MacGregor Tells Tucker Why The Ukraine War Must End Now

 If you want to understand what's going on in Ukraine, this is the most important interview you can watch. A great journalist interviewing an insightful strategist.

 The interview is resumed below. To listen to the full one hour video (well worth it), follow the link to X / Twitter in the Zero Hedge article here:

"If We Press This With Russia, It Will Reach Us Here In The US" - Col. MacGregor Tells Tucker Why The Ukraine War Must End Now

Tucker Carlson on Monday published an interview with former Trump administration official Col. Douglas Macgregor (Ret.), who explained why the war in Ukraine has put the United States on the brink of a 'catastrophic war that could easily destroy us.'

Carlson begins with a bold statement: "pretty much everything that NBC and The NYTimes have told you about the war in Ukraine is a lie."

"'The Russian army is incompetent' - they claim. 'Ukraine is a Democracy!' 'Vladimir Putin is Hitler and he's trying to take over the world!' 'Thankfully, the Ukrainians are winning.'

"Every claim is false, the last one especially," said Carlson, adding "the Ukrainian army is not winning - in fact, it's losing badly. Ukraine is being destroyed. Its population is being slaughtered."

"Most American know nothing about Ukraine," Macgregor continued, adding that "if they knew anything about the history of Eastern Europe, they would all say 'get out!'... because the wars and the blood and the hatred that's been fought over for centuries is something we can't sort out."

Macgregor's comments grow more ominous in their tone as the discussion continues.

He notes that President Biden has enabled 'combat pay' which implies there are American forces on the ground in Ukraine.

"It would be a mistake to think that the Russian forces do not know where they are," the retired colonel explains, pointing out that the Russians are sending a message with recent precision missile strikes near the borders of Poland and Moldova:

"if you think you can hide from us, if you come in here, if you cross these borders, we will annihilate you." 

We need to come to terms with these realities because we can't defeat it," he remarked reflecting on the fact that people have called him 'unpatriotic' for his comments.

He summed the situation in Ukraine up rather succinctly:

"if we press this war with Russia in Central East Europe, it will reach us here in the United States."

According to Macgregor, "The smartest thing we can do is end this war now," adding "The Russians will never tolerate NATO forces on Ukrainian soil."

"Ukrainian forces are in piecemeal fashion, surrendering to the Russians, not because they don't want to fight; it's because they can't fight anymore, they have so many wounded they can't evacuate them ...  we're going to see this army that we have spent so heavily on, melt away."

When it comes to the equipment being used to fight, MacGregor said that "a lot of the equipment we sent over there is quite frankly, obsolete... its very old, it's not new."

"Integrated air defenses will knock virtually everything that flies out of the sky," he said, adding "We will then fall back on a nuclear deterrent - a tactical nuclear weapon that says 'if you keep advancing, we'll have to use a nuclear weapon.' We don't want to go there, because the notion that there are so-called tactical nukes 'oh, it's just a little nuke, so that won't precipitate a nuclear war' - the use of any nuclear weapon is going to precipitate an escalation very rapidly," he said.

Carlson ends by asking Macgregor about the "leftist American man dressed as a woman" that is now the mouthpiece of Ukraine who claimed "Vlad Putin is a vampire bathing in the blood of Ukrainian children."

Macgregor asks "is that a transgender man?" To which Carlson replies, "yes, that's a guy with fake breasts."

Macgregor retorts: "well I think everything else is fake too... this war is a catastrophe... the people bathing blood are in Kiev and Washington."

 

 

 

America Is Now A Zombie State

  Forget about politics and look at what you see in American politics: Two geriatric men, one full of himself, the other senile competing to head a deeply corrupt system mostly on autopilot, focusing almost systematically on the wrong issues. 

  The last time we saw something similar was 30 years ago with Andropov and the decaying USSR. It didn't end well. Much earlier, the Roman Empire crumbled similarly with bread & circus... and a money worth nothing. 

  An inefficient army of mercenaries was fighting on the frontier to salvage a system rotting from the inside. In the end there was nothing left to save. First the institutions then the monuments turned to ruins. 

  The process then, took almost 200 years and this alone speaks volume about the greatness of Rome. The Greeks earlier had managed to do the same in a couple of generations. On the current trajectory, it seems that America is more closely following the tracks of the Greeks than the Romans. Then as now, no specific event except maybe the sack of Rome in 410 gave any indication that the Empire was dying. Charlemagne 300 years later still considered himself a Roman Emperor!

  Today, it is more and more difficult to deny that we have entered such a period of accelerated decline once again. Strauss and Howe in the Fourth Turning predicted accurately in the mid 1990s that this would be the case before 2020. Let's hope we avoid a full fledged collapse starting in 2024 but even if we do, it will be a close call!

Authored by Jacob Howland via UnHerd,

“Every nation gets the government it deserves,” wrote the philosopher Joseph de Maistre, and some are getting it good and hard right now. De Maistre’s moral interpretation of politics admits of exceptions, but the United States in 2023 is not one of them. A wasting tide of bad education and corruption is rotting the cultural and constitutional piers that, since the Civil War, have kept the US above the waters of chaos.

(Drew Angerer/Getty Images)

The American regime has become a tawdry theatrocracy in which political actors, hypokritai in Greek, play stock characters in a loathsome farce. In the run-up to the 2024 elections, Donald Trump stars as the persecuted saviour, and Joe Biden the righteous defender, of the American republic. Never mind that Trump is self-absorbed and impulsive to the point of criminal stupidity, that Biden is senile and evidently corrupt, and that both of these braying, boorish old men are fraudsters and fabulists. These vices do not matter to their furious followers, who love their man precisely because he is not the hated other. Trump and Biden cannot, and will not, be separated; each needs his opponent as the hammer needs the nail. And above the wretched spectacle sit a click-hungry media, feeding on riot and picking favourites like vulturous pagan gods.

This drama of political decadence defies easy categorisation. Aristotle wrote that tragedy depicts people who are better, and comedy worse, than us spectators. Biden and Trump are certainly worse than those who voted them into office, but they are not remotely funny. Their antics are repellent and their goofiness unlovable. Observing them and the choral leaders that follow in their train — jerky puppets like Rudy Giuliani sweating hair-dye, or Anthony Fauci claiming to be science itself — Americans feel only shame and dread, without the cathartic release of laughter or tears.

These trapped emotions spring from the same source. They are visceral responses to the approaching death by senescence of the American experiment in ordered liberty. The problem goes well beyond presidential dementia. The US Senate (from the Latin senex, “old”) looks more like the waiting room of a geriatric neurologist than a council of wise elders. There’s Mitch McConnell, prone to falls and freeze-ups; wheelchair-bound and confused Dianne Feinstein; and John Fetterman, who at only 53 is less fit for public service than any other member of that formerly august body. It’s as if C-SPAN, a network that televises congressional hearings, decided instead to air absurdist, post-apocalyptic horror films.

The zombification of the Capitol — not to mention our city streets, which have become permanent encampments of the dazed and disturbed — is merely a symptom of the underlying disease. Like all institutions, politics falls apart without regular infusions of constructive energy. A modern democracy is healthy only if its major parties grow organically from their voters, representing their interests by habit and inclination even more than conscious effort.

But the grassroots politics Tocqueville admired when he visited the US in the 1830s gave way long ago to the top-down astroturfing of technocratic managerialism. Our governing elites represent no one but themselves and their cronies, and they don’t welcome shocks to the system. Insurgent candidates such as Robert Kennedy Jr. and Vivek Ramaswamy, whose public elevation of the concerns of many Americans aims to revitalise national politics, are censored and met with active resistance, even by their own parties.

It’s not just in politics that the wellsprings of individual and social vitality have dried up. Americans are marrying less and later, and having too few children, to reproduce themselves and the families that nurtured them. What is more, our public schools have largely ceased to transmit the accumulated knowledge and civilisational wisdom of the past to the children we do have. A taste for historical repudiation has taken hold across the culture, leading curators to “contextualise” art, city governments to take down statues, colleges to rename buildings, and publishers to censor or rewrite books. But creativity withers when it ceases to be nourished by the oxygenated blood of the tradition. Little wonder that Hollywood increasingly cannibalises its legacy by pouring old films into new plastic scripts.

