Where finance and media intersect with reality.

In the Blind Spot (Central bank schisms in Europe and beyond)

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SNEAK PEEK

What it means for Poland and the ECB’s independence if Prime Minister Donald Tusk manages to remove central bank governor Adam Glapiński.

Dario argues that Nato’s push to up readiness for a Russian attack on Europe will run into the usual continental cohesion challenges

The Blind Spot’s Del J. Kelham argues the transgender debate is marred by politics when it shouldn’t be.

Greetings and salutations on Palm Sunday dear subscribers. When I originally wrote this intro on Friday afternoon, none of the following had yet happened: we still didn’t know the Princess of Wales had cancer, Moscow had not yet been attacked by Wahhabi extremists and it was not yet popular knowledge that the US had warned the Russians that a terrorist attack on concert halls in Moscow was incoming. This, however, is the newsflow that greeted people on Saturday morning.

Instead, I’d started off by pointing out another busy central banking week, in which the Swiss National Bank had officially become the first major G7 bank to set upon a rate-cutting cycle. The unexpected news out of Switzerland, I’d added, had incidentally come the week of the first anniversary of Credit Suisse’s demise. I also noted that the ECB was now guiding that June cuts were on their way and that even the BoE’s Bailey was indicating the UK could be ready for more than one cut. What’s more, the BoJ had finally ended the world’s longest-running experiment with negative rates this week, raising its key interest rate for the first time since 2007 out of negative territory.

But sometimes things take an unexpected turn. And while not entirely related, the overnight news complements a subtler point I was trying to make about backroom deals and appearances. Not everything is what it seems. And, sometimes, misdirection (as in the case of the Princess of Wales) is justified by the circumstances at hand. Who can blame the palace for the photo edit now that we know the truth? Meanwhile, even your worst enemy might sometimes surprise you, a point well expressed by Dario in this week’s spotlight about the unlikely state partnerships that have been forged in Libya.

On that note, if you thought the handover of easing policy from Japan to the West seems suspiciously well synchronised, that’s exactly what former central banking lawyer and all-around dollar-clearing expert Kathleen Tyson has been arguing for a while. The dollar system, she says, just can’t afford universally tight conditions. If it’s getting tighter in Japan, it must therefore start getting easier everywhere else, or else the system will break.

As ever, the Blind Spot is more concerned with what’s not making the headlines. And this week we’re drawn to events at the National Bank of Poland and what they may indicate about the brewing war between central bankers and politicians. For more on that, see below.

Also this week, our in-house editorial aide Del J Kelham provides some context to the puberty blocker debate drawing on his own highly relevant experiences.

Housekeeping note: There will be no newsletter next week because of Easter.

Send tips to [email protected] and [email protected]. You can also contact us anonymously via the Haya app.

THE BIG BLIND SPOT THIS WEEK

CENTRAL BANK SCHISMS. It’s not every day that a European central banker gets thrown in the dock to defend his record. But Thursday proved to be that day. Poland’s coalition government headed by Donald Tusk moved on its election pledge to oust the National Bank of Poland president by submitting a motion to put him in front of a State Tribunal. You can read the Politico story here.

The great purge-ski: A quick reminder of the context: The former Law and Justice (PiS) government’s anti-immigration, anti-LGBT and anti-abortion policies were notoriously unpopular with European high society, as was the party’s not-so-subtle attempt to pack all sorts of Polish institutions with its loyalists.

But what really infuriated Brussels more than anything about the former government — and which led to the high-profile freezing of Covid funds to Poland — was its move to reform the judicial system from 2017 onwards. PiS claimed the reforms were essential to rid the judicial system of the ongoing influence of the old communist/secret service networks. But the heavy-handed way in which PiS went about the corrections — ignoring appointment protocols and appointing judges to the Constitutional court who tended to ignore European Union rules — drew the ire of Commission heavyweights.

The push to get rid of NBP boss Adam Glapiński is part of a wider effort by Tusk’s government to purge public institutions, such as state broadcaster TVP, of the ongoing influence of the right-wing PiS party, which ruled Poland from 2015 to 2023. 

But, but, but… having made such a huge song and dance about the importance of abiding by European conventions, Donald Tusk’s attack on central bank independence exposes him to the very same criticisms his own party has been flinging at the PiS government throughout the years. Two wrongs don’t make a right, and abuse of European Law by those who have lectured so prominently about the wrongs of doing so for so long may prove a bitter pill to swallow for the electorate.

Okay, enough about Poland already! Look, it’s not just because I’m a Kaminska. What’s happening in Poland is really important, and could prove to be a precursor for similar events further afield. Is Poland on the brink of a civil war? No. But some of its institutions are on the verge of being hijacked by external forces in curious ways. And that’s just as world powers are beginning to talk about giving the country nukes. You have to remember, Poland is no ordinary country. It has forged a national identity out of resistance to occupation and general persecution. This makes it a geopolitical tinderbox.

