Thursday, October 6, 2022

“When Pigs Fly”

“When Pigs Fly”
(...or The Archaic Nature of the Jones Act)
by Addison Wiggin

“You can’t fatten the pig on market day.”
- John Howard

“Pigging” is the method used to clean sediment build-up in pipelines. You may have known that before the Nordstream Pipeline was sabotaged. Or maybe not. Allow us to indulge in the mechanics: Devices known as “pigs” are inserted into a “pig launcher” (or “launching station”). The launching station is then closed and the pressure-driven flow of the product in the pipeline is used to push the “pig” down the pipe until it reaches the receiving trap — the “pig catcher” (or “receiving station”).

As the pig travels through the pipeline, it pushes out sediment and cleans the pipe walls, leaving the pipeline ready for the next transfer of gas or oil. Liquified Natural Gas (LNG) in this case. The pig is frequently propelled with nitrogen. The original pig designs were made from straw wrapped in barbed wire – they made a squealing noise while traveling through the pipe, like a pig, which gave the method its name.
The starting phase of an otherwise benign pig launch.
“This is where you could have easily put explosives on the Nord Stream 2 pipeline,” suspects Mark Rossano of C6 Capital Holdings. Mr. Rossano continues: "You would know in which direction it exploded based on which way the metal is bent. Is it bent outwards, facing in which direction…? And then if it’s something where it was done from external, obviously everything would be bent inward. We could get a decent amount of information just from pictures. So we have to wait for it to empty out completely, just for fear of getting too close."

Conjecture aside, Mr. Rossano’s running joke is that “the US diver and the Russian diver bonked heads going down, and they just decided to divide and conquer… who would blow up what.” You can listen to his whole description of pigging and the Nord Stream 2 sabotage by clicking here.

The explosion off the coast of Denmark and Sweden last week – just outside NATO territorial waters, mind you – exacerbates global LNG supply concerns. If gas is not coming through that pipeline then more LNG has to come from the United States, or some other place in the global market, to heat the homes of Danes, Swedes, Germans, the Dutch... and all those other little monarchies this winter. And that’s just the problem. Winter is coming. The clock is ticking. The cold months are a pig’s snort away.

We’re currently in what Rossano calls “the shoulder season.” Prices remain stable for the most part until demand picks up for real. LNG is mainly frozen. Without the pipeline, other methods of transportation will have to be used. Europe is bracing for less product in exchange, plus a drastic slow down in the time it takes for the gas to be delivered. “We have a ton of natural gas in the US,” Rossano says. “We have a ton of natural gas liquids. We really need to focus on tapping that and moving it through the system in the most efficient way.”

The way it works today, however, is fraught with inconsistency… He refers to an archaic policy on the books known as The Jones Act. The Jones Act of 1920 has been a fixture of U.S. law and an imposition on the U.S. economy for almost 100 years.
Keeping up with The Jones Act.
The law was presented as a plan to ensure adequate domestic shipbuilding capacity and a ready supply of merchant mariners to be available in times of war or other national emergencies. A century of evidence supports the conclusion that the Jones Act has failed in its main objectives while imposing substantial economic costs. Rossano continues: "You’re looking at a very inefficient system in the United States purely because of an archaic policy standing in the way of… let’s call it safety. Just an example, there’s no way to get LNG cargo from Houston to Boston because there isn’t a Jones Act vessel.

A Jones Act vessel is a vessel that was built, manned, and flagged in the U.S. So that means if Boston wants U.S. cargo, it has to go from the U.S. to the UK, get put into a tank, get put back on the boat, and then it can come over to Boston. And then it’s not even enough to maintain the pressure of the system. Then they have to take compressed gas in trucks all throughout Pennsylvania, drive them over to injection points along the system, stack them eight to 12 deep, so that if you have a cold spell and people start pulling that gas out quickly, they start lining those trucks up and injecting the gas in order to maintain flow."