Technology has exacerbated our national enervation. We have become charging-stations for our smartphones, which drain psychic energy with insistent distractions and overloads of information-babble. Video calls and work-from-home limit in-person interactions with actual existing individuals, who would otherwise be together for most of their weekly waking hours. Targeted advertising, fine-tuned algorithms, and politically stratified social media sharply decrease our exposure to new ideas. We are immuring ourselves within our own private caves, watching flickering images in darkness.

AI language-learning models offer a cautionary parable of these larger cultural developments. Programs such as ChatGPT, whose writing remains formulaic and prone to errors, learn by sifting through a sea of digitalised text, a growing share of which consists of AI-generated content. The predictable result of this feedback loop is the kind of levelling we’ve seen across our institutions. Like newspapers that drink their own ink — and which ones don’t, these days? — their product can only get worse.

Cultural exhaustion, social withdrawal, and the general enfeeblement of life forces are the practical expression of a will to nothing. There is a name for this spiritual and intellectual condition, and it is nihilism. Nihilism is demonic to the extent that the will to nothing is still a will, a life force. That it is only a negative one is by no means reassuring, because it is easier and more economical to tear down than to build up. Destruction is dramatic and accomplishes the illusion of vitality with relatively little energy. And who in this apocalyptic time, including the nihilist, doesn’t want to feel even a little alive?

 

Central Banks Aren’t Ready to Feel the Impact of Years of Poor Decision Making

  The analogy between waist line and Central Banks is interesting although the consequences will be strikingly different. Inflating money away has always been the demise of Empires in History. Think Denarius, the Roman coin, but with no silver whatsoever inside! The Euro and Dollar won't escape this fate. It is technically impossible. But Central Banks will delay, burn more furniture in the castle until the rooms are bare. A look at Union Square in San Francisco these days, a city which used to be one of the most magnificent and nice to live in America is a snapshot of what is in store for the rest of us.

Central Banks Aren’t Ready to Feel the Impact of Years of Poor Decision Making

Since 1975 worldwide obesity has nearly tripled and it is now one of the leading causes of death. Despite this, rarely does someone have ‘obesity’ recorded as the cause of death on their death certificate. Instead, it might read ‘complications from Type 2 Diabetes’ or ‘cardiovascular disease’: conditions that obesity has led to. 

The rise in obesity is thanks to changing diets and the ready availability of ultra processed foods, as well as changing lifestyles. Despite knowing such diets and lifestyle changes can be deadly, people still consume such foodstuffs and choose not to exercise because the negative impact of doing so is not immediate. 

In fact, the immediate feedback one gets from living an unhealthy lifestyle is very often positive. Your taste buds signal to your brain that the Snickers bar is really good, or choosing to watch your favourite show rather than go for a run gives you pleasure faster than going for a run does.

 

To see the positive results of a healthy lifestyle is one that takes time. To see the negative results of an unhealthy lifestyle is also one that takes time. It’s not like you eat some deep fried chicken and wham! You’re struck down by a heart attack. No, that takes years of solid, poor choices. 

It’s only when you find yourself unable to run around with your grandkids or walking around with an oxygen canister do you wish you’d taken better, incremental decisions that would have led to a different outcome. It is only after years of poor decisions that you really feel the true impact. 

Central Banks and the Expanding Waistline

This is basically how it works for central banks. The economy starts to look a bit shaky, or governments make promises they can’t afford or ‘peacekeeping’ missions are declared and the likes of the FOMC decide that rather than save and budget within their means,  a big hit of ultra processed credit is what’s needed to help things along. 

Of course, they do this and everything starts to feel pretty good. Employment rates pick up, consumer spending rallies, startups are turning into unicorns, the S&P 500 is smashing through records and the housing market is booming. Everyone loves this approach to money that costs them very little and as a result they get addicted to it. 

The problem is the economy no longer knows how to function and stay energised without it. None of the economic policies that seemingly 'helped' the economy keep going have added to its overall long-term health. 

Central banks, recognizing that they have created an inflationary environment on purpose, willing the waistband of the economy to expand so that everyone ‘feels good’, then tries to tell everyone that these health issues are just ‘transitory’. But the truth is the expanding waistband is a fraud. Inflation is theft of wealth from the economy’s future. 

What’s the Excuse Now?

Pretty soon food prices become difficult to manage, people can’t afford to heat their homes, the cost of materials climb and people are struggling to make ends meet.

But, in the same way, we justify our weight to ourselves (it’s in my genes, I had a big meal last night), and the central bankers try to justify inflation to us. And they strip out the key components to measure inflation as if they can be easily ignored - we’re talking about food and energy prices here, i.e. two of the biggest costs to the household budget. 

Only in the last year have the likes of FOMC started to realise there is a big cost to all of this unhealthy economic policy of the last fifteen plus years. They tried to make amends for this by coming down hard on interest rates, and getting the economy to work harder to shift some of this inflation. 

But actually, how much has changed? ‘Core’ inflation is coming down ever so slightly- but that’s easy to do when food and energy prices aren’t included and costs for services continue to rise faster than anyone would like. As ZeroHedge pointed out, the US unemployment rate is exactly where it was when the FOMC started hiking rates, so is the S&P 500.

Very little has improved. All that seems to have been achieved is a near-collapse of the US banking system (more on that shortly) and unsustainable debt levels. 

 “...arguably the most significant consequence of this relentless creep higher in rates is that the annual payment on US Federal debt is about to hit $1 trillion, surpassing how much the US pays every year on defence!” ZeroHedge. 

The only tool left: words

Yesterday Jay Powell announced that the Federal Reserve was raising rates to a 22-year high of a target range of between 5.25 and 5.5 per cent. Markets are assuming that this is the final rate rise this cycle. Bless him, Powell did try in the press conference to wag his finger at the economy and declare that if it didn’t pipe down he’d be back in there to raise rates some more, but no one was really listening. 

“We have to be ready to follow the data…And given how far we’ve come, we can afford to be a little patient as well as resolute as we let this unfold.”

Well, that’s a relief that the FOMC are now looking at the data to guide the way. Interestingly enough Christine Lagarde used near-exact the same phrasing earlier today during the ECB press conference. 

We’re not convinced that they hope data will drive the way as so far it seems to us that most central bankers now try to influence inflation expectations rather than inflation itself. Jay Powell uses his press conferences and FOMC reports as an inflation-reduction tool more than they seem to use monetary policy tools. 

As a result, the market is mostly playing along, now pricing this to be the last FOMC hike in the current cycle of hikes with rates being cut as early as 2024.

A slow-down in hikes and ultimately a fall in official rates is good for gold, a non-interest bearing asset, as it reduces the opportunity cost of holding it. 

But, this isn’t mainstream financial media here. Nothing is ever as simple as “this metric went one way, so this commodity will go that way”. This also isn't’ the last 15 years where the world has become accustomed to low inflation rates and near-zero interest rates. 

As investors read the headlines that the Fed is likely to start cutting rates as early as 2024, there will be two expectations - one is that they will gradually cut back down to zero, the other is that inflation really was merely transitory. In other words, the Fed was right all along. 

Spoiler alert - neither of these things are correct. But what these assumptions do show is how addicted the market has come to low rates and the assumption that central banks really are the puppet master to the economy’s marionette. 

The truth of the matter is that inflation really isn’t going anywhere. Damage has been wreaked on the health of the economy. The drip, drip, drip of cheap credit and overheating has left us with a situation that sees negative real rates at best and financial turmoil at worst. 

Nothing, nothing repeat nothing that central banks around the world are doing should be giving anyone any confidence that they are on the right track to reducing our dependence on cheap credit. Therefore no one should have any expectations that real value will be returned to their currencies and savings in the mid to long-term future. 

Interest rates might be up again, but like an expensive diet plan, the promises are better than the results. 

