War Dogs Bite

• Oil’s post-9/11 performance: A template for the 2020s
• Europe to Elon: You’re not censoring enough
• Just when you thought the IRS couldn’t get any worse…
• Good news: Britain slows the cashless-society rush
• Readers write: In praise of cursive.

Oil After 9/11… and Oil Now

It finally clicked last night: This fellow gives voice to the inchoate despair your editor has felt all week…

Yep, it’s that post-9/11 shock of recognition. What happened in the early 2000s — it’s about to happen all over again. All the blunders, all the horrors — now with social media!

But, per this e-letter’s founding mission, we keep our focus on events within our control — following the money trail set in motion by distant events.

With that in mind…

A strange complacency overtook the oil markets this week.

Sure, after Hamas unleashed its assault on Israel Saturday, the price of crude popped nearly 5% Sunday night when trading opened for a new week.

But then the price quickly retreated — on the theory that there’s no oil to speak of in Israel and Gaza and there’s little risk of the conflict spreading.

Really? The day after the attack, the Biden administration redirected an aircraft carrier to the Eastern Mediterranean. “Iran was the only plausible target for that show of force,” points out Ted Galen Carpenter, senior fellow at the Libertarian Institute — “Hamas has neither an air force nor a navy.”

As we mentioned on Monday, a reporter at The Wall Street Journal with a dubious career history published a story citing a source within Hamas as saying Iranian security officials helped plan the attacks.

Someone with a conscience inside the U.S. deep state — hey, there’s a few of them! — made it known to The New York Times that according to “multiple pieces of intelligence,” Iranian leaders were just as surprised by the attack as — well, Israeli leaders.

But that made no difference at all to former UN Ambassador Nikki Haley — who the power elite is desperate to elevate to the GOP presidential nomination.

She wasted no time trying to whip up the masses on Fox News. “This is an attack on America,” she bellowed. ”And I’ll say this to Prime Minister Netanyahu… Iran’s behind it, finish them.”

So if there are factions within the Beltway determined to “finish Iran” in much the same way as they “finished Iraq” 20 years ago… oil prices have a long, long way to run.

Oil prices reacted little to the 9/11 attacks in 2001 — staying under $20 a barrel into early 2002. But by mid-2005, the price tripled to $60. Ultimately, crude set a record of $147 during the summer of 2008. Adjusted for inflation, that’s $208 today.

With oil in the mid-$80s this week, a mere tripling of the price would propel crude over $250 — eclipsing those 2008 highs both in absolute and inflation-adjusted terms.

And energy stocks? The big energy ETF XLE was cut by a third amid the general stock market slump of 2002… but as the war drums beat ever louder, it went on a tear from $20 to $60 by 2006, topping out over $90 in 2008.

Of course, history never repeats exactly — but it does rhyme reliably. Something to think about now.

[For the sake of full disclosure, I’ve been dollar-cost-averaging into XLE since last year, and I’m not about to stop now. Not that my piddly buys can move a $38.2 billion ETF — but we aim for transparency.]

Europe to Elon: You’re Not Censoring Enough

Meanwhile, the Hamas attack is giving the power elite a new pretext to ram through even more internet censorship.

On Tuesday, the European Union’s “Commissioner for Internal Market” Thierry Breton fired off a letter to Elon Musk, informing him that his X-formerly-Twitter platform had run afoul of Europe’s Digital Services Act.

Thierry Breton: He’s got the all-knowing smirk of a European bureaucrat.
[European Parliament photo]

Despite its benign-sounding name, the Digital Services Act empowers European bureaucrats to decree what is true and what is false — and to ban the dissemination of anything they consider false. Violations can result in fines as steep as 6% of a company’s revenue — not profits, revenue.

“Following the terrorist attacks carried out by Hamas against Israel,” Thierry’s letter begins, “we have indications that your platform is being used to disseminate illegal content and disinformation in the EU.”

Presumably the offending content is critical of the Israeli government, given the statements of fulsome support for Israel coming out of EU leaders this week. But the letter fails to cite any specific posts that the EU deems to be false.

