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Dalio Sheds Light On Chinese Thinking On Trade Deal

Dalio Sheds Light On Chinese Thinking On Trade Deal

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Dalio Sheds Light On Chinese Thinking On Trade Deal Tyler Durden Wed, 09/16/2020 - 20:50

Authored by Ye Xie, Bloomberg macro commentator and analyst

There were few surprises at the FOMC meeting as the Fed signaled it plans to leave rates near zero for at least three years, even as it upgraded growth forecasts. The fact that bond yields and the dollar erased earlier declines perhaps reflected the positioning of a minority of investors who were looking for more. In the bigger picture, though, the macro backdrop remains the same - accommodative monetary policy with continued economic recovery, coupled with both upside risks (a vaccine) and downside risks (fiscal, virus and the presidential election).

In China, Vice Commerce Minister Wang Shouwen said Beijing is “seriously” implementing the phase-one trade deal with the U.S. even as it faces difficulties caused by the pandemic and complexities in the relations between the two nations.

So why does Beijing bother to stick to the deal when the conflicts extend everywhere from technology to human rights and capital markets?

In a long article published this week to promote his upcoming book, Bridgewater Associates founder Ray Dalio shed some light on the thinking of Chinese policy makers: It’s really about avoiding a real war.

Dalio, who has connections with senior policy makers since the 1980s, recounted a meeting between him and China’s top negotiator Liu He during the first round of trade talks:

“He explained that going into his meeting with Trump, he was concerned about how it would go, not because of the trade negotiations, which he was confident didn’t have any issues that couldn’t be worked out, but because he was concerned about the worst-case scenario where tit-for-tat escalations could get out of control and lead to more serious consequences.”

China has long said that trade is the anchor for the Sino-U.S. relationship. Without it, relations could slip into a military confrontation. To Dalio, the U.S. conflicts with China rose in a way that was “analogous to the rise of Japan and Germany to challenge the then-existing powers in the 1930s,” which eventually led to World War II.

To some extent, the tension is inevitable, given the two sides’ different understandings of the role of the state in the economy. In fact, Dalio said he “would have done almost the exact same things as they did if I were in their shoes,” given the constraints China faces. He urges the U.S. to abandon the stereotype of “communist China” to really understand what Beijing is actually doing.

So where do we go from here? Dalio left his conclusion for the next chapter of his book. From what we’ve learned, though, he seems to believe that gold is something that one must have in the current chaotic global environment. After all, 12 of the past 16 global transitions of rival powers in the last 500 years ended in war, the ominous curse of the "Thucydides Trap."

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US Confirms 2nd Carrier Group En Route To “Deter Hostile Actions Against Israel”

US Confirms 2nd Carrier Group En Route To "Deter Hostile Actions Against Israel"

Update (2100ET): The Pentagon has ordered a second carrier…

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US Confirms 2nd Carrier Group En Route To "Deter Hostile Actions Against Israel"

Update (2100ET): The Pentagon has ordered a second carrier strike group to the eastern Mediterranean Sea, according to two US officials, as Israel prepares to expand its Gaza operations.

The first carrier strike group, led by the USS Gerald R. Ford, arrived off the coast of Israel earlier this week.

US Defense Secretary Lloyd Austin announced on Saturday night that the USS Dwight D. Eisenhower carrying nine aircraft squadrons, as well as two guided-missile destroyers and a guided-missile cruiser, will soon join the USS Gerald R. Ford carrier group in the region to “deter hostile actions against Israel or any efforts toward widening this war following Hamas's attack on Israel.”

The Biden administration made clear that the carrier, and its accompanying force, are not there to engage in combat activities on behalf of Israel but rather to deter others from entering the conflict, including Hezbollah.

“The increases to US force Posture signal the United States' ironclad commitment to Israel’s security and our resolve to deter any state or non-state actor seeking to escalate this war,” Austin stated.

 

Additionally, the US administration has so far ruled out sending military personnel into Gaza as part of any Israeli ground invasion or attempt to free American hostages there, only aiding the IDF with intelligence and operation planning.

*  *  *

Update (1330ET): The Israeli military has announced it is prepared for a coordinated air, ground and naval offensive in the Gaza Strip "very soon," according to reports from AP.

In a nationally broadcast address Saturday night, Rear Adm. Daniel Hagari issued a new appeal to residents to move to the southern Gaza Strip.

“We are going to broadly attack Gaza City very soon,” he said.

He accused Hamas of trying to use civilians as human shields.

Meanwhile, the social media rhetoric between leaders has gone to '11'...

