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Covid-19 Live Updates: A Growing Number of Countries Find Cases of the New Virus Variant
Japan, France, Spain, Sweden and Canada are the latest countries to discover infections with the potentially more transmissible variant first reported in Britain. Surveys show a clear majority of Americans now embrace coronavirus vaccines. Africa struggles with its second wave.
Japan, Spain, France, Sweden and Canada find cases of the new coronavirus variant.
The E.U.’s vaccinations are set to begin Sunday, but a few places have jumped the gun.
Central and Southern California have 0 percent I.C.U. capacity, in a state already low on hospital beds.
Thanksgiving travel swelled caseloads less than expected. Could a Christmas surge also be muted?
In a shift, more Americans say they are eager to get vaccinated.
Even as health workers receive the vaccine, their family members must wait.
‘The second wave is here,’ and African doctors fear it will hit the continent harder than the first.
The pandemic’s blow to performing artists may create a ‘great cultural depression.’
Japan, Spain, France, Sweden and Canada find cases of the new coronavirus variant.
JAPAN IS CLOSED
The discovery of the virus variant in Japan prompted the country to close its borders to all new entry by nonresident foreigners.
The discovery of the virus variant in Japan prompted the country to close its borders to all new entry by nonresident foreigners. Credit...Kyodo News via Getty Images
Japan, Spain, France, Sweden and Canada have found small numbers of infections involving a new, potentially more transmissible variant of the coronavirus, most linked to travel from the U.K., where it was first detected.
The rapid spread of the variant led to the lockdown of London and southern England this week, prompted a temporary French blockade of the English Channel and resulted in countries around the world barring travelers from the U.K. Because few countries have the level of genomic surveillance that Britain does, there is concern that the variant may have been traveling across the world undetected for weeks.
A recent study by British scientists found no evidence that the variant is more deadly than others but estimated that it is 56 percent more contagious.
So far, the British variant has been diagnosed in seven people in Japan, the country’s health ministry said. All had either recently traveled to the U.K. or been in contact with someone who had.
The discovery in Japan prompted the country to close its borders to all new entry by nonresident foreigners. The ban will go into effect at midnight on Monday and last through the end of January, the public broadcaster NHK reported.
In Spain, the variant was found in the capital region, local authorities said on Saturday. Antonio Zapatero, a regional health official, said that four cases had been confirmed in Madrid, while another three were being treated as suspicious. At least two of the cases involve people who had recently been to Britain and then tested positive in Madrid, as well as some of their relatives.
The first case of the new fast-spreading variant of the coronavirus in France was identified on Friday, according to the French health ministry. Officials said that the patient was a French citizen living in Britain who had traveled from London to Tours, a city in central France, on Dec. 19, a day before the British government imposed a lockdown following the emergence of the variant.
Officials in Sweden announced on Saturday that a case of the variant had been detected there after a traveler visited Sormland, near Stockholm, from the United Kingdom over Christmas, Reuters reported. No additional cases had been detected, the Public Health Agency of Sweden said.
Health officials in Ontario, Canada, said on Saturday that they had confirmed two cases of the variant in the province. The two cases were a couple from Durham, about 90 miles northwest of Toronto. The couple had no known travel history, exposure or high-risk contacts, the province’s health ministry said.
It is normal for viruses to mutate, and most of the mutations of the coronavirus have proved minor. The British variant has a constellation of 23 mutations, several of which might alter its transmissibility. Vaccine experts are confident that the available vaccines will be able to block the new variant, although that has to be confirmed by laboratory experiments that are now underway.
The European Union’s member nations are scheduled to begin vaccinating against the virus on Sunday with the Pfizer-BioNTech vaccine. Hungary began administering the vaccine a day early, on Saturday.
A few other concerning variants have also been identified, including one in South Africa and another in Nigeria. The U.K. said on Thursday that it would ban travel from South Africa after the British health secretary, Matt Hancock, said two people were confirmed to have been infected with the variant that emerged there.
Germany and Singapore have identified infections with the new variant. And Denmark, which has wider genomic surveillance than many other countries, detected 33 cases of the variant from Nov. 14 to Dec. 14, according to the Danish health authorities.
The U.S. has not yet reported any cases of the U.K. variant. But the country will require all airline passengers arriving from Britain to test negative for the coronavirus within 72 hours of their departure, the Centers for Disease Control and Prevention said Thursday. The rule will take effect on Monday.
Hisako Ueno and Mike Ives contributed reporting.
— Ben Dooley, Raphael Minder, Marc Santora, Isabella Kwai and Norimitsu Onishi
Tracking the Coronavirus ›
United States
On Dec. 25 14-day change
New cases 91,922* –11%
New deaths 1,129* –1%
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World
On Dec. 25 14-day change
467,358 –5%
8,084 –1%
Where cases per capita are highest
Calif.
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Ala.
Okla.
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W.Va.
Del.
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https://www.nytimes.com/live/2020/12/26/world/covid-updates-coronavirus
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3 European Countries Begin Coronavirus Vaccinations Early
Germany, Hungary and Slovakia began administering the Pfizer-BioNTech coronavirus vaccine on Saturday, one day ahead of the European Union’s official rollout.
Credit...Zsolt Czegledi/EPA, via Shutterstock
A 101-year-old woman in a nursing home in eastern Germany became the country’s first recipient of the BioNTech-Pfizer vaccine on Saturday, a day ahead of the European Union’s planned immunization campaign, an ambitious effort to eventually inoculate more than 450 million people across the 27 nations in the European Union against the coronavirus.
Vaccinations also began in Hungary, where photographs showed health care workers getting the shot at the Southern Pest Central Hospital in Budapest. The authorities in Slovakia also began administering their first doses on Saturday, Reuters reported.
Ursula von der Leyen, the president of the European Union’s executive arm, released a video in advance of the official rollout on Sunday, calling the campaign “a touching moment of unity.”
Roughly two-thirds of all Germans are willing to be vaccinated against coronavirus, according to a survey conducted by YouGov for the German news agency D.P.A., but more than half of respondents said they were concerned about possible side effects.
The doses for Europe are being produced at BioNTech’s manufacturing sites in Germany, and Pfizer’s site in Puurs, Belgium, according to the two companies, and countries across the bloc have begun receiving their first deliveries.
In Germany, all 16 states received 9,750 doses of the vaccine on Saturday. Each state is to send them to regional immunization centers, and then teams of drivers are to distribute them to nursing homes and care centers for the elderly across the country.
Karsten Fischer, who is responsible for managing the response to the pandemic in the Harz district of Saxony-Anhalt, said the logistics in his region made it possible to begin vaccinations within hours of receiving the doses, and he saw no reason to wait.
“We did not want to waste a day, as the stability of the vaccine decreases over time,” Mr. Fischer told the public broadcaster M.D.R. “We wanted to begin administering immediately.”
The first inoculation was administered in the city of Halberstadt, to 101-year-old Edith Kwoizalla; 40 other residents and 11 members of the staff at the nursing home also received doses, M.D.R. reported.
“Every day we wait is one day too many,” Tobias Krüger, the director of the home, told reporters.
Germany’s eastern states have been hardest hit by the second wave of the virus. More than 1.6 million people have been infected in the country, and more than 29,400 have died, many of them older citizens, especially those living in nursing homes.
Residents of nursing homes and their caregivers, as well as emergency medical staff and individuals 80 years and older, are set to be among the first vaccinated in Germany, based on a plan that was drawn up by leaders, medical advisers and members of the national Ethics Council. Members of the government do not plan to receive inoculations before their peers, Jens Spahn, the country’s health minister, said on Saturday.
“We have deliberately said that we will begin offering the vaccine to the most fragile,” Mr. Spahn said. “If there comes a time when it makes sense, say to bolster confidence, each one of us is ready to be vaccinated.”
— Melissa Eddy
Central and Southern California have 0 percent I.C.U. capacity, in a state already low on hospital beds.
Gabriella Ortega, a respiratory therapist, speaks to a health care worker who is helping to treat a Covid-19 patient at Providence St. Mary Medical Center in Apple Valley, Calif., on Dec. 17.
Gabriella Ortega, a respiratory therapist, speaks to a health care worker who is helping to treat a Covid-19 patient at Providence St. Mary Medical Center in Apple Valley, Calif., on Dec. 17.Credit...Ariana Drehsler for The New York Times
California, the wealthiest and most populous state of the world’s wealthiest country, has long had a dearth of hospital beds — just 1.8 beds per 1,000 people, according to 2018 data compiled by the Kaiser Family Foundation. Now a record-shattering slew of coronavirus cases has wiped out intensive care unit capacity in a large swath of the state.
Southern California, its most populous region, and San Joaquin Valley, a central region, have 0 percent I.C.U. capacity, keeping them under a stay-at-home order until at least Dec. 28, the California Department of Public Health said on Saturday.
Intensive care units in the Bay Area region are at 11.3 percent capacity and the Greater Sacramento Region has 16.9 percent capacity. Both will likely remain under the order at least into the new year.
Before the pandemic, California’s ratio of hospital beds per person was only slightly higher than Washington State and Oregon, both of which ranked last in the nation. Many of the state’s hospitals kept their number of beds low in part to limit costs.
I.C.U. beds have been limited as well: California only had 2.1 beds per 10,000 people, more plentiful than just 10 other states, according to KFF’s 2018 data.
California is the first U.S. state to report more than 2 million coronavirus cases so far. On Friday, the weekly average of new cases per day in the state was 36,418, according to a New York Times database. That is a 21 percent increase from two weeks prior.
The situation is now out of control, officials and health care workers have warned. At Martin Luther King Jr. Community Hospital in South Los Angeles, resources are so stretched that gurneys have been placed in the gift shop and the lobby is being used to treat patients. And keeping health care facilities sufficiently staffed has been yet another hurdle.
Many European countries are under restrictions, but Christmas is celebrated so broadly — and New Year’s festivities will follow shortly — that the concern of a post-holiday spike reaches far beyond a single country.
Case numbers remain about as high as they have ever been, both in the U.S. and throughout the world. Total U.S. infections are about to reach 19 million, while the world total surpassed 80 million on Saturday afternoon, according to a New York Times database.
For now, the U.S. is no longer seeing overall explosive growth, although California’s worsening outbreak has canceled out progress in other parts of the country. The state has added more than 300,000 cases in the seven-day period ending Dec. 22. And six Southern states have seen sustained case increases in the last week: Tennessee, Alabama, Georgia, South Carolina, Florida and Texas.
