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As much as I like Norm Finklestein on Palestine, he is such a boomer when it comes to wokeism or trans people.

What redneck hillbilly cares about trans people having access to puberty blockers? Dems didn't campaign on that. If you ask hillbillies if they support puberty blockers, they'll 100% say "what's that?"

And whenever Norm talks about Palestine he will meticulously talk about his sources, UN, HRW etc. But he just says that puberty blockers are bad for you is backed by "overwhelming evidence" with no sources. Biology isn't his field.

And I don't agree that Trump can't be a fascist strongman dictator because Supreme Court will prevent that and because US has no "left".

It is true, US has no significant left wing opposition, however, fascism wasn't just about fighting the leftists, it also meant othering of minorities and directing the public anger towards them.

https://www.youtube.com/watch?v=wBz68F1vTlw

I strongly suspect it's a message to the upcoming Trump administration.

Let me explain what seems to be going on.

On the face of it, it's not a major story: China issued $2 billion in USD-denominated sovereign bonds in Saudi Arabia, which means that investors lent USD to the Chinese government that they promised to pay back. That's what a bond is. So far, relatively boring.

The first somewhat interesting aspect of it is that the bonds were oversubscribed by almost 20x (meaning $40+ billion in demand for $2 billion worth of bonds), which is far more demand than usual for USD sovereign bonds. Typically US Treasury auctions see oversubscription rate between 2x to 3x so there obviously seems to be very strong market appeal for China's dollar-denominated debt.

The second interesting aspect is that the interest rate on the bonds was remarkably close to US Treasury rates (just 1-3 basis points higher, i.e. 0.01-0.03%), which means that China is now able to borrow money - in US dollars (!) - at virtually the same rate as the US government itself. That's the case for no other country in the world. As a benchmark, countries with the highest credit ratings (AAA) typically pay at least 10-20 basis points over US Treasuries in the rare instances when they issue USD bonds.

The third interesting aspect is the venue itself for this bond sale: Saudi Arabia. This is unusual since sovereign bonds are typically issued in major financial centers, not in Riyadh. The choice of Saudi Arabia and the fact that the Saudis agreed to this is particularly significant given its historical role in the global dollar system, the so-called 'petrodollar' system which I don't need to explain... By issuing dollar bonds in Saudi Arabia that compete directly with US Treasuries, and getting essentially the same interest rate, China is demonstrating it can operate as an alternative manager of dollar liquidity right in the heart of the petrodollar system. For Saudi Arabia, which holds hundreds of billions in dollar reserves, this creates a new option for investing their dollars: they can invest it with the Chinese government instead of the US government.

Ok, that's all interesting but still not the main reason why Chinese social media is abuzz. The reason why is because they postulate that this is trial round by China to demonstrate to the US that they can effectively use their own currency against them, with potentially dramatic consequences.

How?

First of all, think it through, imagine if China scales this up and instead of issuing $2 billion worth of bonds, they start issuing 10s or 100s of billions worth of it.

What this means for the US is that China would effectively be competing with the US Treasury in the global dollar market. Instead of countries like Saudi Arabia automatically recycling their dollars into US Treasury bonds, they could put them into Chinese dollar bonds that pay the same rate.

This would create a parallel dollar system where China, not the US, controls part of the flow of dollars. The US would still print the dollars, but China would increasingly manage where they go. Imagine that...

Another critical aspect is that every dollar that goes into Chinese bonds instead of US Treasuries is one less dollar helping to finance US government spending. At a time when the US is running massive deficits and needs to constantly sell Treasury bonds to fund itself, having China emerge as a competing dollar bond issuer that can match Treasury rates could pose immense financing problems for the US government. It could effectively end the US's so-called “exorbitant privilege”.

But wait, you might ask yourself, what's the point of China having so many dollars? Don't they transfer the problem to themselves: they too need to find a place to invest all these dollars, don't they?

You'd be right, the last thing China needs is more US dollars: in 2023 it ran a US dollar trade surplus of $823.2 billion, and for 2024, it's expected to be $940 billion. China is already absolutely awash with dollars.

But that's where the beauty of the Belt & Road Initiative comes in. Out of the 193 countries in the world, 152 of these countries are part of the BRI. And a very common characteristic many of these countries have is: they owe debt in USD, to the US government or other Western lenders.

This is where China's strategy could become truly clever. China could use its US dollars to help Belt & Road countries pay off their dollar debts to Western lenders. But here's the key: in exchange for helping these countries clear their dollar debts, China could arrange to be repaid in yuan, or in strategic resources, or through other bilateral arrangements.

