Why is Apple so vulnerable to a trade war with China?

  • Apple closes down almost 6% on Monday after news of a major escalation in the U.S.-China trade war.
  • The company assembles iPhones in China, making it vulnerable to price increases if a tariff were to be placed on Chinese exports.
  • It also sells a lot of iPhones in China, making it sensitive to Chinese consumer confidence.
GP: Tim Cook China Development Forum 2019 In Beijing
CEO of Apple Tim Cook attends China Development Forum 2019 at the Diaoyutai State Guesthouse on March 23, 2019 in Beijing, China.
VCG | Getty Images

Apple closed down nearly 6% on Monday after news of a major escalation in the U.S.-China trade war.China said on Monday that it decided to raise tariffs on some U.S. goods after President Donald Trump threatened to further raise tariffs on Chinese imports last week.

The trade war is affecting a lot of different stocks, but Apple seems to be hit harder than most. The Dow Jones Industrial index dropped 2.6%, and the Nasdaq Composite dropped 3.5%.Apple is especially vulnerable to a trade war with China for two primary reasons.First, it assembles its iPhones primarily in China. Although it has a lot of American suppliers — it spent $60 billion on American suppliers in 2018 — iPhone assembly is done in mainland China.Whenever new tariffs are announced, investors must keep an eye on the details because it’s possible that some of Apple’s products could get caught in the crossfire.Morgan Stanley analyst Katy Huberty estimates that a 25% tariff on the iPhone could lead to a price increase of $160 for the iPhone XS. Or Apple could eat the tax, which could lead to a 23% decrease in earnings per share in 2020.

“Apple has one of the most significant exposures to Chinese exports to the US in our IT Hardware coverage group, given final assembly for many of its consumer electronic devices is located in China,” Huberty wrote in a note last week.“And given the reliance on China’s established, low-cost labor force and expertise in manufacturing/tooling, a large-scale move out of the country would not only be costly, but could take multiple years to complete, potentially raising the odds of execution risk, in our view,” the note continued.Last fall, a draft list of one of Trump’s round of China tariffs would have affected the Apple Watch and Apple AirPods, for example, although the final list did not affect Apple’s products.The other reason is that Apple, unlike other big tech companies, makes a substantial amount of its money by selling its products to Chinese consumers.Apple reported $51 billion in revenue in 2018 from “Greater China,” which includes Hong Kong and Taiwan. That’s Apple’s third-biggest region, after the Americas and Europe. Apple’s total revenue for the year was $265.6 billion.When Apple said earlier this year that its holiday quarter revenue would be significantly less than it had previously said to expect, it blamed a bad economic climate in China.“It’s clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy,” Apple CEO Tim Cook said in an interview with CNBC in January.“One of the reasons Apple CEO cited for China improvement was increased consumer confidence due to easing of US-China trade tensions,” UBS analyst Timothy Arcuri wrote in a note last week.“However, in recent days, trade tensions have escalated and it bears watching whether this affects China consumer sentiment,” the note continued.Apple has consistently opposed Trump’s proposed tariffs, and Cook has personally told Trump that Apple does not support implementing taxes on imports from China.Apple stock is up 24.9% since Jan. 1.
CEO of Apple Tim Cook attends China Development Forum 2019 at the Diaoyutai State Guesthouse on March 23, 2019 in Beijing, China.
VCG | Getty Images

Apple closed down nearly 6% on Monday after news of a major escalation in the U.S.-China trade war.China said on Monday that it decided to raise tariffs on some U.S. goods after President Donald Trump threatened to further raise tariffs on Chinese imports last week.

The trade war is affecting a lot of different stocks, but Apple seems to be hit harder than most. The Dow Jones Industrial index dropped 2.6%, and the Nasdaq Composite dropped 3.5%.Apple is especially vulnerable to a trade war with China for two primary reasons.First, it assembles its iPhones primarily in China. Although it has a lot of American suppliers — it spent $60 billion on American suppliers in 2018 — iPhone assembly is done in mainland China.Whenever new tariffs are announced, investors must keep an eye on the details because it’s possible that some of Apple’s products could get caught in the crossfire.Morgan Stanley analyst Katy Huberty estimates that a 25% tariff on the iPhone could lead to a price increase of $160 for the iPhone XS. Or Apple could eat the tax, which could lead to a 23% decrease in earnings per share in 2020.

“Apple has one of the most significant exposures to Chinese exports to the US in our IT Hardware coverage group, given final assembly for many of its consumer electronic devices is located in China,” Huberty wrote in a note last week.“And given the reliance on China’s established, low-cost labor force and expertise in manufacturing/tooling, a large-scale move out of the country would not only be costly, but could take multiple years to complete, potentially raising the odds of execution risk, in our view,” the note continued.Last fall, a draft list of one of Trump’s round of China tariffs would have affected the Apple Watch and Apple AirPods, for example, although the final list did not affect Apple’s products.The other reason is that Apple, unlike other big tech companies, makes a substantial amount of its money by selling its products to Chinese consumers.Apple reported $51 billion in revenue in 2018 from “Greater China,” which includes Hong Kong and Taiwan. That’s Apple’s third-biggest region, after the Americas and Europe. Apple’s total revenue for the year was $265.6 billion.When Apple said earlier this year that its holiday quarter revenue would be significantly less than it had previously said to expect, it blamed a bad economic climate in China.“It’s clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy,” Apple CEO Tim Cook said in an interview with CNBC in January.“One of the reasons Apple CEO cited for China improvement was increased consumer confidence due to easing of US-China trade tensions,” UBS analyst Timothy Arcuri wrote in a note last week.“However, in recent days, trade tensions have escalated and it bears watching whether this affects China consumer sentiment,” the note continued.Apple has consistently opposed Trump’s proposed tariffs, and Cook has personally told Trump that Apple does not support implementing taxes on imports from China.Apple stock is up 24.9% since Jan. 1.
Apple closed down nearly 6% on Monday after news of a major escalation in the U.S.-China trade war.China said on Monday that it decided to raise tariffs on some U.S. goods after President Donald Trump threatened to further raise tariffs on Chinese imports last week.

