newswars--2020-05-25--Galactic crash may have triggered solar system formation

The formation of the Sun , the Solar System and the subsequent emergence of life on Earth may be a consequence of a collision between our galaxy , the Milky Way , and a smaller galaxy called Sagittarius , discovered in the 1990s to be orbiting our galactic home .
Astronomers have known that Sagittarius repeatedly smashes through the Milky Way ’ s disc , as its orbit around the galaxy ’ s core tightens as a result of gravitational forces .
Previous studies suggested that Sagittarius , a so called dwarf galaxy , had had a profound effect on @ @ @ @ @ @ @ .
Some even claim that the 10 000 times more massive Milky Way ’ s trademark spiral structure might be a result of the at least three known crashes with Sagittarius over the past six billion years .
A new study , based on data gathered by ESA ’ s galaxy mapping powerhouse Gaia , revealed for the first time that the influence of Sagittarius on the Milky Way may be even more substantial .
The ripples caused by the collisions seem to have triggered major star formation episodes , one of which @ @ @ @ @ @ @ formation of the Sun some 4.7 billion years ago .
“ It is known from existing models that Sagittarius fell into the Milky Way three times—first about five or six billion years ago , then about two billion years ago , and finally one billion year ago , ” says Tomás Ruiz-Lara , a researcher in Astrophysics at the Instituto de Astrofísica de Canarias ( IAC ) in Tenerife , Spain , and lead author of the new study published in Nature Astronomy .
“ When we looked into the Gaia data about @ @ @ @ @ @ @ periods of increased star formation that peaked 5.7 billion years ago , 1.9 billion years ago and 1 billion years ago , corresponding with the time when Sagittarius is believed to have passed through the disc of the Milky Way.
” The researchers looked at luminosities , distances and colours of stars within a sphere of about 6500 light years around the Sun and compared the data with existing stellar evolution models .
According to Tomás , the notion that the dwarf galaxy may have had such an effect makes a lot of @ @ @ @ @ @ @ have a galaxy , the Milky Way , which is relatively quiet , ” Tomás says .
“ After an initial violent epoch of star formation , partly triggered by an earlier merger as we described in a previous study , the Milky Way had reached a balanced state in which stars were forming steadily .
Suddenly , you have Sagittarius fall in and disrupt the equilibrium , causing all the previously still gas and dust inside the larger galaxy to slosh around like ripples on the water.
” In some areas of @ @ @ @ @ @ @ lead to higher concentrations of dust and gas , while emptying others .
The high density of material in those areas would then trigger the formation of new stars .
“ It seems that not only did Sagittarius shape the structure and influenced the dynamics of how stars are moving in the Milky Way , it has also led to a build-up of the Milky Way , ” says Carme Gallart , a co-author of the paper , also of the IAC .
“ It seems that an important part of the Milky @ @ @ @ @ @ @ due to the interactions with Sagittarius and wouldn ’ t exist otherwise.
” The birth of the Sun In fact , it seems possible that even the Sun and its planets would not have existed if the Sagittarius dwarf had not gotten trapped by the gravitational pull of the Milky Way and eventually smashed through its disc .
“ The Sun formed at the time when stars were forming in the Milky Way because of the first passage of Sagittarius , ” says Carme .
“ We don ’ t know if the @ @ @ @ @ @ @ turned into the Sun collapsed because of the effects of Sagittarius or not .
But it is a possible scenario because the age of the Sun is consistent with a star formed as a result of the Sagittarius effect.
” Every collision stripped Sagittarius of some of its gas and dust , leaving the galaxy smaller after each passage .
Existing data suggest that Sagittarius might have passed through the Milky Way ’ s disc again quite recently , in the last few hundred million years , and is currently very close to @ @ @ @ @ @ @ study found of a recent burst of star formation , suggesting a possible new and ongoing wave of stellar birth .
According to ESA Gaia project scientist Timo Prusti , such detailed insights into the Milky Way ’ s star formation history wouldn ’ t be possible before Gaia , the star-mapping telescope launched in late 2013 , whose two data releases in 2016 and 2018 revolutionised the study of the Milky Way .
“ Some determinations of star formation history in the Milky Way existed before based on data from ESA ’ @ @ @ @ @ @ @ says Timo .
“ But these observations were focused on the immediate neighbourhood of the Sun .
It wasn ’ t really representative and so it couldn ’ t uncover those bursts in star formation that we see now .
“ This is really the first time that we see a detailed star formation history of the Milky Way .
It ’ s a testament to the scientific power of Gaia that we have seen manifest again and again in countless ground-breaking studies in a period of only a couple of years.
” @ @ @ @ @ @ @ dwarf on the Milky Way star formation history ” by T. Ruiz-Lara et al is published in Nature Astronomy .

The formation of the Sun, the Solar System and the subsequent emergence of life on Earth may be a consequence of a collision between our galaxy, the Milky Way, and a smaller galaxy called Sagittarius, discovered in the 1990s to be orbiting our galactic home.
Astronomers have known that Sagittarius repeatedly smashes through the Milky Way’s disc, as its orbit around the galaxy’s core tightens as a result of gravitational forces. Previous studies suggested that Sagittarius, a so called dwarf galaxy, had had a profound effect on how stars move in the Milky Way. Some even claim that the 10 000 times more massive Milky Way’s trademark spiral structure might be a result of the at least three known crashes with Sagittarius over the past six billion years.
A new study, based on data gathered by ESA’s galaxy mapping powerhouse Gaia, revealed for the first time that the influence of Sagittarius on the Milky Way may be even more substantial. The ripples caused by the collisions seem to have triggered major star formation episodes, one of which roughly coincided with the time of the formation of the Sun some 4.7 billion years ago.
“It is known from existing models that Sagittarius fell into the Milky Way three times—first about five or six billion years ago, then about two billion years ago, and finally one billion year ago,” says Tomás Ruiz-Lara, a researcher in Astrophysics at the Instituto de Astrofísica de Canarias (IAC) in Tenerife, Spain, and lead author of the new study published in Nature Astronomy.
“When we looked into the Gaia data about the Milky Way, we found three periods of increased star formation that peaked 5.7 billion years ago, 1.9 billion years ago and 1 billion years ago, corresponding with the time when Sagittarius is believed to have passed through the disc of the Milky Way.”
Ripples on the water
The researchers looked at luminosities, distances and colours of stars within a sphere of about 6500 light years around the Sun and compared the data with existing stellar evolution models. According to Tomás, the notion that the dwarf galaxy may have had such an effect makes a lot of sense.
“At the beginning you have a galaxy, the Milky Way, which is relatively quiet,” Tomás says. “After an initial violent epoch of star formation, partly triggered by an earlier merger as we described in a previous study, the Milky Way had reached a balanced state in which stars were forming steadily. Suddenly, you have Sagittarius fall in and disrupt the equilibrium, causing all the previously still gas and dust inside the larger galaxy to slosh around like ripples on the water.”
In some areas of the Milky Way, these ripples would lead to higher concentrations of dust and gas, while emptying others. The high density of material in those areas would then trigger the formation of new stars.
“It seems that not only did Sagittarius shape the structure and influenced the dynamics of how stars are moving in the Milky Way, it has also led to a build-up of the Milky Way,” says Carme Gallart, a co-author of the paper, also of the IAC. “It seems that an important part of the Milky Way’s stellar mass was formed due to the interactions with Sagittarius and wouldn’t exist otherwise.”
The birth of the Sun
In fact, it seems possible that even the Sun and its planets would not have existed if the Sagittarius dwarf had not gotten trapped by the gravitational pull of the Milky Way and eventually smashed through its disc.
“The Sun formed at the time when stars were forming in the Milky Way because of the first passage of Sagittarius,” says Carme. “We don’t know if the particular cloud of gas and dust that turned into the Sun collapsed because of the effects of Sagittarius or not. But it is a possible scenario because the age of the Sun is consistent with a star formed as a result of the Sagittarius effect.”
Every collision stripped Sagittarius of some of its gas and dust, leaving the galaxy smaller after each passage. Existing data suggest that Sagittarius might have passed through the Milky Way’s disc again quite recently, in the last few hundred million years, and is currently very close to it. In fact, the new study found of a recent burst of star formation, suggesting a possible new and ongoing wave of stellar birth.
According to ESA Gaia project scientist Timo Prusti, such detailed insights into the Milky Way’s star formation history wouldn’t be possible before Gaia, the star-mapping telescope launched in late 2013, whose two data releases in 2016 and 2018 revolutionised the study of the Milky Way.
“Some determinations of star formation history in the Milky Way existed before based on data from ESA’s early 1990s Hipparcos mission,” says Timo. “But these observations were focused on the immediate neighbourhood of the Sun. It wasn’t really representative and so it couldn’t uncover those bursts in star formation that we see now.
“This is really the first time that we see a detailed star formation history of the Milky Way. It’s a testament to the scientific power of Gaia that we have seen manifest again and again in countless ground-breaking studies in a period of only a couple of years.”
“The recurrent impact of the Sagittarius dwarf on the Milky Way star formation history” by T. Ruiz-Lara et al is published in Nature Astronomy.


