President Joe Biden issued a surprisingly blunt response when asked in a CBS “60 Minutes” interview what the US reaction would be if China decided to invade Taiwan.
Biden answered “yes” when asked whether American forces would defend the self-ruled island if it came under Chinese military invasion. “Yes, if, in fact, there was an unprecedented attack,” he said in a sit-down with Scott Pelley, which aired in full Sunday night.
However, Biden was quick to reiterate that the US maintains a “One China” policy and doesn’t currently support Taiwan’s political independence. But he was asked again to clarify if, unlike in Ukraine, the US military would intervene directly in the event of a Chinese invasion, to which the president replied: “Yes.”
The EU Commission presented an energy crisis emergency plan this week.
The plan includes a windfall tax and a framework on capping energy prices in EU member states.
The $140 billion windfall tax plan could slow down investment in both oil and gas and renewables.
This week saw the European Commission’s President Ursula von der Leyen do something that would have probably been considered the opposite of democracy just a few years ago. She proposed that governments impose a ceiling on certain energy producers’ revenues and add a windfall profit for Big Oil majors. Called “a solidarity contribution” or “a crisis contribution,” the windfall tax’s aim is the same as the aim of the revenue ceiling: manage energy costs in a runaway inflation environment and get some additional money to, according to the plan, distribute among those who most need it.
Like all grand plans, however, unintended consequences abound with this one, and one of the gravest is the discouragement of oil and gas investments at a time when global oil and gas investments are already lower than they should be in light of demand projections.
JP Morgan’s head of global energy strategy said it this week in an interview with Bloomberg.
“If you’re planning your capital budget, you have to think twice now that you have a new risk,” Malek told Bloomberg.
“It encourages majors to return cash to shareholders as they use that free cashflow that could have been used in investment.”
Per plans, the EU seeks to “raise” some $140 billion from windfall taxes on non-gas electricity generators and oil gas, and coal companies for their “extraordinary record profits benefiting from war and on the back of consumers,” to quote Von der Leyen.
However, monetary policy interventions introduce other distortions into the economy which can have severe economic consequences, as illustrated by Japan’s lost decades after the Plaza Accord.
The recent hefty depreciation of the yen to a twenty-four-year low against the dollar has raised eyebrows due to the yen’s traditional safe haven role in times of turmoil, such as the war in Ukraine. The yen’s decline had already started when major central banks signaled a tightening of monetary policy to fight inflation while the Bank of Japan (BoJ) doubled down on its loose monetary policy and zero target for ten-year bond yields. The depreciation accelerated further when oil and gas prices surged, weakening Japan’s terms of trade.
Mainstream analysts got wary about the yen’s tumble and its negative impact on import prices and consumption, but recommended the BoJ to continue its ultraloose monetary policy in order to reflate the economy and support growth. What these analysts fail to grasp is that in a longer-term perspective, the yen’s value relative to other currencies is anchored in economic fundamentals driven by monetary developments and its purchasing power.
Since the sharp appreciation of the yen following the Plaza Accord in 1985, the currency has preserved its relative strength versus the dollar despite Japan’s ultraloose fiscal and monetary policies. This is because money creation has run at a slower pace in Japan than in the US, as the Plaza agreement ushered in Japan’s lost decades, illustrating well how disruptive government interventions in foreign exchange markets can be.
The Plaza Accord
For more than three decades, following its sudden appreciation as a result of the 1985 Plaza Accord (graph 1), the yen has followed a steady path versus the dollar. The Plaza agreement between G-5 countries—the United States, West Germany, France, Japan, and the United Kingdom—marked the first large experiment in international monetary cooperation to revalue the exchange rate system.
At the behest of the United States, which wanted to devalue the dollar and reduce the trade deficit, the five central banks agreed to intervene in currency markets to rebalance international trade and growth. The perceived overvaluation of the US dollar was the result of relatively high interest rates promoted by the Fed during 1980–82 to quell inflation, combined with Ronald Reagan’s expansionary fiscal policy during 1981–84, which caused capital inflows and an appreciation of the dollar.