The trade war is affecting a lot of different stocks, but Apple seems to be hit harder than most. The Dow Jones Industrial index dropped 2.6%, and the Nasdaq Composite dropped 3.5%.Apple is especially vulnerable to a trade war with China for two primary reasons.First, it assembles its iPhones primarily in China. Although it has a lot of American suppliers — it spent $60 billion on American suppliers in 2018 — iPhone assembly is done in mainland China.Whenever new tariffs are announced, investors must keep an eye on the details because it’s possible that some of Apple’s products could get caught in the crossfire.Morgan Stanley analyst Katy Huberty estimates that a 25% tariff on the iPhone could lead to a price increase of $160 for the iPhone XS. Or Apple could eat the tax, which could lead to a 23% decrease in earnings per share in 2020.

“Apple has one of the most significant exposures to Chinese exports to the US in our IT Hardware coverage group, given final assembly for many of its consumer electronic devices is located in China,” Huberty wrote in a note last week.“And given the reliance on China’s established, low-cost labor force and expertise in manufacturing/tooling, a large-scale move out of the country would not only be costly, but could take multiple years to complete, potentially raising the odds of execution risk, in our view,” the note continued.Last fall, a draft list of one of Trump’s round of China tariffs would have affected the Apple Watch and Apple AirPods, for example, although the final list did not affect Apple’s products.The other reason is that Apple, unlike other big tech companies, makes a substantial amount of its money by selling its products to Chinese consumers.Apple reported $51 billion in revenue in 2018 from “Greater China,” which includes Hong Kong and Taiwan. That’s Apple’s third-biggest region, after the Americas and Europe. Apple’s total revenue for the year was $265.6 billion.When Apple said earlier this year that its holiday quarter revenue would be significantly less than it had previously said to expect, it blamed a bad economic climate in China.“It’s clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy,” Apple CEO Tim Cook said in an interview with CNBC in January.“One of the reasons Apple CEO cited for China improvement was increased consumer confidence due to easing of US-China trade tensions,” UBS analyst Timothy Arcuri wrote in a note last week.“However, in recent days, trade tensions have escalated and it bears watching whether this affects China consumer sentiment,” the note continued.Apple has consistently opposed Trump’s proposed tariffs, and Cook has personally told Trump that Apple does not support implementing taxes on imports from China.Apple stock is up 24.9% since Jan. 1.

https://www.cnbc.com/2019/05/13/why-is-apple-so-vulnerable-to-a-trade-war-with-china.html

Obama’s spying scandal is starting to look a lot like Watergate

F.B.I. Used Informant to Investigate Russia Ties to Campaign, Not to Spy, as Trump Claims,” read the headline on a lengthy New York Times story May 18. “The Justice Department used a suspected informant to probe whether Trump campaign aides were making improper contacts with Russia in 2016,” read a story in the May 21 edition of the Wall Street Journal.

So much for those who dismissed charges of Obama administration infiltration of Donald Trump’s campaign as paranoid fantasy. Defenders of the Obama intelligence and law enforcement apparat have had to fall back on the argument that this infiltration was for Trump’s — and the nation’s — own good.

It’s an argument that evidently didn’t occur to Richard Nixon’s defenders when it became clear that Nixon operatives had burglarized and wiretapped the Democratic National Committee’s headquarters in June 1972.

https://nypost.com/2018/05/27/obamas-spying-scandal-is-starting-to-look-a-lot-like-watergate/

Conservatives face a tough fight as Big Tech’s censorship expands

As Big Tech’s censorship of conservatives becomes ever more flagrant and overt, the old arguments about protecting the sanctity of the modern public square are now invalid. Our right to freely engage in public discourse through speech is under sustained attack, necessitating a vigorous defense against the major social media and internet platforms.

From “shadowbans” on Facebook and Twitter, to demonetization of YouTube videos, to pulled ads for Republican candidates at the critical junctures of election campaigns, the list of violations against the online practices and speech of conservatives is long.

I certainly had my suspicions confirmed when Instagram, which is owned by Facebook, “accidentally” censored a post I made regarding the Jussie Smollett hoax, which consequently led to me hearing from hundreds of my followers about how they’ve been having problems seeing, liking or being able to interact with my posts. Many of them even claimed that they’ve had to repeatedly refollow me, as Instagram keeps unfollowing me on their accounts.

While nothing about Big Tech’s censorship of conservatives truly surprises me anymore, it’s still chilling to see the proof for yourself. If it can happen to me, the son of the president, with millions of followers on social media, just think about how bad it must be for conservatives with smaller followings and those who don’t have the soapbox or media reach to push back when they’re being targeted?

Thanks to a brave Facebook whistleblower who approached James O’Keefe’s Project Veritas, we now know that Mark Zuckerberg’s social media giant developed algorithms to “deboost” certain content, limiting its distribution and appearance in news feeds. As you probably guessed, this stealth censorship was specifically aimed at conservatives.

Facebook appears to have deliberately tailored its algorithm to recognize the syntax and style popular among conservatives in order to “deboost” that content. “Mainstream media,” “SJW” (Social Justice Warrior) and “red pill” — all terms that conservatives often use to express themselves — were listed as red flags, according to the former Facebook insider.

