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China applies its own maximum pressure policy on Pyongyang

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As the U.S.-North Korea summit looms, President Donald Trump‘s maximum pressure policy on North Korea may be working — thanks to China.

Beijing appears to have gone well beyond U.N. sanctions on its unruly neighbor, reducing its total imports from North Korea in the first two months this year by 78.5 and 86.1 percent in value — a decline that began in late 2017, according to the latest trade data from China. Its exports to the North also dropped by 33 percent to 34 percent both months.

The figures suggest that instead of being sidelined while North Korean leader Kim Jong Un made his surprising diplomatic overtures to Seoul and Washington, China’s sustained game of hardball on trade with Pyongyang going back at least five months may have been the decisive factor in forcing Kim’s hand.

Trade with China is absolutely crucial to North Korea’s survival.

It accounts for the largest share of the North’s dealings with the outside world and provides a lifeline to many of the necessities Pyongyang relies on to keep its nation fed and its economy from breaking down. Estimates vary, but it is believed that roughly half of all transactions in the North Korean economy are made in foreign currencies, with the Chinese yuan being the most common.

That gives Beijing tremendous leverage, though for political and national security reasons it has generally been reluctant to exert too much pressure on Pyongyang.

That reluctance is clearly wearing thin.

The statistics need to be taken with a dose of caution. Neither country is known for its commitment to transparency. Even so, more specific data reveal an even tougher, targeted crackdown, according to Alex Wolf, a senior emerging markets economist with Aberdeen Standard Investments:

— China’s exports of refined petroleum have collapsed over the past five months — to an annual rate of less than 4 percent of what it exported last year. With the pace on a downward trend, he believes, total exports could actually fall further.

— North Korean steel imports from China have also collapsed in 2018, and the same goes for cars. Wolf notes that it’s unclear if China is blocking such exports or North Korea simply can’t afford them. But either one, he wrote in a recent report for the company, would be a clear signal the North’s economy is “under a great deal of stress.”

“While China’s role over the past few months has often been overlooked or little understood, it appears a strategy could be emerging: China wants to play a central role in ‘resolving’ this crisis, but wants to do it on its own terms,” he wrote. “It’s increasingly clear that Chinese pressure is a driving force and China will play a central role in any future talks.”

Kim announced in his New Year’s address he would reach out to the South to ease tensions on the Korean Peninsula. He then agreed to hold a summit with South Korean President Moon Jae-in on April 27 and with Trump after that. But to the surprise of many, Kim suddenly showed up in Beijing first for a summit with President Xi Jinping last month, underscoring the continued primacy of China in North Korea’s foreign relationships.

Lu Chao, director of the Border Study Institute at the Liaoning Academy of Social Sciences, noted that China accounts for almost 80 percent of the North’s total trade, meaning the onus for implementing U.N. sanctions has been mainly borne by Beijing, whose enforcement has created “huge pressure on North Korea.”

“There is no doubt China is doing more than ever when it comes to sanctions,” he said, adding restrictions on sales of textile and seafood products to North Korea imposed by China last autumn “have dealt a huge blow to the country.”

“China has played a very important role in promoting the current change of the situation,” he said.

The decrease in trade isn’t just about politics.

China’s economy is also dealing with overproduction in many industries and its demand for North Korean imports is low. Efforts at joint development projects have languished and difficulties suffered by Chinese firms in North Korea — especially problems receiving payment — have soured enthusiasm for cross-border trade.

But the deficit presents an obvious dilemma for the Kim regime: the more it depletes its foreign reserves by buying in excess of what it sells, the less money it has to buy anything at all. Normally, that would lead to inflation — and even hyperinflation — as imported necessities become scarcer and people who can afford to do so dump their holdings in the local currency to buy safer U.S. dollars or Chinese yuan.

Georgetown University economist William Brown said he believes the North’s current account deficit has risen dramatically since the strengthening last November of sanctions on North Korean exports by China, which he said are by now “certainly biting.”

“Why is Kim venturing his offer now? My impression is he is feeling very strong pressure from China’s virtual embargo on North Korea’s exports, and what he must see as a gradual ratcheting down of needed imports, even petroleum,” Brown wrote in a recent blog post. “This is an enormous economic hit of a sort the country has never had to deal with on this scale.”

Brown believes an important indicator of the North’s economic health will be movement of the unofficial but widely used exchange rate for the North Korean currency, which has been surprisingly stable at around 8,000 to the U.S. dollar for years but should now be under intense inflationary pressure.

“China is giving us the chance, and (we should) use it cleverly to get what we want out of the nuclear program and systemic reform,” he added. “It’s not so impossible if you realize everyone, even young Kim, can benefit.”

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SpaceX crew splashes back down to earth after record mission

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A SpaceX Falcon 9 rocket, with the Crew Dragon capsule, is launched carrying four astronauts on a NASA commercial crew mission to the International Space Station at Kennedy Space Center in Cape Canaveral, Florida, April 23, 2021.

Joe Skipper | Reuters

The four astronauts aboard the SpaceX Crew Dragon capsule have returned to earth, splashing down in a parachute landing in the Gulf of Mexico after a record-setting mission to the International Space Station. The astronauts spent five months in space, the longest-ever duration for a crew launched in an American-built spacecraft.

NASA’s Shannon Walker, Mike Hopkins, and Victor Glover and Japan’s Soichi Noguchi reached the space station via the Dragon capsule last November.