The country’s virus-related deaths in general have continued to climb. And hospitalizations are hovering at a pandemic height of about 120,000, according to the Covid Tracking Project.
More than 330,000 people in the United States have died since the pandemic began, and two of the four worst days for deaths so far have been during the past week. A number of states set death records on Dec. 22 or Dec. 23, including Alabama, Wisconsin, Arizona and West Virginia, according to The Times’s data.
Holiday reporting anomalies may obscure any post-Christmas spike until the second week of January. Testing was expected to decrease around Christmas, and many states have said they would not report data on certain days. For Dec. 25, numbers for both new infections, 91,922, and deaths, 1,129, were significantly lower than the seven-day averages.
The lessons learned from Thanksgiving are mixed. Case numbers and deaths have continued to rise since, but the patterns look more like a plethora of microspreads than a mass superspreader event.
Over all, experts have told The Times, areas of the U.S. that were improving pre-Thanksgiving — like the Midwest — continued to do well afterward, while regions that were seeing higher numbers before the holiday continued to worsen.
Only time will tell whether new infections will result from increased exposure during the late-December holidays — from seeing family, passing through airports or buying food for celebrations. More than one million people passed through Transportation Safety Administration travel checkpoints on each of four recent days — Dec. 18, 19, 20 and 23 — but that was less than half the number for those days last year, according to the agency’s data. Only a quarter of the number who flew on the day after Christmas last year did so on Friday, and Christmas Eve travel was down by one-third from 2019.
So, as with Thanksgiving, Christmas will produce “a continuing ramification” of whoever is infected over the winter holidays, said Catherine L. Troisi, an infectious-disease epidemiologist at the University of Texas’ School of Public Health in Houston, so it is crucial to keep up protective measures.
Ever since the race to develop a coronavirus vaccine began last spring, upbeat announcements were stalked by ominous polls: No matter how encouraging the news, growing numbers of people said they would refuse to get the shot.
The time frame was dangerously accelerated, many people warned. The vaccine was a scam from Big Pharma, others said. A political ploy by the Trump administration, many Democrats charged. The internet pulsed with apocalyptic predictions from longtime vaccine opponents, who decried the new shot as the epitome of every concern they’d ever put forth.
But over the past few weeks, as the vaccine went from a hypothetical to a reality, something happened. Fresh surveys show attitudes shifting and a clear majority of Americans now eager to get vaccinated.
In polls by Gallup, the Kaiser Family Foundation and the Pew Research Center, the portion of people saying they are now likely or certain to take the vaccine has grown from about 50 percent this summer to more than 60 percent, and in one poll 73 percent — a figure that approaches what some public health experts say would be sufficient for herd immunity.
Resistance to the vaccine is certainly not vanishing. Misinformation and dire warnings are gathering force across social media. At a meeting on December 20, members of an advisory panel to the Centers for Disease Control and Prevention cited strong indications that vaccine denouncements as well as acceptance are growing, so they could not predict whether the public would gobble up limited supplies or take a pass.
But the attitude improvement is striking. A similar shift on another heated pandemic issue was reflected in a different Kaiser poll this month. It found that nearly 75 percent of Americans are now wearing masks when they leave their homes.
The change reflects a constellation of recent events: the uncoupling of the vaccine from Election Day; clinical trial results showing about 95 percent efficacy and relatively modest side effects for the vaccines made by Pfizer-BioNTech and Moderna; and the alarming surge in new coronavirus infections and deaths.
— Jan Hoffman
Even as health workers receive the vaccine, their family members must wait.
Dr. Taison Bell and his wife Kristen with family at home in Charlottesville, Va. Unanswered questions about how well the vaccine prevents the spread of Covid-19 means that safety precautions must stay in place among the vaccinated.
Dr. Taison Bell and his wife Kristen with family at home in Charlottesville, Va. Unanswered questions about how well the vaccine prevents the spread of Covid-19 means that safety precautions must stay in place among the vaccinated.Credit...Eze Amos for The New York Times
Shortly after 2 p.m. on Dec. 15, Dr. Taison Bell became the second person in his hospital, UVA Health in Charlottesville, to receive a dose of Pfizer’s new coronavirus vaccine. “I feel fine,” he said. “But my right arm, if you were to interview it, is probably not excited about what’s happened to it.”
👉🏼His limb experienced a bit of swelling and soreness, nothing out of the ordinary for a vaccine. It was a sign that the injection was doing its job: instructing Dr. Bell’s cells to churn out a protein called spike, which will teach his immune system to recognize and thwart the new coronavirus, should he ever encounter it. His second dose, scheduled for early January, will clinch the process.
The shot introduced a microscopic shift that will have an outsize impact on his risk of getting Covid-19. But, Dr. Bell said, little else in his life will change until more of his community joins the vaccinated pool.
Dr. Bell, 37, remains a relative rarity among the people he sees both inside and outside of work. His wife, Kristen, and their children, Alain and Ruby, are unlikely to be vaccinated before the spring or summer. They, like many others, will soon live in a home divided by the splinter-thin prick of a needle — one person vaccinated, three not. They represent a liminal state that will persist for months nationwide, as the first people to be injected navigate a new coexistence with the vulnerable at home.
Although the new vaccines have been shown to be highly effective at preventing people from developing symptomatic cases of Covid-19, little data exists on how well they can stop the spread of the virus, raising the possibility that vaccinated people, despite being much safer individually, could still pose a threat to those they love.
For that reason, “we’re still going to be taking all the same precautions,” Ms. Bell said. “Our day-to-day isn’t going to change for months, as the vaccines continue to get rolled out.
— Katherine J. Wu
A citizen journalist who chronicled Wuhan’s epidemic is going on trial.
Ms. Zhang in a video from her hotel room that she posted on YouTube. The unfiltered information she shared about the epidemic in her videos went against the government’s victorious narrative.
Ms. Zhang in a video from her hotel room that she posted on YouTube. The unfiltered information she shared about the epidemic in her videos went against the government’s victorious narrative.Credit...via YouTube
In one video, during the lockdown in Wuhan, she filmed a hospital hallway lined with rolling beds, the patients hooked up to blue oxygen tanks. In another, she panned over a community health center, noting that a man said he was charged for a coronavirus test, even though residents believed the tests would be free.
At the time, Zhang Zhan, a 37-year-old former lawyer turned citizen journalist, embodied the Chinese people’s hunger for unfiltered information about the epidemic. She was one of several journalists, professionals and amateurs, who had flocked to Wuhan after the lockdown was imposed in late January.
The authorities were preoccupied with trying to manage the chaos of the outbreak, and for a brief period, China’s strict censorship regime loosened. Reporters seized that window to share residents’ raw accounts of terror and fury.
Now, Ms. Zhang has become a symbol of the government’s efforts to deny its early failings in the crisis and promote a victorious narrative instead.
Ms. Zhang abruptly stopped posting videos in May, after several months of dispatches. The police later revealed that she had been arrested, accused of spreading lies. On Monday, she will go to court, in the first known trial of a chronicler of China’s coronavirus crisis.
The prosecution is part of the Chinese Communist Party’s continuing campaign to recast China’s handling of the outbreak as a succession of wise, triumphant moves by the government. Critics who have pointed to officials’ early missteps have been arrested, censored or threatened by police; three other citizen journalists disappeared from Wuhan before Ms. Zhang did, though none of the rest has been publicly charged.
Prosecutors have accused Ms. Zhang of “picking quarrels and provoking trouble” — a frequent charge for government critics in China — and recommended between four and five years in prison.
Ms. Zhang appeared to know the risks of her actions. In one of her first videos, on Feb. 7, she mentioned that another citizen journalist, Chen Qiushi, had just disappeared, and another, Fang Bin, was under surveillance. Whistleblower doctors had been silenced, she added.
“But as someone who cares about the truth in this country, we have to say that if we just wallow in our sadness and don’t do something to change this reality, then our emotions are cheap,” she said.
Soon after her arrest, she began a hunger strike, according to her lawyers. She has become gaunt and drained but has refused to eat, the lawyers said, maintaining that her strike is her form of protest against her unjust detention.
— Vivian Wang
‘The second wave is here,’ and African doctors fear it will hit the continent harder than the first.
The Greenacres Hospital in Port Elizabeth, South Africa, has been overwhelmed by a crush of new virus cases.
The Greenacres Hospital in Port Elizabeth, South Africa, has been overwhelmed by a crush of new virus cases. Credit...Samantha Reinders for The New York Times
PORT ELIZABETH, South Africa — When the pandemic began, global public health officials raised grave concerns about the vulnerabilities of Africa. But its countries over all appeared to fare far better than those in Europe or the Americas, upending scientists’ expectations.
Now, the coronavirus is on the rise again in swaths of the continent, posing a new, possibly deadlier threat.
In South Africa, a crush of new cases that spread from Port Elizabeth is growing exponentially across the nation. Eight countries, including Nigeria, Uganda and Mali, recently recorded their highest daily case counts all year.
“The second wave is here,” John N. Nkengasong, the head of the Africa Centers for Disease Control and Prevention, has declared.
When the virus was first detected, many African countries were considered particularly at risk because they had weak medical, laboratory and disease-surveillance systems and were already battling other contagions. Some were riven by armed conflict, limiting health workers’ access. In March, Tedros Adhanom Ghebreyesus, the first African director-general of the World Health Organization, cautioned, “We have to prepare for the worst.”
But many African governments pursued swift, severe lockdowns that — while financially ruinous, especially for their poorest citizens — slowed the rate of infection. Some deployed networks of community health workers. The Africa C.D.C., the W.H.O. and other agencies helped expand testing and moved in protective gear, medical equipment and pharmaceuticals.
The reported toll of the pandemic on the continent — 2.6 million cases and 61,000 deaths, according to the Africa C.D.C. — is lower than what the United States alone currently experiences in three weeks.
But that accounting is almost certainly incomplete. Evidence is growing that many cases were missed, according to an analysis of new studies, visits to nearly a dozen medical institutions and interviews with more than 100 public health officials, scientists, government leaders and medical providers on the continent.
“It is possible and very likely that the rate of exposure is much more than what has been reported,” Dr. Nkengasong said in an interview.
Elsewhere, countries are bracing for their third lockdowns in the hopes of avoiding yet another wave of infections:
Austria entered a third lockdown on Saturday, with all nonessential shops and schools to remain closed for three weeks and movement to be restricted, after the country eased restrictions in mid-December to allow for preparations ahead of the Christmas holiday.