Iran's Supreme Leader Khamenei expects a "complete victory"...

Calling on all Muslims to join the fight...

Israeli PM Netanyahu made his views very clear:

Live feeds below on Gaza: 

*  *  *

Israeli media is reporting a "greenlight" has been given for the expected major Israeli offensive on the Gaza Strip as massive convoys of Palestinian civilians have been observed fleeing to the southern part of the densely populated strip. So far there has been limited ground incursions by the army into the strip, targeting Hamas operatives and reportedly to gain intelligence on the whereabouts of hostages. 

The United Nations has issued a report saying at least 423,000 Palestinians have already been internally displaced within Gaza and this massive figure is expected to ratchet further. Likely it has surpassed a half-million as of Saturday, following the Israeli-issued evacuation order, which included dropping thousands of leaflets and warnings over Gaza City. 

Via The Guardian

The UN said it "considers it impossible for such a movement to take place without devastating humanitarian consequences." Middle East Eye and other regional sources have said over 700 Palestinian children were killed in one week of fighting. As of Friday Israel authorities tallied that over 1,300 Israelis were killed by the Hamas terror attacks on the southern settlements and the music festival, and rocket fire, with at least 3,200 wounded. 27 among the dead were Americans.

Middle East Eye on Saturday reports the following of the mounting Palestinian death toll in both Gaza and the West bank as follows:

Israel has killed at least 2,215 people in Gaza over the past week, according to the Palestinian health ministry. Of those killed, 724 are children and 458 are women. Some 8,714 people have been wounded in the besieged enclave in that time, it added. 

Meanwhile, Israeli forces have killed 54 people and wounded 1,100 others in the occupied West Bank.

According to a review of the last hours of developments, the population is about to run out of water as the remaining supply dwindles after Israel cut off external supply sources

  • UN agency for Palestinian refugees says its shelters in Gaza “are not safe anymore” as it warns water running our for besieged enclave’s residents.
  • More than 320 Palestinians have been killed in the past 24 hours, including many women and children killed in Israeli air raids on convoys fleeing Gaza City, according to health officials.
  • The rising toll comes as Israel continues bombing Gaza a day after telling 1.1 million residents to head south ahead of a looming ground offensive following Hamas’s attack inside Israel last week.
  • At least 2,215 Palestinians have been killed and 8,714 wounded in Israeli air attacks on Gaza. The number of people killed in Israel has reached 1,300, with more than 3,400 wounded.
  • In the occupied West Bank, the number of Palestinians killed by Israeli fire in the past week has topped 50. More than 1,000 have been wounded and hundreds arrested.

The fate of the estimated 100 to 200 hostages in Hamas captivity still remains largely unknown, but Hamas in statements which have been underreported in Western press has claimed that over two dozen of the hostages have been killed by the IDF's ongoing aerial bombardment of the Gaza Strip

Hamas' Izz al-Din al-Qassam Brigades said nine more captives were killed in indiscriminate Israeli shelling in the last 24 hours, including a number of foreigners

Qassam has previously announced the death of 17 captives in Israeli air stikes in Gaza over the past week. 

Sky News and others are also reporting, based on Israeli sources, that bodies of hostages have been recovered after some of the initial IDF infantry cross-border raids which began Friday into Saturday:

Raids carried out on the Gaza Strip by Israeli forces discovered human remains of those who had been missing since Hamas's attack last weekend, local media is reporting.

According to Haaretz, armed forces entered an enclave where it is thought up to 200 people were being held hostage by Hamas, and retrieved the bodies of several people.

Items belonging to the missing people were also discovered. 

The US said Friday it chartered its first successful evacuation flight, with talk of more to come.

TOI: A military official at the forensic center at the Military Rabbinate's headquarters in Ramle stands in front of the remains of the victims of Hamas's October 7 shock onslaught in Israel, October 13, 2023. Flash90

There are Americans (many of them likely dual nationals) among the population of Gaza, which Washington says it is trying to facilitate safe exit for as Israeli airstrikes continue. Dangerously, the lone Raffah border crossing into Egypt has at this point been bombed several times. 

But regional media is reporting there's been a diplomatic breakthrough on this front, as Israel, Egypt, and the United States have forged an agreement to let foreigners residing in Gaza pass through the Rafah border crossing into Egypt.

Scene from the frontlines as the IDF build-up outside Gaza continues:

Huge civilian convoys have been witnessed fleeing to the southern half of Gaza, creating bottlenecks...