newswars--2020-05-25--Solving the space junk problem

Solving the space junk problem

Aging satellites and space debris crowd low-Earth orbit , and launching new satellites adds to the collision risk .
The most effective way to solve the space junk problem , according to a new study , is not to capture debris or deorbit old satellites : it ’ s an international agreement to charge operators “ orbital-use fees ” for every satellite put into orbit .
Orbital use fees would also increase the long-run value of the space industry , said economist Matthew Burgess , a CIRES Fellow and co-author of the new paper .
By reducing future satellite and @ @ @ @ @ @ @ rising to about $ 235,000 per satellite would quadruple the value of the satellite industry by 2040 , he and his colleagues concluded in a paper published today in the Proceedings of the National Academy of Sciences .
“ Space is a common resource , but companies aren ’ t accounting for the cost their satellites impose on other operators when they decide whether or not to launch , ” said Burgess , who is also an assistant professor in Environmental Studies and an affiliated faculty member in Economics at the University of @ @ @ @ @ @ @ policy that lets satellite operators directly factor in the costs their launches impose on other operators.
” Currently , an estimated 20,000 objects—including satellites and space debris—are crowding low-Earth orbit .
It ’ s the latest Tragedy of the Commons , the researchers said : Each operator launches more and more satellites until their private collision risk equals the value of the orbiting satellite .
So far , proposed solutions have been primarily technological or managerial , said Akhil Rao , assistant professor of economics at Middlebury College and the paper ’ s @ @ @ @ @ @ @ space debris from orbit with nets , harpoons , or lasers .
Deorbiting a satellite at the end of its life is a managerial fix .
Ultimately , engineering or managerial solutions like these won ’ t solve the debris problem because they don ’ t change the incentives for operators .
For example , removing space debris might motivate operators to launch more satellites—further crowding low-Earth orbit , increasing collision risk , and raising costs .
“ This is an incentive problem more than an engineering problem .
What ’ s key @ @ @ @ @ @ @ Rao said .
A better approach to the space debris problem , Rao and his colleagues found , is to implement an orbital-use fee—a tax on orbiting satellites .
“ That ’ s not the same as a launch fee , ” Rao said , “ Launch fees by themselves can ’ t induce operators to deorbit their satellites when necessary , and it ’ s not the launch but the orbiting satellite that causes the damage.
” Orbital-use fees could be straight-up fees or tradeable permits , and they could also be @ @ @ @ @ @ @ produce varying collision risks .
Most important , the fee for each satellite would be calculated to reflect the cost to the industry of putting another satellite into orbit , including projected current and future costs of additional collision risk and space debris production—costs operators don ’ t currently factor into their launches .
“ In our model , what matters is that satellite operators are paying the cost of the collision risk imposed on other operators , ” said Daniel Kaffine , professor of economics and RASEI Fellow at the University of @ @ @ @ @ @ @ .
And those fees would increase over time , to account for the rising value of cleaner orbits .
In the researchers ’ model , the optimal fee would rise at a rate of 14 percent per year , reaching roughly $ 235,000 per satellite-year by 2040 .
For an orbital-use fee approach to work , the researchers found , all countries launching satellites would need to participate—that ’ s about a dozen that launch satellites on their own launch vehicles and more than 30 that own satellites .
In addition , each @ @ @ @ @ @ @ fee per unit of collision risk for each satellite that goes into orbit , although each country could collect revenue separately .
Countries use similar approaches already in carbon taxes and fisheries management .
In this study , Rao and his colleagues compared orbital-use fees to business as usual ( that is , open access to space ) and to technological fixes such as removing space debris .
They found that orbital use fees forced operators to directly weigh the expected lifetime value of their satellites against the cost to industry of putting @ @ @ @ @ @ @ risk .
In other scenarios , operators still had incentive to race into space , hoping to extract some value before it got too crowded .
With orbital-use fees , the long-run value of the satellite industry would increase from around $ 600 billion under the business-as-usual scenario to around $ 3 trillion , researchers found .
The increase in value comes from reducing collisions and collision-related costs , such as launching replacement satellites .
Orbital-use fees could also help satellite operators get ahead of the space junk problem .
“ In other @ @ @ @ @ @ @ Commons has often been a game of catch-up with substantial social costs .
But the relatively young space industry can avoid these costs before they escalate , ” Burgess said .

Space is getting crowded.
Aging satellites and space debris crowd low-Earth orbit, and launching new satellites adds to the collision risk. The most effective way to solve the space junk problem, according to a new study, is not to capture debris or deorbit old satellites: it’s an international agreement to charge operators “orbital-use fees” for every satellite put into orbit.
Orbital use fees would also increase the long-run value of the space industry, said economist Matthew Burgess, a CIRES Fellow and co-author of the new paper. By reducing future satellite and debris collision risk, an annual fee rising to about $235,000 per satellite would quadruple the value of the satellite industry by 2040, he and his colleagues concluded in a paper published today in the Proceedings of the National Academy of Sciences.
“Space is a common resource, but companies aren’t accounting for the cost their satellites impose on other operators when they decide whether or not to launch,” said Burgess, who is also an assistant professor in Environmental Studies and an affiliated faculty member in Economics at the University of Colorado Boulder. “We need a policy that lets satellite operators directly factor in the costs their launches impose on other operators.”
Currently, an estimated 20,000 objects—including satellites and space debris—are crowding low-Earth orbit. It’s the latest Tragedy of the Commons, the researchers said: Each operator launches more and more satellites until their private collision risk equals the value of the orbiting satellite.
So far, proposed solutions have been primarily technological or managerial, said Akhil Rao, assistant professor of economics at Middlebury College and the paper’s lead author. Technological fixes include removing space debris from orbit with nets, harpoons, or lasers. Deorbiting a satellite at the end of its life is a managerial fix.
Ultimately, engineering or managerial solutions like these won’t solve the debris problem because they don’t change the incentives for operators. For example, removing space debris might motivate operators to launch more satellites—further crowding low-Earth orbit, increasing collision risk, and raising costs. “This is an incentive problem more than an engineering problem. What’s key is getting the incentives right,” Rao said.
A better approach to the space debris problem, Rao and his colleagues found, is to implement an orbital-use fee—a tax on orbiting satellites. “That’s not the same as a launch fee,” Rao said, “Launch fees by themselves can’t induce operators to deorbit their satellites when necessary, and it’s not the launch but the orbiting satellite that causes the damage.”
Orbital-use fees could be straight-up fees or tradeable permits, and they could also be orbit-specific, since satellites in different orbits produce varying collision risks. Most important, the fee for each satellite would be calculated to reflect the cost to the industry of putting another satellite into orbit, including projected current and future costs of additional collision risk and space debris production—costs operators don’t currently factor into their launches. “In our model, what matters is that satellite operators are paying the cost of the collision risk imposed on other operators,” said Daniel Kaffine, professor of economics and RASEI Fellow at the University of Colorado Boulder and co-author on the paper.
And those fees would increase over time, to account for the rising value of cleaner orbits. In the researchers’ model, the optimal fee would rise at a rate of 14 percent per year, reaching roughly $235,000 per satellite-year by 2040.
For an orbital-use fee approach to work, the researchers found, all countries launching satellites would need to participate—that’s about a dozen that launch satellites on their own launch vehicles and more than 30 that own satellites. In addition, each country would need to charge the same fee per unit of collision risk for each satellite that goes into orbit, although each country could collect revenue separately. Countries use similar approaches already in carbon taxes and fisheries management.
In this study, Rao and his colleagues compared orbital-use fees to business as usual (that is, open access to space) and to technological fixes such as removing space debris. They found that orbital use fees forced operators to directly weigh the expected lifetime value of their satellites against the cost to industry of putting another satellite into orbit and creating additional risk. In other scenarios, operators still had incentive to race into space, hoping to extract some value before it got too crowded.
With orbital-use fees, the long-run value of the satellite industry would increase from around $600 billion under the business-as-usual scenario to around $3 trillion, researchers found. The increase in value comes from reducing collisions and collision-related costs, such as launching replacement satellites.
Orbital-use fees could also help satellite operators get ahead of the space junk problem. “In other sectors, addressing the Tragedy of the Commons has often been a game of catch-up with substantial social costs. But the relatively young space industry can avoid these costs before they escalate,” Burgess said.


newswars--2020-05-25--Why Didn’t the 1958 and 1918 Pandemics Destroy the Economy? Hint: It’s the Lockdowns

