared when the unexpected encounter finally occurs, it will not yield much value. Listening deeply, being attentive, and understanding what the other person is involved in prove invaluable in converting a chance meeting into a more valuable sustained relationship that keepson giving.

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The Price of Hegemony Can America Learn to Use Its Power? @ForeignAffairs By Robert Kagan cont
Law & Politics

In the fall of 1940, Japan’s foreign minister, Yosuke Matsuoka, posed his country’s predicament starkly in a meeting with other senior officials. 

Japan could seek a return to cooperative relations with the United States and the United Kingdom, he noted, but only on those countries’ terms. 

This meant returning to “little Japan,” as the minister of war (and future prime minister), General Hideki Tojo, put it. 

To Japanese leaders at the time, that seemed intolerable, so much so that they risked a war that most of them believed they were likely to lose. 

The coming years would prove not only that going to war was a mistake but also that the Japanese would indeed have served their interests better by simply integrating themselves into the liberal order from the beginning, as they did quite successfully after the war.

Putin’s Russia has made much the same choice as did imperial Japan, Kaiser Wilhelm II’s Germany, and many other dissatisfied powers throughout history, and likely with the same end—eventual defeat. 

But Putin’s choice should hardly have come as a surprise. Washington’s protestations of goodwill, the billions of dollars it poured into the Russian economy, the care it took in the early post–Cold War years to avoid dancing on the Soviet Union’s grave—all this had no effect, because what Putin wanted could not be granted by the United States. 

He sought to reverse a defeat that could not be reversed without violent force, but he lacked the wherewithal to wage a successful war. 

He wanted to restore a Russian sphere of interest in central and eastern Europe that Moscow had lost the power to sustain.

The problem for Putin—and for those in the West who want to cede to both China and Russia their traditional spheres of interest—is that such spheres are not granted to one great power by other great powers; they are not inherited, nor are they created by geography or history or “tradition.” 

They are acquired by economic, political, and military power. They come and go as the distribution of power in the international system fluctuates. 

The United Kingdom’s sphere of interest once covered much of the globe, and France once enjoyed spheres of interest in Southeast Asia and much of Africa and the Middle East. 

Both lost them, partly due to an unfavorable shift of power at the beginning of the twentieth century, partly because their imperial subjects rebelled, and partly because they willingly traded in their spheres of interest for a stable and prosperous U.S.-dominated peace. 

Germany’s sphere of interest once extended far to the east. Before World War I, some Germans envisioned a vast economic Mitteleuropa, where the people of central and eastern Europe would provide the labor, resources, and markets for German industry. 

But this German sphere of interest overlapped with Russia’s sphere of interest in southeastern Europe, where Slavic populations looked to Moscow for protection against Teutonic expansion. 

These contested spheres helped produce both world wars, just as the contested spheres in East Asia had helped bring Japan and Russia to blows in 1904.

Russians may believe they have a natural, geographic, and historical claim to a sphere of interest in eastern Europe because they had it throughout much of the past four centuries. 

And many Chinese feel the same way about East Asia, which they once dominated. 

But even the Americans learned that claiming a sphere of interest is different from having one. 

For the first century of the United States’ existence, the Monroe Doctrine was a mere assertion—as hollow as it was brazen. 

It was only toward the end of the nineteenth century, when the country was able to enforce its claim, that the other great powers were grudgingly forced to accept it. 

After the Cold War, Putin and other Russians may have wanted the West to grant Moscow a sphere of interest in Europe, but such a sphere simply did not reflect the true balance of power after the Soviet Union fell. 

China may claim the “nine-dash line”—enclosing most of the South China Sea—as marking its sphere of interest, but until Beijing can enforce it, other powers are unlikely to acquiesce.

Some Western analysts nonetheless argued when the Cold War ended, and continue to argue now, that Washington and western Europe should have given in to Russia’s demand. 

But if Moscow could not enforce a sphere, then on what grounds should the West have acceded? Fairness? Justice? 

Spheres of interest are not about justice, and even if they were, consigning the Poles and other eastern Europeans to subservience to Moscow would have been a dubious justice. 

They knew what it was like to be under Moscow’s sway—the loss of independence, the imposition of rulers willing to take direction from the Kremlin, the squelching of individual liberties. 

The only way they would have accepted a return to Russia’s sphere was if they were compelled to by a combination of Russian pressure and the studied indifference of the West.