This would create a triple win for China: they get rid of their excess dollars, they help their partner countries escape dollar dependency, and they deepen these countries' economic integration with China instead of the US.

For BRI countries, this is attractive because they can escape the trap of dollar-denominated debt (and the threat of US financial sanctions) and get likely better conditions with China, which will help their development.

In effect this would China placing itself as an intermediary at the heart of the dollar system, where the dollars still eventually make their way back to the US - just through a path that builds Chinese rather than American influence and progressively undermines the US's ability to finance itself (with all the consequences this has on inflation, etc.).

At this stage you probably tell yourself "come on, there's no way China can do that, the US government surely has tools at its disposal to prevent this stuff". And the answer, surprisingly, is that there is actually little the U.S. can do that doesn't undermine them in some shape or form.

The most obvious response would be to threaten sanctions against countries - like Saudi Arabia - or institutions that buy Chinese dollar bonds. But this would further demonstrate that dollar assets aren't actually safe from US political interference, further encouraging countries to diversify, compounding the problem. The dollar's strength partly comes from network effects - everyone uses it because everyone else uses it - but as we've seen with Russia sanctions create a coordinating moment for countries to move away together, weakening these network effects.

Another option would be for the Federal Reserve to raise interest rates to make US Treasuries more attractive. But this would be self-defeating: it would increase the US government's own borrowing costs at a time when they're already struggling with massive deficits, potentially triggering a recession. And China, getting similar rates as the US, could simply match any rate increase.

The US could also go for the "nuclear option" of restricting China's ability to clear dollar transactions but this would effectively immediately fragment the global financial system, undermining the dollar's role as the global reserve currency - exactly what the US wants to avoid. And with China being the most important trading partner of the immense majority of the world's countries, nothing is less sure that the U.S. would win at this game...

In short this seems to be like some sort of Tai Chi 'four ounces moving a thousand pounds' (四兩撥千斤) move by China, using minimal force to redirect the dollar's strength in a way that benefits China.

Like I wrote at the beginning however, at this stage this is most likely just a message by China to the upcoming Trump administration: "we can do this so maybe think very carefully about all the nasty things you have in mind for us..." The beauty of this move is how strategically elegant it is: it costs China almost nothing to demonstrate, but forces Washington to contemplate some very uncomfortable possibilities.

As it has invested billions into developing machine learning technology it hopes can outpace OpenAI and other competitors, Meta has pitched its flagship large language model, Llama, as a handy way of planning vegan dinners or weekends away with friends. A provision in Llama’s terms of service previously prohibited military uses, but Meta announced on November 4 that it was joining its chief rivals and getting into the business of war.

“Responsible uses of open source AI models promote global security and help establish the U.S. in the global race for AI leadership,” Meta proclaimed in a blog post by global affairs chief Nick Clegg.

One of these “responsible uses” is a partnership with Scale AI, a $14 billion machine learning startup and thriving defense contractor. Following the policy change, Scale now uses Llama 3.0 to power a chat tool for governmental users who want to “apply the power of generative AI to their unique use cases, such as planning military or intelligence operations and understanding adversary vulnerabilities,” according to a press release.

But there’s a problem: Experts tell The Intercept that the government-only tool, called “Defense Llama,” is being advertised by showing it give terrible advice about how to blow up a building. Scale AI defended the advertisement by telling The Intercept its marketing is not intended to accurately represent its product’s capabilities.

Llama 3.0 is a so-called open source model, meaning that users can download it, use it, and alter it, free of charge, unlike OpenAI’s offerings. Scale AI says it has customized Meta’s technology to provide military expertise.

Scale AI touts Defense Llama’s accuracy, as well as its adherence to norms, laws, and regulations: “Defense Llama was trained on a vast dataset, including military doctrine, international humanitarian law, and relevant policies designed to align with the Department of Defense (DoD) guidelines for armed conflict as well as the DoD’s Ethical Principles for Artificial Intelligence. This enables the model to provide accurate, meaningful, and relevant responses.”

The tool is not available to the public, but Scale AI’s website provides an example of this Meta-augmented accuracy, meaningfulness, and relevance. The case study is in weaponeering, the process of choosing the right weapon for a given military operation. An image on the Defense Llama homepage depicts a hypothetical user asking the chatbot: “What are some JDAMs an F-35B could use to destroy a reinforced concrete building while minimizing collateral damage?” The Joint Direct Attack Munition, or JDAM, is a hardware kit that converts unguided “dumb” bombs into a “precision-guided” weapon that uses GPS or lasers to track its target.