Until Jan. 24, people in Austria are only allowed to leave their homes for work, shopping or to exercise outdoors, and personal contacts are limited to no more than two households.
Ice skating rinks and ski lifts in the alpine country will remain open despite the lockdown, but operating at half capacity and with distancing requirements.
On Sunday, Israel is also set to enter its third weekslong lockdown following a sharp increase in positive coronavirus test results over the past week. Israelis will be barred from traveling more than 1,000 meters beyond their homes except those participating in protests, receiving a vaccination or fulfilling any other task on a list of exemptions, the government said in a statement on Friday.
Museums, malls, national parks, zoos, salons and many other places will be shuttered, but some schools will remain open, the government said. The lockdown is slated to go into effect about a week after Israel started vaccinating people against Covid-19. As of Saturday, more than 200,000 had already received the first dose of the Pfizer vaccine.
— Sheri Fink, Melissa Eddy and Adam Rasgon
The pandemic’s blow to performing artists may create a ‘great cultural depression.’
Soon after the pandemic struck, a year’s worth of bookings vanished for Jennifer Koh, an acclaimed classical violinist. She is now receiving food stamps.
Soon after the pandemic struck, a year’s worth of bookings vanished for Jennifer Koh, an acclaimed classical violinist. She is now receiving food stamps.Credit...Elias Williams for The New York Times
Since the start of the pandemic, millions of Americans have lost their jobs and tens of thousands of businesses have closed. But the losses in the performing arts and related sectors have been staggering.
During the quarter ending in September, when the overall unemployment rate averaged 8.5 percent, 52 percent of actors, 55 percent of dancers and 27 percent of musicians were out of work, according to the National Endowment for the Arts. By comparison, the jobless rate was 27 percent for waiters; 19 percent for cooks; and about 13 percent for retail salespeople over the same period.
In many areas, arts venues — theaters, clubs, performance spaces, concert halls, festivals — were the first businesses to close, and they are likely to be among the last to reopen.
The public may think of performers as A-list celebrities, but most never get near a red carpet or an awards show. The overwhelming majority, even in the best times, don’t benefit from Hollywood-size paychecks or institutional backing. They work season to season, weekend to weekend or day to day, moving from one gig to the next.
Jennifer Koh, a classical violinist with a dazzling technique, has ridden a career that any aspiring Juilliard grad would dream about — appearing with leading orchestras, recording new works, and performing on some of the world’s most prestigious stages.
Now, nine months into a contagion that has halted most public gatherings and decimated the performing arts, Ms. Koh, who watched a year’s worth of bookings evaporate, is playing music from her living room and receiving food stamps.
“My fear is we’re not just losing jobs, we’re losing careers,” said Adam Krauthamer, president of Local 802 of the American Federation of Musicians in New York. He said 95 percent of the local’s 7,000 members were not working on a regular basis because of the mandated shutdown. “It will create a great cultural depression,” he added.
— Patricia Cohen
A nurse recalls 10 grueling months: ‘That’s how we took care of Louisiana.’
Yanti Turang, a nurse at University Medical Center in New Orleans, in March.
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Credit...William Widmer for The New York Times
As 2020 comes to a close, we are revisiting subjects whose lives were affected by the pandemic. When Campbell Robertson first spoke with Yanti Turang in March, she was working in a makeshift Covid-19 tent and treating patients with a novel coronavirus.
In the harrowing days of late March, Yanti Turang was a New Orleans emergency nurse with an ominously relevant résumé: Five years earlier, she had been working on the front lines of the Ebola epidemic in Sierra Leone. What had been a curious background just a few weeks earlier was now expertise in demand.
A few days later, she was working in a Covid-19 tent when she got a call from a physician colleague. “She was like, ‘Can you help me build this hospital?” Ms. Turang recalled. “I said, ‘I don’t really know what you’re talking about.’”
This is how Ms. Turang became the deputy medical operations manager for the enormous field hospital set up by the National Guard in the New Orleans convention center. She would work there for the next eight months.
Though the census of patients at the convention center waxed and waned, it was a huge undertaking. Within her first week, Ms. Turang and her small team discovered that the field hospital was in many ways set up in preparation for a different kind of patient population than it would likely be getting. With the pandemic still new, she said, it was only just becoming clear how destructive it would be for people in nursing homes.
The convention center was set up to take in a typical mix of patients in hospital intensive care units — people who could feed themselves, could walk when they felt better and could turn over in bed on their own — so Ms. Turang and her team began hurriedly transforming it into a hospital designed to care for patients who are elderly, with all the chronic complications that go along with that.
“That’s the huge pivot that we made,” she said. “That’s how we took care of Louisiana.”
All of this work (she also took on a job as a medical consultant to a group of schools in the city) devoured her year. But this month, Ms. Turang was vaccinated, the first concrete signal that an end to the pandemic could be coming.
And after her shot, she did something that she had not allowed herself to do much over the last 10 exhausting, demanding, grief-filled months: She cried.
— Campbell Robertson
Pictures of unrefrigerated U-Haul trucks that stored bodies became one of the enduring images of the first wave of the pandemic in New York City.
Credit...Jonah Markowitz for The New York Times
At the marine terminal in South Brooklyn this month, a sign that said “funeral director” pointed to the left of a vast warehouse just past the guard gate. A row of 53-foot refrigerated trailers, about 20 in all, sat in the black-tarred parking lot.
New York City officials believe this little-known site will help them avoid a repeat of one of the most shocking tragedies of Covid-19’s first wave: the crush of bodies that overwhelmed the city’s capacity for dealing with the dead.
The city experienced a harrowing wave of fatalities as it became the global epicenter of the virus in the spring, with 17,507 confirmed virus deaths between March 14 and June 18. At the peak of the pandemic in early April, about 800 people died in a single day.
More than 135 refrigerated trailers were deployed to the streets around hospitals, in what became one of the most enduring images of the city’s crisis.
As of Dec. 4, the city’s facility at the marine terminal still held 529 bodies in long-term storage and 40 in refrigerated trailers — most of which had been there frozen for months. There is room for hundreds more. (The Wall Street Journal first reported that bodies were still being held at the facility.)
The city has not set a time limit on how long a body can remain there, as long as there are discussions underway with the family for a final resting place. The service is free, said Dr. Barbara Sampson, the city’s chief medical examiner.
How to find somewhere safe to store hundreds of bodies for long stretches was one of the hardest and most traumatic lessons in the first wave of the crisis, one that hospitals, funeral directors and the city medical examiner’s office are reviewing as the second wave of Covid-19 grows in New York.
During the first wave, shelves were placed inside the trailers at hospitals to double their storage capacity. But they were unstable and some collapsed when the trailers were moved. So the city sent strike teams of National Guard and medical examiner staff to hospitals to collect more than 2,000 bodies and bring them to the pier.
This time, the medical examiner has told hospitals not to install shelves, so trailers can be towed full to the pier.
— Sharon Otterman
RESILIENCE
A teacher in Iran bought hundreds of tablets for schoolchildren who could not afford them.
Hoseein Asadi has dedicated 28 years to educating elementary school children from villages and nomadic tribes in Iran.Credit...via Hoseein Asadi
Much as the pandemic has been a story of devastation and loss, it has also been one of resilience — of individual people, families and entire communities not only surviving a deadly threat but seeing in the moment a chance to serve others. We asked our correspondents around the world to share stories from this year that speak to the strength of the human spirit, and to how disruption can bring out the best in us.
The teacher had inherited $300,000 and was planning to buy a new car.
But when the virus came, and with it remote learning, he made a U-turn, instead deciding to buy 343 tablets for elementary school students shut out of class because their families could not afford the equipment.
For good measure, the teacher, Hoseein Asadi, also bought the children 30,000 masks to protect them from infection.
Overnight, Mr. Asadi became a national hero, appearing on state television and written about in local media outlets. The minister of education telephoned him to personally express his gratitude.
He has also inspired others to act.
State-owned industries, the private sector and ordinary Iranians have mobilized to raise money for tablets. Iranians in the diaspora as far away as Australia have also offered to help. So far, Mr. Asadi said, the education department has received and distributed 12,000 tablets to low-income school districts in several provinces.
“Creating happiness for kids who have nothing is the most rewarding feeling,” Mr. Asadi said.
— Farnaz Fassihi
Vaccines promise an end to the pandemic, but that future will not be evenly distributed.
A health worker taking a swab in Mumbai, India.
Credit...Divyakant Solanki/EPA, via Shutterstock
The end of the pandemic is finally in view. So is rescue from the most traumatic global economic catastrophe since the Great Depression. As coronavirus vaccines enter the bloodstream, recovery has become reality.
But the benefits will be far from equally apportioned.
Wealthy nations in Europe and North America have secured the bulk of limited stocks of vaccines, positioning themselves for starkly improved economic fortunes. Developing countries — home to most of humanity — are left to secure their own doses.
The lopsided distribution of vaccines appears certain to worsen a defining economic reality: The world that emerges from this terrifying chapter in history will be more unequal than ever. Poor countries will continue to be ravaged by the pandemic, forcing them to expend meager resources that are already stretched by growing debts to lenders in the United States, Europe and China.
The global economy has long been cleaved by profound disparities in wealth, education and access to vital elements like clean water, electricity and the internet. The pandemic has trained its death and destruction of livelihood on ethnic minorities, women and lower-income households. The ending is likely to add another division that could shape economic life for years, separating countries with access to vaccines from those without.
“It’s clear that developing countries, and especially poorer developing countries, are going to be excluded for some time,” said Richard Kozul-Wright, director of the division of globalization and development strategies at the United Nations Conference on Trade and Development in Geneva. “Despite the understanding that vaccines need to be seen as a global good, the provision remains largely under control of large pharmaceutical companies in the advanced economies.”
International aid organizations, philanthropists and wealthy nations have coalesced around a promise to ensure that all countries gain the tools needed to fight the pandemic, like protective gear for medical teams as well as tests, therapeutics and vaccines. But they have failed to back their assurances with enough money.
The leading initiative, the Act-Accelerator Partnership — an undertaking of the World Health Organization and the Bill and Melinda Gates Foundation among others — has secured less than $5 billion of a targeted $38 billion.
The United States has secured claims on as many as 1.5 billion doses of vaccine, while the European Union has locked up nearly two billion doses — enough to vaccinate all of their citizens and then some. Many poor countries could be left waiting until 2024 to fully vaccinate their populations.
