Winder, Georgia, USA. Thanks for stopping by!
So, we rise from the rubble...
Thursday, February 17, 2022
"The Bamboozle..."
"One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back. "
- Carl Sagan
"The Color of Money"
"The Color of Money"
by Bill Bonner
Youghal, Ireland - "Good ol’ Charlie Munger. Yesterday, the 98-year-old gave his opinion on the biggest danger facing US democracy. Yahoo Finance was on the case: "Citing examples from the Roman Republic to Adolf Hitler to Latin America, Munger said, “Inflation is a very serious subject, you could argue it is the way democracies die.” He notes that it was after years of inflation when “eventually the whole damn Roman Empire collapsed, so [the current situation] is the biggest long-range danger we have, apart from nuclear war.”
When the money goes, everything goes. Consensual democracy goes along with them. And our hunch, this morning, is that the feds will lead the way.
Yesterday, we saw that NFL teams seem to discriminate in a peculiar way – against Black coaches… but in favor of Black players. We guessed that – if you want to win the SuperBowl – you might want to hire someone who can keep crossing the goal line, rather than hiring a guy just because he is White. Or Black.
Terror… Bailout… Panic… This thought took us to the next one – that we are generally better off keeping our eyes on the ball… than by pursuing goals set up for us by the intellectual elite. “Public intellectuals should be regarded as charlatans,” says Nassim Taleb.
We’ve already seen that the three biggest initiatives that the intellectuals came up with so far this century – the War on Terror, the Wall Street bailout, and the Covid Panic – were all driven by corruption and riven by incompetence. All were failures. The War on Terrorism achieved nothing. The Wall Street bailout made the economy weaker, not stronger… and buried the whole nation under $44 trillion in additional debt. And the Covid virus romped across the nation regardless of the feds’ shutdowns and mandates.
So… what about the latest broad policy goals? Save the planet from CO2? Put an end to racism? Make everyone equal? Those programs will cost money (Janet Yellen estimated the cost of eliminating carbon emissions at more than $100 trillion…) Will they pay off?
And what about you, Dear Reader? Should you do your part by investing only in ESG (environmental, social, governance) companies? Is that how real progress is made? By conscious intention? By activists… do-gooders… and world improvers? Or, are efforts to rinse out the stain of slavery… to control the world’s temperature… and to make us all the same… doomed to fail? Do they even make the situation worse for the people they claim to help?
One of the narratives favored by the government elite is that the US is a ‘racist country,’ always has been… and without concerted effort by the great and the good… always will be. This message itself may do good… or harm. While it gives the old, rich, White investor an easy way to feel good about himself – simply invest in ESG companies – it signals to the young, poor, Black person that his problems are not of his own doing. Therefore, he might conclude, there is nothing he can do to improve things for himself. No point in studying late at night, working hard or saving his money; he can’t win.
Where Togo? We had a roof repaired in Baltimore recently. We were surprised when the crew arrived to do the job. They were a group of jolly, French speaking immigrants from Togo. What were they doing here? Didn’t they know how horribly America treats its ‘people of color?’ They didn’t seem worried about it. It was the color of money that interested them. And the people of color keep coming.
Deseret news has the report: “Following the relaxation of U.S. immigration policy in the 1960s away from racial preference, Black immigration to America in particular climbed sharply. According to the Population Reference Bureau, the foreign-born Black population in America increased seven-fold in the next two decades. Between 1980 and 2005 it tripled again. By 2013, Pew Research Center reported that Black immigration had more than quadrupled since 1980.
The latest studies now place the Black immigrant population around 4.6 million by 2019, nearly double the community’s size in 2000. The figures are even larger for Latin American immigration. In 2018, an estimated 44.8 million immigrants were living in the United States with more than half coming from Mexico or Latin America, according to a Pew Research Center report.
Many of the Black immigrants come from Caribbean countries such as Haiti or from Africa itself. The average wage in Haiti is about $800 per year. In Sub-Saharan Africa the average wage is only $315, according to Forbes."
Native-born Black Americans might know how the deck is stacked against them. There’s a White intellectual on every street corner to tell them so. But the poor foreigners don’t know what they’re getting into.
Steeped in white supremacy, hatred, and racism… it is amazing that America lets them enter in the first place. Or that they should wish to go there at all. And then, the new arrival, with almost no money… and barely speaking English… goes to a city like Baltimore, where – because of systemic racism – four out of ten young Black men are unemployed… he draws his cards… and the next thing you know, he’s repairing a roof!
Business Insider: "The researchers write that Black immigrants tend to earn more than US-born Black households, the former's median income being $57,200 while the latter's is $42,000. Black immigrants, however, still lag behind other immigrant racial groups, the pooled median being $63,000 for all households."
Huh? What gives? How come American whites discriminate so effectively against native born blacks, but not so much against foreign born blacks? How come they block the Black coaches but not the Black players?
And what about Asians? They’re ‘people of color,’ too. Yet, while White household income is reported at $72,000 per year, Asian household income is $98,000. Where’s the ‘white privilege?’ Where’s the ‘equality?’ Almost every pulpit, newspaper and microphone has sent forth the warning: America is a racist country. If so, the racists do a sloppy job of it."
