The EU Wants To Spy On Europeans' Internet Use

  This is a complicated and technical post so most people will yawn and may move to something else. It would be a mistake because it is important. 

  There is a clear effort in Europe to take back control of the narrative. The first wave concerned platforms and their ability to remove posts. It would have been difficult 10 years ago but has become over time an easy shot. But likewise, people have become more sophisticated and the information is now becoming more diffuse and distributed to the great dismay of most Eurocrats. 

 The only way to fight this is to insert a "man-in-the-middle" in the Internet so that you can actually identify nodes of information such as this blog and suppress them before the erroneous, extremist, misinformation (pick your choice) spreads. Never mind that you made "one" mistake among hundreds of articles, the mere fact that you contradict the official version will eventually get you cancelled. Imagine such a system monitored in real time by AI and lo, the Chinese system is here. So much for democratic principles. In the end the goal of any bureaucracy is total control. No exception. We are getting closer.

Authored by Robert Blumen via The Brownstone Institute,

The European Commission is an EU legislative body with regulatory authority over digital technology. The EC’s eIDAS Article 45, a proposed regulation, would deliberately weaken areas of internet security that the industry has carefully evolved and hardened for over 25 years. The Article would effectively grant the 27 EU governments vastly expanded surveillance powers over internet use. 

The rule would require all internet browsers to trust an additional root certificate from an agency (or a regulated entity) from each of the national governments of each one of the EU member states. For the non-technical readers, I will explain what a root certificate is, how internet trust has evolved, and what Article 45 does to this. And then I will highlight some of the commentary from the tech community on this matter. 

The next section of this article will explain how the trust infrastructure of the internet works. This background is necessary in order to understand how radical the proposed Article is. The explanation is intended to be accessible to a non-technical reader.

The regulation in question addresses internet security. Here, “internet” means, largely, browsers visiting websites. Internet security consists of many distinct aspects. Article 45 intends to modify public key infrastructure (PKI), a part of internet security since the mid-90s. PKI has been at first adopted, and then improved over a 25-year period, to give users and publishers the following assurances: 

• Privacy of the conversation between the browser and the website: Browsers and websites converse over the internet, a network of networks operated by Internet Service Providers, and Tier 1 carriers; or cellular carriers if the device is mobile. The network itself is not inherently safe nor trustworthy. Your nosy home ISP, a traveler in the airport lounge where you are waiting for your flight, or a data vendor looking to sell leads to advertisers might want to spy on you. Without any protection, a bad actor could view confidential data such as a password, credit card balance, or health information. 

• Guarantee that you view the page exactly the way the website sent it to you: When you view a web page, could it have been tampered with between the publisher and your browser? A censor might want to remove content that they don’t want you to see. Content labeled as “misinformation” was widely suppressed during covid hysteria. A hacker who had stolen your credit card might want to remove evidence of their fraudulent charges. 

• Guarantee that the website you see is really the one in the browser’s location bar: When you connect to a bank how do you know that you are seeing the website of that bank, not a fake version that looks identical? You check the location bar in your browser. Could your browser be tricked into showing you a fake website that appears identical to the real one? How does your browser know – for sure – that it is connected to the correct site? 

In the early days of the internet, none of these assurances existed. In 2010, a browser plugin available in the add-on store enabled the user to participate in someone else’s Facebook group chat in a cafe hotspot. Now – thanks to PKI, you can be pretty sure of these things. 

These security features are protected with a system based on digital certificates. Digital certificates are a form of ID – the internet version of a drivers’ license. When a browser connects to a site, the site presents a certificate to the browser. The certificate contains a cryptographic key. The browser and the website work together with a series of cryptographic calculations to set up secure communication.

Together, the browser and the website provide the three security guarantees:

• privacy: by encrypting the conversation.

• cryptographic digital signatures: to ensure that the content is not modified in flight. 

• verification of the publisher: through the chain of trust provided by PKI, that I will explain in more detail below. 

A good identity should be difficult to counterfeit. In the ancient world, a wax casting of a seal served this purpose. Identities for humans have relied on biometrics. Your face is one of the oldest forms. In the non-digital world, when you need to access an age-restricted setting, such as ordering an alcoholic beverage, you will be asked for a photo ID.

Another biometric from before the digital era was to match your fresh pen-and-ink signature against your original signature on the back of your ID. As these older types of biometrics become easier to counterfeit, human identity verification has adapted. Now, it is common for a bank to send you a validation code on your mobile. The app requires you to pass a biometric identity check on your mobile phone to view the code such as face recognition or your fingerprint. 

In addition to a biometric, the second factor that makes an ID trustworthy is the issuer. IDs that are widely accepted depend on the ability of the issuer to verify that the person applying for an ID is who they say they are. Most of the more widely accepted forms of ID are issued by government agencies, such as the Department of Motor Vehicles. If the issuing agency has reliable means to track who and where its subjects are, such as tax payments, employment records, or the use of water utility services, then there is a good chance the agency can verify that the person named on the ID is that person.

In the online world, governments have, for the most part, not involved themselves in identity verification. Certificates are issued by private sector firms known as certificate authorities (CAs). While certificates used to be quite expensive, fees have come down considerably to the point where some are free. The best known CAs are Verisign, DigiCert and GoDaddy. Ryan Hurst shows the seven major CAs (ISRG, DigiCert, Sectigo, Google, GoDaddy, Microsoft, and IdenTrust) issue 99% of all certificates.

The browser will accept a certificate as proof of identity only if the name field on the certificate matches the domain name, which the browser shows in the location bar. Even if the names match, does that provide that a certificate saying “apple.com” belongs to the consumer electronics business known as Apple, Inc.? Identity systems are not bulletproof. Underage drinkers can get fake IDs. Like human IDs, digital certificates can also be fake, or invalid for other reasons. A software engineer using free open source tools can create a digital certificate named “apple.com” with a few Linux commands. 

The PKI system relies on CAs to issue any certificate only to the owner of the website. The workflow to acquire a certificate goes like this:

1. The publisher of a website applies to their preferred CA for a certificate, for a domain. 

2. The CA verifies that the certificate request comes from the actual owner of that site. How does the CA establish this? The CA demands that the entity making the request publish a specific piece of content on a specific URL. The ability to do this proves that the entity has control over the website.

3. Once the website has proven ownership of the domain, the CA appends a cryptographic digital signature to the certificate usings its own private cryptographic key. The signature identifies the CA as the issuer. 

4. The signed certificate is conveyed to the person or entity making the request. 

5. The publisher installs their certificate on their website, so it may be presented to browsers. 

Cryptographic digital signatures are “a mathematical scheme for verifying the authenticity of digital messages or documents.” They are not the same thing as the online document signing provided by DocuSign and similar vendors. If the signature could be forged, then the certificates would not be trustworthy. Over time the size of the cryptographic keys has increased with the aim of making forgery more difficult. Cryptography researchers believe that current signatures, in practical terms, are impossible to forge. Another vulnerability is when the CA has its secret keys stolen. The thief could then produce valid signatures of that CA. 

Once the certificate has been installed, then it is used during the setup of a web conversation. The Register explains how that goes:

If the certificate was issued by a known good CA, and all the details are correct, then the site is trusted, and the browser will try to establish a secure, encrypted connection with the website so that your activity with the site isn’t visible to an eavesdropper on the network. If the cert was issued by a non-trusted CA, or the certificate doesn’t match the website’s address, or some details are wrong, the browser will reject the website out of a concern that it’s not connecting to the actual website the user wants, and may be talking to an impersonator.

We can trust the browser because the browser trusts the website. The browser trusts the website because the certificate was issued by a “known good” CA. But what is a “known good CA?” Most browsers rely on the CAs provided by the operating system. The list of trustworthy CAs is decided by device and software vendors. The major computer and device vendors – Microsoft, Apple, Android phone manufacturers, and the open source Linux distributors – preload the operating system on their devices with a set of root certificates.

These certificates identify the CAs they have vetted and consider to be reliable. This collection of root certificates is called the “trust store.” To take an example close to me, the Windows PC that I am using to write this piece has 70 root certificates in its Trusted Root Certificate Store. Apple’s support site lists all of the roots trusted by the Sierra version of MacOS. 

