WATCH: Ukrainian President Volodymyr Zelensky Posts Video Assuring Citizens, 'All of us here are protecting the independence of our country...'

This guy something else. A true wartime leader.

Putin Taking Long Game on Economic Sanctions

Vladdy's been preparing for Russia to take massive sanctions hits for quite a while.

At the Los Angeles Times, "Russia has spent years preparing for international sanctions":

SINGAPORE — With no appetite for military confrontation, the U.S. and its allies are relying on sweeping economic sanctions to persuade Russian President Vladimir Putin to pull out of Ukraine. But the effectiveness of those measures are anything but certain, relying on a host of factors that includes how much China is willing to come to Moscow’s aid.

Placing a stranglehold on Russia’s $1.5-trillion economy will not be easy, especially since it began trying to buffer itself from international sanctions after it annexed Crimea from Ukraine in 2014.

Russia has sidelined growth to pare down its debt and built up its reserves of foreign currency and gold — so much so that it reached record levels this year at over $640 billion.

The reserves help soften the financial blowback of Russia’s invasion. On Thursday, the Russian central bank pumped liquidity into the country’s banking system and sold foreign currency for the first time in years to prop up the ruble, which plunged to its weakest level since 2016.

President Biden announced Thursday that U.S. and European allies would sanction five Russian banks holding about $1 trillion in assets and block high-tech exports. Russian oligarchs, said to be members of Putin’s inner circle, were also targeted by sanctions.

As it stands, those measures are highly unlikely to inflict enough pain on Moscow to trigger a reversal in Ukraine, analysts said, noting that any sanctions imposed now are likely to be too little, too late...

China Rethinking Embrace of Putin?

Following up, "'Brandon's Big Plans for Stopping Russia From Invading Was to BEG CHINA TO STOP RUSSIA...'"

Hey, Maybe China is a little scared of the U.S. after all.

At WSJ, "China Adjusts, and Readjusts, Its Embrace of Russia in Ukraine Crisis":

China’s leader Xi Jinping on Friday called on Russian President Vladimir Putin to negotiate with Ukraine, the most recent twist as Beijing modulates its embrace of Russia.

Beijing has been flailing to adjust its position on the Ukraine situation ever since Mr. Xi signed on to an extraordinary solidarity statement with Mr. Putin early this month, a decision influenced by a Chinese foreign-policy establishment stuck in a belief that Mr. Putin wasn’t out for war.

“China supports Russia and Ukraine to resolve issues through negotiations,” Mr. Xi told Mr. Putin in a phone call, while pledging to safeguard the international system with the United Nations at its core, China’s state media reported. Mr. Putin told the Chinese leader he was prepared for talks with Ukraine based on “signals just received from Kyiv,” according to a Kremlin readout of the call.

For weeks, China’s foreign-policy establishment dismissed a steady stream of warnings from the U.S. and its European allies about a pending Russian invasion, and instead blamed Washington for hyping the Russian threats.

Now, China is trying to regain its balance after making a calculation that could seriously undermine a position it has tried to build for itself as a global leader and advocate for developing nations.

As late as this week, with signs looming of an impending invasion, when a well-connected foreign-policy scholar in China gave a talk to a group of worried Chinese investors and analysts, he titled the speech “A War That Won’t Happen.”

“We see little chance of Russia unilaterally declaring war on Ukraine,” Shen Yi, a professor of international relations at Shanghai’s Fudan University who advises the government, said at the Tuesday teleconference held by a securities firm, according to people who dialed into the call.

Less than 48 hours later, Mr. Putin launched a full-scale attack on Ukraine...

Thing go wrong during wartime, badly wrong. 

Keep reading.

 

'Brandon's Big Plans for Stopping Russia From Invading Was to BEG CHINA TO STOP RUSSIA...'

Heh.

Ace's comments on NYT's burning skull report of the Biden administration pressing Beijing to prevent war in Ukraine.

At AoSHQ,  "America is BACK: Brandon's Big Plan for Stopping Russia From Invading Was to BEG CHINA TO PRESSURE RUSSIA; Instead of Helping Brandon, China Betrayed Him and Told Russia All About His Undignified Groveling":

Actually, this wouldn't fit in the headline:

Brandon shared secret intelligence with China to prove Russia was about to invade. China showed how much it Feared and Respected Brandon by immediately giving that US intelligence to Russia.

America is Back, baby...

RTWT. 

Clearly Trump at Fault for Russia's Invasion of Ukraine

This is clever, via Instapundit:

Biden Administration Pressed Beijing to Help Avert War in Ukraine

At the New York Times, "U.S. Officials Repeatedly Urged China to Help Avert War in Ukraine":

WASHINGTON — Over three months, senior Biden administration officials held half a dozen urgent meetings with top Chinese officials in which the Americans presented intelligence showing Russia’s troop buildup around Ukraine and beseeched the Chinese to tell Russia not to invade, according to U.S. officials.

Each time, the Chinese officials, including the foreign minister and the ambassador to the United States, rebuffed the Americans, saying they did not think an invasion was in the works. After one diplomatic exchange in December, U.S. officials got intelligence showing Beijing had shared the information with Moscow, telling the Russians that the United States was trying to sow discord — and that China would not try to impede Russian plans and actions, the officials said.

The previously unreported talks between American and Chinese officials show how the Biden administration tried to use intelligence findings and diplomacy to persuade a superpower it views as a growing adversary to stop the invasion of Ukraine, and how that nation, led by President Xi Jinping, persistently sided with Russia even as the evidence of Moscow’s plans for a military offensive grew over the winter.

