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Wednesday 24th of August 2022
 


UK inflation to hit 18% in early 2023, Citi forecasts
World Of Finance


UK inflation to hit 18% in early 2023, Citi forecasts


British consumer price inflation is set to peak at 18.6% in January, more than nine times the Bank of England's target, an economist at U.S. bank Citi said on Monday, raising his forecast once again in light of the latest jump in energy prices.
"The question now is what policy may do to offset the impact on both inflation and the real economy," Benjamin Nabarro said in a note to clients.
Consumer price inflation was last above 18% in 1976.

"This means getting rates well into restrictive territory, and quickly," Nabarro said. 

"Should signs of more embedded inflation emerge, we think Bank Rate of 6-7% will be required to bring inflation dynamics under control''

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Sunday, April 10, 2022 The moment we find ourselves is in is one of extreme stress and complexity.
World Of Finance


Sunday, April 10, 2022 The moment we find ourselves is in is one of extreme stress and complexity. 




The Geopolitical fault line is most visible in Ukraine and therefore at the European periphery, however, fault lines are emerging all over the global landscape and exhibiting multiple feedback loops, which feedback loops all have viral and exponential characteristics.


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The policymakers to follow are no longer central bankers, but heads of state at the pinnacle of power who aren’t known for the transparency of their thinking – especially not when at war. @CreditSuisse Zoltan Pozsar
World Of Finance


By extension, Russia and China have been the main “guarantors of macro peace”, providing all the cheap stuff that was the source of deflation fears in the West, which, in turn, gave central banks the license for years of money printing (QE).

Maybe to understand the path of inflation from here, we should read less Friedman and Schwartz and much-much more Brzezinski and Mackinder

Wars are hard to forecast...
...as are all the “tits” for “tats” in an unrestricted, geostrategic game of Go (or chess, depending on your perspective

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War and Interest Rates @CreditSuisse Zoltan Pozsar
World Of Finance



War and Interest Rates @CreditSuisse Zoltan Pozsar 



 
Getting right where inflation goes from here is basically a matter of perspective: 

do you see inflation as cyclical (a messy re-opening after Covid, exacerbated by excessive stimulus) or structural (a messy transition to a multipolar world order, where two great powers are challenging the might and hegemony of the U.S.). 

If the former, inflation has peaked. If the latter, inflation has barely started, and could actually be understood as an outright instrument of war, for as Lenin said, “the best way to destabilize the capitalist system [is] to debauch the currency”


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War and Interest Rates @CreditSuisse Zoltan Pozsar H/T @RonStoeferle
World Of Finance



War and Interest Rates @CreditSuisse Zoltan Pozsar H/T @RonStoeferle 


The market can talk all it wants about a “soft landing,” but as explained above, we need an “L”-shaped adjustment in activity, and an “L”-shape has two parts: first an “I” which you can think of as a vertical drop (perhaps a deep recession); second, an “_” which you can think of as a flatline (stagnation, as in stagflation).

Regarding the first bit, there is nothing “soft” about a vertical drop.
Regarding the second bit, there is nothing that guarantees an interest rate cut after the vertical drop: stagnation, especially when paired with inflation (stagflation), means that interest rates may be kept high for a while to ensure that rate cuts won’t cause an economic rebound (an “L” and not a “V”), which might trigger a renewed bout of inflation. 


But make no mistake about it: the risk of the Fed hiking to 5% or 6% is very real, and ditto the risk of rates cresting there despite economic and asset price pain.

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The Masque of Pandora Alastair Crooke
World Of Finance



The Masque of Pandora Alastair Crooke


This, however, is but the initial step. When the western financial authorities say they ‘welcome’ a recession to destroy demand – and so to reduce inflation – implicit in this statement is an élite conviction that protest can and will be successfully squashed.
All the signs are that a ruthless, violent, and administrative suppression of popular disquiet is being contemplated.


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"Crisis is the new normal," says the Alexandre Bompard, the Chief Executive of retailer Carrefour (CARR.PA). "What we have been used to in the last decades - low inflation, international trade - it's over," he told investors.
World Of Finance


At 9%, inflation in the euro area is at levels not seen in a half a century and it is sapping purchasing power with spare cash used up on petrol, natural gas and staple food.
Retail sales are already plunging, months before the heating season starts and shoppers are scaling down their buys. In June, retail sales volumes were down nearly 4% from a year earlier, led by a 9% drop recorded in Germany.

Close to half of Europe's aluminium and zinc smelting capacity is already offline while much of fertilizer production, which relies on natural gas, has been shut.

"The gas shock today is much greater; it is almost double the shock that we had back in the 70s with oil," Caroline Bain at Capital Economics said. 

"We've seen a 10 to 11 fold increase in the spot price of natural gas in Europe over the last two years."

Wholesale gas prices in Germany, the bloc's biggest economy, are up five-fold in a year but consumers are protected by long term contracts, so the impact so far has been far smaller.
Still, they will have to pay a government mandated levy and once contracts roll over, prices will soar, suggesting the impact will just come with a delay, putting persistent upward pressure on inflation.

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“We live lives that are waveforms constantly changing with time, now positive, now negative. Only at moments of great serenity is it possible to find the pure, the informationless state of signal zero.” ― Thomas Pynchon, Gravity's Rainbow
Misc.

