Nearly 50 years ago, Vanguard disrupted the investing world by launching the first index fund for individual investors. Here comes the sequel.
Investors have tried everything to avoid paying those pesky capital gains tax bills in their mutual funds. Now Vanguard’s got an ETF share class for that — and by most indications, it could upend the $28 trillion fund industry.
The world’s second largest investment company after BlackRock, the Malvern, Pennsylvania-based Vanguard has experimented with a method for constructing exchange-traded fund share classes of its existing mutual funds over the past two decades. It’s been so successful that the company reportedly used the structure in 14 stock funds that booked $191 billion in gains for investors as of 2019 and paid out a total tax bill to the Internal Revenue Service of $0.
It’s a mouth-watering metric that took on even more significance after Vanguard’s prized patent expired last year. Now, Charles Schwab, Morgan Stanley, Fidelity, and roughly a dozen other companies have filed applications with the Securities and Exchange Commission to copy the structure. While it’s unclear whether the agency will approve the applications, its eventual decision holds enormous sway not only on the industry but also potentially over hundreds of billions of dollars in revenue for the Treasury.
In any alternative media space, you are sure to find much talk about US dollar dominance, as well as optimistic forecasts of its imminent decline. This is also true in the radical right, where nationalists pine after an end to US imperial hegemony and the rise of a more multipolar world.
Often though, this hope is little more than wishful thinking, with unlikely challengers to US power much overhyped. This is especially true concerning US dollar hegemony, a topic that is ripe for misunderstanding at the best of times.
It’s important to keep in mind that people have been forecasting the decline of the dollar ever since it attained its status as global reserve currency. As far back as 1960, the economist Robert Triffin was warning of an “imminent threat to the once-mighty US dollar”. Understanding the reason for Triffin’s pessimism, and why it turned out to be misguided, is crucial to understanding today’s global monetary system and the enduring dominance of the dollar.
Triffin’s concerns were more informed than most: his “Triffin dilemma”, as it came to be known, highlighted an inherent problem with a country’s national currency also serving as the reserve currency of choice for the international system. The country supplying the world with the reserve currency has to produce a surplus of money, thereby creating a trade deficit. In other words, the supplier country needs to be continually losing money to fill up the reserves of other countries and make the currency a low-risk option to hold as a reserve. But if the supplier country becomes too indebted to the rest of the world in this scenario, then its currency ceases to be such a low-risk asset, and that’s the dilemma.
…For all the scare-mongering from libertarians about “Fed money-printing”, it is international bankers — outside the regulations of the US Federal Reserve — who are the ones in control of creating the US dollar supply on international markets. Big commercial banks create Eurodollars using the offshore system without the backing of the Federal Reserve. This is done through fractional lending, where dollar deposits are used as collateral to loan out a higher amount of dollars.
China is constructing a secret military base in Tajikistan, satellite images reveal, as it seizes on the rising threat to security posed by Taliban-ruled Afghanistan.
Beijing has been building the base in one of the most remote corners of the world for almost a decade. China signed a security pact with Tajikistan in 2016.
The facility, carved out of mountains that rise 13,000ft high, has look-out towers and troops from both countries, which now hold regular joint military drills shown on Chinese state media.
Neither government has publicly acknowledged the existence of the base, which extends a former Soviet outpost. But the images show a steady pace of construction, including access roads to the base.
Concern is rising that Beijing plans to do the same in neighbouring nations, as it boosts relations with Tajikistan at a time when Russia, its usual economic and security partner, is embroiled in its invasion of Ukraine.
On July 4, president Xi Jinping cemented growing ties with Tajikistan in his third state visit.
“The situation is that of a vacuum, and the vacuum is filled by China,” said Parviz Mollojonov, a political scientist and acting country director for International Alert, a UK-based NGO that promotes peace.
“Since the deterioration of the situation in Afghanistan, China uses the concern of the Tajik government to build in the security sector.”
Central policy and money laundering have created networks that aid traffickers.
A mixture of unintended consequences and indifference has left China playing a significant role in America’s fentanyl crisis. This has become a point of heated contention between Beijing and Washington. U.S. politicians accuse China of deliberately stoking the U.S. drug crisis; China responds that it has done its part and the United States is scapegoating.