Facebook engineers even cited BlazeTV host Lauren Chen’s video criticizing the social justice movement as an example of the kind of “red pills” that users just aren’t allowed to drop anymore. Mainstream conservative content was strangled in real time, yet fringe leftists such as the Young Turks enjoy free rein on the social media platform.

Despite the occasional brave gesture, politicians have been far too sluggish in recognizing the extent of the problem. But the Republican Party and the conservative movement are becoming more vigilant against the suppression of our speech, as we saw at last weekend’s Conservative Political Action Conference (CPAC).

Silicon Valley lobbyists have splashed millions of dollars all over the Washington swamp to play on conservatives’ innate faith in the free-market system and respect for private property. Even as Big Tech companies work to exclude us from the town square of the 21st century, they’ve been able to rely on misguided conservatives to carry water for them with irrelevant pedantry about whether the First Amendment applies in cases of social media censorship.

Sen. Josh Hawley (R-Mo.) has been making a name for himself as a Republican prepared to stand up to Big Tech malfeasance since his time as Missouri’s attorney general. He delivered a tour de force interview with The Wall Street Journal’s Kimberly Strassel in front of the CPAC crowd, one that provided a clear-eyed assessment of the ongoing affront to the freedoms of conservative speech and expression.

Hawley demolished the absurd notion that “conservative principles” preclude taking action to ensure free debate online simply because Big Tech firms — the most powerful corporations in the world — are private companies.

Hawley pointed out that Big Tech companies already enjoy “sweetheart deals” under current regulations that make their malfeasance a matter of public concern. Section 230 of the Communications Decency Act, for instance, allows them to avoid liability for the content that users post to their platforms. To address this problem, Hawley proposed adding a viewpoint neutrality requirement for platforms that benefit from Section 230’s protections, which were originally enacted to protect the internet as “a forum for a true diversity of political discourse.”

“Google and Facebook should not be a law unto themselves,” Hawley declared. “They should not be able to discriminate against conservatives. They should not be able to tell us we need to sit down and shut up!”

It’s high time other conservative politicians started heeding Hawley’s warnings, because the logical endpoint of Big Tech’s free rein is far more troubling than conservative meme warriors losing their Twitter accounts. As we’re already starting to see, what starts with social media censorship can quickly lead to banishment from such fundamental services as transportation, online payments and banking.

Left unchecked, Big Tech and liberal activists could construct a private “social credit” system — not unlike what the communists have nightmarishly implemented in China — that excludes outspoken conservatives from wide swaths of American life simply because their political views differ from those of tech executives.

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://thehill.com/opinion/technology/434407-conservatives-face-a-tough-fight-as-big-techs-censorship-expands

“Founders Did Not Want A King” – Democrats Vote Unanimously To Overturn Trump Border Emergency Plan

Less than two weeks after President Trump declared a national emergency to fund his border wall, House Democrats have voted unanimously to block Trump’s declaration, marking an unprecedented congressional challenge to a president’s authority to invoke emergency powers.

13 Republicans joined with Democrats to admonish Trump’s move — well short of the number Democrats would need to overturn the president’s promised veto.

As The Hill reports, the vote marks the first time Congress has taken formal action to block a presidential emergency declaration since the power was created in the National Emergencies Act of 1976.

Democrats hinged their opposition on the basic principles of constitutional law, arguing that Trump’s unilateral move marks a clear-cut violation of the separation of powers and the unique authority of Congress to dictate where federal dollars are spent.

“If it were truly an emergency we’d all be there with the president,” Speaker Nancy Pelosi (D-Calif.) said several hours before Tuesday’s vote, during a conference of the American Legion in Washington.

“Our founders had great vision. They did not want a king.”

As a reminder, here’s a list of all the national emergencies…

  1. Nov 14, 1979: Blocking Iranian Government Property (EO12170)
  2. Nov 14, 1994: Proliferation of Weapons of Mass Destruction (EO 12938)
  3. Jan 23, 1995: Prohibiting Transactions With Terrorists Who Threaten To Disrupt the Middle East Peace Process (EO 12947)
  4. Mar 15, 1995: Prohibiting Certain Transactions with Respect to the Development of Iranian Petroleum Resources (EO 12957)
  5. Oct 21, 1995: Blocking Assets and Prohibiting Transactions with Significant Narcotics Traffickers (EO 12978)
  6. Mar 1, 1996: Declaration of a National Emergency and Invocation of Emergency Authority Relating to the Regulation of the Anchorage and Movement of Vessels (Proc. 6867)
  7. Nov 3, 1997: Blocking Sudanese Government Property and Prohibiting Transactions With Sudan (EO 13067)
  8. Jun 26, 2001: Blocking Property of Persons Who Threaten International Stabilization Efforts in the Western Balkans (EO 13219)
  9. Aug 17, 2001: Continuation of Export Control Regulations (EO 13222)
  10. Sep 14, 2001: Declaration of National Emergency by Reason of Certain Terrorist Attacks (Proc. 7463)
  11. Sep 23, 2001: Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism (EO 13224)
  12. Mar 6, 2003: Blocking Property of Persons Undermining Democratic Processes or Institutions in Zimbabwe (EO 13288)
  13. May 22, 2003: Protecting the Development Fund for Iraq and Certain Other Property in Which Iraq Has an Interest (EO 13303)
  14. May 11, 2004: Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria (EO 13338)
  15. Jun 16, 2006: Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus (EO 13405)
  16. Oct 27, 2006: Blocking Property of Certain Persons Contributing to the Conflict in the Democratic Republic of the Congo (EO 13413)
  17. 17. Aug 1, 2007: Blocking Property of Persons Undermining the Sovereignty of Lebanon or Its Democratic Processes and Institutions (EO 13441)
  18. Jun 26, 2008: Continuing Certain Restrictions With Respect to North Korea & North Korean Nationals (EO 13466)
  19. Apr 12, 2010: Blocking Property of Certain Persons Contributing to the Conflict in Somalia (EO 13536)
  20. Feb 25, 2011: Blocking Property and Prohibiting Certain Transactions Related to Libya (EO 13566)
  21. Jul 24, 2011: Blocking Property of Transnational Criminal Organizations (EO13581)
  22. May 16, 2012: Blocking Property of Persons Threatening the Peace, Security, or Stability of Yemen (EO 13611)
  23. Mar 6, 2014: Blocking Property of Certain Persons Contributing to the Situation in Ukraine (EO 13660)
  24. Apr 3, 2014: Blocking Property of Certain Persons With Respect to South Sudan (EO 13664)
  25. May 12, 2014: Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic (EO 13667)
  26. Mar 8, 2015: Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela (EO 13692)
  27. Apr 1, 2015: Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities (EO 13694)
  28. Nov 22, 2015: Blocking Property of Certain Persons Contributing to the Situation in Burundi (EO 13712)
  29. Dec 20, 2017: Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption (EO13818)
  30. Sep 12, 2018: Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election (EO 13848)
  31. Nov 27, 2018: Blocking Property of Certain Persons Contributing to the Situation in Nicaragua (EO 13851)