High budget deficits together with buoyant domestic demand swelled the trade deficit, producing the famous 1980s “twin deficits.” In reality, the exchange rate was not the problem, but US fiscal profligacy and excessive money supply expansion, which exceeded 12 percent in 1983. Instead of fixing domestic policies, the US government talked Japan and Germany into manipulating their exchange rates and increasing domestic demand. As Ludwig von Mises put it so aptly: “What governments call international monetary cooperation is concerted action for the sake of credit expansion.”
Graph 1: Japanese yen to US dollar spot exchange rate
Following concerted interventions by central banks, the yen appreciated from about 240 units per dollar in September 1985 to 153 units in 1986. By 1988, the yen had almost doubled in value to an exchange rate of 120 units per dollar. Many analyses, including International Monetary Fund reports, concur that the significant government-driven appreciation of the yen sowed the seeds for Japan’s subsequent long-lasting economic debacle.
MARTHA’S VINEYARD, MA — Residents of upscale Martha’s Vineyard are in a panic after several buses dropped off illegal immigrants from Florida this week. One terrified resident reportedly called the authorities after seeing Hispanic males outside her home, not even operating a leaf blower or any other kind of gardening equipment.
“Hello, is this 911? Yes, there are brown-looking Latinx people outside my 20,000-square-foot seaside home, and they aren’t even carrying leaf blowers,” said a terrified Mavis McWhite to the dispatcher. “They aren’t even holding so much as a rake. They’re up to no good. I’m scared! Please send help!”
Early reports from one of the wealthiest zip codes on earth indicate that approximately 50 people from countries south of the equator are striking fear in the hearts of local oligarchs, movie stars, and millionaire politicians who reside there. “It was so inconsiderate for DeSantis to ship these dark-skinned people up to our neighborhood without the tools they need to maintain our multimillion-dollar properties,” said Town Councilmember Pam Karen-Cindy. “What else are they going to do all day? Just despicable.”
At publishing time, the Hispanic immigrants who currently work as landscapers and house servants in Martha’s Vineyard for minimum wage had organized a demonstration to protest the arrival of new Hispanic immigrants who will work for even cheaper.
We’ve learned that senior editor Kiera Butler is preparing a hit piece on Dr. Vinay Prasad, himself a political liberal, for questioning the safety of the “boosters”; Prasad has correctly noted that the so-called safety data consists of results on eight mice.
It’s hard to believe now, but not even one human lifetime ago the slogan “question authority” was associated with the left-liberal project.
That’s long gone, having been replaced by “shut up and obey.”
This more recent, more authoritarian approach is much more in line with historic progressivism, which began in the Progressive Era as an elitist movement that favored the management of society by a self-identified expert class, albeit concealed beneath a veneer of “democracy.”
So it should not surprise us that Mother Jones, a progressive publication, isn’t really so skeptical of authority or of big corporations after all. It’s now more or less an unpaid division of Pfizer.
We’ve learned that senior editor Kiera Butler is preparing a hit piece on Dr. Vinay Prasad, himself a political liberal, for questioning the safety of the “boosters”; Prasad has correctly noted that the so-called safety data consists of results on eight mice.
Butler sought comment from Stanford’s Jay Bhattacharya, whom I mention quite a bit in this newsletter. Jay has since reproduced her email, along with his answers.
So here’s Kiera Butler:
I’m writing about the bivalent vaccines, and I saw that you had retweeted Dr. Prasad’s video questioning their safety. I’m wondering if your past activism around opposing Covid protections — with the Brownstone Institute, Hillsdale College, and the Great Barrington Declaration — influenced your opinion on this at all? And I’m wondering if you think it’s fair to characterize your takes on Covid as contrarian?