“We live lives that are waveforms constantly changing with time, now positive, now negative. Only at moments of great serenity is it possible to find the pure, the informationless state of signal zero.” ― Thomas Pynchon, Gravity's Rainbow

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Descent Into Madness Alastair Crooke
Law & Politics


Descent Into Madness  Alastair Crooke



Arguments no longer revolve around truth. You are either ‘with the narrative’ or ‘against it’, Alastair Crooke writes.
“Madness is the exception in individuals; but the rule within groups”

As the means of communication have become decentralized, digitized and algorithmic, state collusion with the tech platforms in controlling contemporary culture has forced individuals into herds, where reductive analysis, hearsay, and a toxic sneering at any contrariness, serves to fuel viewer MSM ‘clicks’ – even as it freezes cold both creative imagination and intellect.
There is no standing apart from this discourse; there is no thinking outside of the Twitter feed. 

The digital psyche, like Adam in Eden, however, gives names to things. You are not ‘you’: You are the label you are given; your work is the sum of what is said about it; your ideas are reducible to the web reaction to them. 

Groupthink thus refers to a deterioration of mental efficiency and moral judgment that results in the formation of a pseudo-reality, severed from the World, and generated for wider ideological ends.
Groupthink is not a segment of society thinking its own rationality. It is a loop-rationality that allows some self-imagined reality to detach; to drift further and further from any connection to reality, and then to transit into delusion – always drawing on like-minded peer cheerleaders for its validation and extended radicalisation.
The point here, as Dr Robert Malone has observed, is to move away from the focus on external actors and literal forces, and to consider the psychological processes fuelling the denialism – and the seeming hypnosis of colleagues, friends and family.
Dr Malone is understandably focussed on the “madness that has gripped the U.S.”, which has been directly responsible for “the amazingly unscientific and counterproductive decisions – bypassing normal bioethical, regulatory and clinical development norms – to expedite genetic vaccine products”. But Malone’s comments have a much broader import:
“Just as within groups of ordinary citizens, a dominant characteristic appears to be remaining loyal to the group by sticking with the decisions to which the group has committed itself – even when the policy is working badly and has unintended consequences that disturb the conscience of the members. 

In a sense, members consider loyalty to the group the highest form of morality. That loyalty requires each member to avoid raising controversial issues, questioning weak arguments, or calling a halt to wishful thinking”.
“Paradoxically, softheaded groups are likely to be extremely hard-hearted toward out-groups and enemies. In dealing with a rival nation, policymakers comprising an amiable group, find it relatively easy to authorize dehumanizing solutions such as large-scale bombings. An affable group of government officials is unlikely to pursue the difficult and controversial issues that arise when alternatives to a harsh military solution come up for discussion”.
“Nor are members inclined to raise ethical issues that imply that this “fine group of ours, with its humanitarianism and its high-minded principles, might be capable of adopting a course of action that is inhumane and immoral””.
Arguments no longer revolve around truth but are judged by their fidelity to the tenets of singular messaging. You are either ‘with the narrative’ or ‘against it’ – betweenness being the worst ‘sin’. 

Desmet effectively has updated Hannah Arendt’s definition of a totalitarian society as “one in which an ideology seeks to displace all prior traditions and institutions, with the goal of bringing all aspects of society under the control of that ideology”. 

This can be distinguished from authoritarianism, where a state aims to monopolise political control, but does not seek a more thoroughgoing and intrusive transformation in its citizens’ worldviews, behaviours and habits of mind.
During the early 1970s, as the VietNam War foreign policy fiasco was ending, an academic psychologist, similarly focused on group dynamics and decision making, was struck by parallels between his own research findings and the group behaviours involved in the Bay of Pigs foreign policy fiasco. 

Intrigued, he began to further investigate the decision-making involved in this case study, as well as the policy debacles of the Korean War, Pearl Harbour, and the escalation of the VietNam War. 

The result was Victims of Groupthink: A psychological study of foreign-policy decisions and fiascoes by Irving Janis (1972).
Janis duly outlined three defining rules of Groupthink (as paraphrased by Christopher Booker):
First, a group of people come to share a common view, often proposed by a few individuals deemed to be credentialised. 

It is a view however, not based in reality. These adherents may be convinced intellectually that their view is right, but their belief cannot be tested in a way which could confirm it – beyond doubt. 

It is simply based on a picture of the world as they imagine it to be, or more to the point, would like it to be.
The second rule is that precisely because their shared view is essentially subjective and not provable, Groupthinkers go out of their way to insist that it is so self-evidently correct that a ‘consensus’ of all right-minded people must agree with it. 

Any contradictory evidence, and the views of anyone who does not agree with them, can be disregarded entirely.
Third, and highly significant, is the rule which states that in order to reinforce the conviction of the ‘in-group’ that their viewpoint is right, they need to treat the opinions of anyone who questions it as wholly unacceptable. 

These latter people are considered to be obtuse, and who should not be engaged with in any serious dialogue, but rather should be shut down. 

Those outside the bubble must be marginalised and if necessary, their views mercilessly caricatured to make them seem ridiculous.
If this is not enough, they must be attacked in the most violently contemptuous terms, usually with the aid of some scornfully dismissive label – such as ‘bigot’, ‘prude’, ‘xenophobe’ or ‘denier’. 

Dissent in any form cannot be tolerated. Some members of the group take it upon themselves to become ‘mind guards’ and correct dissenting beliefs.
This psychic process can cause a group to make risky or immoral decisions. 

Many of the greatest horrors of the history of humanity owe their occurrence solely to the establishment and social enforcement of a false reality – a perceived world as they imagine it to be; a pseudo-reality in the place of reality. 

The more thoroughly they take on this delusional position, the more functional psychopathy they necessarily exhibit; and thus, the less normal they become. In short, they descend into collective delusion.
However, to misperceive them as normal, when they are not, will lead others to misunderstand the motivation of ideological pseudo-realists – which is the universal installation of their own ideology – so that everyone lives passively by their totalitarianism, until it is far too late for them to change course.
Madness is a special form of the spirit and clings to all teachings and philosophies, but even more to daily life, since life itself is full of craziness, and at bottom utterly illogical. Man strives toward reason only so that he can make rules for himself
The point here is that a rational geo-political analysis of Mass Formation Psychosis is pointless. 