What’s Glapiński got to do with it? As governor of the NBP, Glapiński controls access to the country’s reserves and, after the President, is PiS’s last remaining power loyalist. For as long as Poland stays out of the euro, he has the capacity to undermine the Tusk government much the way the BoE is said to have undermined Liz Truss.  

What are the charges? Tusk’s motion presents eight key charges against Glapiński: among them — directing the NBP to buy freshly-issued bonds by state investment fund PFR and state development bank BGK; unauthorised interventions in the currency markets; a combined 1 percentage point interest rate cut to benefit the PiS government just before national elections; and misleading government officials.

Do the charges hold water? That’s the thing. Not really. The ECB, has already (somewhat begrudgingly) offered a legal opinion defending Glapiński on the basis that “any measure affecting your ability to perform your duties as Governor of NBP may, if not lawful, affect your independence and by extension the independence of the General Council.” The market’s sanguine reaction — the zloty strengthened against the euro on the day — suggested much of the bad news had either been priced in or that markets viewed the charges as weak.

The case against: Glapiński’s controversial rate cuts have not yet impeded the central bank’s mandate of price stability: Inflation fell to 2.8 percent in February, within the NBP’s target range of 1.5-3.5 percent. It’s expected to fall to 2.5 percent, the exact middle of that range, in March. The purchase of government assets mentioned in the charges, meanwhile, was an official policy of virtually every major Western central bank during the pandemic, including at the ECB. In that context, bar the discovery of some real criminality, it’s tough for the ECB or any central bank to back Tusk’s motions. Doing so would open the door to other populist governments or even institutional investors going after them in court. It’s important to remember, central banks the world over operate under the protection of a James Bond-style licence to do things other financial counterparts are not allowed to do. That’s because their raison d’etre is market manipulation. Immunity is baked into the central bank model. Without it, the system doesn’t work. While the ECB is no friend of PiS, it’s slightly snookered by the circumstances.

Why the urgency to get rid of Glapiński then? The coalition came to power on a campaign promise to oust Glapiński, having heavily demonised him for years. They also campaigned on a ticket promising life-long zero-interest mortgages for under 45s purchasing their first property, which is set to clash directly with the central bank’s ability to steer interest rate policy. Adding to the inflationary pressures, Tusk also wants to pass a raft of pay rise guarantees for government workers, some as high as 30 percent. Keeping Glapiński in situ risks not just open opposition to all these policies but active monetary policy countermeasures.

Central bank schism risk: While Poland’s Constitutional Court would likely overrule any guilty verdict by the State Tribunal, the fact that the Tusk government does not currently recognise its findings opens the door to a full-blown Constitutional crisis. The ultimate risk, if the ECB stands by Glapiński, is a scenario where international central banks refuse to recognise a Tusk-appointed replacement. This in turn could splinter the institution, leading to two rival factions claiming authority over the NBP’s assets.

The situation is not unprecedented. The Bank of England famously refused to recognise the legitimacy of Nicolas Maduro’s appointed central bank president, Calixto Ortega Sanchez, in 2020, in favour of opposition leader Juan Guaido’s appointment, Ricardo Villasmil. The decision prevented Maduro’s BCV from accessing the gold kept under custody with the Bank of England. Glapiński has been very vocal about his decision in recent months to keep two-thirds of the country’s gold reserves abroad, notably with the BoE and the New York Fed.

What happens next? According to the regulations governing the work of the State Tribunal, Glapiński will be suspended if the parliament decides he should face trial. In such circumstances, he would be replaced by another PiS loyalist, first deputy governor Marta Kightley. However, should the ECB continue to recognise him as legitimate, there’s a chance he could still hold enough sway to influence policy.

Cui bono from a divided Poland? No prizes for guessing the answer to that: Political instability in Poland would undermine the chances of the country ever getting nukes. What’s more, while PiS strongman Jaroslaw Kaczynski’s hatred for Moscow is deep-seated, it’s also predicated on the notion that Putin killed his brother in Smolensk in 2010, for which there has, thus far, been no proof. But that’s not the only Smolensk narrative out there centred on foul play. The other favourite yarn is that former Polish secret services, the WSI, were responsible and protected by Donald Tusk, who has already been dubbed an asset of Germany by Kaczynski. In a major schism, or the reemergence of an underground resistance, a shift in allegiances to the “lesser of two evils” might still happen.

IZZY COMMENT: Parallel systems within states used to be unique to the developing world. But all signs point to their reemergence here in the West, and it may be within the realms of central banking that these schisms manifest first.