How do the computer and phone vendors decide which CAs are trustworthy? They have audit and compliance programs to evaluate the quality of CAs. Only the ones that pass are included. See for example, the Chrome browser (which provides its own trust store rather than using the one on the device). The EFF (which describes itself as “the leading nonprofit organization defending civil liberties in the digital world”) explains:

Browsers operate “root programs” to monitor the security and trustworthiness of CAs they trust. Those root programs impose a number of requirements varying from “how must key material be secured” to “how must validation of domain name control be performed” to “what algorithms must be used for certificate signing.”

After a CA has been accepted by a vendor, the vendor continues to monitor it. Vendors will remove CAs from the trust store should the CA fail to uphold the necessary security standards. Certificate authorities can, and do, go rogue, or fail for other reasons. The Register reports:

Certificates and the CAs that issue them are not always trustworthy and browser makers over the years have removed CA root certificates from CAs based in Turkey, France, China, Kazakhstan, and elsewhere when the issuing entity or an associated party was found to be intercepting web traffic. 

In 2022, researcher Ian Carroll reported Security concerns with the e-Tugra certificate authority. Carroll “found a number of alarming issues that worry me as to the security practices inside their company,” such as weak credentials. Carroll’s reports were verified by the major software vendors. As a result, e-Tugra was removed from their trusted certificate stores. 

The Timeline of Certificate Authority Failures tells of other such incidents. 

There are still some known holes in PKI as it currently exists. Because one particular issue is important to an understanding of eIDAS Article 45, I will explain that next. A CA’s trust is not scoped to those websites that conduct their business with that CA. A browser will accept a certificate from any trusted CA for any website. There is nothing preventing the CA from issuing a website to a bad actor that was not requested by the owner of the site. Such a certificate would be fraudulent in the legal sense because of who it was issued to. But the contents of the certificate would be technically valid from the browser’s viewpoint. 

If there was a way to associate each website with its preferred CA, then any certificate for that site from any other CA would be immediately recognized as fraudulent. Certificate pinning is another standard that takes a step in this direction. But how would that association be published and how would that publisher be trusted? 

At each layer of this process, the technical solution relies on an external source of trust. But how is that trust established? By relying on an even more trusted source on the next higher plane? This question illustrates the “turtles, all the way down” nature of the problem. PKI does have a turtle at the bottom: the reputation, visibility, and transparency of the security industry and its customers. Trust is built at this level through constant monitoring, open standards, the software developers, and the CAs. 

Fraudulent certificates have been issued. In 2013, ArsTechnica reported French agency caught minting SSL certificates impersonating Google:

In 2011…security researchers spotted a bogus certificate for Google.com that gave attackers the ability to impersonate the website’s mail service and other offerings. The counterfeit certificate was minted after attackers pierced the security of Netherlands-based DigiNotar and gained control of its certificate-issuing systems.

The secure sockets layer (SSL) credentials were digitally signed by a valid certificate authority…In fact, the certificates were unauthorized duplicates that were issued in violation of rules established by browser manufacturers and certificate authority services.

Fraudulent certificate issuance can happen. A rogue CA can issue one, but they won’t get far. The bad certificate will be detected. The bad CA will fail compliance programs and be removed from trust stores. Without acceptance, the CA will go out of business. Certificate Transparency, a more recent standard, enables more rapid detection of fraudulent certificates. 

Why would a CA go rogue? What advantage can the bad guy gain from an unauthorized certificate? With the certificate alone, not much, even when signed by a trusted CA. But if the bad guy can team up with an ISP, or otherwise access the network that the browser uses, the certificate gives the bad actor the ability to break all of PKI’s security guarantees. 

The hacker could mount a man-in-the-middle attack (MITM) on the conversation. The attacker could insert himself in between the browser and the real website. In this scenario, the user would be talking directly to the attacker, and the attacker would relay the contents back and forth with the real website. The attacker would present the fraudulent certificate to the browser. Because it was signed by a trusted CA, the browser would accept it. The attacker could view and even modify what either party sent before the other side received it.

Now we come to the EU’s sinister eIDAS, Article 45. This proposed regulation requires all browsers to trust a basket of certificates from CAs designated by the EU. Twenty-seven to be exact: one for each member nation. These certificates are to be called Qualified Website Authentication Certificates. The acronym “QWAC” has an unfortunate homophone to quackery – or perhaps the EC is trolling us.

The QWACs would be issued either by either government agencies, or what Michael Rectenwald calls governmentalities: “corporations and companies and other adjuncts of the state who are otherwise called ‘private,’ but really are operating as state apparatuses, in that they’re enforcing state narratives and dictates.” 

This scheme would bring EU member governments one step closer to the point where they could man-in-the-middle attack against their own citizens. They would also need to access the networks. Governments are in a position to do that. If the ISP is run as a state-owned enterprise, then they would already have it. If ISPs are private firms, then local authorities could use police powers to gain access. 

One point which has not been emphasized in the public conversation is that a browser in any of the 27 EU member nations would be required to accept every single QWAC, one from each EU member. This means that a browser in, for example, Spain, would have to trust a QWAC from entities in Croatia, Finland, and Austria. The Spanish user visiting an Austrian website would have to transit over Austrian portions of the internet. The issues raised above would all apply across countries within the EU. 

The Register, in a piece titled Bad eIDAS: Europe ready to intercept, spy on your encrypted HTTPS connections explains one way this might work:

[T]hat government can ask its friendly CA for a copy of [the QWAC] certificate so that the government can impersonate the website – or ask for some other certificate browsers will trust and accept for the site. Thus, using a man-in-the-middle attack, that government can intercept and decrypt the encrypted HTTPS traffic between the website and its users, allowing the regime to monitor exactly what people are doing with that site at any time.

Having penetrated the shield of encryption, monitoring could include saving users’ passwords, and then using them at another time to access citizens’ email accounts. In addition to monitoring, governments could modify content inline. For example, they could remove the narratives they want to censor. They could attach annoying nanny state fact checks and content warnings to dissenting opinions.

As things currently stand, CAs must maintain the trust of the browser community. Browsers currently warn the user if a site presents an expired or otherwise untrusted certificate. Under Article 45, warnings or the ejection of trust abusers would be forbidden. Not only are browsers mandated to trust the QWACs, but Article 45 prohibits browsers from showing a warning that a certificate signed by a QWAC. 

Last Chance for eIDAS (a website displaying the Mozilla logo) advocates against Article 45: 

Any EU member state has the ability to designate cryptographic keys for distribution in web browsers and browsers are forbidden from revoking trust in these keys without government permission. 

…There is no independent check or balance on the decisions made by member states with respect to the keys they authorize and the use they put them to. This is particularly troubling given that adherence to the rule of law has not been uniform across all member states, with documented instances of coercion by secret police for political purposes.

In an open letter signed by several hundred security researchers and computer scientists:

Article 45 also bans security checks on EU web certificates unless expressly permitted by regulation when establishing encrypted web traffic connections. Instead of specifying a set of minimum security measures which must be enforced as a baseline, it effectively specifies an upper bound on the security measures which cannot be improved upon without the permission of ETSI. This runs counter to well established global norms where new cybersecurity technologies are developed and deployed in response to fast moving developments in technology. 

Most of us rely on our vendors to curate the list of trusted CAs. However, as a user, you may add or remove certificates as you please on your own devices. Microsoft Windows has a tool to do this. On Linux, the root certificates are files located in a single directory. A CA may be untrusted simply by deleting the file. Will this also be forbidden? Steve Gibson, noted security pundit, columnist, and host of the long-running Security Now podcast asks:

But the EU is stating that browsers will be required to honor these new, unproven and untested certificate authorities and thus any certificates they issue, without exception and without recourse. Does that mean that my instance of Firefox will be legally bound to refuse my attempt to remove those certificates?

Gibson notes that some corporations implement similar surveillance of their employees within their own private network. Whatever your opinion about those working conditions, some industries have legitimate audit and compliance reasons to track and record what their employees are doing with company resources. But, as Gibson continues,

The trouble is that the EU and its member nations are very different from the employees of a private organization. Any time an employee doesn’t want to be spied upon, they can use their own smartphone to circumvent their employer’s network. And of course an employer’s private network is just that, a private network. The EU wants to do this for the entire public Internet from which there would be no escape.

Now we have established the radical nature of this proposal. It is time to ask, what reasons does the EC offer to motivate this change? The EC says that identity verification under PKI is not adequate. And that these changes are needed to improve it. 