In fact, even if the United States had vetoed the accession of Poland and others to NATO, as some suggested at the time that it should have, the Balts, the Czechs, the Hungarians, and the Poles would have done everything they could to integrate themselves into the transatlantic community in every other possible way. 

They would have worked to join the global economy, to enter other Western-dominated international institutions, and to gain whatever commitment they could to their security—acts that almost certainly would have still antagonized Moscow. 

Once Putin began taking slices out of Ukraine (there would be no way for him to restore Russia to its previous great-power status without controlling Ukraine), the Poles and others would have come banging on NATO’s door. 

It seems unlikely that the United States and its allies would have continued to say no.

Russia’s problem was ultimately not just about its military weakness. Its problem was, and remains, its weakness in all relevant forms of power, including the power of attraction

At least during the Cold War, a communist Soviet Union could claim to offer the path to paradise on earth. 

Yet afterward, Moscow could provide neither ideology, nor security, nor prosperity, nor independence to its neighbors. 

It could offer only Russian nationalism and ambition, and eastern Europeans understandably had no interest in sacrificing themselves on that altar. 

If there was any other choice, Russia’s neighbors were bound to take it. 

And there was: the United States and its strong alliance, merely by existing, merely by being rich and powerful and democratic, offered a very good choice indeed.

Putin may want to see the United States as being behind all his troubles, and he is right that the country’s attractive power closed the door to some of his ambitions. 

But the real sources of his problems are the limitations of Russia itself and the choices that he has made not to accept the consequences of a power struggle that Moscow legitimately lost. 

Post–Cold War Russia, like Weimar Germany, never suffered an actual military defeat and occupation, an experience that might have produced a transformation of the sort that occurred in post–World War II Germany and Japan. 

Like the Weimar Republic, Russia was therefore susceptible to its own “stab-in-the-back myth” about how Russian leaders supposedly betrayed the country to the West. 

But although Russians can cast blame in any number of directions—at Gorbachev, at Yeltsin, and at Washington—the fact is that Russia enjoyed neither the wealth and power nor the geographic advantages of the United States, and it was therefore never suited to be a global superpower. 

Moscow’s efforts to sustain that position ultimately bankrupted its system financially and ideologically—as may well be happening again.

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A President Putin who has waited close to three decades for precisely this moment to try expunge the humiliation of the 1990s create a sphere of influence
Law & Politics

a President  Putin who has waited close to three decades for precisely this moment to try expunge the humiliation of the 1990s create a sphere of influence and is seizing this moment in the context of a now extinct ''Unipolar'' World and a freshly minted Tripolar World

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The Price of Hegemony Can America Learn to Use Its Power? @ForeignAffairs By Robert Kagan more
Law & Politics


Observers used to say that Putin played a bad hand skillfully. It is true that he read the United States and its allies correctly for many years, pushing forward just enough to achieve limited goals without sparking a dangerous reaction from the West, up until this latest invasion. 

But even so, he had help from the United States and its allies, which played a strong hand poorly. 

Washington and Europe stood by as Putin increased Russian military capabilities, and they did little as he probed and tested Western resolve, first in Georgia in 2008 and then in Ukraine in 2014. 

They didn’t act when Putin consolidated Russia’s position in Belarus or when he established a robust Russian presence in Syria, from which his weapons could reach the southeastern flank of NATO. 

And if his “special military operation” in Ukraine had gone as planned, with the country subdued in a matter of days, it would have been a triumphant coup, the end of the first stage of Russia’s comeback and the beginning of the second. 

Rather than excoriating him for his inhumane folly, the world would again be talking about Putin’s “savvy” and his “genius.”

Thankfully, that was not to be. But now that Putin has made his mistakes, the question is whether the United States will continue to make its own mistakes or whether Americans will learn, once again, that it is better to contain aggressive autocracies early, before they have built up a head of steam and the price of stopping them rises. 

The challenge posed by Russia is neither unusual nor irrational. The rise and fall of nations is the warp and woof of international relations. 

National trajectories are changed by wars and the resulting establishment of new power structures, by shifts in the global economy that enrich some and impoverish others, and by beliefs and ideologies that lead people to prefer one power over another. 

If there is any blame to be cast on the United States for what is happening in Ukraine, it is not that Washington deliberately extended its influence in eastern Europe. 

It is that Washington failed to see that its influence had already increased and to anticipate that actors dissatisfied with the liberal order would look to overturn it.

For the 70-plus years since World War II, the United States has actively worked to keep revisionists at bay. 

