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Escobar: Russia Is Primed For A Persian Gulf Security ‘Makeover’

Escobar: Russia Is Primed For A Persian Gulf Security ‘Makeover’

Authored by Pepe Escobar via TheCradle.co,

It’s impossible to understand…

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This article was originally published by Zero Hedge

Escobar: Russia Is Primed For A Persian Gulf Security ‘Makeover’

Authored by Pepe Escobar via TheCradle.co,

It’s impossible to understand the resumption of the JCPOA nuclear talks in Vienna without considering the serious inner turbulence of the Biden administration.

Everyone and his neighbor are aware of Tehran’s straightforward expectations: all sanctions – no exceptions – must be removed in a verifiable manner. Only then will the Islamic Republic reverse what it terms ‘remedial measures,’ that is, ramping up its nuclear program to match each new American ‘punishment.’

The reason Washington isn’t tabling a similarly transparent position is because its economic circumstances are, bizarrely, far more convoluted than Iran’s under sanctions. Joe Biden is now facing a hard domestic reality: if his financial team raises interest rates, the stock market will crash and the US will be plunged into deep economic distress.

Panicked Democrats are even considering the possibility of allowing Biden’s own impeachment by a Republican majority in the next Congress over the Hunter Biden scandal.

According to a top, non-partisan US national security source, there are three things the Democrats think they can do to delay the final reckoning:

  • First, sell some of the stock in the Strategic Oil Reserve in coordination with its allies to drive oil prices down and lower inflation.

  • Second, ‘encourage’ Beijing to devalue the yuan, thus making Chinese imports cheaper in the US, “even if that materially increases the US trade deficit. They are offering trading the Trump tariff in exchange.” Assuming this would happen, and that’s a major if, it would in practice have a double effect, lowering prices by 25 percent on Chinese imports in tandem with the currency depreciation.

  • Third, “they plan to make a deal with Iran no matter what, to allow their oil to re-enter the market, driving down the oil price.” This would imply the current negotiations in Vienna reaching a swift conclusion, because “they need a deal quickly. They are desperate.”

There is no evidence whatsoever that the team actually running the Biden administration will be able to pull off points two and three; not when the realities of Cold War 2.0 against China and bipartisan Iranophobia are considered.

Still, the only issue that really worries the Democratic leadership, according to the intel source, is to have the three strategies get them through the mid-term elections. Afterwards, they may be able to raise interest rates and allow themselves time for some stabilization before the 2024 presidential ballot.

So how are US allies reacting to it? Quite intriguing movements are in the cards.

When in doubt, go multilateral

Less than two weeks ago in Riyadh, the Gulf Cooperation Council (GCC), in a joint meeting with France, Germany and the UK, plus Egypt and Jordan, told the US Iran envoy Robert Malley that for all practical purposes, they want the new JCPOA round to succeed.

A joint statement, shared by Europeans and Arabs, noted “a return to mutual compliance with the [nuclear deal] would benefit the entire Middle East, allow for more regional partnerships and economic exchange, with long-lasting implications for growth and the well-being of all people there, including in Iran.”

This is far from implying a better understanding of Iran’s position. It reveals, in fact, the predominant GCC mindset ruled by fear: something must be done to tame Iran, accused of nefarious “recent activities” such as hijacking oil tankers and attacking US soldiers in Iraq.

So this is what the GCC is volunteering to the Americans. Now compare it with what the Russians are proposing to several protagonists across West Asia.

Essentially, Moscow is reviving the Collective Security Concept for the Persian Gulf Region, an idea that has been simmering since the 1990s. Here is what the concept is all about.

So if the US administration’s reasoning is predictably short-term – we need Iranian oil back in the market – the Russian vision points to systemic change.

The Collective Security Concept calls for true multilateralism – not exactly Washington’s cup of tea – and “the adherence of all states to international law, the fundamental provisions of the UN Charter and the resolutions of the UN Security Council.”

All that is in direct contrast with the imperial “rules-based international order.”

It’s too far-fetched to assume that Russian diplomacy per se is about to accomplish a miracle: an entente cordiale between Tehran and Riyadh.

Yet there’s already tangible progress, for instance, between Iran and the UAE. Iranian Deputy Foreign Minister Ali Bagheri held a “cordial meeting” in Dubai with Anwar Gargash, senior adviser to UAE President Khalifa bin Zayed Al Nahyan. According to Bagheri, they “agreed to open a new page in Iran-UAE relations.”

Geopolitically, Russia holds the definitive ace: it maintains good relationships with all actors in the Persian Gulf and beyond, talks to all of them frequently, and is widely respected as a mediator by Iran, Saudi Arabia, Syria, Iraq, Turkey, Lebanon, and other GCC members.