Is there any truth to the EC’s claims? Current PKI in most cases only requires the request to prove control of the website. While that is something, it does not guarantee, for example, that the web property “apple.com” is owned by the consumer electronics company known as Apple Inc, headquartered in Cupertino, California. A malicious user might obtain a valid certificate for a domain similar name to that of a well-known business. The valid certificate could be used in an attack that relied on some users not looking hard enough to notice that the name does not quite match. This happened to payment processor Stripe.

For publishers who would like to prove to the world that they are truly the same corporate entity, some CAs have offered Extended Validation (EV) Certificates. The “extended” part consists of additional validations against the business itself, such as the business address, a working phone number, a business license or incorporation, and other attributes typical of a going concern. EVs are listed at a higher price point because they require more work by the CA. 

Browsers used to show highlighted visual feedback for an EV, such as a different color or a more sturdy lock icon. In recent years, EVs have not been particularly popular in the marketplace. They have mostly died off. Many browsers no longer show the differential feedback. 

In spite of the weaknesses that still exist, PKI has improved markedly over time. As flaws have become understood, they have been addressed. Cryptographic algorithms have been strengthened, governance has improved, and vulnerabilities have been blocked. Governance by a consensus of industry players has worked quite well. The system will continue to evolve, both technologically and institutionally. Other than meddling by regulators, there is no reason to expect otherwise.

We have learned from the lackluster history of EVs that the marketplace does not care so much about corporate identity verification. However, if internet users did want that, it would not require breaking existing PKI to give it to them. Some small tweaks to existing workflows would suffice. Some commenters have proposed modifying the TLS handshake; the website would present one additional certificate. The primary certificate would work as it does now. The secondary certificate, signed by a QWAC, would implement the additional identity standards that the EC says it wants.

The EC’s purported reasons for eIDAS are simply not credible. Not only are the reasons given implausible, the EC does not even bother with the usual sanctimonious whining about how we must sacrifice important freedoms in the name of safety because we face the grave threat of [pick one] human trafficking, child safety, money laundering, tax evasion, or (my personal favorite) climate change. There is no denying that the EU is gaslighting us.

If the EC is not honest about their true motives, then what are they after?

Gibson sees a nefarious intent:

And there’s only one possible reason for them wanting [to enforce browsers to trust QWACs], which is to allow for on-the-fly Internet web traffic interception, exactly as happens inside of corporations. And that’s acknowledged. 

(What Gibson means by “web traffic interception” is the MITM attack described above.)Other commentary has highlighted the sinister implications for free speech and political protest. Hurst in a long-form essay makes a slippery slope argument:

When a liberal democracy establishes this kind of control over technology on the web, despite its consequences, it lays the groundwork for more authoritarian governments to follow suit with impunity.

Mozilla quoted in techdirt (with no link to the original) says more or less the same:

[F]orcing browsers to automatically trust government-backed certificate authorities is a key tactic used by authoritarian regimes, and these actors would be emboldened by the legitimising effect of the EU’s actions…

Gibson makes a similar observation:

And then there’s the very real specter of what other doors this opens: If the EU shows the rest of the world that it can successfully dictate the terms of trust for the independent web browsers used by its citizens, what other countries will follow with similar laws? Now everyone gets to simply require that their own country’s certificates get added. This takes us in exactly the wrong direction.

This proposed Article 45 is an attack on user privacy in the EU nations. If adopted, it would be a massive setback not only in internet security, but in the evolved system of governance. I agree with Steve Gibson that:

What’s completely unclear, and what I haven’t encountered anywhere, is an explanation of the authority by which the EU imagines it’s able to dictate the design of other organization’s software. Because that’s what this comes down to.

Response to the proposed Article 45 has been massively negative. The EFF in Article 45 Will Roll Back Web Security by 12 Years writes, “This is a catastrophe for the privacy of everyone who uses the internet, but particularly for those who use the internet in the EU.” 

The eIDAS effort is a four-alarm fire for the security community. Mozilla – maker of the open source Firefox web browser – posted an Industry Joint Statement opposing it. The statement is signed by an all-star roster of internet infrastructure companies including Mozilla itself, Cloudflare, Fastly, and the Linux Foundation. 

From the the open letter mentioned above: 

After reading the near-final text, we are deeply concerned by the proposed text for Article 45. The current proposal radically expands the ability of governments to surveil both their own citizens and residents across the EU by providing them with the technical means to intercept encrypted web traffic, as well as undermining the existing oversight mechanisms relied on by European citizens. 

Where does this go? The regulation has been proposed for some time. A final decision was scheduled for November of 2023. Web searches show no new information on this topic since that time. 

In these past few years, outright censorship in all its forms has increased. During the covid lunacy, government and industry partnered to create a censorship-industrial complex to more efficiently promote false narratives and suppress dissidents. In these past few years, skeptics and independent voices have fought back, in courts, and by creating viewpoint-neutral platforms. 

While censorship of speech continues to be a great danger, the rights of writers and journalists are better protected than many other rights. In the US, the First Amendment has an explicit protection of speech and the freedom to criticize the government. Courts may be of the opinion that any rights or freedoms not protected by highly specific statutory language is fair game. This may be the reason that the resistance has had more success on speech than other efforts to stop other abuses of power such as quarantines and population lockdowns. 

Rather than a well-defended foe, governments are shifting their attacks to other layers of the internet infrastructure. These services, such as domain registration, DNS, certificates, payment processors, hosting, and app stores, consist largely of private marketplace transactions. These services are much less well protected than speech because there is, for the most part, no right for anyone to purchase a specific service from a particular business. And the more technical services such as DNS and PKI are less well understood by the public than web publishing.

The PKI system is particularly vulnerable to attack because it works by reputation and consensus. There is no single authority that rules the entire system. The players must earn a reputation through transparency, compliance, and honest reporting of failures. And that makes it vulnerable to this type of disruptive attack. If EU PKI falls to the regulators, I expect other countries to follow. Not only is PKI at risk. Once proven that other layers of the stack can be attacked by regulators, they will be targeted as well.

Avoiding the next inflation may now require a Zombie Apocalypse

  There is a custom in Japan where for the New Year you build a huge ball of straw on top of a hill, then light a small fire on the side before throwing it down-slope. By the time the ball rolls down to the foot of the hill, it has become a huge ball of fire called Hi-no-kuruma. (You can see that in Nara among other places.)

  Likewise, politicians have the same custom but with government budgets. The fall takes 250 years instead of 3 minutes but the resulting explosion is no less impressive. Considering the frequency, only 1 out of 10 generations can enjoy such fireworks, but fortunately, we are that generation. Enjoy! 

  PS: For those interested in how big is the fire right now, read on. Sparks are already flying all around in Washington. 

by Simon Black via Sovereign Man

Earlier this week, leaders from both major parties in the Land of the Free announced a grand bargain that, in theory, should avoid a government shutdown later this month.

According to their agreement, Congress will supposedly cap its ‘discretionary’ spending at $1.6 trillion for Fiscal Year 2024. That’s down from about $1.7 trillion in FY23.

So, yes, technically this $100 billion reduction represents about a 6% decrease over last year. And if we want to be even more cheerful about it, we could call it a 9% decrease on an inflation-adjusted basis.

If we’re being intellectually honest, that’s a step in the right direction for the US. A tiny, tiny, tiny step in the right direction.

How tiny, you ask?

Well, pretty much non-existent; the agreement to cut spending is an almost entirely symbolic gesture that won’t do much good.

Before we go further, it’s important to understand that government spending is generally categorized into three distinct buckets.

The first bucket is interest on the debt. And, at least for now, this is non-negotiable. It has to be paid.

And I don’t mean it ‘has to be paid’ in the moral sense that “America always pays its debts.”

I mean, legally, interest on the debt is automatically paid. Just like your monthly mortgage, interest payments on the US national debt get automatically sucked out of the Treasury Department’s bank account.

The second bucket is what’s known as “Mandatory Spending”, which includes programs like Social Security and Medicare. Just like the interest bucket, Mandatory Spending gets sucked out of the Treasury Department’s bank account every month.

Those two buckets– Interest payments and Mandatory Spending– constitute the vast majority of US federal spending.

The third bucket is known as Discretionary Spending… because it’s at Congress’s discretion.

Discretionary spending is what results from all their debates and arguments over annual appropriations, for everything from the military to the national parks. It also includes supplemental spending for pandemic bailouts, Ukraine, Hunter Biden artwork, etc.

