Thursday, December 9, 2021

"The Economy is Running on Fumes - Middle Class is Getting Destroyed"

Full screen recommended.
Dan, iAllegedly, PM 12/9/21:
"The Economy is Running on Fumes - 
Middle Class is Getting Destroyed"
"How do people afford the increases that are happening all around them? Every day there’s a new major expense getting reported. Health insurance is the latest major increase. This includes housing, food, clothing and everything else in our lives."

The Daily "Near You?"

Grimsby, North East Lincolnshire, United Kingdom.
Thanks for stopping by!

"In All Seriousness..."

"Thomas Edison said in all seriousness: "There is no expedient to which a man will not resort to avoid the labor of thinking"- if we bother with facts at all, we hunt like bird dogs after the facts that bolster up what we already think- and ignore all the others! We want only the facts that justify our acts- the facts that fit in conveniently with our wishful thinking and justify our preconceived prejudices. As Andre Maurois put it: "Everything that is in agreement with our personal desires seems true. Everything that is not puts us into a rage." Is it any wonder, then, that we find it so hard to get at the answers to our problems? Wouldn't we have the same trouble trying to solve a second-grade arithmetic problem, if we went ahead on the assumption that two plus two equals five? Yet there are a lot of people in this world who make life a hell for themselves and others by insisting that two plus two equals five- or maybe five hundred!"
- Dale Carnegie

"Life, eh?"

"We said together, wistfully, 'Life, eh?' It says everything without having to say anything: that we all experience moments of joyful or painful reflection, sometimes alone, sometimes sharing laughs and tears with others; that we all know and appreciate that however wonderful and precious life is, it can equally be a terribly confusing and mysterious beast. 'Life, eh?'"
- Miranda Hart

The Poet: Langston Hughes, "Dreams"

"Dreams"

"Hold fast to dreams
For if dreams die
Life is a broken-winged bird
That cannot fly.
Hold fast to dreams
For when dreams go
Life is a barren field
Frozen with snow."

- Langston Hughes

"How It Really Is"

 

"Hint of Truth"

"Hint of Truth"
by Bill Bonner

YOUGHAL, IRELAND – "In the news yesterday came a report from FantasyLand that a nonexistent social media company had chosen a non-tech, non-media executive to head up its nonexistent operations. CNET reports: "GOP Rep. Devin Nunes to leave Congress to run Trump's media company. The California Republican has been one of the former president's most ardent supporters."

Our premise here at the Diary is that it is real money that keeps our shoulders to the wheel and our feet on the ground. We want it. And we get it by providing goods and services to others. That is why a “capitalist” economy is so much more productive, prosperous, and polite than a “socialist” economy. The “hidden hand,” as 18th-century economist Adam Smith called it, guides people to increase the wealth of others as well as themselves. But substitute fake money for real money… and even a capitalist system soon goes giddy with corruption, malinvestment, and waste. And substitute an “ardent supporter” for a real entrepreneur or businessman… and… well… investors are probably better off keeping their money in their pockets.

Midas Touch: Axiomatic in a fake-money economy is that real capital is squandered on projects that never produce a profit (an increase to the world’s wealth). This is the story of one of them. Behind it is a remarkable story of a remarkable man with a remarkable career… and a remarkable new plan for separating investors from their money. Yes, we speak of Donald J. Trump, impresario, former president, entertainer, developer… and who knows what else.

Mr. Trump (and a few Wall Street whizzes in cahoots with him) set up a SPAC (special-purpose acquisition company), Digital World Acquisition Company (DWAC). The sole aim of this company was to purchase a media company, Trump Media and Technology Group, that they also set up.

There is nothing particularly notable about a SPAC. People with name recognition set them up. Other people invest in them. Then, the SPAC is supposed to go out into the real world and buy a real company… thus putting the acquired company on the public stock market – without all the usual IPO rigamarole – and making SPAC investors a lot of money. At least, that’s how investors think it works.

In this case, the DWAC stock soared when the deal to purchase Trump Media and Technology Group was announced – leading to a nearly 850% gain for investors in a couple of days. And this is not the first time money has been made and lost by attaching the Trump name to a long-shot deal. Set up by Trump himself, there was Trump Shuttle… and Trump University. And now, others have gotten in on the act, with a Trump crypto… and a Baby Trump crypto… and another token with the same initials as Trump’s new “media and technology” company, TMTG (interestingly named The Midas Touch Gold).

Clear and Present Danger: Your editor admits to some first-hand knowledge of the SPAC world. One of the companies with which he is associated recently completed a SPAC deal. In our experience… and by our cynical reckoning of the way the world works… it is unlikely that most SPAC deals will lead to any real-world business success. Businesses are complex. SPAC promoters generally lack the experience or the determination to fully grasp them. What SPAC organizers have is a pot of money from investors… and a keen motivation to spend it.

If they buy nothing, they have to return the money. But if they buy something, they get a part of the deal and come out ahead – whether it works for investors, or not. From the investors’ standpoint, this is not a good setup; it is a FantasyLand innovation, encouraging the SPAC organizers to pay too much for businesses they don’t really understand. And in the case of DWAC, there was nothing they could understand. The business didn’t exist.

Yes, Dear Reader, the odds that the Trump SPAC would lead to a successful business fell dramatically when the SPAC targeted Trump Media and Technology Group (TMTG), another Trump company that is more wishful thinking than reality.

It’s hard enough to find a good business at a good price, especially with so many SPACs looking for them. A nonexistent business (one that has no sales, no managers, no patents, no offices, no profits, no coffee machine, no market niche, no brand, etc.) may be easy to propose… but it is much less likely to ever be profitable.

Buying a nonexistent business founded by the same people who started up the SPAC in the first place is also a clear and present danger. Typically, at least the seller knows his business. In this case, neither buyer nor seller has any idea how to build a successful social media company. And then, yesterday’s announcement – turning to a political hack with no experience either in technology or media, nor anything other than dairy farming (perhaps) and political chicanery (surely) – dooms the project altogether.

Fast Money: We might add, too, that “Truth Social,” Trump’s proposed social media platform, invites ridicule as well as losses. We humans only get a faint whiff of truth, rarely, when the wind is blowing in the right direction, and we have just suffered some crushing and humiliating loss. Truth 24/7 is much more than we can handle. And now… adding to the odds against investors… the pros are circling like vultures, ready to pick the carcass clean.

