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https://caitlinjohnstone.com/2023/03/14/on-war-with-china-australia-is-caught-between-a-rock-and-a-pentagon/

On War With China, Australia Is Caught Between A Rock And A Pentagon

As part of Australian media’s relentless onslaught of war–with–China propaganda, the government-run Australian Broadcasting Corporation just aired a radio segment on RN Breakfast about the newly revealed details on the AUKUS nuclear-powered submarine deal, featuring two guests who are enthusiastic supporters of the deal, and hosted by another enthusiastic supporter of the deal.

One of the guests, Australia’s former treasurer and ambassador to the United States Joe Hockey, made some interesting remarks.

“This locks us in with the United States for decades to come; is there a risk, as the smaller partner in this deal, we’ll just have to do what the US tells us when it comes to future wartime engagements?” host Patricia Karvelas asked Hockey.

“Well we’re already fully integrated with the United States military, and arguably have been for more than one hundred years,” Hockey replied. “We’re the only country in the world that has fought side-by side with them in every major battle for the last one hundred years. And already today a lot of our navy has the Aegis Combat System, which is an American combat system; our current Collins-class submarines use American torpedoes… and in every major way, communications systems and integration, we already have American technology, and we’re integrated with American systems. So there’s nothing new here in that regard.”

This is true; Australia is inseparably intertwined with the US military and is in practice nothing other than a US military and intelligence asset in every meaningful way, to such an extent that the US navy is reportedly planning to use the country as a full-service submarine station for the entire range of undersea activities in the Asia-Pacific region. In an incredibly brazen admission that the Australian government has fully given away the nation’s sovereignty to a foreign power, Deputy Prime Minister and Secretary of Defence Richard Marles said last year that the Australian Defence Force is moving “beyond interoperability to interchangeability” with the US military so they can “operate seamlessly together, at speed.”

Asked about the hundreds of billions of dollars this submarine program is going to cost Australians, Hockey said that “the cost of failure is far greater than the cost of investment,” citing Australia’s ports and shipping routes which could come under attack without the deterrence factor of the new submarines.

This claim is false. As has been humorously explained on the Australian TV series Utopia, China is the power who is supposedly being “deterred” from attacking Australia’s ports and shipping routes, and since China is Australia’s largest two-way trading partner this means that we are effectively pouring hundreds of billions of dollars into protecting our trade with China, from China.

In reality, Australia is not arming itself against China to protect itself from China. Australia is arming itself against China to protect itself from the United States.

This dynamic was illustrated in all its grotesque glory by a 2019 presentation at the Australian think tank Centre for Independent Studies by American political analyst John Mearsheimer. In his usual uncomfortably blunt manner, Mearsheimer told his audience that the US is going to do everything it can to halt China’s rise and prevent it from becoming the dominant power in the region, and that Australia should align with the US in that battle or else it would face the wrath of Washington.

“The question that’s on the table is what should Australia’s foreign policy be in light of the rise of China,” Mearsheimer said. “I’ll tell you what I would suggest if I were an Australian.”

Mearsheimer said China is going to continue to grow economically and will convert that economic power into military power to dominate Asia “the way the US dominates the western hemisphere”, and explained why he thinks the US and its allies have every ability to prevent that from happening.

“Now the question is what does this all mean for Australia?” Mearsheimer said. “Well, you’re in a quandary for sure. Everybody knows what the quandary is. And by the way you’re not the only country in East Asia that’s in this quandary. You trade a lot with China, and that trade is very important for your prosperity, no question about that. Security-wise, you really want to go with us. It makes just a lot more sense, right? And you understand that security is more important than prosperity, because if you don’t survive, you’re not gonna prosper.”

“Now some people say there’s an alternative: you can go with China,” said Mearsheimer. “You have a choice here: you can go with China rather the United States. There’s two things I’ll say about that. Number one, if you go with China, you want to understand you are our enemy. You are then deciding to become an enemy of the United States. Because again, we’re talking about an intense security competition.”