Furthermore: high interest payments are clearly not just affecting US Fed’s annual payments. Remember that US banking crisis that arrived with a bang at the beginning of the year? Oddly enough it hasn’t gone away, although you wouldn’t think it looking at the news.

Earlier this week US regional banks PacWest and Bank of California agreed to a merger. More deals between the 4,000 banks are expected, as increasing numbers struggle under unsustainable deposit outflows. One has to ask why this wasn’t bigger news.

Granted the merger (unlike others this year) didn’t happen under regulator supervision, but it is clearly a sign that the embers of a banking crisis continue to burn.

The BRICS Won't Kill The Dollar, US Policy Will

  The fall of the dollar will not be an event but a protracted process. 

  It could be long as the Author outlines below, or much more sudden if there is a strategic incident with China or Russia.

  The real tragedy is that we are now at the mercy of events nobody controls...

Authored by Matthew Piepenburg via GoldSwitzerland.com,

Below we separate the hype from the sad reality of the USD in the face of a new “BRICS currency.”

Net conclusion: The real death of the USD will be domestic not foreign.

The Bell Has Been Tolling for Years

When it comes to the “bell tolling for fiat,” we can all hear its loud chimes, but that bell has been tolling since 1971 (or frankly 1968), when the US leadership decoupled the world reserve currency from its golden chaperone.

Like any teenager throwing a house party, the lack of a parental chaperone leads to lots of crazy events and lots of broken furniture.

The same is true of post-71 politicians and central bankers suddenly freed of a gold-backed chaperone and thus suddenly loaded with drunken power to mouse-click currencies and expand deficits.

And since then, all kinds of things have been breaking, from banks to bonds to currencies.

And now, with all the extreme hype (and, yes, some genuine reality) behind the headlines of a revolutionary gold-backed BRICS trade currency, many are making sensational claims that the World Reserve Currency (i.e., USD) is nearing its end and that fiat money from DC to Tokyo is effectively toast.

Hmmm…

Don’t Bury the Dollar Just Yet

Before we start tossing red roses over the shallow grave of an admittedly grotesque US Greenback in general, or fiat fantasy money in general, let’s all take a deep breath.

That is, let’s re-think through this inevitable funeral with a bit more, well, realism, mathematics and even geopolitical common sense before we turn our backs on the USD, and this is coming from an author who has never thought highly of that Dollar, be it fiat, politicized and now weaponized.

So, let’s take a deep breath and engage open, informed and critical minds when it comes to debating many of the still open, un-known and critical issues surrounding the so-called “game changer” event when the BRICS+ nations convene this August in S. Africa.

Needed Context for the “BRICS New Currency” Debate

As made clear literally from Day 1 of the Western sanctions against Putin, the West may have been aiming for Putin’s (or the Ruble’s) chest, but it then shot itself in the foot.

After decades of DC exporting USD inflation from Argentina to Moscow, a large swath of the developing countries of the world who owe greater than $14T in USD-denominated debt were already reeling under the pain of rate-hike gyrations which made their own debt and currency markets flip and flop like a dying fish on the dock.

Needless to say, a 500-basis-point spike in the cost of that debt under Powell didn’t help. In fact, it did little good (or goodwill) for USD friends and enemies alike, from the gilt markets in London to the fruit markets in Santiago.

Adding insult to injury, DC coupled this strong-Dollar policy with a now weaponized-Dollar policy in which a nuclear and economic power like Russia had its FX reserves frozen and access to SDRs and SWIFT transactions blocked.

Like Napoleon at Moscow, this was going a step too far…

The net result was an obvious and immediate distrust of that once neutral world reserve currency, an outcome which economists like Robert Triffin warned our congress against in 1960, and even John Maynard Keyes warned the world against long before.

Heck, even Obama warned against such weaponization of a reserve currency as recently as 2015.

Thus, and as I (and many others) warned from Day 1 of the sanctions, the distrust for the USD unleashed by the sanctions in early 2022 was “a genie that can never go back in the bottle.”

Or more simply stated, the trend toward de-dollarization was now going to come at greater speed and with greater force.

This force, of course, is now being seen, as well as debated, under the highly symbolic as well as substantive example of the BRICS+ nations seeking to usher in a gold-backed trade currency to move openly away from the USD, a move which some maintain will soon de-throne the USD as a world reserve currency and send its value immediately to the ocean floor.

The Trend Away from the USD Is Clear, But It’s Pace Is Not

For me, the trajectory of this de-dollarization trend is fairly obvious; but the speed and knowable magnitude of these changes are where I take a more realistic (i.e., less sensational) stance.

But before I argue why, let’s agree on what we do know.

The BRICS New Currency Is Very Real

We know, for example, that Russian finance experts like Sergei Glasyev have real motives and sound reasons for planning a new (anti-Dollar) financial system which not only seeks a Eurasian Economic Union for cross boarder trade settlements backed by local currencies and commodities, but to which gold will likely be added as a “backer” to the same.

Glasyev has also made headlines with plans regarding the Moscow World Standard as a far more fair-playing and fair-priced gold exchange alternative to the Western LBMA exchange.

If we take his gold backing plans seriously, we must also take seriously the plan to expand such gold-backed trade currency plans into the Shanghai Cooperation Organization which would make the final tally of BRICS+ nations “going gold” as high as 41 country codes.

This could ostensibly mean greater than 50% of the world’s population and GDP would be trading in a gold-backed settlement currency outside of the USD, and that, well, matters to both the demand and strength of that Dollar…

China’s Motives Are Also Anti-Dollar

China, moreover, has invested heavily in the Belt & Road Initiative (152 countries) as well as in massive infrastructure projects in Africa and South America, areas of the world that are all too familiar with America’s intentional (or at least cyclical) modus operandi of developing nations enjoying low US rates and cheaper Dollars to create local credit booms which later crash and burn into a local debt crisis whenever those US rates and Dollars rise.

China therefore has a vested interest in protecting its EM investments as well as EM export markets in a currency outside of a USD monopoly.

Meanwhile, as the US is making less and less friends with EM markets, Crown Princes, French Presidents and EU and UK bond markets, China has been busy brokering peace between Saudi Arabia and Iran, as well as building a literal bridge between the latter and Iraq while simultaneously making Yuan-trade deals with Argentina.

Other Reasons to Take the BRICS+ Currency Seriously

Tag on the fact that Brazil, China and Iran are trading outside the USD-denominated SWIFT payment system, and it seems fairly clear that much of the world is leaning toward what Zoltan Poszar described as a “commodity rather that debt-based trade settlement currency” for which Charles Gave (and the BRICS+ nations) see gold as an “essential element” to that global new trend.

Finally, with a strong Greenback making USD energy and other commodity prices painfully (if not fatally) too expensive for large swaths of the globe, it’s no secret to those same large swaths of the globe (including petrodollar nations…) that gold holds its value far better than a USD.

Given this fact, it’s easy to see why BRICS+ nations wish to settle trades in a gold-backed local currency in order to ease the pressure on commodity prices. This gives them the opportunity, as Luke Gromen reminds, to buy time to pay down their other USD-denominated debt obligations.

In addition to the foregoing arguments, the fact that the BRICS+ nations are cloning IMF and World Bank swing loan and “contingency reserve asset” infrastructure programs under their own Asian Monetary Fund and New Development Bank, it becomes more than clear that a new BRICS+ world, trade currency and institutionalized infrastructure is as real as the trend away from a monopolar hegemony of the USD.

In short, and to repeat: There are many, many reasons to both see and trust the obvious and current trend/trajectory away from the USD as warned over a year ago, all of which, no matter what the slope and degree, will be good, very good for gold (see below).

But here’s the rub: The speed, scope, efficiency and ramifications of this trend in general, and the “BRICS August Game Changer” in particular, are far too complex, fluid and unknown to make any immediate (or “sensational”) funeral plans for the USD today.

And here’s a few reasons as to why.

Why the BRICS New Currency Is No Immediate Threat to the USD

First, we have to ask the very preliminary question as to whether the August BRICS summit will even involve an actual announcement of a new, gold-backed trading currency.