Only a psychotherapist might have relevant observations to make. 

Nothing said about mass denialism makes sense, beyond recognising its malign existence.
It is what ‘it is’ and will require catharsis to clear it.
This raises the well-known Solzhenitsyn paradox: Why do dissenters and libertarians not resist more? 

The people who suffer cancel culture injustices tend not to come out fighting, screaming and scratching their way back to safety. 

They tend to submit to the madness which has washed over them, partly in the hope that they will someday claw their way back. 

It’s hard to grasp at the time – that ‘this is it’ – and that they need to fight for everything.
Does Janis’ analysis then help explain geo-political events such as Europe’s hyper-ideological response to the Ukraine crisis? 

It does seem to tick all the boxes of his dissection of earlier foreign-policy fiascos. 

Group-madness is most characteristic when we come up against people who hold an emphatic opinion on some subject, yet who turn out not really to have thought it through beforehand (i.e. the comprehensive sanctioning of Russia by the EU).
And, (such as) ‘Ukrainian victory is inevitable – it is just a matter of when’; “We are at war … The public must be willing to pay the price of supporting Ukraine and for preserving the unity of the EU” … “We are at war. These things are not free”.
They have not looked seriously at the facts or the evidence. But the very fact that their opinions are not based on any real understanding of why they believe what they do, only encourages them to insist even more vehemently and intolerantly that their views were always right, and to dismiss public opposition out of hand.
All fanaticism is repressed doubt
It is said that in its literal thinking, and insistence on distanced disengagement, liberalism has an ‘empty centre’, denuded of any substantive source of moral meaning. 

Yet political life abhors a vacuum, and the centre doesn’t remain empty. 

The ‘good’ that was latched onto – as a source of collective western meaning – is ‘the saving of the liberal order’, preserving its’ ideological project, versus the rising appeal of civilisational states.
In his essay Men without Chests, CS Lewis characterised athumia (a failure of thumos – an Ancient Greek concept inferring human empathy and connectedness) as a disheartened, melancholic state of being that results from an education that insists that all perception of moral worth is merely subjective.
The philosopher Talbot Brewer says we all have an “evaluative outlook” on the world. 

But, if there is nothing real out there to look upon, then our evaluative capacity can make no reference to anything located beyond the subjective self. 

In that case, it is hard to see how such Groupthink can make any distinction between evaluation and self-assertion. 

Groupthink has no resort, save to impose it’s ‘values’ on the world through ideology.
Thumos more broadly asserts the moral merit of things, creating the field for moral choice. 

If all goes well, it does this in dialectic with logos, the reasoning part of consciousness. 

Working together in a well-ordered human society, they don’t just assert, they are alert to the broader value derived from the shared pragmatic interests of those who inhabit a real world together. 

This was one of Kissinger’s points in a recent Wall Street Journal interview when he underlined the need for “equilibrium” in our world.
The idea that empathy and community between humans should have any positive epistemic role to play in grasping reality is now largely foreign to contemporary western political thought

Yet, when thumos dies, the symptoms of psychic disorder, of anxiety, loneliness and bitterness inevitably take us to madness – either individually or collectively.
“The gigantic catastrophes that threaten us today are not elemental happenings of a physical or biological order, but psychic events. 

To a quite terrifying degree we are threatened by wars and revolutions which are nothing other than psychic epidemics.

 At any moment several million human beings may be smitten with a new madness, and then we shall have another world war or devastating revolution. 

Instead of being at the mercy of wild beasts, earthquakes, landslides, and inundations, modern man is battered by the elemental forces of his own psyche”.

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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
Law & Politics


Layer on top of this a highly managed media construct which is essentially a Claque where alternative voices are deplatformed and we have an environment which was accurately described thus by @FukuyamaFrancis

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. 
At a time when what is required is agile multi disciplinary thinking we have ''weaponized babble''

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“You know, we can play chess, too,” Singh said. “It was important for us to show that the fortress could come crumbling down.”
Law & Politics

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 geoeconomic debacle is off the scale.  

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US, China in a daring game of chicken over Taiwan @asiatimesonline
Law & Politics


US, China in a daring game of chicken over Taiwan @asiatimesonline 


both superpower sides have upped the ante, embarking on a daring game of chicken in the heart of the Indo-Pacific.
In a clear show of support for both Taiwan and the US House Speaker, a bipartisan delegation of American legislators led by Senator Ed Markey of Massachusetts arrived in Taiwan this week.
In response, the Pentagon is set to deploy its own warships to the area in order to stave off what the US sees as an “intensified pressure campaign” from Beijing.
Kurt Campbell, the Indo-Pacific czar in the White House, has also said “an ambitious road map for trade negotiations” with Taiwan would be announced “in the coming days”, underscoring America’s commitment to expanding strategic engagement with the self-ruling island.
The rapid expansion in Chinese and American military activities in the region, including in the hotly-disputed South China Sea, has spooked Southeast Asian nations, which have desperately sought to avoid another major conflict in their backyard.
Taiwanese President Tsai wasted no time in portraying China as an aggressive power akin to Russia, telling the visiting US delegation, “Russia’s invasion of Ukraine earlier this year has shown the threat that authoritarian nations pose to the global order.”
Moreover, China has also announced new drills around Taiwan following its recent wargames in the area which saw the People’s Liberation Army (PLA) fire missiles into Taiwanese waters, deploy fighter jets and warships across the de facto line separating the two sides in the Taiwan Straits and showcase its multi-domain offensive capabilities, 

