Tuesday, March 15, 2022

"Comparing the 1930s and Today"

"Comparing the 1930s and Today"
by Doug Casey

"You've heard the axiom "History repeats itself." It does, but never in exactly the same way. To apply the lessons of the past, we must understand the differences of the present. During the American Revolution, the British came prepared to fight a successful war - but against a European army. Their formations, which gave them devastating firepower, and their red coats, which emphasized their numbers, proved the exact opposite of the tactics needed to fight a guerrilla war.

Before World War I, generals still saw the cavalry as the flower of their armies. Of course, the horse soldiers proved worse than useless in the trenches.

Before World War II, in anticipation of a German attack, the French built the "impenetrable" Maginot Line. History repeated itself and the attack came, but not in the way they expected. Their preparations were useless because the Germans didn't attempt to penetrate it; they simply went around it, and France was defeated.

The generals don't prepare for the last war out of perversity or stupidity, but rather because past experience is all they have to go by. Most of them simply don't know how to interpret that experience. They are correct in preparing for another war but wrong in relying upon what worked in the last one.

Investors, unfortunately, seem to make the same mistakes in marshaling their resources as do the generals. If the last 30 years have been prosperous, they base their actions on more prosperity. Talk of a depression isn't real to them because things are, in fact, so different from the 1930s. To most people, a depression means '30s-style conditions, and since they don't see that, they can't imagine a depression. That's because they know what the last depression was like, but they don't know what one is. It's hard to visualize something you don't understand.

Some of them who are a bit more clever might see an end to prosperity and the start of a depression but - al­though they're going to be a lot better off than most - they're probably looking for this depression to be like the last one. Although nobody can predict with absolute certainty what this depression will be like, you can be fairly well-assured it won't be an instant replay of the last one. But just because things will be different doesn't mean you have to be taken by surprise. To define the likely differences between this depres­sion and the last one, it's helpful to compare the situa­tion today to that in the early 1930s. The results aren't very reassuring.

Corporate Bankruptcy 1930s: Banks, insurance companies, and big corporations went under on a major scale. Institutions suffered the consequences of past mistakes, and there was no financial safety net to catch them as they fell. Mistakes were liquidated and only the prepared and efficient survived.

Today: The world’s financial institutions are in even worse shape than the last time, but now business ethics have changed and everyone expects the government to "step in." Laws are already in place that not only allow but require government inter­vention in many instances. This time, mistakes will be compounded, and the strong, productive, and ef­ficient will be forced to subsidize the weak, unproductive, and inefficient. It's ironic that businesses were bankrupted in the last depression because the prices of their products fell too low; this time, it'll be because they went too high.

Unemployment 1930s: If a man lost his job, he had to find another one as quickly as possible simply to keep from going hungry. A lot of other men in the same position competed desperately for what work was available, and an employer could hire those same men for much lower wages and expect them to work harder than what was the case before the depression. As a result, the men could get jobs and the employer could stay in business.

Today: The average man first has months of unemployment insurance; after that, he can go on welfare if he can't find "suitable work." Instead of taking whatever work is available, especially if it means that a white collar worker has to get his hands dirty, many will go on welfare. This will decrease the production of new wealth and delay the recovery. The worker no longer has to worry about some entrepreneur exploiting (i.e., employing) him at what he considers an unfair wage because the minimum wage laws, among others, precludes that possibility today. As a result, men stay unemployed and employers will go out of business.

Welfare 1930s: If hard times really put a man down and out, he had little recourse but to rely on his family, friends, or local social and church group. There was quite a bit of opprobrium attached to that, and it was only a last resort. The breadlines set up by various government bodies were largely cosmetic measures to soothe the more terror-prone among the voting populace. People made do because they had to, and that meant radically reducing their standards of living and taking any job available at any wage. There were very, very few people on welfare during the last depression.

Today: It's hard to say how those who are still working are going to support those who aren't in this depression. Even in the U.S., 50% of the country is already on some form of welfare. But food stamps, aid to fami­lies with dependent children, Social Security, and local programs are already collapsing in prosperous times. And when the tidal wave hits, they'll be totally overwhelmed. There aren't going to be any breadlines because people who would be standing in them are going to be shopping in local supermarkets just like people who earned their money. Perhaps the most dangerous aspect of it is that people in general have come to think that these programs can just magically make wealth appear, and they expect them to be there, while a whole class of people have grown up never learning to survive without them. It's ironic, yet predictable, that the programs that were supposed to help those who "need" them will serve to devastate those very people.

Regulations 1930s: Most economies have been fairly heavily regulated since the early 1900s, and those regulations caused distortions that added to the severity of the last depression. Rather than allow the economy to liquidate, in the case of the U.S., the Roosevelt regime added many, many more regulations - fixing prices, wages, and the manner of doing business in a static form. It was largely because of these regulations that the depression lingered on until the end of World War II, which "saved" the economy only through its massive reinflation of the currency. Had the government abolished most controls then in existence, instead of creating new ones, the depression would have been less severe and much shorter.

Today: The scores of new agencies set up since the last depression have created far more severe distortions in the ways people relate than those of 90 years ago; the potential adjustment needed is proportionately greater. Unless government restrictions and controls on wages, working conditions, energy consumption, safety, and such are removed, a dramatic economic turnaround during the Greater Depression will be impossible.

Taxes 1930s: The income tax was new to the U.S. in 1913, and by 1929, although it took a maximum 23.1% bite, that was only at the $1 million level. The average family’s income then was $2,335, and that put average families in the 1/10th of 1 percent bracket. And there was still no Social Security tax, no state income tax, no sales tax, and no estate tax. Furthermore, most people in the country didn't even pay the income tax because they earned less than the legal minimum or they didn't bother filing. The government, therefore, had immense untapped sources of revenue to draw upon to fund its schemes to "cure" the depression. Roosevelt was able to raise the average income tax from 1.35% to 16.56% during his tenure - an increase of 1,100%.

