- DOJ throws the book at a “de-dollarization” guru
- *Sigh* Hunter Biden? AGAIN?
- Alan Knuckman: “Gold is great”
- Ad watchdog tells beer brand to “can” it
- Former NYT reporter on the destruction of journalism… And more!
The guy who literally wrote the book on the most important economic trend of the 2020s…
… sits in foreign custody, awaiting extradition to the United States on charges of international arms trafficking.
It gets weirder: He says the feds have ginned up the charges because he’s got the dirt on Joe Biden’s son Hunter.
It was nearly five years ago when an analyst named Gal Luft first came on our radar in this e-letter.
Luft is co-director of a think tank called the Institute for the Analysis of Global Security. In the summer of 2018, he wrote an eye-opening opinion piece on the CNBC website. Topic: the weaponization of the U.S. dollar, and the steps other nations were taking to get out from under the dollar’s thumb.
“De-dollarization” is a trend we’d already been following for years. So when CNBC gave the topic a little attention — even if it was buried where nearly no one would see it — we perked up.
“In the coming years the dollar will be facing a barrage of attacks with the goal of eroding its hegemony,” Luft wrote in that 2018 article.
Luft noted how Washington was “waging economic warfare against one-tenth of the world’s countries…
“These include Russia, Iran, Venezuela, Cuba, Sudan, Zimbabwe, Myanmar, the Democratic Republic of Congo, North Korea and others on which Washington has imposed sanctions over the years, but also countries like China, Pakistan and Turkey, which are not under full sanctions but rather targets of other punitive economic measures.”
All told, the U.S. government was taking aim at countries comprising more than a quarter of the globe’s population and economic output nearly equal to that of America’s. Together, he said, they seek to “[join] forces to create a parallel financial system which would be out of reach of America’s long arm.”
Again, this was 2018 — years before Washington froze the assets of Russia’s central bank and Saudi Arabia started talking openly about selling oil to China priced in yuan. In 2019, Luft followed up with a book called De-Dollarization: The Revolt Against the Dollar and the Rise of a New Financial World Order.
Fast-forward to the present…
Luft was picked up on an Interpol warrant at the airport in Larnaca, Cyprus, on Feb. 16 — shortly before boarding a flight home to Israel. (Luft’s think tank is based in Washington, but he’s an Israeli national — which was news to us.) He stands accused of illegally funneling arms to Libya and China.
“Luft is further suspected of conspiracy to commit serious felonies,” says The Jerusalem Post, “as well as making false statements and other unspecified offenses he has allegedly committed since 2015.”
Luft’s lawyer Mordechai Tzivin expanded on his client’s tweet: The weapons charges “would be a good way to shut him up,” Tzivin told the Ynet website, “because he knows a lot of information on Hunter. The Senate only recently began to investigate Hunter’s case and Gal’s testimony, if [he is allowed to testify], will bury Hunter Biden. Even more so, his testimony will shift the attention toward the president himself.”
For now, Luft is under house arrest in Cyprus — stripped of his passport. His next court date is April 3.
It seems in addition to his think-tank duties, Luft worked alongside Hunter Biden as “an adviser to a Chinese energy conglomerate widely suspected of serving as a front for the Chinese Communist Party,” according to Chuck Ross at the Washington Free Beacon.
“Luft served as an adviser to CEFC China Energy, a conglomerate that ‘aligned itself so closely with the Chinese government that it was often hard to distinguish between the two,’ according to CNN. The group, which donated at least $350,000 to Luft’s think tank, paid Hunter Biden at least $6 million in 2017 to procure energy investment deals in the United States…
“While Luft’s claims might otherwise be easily dismissed as a bluff, his connection to CEFC China Energy suggests he may know something about the Bidens.”
Luft claims he furnished information about Hunter Biden, Joe Biden and Joe Biden’s brother Jim to the Justice Department in 2019. His American lawyer Robert Henoch plans to submit a letter to Congress that will “include details regarding statements that Gal gave to the US DOJ when he was interviewed, and I accompanied him in Brussels, Belgium.”
And with that, you know what we know. There are many missing puzzle pieces, including details about what the feds believe Luft did to run afoul of U.S. law — which makes this tale of international intrigue even more sketchy than it is already.
Even if Luft lacks the goods on Hunter Biden’s dealings with China, it wouldn’t surprise us if the powers that be want to shut up one of the most articulate critics of the way Washington has weaponized the dollar.
In 2021, Luft took part in a Beijing summit called “International Forum on Democracy: The Shared Human Values.” He said the Biden administration’s “commitment to democracy [goes] only as far as its interests allow.”
And in January, according to that Jerusalem Post account, Luft’s think tank “released a scathing analysis accusing the U.S. of ‘pursuing illegal economic policies’ in regard to its ‘extremely trigger-happy’ economic measures against several nations across the world, most notably Russia, which has been at the receiving end of a multitude of economic sanctions from Washington and Western allies in Europe.” [Emphasis ours.]
We await further developments, and we’ll pass them along as they happen.
Interest rates are creeping higher on this Thursday, but the stock market is taking it in stride.
The yield on a 10-year Treasury note has crept above 4% for the first time in nearly four months. In fact, the entire U.S. yield curve is over 4% now.
And the curve remains inverted, with short-term rates higher than long-term rates — typically a harbinger of recession. As we said a few days ago, you can lend your money to Uncle Sam for only six months and get over 5%.