This account is based on interviews with senior administration officials with knowledge of the conversations who spoke on the condition of anonymity because of the sensitive nature of the diplomacy. The Chinese Embassy did not return requests for comment.

China is Russia’s most powerful partner, and the two nations have been strengthening their bond for many years across diplomatic, economic and military realms. Mr. Xi and President Vladimir V. Putin of Russia, two autocrats with some shared ideas about global power, had met 37 times as national leaders before this year. If any world leader could make Mr. Putin think twice about invading Ukraine, it was Mr. Xi, went the thinking of some U.S. officials.

But the diplomatic efforts failed, and Mr. Putin began a full-scale invasion of Ukraine on Thursday morning after recognizing two Russia-backed insurgent enclaves in the country’s east as independent states.

In a call on Friday, Mr. Putin told Mr. Xi that the United States and NATO had ignored Russia’s “reasonable” security concerns and had reneged on their commitments, according to a readout of the call released by the Chinese state news media. Mr. Xi reiterated China’s public position that it was important to respect the “legitimate security concerns” as well as the “sovereignty and territorial integrity” of all countries. Mr. Putin told Mr. Xi that Russia was willing to negotiate with Ukraine, and Mr. Xi said China supported any such move.

Some American officials say the ties between China and Russia appear stronger than at any time since the Cold War. The two now present themselves as an ideological front against the United States and its European and Asian allies, even as Mr. Putin carries out the invasion of Ukraine, whose sovereignty China has recognized for decades.

The growing alarm among American and European officials at the alignment between China and Russia has reached a new peak with the Ukraine crisis, exactly 50 years to the week after President Richard M. Nixon made a historic trip to China to restart diplomatic relations to make common cause in counterbalancing the Soviet Union. For 40 years after that, the relationship between the United States and China grew stronger, especially as lucrative trade ties developed, but then frayed due to mutual suspicions, intensifying strategic competition and antithetical ideas about power and governance.

In the recent private talks on Ukraine, American officials heard language from their Chinese counterparts that was consistent with harder lines the Chinese had been voicing in public, which showed that a more hostile attitude had become entrenched, according to the American accounts.

On Wednesday, after Mr. Putin ordered troops into eastern Ukraine but before its full invasion, Hua Chunying, a Foreign Ministry spokeswoman, said at a news conference in Beijing that the United States was “the culprit of current tensions surrounding Ukraine.”

“On the Ukraine issue, lately the U.S. has been sending weapons to Ukraine, heightening tensions, creating panic and even hyping up the possibility of warfare,” she said. “If someone keeps pouring oil on the flame while accusing others of not doing their best to put out the fire, such kind of behavior is clearly irresponsible and immoral.”

She added: “When the U.S. drove five waves of NATO expansion eastward all the way to Russia’s doorstep and deployed advanced offensive strategic weapons in breach of its assurances to Russia, did it ever think about the consequences of pushing a big country to the wall?” She has refused to call Russia’s assault an “invasion” when pressed by foreign journalists...

More.

 

Majority in U.S. Sees Russia-Ukraine Conflict as Critical Threat

It's not a huge majority, but the survey ran from February 1st to the 17th, ending about a week before Russia's attack on Ukraine.

It's all broken down at Gallup, "U.S. Public Sees Russia-Ukraine Conflict as Critical Threat."

President Biden Announces Harsh New Round of Economic Sanctions Against Russia (VIDEO)

I watched Biden's speech and press conference live this morning. He looked sharp, actually. Seemed fired up and outraged by Russia's invasion and he announced some serious motherfucking sanctions. The U.S. is going hit Russian financial institutions hard, basically shutting down four major banks controlling $100s of billions dollars, and going directly after the assets of Vladimir Putin's billionaire oligarch stooges. 

There's still much economic damage the U.S. can inflict. On the military side, the Pentagon's announced it's sending 7,000 U.S. service personnel to Europe, to Estonia, Latvia, Lithuania, Poland, and Romania.

There's so much on the line and the news coverage is voluminous and literally impossible to read and view it all. I'll have updates through the night. 

At the Wall Street Journal, "Biden Aims Sanctions at Russian Military, State-Owned Enterprises":

WASHINGTON—President Biden promised to make Russian President Vladimir Putin an international pariah as he announced a wave of new sanctions intended to cripple Russia’s economy, military and elites, the latest effort to punish Moscow for launching a large-scale invasion of Ukraine.

“Putin is the aggressor. Putin chose this war and now he and his country will bear the consequences,” Mr. Biden said during a speech at the White House on Thursday.

The president said the coming sanctions would stunt Russia’s military growth, limit the country’s ability to compete on the world stage and put restrictions on its largest state-owned enterprises. The Treasury Department said the actions target 80% of all banking assets in Russia and limit the country’s access to the global financial system.

Taken together, the sanctions announced by the Biden administration this week are unprecedented in their scope and impact on Russia’s post-Soviet relations with the West. Moscow’s markets are signaling the scale of the potential impact on Russia’s economy. Since Western nations began warning three months ago that they would respond with a tough sanctions package, the Moscow Exchange has lost 50% of its value and the ruble depreciated by 20%.

Senior Biden administration officials have said the threat of sanctions was intended in part to deter Mr. Putin from invading Ukraine. But the Russian leader attacked the country anyway. Mr. Biden said it would take time for Moscow to feel the effects of the financial penalties. ”Let’s have a conversation in another month or so to see if they’re working,” he said.

Thursday’s announcement, which Mr. Biden said was coordinated with the Group of Seven countries, came after lawmakers of both political parties called on the U.S. president to come down on Mr. Putin with the full suite of sanctions at the government’s disposal.