The Times of Israel cites a senior Egyptian official as follows:

The official says Israel has agreed to refrain from striking areas the foreigners would pass through on their way out of the besieged Palestinian territory. He adds that Qatar was involved in the negotiations and the participants received approval from the Palestinian terror groups, Hamas and Islamic Jihad.

The agreement  does not deal with hostages being held by Hamas.

A second official at the Egyptian side of the Rafah crossing point says they received “instructions” to reopen it on Saturday afternoon for foreigners coming from Gaza.

But Egypt is by and large not letting Gazans exit, even erecting bigger concrete barriers of extra border protection, amid what's setting up to be a catastrophic humanitarian crisis as the Israeli pressure ratchets.

The IDF says it is about to attack the northern half of the Gaza Strip with "great force" - while the US and other countries are urging for caution regarding Palestinian civilians. Below is rare footage of an elite Israeli rescue squad in action (intentionally blurred by IDF sources):

Washington has still all the while said it "stands with Israel" - and has not tried to actually halt the unrelenting IDF bombardment of civilian areas.

Meanwhile, things continue ratcheting in south Lebanon, with reports of new strikes being exchanged between Israel and Hezbollah, and other pro-Palestinian factions.

Tyler Durden Sat, 10/14/2023 - 21:00

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Ukraine Vs Israel: Can The West Arm Both?

Ukraine Vs Israel: Can The West Arm Both?

Authored by William Van Wagenen via The Cradle,

Just three days after the Hamas-led Palestinian…

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Ukraine Vs Israel: Can The West Arm Both?

Authored by William Van Wagenen via The Cradle,

Just three days after the Hamas-led Palestinian resistance launched an unprecedented military offensive against Israeli military posts and settlements by land, sea, and air, Israeli officials began begging their US sponsors for additional weapons. Politico reported this week that according to a senior Pentagon official, "The Biden administration is surging weapons to Israel, rapidly sending air defenses and munitions in response to Israeli officials’ urgent requests for aid."

“Planes have already taken off,” the senior official told reporters. Amidst this escalating crisis for the occupation state, it's worth pondering a crucial question: Can the US sustain a commitment to two significant existential conflicts involving vital allies in separate geographies simultaneously? 

The answer is likely no. Washington has already devoted over $100 billion in military aid to Ukraine to fight Russia, while facing a national debt spiraling out of control and spiking inflation.

It wasn't supposed to be this way. The Ukraine war was meant to be easier; the isolation and economic unraveling of its Russian adversary, was a cinch. Instead, 18 months on, the US is struggling to support Ukraine in a bloody war of attrition. Worse yet, Kiev’s well-publicized spring offensive that was meant to flip those odds has come to naught in the face of Russia’s overwhelming advantage in artillery and advanced missiles. 

AFP/Getty Images

Little territory has changed hands since Russian forces withdrew from Kharkiv and Kherson in late 2022, but the Ukrainian army has since been decimated by Russian artillery in theatres such as Bakhmut. 

"We think that Ukrainians have lost somewhere between 300 to 350 thousand dead, maybe more, hundreds of thousands of wounded," retired US Colonel Douglas Macgregor bluntly stated in August. "These attacks have utterly bled Ukraine white."

This grim reality has given rise to what the BBC has described as "Ukraine's army of amputees." In the first half of this year alone, some 15,000 soldiers joined their ranks, surpassing the total amputees the UK produced over six years during World War II.

While Ukraine faces a severe manpower shortage, western powers find themselves faced with a dearth of available weaponry to send to Kiev. Admiral Rob Bauer, NATO's highest-ranking military official, candidly admitted on October 3rd, "The bottom of the barrel is now visible" concerning the west's ammunition stockpile.

In a sign of the mounting strain, the US began transferring to Ukraine 300,000 155-millimeter shells it had stored in Israel as part of the War Reserves Stock Allies-Israel (WRSAI) program.

According to one Israeli officer, “Officially, all of this equipment belongs to the US military …. If, however, there is a conflict, the IDF [Israel Defense Forces] can ask for permission to use some of the equipment.”

Pentagon spokesman Brig. Gen. Patrick Ryder claimed the US would replenish these stocks of artillery shells stored in Israel. But the US does not have the ability to do so, as Ukraine has been using between 3,000 and 6,000 rounds per day, a quarter of what Russia has used on the battlefield.

CNN reported at the time that “The strain on weapons stockpiles – and the ability of the US industrial base to keep up with demand – is one of the key challenges facing the Biden administration.”

