Month: October 2020

Authored by Tuomas Malinen via GnSEconomics.com,

For years, we have been warning about dire consequences if central banks continue to meddle in the economy and financial markets. In December 2013, we wrote

There is a serious possibility that the measures taken by the central banks have already created a situation in which their actions increase rather than decrease financial instability. This is due to the fact that, if the actual price of an asset does not meet its market–based value, the true level of risk is not properly revealed.

During the “Coronavirus rescue” by the major central banks from March through June of this year, we essentially ran down the clock. No viable paths remain to escape the vicious feedback loop between central banks and financial markets – at least without serious repercussions.  

Over the years, central banks have created conditions where prices in capital markets—and by implication, the resulting capital allocation structure—have become distorted to a previously unimaginable degree.

This has resulted in three extremely troublesome fragilities at the heart of the world economy.

First, it has led to ‘yield hunting’ among investors, who are forced to seek higher yields from riskier financial products.

Secondly, it has led to a permanent central bank intervention in the financial markets, because without it a crash would surely occur.

Thirdly – and this is something that has received much too little attention – the massive capital misallocations due to unnaturally low interest rates have ‘hollowed-out’ vast sectors of the global economy.

We have been focusing on the fragility of the financial markets frequently lately, so this time we will concentrate on the capital misallocation issue instead, though the two are inherently linked.

The driving force of the economy

In March 2019 we devoted the entirety of the Q-Review to explain why global economic growth has sputtered since 2009.

We explored, extensively, the concept of creative destruction, which describes the process by which capitalist economies evolve and grow over time. In essence, creative destruction enables the flow of technical innovations into the economy through the destruction of old and inefficient production methods and enterprises, and the emergence of new, more productive firms.

Moreover, we wrote that

The risk-and-reward relationship, that is, the gains and failures of the private sector drive economic progress. The first accumulates income and capital, while the second uncovers sustainable businesses, setting the stage for the creative destruction.

In essence, this is what a capitalist economy is all about.  The accumulation of capital is required to provide the funding for sustainable businesses, which provide employment, personal income and tax revenues.

Price discovery in the modern capital markets is essential to accurately evaluate the risk-and-reward relationship of both real economic investments as well as those of financial assets.  Price discovery thus guides the efficient allocation of capital to its most profitable employment, based on the information gathered by millions of investors.  This idea is part of the bedrock of capitalist theory.

‘Hollowing out’

When central banks pushed both long and short-term interest rates to extreme lows, two things happened:

1. Less-attractive investments became “profitable”.

2. Capital allocation started to become distorted.

An interest rate is essentially the “price of time”, as the future tends to be more risky than the present. When we borrow from the future to invest, an interest rate attempts to reflect this risk. The more uncertainty, the higher the interest rate. Or that is how it should go, but central banks have worked against this natural economic law in a determined way.

With either very low or negative interest rates, which became common in early 2010s, funding becomes available to marginal and even unprofitable investments. Even more destructive capital misallocation occurs when unprofitable firms that should fail, do not do so because of artificially cheap funding. These “zombie” enterprises freeze capital which could be used to fund more profitable investments, which in turn would translate into higher worker salaries, dividends and capital gains for shareholders, and a more vigorous and dynamic economy.

This is the burden central banks have laden the world economy with, and it shows in the numbers.

The collapse of productivity growth

Measuring the impact of creative destruction, that is, the flow of technological innovations into the economy, is hampered by the fact that it is – generally speaking – unobservable.

When a profitability-enhancing technological innovation appears, firms acquire new equipment and higher skilled workers to integrate it into production. While we can measure equipment, machinery and even labour quality, the actual productivity-increasing effect of the innovation cannot be observed directly, at least at the “macro” level of the economy.

However, we do know the level of increased production, the investment in acquired equipment and machinery (capital), and the improved quantity and quality of the labour force. That part of the increase in production that cannot be explained by these elements can be interpreted as the economy-wide growth of productivity. This measure is called the Total Factor Productivity, or TFP.

