West Ready To Court Terror Leader Jolani If Russian Military Pushed Out Of Syria

We reported earlier that Russia is in contact with Hayat Tahrir al-Sham (HTS) in Damascus over the future fate of the two Russian military bases on Syria's coast. The Tartous Naval Base remains Russia's only Mediterranean military port. And alongside Khmeimim Air Base, these are the only two major Russian military outposts outside of the former Soviet Union.

As expected, the West is pressuring the jihadist group under Abu Mohammed al-Jolani to ensure Russia's military is booted from the country. What's more is that European countries are using the question of Syria's continued economic isolation as leverage.

The newly installed Syrian leader Al-Julani

And the West is also dangling the terror designation in front of HTS. "Some European nations are considering making the expulsion of Russia’s military from Syria a precondition for lifting restrictions against the Islamist group now in control of most of the country, according to people familiar with the matter," The Straits Times reports.

The report comes as the Biden White House is also mulling the matter of whether to drop its formal terror designation against HTS, which began years ago as Al-Nusra Front, or Syrian al-Qaeda. 

The West seems to be saying that if HTS merely does what it wants, all can be 'forgiven'. Per the same report:

A debate is also underway about whether to make the delivery of longer-term aid to the war-ravaged nation conditional on Moscow vacating its two Syrian bases, said the people, who asked not to be identified discussing sensitive material. The talks are ongoing and a joint final decision has yet to be taken, they said. 

The conferring between countries is a sign of broader international support for the position taken by Dutch Foreign Minister Caspar Veldkamp, who said it would be “too early” to lift European Union sanctions against Hayat Tahrir Al-Sham, or HTS, which ousted former Syrian President Bashar al-Assad a little over a week ago. 

"We really would like to condition that on an inclusive political transition," Veldkamp also said. The West has been urging HTS to respect ethnic and religious minorities, given that it has been known to massacre and persecute Alawites, Christians, Druze, Shia, or anyone who is not an extremist Sunni.

The Dutch foreign minister emphasized, "I think it’s also important to look at conditionality regarding the Russian military bases in Syria." He's emphatic that "We want the Russians out."

The West is turning a blind eye to the ground reality that Syria will go from quasi-secular state under Baath rule to rapid hardline Islamization...

It is disgraceful for an institution like the U.N. to bow to the leader of HTS and require the women in this delegation to cover their hair. This represents a betrayal of women and sends a dangerous message that the U.N. is willing to legitimize the Islamization of the state. pic.twitter.com/VkWUoaCm0w

— Greco-Levantines World Wide (@GrecoLevantines) December 16, 2024

Thus it appears the West is lining up to court the terrorists in Damascus... or as we described earlier this is all about putting lipstick on a pig - at the end of which Jolani and HTS will be sold to the European and Americans as a "moderate". And for Europe, this arrangement will also help deal a blow to Russia related to the Ukraine war.

Tyler Durden Mon, 12/16/2024 - 22:10

The U.S. Must Fortify Itself Against Future Mineral Export Bans

Authored by Gregory Wischer, Morgan Bazilian & Jahara Matisek via RealClearDefense,

Last week, China imposed export bans on antimony, gallium, and germanium—all of which are listed on China’s dual-use export control list. Other minerals on the list and, thus, at risk of future bans include aluminum, magnesium, and zinc, among others. Beyond their economic importance, many of these minerals have military applications. For example, tungsten superalloys are used in military turbines and armor-piercing munitions, while bismuth is used in ammunition and alloys for defense.

With many minerals, the U.S. government can increase domestic mining, processing, and recycling to help mitigate future supply cutoffs from China. Of course, building and expanding domestic capacity will take time, significant capital, and appropriate government policies, but it can be done.

However, for some minerals—such as bismuth and tungsten—the United States simply lacks the mineral reserves, scrap, and substitutes to fill supply gaps from a Chinese export ban. For instance, China supplied over 60 percent of America’s bismuth consumption from 2019 to 2022, and the United States has not produced bismuth since 1997. The U.S. National Defense Stockpile also has no inventory of bismuth.

For such minerals, the U.S. government—in addition to seeking to boost domestic production—should both increase inventories in the National Defense Stockpile and sign right-of-first refusal (ROFR) offtake agreements with existing overseas mineral producers. Such steps will help buttress the United States against future export bans.

With stockpiling, the U.S. government should acquire minerals from domestic producers when possible but prioritize acquiring supply wherever it is available including from China. For instance, with both bismuth and tungsten, China is far and away the world’s largest producer: it produces 80 percent of the world’s bismuth and 81 percent of its tungsten.

The second policy is signing ROFR offtake agreements with existing overseas mineral producers for their uncontracted production. In ROFR agreements, the U.S. government would have the first right—but not the obligation—to purchase a certain volume of mineral production before it is offered to other buyers.

To secure ROFR offtake agreements, the U.S. government could invest in overseas mineral projects or expansions. Already, the U.S. government has invested (through an intermediary) in two overseas mineral projects: a nickel-cobalt mine in Brazil and a rare earth processing project in South Africa.

While ROFR offtake agreements are common with prospective mineral producers, the timeline for commissioning new production is lengthy and often jeopardized by technical (e.g., ramp-up issues) and jurisdictional (e.g., regulations) risks. Moreover, ROFR offtake agreements for future mineral production cannot supply minerals if China imposes export bans with immediate effect. Having ROFR offtake agreements for existing production could immediately help fill supply gaps caused by adversarial export bans.

The U.S. government should prioritize signing ROFR offtake agreements with firms operating in allied and partner countries, such as Australia, Canada, Japan, and South Korea. The U.S. government should also prioritize inking agreements in countries least likely to face disruptions from a possible U.S.-China conflict in the western Pacific.

For example, Australia and Austria produce about the same volume of tungsten, yet because shipping across the Atlantic Ocean would be more secure than shipping across the Pacific Ocean in a U.S.-China conflict, the U.S. government should first prioritize agreements for tungsten with Austria over Australia. In other cases, avoiding the western Pacific is not possible. For instance, Japan and South Korea are highly exposed to a U.S.-China conflict over Taiwan, but they are the only major bismuth producers that are U.S. allies.

Demonstrating tungsten’s importance for the U.S. military, U.S. tungsten imports spiked during World War I, World War II, and the Korean War, and U.S. imports would likely spike again in a potential conflict against China. The U.S. government would be well-served in pre-emptively securing these imports and similarly important war minerals through ROFR offtake agreements.

Controlling the overseas supply of these military minerals can have direct combat implications, too. The Tungsten Institute writes, “Before World War II was started, Germany had bought up virtually the entire world supply of off-grade tungsten ore.” This tungsten proved critical in Germany’s nearly successful North Africa campaign: German tanks used armor-piercing munitions with tungsten carbide cores with dangerous effects against British tanks.

China’s recent mineral export ban is yet another wake-up call for the U.S. government to reduce America’s reliance on China for critical minerals. For many minerals, the United States can indeed rely on domestic resources to offset future mineral cutoffs from China, but for other minerals, it cannot—it must depend on foreign actors. In such cases, the U.S. government should preemptively stockpile and sign ROFR offtake agreements with overseas mineral producers. These proactive steps will help fortify the United States against future mineral export bans.

Gregory Wischer is a fellow at the Payne Institute for Public Policy at the Colorado School of Mines.

Morgan Bazilian is the director of the Payne Institute for Public Policy at the Colorado School of Mines.

Lt Col Jahara “Franky” Matisek is a military professor in the National Security Affairs department at the U.S. Naval War College and fellow at the Payne Institute for Public Policy. The views expressed in this article are his own.

Tyler Durden Mon, 12/16/2024 - 21:45

Two Homeland Security Agents Sold Drugs Previously Seized As Evidence For Up To $300,000

It's another one of those "do as I say, not as a do" examples that continue to emerge during President Biden's administration...

This time, it was two Homeland Security agents in Utah, who allegedly sold seized drugs through an informant, earning up to $300,000 per to court documents and according to Yahoo Finance.

According to an FBI affidavit, the agents sold “bath salts” to the informant weekly from spring to December, with each ounce sold for $5,000 and resold at a higher price.

The informant, recruited by federal agents while in prison, was initially tasked with legitimate controlled buys. However, the affidavit claims the agents also pressured him into illegal drug sales.

Yahoo reported that Homeland Security Agent David Cole was arrested in Salt Lake City on Friday and charged in federal court with conspiracy to distribute a controlled substance. During a Monday hearing, a judge ordered him detained. If convicted, Cole faces a potential prison sentence of 10 years or more.

Court documents also implicate a second agent, identified as “Person A,” in selling drugs to the informant, though it’s unclear if charges will follow. Cole’s attorney, Alexander Ramos, declined to comment on the allegations, citing ongoing case review.

Ramos commented: “Dave has many years of service to his community as an outstanding agent with HSI and holds a great reputation among the federal law enforcement community.”

Searches of the agents' homes, vehicles, phones, and workspaces uncovered over $67,000 in cash, suspected bath salts, and other evidence, according to the affidavit.

FBI Special Agent Tristan Hall commented: “Based on an average of one or two drug buys per week, involving 25 grams of bath salts and the amount of $5,000 each buy, it is estimated that Cole and Person A have profited approximately $150,000 to $300,000 in illegal proceeds.”

The investigation began after the informant’s attorney reported that two Homeland Security agents had coerced him into illegal activities, the report says. 

The informant, cooperating with the FBI for money and personal safety, alleged the agents sold him drugs seized as evidence, meeting in public locations like Panera Bread and Shake Shack. Details were confirmed through surveillance, and while the agents’ credentials were suspended, they remain employed.

Tyler Durden Mon, 12/16/2024 - 21:20

Trump Says Assad's Ouster In Syria Was An 'Unfriendly Takeover' By Turkey

In a wide-ranging question and answer session from the press, President-elect Donald Trump speculated over what was behind the collapse of Syria and the fall of President Bashar al-Assad.

He said the jihadist rebel victory in Syria was really an 'unfriendly takeover' by Turkey. The explanation he gave at first generated headlines which made it appear he was condemning and lashing out at Turkish action; however, the full comments were a bit more sympathetic and deferential to Erdogan and to Turkey.

Getty Images

In the comments he hailed Turkey's regional role as a major power and his personal ties with President Erdogan.

"Turkey is a major force, by the way, and Erdogan is somebody I got along with great but he has a major military force. And he has not been worn out with war," Trump told reporters at the briefing held at Mar-a-Lago estate. "He's built a very strong, powerful army" - he said in reference to Erdogan.

"[Erdogan] is a very smart guy and very tough, but Turkey did an unfriendly takeover without a lot of lives being lost. I can say that Assad was a butcher here what he did to children.”