One possible outcome of the Glapinski debacle is a scenario where international central banks refuse to recognise a Tusk-appointed Glapiński successor. In that case, Poland’s Tusk-recognised NBP could be locked out of accessing its gold reserves just as the government introduces its zero-interest rate mortgage policy. It’s very unlikely, however, that the move would empower Glapiński directly. There’s not much he could do to influence interest policy in the context of banks being forced to distribute zero-interest rate mortgages by a government that refuses to recognise its Constitutional court. Any remaining Western banking institutions would likely shut up shop in such circumstances, while those that remain might have to be nationalised.
The impact on the zloty would be such that Poles would likely flock to the euro for stability. And Glapiński’s best bet would be to join the ECB as a full-fledged member.
And perhaps that really is the point of the exercise? Tusk’s power isn’t absolute. He needs coalition support to push through the bulk of his agendas. Yet, when it comes to joining the euro, Tusk’s coalition is far from united on the issue. The public also isn’t keen on euroisation any time soon. Indeed, the topic rarely came up in election campaigns at all.

But what a coup it would be for the ECB if, by protecting Glapiński, it also tanked the legitimacy of the zloty and fast-forwarded euro adoption in Poland, which remains one of the last remaining growth engines in Europe.

BUSINESS, ECON, FINANCE

US BACKS UKRAINE BOND: The US is on board with the idea of issuing at least a $50 billion bond backed by the profits generated by frozen Russian assets and use the proceeds for Ukraine, Bloomberg reported.

Into the weeds: Every week we learn a little more about the complexities associated with repurposing Russian assets or the use of their proceeds. Here’s what you need to know about the situation thus far.

Where we stand:
The Euroclear assets are divided between assets under custody and assets rehypothecated by Euroclear and are, thus, sitting on its balance sheet. On both fronts, Euroclear rules state that the company is obliged to reinvest proceeds/redemptions to comply with capital risk regulations. Proceeds generated by reinvestments are captured by Euroclear directly, and have thus far led to some 5 billion in profit for the company since the war began. Beyond that sum, the Belgian government has already captured 25 percent of the proceeds via the usual corporation tax it applies to companies. Those proceeds are yet to be assigned by the Belgians.

Where we are going: Any decision on the reallocation of proceeds by Euroclear is set to apply to future proceeds only. The historical proceeds, nearly 5 billion worth, are set to stay on Euroclear’s balance sheet as a provision against any future lawsuits by the Russians. But even moving forward it’s still good news for Euroclear. Under the current plan, Euroclear will retain 3 percent of any future proceeds as a type of management commission for managing the assets and reinvestments in the first place.

War profiteering? Here’s the real clincher for Euroclear. Under the agreement that’s being negotiated, if and when lawsuit risk is deemed de minimis, Euroclear gets to keep the entire 5 billion for itself. But hold on. Don’t go buying Euroclear shares just yet. There’s still the risk that when it fully absorbs that as profit, the Belgians might still slam the company with a singular extraordinary windfall tax.

YELLEN’S UNREALISED GAINS TAX: US Treasury Secretary Janet Yellen confirmed that Joe Biden’s proposed 5 percent minimum tax on Americans with $100 million in wealth would cover unrealised capital gains. The American Institute for Economic Research slammed the policy arguing “A tax on unrealised capital gains means that individuals are penalized for owning appreciating assets, regardless of whether they have realized any actual income from selling them.” They added “taxation, if we’re going to have it on income, should be based on actual income earned, not on paper gains that may never materialize.”

GOODBYE ESG, SAYS TEXAS: The State of Texas said it was terminating a massive $8.5 billion investment with trillion-dollar asset manager BlackRock over the state’s determination that the firm was engaged in a boycott of energy companies, reported the New York Post.

SORKIN VS THE INSTITUTIONAL SHAREHOLDERS SERVICES: Andrew Ross Sorkin faced off with ISS’s global head of stewardship, Lorraine Kelly, about the organisation’s outsized and increasingly political influence on how passive shareholders vote. Consumer Frist’s Wild Hild’s Twitter thread runs through the most insightful bits of the exchange, concluding that Kelly, who was on the show to promote the company’s collaboration with an “ESG skeptic” product, inadvertently admits that ISS’s advice controls a ton of votes and even “votes their shares” for them. “By changing their advice, *on the same proposals*, they’re showing that they were violating their fiduciary duty to clients,” he argued.

POITICS, POLITICS, POLITICS

MAGGIE IS BACK IN VOGUE: Rachel Reeves channelled Margaret Thatcher (and Liz Truss, ahem) when she laid out her economic vision during this week’s Mais lecture. This included a pledge to embark on a “decade of national renewal” and to go for growth, which was seen as paralleling Thatcher’s 1979 rhetoric that Britain was at an inflection point.