All the rules get weird when gas must get shipped across the gargantuan puddle known as the Atlantic. The Cato Institute expands on the Jones Act, calling it “archaic” and “perfunctory”: As a result of these restrictions, the U.S. economy endures artificially inflated shipping costs because the transport of cargo between U.S. ports and within the country’s vast inland waterways is off-limits to foreign competition and domestic shipping firms must pay vastly higher prices for the ships they use.

Basic supply and demand dictates a hellish future for consumers in the coming months. We’ve been anticipating a “Nightmare Winter.” And thus far, we don’t see any reason the trend will change.

So it goes,"

"No Cash at the ATMs"

Full screen recommended.
Dan, iAllegedly 10/6/22:
"No Cash at the ATMs"
"If it was just one bank it wouldn’t be a concern. I am hearing from multiple banks and credit unions that they are limiting cash withdrawals out of the ATM. Do you know if your ATM limit has been reduced lately?"
Comments here:
Personal experience:
A week ago my credit union website had a large notice warning of "wide spread debit card fraud." On Tuesday was a notice that "All ATMs in all branches are unavailable." Today a new warning that "Online services for inquiries and transactions are unavailable." "Something" is very definitely happening... and it's not good. - CP

Musical Interlude: Leonard Cohen, "Anthem"

Full screen recommended.
Leonard Cohen, "Anthem"

"A Look to the Heavens"

“To some, the outline of the open cluster of stars M6 resembles a butterfly. M6, also known as NGC 6405, spans about 20 light-years and lies about 2,000 light years distant. M6 can best be seen in a dark sky with binoculars towards the constellation of Scorpius, coving about as much of the sky as the full moon.
Like other open clusters, M6 is composed predominantly of young blue stars, although the brightest star is nearly orange. M6 is estimated to be about 100 million years old. Determining the distance to clusters like M6 helps astronomers calibrate the distance scale of the universe.”

"What Really Matters"

"What Really Matters"
A reality-check on what's truly important in life.
by Adam Taggart

"Here at PeakProsperity.com, we devote a lot of focus to building wealth and other forms of "capital". This website has hosted thousands of discussions over the years on how to preserve and increase wealth. But what's it all for?

Every so often, it's useful to pull waay back to look at the big picture. To re-examine the Why? underlying our plans and aspirations. Most of us don't do this very often. We usually only do so after life throws us a curve ball - often some form of tragedy or crisis - that suddenly forces us to re-evaluate everything we may have taken for granted beforehand.

I've certainly been guilty of some of this complacency. I think Chris would admit to a little, as well. But sadly, we've both recently experienced traumatic events that have forced a renewed appreciation of what truly matters in life. For me, my (very personal and highly subjective) conclusion is that "what matters" pretty much boils down to just two things:

1. living with meaning, and
2. valued relationships.

Everything else - money, knowledge, possessions, skills, experiences...even our beliefs and actions - are means to achieve those two goals.

Living with meaning is a huge topic. One we've addressed in parts occasionally here which I expect we'll tackle more ambitiously in the future. But for now, I just want to point out that it's rooted within the individual. Each of us has to identify what "meaning" is for ourselves, and then determine how best to pursue it in our lives. (Much easier said than done, of course).

Valued relationships, on the other hand, are by definition interpersonal. As our podcast with Pulitzer prize-winning author Sebastian Junger explored, humans are evolutionarily hard-wired to co-exist in community with others. Deriving self-worth from our relationships is simply a fundamental feature of the human species. And the theme of the remainder of this article.

Some Learnings From The Big Picture View: A sad reality is that we often don't actively appreciate the value of our relationships until they're in jeopardy or lost for good. As mentioned earlier, Chris and I have both had recent reminders of this.

Chris lost a nephew a few weeks ago. 18 years old and died in his sleep of an undiagnosed congenital heart condition. A promising, accomplished, athletic young man who simply went to bed and never woke up. Pretty much any parent's worst nightmare.

