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Chalk this one up to the bond vigilantes.

This is the term used periodically to describe investors who push back against what are perceived to be irresponsible fiscal or monetary policies by selling government bonds, in the process pushing up yields, or implied borrowing costs.

Most of the focus on markets in the wake of Donald Trump’s imposition of tariffs on the rest of the world has, in the last week, been about the calamitous stock market reaction.

This was previously something that was assumed to have been taken seriously by Mr Trump.

During his first term in the White House, the president took the strength of US equities – in particular the S&P 500 – as being a barometer of the success, or otherwise, of his administration.

U.S. President Donald Trump speaks, as he signs executive orders and proclamations in the Oval Office at the White House in Washington, D.C., U.S., April 9, 2025. REUTERS/Nathan Howard
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Donald Trump in the Oval Office today. Pic: Reuters

He had, over the last week, brushed off the sour equity market reaction to his tariffs as being akin to “medicine” that had to be taken to rectify what he perceived as harmful trade imbalances around the world.

But, as ever, it is the bond markets that have forced Mr Trump to blink – and, make no mistake, blink is what he has done.

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To begin with, following the imposition of his tariffs – which were justified by some cockamamie mathematics and a spurious equation complete with Greek characters – bond prices rose as equities sold off.

That was not unusual: big sell-offs in equities, such as those seen in 1987 and in 2008, tend to be accompanied by rallies in bonds.

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What it’s like on the New York stock exchange floor

However, this week has seen something altogether different, with equities continuing to crater and US government bonds following suit.

At the beginning of the week yields on 10-year US Treasury bonds, traditionally seen as the safest of safe haven investments, were at 4.00%.

By early yesterday, they had risen to 4.51%, a huge jump by the standards of most investors. This is important.

The 10-year yield helps determine the interest rate on a whole clutch of financial products important to ordinary Americans, including mortgages, car loans and credit card borrowing.

By pushing up the yield on such a security, the bond investors were doing their stuff. It is not over-egging things to say that this was something akin to what Liz Truss and Kwasi Kwarteng experienced when the latter unveiled his mini-budget in October 2022.

And, as with the aftermath to that event, the violent reaction in bonds was caused by forced selling.

Sky graphic showing the US 30-year treasury yield

Now part of the selling appears to have been down to investors concluding, probably rightly, that Mr Trump’s tariffs would inject a big dose of inflation into the US economy – and inflation is the enemy of all bond investors.

Part of it appears to be due to the fact the US Treasury had on Tuesday suffered the weakest demand in nearly 18 months for $58bn worth of three-year bonds that it was trying to sell.

But in this particular case, the selling appears to have been primarily due to investors, chiefly hedge funds, unwinding what are known as ‘basis trades’ – in simple terms a strategy used to profit from the difference between a bond priced at, say, $100 and a futures contract for that same bond priced at, say, $105.

In ordinary circumstances, a hedge fund might buy the bond at $100 and sell the futures contract at $105 and make a profit when the two prices converge, in what is normally a relatively risk-free trade.

So risk-free, in fact, that hedge funds will ‘leverage’ – or borrow heavily – themselves to maximise potential returns.

The sudden and violent fall in US Treasuries this week reflected the fact that hedge funds were having to close those trades by selling Treasuries.

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What a global recession would mean
Is there method to the madness?

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Trump freezes tariffs at 10% – except China

Confronted by a potential hike in borrowing costs for millions of American homeowners, consumers and businesses, the White House has decided to rein back its tariffs, rightly so.

It was immediately rewarded by a spectacular rally in equity markets – the Nasdaq enjoyed its second-best-ever day, and its best since 2001, while the S&P 500 enjoyed its third-best session since World War Two – and by a rally in US Treasuries.

The influential Wall Street investment bank Goldman Sachs immediately trimmed its forecast of the probability of a US recession this year from 65% to 45%.

Sky graphic showing the Nasdaq composite across the past fortnight

Of course, Mr Trump will not admit he has blinked, claiming last night some investors had got “a little bit yippy, a little bit afraid”.