Among the targets of the new sanctions: Russia’s first- and second-largest financial institutions, Sberbank and VTB. The package sanctions additional Russian elites and their families, and places new restrictions on exports to Russia of technological goods used in the country’s defense, maritime and aerospace sectors.

The restrictions on goods destined for Russia, which took effect Thursday, apply to technology such as semiconductors, computers, telecommunications, information security equipment, lasers and sensors. They cover items produced in the U.S., as well as foreign items made using U.S. equipment, software and blueprints, the Treasury Department said in a statement. U.S. officials said they are also restricting exports to 49 additional Russian military entities, placing them on a blacklist.

The administration expanded its bans on trade of new government debt, adding short-term securities and new equity of 11 Russian state-owned companies and two major privately owned firms in the financial services sector. Those include the natural-gas behemoth Gazprom; Sovcomflot, Russia’s largest maritime and freight shipping company; plus its biggest telecoms firm and the No. 1 power company.

“We have purposely designed these sanctions to maximize a long-term impact on Russia and to minimize the impact on the United States and our allies,” Mr. Biden said.

The administration also announced sanctions on 24 Belarusian individuals and entities, including two state-owned banks and nine defense firms, for supporting the Russian invasion in Ukraine. Mr. Biden said in his remarks that any country that helped Russia would be “stained by association.”

The new effort doesn’t take steps to disconnect Russia from the Swift global payment system, a move that policy makers said could be a significant blow to Moscow. “The sanctions that we have imposed on all their banks are of equal consequence, maybe more consequence, than Swift, No. 1,” Mr. Biden said. “No. 2, it is always an option, but right now that is not the position that the rest of Europe wants to take.”

The blacklisting won’t hit Russia as hard, nor cause the collateral damage to Europe or the world economy that cutting off the world’s 12th-largest economy—and a top oil exporter—from the global-payments system would wreak, say economists and former U.S. officials.

Top officials in Ukraine and countries along the European Union’s border with Russia, as well as U.S. lawmakers from both parties, called for Moscow to be disconnected from the Swift system. Some U.S. lawmakers have privately pressed the White House on the issue, according to people familiar with the matter.

Removing an economy of the size and geopolitical importance of Russia’s from Swift would be an unprecedented sanction by Western allies—one that would eliminate Russia’s ability, at first, to conduct basic commerce with the outside world. But opponents say such a move could help build up workarounds to circumvent the global American-led financial order.

The Swift option is a bludgeon in the economic warcraft arsenal, compared with targeted sanctions, which provide precision and diplomatic flexibility for policy makers. The West has much better control of the flow of international finance and can raise or lower the pressure. Cross-border payments are still possible under the current package, and governments could carve out exemptions.

Mr. Biden suggested on Thursday that he is weighing additional economic penalties. He told reporters that he would consider sanctioning Mr. Putin directly...

 Keep reading.

Surging American Demand Ripples Through the Global Economy

The economy is expected to grow at an annualized rate of 7 percent for the fourth quarter, but big numbers won't help the White House. Voters are really souring on this administration, most likely from relentless inflationary pressures, felt everyday at the gas pumps especially. 

At WSJ, "Booming U.S. Economy Ripples World-Wide":

FRANKFURT—A booming U.S. economy is rippling around the world, leaving global supply chains struggling to keep up and pushing up prices.

The force of the American expansion is also inducing overseas companies to invest in the U.S., betting that the growth is still accelerating and will outpace other major economies.

U.S. consumers, flush with trillions of dollars of fiscal stimulus, are snapping up manufactured goods and scarce materials.

U.S. economic output is set to expand by more than 7% annualized in the final three months of the year, up from about 2% in the previous quarter, according to early output estimates published by the Federal Reserve Bank of Atlanta. That compares with expected annualized growth of about 2% in the eurozone and 4% in China for the fourth quarter, according to JPMorgan Chase.

Major U.S. ports are processing almost one-fifth more container volume this year than they did in 2019, even as volumes at major European ports like Hamburg and Rotterdam are roughly flat or lag behind 2019 levels. The busiest U.S. container ports are leaping ahead of their counterparts in Asia and Europe in global rankings as volumes surge, according to shipping data provider Alphaliner.

In Europe, “durable goods consumption is showing nothing like the boom that is ongoing in the United States,” said Fabio Panetta, who sits on the European Central Bank’s six-member executive board, in a speech last month. Consumption of durable goods has surged about 45% above 2018 levels in the U.S., but is up only about 2% in the eurozone, according to ECB data.

Factory gate prices in China are far outpacing consumer prices, signaling a gulf between weak domestic demand and strong overseas demand that is powered in particular by U.S. hunger for China’s manufactured goods.

While tangled global supply chains also play a role in driving global inflation, economists and central bankers are increasingly pointing to ultrastrong U.S. demand as a root cause.

“Are we crowding out consumers in other countries? Probably,” said Aneta Markowska, chief financial economist at Jefferies in New York. “The U.S. consumer has a lot more purchasing power as a result of fiscal policy than consumers elsewhere. Europe could be in a stagflationary scenario next year as a consequence.”

The U.S. accounts for almost nine-tenths of the roughly 22-percentage-point surge in demand for durable goods among major advanced economies since the end of 2019, according to data from the Bank of England.

“Very strong U.S. demand is certainly where [global supply bottlenecks] started,” said Lars Mikael Jensen, head of network at container ship giant A.P. Moller-Maersk A/S.

“It’s like a queue on a highway. The increase in volume in the U.S…takes ships away from other markets,” said Mr. Jensen. “Problems in one place will trigger problems somewhere else, we live in a global world.”