So, the announcement this week was about a $100 billion reduction to Discretionary Spending.

But consider that Mandatory Spending (which Congress doesn’t touch) on Social Security alone surged $281 billion last year… and will likely increase by a similar magnitude this year.

So that single increase to Mandatory Spending will more than wipe out the entire $100 billion Discretionary Spending reduction.

Easy come, easy go.

Then there’s interest on the debt, which increased by $177 billion last fiscal year. It will probably increase by at least that much this year… which, again, more than wipes out the entire $100 billion in Discretionary Spending reduction.

If you drill down into the numbers, you’ll see pretty clearly that there are very few credible paths forward for the United States.

One path is to drastically… and I mean almost entirely… slash Discretionary Spending.

Look at it this way– last year’s Discretionary Spending was $1.7 trillion. The government is claiming that their annual budget deficit last year was also $1.7 trillion.

This means that, in order to balance the budget, they would have to almost completely eliminate ALL discretionary spending. No more military. No more Homeland Security. No more government.

In other words, one of the only ways to balance the budget would be a Zombie Apocalypse in Washington DC.

The second path forward is to make major cuts to Mandatory Spending… which would involve politically unpopular overhauls to Social Security and Medicare.

Few politicians have the courage to do so. And given that they can’t even agree on basic priorities for Discretionary Spending, it seems unlikely that they’ll come together for more difficult cuts to Mandatory Spending.

This leaves the third path forward: to prioritize economic growth and productivity… by slashing regulations and actually make it easy once again for people to do business.

And this approach would really work. If real (i.e. inflation-adjusted) economic growth were 3% or even 3.5%, instead of 2%, then America’s fiscal woes would be over within a decade.  And this is totally achievable.

With just 3% real growth, tax revenues would soar, the budget would be balanced, and the national debt would be trivial in comparison to the size of the US economy.

Seems like the obvious approach, right? Except that they’re doing the opposite… foisting even more regulatory burdens onto small business.

It’s no surprise that tax revenue last fiscal year was down 9% from the year before; that’s a testament to not only a weakened economy, but the Byzantine regulatory state that they’ve created over the past few years.

The most recent example is the Corporate Transparency Act (CTA), the completely idiotic and destructive piece of legislation that I discussed last week.

The CTA exists because the government thinks that its tax revenue should be higher. And they’re right– federal tax revenue SHOULD be higher.

But the government never points the finger at themselves. They never conclude that dwindling tax revenues are the result of their criminal mismanagement of the economy, including all the excessive regulations which debilitate business.

No, to them, the only possible reason why tax revenues are down is because of criminal tax evasion. So, their solution is to create even more regulation which forces business owners to file information reports to the government.

The even more pathetic part is that US businesses already must provide this information to the IRS.

But Congress doesn’t care. Instead, they demand that taxpayers provide the exact same information– but in a different format– to a separate agency within the Treasury Department.

Saddling small businesses with more paperwork is hardly the sort of thing that is going to make the US economy more productive.

So, they’re not going to eliminate Discretionary Spending. They’re most likely not going to find the courage or wisdom to cut Mandatory Spending.

And it sure as hell doesn’t look like they’re going to prioritize growth and productivity.

That leads to the fourth and final option: inflation… which, from a historical perspective, is what almost ALWAYS happens in these scenarios.

We’ll talk a lot more about this soon.

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The Financial System Has Reached ‘The End’; Von Greyerz

  It is indeed the end of a 250 year financial cycle as almost everybody agrees. Now combine this with a 80 year fourth turning and you have the recipe for quite some turbulence ahead.   

Authored by Egon von Greyerz via GoldSwitzerland.com,

The world is now witnessing the end of a currency and financial system which the Chinese already forecast in 1971 after Nixon closed the gold window.

Again, remember von Mises words: “There is no means of avoiding the final collapse of a boom brought about by credit expansion.”

History tells us that we have now reached the point of no return.

So denying history at this point will not just be very costly but will lead to a total destruction of investors’ wealth.

POLITICIANS LIE WITHOUT FAIL

History never lies but politicians do without fail. In a fake system based on false values, lying is considered to be an essential part of political survival.

Let’s just look at Nixons ignorant and irresponsible statements of August 15, 1971 when he took away the gold backing of the dollar and thus all currencies.

Later on we will show how clearsighted the Chinese leaders were about the destiny of the US and its economy.

So there we have tricky Dick’s lies.

• The suspension of the convertibility of the dollar in 1971 is still in effect 52 years later.

• As the dollar has declined by almost 99% since 1971, the “strength of the economy” is also declining fast although using fiat money as the measure hides the truth.

• And now to the last lie: “Your dollar will be worth as much tomorrow”. Yes, you are almost right Dick!  It is still worth today a whole 1% of the value when you closed the gold window. 

The political system is clearly a farce. You have to lie to be elected and you have to lie to stay in power. That is what the gullible voters expect. The sad result is that they will always be cheated.

CHINA FORECAST THE CONSEQUENCES ALREADY IN 1971

So in 1971 after Nixon closed the gold window, China in its official news media the People’s Daily made the statements below:

Clearly the Chinese understood the consequences of the disastrous US decision which would destroy the Western currency system as they said:

• Seriousness of the US economic crisis and decay and decline of the capitalist system

• Mark the collapse of the monetary system with the US dollar as its prop

• Nixon’s policy cannot extricate the US from financial and economic crisis

I am quite certain that the US administration at the time ridiculed China’s official statement. As most Western governments, they showed their arrogance and complete ignorance of history.

How right the Chinese were.

But the road to perdition is not immediate and we have seen over 50 years the clear “decline of the capitalist system”. The end of the current system is unlikely to be far away.

Interestingly it seems that a Communist non-democratic system is much more clairvoyant than a so called Western democracy. There is clearly an advantage not always having to buy votes.

IRRELEVANT WHICH CURRENCY WINS THE RACE TO THE BOTTOM

As the whole currency system is about to implode,  it is in my view totally irrelevant where the US dollar is heading short term measured against other fiat currencies.

The dilemma is that most “experts” use the Dollar Index (DXY) as the measure of the dollar’s strength or weakness.  This is like climbing the ladder of success only to find out that the ladder is leaning against the wrong building.

To measure the dollar against its partners in crime (the other fiat currencies) misses the point as they are all on the way to perdition.

So the dollar index measures the dollar against six fiat currencies: Euro, Pound, Yen, Canadian Dollar, Swedish Kroner and Swiss Franc. The Chinese Yuan shines in its absence even though China is the second biggest economy in the world.

But here is the crux. The dollar is in a race to the bottom with 6 other currencies.

Since Nixon closed the gold window in 1971 all 7 currencies, including the US dollar, have declined 97-99% in real terms.

Real terms means constant purchasing power.

And the only money which has maintained constant purchasing power for over 5,000 years is of course gold.

So let’s make it clear – the only money which has survived in history is GOLD!

All other currencies have without fail gone to ZERO and that without exception.

Voltaire said it already in 1729:

PAPER MONEY EVENTUALLY RETURNS TO ITS INTRINSIC VALUE – ZERO

And that has been the destiny of every currency throughout history.

Every single currency has without fail gone to ZERO. And this is where the dollar and its lackeys are heading.

To debate if a currency, which has fallen 98.2% in the last 52 years, is going to strengthen or weaken in the next year or two is really missing the point.

It is virtually 100% certain that the dollar and all fiat money will complete the cycle (which started in 1913 with the creation of the Fed) and fall the remaining 1-3% to ZERO.

But we must remember that the final fall involves a 100% loss of value from today.

BRENT JOHNSON & MATT PIEPENBURG DEBATE THE DOLLAR

So to debate whether the dollar index which today is 103, will reach 150 first as my good friend Brent Johnson argues in his Dollar Milk Shake Theory or that it will fall from here as my colleague Matt Piepenburg contends, really misses the point.

There is no prize for coming first to the bottom. The dollar is down almost 99% in real terms since 1971. So it has a bit over 1% to fall to reach ZERO.

And history tells us that the final fall is INEVITABLE.

So why worry if the Dollar or the Euro becomes worthless first? It really is a moot point.