Media pundits and politicians are now in the habit of claiming it was the pandemic itself that has caused unemployment to skyrocket and economic growth to plummet .
The claim is that sick and dying workers , fearful consumers , and disrupted supply chains would cause economic chaos .
Some have even claimed that economic shutdowns actually help the economy , because it is claimed allowing the spread of the disease will itself destroy employment and economic growth .
Leaving aside the fact there ’ s no evidence lockdowns actually work , we can nonetheless look to past pandemics—where coercive @ @ @ @ @ @ @ see immense economic damage .
Specifically , we can look to the the pandemic of 1957-58 , which was more deadly than the COVID-19 pandemic has been so far .
We can also look to the 1918-19 pandemic .
Yet , we will see that neither produced economic damage on a scale we now see as a result of the government mandated lockdowns .
This thoroughly undermines the claims that the lockdowns are only a minor factor in economic destruction , and that the virus itself is the real culprit .
Economic Reactions @ @ @ @ @ @ @ CDC estimates that as of May 18 this year approximately ninety thousand Americans have died of COVID-19 .
Adjusted for population size , that comes out to a mortality rate of 272 per million .
This is ( so far ) less than half the mortality rate for the 1957–58 flu pandemic .
In that pandemic , it is estimated that as many as 116,000 Americans died .
Yet , the US population was much smaller then , totaling only 175 million .
Adjusted for population size , mortality as a result of @ @ @ @ @ @ @ 1957–58 was more than 660 per million .
That ’ s the equivalent of 220,000 deaths in the United States today .
Yet , Americans in 1957 did not respond by shutting down commerce , forcing people into “ lockdown , ” or driving unemployment up to Depression-era levels .
In fact , reports show that Americans took little action beyond the usual measures involved in trying to slow the spread of disease : hand washing , staying home when ill , etc .
Although the virus does appear to have been a @ @ @ @ @ @ @ economic effects were miniscule compared to what the US now faces from the reaction to the COVID-19 virus .
This suggests that most of the economic damage now being experienced by workers and households in the US is more a product of the policy reaction to the virus than to the virus itself .
The pandemic of 1957–58 was a serious and deadly problem for many .
As cases of the Asian flu began to spread , it became clear to many scientists and other observers that there was something different and deadly @ @ @ @ @ @ @ to D.A .
Henderson , et al in “ Public Health and Medical Responses to the 1957–58 Influenza Pandemic , “ Humans under 65 possessed no immunity to this H2N2 strain.
” This meant that the “ highest attack rates were in school-age children through young adults up to 35 or 40 years of age.
” Total deaths due to the flu over this period range from 70,000 to 116,000 .
This is cause for concern , to say the least .
With younger Americans , many of them in prime working age @ @ @ @ @ @ @ could anticipate significant costs in terms of economic growth and health .
What was the policy reaction to this ?
Henderson et al .
continue : The 1957–58 pandemic was such a rapidly spreading disease that it became quickly apparent to U.S. health ofﬁcials that efforts to stop or slow its spread were futile .
Thus , no efforts were made to quarantine individuals or groups , and a deliberate decision was made not to cancel or postpone large meetings such as conferences , church gatherings , or athletic events for the purpose @ @ @ @ @ @ @ made to limit travel or to otherwise screen travelers .
Emphasis was placed on providing medical care to those who were afﬂicted and on sustaining the continued functioning of community and health services….there were no reports that major events were canceled or postponed except for high school and college football games , which were often delayed because of the number of players afﬂicted .
In 1957–58 , there was concern over the availability of medical services .
But the emphasis then was on increasing medical services rather than state-enforced quarantines and “ social @ @ @ @ @ @ @ vaccine offer an easy way out : Health officers had hopes that significant supplies of vaccine might become available in due time , and special efforts were made to speed the production of vaccine , but the quantities that became available were too late to affect the impact of the epidemic .
Schools and workplaces were affected by absent students and workers , but absenteeism at schools was a larger factor , with some schools even closed for short periods as a result of so many missing students .
Absenteeism did not rise @ @ @ @ @ @ @ Available data on industrial absenteeism indicate that the rates were low and that there was no interruption of essential services or production .
The overall impact on GDP was negligible and likely within the range of normal economic variation .
Overall , the economy declined by approximately 2 percent during both the first and second quarter of 1958 , but this could not all be attributed to the effects of the virus .
Unemployment at the time also surged , peaking at 7.5 percent during July 1958 .
Economic growth was positive again @ @ @ @ @ @ @ of 1958 and had soared to over 9 percent growth in 1959 .
Unemployment had fallen to 5 percent by June of 1959 .
But the overall economic impact of the virus itself was hardly disastrous .
Henderson , et al conclude : Despite the large numbers of cases , the 1957 outbreak did not appear to have a significant impact on the U.S. economy .
For example , a Congressional Budget Office estimate found that a pandemic the scale of which occurred in 1957 would reduce real GDP by approximately 1 % @ @ @ @ @ @ @ a recession and might not be distinguishable from the normal variation in economic activity.
’ ’ The 1918–19 pandemic , which caused an astounding ten times as many deaths per million as the 1957–58 pandemic , also failed to produce economic disaster .
Although the US entered the 1918–19 pandemic in poor economic shape thanks to the Great War , according to economists Efraim Benmelech and Carola Frydman , The Spanish flu left almost no discernible mark on the aggregate US economy….According to some estimates , real gross national product actually grew in @ @ @ @ @ @ @ % ( Romer 1988 ) .
In new work , Velde ( 2020 ) shows that most indicators of aggregate economic activity suffered modestly , and those that did decline more significantly right after the influenza outbreak , like industrial output , recovered within months .
Nor can the pandemic be blamed for the 1921 recession , because “ by then the decline in output had all to do with a collapse in commodity prices when post-war European production finally recovered.
” Not surprisingly , then , we find relatively mild estimates in @ @ @ @ @ @ @ economic consequences of new pandemics .
The authors concluded that moderate and severe pandemics would lead to GDP declines of 2–5 percent .
Or , as a 2009 Reuters report summarized it : If we get hit with something like the 1957 Asian flu , say goodbye to 2 percent of GDP .
Something as bad as the 1918–19 Spanish flu would cut the world ’ s economic output by 4.8 percent and cost more than $ 3 trillion .
Not even a 1918-sized pandemic was expected to produce the sort of economic @ @ @ @ @ @ @ Needless to say , the economy today appears to be in far worse shape in the wake of the 2020 pandemic than in the days following the 1957–58 outbreak , or even in 1919 .
As of April 2020 , the unemployment rate has ballooned to 14.4 percent , the highest rate recorded since the Great Depression .
The Atlanta Federal Reserve , meanwhile , forecasts a drop in GDP of more than 40 percent .
More mild estimates suggest drops of 8 to 15 percent .
If the milder predictions prove true @ @ @ @ @ @ @ only ” the worst since the Great Depression .
If the Atlanta Fed is right , then we ’ re in an unprecedented economic disaster .
The World Bank ’ s estimates of even a “ severe ” pandemic , which predicted a GDP drop of around 5 percent , don ’ t even come close to the estimates for the 2020 collapse .
And why should they ?
The World Bank report didn ’ t anticipate the global economic shutdown imposed on billions of human beings by the world ’ s regimes @ @ @ @ @ @ @ estimates assumed that economic losses would be limited to absenteeism , disrupted trade and travel , and declining demand due directly to disease or fear of disease .
So why the enormous difference in economic effects ?
The answer almost certainly lies in the fact that governments in 2020—unlike in any other period in American history—engaged in widespread business closures , “ stay-at-home ” orders , and other state-mandated and state-enforced actions that led to widespread layoffs and plummeting economic output .
Defenders of government-coerced “ lockdowns ” have insisted that fear of @ @ @ @ @ @ @ even without lockdowns , but there is no historical precedent for this claim , and no current evidence to support it .
Although some survey data has been proffered to suggest that more than 60 percent of Americans say they plan to comply with stay-at-home orders , this merely tells us how people make plans when threatened with fines , police harassment , and other coercive measures .
In reality , the experience of the 1957–58 pandemic—or even the 1918–19 pandemic—gives us no reason to believe that joblessness should be increasing at unprecedented @ @ @ @ @ @ @ catastrophic levels .
In a modern industrialized economy , that sort of economic damage is only achievable through government intervention , such as socialist coups , wars , and forced economic shutdowns in the name of combating disease .
The cost in terms of human life will be significant .
One study contends that the current economic downturn could lead to seventy-five thousand “ deaths of despair.
” This is not shocking , however , since the fatal effects of unemployment and economic decline have been known for decades .
Defenders of lockdowns @ @ @ @ @ @ @ we have no choice ” but to continue lockdowns for long periods of time .
At the very least , many claim that the lockdowns until now have been “ worth it.
” Yet the efficacy of lockdowns remains an open question , and has hardly been proven .
Meanwhile , the world faces the worst economic disaster experienced in centuries .
It didn ’ t have to be this way .