…and since the National Emergencies Act went into effect in the mid-1970s, a total of 58 have been declared, most of which were in regard to foreign issues (like the War in Iraq).

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://www.infowars.com/founders-did-not-want-a-king-democrats-vote-unanimously-to-overturn-trump-border-emergency-plan/

The Birth of a Monster

The Federal Reserve’s doors have been open for “business” for one hundred years.

In explaining the creation of this money-making machine (pun intended — the Fed remits nearly $100 bn. in profits each year to Congress) most people fall into one of two camps.

Those inclined to view the Fed as a helpful institution, fostering financial stability in a world of error-prone capitalists, explain the creation of the Fed as a natural and healthy outgrowth of the troubled National Banking System. How helpful the Fed has been is questionable at best, and in a recent book edited by Joe Salerno and me — The Fed at One Hundred — various contributors outline many (though by no means all) of the Fed’s shortcomings over the past century.

Others, mostly those with a skeptical view of the Fed, treat its creation as an exercise in secretive government meddling (as in G. Edward Griffin’s The Creature from Jekyll Island) or crony capitalism run amok (as in Murray Rothbard’s The Case Against the Fed).

In my own chapter in The Fed at One Hundred I find sympathies with both groups (you can download the chapter pdf here). The actual creation of the Fed is a tragically beautiful case study in closed-door Congressional deals and big banking’s ultimate victory over the American public. Neither of these facts emerged from nowhere, however. The fateful events that transpired in 1910 on Jekyll Island were the evolutionary outcome of over fifty years of government meddling in money. As such, the Fed is a natural (though terribly unfortunate) outgrowth of an ever more flawed and repressive monetary system.

Before the Fed

Allow me to give a brief reverse biographical sketch of the events leading up to the creation of a monster in 1914.

Unlike many controversial laws and policies of the American government — such as the Affordable Care Act, the Troubled Asset Relief Program, or the War on Terror — the Federal Reserve Act passed with very little public outcry. Also strange for an industry effectively cartelized, the banking establishment welcomed the Fed with open arms. What gives?

By the early twentieth century, America’s banking system was in a shambles. Fractional-reserve banks faced with “runs” (which didn’t have to be runs with the pandemonium that usually accompanies them, but rather just banks having insufficient cash to meet daily withdrawal requests) frequently suspended cash redemptions or issued claims to “clearinghouse certificates.” These certificates were a money substitute making use of the whole banking system’s reserves held by large clearinghouses.

Both of these “solutions” to the common bank run were illegal as they allowed a bank to redefine the terms of the original deposit contract. This fact notwithstanding, the US government turned a blind eye as the alternative (widespread bank failures) was perceived to be far worse.

The creation of the Fed, the ensuing centralization of reserves, and the creation of a more elastic money supply was welcomed by the government as a way to eliminate those pesky and illegal (yet permitted) banking activities of redemption suspensions and the issuance of clearinghouse certificates. The Fed returned legitimacy to the laws of the land. That is, it addressed the government’s fear that non-enforcement of a law would raise broader questions about the general rule of law.

The Fed provided a quick fix to depositors by reducing cases of suspensions of their accounts. And the banking industry saw the Fed as a way to serve clients better without incurring a cost (fewer bank runs) and at the same time coordinate their activities to expand credit in unison and maximize their own profits.

In short, the Federal Reserve Act had a solution for everyone.

Taking a central role in this story are the private clearinghouses which provided for many of the Fed’s roles before 1914. Indeed, America’s private clearinghouses were viewed as having as many powers as European central banks of the day, and the creation of the Fed was really just an effort to make the illegal practices of the clearinghouses legal by government institutionalization.

Why Did Clearinghouses Have So Much Power?

Throughout the late nineteenth century, clearinghouses used each new banking crisis to introduce a new type of policy, bringing them ever closer in appearance to a central bank. I wouldn’t go so far as to say these are examples of power grabs by the clearinghouses, but rather rational responses to fundamental problems in a troubled American banking system.