“You’re either with us or against us,” he continued. “And if you’re trading extensively with China, and you’re friendly with China, you’re undermining the United States in this security competition. You’re feeding the beast, from our perspective. And that is not going to make us happy. And when we are not happy you do not want to underestimate how nasty we can be. Just ask Fidel Castro.”

Nervous laughter from the Australian think tank audience punctuated Mearsheimer’s more incendiary observations. The CIA is known to have made numerous attempts to assassinate Castro.

So if you’re confused as to why Australia is preparing to fight an unwinnable war against its primary trading partner, in direct contradiction to its own security and economic interests, that’s why. It’s because Australia is ultimately more afraid of the US than it is of China.

Contrary to Joe Hockey’s claims, Australia is not paying hundreds of billions of dollars to knit itself even further into the US war machine because “the cost of failure is far greater than the cost of investment.” In truth those hundreds of billions of dollars are more like pizzo payments to the Mafia; we’re letting the boss wet his beak so he doesn’t trash our business and break our kneecaps.

Nobody ever talks about this, even though anyone who studies US foreign policy knows it’s true. All the Australian propagandists always make up stories about what China might do to us if we don’t play along with Washington’s brinkmanship against Beijing, but they never talk about what the US would do to us if we don’t. This is because they don’t want us thinking too hard about the fact that we are being coerced by the world’s most powerful government into preparing to fight a war of unfathomable horror under the tacit threat of inflicting even worse horrors upon us if we don’t.

Australia is caught between a rock and a Pentagon, and both are the fault of the United States. The US is responsible for engineering all these hostilities between China and the western power alliance in its desperate attempts to secure unipolar hegemony, and the US is responsible for creating the fear other countries feel knowing what fate might befall them if they disobey its dictates. The US is solely responsible for creating a situation in which we are being forced to choose between (A) throwing our sons and daughters into the gears of an unimaginably terrible war while destroying our economy and risking nuclear armageddon, or (B) facing retribution and retaliation from a government that is far more violent and destructive than China.

This completely intolerable situation is why Australians are being aggressively hammered with war propaganda about China right now; if we were simply allowed to consume truthful information and think normal thoughts, no healthy person would ever consent to any of this.

But that’s where we’re at, and it’s not going to get better until people understand that that’s what’s happening. We’ve got to talk about this thing, and we’ve got to help everyone understand the reality of the situation we now find ourselves in. In the end, humanity will not have a chance at health until it has freed itself from the shackles of the US empire.

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https://kunstler.com/clusterfuck-nation/money-troubles/

Money Troubles

“As for the evil: It lurks in the interstices of our bureaucratic institutions, which, as they have grown in size and complexity since the nineteenth century, behave in ways that are increasingly impossible to understand and contrary to human flourishing.”

Money is all theoretical… until it’s not. Paper money is bad enough, as France learned under the tutelage of the rascal John Law in the early 1700s. The nation was broke, exhausted by foolish wars, and heaped under unbearable debt. Monsieur Law, a Scottish genius-wizard (the Jerry Lewis of political economy), landed in Paris, cast a spell on the regent Duc d’Orléans, set up a magic credit engine fueled by dreams of untold riches-to-come burgeoning out of the vast, new-found lands called Louisiana up the Mississippi River, and modern finance was born!

       The stock-and-money schemes known as the Mississippi Bubble soon ruined France and put finance in such a bad odor that the word “banque” could not be used in polite society there for a century to come. Monetary inflation became a thing for the first time since Roman days — a much easier trick with printed paper banknotes than with silver coins — but the effect was the same: the evaporation of “wealth” (which is what money supposedly represents). At the height of the crisis, trading in gold was criminalized, though that was so easily worked-around due to sheer custom and habit that the Crown had to re-legalize it. The frenzy from start to finish lasted only a few years, but the nation was set on the path that would eventually lead to revolution. Law ended his days dolefully running card games in Venice.

      Likewise, the creaking polity called the USA in our time spawned many new incarnations of John Law as it transitioned from being “the arsenal of democracy” — you know, making real things — to a land of make-believe, where unicorns galloped over rainbows conjured by computer magic and utopian wishes of equity, diversity, and inclusion. The overhang of previously amassed wealth kept those dreams going long after we discontinued the rough and messy business of making stuff, and thereby generating real wealth. But now a klaxon blares, signaling the end of dream-time, and the nation wakes up in a ramshackle house with the floor giving way under the bed.