Media pundits and politicians are now in the habit of claiming it was the pandemic itself that has caused unemployment to skyrocket and economic growth to plummet.
The claim is that sick and dying workers, fearful consumers, and disrupted supply chains would cause economic chaos. Some have even claimed that economic shutdowns actually help the economy, because it is claimed allowing the spread of the disease will itself destroy employment and economic growth.
Leaving aside the fact there’s no evidence lockdowns actually work, we can nonetheless look to past pandemics—where coercive government interventions were at most sporadic—we should see immense economic damage. Specifically, we can look to the the pandemic of 1957-58, which was more deadly than the COVID-19 pandemic has been so far. We can also look to the 1918-19 pandemic. Yet, we will see that neither produced economic damage on a scale we now see as a result of the government mandated lockdowns. This thoroughly undermines the claims that the lockdowns are only a minor factor in economic destruction, and that the virus itself is the real culprit.
Economic Reactions in 1957–58, and in 1918–19
The CDC estimates that as of May 18 this year approximately ninety thousand Americans have died of COVID-19. Adjusted for population size, that comes out to a mortality rate of 272 per million.
This is (so far) less than half the mortality rate for the 1957–58 flu pandemic. In that pandemic, it is estimated that as many as 116,000 Americans died. Yet, the US population was much smaller then, totaling only 175 million. Adjusted for population size, mortality as a result of the “Asian flu” pandemic of 1957–58 was more than 660 per million.
That’s the equivalent of 220,000 deaths in the United States today.
Yet, Americans in 1957 did not respond by shutting down commerce, forcing people into “lockdown,” or driving unemployment up to Depression-era levels. In fact, reports show that Americans took little action beyond the usual measures involved in trying to slow the spread of disease: hand washing, staying home when ill, etc.
Although the virus does appear to have been a factor in the 1958 recession, the economic effects were miniscule compared to what the US now faces from the reaction to the COVID-19 virus. This suggests that most of the economic damage now being experienced by workers and households in the US is more a product of the policy reaction to the virus than to the virus itself.
The pandemic of 1957–58 was a serious and deadly problem for many. As cases of the Asian flu began to spread, it became clear to many scientists and other observers that there was something different and deadly about this flu. Indeed, according to D.A. Henderson, et al in “Public Health and Medical Responses to the 1957–58 Influenza Pandemic, “Humans under 65 possessed no immunity to this H2N2 strain.” This meant that the “highest attack rates were in school-age children through young adults up to 35 or 40 years of age.” Total deaths due to the flu over this period range from 70,000 to 116,000. This is cause for concern, to say the least. With younger Americans, many of them in prime working age, susceptible to the disease, one could anticipate significant costs in terms of economic growth and health.
What was the policy reaction to this? Henderson et al. continue:
The 1957–58 pandemic was such a rapidly spreading disease that it became quickly apparent to U.S. health ofﬁcials that efforts to stop or slow its spread were futile. Thus, no efforts were made to quarantine individuals or groups, and a deliberate decision was made not to cancel or postpone large meetings such as conferences, church gatherings, or athletic events for the purpose of reducing transmission. No attempt was made to limit travel or to otherwise screen travelers. Emphasis was placed on providing medical care to those who were afﬂicted and on sustaining the continued functioning of community and health services….there were no reports that major events were canceled or postponed except for high school and college football games, which were often delayed because of the number of players afﬂicted.
In 1957–58, there was concern over the availability of medical services. But the emphasis then was on increasing medical services rather than state-enforced quarantines and “social distancing” measures. Nor did a vaccine offer an easy way out:
Health officers had hopes that significant supplies of vaccine might become available in due time, and special efforts were made to speed the production of vaccine, but the quantities that became available were too late to affect the impact of the epidemic.
Schools and workplaces were affected by absent students and workers, but absenteeism at schools was a larger factor, with some schools even closed for short periods as a result of so many missing students. Absenteeism did not rise to the level of causing shortages:
Available data on industrial absenteeism indicate that the rates were low and that there was no interruption of essential services or production. The overall impact on GDP was negligible and likely within the range of normal economic variation.
Overall, the economy declined by approximately 2 percent during both the first and second quarter of 1958, but this could not all be attributed to the effects of the virus. Unemployment at the time also surged, peaking at 7.5 percent during July 1958. Economic growth was positive again, however, by the fourth quarter of 1958 and had soared to over 9 percent growth in 1959. Unemployment had fallen to 5 percent by June of 1959.
But the overall economic impact of the virus itself was hardly disastrous. Henderson, et al conclude:
Despite the large numbers of cases, the 1957 outbreak did not appear to have a significant impact on the U.S. economy. For example, a Congressional Budget Office estimate found that a pandemic the scale of which occurred in 1957 would reduce real GDP by approximately 1% ‘‘but probably would not cause a recession and might not be distinguishable from the normal variation in economic activity.’’
The 1918–19 pandemic, which caused an astounding ten times as many deaths per million as the 1957–58 pandemic, also failed to produce economic disaster. Although the US entered the 1918–19 pandemic in poor economic shape thanks to the Great War, according to economists Efraim Benmelech and Carola Frydman,
The Spanish flu left almost no discernible mark on the aggregate US economy….According to some estimates, real gross national product actually grew in 1919, albeit by a modest 1% (Romer 1988). In new work, Velde (2020) shows that most indicators of aggregate economic activity suffered modestly, and those that did decline more significantly right after the influenza outbreak, like industrial output, recovered within months.
Nor can the pandemic be blamed for the 1921 recession, because “by then the decline in output had all to do with a collapse in commodity prices when post-war European production finally recovered.”
How Do Pandemics Affect Economic Growth?
Not surprisingly, then, we find relatively mild estimates in a 2009 World Bank report estimating the economic consequences of new pandemics. The authors concluded that moderate and severe pandemics would lead to GDP declines of 2–5 percent. Or, as a 2009 Reuters report summarized it:
If we get hit with something like the 1957 Asian flu, say goodbye to 2 percent of GDP. Something as bad as the 1918–19 Spanish flu would cut the world’s economic output by 4.8 percent and cost more than $3 trillion.
Not even a 1918-sized pandemic was expected to produce the sort of economic carnage we now see from COVID-19.
The Reaction in 2020
Needless to say, the economy today appears to be in far worse shape in the wake of the 2020 pandemic than in the days following the 1957–58 outbreak, or even in 1919.
As of April 2020, the unemployment rate has ballooned to 14.4 percent, the highest rate recorded since the Great Depression. The Atlanta Federal Reserve, meanwhile, forecasts a drop in GDP of more than 40 percent. More mild estimates suggest drops of 8 to 15 percent. If the milder predictions prove true, then the current downtown is “only” the worst since the Great Depression. If the Atlanta Fed is right, then we’re in an unprecedented economic disaster.
The World Bank’s estimates of even a “severe” pandemic, which predicted a GDP drop of around 5 percent, don’t even come close to the estimates for the 2020 collapse. And why should they? The World Bank report didn’t anticipate the global economic shutdown imposed on billions of human beings by the world’s regimes. Thus, the bank’s estimates assumed that economic losses would be limited to absenteeism, disrupted trade and travel, and declining demand due directly to disease or fear of disease.
So why the enormous difference in economic effects? The answer almost certainly lies in the fact that governments in 2020—unlike in any other period in American history—engaged in widespread business closures, “stay-at-home” orders, and other state-mandated and state-enforced actions that led to widespread layoffs and plummeting economic output.
Defenders of government-coerced “lockdowns” have insisted that fear of the virus would have destroyed the economy even without lockdowns, but there is no historical precedent for this claim, and no current evidence to support it. Although some survey data has been proffered to suggest that more than 60 percent of Americans say they plan to comply with stay-at-home orders, this merely tells us how people make plans when threatened with fines, police harassment, and other coercive measures.
In reality, the experience of the 1957–58 pandemic—or even the 1918–19 pandemic—gives us no reason to believe that joblessness should be increasing at unprecedented rates and that GDP would collapse by catastrophic levels. In a modern industrialized economy, that sort of economic damage is only achievable through government intervention, such as socialist coups, wars, and forced economic shutdowns in the name of combating disease.
The cost in terms of human life will be significant. One study contends that the current economic downturn could lead to seventy-five thousand “deaths of despair.” This is not shocking, however, since the fatal effects of unemployment and economic decline have been known for decades.
Defenders of lockdowns will likely continue to claim that “we have no choice” but to continue lockdowns for long periods of time. At the very least, many claim that the lockdowns until now have been “worth it.” Yet the efficacy of lockdowns remains an open question, and has hardly been proven. Meanwhile, the world faces the worst economic disaster experienced in centuries. It didn’t have to be this way.


newswars--2020-05-25--Former Van Halen Frontman Sammy Hagar: “I’m Not Locking Down Anymore”

Legendary rocker Sammy Hagar is done complying with coronavirus lockdown measures , according to a recent interview with the former Van Halen singer .
Talking with St. Louis , Missouri ’ s KSHE-95 , a classic rock radio station , the 72-year-old Hagar said despite being someone in the age group most susceptible to coronavirus , he ’ s “ not afraid ” of contracting the illness .
“ I don ’ t say the word ‘ hate ’ very much , but I hate this frigging coronavirus crap , ” Mr. Hagar vented .
“ I ’ m not @ @ @ @ @ @ @ m not locking down anymore .
I ’ ll go around to anyone .
If you don ’ t wan na be around me , fine .
Keep your distance — I ’ m all cool with that .
It ’ s not like I ’ m against that .
But I ’ m sorry — I have no fear at my age about it.
” He did admit to being nervous when the outbreak first happened , but over time , he realized what an incredible life he ’ s lived .
@ @ @ @ @ @ @ possibly killing me , ” Hagar confessed .
“ And you know what I thought of ?
I thought , you know what ?
I ’ ve had the best life of any human being on this planet .
If the damn thing wants to come and get me and kill me , let it be .
Life isn ’ t gon na be any better from this day on for the rest of my life than it has been .
And I swear to you — I came to grips with it.
@ @ @ @ @ @ @ of the people he knows around the world and realized only three of them contracted the virus and that all of them made full recoveries .
“ Only three people out of the thousands of people that I know have got it .
One guy is a very unhealthy 67-year-old guy who got it , ” he said .
“ He lasted 10 days and he ’ s over it , and his son — nine years old ; healthy as a tick — lasted four days and they were diagnosed… they had @ @ @ @ @ @ @ , said , ‘ Hey , I ’ m feeling terrible .
I ’ ve got this terrible fever .
My chest is tired .
I ’ m coughing.
’ They just gave him some antibiotics — bang , bang , bang .
And another guy in his 30s had got it , and he was fine .
He said it was a horrible flu .
It was miserable .
‘ Trust me , you don ’ t wan na get it , Sammy.
’ But he goes , ‘ Five , six @ @ @ @ @ @ @ good.
’ [ He ’ s ] totally over it .
So I ’ m saying I don ’ t know anybody that died .
I read about people that died .
But I ’ m not afraid of it anymore .
That ’ s all I ’ m saying .
Everybody , be their own self .
I ’ m not trying to sway anyone any direction .
But Sammy Hagar , I ’ m not afraid of it .
There you go.
” “ Mr .
Cabo Wabo ” also spoke @ @ @ @ @ @ @ how the government lockdowns in response to coronavirus have wreaked havoc on the economy .
“ This shutdown of the economy is going to make that escalate 10 times and then we ’ re all going to be sick and you can ’ t walk down the street .
I would rather see everyone go back to work , ” he stated .
“ If some of us have to sacrifice on that , OK .
I will die for my children and my grandchildren to have a life anywhere close to the @ @ @ @ @ @ @ country and freedom .
That ’ s just the way that I feel about it.
” Continuing , Hagar went as far as to say , “ I ’ d rather personally get sick and even personally die , if that ’ s what it takes .
We have to save the world and this country from this economic thing that ’ s going to kill more people in the long run.
” As time progresses , more and more Americans are becoming fed up with “ stay-at-home ” orders and other draconian @ @ @ @ @ @ @ KSHE-95 interview below :