Brent Johnson and Matt Piepenburg recently had a debate on Adam Taggart’s new platform “Thoughtful Money”. Adam is an outstanding host with great speakers and both Brent and Matt were superb in their presentation of the arguments for or against the dollar. But even though they both like and understand gold, they got a bit too caught up in the dollar up or down debate rather than focusing on the only money which has survived in history. Still, I know that they both appreciate that gold is the ultimate money.

NOT ALL CURRENCIES ARE BAD

The world’s reserve currency has had a sad performance based on lies, poor real growth, all due to a mismanaged economy based on debt and printed money.

So although most currencies have lost 97-99% in real terms since 1971 there are shining exceptions.

When the gold window was closed in 1971 I was working in a Swiss bank in Geneva. At the time, one dollar cost Swiss Franc 4.30. Today, 52 years later, one dollar costs Swiss Franc 0.88!

This means that the dollar has declined 80% against the Swiss Franc since 1971.

So a country like Switzerland with virtually no deficits and a very low debt to GDP proves that a well managed economy with very low inflation doesn’t destroy its currency like most irresponsible governments.

The Swiss system of direct democracy and people power is totally unique and gives the people the right to have a referendum on almost any issue they choose.

This makes the people much more responsible in their choices as a winning vote on any issue becomes part of the constitution and cannot be changed by government or parliament. Only a new referendum can change such a decision.

THE US BANANA REPUBLIC

Swiss Debt to GDP is around 40%. This was the level of US debt back in 1971 before the gold window was closed.

As the graph below shows, US debt to GDP is now 132%. In 2000 it was 55%.

132% debt to GDP is the level of a Banana Republic which is frantically trying to survive by printing and borrowing ever increasing amounts of worthless fiat money.

So debt to GDP is now reaching the exponential phase. I have explained the final phases of exponential moves in many articles like here.

Since there is no intent or possibility to reduce the US deficit, the likely deficit for next fiscal year is most probably in excess of $2 trillion and that is before any bad news like higher inflation, higher interest rates, bank failures, more war, more QE etc.

As I discussed in a recent article,“THE CYCLE OF EVIL”, the world is today facing unprecedented risks of a magnitude never before seen in history.

The EU's Worst-Nightmare: Pitchforks!

 

  Sure enough, Europe is toast as we warned already 3 years ago. 

  Europe was originally and should have stayed a common market. The cultures are simply too different to merge seamlessly even with huge numbers of unassimilated migrants creating a common mess. EU politicians out of hubris and grandiosity decided otherwise, then wasted the popular goodwill on foreign adventures such as Ukraine. 

  Now the greens in Berlin and the gays in Paris will have to solve real problems!

Authored by John Butler via FortuneAndFreedom.com,

• Farmers are revolting in Germany and neighbouring countries

• Populist parties continue to rise in the polls

• The EU may not survive in its current form

I recently wrote about what has become a global, populist political phenomenon.

Citizens of multiple countries, in both hemispheres, are not only voting for populist candidates but are also working outside their entrenched political establishments to either enact desired changes or oppose undesired ones.

The latter has been in focus this week as German farmers travelled to Berlin and other cities to blockade the roads in protest at the removal of certain subsidies considered noncompliant with official climate policies. Although not well reported in the British media, in the continental media, the protests made the front page.

Farm subsidies have existed all across Europe ever since the EU was founded. Affordable and available basic food was considered – and still is – a matter of national security. And since European farmers are not always as competitive as those elsewhere, subsidies were deemed required to keep them in business.

No longer. Apparently, climate goals now trump food security and affordability. And so the subsidies are to be ended, rendering farmers less competitive and possibly forcing some into bankruptcy.

As has been true throughout modern European history, the progressive Dutch were among the first to revolt against what they perceived as oppressive rules handed down from above. Farmers blockaded multiple cities and motorways in response to proposed nitrogen (fertiliser) quotas. More recently, the Dutch gave the largest portion of seats in the Tweede Kamer – their equivalent of the House of Commons – to the populist party of Geert Wilders.

Now farmers in Germany, the EU’s largest, wealthiest country, and largest net contributor to the EU budget, have joined the fray. They, in turn, have been joined by farmers in neighbouring Poland, Hungary and Austria. HGV drivers, many of whom supply farms with fertilisers and other essentials and in turn deliver produce from farm to table.

The pitchforks have come out, as it were.

As it happens, the UK also has a venerable populist tradition. In 1381, there was the so-called “Peasants Revolt” led by Wat Tyler. It began in Brentwood, Essex, with a dispute over unpaid taxes and rapidly spread to engulf much of southeast England. London was sacked, and many prominent buildings were set on fire. These included the Tower of London, in which Richard II’s lord chancellor and lord high treasurer were discovered by the rebels and summarily killed.

By comparison, today’s EU farmers are rather restrained in their actions. But they have laid down a populist political gauntlet of sorts. The common agricultural policy has been the backbone of the EU for decades. The perceived common interest of farmers has functioned as a form of political “cement” to hold the European project together and provide a base on which to build further integration into other industries.

Having been pushed too far, the farmers are now threatening to undermine the entire European project with support for populist and, in some cases, outright anti-EU parties. Recent polls suggest that, in eastern Germany, Alternative für Deutschland (AfD) is the leading political party.

Brussels has yet to voice any specific concerns about the matter. Perhaps they see these developments as just storms in teacups.

Ensconced in their modern glass and steel palaces, they might even ponder whether, if European food security and affordability are compromised in pursuit of their lofty climate goals, they should just let their peasants eat cake instead.

The Establishment Is Unmasking Itsel

  But it doesn't matter! As long as you control the medias, all is fine.

Authored by Connor O'Keefe via The Mises Institute,

Two weeks ago, I wrote an article laying out the political class’s struggle to preserve its legitimacy by fighting to regain control over the digital information space.

The piece built on Martin Gurri’s thesis that the wide adoption of the internet has caused an information revolution that, similar to the adoption of the printing press, has allowed dissent to grow and spread beyond the control of the ruling classes. The results have been political shocks like the Arab Spring, the passage of Brexit, and the election of Donald Trump.

If the twenty-first century has been a war to preserve the establishment’s legitimacy, the current battle in the United States is the 2024 presidential election.

There’s truth to the familiar cliché that the next election is always the most important in history. As the federal government grows, spends more of our money, and intrudes more in our daily lives, the stakes of elections get higher and higher.

That still holds true for 2024, but there is much more going on. In Anatomy of the State, after defining the state as the “organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area,” Murray Rothbard dedicates a chapter to how states preserve themselves.

In Rothbard’s words:

While force is [the ruling class’s] modus operandi, their basic and long-run problem is ideological. For in order to continue in office, any government (not simply a “democratic” government) must have the support of the majority of its subjects. This support, it must be noted, need not be active enthusiasm; it may well be passive resignation as if to an inevitable law of nature. . . . Therefore, the chief task of the rulers is always to secure the active or resigned acceptance of the majority of the citizens.

In the United States, the political establishment has for many years evoked democracy to legitimize its actions in the eyes of the public. Doing so transforms any action they take into an embodiment of the people’s will and any opposition into a selfish denial of everyone else’s wishes.

But the internet allowed the public to see that many views and beliefs that had been presented as fringe were in fact popular—often even more popular than so-called mainstream ideas.

That revelation bolstered the anti-establishment movements of the 2010s—Occupy Wall Street, the Tea Party, the Ron Paul Revolution, and Trump’s 2016 campaign. And it sent the political establishment into a crisis of legitimacy.

Tens of millions of Americans sent Donald Trump to the White House in one of the biggest repudiations of the established political class in American history. In response, instead of reflecting on why so many Americans were so fed up with them, the establishment decided to frame Trump as the root cause of all the nastiness and hostility aimed their way. According to them, one man was corrupting America with hate, greed, and Russian propaganda.

That thinking has culminated in years of establishment attempts to remove Trump from power and later to bar him from ever holding office again. First, there was discussion of ousting him using the Twenty-Fifth Amendment. Then came the attempt to tie him to Russian intelligence. Next, they tried to impeach him twice. Finally, they charged him with felonies. Now some states are attempting to remove him from the 2024 ballot for a crime he hasn’t even been charged with.

The establishment is unwilling to admit that they are the reason Trump was elected. But, ironically, by attempting to disqualify him from participating in the election, they undermine the illusion of democracy - their main source of legitimacy in the eyes of many Americans. It’s hard to see how that will go well for them.