And it is perfectly possible that markets face more volatile days ahead: the spectre of Mr Trump’s tariffs being reinstated 90 days from now still looms and a full-blown trade war between the US and China is now raging.

But Mr Trump has blinked. The bond vigilantes have brought him to heel. This president, who by his aggressive use of emergency executive powers had appeared to be more powerful than any of his predecessors, will never seem quite so powerful again.

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Trump’s 28-point Ukraine peace plan in full

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Trump's 28-point Ukraine peace plan in full

Donald Trump’s plan for ending the war in Ukraine would hand swathes of land to Russia and limit the size of Kyiv’s military, a draft has revealed.

The copy of the proposal that originates from negotiations between Washington and Moscow was obtained by the Associated Press and appears emphatically favourable to Russia.

It closely resembles the list of demands repeatedly stated by the Kremlin since it launched its full-scale invasion of Ukraine nearly four years ago.

Points included in the plan are widely seen as untenable for Ukrainian President Volodymyr Zelenskyy, who has rejected Mr Trump‘s previous calls for territorial concessions.

Ukraine war latest – Zelenskyy responds to Trump peace plan

Ukraine's President Volodymyr Zelenskyy. Pic: Reuters
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Ukraine’s President Volodymyr Zelenskyy. Pic: Reuters

The draft was reportedly devised by Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev.

It says there would be a “decisive coordinated military response” in the event of further Russian incursions onto Ukrainian territory, but does not say what role the United States would play in that response.

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A side agreement aims to satisfy Ukrainian security concerns by saying a future “significant, deliberate and sustained armed attack” by Russia would be viewed as “threatening the peace and security of the transatlantic community”.

The agreement – detailed to the AP by an unnamed senior US official – does not obligate the US or European allies to intervene on Ukraine’s behalf, although it says they would “determine the measures necessary to restore security”.

The 28-point plan states Ukraine must cede the entirety of Crimea, Luhansk and Donetsk to Russia – despite Ukraine still controlling a third of the latter. Kherson and Zaporizhzhia would be frozen along the existing lines of conflict.

Ukraine’s army, currently at roughly 880,000 troops, would be reduced to 600,000.

A serviceman of the 93rd Kholodnyi Yar Separate Mechanised Brigade of the Ukrainian Armed Forces. Pic: Reuters
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A serviceman of the 93rd Kholodnyi Yar Separate Mechanised Brigade of the Ukrainian Armed Forces. Pic: Reuters

Some frozen Russian assets would go toward rebuilding Ukraine, while sanctions on Russia would be lifted and Moscow and Washington would enter in a series of “long-term” economic arrangements.

The document says Ukraine would not be allowed to join NATO, but would be eligible to join the European Union.

It also says elections must be held in Ukraine in 100 days.

Here is the 28-point draft agreement in full:

1. Ukraine’s sovereignty will be confirmed.

2. A comprehensive non-aggression agreement will be concluded between Russia, Ukraine and Europe. All ambiguities of the last 30 years will be considered settled.

3. It is expected that Russia will not invade neighbouring countries and NATO will not expand further.

4. A dialogue will be held between Russia and NATO, mediated by the United States, to resolve all security issues and create conditions for de-escalation in order to ensure global security and increase opportunities for cooperation and future economic development.

(l-r)Kremlin official Kirill Dmitriev and US special envoy Steve Witkoff in St Petersburg in April. Pic: Kremlin Pool Photo/AP
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(l-r)Kremlin official Kirill Dmitriev and US special envoy Steve Witkoff in St Petersburg in April. Pic: Kremlin Pool Photo/AP

5. Ukraine will receive reliable security guarantees.

6. The size of the Ukrainian Armed Forces will be limited to 600,000 personnel.

7. Ukraine agrees to enshrine in its constitution that it will not join NATO, and NATO agrees to include in its statutes a provision that Ukraine will not be admitted in the future.