Russia also offers the world’s most competitive and cutting edge military hardware to underpin the security needs of all the parties.

And then there’s the overarching, new geopolitical reality. Russia and Iran are forging a strengthened strategic partnership, not only geopolitical but also geoeconomic, fully aligned to the Russian-conceptualized Greater Eurasian Partnership – and also demonstrated by Moscow’s support for Iran’s recent ascension to the Shanghai Cooperation Organization (SCO), the only West Asian state to be admitted thus far.

Furthermore, three years ago Iran launched its own regional security framework proposal for the region called HOPE (the Hormuz Peace Endeavor) with the intent to convene all eight littoral states of the Persian Gulf (including Iraq) to address and resolve the vital issues of cooperation, security, and freedom of navigation.

The Iranian plan didn’t get far off the ground. While Iran suffers from adversarial relations with some of its intended audience, Russia carries none of that baggage.

The $5.4 trillion game

And that brings us to the essential Pipelineistan angle, which in the Russia–Iran case revolves around the new, multi-trillion dollar Chalous gas field in the Caspian Sea.

A recent sensationalist take painted Chalous as enabling Russia to “secure control over the European energy market.”

That’s hardly the story. Chalous, in fact, will enable Iran  – with Russian input – to become a major gas exporter to Europe, something that Brussels evidently relishes. The head of Iran’s KEPCO, Ali Osouli, expects a “new gas hub to be formed in the north to let the country supply 20 percent of Europe’s gas needs.”

According to Russia’s Transneft, Chalous alone could supply as much as 52 percent of natural gas needs of the whole EU for the next 20 years.

Chalous is quite something: a twin-field site, separated by roughly nine kilometers, the second-largest natural gas block in the Caspian Sea, just behind Alborz. It may hold gas reserves equivalent to one-fourth of the immense South Pars gas field, placing it as the 10th largest gas reserves in the world.

Chalous happens to be a graphic case of Russia-Iran-China (RIC) geoeconomic cooperation. Proverbial western speculative spin rushed to proclaim the 20-year gas deal as a setback for Iran. The final breakdown, not fully confirmed, is 40 percent for Gazprom and Transneft, 28 percent for China’s CNPC and CNOOC, and 25 percent for Iran’s KEPCO.

Moscow sources confirm Gazprom will manage the whole project. Transneft will be in charge of transportation, CNPC is involved in financing and banking facilities, and CNOOC will be in charge of infrastructure and engineering.

The whole Chalous site has been estimated to be worth a staggering  $5.4 trillion.

Iran could not possibly have the funds to tackle such a massive enterprise by itself. What is definitely established is that Gazprom offered KEPCO all the necessary technology in exploration and development of Chalous, coupled with additional financing, in return for a generous deal.

Crucially, Moscow also reiterated its full support for Tehran’s position during the current JCPOA round in Vienna, as well as in other Iran-related issues reaching the UN Security Council.

The fine print on all key Chalous aspects may be revealed in time. It’s a de facto geopolitical/geoeconomic win-win-win for the Russia, Iran, China strategic partnership. And it reaches way beyond the famous “20-year agreement” on petrochemicals and weapons sales clinched by Moscow and Tehran way back in 2001, in a Kremlin ceremony when President Putin hosted then Iranian President Mohammad Khatami.

There’s no two ways about it. If there is one country with the necessary clout, tools, sweeteners and relationships in place to nudge the Persian Gulf into a new security paradigm, it is Russia – with China not far behind.

Tyler Durden
Mon, 12/06/2021 – 02:00




Author: Tyler Durden

Precious Metals

Pro-Sound Money Lawmaker Wants To End Income Taxes on Gold and Silver in Oklahoma

Oklahoma ended sales taxes on purchases of precious metals long ago, but now a state senator from Broken Arrow wants to end capital gains taxes on gold…

(Oklahoma City, Oklahoma, USA – January 20, 2022) – Oklahoma ended sales taxes on purchases of precious metals long ago, but now a representative from Broken Arrow wants to eliminate yet another tax on on gold and silver transactions.

Introduced by Sen. Nathan Dahm, Senate Bill 1480 would end capital gain transactions on the exchange of gold and silver.

Arizona, Utah, and Wyoming have enacted similar measures into law. Idaho has considered this measure recently and a similar measure is expected to be heard before the West Virginia legislature this year.

In recent decades, monetary gold and silver — and dollars redeemable in gold and silver — have been supplanted by the Federal Reserve Note as America’s currency. However, an increasing number of West Virginia citizens are realizing that holding gold and/or silver as a form of savings can help protect against the ongoing devaluation of the Federal Reserve Note.

Here are a few reasons why slapping an income tax on the monetary metals is wrong:

  • Current Oklahoma law assesses taxes on imaginary gains. Under current law, a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital “gain” is not necessarily a real gain, it’s often a nominal gain that results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power.