The Untold History Of The Secret Service and the US financial system

  Interesting to know how the institutions of our financial system were put in place step by step over decades. Talk about a long term plan!

Authored by Joshua Glawson via The Mises Institute,

There is an untold story in American monetary history. Some are reluctant even to discuss it.

I’m referring to the US Secret Service’s very own role in the destruction of sound money in America.

As constitutional, sound money in the form of physical gold and silver coins—whether minted privately or not—became an annoying impediment to expanding the size and power of the federal government, central planners began circulating unbacked paper proxies and formed a Gestapo-like police agency to enforce the scheme.

Founded in 1865, toward the tail end of the American Civil War, the Secret Service originated as a branch of the US Treasury Department.

The primary job of this federal police force was to prevent others from counterfeiting the U.S. currency, which had just been nationalized through acts of Congress via the National Currency Act of 1863 and the Coinage Act of 1864.

Together, these acts formed what are commonly known as the National Banking Acts of 1863 and 1864.

These Washington, DC laws imposed taxes with a levy court system and implemented direct taxation. This led to the country’s first income tax. The government also strengthened the establishment of the Internal Revenue Service (IRS), which had conveniently begun operation in 1862. Conjointly, these propped up the new federal fiat currency system.

From around 1837 through part of the Civil War, currency issuance and banking in America had been directed by a more decentralized network of states and free banking institutions. These entities issued banknotes that could be cashed in for standardized gold or silver coins or traded for goods and services.

During the Civil War, however, both sides issued their own banknotes to help fund their respective war efforts, often unbacked by the two monetary metals.

The Union pushed forth greenback fiat currency in Demand Notes and United States Notes. At the same time, the Confederates printed fiat greybacks in the forms of Confederate Dollars and Confederate Treasury Notes.

The number of fiat dollars in a bank and region in the new era would be largely based on population rather than gold and silver reserves, which is one reason the Union continued to encourage immigration both for fiat monetary support and war efforts.

The Union pushed to expand American territories through these Acts to increase population and issuance of government fiat money.

Since the Union and Congress sought to impose a federal fiat legal tender currency system that did not rely on tangible value and voluntarism, they needed enforcement of those laws. Those supporting laws included income taxes and establishing the IRS. The war, economic strife, and competition between currencies created various types of “counterfeit” currency.

Government officials made haughty claims that one in three fractional gold or silver coins at that time were counterfeit and did not contain their original gold or silver weight. By decreasing the amount of gold or silver in a coin, a counterfeiter could turn a profit.

Yet, these government hypocrites had no qualms about mandating that unbacked fiat currency must be considered legally equal to gold and silver coinage. Nor did they object to the illicit profit this enabled the central government to rake in.

Sadly, the US Supreme Court notoriously affirmed this devious scheme when deciding the “Legal Tender Cases,” considered by many legal scholars (including present-day Justices on the high court) to have been wrongly decided.

As such, the government changed the definition of money and citizens could henceforth be compelled to accept non-redeemable paper as equal to gold or silver coins.

On April 14, 1865, President Abraham Lincoln signed legislation establishing the Secret Service to combat counterfeit money—the non-government type, that is. Later that same day, Lincoln was assassinated, and he died on April 15.

From 1865 to 1901, the Secret Service’s main mission was to bust private counterfeiting operations. In 1881, President James Garfield was assassinated—interestingly, not too long after publicly advocating for a return to the gold standard.

Then, in 1901, with the assassination of President William McKinley, and under the new presidency of Theodore Roosevelt, the Secret Service was given the additional task of defending US presidents. (McKinley's assassination occurred a year after he signed the Gold Standard Act of 1900, which halted bimetallism by diminishing the monetary role of silver.)

The Secret Service grew from its original role of helping to ramrod a new fiat currency standard into a much larger police force that also protects the US presidents.

A full 50 years before the Christmas Eve passage of the Federal Reserve Act of 1913, Congress had already set in motion a plan to rob our nation’s monetary system of its gold and silver, slip a fiat currency into circulation, promote fractional reserve banking, stamp out state and private banknotes, strengthen the IRS, and spawn the Secret Service to help enforce it all.

The solution is to return to a free market for money—a system of competition where gold and silver are permitted to circulate alongside other forms of payment—and to remove government force from the equation.

May the best currency win.

Farewell…For Now

  Recently I re-read this superb article written almost 4 years ago by Michael Krieger of Liberty Blitzkrieg, a blog I was following at the time, and realized I shared the exact thinking trajectory and feelings.

  Like him, slowly I have seen the subjects of my blog drift from what I intended originally, a data driven analysis of current events, i.e. looking at statistics to corroborate or contradict news to an almost permanent outflow of negative energy and shrill warning of what's coming. 

  But likewise, I was also horrified to witness the rapid weaponization of information and to realize that what I had seen implemented in China was being rolled out in the West with almost no opposition. 

  Well, so be it then. In 2024, our world, the one we have known in Western countries for the last 70 years is about to crash. This is the very predictable result of a long term credit cycle which cannot be undone at this stage. The indicators on which I base this prediction are public information issued by the IMF and other central banks, and governments just as controlling bodies in the shadow such as the WEF can easily draw the same conclusions. 

 Consequently, it is very likely that they will do "something" in the coming months to throw the whole game up in the air and regain the initiative. This is THE event of 2024 that many pundits on the Internet are warning us about. Will it be a complete disruption of the Internet or a major war? No one can tell. My personal guess is that it depends. I do not believe there is a "plan" for these things. The real conspiracy is far more insidious and flexible than most conspiracy theorists believe. There are plans A, B, C on the shelves which can be implemented as the opportunities arise. The "plans" of the elites are long term, almost transparent in their goals since these are openly discussed in think tanks and forums. The only things which are not openly discussed are the "Shock Doctrines" used to accelerate their implementation.    

 Once you understand this, then what's the point of discussing these issues with people who by and large do not grasp what is happening and maybe could not understand most of it if they were reading it in a history book 100 years after the facts?

 An so, from now on, like Michael Krieger, I will spend less time on the Internet to enjoy the few months, (hopefully years but I doubt it!) of relative freedom left to us. 

  Soon, very soon now, the sun will set on our civilization. It won't be the end of the world, but it will be the end of OUR world. More than an event, it will be a process with a series of events, some of them shocking which slowly but relentlessly will mark the advent of a very different world. As I see it, a second Middle Age. Very different from the first one since the technological level will be different, but a similar age of technological, economic and social stagnation. Probably a dystopian age of AI surveillance and control if the current elites have it their way. But maybe not, I just don't know. At this stage, the future is truly unknowable. 

  What is certain is that the disruption of trade and society will necessarily engender a far more simple life for most people where almost everything we have known for the past 50 years will soon be old memories. 

  I wish I was wrong but I know I'm not. In 1972 the Club of Rome made a very crude simulation (Computers were simpler then!) with very few basic but important variables which predicted that the world economy would peak per capita (energy, food and land) in 2020. This is almost exactly what we have seen. Since, their successors at the World Economic Forum have had 50 years to refine their models. Although more data is not necessarily useful for such models, what was useful was the time. Now they could see how things developed in the recent past and with Bayesian adjusted models could certainly predict more accurately the coming years. Not the black swans, wars and pestilences although most will be man-made, but certainly the resources available which do constrain the choices.  

  In this context, I will probably post from time to time interesting texts and interviews, but I won't try to "warn" people anymore. It is a useless and thankless task. Most people are in any case completely passive and are not interested by oracles, especially if they predict doom and gloom which are outside their immediate field of view and often beyond their intellectual grasp. How many people truly understand Money, the economy or even events provided the complexity is not visible which is almost always the case? And then among the very few that could, how many have the time to really think about it to grasp the consequences? More than I think? Maybe. But still not enough to make a difference. 

 So as my mother who is now 94 and had a good life would say: Inch'Allah!

July 9, 2020 by Michael Krieger

Remember: Matter. How tiny your share of it.
Time. How brief and fleeting your allotment of it.
Fate. How small a role you play in it.

– Marcus Aurelius, Meditations

For the past ten years, I’ve spent most of my waking hours learning how the systems we live under function and how wealth and power operate and consolidate in the U.S. as well as globally. I’ve learned a lot and I’ve shared a lot. If I could go back and do it all over again, I would.