      The rot was plain to see in the banking architecture built on US treasury paper (bills, notes, bonds) as rising interest rates undercut the price of all the debt paper issued previously at lower rates. And this was the collateral that banks generally held the depositors’ money in. So, when it became necessary to declare a problem with the balance sheet, and cash had to be raised to cover it, the treasury paper could only be sold at a loss, liabilities exceeded assets, word got out, depositors rushed to secure the money in their accounts, and that was all she wrote for yon bank, in this case, Silicon Valley Bank, the first to crumble.

      Since banks today exist in a vast matrix of interconnected obligations — promises to pay this-and-that — fear grows that the rot from one bank, such as SVB, will infect many other banks that are no longer able to keep their promises about paying this-and-that, leading to a daisy-chain of things not getting paid. For an economy, that’s about the same as the blood ceasing to circulate in a body.

      The practice in situations such as this (say, as in 2008-09) is for the governing authorities — who supposedly rule over the banking world like gods — to rush to rescue these outfits with “liquidity,” money (or representations of it) as required to re-balance things, or, maybe provide the impression of re-balancing until something else can be figured out. The Jupiter and Minerva of American banking, Jay Powell and Janet Yellen, were faced with just that sort of call for divine intervention over the weekend as fear seeped into every nook and crevice of the money world that wealth was flaring away in the long-feared-of conflagration out of the dumpster banking had become.

      Sunday morning, Ms. Yellen told CBS News “bailouts, no way” but by the afternoon Mr. Powell cried “bailouts, way,” and they had to get their story straight. They offered up $25-billion to bail out depositors for a smoldering system that will arguably require a trillion dollars or more of liquidity to quench the spreading fires. One thing looks for sure: the interest rate hikes that Mr. Powell spoke of so confidently only days ago just got stashed into his folder labeled “Fuggeddabowdit.” So, the campaign to control inflation must now yield to the urgent need to create a whole lot of money to spray over those fires.

      You may have noticed that the value of your money has been slip-sliding away the past year or so. Peanut butter at five bucks a jar, and all. The situation at hand kind of guarantees that we’ll be seeing a whole lot more of that. And then the gods of money will have lost control of the interest rate console altogether. No more tweaking the broken knobs. More inflation will prompt US treasury paper holders to dump what they can while there’s still some value to retrieve. But the US has to issue more debt for all the bail-outs and theoretical buyers of new debt will perforce bid up the rates to keep up with inflation… and yet the US can’t possibly bear the burden of paying higher interest on its debt. Looks like the business model for running the USA is breaking down before our eyes.

      Luckily, Cap’n “Joe Biden” is at the helm of this steaming garbage barge. His conference room full of geniuses is ready with the solution to our predicament: the long-mythologized Central Bank Digital Currency — a dream-come-true for would be tyrants… the Godzilla of unicorns whinnying atop the biggest rainbow of all: the promise of endless magic money for everybody, forever. All you have to do to get it is: surrender your decision-making power over your own life. The government will amalgamate your few remaining assets in a CBDC account, tell you exactly what to spend it on, and shut off your little card if you show any contrary impulses.

     Well, they can try it. I doubt it will work. Instead, the government will melt down in its own rancid puddle of insolvency, the meta-grift will grind to an end, and it will be everyone for his / her / they self in the broke-down Palace of Chaos for a while… until things emergently reconstruct. But I get a little ahead of myself. It’s not even ten o’clock on Monday morning.

     Oh, and then there’s Ukraine….

