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Xi’s National Security ‘Stimulus’ Reaches The People’s Bank of China

Xi Jinping’s true aim, in my view, isn’t to severely limit the spread of the coronavirus, seeking its ultimate eradication, rather to curtail dissent…



Xi Jinping’s true aim, in my view, isn’t to severely limit the spread of the coronavirus, seeking its ultimate eradication, rather to curtail dissent particularly any views contrary to his handling of China’s increasingly desperate economy. Mao’s Xi’s purpose is to completely eliminate all opposition.

This intentional security policy has now been extended to the People’s Bank of China itself. The very engine (formerly) of Keynesian doctrine, the 2009 group of “heroes” who, under the respected leadership of former Governor Zhou Xiaochuan faithfully employing the Keynes Bible, purportedly rescued the nation from the monetary pandemic then ravaging Western economies.

Since the 19th Party Congress (as you’ll see below), however, the PBOC’s monetary policy has been largely silent.

Days ago, out of the blue a top policymaker – make that former top policymaker – was abruptly charged with corruption. The Communist Party’s Central Commission for Discipline Inspection publicly announced it was investigating Sun Guofeng for “suspected serious violation of laws and discipline” of anti-graft laws. Rumors have been circulated (by whom?) alleging Sun has been sharing insider information in order to personally benefit.


Does anyone truly believe that? Well, yes, pretty much everyone in the Western media, from what I can tell.

If you were at all on the fence about which way to think, think about what Sun Guofeng’s job had been until mere days ago: head of the PBOC’s MONETARY POLICY department.

To be perfectly clear, I have no direct evidence nor any inside connections that I might exploit for political let alone information purposes. These are instead rather reasonable dots to connect given the trends in China’s economy parallel to these darker trends in Chinese politics.

Xi announced his big “stimulus” would focus on “national security”, and that brings a fresh – and terrifying – meaning to the word “stimulus” as it is now being applied to the central bank. Might Sun have complained a little too much even on the inside of closed doors about the lack of monetary response to China’s more desperate woes?

To that end, despite expectations for more aggressive “stimulus” before this week, while Sun Guofeng was being hauled in front of the cameras, his name dragged in the dirt for public shame (before who knows what will be his ultimate fate; I can’t imagine it’s anything but Mao-like), the central bank’s monetary policy department had decided to recommend doing…little to nothing. Surprise?

There was no cut to the MLF rate, but there was a cut in MLF use (this is included below in the PBOC line item for Claims on Other Depository Corporations), though I suspect this was because of growing fears and risk aversion among commercial banks rather than by top-down directive. Yet, no top-down directive has been issued to get commercial banks to use more MLF as “stimulus.”

With no change in the MLF rate, therefore there was no cut in the 1-year Loan Prime Rate (LPR) which is the benchmark for corporate credit (above). In fact, despite even Western expectations for several, the PBOC has maintained strict hands-off though, again, the Chinese economy is on the precipice of truly awful possibilities (beyond the artificial downside created by the government’s initial COVID overreaction).

Saying no to lower corporate loan rates, policymakers said yes to the troubled real estate sector – but only for households. Undoubtedly in response to the ugly loan data contained in the PBOC’s Financial Statistics Report, the 5-year LPR was dropped by 15 bps (above) in a very Xi-like preference for households over corporate and financial businesses (the 5-year LPR is the primary reference for household mortgage rates).

Following this, the PBOC also allowed the aggregate balance for bank reserves to decline yet again in April (below). This outcome consistent with both Euro$ #5 (including the timing of it) and Xi’s theme of common prosperity; at least interpreted as less narrow financialism and preference for the financial sector in favor of more focus on China’s struggling citizenry who are going to struggle even more as growth continues to slow and even decline.

No Keynes here, only Cultural Revolution 2.0.

And I’ll add, too, this also encompasses the PBOC’s undeterred gamesmanship when it comes to foreign exchange and foreign reserves (above). There was, for yet another month in April, very minimal change in the central bank’s forex holdings even as SAFE reported the largest decline in foreign assets (not just on prices) in years. April was also the same month when CNY began its latest plummet.

According to every other source, including that same Financial Statistics Report (below), the (euro)dollars are drying up for China (thanks Tokyo) yet this hasn’t impacted the central bank’s holdings despite how CNY’s daily trading is “managed?” No, this is intentional for more obvious reasons of obfuscation, not the sort of procedure you’d find recommended in the central bankers’ handbook.

This rigging of forex is something, “coincidentally”, Sun Guofeng’s former bureau might not be completely comfortable maintaining or fully agree with and to – without, just maybe, a clearcut demonstration of authority rather than argument from above.

If you think the American or European economies are heading toward a bad place, and all evidence indicates they are, then the Chinese are on the same path only ahead of them scheduled to arrive there first. Among the few in China who might be able to more clearly see this coming, as, say, just spitballing here, someone atop the central bank’s monetary policy department, the prospects really might make you think twice if not express concern and doubt as to the wisdom of following this path.

Until expressing doubt gets you a “corruption” charge, that is.

It might sound like a conspiracy theory except this is just how Communism operates; this is how Xi has operated from his very first days on his throne. But it wasn’t a clearcut throne until that 19th Party Congress, before then what had made Xi into Emperor was a million (estimated) bureaucrats who suddenly found themselves afoul of anti-graft laws.

From the BBC in 2016, leading up to Xi’s coronation the following year:

China has punished more than one million officials for corruption over the past three years, the government says…But some observers say the campaign has also been used by Mr Xi to purge political rivals, which he has denied.

Not “some observers”, anyone with a smidgeon of common sense and free from political bias can see this for what it has been. Today, it is no longer the purge of rivals, rather the purge of opposition.

That the pogrom has now ensnared a high official at the central bank can only lead to one rational conclusion: China’s economic course is set and rather than try to change it – which Xi knows he can’t, not really, since from Day One (Euro$ #2) it has been out of his hands – the Communist Party will instead “manage” the “decline” by whatever means necessary.

State security, not government stimulus. The consequences aren’t,  nor will they be, limited to China.

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Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…



Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.


What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…



Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…



The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

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