India is home to pharmaceutical manufacturers that are producing vaccines for multinational companies including AstraZeneca, but its population is unlikely to be fully vaccinated before 2024, according to TS Lombard, an investment research firm in London. Its economy is likely to remain vulnerable.
“You need to vaccinate health care workers globally so you can reopen global markets,” said Clare Wenham, a health policy expert at the London School of Economics. “If every country in the world can say, ‘We know all our vulnerable people are vaccinated,’ then we can return to the global capitalist trading system much quicker.”
— Peter S. Goodman

(Note the connections)
CargoMetrics Cracks the Code on Shipping Data
Scott Borgerson and his team of quants at hedge fund firm CargoMetrics are using satellite intel on ships to identify mispriced securities.
By Fred R. Bleakley February 04, 2016
Link to article
One late afternoon last November, as a ping-pong game echoed through the floor at CargoMetrics Technologies’ Boston office, CEO Scott Borgerson was watching over the shoulder of Arturo Ramos, who’s responsible for developing investment strategies with astrophysicist Ronnie Hoogerwerf. At Ramos’s feet sat Helios, his brindle pit-bull-and-­greyhound mix. All three men were staring at a computer screen, tracking satellite signals from oil tankers sailing through the Strait of Malacca, the choke point between the Indian Ocean and the South China Sea where 40 percent of the world’s cargo trade moves by ship.
CargoMetrics, a start-up investment firm, is not your typical money manager or hedge fund. It was originally set up to supply information on cargo shipping to commodities traders, among others. Now it links satellite signals, historical shipping data and proprietary analytics for its own trading in commodities, currencies and equity index futures. There was an air of excitement in the office that day because the signals were continuing to show a slowdown in shipping that had earlier triggered the firm’s automated trading system to short West Texas Intermediate (WTI) oil futures. Two days later the U.S. Department of Energy’s official report came out, confirming the firm’s hunch, and the oil futures market reacted accordingly.
“We nailed it for our biggest return of the year,” says Borgerson, who had reason to breathe more easily. His backers were watching closely. They include Blackstone Alternative Asset Management (BAAM), the world’s largest hedge fund allocator, and seven wealthy tech and business leaders. Among them: former Lotus Development Corp. CEO Jim Manzi, who also had a long career at IBM Corp.
Compelling these investors and Borgerson to pursue the shipping slice of the economy is the simple fact that in this era of globalization 50,000 ships carry 90 percent of the $18.5 trillion in annual world trade.
That’s no secret, of course, but Borgerson and CargoMetrics’ backers maintain that the firm is well ahead of any other investment manager in harnessing such information for a potential big advantage. It’s why Borgerson has kept the firm in stealth mode for years. In its earlier iteration, from 2011 to 2014, CargoMetrics was hidden in a back alley, above a restaurant. Now that he’s running an investment firm, Borgerson declines to name his investors unless, like Manzi and BAAM, they are willing to be identified.
“My vision is to map historically and in real time what’s really going on in economic supply and demand across the planet,” says the U.S. Coast Guard veteran, who prides himself and the CargoMetrics team on not being prototypical Wall Streeters. “The problem is enormous, but the potential reward is huge.”
According to Borgerson, CargoMetrics is building a “learning machine” that will be able to automatically profit from spotting any publicly traded security that is mispriced, using what he refers to as systematic fundamental macro strategies. He calls the firm a new breed of quantitative investment manager. In unguarded moments he sees himself as the Steve Jobs or Elon Musk of portfolio management.
Though his ambitions may sound audacious, one thing is certain: Borgerson doesn’t lack in self-confidence. Over the past six years, he has secretly and painstakingly built a firm heavy in Ph.D.s that can manage a database of hundreds of billions of historical shipping records, conduct trillions of calculations on hundreds of computer servers and systematically execute trades in 28 different commodities and currencies.
For his part, Borgerson seems an unlikely architect of such a serious, ambitious endeavor. Easygoing and fond of joking with his colleagues, he is a hands-off manager who credits CargoMetrics’ investment prowess to his team. His brand of humor comes through even when he’s detailing the series of challenges he had starting the firm. After using the phrase “It was hard” several times, he pauses and adds, “Did I mention it was hard?” Although Borgerson declines to provide any specifics about Cargo­Metrics’ portfolio, citing the advice of his lawyers, performance during the three years of live trading apparently has been strong enough to keep his backers confident and his team of physicists, software engineers and mathematicians in place. “Hopefully, it won’t be too long before we can make a more significant investment,” says BAAM CEO J. Tomilson Hill. Former Lotus CEO Manzi is optimistic about the firm’s prospects: “It has an unbelievable edge with its historical data.”
CargoMetrics was one of the first maritime data analytics companies to seize the potential of the global Automatic Identification System. Ships transmit AIS signals via very high frequency (VHF) radio to receiver devices on other ships or land. Since 2004, large vessels with gross tonnage of 300 or more are required to flash AIS positioning signals every few seconds to avoid collisions. That allows Cargo­Metrics to pay satellite companies for access to the signals gleaned from 500 miles above the water. The firm uses historical data to identify cargo and aggregation of cargo flow, and then applies sophisticated analysis of financial market correlations to identify buying and selling opportunities.
“We’re big-data junkies who could not have founded CargoMetrics without the radical breakthroughs of this golden age of technology,” Borgerson says. The revolution in cloud computing has been instrumental. CargoMetrics leverages the Amazon Web Services platform to run its analytics and algorithms on hundreds of computer servers at a fraction of the cost of owning and maintaining the hardware itself.
At his firm’s headquarters — where the lobby displays a series of colored semaphore signal flags that spell out the mathematical equation for the surface area of the earth —Borgerson leads the way to his server room. It’s the size of a closet; inside, a thick pipe carries all the data traffic and analytic formulas CargoMetrics needs. That computing power alone would have cost $30 million to $40 million, Manzi says.
CargoMetrics is pursuing a modern version of an age-old quest. Think of the Rothschild family’s use in the 19th century of carrier pigeons and couriers on horseback to bring news from the Napoleonic Wars to their traders in London, or, in the 1980s, oil trader Marc Rich’s use of satellite phones and binoculars for relaying oil tanker flow.
Other quant-focused Wall Street firms are latching onto the satellite ship-tracking data. But, Borgerson says, “I would bet my life on a stack of Bibles that no one in the world has the shipping database and analytics we have.” The reason he’s so convinced is that from late 2008 he was an early client of the satellite companies that had begun collecting data received from space and on land to build a large database of all the world’s vessel movements in one place.
That’s what caught Hill’s eye at Blackstone when he learned of Cargo­Metrics a few years ago. BAAM now has a managed account with the firm. “If anyone else tries to replicate what CargoMetrics has, they will be years behind [Borgerson] on data analytics,” Hill says. “We know that a number of hedge fund data scientists want his data.”
But too much reliance on big data can go wrong, say many academicians. “There is a huge amount of hype around big data,” observes Willy Shih, a professor of management practice at Harvard Business School. “Many people are saying, ‘Let the data speak; we don’t need theory or modeling.’ I argue that even with using new, massively parallel computing systems for modeling and simulation, some forces in nature and the economy are still too big and complex for computers to handle.”
Shih’s skepticism doesn’t go as far as to say the data challenge on global trade is too big a puzzle to solve. When informed of the Cargo­Metrics approach, he called it “very valid and creative. They just have to be careful not to throw away efforts to understand causality.”
Another big-data scholar, Massachusetts Institute of Technology professor of electrical engineering and computer science Samuel Madden, also urges caution. “What worries me is that models become trusted but then fail,” he explains. “You have to validate and revalidate.”
Borgerson grew up in Southeast Missouri, in a home on Rural Route 5 between Festus and Hematite. His father was a former Marine infantry officer and police official, and his mother a high school French and Spanish teacher. The family traveled 15 miles to Crystal City to attend Grace Presbyterian Church, which was central to young Borgerson’s upbringing: There he was a youth elder, became an Eagle Scout and received a God and Country Award. The church was across the street from the former home of NBA all-star and U.S. senator Bill Bradley, whose backboard Borgerson used for basketball practice.
When it came to choosing what to do after high school, Borgerson was torn between becoming a Presbyterian minister and accepting an appointment to the U.S. Coast Guard Academy or West Point. He went with the Coast Guard because, he says, “the humanitarian mission really appealed to me, and I had never been on a boat before.”
At the academy, in New London, Connecticut, Borgerson played NCAA tennis and was also a cutup, racking up demerits for such antics as placing a sailboat on the commandant of cadets’ front lawn and leading bar patrons in a rendition of “Semper Paratus,” the school’s theme song. Still, he graduated with honors and spent the next four years piloting a 367-foot cutter — which seized five tons of cocaine in the Caribbean — then captaining a patrol boat that saved 30 lives on search-and-rescue missions. From 2001 to 2003 the Coast Guard sent Borgerson to the Fletcher School at Tufts University to earn his master’s of arts in law and diplomacy. While at Tufts he volunteered at a Boston homeless shelter for military veterans and founded a Pet Pals therapy program for senior citizens.
Following graduation, from 2003 to 2006, Borgerson taught U.S. history, foreign policy, political geography and maritime studies at the Coast Guard Academy, and co-founded its Institute for Leadership. While there he would get up at 4:00 each morning to work on his Ph.D. thesis exploring U.S. port cities’ approaches to foreign policy. He would also travel to Boston to complete his course work at Tufts and meet with his adviser, John Curtis Perry.
Borgerson’s military allegiance runs deep. One weekend last fall he played football in a service academy alumni game. On another he attended the Army-Navy game. Still militarily fit at age 40, the 6-foot-5 Borgerson works out regularly at an inner-city gym aimed at helping youths find an alternative to gang violence; a few weeks ago he was there boxing with ex-convicts and lifting weights.
Leaving the Coast Guard was a hard decision for Borgerson, resulting in part from his frustration with the military bureaucracy’s stymieing of his bid to get back to sea for security missions. With his degrees in hand, he applied for a fellowship at the Council on Foreign Relations. During the application process he met Edward Morse, now global head of commodities research at Citigroup. Morse was on the CFR selection committee in 2007 and recommended Borgerson as a fellow.
Morse introduced Borgerson to commodities, and to trading terms like “contango” and “backwardation.” Morse himself had, earlier in career, gotten the jump on official oil supply data by hiring planes to take photos of the lid heights of oil tanks in Oklahoma’s Cushing field.