Globalisation is out: “As disruptions have multiplied, and governments around the world have taken steps to strengthen their own self-sufficiency it has become evident that globalisation, as we once knew it, is dead. That is not to say we live in a less interconnected world, as each crisis sends tremors along supply chains that span continents. Nor to pretend that the laws of economics have gone into reverse; or to deny the role of free trade in lifting billions of people from abject poverty. But it is to say that, in a more dangerous world, we must be clear-eyed about where trade-offs exist, and strategic about the directions in which we choose to deepen our economic relationships, ” Reeves said. You can read the full speech here.

Securonomics: Paul Mason, writing for The Spectator dubbed the vision “Securonomics”, a strategy focused on investment-led growth, which is a departure from Labour’s old borrow and spend mindset.

David Lammy agreed: The shadow foreign minister, David Lammy, rose to Reeves’ defence by echoing the pro-Thatcher sentiment. He told Politico’s Anne Mcelvoy that Thatcher had been a “visionary leader for the UK”. “You can take issue with Mrs Thatcher’s prescription, but she had a big manifesto for change and set about a course that lasted for over two decades,” he said. In her speech, Reeves praised Thatcher for delivering “supply-side reforms” and rejecting Britain’s “managed decline.”

What Reeves actually said: “Once again, we have found ourselves in a moment of political turbulence and recurrent crises with the burden falling on the shoulders of working people – with at its root, a failure to deliver the supply side reform needed to equip Britain to compete in a fast changing world. In the face of a more unstable world, the task is not only to recognise the acute risks, but also to identify the huge opportunities.” She added: “To reject managed decline, renew our common purpose, and rebuild growth on strong and secure foundations.”

But is it all a ruse? More astute readers will pick up on the fact that while the speech did advocate for supply-side reform it also leaned heavily on heterodox socialist economists like Karl Polanyi. “The political economist Karl Polanyi, who came to Britain from Austria as fascism rose in the 1930s, wrote of the tendency of market economies that become disembedded from their societies to undermine the conditions for growth and provoke powerful political counter-movements of both left and right. Polanyi’s insights remain prescient,” Reeves said. In essence, its supply-side reform with Labour characteristcs. Notably balancing the forces trying to liberate markets from all regulations with those fighting to protect society from the harmful effects of unregulated markets.

DEMOCRATS VS RFK: This was the week the Democrats seemingly started taking the threat from third-party candidates like RFK Jr seriously, reported Intelligencer. That suggests RFK Jr will soon be greeted by both smears and lawfare aimed at keeping him off the ballot.

SCOTUS CASE — The US’s leading cybersecurity agency may find itself even more hamstrung in its efforts to combat foreign election interference online ahead of this year’s election as it’s caught in the crosshairs of a Supreme Court case, reported Politico.  At issue in Murthy v. Missouri is whether the executive branch went too far in leaning on social media giants like Meta and X to crack down on Covid-19 misinformation — a legal dispute with profound implications for how the government can collaborate with tech platforms to take on disinfo.

Prepping for chaos: Election security experts say the lawsuit has effectively kneecapped a key part of the defences against attackers looking to meddle and sow chaos around the 2024 presidential election. The case “has had a massive impact on the field of election administration,” Larry Norden, senior director of the Brennan Center’s elections and government program, told Morning Cyber. He said the legal battle has sparked a wider “chilling effect” extending beyond just the federal government to also freeze out state election officials and researchers working to identify and counter online falsehoods.

HYBRID WARFARE

AFRICA’S UNDERREPORTED MEGA INTERNET OUTAGE: Did you know that most of Western Africa suffered a four-day internet outage the week beginning March 11? No, neither did we. But as Reuters reported last week, we now know the internet outage was caused by a break in a submarine cable. Here’s the write up of the full drama by Ars Technica.

MEDIA MATTERS

THE GREAT DIGITAL PURGE: The Telegraph reported that a Wikipedia entry detailing “mass killings under Communist regimes” faces being purged from the platform over fears about bias. Apparently, some moderators take issue with the idea that the mass murders of the Soviet period under Stalin and under Mao in China were the result of communist ideology. On the other hand, Nazi atrocities are not seen as worth segregating from fascist ideology.

THE IDEOLOGICAL CAPTURE OF THE FT? DEI critic James Esses and Substacker caused a stir this week when he published a ‘Diversity and Inclusion Toolkit’ given to him by a Financial Times whistleblower, which he claimed called into question the impartiality and integrity of the FT. The toolkit, originally published on the FT’s intranet (but since removed) included a video of an exercise called a ‘Privilege Walk’, which should “show the advantages and disadvantages people have by virtue of their birth”. It appears to be authentic, even though the head of the DEI department who published it has since moved on from the FT over to the FA.

CENTRAL BANKS

THE BUNDESBANK’S REICHSBANK PAST: A multi-year study into the German central bank system’s Nazi past was finally completed by the Bundesbank. It concluded the Reichsbank played an essential role in supporting Adolf Hitler’s regime. “The Reichsbank acted as a willing stooge and receiver of stolen goods in the context of the financial holocaust,” said Albrecht Ritschl, a professor at the London School of Economics, who together with Magnus Brechtken of the Institute for Contemporary History in Munich led the research into German central banking between 1924 and 1970, as reported by Bloomberg. But you’ll have to wait for the English version, which isn’t set to be published for another few weeks.