Over the weekend, the new Trump group announced that it had struck a deal to raise $1 billion from hedge funds and other large players. The deal gives these insiders the right to buy shares for 40% below the retail price. These are not patient, long-term investors, with faith in the new business or its new CEO. These are the fast-money mavens of FantasyLand, preying on ideologically driven, naive “investors,” who think they can make the world a better place… and make money, too. Apparently, the insiders think the stock is way overpriced. Apparently, too, they expect to make money in the old-fashioned way… buying at wholesale… and selling to the rubes at retail.

This is okay with us. It’s fun to watch. And however it goes, we’ll claim it proves our Diary maxim – that “investors don’t get what they want or what they expect; they get what they deserve.” And in this case, as the new project inevitably heads to the finance morgue, they are likely to get a hint of Truth as a bonus."

"Rising Prices And More Empty Shelves At Kroger!"

Full screen recommended.
Adventures with Danno, 12/9/21:
"Rising Prices And More Empty Shelves At Kroger!"
"In today's vlog we are at Kroger with a lot of empty shelves. We are here to check out skyrocketing prices, and to get a few items of course they don't have. It's getting rough out here as stores seem to be struggling with getting products! Thank you so much for watching, and we'll see you in the next video!"

Gregory Mannarino, "Is A Stock Market Drop Imminent? This Is What You Need To Know Now"

Gregory Mannarino, AM 12/9/21:
"Is A Stock Market Drop Imminent? 
This Is What You Need To Know Now"

Wednesday, December 8, 2021

Musical Interlude: 2002, "River Of Stars"

Full screen recommended.
2002, "River Of Stars"

"Your Money Is Not Safe On A Computer Screen; Don't Buy A New Car; Everyone Is Quitting Their Jobs"

Full screen recommended.
Jeremiah Babe, PM 12/8/21:
"Your Money Is Not Safe On A Computer Screen; Don't Buy A New Car;
Everyone Is Quitting Their Jobs"

Gerald Celente & The Judge: "We've Lost Our Freedom; New Omicron Mandates"

Gerald Celente & The Judge:
 "We've Lost Our Freedom; New Omicron Mandates"
"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."

"The Biggest Fall in 60 Years"

"The Biggest Fall in 60 Years"
by Brian Maher

"The Daily Reckoning, June 27, 2019: “Given the finite ability to service debt outstanding… future economic growth, if we are to have it, will need to be based largely on gains in productivity.”

CNBC, Dec. 7, 2021: “Labor productivity fell at the fastest rate in more than 60 years in the third quarter, according to a Labor Department report Tuesday.”

It is true, supply chain disorders have played the devil with economic functioning. Equally true, the virus has been working its mischief. Yet economists had promised us galloping 2021 economic growth after 2020’s tumults. The tumults continue nonetheless. When will they clear on through? We have yet to encounter a plausible answer.

Trillions More Debt: Meantime, debt levels have streaked to impossible heights since June 27, 2019. The virus and the ensuing monetary and fiscal deliriums were still one year distant. The United States government has heaped on an additional $6 trillion of debt in the intervening space. Today’s national debt exceeds $29 trillion.

In 2019’s fourth quarter, the United States debt-to-GDP ratio went at 106% — itself plenty handsome. In 2021’s current quarter the same ratio runs to 125%. Private debt represented 218% of GDP in 2019. In 2020 private debt represented 235% of GDP.

We lack data for 2021, yet hazard no meaningful reducing. And now we learn productivity is plunging at the dizziest rate in over 60 years.

Productivity = Growth: Productivity growth transformed these United States from a stump-toothed backwater into a global behemoth, an economic Colossus bestride the world. Michael Lebowitz of Real Investment Advice: “Productivity growth over the last 350-plus years is what allowed America to grow from a colonial outpost into the world’s largest and most prosperous economic power.”

Productivity growth averaged 4–6% for the 30 years post-WWII. But average productivity has languished between 0–2% since 1980. Meantime, labor productivity averaged 3.2% annual growth from World War II to the end of the 20th century. And since 2011? A mere 0.7%.

Even the Federal Reserve Bank of San Francisco stares the problem square in the eyes: "Estimates suggest the new normal pace for U.S. GDP growth remains 1.5–1.75%, noticeably slower than the typical pace since World War II…A larger challenge is productivity. Achieving GDP growth consistently above 1.75% will require much faster productivity growth than the United States has typically experienced since the 1970s."

Gold and Productivity: What might account for America’s declining productivity growth? We have previously raised a possibility: Look to Nixon’s 1971 slamming of the gold window. The gold standard, though a sad caricature of a gold standard in its dying days, nonetheless enforced an honesty. A wastrel nation that consumed more than it produced would eventually run through its gold stocks.

The fiat dollar, the unbacked dollar, lifted the penalty. It could take things in without sending gold out. A liberated Federal Reserve finally struck its golden shackles… spread its nets… and ensnared the nation in debt. In 1970 — the year before Nixon cut the dollar’s final tether to gold — public debt totaled $371 billion. Or in today’s dollars, some $2.6 trillion.

U.S. public debt today exceeds $29 trillion… and fast approaching $30 trillion. Lebowitz: "The stagnation of productivity growth started in the early 1970s. To be precise it was the result, in part, of the removal of the gold standard and the resulting freedom the Fed was granted to foster more debt… over the last 30 years the economy has relied more upon debt growth and less on productivity to generate economic activity. “Unfortunately, productivity requires work, time and sacrifice,” he adds."

The Financialization of America: Yet the emerging American economy abandoned the grimy toil of the factory floor and the workbench…. and struck out for Wall Street. It went chasing after the fast buck — the easy buck. The financialization of the American economy was underway. Ten percent of GDP in 1970, the finance industry grew to 20% of GDP by 2010… like weeds mushrooming through an abandoned factory.

And as weeds choke a flowering garden, finance choked the flowering of labor…The bottom 90% of American earners advanced steadily from the early 1940s through the early 1970s. But they’ve been sliding back ever since — or held even at best. In contrast we find the top 1% of earners…From 1920 to the early 1970s they lost ground to the bottom 90%. But beginning around 1980 they went leaping ahead… and began showing society their dust.

Good or Bad? But perhaps we can declare the race a draw. Labor’s loss is simply capital’s gain. The economy as a whole comes out even. Money has merely shifted pockets. Perhaps the transaction even benefits the economy. Capital could wring more productive use out of it than labor. But has the United States economy benefited from financialization?

A financialized economy demands perpetually expanding credit — debt — to keep the show going. Servicing that debt absorbs increasing amounts of society’s income. That, in turn, leaves less to save… and to invest in productive assets. Speculation goes amok. Economists Gerald Epstein and Juan Antonio Montecino have plowed through the numbers. These numbers reveal that financialization is — in fact — economically destructive.