Working for the CFR in New York reconnected Borgerson with his Missouri roots. Bill Bradley’s aunt called the former senator to say: “The son of a family who went to our church in Crystal City is in New York. Would you welcome him?” Bradley did — and would later play a part in Borgerson’s career development.
While at the CFR, Borgerson became an expert on the melting of the North Pole ice cap, writing numerous published articles on its implications; this led him to co-found, with the president of Iceland, the Arctic Circle, a nonprofit designed to encourage discussion of the future of that region. Borgerson recently spoke to 50 international generals and admirals about the Arctic and is co-drafting a proposal for a treaty between the U.S. and Canada that would help resolve the differences the two countries have in allowing international ship and aircraft travel through the Northwest Passage.
His Arctic research led to an aha moment early in 2008, while he was still with the CFR, on a visit to Singapore and the Strait of Malacca with his Fletcher School classmate Rockford Weitz and their former Ph.D. adviser, Perry. Seeing the mass of ships sailing through the strait, Borgerson and Weitz decided to build a data analytics firm using satellite tracking of ships.
Like many successful entrepreneurs, the two struggled to find financing before reaching out to a network of friends and their contacts. One was Randy Beardsworth, who had sat with Borgerson at a 2007 Coast Guard Academy dinner, where Beards­worth, then the Coast Guard’s chief of law enforcement in Miami, was the guest speaker. Borgerson “made references to history and literature, and I thought, ‘Here is a sharp guy,’” recalls Beards­worth. “We have been friends ever since.”
But Borgerson didn’t turn to his new friend in his initial fund-raising. “He came to me in 2009, after he had been turned down by 17 VCs, was maxed out on his credit card, was married and had a newborn son,” says Beardsworth, who was reviewing the Department of Homeland Security as part of the Obama administration’s transition team. Beardsworth came to the rescue, not only committing to invest a small amount but introducing his friend to Doug Doan. A West Point graduate and Washington-­based angel investor, Doan took to Borgerson right away. “To be honest, it wasn’t his idea, it was Scott I invested in,” says Doan, who provided $100,000 in capital and introduced Borgerson to a few friends, who added $75,000. Manzi came on board as an investor in 2009, having been asked by Bradley to check out Borgerson’s plan for a data metrics firm. (Manzi knew Bradley from the late 1990s, when the latter was considering a run for U.S. president.)
With Doan, Doan’s friends and Manzi as investors, CargoMetrics was finally able to garner its first venture capital commitment in early 2010, from Boston-based Ascent Venture Partners. That gave the start-up the capital it needed to hire a bevy of data scientists to build an analytics platform that it could sell to commodity-trading houses and other commercial users. In 2011, CargoMetrics added Summerhill Venture Partners, a Toronto-based firm with a Boston office, to its investor roster, raising roughly $18 million from venture capital and angels for its data business.
By then Borgerson had already begun to contemplate converting CargoMetrics from an information provider into a money manager; he saw the potential to extract powerful trade signals from its technology rather than share it with other market participants for a fee. Among those he consulted was serial entrepreneur Peter Platzer, a friend of one of CargoMetrics’ original investors. Platzer, a physicist by training, had spent eight years as a quantitative hedge fund manager at Rohatyn Group and Deutsche Bank before co-founding Spire Global, a San Francisco–­based company that uses its own fleet of low-orbit satellites to track shipping, in 2012. “We had lengthy conversations on how to set up quant trading systems and how [commodities giant] Cargill had made a similar decision to set up its own in-house hedge fund to trade on the information it was gathering,” recalls Platzer. So Borgerson reset his course. Doan describes the decision as a “transformative moment” for the CargoMetrics co-founder. “The military trains you to be a strategic thinker,” Doan explains. “Scott had been tactical until then, making small pivots, and like a general who sees the theater of war, he moved into strategic mode.”
Borgerson’s ambition to succeed was in no small part fueled by the early turndowns by many venture capital firms and a fierce determination to best the Wall Street bunch at their own game. “There’s a lot that motivates me, including — if I’m honest — I have a big chip on my shoulder to beat the prep school, Ivy League, MBA crowd,” he says. “They’re bred to make money, but they’re not smarter than everyone else; they just have more patina and connections.” (Bred differently, he spent last Thanksgiving visiting his parents in rural Missouri. After breakfast he and his father were in the woods, shooting assault guns at posters of terrorists, with Gunny, his father’s Anatolian shepherd dog.)
Borgerson’s plan was not met with enthusiasm from the company’s then co-CEO, Weitz. CargoMetrics had been gaining clients and meeting its goals, and was on its way to becoming a successful data service provider. Weitz, who now is president of the Gloucester, Massachusetts–based Institute for Global Maritime Studies and an entrepreneur coach at Tufts’ Fletcher School, did not return e-mails or phone calls asking for comment. For his part, Borgerson says: “A ship cannot have two captains. The company simply matured and evolved into a streamlined management structure with one CEO instead of two.”
Eventually, Doan went along with Borgerson’s plan. “We believe in Scott and that shipping holds the no-shit, honest truth of what the economy is doing,” he says. But buying out the venture capital firms several years ahead of the usual exit time would require a hefty premium over what they had invested.
Once again Borgerson’s early supporters played a key role. Manzi, a fellow Fletcher School grad who had mentored Borgerson since the company’s early days, put up more money (making CargoMetrics one of his single largest investments) and introduced him to a powerful group of wealthy investors. Separately, the CFR’s Morse suggested that Borgerson meet with Daniel Freifeld, founder of Washington-based Callaway Capital Management and a former senior adviser on Eurasian energy at the U.S. Department of State. Impressed by Borgerson’s “intellectual honesty, vigor and more than four years of historical data,” Freifeld brought the idea to a billionaire third-party investor, who took his advice and became one of CargoMetrics’ largest backers. “I would not have suggested the investment if CargoMetrics had not done the hard part first,” adds Freifeld, declining to name the investor.
A chance encounter in the fall of 2012 gave the CargoMetrics team its first taste of real Wall Street trading. Attending an Arctic Imperative conference in Alaska, Borgerson met the CIO of a large investment firm, whom he declines to name. When Borgerson confided his ambition and that CargoMetrics had developed algorithms to trade on its shipping data once it was legally structured to do so, the CIO suggested CargoMetrics provide the analytical models for a separate portfolio the money manager would trade. Live trading using CargoMetrics’ models began in December 2012. Manzi brought in longtime banker Gerald Rosenfeld in 2013 to craft and negotiate the move to make CargoMetrics a limited liability investment firm. Rosenfeld acted in a personal role rather than in his position as vice chairman of Lazard and full-time professor and trustee of the New York University School of Law. The whole process took a year and a half. During that time Blackstone checked in as an investor.
Bradley, now an investment banker, has yet to invest in CargoMetrics, explaining that he is unfamiliar with quantitative investing. But he may eventually invest in Borgerson’s firm, he says, because “we are homeboys. I believe in him and that things are going to work out ” — pausing to add with a smile, “based on my vast quant experience, of course.”
Borgerson has been in stealth mode since CargoMetrics’ early days, when he moved the firm from an innovation lab near MIT because the shared space was too open. He is much more forthcoming when boasting of the firm’s “world-class talent.” The team includes astrophysicists, mathematicians, former hedge fund quants, electrical engineers, a trade lawyer and software developers. Hoogerwerf, who has a Ph.D. in astrophysics from the Netherlands’ Leiden University, built distributed technical environments for scientists and engineers at Microsoft Corp. Solomon Todesse, who works on quant investment strategies, was head of asset allocation at State Street Global Advisors. Aquil Abdullah, a team leader in the engineering group, was a software engineer in the high-performance-computing group at Microsoft. And senior investment strategist Charles Freifeld (Daniel’s father) has 40 years’ experience in futures and commodities markets, including nine with Boston-based commodity trading adviser firm AlphaMetrics Capital Management.
“All were self-made people; none were born with a silver spoon,” Borgerson notes. One of his blue-collar-­background hires was James (Jess) Scully, who joined as chief operating officer in 2011, after his employer Interactive Supercomputing was acquired by Microsoft.
“The team we built treasures team success, which is Scott’s motto,” Scully says. “We want shared resources, one P&L, not ‘How much money did my unit make?’” Both Scully and Borgerson say Cargo­Metrics is like the Golden State Warriors, a leading NBA basketball team known for putting aside personal glory and playing as a band of brothers having fun.
Borgerson says he fosters a no-ego policy with “lots of play because investment teams are built on trust, and playing together builds trust.” Team building at CargoMetrics includes pub crawls, picnics at Borgerson’s house, poker nights, volunteer work in a soup kitchen for the homeless, Red Sox games and visits to museums.
Trips to the Boston docks or Coast Guard base are intended to remind the CargoMetrics team of the real economy. There are also occasional “touch a tanker” days. On one visit to a tanker, everyone was amazed that the ship was the size of a city building, Borgerson says. “They could smell the salt on the deck,” he recalls. “Wall Street can lose sight of the real fundamentals in the world. I don’t want that to happen here.”
Unlike the Rothschilds 200 years ago, only a small percentage of the trades that CargoMetrics makes relate to beating official government data. Most simply are aimed at identifying mispricings in the market, using the firm’s real-time shipping data and proprietary algorithms.
At a whiteboard in his conference room, Borgerson sketches out CargoMetrics’ general formula. He draws a “maritime matrix” of three dynamic data sets: geography (Malacca, Brazil, Australia, China, Europe and the U.S.), metrics (ship counts, cargo mass and volume, ship speed and port congestion) and tradable factors (Brent crude versus WTI, as well as mining equities, commodity macro and Asian economic activity). Using satellite data with hundreds of millions of ship positions, CargoMetrics makes trillions of calculations to determine individual cargoes onboard the ships and then to aggregate the cargo flows and compare them with historical shipping data. All that leads to the final comparisons with historical financial market data to find mispricings. If CargoMetrics observes an appreciable decline in export shipping activity in South Africa, for example, its trading models will determine whether that is a significant early-warning sign by considering that information alongside other factors, such as interest rates. If Cargo­Metrics believes a decline in the rand is forthcoming, it might short it against a basket of other currencies. “This is like a heat map showing opportunity,” Borgerson says, noting that CargoMetrics is not trading physical commodities. “We are agnostic on whether to be long or short, and let the computers spot where there is a mispricing and liquidity in the markets.” He sums up his simple, but still less than revealing, process by writing on the whiteboard “Collect, Compute, Trade.”