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http://endoftheamericandream.com/the-federal-reserve-just-made-an-emergency-decision-which-will-fundamentally-change-banking-in-america-forever/

The Federal Reserve Just Made An Emergency Decision Which Will Fundamentally Change Banking In America Forever

Did you think that the Federal Reserve was just going to stand by and watch the U.S. banking system completely collapse?  In response to the stunning failures of Silicon Valley Bank and Signature Bank, the Federal Reserve announced a rescue plan on Sunday evening that is going to radically change banking in America forever.  All deposits at Silicon Valley Bank and Signature Bank will be fully guaranteed and will be available on Monday.  Of course the Federal Reserve can’t just make an exception for these two banks.  If they are going to do this for them, that means that they are going to have to do it for everyone else too.  So what this means is that from this point forward the Federal Reserve is essentially promising to guarantee every bank account in America.  Considering the fact that more than 19 trillion dollars is deposited with U.S. banks, that is quite a promise to make.

I want to show you that I am not exaggerating one bit.  The following is the announcement about this new plan that was just posted on the official website of the Federal Reserve…

To support American businesses and households, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy.

The Federal Reserve is prepared to address any liquidity pressures that may arise.

The additional funding will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.

With approval of the Treasury Secretary, the Department of the Treasury will make available up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP. The Federal Reserve does not anticipate that it will be necessary to draw on these backstop funds.

After receiving a recommendation from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, Treasury Secretary Yellen, after consultation with the President, approved actions to enable the FDIC to complete its resolutions of Silicon Valley Bank and Signature Bank in a manner that fully protects all depositors, both insured and uninsured. These actions will reduce stress across the financial system, support financial stability and minimize any impact on businesses, households, taxpayers, and the broader economy.

The Board is carefully monitoring developments in financial markets. The capital and liquidity positions of the U.S. banking system are strong and the U.S. financial system is resilient.

Depository institutions may obtain liquidity against a wide range of collateral through the discount window, which remains open and available. In addition, the discount window will apply the same margins used for the securities eligible for the BTFP, further increasing lendable value at the window.

The Board is closely monitoring conditions across the financial system and is prepared to use its full range of tools to support households and businesses, and will take additional steps as appropriate.

Please don’t just skim those paragraphs.

Take the time to read them in detail, because what the Fed just did literally changes everything.

From now on, nobody will have to worry that their bank will fail, and the Fed has decided to completely end the war against inflation.

If the technical language confuses you, here is Zero Hedge’s translation…

Translation: the Fed’s hiking cycle is dead and buried, and here comes the next round of massive liquidity injections. It also means that the Fed, Treasury and FDIC have just experienced the most devastating humiliation in recent history – just 4 days ago Powell was telling Congress he could hike 50bps and here we are now using taxpayer funds to bail out banks that have collapsed because they couldn’t even handle 4.75% and somehow the Fed has no idea!

That analysis is right on the money.

I warned that our system could not handle higher interest rates, and higher rates were directly related to the collapse of Silicon Valley Bank.

So there won’t be any more rate hikes.

In fact, I wouldn’t be surprised at all if the Fed started cutting rates very soon.

In addition, all of the fresh money that the Fed will be injecting into the financial system now will be highly inflationary.

We are being told that the Fed’s plan won’t cost taxpayers a dime, but the truth is that inflation is a tax on all of us.

So the financial community may be praising this “extraordinary intervention” by the Fed, but there will inevitably be a very high price to pay for spraying money around so recklessly.

But what other choice did the Fed have?

As I have repeatedly warned my readers, our fundamentally flawed system simply cannot survive without artificial support.

And as Bill Ackman has noted, if the Fed had just stood by and done nothing we would have been facing a nightmare scenario as early as next week…

Over the past several days, we really did come to the brink of the abyss.

But now the Federal Reserve has come charging to the rescue and so everything is okay, right?

I wish that was actually true.

As a result of the Fed’s reckless rate hiking strategy, U.S. banks are now sitting on 620 billion dollars of unrealized losses.

That is “billion” with a “b”, and that is a ticking time bomb that is not going to go away any time soon.

Meanwhile, the housing bubble is imploding, we are heading into the worst commercial real estate crisis in all of U.S. history, and now faith in the U.S. banking system has been greatly shaken.

This crisis is not even close to over.

And every time there is a new eruption somewhere, the Fed will try to put the flames out with generous injections of fresh liquidity.

Virtually everyone applauds when the Fed starts spraying money around, but by now all of us should realize that this story is not going to have a happy ending.