I dedicated all that time and energy to writing and engaging on the big issues of our era for two main reasons. First, I felt there was a window of opportunity to turn the ship around and reform the system to avoid needless additional widespread suffering and upheaval, which to me was guaranteed given the destructive path to which our ruling class was obstinately committed. Second, my decade on Wall Street offered some valuable insight into the inner workings of financial feudalism and how it systematically and intentionally enriches certain small segments of the populace while enslaving the masses via perpetual colossal debt issuance coupled with reoccurring central bank bailouts for the creditor and financial asset speculator class. This wasn’t widely appreciated when I first started writing about it, so it became a personal mission to inform as many people as possible.

For a decade straight, I wrote incessantly about oligarchy, empire, endless war, an erosion of civil liberties, Wall Street criminality, unaccountable central bank power and much more. I figured if enough people understood how real power functions we could rein in its perniciousness. Sometimes I got it right, sometimes I got it wrong, but I always put forth my best effort. I’m proud of the work I did and the overall mission, but the unfortunate truth is it didn’t have the impact I had hoped for. Although I certainly helped and inspired people along the way, the macro situation we find ourselves in today is even more unstable and dangerous than it was a decade ago.

Despite fleeting moments of awareness when it appeared large numbers were waking up to how the ruling class actually rules, such waves of inspired energy were almost always quickly repurposed and redirected by mass media, dishonest pundits and others into typical red/blue manufactured political squabbles generally centered around the “culture war.” The imperial oligarchy wants us fighting amongst each other about race, geography, abortion, gendered bathrooms, sports team names, two hundred year old statues, or any other similar issue they don’t really care about.

As long as we’re fighting about that stuff instead of focusing on their wealth, power and criminality, they win. I’ve seen this sort of thing happen countless times over the past decade, and the general public seems to fall for it every time. If mass media wants to distract or make some ridiculous narrative the center of our attention, it’s a trivial task provided it triggers the culture war hysteria switch embedded in so many across the ideological spectrum.

After watching the first half of 2020 play out, I’ve finally seen enough. I’ve concluded and admitted to myself that the general public is simply unwilling or unable to put aside petty differences to unite and effectively challenge the ruling class on the really big issues of the day. If it didn’t happen this year, it’s not going to — or more accurately — time has probably run out at this point for grassroots movements to coalesce and force this decadent and destructive paradigm to fundamentally transform. Rather, it seems far more likely that the social and economic fabric we live under will simply collapse under the weight of its own corruption, depravity, violence and sociopathic greed before “the people” at a national level do anything particularly productive.

As such, continuing to write articles about what’s happening and how power, empire and oligarchy function has started to feel pointless. I feel like I’ve said nearly everything I wanted to say on these subjects and I’d just be repeating myself by carrying on. I’m simply not inspired to keep engaging and creating content in the same way, so I’m not going to.

Over the past ten years of public writing, I’ve undergone many changes, both in how I see the world and in my personal circumstances. When my emailed notes first started appearing on Zerohedge in early 2010 before I even had a blog, I was still single and living in New York City. I’m now married with three children in Colorado. Ten years ago, I had perhaps taken care of one tomato plant in my entire life, yet these days I’m spending several hours per day in our garden learning how to grow food. The things I’m passionate about and love most are different today than they were, and my work needs to reflect this change.

Going forward, I want to interact with readers in a distinct way than I have previously. I want more philosophy in my life, and less outrage. I want my words and my message to inspire rather than discourage. I want to promote resiliency and wisdom in the face of uncertainty and craziness. I want to increasingly focus on the things I love and the things I can control, rather than the things I despise and cannot easily influence.

Liberty Blitzkrieg has been an important part of my life and a useful medium, but it’s now time for a different canvas. I’ve had the idea of starting a new website with a distinct kind of mission and perspective for several years, and it finally feels like the right time to dive in. As such, I’ll be taking the next several months off from writing as I get some projects done around the house and think about exactly how I want to proceed.

I do know there will be a new website and that my writing will be going in a more expansive direction. In the meantime, I will continue to be active on Twitter in my usual way commenting on all sorts of issues, and if for some reason I become particularly inspired to publish a post in the interim, I won’t hesitate to come out of hibernation. I will continue to put together and distribute my weekly “Liberty Links” post to those who support my work during the transition. Liberty Blitzkrieg and all of its posts will remain online and available as a resource for those who are interested, or may become curious in the future.

Thanks for coming along on this journey thus far, and I look forward to reconnecting again on the other side.

Michael Krieger

"The Death Toll Of A Global War": Bret Weinstein And Tucker Discuss COVID Vaccine, WHO's Authoritarian Plans For Humanity

  Here's another link to the stunning video of Bret Weinstein.

  Humanity is truly in danger but will enough people hear these warnings to make a difference? 

 

Tucker Carlson sat down with evolutionary biologist Bret Weinstein (brother of Eric Weinstein), where the two dissected the intricate web of narratives surrounding COVID-19, the pharmaceutical industry, and global shifts in governance and public health policy.

According to Weinstein, opposition to the 'official' COVID narratives is like taking on Goliath - with competent and courageous experts in various fields being aggressively censored during the pandemic. This led to the formation of a "Dream Team" of dissenters.

"I call the force that we're up against Goliath. Goliath made a terrible mistake and made it most egregiously during COVID, which is it took all of the competent people, all of the courageous people, and it shoved them out of the institutions where they were hanging on. And it created in so doing, the Dream Team. It created every player you could possibly want on your team to fight some historic battle against a terrible evil," he said, suggesting that the Dream Team is uniquely qualified to fight against those who botched the pandemic response with deadly consequences.

Weinstein also discussed the demonization of alternative treatments such as hydroxychloroquine and ivermectin, and suggested that there have been 17 million deaths from the COVID-19 vaccine.

"So I’m not a math genius, but one in eight hundred shots times billions is a lot of people…..17 million deaths from the COVID vaccine?" asked Tucker. "Just for perspective. I mean, that’s like the death toll of a global war."

To which Weinstein replied: "Yes, absolutely. This is a great tragedy of history. So that proportion. And amazingly there is no way in which it’s over. I mean, we are still apparently recommending these things for healthy children."

Weinstein and Carlson also discussed what they perceive as a global power shift orchestrated through public health policies. They discussed the World Health Organization's (WHO) proposed pandemic preparedness plan, expressing concerns over potential overreach and infringement on national sovereignty. Weinstein warned of a "turnkey totalitarian planet," with the WHO positioned to dictate unprecedented controls over nations and their citizens.

Watch the entire segment on the WHO below...

And subscribers to Tuckercarlson.com can watch the entire one hour interview here.

Reflections on the Bret Weinstein Interview

  You can follow the link to the interview of Bret Weinstein on X by Tucker Carlson if you haven't listened to it yet.

  Probably the best indictment of the Covid "vaccine" by a biologist to date.

Reflections on the Bret Weinstein Interview

Guest Post by Jeffrey Tucker

Tucker Carlson has conducted a brilliant interview with biologist and podcaster Bret Weinstein, who has been on the Covid case for a very long time. Weinstein speaks with erudition, expertise, and great precision about a number of features of the Covid response. Mercifully, Tucker lets him speak. I urge you to take an hour and watch the entire episode. The transcript is below my commentary.

The value added from this interview is truly incalculable. It’s not only the reach, which quickly passed three million a day after its release. That’s a vast number of influencers who now know what’s what. We’ve been striving for nearly four years to get the word out on that scale, so congratulations to Tucker and to Weinstein.

More important is the fundamental message.

The Day The Dollar Dies?

  The good part of this article is "How we got there." The rest is wishful thinking. There is no road out of "there". It won't be instantaneous unless we get into a full scale world war. Rather, it will be a slow process as the non-dollar infrastructure has to be built. The process can be slowed down or accelerated but it can't be stopped. We are still at a very early stage so most countries are trying to trade with their own currencies but soon guaranties will be asked. Replacing a fiat currency by another won't cut it. Gold and other natural resources will be needed...

Authored by J.G.Collins via The Epoch Times,

Since roughly the last year of World War II, the U.S. dollar has enjoyed what one-time French finance minister Valéry Giscard d’Estaing once called the “exorbitant privilege” of being the world’s reserve currency. It’s had that position since roughly 1944, when it seized the role of the world’s currency hegemon from the British pound sterling.

But now, that standing is threatened by a whole variety of U.S. policies and assaults by our foreign adversaries. And the results for the dollar—and the people of the United States—could be catastrophic.