This is breaking news. Please check back for updates.

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Neuralink cofounder Max Hodak leaves Elon Musk’s brain implant company

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Elon Musk, founder of SpaceX and chief executive officer of Tesla, waves while arriving to a discussion at the Satellite 2020 Conference in Washington, D.C., on Monday, March 9, 2020.

Andrew Harrer | Bloomberg | Getty Images

Neuralink President Max Hodak announced on Saturday, via Twitter, that he is no longer with the health tech venture he co-founded with Elon Musk, and has not been for a few weeks. He did not reveal the circumstances of his departure.

Fremont, California-based Neuralink is, “developing ultra-high bandwidth brain-machine interfaces to connect humans and computers,” according to the company’s self-description on LinkedIn.

Musk – who is also the CEO of electric car makers Tesla and the aerospace defense contractor SpaceX – has said, without showing evidence this is possible, that Neuralink’s devices could enable “superhuman cognition,” enable paralyzed people to operate smartphones or robotic limbs with their minds someday, and “solve” autism and schizophrenia.

Founded in 2016, with Musk investing tens of millions of his significant personal wealth, Neuralink is also developing surgical robotics to implant its devices, essentially sewing tiny wires about a quarter of the diameter of a human hair to connect the implants to the brain.

Skeptics abound.

Musk described the surgery to insert a Neuralink device as taking less than an hour.

Neuralink demo

After the August 2020 demo, MIT Technology Review deemed Neuralink “neuroscience theater,” in a scathing teardown of the presentation.

Musk does not have a background in neuroscience or medical devices but, according to a project director at Neuralink quoted by The New York Times in 2019, has been “active in trying to help solve the engineering challenges that Neuralink faces.”

In the medical news site StatNews, a neuro-ethicist and doctor named Anna Wexler wrote in an op-ed on April 7, 2021:

“In this new world of private neurotech development, company demos are live-streamed on YouTube and have the flavor of techno-optimism that involves proclamations about a future we have yet to see — but one that we are assured will come to pass. Data are sparse; rhetoric about making the world a better place is heavy.”

The next day, Musk wrote in a series of tweets, again without providing evidence:

“First @Neuralink product will enable someone with paralysis to use a smartphone with their mind faster than someone using thumbs

“Later versions will be able to shunt signals from Neuralinks in brain to Neuralinks in body motor/sensory neuron clusters, thus enabling, for example, paraplegics to walk again

The device is implanted flush with skull & charges wirelessly, so you look & feel totally normal”

On Saturday, Hodak was not immediately available to comment.

For Musk, Saturday was a day undoubtedly requiring more focus on his aerospace venture, SpaceX. After 167 days in space, astronauts in crewed, SpaceX and NASA mission began their return flight home, with a “splashdown” expected around 2:57 a.m.

One of Hodak’s followers on Twitter asked him what’s next and he replied, “Not Jurassic Park.” The quip was a reference to a prior fantastical discussion on the micro-blogging platform in which Hodak mused: “We could probably build jurassic park if we wanted to. wouldn’t be genetically authentic dinosaurs but . maybe 15 years of breeding + engineering to get super exotic novel species.”

Neuralink is one of many medical tech companies working on a so-called “brain-machine interfaces.”

Competitors include those developing implants and non-invasive devices like headsets. Among them are Kernel, Synchron, Neurable and even Facebook in the U.S., CereGate in Germany and Mindmaze in Switzerland.



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Charlie Munger calls bitcoin ‘disgusting and contrary to the interests of civilization’

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Charlie Munger at Berkshire Hathaway’s annual meeting in Los Angeles California. May 1, 2021.

Gerard Miller | CNBC

Berkshire Hathaway Vice Chairman Charlie Munger’s distain toward bitcoin has only intensified amid the digital asset’s record run this year.

“Of course I hate the bitcoin success,” the 97-year-old Munger said during a Q&A session at Berkshire’s annual shareholder meeting Saturday. “I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth, nor do I like just shuffling out of your extra billions of billions of dollars to somebody who just invented a new financial product out of thin air.”

“I think I should say modestly that the whole damn development is disgusting and contrary to the interests of civilization,” said Munger, a legendary investor in his own right.

Warren Buffett, who avoided the initial question on bitcoin earlier, responded to Munger’s answer: “I’m alright on that one.”

The “Oracle of Omaha” said he didn’t want to comment directly on the digital token because he didn’t want to get grief from everyone who is long.

The world’s largest cryptocurrency enjoyed a head-turning rally this year, topping $60,000 apiece in April as involvement from Tesla to major Wall Street banks made bitcoin mainstream. Tesla recently made a $1.5 billion bet on bitcoin and now accepts the digital currency as a method of payment for its cars. Meanwhile, Goldman Sachs and Morgan Stanley are looking to offer their wealthy clients some exposure to bitcoin.

Bitcoin last traded above $57,000, up from about $30,000 at the start of 2021, according to Coin Metrics.

Munger has long criticized bitcoin for its extreme volatility and a lack of regulation. At the annual shareholders meeting for Daily Journal in February, Munger said bitcoin is too volatile to serve well as a medium of exchange.

“It’s really kind of an artificial substitute for gold. And since I never buy any gold, I never buy any bitcoin,” Munger said then. “Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it was the pursuit of the uneatable by the unspeakable,” he added.

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