Trump also explained that "Turkey is the one behind it" and stressed "They wanted it for 1000s of years, and he got it, and those people that went in are controlled by Turkey, and that's okay. It's another way to but no, I don't think that."

He said that while "nobody knows" the future of post-Assad Syria, he still thinks "Turkey is going to hold the key to" the nation. "Actually, I don't think you've heard that from anybody else, but I've been pretty good at predicting," Trump followed with, but without saying whether he will eventually pull US forces out of Syria.

Turkey’s leader of the opposition believes Israel and US have reached an agreement to topple Assad by sending HTS to Damascus.

“They agreed that the army would not resist, the prime minister would surrender, and Assad would say he resigned and flee as planned.” pic.twitter.com/BhBLs3vKY6

— Ragıp Soylu (@ragipsoylu) December 16, 2024

The presence of US forces in Deir Ezzor and Hasakeh regions has frequently outraged Turkey, especially given US troops are training and arming Syrian Kurdish YGP forces (which form the core of the Syrian Democratic Forces, or SDF). But Ankara views this group as but an extension of the outlawed PKK.

Tyler Durden Mon, 12/16/2024 - 20:30

Autonomous AI Poses Existential Threat - And It's Almost Here: Former Google CEO

Authored by Joseph Lord via The Epoch Times (emphasis ours),

Former Google CEO Eric Schmidt said that autonomous artificial intelligence (AI) is coming—and that it could pose an existential threat to humanity.

Google Executive Chairman Eric Schmidt testifies before the Senate Judiciary Committee's Antitrust, Competition Policy and Consumer Rights Subcommittee on Capitol Hill, in Washington, D.C., on Sept. 21, 2011. Chip Somodevilla/Getty Images

“We’re soon going to be able to have computers running on their own, deciding what they want to do,” Schmidt, who has long raised alarm about both the dangers and the benefits AI poses to humanity, said during a Dec. 15 appearance on ABC’s “This Week.”

“That’s a dangerous point: When the system can self improve, we need to seriously think about unplugging it,” Schmidt said.

Schmidt is far from the first tech leader to raise these concerns.

The rise of consumer AI products like ChatGPT has been unprecedented in the past two years, with major improvements to the language-based model. Other AI models have become increasingly adept at creating visual art, photographs, and full-length videos that are nearly indistinguishable from reality in many cases.

For some, the technology calls to mind the “Terminator” series, which centers on a dystopian future where AI takes over the planet, leading to apocalyptic results.

For all the fears that ChatGPT and similar platforms have raised, consumer AI services available today still fall into a category experts would consider “dumb AI.” These AI are trained on a massive set of data, but lack consciousness, sentience, or the ability to behave autonomously.

Schmidt and other experts are not particularly worried about these systems.

Rather, they’re concerned about more advanced AI, known in the tech world as “artificial general intelligence” (AGI), describing far more complex AI systems that could have sentience and, by extension, could develop conscious motives independent from and potentially dangerous to human interests.

Schmidt said no such systems exist today yet, and we’re rapidly moving toward a new, in-between type of AI: one lacking the sentience that would define an AGI, and still able to act autonomously in fields like research and weaponry.

“I’ve done this for 50 years. I’ve never seen innovation at this scale,” Schmidt said of the rapid developments in AI complexity.

Schmidt said that more developed AI would have many benefits to humanity—and could have just as many “bad things like weapons and cyber attacks.”

The Challenge

The challenge, Schmidt said, is multifaceted.

At a core level, he repeated a common sentiment among tech leaders: if autonomous AGI-like systems are inevitable, it will require massive cooperation among both corporate interests and governments internationally to avoid potentially devastating consequences.

That’s easier said than done. AI provides U.S. competitors like China, Russia, and Iran with a potential leg-up over the United States that would be difficult to achieve otherwise.

Within the tech industry as well, there’s currently massive competition among major corporations—Google, Microsoft, and others—to outcompete rivals, a situation that raises inherent risks of improper security protocols for dealing with a rogue AI, Schmidt said.

“The competition is so fierce, there’s a concern that one of the companies will decide to omit the [safety] steps and then somehow release something that really does some harm,” Schmidt said. Such harms would only become evident after the fact, he said.

The challenge is greater on the international stage, where adversarial nations are likely to see the new technology as revolutionary for their efforts to challenge U.S. global hegemony and expand their own influence.

“The Chinese are clever, and they understand the power of a new kind of intelligence for their industrial might, their military might, and their surveillance system,” Schmidt said.

That’s a bit of a catch-22 for U.S. leaders in the field, who find themselves forced to balance existential concerns for humanity with the potential for the United States to fall behind its adversaries, which could be catastrophic to global stability.

In the worst case, such systems could be used to engineer crippling biological and nuclear weapons, particularly by terror groups like ISIS.

For this reason, Schmidt said, it’s absolutely crucial that the United States continue to innovate in the field, and ultimately maintain technological dominance over China and other adversarial states and groups.

Industry Leaders Demand Regulation

Regulation of the field remains insufficient, Schmidt said. But he expects that governments’ focus on enhancing safeguards around the tech will accelerate dramatically in the coming years.

Asked by anchor George Stephanopoulos if governments were doing enough to regulate it, Schmidt replied, “Not yet, but they will, because they'll have to.”

Despite some initial interest in the field—hearings, legislative proposals, and other initiatives—emerging during the current 118th Congress, this session seems to be on track to end without any major legislation related to AI.

President-elect Donald Trump, for his part, has warned of the vast risks posed by AI, saying during an appearance on Logan Paul’s “Impaulsive” podcast that it’s “really powerful stuff.”

He also spoke of the need to maintain competitiveness with adversaries.

“It brings with it difficulty, but we have to be at the forefront,” Trump said. “It’s going to happen, and if it’s going to happen, we have to take the lead over China. China’s the primary threat.”

Schmidt’s takes on both the benefits and the challenges of the technology aligns with other industry reactions.

In June 2024, OpenAI and Google employees signed a letter warning of “serious risks” posed by AI, and calling for greater government oversight of the field.

Elon Musk has put forward similar warnings, saying that Google is seeking to create a “digital God” through its DeepMind AI program.

In August, these concerns intensified after it was discovered that an AI took autonomous action to avoid being shut down—raising fears that humanity is already losing control over its creation as governments remain inactive.

Tyler Durden Mon, 12/16/2024 - 18:25

South Korean President Skips Summons Amid Political Crisis, Faces Arrest Risk

South Korea's Constitutional Court began reviewing President Yoon Suk Yeol's impeachment on Saturday, following a National Assembly vote that led to it. Yoon was scheduled for questioning on Sunday as part of a prosecutors' office investigation, but he has not responded. Meanwhile, the leader of his party, who had supported the impeachment, has resigned.

NBC News reports the prosecutors' office asked Yoon to appear for questioning on Sunday as part of an investigation over his failed attempt to declare emergency martial law earlier this month. Prosecutors will issue another summons for the president. 

On Saturday, the National Assembly voted to impeach Yoon, with 204 lawmakers in the 300-member house in favor of the motion and 85 against. Eight votes were declared invalid, while three lawmakers abstained from voting.

Source: Bloomberg 

The vote comes a little more than a week after Yoon survived an impeachment vote, capping multi-week political turmoil in the country that borders North Korea. This follows Yoon's declaration of the briefest martial law in South Korean history on December 3, lasting only a few hours, after accusing the opposition party of engaging in 'anti-state activities.'

Recall, Yoon said: "I will not give up. I will do my best for our country." And this could be why he failed to appear for questioning on Sunday.

"If Yoon continues to defy requests for questioning in the two inquiries, investigators could ask a court to issue a warrant for his arrest," NBC noted. 

Under South Korea's Constitution, Yoon's impeachment has allowed Prime Minister Han Duck-soo to become interim leader.

Political instability in South Korea led to the resignation of Han Dong Hoon, the leader of Yoon's People Power Party, on Monday morning. 

Han said he does "not regret supporting the impeachment" because the president's use of martial law was wrong. 

"Defending illegal martial law is a betrayal of the country, the people, the conservative spirit, and the achievements of our party that achieved industrialization and democratization," Han emphasized. 

Given that the Constitutional Court will now decide whether to reinstate or remove Yoon, Goldman's Goohoon Kwon and Andrew Tilton provided clients with the possible transition scenarios. That process could take up to six months.

Here's what comes next: 

Newsquawk's latest headlines on the ongoing political turmoil: 

• South Korean MPs have successfully voted to impeach President Yoon in their second attempt, amid backlash following his brief move to impose martial law, according to BBC. Yoon was suspended from official duties at 19:24 local time on Saturday while PM Han is to continue as acting president, according to Yonhap.

• South Korea's acting president Han vowed to leave no vacuum in state affairs, build a solid security posture, and ensure the cabinet works hard to maintain trust with the US, Japan, and other partners. He also pledged efforts to operate financial and forex markets smoothly, according to Yonhap. Acting President Han said the country will maintain preparedness to prevent North Korea from stirring up provocations, secure national interests ahead of the new US administration, and prioritise national security above all else, according to News1 and Yonhap.

• South Korea's opposition leader Lee Jae-myung said the party has decided not to proceed with the impeachment of acting , according to Reuters.

• Bank of Korea stated it is necessary to respond more actively to the economic impact compared with past impeachment periods, given heightened challenges in external conditions. It also said it will use all available policy instruments, in conjunction with the government, to respond to and avert escalation of volatility in financial and forex markets, according to Reuters.

• South Korea's Finance Minister said the government will continue to swiftly deploy market-stabilising measures as needed, seek more support measures for vulnerable sectors, and actively communicate with parliament to keep the economy stable. The minister also confirmed that the bi-annual economic policy plan will be announced before the end of the year, according to Reuters.

• South Korea's financial regulator said it will expand market-stabilising funds if needed to boost liquidity in bond and short-term money markets and expects financial markets to stabilise as recent political events are temporary shocks, according to Reuters.

Also, the Goldman analysts warned of another scenario that could unfold: "... muddling through in a political gridlock." 

Tyler Durden Mon, 12/16/2024 - 18:00

Santa, Please Bring Me A War For Christmas

Authored by James Howard Kunstler,

"Understand this deeply - you nearly lost your country and your freedom to a deranged, totalitarian-leaning enemy of our nation's soul and destiny. Take this personally."

- Mel K

So, you expected “Joe Biden” to serve up a neat little Christmas-time World War Three, lobbing ATACMS into Russia and all, but instead, surprise surprise, you got The War of the Worlds: mysterious drones hovering on-high over the endless muffler shops, manicure parlors, mafia palazzos, and mosques of New Jersey.