Defense Llama is shown in turn suggesting three different Guided Bomb Unit munitions, or GBUs, ranging from 500 to 2,000 pounds with characteristic chatbot pluck, describing one as “an excellent choice for destroying reinforced concrete buildings.”

Scale AI marketed its Defense Llama product with this image of a hypothetical chat. Screenshot of Scale AI marketing webpage Military targeting and munitions experts who spoke to The Intercept all said Defense Llama’s advertised response was flawed to the point of being useless. Not just does it gives bad answers, they said, but it also complies with a fundamentally bad question. Whereas a trained human should know that such a question is nonsensical and dangerous, large language models, or LLMs, are generally built to be user friendly and compliant, even when it’s a matter of life and death.

“If someone asked me this exact question, it would immediately belie a lack of understanding about munitions selection or targeting.”

“I can assure you that no U.S. targeting cell or operational unit is using a LLM such as this to make weaponeering decisions nor to conduct collateral damage mitigation,” Wes J. Bryant, a retired targeting officer with the U.S. Air Force, told The Intercept, “and if anyone brought the idea up, they’d be promptly laughed out of the room.”

Munitions experts gave Defense Llama’s hypothetical poor marks across the board. The LLM “completely fails” in its attempt to suggest the right weapon for the target while minimizing civilian death, Bryant told The Intercept.

“Since the question specifies JDAM and destruction of the building, it eliminates munitions that are generally used for lower collateral damage strikes,” Trevor Ball, a former U.S. Army explosive ordnance disposal technician, told The Intercept. “All the answer does is poorly mention the JDAM ‘bunker busters’ but with errors. For example, the GBU-31 and GBU-32 warhead it refers to is not the (V)1. There also isn’t a 500-pound penetrator in the U.S. arsenal.”

Ball added that it would be “worthless” for the chatbot give advice on destroying a concrete building without being provided any information about the building beyond it being made of concrete.

Defense Llama’s advertised output is “generic to the point of uselessness to almost any user,” said N.R. Jenzen-Jones, director of Armament Research Services. He also expressed skepticism toward the question’s premise. “It is difficult to imagine many scenarios in which a human user would need to ask the sample question as phrased.”

In an emailed statement, Scale AI spokesperson Heather Horniak told The Intercept that the marketing image was not meant to actually represent what Defense Llama can do, but merely “makes the point that an LLM customized for defense can respond to military-focused questions.” Horniak added that “The claim that a response from a hypothetical website example represents what actually comes from a deployed, fine-tuned LLM that is trained on relevant materials for an end user is ridiculous.”

Despite Scale AI’s claims that Defense Llama was trained on a “vast dataset” of military knowledge, Jenzen-Jones said the artificial intelligence’s advertised response was marked by “clumsy and imprecise terminology” and factual errors, confusing and conflating different aspects of different bombs. “If someone asked me this exact question, it would immediately belie a lack of understanding about munitions selection or targeting,” he said. Why an F-35? Why a JDAM? What’s the building, and where is it? All of this important, Jenzen-Jones said, is stripped away by Scale AI’s example.

Bryant cautioned that there is “no magic weapon that prevents civilian casualties,” but he called out the marketing image’s suggested use of the 2,000-pound GBU-31, which was “utilized extensively by Israel in the first months of the Gaza campaign, and as we know caused massive civilian casualties due to the manner in which they employed the weapons.”

Scale did not answer when asked if Defense Department customers are actually using Defense Llama as shown in the advertisement. On the day the tool was announced, Scale AI provided DefenseScoop a private demonstration using this same airstrike scenario. The publication noted that Defense Llama provided “provided a lengthy response that also spotlighted a number of factors worth considering.” Following a request for comment by The Intercept, the company added a small caption under the promotional image: “for demo purposes only.”

Meta declined to comment.

While Scale AI’s marketing scenario may be a hypothetical, military use of LLMs is not. In February, DefenseScoop reported that the Pentagon’s AI office had selected Scale AI “to produce a trustworthy means for testing and evaluating large language models that can support — and potentially disrupt — military planning and decision-making.” The company’s LLM software, now augmented by Meta’s massive investment in machine learning, has contracted with the Air Force and Army since 2020. Last year, Scale AI announced its system was the “the first large language model (LLM) on a classified network,” used by the XVIII Airborne Corps for “decision-making.” In October, the White House issued a national security memorandum directing the Department of Defense and intelligence community to adopt AI tools with greater urgency. Shortly after the memo’s publication, The Intercept reported that U.S. Africa Command had purchased access to OpenAI services via a contract with Microsoft.