The US Indo-Pacific czar, who was also the architect of the Obama administration’s “pivot to Asia” policy, announced that the US would deploy its own set of warships and warplanes to the area in the coming weeks in order defend regional allies and stand in solidarity with Taiwan.
Ahead of Pelosi’s visit, the US had already deployed four US warships, including the USS Ronald Reagan aircraft carrier, to the area in order to demonstrate its naval prowess and keep China’s military activities in check.
Throughout the month, the two superpowers have been embroiled in high-stakes, cutting-edge shadow boxing across regional waters

Reports suggest that the US and China were locked in an electronic warfare and reconnaissance showdown in the wake of Pelosi’s visit, testing each other’s ability to conduct full-scale operations in the event of a contingency.
Chinese State broadcaster CCTV reported the PLA deployed naval and air force assets to conduct “full tracking and surveillance” against the US Air Force transporting Pelosi and her delegation from Kuala Lumpur to Taipei earlier this month.
“The PLA deployed some electronic warfare aircraft such as the J-16D and warships to try to locate Pelosi’s aircraft, but were not successful,” a China-based source told the South China Morning Post.
“Almost all the PLA electronic warfare equipment couldn’t work properly because they were all jammed by electronic interference by the American aircraft strike group sent by the Pentagon to escort her,” the source claimed.

In early August, the Washington-based Center for Strategic and International Studies (CSIS) conducted a massive conventional warfare simulation, which showed that any actual conflict over Taiwan could cost the US as many as two aircraft carriers, 20 warships, and 500 aircraft with thousands of lives lost in what would certainly be a bloody and messy conflict unseen since the end of World War II. 
An earlier simulation by the Washington-based Center for a New American Security, which included the possibility of nuclear warfare, arrived at broadly similar yet even more devastating conclusions.

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JoeBiden is in a Pincer with Xi & Vladimir holding the console & ratcheting up the pressure & they own the timing on the Ukraine Taiwan Two Step
Law & Politics


Donald Rumsfeld Thesis of the US need to be prepared to fight in two different theatres simultaneously is set to be tested  Taiwan Ukraine




1-4-2-1


1-4-2-1. The first 1 refers to defending what has since come to be called the homeland. 

The 4 refers to deterring hostilities in four key regions of the world. 

The 2 means the U.S. armed forces must have the strength to win swiftly in two near-simultaneous conflicts in those regions. 

The final 1 means that we must win one of those conflicts “decisively,” toppling the enemy’s regime.



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Xi Jinping’s Radical Secrecy @TheAtlantic
Law & Politics


Xi Jinping’s Radical Secrecy @TheAtlantic 


Xi Jinping has never given a press conference. 

He is the head of China’s ruling Communist Party—a colossal, sprawling political machine with 96.7 million members—yet he does not have a press secretary. 

His office does not preannounce his domestic travel or visitor log. He does not tweet.
What are billed by the official media as important speeches are typically not released until months after Xi has delivered them in closed forums. 

Even then, the published versions can be pallid reworkings of the documents that have been circulated internally and, very occasionally, leaked.
The secretiveness of Beijing’s ruling party might once have been dismissed as a mere eccentricity, fodder for an industry of intelligence analysts and academic Pekingologists to sort through for clues about top-level machinations. 

But with Xi now often described, without hyperbole, as the “world’s most powerful man,” and on the verge of winning a norm-breaking third term later this year at the party congress, Beijing’s radical opacity has real-world consequences.

How would Xi, for example, make any decision to invade Taiwan? 

What would happen if the military pushed back? 

Could the politburo vote to overrule Xi? Does Xi feel pressure from the public to take the island? 

Almost anything China does has global fallout these days, but its internal debates and its decision-making processes are almost entirely hidden.

The challenge of finding out much at all about Xi is certainly evident in a raft of recent biographies (by, variously, the Canadian academic Alfred L. Chan; the British Sinologist Kerry Brown; and two German journalists, Stefan Aust and Adrian Geiges). 

The manner in which anyone writing about Xi and his government is forced to sniff around the perimeters of the party-state in search of scraps of information reminded me of a recurring conversation I had in China when I lived there as a journalist, on and off for about 15 years from the mid-1990s, and then during multiple visits since. 

I often heard the refrain from Chinese officials “You don’t understand China!” when they complained about this or that article of mine. My stock reply was: “You don’t want me to understand China!”
China’s official media awards draw the red lines very clearly for local journalists, who are, inevitably, far better informed than foreigners in an unapologetically closed system. 

To be considered for a reporting prize, according to the independent China Media Project, journalists must “love the Party, protect the Party and serve the Party” and adhere to the principle of “public opinion guidance.”
Heaven help any Chinese journalist who might manage to publish a real-time account of Xi’s decision making. 

At best, they would be out of a job. More likely, they would end up behind bars. Foreigners can simply be banned from entering the country ever again.
Putting aside the political dangers that secrecy engenders, Xi Jinping’s personal story alone makes him a gripping subject. 

His father, Xi Zhongxun, was a revolutionary hero and a senior official in Mao Zedong’s post-1949 government who was purged in 1962 and later sent into internal exile. 

Xi Zhongxun was then denounced in struggle sessions and imprisoned during the Cultural Revolution, a radical mobilization that Mao Zedong unleashed in 1965 to destroy his enemies.
During that turmoil, Xi himself, after starting life in an elite academy in Beijing, was exiled to an impoverished village in central China as a teenager. 

A so-called sent-down youth, he toiled in the fields and dug ditches.

Even then, after Mao died in 1976 and China began to embrace the market, Xi did not have an entirely easy ride. 