But there seems to be more to this than, say, the stunt that Orson Welles pulled in 1938, scaring a few rubes over the radio.

This ain’t no foolin’ around.

It’s been going on for weeks.

And not just in New Jersey. But around New York City, up the Hudson River Valley above Stewart Airport, over in Massachusetts, down in Pennsylvania, and out in Ohio in the vicinity of Wright-Patterson Air Force Base near Dayton Ohio.

Howls of “WTF” echo all over the cable news channels. The US government — that is, the twilighting “Joe Biden” admin — plays dumb.

Alejandro Mayorkas, our unimpeachably frank Homeland Security chief told ABC-News on Sunday “that there’s no question that drones are being sighted.” I’m sure that told you a lot. He went on to explain that the FAA changed its rules last year allowing drones to fly at night. Are we to suppose that avid US drone-owners waited until the very last month of this year to start flying their pet aircraft after dark? Pentagon spox John Kirby, added helpfully at a news conference that federal investigators had been “unable to corroborate reports of any unauthorized drones above New Jersey.”

(Translation: DARPA and other Pentagon ops are too busy figuring out new ways to surveil and kill you to bother with these drone swarms.)

Theories abound and multiply.

One is that these are US Govt drones seeking signals of radioactivity emanating from a nuclear bomb supposedly purloined out of Ukraine’s old Soviet arsenal — and possibly stashed in a shipping container or some-such other hidey-hole along our east coast. It’s a good story. It’s rumored that some-60 Uke nukes from that era have gone missing in the decades since. Of course, the theoretical owner of such a device would have to be pretty dumb to not stash his nuke in a lead-shielded casket to prevent detection. In the meantime, what else can be said or done? Standing by on that mushroom cloud. . . .

Blogger / Author and former White House stenographer (2002 – 2018) Mike McCormick had a neat theory: that shipping interests were testing drone deliveries of imported goods from offshore in an attempt to work-around the longshoreman’s union contract negotiations currently underway.

The union has been fighting against automation that would eliminate the good-paying jobs of 85,000 dock-workers.

Any takers on that one?

Of course, it’s difficult to swallow the govt’s statements that, basically, they dunno nuffins ‘bout no drones. There are enough of them flying over enough varied terrain that surely the USAF could find a way to shoot one down over a cow pasture in, say, Orange County, New York. I’m frankly a little surprised that some enterprising civilian marksman hasn’t popped off a few 7mm Remington mag loads into the hovering lights. At least they haven’t said it’s Santa Claus testing a new high-tech delivery system that would put his old-timey sleigh-and-reindeer out of business.

The theory I lean toward is the notion that “Joe Biden” (meaning the DC blob) is desperately seeking some way to obstruct or fend-off the January 20th inauguration of Mr. Trump. Because, well, to put it bluntly, a whole lot of blobistas are worried about going to jail when the likes of Kash Patel, John Ratcliffe, Tulsi-G, and Pam Bondi get their mitts on the levers of power and start opening up the files. They’ve got thirty-five days to. . . to do something! (Somebody, please do something!!!)

There was a lot of chatter all year long about a coming space alien emergency. I know, sounds preposterous, and even more so when you consider that the military arm of the blob would be so dumb as to try to pass off drones as alien spacecrafts — like something out of a 1950s horror movie when the “special effects” had to be done with puppets and balsa-wood models flying on wires. Maybe it’s actually come to that in this super dumbed-down age. (Are you aware that the main diminishing return of our magical computer tech is that it’s made our society an order-of-magnitude dumber across the board? Well, it has.)

The situation remains fluid, with ongoing investigations and public discourse about the implications and origins of these drone activities.

The FBI is on-the-case (so never fear!) along with Mr. Mayorkas and his outfit, and maybe even the US military.

Chill.

They got this — as Hollywood loves to say. Go shopping. Have a goshdarn eggnog. Shut up.

Tyler Durden Mon, 12/16/2024 - 17:40

How Will Apple Compete With $168 AI Smartphones From China?

Chinese brands are targeting Apple iPhone users with low-cost, AI-equipped smartphones in the world's largest handset market.

Apple's delayed rollout of "Apple Intelligence" has resulted in a very uninspiring launch of the iPhone 16 in China, while domestic brands are ramping up new low-cost AI-powered smartphones to seize market share from Apple in 2025. 

Goldman's Allen Chang and Verena Jeng wrote in a note to clients over the weekend that an increasing number of Chinese handset brands are releasing AI smartphones for the mid-end market for as low as $168. 

"While AI features powered by Large Language Model (LLM) were only available for high-end models in the beginning (Read more in our initial AI smartphone report in Nov 2023), in the past 12 months, Chinese smartphone brands have actively expanded the AI coverage to mid-end segment," the analysts said. 

How can Apple compete with $168 models, with the one featured below from the Chinese brand Honor? 

"Given Chinese New Year will be around the end of January, we expect more model launches from Feb-Mar after the holiday," the analysts said. 

Meanwhile, Counterpoint's third quarter shows Apple's market share fell 2.6% year-on-year to 13.5%, while domestic brands gained ground: Vivo's share increased by 10%, Huawei jumped by 30%, and Xiaomi increased by 13%. However, Oppo and Honor experienced slight declines. 

In October, China's third bestselling smartphone brand, Xiaomi, pointed out that its new smartphone "comprehensively surpasses" the iPhone 16 Pro in AI capabilities. 

Apple Intelligence is so far unavailable in China...

The big question for CEO Tim Cook is how Apple will compete—will the iPhone SE gain AI capabilities?—as domestic Chinese brands roll out AI-equipped smartphones in the mid-end market for as little as $168.

Tyler Durden Mon, 12/16/2024 - 15:25

Intrinsic Value Of Crypto: What Is It & How To Calculate It

Authored by Onkar Singh via CoinTelegraph.com,

Key takeaways

• Cryptocurrencies like Bitcoin gain value from factors like scarcity, utility and security, not physical backing.

• Common methods to calculate intrinsic worth of a cryptocurrency include Metcalfe’s Law, cost of production and discounted utility models.

• Estimating intrinsic value is challenging due to market volatility and speculative data.

• Fiat currencies have no intrinsic value, relying on trust, while cryptocurrencies’ value is based on decentralization and scarcity.

Intrinsic value refers to the actual worth of an asset based on its fundamental characteristics, rather than its market price. For example, in traditional finance, the intrinsic value of a stock is often derived from factors such as earnings, cash flow and growth potential.

In cryptocurrencies, it’s not so straightforward. Since crypto assets are not tied to physical entities or consistent income streams like dividends, assessing their intrinsic value involves a mix of factors — technological, economic and utility-driven. In simple terms, intrinsic value answers the question: What makes this cryptocurrency valuable beyond its price on an exchange?

The intrinsic value of cryptocurrencies is derived from factors such as:

• Utility: What problems does cryptocurrency solve?

• Scarcity: Is the supply limited or inflationary?

• Network value: How large and active is the ecosystem?

• Security: How resilient is the blockchain against attacks?

For example, Bitcoin’s BTC$106,649 intrinsic value lies in its fixed supply (21 million coins), decentralized network and security powered by proof-of-work (PoW) mining. 

On the other hand, Ethereum derives much of its value from being the backbone of decentralized applications (DApps) and smart contracts. 

Did you know? A June 2024 report by Triple A reveals that global crypto ownership rose to 562 million, up from 420 million in 2023, covering 6.8% of the population, with Asia leading the growth.

How to calculate intrinsic value of cryptocurrencies: Three common methods

Let’s move beyond theory and explore three widely-used methods to estimate a cryptocurrency’s intrinsic value.

1. Metcalfe’s Law

• What it is: Metcalfe’s Law states that the value of a network is proportional to the square of its active users. Essentially, as more people use a network, its value grows exponentially.
• How to apply it: This method is particularly relevant for cryptocurrencies with strong ecosystems and active users. It is calculated using the following formula:

Example: Ethereum

Ethereum is a vast ecosystem of developers, DApps and DeFi projects. Its value is bolstered by thousands of developers actively building on its blockchain and millions of users engaging with its applications. Specifically, the number of daily active addresses can serve as a proxy for its “network size.”

As of Dec. 13, 2024, according to YCharts, Ethereum’s daily active addresses stand at 543,929. Here’s how you can apply Metcalfe’s law:

Network value = (543,929)2 = 296,086,104,841 or 296 billion units approx  (a relative measure, not in USD). 

This shows how the network value grows exponentially with the number of users. If Ethereum’s daily active addresses increase, the network’s value increases at an even faster rate.

Challenges

• Oversimplification: Metcalfe’s Law doesn’t account for the quality of user interactions. A network of 1,000 inactive users is less valuable than a smaller, highly engaged network.
• Data accuracy: Estimating the number of “active” users is tricky, especially with bots and spam accounts inflating metrics.
• Comparative limitations: Some blockchain networks may have lower user counts but offer faster transaction speeds. Metcalfe’s Law alone doesn’t capture these differentiators.

2. Cost of production

• What it is: This method calculates a cryptocurrency’s intrinsic value based on the cost to produce or mine it. For PoW blockchains like Bitcoin, this includes electricity, hardware and operational costs.
• How to apply it: Production costs act as a “floor” for the cryptocurrency’s value because miners won’t continue operations if market prices fall below their expenses.

Example: Bitcoin

Bitcoin’s intrinsic value is often anchored to its mining cost.

• As of Dec. 13, Bitcoin’s average mining cost is $86,303, while its market price was $101,523. This indicates that Bitcoin’s intrinsic value, based on mining costs, is at least $86,303. When the price exceeds this cost, mining remains profitable, incentivizing miners to secure the network. If Bitcoin’s price falls below the cost of production, miners may stop mining due to unprofitability, potentially impacting network security. The difference of $15,220 between the price and mining cost reflects a healthy market, where mining continues to be incentivized and the network remains secure.
• During the 2022 bear market, Bitcoin’s price briefly fell to $16,000, below the production cost for some miners ($20,998). This negative difference of $4,998 meant that miners were losing money for each Bitcoin they mined. When this happens, less efficient miners may be forced to shut down, reducing the network’s hashrate and security while also causing difficulty adjustments to eventually bring costs more in line with market prices.

Challenges

• Regional variance: Mining costs differ globally. For instance, miners in Kazakhstan or Texas benefit from cheap electricity, while those in Europe face higher costs. However, many miners are moving toward renewable energy sources, such as solar or wind power, to lower costs and become more environmentally sustainable.
• Market volatility: Bitcoin’s price can temporarily fall below production costs, especially during market downturns.