Jay’s response:
(1) The FDA did not require any human clinical study before approving the bivalent ba4/5 booster, so I don’t have any opinion at all about their safety profile. I simply don’t know.
(2) The GBD was signed and supported by tens of thousands of scientists and doctors around the world. It is not a contrarian position, but represents the standard way of dealing with respiratory virus pandemics that the world has followed for a century until 2020.
(3) I am not paid by any of the organizations you mentioned and received $0 from them. My thoughts reflect my professional training in medicine, epidemiology, and health policy.
Let’s see how much of that winds up in Kiera’s Pfizer press release.
Sorry, article.
For people who really do question authority, I recommend being part of the incredible and smart community I’ve built around the Tom Woods Show. I am extremely proud of it, and would love to have you join us:
You just can’t go from 2.7 million burned acres in 2010 to 7.2 million burned acres in 2012 and then back to 3.9 million burned acres in 2019 and 3.7 million acres in 2020 and argue along with the Climate Howlers that the planet is angry.
To the contrary, the only real trend evident is that on a decadal basis during recent times that average forest fire acreage in California has been slowly rising, owing to the above described dismal failure of government forest management policies.
Editor’s Note: Below is part 2 of David Stockman’s article on the “climate crisis” and why governments are the real cause of the current economic issues.
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As it happens, the same story is true with respect to wildfires—the third category of natural disaster that the Climate Howlers have glommed onto. But in this case it’s bad forestry management, not man-made global warming, which has turned much of California into a dry wood fuel dump.
And don’t take our word for it. This comes from the George Soros funded Pro Publica, which is not exactly a right-wing tin foil hat outfit. It points out that environmentalists have so shackled Federal and state forest management agencies that today’s tiny “controlled burns” are but an infinitesimal fraction of what Mother Nature herself accomplished before the helping hand of today’s purportedly enlightened political authorities arrived on the scene:
“Academics believe that between 4.4 millionand 11.8 million acres burned each year in prehistoric California. Between 1982 and 1998, California’s agency land managers burned, on average, about 30,000 acres a year. Between 1999 and 2017, that number dropped to an annual 13,000 acres. The state passed a few new laws in 2018 designed to facilitate more intentional burning. But few are optimistic this, alone, will lead to significant change.
We live with a deathly backlog. In February 2020, Nature Sustainability published this terrifying conclusion: California would need to burn 20 million acres — an area about the size of Maine — to restabilize in terms of fire.”
In short, if you don’t clear and burn-out the deadwood, you build-up nature-defying tinder-boxes that then require only a lightning strike, a spark from an un-repaired power line or human carelessness to ignite into a raging inferno. As one 40-year conservationist and expert summarized,
“ …. There’s only one solution, the one we know yet still avoid. “We need to get good fire on the ground and whittle down some of that fuel load.”
In fact, a dramatically larger human footprint in the fire-prone shrub-lands and chaparral (dwarf trees) areas along the coasts increases the risk residents will start fires. California’s population nearly doubled from 1970 to 2020, from about 20 million people to 39.5 million people, and nearly all of the gain was in the coastal areas.
Under those conditions, California’s strong, naturally-occurring winds, which crest periodically, are the main culprit which fuels and spreads the human set blazes in the shrub-lands. The Diablo winds in the North and Santa Ana winds in the South can actually reach hurricane force. As wind moves West over California mountains and down toward the coast, it compresses, warms and intensifies. The winds blow flames and carry embers, spreading the fires quickly before they can be contained.
Among other proofs that industrialization and fossil fuels aren’t the culprit is the fact that researchers have shown that when California was occupied by indigenous communities, wildfires would burn up some 4.5 million acres a year. That’s nearly 6X the 2010-2019 period, when wildfires burned an average of just 775,000 acres annually in California.
Beyond the untoward clash of all of these natural forces of climate and ecology with misguided government forest and shrub-land husbandry policies, there is actually an even more dispositive smoking gun, as it were.