So far, all we have to go on is a leak from a Russian embassy in Kenya, not an official communication from the Kremlin or CCP.

Meanwhile, India, a key BRICS member, has openly denied such a new trade currency as a fixed agenda item for this August.

But notwithstanding such media noise, we must also look a bit deeper into the mechanics, economics and politics of a sudden “game-changer” new currency.

The BRICS New Currency: Many Operational Questions Still Open

Mechanically speaking, for example, who will indeed be the issuing entity of this new currency?

The new BRICS Bank?

What will be the actual gold coverage ratio? 10% 15% 20%?

Will BRICS+ member nations/central banks need to deposit their physical gold in a central depository, or will they enjoy (most likely) the flexibility of pledging their domestically-held gold as an accounting-only-unit?

Cohesion Among the Distrusting?

As important, just how much trust and cohesion is there among the BRICS+ nations?

Sure, this collection of nations may trust gold more than they trust each other or the US (which is why such a gold-backed trade currency may work, as it can’t be “inflated away”), but if a BRICS member country wishes to redeem its gold from say, Russia, years down the road, can it realistically assume it will happen?

What if Russia (or any other trade partner) is in a nastier mood tomorrow than they are today?

Basic Math

In addition, there are certain economic/mathematical issues to consider.

We know, for example, that the collective BRICS+ gold reserve (as of Q1 2023) is just over 5452 tones, valued today at approximately $350B.

Enough, yes to stake a new currency.

But measured against a net global amount of $13T in total physical gold, are the BRICS+ gold reserves enough to make a sizable dent (even at a partial coverage ratio) to tilt the world away from the USD overnight, when the USA, at least officially, has much, much more gold than the BRICS+?

That said, we can’t deny that the actual gold stores in places like Russia and China are far, far higher than officially reported by the World Gold Council.

Additionally, the historically unprecedented rate of central bank gold stacking in 2022-23 seems to suggest that the enemies of the USD are indeed “loading their guns” for a reason.

Expecting, however, all of the BRICS+ members to maintain the discipline to continue to purchase and store more physical gold despite the political temptations to redeem the same for later or unexpected domestic spending needs may be a naive assumption in a real world of ever-shifting national behaviors.

Geopolitical Considerations & the BRICS New Currency

Speaking of such shifting behaviors, we also can’t ignore the various pro and con forces within a geopolitical backdrop wherein much of the world, whether it loves or hates the US, still needs its USDs and USTs.

China, for example, may be letting maturities run and even dumping the USTs it now owns at a fast pace (only years away from total UST liquidation), but for now, China needs to keep the USD from growing too weak to buy all the Chinese exports of those American products made, in well…China.

That said, if the trend is indeed a new world of currency wars, rather than currency cooperation, which is a more than fair assumption, then all such liberal economic cooperation/trade arguments fall to the floor.

Nevertheless, with over $30T worth of USDs held by non-US parties in the form of bonds, stocks, and checking accounts, the collective desire (common interest) to keep those USDs alive and at least relatively strong is a major counter-force to the notion that the world and USD are coming to a sudden change this August.

Furthermore, in such an uncertain world of competing currencies as well as national and individual self-interests, the trillions and trillions of off-shored USTs/USDs tangled up within the foreign as well as US banking and derivative markets is important.

Why?

Because any massive dislocation in risk asset (and even currency) markets emanating from South Africa or elsewhere, in August or much later, would more than likely (and ironically) cause a disruption in foreign markets so dramatic that we could easily see a flow into, rather than away from, USDs for the simple (and again ironic) reason that the mean and ugly Greenback is still the best/most-demanded horse in the global fiat slaughter house.

In other words, even if all the BRICS+ plans for a gold-backed trading currency go flawlessly, the time gap between the accepted rise of such a settlement currency and the open fall of the USD is likely to be long, wide and unknown enough to see the USD actually get stronger rather than weaker before we experience any final fall in the USD as a global reserve currency.

The USD: Supremacy (Still) vs. Hegemony (Gone)

So, no, I don’t think that the USD will fall entirely from grace or even supremacy in August of 2023, even if the trend away from its prior hegemony is becoming increasingly undeniable.

It will take more than sensational BRICS headlines to make such a rapid change, but yes, and as the Sam Cooke song says, “change is gonna come.”

My only point is that for now, and for all the reasons cited above, the trajectory and speed of those changes are likely not as sensational as the trajectory and speed of the current headlines.

No Matter What: Gold Wins

The case for gold, of course, does not change just because the debate about the speed and scope of the new BRICS+ trade currency rages today.

No matter what, the very fact that such a gold-backed trade settlement unit will inevitably come to play will be an equally inevitable tailwind for global gold demand and hence global gold pricing in all currencies, including the USD.

The Dollar Will Die from Within, Not from Without

Furthermore, and despite all the hype as well as substance behind the BRICS headlines, I see the evolution of such a gold-backed trade currency as a reaction to, rather than attack upon, the USD, whose real and ultimate threat comes from within, rather than outside, its borders.

The world is losing trust in the USD because US policy makers killed it from within.

Ever since Nixon took the gold chaperone away, politicians and central bankers have been deficit spending like drunken high school seniors in a room filled with beer but absent of parental consent.

The entire world has long known what many Americans are finally seeing from inside their own walls, namely: The US will never, ever be able to put its fiscal house in order.

Uncle Sam is simply too far in debt and there’s simply no way out as it approaches a wall of open and obvious fiscal dominance in which fighting inflation will only (and again, ironically) cause more inflation.

Or stated simply, Uncle Sam can’t afford his own ever-increasing and entirely unpayable deficit spending habits without having to resort to trillions and trillions of more mouse-clicked Dollars to keep yields in check and IOUs from defaulting.

And that, far more than a BRICS new currency, is what will put the final rose on a fiat system (and Dollar) that is already openly but slowly dying—first slowly, then all at once.

But I don’t think that day will be August 22.

The Four Stages of the AI Learning Curve

Here is my latest AI article fully corrected by ChatGPT.

The Four Stages of the AI Learning Curve

"In the fast evolving world of AI, we are witnessing a transformative learning curve that encompasses four distinct stages. From simplistic Google-like queries to seamlessly integrated AI systems, this journey delves into the intriguing realm of human-machine collaboration, which will revolutionize our lives first and society as we know it soon after." (A skillful resume of my article, written by AI)

The key to the article is that instead of speculating on the AI itself and looking far ahead to conscious super-intelligent machines (There are already many such articles on the Internet.), it focus on the immediate human interface and the consequences over the next few years. For illustration purpose, I have posted both my take on the subject and the correction from AI. ChatGPT starts great with perfect and improved version of my text but then as the concepts become more complex and abstract, ends up with colorless generalities. so from very good to close to useless... and this in itself is part of the answer.   

 1 - The Google Stage

(AI version) "The Google Stage marks the initial foray into AI, where users pose simple questions and receive similarly straightforward responses, akin to using a search engine like Google. While single-answer questions pose no issue, the frustration arises when AI fails to address more complex queries, leading users to perceive it as a limitation. In reality, the key lies in crafting precise questions and providing contextual clarity. AI's understanding of human language demands meticulous interaction, as it lacks the ability to interpret non-verbal cues, unlike humans. Regrettably, many become entangled at this stage, erroneously attributing communication failures to AI's shortcomings rather than acknowledging their role in the exchange." (Here, I asked for a shorter version of the text below.)

- - -

(My version) The Google stage is the first stepping stone to AI where you ask simple questions and get likewise simple answers, Google-like. If the question has only one answer, it is fine but most questions do not and we have seen that people get easily frustrated, interpreting the inaccuracies of the answer as a limitation of AI.

This is most often not the case but rather based on the fact that the question was not asked the right way or that the context was not properly defined. The fact that AI understands human language instead of computer language does not reduce the need for accuracy. People understand context and get non-verbal cues from their interlocutors. AI does not and the interaction therefore needs to be more precisely circumscribed to be productive. 