But the actual story of Chinese regulation is far more complex and messy—and shows how powerful the profit motive is and how regulatory effects can have unintended consequences. The Chinese government regulates the production and distribution of fentanyl and its precursor chemicals, but stopping the trade is a challenge. Policies aimed at boosting China’s chemical and pharmaceutical development and exports have instead created a vast cottage industry of hundreds of thousands of small chemical plants and active pharmaceutical ingredient (API) manufacturers—and with it, a vast money laundering industry that takes advantage of the advanced real-time settlement capabilities of China’s banking system.
A U.S. Customs and Border Protection (CBP) officer finds pills in a parcel at John F. Kennedy Airport’s postal service facility in New York on June 24, 2019. Dozens of law enforcement officers sift through packages, looking for fentanyl. JOHANNES EISELE/AFP VIA GETTY IMAGES
Understanding how to control fentanyl requires understanding how to make it. Fentanyl has many variants with similar sounding names that are chemically distinct but cause similar reactions in the body; the variants are merely different icing on the same cake.
Since its creation in 1959, researchers have developed at least three different manufacturing methods for fentanyl, each relying on different precursor chemicals as part of the process. Criminals have continued to adapt these processes to use a broader set of more readily available precursor chemicals—like using margarine because you’re all out of butter. The potential manufacturing methods are limitless. Criminals seeking to profit from fentanyl and governments seeking to control its supply are locked in a never-ending competition, with each new countermeasure spurring further innovation to circumvent it.
For many years, Chinese regulators attempting to uphold the country’s traditionally strict anti-drug policies faced a challenge as new variants of fentanyl emerged faster than they could be administratively added to the list of controlled substances. Between 2012 and 2015, only six new fentanyl variants emerged, but there were 63 new variants in 2016 alone. In response, the Chinese government placed all variants of fentanyl on the controlled substances list as of May 2019.
Since the election of Margaret Thatcher’s Conservative government in 1979, Britain has undergone a great experiment. Economically, the UK became the exemplar of neoliberalism in Europe. Politically, the UK has quietly transitioned to a postnational state, undergoing one of the greatest demographic transformations in the West.
Although the landslide victory of Tony Blair’s “New Labour” in 1997 may have seemed like a return to the model of European social democracy that Britain exemplified after the Second World War, Blair’s “Third Way” represented rather the embrace of neoliberalism by the establishment Left, summed up nicely by their spokesman Peter Mandelson’s declaration that “we are all Thatcherites now”.
Under the leadership of both the Conservative Party and New Labour, Britain has transitioned from a traditional industrial and manufacturing powerhouse to a highly financialised rentier economy. The effects have been profound. The average Briton is considerably worse off and entire regions have been left behind at the same time London has become a booming centre of international finance. The UK has been denationalised by decades of mass-immigration and cultural leftism, and has become the prime example of “anarcho-tyranny”, where the state punishes minor offences and acts of dissent against the liberal consensus with extreme force, while serious crime runs out of control in major cities.
The Rentier Regime
The fundamental transformation in the British economy since the 1980s is the movement away from an economy that made things to an economy that made money . Up to then, Britain’s economic might had been centered on its manufacturing. Britain was the birthplace of the industrial revolution, and the dual expansion of its colonial empire and rapid advances in engineering allowed for the creation of a vast trading network, where colonies provided the raw materials and markets for British manufacturing. Northern English cities like Manchester, Sheffield and Newcastle became manufacturing powerhouses serving the world.
…The graph below demonstrates the explosion in London-based financial services in delivering growth for the British economy
UPDATE: This is an exceptionally good article. It covers much more than even a longish sample can convey. I highly recommend reading it. It has clarified and altered my understanding of the UK. ABN
June 26 (UPI) — The Japanese yen fell below 160 against the U.S. dollar on Wednesday, its lowest point in more than 37 years as Tokyo scrambled to determine what appropriate intervention measures to take.
The record fall of the yen follows Japanese and South Korean national forecasters expressing alarm on Tuesday after the depreciation of their currencies. The United States had placed Japan on its watch list of currency manipulators last week.
The yen fell to 160.39 during London trading hours at one period, its lowest point since 1986. On April 29, the yen fell to 160.24 against the U.S. dollar, leading to intervention by Japan’s central bank.