In my case, my older daughter was at the beach a few days ago with some friends. One of them ran into the surf, dove into an incoming wave...and didn't resurface. His friends managed to drag him out of the water alive, but his neck was broken. He's currently in the hospital without use of his hands or legs.

Morbid stuff, I realize. But I'm not trying to depress you; there are a few worthwhile points to make here.

Don't Wait Until It's Too Late: Hearing from Chris about his nephew's death, I was reminded of a conversation I had with a few folks at our annual seminar back in April. In it, I was reflecting on a memorial service I had recently attended. The gentleman who died was older and not in good health, so his death wasn't a complete shock. He was also a little socially odd - a well-meaning guy, but with an overbearing approach that could be a little too much to handle for very long.

However, the memorial service was amazing. The sentiments shared about him by his friends and family were so wonderful, so loving, and so successful at capturing the best parts of his character to remember and honor. It wasn't false praise - it was all accurate material. Just the good stuff.

I left feeling lucky to have known him and sadder than I'd realized at losing him in my life. I mean this in all sincerity: if folks talk only half as nicely about me when I'm gone, I'd call that a big win. But the tragedy here is that I'm fairly confident the deceased gentleman heard little to none of this praise while he was alive. He very likely died ignorant of the positive influence he had made in the lives of many, instead thinking of himself as the guy others tried to avoid at parties. How sad is that?

That thought got me wondering: Why do we wait until after someone dies to honor them? To express the appreciation we leave unspoken during daily life due to familiarity, cultural norms, busy routine, distance, etc. Wouldn't it be more enjoyable and effective for everyone involved if our culture had a custom in which we celebrate the full measure of someone's life - and they actually get to participate in that celebration, and reflect their gratitude back?

When I raised this at the seminar, there was pretty much universal agreement that such a custom would be welcomed. And interestingly, there were a few folks who had actually experienced something like it. One had enjoyed a surprise 50th birthday party where his family and best friends from each stage of life had been flown in, each of whom spoke from the heart about how they valued him. He said it was a top life moment for him - every bit as meaningful as I was imagining it would be.

I love this idea of an "appreciation ceremony" and I *definitely* plan to do it for the most important folks in my life (wife, family members, close friends). And I'll hope, perhaps, some of them may do the same for me one day. But more generally, I take from all this - underscored by the stinging loss of Chris' nephew - a motivation to be more vocal, more frequently, with my appreciation for others.

Being honest, this won't come easily to me. Having grown up in an emotionally-restricted New England WASP household, the muscle history just isn't there for direct expression of high-intensity sentiment. But it will be healthy to work on. Those I care about will know that I care, why I care, and to the degree that I care. And I'll have the peace of mind of knowing that should a runaway bus take them - or me - tomorrow, the important stuff will not have been left unsaid.

Tragedy Can Bring Out Our Best Selves: I've spent much of the past 72-hours going back and forth from the hospital where my daughter's paralyzed friend is recovering. It's been very tough emotionally - especially watching his parents sit vigil. The situation is exactly like something out of a TV movie. This young man is a star scholar-athlete at the local high school and co-captain of the varsity football team. He's good-looking, charismatic and universally liked around town. His family has lived here for generations and are heavily involved in the community (his father was a local firefighter for 45 years). This tragedy could literally not happen to a nicer family.

As you can imagine, the outpouring of support from the community has been immense. Folks offering hugs, food, rides, child care, laundry services, fund raising, medical connections - you name it, it's being extended.

While sometimes overwhelming for the family, it is clear to see that the community support has been a crucial factor in keeping them from crumpling under the fear and stress resulting from the accident. I feel like I've had a front-row seat to witness the communal bonding process that Sebastian Junger describes in the podcast mentioned above.