When bank runs occurred, the clearinghouse certificate came into use, first in 1857, but confined to the interbank market to economize on reserves. Transactions could be cleared in specie, but lacking sufficient reserves, a troubled bank could make use of the certificates. These certificates were jointly guaranteed by all banks in the clearinghouse system through their pooled reserves. This joint guarantee was welcomed by unstable banks with poor reserve positions, and imposed a cost on more prudently managed banks (as is the case today with deposit insurance). A prudent bank could complain, but if it wanted to use a clearinghouse’s services and reap the cost advantages it had to comply with the reserve-pooling policy.

As the magnitude of the banking crisis intensified, clearinghouses started permitting banks to issue the certificates directly to the public (starting with the Panic of 1873) to further stymie reserve drains. (These issues to the general public amounted to illegal money substitutes, though they were tolerated, as noted above.)

Fractional-Reserve Free Banking and Bust

The year 1857 is a somewhat strange one for these clearinghouse certificates to make their first appearance. It was, after all, a full twenty years into America’s experiment with fractional-reserve free banking. This banking system was able to function stably, especially compared to more regulated periods or central banking regimes. However, the dislocation between deposit and lending activities set in motion a credit-fueled boom that culminated in the Panic of 1857.

This boom and panic has all the makings of an Austrian business cycle. Banks overextended themselves to finance the booming industries during America’s westward advance, primarily the railways. Land speculation was rampant. As realized profits came in under expectations, investors got skittish and withdrew money from banks. Troubled banks turned to the recently established New York Clearing House to promote stability. Certain rights were voluntarily abrogated in return for a guarantee on their solvency.

The original sin of the free-banking period was its fractional-reserve foundation. Without the ability to fund lending activity with their deposit base, banks never would have financed the boom to the extent that it became a destabilizing factor. Westward expansion and investment would still have occurred, though it would have occurred in a sustainable way funded through equity investments and loans. (These types of financing were used, though as is the case today, this occurred less than would be the case given the fractional-reserve banking system’s essentially cost-free funding source: the deposit base.)

In conclusion, the Fed was not birthed from nothing in 1913. The monster was the natural outgrowth of an increasingly troubled banking system. In searching for the original problem that set in motion the events culminating in the creation of the Fed, one must draw attention to the Panic of 1857 as the spark that set in motion ever more destabilizing policies. The Panic itself is a textbook example of an Austrian business cycle, caused by the lending activities of fractional-reserve banks. This original sin of the banking system concluded with the birth of a monster in 1914: The Federal Reserve.

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://www.infowars.com/the-birth-of-a-monster/

Labor Unions Fear ‘Green New Deal’ a Job Killer

Labor unions say they are withholding support for a Green New Deal unveiled by Democrats last week to transition the American economy away from fossil fuels, arguing the loosely-defined plan could kill jobs if its architects aren’t careful.

The cool response from unions underscores the challenge facing Democratic presidential hopefuls who support aggressive action on climate change but must also win back the blue-collar voters that swept President Donald Trump to victory in 2016.

Erik McGregor/Pacific Press/LightRocket via Getty Images

The Green New Deal is a non-binding Congressional resolution introduced by Representative Alexandria Ocasio-Cortez and Senator Edward Markey that would legislate government-led investment in clean energy infrastructure with the goal of making America carbon neutral within a decade.

Read more

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://www.infowars.com/labor-unions-fear-green-new-deal-a-job-killer/

A Quarter of French Believe ‘Elites’ Using Mass Migration to ‘Replace’ Native Europeans

A study claims that up to a quarter of the French population not only believe in a conspiracy of “elites” but also think those same elites are using mass migration to replace European populations.

The study, released by Jean-Jaurès Foundation and Conspiracy Watch, is the second of its kind and looks at the extent to which the French believe in various so-called conspiracy theories.

The study found that 27 per cent of French believe in an “Illuminati” of elites who control the population while one quarter say they believe in the theory of the “Great Replacement,”Le Point reports.

The theory of the Great Replacement was coined by French writer Renaud Camus and encompasses several subjects under the broad scope of interchangeability and exchangeability, from goods and services to people themselves.

Mr Camus spoke to Breitbart London at the beginning of the Yellow Vest protests, which have continued for the past 12 weeks, and claimed much of the origins of the movement lie in his theory.

Read more

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://www.infowars.com/a-quarter-of-french-believe-elites-using-mass-migration-to-replace-native-europeans/

A correlation found between psychiatric disorders and events during the prenatal stage

Particular genetic variants in the human genome that are important for the development of the brain early in the life of the foetus are frequently found in psychiatric disorders. This is shown by a study carried out by iPSYCH.

Researchers studied a total of 8 million genetic variants and found that some of them occur particularly often in people who have one of more of the following psychiatric disorders: schizophrenia, depression, bipolar disorder, autism and ADHD.

This background is provided by Professor Thomas Werge from the Mental Health Services & University of Copenhagen and the Lundbeck Foundation’s Initiative for Integrated Psychiatric Research, commonly referred to as iPSYCH, which has received a total of DKK 361 million in funding from the Lundbeck Foundation. He explains:

“When we take a closer look at these genetic variants, one of the things we can ascertain is that they are tied to genes that are active in connection with the establishing of synapses in the brain during the prenatal stage—that is to say, the formation of the wiring that runs from nerve cell to nerve cell. And this means that the causes of mental disorders may actually originate all the way back from the point during pregnancy when the brain of the foetus was being formed.”

Thomas Werge headed the study, which has just been published in the scientific journal Nature Neuroscience. The Danish contribution involved researchers from Aarhus University, Statens Serum Institut (SSI) and the Technical University of Denmark. Researchers from Australia, Switzerland and USA also took part.