WW3 WATCH

THE US SAYS STOP ATTACKING RUSSIAN REFINERIES: Politico reported that the US has told Ukraine to lay off attacking Russian energy facilities on fears it could encourage retaliation and drive up oil prices (not what Joe Biden currently needs). The move is another example of where the limits to US/Russian hostility lie and the degree to which the powers that be are content with allowing backdoor trade to continue. The attacks saw the price of diesel and gasoline rise significantly in the market this week.

PUTIN IS OPENLY PLANNING A WAR AGAINST NATO. So says the Telegraph’s Defence editor Con Coughlin (and pretty much every other Western rag).

DARIO COMMENT: Another week, another series of EU leaders claiming the motley alliance must prepare for war. But no number of exhortations will ever manage to unite a polity of disparate interests, whose minute advances towards warlike unity are already torn by disagreements. And what’s more — Europe’s push for arms integration is fundamentally flawed regardless of this disunity.
This week’s “prepare for war” commentary were mouthed by Ursula von der Leyen, who is bearing her defence credentials in hopes of winning a second term as EU President.
Her comments come alongside a recent European-wide initiative — the European Defense Industrial Strategy — to consolidate the region as a conjoined arms manufacturer that can stand up to the Russian Beast.
EDIS is a joint communication of the European Commission and the European High Representative that sets a vision for European defence industrial policy until 2035.
Its primary goals are obvious, strengthening Europe’s defence-industrial base through more collaborative approaches to arms procurement and investments by European member states. It also seeks to instill a more harmonised defence readiness culture to improve the responsiveness of member states’ militaries and defence-industrial bases.
But the European Union’s tensions have already been laid bare due to significant differences in EDIS’ primary backers.
There are several lines of contention to deal with.
The first is the different ways in which France and Germany seek to pull the EDIS alliance.
France has always sought to maintain a high level of independence from its most powerful ally, the United States, and therefore insists on maintaining strategic autonomy in defence by increasing domestic arms purchases. Germany, on the other hand, which is recently awakening to the need to spend more on its military, is far happier to import existing American equipment into Europe to bypass its own peculiar political quandaries in rebuilding a proper defence-industrial base.
This was shown in the partners’ clashing over the European Sky Shield Initiative in 2022, which France strongly disagreed with since it relied on purchases of existing aerial systems from the United States and Israel, rather than on developing a Europe-made system of aerial defences.
The same tensions are being laid bare in EDIS, where French policy heavily emphasises the EDIS policy of supporting “European-made, European-designed” arms, whereas Germany prefers to focus on the component of increasing military readiness — something that would spool up faster and without associated political headaches by simply importing American equipment.
On the other hand, Germany supports a Europe-wide mandate for steering defence policy, including on the selection of what countries it can export its European goods to. Something that France, jealous of her own strategic autonomy and ability to export to countries Germany doesn’t like,  like Saudi Arabia, fiercely opposes.
The second problem are the tensions within NATO this European initiative engenders. While the United States is clearly on board with European countries spending a larger proportion of their budget on the military, it’s certainly not aligned with attempts at European unity for defence procurement. Beyond the increased competition this would create for American military goods for export, it also erodes the reliance a European army has on the NATO coordination framework.
This much was said by Secretary-General Jens Stoltenberg, who was open about his wariness regarding EDIS, stating he was “concerned about the potential overlap with existing NATO activities” and how Europe-wide standard setting would “risk damaging Euro-Atlantic interoperability”. He further explained to Ursula von der Leyen that “what will be harmful for interoperability will be the further development of alternative EU-only defence planning process and alternative standards.”
According to Politico, Stoltenberg’s comments were widely agreed to by a range of European policymakers. We can guess which countries would back the sentiments. On the one hand, you have the Poles, the staunchest allies of the US on the continent, and the Nordics, who stand to gain much from American support in their Arctic region against Russia. Presumably, the comments were primarily directed at France, the most ardent supporter for a measure of independence from NATO and the United States.
And beyond all of these tensions, which threaten to water down the EDIS to a nonexistent series of carefully drafted announcements, you have the fundamental flaws with the program.
The first is that EDIS amounts to €1.5bn. You heard that right — €1.5bn. That is precisely nothing, especially when this is supposed to be the groundwork to unify and strengthen Europe’s defence-industrial sector, which turns over around €70bn a year.
The second critical issue of EDIS is there is absolutely no consideration for cost efficiency in production. As an incredible article on RUSI postulated, which explored the art of attritional war, modern attritional warfare is one of economics and not skill. Therefore, the highly skilled and small armies of Europe, wielding beautifully crafted and complex weapons, will come to naught in tomorrow’s conflict. Instead, the RUSI article insists, countries must prioritise the economic manufacturing efficiency of weapons. A large amount of simple, low-cost, high-quantity weaponry will be necessary to survive an obscene churn rate of soldiers and equipment on the frontlines.
This is practically the opposite of what EDIS will do. It is funnelling a small amount of money into a bloated defence-industrial sector that will produce an even smaller amount of weapons they have no chance of scaling up in the event of a real conflict. To put Western cost-efficiency woes into perspective, Russia is estimated to produce up to 3 million shells per year, almost 3 times as much as Europe and the United States combined.
That doesn’t mean all recent European defence initiatives are being wasted, however. The Nordic countries have impressed by joining their air forces under a single command. Such moves to unify and harmonise command and control must be made for our disparate union of countries to have even a mild chance against a united enemy.
Unfortunately, not only is European defence receiving priority too late, it is also not going far enough.