The U.S. economy will likely grow by around 6% in 2021 and 4% or more in 2022, the highest rates for decades, analysts say. Strong U.S. growth momentum is expected to push the unemployment rate to the lowest level in almost seven decades by 2023, according to Deutsche Bank analysts.

U.S. economic output is likely to surpass its pre-pandemic path early next year, while output in China and emerging markets will remain about 2% below that path through 2023, according to JPMorgan Chase.

U.S. wages are growing by about 4% a year, above the precrisis trend rate, compared with less than 1% growth in the eurozone, according to data from the Bank for International Settlements, a Switzerland-based bank for central banks.

“We threw a lot of support at [the economy] and what’s coming out now is really strong growth, really strong demand, high incomes and all that kind of thing,” said Federal Reserve Chairman Jerome Powell after the central bank’s recent meeting. “People will judge in 25 years whether we overdid it or not.”

The Fed said it would more quickly scale back its Covid-19 bond purchases and set the stage for a series of interest-rate increases beginning next spring.

In Europe, the ECB pledged to continue buying bonds at least through October 2022, and said it was unlikely to raise interest rates next year. Underlying U.S. inflation, annualized over two years, has risen above 3%, roughly double the level in the eurozone, according to data that adjust for the impact of the pandemic and changes in volatile food and energy prices.

“The strong post-pandemic recovery that was originally expected for 2022 still hasn’t materialized,” said Timo Wollmershäuser, head of forecasts at Germany’s Ifo think tank. The institute recently lowered its growth forecast for Germany in 2022 by 1.4 percentage points, to 3.7%, citing ongoing supply bottlenecks and a new wave of Covid-19.

The Fed’s assertiveness is pushing up the value of the U.S. dollar and putting pressure on emerging-market central banks to increase interest rates even before their own economic recoveries are assured or risk depreciating currencies and runaway inflation.

Mexico’s central bank on Dec. 16 said it would increase its benchmark interest rate by 0.5 percentage point to 5.50% after inflation rose to a 20-year high of 7.4%.

In Europe, the ECB pledged to continue buying bonds at least through October 2022, and said it was unlikely to raise interest rates next year. Underlying U.S. inflation, annualized over two years, has risen above 3%, roughly double the level in the eurozone, according to data that adjust for the impact of the pandemic and changes in volatile food and energy prices.

“The strong post-pandemic recovery that was originally expected for 2022 still hasn’t materialized,” said Timo Wollmershäuser, head of forecasts at Germany’s Ifo think tank. The institute recently lowered its growth forecast for Germany in 2022 by 1.4 percentage points, to 3.7%, citing ongoing supply bottlenecks and a new wave of Covid-19.

The Fed’s assertiveness is pushing up the value of the U.S. dollar and putting pressure on emerging-market central banks to increase interest rates even before their own economic recoveries are assured or risk depreciating currencies and runaway inflation.

Mexico’s central bank on Dec. 16 said it would increase its benchmark interest rate by 0.5 percentage point to 5.50% after inflation rose to a 20-year high of 7.4%.

Russia’s central bank said Friday it would increase its key interest rate by 1 percentage point to 8.5%, and might raise rates again soon, after inflation hit a near six-year high of 8.4%.

Businesses are pouring money into the U.S., looking to take advantage of what some expect to be a sustainable increase in demand. In some cases, they are bringing production closer to American consumers, looking to avoid supply shocks related to the pandemic and global trade wars...

Still more.

 

Global Markets Swoon as Worries Mount Over Superpowers' Plans

Well, my investment portfolios are going to take a hit, but they'll swing back, despite what bonehead Biden does.

At NYT, "The S&P 500 closed down 1.7 percent over a number of jitters, like China’s sputtering real estate market and the phasing out of stimulus measures in the United States":

Investors on three continents dumped stocks on Monday, fretting that the governments of the world’s two largest economies — China and the United States — would act in ways that could undercut the nascent global economic recovery.

The Chinese government’s reluctance to step in and save a highly indebted property developer just days before a big interest payment is due signaled to investors that Beijing might break with its longstanding policy of bailing out its homegrown stars.

And in the United States, the globe’s No. 1 economy, investors worried that the Federal Reserve would soon begin cutting back its huge purchases of government bonds, which had helped drive stocks to a series of record highs since the coronavirus pandemic hit.

The sell-off started in Asia and spread to Europe — where exporters to China were slammed — before landing in the United States, where stocks appeared to be heading for their worst performance of the year before a rally at the end of the trading day. The S&P 500 closed down 1.7 percent, its worst daily performance since mid-May, after being down as much as 2.9 percent in the afternoon.

The catalyst for the swoon was the continued turmoil at China Evergrande Group, one of that country’s top three developers of residential properties. The company has an estimated $300 billion in debt, and an interest payment of more than $80 million is due this week.

Analysts said Evergrande’s plight was severe enough that it would be unlikely to survive without Chinese government support. “The question is to what degree are there spillover risks within Chinese equities and then cascading into the global markets,” said John Canavan, lead analyst at Oxford Economics.

Few entities move markets the way the American and Chinese governments can, by their actions and inaction, and the worldwide tumble on Monday made this clear. Until recently, investors seemed content to ignore a variety of issues complicating the recovery — including the emergence of the Delta variant and the supply chain snarls that have bedeviled consumers and manufacturers alike.

But beginning this month, as Evergrande began to teeter and the likelihood of the Fed’s scaling back — or tapering — its bond-buying programs grew, the market’s protective bubble began to deflate. Some U.S. investors are also concerned that tax increases are in the offing — including on share buybacks and corporate profits — to help pay for a spending push by the federal government, the signature piece of which is President Biden’s proposed $3.5 trillion budget bill. Separately, Congress also must act to raise the government’s borrowing limit, a politically charged process that has at times thrown markets for a loop.