8. NATO agrees not to station troops in Ukraine.

9. European fighter jets will be stationed in Poland.

10. The US guarantee:

– The US will receive compensation for the guarantee;

– If Ukraine invades Russia, it will lose the guarantee;

– If Russia invades Ukraine, in addition to a decisive coordinated military response, all global sanctions will be reinstated, recognition of the new territory and all other benefits of this deal will be revoked;

Ukraine and Europe cannot reject Trump’s plan – they will play for time


Dominic Waghorn

Dominic Waghorn

International affairs editor

@DominicWaghorn

“Terrible”, “weird”, “peculiar” and “baffling” – some of the adjectives being levelled by observers at the Donald Trump administration’s peace plan for Ukraine.

The 28-point proposal was cooked up between Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev without European and Ukrainian involvement.

It effectively dresses up Russian demands as a peace proposal. Demands first made by Russia at the high watermark of its invasion in 2022, before defeats forced it to retreat from much of Ukraine.

Its proposals are non-starters for Ukrainians.

It would hand over the rest of Donbas, territory they have spent almost four years and lost tens of thousands of men defending.

Analysts estimate at the current rate of advance, it would take Russia four more years to take the land it is proposing simply to give them instead.

It proposes more than halving the size of the Ukrainian military and depriving them of some of their most effective long-range weapons.

And it would bar any foreign forces acting as peacekeepers in Ukraine after any peace deal is done.

The plan comes at an excruciating time for the Ukrainians.

They are being pounded with devastating drone attacks, killing dozens in the last few nights alone.

They are on the verge of losing a key stronghold city, Pokrovsk.

And Volodymyr Zelenskyy is embroiled in the gravest political crisis since the war began, with key officials facing damaging corruption allegations.

The suspicion is Mr Witkoff and Mr Dmitriev conspired together to choose this moment to put even more pressure on the Ukrainian president.

Perversely, though, it may help him.

There has been universal condemnation and outrage in Kyiv at the Witkoff-Dmitriev plan. Rivals have little choice but to rally around the wartime Ukrainian leader as he faces such unreasonable demands.

The genesis of this plan is unclear.

Was it born from Donald Trump’s overinflated belief in his peacemaking abilities? His overrated Gaza ceasefire plan attracted lavish praise from world leaders, but now seems mired in deepening difficulty.

The fear is Mr Trump’s team are finding ways to allow him to walk away from this conflict altogether, blaming Ukrainian intransigence for the failure of his diplomacy.

Mr Trump has already ended financial support for Ukraine, acting as an arms dealer instead, selling weapons to Europe to pass on to the invaded democracy.

If he were to take away military intelligence support too, Ukraine would be blind to the kind of attacks that in recent days have killed scores of civilians.

Europe and Ukraine cannot reject the plan entirely and risk alienating Mr Trump.

They will play for time and hope against all the evidence he can still be persuaded to desert the Kremlin and put pressure on Vladimir Putin to end the war, rather than force Ukraine to surrender instead.

– If Ukraine launches a missile at Moscow or St Petersburg without cause, the security guarantee will be deemed invalid.

11. Ukraine is eligible for EU membership and will receive short-term preferential access to the European market while this issue is being considered.

12. A powerful global package of measures to rebuild Ukraine, including but not limited to:

– The creation of a Ukraine Development Fund to invest in fast-growing industries, including technology, data centres, and artificial intelligence.

– The United States will cooperate with Ukraine to jointly rebuild, develop, modernise, and operate Ukraine’s gas infrastructure, including pipelines and storage facilities.

– Joint efforts to rehabilitate war-affected areas for the restoration, reconstruction and modernisation of cities and residential areas.

– Infrastructure development.

– Extraction of minerals and natural resources.

– The World Bank will develop a special financing package to accelerate these efforts.

13. Russia will be reintegrated into the global economy:

– The lifting of sanctions will be discussed and agreed upon in stages and on a case-by-case basis.