Legendary rocker Sammy Hagar is done complying with coronavirus lockdown measures, according to a recent interview with the former Van Halen singer.
Talking with St. Louis, Missouri’s KSHE-95, a classic rock radio station, the 72-year-old Hagar said despite being someone in the age group most susceptible to coronavirus, he’s “not afraid” of contracting the illness.
“I don’t say the word ‘hate’ very much, but I hate this frigging coronavirus crap,” Mr. Hagar vented. “I’m not afraid of it, and I’m not locking down anymore. I’ll go around to anyone. If you don’t wanna be around me, fine. Keep your distance — I’m all cool with that. It’s not like I’m against that. But I’m sorry — I have no fear at my age about it.”
He did admit to being nervous when the outbreak first happened, but over time, he realized what an incredible life he’s lived.
“I was still worried about this possibly killing me,” Hagar confessed. “And you know what I thought of? I thought, you know what? I’ve had the best life of any human being on this planet. If the damn thing wants to come and get me and kill me, let it be. Life isn’t gonna be any better from this day on for the rest of my life than it has been. And I swear to you — I came to grips with it.”
Additionally, Sammy thought of all of the people he knows around the world and realized only three of them contracted the virus and that all of them made full recoveries.
“Only three people out of the thousands of people that I know have got it. One guy is a very unhealthy 67-year-old guy who got it,” he said. “He lasted 10 days and he’s over it, and his son — nine years old; healthy as a tick — lasted four days and they were diagnosed… they had it. They went to the hospital, said, ‘Hey, I’m feeling terrible. I’ve got this terrible fever. My chest is tired. I’m coughing.’ They just gave him some antibiotics — bang, bang, bang. And another guy in his 30s had got it, and he was fine. He said it was a horrible flu. It was miserable. ‘Trust me, you don’t wanna get it, Sammy.’ But he goes, ‘Five, six days later, I started feeling pretty good.’ [He’s] totally over it. So I’m saying I don’t know anybody that died. I read about people that died. But I’m not afraid of it anymore. That’s all I’m saying. Everybody, be their own self. I’m not trying to sway anyone any direction. But Sammy Hagar, I’m not afraid of it. There you go.”
“Mr. Cabo Wabo” also spoke with Rolling Stone magazine last week about how the government lockdowns in response to coronavirus have wreaked havoc on the economy.
“This shutdown of the economy is going to make that escalate 10 times and then we’re all going to be sick and you can’t walk down the street. I would rather see everyone go back to work,” he stated. “If some of us have to sacrifice on that, OK. I will die for my children and my grandchildren to have a life anywhere close to the life that I had in this wonderful country and freedom. That’s just the way that I feel about it.”
Continuing, Hagar went as far as to say, “I’d rather personally get sick and even personally die, if that’s what it takes. We have to save the world and this country from this economic thing that’s going to kill more people in the long run.”
As time progresses, more and more Americans are becoming fed up with “stay-at-home” orders and other draconian COVID-19 measures.
Listen to the full KSHE-95 interview below:


newswars--2020-05-25--Fact Check: CBS Commentator Suggests Models for Trump’s #YouAintBlack Shirt Wouldn’t Vote For Him

A CBS commentator was quickly corrected after he falsely insinuated black models employed by the Trump campaign probably weren ’ t supporters of the president .
Following Democrat presidential nominee Joe Biden ’ s infamous “ You ain ’ t black ” flub on The Breakfast Club radio show last week , the Trump campaign within hours had produced a shirt sporting the hashtag “ # YouAintBlack , ” one modeled by a black man and another by a black woman .
During a CBS News segment on the shirt , Democrat strategist Joel Payne suggested the models weren ’ @ @ @ @ @ @ @ to look into them .
“ It ’ s so interesting the two models you show showing those shirts , I wonder if they ’ d actually vote for Donald Trump .
That might be a good question for an industrious journalist to go dig into , ” Payne said .
The commentator was swiftly checked by Team Trump senior advisor Katrina Pearson , who pointed out the two people were part of the Trump 2020 campaign staff .
“ Fact Check : @ CBSNews @ paynedc assuming that @ HW_Floyd & @ @ @ @ @ @ @ @ as models ’ and curious to know if the actually support @ realDonaldTrump ?
” Pearson tweeted , attaching photos of the two working at the campaign headquarters .
“ Answer : YES In fact , they are full-time staff working hard to re-elect our @ POTUS.
” After the erroneous insinuation , Payne shot back he was embarrassed and might go “ inject bleach.
” The campaign staffers , Harrison Floyd and Gail Wilson , also condemned Payne ’ s assumptions .
“ It ’ s sad some people think the color @ @ @ @ @ @ @ , ” Floyd wrote on Twitter .
“ I have a great job , work with great people , and I ’ m happy .
Shouldn ’ t that be what matters ?
I ’ m proud to work for @ realDonaldTrump .
he deserves 4 more years !
” Wilson highlighted the fact she ’ s the Deputy Executive Director of Black Voices for Trump , and that “ Yes I support President @ realDonaldTrump.
” Black Voices for Trump also registered the URL YouAintBlack.com , which displays Biden ’ s quote @ @ @ @ @ @ @ s gaffe .
Indeed , Payne ’ s comments are emblematic of the Democrat party ’ s belief that Americans should vote along racial lines .
The Greatest Father/Son duo that we know joins the War Room to talk Creepy Joe , vaccines , and going out in this dangerous time .

A CBS commentator was quickly corrected after he falsely insinuated black models employed by the Trump campaign probably weren’t supporters of the president.
Following Democrat presidential nominee Joe Biden’s infamous “You ain’t black” flub on The Breakfast Club radio show last week, the Trump campaign within hours had produced a shirt sporting the hashtag “#YouAintBlack,” one modeled by a black man and another by a black woman.
During a CBS News segment on the shirt, Democrat strategist Joel Payne suggested the models weren’t actual Trump voters and urged journalists to look into them.
“It’s so interesting the two models you show showing those shirts, I wonder if they’d actually vote for Donald Trump. That might be a good question for an industrious journalist to go dig into,” Payne said.
The commentator was swiftly checked by Team Trump senior advisor Katrina Pearson, who pointed out the two people were part of the Trump 2020 campaign staff.
Fact Check: @CBSNews @paynedc assuming that @HW_Floyd & @MsGailWilson were victims of “being used as models” and curious to know if the actually support @realDonaldTrump? Answer: YES 💯 In fact, they are full-time staff working hard to re-elect our @POTUS. @TeamTrump 2020🇺🇸 pic.twitter.com/ywiRhELhvx — Katrina Pierson (@KatrinaPierson) May 24, 2020
“Fact Check: @CBSNews @paynedc assuming that @HW_Floyd & @MsGailWilson were victims of ‘being used as models’ and curious to know if the actually support @realDonaldTrump?” Pearson tweeted, attaching photos of the two working at the campaign headquarters.
“Answer: YES In fact, they are full-time staff working hard to re-elect our @POTUS.”
After the erroneous insinuation, Payne shot back he was embarrassed and might go “inject bleach.”
Super embarrassed @TeamTrump – I think I’ll go inject some bleach 😳. PS – I probably should not have made that assumption about @HW_Floyd and @MsGailWilson, my bad – welcome them on my podcast to discuss their candidate’s AfAm agenda https://t.co/tY7W9KhyDf — Joel Payne (@paynedc) May 24, 2020
The campaign staffers, Harrison Floyd and Gail Wilson, also condemned Payne’s assumptions.
“It’s sad some people think the color of my skin determines how I think,” Floyd wrote on Twitter. “I have a great job, work with great people, and I’m happy. Shouldn’t that be what matters? I’m proud to work for @realDonaldTrump. he deserves 4 more years!”
Wilson highlighted the fact she’s the Deputy Executive Director of Black Voices for Trump, and that “Yes I support President @realDonaldTrump.”
Let me introduce myself! I’m the Deputy Executive Director for Black Voices for Trump! First Generation American 🇱🇷🇺🇸 And yes, I support President @realDonaldTrump! pic.twitter.com/85vHWqAX35 — Gail Wilson —Text WOKE to 88022 (@MsGailWilson) May 24, 2020
Black Voices for Trump also registered the URL YouAintBlack.com, which displays Biden’s quote along with a video of Biden’s gaffe.
Indeed, Payne’s comments are emblematic of the Democrat party’s belief that Americans should vote along racial lines.
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The Greatest Father/Son duo that we know joins the War Room to talk Creepy Joe, vaccines, and going out in this dangerous time.


newswars--2020-05-25--Muslim World Largely Ignores Social Distancing Rules During Eid Celebrations

In Bangladesh , India and Pakistan , people ignored physical distancing rules to celebrate Eid , the most important Muslim holiday .
With COVID-19 infections on the rise in South Asia , this could lead to a catastrophe .
“ I offered my Eid prayer in a mosque with some 400 fellow worshippers , ” Muhammad Ashraf , a shopkeeper in the capital Islamabad , told DW .
“ Eid is a festival ; I hugged my relatives and friends and shook hands with them without any fear of the virus , ” Ashraf added .
Mosques in Pakistan saw @ @ @ @ @ @ @ , which marked the end of the holy month of Ramadan .
Earlier this month , authorities lifted a lockdown , which Prime Minister Imran Khan ’ s government had imposed to contain the spread of the virus .
But experts say the lockdown was never strict , and Islamic clerics refused to follow physical distancing measures from the start .
Pakistan has recorded close to 57,000 COVID-19 cases as of Monday , and over 1,100 related deaths .
The infection rate has surged since the lifting of the lockdown .
The partial @ @ @ @ @ @ @ on the country ’ s economy , so most people welcomed the easing of restrictions .
“ We remained indoors for around two months .
Eid brought us joy , ” Ahmed , a father of three , told DW .
“ We can ’ t stay at home for too long .
We have to live our lives.
” Bangladesh marked Eid al-Fitr on Monday amid the COVID-19 pandemic , which has claimed over 500 lives in the country .
The number of infections is steadily on the rise there , with @ @ @ @ @ @ @ the disease .
Health experts say the number of COVID-19 cases in South Asian countries does not reflect the actual situation on the ground because of a low testing rate .
Nonetheless , the Bangladeshi government banned outdoor Eid congregations .
Mosques were allowed to hold mass prayers , but clerics were required to ensure physical distancing measures .
Authorities had also urged people to keep a safe distance from each other and not to hug each other — an Eid custom — to curtail the COVID-19 spread .
However , people were @ @ @ @ @ @ @ in long queues , even pushing each other while entering mosques .
“ We tried our best but couldn ’ t manage the crowd .
We could have used force against them , but we didn ’ t want to do that on Eid .
We are still requesting them to follow health guidelines , ” Abdur Rouf , a police official in Dhaka , told DW .
In comparison to last year , Eid celebrations were still much somber in the country this time around .
Those who offered their prayers in @ @ @ @ @ @ @ different experience without the customary hugging .
“ But thanks to Allah , we could offer the Eid prayer .
Allah will save us from the pandemic , ” Abdul Hamid , a businessman , told DW .
Mizanur Rahman , the chief cleric at Baitul Mukarram Mosque in Dhaka , said he prayed for the wellbeing and good health of everyone in the world .
Islam is the second-largest religion in India , with 14.2 % of the country ’ s population — about 172 million people — identifying themselves as Muslim @ @ @ @ @ @ @ Eid al-Fitr was celebrated on Monday , barring places like Kerala and Jammu & Kashmir , which commemorated it on Sunday .
Eid celebrations across the country remained low key as most mosques remained closed as per the government ’ s ban on large gatherings .
Most Muslims offered Eid prayers at home , observing physical distancing measures .
“ For some sects of Islam , mass Eid prayers are mandatory , while for some they are not , ” Sabika Abbas Naqvi , a resident of Lucknow city , told DW .
@ @ @ @ @ @ @ Pradesh state ] , the biggest Eid congregation is held at the Bara Imambara , but it did not take place this year , ” Naqvi added .
In Kerala , Eid prayers were streamed online by clerics to restrict social interaction .
Police registered cases against those who gathered for prayers .
“ Most people did not visit each other ’ s houses to celebrate Eid .
People generally followed the government ’ s health directives , ” Sheeraz Ahmad , a student of Aligarh Muslim University , told DW .
India-administered @ @ @ @ @ @ @ of lockdown since Prime Minister Narendra Modi ’ s government last year stripped the region of its special constitutional status and launched a crackdown on Muslim separatists there .
However , many Kashmiris offered mass prayers to celebrate Eid .
Hindu nationalists hold Muslims responsible for spreading COVID-19 in the country .
The accusations started taking hold after a surge in coronavirus infections was found to be linked to a gathering of an Islamic missionary group , the Tablighi Jamaat , that took place in March in New Delhi .
Around 8,000 people @ @ @ @ @ @ @ which then became a hot spot for the virus .
The group ’ s chief , Maulana Saad , was later charged with culpable homicide and negligence .
Many Muslims say they are facing renewed stigma , threats and boycotts in the country .
For these reasons , they say , they marked this year ’ s Eid with an increasing sense of insecurity and uncertainty .
Alex Jones covers what is on the horizon with COVID-19 , the lockdown , the vaccine , and how Big Tech wants to run your life @