To wit, the Climate Howlers have not yet embraced the apparent absurdity that the planet’s purportedly rising temperatures have targeted the Blue State of California for special punishment. Yet when we look at the year-to-date data through August for forest fires we find, alas, that unlike California and Oregon, the US as a whole is now experiencing the weakest fire years since 2010.
That’s right. As of August 24 each year, the 10-year average burn has been 5.114 million acres across the US, but in 2020 it was 28% lower at 3.714 million acres.
Ideally, this all ends with a more secure, sovereign country. The Martha’s Vineyard transport serves to bring this debate right to the doorstep of the progressive elite, and it shines a light on the lack of sovereignty in America, due to our wide open southern border.
Rarely do you get an opportunity to do what is right, positively impact policy, and showcase hypocrisy in one fell swoop.
And that’s exactly what Florida Governor Ron DeSantis achieved Wednesday when the state sent some 50 Venezuelan immigrants, who I believe entered by way of Mexico, to Martha’s Vineyard.
The affluent Massachusetts summer colony serves as a popular destination spot for the progressive elite. The Obamas own a 12 million dollar waterfront estate on the island. The Clinton family are frequent visitors, along with Oprah, and countless globalists ideologues that claim a willingness to open up their homes to anyone and everyone.
As border states continue to be overrun by the influx of illegal immigrants, and the federal government implicitly encourages the continuation of the crisis, DeSantis was right to shake things up.
If the Biden Administration doesn’t want to address the problem, it’s time to bring the problem to the doorstep of its constituency.
Notably, not a soul on the island has opened up their homes to the Venezuelans. The town has gone as far as to label the continuing episode a “humanitarian crisis.”
While border states deal with the influx of tens of thousands of economic migrants on a regular basis, Martha’s Vineyard has declared a “humanitarian crisis” for 50 people.
And they can’t wait to get rid of them as soon as humanly possible.
MARTHA’S VINEYARD, MA — This week, Florida Governor Ron DeSantis flew 50 migrants to an affluent island in Massachusetts to highlight the struggles of border states whose resources are buckling amid soaring numbers of undocumented immigrants. Progressives have labeled the action as “cruel” and “heartless,” but when California governor Gavin Newsom volunteered asylum for the migrants in his own state, they declined the offer since they had only recently escaped a collapsing communist state without electricity.
“I don’t like bullies, and Florida governor Ron DeSantis is bullying these migrants by not welcoming them! We in California believe a nation of immigrants draws its strength from more immigrants – come to the sunshine state and we will house you, clothe you, and feed you.” Newsom spoke out in a video message from his home after the events of the week, pledging that there was “no limit” to how high he would tax other people to pay for the migrants’ livelihoods but also clarifying that he would not be able to help personally.
While the migrants have heard the message, they have already voiced their intent to avoid California to reporters, speaking out about the harrowing circumstances they had escaped: skyrocketing inflation, a demolished economy, and obvious corruption at the highest levels of government. The migrants say that California’s trash-littered sidewalks, water shortages, and electrical outages bear too much resemblance to the Venezuela they left behind for it to be a desirable destination.
One of Governor Newsom’s PACs, Robbing California Citizens To Fund Our Voter Base, has posted a press release condemning the migrants for the comparison. “To compare California to Venezuela is disingenuous, and these narrow-minded migrants should be ashamed. They come from a nation where business is stifled by overregulation and state interference, a one-party system has ruled for decades with a compliant state media to tout its success while cities burn, and citizens struggling to pay for gas, food, and other necessities – this is nothing like California. For this disrespect, we call for their immediate deportation to the ‘greener pastures’ of Florida that they seek so much, with plans for them to be re-imported for votes during election seasons.”
At publishing time, Newsom had reiterated his offer in a video at his $5 million home, gesturing to the plentiful electricity around him, but migrants have said that this reminds them too much of the opulence enjoyed by Chavez and then Maduro while they wreaked havoc on the nation.
MCViewPoint 