Thanks to his father’s rehabilitation, Xi did enjoy some advantages as the offspring of “red nobility,” gaining entry into a prestigious university before the education system had fully reopened. 

But after a stint as an aide to China’s defense minister during his military service, he was forced to build his career by doing the same hard slog as other Chinese officials.

Xi went to work in coastal Fujian, across from Taiwan, starting in a small, relatively poor city

During his 18-year stint in the province, he managed to avoid becoming embroiled in any of the local corruption scandals, and ended up as Fujian’s governor. 

Once he left there, for nearby Zhejiang province, he rose rapidly, transferring to Shanghai, the up escalator of Chinese politics. 

He rode it to Beijing to become the leader-in-waiting, eventually taking over as party secretary and head of the military in 2012, and state president the following year.

In Xi’s case, we know more about him than we do about previous Chinese leaders, in part because, before rising to the party’s top ranks, he talked about his upbringing. 

The party itself has published a series of reverent oral histories on his years as a sent-down youth and as an official in the provinces.
All of that can be illuminating as far as it goes—like shining a flashlight into the corner of a dark room and no farther. 

But the real business of Chinese politics, together with the rest of Xi’s story, remains securely locked down. 

These glimpses from his past encase his life in an official mythology and largely obscure, or avoid altogether, crucial questions about how he came to power and survived at turning points in his career.
None of the local or foreign books about him can explain with clarity how the party chose Xi as the nominated successor to Hu Jintao in 2007. 

Was it because Xi was considered independent of the party’s main competing factions? 

Did his revolutionary family roots swing the vote in his favor? 

Did a council of party elders support him? Who makes up the council of elders, anyway? Do they ever meet, in fact?

Formally, the head of the Communist Party in China is chosen by the Central Committee, the roughly 370-member body that acts as kind of the expanded board of directors of China, Inc. 

But there is no recorded instance of the committee ever exercising any genuine scrutiny of the party, let alone tussling over who should be leader.

Nor do any writings about Xi illuminate whatever mandate he was given when he assumed leadership of the party in late 2012, amid evident political turmoil. 

That mystery is a live issue to this day. 

China’s official press, quoting senior officials, has accused a Xi rival, Bo Xilai, and his associates of attempting to stage an intraparty coup around this time. 

Bo was the charismatic party secretary of the megacity of Chongqing, in western China, and like Xi, the son of a revolutionary hero. He is now in jail.
Xi’s first 100 days or so in office were a whirlwind, perhaps partly as a response to Bo’s attempted putsch. 

Xi inaugurated an anti-corruption campaign, began locking up liberals, set anti-poverty targets, and announced the Belt and Road Initiative, a multibillion-dollar project to invest—and build influence—in Central Asia, Southeast Asia, the Middle East, and beyond.
In late 2017, after five years in power, he dispensed with the convention of naming a successor. 

The following year, Xi abolished term limits on the presidency, effectively making himself leader in perpetuity.
Xi’s harshness shocked many in the system, and still does. What deals did he have to cut to get his way? 

The Communist Party, after all, is a political machine before anything else. If he went way past what his patrons had wanted him to do, we are, again, none the wiser.
Writing contemporaneous history in China is hard enough. Even telling its recent history is a struggle. 

Take, for example, the way that China-literate Westerners routinely credit Deng Xiaoping with opening the country up to market reforms in the late 1970s. 

As moments in history go, they don’t come much bigger than this: The economic powerhouse that China is today dates from the point when the party-state decided to kick-start growth in the aftermath of Mao’s death. 

Deng gets all the credit for these market-led measures, which is what we might call the “Time Man of the Year” version of history (Deng won the award twice, in 1978 and 1985). But this doesn’t square with the facts.

The historians Warren Sun of Monash University and Frederick Teiwes of the University of Sydney make a persuasive case that the important reforms were under way before Deng took over in 1978. 

According to their research, published in 2011 yet sometimes overlooked, Deng’s predecessor, Hua Guofeng, set in motion just about all of the policies that Deng is now credited with. 

Deng was important, of course, but he possessed the indispensable quality of strong Chinese leaders. 

He made sure that the history was written in his favor, reducing Hua to a hapless leader who had obstructed change—the reverse of the truth.

Under Xi, the battle over history has gone to another level, both in service of his own career and to ensure that the party can dictate whatever version of events it needs to align with current policy.
Glenn Tiffert, a historian of modern China at the Hoover Institution, made a remarkable discovery about a decade ago when researching the legal debates in China in the 1950s over issues such as judicial independence and the ascendancy of the law over politics and class. 

By comparing the original journals in his possession that aired these usually savage debates with their digital editions, Tiffert noticed that scores of articles had been excised from the online records. 

Any historian fresh to the issue and without access to the scarce hard copies could never have known that China had conducted such debates at all.
The doctoring of the records was designed to buttress the party’s vehement opposition to Western legal concepts. 

“The more faithful scholars are to this adulterated source base and the sanitized reality it projects, the more they may unwittingly promote the agendas of the censors,” Tiffert wrote.
Formal restrictions on research are also getting tighter. Over the past decade or so, China has been restricting access to its archives. 

In 2013, the foreign ministry placed about 90 percent of its collection out of reach. Those archives are now closed to the public altogether.

The tightening of access to sources, official and otherwise, has run in parallel with the introduction of a new criminal offense of “historical nihilism,” which can be wheeled out to suppress any version of the past that the party doesn’t like

In 2021, China’s internet regulator, doubtless trying to curry favor with Xi ahead of the party’s 100th anniversary later that year, announced that it had deleted 2 million posts containing “harmful” discussion of history on social-media sites such as Weibo (China’s equivalent of Twitter) and the ubiquitous messaging service WeChat.