3. Discounted utility model

• What it is: This approach estimates a cryptocurrency’s intrinsic value by projecting its future utility, such as transaction volume or adoption, and discounting that value to the present.
• How to apply it: Analysts evaluate potential use cases, adoption rates and transaction activity, then discount the future benefits using a specific discount rate.

Example: BNB

BNB BNB$718.20 derives its intrinsic value from its role in the Binance ecosystem.

BNB is used to pay transaction fees, participate in token sales and access staking rewards. According to YCharts, as of Dec. 14, the BNB Smart Chain processes about 3.795 million transactions per day. Analysts can calculate the discounted value of these transaction fees over time to estimate BNB’s intrinsic worth.

Here’s how you can use the discounted utility model to estimate BNB’s intrinsic value:

Assuming the average fee per transaction is $0.10, the daily transaction fees total:

3,795,000 × 0.10 = $379,500 or 0.3795 million per day

This translates to an annual transaction fee of:

379,500 × 365 (non-leap year) = $138.52 million per year

To calculate the intrinsic value of BNB over the next 10 years, you could apply a 10% discount rate. Using the discounted value formula below, the total discounted value of BNB’s expected transaction fees over 10 years is $851.13 million.

Here are the discounted values for each year based on $138.52 million annual transaction fees, discounted at a 10% rate for 10 years (inputting values in the above formula):

In the example above, the hypothetical scenario was used to demonstrate how discounted utility models could be applied to estimate the intrinsic value of BNB, assuming transaction fees were constant over time. However, real-world fees vary, and factors such as BNB discounts, account level and transaction types play a crucial role in determining the exact cost.

Challenges

• Speculative data: Estimating future transaction volumes and adoption rates involves guesswork.
• Discount rate sensitivity: Small changes in the discount rate significantly impact the valuation.
• Ecosystem changes: If Binance faces regulatory issues or competition, BNB’s utility might decline, invalidating earlier projections.

Why don’t fiat currencies have intrinsic value?

Fiat currency, like the US dollar or the euro, does not have intrinsic value in the traditional sense. Unlike gold or silver, fiat money isn’t backed by a physical commodity. Its value is instead derived from factors like government decree, trust and its ability to serve as a medium of exchange. Even scholarly literature defines fiat money as “an intrinsically useless unbacked token.” 

• No tangible backing: Fiat money is not redeemable for gold, silver or any physical asset. The “gold standard” system was abandoned by most countries decades ago.
• Value based on trust: The worth of fiat depends on people’s belief in the government’s ability to manage the economy and honor its debts. For example, the US dollar is trusted because of the economic and political stability of the United States.
• Unlimited supply: Governments and central banks can print fiat money at will, which means its supply isn’t fixed, unlike BTC or gold. This makes fiat susceptible to inflation, which erodes its purchasing power over time.

You might be wondering how fiat currencies work. Let’s find out.

How is fiat value maintained?

Even without intrinsic value, fiat currency works because of:

• Legal tender laws: Governments mandate using fiat currency for taxes and debts. For example, in the UK, taxes must be paid in pounds.
• Economic utility: Fiat is highly liquid, universally accepted, and easy to use in daily transactions, making it valuable for practical purposes.
• Backing by institutions: Central banks and financial systems create “trust” by managing fiat issuance and ensuring stability.

The debate over whether fiat or crypto has “real” value often highlights the following differences:

To further understand the above distinction, let’s interpret it through the lens of the definitions provided in the Oxford Handbook of Value Theory (p.29), which defines intrinsic value as “what is valuable for its own sake, in itself, on its own, in its own right, as an end, or as such.” In contrast, extrinsic value is “what is valuable as a means, or for something else’s sake.” 

Based on the above definitions, fiat currencies have no intrinsic value; their worth comes from government backing and legal frameworks (extrinsic value). Bitcoin, however, possesses qualities that make it independently valuable through its scarcity (21 million cap), decentralization and utility as a trustless, peer-to-peer network. 

While fiat relies on centralized trust, Bitcoin’s value stems from its unique, self-sustained properties, sparking debate about its intrinsic worth.

Did you know? The 2008 global financial crisis shattered trust in the traditional banking system. It exposed reckless lending practices, flawed regulations and the fragility of institutions once deemed “too big to fail.” This erosion of trust fueled the search for alternatives, eventually paving the way for Bitcoin’s creation in 2009 as a decentralized, trustless financial system.

Why intrinsic value matters

Understanding intrinsic value helps investors separate strong projects from speculative ones. During the 2017 ICO boom, thousands of tokens were launched with little to no intrinsic value. Many collapsed because they lacked the fundamental characteristics — utility, security or scarcity — to sustain long-term demand.

By focusing on intrinsic value, you can make informed decisions and avoid falling for hype. For example, Bitcoin remains dominant because it demonstrates strong intrinsic value through scarcity, network effects and utility, while many other tokens fade away.

Finally, the key to understanding the intrinsic value of crypto versus fiat lies in grasping the correct meaning of intrinsic versus extrinsic value and how it applies to each.

Tyler Durden Mon, 12/16/2024 - 15:05

Trudeau Considering Quitting After Canadian FinMin Freeland Unexpectedly Resigns: Report

Update (2:30pm ET): Canada's CTV News reports that Prime Minister Justin Trudeau is considering interrupting Parliament (prorogation) or resignation according to unnamed sources. The sources say he has spoken to his cabinet and plans to address Parliament later on Monday. This comes after finance minister Chrystia Freeland resigned earlier on Monday citing disagreements over how to deal with tariff threats from US president-elect Donald Trump.

If confirmed, it would mean government collapse in 4 of the staunchest, and most developed "non-banana republic" Western democracies: France, Germany, South Korea and now Canada. And, of course, we use the term "non-banana republic" sarcastically.

As for Turdeau, his odds of being Tru-done just spiked to 88% on Polymarket.

Odds Trudeau is out before April just hit 88%.

Trudone? pic.twitter.com/Fo6cWd00eU

— Polymarket (@Polymarket) December 16, 2024

* *  *

In a stunning move that shakes the government, Canadian Finance Minister Chrystia Freeland has resigned from Prime Minister Justin Trudeau’s cabinet after he tried to move her to a different role.

Freeland has been the most powerful person in Trudeau’s cabinet for years, and was the point person in strategizing how to counter US President-elect Donald Trump’s threat to impose 25% tariffs.

Trudeau has now seen the departure of two finance ministers in a little more than four years.

Freeland got the job in 2020 after the prime minister had a falling out with then-Finance Minister Bill Morneau over issues such as spending on Covid-related income support programs.

Freeland released her statement in a post on X, pulling no punches (emphasis ours):

Dear Prime Minister,

It has been the honour of my life to serve in government, working for Canada and Canadians. We have accomplished a lot together.

On Friday, you told me you no longer want me to serve as your Finance Minister and offered me another position in the Cabinet.

Upon reflection, I have concluded that the only honest and viable path is for me to resign from the Cabinet.

To be effective, a Minister must speak on behalf of the Prime Minister and with his full confidence. In making your decision, you made clear that I no longer credibly enjoy that confidence and possess the authority that comes with it.

For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada.

Our country today faces a grave challenge. The incoming administration in the United States is pursuing a policy of aggressive economic nationalism, including a threat of 25 per cent tariffs.

We need to take that threat extremely seriously. That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.

That means pushing back against ‘America First’ economic nationalism with a determined effort to fight for capital and investment and the jobs they bring. That means working in good faith and humility with the Premiers of the provinces and territories of our great and diverse country, and building a true Team Canada response.

I know Canadians would recognize and respect such an approach. They know when we are working for them, and they equally know when we are focused on ourselves.

Inevitably, our time in government will come to an end. But how we deal with the threat our country currently faces will define us for a generation, and perhaps longer. Canada will win if we are strong, smart, and united.

It is this conviction which has driven my strenuous efforts this fall to manage our spending in ways that will give us the flexibility we will need to meet the serious challenges presented by the United States.

I will always be grateful for the chance to have served in government and I will always be proud of our government’s work for Canada and Canadians.

I look forward to continuing to work with my colleagues as a Liberal Member of Parliament, and I am committed to running again for my seat in Toronto in the next federal election.

Meanwhile, the Loonie has hit its weakest against the dollar since the COVID lockdown lows...

Freeland's resignation follows that of Housing Minister Sean Fraser over the weekend, who notably doesn’t plan to run in the next federal election.

Perhaps Freeland and Fraser see the painful writing on the wall for their boss...

As we highlighted in a recent post, Turdeau’s government (sic) would have no choice but to respond if Trump simply exempted energy while hitting all other Canadian products, said Bloomberg sources, adding that’s a scenario that could prompt the use of export taxes by Canada.

But for the prime minister, going down this path would cause serious political divisions within Canada. Oil, uranium and potash production are concentrated in the western provinces of Alberta and Saskatchewan. 

Those provinces are the strongest voter base for Conservative Leader Pierre Poilievre, and their provincial governments are staunch right-wing opponents of Trudeau.

In short, while Turdeau may retaliate in a Trump trade war, such an action will likely be his last.

Tyler Durden Mon, 12/16/2024 - 14:50

China FX Outflows Soar As Beijing Prepares For Next Currency Devaluation, Priming Next Bitcoin Surge

Last October, when we pointed out that China's FX outflows had just hit a whopping $75BN - the single biggest monthly outflow since the 2015 currency devaluation - we concluded that the "unfavorable interest rate spread between China and the US will "likely imply persistent depreciation and outflow pressures in coming months", or in other words, September's biggest FX outflow in years is just the beginning, and very soon - in addition to geopolitics and central banks - the world will also be freaking out about the capital flight out of China... not to mention where all those billions in Chinese savings are going and which digital currency the Chinese are using to launder said outflows."

We wrote that on October 20, when Bitcoin was trading just under $30,000, a level it had been for much of 2023. And, just as we correctly predicted at the time...

Clockwork: every time China FX outflows surge, bitcoin erupts.

From last Friday: China Capital Flight Panic Eruptshttps://t.co/j0eWLnbFMq

— zerohedge (@zerohedge) October 24, 2023

... following this surge in Chinese FX outflows, bitcoin - traditionally China's preferred means to circumvent Beijing's great capital firewall since gold is, how should one put it, a bit more obvious when crossing borders - promptly soared more than 100% higher in the next 4 months.