A $22.7 Trillion Drain: Since 1990… these gentlemen conclude the financial sector has drained trillions and trillions from the United States economy: "What has this flawed financial system cost the U.S. economy?… We estimate these costs by analyzing three components: (1) rents, or excess profits; (2) misallocation costs, or the price of diverting resources away from non-financial activities; and (3) crisis costs, meaning the cost of the 2008 financial crisis. Adding these together, we estimate that the financial system will impose an excess cost of as much as $22.7 trillion between 1990 and 2023, making finance in its current form a net drag on the American economy.

$22.7 trillion exceeds 2020 GDP by nearly $2 trillion. 2020 was a locust year, yet the central thesis stands: Financialization represents a vast economic wastage.
 Yet these gentlemen settled upon their $22.7 trillion figure prior to the pandemic. We have seen no update. But we hazard it would be an even greater enormity. But the Federal Reserve must keep the show running with greater debt yet — else the curtain falls, and the lights go dark. It is a dreadful cycle. Eventually it leaves the cupboards bare. It leaves the future empty.

Compounding Negative Returns: Average real annual economic growth since 2009 runs to some 2.2%. Compare the past decade’s 2.2% with the larger 3.22% trend since 1980. One percentage point may seem a trifle. And one year to the next it is a trifle. Yet year upon year upon year it is not. Jim Rickards calculates the United States would be $4 trillion richer — had the 3.22% trend held this past decade. Run it 30, 50, 60 years… Jim concludes the nation would be twice as rich over a lifetime. Productivity is likely the lone way up. And productivity has just plunged at its greatest rate in 60 years…"

Gregory Mannarino, "A Scary 'Economic Disaster' Warning, And Is War Coming?"

Gregory Mannarino, PM 12/8/21:
"A Scary 'Economic Disaster' Warning, And Is War Coming?"

"Economists are Struggling to Hide the Economic Collapse"

Dan, iAllegedly, 12/8/21:
"Economists are Struggling to Hide the Economic Collapse"
"The opinions may vary, but the economists are having a difficult time hiding the impending economic collapse. Credit is maxed out and savings accounts are at an all time low. Main street is suffering while Wall Street thrives."

"A Look to the Heavens"

"These cosmic clouds have blossomed 1,300 light-years away, in the fertile starfields of the constellation Cepheus. Called the Iris Nebula, NGC 7023 is not the only nebula to evoke the imagery of flowers. Still, this deep telescopic image shows off the Iris Nebula's range of colors and symmetries, embedded in surrounding fields of interstellar dust. 
Within the Iris itself, dusty nebular material surrounds a hot, young star. The dominant color of the brighter reflection nebula is blue, characteristic of dust grains reflecting starlight. Central filaments of the reflection nebula glow with a faint reddish photoluminesence as some dust grains effectively convert the star's invisible ultraviolet radiation to visible red light. Infrared observations indicate that this nebula contains complex carbon molecules known as PAHs. The dusty blue petals of the Iris Nebula span about six light-years."

"What If..."

"What if when you die they ask, "How was Heaven?"
~ Author Unknown

A truly terrifying thought..

"And When It Happens..."

“Life will break you. Nobody can protect you from that, and living alone won’t either, for solitude will also break you with its yearning. You have to love. You have to feel. It is the reason you are here on earth. You are here to risk your heart. You are here to be swallowed up. And when it happens that you are broken, or betrayed, or left, or hurt, or death brushes near, let yourself sit by an apple tree and listen to the apples falling all around you in heaps, wasting their sweetness. Tell yourself you tasted as many as you could.”
- Louise Erdrich

The Poet: Theodore Roethke, "The Far Field"

"The Far Field"

I
"I dream of journeys repeatedly:
Of flying like a bat deep into a narrowing tunnel
Of driving alone, without luggage, out a long peninsula,
The road lined with snow-laden second growth,
A fine dry snow ticking the windshield,
Alternate snow and sleet, no on-coming traffic,
And no lights behind, in the blurred side-mirror,
The road changing from glazed tarface to a rubble of stone,
Ending at last in a hopeless sand-rut,
Where the car stalls,
Churning in a snowdrift
Until the headlights darken.

II
At the field's end, in the corner missed by the mower,
Where the turf drops off into a grass-hidden culvert,
Haunt of the cat-bird, nesting-place of the field-mouse,
Not too far away from the ever-changing flower-dump,
Among the tin cans, tires, rusted pipes, broken machinery,-
One learned of the eternal;
And in the shrunken face of a dead rat, eaten by rain and ground-beetles
(I found it lying among the rubble of an old coal bin)
And the tom-cat, caught near the pheasant-run,
Its entrails strewn over the half-grown flowers,
Blasted to death by the night watchman.
I suffered for young birds, for young rabbits caught in the mower,
My grief was not excessive.
For to come upon warblers in early May
Was to forget time and death:

How they filled the oriole's elm, a twittering restless cloud, all one morning,
And I watched and watched till my eyes blurred from the bird shapes,-
Cape May, Blackburnian, Cerulean,-
Moving, elusive as fish, fearless,
Hanging, bunched like young fruit, bending the end branches,
Still for a moment,
Then pitching away in half-flight,
Lighter than finches,
While the wrens bickered and sang in the half-green hedgerows,
And the flicker drummed from his dead tree in the chicken-yard.

- Or to lie naked in sand,
In the silted shallows of a slow river,
Fingering a shell,
Thinking:
Once I was something like this, mindless,
Or perhaps with another mind, less peculiar;
Or to sink down to the hips in a mossy quagmire;
Or, with skinny knees, to sit astride a wet log,
Believing:
I'll return again,
As a snake or a raucous bird,
Or, with luck, as a lion.
I learned not to fear infinity,
The far field, the windy cliffs of forever,
The dying of time in the white light of tomorrow,
The wheel turning away from itself,
The sprawl of the wave,
The on-coming water.

III
The river turns on itself,
The tree retreats into its own shadow.
I feel a weightless change, a moving forward
As of water quickening before a narrowing channel
When banks converge, and the wide river whitens;
Or when two rivers combine, the blue glacial torrent
And the yellowish-green from the mountainy upland,-
At first a swift rippling between rocks,
Then a long running over flat stones
Before descending to the alluvial plane,
To the clay banks, and the wild grapes hanging from the elmtrees.
The slightly trembling water
Dropping a fine yellow silt where the sun stays;
And the crabs bask near the edge,
The weedy edge, alive with small snakes and bloodsuckers,-
I have come to a still, but not a deep center,
A point outside the glittering current;
My eyes stare at the bottom of a river,
At the irregular stones, iridescent sandgrains,
My mind moves in more than one place,
In a country half-land, half-water.