Israel's plea for US weapons

The US military-industrial complex is heavily geared to produce high-cost weapons systems and hardware, like the $412 billion F-35 warplane. While these programs undoubtedly benefit weapons manufacturers like Lockheed Martin, they fall short in delivering the essential artillery required in vast quantities for a war of attrition against a formidable military.

Now that war has broken out between Israel and the Palestinian resistance, Kiev faces a competitor not only in Moscow, but in Tel Aviv. Ukrainian President Volodymyr Zelensky on 9 October expressed the fear that US and European support would shift away from Ukraine and toward Israel, and claimed on the social media platform X:

“We have data very clearly proving that Russia is interested in inciting war in the Middle East so that a new source of pain and suffering would erode global unity and exacerbate cleavages and controversies, helping Russia in destroying freedom in Europe.”

While the Ukraine lobby enjoys clout in Washington, the Israel lobby reigns supreme. It is unlikely the former will be able to override the efforts of the latter to redirect what few US weapons remain available away from the defense of the Jewish state.

Israel had consistently refused to send weapons to Ukraine...

That Israel is begging for US weapons just days into a conflict with Hamas and Palestinian Islamic Jihad (PIJ) is alarming for the occupation state’s supporters, considering that none of the remaining Axis of Resistance members, including Hezbollah, Syria, Ansarallah, Popular Mobilization Units (PMU) and Iran, have yet formally entered the conflict.

Should Hezbollah fully join the fight, Israeli planners expect the Lebanese resistance movement to fire 4,000 missiles a day from northern Lebanon and send thousands of elite troops into Israel to take over towns or military bases.

Lessons from the 2006 war with Hezbollah 

Israel and Hezbollah fought a major battle in 2006, which forced the Israeli military to wage war against a more “conventional” military opponent, in contrast to the Palestinians it confronts daily in the West Bank and Gaza.

According to Matt Mathews of the US Army’s Combat Studies Institute, Israel was woefully unprepared to fight a “real war” in that conflict. He notes that as a result, Mossad Chief Meir Degan and the head of Shin Bet, Yuval Diskin, pointedly told then-Prime Minister Ehud Olmert “the war was a national catastrophe and Israel suffered a critical blow.”

The 2006 war also exposed Israel’s reliance on US weapons, which nevertheless proved insufficient to defeat Hezbollah. During the war, Israel requested to access the WRSAI stockpile and that the US expedite the delivery of precision-guided munitions to Israel. Within just 10 days of fighting, Israel used most of its ammunition stock.

Years later, in July 2014, during Israeli military operations against Hamas in the Gaza Strip, Israel was again forced to rely on the WRSAI stockpile to replenish 120-mm tank rounds and 40-mm illumination rounds fired from grenade launchers.

The problems Israel faced in 2006 and 2014 will be compounded if the Axis of Resistance now takes the step of initiating its “unification of the fronts” campaign.

David Wurmer, Middle East adviser to former Vice President Dick Cheney, told the Wall Street Journal on 10 October that “The nightmare scenario for the Israelis is that they go a week or two shooting down 6,000 to 10,000 Hamas missiles, and then they have nothing left to stop the Hezbollah missiles.” 

The silent threat of Iran’s missiles 

The situation for Israel becomes even more challenging if Iran joins the conflict, as the Islamic Republic possesses substantial stocks of short-range and medium-range missiles capable of reaching both Israel and US bases in the region.

The US and Israel often warn of the alleged threat posed by Iran’s nuclear program, despite its civilian orientation, but seldom mention the threat posed by Iran’s burgeoning conventional missile program.

Israel’s actions express its worries more clearly than its words: in February of this year, Israel launched a drone attack against an Iranian military facility in Isfahan. According to Danny Yatom, a former head of the Mossad, the attack targeted a facility developing hypersonic missiles, which the New York Times described as “long-range munitions capable of traveling up to 15 times the speed of sound with terrifying accuracy.” 

A very different Palestinian resistance

In 1993, when Palestine Liberation Organization (PLO) Chairman Yasser Arafat signed the Oslo Accords on the White House lawn with President Bill Clinton and Israeli Prime Minister Yitzhak Rabin, the Soviet Union had recently collapsed, while Iran was recovering from a bloody war with US-backed Iraq that killed one million people on both sides.

When Arafat signed the accords, accepting US and Israeli promises that they would pave the way for a future Palestinian state, the Palestinians had few allies they could rely on and were blindsided by Tel Aviv's actual intentions to fragment and destroy the Palestinian nation.