With so many obstacles in their way, historians of modern China, foreign and local, are like detectives in a dangerous, suspicious neighborhood. 

One of the rising scholars of Chinese elite politics, Joseph Torigian of American University, teaches a course in fact called “Scholar as Detective.”
Decades may pass before the archives are accessible again or another time when the Chinese themselves, who are either unable or afraid to talk, start to publish memoirs and the like. 

Without that opening up, we will have little opportunity to gain deep insight into the inner workings of Xi’s rule. 

By then, our assessments will be academic: Xi’s grand ambitions for China will have played out—with wildly unpredictable results, for his country and for the rest of the world.

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Monday, October 15, 2018 In one fell swoop, President Xi Jinping was President for Life.
Law & Politics


Monday, October 15, 2018  In one fell swoop, President Xi Jinping was President for Life.


Central Committee of the Communist Party of China “proposed to remove the expression that ‘the president and vice-president of the People’s Republic of China shall serve no more than two consecutive terms’ from the country’s constitution.” 

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7 OCT 19 :: “Longing on a large scale makes history.” wrote Don DeLillo and these words streamed into my consciousness as I watched the celebrations in Tiananmen Square, which were marking the 70th anniversary of Chinese Communist Party rule.
Law & Politics


7 OCT 19 ::  “Longing on a large scale makes history.” wrote Don DeLillo and these words streamed into my consciousness as I watched the celebrations in Tiananmen Square, which were marking the 70th anniversary of Chinese Communist Party rule.


The President for Life was seeking to project a sense of inevitable forward motion and a fulfilment of the promise that Mao Zedong made on the founding of the People’s Re- public of China on October 1, 1949 that China would stand up.
They have “stood up.” Xi’s model is one of technocratic authoritarianism and a recent addition to his book shelf include The Master Algorithm by Pedro Domingos. Xi is building an Algorithmic Society.

Today we know the Chinese economy is slowing, but Xi is relying on Chinese resilience “If there is a decoupling between the two economies, so be it. The Chinese people can endure more pain than the spoiled and hubristic Americans.

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Currency Markets at a Glance WSJ
World Currencies

Currency Markets at a Glance WSJ


Euro 0.99588
Dollar Index 108.579
Japan Yen 136.4290
Swiss Franc 0.96440
Pound 1.18255
Aussie 0.691595
India Rupee 79.7415
South Korea Won 1340.690
Brazil Real 5.1051000
Egypt Pound 19.175200
South Africa Rand 17.021300

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Euro versus the Dollar Chart 0.99588
World Currencies

Euro versus the Dollar Chart 0.99588

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Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity.
Commodities


Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity.


Western markets are turbo finiancialized and for an eternity, Western banks and Central Banks have been able to distort the commodity price complex with little difficulty. 
Take the Gold market for example where derivatives are 100x the underlying. 
One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity. 
There are plenty of examples of these inorganic price moves. In essence, the Tail wags the dog. 
The challenge is where the Supply/Demand balance is precarious and a small adjustment [reduce Supply or increase Demand] tips the situation into disequilibrium. 

The Tail will no longer wag the Dog and the Dog will simply run amok.

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Saudi's know the oil price is being manipulated by the US. @thesiriusreport
Minerals, Oil & Energy


Saudi's know the oil price is being manipulated by the US. @thesiriusreport

Saudi Minister of Energy : OPEC+ has the means to deal with market challenges including cutting production at any time.
Saudi's know the oil price is being manipulated by the US.

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More than 14 million Angolans are eligible to vote and will elect the president and 220 members of parliament simultaneously, with a single mark on the ballot paper.
Africa


An Afrobarometer survey in May showed the number of Angolans favouring UNITA, led by the charismatic Adalberto Costa Júnior, had increased to 22% from 13% in 2019, still seven points behind the MPLA. Nearly half of voters were undecided.

"The moment to party has not arrived yet (but) that moment of celebration will come," Lourenço said.

Wearing red and green, UNITA's colours, thousands of people, mostly young, gathered in the suburbs of the capital Luanda on Monday for the party's final rally. 

UNITA is being backed by several groups, including the fourth-largest party, Bloco Democratico.

"There is no democracy without a change in political power," Costa Júnior told the packed rally. "The continuity of a single party in power corresponds to the postponement of Angola's development."
A report by the Institute for Security Studies said that if an MPLA win is perceived as fraudulent, unrest could follow. UNITA leader Costa Junior told Reuters on Sunday that contesting the election result was not off the table.

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Angola’s central bank may consider cutting its interest rate as inflation slows and its currency appreciates at the fastest pace in decades (via @halmeida5 & @flacqua ) @economics
Africa


Angola’s central bank may consider cutting its benchmark rate as inflation slows and after its currency appreciated at the fastest pace in decades. 
The Banco Nacional de Angola kept its benchmark rate at 20% for a sixth straight meeting in July, aided by the kwanza’s 22% gain against the dollar this year that makes it the world’s second-best performing currency tracked by Bloomberg

The central bank forecasts inflation will slow to below 18% by year-end from 21.4% in July.
With price-gains slowing “we expect interest rates to follow the same trend,” Governor Jose de Lima Massano, 53, said in an interview with Bloomberg TV on Tuesday. 

Massano wants to boost foreign-exchange reserves to cover 10 months of imports from eight months, he said. 
Cutting borrowing costs will make Angola, Africa’s second-largest oil producer, a global outlier as inflation accelerates in countries across the world. 

UK inflation is on track to surge above 18% for the first time in almost half a century next year, while Indonesia on Tuesday unexpectedly raised borrowing costs for the first time since 2018.
Angolans will vote to elect its next leader on Wednesday in the closest race since the end of a civil war in 2002 and lower interest rates will be good news for the winner. 