In Bangladesh, India and Pakistan, people ignored physical distancing rules to celebrate Eid, the most important Muslim holiday.
With COVID-19 infections on the rise in South Asia, this could lead to a catastrophe.
Pakistan
“I offered my Eid prayer in a mosque with some 400 fellow worshippers,” Muhammad Ashraf, a shopkeeper in the capital Islamabad, told DW. “Eid is a festival; I hugged my relatives and friends and shook hands with them without any fear of the virus,” Ashraf added.
Mosques in Pakistan saw a huge attendance on Saturday during Eid, which marked the end of the holy month of Ramadan.
Earlier this month, authorities lifted a lockdown, which Prime Minister Imran Khan’s government had imposed to contain the spread of the virus. But experts say the lockdown was never strict, and Islamic clerics refused to follow physical distancing measures from the start.
Pakistan has recorded close to 57,000 COVID-19 cases as of Monday, and over 1,100 related deaths. The infection rate has surged since the lifting of the lockdown.
The partial lockdown measures have taken a heavy toll on the country’s economy, so most people welcomed the easing of restrictions. “We remained indoors for around two months. Eid brought us joy,” Ahmed, a father of three, told DW. “We can’t stay at home for too long. We have to live our lives.”
Bangladesh
Bangladesh marked Eid al-Fitr on Monday amid the COVID-19 pandemic, which has claimed over 500 lives in the country. The number of infections is steadily on the rise there, with more than 35,000 people testing positive for the disease.
Health experts say the number of COVID-19 cases in South Asian countries does not reflect the actual situation on the ground because of a low testing rate.
Nonetheless, the Bangladeshi government banned outdoor Eid congregations. Mosques were allowed to hold mass prayers, but clerics were required to ensure physical distancing measures.
Authorities had also urged people to keep a safe distance from each other and not to hug each other — an Eid custom — to curtail the COVID-19 spread. However, people were seen standing very close to each other in long queues, even pushing each other while entering mosques.
“We tried our best but couldn’t manage the crowd. We could have used force against them, but we didn’t want to do that on Eid. We are still requesting them to follow health guidelines,” Abdur Rouf, a police official in Dhaka, told DW.
In comparison to last year, Eid celebrations were still much somber in the country this time around. Those who offered their prayers in mosque told DW it was a completely different experience without the customary hugging.
“But thanks to Allah, we could offer the Eid prayer. Allah will save us from the pandemic,” Abdul Hamid, a businessman, told DW.
Mizanur Rahman, the chief cleric at Baitul Mukarram Mosque in Dhaka, said he prayed for the wellbeing and good health of everyone in the world.
India
Islam is the second-largest religion in India, with 14.2% of the country’s population — about 172 million people — identifying themselves as Muslim.
In most parts of India, Eid al-Fitr was celebrated on Monday, barring places like Kerala and Jammu & Kashmir, which commemorated it on Sunday. Eid celebrations across the country remained low key as most mosques remained closed as per the government’s ban on large gatherings.
Most Muslims offered Eid prayers at home, observing physical distancing measures. “For some sects of Islam, mass Eid prayers are mandatory, while for some they are not,” Sabika Abbas Naqvi, a resident of Lucknow city, told DW.
“In Lucknow [capital of Uttar Pradesh state], the biggest Eid congregation is held at the Bara Imambara, but it did not take place this year,” Naqvi added.
In Kerala, Eid prayers were streamed online by clerics to restrict social interaction. Police registered cases against those who gathered for prayers.
“Most people did not visit each other’s houses to celebrate Eid. People generally followed the government’s health directives,” Sheeraz Ahmad, a student of Aligarh Muslim University, told DW.
India-administered Kashmir has mostly been in a state of lockdown since Prime Minister Narendra Modi’s government last year stripped the region of its special constitutional status and launched a crackdown on Muslim separatists there. However, many Kashmiris offered mass prayers to celebrate Eid.
Hindu nationalists hold Muslims responsible for spreading COVID-19 in the country. The accusations started taking hold after a surge in coronavirus infections was found to be linked to a gathering of an Islamic missionary group, the Tablighi Jamaat, that took place in March in New Delhi. Around 8,000 people had gathered at the meeting site, which then became a hot spot for the virus. The group’s chief, Maulana Saad, was later charged with culpable homicide and negligence.
Many Muslims say they are facing renewed stigma, threats and boycotts in the country. For these reasons, they say, they marked this year’s Eid with an increasing sense of insecurity and uncertainty.
Alex Jones covers what is on the horizon with COVID-19, the lockdown, the vaccine, and how Big Tech wants to run your life.