"Dominant Superpowers Don’t Accumulate $30 Trillion In Debt"
Full screen recommended.
"US Debt of $30 Trillion Visualized in Stacks of Physical Cash"
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"Dominant Superpowers Don’t Accumulate $30 Trillion In Debt"
by Simon Black
"The year 238 AD began with Maximinus I as Emperor of Rome – a former peasant who had worked his way up through the ranks of the military before being chosen as Emperor by his troops. By August of that year, Maximinus was dead, and five other men had briefly held the title of Emperor. Only one (Gordian III) was still alive by the end of 238 AD. This is known in Roman history as the ‘Year of the Six Emperors’, and it was an obvious watershed moment in the decline of the empire.
It’s not like Rome hadn’t seen plenty of turmoil before – There had been full-blown civil war between Julius Caesar and Pompey the Great nearly three centuries prior in 49 BC. Caligula managed to engineer a major supply chain crisis during his reign in the early 1st century AD. Much of the city of Rome burned to the ground under Emperor Nero in 64 AD. Caracalla heavily debased the currency and caused widespread inflation in the early 200s. And more than a dozen emperors had been assassinated up to that point in Roman history.
People were used to crisis and chaos. But the Year of the Six Emperors felt different. It was as if Romans suddenly realized they were no longer the dominant superpower. The next few decades, in fact, are known as the “Crisis of the Third Century”, with more than two dozen emperors seizing the throne in a power struggle, murdering their political enemies, and then being assassinated themselves. Some emperors, like Silbannacus, Quintillus, and Saloninus, literally sat on the throne for a matter of days before being killed.
The government was extremely unstable, and notoriously corrupt. They rigged elections. They sent Praetorian guards to harass and intimidate their opponents. And they sewed social conflict so that Romans turned on one another.
In the meantime, the Roman economy was collapsing. Inflation became so rampant that Diocletian infamously had to implement extreme price controls, and then threaten to kill anyone who didn’t follow them. They also lost control of their borders, as countless barbarian tribes poured into the empire and squatted on Roman lands.
The barbarian migration eventually turned into full-blown invasions and military conflict, and the Roman military lost a number of major battles. In 251 AD, for example, Rome suffered a crushing defeat by the invading Goths at the Battle of Abritus. The Goths decimated three Roman legions, killed the emperor, and stole TONS of gold.
Even the lowest peasant was able to figure it out: dominant superpowers don’t lose battles. They maintain secure borders. They have strong currencies. They don’t blow through six leaders in a single year. They aren’t in a constant state of social revolution. And they aren’t bankrupt.
We could easily apply the same logic today. And this is especially true after last week’s watershed moment in which the US national debt reached $30 trillion for the first time. It’s hardly controversial to assert that dominate superpowers don’t accumulate $30 trillion in debt (which, by the way, is 25% larger than the entire US economy). But it’s not just the debt. It’s so much more.
Dominant superpowers don’t surrender tens of billions of dollars of military equipment to their sworn enemy, and then fly away with local civilians clinging to the side of their aircraft.
Dominant superpowers don’t abandon their own citizens abroad.
Dominant superpowers don’t engineer historically high inflation… and then ignore it. Nor do they embrace socialism, i.e. the literal opposite of the capitalist economic system that created so much wealth and power to begin with.
Dominant superpowers don’t send their government agents to harass innocent citizens, or tell parents they have no say in the education of their children.
Dominant superpowers don’t suspend their Constitutions because of a virus. They don’t give people incentives to NOT work. They don’t constantly make it difficult for small businesses to succeed.
Dominant superpowers don’t deliberately reduce their military’s physical fitness standards in the name of diversity and inclusion. They don’t prioritize “equity” over national security. And they certainly don’t fire experienced intelligence operatives because of individual medical decisions.
Dominant superpowers don’t placate their adversaries and bow to their demands. They aren’t afraid to offend their rivals.
Dominant superpowers don’t create incentives for countless people to illegally cross the border and go live under a bridge.
And above all else, dominant superpowers are able to deal with challenges.
Yes, there’s always been conflict and disagreement. But dominant superpowers have stable, effective governments who can do what is necessary to solve problems. And they have societies whose people can coexist peacefully without being at each others’ throats all the time.
It might not be pleasant to think about, but these are all true statements about the United States. And like Rome, they are all obvious signs of decline. Simply put, the US is no longer the dominant superpower."
"The Mind Control Police: The Government’s War on Thought Crimes and Truth-Tellers" (Excerpt)
"The Mind Control Police: The Government’s
War on Thought Crimes and Truth-Tellers" (Excerpt)
by John W. Whitehead & Nisha Whitehead
“In a time of deceit telling the truth is a revolutionary act.”
- George Orwell
"The U.S. government, which speaks in a language of force, is afraid of its citizenry. What we are dealing with is a government so power-hungry, paranoid and afraid of losing its stranglehold on power that it is conspiring to wage war on anyone who dares to challenge its authority. All of us are in danger.
In recent years, the government has used the phrase “domestic terrorist” interchangeably with “anti-government,” “extremist” and “terrorist” to describe anyone who might fall somewhere on a very broad spectrum of viewpoints that could be considered “dangerous.” The ramifications are so far-reaching as to render almost every American an extremist in word, deed, thought or by association.