Today: Everyone now pays an income tax in addition to all the other taxes. In most Western countries, the total of direct and indirect taxes is over 50%. For that reason, it seems unlikely that direct taxes will go much higher. But inflation is constantly driving everyone into higher brackets and will have the same effect. A person has had to increase his or her income faster than inflation to compensate for taxes. Whatever taxes a man does pay will reduce his standard of living by just that much, and it's reasonable to expect tax evasion and the underground economy to boom in response. That will cushion the severity of the depression somewhat while it serves to help change the philosophical orientation of society.

Prices 1930s: Prices dropped radically because billions of dollars of inflationary currency were wiped out through the stock market crash, bond defaults, and bank failures. The government, however, somehow equated the high prices of the inflationary '20s with prosperity and attempted to prevent a fall in prices by such things as slaughtering livestock, dumping milk in the gutter, and enacting price supports. Since the collapse wiped out money faster than it could be created, the government felt the destruction of real wealth was a more effective way to raise prices. In other words, if you can't increase the supply of money, decrease the supply of goods.

Nonetheless, the 1930s depression was a deflationary collapse, a time when currency became worth more and prices dropped. This is probably the most confusing thing to most Americans since they assume - as a result of that experience - that "depression" means "deflation." It's also perhaps the biggest single difference between this depression and the last one.

Today: Prices could drop, as they did the last time, but the amount of power the government now has over the economy is far greater than what was the case 90 years ago. Instead of letting the economy cleanse itself by allowing the financial markets to collapse, governments will probably bail out insolvent banks, create mortgages wholesale to prop up real estate, and central banks will buy bonds to keep their prices from plummeting. All of these actions mean that the total money supply will grow enormously. Trillions will be created to avoid deflation. If you find men selling apples on street corners, it won't be for 5 cents apiece, but $5 apiece. But there won't be a lot of apple sellers because of welfare, nor will there be a lot of apples because of price controls.

Consumer prices will probably skyrocket as a result, and the country will have an inflationary depression. Unlike the 1930s, when people who held dollars were king, by the end of the Greater Depression, people with dollars will be wiped out.

The Society 1930s: The world was largely rural or small-town. Communications were slow, but people tended to trust the media. The government exercised considerable moral suasion, and people tended to support it. The business of the country was business, as Calvin Coolidge said, and men who created wealth were esteemed. All told, if you were going to have a depression, it was a rather stable environment for it; despite that, however, there were still plenty of riots, marches, and general disorder.

Today: The country is now urban and suburban, and although communications are rapid, there's little interpersonal contact. The media are suspect. The government is seen more as an adversary or an imperial ruler than an arbitrator accepted by a consensus of concerned citizens. Businessmen are viewed as unscrupulous predators who take advantage of anyone weak enough to be exploited. A major financial smashup in today's atmosphere could do a lot more than wipe out a few naives in the stock market and unemploy some workers, as occurred in the '30s; some sectors of society are now time bombs. It's hard to say, for instance, what third- and fourth-generation welfare recipients are going to do when the going gets really tough.

The Way People Work 1930s: Relatively slow transportation and communication localized economic conditions. The U.S. itself was somewhat insulated from the rest of the world, and parts of the U.S. were fairly self-contained. Workers were mostly involved in basic agriculture and industry, creating widgets and other tangible items. There wasn't a great deal of specialization, and that made it easier for someone to move laterally from one occupation into the next, without extensive retraining, since people were more able to produce the basics of life on their own. Most women never joined the workforce, and the wife in a marriage acted as a "backup" system should the husband lose his job.

Today: The whole world is interdependent, and a war in the Middle East or a revolution in Africa can have a direct and immediate effect on a barber in Chicago or Krakow. Since the whole economy is centrally controlled from Washington, a mistake there can be a national disaster. People generally aren’t in a position to roll with the punches as more than half the people in the country belong to what is known as the "service economy." That means, in most cases, they're better equipped to shuffle papers than make widgets. Even "necessary" services are often terminated when times get hard. Specialization is part of what an advanced industrial economy is all about, but if the economic order changes radically, it can prove a liability.

The Financial Markets 1930s: The last depression is identified with the collapse of the stock market, which lost over 90% of its value from 1929 to 1933. A secure bond was the best possible investment as interest rates dropped radically. Commodities plummeted, reducing millions of farmers to near subsistence levels. Since most real estate was owned outright and taxes were low, a drop in price didn't make a lot of difference unless you had to sell. Land prices plummeted, but since people bought it to use, not unload to a greater fool, they didn't usually have to sell.

Today: This time, stocks - and especially commodities - are likely to explode on the upside as people panic into them to get out of depreciating dollars in general and bonds in particular. Real estate will be - next to bonds - the most devastated single area of the economy because no one will lend money long term. And real estate is built on the mortgage market, which will vanish. Everybody who invests in this depression thinking that it will turn out like the last one will be very unhappy with the results. Being aware of the differences between the last depression and this one makes it a lot easier to position yourself to minimize losses and maximize profits.

So much for the differences. The crucial, obvious, and most important similarity, however, is that most people's standard of living will fall dramatically. The Greater Depression has started. Most people don't know it because they can neither confront the thought nor understand the differences between this one and the last.

As a climax approaches, many of the things that you've built your life around in the past are going to change and change radically. The ability to adjust to new conditions is the sign of a psychologically healthy person. Look for the opportunity side of the crisis. The Chinese symbol for "crisis" is a combination of two other symbols - one for danger and one for opportunity. The rush to inject an unprecedented amount of money into every corner of the economy is a last-ditch effort to keep the stock market casino going for as long as possible - no matter the consequences.

The dangers that society will face in the years ahead are regrettable, but there's no point in allowing anxiety, frustration, or apathy to overcome you. Face the future with courage, curiosity, and optimism rather than fear. You can be a winner, and if you plan carefully, you will be. The great period of change will give you a chance to regain control of your destiny, and that in itself is the single most important thing in life, as an individual and society as a whole."

Paulo Coelho, "The Bird And The Cage"

"The Bird And The Cage"
by Paulo Coelho

"Once upon a time, there was a bird. He was adorned with two perfect wings and with glossy, colorful, marvelous feathers. One day, a woman saw this bird and fell in love with him. She invited the bird to fly with her, and the two travelled across the sky in perfect harmony. She admired and venerated and celebrated that bird. But then she thought: He might want to visit far-off mountains! And she was afraid, afraid that she would never feel the same way about any other bird.