Enormous battery of blood tests

Researchers who study psychiatric disorders have long held an assumption that across psychiatric diagnoses, there will be common characteristics in the form of specific genetic variants. This assumption also builds on the fact that a range of psychiatric disorders can often be seen to appear at the same time—both in families and individuals.

Whether or not this is the case has been tested in a range of studies, but never in a way that actually involves an entire population, explains Thomas Werge: “And that is exactly what we have done, because we have looked at a whole population in Denmark. By doing things in this way, you can achieve the highest possible degree of statistical certainty, as it’s now possible to exclude a long list of biases and thus chance findings, which have to do with factors such as the selection of material for the study. At the same time, we get a very detailed picture of all the forms of mental disorders that can affect a person.”

The study behind the article in Nature Neuroscience is based on the that are taken from nearly all newborn babies in Denmark with parental consent. These heel prick samples, or PKU tests as they are known, are accessible for research work, but only in anonymised form.

The PKU archive is the only one of its kind in the world and by looking at the DNA profiles from all samples taken during the period between 1980 and 2005, Thomas Werge and his colleagues were able to carry out a unique study:

The samples were correlated with the Danish healthcare system’s CPR (civil registration number) registrations, which is to say that the database behind the individual PKU samples—in addition to containing the DNA of the person in question—would also contain in anonymised form much of the of the same person that is stored in the Danish public healthcare system, including information on psychiatric diagnoses.

“In 2012, when we looked at the registers holding detailed information on all of the PKU samples taken in the period 1980-2005—approximately 1.5 million in total—we could see that 46,000 people from this group had, during that time, received one or more major psychiatric diagnoses. We then compared their DNA with the DNA from a sufficiently large number of persons in the register who had not received a psychiatric diagnosis,” says Professor Thomas Werge.

A question of vulnerability

What do these discoveries mean? Is it the case that the genetic variants in the study that were shown to appear especially frequently in people diagnosed with one of the five major will necessarily trigger the disease?

“No, it’s not that simple,” says Professor Thomas Werge. “But knowledge of specific predisposing processes enables us to carry out a qualified search for matching environmental factors that are active in the same time period during foetal brain development, and that may make particularly vulnerable people ill, but have little effect on less liable individuals.”

Andrew Schork from iPSYCH says, “Our study shows that the foundation for both early and late-stage mental disorders is in part located in the foetal stage; that is to say, very, very early in life, and long before the present clinically.”

According to Thomas Werge, it ought to be possible to utilise knowledge of the correlation between mental vulnerability and genetics in preventative contexts: “Hopefully, this knowledge can help us to identify damaging or protective environmental factors enabling us to provide improved guideline on dos and don’ts during pregnancy.

More information: Andrew J. Schork et al. A genome-wide association study of shared risk across psychiatric disorders implicates gene regulation during fetal neurodevelopment, Nature Neuroscience(2019). DOI: 10.1038/s41593-018-0320-0

Provided by: Aarhus University

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://medicalxpress.com/news/2019-02-psychiatric-disorders-events-prenatal-stage.html

Lasers could beam messages directly to a listener’s ear ‘like whispering secret from afar’

This is the first time this technique has been used safely around humans, scientists say.

It’s hoped the directed sounds could one day be used for headphone-free TV watching without disturbing others.

Or they could warn people of danger discreetly in situations like an active shooter attack.

The laser will not cause burns to eyes or skin due to scientists finding the exact wavelength level that allows it to be risk-free.

Researchers tested out the setup on themselves in a laboratory, putting their ears near the beam to pick up the sound, reported Science News.

Physicist Charles Wynn said: “You move your head around, and there’s a couple-inch zone where you go ‘Oh, there it is!’… It’s pretty cool.”

Microphones were also used to capture the sounds that were being produced.

WHISPERING FROM AFAR

The photoacoustic effect, in which pulses of light are converted into sound when absorbed by a material, allows the unprecedented phenomenon to take place.

Researchers tested out two different techniques in order to achieve the sounds.

The first technique involves rapidly ramping the intensity of the laser beam up and down, which transmitted voices and songs.

Physicist Ryan Sullenberger said: “You can hear the music really well; you can understand what people are saying.”

The second method involved using a rotating mirror while researchers swept the laser beam in an arc.

The noise was heard only at the distance along the beam where the light passed by at the speed of sound.

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://www.thesun.co.uk/tech/8335749/lasers-could-beam-messages-directly-to-a-listeners-ear-like-whispering-secret-from-afar-scientists-say/

The Economic Argument for a Carbon Tax Is a Work of Fiction

We live in strange times indeed when an environmental reporter for The New York Times writes that we should stop pushing for a carbon tax, just a few weeks before dozens of distinguished economists sign a letter to the Wall Street Journal calling for a carbon tax.

Yet despite the prestige behind the impressive list of signers, the economists mislead the American public on several key points.

Specifically, there is quite open hostility on the progressive Left to merely a carbon tax—for example as is spelled out in the “Green New Deal” that has attracted so much attention. It is thus very dangerous for these economists to tell the public that a carbon tax would promote economic growth by eliminating unnecessary regulation. Furthermore, there is no discussion of just how severely economic growth would be limited, even if the carbon tax receipts were refunded dollar-for-dollar (which of course they won’t be). The talk about average families receiving more back in dividends than they pay out in higher energy prices is extremely misleading, and could only be true if the scheme fails in its ostensible goal of drastically cutting emissions. Finally, the attempt to maintain American competitiveness with a “border adjustment” would simply ensure that the program was symbolic and did little to slow global carbon dioxide emissions.