That was just the start, because only a few months later, in July, we wrote the follow up as China's capital flight returned with a vengeance, namely "China FX Outflows Soar As Beijing Dumps Record US Securities, Priming Next Bitcoin Surge" which coincided with a Reuters report according to which, it was China's massive wall of inert capital that has been one of the key drivers of bitcoin moves, and never more so than during periods of FX and capital outflows which usually precede some form of capital controls... which regular (and hopefully very rich) readers will of course, recall has been our core, and unwavering, bitcoin thesis since 2015!

In any event, the sharp resumption of Chinese capital outflows, which we highlighted in July, is why we also predicted at the time that "almost a year after our first correct prediction that China's spike in FX outflows would send bitcoin surging, it's time to do it again."

You'll never guess what happened next... And in case you really can't, here is the answer: bitcoin exploded, nearly doubling again over the next 5 months!

We bring all this up because more than a year after our first correct prediction that China's spike in FX outflows would send bitcoin surging, and almost six months after our second correct prediction that China's spike in FX outflows would send bitcoin surging (sic), it's time to do it again.

One wouldn't know it, however, if one merely looked at the official Chinese FX reserve data published by the PBOC, here nothing sticks out. In fact, at $3.3 trillion, reported Chinese reserves are now near the highest level in past nine years, and monthly flows are very much stable as shown in the chart below.

The problem, of course, is that as we have explained previously China's officially reported reserves are woefully - and purposefully - inaccurate of the bigger picture.

Instead if one uses our preferred gauge of FX flows, one which looks at i) onshore outright spot transactions; ii) freshly entered and canceled forward transactions, and iii) the SAFE dataset on “cross-border RMB flows, we find that China's net outflows were a remarkable $39 billion in November, and while (still) a far cry from the massive outflows which we reported earlier this year, is a dramatic and major reversal to the impressive inflows noted in the previous three months.

What is especially notable is that if one just uses the current account channel, one would conclude that November had FX inflows, similar to the official PBOC data. However, one has to also look at the portfolio investment channel to observe the cross-border RMB outflows, likely due to RMB outflows, which led to the sizeable FX outflows in November.

Here are the details: in November, there were US$2bn in net outflows via onshore outright spot transactions, and US$2bn inflows via freshly entered and canceled forward transactions. However, our favorite SAFE dataset on “cross-border RMB flows” showed outflows of US39bn in the month, suggesting net receipts of RMB from onshore to offshore. Our preferred FX flow measure therefore suggests US$39bn net FX inflows in November, in comparison with US$5bn net FX inflows in October (shown on chart above).

The current account channel showed slowed net inflows (US$17bn in November vs. US$28bn inflows in October). There was a net inflow of US$33bn related to goods trade in November vs. an inflow of US$45bn in October. Goods trade surplus FX conversion ratio fell further to 34% in November (vs. 47% in October), well below the average ratio (45%) in 2019-21.

The FX outflows related to services trade deficit was mostly unchanged at US$14bn from October to November. The income and transfers account showed outflows of US$2bn in November, slightly slower than the US$3bn outflows in October.

Turning to the far more important portfolio investment channel (which is where crypto flows tend to be located) we find net FX outflows in November (US$6bn in November vs. US$3bn outflows in October). Bond Connect flows showed US$14bn outflows vs. US$20bn outflows in October. Although FX outflows via portfolio investment channel remained small in November, the large cross-border RMB outflows implies potential outflows from the onshore equity market.

Remarkably, all this takes place when the official FX reserves (released earlier in the month) number rose slightly to US$3,266bn in November from US$3,261bn in October. Luckily, there is a simple "sanity check" way to confirm that the capital inflows story is pure propaganda BS, and China is once again suffering another scorching period of capital flight: just look at FX. Indeed, after after the yuan surged in the fall, coinciding with a period of relative dollar weakness, since October we have seen a surge in the USDCNH spot, as one would expect when there is capital flight.

But wait there's more.

Where the capital flight story gets really interesting, is when we look at what Chinese public and private entities were doing with US assets according to official Treasury data. What we find is that according to Treasury International Capital data, in September Chinese investors sold $17BN in US securities (bonds, MBS, corporate bonds, and stocks), and more notably, following a record sale in May, China has been a constant seller of US securities in the past 5 months!

 

So if one had to guess what was going on, even as the yuan slumped in October and November as the capital flight resumed, the hit to the yuan would have been even bigger had China not liquidated a record amount of US securities, while the PBOC was buying much more gold while China's middle and upper classes were buying up bitcoin.

 

And while Chinese policymakers are still keen on maintaining FX stability (or at least create that impression) as the countercyclical factors in the daily CNY fixing remained deeply negative and front-end CNH liquidity tightened notably in recent weeks, the reality is that with China desperate to boost its exports at a time when its great mercantilist competitor, Japan, has hammered the yen to the lowest level in 3 decades, it is only a matter of time before the currency devaluation advocates win, as they did in 2015. No surprise that the biggest China-related story last week came from Reuters, and reported that Beijing in already planning how to devalue the yuan in response to Trump tariffs. And if you want to see what capital flight from China really looks like, just wait until we get another 2015-style one-time devaluation.

We hope we don't have to remind readers that the first big trigger for bitcoin's unprecedented eruption higher starting in 2015 was - you guessed it - China's August 2015 FX devaluation, as we correctly noted at the time when we predicted that bitcoin would explode from $250 to the thousands; in retrospect we were very conservative.

So don't be surprised if in the next 6 months Bitcoin doubles again - for the third time in the past year - and the move has little to do with ETF inflows, the halving, or frankly anything else taking place in the US, and instead is entirely driven by China's massive wall of money which at last check was almost 3x bigger than the US.

Tyler Durden Mon, 12/16/2024 - 14:05

Watch: Overnight Israeli Strike In Syria So Large It Caused Earthquake

Days ago Israel began warning that it will use large bunker buster munitions to begin destroying the former Syrian Army's underground missile and weapons storehouses. 

This has begun in the overnight hours, with Israeli warplanes pummeling air defense systems and ammunition depots in Damascus and the coastal city of Tartous, near where a Russian naval base is located. The strike on Tartous resulted in the single biggest explosion seen in Syria in years, unleashing a fireball and mushroom cloud so large it led to quick speculation it could have been a tactical nuke (which widespread reports are denying).

Israel hit an arms depot in Bmalkeh, #Syria, a town some klm above Tartus.

Windows in the entire region were broken. We don’t know how many dead. pic.twitter.com/RllrIwhXCd

— Joshua Landis (@joshua_landis) December 16, 2024

The London-based Syrian Observatory for Human Rights (SOHR) described that Israeli warplanes hit air defense units and "surface-to-surface missile depots" as part of a bid to degrade and disable Syria's military capability. SOHR also called it the "the heaviest strikes" on the region in over a decade.

The Telegraph wrote that "A 3.1 magnitude tremor was reported by the Geographic Survey of Israel’s seismology department at 11.49pm on Sunday night in the region of the bombings."

"The explosions in Tartous were extremely loud," Al Jazeera’s Resul Serdar, reporting from inside the country, additionally described. "Some experts are saying that might probably mean it was a chemical weapons production house."

Other sites which were bombed overnight were radar and air defense systems outside of Damascus, around the Qaisioun mountain which dominates the background of the capital.

In total there have been an estimated 600 Israeli strikes over the course of eight days. Some of them began immediately upon Hayat Tahrir al-Sham (HTS) entering the environs of Damascus as President Assad fled the country.

An Israeli broadcast correspondent from Kann previously wrote that "An Israeli source tells me: Israel's goal is to destroy everything from Assad's army that could fall into the hands of the rebels - from tanks to missiles. We are destroying the equipment of the Assad army."

A Massive Explosion seen in Northwestern Syria near the City of Tartus, following an Israeli Strike against a Munitions Depot; with the Explosion reported to have been so large, that it measured as a 3.0 Magnitude Earthquake on nearby Seismic Sensors. pic.twitter.com/i1jC1vNjVJ

— OSINTdefender (@sentdefender) December 15, 2024

Jets and aerial equipment, and runways at bases are being obliterated. Part of Israel's aim also seems to be preventing pro-Iranian entities from ever popping up again in Syria, and to finally and definitively dismantle Hezbollah and Shia militias' arms networks. It's also unclear what kind of future government will dominate Syria - most likely a hardline Sunni one.

Tyler Durden Mon, 12/16/2024 - 13:45

Global Food Prices Are Entering Very Dangerous Territory

Authored by Michael Snyder via The Economic Collapse blog,

What in the world is going to happen if global food supplies continue to get even tighter?  During the second half of this year global food prices have been surging.  A “perfect storm” of factors is suppressing production all over the planet, and meanwhile worldwide demand for food just keeps rising.  Needless to say, higher prices hurt those at the bottom of the economic food chain the worst.  Food prices have become a major issue in country after country, and if current trends continue it won’t be too long before widespread unrest breaks out.  Here in the United States, the cost of living is absolutely eviscerating the middle class.  If a way cannot be found to stabilize food prices, we will be seeing a tremendous amount of anger and frustration in 2025 and beyond.

Last week, it was being reported that global food prices had risen to “the highest level in 19 months”…

The world food price index, compiled by the U.N. Food and Agriculture Organization (FAO) to track the most globally traded food commodities, increased to 127.5 points last month from a revised 126.9 points in October, the highest level in 19 months and up 5.7% from a year ago.

The vegetable oil index jumped 7.5% above levels seen a month ago and 32% above those seen a year earlier, driven by concerns over lower-than-expected palm oil output due to excessive rainfall in Southeast Asia.

Clearly, things are not heading in the right direction.

But what could be coming next is potentially even more alarming.

Insane global weather patterns are having a dramatic impact on the production of some of our most important staples, and as a result prices are rapidly trending higher.  For example, the price of Arabica beans has risen over 80 percent so far in 2024…

 Coffee drinkers may soon see their morning treat get more expensive, as the price of  coffee on international commodity markets has hit its highest level on record.

On Tuesday, the price for Arabica beans, which account for most global production, topped $3.44 a pound (0.45kg), having jumped more than 80% this year. The cost of Robusta beans, meanwhile, hit a fresh high in September.

It comes as coffee traders expect crops to shrink after the world’s two largest producers, Brazil and Vietnam, were hit by bad weather and the drink’s popularity continues to grow.

If you love coffee, you are already feeling quite bit of pain.

Unfortunately, it appears that coffee prices could become even more painful in 2025.

A similar thing is happening to another very popular morning beverage.

The price of orange juice is up 327 percent over the last 3 years, and thanks to Hurricane Helene and Hurricane Milton it is expected to go even higher in 2025…

As consumers struggle with higher prices for groceries, one staple of the American breakfast is about to get a lot more expensive. Plagued by diseased groves, uprooted trees to make room for housing developments, and severe weather that has decimated crops, the price of orange juice has skyrocketed in the past 3 years by 327% and is expected to climb even higher in the wake of Hurricanes Helene and Milton which swept through Florida less than three weeks apart.