Figure 1 presents TFP in the world since 1990. As one notes, the TFP falls during crises and increases during economic expansions and booms. However, global TFP growth began to stagnate in 2011 and has never recovered.

Figure 1. The regional and global growth of the total factor productivity (in %). Source: GnS Economics, Conference Board

The period we call the “Great Stagnation” from 2011 till now, should not have occurred. Productivity should grow in economic expansions, but since then has not.

The stagnation of TFP growth tells a chilling tale about the destruction of the foundations of our economies. The deep erosion of both the risk-and-reward relationship and free capital allocation by misguided central banks have literally stopped the great engine of global productivity growth.

We have lived in a ‘mirage’ of economic expansion since 2011.

The end is nigh!

Central banks have delivered a ‘double-whammy’ to the global economy.

They have hollowed-out the world economy by seriously undermining the process of creative destruction. In addition, they have destroyed the pricing mechanism in the capital markets, which has led to serious distortions (i.e. ‘bubbles’) in the financial markets.

It is actually quite unbelievable how the central bankers have managed to negatively affect the world economy during the past 11 years. While rather interesting from a dispassionate academic perspective, the resulting fragility of the world economy and financial markets means that we are prone to an epic collapse, which will hurt households, companies and even countries badly.

The collapse may start from the U.S. stock market, some corner of the U.S. credit markets, from the teetering European banking sector, or from some other obscure part of the financial markets. The only question is, how long do we have?

With the second wave of the coronavirus pandemic gathering steam, the only remotely reliable answer we can give is, “not long”.

And, when the collapse occurs, then the fate of our and future generations will be decided. If we let the central banks assume full control of our economies, a truly horrible future scenario emerges, as we warned in the Q-Review 9/2020.

However, if we let the crisis play out and allow the foundations of the market economy, like free price discovery in the capital markets, to return, we are likely to face one of the most prosperous periods in human history.

The simple fact is that is time has come for the central banks to go. The sooner, the better.

*  *  *

Stay informed how the world economy and the global economic crisis through our Q-Review reports and Deprcon Service

Authored by Steve Watson via Summit News,

Over six thousand scientists and doctors have signed a petition against coronavirus lockdown measures, urging that those not in the at risk category should be able to get on with their lives as normal, and that lockdown rules in both the US and UK are causing ‘irreparable damage’.

Those who have signed include professors from the world’s leading universities.

Oxford University professor Dr Sunetra Gupta was one of the authors of the open letter that was sent with the petition, along with Harvard University’s Dr Martin Kulldorff and Stanford’s Dr Jay Bhattacharya.

It declares that social distancing and mask mandates are causing ‘damaging physical and mental health impacts.’

The petition, dubbed the Great Barrington Declaration after the town in Massachusetts where it was written, has been signed by close to 73,000 members of the public at time of writing, as well as over 4,700 medical and public health scientists and around 3,200 medical practitioners.

“Those who are not vulnerable should immediately be allowed to resume life as normal,” it notes, adding “Keeping these [lockdown] measures in place until a vaccine is available will cause irreparable damage, with the underprivileged disproportionately harmed.”

“Current lockdown policies are producing devastating effects on short and long-term public health,” the declaration also declares.

It continues, “The results (to name a few) include lower childhood vaccination rates, worsening cardiovascular [heart] disease outcomes, fewer cancer screenings and deteriorating mental health – leading to greater excess mortality in years to come, with the working class and younger members of society carrying the heaviest burden.”

“Keeping students out of school is a grave injustice,” the declaration adds.

“Those who are not vulnerable should immediately be allowed to resume life as normal, it concludes, explaining that “Simple hygiene measures, such as hand washing and staying home when sick should be practiced by everyone to reduce the herd immunity threshold.”

“Schools and universities should be open for in-person teaching. Extracurricular activities, such as sports, should be resumed. Young low-risk adults should work normally, rather than from home,” it emphasises.

Finally, the declaration demands that normal life should resume, stating that “Restaurants and other businesses should open. Arts, music, sport and other cultural activities should resume. People who are more at risk may participate if they wish, while society as a whole enjoys the protection conferred upon the vulnerable by those who have built up herd immunity.”