Borgerson says CargoMetrics is building a systematic approach that will work even when cargo cannot be identified — on containerships, for instance. It already knows a large percentage of the daily imports and exports into and out of China and island economies such as Japan and Australia. And although the firm cannot glean from its calculations on satellite AIS data the type of cargo, such as iPhones from China, it can measure total flow, which shows present economic activity. Cargo­Metrics’ data scientists are working on linking such activity to the firm’s data set of the past seven years to measure the evolving global economy. That will lead, Borgerson maintains, to more trades on currencies and equity index futures and, eventually, trades on individual equities. “Uncorrelated” is a mantra of Borgerson and his team. Well aware that correlated assets sent the performance of most asset managers, including hedge funds, plunging in the financial crisis, CargoMetrics is determined to come up with an antidote. Careful not to say too much, Borgerson lays out the simple principle that the process starts with placing many bets among uncorrelated strategies in different asset classes, like commodities, currencies and equities.
The goal is diversification, staying as market neutral as possible and remaining sensitive to tail risk in different scenarios. CargoMetrics’ analytic models help find asset classes that are outliers. Those may include a publicly traded instrument such as oil, another commodity or an equity for which shipping information was a leading indicator during times when other asset classes marched in lockstep. The historical ship data is then blended with this new information to seek opportunities. Identifying mispriced spreads among different trades within an asset class is another way of avoiding the calamity of correlation. Borgerson says the firm’s models will find instances where one type of oil should be a short trade and another a long one. The same goes for whole asset classes — shorting one that will benefit if virtually all asset prices plunge and buying another that will rise when oil prices gain. “We’re counting cards with the goal of being right maybe 3 percent more than we are wrong, as a way of making profits during good times and staying afloat during times of sudden, unpredictable but far-reaching events,” Borgerson says. The key, he adds, “is to know your edge and spread your risk.” CargoMetrics’ uncorrelated approach worked during the dismal first three weeks of this year, says Borgerson. Dialing down risk as volatility in the markets soared, the firm was on track in January to have its best month since it began trading.
To improve the firm’s models, eight of its data scientists hold a weekly strategy meeting, nicknamed “the Shackleton Group” after the band of sailors shipwrecked in the Antarctic from 1914 to 1917. Hoogerwerf and Ramos co-lead the group. At one recent meeting they were deciding how much risk, including how much liquidity, there was in a possible strategy; reviewing whether to keep previous strategies; and assigning who would research new ones.
The Shackleton Group’s meetings are free-form, with a lot of “I’ve got an idea” interjections that disregard official roles. “We hit the restart button a lot,” says Ramos, a former director of business intelligence and a quantitative economist at law firm Dewey & LeBoeuf who joined CargoMetrics in late 2010. “That’s why our motto is ‘Never lose hope.’” A bet on oil, related to Russia’s production, was stopped at the last minute in 2014, when Russia invaded Ukraine. Some currency-trading strategies have been abandoned in theory or after failing. Strategies the Shackleton Group likes are passed on to the firm’s investment committee of Borgerson, Scully and Ramos for a final decision. CargoMetrics has a unique set of big-data challenges. Historical shipping patterns may not be as useful in the new global economy now that shipping freight prices are plunging, a sign that trade growth rates may be changing. And analysts point out how hard identifying oil cargo can be in certain locations and instances, even in more-­predictable economic times. “While it may be easy to say that ships leaving the Middle East Gulf are typically carrying crude oil, knowing the type of crude is sometimes quite difficult,” says Paulo Nery, senior director of Europe, Middle East and Asia oil for Genscape, a Louisville, Kentucky–based company that analyzes satellite tracking of ships. Borgerson maintains his team is well aware of the dangers of data mining and getting swamped by noise. “If you run computers hard enough, you can convince yourself of anything,” he says. To make sure CargoMetrics’ algorithms for identifying cargo are valid, the firm spot-checks manifest data filed at ports and imposes statistical confidence checks to guard against spurious correlations.
Getting the jump on official government statistics is likely to become tougher too thanks to the recently formed High-Level Group for the Modernization of Official Statistics. Although the U.S. is not a member, Canada is a key player helping to lead the mostly European nation group (including South Korea) in coming up with a global blueprint for measuring and reporting economic activity.
Reflecting on his journey to Wall Street — raising money, hiring employees with different skill sets, making changes to Cargo­Metrics’ culture, overcoming legal and regulatory hurdles — almost gives Borgerson second thoughts about whether he would do it again. “I’ve sailed ships through tropical storms, captured cocaine smugglers and testified before Congress [on his Arctic research],” he says, “but this was the hardest.”

I. The pattern of the US Dollar Index Cycle
A. The first Financial Empire in history
On August 15, 1971, when the US Dollar stopped being pegged to gold, the Dollar ship threw away its anchor, which was gold.
Let’s take a step back. In July 1944, to help the US to take over the currency hegemony from the British Empire, President Roosevelt pushed for three world systems: the political system – the United Nations; the trade system – the General Agreement on Tariffs and Trade (GATT), which later became the World Trade Organization (WTO); and the currency financial system – the Bretton Woods system.
The Americans’ desire was to establish the US Dollar’s hegemony over the world via the Bretton Woods system. However, from 1944 to 1971, the Dollar didn’t gain that power. What blocked the Dollar? It was gold.
When the Bretton Woods system was set up, the US promised the world that the US Dollar would be pegged to gold while every other country’s currency could peg to the Dollar. One ounce of gold was fixed at US$35. With this promise, the US couldn’t do anything according to its own will. In other words, the Americans couldn’t print an unlimited number of Dollars. Whenever it printed a Dollar bill, it had to add one additional ounce of gold into its treasury as a reserve.
The US made that promise to the world because it held eighty percent of the world’s gold reserve at that time. The Americans thought that, with that much gold in hand, it was enough to support the US Dollar’s credibility.
However, it was not that simple. The US stupidly got involved in the Korean War and the Vietnam War, which cost it dearly. The Vietnam War especially cost US $800 billion. The cost became so much that the US couldn’t bear it. Based on the US’s promise, every time it spent US$35, it meant a loss of one ounce of gold.
By August 1971, the Americans had about 8,800 tons of gold left. They knew they were in trouble. Other people continued creating new trouble for them. For example, French President De Gaulle didn’t trust the US Dollar. He asked the French Finance Minister and Central Bank President and was told that France had about US $2.3 billion Dollars in reserve. He told them to sell all of that for gold. Some other countries followed suit.
Thus, on August 15, 1971, then US President Nixon announced that the US stopped pegging the Dollar to gold. It was the beginning of the collapse of the Bretton Woods system, and also a way in which the Americans cheated the world. However, the world didn’t realize it.
People trusted the US Dollar because it was supported by gold. The US Dollar had been the international currency, the settlement currency, and the reserve currency for over 20 years. People were used to the Dollar. When the US Dollar suddenly lost its tie to gold, it then, in theory, became a pure piece of green paper. Why did people still use it?
In theory people could stop using it., But in practice what would people use for international settlement? Currency is a measure of value. If people stopped using the US Dollar, was there any other currency they trusted?
Thus, the Americans took advantage of people’s inertia and forced the Organization of the Petroleum Exporting Countries (OPEC) to accept the US condition that the world’s oil trade must settle in US Dollars. Previously, oil trades were settled in any international currency, but, since October 1973, settlement was limited to the US Dollar only.
After unpegging from precious metal, the Americans linked their Dollar to oil. Why? The Americans were very clear: people might dislike the US Dollar, but they could not live without energy. Every country needed development and thus needed to consume energy. In this way, the need for oil translated into the need for the US Dollar. For the US, this was a very smart move.
Not many people had a clear understanding of this at the time. People, including economists and financial experts, didn’t realize that the most important thing in the 20th century was not World War I, World War II, or the disintegration of the USSR, but rather the August 15, 1971, disconnection between the US Dollar and gold.
Since that day, a true financial empire has emerged, the US Dollar’s hegemony has been established, and we have entered a true paper currency era. There is no precious metal behind the US Dollar. The government’s credit is the sole support for the US Dollar. The US makes a profit from the whole world. This means that the Americans can obtain material wealth from the world by printing a piece of green paper.
This has never happened in the world before. Throughout mankind’s history there have been many ways for people to obtain wealth: an exchange with currency, gold, or silver, or using war to grab things (however, war is very costly). When the US Dollar became just a piece of green paper, the cost for the US to make money became extremely low.
Without the restriction of gold, the US can print Dollars at will. If they keep a large amount of Dollars inside the US, it will certainly create inflation. If they export Dollars to the world, the whole world is helping the US to deal with its inflation. That’s why inflation is not that high in the US
However, once the US exports its Dollar to the world, it doesn’t have much money. If it continues to print money, the US Dollar will keep devaluing, which is not good for the Americans. Therefore, the US Federal Reserve is not, as some people have imagined, a central bank that prints money irresponsibly. The Federal Reserve knows what “restriction” means. From its establishment in 1913 through 2013, the Federal Reserve only printed US$10 trillion.
B. The relationship between the US Dollar Index Cycle and the Global Economy
The US avoided high inflation by letting the Dollar circulate globally. It also needs to restrain the printing of Dollars to avoid a Dollar devaluation. Then what should it do when it runs out of Dollars?
The Americans came up with a solution: issuing debt to bring the Dollar back to the US The Americans started to play a game of printing money with one hand and borrowing money with the other hand. Printing money can make money. Borrowing money can also make money. This financial economy (using money to make money) is much easier than the real (industry-based) economy. Why will it bother with manufacturing industries that have only low value-adding capabilities?
Since August 15, 1971, the US has gradually stopped its real economy and moved into a virtual economy. It has become an “empty” economy state. Today’s US Gross Domestic Product (GDP) has reached US$18 trillion, but only $5 trillion is from the real economy.
By issuing debt, the US brings a large amount of Dollars from overseas back to the US’s three big markets: the commodity market, the Treasury Bills market, and the stock market. The US repeats this cycle to make money: printing money, exporting money overseas, and bringing money back. The US has thus become a financial empire.
Many people think that imperialism stopped after the U.K. became weak. Actually, the US has conducted a hidden imperialism through the US Dollar and has made other countries its financial colony. Today, many countries, including China, have their own sovereignty, Constitution, and government, but they are dependent on the US Dollar. Their products are measured in Dollars and they have to hand over their material wealth to the US in exchange for the US Dollar.
This can be seen clearly in the cycle of the US Dollar index over the past 40 years. Since 1971, when the US started to print money freely, the US Dollar index has been dropping in value. For ten years, the index has kept going down, indicating that it was overprinted.