And she thought: “I’m going to set a trap. The next time the bird appears, he will never leave again.” The bird, who was also in love, returned the following day, fell into the trap and was put in a cage. She looked at the bird every day. There he was, the object of her passion, and she showed him to her friends, who said: “Now you have everything you could possibly want.”

However, a strange transformation began to take place: now that she had the bird and no longer needed to woo him, she began to lose interest. The bird, unable to fly and express the true meaning of his life, began to waste away and his feathers to lose their gloss; he grew ugly; and the woman no longer paid him any attention, except by feeding him and cleaning out his cage.

One day, the bird died. The woman felt terribly sad and spent all her time thinking about him. But she did not remember the cage, she thought only of the day when she had seen him for the first time, flying contentedly amongst the clouds. If she had looked more deeply into herself, she would have realized that what had thrilled her about the bird was his freedom, the energy of his wings in motion, not his physical body.

Without the bird, her life too lost all meaning, and Death came knocking at her door. “Why have you come?” she asked Death. “So that you can fly once more with him across the sky,” Death replied. “If you had allowed him to come and go, you would have loved and admired him ever more; alas, you now need me in order to find him again.”

The Daily "Near You?"

Overland Park, Kansas, USA. Thanks for stopping by!

Must Watch "BREAKING: End of the US Petrodollar? What Next?"

Full screen recommended.
Mike Maloney, Adam Taggart, 3/15/22:
"BREAKING: End of the US Petrodollar? What Next?"
"Some massive news broke in the last couple of hours in regards to the US dollar. Join Mike Maloney and Adam Taggart in today’s video update as they discuss what happened, what it means, and where we could be headed next."

Gregory Mannarino, "With The Economy Cratering Will The FED Raise Rates Tomorrow? Rent SKYROCKETS!"

Gregory Mannarino, PM 3/15/22:
"With The Economy Cratering Will The FED 
Raise Rates Tomorrow? Rent SKYROCKETS!"

"Climbing the Escalation Ladder in the Economic War With Russia... Here's the Nuclear Option"

"Climbing the Escalation Ladder in the Economic
 War With Russia... Here's the Nuclear Option"
by Nick Giambruno

"The escalation ladder is a concept to describe how the severity of a military conflict can increase. At the very top of the escalation ladder is all-out nuclear war. While there are numerous countries with nuclear weapons, Russia and China are the only ones with sophisticated enough arsenals to go toe-to-toe with the US up to the top of the escalation ladder. In other words, the US can’t obtain escalation dominance against Russia or China because they can match each escalation up to all-out nuclear war - the very top of the ladder.

For this reason, these countries are deterred from getting into a kinetic conflict with one another. It's also why the US military doesn’t hesitate to bomb countries like Libya, Iraq, Syria, or Afghanistan. It has little to fear because it knows these countries can’t climb very high in the escalation ladder.

This concept is well-understood in military conflicts. However, the same dynamic exists in an economic war, and it's far less understood by governments (and investors). That’s why neither the US nor Russia are not deterred and are climbing up the economic escalation ladder and hurdling towards an increasingly imminent catastrophe.

The Economic War Escalates: In the wake of Russia’s invasion of Ukraine, the US government and EU have launched an unprecedented economic war… with seeming little thought on how it all ends. Russia is not a tiny, feeble country that can't punch back. Even though many people don't realize it, Russia can escalate to the top of the economic escalation ladder. Here’s why…

Russia is the world’s largest exporter of natural gas, lumber, wheat, fertilizer, and palladium (a crucial component in cars). It is the second-largest exporter of oil and aluminum and the third-largest exporter of nickel and coal. Russia is a major producer and processor of uranium for nuclear power plants. Enriched uranium from Russia and its allies provides electricity to 20% of the homes in the US. Aside from China, Russia produces more gold than any other country, accounting for more than 10% of global production.

These are just a handful of examples. There are many strategic commodities that Russia dominates. In short, Russia is not just an oil and gas powerhouse but a commodity powerhouse. Europe cannot survive without Russian commodities.

Taking Russian commodities off of global markets would cause an across-the-board price shock that would decimate financial markets, banks, and practically every industry. Moreover, Russia also has an economic nuclear option that could blow up the Western financial system overnight. In short, Russia has powerful cards to play.

Just like in a kinetic war, Russia can match US moves to escalate an economic war to the top of the escalation ladder. But unlike a kinetic war, neither side is deterred. On the contrary, it seems all but inevitable that things will escalate from here, which makes the situation incredibly dangerous.

Where Are We Now? The US has sanctioned the Russian central bank, making it illegal for any American to engage with it, the finance ministry, or the national wealth fund. The US and European governments froze the US dollar and euro reserves of Russia - the accumulated savings of the nation - worth around $300 billion. Certain Russian banks have been kicked out of SWIFT, the system to send international wire transfers. A stampede of Western companies have left Russia and are banning average Russian citizens from using their platforms.

Visa, MasterCard, and American Express have cut off Russia from their networks. The US government banned all imports of Russian oil.

In return, Russia has matched these moves with defensive maneuvers and escalations of its own. Moscow has banned the export of rocket engines to the US, with an official saying, "In a situation like this we can't supply the United States with our world's best rocket engines. Let them fly on something else, their broomsticks."

Russia and China have live alternatives to SWIFT to facilitate international financial transactions, which limits the effect of being kicked out of SWIFT. Russian banks started issuing credit and debit cards linked to China’s global payment processing network UnionPay. Russia has announced, or already is, doing business with China, India, Iran, Turkey, and other countries in local currencies instead of the US dollar, neutralizing much of the effect of sanctions.

In perhaps the most significant escalatory move, the Russian government has allowed all external debt obtained from unfriendly countries - estimated to be over $400 billion - to be redenominated in rubles. As a result, instead of paying back creditors in the US and Europe in dollars and euros at Western banks, Russian companies can now repay their external debts by depositing rubles on their creditor's behalf in Russian banks, which are inaccessible to them because of sanctions. This move forces the US and EU to either ease sanctions so that the estimated $400 billion in external debt can be repaid or give massive losses to Western banks and other creditors.