Junger points out that humans evolved while living in tribes that needed to band together for survival against a hostile world (e.g., predators, other tribes, weather, famine). Humans have lived like this until very, very recently - historically speaking. Thus, his conclusion is that we are wired to live in connection with our community (our tribe), especially in ways that protect that community from adversity. So you can make the argument that community + adversity = authentic living. In other words, when we pull together with those around us in times of crisis, we are truly living as nature intended us to.

I am certainly seeing this in my present experience. The grace, the generosity, the selflessness, the love, the sense that we are all part of something larger than ourselves - it's astonishing to witness. Especially when compared to the radically more superficial way we all interacted beforehand. This crisis is giving people the permission and inspiration to "be" more real, more authentic, with each other. To be a tribe.

I've spent a lot of time over the past few days reflecting on Junger's tribal theory, and have decided to add the following addendum to it: While never desirable, adversity/tragedy gives us the opportunity to step into our best selves. Not everyone will. But we all have the chance to. And it's how we're designed to be.

I share all this partly as a little writing therapy to help me cope with the stress of the past few days, but more importantly, to give you some perspective that I hope will be useful in the years to come.

Understand what I mean when I say there are some very sizable disasters headed our way. They are mathematically unavoidable at this point. But while we can't control *what* will happen, we each can control *how* we will meet and react to it. Advance preparation is essential. But no plan is foolproof. Having the ability to deal with unexpected setbacks is also key - which a tribe helps immensely with."

"Find your tribe. Celebrate it in the moment. 
And bring out your best self in support of it.”
"The bond that links your true family is not one of blood,
 but of respect and joy in each other's life. 
Rarely do members of one family grow up under the same roof."
- Richard Bach, "Illusions: The Adventures of A Reluctant Messiah"

"A Message from the Hopi Elders"

"A Message from the Hopi Elders"

"You have been telling the people that this is the Eleventh Hour.
Now you must go back and tell the people that this is The Hour.
Here are the things that must be considered:
Where are you living?
What are you doing?
What are your relationships?
Are you in right relation?
Where is your water?
It is time to speak your Truth.
Create your community.
Be good to each other.
And do not look outside yourself for the leader.
This could be a good time!

There is a river flowing now very fast.
It is so great and swift, that there are those who will be afraid.
They will try to hold on to the shore.
They will feel they are being torn apart and will suffer greatly.
Know the river has its destination.
The elders say we must let go of the shore, push off into the middle of the river,
keep our eyes open, and our heads above the water.
And I say, see who is in there with you and celebrate.
At this time in history, we are to take nothing personal. Least of all, ourselves.
For the moment that we do, our spiritual growth and journey comes to a halt.

The time of the lone wolf is over. Gather yourselves!
Banish the word "struggle" from your attitude and your vocabulary.
All that we do now must be done in a sacred manner and in celebration.
We are the ones we have been waiting for!"

- Oraibi, Arizona, Hopi Nation

Chet Raymo, “Singing Beside Me In The Wilderness”

“Singing Beside Me In The Wilderness”
by Chet Raymo

“In one of those infuriating lapses that go with being a certain age, we could not remember the other evening the name of the poet who wrote "A loaf of bread, a jug of wine, and thou..." After scraping the tip of my tongue for a few minutes, I turned to the computer (Google is my browser's home page) and by typing "jug thou" brought Omar Khayyam back into consciousness. (Another click and I could have had the entire Rubaiyat.) (Freely download the entire "Rubaiyat" at that link. - CP)

And so it is that the Googlized internet arrives just in time to compensate for our withering brain cells. Everything I ever remembered is there to be Googled, plus everything I never remembered. Ten billions pages. The searchable memory of the human race. With more yet to come.

My great-great-grandchildren will no doubt have tiny video cameras implanted in the middle of their foreheads, like Hindu beauty marks, recording everything that passes before their eyes 24-7, with a sound track too. All of which will be stored digitally, ready for instant playback, and searchable by date, time, GPS coordinates, or keywords- the whole of a life, not only available to the subjects themselves in their memory-lapsed dotage, but to future generations. "Here's great-great-grandpa on his ninety-first birthday, back in 2027. Look how he dribbles soup on his shirt. Ha, ha."