The declaration echoes President Trump’s words earlier this week when he returned to the White House and asked Americans not to live in fear or let let the virus dominate their everyday lives:

pic.twitter.com/OxmRcZ5nUZ

— Donald J. Trump (@realDonaldTrump) October 5, 2020

The declaration dovetails with other research that has concluded lockdowns will conservatively “destroy at least seven times more years of human life” than they save.

Germany’s Minister of Economic Cooperation and Development, Gerd Muller, has warned that lockdown measures throughout the globe will end up killing more people than the Coronavirus itself.

In an interview with German newspaper Handelsblatt, Muller warned that the response to the global pandemic has resulted in “one of the biggest” hunger and poverty crises in history.

Muller’s comments come five months after a leaked study from inside the German Ministry of the Interior revealed that the impact of the country’s lockdown could end up killing more people than the coronavirus due to victims of other serious illnesses not receiving treatment.

As we have previously highlighted, in the UK there have already been up to 10,000 excess deaths as a result of seriously ill people avoiding hospitals due to COVID-19 or not having their hospital treatments cancelled.

Professor Richard Sullivan also warned that there will be more excess cancer deaths in the UK than total coronavirus deaths due to people’s access to screenings and treatment being restricted as a result of the lockdown.

His comments were echoed by Peter Nilsson, a Swedish professor of internal medicine and epidemiology at Lund University, who said, “It’s so important to understand that the deaths of COVID-19 will be far less than the deaths caused by societal lockdown when the economy is ruined.”

According to Professor Karol Sikora, an NHS consultant oncologist, there could be 50,000 excess deaths from cancer as a result of routine screenings being suspended during the lockdown in the UK.

In addition, a study published in The Lancet that notes “physical distancing, school closures, trade restrictions, and country lockdowns” are worsening global child malnutrition.

Experts have also warned that there will be 1.4 million deaths globally from untreated TB infections due to the lockdown.

As we further previously highlighted, a data analyst consortium in South Africa found that the economic consequences of the country’s lockdown will lead to 29 times more people dying than the coronavirus itself.

Hundreds of doctors are also on record as opposing lockdown measures, warning that they will cause more death than the coronavirus itself.

Despite citizens across the world being told to observe the lockdown to “save lives,” numerous experts who are now warning that the lockdown could end up costing more lives are being ignored or smeared by the media.

*  *  *

The Great Barrington Declaration

Li-Meng Yan, A Chinese virologist (MD, PhD) who worked in a WHO reference lab and fled her position at the University of Hong Kong, has published a second co-authored report, alleging that SARS-CoV-2, the virus which causes COVID-19, was not only created in a Wuhan lab, it’s an "unrestricted bioweapon" which was intentionally released.

"We used biological evidence and in-depth analyses to show that SARS-CoV-2 must be a laboratory product, which was created by using a template virus (ZC45/ZXC21) owned by military research laboratories under the control of the Chinese Communist Party (CCP) government," reads the paper.

SARS-CoV2 is a product of laboratory modification, which can be created in approximately six months using a template virus owned by a laboratory of the People’s Liberation Army (PLA). The fact that data fabrications were used to cover up the true origin of SARS-CoV 2 further implicates that the laboratory modification here is beyond simple gain-of-function research.

The scale and the coordinated nature of this scientific fraud signifies the degree of corruption in the fields of academic research and public health. As a result of such corruption, damages have been made both tot he reputation of the scientific community and to the well-being of the global community.

The report also claims that the RaTG13 virus which Wuhan "Batwoman" Dr. Zhengli Shi and colleagues say they obtained in bat feces in 2013 (and which is 96% identical to SARS-CoV-2), is fraudulent and also man made.

Since its publication, the RaTG13 virus has served as the founding evidence for the theory that SARS-CoV-2 must have a natural origin. However, no live virus or an intact genome of RaTG13 have ever been isolated or recovered. Therefore, the only proof for the “existence” of RaTG13 in nature is its genomic sequence published on GenBank.