But many Americans hoped that with the end of the Cold War, this task would be finished and that their country could become a “normal” nation with normal—which was to say, limited—global interests. 

But the global hegemon cannot tiptoe off the stage, as much as it might wish to. It especially cannot retreat when there are still major powers that, because of their history and sense of self, cannot give up old geopolitical ambitions—unless Americans are prepared to live in a world shaped and defined by those ambitions, as it was in the 1930s.

The United States would be better served if it recognized both its position in the world and its true interest in preserving the liberal world order. 

In the case of Russia, this would have meant doing everything possible to integrate it into the liberal order politically and economically while deterring it from attempting to re-create its regional dominance by military means. 

The commitment to defend NATO allies was never meant to preclude helping others under attack in Europe, as the United States and its allies did in the case of the Balkans in the 1990s, and the United States and its allies could have resisted military efforts to control or seize land from Georgia and Ukraine. 

Imagine if the United States and the democratic world had responded in 2008 or 2014 as they have responded to Russia’s latest use of force, when Putin’s military was even weaker than it has proved to be now, even as they kept extending an outstretched hand in case Moscow wanted to grasp it. 

The United States ought to be following the same policy toward China: make clear that it is prepared to live with a China that seeks to fulfill its ambitions economically, politically, and culturally but that it will respond effectively to any Chinese military action against its neighbors.

It is true that acting firmly in 2008 or 2014 would have meant risking conflict. But Washington is risking conflict now; Russia’s ambitions have created an inherently dangerous situation. 

It is better for the United States to risk confrontation with belligerent powers when they are in the early stages of ambition and expansion, not after they have already consolidated substantial gains. 

Russia may possess a fearful nuclear arsenal, but the risk of Moscow using it is not higher now than it would have been in 2008 or 2014, if the West had intervened then. 

And it has always been extraordinarily small: Putin was never going to obtain his objectives by destroying himself and his country, along with much of the rest of the world. 

If the United States and its allies—with their combined economic, political, and military power—had collectively resisted Russian expansionism from the beginning, Putin would have found himself constantly unable to invade neighboring countries.

Unfortunately, it is very difficult for democracies to take action to prevent a future crisis. 

The risks of acting now are always clear and often exaggerated, whereas distant threats are just that: distant and so hard to calculate. 

It always seems better to hope for the best rather than try to forestall the worst. 

This common conundrum becomes even more debilitating when Americans and their leaders remain blissfully unconscious of the fact that they are part of a never-ending power struggle, whether they wish to be or not.

But Americans should not lament the role they play in the world. The reason the United States has often found itself entangled in Europe, after all, is because what it offers is genuinely attractive to much of the world—and certainly better when compared with any realistic alternative. 

If Americans learn anything from Russia’s brutalization of Ukraine, it should be that there really are worse things than U.S. hegemony.

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Measure Twice: Sizing Europe’s Natural Gas Crisis @DoombergT
Law & Politics

There isn’t a universal unit of measure, and no commodity suffers more from a bewildering array of seemingly disconnected measurement units than natural gas. 

The price of natural gas in the US is quoted in dollars per million British thermal units (BTU). In Europe, it is priced in Euros per megawatt-hour (MWh). 

Production might be quoted as billion cubic feet per day (bcf/d), billion cubic meters per day (bcm/d), or million metric tonnes per year. 

Given the prominent place natural gas occupies in the current news cycle, such unit heterogeneity does the public a disservice.

How much gas does Europe buy from Russia? Most estimates peg the annual amount to about 155 billion cubic meters. 

There are 35.3 cubic feet in a cubic meter, and there are 365 days in a year, thus Europe has a 15 bcf/d gap to fill by turning off the Russian spigot [(155 x 35.3)/365 = 15 bcf/d].

Thanks to the shale revolution, the US now produces approximately 96 bcf/d of natural gas. 

Of that amount, nearly 12 bcf/d is exported via newly constructed LNG terminals. 

Said another way, Europe’s Russian natural gas imports represent the equivalent of 125% of the entire current US LNG export capacity. This is a significant number.

According to data from S&P Global, total LNG exports amounted to approximately 377 million metric tonnes in 2021. 

To convert this into our bcf/d framework, there are 48.7 billion cubic feet in a million metric tonnes and still 365 days in a year, making the global LNG export market approximately 50 bcf/d across all sources [(377 x 48.7)/365 = 50 bcf/d].
At a rate of 15 bcf/d, Europe relies on Russia for the equivalent of 30% of the entire global LNG export market. 