I am renewed by death, thought of my death,
The dry scent of a dying garden in September,
The wind fanning the ash of a low fire.
What I love is near at hand,
Always, in earth and air.

IV
The lost self changes,
Turning toward the sea,
A sea-shape turning around,-
An old man with his feet before the fire,
In robes of green, in garments of adieu.
A man faced with his own immensity
Wakes all the waves, all their loose wandering fire.
The murmur of the absolute, the why
Of being born falls on his naked ears.
His spirit moves like monumental wind
That gentles on a sunny blue plateau.
He is the end of things, the final man.

All finite things reveal infinitude:
The mountain with its singular bright shade
Like the blue shine on freshly frozen snow,
The after-light upon ice-burdened pines;
Odor of basswood on a mountain-slope,
A scent beloved of bees;
Silence of water above a sunken tree:
The pure serene of memory in one man,-
A ripple widening from a single stone
Winding around the waters of the world."

- Theodore Roethke

"The Art And Science..."

 

"We All Live in a Metaversian Cosmos"

"We All Live in a Metaversian Cosmos"
by Bill Bonner

"We all live in a yellow submarine
Yellow submarine, yellow submarine
We all live in a yellow submarine
Yellow submarine, yellow submarine..."
– “Yellow Submarine” by The Beatles

YOUGHAL, IRELAND – "A storm passed over Ireland yesterday. The power went off. Trees blew down. The roof of an old shed flew off. Oh… if we could only live in the Metaverse… where the only things that happen are things we want to happen. If only we knew where to find it!

Here on Planet Earth, life goes on. And with so many hours… so many resources… so much brain power and capital applied to the fantasy world, it is not surprising that the real world feels a little neglected. Here’s the latest news from Breitbart: "Productivity Crashes More Than Expected." "The productivity of U.S. workers in the third quarter of 2021 dropped at a rate of 5.2 percent, the Department of Labor said Tuesday. Economists had forecast productivity would decline by 4.9 percent. Unit labor costs soared at an annual rate of 9.6 percent in the third quarter of 2021, reflecting a 3.9 percent increase in hourly compensation and the decline in productivity."

That was more than expected. Analysts polled by Econoday had forecast unit labor costs to rise 8.3 percent… Let’s see… higher labor costs… less labor output. Is that a formula for success, or what?

Fantasy World: But in the fantasy world, assets get more and more valuable… even though they don’t produce any more wealth…houses go up so much that you can “take out” some of the value, without giving up floorspace…“crypto” currencies… meme stocks… NFTs… and money-losing companies can make you rich – even without sales, profits, goods or services, employees, skills, or tax bills. What in the real world can compete with that?

Yes, we all live in a yellow submarine now… in the deep calm of the metaversian cosmos. But where did it come from?

The Real Cost of Cheap Credit: An educated guess: from a flood of liquidity from the Federal Reserve, that buoyed up everything not firmly attached to the real world. For the last 10 years, scarcely anyone’s toes have been able to touch the bottom.

Even before the Wall Street bailout of 2008-2009, interest rates had been falsified by the Fed for many years. Cheap credit caused a bubble in the housing market that eventually cost up to 10 million American homeowners their homes. Wall Street lenders, however, got off scot-free. They should have taken their losses (they lent far too much money with far too little collateral). And the stock market should have gained a solid footing, but at a much lower level. Instead, the Fed lowered lending rates even further… and the water got deeper.

Today, the federal funds rate is all of 0.08% (essentially zero)… and inflation is running at 6.2%. In other words, the Fed is lending to member banks at a MINUS 6% rate. And by our calculations last month, in order to get ahead of inflation – as Paul Volcker did in 1980 – the Fed would have to put its funds rate up to almost 10%. Not going to happen.

Fleeting Fantasy: Meanwhile, the most important credit in the world, the U.S. 10-year bond, is trading at a nominal yield of 1.4%. But subtract the going inflation rate – 6.2% – and you see that the real yield is MINUS 4.8%. And now, after lending money for years at yields below inflation, is it any wonder that people retreat to fantasyland… a submarine quietly navigating beneath the tempestuous waves?

It is a place where time has stopped… and the future holds no risk. You will not age. No storms will blow up. No one will be shot or die of the omicron variant. Yes, it is a fantasy world. A make-believe world. A world that exists… but only as a fleeting aberration.

Is the Bubble Deflating? And what’s this? SoftBank, the Japanese company that has funded many fantasy start-ups, lost nearly 16% last week. Cathie Wood’s Ark Invest, that invested so much money in them, lost about the same. And bitcoin… the coin of the new fantasy realm… lost a quarter of its peak value in the last month. How long before the fantasists need to come up for air?"

The Daily "Near You?"

Napier, Hawke's Bay, New Zealand. Thanks for stopping by!

"Can Any Nation-State Survive the Era of Inequality and Scarcity?"

"Can Any Nation-State Survive
 the Era of Inequality and Scarcity?"
by Charles Hugh Smith

"The possibility that the United States could fragment is no longer a marginalized topic. Maps displaying various post-U.S. regional configurations accompany essays exploring how and why a break-up of the U.S. would be a solution to regional and ideological polarization, for example, Max Borders' recent article, "Dear America: It's Time to Break Up."

But two forces larger than political polarization may fragment nation-states across the globe, including the U.S.: inequality and scarcity. Inequality and corruption go hand in hand, of course, as the wealthiest few influence the state to protect their monopolies and backstop their speculative gains.

Inequality also goes hand in hand with the collapse of nation-states, as this seminal paper explains: "Human and nature dynamics (HANDY): Modeling inequality and use of resources in the collapse or sustainability of societies." The parasitic elite can accumulate the majority of income, wealth, political power and resources in eras of expanding abundance, as what's left is enough to support an expanding populace that consumes more per capita every year, i.e. broad-based prosperity.

But once abundance transitions to scarcity, the economy and society can no longer sustain the dead weight of its outsized parasitic elite. The parasitic elite believes its bloated share of resources, wealth and power is not only sustainable but can be expanded without consequence, and so it deploys all its formidable power to keep the status quo unchanged even as scarcity lowers the living standards of the bottom 90% and hollows out the economy.

In effect, the modern central state, regardless of ideological label, optimizes inequality and growth. Once growth falters while inequality continues increasing, the only possible outcome is fragmentation and/or collapse. Put another way: the status quo is no longer the solution to inequality and scarcity, it is the problem. Private-sector and political elites are incapable of recognizing they are now the problem, and so the rapid unraveling of the status quo will come as a great shock to their magical-thinking confidence in their power.