In the government’s latest assault on those who criticize the government - whether that criticism manifests itself in word, deed or thought - the Biden Administration has likened those who share “false or misleading narratives and conspiracy theories, and other forms of mis-dis-and mal-information” to terrorists.
The next part is the kicker. According to the Department of Homeland Security’s latest terrorism bulletin, “These threat actors seek to exacerbate societal friction to sow discord and undermine public trust in government institutions to encourage unrest, which could potentially inspire acts of violence.”
You see, the government doesn’t care if what you’re sharing is fact or fiction or something in between. What it cares about is whether what you’re sharing has the potential to make people think for themselves and, in the process, question the government’s propaganda. Get ready for the next phase of the government’s war on thought crimes and truth-tellers."
Please view this complete article here:
"America is Headed for the Worst Real Estate Crash Ever"
Full screen recommended.
Dan, iAllegedly, AM 2/17/22:
"America is Headed for the Worst Real Estate Crash Ever"
"All the warnings signs point to a major real estate crash. This will be the worst ever. We have prolonged low interest rates for so long and the Fed has no interest in raising them. The supply chain problem is catching up to the home builders. Plus, you can finance your next pizza."
"Free Download: Aldous Huxley, "Brave New World Revisited"
"At this point we find ourselves confronted by a very disquieting question: Do we really wish to act upon our knowledge? Does a majority of the population think it worthwhile to take a good deal of trouble, in order to halt and, if possible, reverse the current drift toward totalitarian control of everything? If the United States of America is the prophetic image of the rest of the urban-industrial world as it will be a few years from now - recent public opinion polls have revealed that an actual majority of young people in their teens, the voters of tomorrow, have no faith in democratic institutions, see no objection to the censorship of unpopular ideas, do not believe that government of the people by the people is possible and would be perfectly content, if they can continue to live in the style to which the boom has accustomed them, to be ruled, from above, by an oligarchy of assorted experts.
That so many of the well-fed young television-watchers in the world’s most powerful democracy should be so completely indifferent to the idea of self-government, so blankly uninterested in freedom of thought and the right to dissent, is distressing, but not too surprising. “Free as a bird,” we say, and envy the winged creatures for their power of unrestricted movement in all the three dimensions. But, alas, we forget the dodo. Any bird that has learned how to grub up a good living without being compelled to use its wings will soon renounce the privilege of flight and remain forever grounded. Something analogous is true of human beings. If the bread is supplied regularly and copiously three times a day, many of them will be perfectly content to live by bread alone - or at least by bread and circuses alone."
- Aldous Huxley, "Brave New World Revisited", 1958
Freely download "Brave New World Revisited" here:
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Hat tip to WILLIAMBANZAI7
"Prices Are Getting Ridiculous At Kroger! What Next ?!"
Full screen recommended.
Adventures with Danno, AM 2/17/22:
"Prices Are Getting Ridiculous At Kroger! What Next ?!"
"In today's vlog we visit Kroger and are noticing ridiculously high prices. Prices on groceries continue to rise, as we are also witnessing more empty shelves! It's getting rough out here as stores are struggling to get in products."
Gregory Mannarino, "The Economic Freefall Worsens- Be Ready For Anything"
Gregory Mannarino, AM 2/17/22:
"The Economic Freefall Worsens- Be Ready For Anything"
Wednesday, February 16, 2022
"The Cost Of Living In The United States Is Rising To Absolutely Absurd Levels"
"The Cost Of Living In The United States
Is Rising To Absolutely Absurd Levels"
by Michael Snyder
"Most of the time, the vast majority of Americans simply do not care about economics. And it pains me to say that, because I have been running a website about economics for more than a decade. But it is true. Under normal circumstances, most hard working Americans don’t have the time or the energy to debate the finer points of economic policy. But now things have changed. Here in 2022, our leaders have messed things up so badly that suddenly just about everyone is feeling the pain. Most people just want economic conditions to “return to normal”, but that isn’t going to be so easy.
Over the past couple of years, the Federal Reserve has pumped trillions of fresh dollars into the financial system. You just can’t “undo” that.
And our politicians in Washington have been on the biggest borrowing spree in all of human history. I think that many of them truly believed that there would never be any serious consequences, but as Forbes has aptly noted, we “are now paying a heavy price for this magical thinking”…
Unfortunately, Americans are now paying a heavy price for this magical thinking. Inflation—spurred at least in part by record government spending and inaction on other issues—is running at its highest rate since 1982. The prices for meat and eggs are up 12.2% since last year. Furniture and bedding is up 17% and used cars and trucks are up 40.5%. Meanwhile, the Treasury Department recently reported America’s total national debt is now over $30 trillion—the highest ever. To put this in context: If you stacked $30 trillion of $100 bills you could almost reach the weather satellites orbiting the earth at over 20,000 miles above us.