But, as the old saying goes, there’s nothing more dangerous than an idiot with initiative. Thankfully, a badly financed idiot who can’t successfully go in the wrong direction means we may be in better shape to pivot when the wars get started.

GEOPOLITICAL HOTSPOTS

LIBYA’S NEWLY REUNITED CENTRAL BANK GETS CRACKING ON REFORM: Now that the battle of the two competing central banks in Libya is over, Libya’s Central Bank governor Sadiq Kabi has instructed commercial banks to temporarily impose a 27 percent fee on foreign currency exchange rates. The move follows a devaluation in early March during which time he asked parliament’s speaker to approve a new unified government. As Reuters reports, the governor remains at odds with Prime Minister Abdulhamid al-Dbeibah over the extent of spending by the Government of National Unity (GNU), which is recognised internationally but not by the eastern-based parliament.

DARIO COMMENT: We’ve compiled a little explainer for the Libyan conflict this week. Yes — that one conflict everyone tries to ignore because it’s just too confusing to lay out.

And we can’t blame you. When Russia, France and the United States are supporting the same side against Islamist militias backed by Turkey and Italy, you’d be forgiven for thinking it’s too much to bear.

Thankfully, a little look at the history of Libya and some maps pointing out critical gas supplies makes everything a lot simpler. In sum, Russia and the United States simply wanted to pick a winner, France wanted to pick a secularist, while Turkey and Italy wanted gas. There’s more to it than that, naturally, but you’ll have to dig into our piece to find out.

We hope you enjoy.

CANADIAN REVOLTS? Canada’s National Post reported the Royal Canadian Mounted Police had distributed a secret report to the government warning that Canada may descend into civil unrest once citizens realize the hopelessness of their economic situation. The report also cites growing distrust sowed by conspiracy theories as a major driver of instability in Canada.

CIVILISATION

PUBERTY BLOCKER BACKLASH. Last week, NHS England announced it would be banning future distribution of puberty blockers to children after a consultation found there was a lack of long-term evidence on what happens to young people prescribed blockers. The move comes ahead of the second reading of Liz Truss’s health bill that seeks to ban the prescription of body-altering hormones to children questioning their sex, both privately and on the NHS. Now, French senators are also calling for a similar ban in France.  

Izzy’s thought bubble: The Blind Spot has shied away from publicly addressing the gender debate, not least because it didn’t feel like much of a blind spot given the amount of attention the topic has been getting over the years. But with the new bans coming into place, it’s worth looking at the emerging regional divergence on the matter. It seems that while Europe has started pulling away from a laissez-faire approach to gender treatment, both the US and Canada (and Scotland) are holding tight. How long might this divergence last however? And how might it influence US/European relations?

It’s also interesting that the schism is showing up just as Putin has started doubling down on anti-LGBT rhetoric and leaning into his pro-traditional family narrative. On Friday, Reuters reported that Russia had added what it calls the “LGBT movement” to a list of extremist and terrorist organisations. “The move was in line with a ruling by Russia’s Supreme Court last November that LGBT activists should be designated as extremists, a move that representatives of gay and transgender people said they feared would lead to arrests and prosecutions,” the newswire reported.

This comes after a Russian foreign ministry spokeswoman last week pushed the view that Germany wasn’t entirely denazified, upping the ante on Putin’s ongoing narrative about Ukrainian nazis.

Sterlisation factor: Putin’s pro-family stance, however, isn’t just about bolstering traditionalism in Mother Russia. It’s also about solving the country’s dismal demographics, which are only getting worse. Part of the subtext in the propaganda is the view that demographically challenged countries can’t afford to be LGBT-friendly. The nation needs procreation. And mass transgenderism, especially when it’s encouraged in the young, is impeding national fertility just when Western demographics are already in a very precarious demographic state.