– The United States will enter into a long-term economic cooperation agreement for mutual development in the areas of energy, natural resources, infrastructure, artificial intelligence, data centres, rare earth metal extraction projects in the Arctic, and other mutually beneficial corporate opportunities.

– Russia will be invited to rejoin the G8.

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Ukraine: US ‘has the power’ to make Russia ‘serious’

14. Frozen funds will be used as follows:

– $100bn (£76bn) in frozen Russian assets will be invested in US-led efforts to rebuild and invest in Ukraine;

– The US will receive 50% of the profits from this venture. Europe will add $100bn (£76bn) to increase the amount of investment available for Ukraine’s reconstruction. Frozen European funds will be unfrozen. The remainder of the frozen Russian funds will be invested in a separate US-Russian investment vehicle that will implement joint projects in specific areas. This fund will be aimed at strengthening relations and increasing common interests to create a strong incentive not to return to conflict.

15. A joint American-Russian working group on security issues will be established to promote and ensure compliance with all provisions of this agreement.

16. Russia will enshrine in law its policy of non-aggression towards Europe and Ukraine.

17. The United States and Russia will agree to extend the validity of treaties on the non-proliferation and control of nuclear weapons, including the START I Treaty.

18. Ukraine agrees to be a non-nuclear state in accordance with the Treaty on the Non-Proliferation of Nuclear Weapons.

Zaporizhzhia Nuclear Power Plant. Pic: Reuters
Image:
Zaporizhzhia Nuclear Power Plant. Pic: Reuters

19. The Zaporizhzhia Nuclear Power Plant will be launched under the supervision of the IAEA, and the electricity produced will be distributed equally between Russia and Ukraine – 50:50.

20. Both countries undertake to implement educational programmes in schools and society aimed at promoting understanding and tolerance of different cultures and eliminating racism and prejudice:

– Ukraine will adopt EU rules on religious tolerance and the protection of linguistic minorities.

– Both countries will agree to abolish all discriminatory measures and guarantee the rights of Ukrainian and Russian media and education.

– All Nazi ideology and activities must be rejected and prohibited.

The Donbas
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The Donbas

Zaporizhia
Image:
Zaporizhia

21. Territories:

– Crimea, Luhansk and Donetsk will be recognised as de facto Russian, including by the United States.

– Kherson and Zaporizhzhia will be frozen along the line of contact, which will mean de facto recognition along the line of contact.

– Russia will relinquish other agreed territories it controls outside the five regions.

Read more
Analysis: Why Zelenskyy has to tread carefully over peace plan, or face a Trump ultimatum
Analysis: What deleted post reveals about ‘secret’ plan to end Ukraine war

– Ukrainian forces will withdraw from the part of Donetsk Oblast that they currently control, and this withdrawal zone will be considered a neutral demilitarised buffer zone, internationally recognised as territory belonging to the Russian Federation. Russian forces will not enter this demilitarised zone.

22. After agreeing on future territorial arrangements, both the Russian Federation and Ukraine undertake not to change these arrangements by force. Any security guarantees will not apply in the event of a breach of this commitment.

The east of Ukraine
Image:
The east of Ukraine

23. Russia will not prevent Ukraine from using the Dnieper [Dnipro] River for commercial activities, and agreements will be reached on the free transport of grain across the Black Sea.

24. A humanitarian committee will be established to resolve outstanding issues:

– All remaining prisoners and bodies will be exchanged on an ‘all for all’ basis.

– All civilian detainees and hostages will be returned, including children.

– A family reunification program will be implemented.

– Measures will be taken to alleviate the suffering of the victims of the conflict.

25. Ukraine will hold elections in 100 days.

26. All parties involved in this conflict will receive full amnesty for their actions during the war and agree not to make any claims or consider any complaints in the future.

27. This agreement will be legally binding. Its implementation will be monitored and guaranteed by the Peace Council, headed by President Donald J Trump. Sanctions will be imposed for violations.

28. Once all parties agree to this memorandum, the ceasefire will take effect immediately after both sides retreat to agreed points to begin implementation of the agreement.