Nonetheless, Musk was given 24 hours to hop to it, curb the offending content and “report on the crisis measures taken to my team.”

“This is one of the most authoritarian, really creepy letters you will ever see, but it’s absolutely a sign of what is coming,” says the tireless civil libertarian Glenn Greenwald.

It marks “an even more aggressive expansion of the censorship regime under which we now live,” he said this week on the Rumble video platform.

Musk responded on X, asking for a list of the violations “so that the public can see them.” He got this non-response response from Breton…

So not only do European bureaucrats assert the authority to decide what’s true and false, they’re telling Musk it’s up to him and his lawyers to figure out what the bureaucrats deem to be false.

Within a day, the results were evident — and not just to X users in Europe.

The independent journalist Max Blumenthal tried to post a clip of his 2014 documentary called Killing Gaza. Many viewers got the following result…

No different, really, than YouTube banning Oliver Stone’s 2016 documentary Ukraine on Fire last year — after it became inconvenient to the Western narrative.

What’s happening here is the Alex Jones precedent — and it absolutely won’t stay confined to Europe.

Recall how the Big Tech companies chose Jones as their first target for “deplatforming” in 2018. Jones was a sufficiently vile figure that few would object. Within a few years, legions of everyday people were being cancelled for wrongthink.

The same dynamic is at work again, as Greenwald aptly points out…

And don’t underestimate the potential for European measures to be implemented here.

As the independent journalist Matt Taibbi writes, ”One of the major subplots of the new ‘censorship-industrial complex’ era involves the lead role Europe has assumed in implementing draconian speech laws, its leaders opining with imperious certainty that its restrictive conceptions of speech will be brought to the United States, whether we like it or not.

“If you haven’t seen the video of European Commission VP Věra Jourová at the World Economic Forum telling the nodding cucktastic toady-moderator Brian Stelter about ‘illegal hate speech, which you will have soon also in the U.S.,’ I recommend taking a downer or two before you watch the following.”

We give Taibbi the last word: “Thierry Breton wants Americans to police speech at his say-so? He can put on his tri-cornered hat, sail over here, and make us. Right? Doesn’t anyone have a spine anymore?”

Just When You Thought the IRS Couldn’t Get Any Worse…

If you ignored our warning the last time, the IRS is now even more bound and determined to make life harder for small business owners and the self-employed.

Yesterday the agency said Americans failed to pay an estimated $688 billion in taxes due on their 2021 returns — a record.

Only about 21% of that total is people who didn’t file a return or never paid their bill. The rest is underreported income — which the IRS says is happening more and more with people doing “gig economy” work instead of being W2 wage slaves.

“The largest element of noncompliance, $182 billion, was attributable to undeclared business and farm income reported on Schedule C and F on individual returns,” says The Wall Street Journal. [Emphasis ours]

So… count on more audits and other enforcement measures. “This increase in the tax gap underscores the importance of increased IRS compliance efforts on key areas,” says IRS Commissioner Danny Werfel (not to be confused with Heisman quarterback and NFL disappointment Danny Wuerffel).

As we mentioned last month, the IRS has blown off the Biden administration’s promise to limit this stepped-up enforcement to people with incomes over $400,000. “High income” as defined by the IRS is only $200,000.

If you’re self-employed or you own a small business… well, don’t say we didn’t warn you.

As the week winds down,the commodity complex is rallying for no obvious reason.

Gold is up almost $50 to $1,918 and silver is up more than 80 cents to $22.64. Crude has added another $3 to $85.95.

The explanation may be as prosaic as traders covering their bases in case something blows up in the Middle East while the exchanges are closed for the weekend; Friday rallies were a routine event during the early weeks of the Russia-Ukraine war last year.

"If you don't know what is going to happen during the weekend, you want to hold something that offers you some protection," Saxo Bank’s Ole Hansen tells Kitco News. "We are seeing shorts being covered and investors scrambling to get back into gold."

Meanwhile, the first day of earnings season has been a positive one — not that you’d know it from the major U.S. stock averages.

JPMorgan Chase delivered an earnings “beat” and is up 3% at last check; Citi recorded better-than-expected revenue and is up 2%.

