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The rise of Nazism in Germany was accompanied by the rise of its armed militants. These were used to fight opposing political parties and militia formations. They were ruthless.

The units were later known as the Waffen-SS:

After release from prison Hitler decided that he needed a paramilitary group to protect him personally. That group should be steadfastly faithful and loyal to him alone; not least to protect him from possible SA intrigues. Therefore Hitler established a personal bodyguard in his hometown München (Munich). Initially this group numbered only ten men with one officer. It was first called "Stoßtruppe Hitler" (Shock Troops Hitler). Again the title derived from divisional assaults groups from World War I. Later it was renamed "Schutz Staffel" (SS or Protection Squad).
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By 1932 the SS had some 30,000 men, …
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In March 1935 Hitler renounced the Treaty of Versailles and announced the expansion of the German Army and the formation of the SS Verfügungstruppen (SS VT or SS special purpose troops) as the core of a full military division. This unit was financed by the police budget to counter any Army fears.

After the start of the war the 'armed evil' grew further:

By 1939, four regiments (Standarten) had been organized.
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During the following winter and spring, regiments that had fought in Poland were expanded into brigades and later divisions. … These three divisions were to be the nucleus of the Waffen-SS in its subsequent rapid expansion.
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At the end of 1940, the Waffen-SS numbered slightly more than 150,000 men. By June 1944, it had grown to 594,000. Intended as an elite force, the Waffen-SS evolved due to the exigencies of war from the original SS concept of a military organization imbued with Nazi ideology and loyalty to Hitler into a polyglot force of decreasing combat effectiveness.

The Waffen-SS was not part of the regular army. It had its own financial resources. It recruited and trained its own officers through Nazi youth organizations. These were 'true believers' .

There are a lot of parallels between the rise of the Waffen SS and the Ukrainian Nazi formation known as Azov.

Cont. reading: Growth Of Ukraine’s Azov Units Follow Path Of Waffen-SS

Yesterday I reported of Sunday's missile attack in Sumy, Ukraine:

There was a ceremony planned for the seventh anniversary of the founding of the 117th Territorial Brigade. This was to take place in the congress center of the Sumy State University. Medals were to be presented for the recent participation of the brigade in the attack on the Russian oblast of Kursk. Invitations to the commanders of neighboring units were sent out.
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The Russian military got wind of the event and destroyed the congress center (pics) with two Iskander missiles. There were military and civilian casualties. But under the rules of war the strike was on a legitimate target.

Ukrainian politicians had alleged that the head of the Sumy Oblast State Administration Volodymyr Artiukh had send out the invitation for the event and had arranged for the military ceremony to take place in the middle of the city.

The government of Ukraine essentially confirmed that today by removing Artiukh from his position:

The Cabinet of Ministers has approved the dismissal of Volodymyr Artiukh from the post of head of Sumy Oblast State Administration and the appointment of Oleh Hryhorov to this position.

Konotop Mayor Artem Semenikhin accused Volodymyr Artiukh, Head of Sumy Oblast State Administration, of organising a gathering of soldiers from the 117th Brigade for an award ceremony in the centre of Sumy on 13 April.

Artiukh acknowledged that an award ceremony for servicemen took place in the city centre, but did not name the initiator.

Do not expect any western mainstream media to report these facts.

I have for quite some time not reported on the progress of the war in Ukraine. That is not because nothing is happening there. The Russian forces are pressing on all fronts while building up their reserves. Most of the many small pushes are successful but the current progress isn't measured in miles per day.

This is an attrition war. The capturing of land, which still happens, is not the measure of success. The destruction of the enemy's material and personnel resources is what matters. In this regard the Russian forces are making good progress. Over the last month the daily Ukrainian casualties as reported by the Russian Ministry of Defense have crept up from a low of about 1,200 per day to some 1,500 per day now. That is still far away from the 2,500 per day reported during the summer and fall of 2024 but still a noticeable increase.

There is also an intensification of air and drone strikes on military factories far behind the frontlines. Instead of once or twice per week these are now a daily occurrence. The results of these strikes are only rarely reported. They do not have an immediate effect on the fighting. But they will over time diminish Ukraine's resources and its supplies of weapons and munition.

The ground in Ukraine is still muddy. Only when it dries up will we see a general campaign by the Russian forces.