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Ukraine and Europe cannot reject Trump’s plan – they will play for time and hope he can still be persuaded to desert the Kremlin

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Ukraine and Europe cannot reject Trump's plan - they will play for time and hope he can still be persuaded to desert the Kremlin

“Terrible”, “weird”, “peculiar” and “baffling” – some of the adjectives being levelled by observers at the Donald Trump administration’s peace plan for Ukraine.

The 28-point proposal was cooked up between Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev without European and Ukrainian involvement.

It effectively dresses up Russian demands as a peace proposal. Demands first made by Russia at the high watermark of its invasion in 2022, before defeats forced it to retreat from much of Ukraine.

Ukraine war latest: Kyiv receives US peace plan

(l-r) Kirill Dmitriev and special envoy Steve Witkoff in St Petersburg in April 2025. Pic: Kremlin Pool Photo/AP
Image:
(l-r) Kirill Dmitriev and special envoy Steve Witkoff in St Petersburg in April 2025. Pic: Kremlin Pool Photo/AP

Its proposals are non-starters for Ukrainians.

It would hand over the rest of Donbas, territory they have spent almost four years and lost tens of thousands of men defending.

Analysts estimate at the current rate of advance, it would take Russia four more years to take the land it is proposing simply to give them instead.

It proposes more than halving the size of the Ukrainian military and depriving them of some of their most effective long-range weapons.

And it would bar any foreign forces acting as peacekeepers in Ukraine after any peace deal is done.

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Is Moscow back in Washington’s good books?

The plan comes at an excruciating time for the Ukrainians.

They are being pounded with devastating drone attacks, killing dozens in the last few nights alone.

They are on the verge of losing a key stronghold city, Pokrovsk.

And Volodymyr Zelenskyy is embroiled in the gravest political crisis since the war began, with key officials facing damaging corruption allegations.

Read more from Sky News:
Witkoff’s ‘secret’ plan to end war
Navy could react to laser incident

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Ukrainian support for peace plan ‘very much in doubt’

The suspicion is Mr Witkoff and Mr Dmitriev conspired together to choose this moment to put even more pressure on the Ukrainian president.

Perversely, though, it may help him.

There has been universal condemnation and outrage in Kyiv at the Witkoff-Dmitriev plan. Rivals have little choice but to rally around the wartime Ukrainian leader as he faces such unreasonable demands.

The genesis of this plan is unclear.

Was it born from Donald Trump’s overinflated belief in his peacemaking abilities? His overrated Gaza ceasefire plan attracted lavish praise from world leaders, but now seems mired in deepening difficulty.

The fear is Mr Trump’s team are finding ways to allow him to walk away from this conflict altogether, blaming Ukrainian intransigence for the failure of his diplomacy.

Mr Trump has already ended financial support for Ukraine, acting as an arms dealer instead, selling weapons to Europe to pass on to the invaded democracy.

If he were to take away military intelligence support too, Ukraine would be blind to the kind of attacks that in recent days have killed scores of civilians.

Europe and Ukraine cannot reject the plan entirely and risk alienating Mr Trump.

They will play for time and hope against all the evidence he can still be persuaded to desert the Kremlin and put pressure on Vladimir Putin to end the war, rather than force Ukraine to surrender instead.

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South Africa is making history with its first G20 summit, but the continued exclusion of its oldest communities is a symbolic threat

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South Africa is making history with its first G20 summit, but the continued exclusion of its oldest communities is a symbolic threat

This is the first time the G20 summit is being hosted on African soil.

Heads of state from 15 countries across Europe, Asia and South America are expected to convene in South Africa’s economic capital, Johannesburg, under the banner of “solidarity, equality and sustainability.”

The summit is facing challenges from the Oval Office as US President Donald Trump boycotts the event, where the G20 leadership is meant to be handed over to him by South African President Cyril Ramaphosa.

The US has also warned South Africa against issuing a joint declaration at the end of the summit. The challenges to South Africa’s G20 debut are also domestic.