On Monday, those currents combined, reflecting the interconnectedness of the global markets as investors everywhere sold their holdings.

The decline was ugliest in Asia, where Evergrande’s woes — its shares fell 10.2 percent — dragged down other Chinese real estate companies’ stocks by 10 percent or more. Markets on the Chinese mainland were closed for the day, but Hong Kong’s Hang Seng index fell 3.3 percent.

For decades, Chinese growth was driven by investment in infrastructure, including the market for residential property, which was financed with huge sums of borrowed money. Banks often lent to developers at the direction of the government, which looked at property building as a source of jobs and economic growth.

“Beijing says lend, so you lend; when or even whether you get your money back is secondary,” wrote analysts with China Beige Book, an economic research firm.

Many lenders therefore viewed companies such as Evergrande as having an implicit guarantee from the government, meaning that if the company couldn’t pay its debts, the government would ensure creditors get repaid...

Pfft.

We should be hammering the Chinese economy: Dump all Chinese listings off U.S. capital markets and retaliate against Chinese currency manipulation, protectionist trade practices, and theft of U.S. technological know-how. And if Xi attacks Taiwan, we should bomb Chinese cities and military-industrial centers and destroy the Chinese navy.

Still more.

Xi Jinping Aims to Rein In Chinese Capitalism, Hew to Mao’s Socialist Vision

Rein in? Yeah, we need to rein in Beijing, the freakin' lyin', cheatin,' heathen rogue regime of the new new world order. 

Jeez, I can't stand China. (Though I'm around Chinese folks all the time in Irvine, and they're just fine; indeed, I see them as hitting the lottery, coming here, getting citizenship, bringing their folks over from the Mandarin prison state; hittin' the lottery indeed.)

At Wall Street Journal, "Going beyond curbing tech giants, he wants the Communist Party to steer flows of money and set tighter limits on profit making":

Xi Jinping’s campaign against private enterprise, it is increasingly clear, is far more ambitious than meets the eye.

The Chinese President is not just trying to rein in a few big tech and other companies and show who is boss in China.

He is trying to roll back China’s decadeslong evolution toward Western-style capitalism and put the country on a different path entirely, a close examination of Mr. Xi’s writings and his discussions with party officials, and interviews with people involved in policy making, show.

For most of the 40 years after Deng Xiaoping first unleashed economic reforms in China, Communist Party leaders gave market forces wider room to flourish. That opening helped lift hundreds of millions of people out of poverty and created trillions of dollars in wealth, but also led to rampant corruption and eroded the ideological basis for continued Communist rule.

In Mr. Xi’s opinion, private capital now has been allowed to run amok, menacing the party’s legitimacy, officials familiar with his priorities say. The Wall Street Journal examination shows he is trying forcefully to get China back to the vision of Mao Zedong, who saw capitalism as a transitory phase on the road to socialism.

Mr. Xi isn’t planning to eradicate market forces, the Journal examination indicates. But he appears to want a state in which the party does more to steer flows of money, sets tighter parameters for entrepreneurs and investors and their ability to make profits, and exercises even more control over the economy than now. In essence, this suggests that he aims to rewrite the rules of business in what could someday be the world’s biggest economy.

“China has entered a new stage of development,” Mr. Xi declared in a speech in January. The goal, he said, is to build China into a “modern socialist power.”

Mr. Xi’s overhaul has generated more than 100 regulatory actions, government directives and policy changes since late last year, according to a Journal tally, including steps aimed at breaking the market dominance of companies such as e-commerce behemoth Alibaba Group Holding Ltd., conglomerate Tencent Holdings Ltd. and ride-sharing leader Didi Global Inc.

The government’s recent measures to tame housing prices are worsening a cash crunch at China Evergrande Group , a heavily indebted real-estate developer, sending chills across global markets. Beijing is unlikely to bail out Evergrande the way it has rescued many state firms, analysts say, and could further tighten the regulatory screws on other private developers.

Mr. Xi has signaled plans to go much further. During a leadership meeting in August, he emphasized a goal of “common prosperity,” which calls for a more equal distribution of wealth. This would be achieved in part through more government intervention in the economy and more steps to get the rich to share the fruits of their success.

An Aug. 29 online commentary circulated by state media called it a “profound revolution” for the country.

“Xi does think he’s moving to a new kind of system that doesn’t exist anywhere in the world,” said Barry Naughton, a China economy expert at the University of California, San Diego. “I call it a government-steered economy.”

A number of countries closely regulate industry, labor and markets, set monetary policy and provide subsidies to help boost their economies. In Mr. Xi’s version, the government would have a level of control that would allow it to steer the economy and industry along a path of its choosing, and channel private resources into strengthening state power.

The big risk for China and Mr. Xi is that the push winds up suppressing much of the entrepreneurial energy that has powered China’s boom and years of innovation.

For foreign businesses, the campaign likely means more turbulence ahead. Western companies have always had to toe the party line in China, but they are increasingly asked to do more, including sharing personal user data and accepting party members as employees. They could be pressed to sacrifice more profits to help Beijing achieve its goals.

“Supervision over foreign capital will be strengthened,” said a person familiar with the thinking at China’s top markets regulator, “so it won’t be able to obtain ultra-high profits in China through monopoly and capital-market operations.”

The Information Office of the State Council, China’s top government body, didn’t respond to questions for this article.

Before this year, Mr. Xi was distrustful of capital, but he had other priorities. Now, having consolidated power, he is putting the whole government behind his plans to make private business serve the state.