Given the price elasticity of demand for natural gas, and the fact that countries like Japan, South Korea, China, and India depend heavily on LNG imports to meet their energy needs, the nature of the challenge facing Europe becomes clearer.

Aside from securing commercial agreements for alternative supply, there is also the issue of whether Europe has the capacity to accept more LNG imports. 

Regasification requires specialized import terminals and pipelines to distribute the gas, both of which seem to be in short supply. 

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Rocketing Prices Test Europe’s Political Resolve in Confrontation With Russia @WSJ
Law & Politics

Surging food and fuel prices following Russia’s invasion of Ukraine are fueling discontent across Europe, testing Western democracies’ political resilience.
The first round of France’s presidential election on Sunday saw right-wing populist Marine Le Pen get 22.9% of the vote on the back of a campaign focused on voters’ dwindling purchasing power. 

Her far-left rival, Jean-Luc Mélenchon, whose campaign focused on prices, wages and welfare benefits, wasn’t far behind, with 22% of votes.

From France to Spain, Germany and Greece, a combination of near-stagnant wages and rising prices is sparking protests and piling pressure on governments fragilized by years of unpopular Covid-19 restrictions.

The darkening mood raises questions about how much European voters are willing to tolerate the economic costs of what looks likely to become a protracted confrontation with Russia.
Russia accounts for around 40% of the European Union’s imports of natural gas, a key source of energy for the bloc. 

It also supplies around a quarter of the bloc’s oil imports. 

While supplies of both have continued to flow from Russia, their prices have risen sharply.

Eurozone energy prices rose 12.5% in March from February and were 44.7% higher than a year earlier, according to the European Union’s statistics agency. 

Food prices are also rising rapidly, up 0.9% in March and 5% from a year earlier, partly driven by concerns about a shortage of wheat and vegetable oil, which Russia and Ukraine produce in large quantities.

Samira Tafat, a podiatrist who lives in the Paris region, spends most of her day at the wheel, making house calls. Her husband is a taxi driver.

“Our fuel budget is huge, it’s become unmanageable,” she said. “I have three children, I need to feed them.”
Some 79% of roughly 4,000 people polled across France, Germany, Italy and Poland supported economic sanctions against Russia, according to an Ifop survey from early March, while 67% supported supplying military equipment to Ukraine.

However, worries about the cost of living are rising. A separate survey by YouGov published last month found 82% of Germans expect their household bills to increase over the coming 12 months, alongside 79% of Italians and 78% of Spaniards.

This economic uncertainty is providing an opportunity for populist parties that remain in the opposition across most of Europe to refocus their public message away from traditional anti-immigration, anti-Islam and law-and-order positions.
In France, Ms. Le Pen’s campaign focused on the economic sting of rising inflation. 

She has held rallies in small rural towns, pledging to slash taxes on fuel and other essentials and to give businesses incentives to raise wages.
By contrast, President Emmanuel Macron’s advisers said the leader was too busy taking calls with President Biden and his Russian counterpart, Vladimir Putin, about the war in Ukraine to campaign in earnest or debate with his rivals.

Some right-wing populist leaders elsewhere in Europe have echoed Ms. Le Pen’s approach. 

Matteo Salvini, leader of Italy’s anti-immigrant League party, has avoided speaking about the war, focusing instead on taxes and the economy.
Morena Colombi, who works at a cosmetics company near Milan, said her most recent two-month heating bill was 1,250 euros, equivalent to around $1,361. That compared with €450 for the same period last year. 

She said that even before the war in Ukraine, her salary wasn’t keeping up with inflation.
She used to go out for a pizza with her son or friends about every other weekend, but lately has been doing it once a month. 

She has cut down on visits to the beautician and resorted to “do it yourself grooming” instead. 

She has also started shopping at discounters for groceries.

“I’m anxious all the time now because I see prices going up every day,” said Ms. Colombi, 61. “Prices go up and the salary is what it is.”

Energy and food price rises hit the poor hardest, because such essentials account for a larger share of their budgets. 

In Europe, wages haven’t kept pace with inflation, making Europeans poorer in real terms and threatening the region’s post-Covid-19 economic recovery.
In the final three months of 2021, hourly wages were 1.5% higher than a year earlier, while the average rate of inflation was 4.7%—a fall in real wages of 3.1%.
“Everything is increasing except our salaries,” said Aurélie Karmann, a factory worker and mother of two who lives in Stiring-Wendel, a small town close to France’s border with Germany. “It is becoming very hard.”