Trump had a contentious meeting with Cyril Ramaphosa in the Oval Office earlier this year. File pic: AP
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Trump had a contentious meeting with Cyril Ramaphosa in the Oval Office earlier this year. File pic: AP

Nationwide civic disobedience has been planned by women’s rights charities, nationalist groups and trade unions – all using this moment to draw the government’s attention to critical issues it has failed to address around femicide, immigration and high unemployment.

But a key symbolic threat to the credibility of an African G20 summit themed around inclusivity is the continued exclusion and marginalisation of its oldest communities.

“There is a disingenuous thread that runs right through many of these gatherings, and the G20 is no different”, Khoisan Chief Zenzile tells us in front of the First Nations Heritage Centre in Cape Town, “from any of them”.

More on G20

“I am very concerned that the many marginalised sections of society – youth, indigenous people, are not inside the front and centre of this agenda,” he added.

Khoisan Chief Zenzile says land developments on indigenous land are the 'most ridiculous notion'
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Khoisan Chief Zenzile says land developments on indigenous land are the ‘most ridiculous notion’

As we speak, the sounds of construction echo around us. We are standing in a curated indigenous garden as South Africa’s Amazon headquarters is being built nearby.

After years of being sidelined by the government in a deal that centres around construction on sacred Khoisan land, Chief Zenzile said he negotiated directly with the developers to build the heritage centre and sanctuary as a trade-off while retaining permanent ownership of the land.

“There are many people who like to fetishise indigenous people who want to relegate us to an anthropoid state, as if that is the only place we can, as if we don’t have the tools to navigate the modern world,” he says when I ask about modern buildings towering over the sacred land.

“That is the most ridiculous notion – that the entire world must progress and we must be relegated to a state over which we have no agency.”

An hour and a half from Cape Town’s centre, Khoi-San communities have seized 2,000 hectares of land that they say historically belongs to them.

Knoflokskraal is a state where they exercise full agency – filling in the infrastructural gaps around water and electricity supply that the provincial government will not offer to residents it categorises as “squatters”.

“We are – exactly today – here for five years now,” Dawid De Wee, president of the Khoi Aboriginal Party, tells us as he gives us a tour of the settlement. “There are more or less around 4,000 of us.

“The calling from our ancestral graves sent us down here, so we had an urge to get our own identity and get back to our roots, and that was the driving motive behind everything we are here now to take back our ancestral grounds.”

'We are here now to take back our ancestral grounds,' Dawid De Wee says
Image:
‘We are here now to take back our ancestral grounds,’ Dawid De Wee says

Dawid says they have plans to expand to reclaim more swathes of land stolen from them by European settlers in the 1600s across the Cape Colony.

Land reform is a contentious issue in post-Apartheid South Africa, with a white minority still owning a majority of the land.

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Indigenous land is even further down the agenda of reparations, and South Africa’s oldest communities continue to suffer from historic dispossession and marginalisation.

For many Khoi-San leaders, G20 represents the ongoing exclusion from a modern South African state.

They have not been invited to officially participate in events where “solidarity, equality and sustainability,” are being discussed without reference to their age-old knowledge.

Instead, we meet Khoi-San Queen Eloise at a gathering of tribal leaders from around the world on the most southwestern tip of Africa in Cape Point called the World Tribal Alliance.

Khoi-San Queen Eloise tells Sky that the G20 'is a politically-based gathering'
Image:
Khoi-San Queen Eloise tells Sky that the G20 ‘is a politically-based gathering’

“In order for us to heal, Mother Nature and Mother Earth is calling us, calling our kinship, to come together – especially as indigenous people because with indigenous people we are still connected to our lands, to our intellectual property we are connected to who we are,” Queen Eloise tells us.

“G20 is a politically-based gathering – they are coming together to determine the future of people politically.

“The difference is that we will seek what Mother Earth wants from us and not what we want to do with technology or all those things politically, but the depth of where we are supposed to go.”

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