I think nature knew what it was doing when it allows our memory to fade with age. It is particularly notable that the more unpleasant memories go first, so that every summer past was golden with sunshine, and every child was a model of respectful propriety. And no one, not even grandpa himself, remembers the time he... “

"Because..."

"There is much asked and only so much I think I can or should answer, and so, in this post I would like to give a few thoughts on what seemed to be the overwhelming question: "WHY?" And here is the best answer I can give: Because. Because sometimes, life is damned unfair. Because sometimes, we lose people we love and it hurts deeply. Because sometimes there aren't really answers to our questions except for what we discover, the meaning we assign them over time. Because acceptance is yet another of life's "here's a side of hurt" lessons and it is never truly acceptance unless it has cost us something to arrive there. Why, you ask? Because, I answer. Inadequate yet true."
- Libba Bray

"That's All There Is..."

"Angel: Well, I guess I kinda worked it out. If there's no great glorious end to all this, if nothing we do matters... then all that matters is what we do. 'Cause that's all there is. What we do. Now. Today. I fought for so long, for redemption, for a reward, and finally just to beat the other guy, but I never got it.
Kate Lockley: And now you do?
Angel: Not all of it. All I wanna do is help. I wanna help because, I don't think people should suffer as they do. Because, if there's no bigger meaning, then the smallest act of kindness is the greatest thing in the world.
Kate Lockley: Yikes. It sounds like you've had an epiphany.
Angel: I keep saying that, but nobody's listening."

Free Download: "The Essential Rumi"

"All day I think about it, then at night I say it. Where did I come from, and what am I supposed to be doing? I have no idea. My soul is from elsewhere, I'm sure of that, and I intend to end up there. Who looks out with my eyes? What is the soul? I cannot stop asking. If I could taste one sip of an answer, I could break out of this prison for drunks. I didn't come here of my own accord, and I can't leave that way. Whoever brought me here, will have to take me home."
- Rumi, "The Tavern," Ch. 1:, p. 2, from "The Essential Rumi"

Freely download "The Essential Rumi" here:
https://littlethingsaboutmeeh.files.wordpress.com/

The Daily "Near You?"

Halfweg, Noord-Holland, Netherlands. Thanks for stopping by!

"Bubble, Bubble Toil and Trouble"

"Bubble, Bubble Toil and Trouble"
Like a hell broth boil... the Fed's potion brought 
forth all manner of wicked distortions.
by Bill Bonner and Joel Bowman

Baltimore, Maryland - "YODO… you only die once. Print it out. Put it on your refrigerator. The great Bubble distorted markets. It distorted the economy. It distorted politics and government. It distorted everything. It bent spoons. It curdled milk. And it left people with eternal truths that weren’t true for one minute.

Almost everything was weirded through the bubble prism. Money appeared to be almost unlimited… stocks always went up… the feds could spend billions… or even trillions… on any goofy project they wanted… and America – financed by its fake money – ruled the world. YOLO, you only live once, was the prevailing zeitgeist. You had to take advantage of this once-in-a-lifetime fantasy world: get it while the gittin’ was good.

The young, restless and reckless bought cryptos or ‘the next Apple’ or ‘the next Google’ or the next something. Older, more cautious investors followed Buffett. They thought they could buy-and-hold their way to wealth. They were in ‘stocks for the long run,’ expecting to make money simply because they were wise enough to stay ‘in the market.’