A once-in-a-decade leadership transition due for late 2022, when Mr. Xi is expected to break the established system of succession to stay in power, provided an impetus to act and show he is doing something big for the people to justify longer rule, officials involved in policy making say.

At internal meetings, some of them say, Mr. Xi has talked about the need to differentiate China’s economic system. Western capitalism, in his view, focuses too heavily on the single-minded pursuit of profit and individual wealth, while letting big companies grow too powerful, leading to inequality, social injustice and other threats to social stability.

Early this year, when Facebook Inc. and Twitter Inc. took down former U.S. President Donald Trump’s accounts, Mr. Xi saw yet another sign America’s economic system was flawed—it let big business dictate what a political leader should do or say—officials familiar with his views said.

A few months later, when the Chinese Communist party celebrated its centenary on July 1, Mr. Xi donned a Mao suit and stood behind a podium adorned with a hammer and sickle, pledging to stand for the people. After the speech, he sang along with “The Internationale” broadcast across Tiananmen Square. In China, the song, a feature of the socialist movement since the late 1800s, has long symbolized a declaration of war by the working class on capitalism.

Such gestures, once dismissed as political stagecraft, are being taken more seriously by China watchers as it becomes evident Mr. Xi is more ideologically driven than his immediate predecessors.

The difference between his vision and Western-style capitalism, he has said at internal meetings, is that in China, “Capital serves the people.”

Industries that Mr. Xi views as being led astray by a capitalist spirit, including not only tech but also after-school tutoring, digital gaming and entertainment, are bearing the immediate brunt.

A policy aimed at turning private education companies into nonprofit entities all but killed New Oriental Education & Technology Group Inc., which has provided English lessons to generations of students studying abroad. Its shares have plunged about 90% this year.

Founder Yu Minhong, nicknamed “Godfather of English Training” in China, broke into tears during a recent company meeting, according to an employee. “It’s devastating to him, and to all of us,” the employee said.

Mr. Xi’s policy changes have dashed more than $1 trillion in stock-market value and erased over $100 billion of wealth for entrepreneurs such as Alibaba founder Jack Ma and Tencent’s Pony Ma. Private companies and their owners are being encouraged to donate profits and wealth to help with Mr. Xi’s common-prosperity goals. Alibaba alone has pledged the equivalent of $15.5 billion. State-owned companies, having already bulked up under Mr. Xi’s rule, are marching into areas that were pioneered by private firms but are increasingly seen as crucial to national security, such as management of digital data.

A ministry supervising state companies, the State-owned Assets Supervision and Administration Commission, is mapping plans to set up more government-controlled providers of cloud services for data storage, people familiar with the agency’s workings say. Such services have been dominated by private companies, including Alibaba and Tencent.

The city of Tianjin has ordered companies it supervises to migrate data from private-sector cloud platforms to state-owned ones within two months of the expiration of existing contracts, and by September 2022 at the latest, according to an official notice dated Aug. 12. More localities are expected to follow suit, the people say.

Government-controlled entities are acquiring stakes and filling board seats in more companies to make sure they fall in line with the state’s goals. ByteDance Ltd., owner of the video-sharing app TikTok, and Weibo Corp. , which runs Twitter-like microblogging platforms, recently have sold stakes to state-backed companies.

Mr. Xi is fully in charge of the campaign, instead of delegating details to Vice Premier Liu He, his chief economic adviser, as in the past. A central party office reporting directly to Mr. Xi has been sending out directives instructing ministries to take actions and coordinate policies...

 

Benjamin J. Cohen, Currency Power

At Amazon, Benjamin J. Cohen, Currency Power: Understanding Monetary Rivalry.

Benjamin J. Cohen, Currency Statecraft

Following-up, "China and the Future of the Dollar."

From my former professor and mentor at UCSB, Dr. Benjamin J. Cohen, Currency Statecraft: Monetary Rivalry and Geopolitical Ambition.

China and the Future of the Dollar

From Henry Paulson, former U.S. Secretary of the Treasury, at Foreign Affairs, "The Future of the Dollar: U.S. Financial Power Depends on Washington, Not Beijing":

NEW: The enduring dominance of the US dollar is remarkable, but its status will be tested by Washington’s ability to weather the COVID-19 storm and emerge with prudent economic policies, writes Hank Paulson in @ForeignAffairs. https://t.co/kVNFM2kxA4

— Paulson Institute (@PaulsonInst) May 19, 2020

In late March, global financial markets were collapsing amid the chaos of the novel coronavirus pandemic. International investors immediately sought refuge in the U.S. dollar, just as they had done during the 2008 financial crisis, and the U.S. Federal Reserve had to make huge sums of dollars available to its global counterparts. Seventy-five years after the end of World War II, the primacy of the dollar has not waned.

The enduring dominance of the dollar is remarkable—especially given the rise of emerging markets and the relative decline of the U.S. economy, from nearly 40 percent of world GDP in 1960 to just 25 percent today. But the dollar’s status will be tested by Washington’s ability to weather the COVID-19 storm and emerge with economic policies that allow the country, over time, to manage its national debt and curb its structural fiscal deficit.

The stature of the dollar matters. The dollar’s role as the primary global reserve currency makes it possible for the United States to pay lower rates on dollar assets than it otherwise would. Equally significant, it enables the country to run larger trade deficits, reduces exchange-rate risk, and makes American financial markets more liquid. Finally, it favors U.S. banks because of their enhanced access to dollar funding.