They will look for weak spots in Ukraine's defense lines and push on each of those until one or more breakthroughs occur. Fresh forces will then moved up to exploit the breaches.

In yesterday's week-in-review I had linked to a missile attack on the Ukrainian city of Sumy:

Russia launched a missile attack on the center of Sumy. More than 30 people were killed – Strana

Machine translation:

This morning, the Russians fired two ballistic missiles at the center of Sumy. 31 people were killed, including 2 children.

84 people were injured, including 10 children.

The Prosecutor General's Office reported that at about 10:15, the Russian military launched two missile strikes on the center of the city of Sumy. Rescue operations are continuing, the number of victims is being specified.

One of the pictures Strana provided showed the destroyed congress center of the Sumy State University .

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Shortly after the incident the Member of the Rada Mariana Bezuglaya accused the military command of staging a ceremony in the city despite it being less than 20 kilometer from the active fighting front (machine translation):

Cont. reading: Palm Sunday Attacks On Sumy And Al-Ahli

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Last week's posts on Moon of Alabama:

• Apr 7 – Trump To Eliminate Capital Gains
• Apr 9 – Some Fall-Out From The Tariff Wars
• Apr 10 – Trump's Market Whiplash Continues
• Apr 12 – Tariffs – Trump Blinks Again
  Related:
  – Trump’s China tariff shocks US importers. One CEO calls it ‘end of days’ – AP
  – Pharmaceutical Tariffs: The What and the How – Science
  – Trump, Tariffs and Trade – Craig Murray
  – Trump Axes a Stricken World Order — But There's Opportunity Amidst the Turmoil – Conflicts Forum
  – Chartbook 372 "We create our own reality" – Trump's delirious negative-sum populism, or how the Empire comes home. – Adam Tooze

• Apr 8 – An Economic Advisor's Weird Theory
  Related:
  – Treasury yields soar as bond rout intensifies (archived) – FT
  – The real bond vigilantes hounding Trump are Asian – Asia Times
  – ‘This is Not Normal’: Trump’s Tariffs Upend the Bond Market (archived) – New York Times
  In the usually steady government bond market, the yield on the 10-year Treasury has risen to about 4.5 percent from less than 4 percent at the end of last week.
  – Top Trade Expert Says Trump Tariff Pause Lays Bare ‘Just One More Con on Working People’ – Naked Capitalism

• Apr 12 – War With Iran?
  Related:
  – Iran and US hold ‘productive’ nuclear talks in Oman as Trump rushes for new deal – Independent
  – Indirect but impactful: Iran-US talks mediated by Oman off to a ‘constructive’ start – PressTV

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Other issues:

Cont. reading: The MoA Week In Review – OT 2025-077

On Thursday President Trump pulled back on tariffs because a sell-off in treasuries threatened to develop into a serious economic catastrophe.

Tariffs were reduced to 10% for most countries but China. (10% is still a lot higher than they were before Trump started his tariff onslaught.) The tariffs on products from China were raised to a total of 145%.

The high China tariffs would inevitably lead to a steep raise of U.S. prices for consumer electronics which, at least partially, are nowadays coming from China. For big U.S. companies, foremost Apple, this would have entailed large losses.

So Trump blinked again:

US excludes smartphones, computers from Trump's reciprocal tariffs – Reuters, Apr 12 2025

The Trump administration has granted tariff exclusions for smartphones, computers and other electronics imports supplied largely by China, sparing them from much of President Donald Trump's steep 125% duties.

In a notice to shippers, the U.S. Customs and Border Protection agency published a list of tariff codes that will be excluded from the duties. The exclusions are retroactively to 12:01 a.m. on April 5.

The U.S. CBP listed 20 product categories, including the very broad 8471 code for all computers, laptops and disc drives and automatic data processing. It also included semiconductor devices, equipment, memory chips and flat panel displays.

The notice did not provide an explanation for the Trump administration's move, but the late-night exclusion provides welcome relief to major U.s. technology firms, including Apple Dell Technologies and countless other importers.

The full list of the new tariff exceptions is here.

This is a curious way to 1. undermining U.S. manufacturing and 2. to increase the trade imbalance.

High price, high technology products can now be imported from China with low tariffs applied to them while low tech intermediate goods from China, which U.S. producers need for their products, will have super high tariffs on them.