            Yet this nominal gain is taxed at the federal level – and, because West Virginia uses federal adjusted gross income (AGI) as a starting point for Oklahoma income calculations, this nominal gain is taxed again by the Sooner State. 

  • Inflation harms the poorest among us. Inflation is a regressive tax. The hardest hit are wage earners, savers, and pensioners on fixed incomes – as well as those who own few or no tangible assets. 
  • Taxing imaginary gains is harmful to citizens attempting to protect their assets. Investments in precious metals coins and bullion are rightly exempt from Oklahoma’s sales tax. Neutralizing Oklahoma’s income tax treatment of the monetary metals would remove the last major disincentive in the state that stands against the ownership and use of the monetary metals.

Policies that penalize savers in precious metals reduce the likelihood that Oklahoma citizens will take prudent steps to insulate themselves from the inflation and financial turmoil caused by the Federal Reserve.

Oklahoma savers, wage earners, and all those who use gold and silver to insulate against the devastating effects of inflation should be able to protect themselves without getting punished by taxation.

      









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Economics

Initial Jobless Unexpectedly Surge To A Three Month High As Economic Slowdown Deepens

Initial Jobless Unexpectedly Surge To A Three Month High As Economic Slowdown Deepens

While the number of actual Americans filing for jobless…

Initial Jobless Unexpectedly Surge To A Three Month High As Economic Slowdown Deepens

While the number of actual Americans filing for jobless benefits for the first time dipped to 337.4K from a 8 month high of 420.8K last week, on a seasonally-adjusted, initial claims unexpectedly soared from 231K to 286K, a huge miss to expectations of 225K, the highest print since October 8 and the latest confirmation that the economy is slowing rapidly not just because of Omicron but due to general exhaustion at the consumer level the result of stimmies having been spent long ago.

While continuing claims on a seasonally-adjusted basis rose from a fresh pre-COVID low of 1.551MM last week to 1.635MM, on a non-seasonally-adjusted basis, continuing claims jumped to a fresh 3 month high of 2.075mm, the highest since the first week of October.

On an unadjusted state by state basis, claims fell in virually all states with the exception of California, where the DOL estimates that they rose (it didn’t actually measure them).

Overall, the number of Americans filing for some form of unemployment benefit rose again from 1.948mm (unadjusted) to 2.128MM.

And while pundits and economists will be quick to blame everything on Omicron (which of course is transitory), they will again be wrong because we are now entering the phase where the US consumer is now tapped out. But of course, just as the Fed erred last year and allowed inflation to run red hot, in 2022 it won’t spot the economic slowdown in time and will keep tightening right into a major recession if not worse…. at which point Powell will of course panic and unleash an even bigger easing cycle than the Covid one.

Tyler Durden
Thu, 01/20/2022 – 08:42

Author: Tyler Durden

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Economics

Today’s Mortgage Rates Move Higher | January 20, 2022

The 30-year fixed-rate mortgage is averaging 4.05%, up 0.17 percentage points from yesterday.

Mortgage rates continued climbing today. The 30-year fixed-rate mortgage is averaging 4.05%, up 0.17 percentage points from yesterday. Rates for other loan types are also starting the day higher, with the 30-year refinance rate averaging 4.153%, up 0.007 percentage points.

Although rates are moving higher, well-qualified borrowers can still lock in competitive interest rates and affordable monthly payments for either a home purchase or a mortgage refinance.

  • The latest rate on a 30-year fixed-rate mortgage is 4.05%.
  • The latest rate on a 15-year fixed-rate mortgage is 3.074%. ⇑
  • The latest rate on a 5/1 ARM is 2.575%. ⇑
  • The latest rate on a 7/1 ARM is 3.868% ⇑
  • The latest rate on a 10/1 ARM is 4.153%. ⇑

Money’s daily mortgage rates reflect what a borrower with a 20% down payment and a 700 credit score — roughly the national average score — might pay if he or she applied for a home loan right now. Each day’s rates are based on the average rate 8,000 lenders offered to applicants the previous business day. Freddie Mac’s weekly rates will generally be lower, since they measure rates offered to borrowers with higher credit scores.

Today’s 30-year fixed-rate mortgage rates

  • The 30-year rate is 4.05%.
  • That’s a one-day increase of 0.017 percentage points.
  • That’s a one-month increase of 0.434 percentage points.

The long payback time, steady interest rate and affordable monthly payments make the 30-year mortgage the most popular option. The trade-off is that the interest rate will be higher compared to a shorter-term loan, so this is a more expensive option over time.

Today’s 15-year fixed-rate mortgage rates

  • The 15-year rate is 3.074%.
  • That’s a one-day increase of 0.007 percentage points.
  • That’s a one-month increase of 0.53 percentage points.