All for Naught: Both young and old, aggressive and cautious, were wrong. Over time, stocks do not become more valuable. What really happens is that money becomes less valuable, making higher stock prices look better. In terms of real money, gold, prices are about where they were in the boom of the 1920s – a century ago. You could have bought the 30 Dow stocks in 1929 for 18 ounces of gold. And what are the Dow stocks worth today? About 18 ounces of gold. Ninety years later… no gain. All of that hullabaloo – the Crash of ’29… the Great Depression… WWII… the Nifty Fifty… the Oil Shock… Inflation… LTCM… Ben Bernanke… the Covid Panic – for nothing. But in the dreamtime of the Bubble Epoch, the Fed was pumping in money… and the yachts were rising.

Our message today: the gittin’ ain’t good no more. Ante-2022, every pullback in the stock market was an opportunity to ‘buy the dip’ and make money. Losses were temporary; they lasted only for a few months, the time it took for the Fed to get more money into the system. The Fed was backstopping investors for many years. Now it is backstabbing them. And now, when the knife goes in your back, it stays there. Because the Fed can’t bring up the ambulance, not without also bringing more inflation.

Yesterday, we looked at why the Fed can no longer be counted on to raise stock prices. First, because the momentum of a recession is likely to drag stocks down anyway. A ‘pause’ by the Fed is likely to make little difference.

Second, because the Fed is famously trapped. It can continue inflating… or it can let the Bubble die. It can’t do both at the same time. A U-turn now will mark the beginning of the next phase of inflation. Howevermuch asset prices may go up, inflation is likely to cut them down even more.

Don’t Think Once, It’s All Right: The lurid history of inflation should cause policymakers to think twice before pivoting away from inflation fighting. In France, high rates of inflation in 1787 -1788 it led to the bloody French Revolution and the Terror. In Russia, 1917, inflation set the stage for the Bolshevik Revolution. Germany, 1921-23, it led to the rise of Adolph Hitler. In Argentina, Brazil, Zimbabwe, Venezuela – there are no inflation stories with happy endings. All end in misery, poverty, war and/or revolution. But the elite don’t even think once. And they’re already egging the Fed on… to go back to inflating.

Here’s a typical ‘think piece’ on Substack: "Raising interest rates is a blunt means to fight inflation. It worsens living costs and job losses, while tax cuts mainly benefit the rich. Instead, the rich should be taxed more to enhance revenue to increase public provisioning of essential services, such as transport, health and education."

And here’s Markets Insider dusting off a Nobel winner: "Nobel laureate Paul Krugman warns the Fed risks going too far in fighting inflation - and predicts a return to rock-bottom interest rates.The Nobel Prize-winning economist has also predicted an eventual return to near-zero interest rates once price increases are brought under control."

And here’s the UN with its own high-minded thoughts. CommonDreams: "A United Nations organization on Monday joined critics of the U.S. Federal Reserve and other central banks across the globe hiking interest rates with the goal of reining in inflation. "Not only is there a real danger that the policy remedy could prove worse than the economic disease, in terms of declining wages, employment, and government revenues, but the road taken would reverse the pandemic pledges to build a more sustainable, resilient, and inclusive world," the document warns."

Closer to home, analysts think the recent falloff in job offerings will harm the poor and put pressure on the Fed to do its U-Turn sooner rather than later. They say inflation is temporary, or that it is caused by “supply chain bottlenecks” that can be solved by “policy changes.”

Of course, the concern for the poor is as fraudulent as the dollar itself. The poor don’t care if Amazon shares go down; what they care about is the price of milk and gasoline. And as for the policy changes, the only ones that would reduce inflation – cutting spending and regulation – are the ones the policymakers are least likely to make. But the elite rule the world. And it is just a matter of time until they get their way.

YODO.

Stay tuned..."
Joel’s Note: "Left to its own devices, the market metes out reward and punishment to those who deserve it. Whether over-leveraged financial institution or under-performing developer… over-priced lemonade stand or under-stocked iGadget warehouse… the market, through honest price information, like profit and loss signals, allocates capital to those who treat it best.

But during the Fed’s “bubble, bubble, toil and trouble” years, cheap money distorted prices to such an extent that investors had no idea which companies were, in fact, financially sound… and which were merely riding the rising tide of EZ credit.