If this stands it will lead to more low tech production of intermediate goods within the U.S. while the high tech production will stay and expand in China.

China had retaliated to the U.S. tariffs by applying a 125% tariff on all U.S. products. It is unlikely to exempt specific categories from that. At rates above 100% trade between China and the U.S. will within a short timeframe come to a complete halt.

The U.S. has now exempted some 22% in value of its previous imports from China from tariffs while China keeps tariffs on all U.S. products high. The trade between the two countries will thereby become more unbalanced than ever before.

The U.S. will continue to import 22% of its previous imports from China while its exports to China will shrink to zero. The absolute trade imbalance will thereby be higher than it was before Trump started his tariff war.

All this is a curious way of acknowledging defeat in the war. The rolling of heads will start tomorrow.

There are a number of discussions about a potentially imminent U.S. war on Iran. Yves Smith at Naked Capitalism concludes that a war is more likely than not. Crooke, Mercouris and Diesen are ambivalent (vid) but also seem to expect a conflict.

President Trump (or, more correct, Netanyahoo behind him) has made demands towards Iran that are designed to be rejected:

• End all nuclear programs
• Destroy medium range missiles which can reach Israel
• Stop support for all 'resistance' movements in the Middle East

Iran will of course reject those demands.

It is willing to put its nuclear program back into the parameters of the JCPOA nuclear agreement, which Trump previously discarded, IF sanctions against it are lifted. It is also willing to do lucrative business with the U.S. But that is about it.

The U.S. is trying to impress Iran with military arrangements. Several B-2 bombers were sent to Diego-Garcia, two airforce carriers are in the Middle East, Israel has been supplied with more THAAD and Patriot air defense missiles.

I find that to be a mere show of force mostly for the audience in the U.S. It is not enough for a sufficiently strong attack that aims to defeat Iran. Iran's abilities to retaliate require a much larger force for the opening campaign and many more forces to handle all the calamities which would inevitably follow.

Trump's envoy Steve Witkoff was in Oman today for talks with Iran's Foreign Minister Abbas Araqchi. The first reactions are positive but there are no words (yet) of any results:

"Talks were held in a constructive atmosphere, based on mutual respect," and the delegations exchanged the views of their respective governments about "Iran's nuclear program and sanctions relief with the mediation of Oman FM," says the MFA statement.

The talks will continue next week.

It is hard to assess what Trump might do. If he does not give a f*** he will attack Iran no matter what. If he still cares for his legacy he will avoid a war that would let energy prices explode and pull the U.S. into another large war without end which it can not possibly win.

My current line of (wishful?) thinking is similar to Larry Johnson's:

My hope is that Trump is smarting from the beating he has taken over the tariff fiasco and that he is eager to score a diplomatic win. If my assumption is correct, Trump will embrace JCPOA 2 as his creation and proclaim himself as the one who stopped Iran from building a nuke.

Then again, as Alastair Crooke reminds us, the current volatile international situation may make random events more relevant than politicies in creating the outcome. Simple moves, from potentially many sides, (an Israeli attack on Iran?) could easily have snowball effects.

News & views related to the war in Palestine …

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Yesterday's piece had warned about the curious drop in Treasurys and rise of interest rates. It was a dire sign that the global economy and markets far beyond Wall Street were going bad.

The Trump administration recognized the danger and, just fifteen minutes after I had published my post, pulled back (archived):

The economic turmoil, particularly a rapid rise in government bond yields, caused Mr. Trump to blink on Wednesday afternoon and pause his “reciprocal” tariffs for most countries for the next 90 days, according to four people with direct knowledge of the president’s decision.

Asked to explain the decision, Mr. Trump told reporters: “Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid.”

Behind the scenes, senior members of Mr. Trump’s team had feared a financial panic that could spiral out of control and potentially devastate the economy. Treasury Secretary Scott Bessent and others on the president’s team, including Vice President JD Vance, had been pushing for a more structured approach to the trade conflict that would focus on isolating China as the worst actor while still sending a broader message that Mr. Trump was serious.

This does not mean that the trouble has ended.

Who is going to invest, into what, while any day, at any moment, the most basic economic conditions may change in completely unpredictable directions:

Asked on Wednesday how he would decide on any further exemptions, Mr. Trump said: “Instinctively, more than anything else. I mean, you almost can’t take a pencil to paper. It’s really more of an instinct, I think, than anything else.”