Some borrowers prefer the shorter payback time and lower interest rate of a 15-year fixed-rate mortgage because the debt will be paid off faster and won’t cost as much ultimately. The caveat is that the monthly payments will be higher than those on a 30-year loan of equal amount and may not be affordable for some buyers.

The latest rates on adjustable-rate mortgages

  • The latest rate on a 5/1 ARM is 2.575%. ⇑
  • The latest rate on a 7/1 ARM is 3.868%. ⇑
  • The latest rate on a 10/1 ARM is 4.153%. ⇑

Adjustable-rate mortgages will start with a fixed ‘teaser’ rate that becomes adjustable after a set number of years. For example, a 5/1 ARM will have a fixed interest rate for five years before adjusting once a year. Borrowers who may be planning on either selling the home or refinancing before the fixed-rate period ends sometimes find this type of loan attractive, as the initial interest rate tends to be very low. The potential risk is that the interest rate could increase significantly after it becomes adjustable.

The latest VA, FHA and jumbo loan rates

The average rates for FHA, VA and jumbo loans are:

  • The rate on a 30-year FHA mortgage is 3.96%. ⇑
  • The rate on a 30-year VA mortgage is 4.026%. ⇑
  • The rate on a 30-year jumbo mortgage is 3.726%. ⇔

The latest mortgage refinance rates

The average refinance rates for 30-year loans, 15-year loans and ARMs are:

  • The refinance rate on a 30-year fixed-rate refinance is 4.153%. ⇑
  • The refinance rate on a 15-year fixed-rate refinance is 3.188%. ⇑
  • The refinance rate on a 5/1 ARM is 2.87%. ⇑
  • The refinance rate on a 7/1 ARM is 4.048%. ⇑
  • The refinance rate on a 10/1 ARM is 4.297%. ⇑

Where are mortgage rates heading this year?

Mortgage rates sank through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes they may not have been able to afford if rates were higher. In January 2021, rates briefly dropped to the lowest levels on record, but trended slightly higher through the rest of the year.

Looking ahead, experts believe interest rates will rise more in 2022, but also modestly. Factors that could influence rates include continued economic improvement and more gains in the labor market. The Federal Reserve has also begun tapering its purchase of mortgage-backed securities and announced it anticipates raising the federal funds rate three times in 2022 to combat rising inflation.

While mortgage rates are likely to rise, experts say the increase won’t happen overnight and it won’t be a dramatic jump. Rates should stay near historically low levels through the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a favorable time to finance a new home or refinance a mortgage.

Factors that influence mortgage rates include:

  • The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March of 2020. The Fed announced plans to keep money moving through the economy by dropping the short-term Federal Fund interest rate to between 0% and 0.25%, which is as low as they go. The central bank also pledged to buy mortgage-backed securities and treasuries, propping up the housing finance market but began cutting back those purchases in November.
  • The 10-year Treasury note. Mortgage rates move in lockstep with the yields on the government’s 10-year Treasury note. Yields dropped below 1% for the first time in March 2020 and have been rising since then. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
  • The broader economy. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can push interest rates down. Thanks to the pandemic, unemployment levels reached all-time highs early last year and have not yet recovered. GDP also took a hit, and while it has bounced back somewhat, there is still a lot of room for improvement.

Tips for getting the lowest mortgage rate possible

There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a little bit of work and will depend on both personal financial factors and market conditions.

Check your credit score and credit report. Errors or other red flags may be dragging your credit score down. Borrowers with the highest credit scores are the ones who will get the best rates, so checking your credit report before you start the house-hunting process is key. Taking steps to fix errors will help you raise your score. If you have high credit card balances, paying them down can also provide a quick boost.

Save up money for a sizeable down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually translates to a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender you have the money to finance the home purchase.

Shop around for the best rate. Don’t settle for the first interest rate that a lender offers you. Check with at least three different lenders to see who offers the lowest interest. Also consider different types of lenders, such as credit unions and online lenders in addition to traditional banks.

Also. take time to find out about different loan types. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan like a 15-year loan or an adjustable-rate mortgage. These types of loans often come with a lower rate than a conventional 30-year mortgage. Compare the costs of all to see which one best fits your needs and financial situation. Government loans — such as those backed by the Federal Housing Authority, the Department of Veterans Affairs and the Department of Agriculture — can be more affordable options for those who qualify.

Finally, lock in your rate. Locking your rate once you’ve found the right rate, loan product and lender will help guarantee your mortgage rate won’t increase before you close on the loan.

Our mortgage rate methodology

Money’s daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the most recent business day rates are available for. Today, we are showing rates for Wednesday, January 19, 2022. Our rates reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. These rates were offered to people putting 20% down and include discount points.

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