So, that’s where things stand now. It's worth noting that Europe is still paying for Russian energy, and Moscow is still delivering it. Nonetheless, Russia and the US are climbing the economic escalation ladder, with neither side showing any sign of slowing down. However, we are still several destructive steps away from the top.

What Comes Next: Putin recently announced a forthcoming ban on exports of certain commodities to certain unfriendly countries, with details coming soon. Given Russia’s dominance in the commodity markets, such a move will be significant. A logical next step Russia could take if the US and EU increase their sanctions would be to force Europe to pay for its energy imports in rubles.

European buyers would have to first buy rubles with their euros and use them to pay for Russian gas, oil, and other exports. Such a move would neutralize the entire sanctions regime because it would force Europeans to deal with the sanctioned Russian central bank or get cut off from crucial commodities. The Europeans have no alternative to Russian energy and would have no choice but to comply.

Moscow could implement its economic nuclear option if the US really pushes Russia to the point where it has nothing left to lose. That would be demanding payment for oil and other commodities in gold. Since Russia is such a dominant player in the commodity markets, it could dictate this. Such a move would send gold skyrocketing and blow up the entire Western financial system overnight. Moreover, the dollar and euro would likely suffer an enormous loss in purchasing power as commodities would be repriced in gold.

That's Russia’s financial nuclear option, and if the US continues up the escalation ladder, this is where it will ultimately lead. With neither side backing down, escalation appears inevitable. That means we are likely on the cusp of a historic financial earthquake… one that could alter the direction of the US forever and mark the biggest economic event of our lifetimes."

"Credit Markets are Cracking - Is the Dollar Safe?"

Full screen recommended.
Dan, iAllegedly 3/15/22:
"Credit Markets are Cracking - Is the Dollar Safe?"
Producer Price Index just jumped above 10%. The stock market is celebrating this by giving a massive runner. When does this nonsense come to an end? Oil drops to $100 a barrel and everybody starts to celebrate. Collateral loan obligations are defaulting around the world. When will this catch up to the economy?"

"How It Really Is"

 

"Next to Nothing"

"Next to Nothing"
by Bill Bonner

San Martin, Argentina -  "Jerome Powell and his fellow Fed heads are hunkered down for their big meeting today and tomorrow. Caught between a rock and a hard place, the Fed has to decide. Consumer prices are rising at a politically uncomfortable rate – almost 8% per year. But the stock market is wobbly… and threatens to crash.

What to do? Nothing! Or as close to nothing as it can get away with. Later tomorrow, the Fed will almost certainly announce a tiny 0.25% increase in its key lending rate… bringing it (adjusted for inflation) to MINUS 7.4%.

To get our bearings, we note that if you’re going to stop price increases you have to lend money at a rate that is higher than the inflation rate, not below it. An inflation-killing move equivalent to what Paul Volker did in 1980 would put the Fed rate at PLUS 10% – or 1,740 basis points higher than it is today. And if the Fed continues its baby steps to nowhere approach, raising the key rate by a quarter point per trimester, it will take 17 years to get there… or until 2039. By that time, the dollar and the world’s US dominated money system will be long forgotten.

“Inflate or Die?” On a scale of 10, we rate the chances that the Fed will mount a serious fight against inflation at 1. Fed chief Jerome Powell says he is just being cautious. What with a war going on and all… he didn’t want to introduce more “uncertainty.” What to make of it? Sarcasm offers the only relief.

Gladiators, Fight! Elon Musk has proposed what must be the best solution to the Russo-Ukraine war. He challenged Putin to a ‘single combat’ to settle the issue:
It is absurd, of course. But it would be a great way to end the war. Imagine the box office! Billions could be raised from selling tickets to the event or on-line viewing. The money then could be used to repair the damage. And if Putin wins, he gets what he wants without more bloodshed. If Musk wins, whatever he wants… well, who knows? But it’s not likely to be worse than what is happening now.

So far, no word from the Kremlin about whether the challenge has been accepted. So, the bombing, shelling, killing, sanctioning and spending goes on… in the Ukraine, in Yemen, in Afghanistan… and all over the world. But why? Why is money taken from Americans to be used to kill Russians, Yemenis or Afghanis? Why is money taken from Russian civilians without due process? (What kind of kangaroo court would condone taking money away from people who had done nothing wrong?)

Here at BPR money is our beat. Money is made by producing goods or delivering services – such as providing gas to Europeans – and thereby satisfying customers. But politics intrudes… and money vanishes. “You’re either with us or against us,” George W. Bush said of the War on Terror. There was no middle-ground… no room for compromise… no other side to the story. You’re either vaccinated… or you’re causing the “pandemic of the unvaccinated,” said Joseph Biden, even though vaccinated people – such as your editor – got the COVID too.

And now… even suggesting that there is another side to the story marks you as a “Russian asset.” Yesterday, the Financial Times cited the case of India. The fact that it has not come out four-square in favor of the ‘western allies,’ could “imperil relations with the US.”

Holy Fantasies: This train is bound for glory; everyone is meant to get onboard. But getting on-board with the sanctions war against Russia means getting off-board with other fads and fashions of the elite. Until a few weeks ago, for example, fossil fuels were the devil’s work and investors were proudly displaying their contempt for weapons manufacturers.

‘A nasty business… with nasty clients… and nasty results,’ we put words in their mouths. In the ESG (Environmental, Social, Governance) world, investing in energy or weapons was a no-no. Making the world a better place was the goal, even if it meant lower profits. But now they’ve all signed on to the ‘Ukraine-as-Holy Land’ fantasy, and suited up for battle. Suddenly, the war on CO2 has disappeared from the headlines and ‘defense’ is no longer a bad word.

“Ukraine is one of the most important ESG issues we’ve ever had,” said Philippe Zaouati, chief executive of Mirova, the $30 billion sustainable-investing unit affiliated with Natixis Investment Managers. “It’s a vital issue for energy and human rights, and questions whether we still want to live in a democracy or not.”

Really? Is that what it’s all about? Is that what we’re fightin’ for? Is democracy at stake? Is that the reason to switch from saving the planet to saving the Ukraine?