A YouGov poll of German consumers released April 3 showed 15.2% of respondents said they could no longer afford basic necessities and 53.4% were concerned about rising prices, up 10 points in three months.

Last week, Greece’s two largest labor unions held a nationwide strike to protest rising prices and call for an increase in the minimum wage. 

The Greek government has spent more than €3 billion on offsetting the effects of inflation, for instance, by offering subsidies for power and gas bills.
“Prices are going up everywhere: supermarkets, clothing, water, electricity, gas, heating,” said Frosso Batzi, 51, who works for a clothing company in Greece and is married with two children. “It is getting worse all the time.”
Esther Lynch, deputy secretary-general of the European Trade Union Confederation, which represents 45 million workers, says the level of inflation, not seen since the 1980s, is pushing demands for higher wages.

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Part V: The Myth of the Blind Watchmaker @CharlesRixey

In his 1986 book The Blind Watchmaker, the evolutionary biologist Richard Dawkins made an evolutionary case for the emergence of complex life by contrasting that process with the earlier ‘Watchmaker’ argument in favor of creationism. 

In its original form, the idea was that the existence of a watch logically implies the existence of a watchmaker capable of creating such an intricate device. 

Dawkins argued that the apparent intricacy of evolution [a natural process] is a result of countless generations of random mutations guided by natural selection.
In its own way, the origin of SARS-CoV-2 [the virus that causes the disease COVID-19] is a modern-day example of this argument - one whose answer may have enormous implications. 

In this latest version, the scientists who’ve claimed that the virus naturally jumped from an animal to humans [zoonosis] are following the blind watchmaker logic, while engaging in such unprecedented gaslighting that actual evidence has become impossible to see through the smoke.
The intensity of the campaign to smother the lab-leak hypothesis for COVID-19 has always seemed out of proportion to the evidence that points to either possibility, but the strength of the assertions from the global experts on coronavirology & microbiology quickly established the appearance of an authoritative consensus. 

The majority of my research has been focused on compiling and laying out the evidence that shows how Anthony Fauci & others manufactured that consensus, and used censorship to prevent the public from learning of their activities.
An Abstract in 4 Key Points:
-Dr. Fauci and a few other senior scientists knew instantly that the discovery of HIV spike inserts within the SAR-CoV-2 viral genome made it almost impossible for the virus to be natural.
-They knew about the Furin cleavage site [FCS], the single biggest genomic contributor to SARS-CoV-2’s ability to become a pandemic virus.
- They suppressed treatments that were already available – including the very fusion inhibitors implicated by the existence of the HIV inserts.
-Much of what has been done to combat the pandemic – especially here in the United States – has been the opposite of what would’ve been recommended, had all of the information been publicly known in early 2020.
I know why Dr. Fauci was so unsettled by the Indian paper. Pradhan et al had found the HIV inserts, but they didn't know why they'd be there. Arkmedic felt that the inserts were tied to an antidote, but we knew that there were still missing pieces.
Here are some basic implications of what’s been found:
-Dr. Fauci panicked when the HIV inserts were announced, because he knew they proved 'intelligent design'
-Dr. Fauci suppressed fusion inhibitors, despite knowing their early-treatment potential
-This was done despite the fact that Gallaher had invented this niche of therapeutics for CoV's
-By suppressing this info about the inserts - and about the FCS - Dr. Fauci kept medical professionals in the dark about how infectious the virus was, and how dangerous the potential long-term effects on the immune system might be
Dr. Fauci knew that the specific HIV inserts served the purpose of making the virus more susceptible to fusion inhibitors. 

Why would he decline? Because calling attention to this vulnerability would naturally highlight the fact that the inserts were unnatural, which would make US grant support via NIH, USAID & DTRA linked to research that produced a potential pandemic pathogen [this was back when COVID-19 had killed a hundred people, not 6 million].

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The Origin of #COVID19

“If they can get you asking the wrong questions, they don't have to worry about answers.”

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04-JAN-2021 Today only the Paid for Propagandists and Virologists will argue that there is a 'zoonotic' origin for COVID19.

Today only the Paid for Propagandists and Virologists and WHO will argue that there is a ''zoonotic'' origin for COVID19.
It is remarkable that the Propaganda is still being propagated more than a year later.
Those who have chosen to propagate this narrative are above the radar and in plain sight and need to be called to account.
The Utter Failure to call these 5th columnists to Account is the clearest Signal that there is no external threat because it is already on the inside.