No, a Revenue-Neutral Carbon Tax Deal to Replace Regulations Is Not Going to Happen

The letter is composed of five separate principles upon which the distinguished economists agree. Here are two of them:

II. A carbon tax should increase every year until emissions reductions goals are met and be revenue neutral to avoid debates over the size of government. A consistently rising carbon price will encourage technological innovation and large-scale infrastructure development. It will also accelerate the diffusion of carbon-efficient goods and services.

III. A sufficiently robust and gradually rising carbon tax will replace the need for various carbon regulations that are less efficient. Substituting a price signal for cumbersome regulations will promote economic growth and provide the regulatory certainty companies need for long- term investment in clean-energy alternatives.

Yes, it is certainly true that if the federal government institutes a carbon tax, then it would be better to keep it revenue neutral, and to also scrap the existing regulations on the energy and transportation sectors that are ostensibly in place to limit greenhouse gas emissions.

However, those observations don’t prove that it’s a good idea to go down this route in the first place, or that these “if, then” statements have any practical relevance. It is extremely naïve for these economists—many of whom are quite familiar with the Public Choice school, and are usually quite skeptical of “government solutions” to social problems—to lead the public to believe that either of these outcomes will occur. Does anyone really believe that in this political climate, with a massive federal debt that is projected to grow by more than a trillion dollars next year, that the federal government will install a gigantic new tax and not touch any of the incoming receipts? (Keep in mind, even if the government didn’t engage in any new spending, but instead used just some of the new carbon tax receipts to partially offset the budget deficit, then that would still constitute a net tax increase, and would not be revenue neutral.)

Regarding the regulations, such as the Renewable Fuel Standard (RFS), CAFE mandates requiring ever higher fuel efficiency in our vehicles, and the so-called “Clean Power Plan” which punishes coal-fired power plants: Yes, I agree wholeheartedly that these are absurdly inefficient regulations, even if we stipulate the basic climate change externality framework. But these economists should ask themselves: If these regulations are so inefficient, then why do they exist in the first place? The answer, of course, is that they are there for political reasons, not because they passed a legitimate cost-benefit test.

My concerns aren’t merely hypothetical. We have popular progressive outlets like Vox saying for years that a carbon tax won’t be enough, and the draft text calling for a “Green New Deal” is quite explicit that it will take a carbon tax plus regulation and plus massive “green” federal investment programs in order to cope with climate change.

Furthermore, voters in Washington State have twice rejected carbon tax ballot proposals, with the version in 2016 being a carbon-fee-and-rebate plan that was explicitly designed by an environmental economist. In Australia the carbon tax has been a political football. Even in “civilized” Canada, the carbon tax is a very contentious issue, with certain provinces rejecting the idea and the federal government foisting it upon them. Finally, the last time I saw Paris, it was reeling from grassroots opposition to a carbon tax affecting fuel prices.

Indeed, in contrast to the economists in the Wall Street Journal’s claim that “bipartisan support” exists for the carbon tax, here is what Paul Krugman (who is also a Nobel laureate) said recently in the New York Times: “[C]laims that a carbon tax high enough to make a meaningful difference would attract significant bipartisan support are a fantasy at best, a fossil-fuel-industry ploy to avoid major action at worst.”

A U.S. Carbon Tax (With Border Adjustments) Will Not Solve the Problem

As usual, proponents of a carbon tax engage in a “shell game” as Oren Cass called it. In this case, the WSJ letter tries to save the planet while sparing U.S. jobs:

IV. To prevent carbon leakage and to protect U.S. competitiveness, a border carbon adjustment system should be established. This system would enhance the competitiveness of American firms that are more energy-efficient than their global competitors. It would also create an incentive for other nations to adopt similar carbon pricing.

Here’s what’s going on in principle IV, quoted above: If the U.S. government enacts a stiff (and rising) carbon tax on American industry, it will raise the prices of American-made goods. If foreign imports from countries without a carbon tax were allowed in, they would undercut American products. Not only would this hurt American-based firms, but it would perversely shift production to other countries where emissions are higher (per unit of output) than they are in the U.S., even before the implementation of a carbon tax. (This is the problem of “leakage.”)

In order to stop leakage and maintain U.S. competitiveness, therefore, the WSJ letter calls for a border adjustment, where a special tax is added to any imports coming from countries that lack a carbon tax, and where U.S. exports entitle the American producers to a refund, so that they can still compete in the global market without being hobbled by a unilateral U.S. carbon tax.

A border tax adjustment can indeed partially cushion the blow from a U.S. carbon tax, but it does so by limiting its applicability. In particular, U.S. firms are still allowed to produce and sell to foreigners without taking account of the greenhouse gas emissions involved. Furthermore, most (perhaps all) of the economists signing the WSJ letter are fierce critics of President Trump’s moves on international trade. It seems odd then that they would so cheerfully embrace a proposal that would involve massive new taxes to be levied at the border on imports, especially when there could be all sorts of “regulatory arbitrage” in which multinational corporations rearranged their production chains in order to exploit imperfections in the border adjustment rules.

No, American Families Won’t Benefit Financially From Getting Some of Their Money Back

One of the most misleading claims in the WSJ letter is the final plank:

V. To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.

On this one, it’s hard to know where to begin. First, let’s assume for the sake of argument that the WSJ letter is accurately describing the situation. It is telling Americans that only a small segment of the population—“the rich”—have above-average emissions, and so they will be the ones to pay out on net, once we take into account the “carbon dividends” funded by the new tax.