But Mr. Putin has shown no sign of wanting to end the Ukrainian democracy; instead, he seems to want to increase it, by allowing the Eastern provinces to elect their own leaders. As for the rest of it, he insists only that it remains neutral. Thinking strategically, he doesn’t want any NATO missiles hard against his southern flank. How this poses a risk to democracy, we don’t know. Were Mexico to announce that it was allowing China or Russia to put their missiles on the south side of the Rio Grande…how long would it take the US to launch an invasion? Mexico’s democracy be damned!

But that’s the nice thing about politics. Nothing is ever marked to market. You can believe anything you want. And since you can fool most of the people most of the time, you’re almost always able to get the yahoos behind you. Alas, fooling people causes foolish people to do foolish things. Tune in tomorrow for more on the foolishness surrounding us all."

Gregory Mannarino, "A Russian Debt Default Is Not A Black Swan; War: Prolong Tactics In Full Swing"

Gregory Mannarino, AM 3/15/22:
"A Russian Debt Default Is Not A Black Swan; 
War: Prolong Tactics In Full Swing"

"6 Years Of Being Manipulated By Manufactured Waves Of Outrage With No End In Sight"

"6 Years Of Being Manipulated By Manufactured 
Waves Of Outrage With No End In Sight"
by Michael Snyder

"Are you starting to notice a pattern by now? For the past six years, the American people have been emotionally manipulated by what I call “manufactured waves of outrage”. Once the corporate media identifies a trigger, it will obsessively focus on it for weeks or months on end, and the narrative that develops will be echoed and magnified by millions upon millions of social media denizens. Before too long, much of the population is whipped up into an irrational emotional frenzy, and that frenzy is used to move certain agendas forward.

To me, this new era began in 2016. Donald Trump was a political candidate like no other, and the elite absolutely hated the fact that he did not follow their rules and that they could not control him. So when he actually won, it truly was a catastrophic event for them. From that moment forward, most corporate media outlets relentlessly demonized Trump. Never before in U.S. history had a sitting U.S. president been treated in such a fashion, and we may never see anything like it ever again.

The anti-Trump narratives which were being pumped out by the corporate media were constantly fed to social media influencers on both sides of the political spectrum, and that ultimately created extremely deep political divisions in this country which still exist to this day. Many on the left are entirely convinced that Trump is the devil, while many on the right believe that he is the greatest American that ever lived.

Of course the truth is that Trump is not actually on the far end of the political spectrum that currently exists in this country. There is a lot about Trump that liberals should actually like, and there is a lot about Trump that conservatives should actually be criticizing. But that is not how the debate has been framed. If you hate Trump you are on the left, and if you love Trump you are on the right, and that is the end of the story.

In 2020, a couple things happened that caused new manufactured waves of outrage. One was the tragic death of George Floyd. His death sparked the BLM movement, and our country was whipped up into an emotional frenzy. Protests, civil unrest and riots erupted all over the nation, and the level of violence that we witnessed shocked the entire planet.

But if you did not support the protesters, you were suddenly a bad person. Instead, it was the police that were relentlessly demonized by the media, and this greatly upset a lot of us that are very supportive of the police.

Without a doubt, the U.S. has had problems with police brutality. And without a doubt, there is a lot of racism out there. I have been boldly speaking out against racism for many years, and I will continue to speak out against it. I believe that every man, woman and child on the entire planet was created equal, and I believe that every single one of us possesses immense value. But there were millions upon millions of us that did not agree with the political agenda of the BLM movement, and many of the specific political positions that the organization adopted were deeply alarming. Does that make us bad just because we don’t agree with their far left agenda?

2020 also brought us the COVID pandemic. Our societal divisions became deeper than ever before as we endlessly debated about masks, vaccines, mandates and other restrictions. Manufactured waves of outrage about COVID dominated our national discourse for nearly two full years, but we were finally getting to a point where we were almost ready to put it all behind us.

And then the Ukraine war came along, and now everyone has a reason to be outraged again. I think that Elon Musk summed things up very well in one of his latest tweets.

- Elon Musk (@elonmusk) March 14, 2022

You may have noticed that hordes of social media lemmings are plastering their profiles with Ukrainian flags these days. Next month, they may have to switch back to COVID again. Then in May, the hot topic may be racial injustice. Of course every June is reserved for the alphabet people.

Social media has become a very clear reflection of society as a whole, and so much of what goes on in our world today is being driven by social media. Last week, I was stunned to learn that the Biden administration had actually conducted a briefing on the war in Ukraine for 30 key TikTok influencers… "To get ahead of misinformation and spread its messaging, the Biden administration on Thursday briefed 30 top TikTok stars on key information regarding the war in Ukraine, The Washington Post reports.

The online influencers received updates about the U.S.’ “strategic goals in the region” while National Security Council staffers and White House Press Secretary Jen Psaki “answered questions on distributing aid to Ukrainians, working with NATO, and how the United States would react to a Russian use of nuclear weapons.”

Can you imagine the Reagan administration doing such a thing? Of course not. But the world has changed. Today, the elite need the support of influencers on social media, because those social media influencers can whip up tremendous waves of manufactured outrage.

If you asked random U.S. social media users to tell you what caused the war in Ukraine, the vast majority of them could not give you any sort of a coherent answer. And the vast majority of them would not be able to point out Ukraine on a blank map of the world. But they do know that Russia is really bad and Ukraine is really good, and that is all that the elite really need for them to know.

For years, I have been encouraging my readers to think for themselves. Because if you don’t learn to think for yourself, there are others that will be more than happy to do your thinking for you. That can be a tempting path to follow, but when you let others do your thinking for you it is way too easy for them to manipulate your emotions with the latest wave of manufactured outrage."

Monday, March 14, 2022

"In These Downbeat Times..."