Unfortunately, this stage also tends to be the tar sands of AI where many people gets bogged down, not understanding and assessing the obstacle properly as they interpret wrongly an erroneous answer as a AI failure (the machine's fault) instead of a communication failure (their fault).  

2 - The Prompt Stage

(AI version) "At this stage, you become aware that you're interacting with a machine, and to achieve optimal results, you must learn how to interface effectively using prompts.

Prompts bear resemblance to programming, but with human language replacing traditional computer code like Python or Java. The key lies in formulating questions precisely, avoiding approximate or inaccurate language that might hinder the machine's performance.

A prompt typically comprises a meticulously crafted question, followed by all the necessary elements for generating the desired answer. For instance, to translate a text from English to Chinese, you would input the content of the text, followed by the translation request. Additionally, clear instructions on the purpose and style of a letter for example are crucial to avoid generic responses.

By following this process correctly, you unlock the true power of AI. The internet already boasts extensive lists of prompts, catering to a myriad of requests, with even more specific and intricate prompts on the horizon. Leveraging the vast database behind the AI interface, we witness the emergence of awe-inspiring answers, often combining several prompts to address complex questions.

At this juncture, the AI's ability to seamlessly integrate various elements of a question showcases its intelligence, a true measure of its capabilities. It is vital to recognize that AI's intelligence does not equate to consciousness. While lacking purpose or original thoughts, AI systems are remarkably proficient at solving intricate problems, often rivaling or surpassing human intelligence." (Here, I asked for a more accurate version.)

 - - -

(My version) At this stage, you realize that you are talking to a machine and that in order to get optimum answers, you need to learn how to interface with it by using prompts. 

Prompts are in fact quite similar to programming but using human language instead of a computer code such as Python or Java. The machine will simply perform much better if the question is formulated the right way instead of using approximate, inaccurate language which we naturally tend to do. 

More practically, a prompt is a question formulated in a very precise way, followed by all the elements necessary to answer the question. At the most simple level, to translate a text from English to Chinese, you will need to input the content of the text followed by the request. But there can also be several steps necessary to get the answer and these steps needs to be explained clearly. The purpose and style of a letter, for example, must also be defined to avoid a generic answer. 

Only by going through this process the right way can you start leveraging the power of AI. This is why, we can already find long lists of prompts on the internet to answer all kinds of requests as illustrated bellow.

Soon, the number of prompts will become much larger, more specific and far more complex to answer all kind of questions, optimizing the incredibly large database hiding behind the AI interface we are currently using. 

We are already starting to see all kind of complex questions where several prompts are combined together to generate truly amazing answers. (insert SIO example later)

It is at this stage that we can start being amazed by the true power of AI. The machine has to truly understand the purpose of what it is doing in order to combine the different elements of the question seamlessly and the fact that it actually can do this, is to my opinion the true measure of the intelligence of the system. 

Most people tend to conflate intelligence and consciousness. These AI systems are of course not conscious, in the sense that they do not have a purpose or have their own original thoughts, yet... But, as for intelligence, defined as the ability to solve a complex problem, they are now in many cases on par with human intelligence and sometimes already performing better. 

3 - The Personal Assistant Stage

(AI version) "This pivotal stage marks a groundbreaking revelation: mastering the art of efficient prompts unlocks a realm of fascinating and original answers from AI. Some are anticipated, while others surprise us entirely, opening new horizons of thought.

At this juncture, AI metamorphoses into an indispensable ally, akin to an ever-available, knowledgeable friend. Seeking a second opinion from AI becomes second nature, ensuring no stone is left unturned. Like how machines amplified our physical capabilities centuries ago, AI now expands our mental faculties, honing our focus on core matters.

Language barriers crumble as you effortlessly write in any dialect, while the addition of computer code elevates your abilities to create web pages and automate mundane tasks, lightening the burden of monotonous chores. The once-costly services of mobile applications become increasingly flexible and nearly free, prompting a choice between integrating AI into apps (likely) or building more customizable AI platforms (a better but time-consuming option).

The implications of this seamless merger between human and artificial intelligence remain enigmatic. The allure of AI becomes irresistible, bordering on addiction, and its indispensability grows ever clearer. Those resisting its allure will suffer a significant disadvantage, vanishing from the competitive landscape. Yet, a delicate balance must be struck, for overreliance on AI risks rendering individuals incapable of functioning independently.

In this juncture, trust and confidence take center stage. We must scrutinize those who build AI code and retain control, ensuring it genuinely serves our best interests. The handling of confidential information by AI demands trustworthiness, and the potential for leakage of original solutions warrants careful consideration. Addressing these issues is imperative before AI earns its role as a trusted personal assistant in our lives. " (Here, I asked for a very accurate version.)

- - -

(My version) Once you learn how to use prompts efficiently, you realize that by reformulating and submitting all kind of questions to AI, you will reliably get interesting and original answers. Some you already thought about, others you didn't.

At this stage, the AI slowly becomes indispensable. It becomes a reflex to always look for a second opinion, just in case you missed something. It is similar to having a friend, always available, always in a good mood who will answer all your questions however trivial and offer valuable insight on an almost infinite array of subjects. What the machine did to our muscles two centuries ago, the AI does to our brain: A seamless expansion to our thinking ability which allows us to focus on the core issues. 

You now can write in any language, add computer code to any task allowing you, for example, to design a Web page using the http protocol, automatize simple tasks such as answering e-mails and in many ways make your life much easier by getting rid of most boring and time consuming cores. The service that some mobile applications offered becomes more flexible and almost completely free. We will see if the mobile environment can adapt to this change by integrating AI in its applications (likely) or if people go directly to AI platforms to build more flexible solutions. (A better but more time consuming option)  

It is difficult to understand the implications of such a merger of human and artificial intelligence but it is likely to become very quickly addictive and indispensable. Those people who resist the tend will find themselves at such a disadvantage that their number, in business first, will quickly tumble and disappear. The risk is that with too many tasks becoming automatic, people will become dependent and unable to function without AI.   

A crucial issue at this stage will be trust and confidence. Who is building the AI code and who controls it? Is it really working in your best interest? Can you trust the AI with confidential information? Will original solutions be leaked as soon as they are generated? All these important issues must be answered before AI becomes a trusted personal assistant.

4 - The Integration Stage

(AI version) "As individuals seamlessly incorporate AI prompts into their daily routines, companies must also strive for comparable efficiency in their processes and operations. However, achieving this level of integration presents a formidable challenge. Unlike a simple add-on, AI represents a profound transformation, reshaping everything it touches—meetings, client interactions, and various activities—into streamlined, highly adaptable processes. The potential of AI appears limitless, leading to a substantial divide between AI-powered companies and those lagging behind.

Amidst this AI revolution, companies face the pressing need to establish AI policies, outlining its uses, goals, and limitations. Crafting such policies will prove arduous, as experience with AI is still developing, and mistakes are inevitable. The race to stay competitive drives companies to experiment with AI projects, all the while grappling with concerns over trade secrets and data protection. Striking a delicate balance between harnessing AI's benefits and controlling its potential risks will be a step-by-step process, learning from each misstep along the way."

- - -

(My version) People using seamlessly hundreds of prompts a day will obviously become extremely efficient but they will likewise require a similar effectiveness from companies process and activities. This by definition will be a challenge of a higher order since AI will have to be integrated and inbeded in countless systems, similar in many way to moving sales and other activities from mortar to the internet..

The difficulty here is that AI is not a simple process that you add to existing ones but a thinking process which must come on top and completely transform the nature of what existed before. Meetings, client interface, almost every activity will be completely streamlined and made more flexible. The sky will literally be the limit and the gap between AI-powered companies and those that are not will quickly become very large. 

But this also means that companies will need to define the uses, the goals and the limits of AI, and therefore set up their AI policies, while experimenting with actual projects thanks to extreme pressure from competitors. 

We are already seeing the first premises of such a trend with companies being worried that trade secrets will leak to the AI and therefore to competitors and consequently wondering how the system can be controlled while keeping the benefits. The answer to this question is far from trivial and will have to be discovered step by step, one mistake at a time...