13-JUL-2020 :: Year of the Virus ’Zoonotic’’ origin was one that was accelerated in the Laboratory

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27-JUL-2020 It is impossible to ignore the introduction of a PRRA insert between S1 and S2: it sticks out like a splinter. This insert creates the furin cleavage site

When I first saw the furin cleavage site in the viral sequence... I said to my wife it was the smoking gun... mak[ing] a powerful challenge to the idea of a natural origin for #SARSCoV2." virologist David Baltimore, former president of @Caltech

There's 1 thing that I absolutely trust the scientists about - that the Furin Cleavage Site is the essential piece of this puzzle. @CharlesRixey

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.078855
Dollar Index 100.739
Japan Yen 126.7295
Swiss Franc 0.94407
Pound 1.302045
Aussie 0.735755
India Rupee 76.25960
South Korea Won 1235.270
Brazil Real 4.6807
Egypt Pound 18.604300
South Africa Rand 14.725185

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UK households cancel streaming subscriptions in record numbers @FT

British households have cancelled video subscriptions in record numbers as they curb non-essential spending to cope with the cost of living squeeze, reinforcing concerns that a pandemic-fuelled boom in streaming is over.
Consumers walked away from about 1.5mn video on-demand accounts such as Disney Plus, Apple TV Plus and Now during the first three months of the year, according to figures from analytics group Kantar.
While 58 per cent of households retain at least one streaming service, a decline of only 1.3 per cent from the end of 2021, the terminations suggest that viewers have become more discerning about subscribing to multiple platforms.
A desire to save money was the most important reason for the cancellations and young adults have become particularly wary of paying for television on top of the £159 annual licence fee, the researchers found.
Netflix and Amazon’s Prime Video had the lowest churn rates in the quarter. Kantar said this was a sign they were “the last to go when households are forced to prioritise”.

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@WorldBank for each one percentage point increase in food prices, 10 million people are thrown into extreme poverty worldwide. @WFPChief @KGeorgieva @NOIweala @DavidMalpassWBG

“The world is shaken by compounding crises. The fallout of the war in Ukraine is adding to the ongoing COVID-19 pandemic that now enters its third year, while climate change and increased fragility and conflict pose persistent harm to people around the globe. Sharply higher prices for staples and supply shortages are increasing pressure on households worldwide and pushing millions more into poverty. The threat is highest for the poorest countries with a large share of consumption from food imports, but vulnerability is increasing rapidly in middle-income countries, which host the majority of the world’s poor. World Bank estimates warn that for each one percentage point increase in food prices, 10 million people are thrown into extreme poverty worldwide.”

“The rise in food prices is exacerbated by a dramatic increase in the cost of natural gas, a key ingredient of nitrogenous fertilizer. Surging fertilizer prices along with significant cuts in global supplies have important implications for food production in most countries, including major producers and exporters, who rely heavily on fertilizer imports. The increase in food prices and supply shocks can fuel social tensions in many of the affected countries, especially those that are already fragile or affected by conflict.”

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Commodity Prices will continue to surge. Just look at Food Prices last month.

Food prices are soaring at a record pace, rising another 13% in March. @lisaabramowicz1
“But it is a curve each of them feels, unmistakably. It is the parabola They must have guessed, once or twice -guessed and refused to believe -that everything, always, collectively, had been moving toward that purified shape latent in the sky, that shape of no surprise, no second chance, no return.’’
Gravity’s Rainbow is a 1973 novel by Thomas Pynchon

The consequences for global stability are now unfathomable.

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In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state.

Lorenz wrote:
"At one point I decided to repeat some of the computations in order to examine what was happening in greater detail. I stopped the computer, typed in a line of numbers that it had printed out a while earlier, and set it running again. I went down the hall for a cup of coffee and returned after about an hour, during which time the computer had simulated about two months of weather. The numbers being printed were nothing like the old ones. I immediately suspected a weak vacuum tube or some other computer trouble, which was not uncommon, but before calling for service I decided to see just where the mistake had occurred, knowing that this could speed up the servicing process. Instead of a sudden break, I found that the new values at first repeated the old ones, but soon afterward differed by one and then several units in the last decimal place, and then began to differ in the next to the last place and then in the place before that. In fact, the differences more or less steadily doubled in size every four days or so, until all resemblance with the original output disappeared somewhere in the second month. This was enough to tell me what had happened: the numbers that I had typed in were not the exact original numbers, but were the rounded-off values that had appeared in the original printout. The initial round-off errors were the culprits; they were steadily amplifying until they dominated the solution." (E. N. Lorenz, The Essence of Chaos, U. Washington Press, Seattle (1993), page 134)[7]
Elsewhere he stated:
One meteorologist remarked that if the theory were correct, one flap of a sea gull's wings would be enough to alter the course of the weather forever. The controversy has not yet been settled, but the most recent evidence seems to favor the sea gulls.