Whether intentional or not, that subtext was echoed last week by the world’s most prominent trans critic, JK Rowling. Commenting on NHS England’s ban, Rowling tweeted in reply to a critic:

I’m afraid this tactic doesn’t work on me. Perhaps your time would be better spent thinking up some reasons you cheered on the sterilisation of gay and autistic kids? One of your co-religionists is probably working on a slogan right now. We all look forward to seeing it.

Rowling went on to repost a tweet thread explaining the connection between Nazi sterlisation campaigns and the emergence of trans healthcare focused on the work of Magnus Hirschfeld, a Jewish, gay sexologist and pioneer of gender reassignment surgery. But, as the thread points out, he may also have been an eugenicist. His work may also have influenced Nazi sterilisation programmes directly. As one of the posts in the thread noted,In a book last year, Laurie Marhoefer revealed Hirschfeld argued homosexuality was Nature’s way to prevent bad genes being passed on. Gays must not procreate, he said. Unwittingly, Hirschfeld gave credence to the Nazi conviction that gays were a threat to racial purity.”

The underlying message here is that trans ideology could end up being a mechanism exploited by actual homophobes to encourage gays, bisexuals and lesbians to voluntarily self sterilise.

Another outspoken critic of transgender ideology, and who has a transgender child himself, is Elon Musk. But while Musk has been increasingly vocal about the wrongs he sees in the transgender movement, especially with respect to the application of puberty blockers (a function of the “woke mind virus” as he calls it), his recent tweet arguing “no sterlisation before age of consent” was buttressed by an associated call to his gay friends saying…

My observation is that people are born one way or another – it is not a choice. People should find mutual love and happiness where their heart leads them. I only ask of my gay friends that they have children for the continuance of civilization.

The underlying subtext here is that trans ideology is being pushed by those who have a death wish for Western civilisation.

GUEST COMMENT by Del J. Kelham, a longstanding behind the scenes editorial aide to the Blind Spot, whose story is worth listening to.

In the context of the latest controversy on puberty blockers and gender transition, it is worthwhile asking what it means to be “transgender”. So you’re up to speed, I ‘transitioned’ in 2008-9, when I was in my twenties. I completely regret it. Despite my surgeries, I once again identify as a man. But, I still support people to be who they are and want to be, providing that no-one gets hurt unnecessarily in the process.

So what does it mean to identify as the very opposite of your (we assume, based on current scientific understanding) biological, pre-determined destiny? How do we define and redefine the rights and wrongs of gender norms – many of which are based on historical and current cultural expectations, vs our biological sex? These, and other questions, should be asked by all of us because they are important, but they tend to play second fiddle to another conversation that serves the usual liberal v conservative dichotomy.

A quick scroll through social media offers little help. Social conservatives obsess over who’s doing what in which toilet or changing room and whether they have a peepee or a coochie, and how this may or may not impact women and children in their “safe” spaces. The so-called silent majority not-so-silently rages at a genetically male, post-op transgender UFC fighter beating up a genetic female in a cage as an outrage that could only have been enabled by “libtards”, or a man in a skirt called ‘Shirley’ or ‘Michelle’ being promoted to “normalise perversion”. Liberals and progressives, often with transgender and/or rainbow flags in their bios, respond angrily or dismissively.

Ideologically, we are expected to choose our tribe, and being pro- or anti- trans is part of that ideological division. To activists on the right, if being trans isn’t part of a depopulation agenda, it at least represents the worst of globalism, with genuine fears that vulnerable children are being used to further a dystopian, transhumanist vision. This makes it a safeguarding issue for them, not just an ideological one. To activists on the left, the trans community must be protected at all costs because that very community is so loathed by conservatives and their “TERF” (Trans Exclusionary Radical Feminist) allies.

And in this divided landscape, many of us don’t know what to think. If you’re a parent, you just want to do what’s best for your child. The challenge is that everything is so politicised we are unable to come together to apply the best solutions and safeguard everyone, and it has even impacted our medical institutions. Once upon a time, identifying as the opposite sex resulted in all kinds of tests and interrogations from psychiatrists. Nowadays, there are umpteen genders on forms and one can “self ID” without any surgical commitment whatsoever. Where do parents go in such an environment? I do not envy them – not one bit.

For many years, being anything other than society determined for you was a burden. In 1967, under Harold Wilson’s administration, Roy Jenkins passed the Sexual Offences Act. Did it stop people being homophobic? Since two thirds of Labour members were against the Act at the time, the answer is no. But it did open doors. It offered legal protection that was, previously, non-existent. It wasn’t the solution but it was a bloody good start.

Over the last few decades, the left has focused increasingly on identity and less on bread-and-butter issues such as workers’ rights, though they will claim otherwise. Led by a university-educated middle class that understands race, sex and gender more than the economic hardship of a working class with which it barely interacts, it is unsurprising that activists on the left are so identity-focused. Meanwhile, today’s right has become more blue collar than ever, hence, the rise of alternative right-wing voices in recent years.