Today, we have absolutely gigantic mountains of money chasing a smaller pool of goods and services because of the pandemic. As a result, the cost of living has been soaring into the stratosphere. For example, one new study found that 82.2 percent of new vehicle buyers actually paid above sticker price during the month of January…"A study from the online marketplace found that 82.2% of new car buyers paid over the manufacturer’s suggested retail price (MSRP) in January, up from .3% in January 2020, before the coronavirus pandemic started affecting the industry The average price paid above sticker was $728, while savvy shoppers were getting a discount of $2,648 just two years ago. Cadillac’s customers led the way by paying a $4,048 premium, followed by Land Rover’s ($2,565) and Kia ‘s ($2,289)."
In my entire lifetime, I have never seen anything like this. Years ago, I remember spending hours hammering a salesman until I was totally satisfied that the dealership would not knock off a single penny more from the price of a used vehicle that I wanted. But now things have completely changed. Today, just about everyone is paying above MSRP.
Of course it is becoming more expensive to fuel our vehicles as well. On Wednesday, the average price of a gallon of gasoline in California hit a brand new record high… "Gas in California hit a record high of $4.72 a gallon on average on Wednesday — and experts say a whopping $5 a gallon will likely be the norm there in a matter of months, if not sooner."
Sadly, five dollar gas is only just the beginning. In fact, one expert that was interviewed by Yahoo Finance has actually raised the specter of seven dollar gas… "Drivers best start bracing for another surge in gas prices amid the conflict between Russia and Ukraine and years of under-investment by the oil industry, warns one veteran energy strategist. “My guess is that you are going to see $5 a gallon at any triple-digit [oil prices] … as soon as you get to $100. And you might get to $6.50 or $7. Forget about $150 a gallon, I don’t know where we will be by then,” Energy Word founder Dan Dicker said on Yahoo Finance Live."
Can you imagine paying seven dollars for a gallon of gasoline? That definitely seems crazy to me. But soon it will happen.
Housing prices continue to surge as well. In fact, we are being told that a recent spike in lumber prices has increased the average price of a new home by nearly $19,000… “If people aren’t listening now, the dire predictions that we’ve been making appear to be coming true,” National Association of Home Builders CEO Jerry Howard said on “Varney & Co.” Wednesday." Volatile lumber prices have caused the average price of a new single-family home to increase by $18,600, according to a new statistic from the NAHB.
Heating our homes is becoming a lot more painful too. According to the Heartland Institute, the average American family saw their heating and cooling costs jump “by as much as $1,000” last year… "A new analysis by the Heartland Institute reports the typical American family’s home heating and cooling costs increased by as much as $1,000 in 2021 as a result of President Joe Biden’s energy and environmental policies."
Needless to say, most Americans were not prepared for a dramatic shift in the cost of living such as this. At this point, 70 percent of Americans are living paycheck to paycheck.
So how are people making ends meet? Well, we just found out that credit card debt rose at the fastest pace ever seen during the fourth quarter of 2021… "Americans have been swiping their credit cards at record speed in the last few months, as rising inflation eats into the savings people accumulated during the pandemic.
The total US household debt hit $15.8 trillion in the fourth quarter of 2021, the New York Fed reported this week, seeing an increase of $333 billion from the previous quarter. Credit card balances alone hit $860 billion, up $52 billion in that same timeframe. That’s the largest quarterly increase the Fed has seen in the 22 years it’s been collecting data, the researchers say, adding that the surge in debt overall was driven by home and car purchases."
The middle class is being systematically destroyed, and it is happening right in front of our eyes. And the truth is that we can see evidence of this all around us. For example, just check out this footage that one man recently took of his neighborhood in Los Angeles.
My neighborhood in Los Angeles 2/14/22
People have just given up. pic.twitter.com/C0LA0jd2tn
— Colin Keating (@keating89_colin) February 14, 2022
Our major cities are becoming exactly what I warned they would become. Once upon a time, the U.S. had the largest and most prosperous middle class that the world had ever seen. But now that middle class is being absolutely eviscerated, and it is our own leaders that have done this to us.
With each passing day, more Americans are waking up and understanding what has happened, and anger is growing all over the nation. Most Americans had assumed that there would be endless prosperity for many decades to come, but now it is becoming clear that the years ahead are going to be very, very ugly."
"McDonalds Food Shrinks, Prices Skyrocket; Living Credit Card To Credit Card; Homebuilders In Danger"
Jeremiah Babe, 2/16/22:
"McDonalds Food Shrinks, Prices Skyrocket;
Living Credit Card To Credit Card; Homebuilders In Danger"
"5 New Numbers That Prove That America’s Horrifying Inflation Crisis Is Getting Even Worse"
Full screen recommended.
"5 New Numbers That Prove That America’s
Horrifying Inflation Crisis Is Getting Even Worse"
by Epic Economist
"Inflation is SOARING in the US! The inflation rate is now at 7.5% and many signs point that inflation is getting worse! That’s what we’re going to expose in today’s video. We’re sharing 5 numbers that show that why the horrifying inflation crisis is getting even worse!
The vast majority of the U.S. population has never seen inflation running this hot in their entire lives. Explosive consumer prices are bringing a lot of pain to everyday Americans, whose buying power has been on a steady decline. The producer price index just hit a new record high.