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Think about that: only 14% of the world’s economy will remain unharmed by Putin this year. @David_McNair

Why is this happening?  Well, it’s mostly about commodity prices - food and energy.

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This is the most important chart around. @Theimmigrant84

‘’You can print money, but not oil to heat or wheat to eat’’ wrote @CreditSuisse’s Zoltan Pozsar.

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US UK European Sanction warfare cc @JoeBiden @BorisJohnson @vonderleyen H/T NorthmanTrader

I think Macro Investors are totally failing to understand The Putin response and its centrality to the Macro Story

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@StanChart Plans to Exit Seven Markets in Africa, Middle East @markets
Emerging Markets

Lender says it will instead focus on faster growing markets
Markets to be exited made up around 1% of total group income
Standard Chartered Plc is planning to exit its operations in seven countries in Africa and the Middle East as the lender looks to focus attention on the region’s largest and fastest growing markets including Saudi Arabia and Egypt.
The lender said in a statement Thursday that it will no longer have a presence in Angola, Cameroon, Gambia, Jordan, Lebanon, Sierra Leone and Zimbabwe.

 It will also exit consumer, private and business banking businesses in Tanzania and the Ivory Coast to focus solely on corporate, commercial and institutional banking there.

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Watch as Sri Lankans break through a police barricade during a protest. Currency devaluation, inflation, food shortages, and energy shortages are plunging Lanka into chaos. @steve_hanke
Emerging Markets

Paul Virilio Speed and Politics

“The revolutionary contingent attains its ideal form not in the place of production, but in the street, where for a moment it stops being a cog in the technical machine and itself becomes a motor (machine of attack), in other words, a producer of speed.’’

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British home secretary Priti Patel and Rwandan foreign minister Vincent Biruta shake hands after signing an agreement in Kigali, Rwanda © Simon Wohlfahrt/AFP/Getty Images

Priti Patel’s blithe comment that asylum seekers will be able to “settle and thrive” in Rwanda, under the terms of a deal struck with the government in Kigali, is triggering widespread incredulity.
Rwanda is not only one of the poorest countries in the world, it is the single most densely populated state in Africa, a nation already struggling to accommodate a refugee caseload of its own — 130,000 refugees, mostly from neighbouring Democratic Republic of Congo.

For Kagame, this deal with the UK marks part of a relentless and strikingly effective campaign to persuade the west to embrace him as a proactive African leader offering radical solutions to thorny domestic and foreign policy problems.
When Total’s giant liquefied gas project in Mozambique was closed by jihadist rebels last year, for example, Kagame was quick to send 1,000 troops, which swiftly secured the area and won him admiration from France’s Emmanuel Macron. 

This new offshore processing deal possesses a similar imaginary silver bullet quality.
The problem is that the solutions offered tend to be cosmetic, short-lived and often come with a sinister sting in the tail.
Rwanda’s operation in Mozambique has done nothing to address the marginalisation that caused the jihadist insurgency in the first place, and there are signs the rebels merely shifted their operations into Tanzania. 

That deployment has also coincided with a spate of assassinations and disappearances of high-profile Rwandan exiles who had sought safety in Maputo.
Patel’s asylum agreement does not even possess the merit of originality. 

Not long ago, Denmark’s government struck a migration deal with Rwanda, but it seems not a single migrant has been dispatched there yet.

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Italian PM Mario Draghi will travel to central & outhern Africa next week in pursuit of further supplies after Italy struck agreements for Algerian & Egyptian gas. @BBGAfrica @MwangoCapital

Italy is looking for alternatives to  Russia from where it currently gets about 40% of its gas.