"In these downbeat times, we need as much hope and courage as we do vision and analysis; we must accent the best of each other even as we point out the vicious effects of our racial divide and pernicious consequences of our maldistribution of wealth and power. We simply cannot live in the twenty-first century at each others throats, even as we acknowledge the weighty forces of racism, patriarchy, economic inequality, homophobia, and ecological abuse on our necks. We are at a crucial crossroad in the history of this nation - and we either hang together by combating these forces that divide and degrade us or we hang separately. Do we have the intelligence, humor, imagination, courage, tolerance, love, respect, and will to meet the challenge? Time will tell. None of us alone can save the nation or world. But each of us can make a positive difference if we commit ourselves to do so."
- Cornel West

Deuter, "Endless Horizon"

Deuter, "Endless Horizon"
Full screen recommended. Feel it...
"I cannot paint
What then I was. The sounding cataract
Haunted me like a passion: the tall rock,
The mountain, and the deep and gloomy wood,
Their colors and their forms, were then to me
An appetite; a feeling and a love,
That had no need of a remoter charm,
By thought supplied, not any interest
Unborrowed from the eye.

That time is past,
And all its aching joys are now no more,
And all its dizzy raptures. Not for this
Faint I, nor mourn nor murmur: other gifts
Have followed; for such loss, I would believe,
Abundant recompense. 

For I have learned
To look on nature, not as in the hour
Of thoughtless youth; but hearing oftentimes
The still, sad music of humanity,
Nor harsh nor grating, though of ample power
To chasten and subdue." 

- William Wordsworth,
"Lines Written A Few Miles Above Tintern Abbey"
“Some feelings sink so deep into the heart that 
only loneliness can help you find them again. 
Some truths are so painful that only shame can help you live with them. 
Some things are so sad that only your soul can do the crying for them.”
- Gregory David Roberts, "Shantaram"

"A Look to the Heavens"

“Globular clusters once ruled the Milky Way. Back in the old days, back when our Galaxy first formed, perhaps thousands of globular clusters roamed our Galaxy. Today, there are less than 200 left. Many globular clusters were destroyed over the eons by repeated fateful encounters with each other or the Galactic center. Surviving relics are older than any Earth fossil, older than any other structures in our Galaxy, and limit the universe itself in raw age.
There are few, if any, young globular clusters in our Milky Way Galaxy because conditions are not ripe for more to form. Pictured above by the Hubble Space Telescope are about 100,000 of M72's stars. M72, which spans about 50 light years and lies about 50,000 light years away, can be seen with a small telescope toward the constellation of the Water Bearer (Aquarius).”

"Catastrophic Inflation: 'I’ve Never Seen Prices Jump This High, This Fast'”

Full screen recommended.
"Catastrophic Inflation: 
'I’ve Never Seen Prices Jump This High, This Fast'”
by Epic Economist

"The U.S. economy is heading to an inflationary collapse of catastrophic proportions. What we’re witnessing right now are just the very early stages of that meltdown. The road will only get bumpier from here. Last week, official agencies reported that consumer prices have jumped 7.9% in February compared to one year ago, breaking the previous record set in January and marking the highest rate of inflation in 40 years. Of course, if you watch our videos on a regular basis, you already know that the reality is much worse than it seems.

Over the past seven days, the average price of a gallon of gasoline in the U.S. went up by 13 percent, and compared to a year ago, gasoline prices soared by an impressive 38 percent. And now that the conflict is threatening to disrupt global energy exports, Americans will have to cope with skyrocketing energy prices all across the board. Drivers are already facing sticker shock at gas stations all over the country, but there are many other ways in which higher global energy costs can ripple through the economy. For example, there have been reports of airlines reducing the number of flights due to soaring fuel costs. Meanwhile, truckers are adding fuel surcharges to be able to deliver goods across the nation. During an interview, one trucking company executive was asked about the current state of affairs and the impacts of rising fuel prices, and he said that this situation is extremely distressing for both customers and service providers.

“Customers really don’t want to hear it, but fuel prices are going through the roof so we’re having to charge more,” said John Migliorini, vice president of Lakeville Trucking in Rochester, N.Y., where diesel costs have nearly doubled to about $400,000 a month. “What choice do we have? I’ve never seen prices jump this high, this fast.” And he is absolutely right. A new study released by the UN, analysts warned that global food prices could soon face another double-digit spike. This is really devastating news for the billions of people that are already living in poverty all over the planet. Last month, food prices had reached another record due to high demand, input and transportation costs, and port disruptions. The new price increases mean that the global number of undernourished people could surge by eight to 13 million people in 2022, according to FAO. As a result, grocery prices are going to get a lot more expensive. At the end of the day, consumers end up paying for the crises caused by global leaders.

Meanwhile, our own economic conflict with Russia continues to get worse. The U.S. government has launched a series of economic sanctions on Russia, and they’re causing severe damages to the Russian economy. But ours is going to be impacted just as well. Palladium and neon are two resources that are key to the production of semiconductor chips. And considering that Russia supplies over 40 percent of the world’s supply of palladium and Ukraine produces 70 percent of the global supply of neon, the global semiconductor shortage is going to become even more acute in the coming months. We cannot underestimate the seriousness of this shortage. Semiconductors are essential components of industrial machinery. Without them, it’s not possible to make those types of equipment operate properly. So if that shortage aggravates even further, our domestic manufacturing is going to significantly slow down as companies are forced to shut down factories, leading to mass lay-offs and billions in losses.

And this is just one way out of hundreds that our economy is going to be impacted by the sanctions imposed on Russia. Most Americans do not understand how terrible conditions will become if this conflict persists for an extended period of time. At this point, we should hope for the best but prepare for the worst because the things we’re watching play out right in front of our eyes may be the events that change modern life forever."

"Retail Investors Will Be Sacrificed., Not Blackrock; Markets Fall Apart Again; Beware Bank Closures"

Jeremiah Babe, PM 3/14/22:
"Retail Investors Will Be Sacrificed., Not Blackrock;
 Markets Fall Apart Again; Beware Bank Closures"

"Fake Economics is Alive and Well"

Full screen recommended.
Dan, iAllegedly, 3/14/22:
"Fake Economics is Alive and Well"
"It seems that the only consistency in the Markets is that they are fake. It’s crazy that when we get bad news the market goes up. This week is going to be very tumultuous because we’re going to get a tremendous amount of bad news that will affect worldwide economics. We should have a cataclysmic drop off of the stock market."

The Daily "Near You?"

Niceville, Florida, USA. Thanks for stopping by!