In essence, “PPI offers a window to the price pressures that businesses are facing, and which will likely be passed on to consumers in the way of consumer price inflation in the months to come,” PNC economist Kurt Rankin has explained. “Strong gains across the board for businesses reinforce the inflationary concerns that the Federal Reserve is set to battle this year with monetary policy, and which the economy, in general, has recently begun expressing caution and concern over”.
Meanwhile, the transportation crisis continues to aggravate! There’s a massive shortage of trailers adding much more pressure to our already-stressed supply chains. Since the final quarter of 2021, trailer manufacturing has contracted. Of course, the effects of this shortfall are already rippling through the economy and leading to much more expensive rates to move goods across the country. The Department of Labor’s index of the price of transportation of freight by truck rose 18.3 percent last month compared to a year ago. Rail freight prices have also jumped nine percent and air freight prices went up 10.8 percent
On a consumer level, the rise in transportation costs has been even more acute. Last week, the U.S. Bureau of Labor Statistics released new data showing that the price of used vehicles shoot up! The agency pointed out that the market is extremely bleak for buyers right now, and blamed the aggressive increase in prices on the ongoing global semiconductor shortage.
You may have noticed that prices at the pump have been shooting up recently. Between January 2021 and January 2022 gas prices rose from an average of $2.50 to $3.50 per gallon last Sunday, up nearly a dollar from last year's levels, according to AAA. Recent data also shows that transportation services - including buses, trains, airlines, and taxisare expected to continue rising throughout 2022 as gasoline prices soar all across the country.
Furthermore, if you’re thinking about remodeling or buying a newly-built home, you may have to think twice. The price of lumber has started to go up once again. The latest numbers released by the National Association of Home Builders suggest that the most recent price jump has added “more than $18,600 to the price of a newly built home.”
“With a historically low level of overall housing inventory and solid demand due to low mortgage interest rates and favorable demographics, new construction has been unable to add additional needed supply to the market, resulting in unsustainable gains for home prices,” stressed David Logan, director of tax and trade analysis at NAHB.
We are headed to national ruin, and those that are running our country are even more blind than those that they are supposed to be leading."
"Geoeconomics: The New Geopolitics"
by Jim Rickards
"Geopolitics play a major role in the outlook for global economies. But more importantly, today, we must look at the world through the prism of geoeconomics. What is “geoeconomics”? Obviously, it’s a portmanteau from the words geopolitics and economics. There’s nothing new about considering those disciplines in the same context.
Wars are geopolitical and are often won through industrial capacity, which is primarily economic. Economics and global strategy have always been entwined. What is new is the idea that economics are not just an adjunct of geopolitics, but are now the main event. This does not mean that warfare is over or that military prowess no longer matters... It means that the major powers in a globalized age will base their calculations on economic gain and loss, and will use economic weapons not as ancillaries, but as primary weapons.
This change was described at the beginning of the new age of globalization by strategic thinker Edward N. Luttwak in a 1990 article titled "From Geopolitics to Geo-Economics: Logic of Conflict, Grammar of Commerce." Luttwak wrote that the end of the Cold War and the start of globalization meant that armed conflict was too costly and uncertain for great powers. Economic interests would now be the arena for great power conflict.
Luttwak wrote, “Everyone, it appears, now agrees that the methods of commerce are displacing military methods – with disposable capital in lieu of firepower, civilian innovation in lieu of military-technical advance and market penetration in lieu of garrisons and bases.” Luttwak concluded, “While the methods of mercantilism could always be dominated by the methods of war, in the new ‘geoeconomic’ era not only the causes but also the instruments of conflict must be economic.”
To be clear, Luttwak’s analysis principally applied to great powers including the U.S., China, Russia, Japan, members of the EU and Commonwealth nations including Canada and Australia. Luttwak recognized that middle powers such as Israel, Iran, Iraq, Pakistan, North Korea and some others might still find warfare beneficial. He did not rule out the fact that great powers might intervene in wars involving these middle powers, such as the U.S. interventions in Iraq and Afghanistan, and Russia’s involvement in Ukraine. His point was not that war was obsolete, but only that it would not involve direct confrontation between great powers. Interventions and wars involving lesser states would still be on the table.
Geoeconomics – great power competition using economics as a goal and a weapon – is an excellent tool for analyzing the two critical hotspots in the world today. These are Russia’s role in Ukraine, and China’s threat to Taiwan.
While Americans are preoccupied with Capitol Hill games on the filibuster, voting rights, Build Back Better and other stories that are mostly for show, more serious thinkers are applying themselves to oil, natural gas, gold, the dollar, technology and other geoeconomic benchmarks. Let’s leave the Washington circus to others and focus on what really matters to investors. Let’s focus on geoeconomics. Read on."
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"The Geoeconomics of Modern Conflict"
By Jim Rickards
"The Western narrative that Putin is the bad guy bent on conquering Ukraine is false. Putin had warned the West about not pushing its advantage in Ukraine for over 20 years. While Putin was amenable to NATO expansion, he always drew the line at Lithuania, Ukraine and Georgia. In 2004, NATO crossed Russia’s red line by admitting Lithuania to membership, but there was little Putin could do to stop it.