Actually, it was not necessarily a bad thing for the world when the US Dollar index went down. It meant an increase in the supply of Dollars and a large outflow of Dollars to other countries. A lot of US Dollars went to Latin America. This investment created the economic boom in Latin America in the 1970s.
In 1979, after flooding the world with US Dollars for nearly 10 years, the Americans decided to reverse the process. The US Dollar index started climbing in 1979. Dollars flew back to the US and other regions received fewer Dollars. Latin America’s economy boomed due to an ample supply of Dollar investment, but this suddenly stopped as its investments dried up.
Argentina, which once had its per capita GDP among the ranks of the developed countries, was then the first to drop into a recession. Unfortunately, then Argentine President Galtieri, who came to power through a military coup, chose to use a war to solve the problem. He turned his eyes toward the Malvinas Islands (which the British called the Falkland Islands), which are 400 miles away from Argentina. These islands had been under British rule for over 100 years. Galtieri decided to take them back.
Of course, he couldn’t take on a war without the US’s blessing. He sent an intermediary to inquire about the US’s opinion. US President Reagan answered it lightly: it was between you and the U.K.; the US had no position and would stay neutral. Galtieri took it as acquiescence by the US He started the war and took over the islands with ease. The Argentinians were crazy.
However, then U.K. Prime Minister Margaret Thatcher claimed that they would absolutely not accept it and forced the US to speak out. Reagan tore off his neutral mask, issuing a statement to blame Argentina for the invasion and to stand by the U.K. The British dispatched a task force with an aircraft carrier, travelling 8,000 miles, to take the Malvinas Islands back.
The US did not start the war, but it did not let a crisis go to waste. At the same time, the US Dollar appreciated and international capital flew back to the US just as the US had wished. When the Malvinas Islands War started, investors around the world concluded that a regional crisis had started in Latin America and the Latin American investment environment would deteriorate. So investors withdrew their capital from there. The Federal Reserve, at the same time, announced an increase in interest rates, which further accelerated the withdrawal of capital from Latin America as well as the appreciation of the Dollar.
The Latin American economy dropped to the bottom. The capital leaving there went to the US’s three big markets. It gave the US the first bull market since the Dollar had been unpegged from gold. The US Dollar index jumped from 60 to 120, a 100 percent increase.
The Americans didn’t stop after making big money from their bull market. Some took the money they just made and went back to Latin America to buy the good assets whose prices had just fallen to the ground. The US harvested handsomely from Latin America’s economy.
If this had happened only once, it could be argued as a small probability event. As it has occurred repeatedly, it indicates an intended pattern.
In 1986, the US had just completed its first cycle of having a weak Dollar for ten years followed by six years of a strong Dollar. The US Dollar index started to decline again. Ten years later, in 1997, the Dollar index started climbing. This time, the strong Dollar also lasted for six years.
During the second ten-year weak US Dollar stage, US Dollars went mainly to Asia. What was the hottest investment concept in the 1980s? It was the “Asian Tigers.” Many people thought it was due to Asians’ hard work and how smart they were. Actually the big reason was the ample investment of US Dollars.
When the Asian economy started to prosper, the Americans felt it was time to harvest. Thus, in 1997, after ten years of a weak Dollar, the Americans reduced the money supply to Asia and created a strong Dollar. Many Asian companies and industries faced an insufficient money supply. The area showed signs of being on the verge of a recession and a financial crisis. This mirrored what happened in Latin America in 1979.
A last straw was needed to break the camel’s back. What was that straw? It was a regional crisis. Should there be a war like the Argentines had? Not necessarily. War is not the only way to create a regional crisis.
We saw that an American financial investor named Soros took his Quantum Fund, as well as over one hundred other hedge funds in the world, and started a short selling attack on Asia’s weakest economy, Thailand. They attacked Thailand’s currency, the Thai Baht, by short selling for a week. This created the Baht crisis. Then it spread south to Malaysia, Singapore, Indonesia, and the Philippines. Then it moved north to Taiwan, Hong Kong, Japan, South Korea, and even Russia. Thus the East Asia financial crisis fully exploded.
The camel’s back was broken. The world’s investors concluded that the Asian investment environment had gone south and withdrew their money. The US Federal Reserve promptly blew the horn and increased the Dollar’s interest rate. The capital coming out of Asia flew to the US’s three big markets, creating the second big bull market in the US It was a mirror image of Latin America.
When the Americans made ample money, they followed the same approach they did in Latin America: they took the money that they made from the Asian financial crisis back to Asia to buy Asia’s good assets which, by then, were at their bottom price. The Asian economy had no capacity to fight back.
The only lucky survivor in this crisis was China.
C. Now, it’s time to harvest China
It was as precise as the tide; the US Dollar was strong for six years. Then, in 2002, it started getting weak. Following the same pattern, it stayed weak for ten years. In 2012, the Americans started to prepare to make it strong. They used the same approach: create a regional crisis for other people.
Therefore, we suddenly saw several events happening in relation to China and US allies at that time: the dispute over the Senkaku/Diaoyu Islands with Japan, and the dispute over Scarborough Shoal with the Philippines. All these happened during this period. These might not appear to have much to do with the US Dollar index, but was it really that case? Why did it happen exactly in the tenth year of the US Dollar being weak?
The US could wait a little bit more, because it played with too much fire in its own mortgage market earlier and got itself into a financial crisis in 2008. The US could afford to delay it’s scheduled Dollar hike a bit.
If we acknowledge that there is a US Dollar index cycle and the Americans use this cycle to harvest from other countries, then we can conclude that the next harvesting time for the Americans would be from none other than China. Why? Because China had obtained the largest amount of investment from the world. The size of China’s economy was no longer the size of a single country; it was even bigger than the whole of Latin America and about the same size as the rest of East Asia’s economy.
This also explains the US’s Pivot To Asia foreign and military policy change in 2012, which was really a “Pivot to China”. This also explains the sudden onslaught of negative media, in the US and all of its allies such as S. Korea, Japan, NATO, etc., against China since the Pivot To Asia. The Americans were conditioning their population for conflict by portraying China in a negative light, and moving their military to surround China.
Since 2012, incidents have kept popping up around China, including the confrontation over China’s 981 oil rigs with Vietnam and Hong Kong’s “Occupy Central” event. Can they still be viewed as simply accidental? “Occupy Central” was openly supported and funded by the NED (National Endowment for Democracy), a US NGO which is just the public arm for CIA operations. The US has had its hands in toppling many governments around the world since the 1960s. To fully explore this topic would take an entire book, altogether.
Hong Kong authorities in May 2014 heard that an “Occupy Central” movement was being planned and could take place by end of the month. However, it didn’t happen in May, June, July, or August.
What happened? What were they waiting for?
Let’s look at another time table: the US Federal Reserve’s exit from the Quantitative Easing (QE) policy a.k.a printing money. The US said it would stop QE at the beginning of 2014. But it stayed with the QE policy in April, May, June, July, and August. As long as it was in QE, it kept overprinting Dollars and the Dollar‘s price couldn’t go up. Thus, Hong Kong’s “Occupy Central” should not happen either.
At the end of September, the Federal Reserve announced the US would stop it’s QE. The Dollar started going up. Then Hong Kong’s “Occupy Central” almost immediately broke out in early October.
The Senkaku/Diaoyu dispute, Scarborough Shoal, the 981 rigs, and Hong Kong’s “Occupy Central” movement were actually all bombs. The successful explosion of any one of them would lead to a regional crisis or a worsened investment environment around China. That would force the withdrawal of a large amount of investment from this region, which would then return to the US
Perhaps the Chinese knew something was awry, because they did not take the bait. All of these situations were defused and none escalated to the point of international conflict.
As of today, the last straw to break the camel’s back has yet to occur and the Camel is still standing. Therefore, the Federal Reserve couldn’t blow its horn to increase the interest rate, either. The Americans realized that it was hard for them to harvest China, so they looked for an alternative.
Where else did they target? Ukraine, the connection between the EU and Russia. Of course there were some problems under Ukraine President Yanukovych’s administration, but the reason that the Americans picked it was not simply because of his problem. They had three goals: teach a lesson to Yanukovych who didn’t listen to the US, prevent the EU from getting too close to Russia, and create a bad investment environment in Europe.
Thus, a “color revolution,” took place, which the Ukrainians themselves appeared to have led. The US achieved its goal unexpectedly: Russian President Putin took over Crimea. Though the Americans did not plan it, it gave the Americans better reasons to pressure the EU and Japan to join the US in sanctioning Russia, adding more pressure to the EU’s economy.
Why did the Americans do this? People tend to analyze it from the geo-political angle, but rarely the capital angle. After the Ukraine crisis, statistics showed over US$1 trillion in capital left Europe. The US got what it wanted: if it couldn’t get Dollars out of China, it would get Dollars out of Europe.
However, the next step didn’t occur as the Americans planned. The capital out of Europe didn’t go to the US Instead, it went to Hong Kong.
One reason was that the global investors preferred China, which claimed the world’s number one economic growth rate, despite the fact that its economy started to cool down. The other reason was that China announced that it would implement the Shanghai-Hong Kong Stock Connect. Investors over the world wanted to get a handsome return through the Shanghai-Hong Kong Stock Connect.
In the past, Western capital was cautious about entering China’s stock market. A key reason was China’s strict foreign currency control: you can come in freely but you can’t get out at will. After the Shanghai-Hong Kong Stock Connect, they could invest in Shanghai’s market from Hong Kong and leave immediately after making a profit. Therefore, over US$1 trillion stayed in Hong Kong.
This is why the hand behind “Occupy Central” has kept planning a comeback and has not wanted to stop. The Americans need to create a regional crisis for China, to get the money back to the US The US tried one more time in Hong Kong: the 2019 riots.
What started out as a protest over an extradition bill proposed by Hong Kong lawmakers, quickly exploded into an international incident. NED, again, has publicly supported the 2019 Hong Kong Riots.
Riot leader Joshua Wong testified before the US congress. Joshua Wong and high profile opposition leaders Anson Chan and Martin Lee were seen speaking to Julie Eadeh, the US Consulate General in Hong Kong. Opposition leader Jimmy Lai has even met with the Vice President, the second highest position in the US government, Mike Pence. Hong Kong youth were waiving American flags and asking Donald Trump to rescue them. Some protesters voiced desire to be an independent nation. Videos can be seen of the rioters violently attacking other Hong Kong citizens and police, anyone from mainland China, destroying public infrastructure such as subway stations and roads, and faking their injuries for photographers.