There is no silver Bullet in the short term 

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Egypt's mounting debt crisis @MiddleEastEye

By the end of the 2020/2021 fiscal year, Egypt's total debt reached $392bn. That includes $137bn in external debt, which is four times higher than in 2010 ($33.7bn). It also includes $255bn in internal debt, according to the Central Bank of Egypt, almost double domestic debt in 2010.
Figures released by the Daily News Egypt last week also revealed that the government is expected to borrow EGP 634bn ($34bn) from the local market in the last quarter of the 2021/2022 fiscal year.
External debt has been growing rapidly since President Abdel Fattah el-Sisi came to power in 2014. It stood at $46.5bn in 2013, then declined to $41.7bn in 2014 before surging in the following years, reaching $84.7bn in 2016, $100bn in 2018 and $115bn in 2019.
The ratio of the foreign debt to gross domestic product (GDP) is now 33.9 percent, which is relatively within safe limits according to international standards, which consider the ratio safe so long as it is below 60 percent. 
However, when added to domestic debt, $79.4bn towards the end of the 2012/2013 fiscal year and now $255bn, the ratio of the total debt to GDP becomes 89.84 percent, significantly higher than safe limits. 
In 2021, Egypt ranked 158th of 189 countries in the ratio of debt to GDP and 100th in debt per capita.
In January, the government debt-to-GDP ratio was 91.6 percent, up from 87.1 percent in 2013. 

The government says it hopes to reduce the total debt-to-GDP ratio to 85 percent in the coming three years. 
IMF loans to Egypt since 2016 are significantly higher than the IMF's quota, and accordingly incurs an interest rate surcharge, according to a report by the Project on Middle East Democracy (POMED). The country has become the IMF's largest client after Argentina.
Egyptian economists express concerns that most of the debt will go towards serving older debt or repayments.  
"The new financial resources need to create returns that help the state to repay the debts and the interests," Egyptian economic analyst Mamdouh al-Wali told Middle East Eye. 

"We need to use the loans in the production of commodities and services, not in the repayment of debts."  
Apart from its ever-growing debt, the government has spent the bulk of its available revenues in recent years on megaprojects that "have a symbolic rather than economic value," according to the POMED report by Robert Springborg.

Overall spending in the 2020/2021 budget was $93bn. Out of this, $30.7bn went to servicing debt. 

Coupled with a huge amount of money that goes to paying the salaries of the nation's more than six million civil servants ($18.2bn in the 2020/2021 budget), this leaves the rest of the budget to cover health, education and other services, and development.
Economists expect Egypt's foreign and domestic debt to keep increasing in the coming period for a number of reasons. 
The war in Ukraine has deprived Egypt of an important source of national income, namely tourism, as almost a third of tourist inflows in recent years came from Russia and Ukraine. 
In 2019, the tourism sector brought in $13bn in revenue.

On 21 March, Egypt raised the interest rate by 100 basis points and devalued its currency by 14 percent in the aftermath of Russia's invasion of Ukraine. 

The aim was to curb foreign capital outflows, stabilise the exchange rate of the Egyptian pound and prevent overall debt from growing. 

Saudi Arabia has already deposited $5bn in the Central Bank of Egypt. It has also said it would invest an additional $10bn in the country in the coming period. 

The United Arab Emirates has invested $2bn in the purchase of the government's share in several projects, including a major bank and a fertiliser company. 
Qatar said it would invest $5bn in Egypt in the coming years, without specifying the type of investment.
What is happening to foreign reserves?
The war has also impacted foreign reserves, which were just short of $41bn at the end of February this year, then dropped by almost $4bn in March to $37.082bn.

Remittances from Egyptian workers in other countries amounted to $31.5bn in 2021. 
Economists like al-Omda expect remittances to increase this year, with Gulf states, where millions of Egyptians work, making gains from the higher oil price caused by the war. 
Egypt's commodity exports were over $30bn in 2021. 

The annual inflation rate jumped to 12.1 percent in March, up from 4.8 percent in the corresponding month last year, according to the government.

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@FlyJambojet Taifa Gas reap big in new Dar-Nairobi trade agreement @The_EastAfrican

Kenya and Tanzania have hammered out a bilateral trade deal cutting across the aviation and energy sectors, enabling growth of the Common Market.
In the new deal, Kenyan airline Jambojet will now be allowed to fly to destinations in Tanzania while Tanzania’s Taifa Gas has been granted permission to establish a plant in Kenya’s Export Processing Zone.

The two East African Community partners have also resolved the disputes involving aviation, tour vans, Covid-19 clearance certificates, clearance of goods at the Namanga-Kenya-Tanzania border and mutual recognition of engineers’ certificates.

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by Aly Khan Satchu (www.rich.co.ke)
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April 2022

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