The 2008 nomination of Ukraine to NATO was an unforced error. Putin had been content to leave Ukraine as a neutral buffer state. The West was not and pushed Putin too hard. Now Putin has pushed back. Why is Ukraine so important to Russia? A quick glance at a map shows that Ukraine in NATO or even a pro-Western Ukraine is an existential threat to Moscow. The line from Estonia in the north to Ukraine in the south forms the letter “C” that encircles Moscow from the north, west and south.
Parts of Ukraine actually lie east of Moscow, opening that region to attack from the west, something that has not happened since the Mongol Empire of Genghis Khan in the 13th century. If Ukraine will not become neutral, then Putin must control it, at least the eastern half, by force if necessary.
In the past six months, Russia has moved over 100,000 troops to its border with Ukraine. Additional troops are standing by to join this force. This is equivalent to more than 10 divisions, equal to a corps in the order of battle. These troops are not limited to infantry and include armor, artillery, special forces and air support. It is extremely costly to move and support that number of troops especially in winter. Putin is not doing this for show.
But conquering Ukraine is not Putin’s main goal. What he wants is a promise that Ukraine will not join NATO, no NATO troops will be stationed in the post-1995 NATO member states, neutrality in the Ukrainian government and full operation of the Nord Stream 2 natural gas pipeline from Russia to Germany under the Baltic Sea.
If Putin can get all or most of that through negotiations, there is no reason to invade Ukraine. The threat to do so will have served its purpose. This outcome would be a perfect illustration of Luttwak’s geoeconomics definition. The goals are commercial (dependence of Western Europe on Russian natural gas), and the tools are commercial (pipelines) even though the players are sovereign states (Russia and the U.S.).
The U.S. has announced that it will impose severe economic sanctions on Russia if it does invade. But these sanctions will have little impact on Russia. Sanctions have been imposed on Russia since the 2014 annexation of Crimea and have had no material impact on Russian behavior.
Russia has already moved over 20% of its reserves into physical gold bullion stored in Moscow. This gold is worth about $140 billion at current market prices. Because the gold is physical, not digital, it cannot be hacked, frozen or seized. Importantly, U.S. sanctions will not affect exports of Russian oil or natural gas. Russia provides about 10% of all the oil produced in the world. It’s simply impossible to sanction Russian oil sales.
That means it’s impossible to cut off Russia’s dollar supply because oil is sold for dollars on world markets. Any interference in Russian oil sales would cause global hyperinflation and global economic collapse at the same time. It won’t happen.
Meanwhile, the U.S. will not prevent Russian bank transactions on SWIFT, the international financial communications network based in Belgium. That would be regarded as an act of war by Russia, and would not be supported by European members of SWIFT.
The bottom line is Russia is trying to get what it wants by threatening an invasion, and therefore it will not be necessary to invade Ukraine. This includes pledges that Ukraine will not join NATO, and permission for a smooth opening of the Nord Stream 2 pipeline. Other issues will be the subject of ongoing negotiations, but none of them is as important as NATO and Nord Stream 2.
This means Russia’s stranglehold on Western European energy supplies will be tightened. Russia will be able to open or close the valves as she sees fit, and thereby ensure high energy prices for the foreseeable future. High prices will be compounded by the misguided and mindless climate alarm policies of the German government.
Russia and the U.S. will likely avoid direct armed conflict. But energy prices will go higher, which helps Russia. The losers will be Ukraine and global energy users. The biggest loser could be the United States, which may suffer higher inflation and a recession (stagflation), due to higher energy prices. This is all consistent with Luttwak’s definition of geoeconomics as the displacement of armed conflict by economic goals using economic weapons.
The second critical hotspot today is the potential for a Chinese invasion of Taiwan. Will it happen? The case against such a war is basically in the scenarios described above. Events would likely escalate and spin out of control, resulting in a large-scale conflict. Gains are possible for China, especially if the U.S. does not come to the aid of Taiwan. Still, the risks are too high, and the costs are too great. Instead of an invasion, China could continue its rhetoric and its military readiness, but otherwise bide its time.
This is where Luttwak’s definition of geoeconomics casts a new light. In a pre-globalized world, China might well attack. In the post-globalized world, China might refrain militarily while continuing its progress in technology, natural resources and value-added manufacturing. This path requires cooperation, not confrontation, with the U.S. and Western Europe.
My estimate is that China will refrain from an invasion consistent with the geoeconomic thesis. At the same time, Xi Jinping will continue threats and economic confrontation with the West. Investors should expect the following from this unstable confrontation: The U.S. and China will continue to decouple economically. Supply chain disruptions will grow worse before they get better. A new supply chain configuration will emerge involving more onshoring and shorter transportation lanes.
China’s growth will lag and it will be unable to make the technological leaps it needs to escape the middle-income trap and become a high-income developed economy. Over time, excessive debt and adverse demographics will overtake China’s ambitions and leave it an aging and low-productivity shell.
China’s economic problems will sustain its demand for energy and put a floor under energy prices. Manufacturing costs will rise as China’s labor pool evaporates. Investors should not rule out a financial crisis in China that would spread to a global collapse in capital markets, probably worse than those of 2008 and 2020. But geopolitical tensions will disrupt global supply chains, which will result in higher input prices and transportation costs. That’s a receipt for inflation, and higher interest rates. And any form of uncertainty is a plus for the one safe haven investment that never fails – gold."