A smooth process will help policy makers such as Massano build on an economic recovery that resulted in the nation’s credit rating being raised by S&P Global Ratings for the first time in about a decade.
President Joao Lourenco, who heads the Popular Movement for the Liberation of Angola, or MPLA, is seeking re-election. 

He’s facing tough opposition from Adalberto Costa Junior, head of the National Union for the Total Liberation of Angola, or Unita.
While Fitch Ratings Inc. predicts Angola’s public debt will fall to 56.5% of gross domestic product in 2022, from 123.8% in 2020, its overseas debt amortization in the three years to 2025 will cost about $5.5 billion a year

That’s because Lourenco’s government has re-profiled bilateral debt owed to Chinese official lenders, according to Fitch. The southwest African country owes about $19 billion to China.
This is the second time Massano is at the helm of Angola’s central bank. 
During his current tenure, which began in 2017, the UK-educated Massano has been credited with stabilizing the exchange rate by allowing the local currency to float freely against other currencies, slowing inflation and improving the reputation of Angola’s financial sector after a series of reforms with the International Monetary Fund. 

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Egypt Nears Deal on New @IMFNews Loan in Face of Economic Crisis @markets @economics
Africa


Egypt Nears Deal on New @IMFNews  Loan in Face of Economic Crisis @markets @economics 



Egypt is nearing an agreement with the International Monetary Fund on a new loan, its prime minister said, signaling more help for the economy may be imminent after a leadership shakeup at the central bank.
“The government is in the final-agreements stage regarding new financing from the IMF,” premier Mostafa Madbouly said Monday in a statement from his cabinet. There were no further details, including on how much Egypt might borrow.
An IMF deal has become key for the Arab world’s most populous nation as it grapples with higher food and fuel import bills. 

Foreign portfolio investors have pulled some $20 billion from the local debt market amid the conflict in Ukraine.
Egypt’s Gulf allies have stepped up to support the economy of a country seen as a regional linchpin, pledging more than $22 billion in deposits and investments

Leaders of the United Arab Emirates, Jordan, Bahrain and Iraq are in Egypt on Monday for a five-country Arab summit including talks on economic, investment and trade cooperation.

Egypt has been in talks for months with the Washington-based lender, with discussions centering on a so-called Extended Fund Facility and the necessity of a more flexible exchange rate for the pound. 

Pressure is mounting on the currency even after it was devalued by about 15% in March, with economists and analysts saying it needs to fall further to reduce Egypt’s funding gap.
Goldman Sachs Group Inc. estimates Egypt may need to secure a $15 billion package from the IMF to meet its funding requirements over the next three years, though the government is asking for a smaller amount. 
The past week has seen change at the top of Egypt’s central bank. Governor Tarek Amer, who’d been in the role for about seven years and was seen as supportive of a stable pound, resigned a day before an interest-rate meeting. Veteran financier Hassan Abdalla has been named acting chief.
Egyptian Supply Minister Aly El-Moselhy on Monday told reporters the country is leaving bread subsidies unchanged for now, saying the time wasn’t right to take action. 

Authorities had previously vowed to reduce spending on the costly system that provides the staple foodstuff to an estimated 70% of the country’s 100-million-plus population.
Egypt agreed a three-year IMF program in late 2016 that involved a currency devaluation, sweeping reforms and a $12 billion loan. 

The moves helped rekindle investor interest in the economy battered by the 2011 uprising that ousted long-time President Hosni Mubarak and its aftermath.
In 2020, Egypt secured a $5.2 billion stand-by arrangement as well as $2.8 billion under the IMF’s Rapid Financing Instrument aimed at helping authorities tackle the impact of the coronavirus.

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It’s Mangoes season in #Fayoum…Do you know that Fayoum in one of the main mango producing governorates in Egypt?! 🥭🥭❤️ @Fayoumer
Africa

Fayoum alongside Ismailia, Sharkia and Giza governorates are producing 88.8% of total Egyptian production of Mangoes

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Will Kenya’s next president follow through on China contract promises? @SCMPNews
Kenyan Economy


Will Kenya’s next president follow through on China contract promises? @SCMPNews 


Kenya’s relations with China will be a priority for the country’s new president’s foreign policy because of China’s outsize role in the Kenyan economy, observers said.
The assessment comes after William Ruto, a vocal critic of China’s growing influence in Kenya, was declared president-elect in a tight and disputed race.
Ruto, 55, deputy president since 2013, gained 7.17 million votes, or 50.49 per cent of the total, while veteran opposition politician Raila Odinga had 6.94 million votes, or 48.85 per cent, Kenya’s Independent Electoral and Boundaries Commission announced on Monday.
But the Odinga campaign team rejected the results, alleging vote-rigging.

Further, the electoral commission’s deputy chairwoman said four of its seven members rejected the presidential election results, saying the results were arrived at in an opaque manner.

Throughout the campaign China, Kenya’s second-largest lender after the World Bank, was a major issue, with some politicians accusing the government of taking excessive loans to finance projects.
Kenya’s debt to China rose from US$2.1 billion in 2015 to about US$6.4 billion in December 2021, accounting for about two-thirds of all bilateral debt.
During the campaign, Ruto styled himself as a champion of the poor and advocated a “bottom-up” economics model, promising to establish a US$420 million annual fund to give affordable credit to 10 million micro and small enterprises.