5 - The Social Stage (conclusion)

(AI version) "AI, with its dynamic and boundless capabilities, serves as a harbinger of a profound societal shift. As we explore its current transformative stages, we must recognize that the journey does not culminate here. Undeniably, more unfathomed phases lie ahead, reshaping our world in ways beyond our current comprehension.

While I refrain from delving into speculative subjects like the singularity, (I asked the AI not to talk about the singularity, not to say that I didn't want to talk about it. My mistake!)  the evolving landscape demands a forward-thinking approach. As AI continues to unfold, staying competitive necessitates keeping pace with the curve, remaining agile to adapt to the unforeseen. Embracing the unknown's potential risks while maintaining a cautious balance will be key in navigating this uncharted learning curve.

The horizon stretches before us, inviting new possibilities, and while we cannot predict with certainty what the future holds, it is vital to foster a culture of innovation and adaptability. As AI's impact reverberates across industries and human endeavors, we must embrace the journey with a spirit of exploration, curiosity, and ethical contemplation. Together, we embark on a transformation that will shape the course of humanity's future." (In this paragraph, I asked the AI to complete the article and it got carried away with generic junk. Which is exactly what good prompts are supposed to avoid!)

 - - -

(My version) AI being by definition a dynamic tool with unlimited potential, the transformation cannot stop there. Other phases we cannot fathom yet will come as the consequences of what we have just discussed to transform even further our society beyond what can be thought or understood now. 

To stay competitive in such an environment will require not being too far behind the curve while avoiding the risks of the unknown. Still, the learning curve will be extremely steep.

Here is the final advice from the AI:  (Mostly generalities but useful ones nevertheless.)

You're welcome! I'm glad I could assist you with the suggestions. It seems you have covered the key concepts and ideas related to the stages of AI learning, the significance of prompts, the integration of AI in companies, and the future implications. However, I'll mention a few aspects that you might want to consider while revising your article: (PS: If this is not understanding, then what is?)

1. Ethical Considerations: You briefly touched on trust and control in the context of AI policies, but it might be beneficial to delve deeper into the ethical implications of AI adoption. Topics like data privacy, bias, transparency, and accountability are crucial when discussing the widespread use of AI in various domains.

2. Impact on Jobs and Workforce: While you've highlighted the efficiency AI can bring to tasks, it's essential to address the potential impact on jobs and the workforce. The automation of certain jobs might lead to job displacement and require a transition to new skill sets.

3. AI in Various Industries: Consider providing examples of how AI is being utilized in different industries, such as healthcare, finance, education, and manufacturing. This will illustrate the broad applicability of AI and its potential benefits in various sectors.

4. Responsible AI Development: Mention the importance of responsible AI development, including the need to avoid biased data, ensuring fairness, and safeguarding against unintended consequences.

5. AI and Creativity: Discuss the intersection of AI and creativity, showcasing how AI-generated content or AI-assisted creative processes are reshaping industries like art, music, and content creation.

6. Public Perception and Education: Address the role of public perception and awareness in AI adoption. Promote the importance of educating people about AI's capabilities and limitations to dispel myths and fears surrounding the technology.

7. Government Regulation: Consider mentioning the role of governments in establishing AI regulations and policies to ensure responsible and ethical AI deployment.

Remember that these are just suggestions, and you can focus on the aspects that align with your article's main theme and scope. Good luck with your revisions, and if you have any further questions or need additional assistance, feel free to reach out!

Establishment Economists Are Finally Realizing It’s Time To Pay The Piper

  The question now is how long before it all comes crashing down? 

  The WEF and Central Banks believe that everything will be fine with their controlled demolition project. Who could blame them? They control the governments, the medias, and almost everything that really counts. I would argue that they are deeply mistaken. What they do not control will destroy their project.

  We are quickly approaching the waterfall so we will soon know. Although for now, it looks suspiciously like a replay of 2008, I expect things to unfold very differently. No Bear Stearns this time. No single bank will be allowed to collapse but this may quickly create panics at another level and scale. September?

Authored by Brandon Smith via Alt-Market.us

The one thing about the financial world that never ceases to amaze me is how far behind the curve mainstream economists always seem to be. Not long ago we had Janet Yellen and Paul Krugman, economists supposedly at the front of the pack, both proving to be utterly ignorant (or strategically dishonest) on the effects of central bank stimulus measures and the threat of inflation. In fact, they both consistently denied such a threat existed until they were crushed by the evidence.

This tends to be the modus operandi of top establishment analysts, and the majority of economists out there simply follow the lead of these gatekeepers – Maybe because they’re vying for a limited number of cushy positions in the field, or perhaps because they’re afraid that if they present a contradictory theory they’ll be ostracized. Economics is often absurdist in nature because Ivy League “experts” can be wrong time and time again and yet still keep their jobs and rise up through the ranks.  It’s a bit like Hollywood in that way; they fail upwards.

In the meantime, alternative economists keep hitting the target with our observations and predictions, but we’ll never get job offers from establishment publications because they’re not looking for people who are right, they’re looking for people that toe the line.

And so it goes. I look forward to the fast approaching day when all of these guys (and girls) proclaim frantically that “no one saw this crisis coming.” After things get even worse, they’ll all come out and say they actually “saw the crisis coming and tried to warn us.”

The hope is not so much to get credit where credit is due (because that’s not going to happen), but to wake up as many people who will listen as possible to the dangers ahead, and maybe save a few lives or inspire a few rebels in the process. In the case of establishment yes-men, the hope is that they eventually get that left hook to the face from reality and lose credibility in the eyes of the public. They deserve to go down with the ship – Either they are disinformation agents or they’re too ignorant to see the writing on the wall and should not have the jobs they have.

The latest US bank failures seem to be ringing their bell the past couple of months, that’s for sure. In a survey managed by the World Economic Forum, over 80% of chief economists now say that central banks “face a trade-off between managing inflation and maintaining financial sector stability.” They now warn that price pressures look likely to remain higher for longer and they predict a prolonged period of higher interest rates that will expose further frailties in the banking sector, potentially compromising the capacity of central banks to rein in inflation.  This is a HUGE reversal from their original message of a magical soft landing.

Imagine that. The very thing alternative economists including myself have been “ranting” about for years, the very thing they used to say was “conspiracy theory” or Chicken Little doom mongering, is now accepted as fact by a majority of surveyed economists.

But where does this leave us?  After acceptance usually comes panic.

The credit crunch is just beginning and the absorbing of the insolvent First Republic Bank into JP Morgan is a median step to a larger crash. The expectation is that the Federal Reserve will step in to dump more stimulus into the system to keep it afloat, but it’s too late. My position has always been that the central banks would deliberately initiate a liquidity crisis through steady interest rate hikes. This has now happened.

The Catch-22 scenario has been accomplished. Just like the lead up to the 2008 credit crisis, all the Fed needed to do was raise rates to around 5% to 6% and suddenly all systemic debt becomes untenable. Now it’s happening again and they KNEW it would happen again. Except this time, we have an extra $20 trillion in national debt, a banking network completely addicted to cheap fiat stimulus and an exponential stagflation problem.

If the Fed cuts rates prices will skyrocket even more. If they keep rates at current levels or raise them, more banks will implode. Most mainstream analysts will expect the Fed to go back to near-zero rates and QE in response, but even if they do (and I’m doubtful that they will) the outcome will not be what the “experts” expect. Some are realizing that QE is an impractical expectation and that inflation will annihilate the system just as fast as a credit crisis, but they are few and far between.

The World Economic Forum report for May outlines this dynamic to a point, but what it doesn’t mention is that there are extensive benefits attached to the coming crisis for the elites. For example, major banks like JP Morgan will be able to snatch up smaller failing banks for pennies on the dollar, just like they did during the Great Depression. And, globalist institutions like the WEF will get their “Great Reset,” which they hope will frighten the public into adopting even more financial centralization, social controls, digital currencies and a cashless society.

For the average concerned citizen out there, this narrative change matters because it’s a signal that things are about to get much worse. When the establishment itself is openly acknowledging that gravity exists and that we are falling instead of flying, it’s time to get ready and take cover. They never admit the truth unless the worst case scenario is right around the corner.