By admitting that Trump acknowledges that he is the real problem.

How can I decide to invest in a new car when by delivery date the tariffs and interests involved might have changed in unforeseeable directions? On what basis can I trust Trump's instincts? I can't and won't. The same will hold for much bigger investment decisions.

For once the Washington Post editorial is getting it right (archived):

The bond markets forced Trump’s hand. By moving their money out of dollars and selling U.S. Treasury bonds, investors told Trump what his closest advisers would not about the perils of starting trade wars with all other countries at once. Trillions in value were wiped out in equity markets, and the financial system blinked red with indicators of contagion.

Finally, bond yields began to forecast calamity — especially the alarming sell-off of 10-year Treasurys. In times of panic, these bonds usually attract investors. Their failure to do so this time reflected declining confidence that the U.S. government would repay its debts.
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After Trump finally announced the tariff pause, the S&P 500 closed up 9.5 percent and the tech-heavy Nasdaq gained 12 percent. The news is indeed worth rejoicing. But keep in mind that the 90-day pause will last only until July 8, and in the meantime the trade war with China might continue to escalate. In other words, investors, business and consumers will still be living with uncertainty. For the long term, Trump and his team are well advised to come up with a less volatile economic strategy.

Until Trump settles on a predictable course the global carnage will continue.

President Trump likely thought that he could press China into making a deal with him. The tariffs he imposed were supposed to create leverage for that.

Instead he found that China is willing and able to fight back:

China said it will raise its tariff on US goods to 84%, retaliating to the hefty new tariffs on its imports that kicked in on Wednesday.

The move came after the Trump administration followed through on a threat to add a 50% tariff on Chinese goods, in addition to 34% reciprocal tariffs, raising the overall tariff rate on Chinese goods to 104%. The steep new duties on China and 184 other US trading partners took effect at 12:01 a.m. ET on Wednesday.

Beijing's move marks further deterioration in US-China trade relations after China vowed on Tuesday to "fight to the end" in the renewed trade war.

When the U.S. launched its proxy war in Ukraine against Russia it thought that it could defeat Russia by economic means. A wall of sanctions and other restrictions were to destroy the Russian economy. But Russia was prepared and much stronger than the U.S. had anticipated. Its economy did better than those of the countries which opposed it.

A similar miscalculation seems to have happened with regards to China.

Trump is not knowledgeable about China's mighty economy. Vice-President Vance recently called China's highly qualified work force 'peasants'. Treasury Secretary Scott Bessent is likewise ignorant:

I advised Scott Bessent, now Trump's Secretary of the Treasury who is leading the tariff war, in 2013 when he was still with Soros. An investment bank engaged me to advise Bessent on China's economy and consumer trends and go over my book The End of Cheap China.

I took an instant disliking – Bessent was one of the most arrogant and ignorant on China people I had ever met. He was uber bearish on China and was largely ideologically driven in his analysis. Communist countries couldn't succeed was basically the jist of his views.

Data and rational analysis did not reign supreme.
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He thinks America has the upper hand with China right now. I worry for America. We have one of the most ignorant on China yet arrogant people I've ever met running a trade war against China.

Along with trouble in the stock and treasury markets we now can see trade between the U.S. and not only China but large parts of South Asia comes to a screeching halt:

Cont. reading: Some Fall-Out From The Tariff Wars

Steve Miran is the Chairman of President Trump's Council of Economic Advisors.

CEA Chairman Steve Miran Hudson Institute Event Remarks – The White House, Apr 7 2025

Today I’d like to discuss the United States’ provision of what economists call “global public goods,” for the entire world. First, the United States provides a security umbrella which has created the greatest era of peace mankind has ever known. Second, the U.S. provides the dollar and Treasury securities, reserve assets which make possible the global trading and financial system which has supported the greatest era of prosperity mankind has ever known.
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Let me clarify that by “reserve currency,” I mean all the international functions of the dollar—private savings and trade included. I’ve often used the example that when private agents in two separate foreign countries trade with each other, it’s typically denominated in dollars because of America’s status as the reserve provider. That trade entails savings housed in dollar securities, often Treasurys. As a result of all this, Americans have been paying for peace and prosperity not just for themselves, but for non-Americans too.
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I’m an economist and not a military strategist, so I’ll dwell more on trade than on defense, but the two are deeply connected. To see how it works, imagine two foreign nations, say China and Brazil, trading with each other. Neither country has a currency that is trusted, liquid, and convertible, which makes trading with each other challenging. However, because they can transact in U.S. dollars backed by U.S. Treasuries, they are able to trade freely with each other and prosper. Such trade can only occur because of U.S. military might ensuring our financial stability and the credibility of our borrowing. Our military and financial dominance cannot be taken for granted; and the Trump Administration is determined to preserve them.