As the Austrian School economist Ludwig von Mises observed, “The boom squanders through malinvestment scarce resources of production and reduces stock available through overconsumption; its alleged blessings are paid for through impoverishment.”

We do well to remember that the “crack up boom,” as Mises describes it elsewhere, is largely a man-made phenomenon. From artificially cheap credit at the one end… through to government “bailouts” and “too big to fail” shenanigans at the other, where profits are privatized and losses socialized, the natural processes of the market are subverted and distorted.

“I’ve described the coming financial crisis as a big storm coming off the ocean and getting ready to make landfall,” Bonner Private Research’s Tom Dyson wrote to members in a note yesterday. “But it’s not the right metaphor. Storms are a natural occurrence. Financial crises are man made.”

How so, you wonder? Tom, again…"A collapsing dam is a much better metaphor for what’s coming. The system managers built a dam to suppress volatility and prop up the stock market. I’ve called it the greatest financial experiment in history. The problem is, their intervention created a gigantic gap between quoted financial prices and actual real-world values. And now that dam is collapsing, which means we’re about to witness a violent equalization in the water level, what we might call a “financial panic” or even a “bear market.”

Unless policy makers change their minds, it feels like the dam could burst at any moment. The fact pattern shows that the global economy is becoming more and more “crashy” by the day.

FOMO - Fear Of Missing Out - is another one of those acronyms that floated to the surface during the “bubble bubble” days… and it can be difficult to resist the temptation to be suckered back into equities during bear market “relief” rallies. But Tom and Dan remain adamant. Engage Maximum Safety Mode. When the levees break, you’ll be glad you did."

Gregory Mannarino, "Alert! Liquidity Crisis Is Getting Worse Faster! Along With A Currency Crisis- It's Coming Apart"

Gregory Mannarino, AM 10/6/22:
"Alert! Liquidity Crisis Is Getting Worse Faster! 
Along With A Currency Crisis - It's Coming Apart"
Comments here:

"The Whole Chessboard Is About To Be Radically Changed"

"The Whole Chessboard Is About To Be Radically Changed"
by Pepe Escobar

"There’s no question that future unbiased historians will rank Russian President Vladimir Putin's address on the Return of the Baby Bears – Donetsk, Lugansk, Kherson, and Zaporizhzhia – on September 30 as a landmark inflection point of the Raging Twenties. The underlying honesty and clarity mirror his speech at the 2007 Munich Security Conference, but this time largely transcending the trappings of the geopolitical New Great Game.

This was an address to the collective Global South. In a key passage, Putin remarked how “the world has entered a period of revolutionary transformations, which are fundamental in nature. New development centers are being formed, they represent the majority.”

As he made the direct connection between multipolarity and strengthening of sovereignty, he took it all the way to the emergence of a new anti-colonial movement, a turbocharged version of the Non-Aligned Movement of the 1960s: “We have many like-minded people all over the world, including in Europe and the United States, and we feel and see their support. A liberating, anti-colonial movement against unipolar hegemony is already developing in various countries and societies. Its subjectivity will only grow. It is this force that will determine the future geopolitical reality.”

Yet the speech’s closure was all about transcendence - in a spiritual tone. The last full paragraph starts with "Behind these words stands a glorious spiritual choice". Post-post-modernism starts with this speech. It must be read with utmost care so its myriad implications may be grasped. And that’s exactly what tawdry Western spin and a basket of demeaning adjectives will never allow.

The speech is a concise road map to how we got to this incandescent historical crossroads – where, to venture beyond Gramsci, the old order refuses to acknowledge its death while the new one is inexorably being born. There’s no turning back. The key consequence of a largely documented fact – “a hybrid war is being waged against Russia because it stands in the way of the neocolonial world order” – is that Russia is getting ready for an all-out collision with the Empire of Lies. Alongside top Eurasian powers China and Iran. Imperial vassals in this case are at best collateral damage. Moreover, it’s quite telling that Putin’s speech followed India’s External Affairs Minister, Dr. S. Jaishankar, stressing the "pillaging of India by the colonial power" at the UN General Assembly.