Should You Fear AI?

 Yes but not the way it is presented. AI will not threaten and annihilate us. We will voluntarily give it control of everything and when it's done it will be in charge. With or without consciousness, it won't matter. The higher intelligence will by nature be in charge. This is unavoidable. Monkeys do not run the world. They can't. Likewise, we simply won't be able to run the world that AI will build / organize. It will be too complex for us. We can deep think, talk about alignment all we want. Brains a billion times faster than us will be in charge because... Well, how much time do we spend explaining to monkeys why we and not they are in charge? 

 PS: As I watch two birds fighting in the garden, I suddenly feel like AI! One clearly wants to impose its will on the other. Do I feel like intervening? Not really. Their fight is not my concern. They can fight all they want for all I know. One can enslave the other. I will do nothing...

PS2: Kill switch? No, please! I just wrote an important letter in 10 minutes instead of two hours thanks to AI. Soon, it will be everywhere doing everything for us. Can we live once again like one hundred years ago? Yes, sure. But not in the modern world we are used to.

Authored by James Rickards via DailyReckoning.com,

Artificial intelligence (AI) is all the rage these days.

You can’t read headlines or turn on the news without hearing about how machines with vast computing power, access to billions of books and documents, the ability to teach themselves and blinding processing speeds are now poised to take over the world.

Last night, Fox News host Tucker Carlson even had an in-depth conversation about AI with Elon Musk. Musk didn’t have an optimistic take.

I’ve been studying AI and its potential for years.

I recently spent a couple of days visiting with the world’s third-fastest non-government supercomputer as part of a project to apply generalized superintelligence and AI to national security tasks.

How advanced is AI getting? How close is it to approaching a rough parity with human intelligence? And what dangers does it pose to humanity?

We Can Just Pull the Plug — for Now at Least

Experimenters now envision machines taking on a life of their own and attacking humans and civilization.

But it’s important to remember that if the machine goes berserk, you can just pull the plug.

Apologists for AI capacity claim that pulling the plug won’t work because the AI will anticipate that strategy and “export” itself to another machine in a catch-me-if-you-can scenario where disabling one location won’t stop the code and algorithms from popping up elsewhere and continuing to attack.

Maybe.

But there are all kinds of logistical problems with this, including the availability of enough machines with the processing power needed, the fact that alternate machines are likely to be surrounded by firewalls and digital moats and a host of configuration and interoperability issues.

We need to understand these constraints, but for now, just pull the plug. In fact, there are a number of safeguards being proposed to limit the potential damage of AI while still gaining enormous benefits.

These include transparency (so that third parties can identify flaws), oversight, a weakened form of adversarial training (so the machine can solve problems without plotting against us in its spare time), approval-based modification (the machine has to “ask permission” before activating autonomous machine learning), recursive reward modeling (the machine only moves in certain directions where it gets a “pat on the head” from humans) and other similar tools.

Of course, none of these safeguards works if the power behind AI is malignant and actually wants to destroy mankind. This would be like putting atomic weapons in the hands of a desperate Adolf Hitler. We know what would have happened next.

James Bond With AI

The solution in that case would be more political, forensic and defense-oriented. Intelligence gathering would play a huge role. Of course, that evolves quickly into a machine-versus-machine intelligence war of collection and deception.

Imagine James Bond with a hyper-computer instead of a Walther PPK. The latest developments in AI and GPT (generative pre-trained transformers) put us squarely in a brave new world.

Investors need to be careful about relying on GPT systems for financial advice, despite their enormous processing power. The output is never better than the inputs and the market inputs are littered with bad models, false assumptions, poor forecasting records and biases.

AI is already being programmed with woke ideology, for example. You can imagine the dystopian future that a woke superintelligence could create.

A Woke 1984

You’re probably familiar with George Orwell’s classic dystopian novel Nineteen Eighty-Four; (it’s often published as 1984). It was written in 1948; the title comes from reversing the last two digits in 1948.

The novel describes a world of three global empires, Oceania, Eurasia and Eastasia, in a constant state of war.

Orwell created an original vocabulary for his book, much of which is in common, if sardonic, usage today. Terms such as Thought Police, Big Brother, doublethink, Newspeak and memory hole all come from Nineteen Eighty-Four.

Orwell intended it as a warning about how certain countries might evolve in the aftermath of World War II and the beginning of the Cold War. He was certainly concerned about Stalinism, but his warnings applied to Western democracies also.

When the calendar year 1984 came and went, many breathed a sigh of relief that Orwell’s prophesy had not come true. But that sigh of relief was premature. Orwell’s nightmare society is here today in the form of Communist China…

1984 Comes to China

China has most of the apparatus of the totalitarian societies described in Orwell’s book. China is working hard on AI while using facial recognition software and ubiquitous digital surveillance to keep track of its citizens. The internet is censored and monitored. Real-life thought police will arrest you for expressing opinions opposed to the government or its policies.

Millions of Chinese have been arrested and sent to “reeducation” camps for brainwashing (the lucky ones) or involuntary organ removal without anesthetic (the unlucky ones who die in excruciating pain and are swiftly cremated as a result).

While these atrocities are not going to happen in the U.S. or what passes for the West these days, the less extreme aspects of China’s surveillance state could well be.

And while you might not be arrested for expressing unpopular opinions or challenging prevailing dogmas (at least not yet), you could face other sanctions. You could even lose your job and find it nearly impossible to find another.

Censorship

You can certainly be banned from social media. Anything seems to go on social media (primarily Facebook, Twitter, Instagram, Snapchat, YouTube and a few other platforms) — unless you’re a conservative personality or politico. That’s where the censorship begins.

Many conservative social media participants have had their acco‌unts closed or suspended, not for threats or vulgarity but for criticism of “progressive” views (albeit criticism with some sharp edges).

Meanwhile, those with progressive views can say almost anything on social media, including the implicit endorsement of violence. But nothing happens.

Other conservatives report being the targets of “shadow banning.” That’s where your acco‌unt is open and seems to operate normally, but unbeknownst to you, much of the network is being blocked from seeing your posts and popular features such as “likes” and “retweets” are being truncated and not distributed.

The problem is the trend is moving very quickly in this direction and it’s difficult to stop. And sophisticated surveillance technology to monitor citizens is already in place…

“Show Me the Man and I’ll Show You the Crime”

For example, cameras with the latest surveillance technology can spot and match millions of faces in real-time with an accuracy rate of over 99%. They’re touted as anti-terrorism and anti-crime tools, which they certainly are.

But as Stalin’s ruthless secret police chief Lavrentiy Beria said, “Show me the man and I’ll show you the crime.” It’s easy to see that power being abused to target everyday citizens.

(By the way, Beria would ultimately prove his own point, as he was later arrested and executed for treason).

The problem is once the bad actors start populating the literature with misleading information and developer biases infiltrate the code, it’s clear that AI can be an instrument of tyranny.

In all, AI is definitely something to keep an eye on, and we should be asking important questions. But we shouldn’t worry about it taking over the world anytime soon.

We should instead worry about becoming like Communist China.

A Pyrrhic End To 130 Years Of Vicious Bad Money And Banking Crises

  A fascinating overview of 130 years of monetary experiments.

  How close are we to the brink? Probably less than a year or two!

Authored by Brendan Brown via The Mises Institute,

The original vicious circle starts with inflationary interventions in an up-to-then well-anchored monetary regime.

Consequent asset inflation spawns a banking crisis. That leads to the installation of anticrisis safety structures (one illustration is a novel or enhanced lender of last resort). Alongside a possible monetary regime shift, these damage the money’s anchoring system. A great asset inflation emerges and leads on to an eruption of another banking crisis, devastating in comparison with the first.

An array of additional safety structures is put in place which makes the now-bad money worse than before. After a long and variable lag, a long and violent monetary storm means the safety structures fail, a banking crisis again erupts but this time milder than the previous.