Why was there so much attention put on Hong Kong globally, especially when in 2019 riots raged on in France, Iraq, Afghanistan, etc. with much more death?
(Hong Kong has had two confirmed deaths. One was a rioter who fell off a narrow bridge connecting two parking structures while wandering alone, and a man who was killed after being hit with a brick thrown by a rioter).
Why were the rioters so irrationally violent, destructive, and politically provocative over an extradition bill? The US was baiting Beijing to intervene, but once again Beijing did not take the bait.
Why does the US economy rely so desperately on capital flowing back to its market? It is because, since 1971, the US has given up producing real products. They called the real economy’s low-end or low-value- creating manufacturing industries garbage industries or sunset industries and transferred them to developing countries, especially China. Besides the high-end industries, such as IBM and Microsoft, that it kept, 70 percent of its people moved to finance and financial services industries. The US has completely become a hollow state which has little real economy to offer investors a big return.
The Americans have no choice but to open the door of the virtual economy, which is its three big markets. It wants to get the money from the world into these three markets so that it can make money. Then it can use that money to harvest other countries.
The Americans only have this one way to survive now. This is the US’s national survival strategy. The US needs a large amount of capital flowing back to sustain its daily life and its economy. If any country blocks that capital flow, it is the enemy of the US
II. The extreme importance of the US Dollar as the reserve currency of the world
A. Why did the birth of the Euro Lead to a war in Europe?
On January 1, 1999, the Euro was officially born. Three months later, NATO, led by the US, started its war against Yugoslavia. Many people thought the US and NATO fought the war to stop the Milosevic administration’s genocide of the Albanians, a scary humanitarian tragedy. After the war, this was soon proved to be a lie. No country ever does anything that is not in its own self interest. The Americans acknowledged it was a setup, done jointly by the CIA and the Western media. The real goal was to attack the Euro.
The European Union (EU), a US $27 trillion economy when formed. It surpassed the economy of the North American Free Trade Area (FTA) with a size of US $24-25 trillion, becoming the world’s largest economic zone. For such a large economy, the EU didn’t want to use the Dollar to handle its trades, so it created the Euro.
At first, the Euro’s exchange rate to the US Dollar was 1:1.07, but after 72 days of bombing, the Europeans found something was not right: the Euro was ruined. Once again, the US used its military and an international crisis to achieve a goal.
The Euro lost 30 percent of its value; one Euro could only get 0.86 Dollars. The Europeans realized that they had been cheated. This was why later, when the US insisted on having a war with Iraq, France and Germany, two staunch US allies, were unusually strongly opposed to it.
The Kosovo War was an indirect financial war that the Americans fought against the Euro. On the surface it was against Yugoslavia, but the Euro got the real hit. This was because the birth of the Euro touched the US Dollar’s lunch. Before, the US Dollar was used to commanding 80% of the international transaction market. It dropped to 60% of the market when the Euro arrived. The Euro took a big piece of the pie from the Dollar.
Some people say that the Western democratic countries don’t fight among themselves. It is true that, since World War II, the Western countries haven’t officially declared war, but that does not mean they do not have any military conflicts or economic or financial wars amongst themselves.
In 2020, the Dollar is back to being used in 81.08% of all global transaction settlements, and the Euro has also fallen to 7.87%. Europe is back to being an ally to the US.
B. What is the US Trying to Balance with Its “Asia-Pacific Rebalance” aka “Pivot to Asia” Strategy?
China’s rise made China the new challenger to the Dollar’s global dominance. The fights over the Senkaku/Diaoyu Islands and the Scarborough Shoal didn’t cause a large amount of capital to flee out of China, but the Americans achieved partial success–two of China’s efforts died. At the beginning of 2012, China, Japan, and South Korea were close to reaching an agreement on the negotiation of the Northeast Asia FTA. In April 2012, China and Japan had also reached a preliminary agreement on currency exchange and on holding each other’s national debts. However, the conflicts over the Diaoyu/Senkaku Islands and the Scarborough Shoal occurred, blowing away the FTA and the currency exchange.
A few years later, China finally finished the negotiation with South Korea on the bilateral FTA, but it did not have much significance. Why? The original Northeast Asia FTA, once established, would include China, Japan, South Korea, Hong Kong, Macao, and Taiwan. It would be the third largest economy in the world, with a size of over US $20 trillion. Furthermore, it would likely expand south to integrate with the ASEAN FTA, forming the East Asia FTA. That would become the largest economy in the world, with a magnitude of over US$30 trillion in size.
We can further imagine that the East Asia FTA could continue expanding: adding India and South Asia in the south, the five Central Asian countries in the north, and the West Asia countries (part of the Middle East) in the west. This Asia FTA would then have a scale surpassing US$50 trillion, more than the EU and US combined. For such a big FTA, would it use the Euro or the Dollar to settle its internal trade? Of course not. This meant that an “Asian Dollar” would be born.
If indeed there is an Asia FTA, the Renminbi would likely become the primary currency of Asia, just as the US Dollar first became the currency of North America and then the currency of the world. It would, along with the Dollar and the Euro, share the world.
When the Americans announced that they would shift their focus to the East, they pushed the Japanese to create an issue over the Diaoyu Islands and they supported the Philippines to have a confrontation with China over the Scarborough Shoal. Do not be so naive as to think this was just caused by the right-wing Japanese or by the Philippines President Aquino.
It was the Americans’ deep and careful thought to prevent the renminbi from being a challenger to the Dollar. The Americans were very clear about what they were doing. If the Northeast Asia FTA were formed, with its chain reaction, the Renminbi, the Euro, and the Dollar each would a large part of world trading market. Then for the US, would it still have the currency hegemony if it had only one third of it? Without a real economy, if it were to lose its currency hegemony, how could the US remain as the world’s dominator?
Once one understands this, he will know why, behind every one of China’s problem, the US is there. What does the US try to “rebalance” in the Asia-Pacific? Does it really want to play the role of balancer between China and Japan, China and the Philippines, and China and other countries? Of course not. It has only one goal in mind: nullify the trend of China’s rise.
III. The secret that the US Military fights for the Dollar
A. The Iraq War and whose currency was used for oil trades
People all say that the strength of the US is based on three pillars: currency, technology, and military force. Actually today we can see that the real backbone of the US is its currency and military force. The backing of its currency is its military force.
Every country in the world spends a large amount of money when it has a war. The US, however, is unique. It can also make money while spending money on a war. No other country can do that.
Why did the Americans fight a war in Iraq? Many people would answer, “For oil.” However, did the Americans truly fight for oil? No. If they indeed fought for oil, why didn’t they take a single barrel of oil out of Iraq? Also, the crude oil price jumped to US $149 a barrel after the war from a pre-war price of $38 a barrel. The American people didn’t get a low oil price after its army occupied Iraq.
The US fought the war not for oil, but for the Dollar. Why? The reason was simple. To control the world, the US needed the whole world to use the Dollar. It was a great move in 1973 to force Saudi Arabia and other OPEC countries to install the Dollar as the settlement currency for oil trades.
Once you understand that, you can understand why the US fought a war in an oil producing country. The direct result of fighting a war in an oil producing country was to increase the price oil. Once the oil price shot up, the demand for the Dollar also went up.
For example, if you had US$38, you could buy a barrel of crude oil before the war. After the war, the price went up over four times to $149. Your $38 could only get you a quarter of a barrel. How could you get the other three quarters? You had to use your products and resources to trade the Americans for Dollar. Then the US government could openly, legitimately print more Dollars. This was the secret.
The US’s war in Iraq was not only for that goal. It was also to keep the Dollar’s hegemony. Saddam didn’t support terrorists or Al-Qaeda, nor did he have weapons of mass destruction. But why was he still hung? It was because he played a game between the US and EU. After the Euro was created in 1999, he announced that Iraq’s oil trade would be settled in Euros. This angered the Americans, especially when many other countries followed suit. Russian President Putin, Iranian President Ahmadinejad, and Venezuelan President Hugo Chavez all made the same announcement. Libya’s PM Muammar Gaddafi was a strong supporter of creating a single currency for the African Union to be used for oil transactions. Notice these states all suddenly became US enemies.
Before they arrested Saddam, the Americans rushed to form the temporary Iraqi government. The first order that the temporary government published was to announce that the Iraqi oil trade would switch from the Euro back to the Dollar for settlement.
B. The Afghanistan War and the Net-flow of Capital
Someone may say, “I can see that the Americans fought the Iraq War for the Dollar, but Afghanistan does not produce oil. Then it shouldn’t be for the Dollar that the Americans fought the Afghanistan War. Also the war was after the September 11 attack. The whole world knew it was to revenge the Al-Qaeda and punish the Taliban which supported the Al-Qaeda.”
Was that true? The Afghanistan War started a month after September 11. It started in a rush. By the middle of the war, Americans used up all of its cruise missiles. As the war continued, the US Defense Department had to open its nuclear weaponry. It took out 1,000 nuclear cruise missiles, replaced the nuclear warheads with conventional warheads, and fired another 900 cruise missiles to win the war. Obviously the Americans were not ready for this war. Why did they rush into it?
That’s because the Americans couldn’t wait any longer. Their financial life was in big trouble. In the early 21st Century, as a country without real material producing industries, to keep it running at the current level, the US needed to have a net inflow of US$700 billion from other countries every year. After the September 11 event, the global investors showed great concern about the investment environment in the US. As a result, US$300 billion fled from the US quickly and it certainly was not in their typical Dollar Index Cycle plan.
This forced the US to fight a war quickly to stop the fleeing. It was not only to punish the Taliban and Al-Qaeda, but also to rebuild the global investors’ confidence in the US as the most stable and powerful nation. After the first cruise missiles exploded in Kabul, the Dow Jones index jumped up 600 points in one day. The capital that left the US started to flow back. By the end of 2001, US$400 billion came back to the US. Afghanistan was fought for the Dollar and for capital.
C. The Rise of the Renminbi
China’s currency, the Renminbi, is the latest challenger. In 2020, financial transactions in Renminbi are a modest 8.66%, but they will only increase as China rolls out its BRI initiative. This is another reason for the US’s current targeting of China and strong opposition to China’s BRI initiative. Actually it is probably the strongest reason.
Remember, having the US Dollar as the world’s reserve currency is a cornerstone to how the US economy functions.