But at last check, the Dow is up about a third of a percent at 32,760. The S&P 500 is down about a quarter percent at 3,940. And the Nasdaq is down a half percent at 11,315.
Crude popped big after we went to virtual press yesterday and it’s adding to those gains today, a barrel of West Texas Intermediate over $78 for the first time in nearly two weeks.
Precious metals are hanging onto yesterday’s gains, gold at $1,836 and silver at $20.88.
“Gold is great right here,” said Paradigm trading guru Alan Knuckman during our weekly editorial Zoom call yesterday.
Gold held the line on the $1,800 level during its February swoon… and $1,800 is the midpoint of gold’s six-month trading range between $1,650–1,950.
Gold’s movement of late has been tied intimately with that of the U.S. dollar index — dollar up, gold down and vice versa. The dollar index fell to nearly 100 a month ago and popped over 105 last week. “I think the next move for the dollar’s back to the downside,” says Alan — which would be gold positive.
It was back in October Alan told attendees at our Paradigm Shift Summit in Las Vegas that gold was set to bounce — and it did. He recommended March call options on the gold-mining giant Newmont Corp. (NEM). Those calls doubled in value by mid-January — 100% in only three months. If Alan says gold is set to move again… take him at his word.
Great moments in advertising: The U.S. ad industry’s watchdog has told Molson Coors to can it with this campaign…
Note the generic “Extremely Light Beer” label [Molson Coors screengrab]
Last year, Molson Coors adopted the following tagline for its Miller Lite brand: “Light beer shouldn’t taste like water. It should taste like beer.”
Execs at Anheuser-Busch InBev took exception and raised a squawk with the National Advertising Division of BBB. They seemed to think Miller Lite (96 calories per serving) was taking a swipe at Michelob Ultra (95 calories), even though it wasn’t singled out by name. (Seriously? For all we know, Molson Coors could have been taking a swipe at its own infamous “Beast Light.” Heh…)
The NAD has issued its decision: “Although no specific competing light beer is identified by name in the challenged videos, NAD determined that tasting ‘like water’ is a measurable attribute. Reliable sensory testing could demonstrate whether consumers detect a watery taste or the complete absence of taste. Consumers may also reasonably expect that the statement is supported by such evidence.”
Molson Coors plans an appeal: “We vehemently disagree with this decision because we believe light beer should taste like beer, not water, and we are well within our right to share that belief,” says a company statement to the Milwaukee Business Journal.
On the ongoing topic of “What happened to America?” several readers weighed in on the media — an industry I watched decaying from the inside for 20 years.
“I’m old enough to remember the Vietnam War,” says one. “Back then The New York Times would publish the war death count on a daily basis on the front page. There was resistance to the Vietnam War. Now no one really knows what is going on in Ukraine.
“Today journalists are no longer reporting on the news but have chosen political sides. America has slowly and surely lost its moral compass since the Vietnam War. Our government got us involved in many wars since Vietnam based on lies told to the American people. I fully admit I was not able to see those lies.
“COVID-19 and social media have increased the speed of America’s moral decline. America has the best government that money CAN buy.”
“We used to have fact-based journalism in America,” says a self-described “avid reader of The 5” — “where journalists used to be in the business of monitoring and keeping a check on political leaders and institutions in power. I believe they used to call it ‘watchdog’ journalism where they would keep focus on the actions of government and its leaders to help protect the American people.
“But somehow objective truth has morphed into a subjective truth by the media who have now collaborated with the very political leaders and institutions in power they were supposed to monitor!
“If there is no longer objective truth like we used to value here in America and now it’s all about my truth, and my feelings are my truth, then we as a society are most certainly doomed to a demise we never thought possible only 15 years ago.”
The 5: Heh, 15 years ago was when I got out of the TV news racket.
But you’re onto something. “The commercial model of journalism has changed from when I began working as a reporter, covering conflicts in Central America in the early 1980s,” wrote ex-NYT reporter Chris Hedges last week. “In those days, there were a few large media outlets that sought to reach a broad public.”
For that reason, the media could report “on events and issues that did not please all of its readers. It left a lot out, to be sure. It gave too much credibility to officialdom, but, as [legendary Timesman Sydney] Schanberg told me, the old model of news arguably kept ‘the swamp from getting any deeper, from rising higher.’”
“The advent of digital media and the compartmentalizing of the public into antagonistic demographics has destroyed the traditional model of commercial journalism,” Hedges went on.
“Devastated by a loss of advertising revenue and a steep decline in viewers and readers, the commercial media has a vested interest in catering to those who remain. The approximately three and a half million digital news subscribers The New York Times gained during the Trump presidency were, internal surveys found, overwhelmingly anti-Trump. A feedback loop began where the paper fed its digital subscribers what they wanted to hear.”
Even the NYT’s editor at the time, Dean Baquet, acknowledged as much. When special counsel Robert Mueller found no evidence of collusion between Trump and the Russian government, Baquet was crestfallen.
“The day Bob Mueller walked off that witness stand, two things happened,” Baquet told a “town hall” of NYT employees in 2019.
“Our readers who want Donald Trump to go away suddenly thought, Holy s***, Bob Mueller is not going to do it. And Donald Trump got a little emboldened politically… We’re a little tiny bit flat-footed. I mean, that’s what happens when a story looks a certain way for two years. Right?”
We give Chris Hedges the last word today: “Giving subscribers what they want makes commercial sense. However, it is not journalism.”
The 5 Min. Forecast