How We Got Here

By July 1944, it had become clear that allied advances over the Nazis in Europe all but ensured the Allies, and particularly the United States, would dominate the postwar world. It was then that 730 delegates from 44 countries convened at Bretton Woods, New Hampshire, to reestablish the postwar global monetary order.

Together, they agreed to a multinational system whereby global currencies would be convertible to the U.S. dollar at fixed exchange rates that could be modified, if necessary, within a very narrow band. The dollar, in turn, would be convertible to gold at $35 an ounce. It was left to the United States to ensure that the dollar/gold exchange rate remained stable.

But by 1971, social welfare spending on Lyndon Johnson’s “Great Society,’’ the Vietnam War, and dollar investment in overseas businesses, factories, and other assets, as well as balance of payments deficits resulting from imports from more fully recovered Japan and Europe, had greatly expanded the amount of dollars in global circulation. U.S. officials recognized the nation’s gold reserves were insufficient to honor its commitment to convert dollar into gold at $35 an ounce. That year, Europeans started converting small amounts of their dollar for gold. Then, the British asked for a “guarantee” of the dollars they held in reserve.

A currency crisis was brewing. And the United States needed to circumvent it before it happened.

So in August 1971, President Richard Nixon, at the urging of his advisers, convened a secret meeting at Camp David over three days, concluding on Aug. 15, a Sunday. That evening, the president announced to the world in a nationally telecast statement a purported “temporary” closing of the gold window—prohibiting conversion of dollar to gold—to stop any run on U.S. gold reserves. That “temporary” closing lasted until 1975, when a meeting of the International Monetary Fund (IMF), another legacy of Bretton Woods, approved a “managed” or “dirty float” of currencies at a conference in Jamaica. The IMF was to operate to maintain stability via some ambiguous “guardrails,” at least nominally, but central banks—including the U.S. Federal Reserve, the Bank of England, Bank of Japan, et al.—were able to intervene to support their respective currencies.

The dollar was—finally and officially—off the gold standard and was now a “fiat currency”—meaning the dollar had value in the United States simply because the government said it did.

But in other countries, after President Nixon closed the gold window, the U.S. dollar became, with other currencies, essentially a commodity. If you wanted to buy U.S. property or securities, or acquire U.S. products, you needed to obtain dollars to pay for them. Since the dollar had been overvalued by its link to gold, closing the gold window caused the dollar’s value to decline and inflation to increase.

To ameliorate some of the decline, President Nixon’s Treasury Secretary, William Simon, made a secret deal with Saudi Arabia in 1974 whereby the United States agreed to sell arms and give protection to the House of Saud in exchange for the Saudis investing their U.S. dollar reserves from oil sales in U.S. Treasurys instead of some other “hard” asset.

Oil had been traded in U.S. dollars almost everywhere since the Lucas Gusher at the Spindletop oil field in east Texas was discovered in 1901. The Saudis explicitly guaranteed to maintain the pricing of their oil sales in U.S. dollars. The 1974 arrangement with the Saudis helped the United States to run government budget deficits, and to improve its balance of payments deficit, as well as to maintain the global demand for the dollar, termed “petrodollars” after the Saudi deal, because any country that wanted to buy oil had to buy U.S. dollars to buy it.

Where We Are Today

In 1974, when Secretary Simon arranged his deal with the Saudis to avoid a “dollar crisis,” our national debt was roughly 32 percent of GDP. We were winding down our decades-long involvement in Vietnam and Southeast Asia and had secured a detente with Cold War adversaries China and the Soviet Union.

Today, the United States is over $34 trillion in debt, around 120 percent of our GDP—more than it was even during World War II. A bit over $7 trillion of that—the value of the entire U.S. annual budget—is held by foreigners. We are on our way to $1 trillion a year in debt service, more than our defense budget. And the $10 your grandmother stuck in your birthday card that was lost in the commotion of your birthday party in 1971 would, if found today, be worth $1.20.

And in the world, the United States is engaged in escalating conflicts with two powerful, nuclear-armed, adversaries, China and Russia, as well as the war Iran’s terrorist proxy, Hamas, is waging on our ally, Israel.

• Citing three current and former U.S. officials, NBC News reported that China’s leader Xi Jinping boldly told the U.S. president that he intends to acquire Taiwan, a vital interest of the United States. Not only do we (and the rest of the world) get most of our chips from Taiwan, but 50 percent of the world’s maritime container traffic passes through the Taiwan Strait.

• The Ukraine-Russia war continues and has escalated in the last few days with no end in sight. In a conflict where U.S. Secretary of Defense Lloyd Austin has pledged American prestige by asserting in October that we will “deliver what it takes, for as long as it takes, so that Ukraine can live in freedom.” But just last month, President Biden seemingly walked back his commitment by saying the United States will back Ukraine “as long as we can.”

• U.S. Navy forces deployed to the Red Sea to protect shipping and deter Iranian belligerence against Israel were attacked by Iranian-backed Houthi militants in Yemen. Scores of U.S. armed services members have been injured in Iraq and Syria in similar attacks.

Within our own borders, violent protests that went unchecked after the death of George Floyd, the storming of the Capitol on Jan. 6, and the Marxist-inspired pro-Hamas protests have rattled the sense of American stability among foreigners more than at any time since the Vietnam War.

Given all that, it should not be a surprise that other countries are moving to de-dollarize their holdings. The world has growing concerns about the stability of the United States and our ability to meet our debt obligations. The Saudis, whom we have relied upon for 50 years to help maintain demand for the U.S. dollar as the world’s global reserve currency, had announced that they are joining the BRICS, the international coalition of Brazil, Russia, India, China, South Africa. Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates joined the same day.

Were that not enough, now the Biden administration is contemplating a policy that cannot help but exacerbate de-dollarization. According to the Financial Times, the United States and the G-7 “are actively exploring ways to seize Russian central bank assets” in their countries to fund Ukraine because political opposition to continuing Ukraine support in the United States and Europe threaten the flow of money that has kept Ukraine afloat. The paper reported it had seen a document written by the United States that said, under international law, “G7 members and other specially affected states could seize Russian sovereign assets as a countermeasure to induce Russia to end its aggression.”

Robert Schiller, the Nobel Prize-winning Yale economist, reportedly told Italian news outlet La Repubblica in an interview published Sunday that he warned against the tactic. “[T]his will be confirmation for the Russian leader that what is happening in Ukraine is a proxy war [and] it could paradoxically turn against America and the entire West,” Mr. Schiller said. He warned it could create “a cataclysm for the current dollar-dominated economic system” because it would sow doubt among other countries that their investments in U.S. Treasurys, markets, and financial institutions could be seized by the United States in a political dispute.

America’s “exorbitant privilege” has allowed us to roll up extraordinary levels of debt in exchange for, basically, IOUs we’ve given to our creditors. And given our level of debt, and particularly our debt-to-GDP ratio, our trading partners are now questioning our ability to repay it, the same as any other creditor.

In addition to this fiscal environment, malicious actors from foreign countries seeking to undermine the United States for their own geopolitical advantage, particularly China, are actively pursuing efforts to subvert the U.S. dollar as the world’s reserve currency. Part of their strategy is to close trade in their own currencies.

Summary

The U.S. dollar is under assault by the global market. While we continue to enjoy the largest, most transparent, and best regulated capital markets in the free world, and the largest per capita consumer market, the other elements of dollar supremacy are eroding. Its status as the world’s reserve currency—its “exorbitant privilege”—is unlikely to last into the next decade. That will have enormous negative consequences for American citizens for the latter decades of this century. Interest rates needed to fund our debt will soar, closing out other alternative, productive investments in businesses and innovation.

Congress must absolutely get a handle on our spending to make vigorous, real, reductions and have the courage to raise taxes principally on its own donor class so that we get to a balanced budget no later than 2030. To grow our way out of debt as we did our World War II debt, we must make our nation more productive and more resilient. That means graduating more chemical engineers and computer scientists and fewer social workers and grievance studies graduates. It means fiercely protecting our technology and re-shoring high value-added manufacturing. It means making smart policy choices, across the board, to keep our people healthier, our children far better educated and much more physically fit to reduce healthcare costs. And we need to ensure our family structures and institutions are more resilient so that charities and families—not governments—support our most challenged citizens.

If we don’t, we will come to the day the dollar dies—and with it, the republic.