That the dollar has maintained this stature for so long is a historic anomaly, particularly in the context of a rising China. The Chinese renminbi (RMB) has by far the greatest potential to assume a role rivaling that of the dollar. China’s economic size, prospects for future growth, integration into the global economy, and accelerated efforts to internationalize the RMB all favor an expanded role for the Chinese currency. But by themselves, these conditions are insufficient. And China’s much-touted successes in the realm of fintech—including its rapid deployment of mobile payment systems and the recent pilot project by the People’s Bank of China to test a digital RMB—will not change that. A central bank–backed digital currency does not alter the fundamental nature of the RMB.

Beijing still has major hurdles to overcome before the RMB can truly emerge as a primary global reserve currency. Among other transformative measures, it needs to make more progress in moving to a market-driven economy, improve corporate governance, and develop efficient, well-regulated financial markets that earn the respect of international investors so that Beijing can eliminate capital controls and turn the RMB into a market-determined currency.

Washington should be clear-eyed about what is actually at stake in the competition with China. The United States should maintain its lead in financial and tech innovation, but there is no need to exaggerate the impact of a Chinese digital reserve currency on the U.S. dollar. Above all, the United States must preserve the conditions that created the dollar’s primacy in the first place: a vibrant economy rooted in sound macroeconomic and fiscal policies; a transparent, open political system; and economic, political, and security leadership abroad. In short, sustaining the dollar’s status will not be determined by what happens in China. Rather, it will depend almost entirely on the United States’ ability to adapt its post-COVID-19 economy so that it remains a model of success...

Fuck China. The more the U.S. can do to weaken that communist kleptocracy the better.

Keep reading.

Greta Thunberg, Abused and Exploited (VIDEO)

The video's genuinely hard to watch. I'm torn between contempt and compassion. She's been sold a damned bill of goods. A hoax handbag, and she's carrying it for all the cowards willing to hide behind a neurologically impaired child.

It's a shame all around. And frankly sad.

At AoSHQ, "Zealot Moppet Greta Thunberg Damns Adults as "Evil," Curses Alexandria Donkey-Chompers' Cowardly, Lethal Green New Deal."

And FWIW, at LAT, "Trump briefly attends U.N. climate summit; Greta Thunberg rails against ‘empty words’."

Greta Thunberg to world leaders at the U.N. climate summit: “You have stolen my dreams and my childhood with your empty words” https://t.co/vhK7qb7Dgb pic.twitter.com/kArrseEu9f

— TIME (@TIME) September 23, 2019

“People are suffering. People are dying. Entire ecosystems are collapsing. We are in the beginning of a mass extinction. And all you can talk about is money and fairytales of eternal economic growth. How dare you!”My speech in UN General Assembly in print https://t.co/8wYyCa4H01

— Greta Thunberg (@GretaThunberg) September 23, 2019

Telling children that our species is headed for imminent extinction is psychological abuse. Climate alarmists are child abusers. They aren't just wrong and stupid -- though they are those things -- they're also morally depraved.

— Matt Walsh (@MattWalshBlog) September 23, 2019

Not interested in seeing/hearing children used as political pawns while being labeled “political activists.” And if you peddle this kind of stuff, you should be deeply ashamed of yourself. Self-reflect. Seriously.

— Jedediah Bila (@JedediahBila) September 23, 2019

Teen suicide & anxiety disorders are through the roof. Constant fearmonging from adults is only making it worse. My latest for @Ricochet. https://t.co/aQtwkzXmry

— jon gabriel (@exjon) September 23, 2019

Poor Greta

She's being horribly exploited.

Already on the spectrum, she's overloaded with stimuli and prone to mistakes.

At AoSHQ, "Democrats Invite Idiot Antifa Supporter to Address Congress."

Teenage climate activist Greta has apologized for wearing that Antifa tee-shirt. She just borrowed it from a friend. https://t.co/ZKJQl50xyK pic.twitter.com/g91OkVH932

— Ryan Maue (@RyanMaue) July 26, 2019

Adam Tooze, Crashed

*BUMPED.*

This is a really amazing book, totally recommendable.

At Amazon, Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World.

The U.S. Financial Crisis, Leading to the Great Recession, Hit Ten Years Ago Today

Here's the story, at LAT, "The financial crisis hit 10 years ago. For some, it feels like yesterday."

And from Adam Tooze, at Foreign Affairs, "The Forgotten History of the Financial Crisis: What the World Should Have Learned in 2008":

The risk of simultaneous implosion on both sides of the Atlantic made 2008 the most dangerous financial crisis ever witnessed.https://t.co/corEXXxIbA

— Foreign Affairs (@ForeignAffairs) September 8, 2018

September and October of 2008 was the worst financial crisis in global history, including the Great Depression.” Ben Bernanke, then the chair of the U.S. Federal Reserve, made this remarkable claim in November 2009, just one year after the meltdown. Looking back today, a decade after the crisis, there is every reason to agree with Bernanke’s assessment: 2008 should serve as a warning of the scale and speed with which global financial crises can unfold in the twenty-first century.

The basic story of the financial crisis is familiar enough. The trouble began in 2007 with a downturn in U.S. and European real estate markets; as housing prices plunged from California to Ireland, homeowners fell behind on their mortgage payments, and lenders soon began to feel the heat. Thanks to the deep integration of global banking, securities, and funding markets, the contagion quickly spread to major financial institutions around the world. By late 2008, banks in Belgium, France, Germany, Ireland, Latvia, the Netherlands, Portugal, Russia, Spain, South Korea, the United Kingdom, and the United States were all facing existential crises. Many had already collapsed, and many others would before long.

The Great Depression of the 1930s is remembered as the worst economic disaster in modern history—one that resulted in large part from inept policy responses—but it was far less synchronized than the crash in 2008. Although more banks failed during the Depression, these failures were scattered between 1929 and 1933 and involved far smaller balance sheets. In 2008, both the scale and the speed of the implosion were breathtaking. According to data from the Bank for International Settlements, gross capital flows around the world plunged by 90 percent between 2007 and 2008.