Celente and the Judge, "The Government Is Spying On You, How Can We Stop This?"
Full screen recommended.
Celente and the Judge, 2/16/22:
"The Government Is Spying On You, How Can We Stop This?"
"The Trends Journal is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over fear and propaganda to help subscribers prepare for What’s Next in these increasingly turbulent times."
Gregory Mannarino, "Meltdowns, Superspikes, Geopolitical Events, Media, WAR, Elections- All Controlled By Central Banks"
Gregory Mannarino, PM 2/16/22:
"Meltdowns, Superspikes, Geopolitical Events,
Media, WAR, Elections- All Controlled By Central Banks"
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Related:
Musical Interlude: 2002, "The End Is a Beginning"
Full screen recommended.
2002, "The End Is a Beginning"
"A Look to the Heavens"
“The Cat's Eye Nebula (NGC 6543) is one of the best known planetary nebulae in the sky. Its more familiar outlines are seen in the brighter central region of the nebula in this impressive wide-angle view. But the composite image combines many short and long exposures to also reveal an extremely faint outer halo. At an estimated distance of 3,000 light-years, the faint outer halo is over 5 light-years across.
Planetary nebulae have long been appreciated as a final phase in the life of a sun-like star. More recently, some planetary nebulae are found to have halos like this one, likely formed of material shrugged off during earlier episodes in the star's evolution. While the planetary nebula phase is thought to last for around 10,000 years, astronomers estimate the age of the outer filamentary portions of this halo to be 50,000 to 90,000 years. Visible on the left, some 50 million light-years beyond the watchful planetary nebula, lies spiral galaxy NGC 6552.”
○
"Our planet is a tiny porthole, looking over a cosmic sea.
Can we learn what lies beyond our own horizons of perception?"
Oriah Mountain Dreamer, "The Invitation"
"The Invitation"
"It doesn't interest me what you do for a living.
I want to know what you ache for,
and if you dare to dream of meeting your heart's longing.
It doesn't interest me how old you are.
I want to know if you will risk looking like a fool for love,
for your dream, for the adventure of being alive.
It doesn't interest me what planets are squaring your moon.
I want to know if you have touched the center of your own sorrow,
if you have been opened by life's betrayals or have
become shriveled and closed from fear of further pain!
I want to know if you can sit with pain, mine or your own,
without moving to hide it or fade it, or fix it.
I want to know if you can be with joy, mine or your own,
if you can dance with wildness and let the ecstasy fill you
to the tips of your fingers and toes without cautioning us to be careful,
to be realistic, to remember the limitations of being human.
It doesn't interest me if the story you are telling me is true.
I want to know if you can disappoint another to be true to yourself;
if you can bear the accusation of betrayal and not betray your own soul;
if you can be faithless and therefore trustworthy.
I want to know if you can see beauty even when it's not pretty,
every day, and if you can source your own life from its presence.
I want to know if you can live with failure, yours and mine,
and still stand on the edge of the lake and shout to the silver of the full moon, "Yes!"
It doesn't interest me to know where you live or how much money you have.
I want to know if you can get up, after the night of grief and despair,
weary and bruised to the bone,
and do what needs to be done to feed the children.
It doesn't interest me who you know or how you came to be here.
I want to know if you will stand in the center of the fire with me
and not shrink back.
It doesn't interest me where or what or with whom you have studied.
I want to know what sustains you, from the inside, when all else falls away.
I want to know if you can be alone with yourself and if you truly like
the company you keep in the empty moments."
- Oriah Mountain Dreamer
“‘Sometimes’: Poet and Philosopher David Whyte’s Stunning Meditation on Walking into the Questions of Our Becoming”
“‘Sometimes’: Poet and Philosopher David Whyte’s
Stunning Meditation on Walking into the Questions of Our Becoming”
by Maria Popova
“The role of the artist, James Baldwin believed, is “to make you realize the doom and glory of knowing who you are and what you are.” This, too, is the role of the forest, it occurs to me as I walk the ferned, mossed woods daily to lose my self and find myself between the trees; to “live the questions,” in Rilke’s lovely phrase – to let the rustling of the leaves beckon forth the stirrings and murmurings on the edge of the psyche, which we so often brush away in order to go on being the smaller version of ourselves we have grown accustomed to being out of the unfaced fear that the grandeur of life, the grandeur of our own untrammeled nature, might require of us more than we are ready to give.
Those disquieting, transformative stirrings are what the poet and philosopher David Whyte explores with surefooted subtlety in his poem “Sometimes,” found in his altogether life-enlarging collection “Everything Is Waiting for You” (public library) and read here by the poet himself as part of a wonderful short course of poem-driven practices for neuroscientist and philosopher Sam Harris’s “Waking Up” meditation toolkit (which I can’t recommend enough and which operates under an inspired, honorable model of granting free subscriptions to those who need this invaluable mental health aid but don’t have the means).
Full screen recommended.