The elite's delusional "solution" is a seamless, painless transition to a new era of abundance via "green energy." Unfortunately, this vision is 100% magical thinking, as all these projections ignore the physical realities of building out a global energy system that generates energy on the same scale as existing hydrocarbon energy sources. Read these three reports for reality-based assessments:

• "The New Energy Economy": An Exercise in Magical Thinking (manhattan-institute.org)
• "The Delusion of Infinite Economic Growth": Even "sustainable" technologies such as electric vehicles and wind turbines face unbreachable physical limits and exact grave environmental costs. (scientificamerican.com)
• "Assessment of the Extra Capacity Required of Alternative Energy Electrical Power Systems to Completely Replace Fossil Fuels" (PDF, Simon P. Michaux, Geological Survey of Finland) Read the 3-page abstract.

As explained in the first paper, inequality generates collapse and so does a decline in resources, i.e. scarcity. Put the two together and the only possible outcome is collapse of all centralized nation-states that optimize inequality and endless expansion of consumption. The issue isn't ideological labels or principles, it's whether the state solves problems or covers them up with fake fixes that accelerate collapse.

Nations which want to not just survive but emerge stronger have one path: a revolutionary transformation from "waste is growth" to degrowth, from an economy and state dominated by a parasitic elite to a strictly limited parasitic elite and from abject dependence on fragile supply chains originating in other nations to decentralized, localized independence for essentials.

I've written a book that is a template for this transformation. This book is the culmination of a lifetime of study, observation, experience and analysis: "Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States." Though I devote some analysis specifically to the U.S., the book is a template for any nation to not just survive scarcity but emerge stronger by evolving a degrowth economy and a decentralized political order. We have an extraordinary opportunity to transform our unsustainable "waste is growth" economy and toxic inequality to sustainable systems that optimize well-being rather than collapse. I'm offering the print edition at a 20% discount this month: print $20, Kindle ebook $8.95. You can read the Introduction and Chapter One for free (PDF).

This is me when I started thinking about these topics in 1972. Don't laugh too hard, you might hurt yourself..."

Gregory Mannarino, "The Federal Reserve WILL Do The Opposite Of What Everyone Expects"

Gregory Mannarino, AM 12/8/21:
"The Federal Reserve WILL Do 
The Opposite Of What Everyone Expects"

Greg Hunter, "Dollar Has Stage 4 Cancer"

"Dollar Has Stage 4 Cancer"
by Greg Hunter’s USAWatchdog.com

"Macroeconomic analyst Rob Kirby has long predicted Fed money printing would have to go “on a vertical curve where money has to be added to the system to keep the system from crapping out and imploding.” Kirby said this more than a year ago. Massive money printing can no longer be hidden, and it has disastrous and dire implications for the dollar. Kirby explains, “They are not hiding it. It’s too big. If you have an elephant under your carpet in the living room, you can’t say ignore the bump. Elephants are hard to hide. It’s also hard to hide $150 billion in daily turnover in cryptos. That translates into a $54 trillion annual run rate. That means trade settlement. This is admitting there is trade settlement in dollars, and that amount is growing. The dollar is on this exponential growth curve. More dollars are being pushed into the world market every year, and fewer of them are being used in trade settlement. What happens when dollars are not used in trade settlement? They return home. The dollars are returning home, and that’s why the price for everything in America is going up. That’s why the equity markets are higher when fundamentals say the equity markets should be down. We have a huge swath of the economy in America that is still shuttered from this supposed pandemic.”

Kirby contends we are getting closer to a dollar crash. Kirby says, “Until it gets so tall that it looks like the World Trade Center, and you know what happens when things get that tall? They come down in a heap, and that’s what’s going to happen with the dollar. It’s going to come down in a heap just like the World Trade Center. It’s going to be fast, and it’s going to be brutal. That’s where we are headed, and the powers that be know it. That’s what they are keeping from us. That’s why we have the censorship on social media. That’s why people who talk authoritatively about reality are censored and cut off because we are in trouble. They don’t want us to know, and I think they want a lot of us eliminated.”

Does that mean gold and silver have lost their shine to crypto currency? No way, and Kirby predicts, “Metal prices are suppressed. There is going to come a day when metal prices will free itself from the shackles it is currently engaged with. When that occurs, precious metals, in my view, will exceed what we have seen in the crypto universe. What we have seen in crypto currency in the last year or two, I think we could see that in spades in precious metals. The dollar has stage 4 cancer right now. Best you have insurance to cover yourself when the dollar does what it is destined to do.”

Join Greg Hunter on Rumble One-on-One with analyst Rob Kirby, founder of KirbyAnalytics.com. (There is much more in the 33 min. interview.) 

"And If You Try..."

 

"The Great Realignment: Countless More Americans Will Be Moving From Blue States To Red States In 2022"

"The Great Realignment: Countless More Americans 
Will Be Moving From Blue States To Red States In 2022"
by Michael Snyder

"We are rapidly becoming two very different nations with two very different cultures. At one time we truly were the “United” States of America, but now we have been split into two opposing camps that deeply hate one another. As a result, in recent years we have watched millions of Americans relocate for ideological reasons. This has caused “red states” to become even redder and “blue states” to become even bluer. At this point, there are just a handful of “purple states”, and it is in those states where our presidential elections are determined. It is really not healthy for just a few states like Pennsylvania and Michigan to have such power, but that is a topic for another article. In this article, I want to discuss why the mass exodus from blue states to red states is actually going to accelerate in 2022.

Right now, there is no issue in the United States that is more divisive than the COVID vaccine. Most conservatives want to be able to have the freedom to choose whether to take the injections or not, while many on the left want to use the power of government to compel people to get injected. It has truly been frightening to watch many on the left embrace authoritarianism so eagerly, and many leftist politicians just continue to tighten down the screws.

For example, New York City Mayor Bill de Blasio just decided to impose a very strict vaccine mandate on all private employers in his entire city…"Mayor Bill de Blasio announced what he called a first-in-the-nation vaccine mandate for private companies Monday. He said the combination of the Omicron variant and holiday gatherings forced him to take “bold” steps. He’s giving businesses just three weeks to make sure their workers are vaccinated. If you don’t get the jab, you won’t be allowed to keep your job."