But the S&P 500 is up less than four points to 4,353 — stuck around the same level where it was four months ago. The Dow is up a third of a percent, the Nasdaq down a third of a percent.

Who Says We Never Have Any Good News?

The war on cash and the push for a cashless society just suffered a setback — thanks to none other than creepy King Charles.

From the BBC: “Large numbers on an entirely redesigned set of U.K. coins will help children to identify figures and learn to count, The Royal Mint has said.”

With a new monarch comes the need for redesigned coinage. Obviously the new king’s mug is on the front, but it’s the back that’s more interesting. Each coin will feature the country’s flora and fauna — a reflection of the king’s affinity for nature.

But note also the big numbers on there. "The large numbers will be very appealing to children who are learning to count and about the use of money,” says Royal Mint Director Rebecca Morgan.

OK, so it’s still fiat currency that’s being inflated to oblivion.

But otherwise this is all good — teaching basic math (yeah, it’s “maths” over there) and instilling an appreciation for tangible physical cash from a young age, all at the same time.

In the battle against the impending tyranny of a central bank digital currency… who’d have guessed ol’ lizard-face Charles would be an accidental ally?

In Praise of Cursive

We heard from several readers about the demise of cursive handwriting after we noted yesterday that Eddie Bauer is doing away with its famous cursive-script logo.

“I am an active adult leader in a Boy Scout troop and regularly interact with the 11- to 17-year-old age group. Handwriting skills?? Some of them can barely print their names.

“They tell me that they don't need to learn how to write because everything is electronic at school. Can illiteracy be far behind? And let's not even touch on the loss of hand-eye coordination skills.”

“The demise of cursive writing is more than just learning dumbing down,” says another reader.

“According to graphologists, (those who study handwriting and its relation to personality), learning cursive is important. Just the connecting strokes alone tells how the writer relates to others and the outside world. It also indicates how willing or unwilling that person probably is to do so.

“Connecting strokes is only one aspect of writing. There’s also spacing, (between letters, words and lines), slant, size of writing and a number of other writing characteristics that can help us understand one another.

“I am not a therapist, but I’ve read and heard that changing handwriting (which includes word connections) can help emotional issues.”

“Pretty sure we used to have to write in cursive when ink had to fill the feather quill to keep a steady flow,” writes a third. “Otherwise, drops were everywhere. Means to an end, eh?

“When was the last time that was an issue? Oh sure, I’ve had the occasionally leaky ball point pen, but I digress.

“I’m down to all block print writing. Decades now. I just make the first one taller when I need to capitalize. I couldn’t even write lower case anymore if I tried. And I’m a fellow Gen X’er.

“Heck, the computer doesn’t use cursive either.

“However, I think your wife is on to something with the rise of Emoji’s. 😉

“Luv The 5! Or do I say The Bullets now? Heh.”

“I have been a student of personality assessment through handwriting for over 50 years,” says a fourth.

“After graduating from college with a minor in psychology, I was disappointed that none of my courses offered a ‘shortcut into the mind.’ 

“‘Graphoanalysis’ purported to do so. I became certified in this technique through the International Graphoanalysis Society. Whether you know/believe anything about this activity or not, you can certainly understand my consternation over the demise of cursive writing. Even I gave up handwriting decades ago and reverted to printing (itself an insight into me!) 

“So naturally I am disappointed by the demise of cursive writing. Keypads and view screens will never provide the insights that pen, ink and paper do.”

“Learned cursive in second and third grade. I’m 62,” writes our final correspondent. There was actually a grade in ‘penmanship.’ Anathema.

“My great aunt, a schoolteacher for 40 years, is doing somersaults in her grave. Cursive is much more efficient, writing wise, but who has to actually write, when you can use your thumbs?

“Hint: it’s going to get ugly going forward. The technology that enables you to use your thumbs might not always work.

“And the constitution was written in that barbaric cursive.”

Dave responds: Yeah, now that you mention the thumb thing, is this really progress?

And the posture on that last dude is way better than in real life…

Try to have a good weekend,

 

 

 

 

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets

P.S. I mean, I guess it can’t be all bad if the leading conservative satire site is posting this…