Although the left is no less divided, this is nothing new. Bennites vs Blairites, Neo-liberals vs Progressives, etc. But the ‘alt right’, or ‘new right’ as I call it, fascinates me. This is an economically protective, fiercely patriotic, very socially conservative group that is tired of ‘causes’ being pushed down its collective throat in the name of progress, hence the #GoWokeGoBroke hashtag. This is why they love Donald Trump. He’s completely unlikeable, of course (see Nate White’s take on why many Brits don’t like him) but he isn’t a Clinton or an Obama and that’s a red pill box tick to anyone who, to paraphrase Gordon about The Joker in The Dark Knight, is willing to watch the world burn… until the swamp is drained.

In the middle of all this is a community caught firmly in the crossfire because it is perceived as the very worst of the modern left – as the ultimate symbol of moral decadence, and a trojan horse for transhumanism. The problem is, that parents don’t need the left or the right, only what’s right for their kids.

And this brings me back to my own journey. In my regretful case, it was probably the result of a perfect storm that included an absent father, sexual abuse at a very young age, severe bullying, and probably some latent bisexuality to add to the confusion. Years later, I write as a 44-year old castrated man with fake breasts and a surgically altered face, pleading for understanding and sympathy for a vulnerable group, while advocating the reintroduction of basic gatekeeping by the medical profession, especially where children are concerned.

Parents, everywhere, please talk to your children. Do not assume they know what they’re talking about, but do not dismiss them. Be there for them, but guide them. Listen to your gut but prepare for it to be wrong. And, for God’s sake, do not accept without question that which you read or hear, including these very words. Question everything.

As for puberty blockers, I’m not sure what I think about them, nor am I sure what I think about other gender-affirming care for children generally. What I do know is that boys are born with peepees and girls are born with coochies, unless something goes wrong and we’re in the world of intersex anomalies. But we must not normalise the abnormal. It’s important to accept the deviations (like a glitch in the matrix), but it’s wrong to normalise them. Do not allow yourself, however well meaning you may be, to be subsumed in the “gender fluidity” narrative. Gender norms should be challenged, yes, but biological sex is, by default, very clear. Until science provides hard evidence to back up alternative positions, boys are boys and girls are girls. This isn’t a blind spot, either. On the contrary, I have never seen things clearer than I do now.

HOLY WARS

THE RED HEIFER GAZA FACTOR: CBS dived deep into the significance of a bunch of red heifer cows that were imported from Texas to Israel by an Israeli group last year. According to the report the move may have been a motivating factor for the October 7 massacre. From the piece: “When Hamas spokesman Abu Ubaida began a speech marking the 100th day of the war in Gaza, one confounding yet eye-opening proclamation escaped the headlines. Listing the motives for the Palestinian militant group’s Oct. 7 massacre in Israel, he accused Jews of “bringing red cows” to the Holy Land.” Watch the video to find out all about the bible prophecy and the massive altar that’s already been erected by the Temple Mount. Then read this.

IZZY COMMENT: To the minds of Western secularists this sort of stuff seems beyond conceivable, but that doesn’t mean bible prophecy factors aren’t playing into geopolitics due to there being sufficient numbers of people in the world who do believe them.

What the non-religious need to be aware of is that there are currently four main Abrahamic groups engaged in actions to bring forward “the end times” and their respective messiahs with it more quickly. Over in Israel there are the extreme religious groups that have gained power in the Knesset over the course of 2022. Then there are the US evangelicals who support the radical Israelis, since that accelerates the return of Jesus. In opposition to both groups’ we have the Muslim world and their actions to upend their efforts to bring about the wrong messiah (who they see as the anti-Christ). And finally, you have the Russian Orthodox vision that sees itself as the holy seat of a reinvigorated Christian world under the Third Rome framing, with a mission to “save the world” from all of the above.

For those of you, like me, who have found themselves marveling at the narrative that Putin would ever strike against Nato unless utterly provoked by Nato actions within Russia’s own borders first, it’s worth considering under what domestic propaganda narrative a Russian assault on Nato countries would have to be framed. Indeed, leaders can’t easily get troops to march on other countries just for the hell of it. Look to our own occupation of Afghanistan and Iraq which was justified by the rhetoric that we were liberating the locals from tyranny.

So why would the Russians ever think Western Europeans “need liberating”? How could a war on Nato be sold domestically? Well, we may have already been given the hint, with the recent claims that Germany was never fully denazified. Take that into the holy war framing, and you see where this is going. The West, under ongoing influence of the “Nazi continuum”, has become Babylon, and it is now Russia’s responsibility to liberate its European Christian brethren from that unholy yoke. Yes, it sounds bonkers. But now consider the messiah they’re all talking about is an AGI. Ay Caramba.

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