There will not be a “testing option” under this new mandate, and so anyone that refuses to comply will be kicked to the curb two days after Christmas…"De Blasio said the city will release specific rules on Dec. 15, before the mandate takes effect Dec. 27. He said it will apply to in-person employees, but would not provide any details about enforcement. He also said there will not be a weekly testing option."

This is complete and utter lunacy, but of course we are witnessing lots of that in blue states these days. We are being told that this new mandate will apply to approximately 184,000 businesses, and that means that vast numbers of New Yorkers will soon be forced to search for greener pastures.

One of them is a woman named Cynthia. She told a reporter that this mandate gave her yet another reason “to get the hell out of New York”…"Cynthia, an employee at a Midtown marketing firm who refused to share her last name due to fear of blowback, told the Post that the new requirement is ‘another reason’ to leave the city. ‘Just terrific. Bill de Blasio just gave me another reason I need to get the hell out of New York, or at least find a job that lets me work remotely,’ she said."

Where will thousands upon thousands of displaced New Yorkers like Cynthia go? One conservative member of Congress that represents New York fears that many of them will head to “the free state of Florida”… ‘Mayor de Blasio can’t leave fast enough. He has crushed small business, the economy and quality of life. How many more New Yorkers does he want to see move to the free state of Florida?’ said US Rep. Nicole Malliotakis, who represents Staten Island and Brooklyn." So New York is going to get even bluer in 2022, and Florida will be getting even redder.

Down in Massachusetts, hundreds of hospital workers were just ruthlessly canned because they refused to comply with a vaccine mandate…"About 200 UMass Memorial Health employees are out of a job because they missed the health care system’s COVID vaccination deadline. UMass Memorial announced the mandate over the summer with a deadline to get vaccinated or receive an exemption by November 1. Employees were let go on December 1 if they did not get the vaccine. Many of those displaced health workers aren’t going to be able to find similar work in Massachusetts, and so they will head to red states."

As for UMass Memorial Health, I am not sure exactly what they plan to do. You can’t just pull people off the streets to be medical professionals. They will probably be short-handed for a long time to come, and that is just going to hurt the people that they are supposed to be serving.

In Oregon, a different sort of mandate has people thinking that it may be time to relocate. If you can believe it, officials in Oregon are actually thinking of making their indoor mask mandate permanent…"The Oregon Health Authority (OHA) assembled a Rules Advisory Committee (RAC) earlier this week to address a permanent indoor mask mandate in the state. Oregon is one of a few states that still retain one nearly two years into the pandemic. The committee included several community stakeholders, including representatives from the hospitality industry, the business sector, and faith communities, according to local ABC affiliate KATU."

I cannot understand why any rational decision maker would want to do such a thing, but apparently they are quite serious. There are a whole lot of very conservative people that live in eastern Oregon, and I think that even more of them are going to be moving over the border into Idaho in 2022.

Before I end this article, I want to mention what Canada has just done. Beginning November 30th, all unvaccinated individuals are now banned from using any form of public transportation… "In Canada, any travelers older than 12 years old must show proof of full vaccination to take any form of public transportation including domestic and international flights as well as trains. “Starting November 30 at 3:01 am EST, vaccination will be required for travel within and to depart Canada,” the Canadian travel website states. “A valid COVID-19 molecular test will no longer be accepted as an alternative to vaccination unless you’re eligible for one of the limited exemptions.” Trudeau and his minions have completely gone off the deep end, and I feel so sorry for freedom-loving Canadians that are deeply suffering under his regime.

Of course the Biden administration is considering something similar for domestic travel inside the United States. Let us hope that they never pull the trigger on such a move. All over the globe we are seeing governments become more authoritarian, and that certainly sets the stage for some of the things that I warned about in my latest book.

Here in the U.S., countless numbers of freedom-loving Americans are fleeing to red states as they seek to escape the oppression that they have been experiencing in blue states. Unfortunately, blue state tyrants have no intention of backing down, and this is going to create a tremendous amount of tension in our nation as we head into 2022 and beyond."

"How It Really Is"

 

Tuesday, December 7, 2021

"Get Your Money Out Of The Bank, Outages Coming; Buybacks Prop Up Markets; Maxing Out Credit Cards"

Jeremiah Babe, PM 12/7/21:
"Get Your Money Out Of The Bank, Outages Coming; 
Buybacks Prop Up Markets; Maxing Out Credit Cards"

Peak Prosperity, Dr. Chris Martenson, "1200 Dead in First 90 Days"

Peak Prosperity, Dr. Chris Martenson 12/7/21:
"1200 Dead in First 90 Days"
Related: 
This is shocking and extremely disturbing. 
Consider the implications and draw your own informed conclusions.
"Harrison Smith breaks down a shocking report of a German scientist named Dr. Andreas Noack who was reportedly murdered after revealing that a stable carbon compound called graphene hydroxide was found in the Covid injection that acts as thousands of tiny razor blades within the cardiovascular system."
"The data suggests that we may currently be witnessing
 the greatest organized mass murder in the history of our world."

Gerald Celente, "Play Scramble - Omicron = Moronic"

Full screen recommended.
Strong language alert!
Gerald Celente, 12/7/21:
"Play Scramble - Omicron = Moronic"

Musical Interlude: Moby, "Why Does My Heart Feel So Bad" (Ben-E.dit)

Full screen recommended.
Moby, "Why Does My Heart Feel So Bad" (Ben-E.dit)

"China's Commercial Real Estate Crash And Housing Bubble Burst On The Horizon As Evergrande Collapses"

Full screen recommended.
"China's Commercial Real Estate Crash And Housing
 Bubble Burst On The Horizon As Evergrande Collapses"
Full screen recommended.
by Epic Economist

"Global markets are in panic mode since the Chinese property developer Evergrande admitted that it's running out of money to pay off its gigantic billion dollar debt, and it doesn't have enough funds to finish thousands of construction projects that it had previously started. Market watchers around the world are sounding the alarm for a global financial crash as the debt-burdened property giant revealed that at least $24 billion in international bonds may not be refunded to bondholders this week, raising fears of bankruptcy and threatening to spark a real estate crash in China, which would then trigger a cascade of systemic failures and depress global markets in the process. Global market insiders revealed that Evergrande has already missed five deadlines for bond interest repayments and warned that the collapse of the property giant is about to send shockwaves throughout the global financial system.

According to a recent report published by Reuters, the Guangdong government will send a working group to oversee Evergrande's risk management, internal controls and operations. A quite desperate move and an attempt to spot any potential risks that may spark a chain reaction of failures within the company or a sudden meltdown that could end up collapsing the country's entire property market. Evergrande said that it's currently assessing how severe the financial damages are going to be and also trying to find offshore creditors to create a restructuring plan and prevent bankruptcy.