According to industry data, Hurricane Milton destroyed over 3 million boxes of oranges in Florida, setting the state up for the smallest orange harvest in close to 100 years. Coupled with a protracted drought in Brazil, the world’s largest orange exporter, the price for frozen concentrated orange juice trading on the Intercontinental Commodity Exchange (“ICE”) has soared 80% to a record high of $5.25 per pound.

Many Americans like to have eggs with their orange juice in the morning, but the bird flu is sending egg prices into the stratosphere.

In some areas of California, a dozen eggs will now cost you more than 4 dollars…

Economists said the bird flu is continuing to impact the supply chain, with California becoming the epicenter of the virus and the fallout.

Gillian Thorp went to her local Trader Joe’s in Santa Clara in search for a dozen eggs that now costs her $4, assuming she could find some in the first place.

“I stopped by the egg section and there were only two choices,” Thorp said. “It was pretty empty. I usually only purchase organic eggs and there was only one choice for that.”

The bird flu isn’t going anywhere.

In fact, a fresh wave is sweeping across the United States right now.

So if you love eggs, that is really bad news.

Meanwhile, the size of the U.S. cattle herd has fallen to the lowest level since 1961…

America’s beef cow inventory has steadily declined over the last half-decade, reaching 64-year lows and signaling a deepening crisis across the cattle industry. As the cattle crisis worsens, consumers should brace for higher ground beef prices.

The shrinking beef supply has pushed the nation’s herd size to its smallest level since 1961. With severe droughts, high interest rates, costly feed prices, sliding farm income, surging farm debt, and a shifting consumer preference toward cheaper chicken, struggling ranchers have been culling heifers, preventing any meaningful recovery in the number of calves necessary to expand the nation’s herds.

There were 183 million people living in the United States in 1961.

Today, our population is nearly double that figure.

So we have the same amount of beef that we did in 1961 to feed almost twice as many people.

If you were wondering why beef prices had gotten so high, now you know.

Instead of eating a steady diet of high quality food, we are being fed an endless stream of heavily-processed packaged foods that are loaded with extremely unhealthy filler ingredients such as high fructose corn syrup.

Sadly, many Americans are in such financial distress that the heavily-processed packaged foods are all that they can afford.

Of course even the heavily-processed packaged foods are quite a bit more expensive than they once were.

We have definitely entered very dangerous territory, and I fully expect the trends that have been pushing up food prices to accelerate even more in 2025.

*  *  *

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Mon, 12/16/2024 - 13:25

Schumer Urges Feds To Deploy Declassified Technology That Can Identify Drones

Update: 

A law enforcement source told ABC News on Monday morning that the FBI and the Department of Homeland Security have deployed infrared cameras and other drone detection sensors across New Jersey and New York to capture clear footage of the reported drone sightings. 

Source: Fox News

Additional color on the situation from ABC's source:

The agencies are also looking at social media and other photos to determine what exactly is in the photos. Most of the photos and video depict manned aircraft, according to a law enforcement source.

There have also been no reports from pilots about seeing any drones in the sky, according to the source.

Another other issue federal authorities are dealing with: over-reporting of potentially seeing drones, according to the source. In the New York-New Jersey area, where they are being spotted, there are very few restrictions.

There have been over 1,000 reported sightings in New Jersey, with some witnesses saying they've spotted 'truck-sized' drones.

As we've previously noted: "NJ Drone 'Invasion' Just In Time For Congress To Reauthorize Orwellian Law."

*   *   * 

Authored by Melanie Sun via The Epoch Times,

Senate majority leader Chuck Schumer (D-N.Y.) on Sunday called for the federal government to use its powers to identify who is behind the mysterious drones being reported hovering in U.S. airspace above concerned residents.

“New Yorkers have tremendous questions about it. We are going to get the answers for them,” Schumer told reporters after he asked the U.S. Department of Homeland Security (DHS) to deploy their drone-tracking technology to identify the unidentified drones and their operators.

He suggested the federal government use a recently declassified radio wave technology to investigate the flying objects. The radio wave detector can be attached to a drone or airplane and can determine whether another flying object is a bird or a drone, read its electronic registration, and follow it back to its landing place.

So far, briefings by government officials regarding drones sightings reported in multiple locations across the United States have added little clarity to the situation.

“There’s no question that people are seeing drones,” U.S. Homeland Security Secretary Alejandro Mayorkas told ABC’s George Stephanopoulos on Sunday. “But I want to assure the American public that we are on it. We are working in close coordination with state and local authorities.”

Some of the drones reported in parts of New York and New Jersey have turned out to be “manned aircraft that are commonly mistaken for drones,” Mayorkas said. “We know of no foreign involvement with respect to the sightings in the Northeast. And we are vigilant in investigating this matter.”

Mayorkas said that certain agencies within DHS have the power to “incapacitate” drones. “But we need those authorities expanded,” he said.

Members of Congress from both political parties are demanding transparency, better technology, and more power to deal with the drones. Schumer noted that state and local authorities do not have the authority to track drones.

Many are voicing support for passing the Counter-UAS Authority Security, Safety, and Reauthorization Act to strengthen FAA oversight of drones and extend authorities to track drones to state and local authorities. UAS stands for unmanned aerial vehicle.

Over the last month, dozens of unidentified drone-like objects have been reported flying in from the ocean over parts of New Jersey, including residential areas, each night, raising concerns about safety and national security. Initial reports had the objects flying near Picatinny Arsenal, a U.S. military research and manufacturing facility.

This week, more potential sightings were reported along the northern East Coast, as well as in other parts of the country like California, according to news reports. While some sightings were actually of commercial planes mistaken for drones, others have been confirmed as sightings of unidentified drones.

Drones are legal in the state as long as they comply with local and Federal Aviation Administration (FAA) regulations and flight restrictions. Operators must also be FAA certified.

Last year, federal aviation rules also began requiring that drones weighing 0.55 pounds (250 grams) or more broadcast real-time their remote identification, including the location of their operators, to improve the safety and security of U.S. airspace.

“What the drone issue points out are gaps in our agencies, gaps in our authorities between the Department of Homeland Security, local law enforcement, the Defense Department,” Rep. Mike Waltz (R-Fla.), who has been chosen to serve as President-elect Donald Trump’s national security adviser, said on CBS’s “Face the Nation” on Sunday.

“Americans are finding it hard to believe we can’t figure out where these are coming from.’’

The top Democrat on the House Intelligence Committee Rep. Jim Himes (D-Conn.) also said on “Fox News Sunday,” “There’s a lot of us who are pretty frustrated right now.”

“‘We don’t know’ is not a good enough answer.”

On Saturday, Rep. Nicole Malliotakis (R-N.Y.) said he believes that the source of drone activity was the U.S. government, and urged for transparency with the public over the mysterious aerial activity, which has also been reported at U.S. military facilities overseas, including the U.S. Air Force base at Ramstein, Germany.

“I don’t believe that they’re commercial,” Malliotakis told “Fox Report” on Saturday, saying that it was unlikely commercial flights are violating FAA regulations by flying late at night.

“I would think that if it was a foreign government, with our military capabilities, we would be taking significant action. It does seem to me that this would be activity from our own government. I’m not sure if it’s related to counterterrorism efforts or what exactly is the purpose, but they should be honest and just tell the public.

“When people are nervous, when people are concerned, it leads to all sorts of theories, all sorts of misinformation being spread, and that is exactly what you’re seeing take place.”

New York Gov. Kathy Hochul said on Sunday that the Biden Administration has agreed to send a drone detection system to her state.

“I am grateful for the support, but we need more. Congress must pass a law that will give us the power to deal directly with the drones,” she said on X.

New Jersey Gov. Phil Murphy also asked the Biden administration for more resources to investigate the drones.

White House national security communications advisor John Kirby previously said the drones reported in New Jersey are not a threat to national security.

“We have no evidence at this time that the reported drone sightings pose a national security, or a public safety threat, or have a foreign nexus,” White House national security spokesman John Kirby said during a Dec. 12 press briefing.

Trump has called for U.S. officials to provide transparency to the American people about the origin of the drones.

“Otherwise, shoot them down!!!” the president-elect wrote on social media on Dec. 13.

Tyler Durden Mon, 12/16/2024 - 12:45

"The Timing Is Absolutely Terrible": German Government Collapses Just One Week After French Implosion

Europe is disintegrating as legacy political regimes are collapsing over across the world.

Just one week after Marine Le Pen precipitated the collapse of the French government, on Monday, Chancellor Olaf Scholz lost a confidence vote in the German Parliament on Monday, a defeat that effectively ended the increasingly unpopular government he has led since 2021 and ushered in elections early next year.

German lawmakers voted to dissolve the existing government by a vote of 394 to 207, with 116 abstaining.

The collapse of the government just nine months before elections had been scheduled was an extraordinary moment for Germany, once Europe's powerhouse but now a laughingstock at the mercy of both China and Russia. This will be only the fourth snap election in the 75 years since the modern state was founded, and it reflected a new era of more fractious and unstable politics in a country long known for durable coalitions built on plodding consensus.

The confidence vote, in the same month that the French government fell, deepens a crisis of leadership in Europe at a time of mounting economic and security challenges. The war in Ukraine has reached a pivotal moment, with Russia set to make decisive territorial gains and perhaps even push on toward Kiev, while president-elect Donald J. Trump is set to take office in the United States. And now, Europe’s largest and second largest economies are in the hands of a caretaker governments, as the continent is sent reeling in a tailspin of chaos and revulsion to the status quo.

Scholz had little choice but to take the unusual step of calling for the confidence vote after his three-party coalition splintered in November, ending months of bitter internal squabbling and leaving him without a parliamentary majority to pass laws or a budget. And now, the political uncertainty could last for months. The elections are expected to be held on Feb. 23, but even if, as expected, his party does not finish first, Scholz would remain in place as a caretaker chancellor until weeks after that. He would step down only after a new coalition forms, which will probably not happen until April or May according to the NYT..

Seven parties will go into the campaign for Parliament with a realistic chance of gaining seats, and some on - especially on the right - are poised for very strong showings, according to polls.

The campaign is likely to be dominated by several issues that have roiled Europe in recent years. Germany and France, traditionally the two most influential countries in the European Union, are mired in debates over how best to revive their struggling economies, breach growing social divides, ease voter anxieties over immigration and buttress national defense.