newswars--2020-05-25--Central Banks Are Destroying What Was Left of Free Markets

President Reagan memorably said that the nine words you don ’ t want to hear are “ I ’ m from the government , and I ’ m here to help.
” Governments in all the major jurisdictions are now making good on that unwanted promise and are taking responsibility for everything from our shoulders .
Those receiving subsidies and loan guarantees are no doubt grateful , though they probably see it as the government ’ s duty and their right .
But someone has to pay for it .
In the past , the redistribution of wealth through taxes @ @ @ @ @ @ @ give financial support to the have-nots , at least that was the story .
Today , through monetary debasement nearly everyone benefits from monetary redistribution .
This is not a costless exercise .
Governments are no longer robbing Peter to pay Paul .
They are robbing Peter to pay Peter as well .
You would think this is widely understood , but the Peters are so distracted by the apparent benefits they might or might not get that they don ’ t see the cost .
They fail to appreciate that printing money @ @ @ @ @ @ @ financing for excess government spending , but that it has now become mainstream .
There is almost a total absence in the established media of any commentary on the consequences of monetary inflation , and in a cry for more we even have financial experts warning us of a deflationary collapse and the need for the Fed to introduce negative interest rates to stave off deflation .
Yes , there are deflationary forces , because banks wish to reduce their loan exposure at a time of increasing risk .
But we can be @ @ @ @ @ @ @ masters will do everything they can to counter the trend of contracting bank credit by increasing base money .
There can only be one outcome : the debasement and eventual destruction of fiat currencies .
There is an aspect of the destruction brought about by monetary policy which is almost never considered by policymakers , and that is how it distorts the allocation of capital and leads to its misallocation .
In free markets , capital is scarce and must be used to greatest effect if the consumer is to be properly served @ @ @ @ @ @ @ profits .
Capital comes in several forms and encompasses every aspect of production : principally an establishment , machinery , labor , semimanufactured goods and commodities to be processed , and money .
An establishment , such as a factory or offices , and the availability of labor are relatively fixed in their capacity .
Depending on their deployment and capacity they produce a limited amount of goods .
It is just one form of capital , money and credit , which central banks and the banking system now provide , and which @ @ @ @ @ @ @ .
Consequently , attempts to stimulate production by monetary means still run into the capacity constraints of the other forms of capital .
Monetary policy has been increasingly used to manipulate capital allocation since the early days of the Great Depression .
The effect has varied , but it has generally come up against the constraints of the other forms of capital .
Where there is excess labour , it takes time to retrain it with the specialized skills required , a process hampered by trade unions ostensibly protecting their members but in @ @ @ @ @ @ @ .
Government control over planning and increasingly stifling regulations , again putting a brake on change , mean that changes and additions to the use of establishments have lengthened the time before entrepreneurial investment is rewarded with profits .
Government intervention has also discouraged the withdrawal of monetary capital from unprofitable deployment , or malinvestments , lengthening recessions needlessly .
When the advanced nations had strong industrial cores , the periodic expansions of credit and their subsequent sudden contractions led to observable booms and busts in the classical sense , since production of @ @ @ @ @ @ @ There have been two further developments .
The first was the abandonment of the Bretton Woods agreement in 1971 , which led to a substantial rise in prices for commodities .
The broad-based UN index of commodities rose from 33 to 157 during the decade , a rise of 376 percent .
This input category of production capital compared unfavorably with US consumer price increases of 112 percent over the decade , the mismatch between these and other categories of capital allocation making economic calculation a fruitless exercise .
The second development was @ @ @ @ @ @ @ mid-eighties , London ’ s Big Bang and the repeal of America ’ s Glass-Steagall Act of 1933 , allowing commercial banks to fully embrace and exploit investment banking activities .
The banking cartel increasingly directed its ability to create credit toward purely financial activities mainly for their own books , thereby financing financial speculation while deemphasising bank credit expansion for production purposes for all but the larger corporations .
Partly in response , the nineties saw businesses move production to low-cost centers in Southeast Asia , where all forms of production capital @ @ @ @ @ @ @ , were significantly cheaper and more flexible .
There then commenced a quarter-century of expansion of international trade replacing much of the domestic production of goods in the US , the UK , and Europe .
It was these events that denuded America of its manufacturing , not unfair competition as President Trump has alleged , and Germany ’ s retention of manufactures proves this .
But the effect has been to radically alter how we should interpret the effects of monetary expansion on the US economy and others , compared with Hayekian @ @ @ @ @ @ @ research had assumed a capitalistic structure of savers saving and thereby making monetary capital available to entrepreneurs .
Changes in the propensity to save sent contrary signals to businesses about the propensity to consume , which caused them to alter their production plans .
Based on the ratio between consumer spending and savings , this analytic model has been corrupted by the state and its licensed banks by replacing savers with former savers now no longer saving , and even borrowing to consume .
Today , the inflationary origins of investment funds for @ @ @ @ @ @ @ by venture capital funds , quasi-government funds , and others .
Being mandatory , pension funds continue to invest savings , but their beneficiaries have abandoned voluntary saving and run up debts , so even pension funds are not entirely free of monetary inflation .
Insurance funds alone appear to be comprised of genuine savings within an inflationary system .
Other than pension funds and insurance companies , Keynes ’ s wish for the euthanasia of the saver has been achieved .
He went on to suggest there would be a time “ @ @ @ @ @ @ @ increase in the volume of capital until it ceases to be scarce , so that the functionless investor will no longer receive a bonus.
” Now that everywhere bank deposits pay no interest , his wish has been granted , but Keynes did not foresee the unintended consequences of his inflationist policies which are now being visited upon us .
Among other errors , he failed to adequately account for the limitation of nonmonetary forms of capital , which leads to bottlenecks and rising prices as monetary expansion proceeds .
The unintended consequences @ @ @ @ @ @ @ be exposed .
The checks and balances on the formation and deployment of monetary capital in the free market system have been completely destroyed and replaced by inflation .
So , where do you take us from here , Mr. Powell , Mr. Bailey , Ms. Lagarde , Mr. Kuroda ?
We can now say that America , the nation responsible for the world ’ s reserve currency , has encouraged policies which have turned its economy from being a producer of goods with supporting services as the source of its citizens ’ @ @ @ @ @ @ @ casino .
The virtues of saving and thrift have been replaced by profligate spending funded by debt .
Unprofitable businesses are being supported until the hoped-for return of easier times , which are now gone .
Cash and bank deposits ( checking accounts and savings deposits ) are created almost entirely by inflation and currently total $ 15.2 trillion in the US , while total commercial bank capital is a little under $ 2 trillion .
This tells us crudely that the $ 13 trillion sitting in customer accounts can be attributed to @ @ @ @ @ @ @ those customers are financial corporations and foreign entities , and not consumers maintaining cash and savings balances .
On the other side of bank balance sheets is consumer debt , mostly off balance sheet , but ultimately funded on balance sheet .
Excluding mortgages , the total consumer debt , comprising credit card , auto , and student debt , was $ 3.86 trillion in mid-2019 , amounting to an average debt of $ 27,571 per household , confirming the extent to which consumer debt has replaced savings .
At $ 20.5 trillion @ @ @ @ @ @ @ than just the sum of cash and bank deposits , giving them a leverage of over ten times their equity .
Bankers will be very nervous of the current economic situation , aware that loan and other losses of only 10 percent wipe out their capital .
Meanwhile , their corporate customers are either shut down , which means that most of their expenses continue while they have no income , or they are suffering payment disruptions in their supply chains .
In short , bank loan books are staring at disaster .
@ @ @ @ @ @ @ underwater at the same time that the Fed is extolling them to join with it in rescuing the economy by expanding their balance sheets even more .
The sums involved in supply chains are considerably larger than the US ’ s GDP .
Onshore , it is a substantial part of the nation ’ s gross output , which captures supply chain payments at roughly $ 38 trillion .
Overseas , there is a further mammoth figure feeding into the dollar supply chain , taking the total for America to perhaps $ 50 @ @ @ @ @ @ @ foreign element through currency swaps and the domestic element mainly through the commercial banking system .
And it is indirectly funding government attempts to support consumers who are in the hole for that $ 27,571 on average per household .
In short , the Fed is committed to rescuing all business from the greatest economic collapse since the Great Depression and , probably greater than that , to funding the US government ’ s rocketing budget deficits and funding the maintenance of domestic consumption directly or indirectly through the US Treasury , while @ @ @ @ @ @ @ and preserve the illusion of national wealth .
Clearly , we stand on the threshold of an unprecedented monetary expansion .
Part of it will be , John Law–style , to ensure that inflated prices for US Treasurys are maintained .
At current interest rates , debt servicing was already costing the US government 40 percent of what was expected to be this year ’ s government deficit .
That bill will now rise beyond control even without bond yields rising .
Assistance is also being provided to the corporate debt market .
@ @ @ @ @ @ @ Fed ’ s money-printed investment through ETFs ( exchange-traded funds ) specializing in this market .
So not only is the Fed underwriting the rapidly expanding US Treasury market , but it is underwriting commercial dollar debt as well .
In late 1929 , a rally in the stock market was prolonged by a similar stimulus , with banks committed to buying stocks and the Fed injecting $ 100 million in liquidity into markets by buying government securities .
Interest rates were cut .
And when these attempts at maintaining asset prices failed @ @ @ @ @ @ @ percent of its value from September 1929 .
Today , similar attempts to rescue economies and financial markets by monetary expansion are common to all major central banks , with the possible exception of the European Central Bank ( ECB ) , which faces the unexpected obstacle of a challenge by the German Federal Constitutional Court claiming primacy in these matters .
There is therefore an added risk that the global inflation scheme will unravel in Europe , which would rapidly lead to funding and banking crises for the spendthrift member states .
@ @ @ @ @ @ @ yet more money printing by the other major central banks to ensure that there are no bank failures in their domains .
So far , few commentators have grasped the implications of what amounts to the total nationalization of the American economy by monetary means .
They have only witnessed the start of it , with the Fed ’ s balance sheet reflecting the earliest stages of the new inflation which has seen its balance sheet increase by 61 percent so far this year .
Not only will the Fed battle to fund @ @ @ @ @ @ @ to compensate for contracting bank credit , which we know stands at about $ 18 trillion .
The Fed must be assuming that the banks will cooperate and pass on the required liquidity to save the economy .
Besides the monetary and operational hurdles such a policy faces , it can not expect the banks to want responsibility for the management of businesses that without this funding would not exist .
The Fed , or some other government agency , then has to decide on one of three broad options : further support @ @ @ @ @ @ @ for business activities .
This last option involves full nationalization .
We must not be seduced into thinking that this is an outcome that can work .
The nationalization of failing banks and their eventual privatization is not a good precedent for wider nationalization , because a bank does not require the entrepreneurial flair to estimate future consumer demand and to undertake the economic calculations to provide for it .
The state taking over business activities fails for this reason , as demonstrated by the collapse of totalitarian states such as the USSR @ @ @ @ @ @ @ That leaves a stark choice between indefinite monetary support or pulling the rug from under failing businesses .
There are no prizes for guessing that pulling rugs will be strongly resisted .
Therefore , government support for failing businesses is set to continue indefinitely .
At some stage , the dawning realization that central banks and their governments are steering into this economic cul-de-sac will undermine government bond yields , despite attempts by central banks to stop it , even if the deteriorating outlook for fiat currencies ’ purchasing power does not destroy @ @ @ @ @ @ @ descent into the socialization of money , nations had opportunities to change course .
Unfortunately , they had neither the knowledge nor the guts to divine and implement a return to free markets and sound money .
Those opportunities no longer exist , and there can be only one outcome : the total destruction of fiat currencies , accompanied by all the hardships that go with it .