Once the main catalyst of China's property boom, Evergrande has now become the most indebted property company in the whole planet, with a debt load of around $300billion. Even the U.S. central bank, the Federal Reserve, is warning that China's looming real estate market crash can compromise global economic growth for years to come. Property accounts for a third of China's GDP, and the company's collapse would cost at least the equivalent of 2 percent of Chinese GDP because it would consequently spark the bankruptcy of several smaller firms in the sector.

Evergrande's meltdown already had a huge impact in the nation's real estate sector. On Monday, a smaller developer, Sunshine 100, defaulted on $179million of debt and interest payments that had been due on Sunday. The default occurred because of “liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment and the real estate industry”, the company said in an exchange filing. Sunshine 100 has repeatedly failed to meet its debt obligations this year and also defaulted on a bond repayment in August. The company has $385million of outstanding dollar notes, according to data compiled by Bloomberg.

Investors are also worried about a potential default by Kaisa Group Holdings, which faces a staggering $400million bond maturity this week since it failed to secure a debt swap that would have bought it crucial time to pay back some of its bonds. The group has the second-highest debt with foreign bondholders, just after Evergrande, accounting approximately $12billion. Meanwhile, already paralyzed by its massive debt, Evergrande is now threatening Chinese growth. The developer has more than 1,300 unfinished construction projects across China, as well as several financial products, such as electric cars, livestock, bottled water and even a football club, now left without financial support.

Over the past decade, the property giant has been piling on debt to finance its activities. But since the Chinese government decided to change criteria for borrowing, real estate companies were hard-hit by the new policies. Today, Evergrande has no cash to complete any of its projects, and thousands of buyers still have no idea if they will ever get the home they paid for. Some are calling the company's downfall as 'China's Lehman moment,' referencing the bankruptcy of former U.S. bank Lehman Brothers that helped to fuel the 2008 global financial crisis. Economists have been warning that over a third of China's developers could face a similar crisis. Considering that the country’s inflated housing market is stagnating, property values are about to go down, which will wreak further havoc on these firms' balance sheets.

The situation is raising widespread alarm on global financial markets, especially because China's property market is essential for the country's GDP and is valued at $55trillion, about four times larger than the rest of its economy. For global markets, a slight slump in the Chinese real estate market could result in a liquidity crunch and a major retraction. This turn of events couldn't be happening at a worse possible time for the global economy, given that fears of the new virus variant have sparked an overreaction in stock markets worldwide and economic conditions in the global economy."

"A Look to the Heavens"

"Sweeping through northern predawn skies, on November 24 Comet Leonard (C/2021 A1) was caught between two galaxies in this composite telescopic image. Sporting a greenish coma the comet's dusty tail seems to harpoon the heart of NGC 4631 (top) also known as the Whale Galaxy. Of course NGC 4631 and NGC 4656 (bottom, aka the Hockey Stick) are background galaxies some 25 million light-years away. 
On that date the comet was about 6 light-minutes from our fair planet. Its closest approach to Earth (and even closer approach to Venus) still to come, Comet Leonard will grow brighter in December. Already a good object for binoculars and small telescopes, this comet will likely not return to the inner Solar System. Its perihelion, or closest approach to the Sun, will be on January 3, 2022."

"Man's Nature..."

"Man has one name, and many more than two natures. 
But the essential two are these:
that he shall strive to impose order on chaos, 
and that he shall strive to take advantage of chaos…
A third element of man's nature is this: 
that he shall not understand what he is doing."
- John Brunner

"Lessons From Pearl Harbor"

"Lessons From Pearl Harbor"
by Jim Rickards

"Today’s the 80th anniversary of the Japanese attack on Pearl Harbor, which thrust the U.S. into World War II. While the actual attack was a shock to many Americans, it was the culmination of a series of policy decisions years in the making.

The most immediate catalyst came when the U.S. froze Japanese assets and imposed an embargo on oil shipments to Japan in the summer of 1941, after Japan rejected U.S. demands that it withdraw from China. Japan received over 80% of its oil from the U.S., so the embargo backed Japan into a corner. It could either submit to the U.S. demands, or it could launch an attack to secure the oil-rich territories of the Dutch East Indies (presently Indonesia).

It chose the latter. But a move against the Dutch East Indies would be vulnerable to attack from the Philippines, which was a U.S. commonwealth with a U.S. military presence. That threat would have to be neutralized, so a Japanese invasion of the Dutch East Indies would inevitably mean war with the U.S. Most policy experts expected any Japanese attack on U.S. forces would take place in the Philippines. But they first attacked the naval base and airfields at Pearl Harbor.

Japan didn’t just wake up one day and decide it was a good idea to attack the U.S. It was faced with a limited set of policy options in the face of the U.S. embargo, and took what it believed was a necessary action. The point being, wars are the end result of policy decisions that take place long before the first shot is fired. If a nation believes its vital interests are severely threatened, it will often choose war, not necessarily because it wants war, but because it believes it has no recourse. Now fast forward to today…

Russia is massing troops and offensive mobility capabilities on its border with Eastern Ukraine. The U.S. is concerned that Russia will invade Ukraine to annex the Donbass region, which is populated with Russian ethnic citizens and pro-Russian militias.

The U.S. policy makers seem to forget that the entire fiasco in Ukraine began in 2014 when CIA and MI6 operatives launched a “color revolution” that led to the overthrow of a duly elected pro-Russian president. This was part of a larger effort to include Ukraine in NATO and the EU. It was also done in support of a lucrative kickback racket that supported Democratic politicians, including the Clintons and the Bidens.

The result was a de facto split of Ukraine into a pro-Western half centered in Kiev and a pro-Russian half in the Donbass and Luhansk regions. Western intervention in what was a somewhat neutral status quo ignored the fact that Ukraine is like a dagger aimed at the heart of Russia, and forms part of an arc from Ukraine to Estonia (which is a NATO member). This arc surrounds Moscow: parts of it lie east of Moscow. A NATO-member or even pro-Western Ukraine is an existential threat to Russia. Ukraine is a red line as far as Russia is concerned.

The U.S. should have realized this and left the status quo. Instead, people like Secretary of State Anthony Blinken and National Security Advisor Jake Sullivan went too far under Obama. Now they’re back making the same mistake under Biden. Blinken says that if Russia intervenes, they will suffer enormous economic sanctions. But proposed sanctions include cutting off natural gas from Russia to Germany, which will hurt Germany worst of all. Besides, Russia has been under sanctions for over ten years, and it has not changed their behavior. Russia is not about to let Ukraine fall into the Western orbit over the threat of sanctions.