He also promised to make public all contracts for major projects that Kenya signed with China.
One of the projects is the US$4.7 billion Standard Gauge Railway which was funded by China Exim Bank and runs from the port city of Mombasa to the capital city Nairobi with an extension to Naivasha, a town in Central Rift Valley.
China has also funded and built the 27.1km (16.8 miles) Nairobi Expressway, which was constructed by China Road and Bridge Corporation for US$688 million under the public private partnership model.
Ruto, who sold chickens before entering politics, also threatened to deport foreign nationals, including Chinese working illegally in Kenya and operating small retail businesses that could be done by locals.
Running for president for a fifth time, Odinga, 77, promised to renegotiate foreign debt, including that owed to China, if he won. 

As prime minister from 2008 to 2013, Odinga negotiated deals with China such as the Kenyan Standard Gauge Railway.

Michael Chege, a political economy professor at the University of Nairobi, said Ruto’s “outrageous statements” against China and resident Chinese were not unusual for political leaders seeking election.
Chege said that in a presidential campaign more than a decade ago in Zambia, the late Michael Sata warned against giving away Zambia’s sovereignty to China. 

But when elected president five years later, he changed his tune and welcomed Beijing’s continued funding for infrastructure projects.
“When Mr Ruto faces the actual project agreements of Kenya with the PRC and the consequences of expelling the Chinese, he will pause and think again,” Chege said, referring to the People’s Republic of China.

Mark Bohlund, a senior credit research analyst at REDD Intelligence, said Kenya remained a key African partner for China, but relations had frayed between the two countries due to criticism over the Standard Gauge Railway project and the performance of the rail system.
“Ruto is likely to seek to repair these relations and secure Chinese financing for key projects, such as the extension of the SGR into Uganda and also to develop Kenya’s oil resources in the Turkana region,” Bohlund said.
“It is far from certain that Ruto will make good on his promise to publish the contracts.”

Bohlund said questions of Kenya’s debt sustainability were likely to remain important in Ruto’s first term.
He said the International Monetary Fund (IMF) was likely to require some more progress on reducing the budget deficit to disburse more funds, which was likely to clash with Ruto’s political priorities.
“While repayments on Chinese debt have dominated Kenya’s external debt servicing in 2022 and are likely to remain so in 2023, the more significant threat to debt sustainability is the rollover of the US$2 billion 2024 Eurobond and syndicated loans maturing in 2025,” Bohlund said.
“Both the IMF and China are likely to seek to influence Kenya to take a more proactive approach to reduce its borrowing requirements in order to reduce the risks associated with the 2024-25 spike in external debt maturities.”
XN Iraki, a professor at the University of Nairobi’s faculty of business and management sciences, said politics and reality were two different things. “What politicians said during the campaign and what they will do is different,” Iraki said.
He said he doubted if relations with China would change dramatically. “Not when China has become this influential. The level of engagement may change. Maybe more open, more like the West,” Iraki said.
He said Chinese debt would inevitably shape the relationship. “The new regime will inherit the old debts. They will either have to pay it or renegotiate,” Iraki said.

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Equity Group Holdings Ltd reports HY 2022 EPS 6.29 +35.26% @KeEquityBank #Equity2022HYResults
N.S.E Equities - Finance & Investment


Equity Group Holdings Ltd reports HY 2022 EPS 6.29 +35.26% @KeEquityBank #Equity2022HYResults


Par Value:                  0.50/-
Closing Price:           49.00
Total Shares Issued:          3773674802.00
Market Capitalization:        184,910,065,298
EPS:             10.38
PE:                 4.721

Equity Group reports HY 2022 through 30th June 2022 versus through 30th June 2021

HY 22 Total Assets 1.333860884 Trillion versus 1.119737205 Trillion +19%

HY 22 Investment Securities 365.023144b versus 315.497412b

HY 22 Fair value through other comprehensive income (FVOCI) Kenya Government securities 223.714830b

HY 22 Fair value through other comprehensive income (FVOCI) Other Securities 127.360904b versus 111.762108b

HY 22 Loans and advances to customers (net) 650.556497b versus 504.848616b

HY 22 Customer Deposits 970.942913b versus 819.684096b

HY 22 Borrowed Funds 120.522956b versus 98.603415b

HY 22 Total Interest Income 54.973b versus 42.746576b

HY 22 Total Interest Expenses 15.169161b versus 11.591921b

HY 22 Net Interest Income 39.803839b versus 31.154655b

HY 22 Total Non Interest Income 25.844495b versus 2.767065b

HY 22 Total Operating Income 65.648334b v ersus 51.921720b

HY 22 Loan Loss Provision 4.086983b versus 2.912467b

HY 22 Staff Costs 10.818825b versus 8.518591b

HY 22 Total Operating Expenses 34.730393b versus 28.090747b

HY 22 Profit/(loss) before tax and exceptional items 30.917937b versus 23.830973b

HY 22 Profit/(loss) after tax and exceptional items 24.430474b versus 17.944198b

HY 22  Fair value changes in FVOCI assets [38.945243b] versus [2.445727b]

HY 22 Total comprehensive income for the year [13.877697b] versus 16.432692b

HY 22 EPS 6.29 versus 4.65 +35.26% 

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Our regional subsidiaries are growing faster than the Kenyan market. The subsidiaries have become high growth assets with Rwanda and Uganda recording high returns – Dr. James Mwangi, Equity MD & CEO @KeEquityBank
N.S.E Equities - Finance & Investment


Our regional subsidiaries are growing faster than the Kenyan market. The subsidiaries have become high growth assets with Rwanda and Uganda recording high returns – Dr. James Mwangi, Equity MD & CEO @KeEquityBank

Conclusions

Underlying, organic growth continues to build momentum.

However, there is a brutal mark to market downshift [but they are to be commended for taking it in a transparent manner]


HY 22  Fair value changes in FVOCI assets [38.945243b] versus [2.445727b]

HY 22 Total comprehensive income for the year [13.877697b] versus 16.432692b


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