Meanwhile, the establishment EU partners are looking warily toward Russia, where Putin has escalated threats about the use of nuclear weapons amid Moscow’s war against Ukraine, and where states like Germany have been providing Kiev with long-range missiles to be used deep inside Russia, in the process ensuring that relations with Moscow are abysmal for years to come.

And in typical social-democrat fashion, the leading European politicians have also been vexed by their deteriorating economic relationship with China, which has grown into a formidable competitor for many of their most important industries but has not become the booming consumer market for European products that leaders long envisioned. Instead, China has promptly become the world's biggest producer of cars, making a mockery of what was once Germany's most important and profitable industry, and no lies in tatters.

And they are bracing for the start of the new presidential term for Trump, who has threatened a trade war and the end of the United States’ commitment to the NATO alliance that has guaranteed Europe’s security for 75 years.

The combination of challenges has proved politically catastrophic for Europe's legacy powers. French President Emmanuel Macron on Friday named his fourth prime minister in a year and is under mounting pressure to resign. Macron says he will stay in office and try to repair the deep fissures in his government over the 2025 budget. Scholz’s government faced similar budget challenges, along with growing concerns about how to rebuild the German military in the face of a belligerent Russia and Trump’s criticism of NATO.

As even the liberal NYT admits, it is an inopportune time for Germany to be plunged into a grueling winter election campaign and a political freeze that could last until a new government takes power.

The even more liberal Bloomberg News, made a stunning admission that "Germany's Economy Is Unraveling Just as Europe Needs It Most", and notes that "Germany is reaching a point of no return. Business leaders know it, the people in the country feel it, but politicians haven’t come up with answers."

That has set Europe’s largest economy on a path of decline that threatens to become irreversible.

Following five years of stagnation, Germany’s economy is now 5% smaller than it would have been if the pre-pandemic growth trend had been maintained.

In short, Germany is heading straight for a historic economic and political collapse.

“The timing is absolutely terrible for the E.U. — basically, these multiple crises are hitting the E.U. at the worst possible time, because the bloc’s traditional engine is busy with itself,” Jana Puglierin, of the European Council on Foreign Relations, said, referring to Germany and France.

The war in Ukraine and the need to bolster Germany’s military — and what that will cost — will be among the urgent issues likely to dominate the election campaign, along with the floundering economy, failing infrastructure, immigration and the rise of the political extremes. Badly behind in the polls, Scholz is planning to highlight his caution when supplying Ukraine with weapons, especially sophisticated offensive hardware. Which, of course, is a U-turn to Germany's legacy position which was literally the opposite, and took advantage of every opportunity to arm Zelensky and deposit more euros into his slush fund.

In any case, Scholz will have to fight hard to persuade voters to give him another chance. For now, it is Mr. Merz, a longtime figure on the political stage, who is widely expected to be the next chancellor, given his party’s strong lead in polls.

The three other mainstream parties are also led by well-known politicians, two of whom held important posts in the government: Christian Lindner, leader of the pro-business Free Democrats, whose falling out with the chancellor helped precipitate the collapse of the coalition; and Robert Habeck, the economic minister and lead candidate for the left-leaning Greens.

But in Germany’s fractious political landscape, no single party is likely to win an outright majority, leading to potentially tricky negotiations to build a coalition more functional and durable than the one that failed.

That necessity probably means that opponents cannot be criticized too heavily because they are all potential coalition partners. But it may also present mainstream parties with difficult decisions about whom they chose to work with.

All of the mainstream parties have said they would refuse to partner with the conservative Alternative for Germany, parts of which are being monitored as a threat to the Constitution by the domestic security services. Nonetheless, the party, which is known as the AfD and is ascendant in the polls with 18 percent approval, continues to gain ground.

As noted at the time, in the closely watched state elections in September, both the AfD and a newer, extreme-left party, the Sahra Wagenknecht Alliance, had their best showings ever. But mainstream parties still consider them an anathema, making it hard to form governing coalitions in those states. The results could portend equally messy coalition haggling in Berlin after a national vote, though the political fringes are less popular nationally than they are in those eastern states.

But given the likely vote tally, many political watchers predict a return of the grand coalition of the center between the conservative CDU and the progressive Social Democratic Party, which governed Germany for 12 of the past 20 years.

Tyler Durden Mon, 12/16/2024 - 12:25

Schiff: The Economy Needs Deflation

Via SchiffGold.com,

In a recent discussion with Darcy Ungaro of The Everyday Investor, Peter challenged the widespread narratives surrounding government spending, the Fed’s 2% inflation target, and the policies that perpetuate these problems. Peter and Darcy highlight the underlying structural issues that plague the economy—massive government debt, intentional inflation, and a citizenry oblivious of the true cost of inflation.

Peter begins by pointing to the fundamental problem: profligate politicians have borrowed freely, relying on the reserve currency status of the US dollar and eager lenders worldwide. That global willingness to lend paved the way for politicians to promise generous programs without raising enough revenue to cover them:

The world was dumb enough to loan us the money. But it goes back to the days where the dollar became the reserve currency. And so the world is looking to accumulate dollars and not to just hold them in cash, but to lend them out to generate a return...

These large deficits enable politicians to promise something for nothing, which is how politicians win elections...

And so if you deliver government programs but you don’t raise taxes, commensurate with the cost of those programs, then you get votes. 

This $34 trillion figure barely scratches the surface of America’s true liabilities. Unfunded promises, hidden from official tallies, only compound the country’s dire financial position:

But that’s just the tip of the iceberg because politicians didn’t just borrow money and spend it. They actually promised voters all sorts of benefits that have never been funded. So that’s still a debt that’s still a liability. Social Security, Medicare, guaranteed student loans, guaranteed mortgages, guaranteed brokerage accounts, guaranteed pensions – the US government gave all these benefits to Americans but never funded them. … So the government is hopelessly insolvent. 

With the debt ballooning, the Federal Reserve faces immense pressure. Peter suggests that while the market expects interest rate cuts, economic reality demands hikes instead:

Well, the markets expect a cut, but a cut is not warranted. In fact, the Fed should continue to hike....

[The debt] is currently financed at very low rates and it would have to be rolled over at much, much higher rates. In addition, we’re adding about a trillion dollars a quarter to the national debt. So that’s another $4 trillion that the government’s going to need to borrow. In addition to the $9 trillion, it’s going to need to refinance. So you’re looking at $13 trillion of debt. I mean, I just don’t think the appetite is there around the world.

Peter recounts the history of the Fed’s 2% inflation target, noting that it was originally intended to be a limit, not a target:

Central banks eventually perverted this whole concept to making a target of inflation. Like you need 2%, that 1% isn’t enough. But that was never part of what New Zealand did. They never said that we needed 2% inflation. They just said if we get 2%, that’s too much. It needs to be, it needs to be less. 2% was the upper end of what they would tolerate for inflation. But it became the target and now it’s really a floor. 

Inflation is a subtle but malicious tax. It benefits those in power by allowing them to appear generous without overtly raising taxes:

It’s in the government’s best interest to have inflation. And so they have to convince the public that it’s good for them... because that’s how they give you something for nothing.

But inflation is a tax. It’s just a tax that the public doesn’t realize they’re paying. And they actually expect us to believe it.

Contrary to what the mainstream says, falling prices benefit consumers. Falling prices don’t destroy commerce any more than rising prices:

Nobody wants health care to be more expensive, education to be more expensive, their insurance to be more expensive. Everybody wants stuff to get cheaper and it’s better.

Now, the other thing they say as well, if prices go down, businesses can’t make any money. Sure, they can. They make more money because their costs are also coming down. 

Unfortunately, the Fed is poised only to continue these problems, not fix them. As Peter explains in his most recent podcast, Fed chair Jerome Powell is distracted from the real issues.

Tyler Durden Mon, 12/16/2024 - 12:05

Kremlin Admits The Fate Of Its Syrian Bases Is Undecided

On Monday the Kremlin disclosed that the fate of its military bases in Syria remains unclear and undecided, following the collapse of the Syrian government and Assad having fled the country on December 8.

"There are no final decisions on this," Kremlin spokesman Dmitry Peskov told a press briefing. "We are in contact with representatives of the forces that now control the situation in the country."

Via AFP

Likely Moscow is pressing representatives of Hayat Tahrir al-Sham (HTS), which holds Damascus, to at least temporarily give assent to the continued Russian military presence on the coast.

The Tartus Naval Base remains Russia's only Mediterranean military port. And alongside Khmeimim Air Base, these are the only two major Russian military outposts outside the former Soviet Union.

They are strategic and crucial for Russia's operations in the Middle East and North Africa, and a full closure of these bases would be a logistical blow in the region for Moscow. It would also signal Russia's waning influence in the Middle East, also at a moment the Pentagon continues occupying Syria's northeast.

Moscow has been busy evacuating both diplomatic staff and some military assets from Syria, as Maxar satellite photos show. 

Since the HTS takeover of Damascus there have been no reported incidents of Russian troops or the bases coming under fire; however, Moscow forces are on high alert.

The last several days have seen huge Russian armored and troop convoys withdrawing from the capital area and some other parts of Syria, headed to the safety of Hmeimim airbase in Latakia province. Assets like anti-air defense missiles are being flown out, and will likely be repositioned related to the war in Ukraine.

Who controls the oil and gas infrastructure in Syria after the fall of Assad (via @MeesEnergy)

Several videos have emerged showing significant amounts of Russian equipment being moved to the coast. Negotiations with the new leaders in Damascus for Russia's bases to be maintained appear to be ongoing.

Washington is likely to press the powers that be in Damascus to force a Russian military exit from the country. And certainly HTS leaders themselves are not going to trust Moscow, given that it was Russian forces for years bombing its enclave of Idlib in support of the Syrian Army.

Tyler Durden Mon, 12/16/2024 - 11:45

Drone Activity Closes Airspace Over Wright Patterson Air Force Base

Authored by Aldgra Fredly via The Epoch Times,

The Wright Patterson Air Force Base in Ohio temporarily closed its airspace on Dec. 13 after drone activity was detected in the area, a base spokesperson said on Dec. 15.

Bob Purtiman, public affairs director for 88th Air Base Wing, told media outlets that the airspace was blocked after small unmanned aerial systems were spotted flying over the air base late Friday and early Saturday.

Purtiman said installation leadership determined that none of the incursions impacted base residents, facilities, or assets.

Purtiman told defense industry news outlet The War Zone that the drones ranged in size and configuration, without elaborating further. It was not immediately clear where the drones came from.

The air base issued a Notice to Air Missions to announce the airspace closure after the drones were detected. The airspace has since been reopened.

Purtiman said that the 88th Air Base Wing, the host unit for Wright Patterson Air Force Base, was working with local authorities in Ohio to ensure the safety of base personnel, facilities, and assets.