Even on these terms, it is odd to see so many economists—several of whom are considered politically conservative—embrace the claim that a new tax is “fair” if it redistributes hundreds of billions of dollars from a small segment of the population to everybody else. Suppose instead the government levied a one-time surtax of 50% on everybody’s checking account balances, and then sent the money raised in equal lump-sum installments to every citizen. Under that scenario, the “majority of American families” would “benefit financially” too, but how many of these Nobel-winning economists call it fair?

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In any event, the claim is extremely misleading. Remember, the whole point of doing this—so we are told—is to drastically cut U.S. emissions of carbon dioxide. If households and businesses completely revamp their operations in order to reduce their carbon footprint, then they won’t be paying taxes on those avoided emissions. The government can’t send out lump-sum checks with money it hasn’t collected.

I have written on this issue before, with different types of examples to explain the situation to the reader. For our purposes here, let me try this approach: Suppose the economy consists of 90 poor people and 10 rich people. Originally, each poor person emits 10 tons of carbon dioxide per year, while each rich person emits 20. The government institutes a stiff new carbon tax of $100 per ton, leading everybody to cut emissions in half.

When the dust settles, each poor person emits 5 tons of CO2, on which he or she pays 5 x $100 = $500 in annual carbon tax. Similarly, now that the stiff tax is in place, each rich person emits only 10 tons, on which he or she pays 10 x $100 = $1,000. Put the money from the 90 poor people and the 10 rich people into one giant pot, and you have (90 x $500) + (10 x $1,000) = $55,000 in total carbon tax receipts. The government thus mails out lump sum checks of ($55,000 / 100) = $550 to each person in this hypothetical community.

Now in this setting, the rich people are clearly hurt: Each one faces much higher prices on goods and services, and must explicitly pay out $450 in net carbon taxes. (Each rich person pays in $1,000 and gets a rebate of $550). The poor people, on the other hand, might seem to be ahead: Each one only explicitly paid out $500 in carbon taxes, while receiving a lump-sum rebate of $550. What’s happening is that the explicit losses of $450 per rich person adds up to $4,500 (because there are ten total rich people in this example), which is then used to send a net $50 to each of the 90 poor people. Because there are more poor people than rich people, the explicit losses of the rich group are spread out and diluted when they’re redistributed among the whole society.

However, simply following the dollars around is not the full pain caused by our hypothetical carbon tax. Everybody suffers from a lower standard of living. For example, with a $100 per ton carbon tax, according to this online calculator, gasoline prices rise 44 percent, natural gas prices rise 124 percent, and home heating fuel rises 56 percent. And if we consider coal prices, they would rise a whopping 660 percent—which would of course completely knock out coal as a viable energy source, even though it currently provides almost 30 percent of U.S. electricity.

And these obvious jumps in fuel prices (which are calculated based on the chemistry of their carbon content) would spill over into everything you buy. Imagine how much more it will cost to have goods shipped via Amazon, or how much more fruit in the store would cost, when gas and diesel prices rise so much.

This is the way to think about the much-ballyhooed “dividends” that our WSJ letter writers are promising to American households. Right now, would you, the reader, agree to a deal that raised prices by the percentages I outlined above, even if you got an extra annual check for $550 to help compensate you? In this framework, would the extra $50 per year you’re effectively skimming off the rich guy down the street really make you whole?

To repeat, part of what’s going on in the numerical example is that the stiff carbon tax is causing people to reduce their use of carbon-intensive goods and services. To the extent that it is successful, a carbon tax causes people to avoid paying the carbon tax. When economists discuss the society-wide burden or compliance cost of a tax, the issue is not the flow of dollars into the Treasury, but rather it comes from changing patterns of behavior that are less efficient than the status quo.

Now of course, the economists who signed the Wall Street Journal letter would reply that these large economic compliance costs would be more than matched by the environmental benefits of reduced emissions. But if they want to tell Americans that the carbon tax will reduce their material lifestyle, in exchange for less climate change, then they should do so openly.

Before leaving this section, let me try one last attempt to get the reader to see the sleight-of-hand that these economists are pulling here. Suppose that President Trump had his protectionist economic adviser, Peter Navarro (who has a PhD in economics from Harvard, by the way), announce a new tariff of 100% on all Chinese imports, but that the proceeds from this new tax would be sent lump-sum to every American citizen. Would the economists who signed the WSJ letter then agree that “most American families” would benefit financially from the tariff? I mean after all, rich people tend to spend more dollars (in absolute terms) on imported goods than poor people do, so the statement would be correct. And yet, of course none of the WSJ letter signers would endorse such a plan. They would (rightly) warn Americans that such a large tariff would disrupt production decisions and lower just about everybody’s standard of living. The fact that these economists are adopting a completely novel talking point to sell a carbon tax should make Americans quite suspicious.

Conclusion

Dozens of heavy-hitting economists have sent a letter to the WSJ, praising a bipartisan revenue-neutral carbon tax that halts climate change, eliminates inefficient government regulations, and makes most families richer. It would be more fitting for Nobel laureates in literature to pen such a plea, because it’s based entirely in fiction.

As many of these same economists recognize in their other work, there are institutional reasons that government wastes money and produces counterproductive regulations. The only way the “border adjustments” and rebate checks will actually limit the economic fallout from a new carbon tax, is if the scheme fails in its ostensible purpose of sharply curtailing emissions. The simple fact is that rapidly reducing U.S. emissions through a massive new tax is going to have huge economic consequences. If some economists think that this cost is worth it, they should make the case plainly to the public and policymakers, rather than engaging in misleading talk about dividend checks.

FOLLOW THE LINK FOR THE FULL REPORT – JR

https://www.infowars.com/the-economic-argument-for-a-carbon-tax-is-a-work-of-fiction/