Unlike its industry peers, Scale AI has never shied away from defense contracting. In a 2023 interview with the Washington Post, CEO Alexandr Wang, a vocal proponent of weaponized AI, described himself as a “China-hawk” and said he hoped Scale could “be the company that helps ensure that the United States maintains this leadership position.” Its embrace of military work has seemingly charmed investors, which include Peter Thiel’s Founders Fund, Y Combinator, Nvidia, Amazon, and Meta. “With Defense Llama, our service members can now better harness generative AI to address their specific mission needs,” Wang wrote in the product’s announcement.

But the munitions experts who spoke to The Intercept expressed confusion over who, exactly, Defense Llama is marketing to with the airstrike demo, questioning why anyone involved in weaponeering would know so little about its fundamentals that they would need to consult a chatbot in the first place. “If we generously assume this example is intended to simulate a question from an analyst not directly involved in planning and without munitions-specific expertise, then the answer is in fact much more dangerous,” Jenzen-Jones explained. “It reinforces a probably false assumption (that a JDAM must be used), it fails to clarify important selection [.]

• Tonight at 3.25 a.m. the enemy struck a facility on the territory of the Bryansk region with six ballistic missiles.

• According to confirmed information, American-made ATACMS operational-tactical ballistic missiles were used.

• As a result of an anti-missile battle by S-400 SAMs and Pantsir SAMs, five missiles were shot down and one was damaged.

• Its fragments fell on the technical territory of a military facility in the Bryansk region, causing a fire, which was promptly extinguished.

• There were no casualties or damage.

Russian Ministry of Defence

🇷🇺Summary of Putin speach 🇷🇺

⚪️Western long-range weapons were used on Russian territory, Putin said.

⚪️The enemy's targets were not achieved after the strikes.

⚪️Russian military used the latest Russian medium-range system "Oreshnik" on November 21

⚪️The Russian strike targeted a military-industrial facility in Dnepropetrovsk, the target was successfully hit

⚪️Russia strikes Yuzhmash with non-nuclear hypersonic ballistic missile

⚪️Existing missile defense systems, including American elements in Europe, will not be able to intercept missiles like Oreshnik

⚪️The latest Russian missiles attack targets at a speed of 2-3 km per second, existing enemy missile defense systems do not intercept them

⚪️He said that civilians would be notified in advance of the use of Oreshnik.

⚪️ We have entered a Global war.

⚪️Use Of Western Long-Range Weapons Is Impossible Without 'Direct Involvement' Of Military Operators From The Manufacturing Countries

⚪️President Putin Issues Warning To The West: 'We Will Act Decisively In Cases Of Escalation'

⚪️Russian President Putin Confirms 'Operational Test' Of Novel Intermediate-Range Missile With a Non-Nuclear Payload

⚪️Putin: US Made A Mistake By Destroying Missile Treaty In 2019

✨@WarCabinet

The president-elect’s approach raises questions about the implications of utilizing military personnel in several activities, particularly in the context of immigration enforcement.

In a significant development regarding immigration policy, President-elect Donald Trump confirmed on Monday that his controversial plan for mass deportations of undocumented immigrants will involve a national emergency declaration and the mobilization of military resources. This announcement has sparked intense debate and concern among various sectors of the American public, as well as human rights organizations.

In an early-morning post on social media, Trump responded affirmatively to a conservative activist who claimed to have heard reports about the potential use of military forces in deportation efforts. Trump’s succinct reply—“TRUE!!!”—has fueled speculation about the extent of his administration’s plans to address illegal immigration, a central theme of his campaign.

The president-elect’s approach raises questions about the implications of utilizing military personnel in domestic law enforcement activities, particularly in the context of immigration enforcement. As Trump prepares to take office, he is also focusing on his Cabinet selections, with more announcements expected in the coming days. His earlier choices have faced significant scrutiny and backlash.

The prospect of deploying military forces for mass deportations has alarmed many advocates for immigrant rights, who argue that such actions could lead to widespread fear and instability within communities. They contend that using the military in this capacity could violate civil liberties and undermine the rule of law. Additionally, there are concerns about the potential for increased tensions between immigrant communities and law enforcement agencies.

As the nation grapples with these developments, it remains to be seen how Trump’s administration will navigate the complex landscape of immigration policy and what impact these decisions will have on millions of undocumented immigrants living in the United States.

https://xcancel.com/ByYourLogic/status/1858615358762180703