Through Oslo, the US and Israel created the “shared fiction,” to use New York Times columnist Thomas Friedman’s words, that a Palestinian state would be established at some future date. According to Friedman, this allowed Israel to continue to confiscate land to build Jewish settlements, while the US could keep “peace hopes there just barely alive,” as cover.

But now, more than 40 years later, the Palestinians are not alone. They are part of a region-wide Resistance Axis that has defeated US and Israeli agendas in a number of West Asian states, gaining invaluable fighting, organizational, and planning experience alongside reliable allies. 

Meanwhile, the pile of recent US-side failures keeps mounting: Russia's global clout spiked during the US proxy war in Ukraine; US adversaries China and Russia forged a multipolar world when Washington came at them; economic sanctions designed to cripple Russia and Iran only strengthened both states and sparked military collaborations. 

Crucially, Russia and Iran today possess the industrial capabilities to produce the military firepower the US and NATO cannot provide to allies in either Tel Aviv or Kiev.

Israel has already started the fight it may not be able to finish by declaring total war on Gaza’s civilian population, killing over 1,000, including hundreds of women and children, and flattening large swathes of the Gaza Strip in airstrikes. 

For Tel Aviv, Gaza has always been low-hanging fruit - the punching bag it seeks when it needs to look tough. But today, one misstep, one badly aimed missile, or one step too far, and Israel will face a regional war it cannot withstand for any significant period of time.

Tyler Durden Sat, 10/14/2023 - 21:00

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Don’t Mess With Texas: Senate Passes Bill Allowing Local, State Police To Arrest Illegal Immigrants

Don’t Mess With Texas: Senate Passes Bill Allowing Local, State Police To Arrest Illegal Immigrants

The Texas Senate on Thursday approved…

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Don't Mess With Texas: Senate Passes Bill Allowing Local, State Police To Arrest Illegal Immigrants

The Texas Senate on Thursday approved a bill that will give local and state police the authority to arrest illegal migrants by making it a state crime to cross illegally into the United States. The bill, SB11, enables law enforcement to arrest those who violate the law.

Under current law, state and local authorities must seek federal permission before arresting illegals.

"Texas reached a record number of illegal immigrant apprehension in fiscal year 2023, with over 1.84 million apprehensions in Texas Sectors," said state Sen. Brian Birdwell, author of the legislation. "As a result of the federal government’s unwillingness to enforce federal immigration laws and secure our southern border, Texas has stepped up and devoted time and resources to combat the unprecedented border crisis that the state is facing. SB 11 will give out troopers more authority to control the border and keep Texans safe."

The bill passed late Thursday along party lines in a 19-12 vote, and is expected to advance following Gov. Greg Abbott's show of support for the measure earlier this week.

First time offenders face up to one year in jail, while convicted felons with multiple illegal entries could face life in prison.

According to Lt. Gov. Dan Partrick, "This is the third time the Texas Senate has passed this critical legislation. The Senate is committed to securing the southern border and will pass this bill over and over again until it passes the Texas House, where it has died previously."

In an aerial view, migrants are seen grouped together while waiting to be processed on the Ciudad Juarez side of the border, in El Paso, Texas, on Sept. 21, 2023. (Brandon Bell/Getty Images/TNS)

Earlier this month, Abbott called lawmakers back for a third special session, with border security a central focus, along with school choice, public safety and prohibiting employers from forcing employees to take COVID-19 vaccines.

Mr. Birdwell said the bill aims to deter illegal crossing while encouraging immigrants to enter legally through one of the state's 29 ports of entry, where they can be processed by U.S. Customs and Border Protection authorities.

During Tuesday’s Border Security committee hearing on the bill, Texas Department of Public Safety Director Steve McCraw said an estimated 1.5 million immigrants cross illegally into Texas each year.

Mr. McCraw said DPS troopers could arrest about 72,000 to 75,000 illegal immigrants if the law is passed. He said DPS made 35,000 criminal arrests last year. -Epoch Times

State Democrats have responded to the bill like typical NIMBYs...

"Where do we put all the people?" asked State Sen. Juan "Chuy" Hinojosa.

State Sen. César Blanco (D) said he voted "no" on SB 11 due to the existing federal laws against "unlawful entry" into the country.

"The federal government already has an offense for unlawful entry into the US, but that has not turned away desperate migrants looking for a better life," he wrote on X. "I voted against SB 11 because this bill will only overwhelm local prisons and court systems with non-violent offenders and raise taxes on border communities while doing nothing to mitigate the humanitarian crisis on the border."

If the bill is signed into law it will take effect Dec. 1.

Tyler Durden Sat, 10/14/2023 - 20:25

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