"The Last Straw"

"The Last Straw"
by Jim Rickards

"The U.S. and its allies in the EU and others around the world have imposed the harshest economic sanctions on Russia that have ever been used. In the past, even nations directly at war with each other would continue to pay the debts they owed each other. Since this war is in Ukraine, let’s look at another war that took place in present Ukraine from 1854–56, during the Crimean War.

Britain (and France) was at war with Russia. Yet throughout the war, the Russian government kept paying interest to British holders of its debt. The British government also kept paying its debts to the Russian government. One British minister said that civilized nations should pay their debts, even to an enemy during wartime.

But that was then and this is now. The U.S. and its European allies outside of Ukraine aren’t even directly at war with Russia (not yet anyway), but they’ve still imposed the most punitive economic sanctions in history. To a great extent, the Russian economy has been cut out of the global economy.

The Effects Will Last for Decades: Russia has been kicked out of the SWIFT global financial telecommunications system. A long list of Russian banks, oligarchs and major companies have been listed among those who cannot transact with Western parties. These include Gazprom (the major Russian natural gas company), among others. Biden has also prohibited exports of semiconductors, high-tech equipment and other technology to Russia. When you add it all up, we should expect a decline on the order of 25% in Russian GDP in the first half of 2022. That’s massive.

Even when the kinetic war is over, probably in a month or so, the economic war will continue and the effects on the global economy (not just Russia) will last for decades. Still, Russia is not a punching bag that takes hits without hitting back. They’ll fight the sanctions both with retaliatory measures of their own and with inventive workarounds designed to defeat the sanctions.

For example, Russia will be teaming up with China to roll out the Chinese credit card system (UnionPay) for Russian consumers. This comes after Visa and Mastercard ended all business with Russia. Their efforts won’t end there.

Good Luck Sanctioning Russian Gold: Russia is working with banks in China and India to reestablish hard currency payment channels. There’s now proposed legislation in the U.S. Senate to freeze gold reserves held by the Central Bank of Russia. Well, here’s the problem: The gold is physical, about 2,300 metric tonnes worth about $150 billion, and is stored inside Russia. It can’t actually be frozen or seized at all. The legislation would impose secondary boycott sanctions on any party that assists Russia in transporting or transacting in gold. But this presumed sanction would be easy to evade.

For example, if Russia puts 100 metric tonnes of gold on a plane and flies it to Beijing in exchange for manufactured goods, they’re not exactly going to issue a press release about it. That’s the kind of transaction that will go undetected by U.S. intelligence.

Gold is an element, atomic number 79, and is easily melted down and re-refined into new gold bars with Chinese markings that are untraceable. The Central Bank of Russia can buy more gold from Russian miners for rubles to make up for the shipment. Again, that gold is untraceable (Russia and China both have numerous gold refineries). If this is the best the U.S. can do then Putin is not only on his way to winning the shooting war, but he may win the financial war as well.

Unintended Consequences: Russia has also implemented capital controls that will shift the pain of sanctions from Russian borrowers to Western lenders who will now suffer defaults on the Russian bonds they own. And Russia has announced that it will cut off exports of important chemicals, metals and processed gasses to any nation that has sanctioned Russia. These exports are indispensable to manufacturing processes including semiconductors, automobiles and agriculture. In the end, most of the economic pain will fall on Western manufacturing and farming.

This is where the law of unintended consequences comes into play. Over 65% of the processed neon gas used to power lasers that make semiconductors comes from Ukraine. Between 35% and 50% of strategic metals, such as titanium and aluminum, used in aircraft manufacture by Boeing and Airbus come from Russia. Much of the grain that feeds the Middle East and Africa comes either from Ukraine or Russia. Russia also exports metals used in battery production for EVs including lithium, cobalt and nickel. The list goes on topped by oil, natural gas and coal, where Russia is the leading supplier to Europe.

If Russia follows through, we could be looking at a shutdown of major industries around the world from semiconductors (essential for automobiles, appliances, electronics, etc.) to heavy equipment and transportation. The Biden administration will find out the hard way that in a globalized, densely connected world, what happens in Russia doesn’t stay in Russia. Russia may be the first victim of U.S. sanctions. But the entire world will pay the final price. So will the dollar…

My Vision Is Coming to Pass: In 2009, I facilitated and participated in the first-ever financial war game hosted by the Pentagon. This war game was conducted at the top-secret Warfare Analysis Laboratory of the United States (code name: WALRUS) located in the Applied Physics Laboratory, about halfway between Washington, D.C., and Baltimore.

I wrote about this in 2011 in Chapters 1 and 2 of my book "Currency Wars." The scenario I presented at the time was that Russia and China would accumulate large gold reserves, pool their gold and launch a new digital currency backed by gold in place of the U.S. dollar. Russia and China would then insist that any purchases of Russian energy or Chinese manufactured goods be paid for in the new currency. It would be a clear-cut effort to get out from under U.S. dollar hegemony and to protect themselves from U.S. dollar-based economic sanctions. Of course, that’s exactly what’s playing out today.

The Last Straw for Russia and the World: It took the U.S. dollar 33 years (1914–1944) to achieve its status as the leading global reserve currency. The dollar lost its gold link in 1971 but remained the leading reserve currency due in part to the petrodollar deal that was worked out by Nixon and Kissinger in 1974. The world was flooded with dollars through a combination of Fed money printing and U.S. trade deficits.

The difficulties began in the 1990s and early 2000s when the U.S. used financial sanctions to punish enemies such as Iran, North Korea, Venezuela and, to a limited extent, Russia. The U.S. kept going back to sanctions over and over. Now that the U.S. has frozen the reserves of the Central Bank of Russia, this is the last straw for Russia and the world.

After all, if dollar reserves are no longer a safe haven, then who needs dollar reserves? The world will demand something more dependable that can’t be frozen on U.S. whims. The U.S. is destroying the value of the dollar by abusing sanctions. In the future, the dollar will not be that important. It won’t happen overnight, but the unprecedented sanctions against Russia will only accelerate the process."