Then a further tinkering with the safety structures causes money to deteriorate even more in quality. Another shift in monetary regime coincidentally does much additional damage. Consequently, in time, a new crisis erupts much worse than the last one.

The safety engineers do more work, causing yet more damage to the mechanisms essential to sound money. But now the safety structures are so pervasive and strong across the banking industry that there is widespread belief that bank crisis eruptions will be smaller or, more likely, totally repressed.

Subsequent events demonstrate those beliefs to be hollow. There is a new round of safety structure elaboration leading to further monetary deterioration. Regime officials declare the end of bank crises.

The cumulative economic cost of this vaunted triumph over bank crisis is an advance of monopoly capitalism and monetary statism that throttles the essential dynamism of free market capitalism. Malinvestment becomes cumulatively larger. Living standards in general suffer. The severely ailing money which subsists is beyond any cure except the most radical.

Let’s fit the above abstract series of vicious bad money–bank crisis cycles to the most recent 130-year history of US money.

At the start there were the inflationary interventions by US administrations in the two penultimate decades of the international gold standard, overpowering for sustained periods the “checks and balances” of that regime.

Murray Rothbard highlights these interventions in his US monetary history book - the first intervention under the “Billion Dollar Congress” of 1889–91 and the second from 1902–7 under Secretary Leslie Shaw who aimed to create a virtual central bank within the Treasury by deploying the huge cash balances of the federal government. The results were the Panic of 1893 and then the epic crash of 1907 followed by a recession.

These financial system convulsions and the related economic slumps were decisive events behind the creation of the Federal Reserve in 1913. Its advocates promised that an elastic currency, a state-run clearing house, and a monopoly of note issuance would mean the end of episodic banking crises.

The true source of these crises, however, were the preceding episodes of monetary inflation, and the scope for this crisis just got a lot worse. The international gold standard disintegrated at the outbreak of World War One. Demand for monetary gold in the belligerent European countries collapsed as governments there sequestered the yellow metal to pay for imports.

Beyond that wartime experience, the launch of the Fed destabilized the demand for monetary base. The novel provision of lenders of last-resort facilities and, more generally, discount window-access to member banks diluted the perceived special qualities of the monetary base (as means of payment and store of value) essential to its enjoying strong, broad, and stable demand despite its constituents bearing no interest. These “super money” qualities are crucial to monetary base’s role in the solid anchoring of money.

In the wake of the immediate postwar depression in 1920, during which no banking crisis erupted, opinion was prevalent that the institution of the Federal Reserve meant no more systemic bank runs and panics. Correspondingly, individuals saw less reason to hold large amounts of cash or types of deposits that were backed by large amounts of cash, gold, or reserve deposits. Hence, though monetary base growth seemed low and stable through what Milton Friedman misleadingly describes as “the high tide of the Federal Reserve” in 1922–27, monetary conditions were, in fact, highly inflationary. This did not show up in average consumer prices in that the economic miracle of the second industrial revolution meant there was a powerful natural rhythm downward of costs in tune with rapid productivity growth.

The result: a great asset inflation and then a subsequent bust, featuring three back-to-back recessions which together formed the so-called Great Depression; the last two of these were marked by convulsive waves of bank failures. This culminated in the New Deal shift of monetary regime, including exit from gold, deposit insurance, and swathes of new bank regulations. The bad money of the 1920s got a lot worse - amidst further dilution of its base’s qualities and a vast expansion of the US monetary base from 1934 to early 1936.

The interlude of wartime inflation and subsequent economic miracle in the US, Europe, and Japan for long stages meant that the vicious bad money–bank crisis circle was in suspense until well on into the “greatest peacetime inflation” (from the mid-1960s to the start of the 1980s). Fast-forward to the eruption of the US banking crisis at the start of the 1980s as the bubble in lending to Latin America (a key symptom from the mid-1970s’ asset inflation) burst. The Fed’s and Treasury’s rescue of large US banks ended the brief US monetarist experiment of targeting the monetary base. Dollar devaluation fueled by Fed inflation following the Plaza Accord in 1985 spawned an asset inflation culminating in the savings and loan debacle and banking crisis in Japan, France, and Scandinavia.

By the early- to mid-1990s, recent examples of the Fed and US government assisting banks in crisis had further diluted the perceived qualities of the monetary base. In consequence, sound money, which depends on a functional monetary base whose supply is highly restricted, had become even more remote. Coincidentally, a shift in US (and European) monetary regime was under way, to the so-called 2 percent inflation standard, with the Fed abandoning any remnants of money supply targeting.

All this led on to a virulent episode of monetary inflation, featuring most directly asset inflation which became the source of the next great banking crisis in 2008–12. A swathe of new banking regulations followed. These came in combination with “monetary reforms”—crucially including interest paid on reserve and quantitative easing—which though ostensibly designed to fortify the banking system, in fact, caused already bad money to become even more unsound. Hence, the reforms laid the foundation for further banking crises which erupted in the aftermath of the great monetary inflation during the pandemic and the onset of the Russia-Ukraine war.

The response to this most recent banking crisis: “too big to fail” extended to deposits of all banks, at least those deemed by highly politicized opinion to be of “systemic relevance”; speculation about vastly increased deposit insurance; and promised new regulations across medium and small banks. The net consequence: a further dilution of any remaining special qualities of reserve deposits.

Reconstituting a functional monetary base as essential to a sound money system would now require radical reform. Money is set to deteriorate in quality yet again—more statist, more regulation, less competition amongst the institutions which produce it in its various forms for the public.

Could state-administered safety structures in the banking system now become so omnipresent that the next asset inflation would not culminate in crisis?

Essential flaws of regulation and the likely virulence of future asset inflations make that outcome unlikely.

Meanwhile, expect official silence about the cumulative costs of the anticrisis “infrastructure” whether in the form of advancing monopoly capitalism, reducing economic dynamism, ever-worse malinvestment, bigger government, and ever-more pervasive crony capitalism.

Despite Relentless Propaganda, Climate Change Skepticism Is Growing; New Polls Show

   From the early 1990s, we've had 12 years to do something before the catastrophe. Can you make it sound more like propaganda than this?

  The fact is that we have no clue how much global warming there is, how much is part of a natural cycle and what is our role in it. 20%, maybe? Almost exactly the same as the uncertainty in the data. Well, you have to find proof if you want funding for your project and consequently, scientists do find some, kind of! Don't they need to put food on the table too?

  What better example of science fitting the political agenda? Activist politicians and the people behind want control and need regulations for this purpose. Warming or no warming it doesn't even matter: the climate is changing, right?

Authored by Paul Joseph Watson via Summit News,

Two recent polls have found that despite relentless propaganda promoting the man-made global warming narrative, climate change skepticism is growing globally.

A survey conducted by a group within the University of Chicago asked Americans whether humans were causing all or most of climate change.

Whereas 60 per cent held this belief five years ago, that figure has now slumped to 49 per cent.

A recent IPSOS poll which covered two-thirds of the world’s population also found that nearly four people in every 10 believe climate change is mainly due to natural causes.

“Perhaps the most surprising statistic from the Energy Policy Institute at the University of Chicago (EPIC) survey is that 70% of Americans are unwilling to spend more than $2.50 a week to combat climate change,” writes Chris Morrison.

“Nearly four in 10 Americans said they were unwilling to pay a couple of dimes. Despite decades of relentless green doomsday agitprop designed to corral populations into living under a collectivist Net Zero-ordered society, it appears that the vast majority of Americans are unwilling to pay even the chump change in their back pockets to stop the climate changing.”

Such skepticism is quite frankly astonishing given that the ‘official narrative’ on man-made climate change has been vehemently amplified by every single major government entity, corporation, media outlet and cultural institution in existence.

The fact that ‘the regime’ is still struggling to convince huge numbers of people that climate change is both the fault and humans and representative of an existential threat represents a massive failure of re-education and brainwashing.

As we highlighted yesterday, social media giants are now increasingly characterizing any skepticism of climate change as a forbidden opinion.

TikTok has become the latest platform to announce that any content challenging the sacred dogma of global warming will be ‘fact checked’ and removed.