From an economic standpoint the theory Miran describes is bonkers. "Savings housed in dollar securities, often Treasurys" are not U.S. savings as he implies. They are money the U.S. has borrowed, i.e. the savings of foreigners.

His example of the U.S. dollar enabling trade between Brazil and China is just as wrong as his treasuries theory:

Brazil, China ditch US dollar for trade payments, favour yuan – News.au, Mar 31 2023

Brazil has just cut a deal with China to ditch the US dollar when paying each other for trade goods. It’s the latest victory in Beijing’s long-term drive to stomp on the greenback and establish the yuan as the dominant international currency.

The deal, announced Thursday, has revived concerns about the US dollar’s future.

Brazil and China will directly exchange payments without first converting their currencies to a trusted third-party economy.

That’s the traditional role of the greenback.

These ain't just small numbers:

According to Chinese customs statistics, the bilateral trade volume between China and Brazil in 2023 was US$181.53 billion, a year-on-year increase of 6.1 percent. Of this, China’s exports to Brazil amounted to US$59.11 billion, a year-on-year decrease of 4.3 percent, while imports from Brazil totaled US$122.42 billion, a year-on-year increase of 11.9 percent.

Brazil is not alone in doing this. Several other big countries, Russia, Saudi Arabia, Iran etc., have dropped U.S. Dollar intermediation in trade with China.

The Trump administration is aware of the problem:

Elon Musk @elonmusk – 22:51 UTC · Mar 29, 2023

Serious issue. US policy has been too heavy-handed, making countries want to ditch the dollar.

Combined with excess government spending, which forces other countries to absorb a significant part of our inflation

Steve Miran says the U.S. military ensures the "financial stability and the credibility" of U.S. borrowing. It does so only in that it destroys small countries which are trying to turn away from trading in dollars. Iraq and Libya are prime examples of this. 

Brazil and China are too big to extort them. The consequences of Trump's tariff mania will show that again.

unusual_whales @unusual_whales – 9:37 UTC · Apr 7, 2025

Trump: We're on track to fully eliminate capital gains tax in 2025

I see two ways to do that. Congress could make a law that would eliminate capital gain taxes. It will also have to find money to replace the new hole in federal income. Alternatives are to raise other taxes, to borrow more or to cut defense spending and/or social social security.

There is luckily a different way to eliminate capital gain taxes. Just make sure that no capital gain is made.

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Looks like Trump is trying his best to achieve that:

But there are also other possibilities. In terms of short-term, high intensity crises these are the ones to look out for. I am NOT saying these are likely. But they are there and here are some of the signs to look out for:

Rather than investors piling into Treasuries driving the price up, instead, we could see investors selling Treasuries en masse. There are two possible scenarios, one is more fin-fi than the other.

One very real scenario, which played out in March 2020 (Shutdown), is that investors around the world are desperate to get hold of liquid dollars.
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At this point we would expect to see the Fed step in, not just to lower interest rates, as is now commonly expected, but do more drastic interventions.
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But let us indulge the fin-fi impulse for a moment. What if providing liquidity does not cool the panic? What if investors, both American and foreign decide, that they no longer wish to hitch their wagon to the empire of the mad king? What if they decide that the US is indeed exceptional, but that it is exceptional in rather nasty ways? […] Well in that case, holding billions in dollars newly created by the Fed does not give you the security you want.

So you sell the dollars. You just want out of the mad house.

This, Ladies and Gentleman, would be the truly big disaster. It would be a sell out not just of US stocks. Not just of US fixed income. But of dollar assets tout court. This would be the long heralded crisis of the dollar.

The chance for the last to happen is still low. But there is a nonzero chance that it could happen.

It would eliminate capital gain taxes – by pushing gains to zero.

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