As capital flows dried up, the crisis soon morphed into a crushing recession in the real economy. The “great trade collapse” of 2008 was the most severe synchronized contraction in international trade ever recorded. Within nine months of their pre-crisis peak, in April 2008, global exports were down by 22 percent. (During the Great Depression, it took nearly two years for trade to slump by a similar amount.) In the United States between late 2008 and early 2009, 800,000 people were losing their jobs every month. By 2015, over nine million American families would lose their homes to foreclosure—the largest forced population movement in the United States since the Dust Bowl. In Europe, meanwhile, failing banks and fragile public finances created a crisis that nearly split the eurozone.

Ten years later, there is little consensus about the meaning of 2008 and its aftermath. Partial narratives have emerged to highlight this or that aspect of the crisis, even as crucial elements of the story have been forgotten. In the United States, memories have centered on the government recklessness and private criminality that led up to the crash; in Europe, leaders have been content to blame everything on the Americans.

In fact, bankers on both sides of the Atlantic created the system that imploded in 2008. The collapse could easily have devastated both the U.S. and the European economies had it not been for improvisation on the part of U.S. officials at the Federal Reserve, who leveraged trans-atlantic connections they had inherited from the twentieth century to stop the global bank run. That this reality has been obscured speaks both to the contentious politics of managing global finances and to the growing distance between the United States and Europe. More important, it forces a question about the future of financial globalization: How will a multipolar world that has moved beyond the transatlantic structures of the last century cope with the next crisis?

More.

Also, at Amazon, Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World.

Benjamin J. Cohen, The Future of Money

At Amazon, Benjamin J. Cohen, The Future of Money.

Goldman Sachs, With Long History of Public Service, Makes Return to Washington in Trump Administration

This is pretty fascinating.

At NYT, "Goldman Sachs Completes Return From Wilderness to the White House":

“Government Sachs” is back. In the Trump administration, economic policy making is being handed to Goldman alumni. https://t.co/xOpGGxPGl3

— The New York Times (@nytimes) January 12, 2017

“Government Sachs” is back.

After eight years in the political wilderness, its name synonymous with the supposedly undue and self-serving influence in Washington that brought us the financial crisis and the Wall Street bailout, Goldman Sachs is again making its presence felt. In the Trump administration, to an unprecedented degree, economic policy making is largely being handed over to people with Goldman ties.

The Goldman alumni include Steven T. Mnuchin, the nominee for Treasury secretary; Gary D. Cohn, tapped as director of the National Economic Council and White House adviser on economic policy; and Stephen K. Bannon, who was named chief White House strategist. Jay Clayton, named to head the Securities and Exchange Commission, is a Wall Street lawyer who has represented Goldman.

This week President-elect Donald J. Trump hired Dina H. Powell, a Goldman partner who heads impact investing, as a White House adviser. Anthony Scaramucci, a Goldman alumnus (whom I spotlighted last week), is on the Trump transition committee and is expected to be named to a White House position as well.

And this after Mr. Trump campaigned against Wall Street, excoriated Senator Ted Cruz for his ties to Goldman, and castigated Hillary Clinton for giving paid speeches to big banks, Goldman among them.

The Goldman influx has so far drawn little criticism, perhaps because worries about what once would have been deemed undue influence now mix with relief that there is some adult supervision in the executive branch.

On balance, “it’s a plus,” Michael R. Bloomberg, the former New York City mayor who built his fortune on Wall Street, told me this week. “Whatever you may think of them individually, you can’t get to be a Goldman partner and survive if you’re stupid, lazy or unprofessional.” (Mr. Bloomberg is co-chairman of Goldman’s “10,000 Small Businesses” initiative, which provides support to fledgling entrepreneurs.)

Whatever bricks Mr. Trump threw at Wall Street during the campaign, investors have cheered his victory, driving the stock market to new highs. And Goldman has been a particular beneficiary, with its shares gaining 35 percent since Election Day — the top-performing stock in the Dow Jones industrial average in that time.

Mr. Trump, a spokeswoman of his told me, sees no contradiction here. There’s a difference between individuals who happen to have worked at Goldman Sachs, at some point in their careers, and Goldman Sachs itself. “He’s said from the beginning that he’ll hire the very best people for the job regardless of where they worked before, which is what he’s done throughout his career,” said the spokeswoman, Hope Hicks.

While the firm’s influence in a Trump administration may reach a new apex, Goldman alumni have long been fixtures in both Republican and Democratic administrations. The Goldman legend Sidney J. Weinberg headed Franklin D. Roosevelt’s influential Business Advisory and Planning Council.

Recent Treasury secretaries with Goldman roots include Robert E. Rubin, a former co-chairman, under Bill Clinton; and Henry M. Paulson Jr., a former chairman and chief executive, under George W. Bush.

Even in the Obama administration, where a Goldman pedigree was something akin to a scarlet letter, Gary Gensler was credited with reviving a moribund Commodity Futures Trading Commission and might have been Treasury secretary had Mrs. Clinton won in November.

Which raises the question: Why would such a disproportionate number of the “best people,” in Mr. Trump’s view, come from just one bank? After all, Goldman is hardly the only large bank, and it is also far from the biggest. It employs roughly 33,000 people; JPMorgan Chase’s work force is many times as large.

Many point to a unique Goldman culture that has long encouraged public service and philanthropy as integral to its business model.

Goldman “does seem to produce people who are very smart and have valuable experience,” Mr. Bloomberg said. “And they have a culture and a long tradition of leaving the firm for public service. The firm pushes them to do that.”

More.