“Sometimes”
“Sometimes
if you move carefully
through the forest,
breathing
like the ones
in the old stories,
who could cross
a shimmering bed of leaves
without a sound,
you come to a place
whose only task
is to trouble you
with tiny
but frightening requests,
conceived out of nowhere
but in this place
beginning to lead everywhere.
Requests to stop what
you are doing right now,
and
to stop what you
are becoming
while you do it,
questions
that can make
or unmake
a life,
questions
that have patiently
waited for you,
questions
that have no right
to go away.”
- David Whyte
"Nothing Happens..."
"Nothing happens to anyone that he is not fitted by nature to bear."
- Marcus Aurelius
"Juggling Sticks of Dynamite: Our Fatally Distorted Sense of Risk"
"Juggling Sticks of Dynamite:
Our Fatally Distorted Sense of Risk"
by Charles Hugh Smith
"The problem with constantly being saved from the consequences of our actions is this fatally distorts our sense of risk. The foundation of the ability to accurately assess risk is the experience of real-world consequences: hardship and losses.
If you are sloppy about positioning the ladder securely, the ladder falls and so do you. If you survive the fall, you've learned that risk is real and that precautions must be taken to minimize risk. Precaution requires thinking through all the components of risk and taking steps to remediate or avoid each specific source of risk.
If you've never really been pushed to your limit of endurance, you lack the experience needed to realize you're dehydrated and in danger of succumbing to heat stroke. So when you run out of water on a shadeless climb exposed to the blazing sun, you fall into magical thinking: if we just push on, push harder, power through this, then we'll be fine. But powering on is the worst possible choice, and so the inexperienced hiker passes out and expires.
The Federal Reserve and the rest of the Savior State has saved us from the financial consequences of rampant speculation for decades. As a result, few of those in the casino have the necessary experience of hardship and losses to accurately assess risk. The vast majority have only experienced being saved: the most profitable response to a losing bet is to double-down on the next bet because the house (the Fed) will amply reward every "buy the dip."
After decades of being rewarded for "buying the dip," all the gamblers in the casino believe they are "investors": magical thinking at its most dangerous. Gambling is not investing, and every dollar, yuan, yen and euro being plunked down on a table in the casino is a gamble, because the entire casino is on unstable quicksand.
The gambler who's constantly been saved naturally reckons they're an "investing" genius. Having only experienced winning, the delusional punter attributes this grand success to their own brilliance and trading moxie. They feel invulnerable because they have the winning strategy: but the dip, double-down and ride the next wave of gains.
This feeling of invulnerability is exquisitely dangerous because the punter believes the experience of winning is the consequence of his brilliance. Having never experienced any real losses or hardships, the punter doesn't understand that the winning was the result of the Fed saving all punters from the consequences of speculation.
Having been saved at every turn, the gambler has no real-world experience of risk. Lacking the ability to accurately assess risk, the gamble keeps upping the size of his bets because this has been rewarded.
So when the gambler ends up juggling lit sticks of dynamite, he's confident nothing bad can happen because nothing bad has ever happened, no matter how much risk he takes on. This is the plight of all the gamblers who see themselves as "investors" in the Everything Bubble. Their experience has been artificially limited by the suppression of risk, but they are unaware of this and so their invulnerability exposes them to catastrophic losses they don't even recognize as possible, much less inevitable.
As I often point out here, risk cannot be extinguished, it can only be transferred. Risk has been offloaded from speculators to the entire financial system itself, and so rather than a few speculators going down in flames, the entire casino will collapse.
Although we pride ourselves on being so smart, we only learn from hardship, loss and failure. The Fed and the Savior State have deprived the speculators of the means to learn how to accurately assess risk. Making matters even worse, they've encouraged the delusion that rampant, disconnected-from-reality speculation is actually "investing."
As I also point out here, systems have their own dynamics. The Fed and the Savior State are not omnipotent gods. They have constructed a flimsy facade of marketing, magical thinking and artifice, and this system of falsehoods is manifesting dynamics that have escaped their control.
Every gambler prays for every bet to be a winner. As Oscar Wilde observed: "When the gods wish to punish us they answer our prayers."
"Economy And The Market Are At A Breaking Point"
Full screen recommended.
Dan, iAllegedly, AM 2/16/22:
"Economy And The Market Are At A Breaking Point"
"Enough is enough. We are seeing worldwide markets and the global economy at a breaking point. Prices are way up in value is way down. The fed is giving conflicting information on what they will do."
"Butterflies..."
“I think humans might be like butterflies; people die every day without many other people knowing about them, seeing their colors, hearing their stories… and when humans are broken, they’re like broken butterfly wings; suddenly there are so many beauties that are seen in different ways, so many thoughts and visions and possibilities that form, which couldn’t form when the person wasn’t broken! So it is not a very sad thing to be broken, after all! It’s during the times of being broken, that you have all the opportunities to become things unforgettable! Just like the broken butterfly wing that I found, which has given me so many thoughts, in so many ways, has shown me so many words, and imaginations! But butterflies need to know that it doesn’t matter at all if the whole world saw their colors or not! What matters is that they flew, they glided, they hovered, they saw, they felt, and they knew! And they loved the ones whom they flew with! And that is an existence worthwhile!”
- C. JoyBell C.
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