If a war breaks out, don’t just blame the Russians. Also blame Biden officials like Blinken and Sullivan, who should have left well enough alone. Don’t poke a bear in its own den. Below, I show you how elites derailed U.S.-Russian relations at a time when the U.S. needs Russia to help contain China. Let’s just hope it doesn’t lead to war. Read on."
"Elites Have Destroyed a Possible
U.S. - Russia Alliance to Contain China"
By Jim Rickards

"There’s no need to rehash the sordid politics of the U.S.-Russia relationship since 2014. That relationship became collateral damage to gross corruption in Ukraine. The U.S. and its allies, especially the UK under globalists like David Cameron, wanted to peel off Ukraine from the Russian orbit and make it part of the EU and eventually NATO.

From Russia’s perspective, this was unacceptable. It may be true that most Americans cannot find Ukraine on a map, but a simple glance at a map reveals that much of Ukraine lies East of Moscow.

Putting Ukraine in a Western alliance such as NATO would create a crescent stretching from Luhansk in the South through Poland in the West and back around to Estonia in the North. There are almost no natural obstacles between that arc and Moscow; it’s mostly open steppe. Completion of this “NATO Crescent” would leave Moscow open to invasion in ways that Napoleon and Hitler could only dream. Of course, this situation was and is unacceptable to Moscow.

Ukraine itself is culturally divided along geographic lines. The Eastern and Southern provinces (Luhansk, Donetsk, Crimea and Dnipro) are ethnically Russian, follow the Orthodox Church and the Patriarch of Moscow, and welcome commercial relations with Russia. The Western provinces (Kiev, Lviv) are Slavic, adhere to the Catholic Church and the Pope in Rome, and look to the EU and U.S. for investment and aid.

Prior to 2014, an uneasy truce existed between Washington and Moscow that allowed a pro-Russian President while at the same time permitting increasing contact with the EU. Then the U.S. and UK overreached by allowing the CIA and MI6 to foment a “color revolution” in Kiev called the “Euromaidan Revolution.” Ukrainian President Viktor Yanukovych resigned and fled to Moscow. Pro-EU protestors took over the government and signed an EU Association Agreement. In response, Putin annexed Crimea and declared it part of Russia. He also infiltrated Donetsk and Luhansk and helped establish de facto pro-Russian regional governments. The U.S. and EU responded with harsh economic sanctions on Russia.

Ukraine has been in turmoil (with increasing corruption) ever since. U.S.-Russia relations have been ice-cold, exactly as the globalists intended. The U.S- induced fiasco in Ukraine not only upset U.S.-Russia relations, it derailed a cozy money laundering operation involving Ukrainian oligarchs and Democratic politicians. The Obama administration flooded Ukraine with non-lethal financial assistance.

This aid was amplified by a four-year, $17.5 billion loan program to Ukraine from the IMF, approved in March 2015. Interestingly, this loan program was pushed by Obama at a time when Ukraine did not meet the IMF’s usual borrowing criteria. Some of this money was used for intended purposes, some was skimmed by the oligarchs, and the rest was recycled to Democratic politicians in the form of consulting contracts, advisory fees, director’s fees, contributions to foundations and NGOs and other channels.

Hunter Biden and the Clinton Foundations were major recipients of this corrupt recycling. Other beneficiaries included George Soros-backed “open society” organizations, which further directed the money to progressive left-wing groups in the U.S. This cozy wheel-of-fortune was threatened when Donald Trump became president. Trump genuinely desired improved relations with Russia and was not on the receiving end of laundered aid to Ukraine.

Hillary Clinton was supposed to continue the Obama policies, but she failed in the general election. Trump was a threat to everything the globalists, Democrats and pro-NATO elites had constructed in the 2010s. The globalists wanted China and the U.S. to team up against Russia. Trump understood correctly that China was the main enemy and therefore a closer union between the U.S. and Russia was essential.

The elites’ efforts to derail Trump gave rise to the “Russia collusion” hoax. While no one disputes that Russia sought to sow confusion in the U.S. election in 2016, that’s something the Russians and their Soviet predecessors had been doing since 1917. By itself, little harm was done. Yet, the elites seized on this to concoct a story of collusion between Russia and the Trump campaign. The real collusion was among Democrats, Ukrainians and Russians to discredit Trump.

It took the Robert Mueller investigation two years finally to conclude there was no collusion between Trump and the Russians. By then, the damage was done. It was politically toxic for Trump to reach out to the Russians. That would be spun by the media as more evidence of “collusion.”

It represents an enormous lost opportunity. When future historians look back on the 2010s, they will be baffled by the lost opportunity for the U.S. to mend fences with Russia, develop economic relations and create a win-win relationship between the world’s greatest technology innovator and the world’s greatest natural resources provider.

It will seem a great loss for the world. Here’s the reality: Russia, China and the U.S. are the only true superpowers and the only three countries that ultimately matter in geopolitics. That’s not a slight against any other power. But all others are secondary powers (the U.K., France, Germany, Japan, Israel, etc.) or tertiary powers (Iran, Turkey, India, Pakistan, Saudi Arabia, etc.). This means that the ideal posture for the U.S. is to ally with Russia (to marginalize China) or ally with China (to marginalize Russia), depending on overall geopolitical conditions. The U.S. conducted this kind of triangulation successfully from the 1970s until the early 2000s.

One of the keys to U.S. foreign policy in the last 50 or 60 years has been to make sure that Russia and China never form an alliance. Keeping them separated was key. In 1972, Nixon pivoted to China to put pressure on Russia. In 1991, the U.S. pivoted to Russia to put pressure on China after the Tiananmen Square massacre. Unfortunately, the U.S. has lost sight of this basic rule of international relations. It is now Russia and China that have formed a strong alliance, to the disadvantage of the United States.

Ultimately, this two-against-one strategic alignment of China and Russia against the U.S. is a strategic blunder by the U.S. Russia is the nation that the U.S. should have tried to court and should still be courting. That’s because China is the greatest geopolitical threat to the U.S. because of its economic and technological advances and its ambition to push the U.S. out of the Western Pacific sphere of influence.

Russia may be a threat to some of its neighbors, but it is far less of a threat to U.S. strategic interests. Therefore, a logical balance of power in the world would be for the U.S. and Russia to find common ground in the containment of China and to jointly pursue the reduction of Chinese power. But thanks to the elites’ political games, it hasn’t happened. Let’s just hope their malfeasance doesn’t drag us into an unnecessary war."