"The Great Depression II"; “The Bubble Pops March 16th At Exactly 2 P.M"

"The Great Depression II"
by Jeff Thomas

"Whenever a movie has been a huge hit, the film industry tries to follow it up by doing a sequel. The sequel is almost invariably far more costly, as there’s the anticipation by those who create it that it will be an even bigger blockbuster than the original.

The Great Depression of the 1930’s is seen by most people to be the be-all and end-all of economic catastrophes and there’s good reason for that. Although the economic cycle has always existed, the period leading up to October 1929 was unusual, as those in the financial sector had become unusually creative.

Brokers encouraged people to buy into the stock market as heavily as they could afford to. When that business began to level off, they encouraged people to buy on margin. The idea was that the buyer would only put up a fraction of the money for the purchase and the broker would "guarantee" full payment to the seller. As a condition to the agreement, the buyer would have to relinquish to the broker the right to sell his stock at any point that he wished, should he feel the need to do so to get himself off the hook in the event of a significant economic change.

Both the buyer and the broker were buying stocks with money that neither one had. But the broker entered into the gamble so that he could charge commissions, which he would be paid immediately. The buyer entered into the gamble, as he had been promised by the broker that stocks were "going to the moon" and that he’d become rich.

Banks got into the game, as well. At one time, banks took money on deposit, then lent that money out at interest. They would always retain a percentage of the deposited money within the bank to assure that they could meet whatever the normal demand for withdrawals might be. But, eventually, bankers figured out that, if they were prepared to gamble, they could lend out far more money – many times the amount that they had received on deposit. As long as very few loans turned bad, they would eventually get the money back, with interest.

And so, in the 1920’s, they loaned money to people so that they could buy into the stock market more heavily. From that point forward, an investor who was tapped out and couldn’t afford to buy more stock, then bought on margin. When he was no longer able to even afford to buy on margin, he borrowed money from the bank to buy on margin. That meant that only a tiny percentage of the "money" that passed hands actually existed. The great majority of investment funds only existed on paper.

Of course, the very existence of this absurd anomaly depended upon a market that was thriving and moving steadily upward. If for any reason, there were a sudden loss of confidence in the banks, large numbers of depositors would demand to withdraw their deposits and there would be bank failures, as the banks had been playing with money that did not exist. Likewise, if that loss of confidence were to take place with regard to the stock market, large numbers of stockholders would try to sell at the same time and the market would collapse, as the brokers had been playing with money that did not exist.

In the 1920’s, fortunes were being made by those who ran banks and brokerage houses – at a rate that greatly exceeded anything that had ever existed. Unfortunately, they’d created the greatest financial bubble in history and, when it popped, as all bubbles do, it popped in a very big way.

Thousands of banks were wiped out. Thousands of brokerage houses were wiped out. And millions of investors were wiped out. Not surprising that laws were then passed to assure that such a disaster could never occur again. Of particular importance was the Glass Steagall Act.

Then, in 1999, Glass Steagall was repealed. This was done under the advice of Fed chairman Alan Greenspan, and was accepted readily by then-president Bill Clinton, as he was assured that the repeal would mean a dramatic increase in investment, which would assure a shining legacy for him as he left office.

My own first reaction to the repeal was that, over the ensuing years, we’d see irrational investment in the real estate market, made possible through bank loans. This would lead to a crash in real estate, followed by a crash in the stock market. I believed that this debacle would be papered over by governments, eventually leading to a further crash, and that the latter crash would be of epic proportions.

But, why should this be? Why should the second crash be so much greater? Well, the magnitude of a crash tends to be equal to the magnitude of the economic abnormality that preceded it. The crash of 1929 was greater than previous crashes, because bankers and brokers had found new ways to inflate the bubble beyond anything that had existed before. Likewise, they’ve become even more creative this time around and have inflated the bubble far beyond what existed in 1929. The level of debt far exceeds anything the world has ever seen.

The 2008 crash was, in effect, a mini-crash. No correction ever took place. Instead, it was papered over by massive increased debt, assuring that, when the inevitable big crash did occur, the severity would be far beyond any other crash in history. The sequel to the 1929 crash will be much like movie sequels. With movies, the producers invest more money into the sequel than they spent on the original movie, in the belief that, if they just throw enough money at it, it will somehow be better and make them even more money than the original.

Likewise in economic events, the assumption is that, if a great deal of money had been made in the buildup to the last major collapse, surely, by creating even more debt this time around, the profit to be made will be far greater than before. And this has proven to be true. Financial institutions have entered into an era of profit that has historically been without equal. The original was a monster and the sequel will prove to be an even bigger monster.

Of course, there’s a difference between movies and economic events. With movies, the producers cash in when the moviegoers pay their admissions fee. With economic crises, the producers make their fortunes in the lead-up to the crash. The crash itself simply passes the bill for the disaster to the moviegoers.

The question that’s always asked prior to any crash is, "When will it happen?" Unfortunately, although crises can be analyzed and predicted beforehand, the date is more uncertain. The decisive factor is the loss of confidence by the general public. When they collectively get weak knees about the economic future – when they withdraw their deposits from banks and sell their shares in the market, the bubble will suddenly pop.

And so, the actual screening of this particular epic could be a year from now, or it could be next week. So, it might be premature to buy your box of popcorn now, but, when crashes come, they come suddenly and without warning. Since it’s not possible to predict an exact date, those who don’t wish to be casualties of the collapse may wish to prepare for it – to get free of debt, to liquidate assets that will be devalued in a crisis, to turn the proceeds into real money (precious metals) and to relocate to a place that’s likely to be less impacted by the monetary and social crisis that will ensue."
“The Bubble Pops Tomorrow - Jim Rickards"
by Brian Maher

"Jim Rickards has been on TV countless times warning of the massive stock market bubble. But he’s never issued a warning like this. Because on March 16th at exactly 2 p.m… This bubble is finally set to pop. And when it does it could take the entire U.S. financial system down with it. With less than 48 hours on the clock, there’s nothing left to do but prepare. So click here now to see what’s coming and what he recommends.

Gregory Mannarino, "The UN Warns Of Possible Nuclear War; Gold, Silver, Crude Fall"

Gregory Mannarino, PM 3/14/22:
"The UN Warns Of Possible Nuclear War;
 Gold, Silver, Crude Fall"