The report goes on to say that the RaTG13 genome could easily be fabricated, and that "an entry on GenBank, which in this case is equivalent to the existence of an assembled viral genomic sequence and its associated sequencing reads, is not a definitive proof that this viral genome is correct or real," and that the process for sequencing DNA itself "leaves room for potential fraud."

If one intends to fabricate an RNA viral genome on GenBank, he or she could do so by following these steps: create its genomic sequence on a computer, have segments of the genome synthesized based on the sequence, amplify each DNA segment through PCR, and then send the PCR products (may also be mixed with genetic material derived from the alleged host of the virus to mimic an authentic sequencing sample) for sequencing.The resulted raw sequencing reads would be used, together with the created genomic sequence, for establishing an entry on GenBank. Once accomplished, this entry would be accepted as the evidence for the natural existence of the corresponding virus. Clearly, a viral genomic sequence and its GenBank entry can be fabricated if well-planned.

RaTG13 has ‘multiple abnormal features,’ according to the report. For starters, it’s claimed that it was a fecal sample – yet just 1.7% of the raw sequencing reads are bacterial, when fecal swab samples are typically 70-90% bacterial. Second, the genomic sequence for RaTG13 contains segments of non-bat origin, including fox, flying fox, squirrels and other animals.

What’s more, China destroyed all evidence of RaTG13. "No independent verification of the RaTG13 sequence seems possible because, according to Dr. Zhengli Shi,the raw sample has been exhausted and no live virus was ever isolated or recovered. Notably, this information was known to a core circle of virologists early on and apparently accepted by them."

Meanwhile, another coronavirus which shares a ‘100% nucleotide sequence identity with RaTG13’ – RaBtCoV/4991 – on a ‘short, 440-bp RNA-dependent RNA polymerase gene segment.’

RaBtCoV/4991 was allegedly discovered by Shi and colleagues in 2012 and published in 2016, and colleagues have been asking if it’s the same virus as RaTG13.

Given the  100%  identity  on  this  short  gene  segment between  RaBtCoV/4991  and  RaTG13,the  field  has demanded clarification of whether or not these two names refer to the same virus. However,Dr. Shi did not respond to the requestor address this question for months. The answer finally came from Peter Daszak, president of EcoHealth Alliance and long-term collaborator of Shi, who claimed that RaBtCoV/4991 was RaTG1327.

Three suspicious facts

First, it makes no sense that ‘Batwoman’ Shi and her team wouldn’t have conducted whole genome sequencing of RaBtCoV/4991 before 2020, as it was suspected in the deaths of miners who suffered from severe pneumonia after clearing out bat droppings in a Chinese mineshaft.

Given the Shi group’s consistent interests in studying SARS-like bat coronaviruses and the fact that RaBtCoV/4991 is a SARS-like coronavirus with a possible connection to the deaths of the miners, it is highly unlikely that the Shi group would be content with sequencing only a 440-bp segment of RdRpand not pursue the sequencing of the receptor-binding motif (RBM)-encoding region of the spike gene. In fact, sequencing of the spike gene is routinely attempted by the Shi group once the presence of a SARS-like bat coronavirus is confirmed by the sequencing of the 440-bp RdRpsegment25,32, although the success of such efforts is often hindered by the poor quality of the sample.

"Clearly, the perceivable motivation of the Shi group to study this RaBtCoV/4991 virus and the fact that no genome sequencing of it was done for a period of seven years (2013-2020) are hard to reconcile and explain."

Meanwhile, genomic sequencing of RaTG13 was conducted in 2018.

Second, why did Shi delay publication on RaTG13 until 2020 when it’s got a Spike protein that can bind with human ACE2 receptors?

…if the genomic sequence of RaTG13 had been available since 2018, it is unlikely that this virus, which has a possible connection to miners’ deaths in 2012 and has an alarming SARS-like RBM, would be shelfed for two years without publication. Consistent with this analysis, a recent study indeed proved that the RBD of RaTG13(produced via gene synthesis based on its published sequence) was capable of binding hACE2

Third, there has been no follow-up work on RaTG13 by Shi’s group.