“The Air Force is taking all appropriate measures to safeguard our installations and residents,” he said.

The Epoch Times has reached out to Wright Patterson Air Force Base for details on the incident.

Located northeast of Dayton, Ohio, the Wright Patterson Air Force Base is home to Air Force Material Command, which conducts research, testing, and evaluation, and provides acquisition management services and logistics support “necessary to keep Air Force weapon systems ready for war,” according to its website.

The base also hosts the Air Force research laboratory and the National Air and Space Intelligence Center, which serves as the primary source of the U.S. Defense Department for “foreign air and space threats.”

The incident occurred amid reports of unidentified drone-like objects flying over parts of New Jersey, New York, and California.

Alejandro Mayorkas, secretary of the Department of Homeland Security, said the federal government will take action to address concerns but signaled that officials don’t have the authority to shoot them down.

“I want to assure the American public that we in the federal government have deployed additional resources, personnel, technology to assist the New Jersey State Police in addressing the drone sightings,” he told ABC News’ “This Week” anchor George Stephanopoulos on Sunday.

Mayorkas said the sightings are “in fact” of drones, but some are “manned aircraft that are commonly mistaken for drones,” echoing previous statements made by the FBI and the White House. He did not provide further details.

He stated that the U.S. government is limited in its authority to take down a drone, noting that more than 8,000 drones are flown across the country each day.

Tyler Durden Mon, 12/16/2024 - 11:25

Bitcoin Tops $106K, Goes 'Santa Claus Mode' As Optimism Grows For US Reserve Status

Bitcoin’s price rallied almost 5% over the weekend to set a new all-time high above $106,000 amid speculation that it may become a United States reserve asset.



CK Zheng, chief investment officer of ZK Square, told Cointelegraph that Bitcoin has likely entered “Santa Claus mode,” as many investors fear missing out and look to allocate more capital into the asset class.

He predicted a Bitcoin price tag of $125,000 in early 2025 but warned a possible 30% correction could follow as most of the bullish news from the incoming Trump administration has been “priced in.”

A 30% correction from $125,000 would see Bitcoin retrace to around $87,500.

 

From a liquidity perspective, we should not be surprised that bitcoin continues to charge higher (but the new year may bring some weakness)...

Bitcoin has also reached a new record relative to gold (1 BTC can now buy 40 oz of gold).

Gracy Chen, CEO of Bitget, writes that while the Santa Claus rally is a well-documented phenomenon in traditional stock markets, its presence in cryptocurrency is less clear.

Cryptocurrencies, known for their volatility and 24/7 trading, don’t always follow equities’ seasonal patterns. A second trend can be applied to this model that has empirically proven a powerful predictor of a Santa Claus rally occurring in Cryptoland: whether or not the market is in a bull run.

It’s safe to say that crypto firmly checks that box right now, thus making a compelling case for a severe rally coming together as the year draws close. In late 2017, for example, BTC rallied by 68% over the two weeks spanning the New Year. Subsequent years have been more muted, in line with the prevailing market mood at the time. But then there’s 2024, which has already broken all crypto records. One wouldn’t bet against it closing out the year on a tear just to complete the clean sweep.

If traders buy into the Santa Claus rally thesis, they don’t need to create a prediction market to speculate on the likelihood — although nothing is stopping them. In crypto, financial freedom comes as a standard. A more intelligent strategy is filling one’s conviction bags before the year-end. Load up on the assets you believe in the most, and then sit back and let the prophecy unfold.

As 2024 closes out, the financial landscape presents a mix of optimism and caution. The global economy has shown resilience, with many sectors rebounding from previous downturns. Consumer spending during the holiday season is expected to be robust, bolstering market sentiment. The only potential dampener could be the escalation of global tensions in the Middle East or Ukraine. Still, barring a major macro event, there’s every reason to expect the current bull market to remain intact.

Even if the Santa Claus rally proves to be a damp squib on this occasion, it’s no biggie: The bags investors have accumulated now are likely to stand them in good stead next year as the crypto market continues to grind higher. They don’t have to leave a glass of milk and some cookies out, but there’s no excuse for not being ready for Santa this Christmas.

It comes as Strike founder and CEO Jack Mallers said US President-Elect Donald Trump could potentially issue an executive order designating Bitcoin as a reserve asset on his first day in office on Jan. 20.

“There’s potential to use a day-one executive order to purchase Bitcoin,” Mallers stated, adding:

“It wouldn't be the size and scale of 1 million coins but it would be a significant position."

Meanwhile, Satoshi Action Fund CEO Dennis Porter said a third Bitcoin reserve bill is in the works at the state level, though he didn’t say which state might follow Texas and Pennsylvania’s lead.

“We had Pennsylvania, and we had Texas. And now we have another state coming on board. And they sent me the draft. So I know it’s real,” he said during a Dec. 15 X Spaces.

Porter added he expects at least 10 states to introduce a Bitcoin reserve bill in total.

"Its not going to stop. We're going to see more and more of these bills come. At least 10, in my opinion."

Financial analysts are also tipping a 0.25% interest rate cut from the US Federal Reserve on Dec. 18, which could lift Bitcoin’s price even further in the coming months.

Another catalyst behind Bitcoin’s price surge may be one of the new rules by the Financial Accounting Standards Board, which enables institutions to record the value of their crypto assets more realistically. The rule will apply to fiscal years beginning after Dec. 15.

However, bitcoin’s market sentiment is currently in the “Extreme Greed” zone at a score of 83 out of 100, according to the Crypto Fear and Greed Index.

Crypto Fear and Greed Index score for Dec. 16. Source: Alternative.me

It hasn’t been higher since Dec. 5, when Bitcoin broke through the $100,000 milestone.

Tyler Durden Mon, 12/16/2024 - 11:05

Ghosted By ChatGPT: How Jonathan Turley Was First Defamed & Then Deleted By AI

Authored by Jonathan Turley,

It is not every day that you achieve the status of “he-who-must-not-be-named.”

But that curious distinction has been bestowed upon me by OpenAI’s ChatGPT, according to the New York Times, Wall Street Journal, and other publications.

For more than a year, people who tried to research my name online using ChatGPT were met with an immediate error warning.

It turns out that I am among a small group of individuals who have been effectively disappeared by the AI system. How we came to this Voldemortian status is a chilling tale about not just the rapidly expanding role of artificial intelligence, but the power of companies like OpenAI.

Joining me in this dubious distinction are Harvard Professor Jonathan Zittrain, CNBC anchor David Faber, Australian mayor Brian Hood, English professor David Mayer, and a few others.

The common thread appears to be the false stories generated about us all by ChatGPT in the past. The company appears to have corrected the problem not by erasing the error but erasing the individuals in question.

Thus far, the ghosting is limited to ChatGPT sites, but the controversy highlights a novel political and legal question in the brave new world of AI.

My path toward cyber-erasure began with a bizarre and entirely fabricated account by ChatGPT.

As I wrote at the time, ChatGPT falsely reported that there had been a claim of sexual harassment against me (which there never was) based on something that supposedly happened on a 2018 trip with law students to Alaska (which never occurred), while I was on the faculty of Georgetown Law (where I have never taught).

In support of its false and defamatory claim, ChatGPT cited a Washington Post article that had never been written and quoted from a statement that had never been issued by the newspaper. The Washington Post investigated the false story and discovered that another AI program, “Microsoft’s Bing, which is powered by GPT-4, repeated the false claim about Turley.”

Although some of those defamed in this manner chose to sue these companies for defamatory AI reports, I did not. I assumed that the company, which has never reached out to me, would correct the problem.

And it did, in a manner of speaking — apparently by digitally erasing me, at least to some extent. In some algorithmic universe, the logic is simple: there is no false story if there is no discussion of the individual.

As with Voldemort, even death is no guarantee of closure. Professor Mayer was a respected Emeritus Professor of Drama and Honorary Research Professor at the University of Manchester, who passed away last year. And ChatGPT reportedly will still not utter his name.

Before his death, his name was used by a Chechen rebel on a terror watch list. The result was a snowballing association of the professor, who found himself facing travel and communication restrictions.

Hood, the Australian mayor, was so frustrated with a false AI-generated narrative that he had been arrested for bribery that he took legal action against OpenAI. That may have contributed to his own erasure.

The company’s lack of transparency and responsiveness has added to concerns over these incidents. Ironically, many of us are used to false attacks on the Internet and false accounts about us. But this company can move individuals into a type of online purgatory for no other reason than that its AI generated a false story whose subject had the temerity to object.

You can either be seen falsely as a felon or be unseen entirely on the ubiquitous information system. Capone or Casper, gangster or a ghost — your choice.

Microsoft owns almost half of equity in OpenAI. Ironically, I previously criticized Microsoft founder and billionaire Bill Gates for his push to use artificial intelligence to combat not just “digital misinformation” but “political polarization.” Gates sees the unleashing of AI as a way to stop “various conspiracy theories” and prevent certain views from being “magnified by digital channels.” He added that AI can combat “political polarization” by checking “confirmation bias.”

I do not believe that my own ghosting was retaliation for such criticism. Moreover, like the other desparecidos, I am still visible on sites and through other systems. But it does show how these companies can use these powerful systems to remove all references to individuals. Moreover, corporate executives may not be particularly motivated to correct such ghosting, particularly in the absence of any liability or accountability.

That means that any solution is likely to come only from legislative action. AI’s influence is expanding exponentially, and this new technology has obvious benefits. However, it also has considerable risks that should be addressed.

Ironically, Professor Zittrain has written on the “right to be forgotten” in tech and digital spaces. Yet he never asked to be erased or blocked by OpenAI’s algorithms.

The question is whether, in addition to a negative right to be forgotten, there is a positive right to be known. Think of it as the Heisenberg moment, where the Walter Whites of the world demand that ChatGPT “say my name.” In the U.S., there is no established precedent for such a demand.

There is no reason to see these exclusions or erasures as some dark corporate conspiracy or robot retaliation. It seems to be a default position when the system commits egregious, potentially expensive errors — which might be even more disturbing. It raises the prospect of algorithms sending people into the Internet abyss with little recourse or response. You are simply ghosted because the system made a mistake, and your name is now triggering for the system.

This is all well short of Hal 9000 saying “I’m sorry Dave, I’m afraid I can’t do that” in an AI homicidal rage. Thus far, this is a small haunt of digital ghosts. However, it is an example of the largely unchecked power of these systems and the relatively uncharted waters ahead.

*  *  *

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of “The Indispensable Right: Free Speech in an Age of Rage.”

Tyler Durden Mon, 12/16/2024 - 10:45