As the AI market matures, there is a stark realization in public sectors elsewhere that this is America’s AI world.
You can just picture Sam, Elon, Satya, and Jensen in a Silicon Valley karaoke joint somewhere belting out that ‘80s classic: We are the world.
While governments try to wrap their heads around how to legislate for the Brave New World the US tech industry has thrust upon them, they’re also jostling to grow domestic AI industries. As the AI market matures, there is a stark realization in public sectors elsewhere that this is America’s AI world — the rest of us just live here.
If You Can’t Beat ‘Em, Incentivize ‘Em
Reining in Big Tech means different things in different countries, of course. In China, the Great Firewall is being maintained, more or less. Starting July 9, developer access to ChatGPT will be cut off in China, and domestic rivals are flocking to fill the Sam Altman vacuum. Slightly further down the sliding scale of governmental control is the European Union, which passed the AI Act in March and recently told Meta to stop scraping people’s Facebook data (oh, Meta!) to train its large language models. But EU member states are keen to set themselves up as an AI hub — especially France, which CNBC reports is vying with ex-EU member the UK to attract AI investment.
The pace at which AI has damagedcountlessindustries is whiplash-inducing. And no one understands this better than a writer who in 2023 was excelling at his copywriting job with a team of writers 60 people strong — and by the next year found himself the last human standing, arm in arm with AI imitators he was expected to drag along and get up to speed.
“They wanted to use AI to cut down on costs,” the writer told the BBC, using the pseudonym Benjamin Miller.
At first, the new workflow was this: his manager would feed a headline into an AI model, and it would generate an outline that the team were expected to work with, with Miller doing the final edits.
But that was just the beginning. Months later, management decided to cut humans out of the loop almost completely. Going forward, the AI model would generate articles in their entirety. Shoddy automation was here, and as a consequence, most of the writers lost their jobs. Miller kept his — though his role was going to be a bit different than before.
Now, he was tasked with polishing up the AI’s lackluster prose, and, to quote the BBC, “make it sound more human.” If only there was a way of doing that with, uh, human writers.
Dehumanizing Drudgery
Soon, Miller was the only human employee left on the team. It was down to him, and him alone, to fix up all the AI-generated articles.
“All of a sudden I was just doing everyone’s job,” Miller told the BBC. “Mostly, it was just about cleaning things up and making the writing sound less awkward, cutting out weirdly formal or over-enthusiastic language.”
“It was more editing than I had to do with human writers, but it was always the exact same kinds of edits,” he added. “The real problem was it was just so repetitive and boring. It started to feel like I was the robot.”
And so Miller found himself in the unenviable position of legitimizing the intrusion of AI into his very own job by making the extremely fallible models appear more capable than they actually are. This hasn’t been a fate exclusive to writers; in the service industry, for example, an army of underpaid, outsourced workers secretly worked behind the scenes to power the “AI” drive-thrus at the fast food chain Checkers.
I worked as a translator for many years. Gradually, computers took over and I moved on. I found it liberating to be replaced by machines. The other day I posted a song supposedly composed and played by AI. I think the song is pretty good and is a masterpiece of composition, employing almost every major lyrical and musical trope in its genre. It’s humorous, cleverly mocking, has many good lines—I think her name was Hailey. Where’d you run? The song was based on a Tik Tok clip with the pictured women making a reference to a sexual act. She was joking. The video was widely received with good humor. You can find more reactions at the link. As for the musicality of the tune, I play guitar but AI selected riffs ‘twice as better than I will’. Lots of people dump on music, especially country, because it’s just simple patterns. Steve Pinker has said as much. But AI is going to show Pinker that even his exalted thoughts and prose can be imitated. They too are just simple patterns, tropes. AI is revealing the core of Buddhism, itself the root of skepticism and stoicism, by forcing us see and feel the amalgam of experience and memory that is human ‘creativity’, its transience, emptiness and copyableness by a machine. ABN
How cabal treats indentured slaves who face the public for them while pretending to rule. Notice how cheap it is to infiltrate and takeover a country. You can buy a few hundred of these for peanuts while ‘earning’ total control of Canada, for example. ABN
American Buddhist Net 