Upon obtaining the genomic sequence of a SARS-like bat coronavirus, the Shi group routinely investigate whether or not the virus is capable of infecting human cells. This pattern of research activities has been shown repeatedly. However, such a pattern is not seen here despite that RaTG13 has an interesting RBM and is allegedly the closest match evolutionarily to SARS-CoV-2

Direct genetic evidence proving RaTG13 is fraudulent

Yan’s group closely examined the sequences of specific spike proteins for relevant viruses – specifically comparing mutations, and found that the spike genes of SARS-CoV-2 and RaTG13 do not contain evidence of natural evolution when compared to other coronaviruses which naturally evolved.

A logical interpretation of this observation is that SARS-CoV-2 and RaTG13 could not relate to each other through natural evolution and at least one must be artificial.If one is a product of natural evolution, then the other one must be not. It is also possible that neither of them exists naturally. If RaTG13 is a real virus that truly exists in nature, then SARS-CoV-2 must be artificial.

More:

It is highly likely that the sequence of the RaTG13 genome was fabricated by lightly modifying the SARS-CoV-2 sequence to achieve an overall 96.2% sequence identity. During this process, much editing must have been done for the RBM region of the S1/spike because the encoded RBM determines the interaction with ACE2 and therefore would be heavily scrutinized by others.

The paper concludes: All fabricated coronaviruses share a 100% amino acid sequence identity on the E protein with ZC45 and ZXC21

Evidence herein clearly indicates that the novel coronaviruses recently published by the CCP-controlled laboratories are all fraudulent and do not exist in nature. One final proof of this conclusion is the fact that all of these viruses share a 100% amino acid sequence identity on the E protein with bat coronaviruses ZC45 and ZXC21, which, as revealed in our earlier  report1, should be the template/backbone used for the creation of SARS-CoV-2. Despite its conserved function in the viral replication cycle, the E protein is tolerant and permissive of amino acid mutations. It is therefore impossible for the amino acid sequence of the E protein to remain unchanged when the virus has allegedly crossed species barrier multiple times (between different bat species, from bats to pangolins, and from pangolins to humans). The 100% identity observed here, therefore, further proves that the sequences of these recently published novel coronaviruses have been fabricated.

Unrestricted bioweapon?

Yan notes that while it’s not easy for the public to accept that SARS-CoV-2 is a bioweapon due to its relatively low lethality, it indeed meets the criteria of a bioweapon.

In 2005, Dr. Yang specified the criteria for a pathogen to qualify as a bioweapon:

1. It is significantly virulent and can cause large scale casualty.
2. It is highly contagious and transmits easily, often through respiratory routes in the form of aerosols. The most dangerous scenario would be that it allows human-to-human transmission.
3. It is relatively resistant to environmental changes, can sustain transportation, and is capable of supporting targeted release.

All of the above have been met bySARS-CoV-2: it has taken hundreds of thousands lives, led to numerous hospitalizations, and left many with sequela and various complications; it spreads easily by contact, droplets, and aerosols via respiratory routes and is capable of transmitting from human to human, the latter of which was initially covered up by the CCP government and the WHO and was first revealed by Dr. Li-Meng Yan on January 19th, 2020 on Lude Press; it is temperature-insensitive (unlike seasonal flu) and remains viable for a long period of time on many surfaces and at 4°C (e.g. the ice/water mixture).

What’s more, COVID-19 spreads asymptomatically, which "renders the control of SARS-CoV-2 extremely challenging."

"In addition, the transmissibility, morbidity, and mortality of SARS-CoV-2 also resulted in panic in the global community, disruption of social orders, and decimation of the world’s economy. The range and destructive power of SARS-CoV-2 are both unprecedented."

"Clearly,SARS-CoV-2 not only meets but also surpasses the standards of a traditional bioweapon. Therefore, it should be defined as an Unrestricted Bioweapon."

"Unless Bill Barr indicts these people for crimes — the greatest political crime in history of our country — then… https://t.co/ESjGYbPoOc

— Aaron Rupar (@Aaron Rupar)1602159808.0