President Reagan memorably said that the nine words you don’t want to hear are “I’m from the government, and I’m here to help.”
Governments in all the major jurisdictions are now making good on that unwanted promise and are taking responsibility for everything from our shoulders.
Those receiving subsidies and loan guarantees are no doubt grateful, though they probably see it as the government’s duty and their right. But someone has to pay for it. In the past, the redistribution of wealth through taxes meant that the haves were taxed to give financial support to the have-nots, at least that was the story. Today, through monetary debasement nearly everyone benefits from monetary redistribution.
This is not a costless exercise. Governments are no longer robbing Peter to pay Paul. They are robbing Peter to pay Peter as well. You would think this is widely understood, but the Peters are so distracted by the apparent benefits they might or might not get that they don’t see the cost. They fail to appreciate that printing money is not just the marginal source of financing for excess government spending, but that it has now become mainstream.
There is almost a total absence in the established media of any commentary on the consequences of monetary inflation, and in a cry for more we even have financial experts warning us of a deflationary collapse and the need for the Fed to introduce negative interest rates to stave off deflation. Yes, there are deflationary forces, because banks wish to reduce their loan exposure at a time of increasing risk. But we can be sure that central banks and their political masters will do everything they can to counter the trend of contracting bank credit by increasing base money. There can only be one outcome: the debasement and eventual destruction of fiat currencies.
There is an aspect of the destruction brought about by monetary policy which is almost never considered by policymakers, and that is how it distorts the allocation of capital and leads to its misallocation. In free markets, capital is scarce and must be used to greatest effect if the consumer is to be properly served and the entrepreneur is to maximize his profits.
Capital comes in several forms and encompasses every aspect of production: principally an establishment, machinery, labor, semimanufactured goods and commodities to be processed, and money. An establishment, such as a factory or offices, and the availability of labor are relatively fixed in their capacity. Depending on their deployment and capacity they produce a limited amount of goods. It is just one form of capital, money and credit, which central banks and the banking system now provide, and which in its unbacked form is infinitely flexible. Consequently, attempts to stimulate production by monetary means still run into the capacity constraints of the other forms of capital.
Monetary policy has been increasingly used to manipulate capital allocation since the early days of the Great Depression. The effect has varied, but it has generally come up against the constraints of the other forms of capital. Where there is excess labour, it takes time to retrain it with the specialized skills required, a process hampered by trade unions ostensibly protecting their members but in reality resisting the reallocation of labor resources. Government control over planning and increasingly stifling regulations, again putting a brake on change, mean that changes and additions to the use of establishments have lengthened the time before entrepreneurial investment is rewarded with profits. Government intervention has also discouraged the withdrawal of monetary capital from unprofitable deployment, or malinvestments, lengthening recessions needlessly.
When the advanced nations had strong industrial cores, the periodic expansions of credit and their subsequent sudden contractions led to observable booms and busts in the classical sense, since production of labor-intensive consumer goods dominated production overall.
There have been two further developments. The first was the abandonment of the Bretton Woods agreement in 1971, which led to a substantial rise in prices for commodities. The broad-based UN index of commodities rose from 33 to 157 during the decade, a rise of 376 percent. This input category of production capital compared unfavorably with US consumer price increases of 112 percent over the decade, the mismatch between these and other categories of capital allocation making economic calculation a fruitless exercise. The second development was the liberation of financial controls in the mid-eighties, London’s Big Bang and the repeal of America’s Glass-Steagall Act of 1933, allowing commercial banks to fully embrace and exploit investment banking activities.
The banking cartel increasingly directed its ability to create credit toward purely financial activities mainly for their own books, thereby financing financial speculation while deemphasising bank credit expansion for production purposes for all but the larger corporations. Partly in response, the nineties saw businesses move production to low-cost centers in Southeast Asia, where all forms of production capital, with the exception of monetary capital, were significantly cheaper and more flexible.
There then commenced a quarter-century of expansion of international trade replacing much of the domestic production of goods in the US, the UK, and Europe. It was these events that denuded America of its manufacturing, not unfair competition as President Trump has alleged, and Germany’s retention of manufactures proves this. But the effect has been to radically alter how we should interpret the effects of monetary expansion on the US economy and others, compared with Hayekian triangles and the like.
Business cycle research had assumed a capitalistic structure of savers saving and thereby making monetary capital available to entrepreneurs. Changes in the propensity to save sent contrary signals to businesses about the propensity to consume, which caused them to alter their production plans. Based on the ratio between consumer spending and savings, this analytic model has been corrupted by the state and its licensed banks by replacing savers with former savers now no longer saving, and even borrowing to consume.
Today, the inflationary origins of investment funds for business development are hidden through financial intermediation by venture capital funds, quasi-government funds, and others. Being mandatory, pension funds continue to invest savings, but their beneficiaries have abandoned voluntary saving and run up debts, so even pension funds are not entirely free of monetary inflation. Insurance funds alone appear to be comprised of genuine savings within an inflationary system.
Other than pension funds and insurance companies, Keynes’s wish for the euthanasia of the saver has been achieved. He went on to suggest there would be a time “when we might aim in practice…at an increase in the volume of capital until it ceases to be scarce, so that the functionless investor will no longer receive a bonus.”
Now that everywhere bank deposits pay no interest, his wish has been granted, but Keynes did not foresee the unintended consequences of his inflationist policies which are now being visited upon us. Among other errors, he failed to adequately account for the limitation of nonmonetary forms of capital, which leads to bottlenecks and rising prices as monetary expansion proceeds.
The unintended consequences of neo-Keynesian policy failures are shortly to be exposed. The checks and balances on the formation and deployment of monetary capital in the free market system have been completely destroyed and replaced by inflation. So, where do you take us from here, Mr. Powell, Mr. Bailey, Ms. Lagarde, Mr. Kuroda?
Taking Stock
We can now say that America, the nation responsible for the world’s reserve currency, has encouraged policies which have turned its economy from being a producer of goods with supporting services as the source of its citizens’ wealth into little more than a financial casino. The virtues of saving and thrift have been replaced by profligate spending funded by debt. Unprofitable businesses are being supported until the hoped-for return of easier times, which are now gone.
Cash and bank deposits (checking accounts and savings deposits) are created almost entirely by inflation and currently total $15.2 trillion in the US, while total commercial bank capital is a little under $2 trillion. This tells us crudely that the $13 trillion sitting in customer accounts can be attributed to bank credit inflation. Increasing proportions of those customers are financial corporations and foreign entities, and not consumers maintaining cash and savings balances.
On the other side of bank balance sheets is consumer debt, mostly off balance sheet, but ultimately funded on balance sheet. Excluding mortgages, the total consumer debt, comprising credit card, auto, and student debt, was $3.86 trillion in mid-2019, amounting to an average debt of $27,571 per household, confirming the extent to which consumer debt has replaced savings.
At $20.5 trillion, bank balance sheets are far larger than just the sum of cash and bank deposits, giving them a leverage of over ten times their equity. Bankers will be very nervous of the current economic situation, aware that loan and other losses of only 10 percent wipe out their capital. Meanwhile, their corporate customers are either shut down, which means that most of their expenses continue while they have no income, or they are suffering payment disruptions in their supply chains. In short, bank loan books are staring at disaster. Effectively, the whole banking system is underwater at the same time that the Fed is extolling them to join with it in rescuing the economy by expanding their balance sheets even more.
The sums involved in supply chains are considerably larger than the US’s GDP. Onshore, it is a substantial part of the nation’s gross output, which captures supply chain payments at roughly $38 trillion. Overseas, there is a further mammoth figure feeding into the dollar supply chain, taking the total for America to perhaps $50 trillion. The Fed is backstopping the foreign element through currency swaps and the domestic element mainly through the commercial banking system. And it is indirectly funding government attempts to support consumers who are in the hole for that $27,571 on average per household.
In short, the Fed is committed to rescuing all business from the greatest economic collapse since the Great Depression and, probably greater than that, to funding the US government’s rocketing budget deficits and funding the maintenance of domestic consumption directly or indirectly through the US Treasury, while pumping financial markets to achieve these objectives and preserve the illusion of national wealth.
Clearly, we stand on the threshold of an unprecedented monetary expansion. Part of it will be, John Law–style, to ensure that inflated prices for US Treasurys are maintained. At current interest rates, debt servicing was already costing the US government 40 percent of what was expected to be this year’s government deficit. That bill will now rise beyond control even without bond yields rising. Assistance is also being provided to the corporate debt market. Blackrock has been deputed to channel the Fed’s money-printed investment through ETFs (exchange-traded funds) specializing in this market. So not only is the Fed underwriting the rapidly expanding US Treasury market, but it is underwriting commercial dollar debt as well.
In late 1929, a rally in the stock market was prolonged by a similar stimulus, with banks committed to buying stocks and the Fed injecting $100 million in liquidity into markets by buying government securities. Interest rates were cut. And when these attempts at maintaining asset prices failed, the Dow declined, losing 89 percent of its value from September 1929.
Today, similar attempts to rescue economies and financial markets by monetary expansion are common to all major central banks, with the possible exception of the European Central Bank (ECB), which faces the unexpected obstacle of a challenge by the German Federal Constitutional Court claiming primacy in these matters. There is therefore an added risk that the global inflation scheme will unravel in Europe, which would rapidly lead to funding and banking crises for the spendthrift member states. Doubtless, any financial contagion will require yet more money printing by the other major central banks to ensure that there are no bank failures in their domains.
Whither the Exit?
So far, few commentators have grasped the implications of what amounts to the total nationalization of the American economy by monetary means. They have only witnessed the start of it, with the Fed’s balance sheet reflecting the earliest stages of the new inflation which has seen its balance sheet increase by 61 percent so far this year. Not only will the Fed battle to fund everything, but it will also have to compensate for contracting bank credit, which we know stands at about $18 trillion.
The Fed must be assuming that the banks will cooperate and pass on the required liquidity to save the economy. Besides the monetary and operational hurdles such a policy faces, it cannot expect the banks to want responsibility for the management of businesses that without this funding would not exist. The Fed, or some other government agency, then has to decide on one of three broad options: further support, withdrawing support, or taking responsibility for business activities. This last option involves full nationalization.
We must not be seduced into thinking that this is an outcome that can work. The nationalization of failing banks and their eventual privatization is not a good precedent for wider nationalization, because a bank does not require the entrepreneurial flair to estimate future consumer demand and to undertake the economic calculations to provide for it. The state taking over business activities fails for this reason, as demonstrated by the collapse of totalitarian states such as the USSR and the China of Mao Zedong.
That leaves a stark choice between indefinite monetary support or pulling the rug from under failing businesses. There are no prizes for guessing that pulling rugs will be strongly resisted. Therefore, government support for failing businesses is set to continue indefinitely.
At some stage, the dawning realization that central banks and their governments are steering into this economic cul-de-sac will undermine government bond yields, despite attempts by central banks to stop it, even if the deteriorating outlook for fiat currencies’ purchasing power does not destroy government finances first.
Earlier in the descent into the socialization of money, nations had opportunities to change course. Unfortunately, they had neither the knowledge nor the guts to divine and implement a return to free markets and sound money. Those opportunities no longer exist, and there can be only one outcome: the total destruction of fiat currencies, accompanied by all the hardships that go with it.