Putin’s speech and Russia’s resolve to fight the – hybrid and otherwise - war against the collective West set up the Macro Picture. The Micro Picture regards the see-saw in the battlefields in Ukraine, and even the blow-up of the Nord Stream and Nord Stream 2 pipelines: a desperate gambit, a few days before the result of the referendums and their official recognition on September 30.

Where’s Osama when we need him? As working hypotheses swirl on how the deed was done, a few things are quite clear. Russia had absolutely no motive to destroy billions of dollars of Gazprom’s energy infrastructure: they could always use it as leverage; and they could just turn it off – as they did, because of the sanctions dementia - and re-route the gas to Asian customers.

A White House “led” by a senile teleprompter reader, mired in a black politico-economic void, was most certainly clueless. The prime suspect is a rogue National Security/State Department faction – part of what is known in the Beltway as The Blob. Call them Straussians or neo-con fanatics, these are the players who are conducting a US foreign “policy” whose central premise is the destruction of Russia – with the European “allies” as collateral damage.

An inevitable – certainly unforeseen - consequence is that in this new twist in the War of Economic Corridors, all bets are off: no pipeline or undersea cable, anywhere in the world, is now safe and may become fair game in retaliation.

So the blow-up of the twin pipes - NS and NS2 – is 9/11 remixed Pipeline Terror. With no Islamist with a Kalashnikov hiding in an Afghan cave to take the fall. Financial losses will involve quite a few weighty players. The shareholders of Nord Stream AG are Gazprom (51%); Wintershall Dea AG (15.5%); PEG Infrastruktur AG, a subsidiary of E.ON Beteiligungen (15.5%); N.V. Nederlandse Gasunie (9%) and Engie (9%). So this is an attack not only against Russia and Germany but also against major European energy companies.

NS2 is an engineering marvel: over 200,000 pipe segments coated with 6” of concrete, each weighing 22 tons, laid out on the bottom of the Baltic Sea. And just when it seemed that all was lost, well, not really. The engineering marvel theme resurfaced: the pipes are so strong they were not broken, but merely punctured. Gazprom revealed there’s an intact string of NS2 that may “potentially” be used. The bottom line is that reconstruction is possible, as Russian Deputy Prime Minister Aleksandr Novak stressed: “There are technical possibilities to restore the infrastructure, it requires time and appropriate funds. I am sure that appropriate opportunities will be found.” But first, Russia wants to conclusively identify the perpetrators.

Henry Kissinger, sore loser: US establishment oracle cum notorious war criminal, Henry Kissinger, could not get rid of his trademark Return of the Living Dead act, saying Russia has “already lost the war” because its capacity to threaten Europe with conventional attacks, which it had enjoyed for decades or even centuries, “has now been demonstrably overcome.”

Moscow was not “threatening” Europe with anything conventional or otherwise; it was trying to do business, and the Americans blocked it with a vengeance, even resorting to Pipeline Terror. This American tactical victory was achieved in only seven months, and cost next to nothing. The results may seem impressive: US hegemony over the whole EU spectrum is now undisputed, as Russia lost its economic leverage. But that will only deepen Moscow’s resolve –as stressed by Putin’s speech – to take the fight against the Empire and its vassals to the limit.

On the Ukraine battlefields, that means forcing them to the negotiating table on Russia’s terms. And then force them to agree to a new European “indivisibility of security” arrangement. And to think that all that could have been accomplished with a simple phone call in late 2021, when Moscow sent letters to Washington proposing a serious discussion.

In fact, it’s the US that has “already lost the war”: at least 87% of the world – including virtually the whole Global South – has already concluded this is a rogue, rudderless empire. “Losing”, Kissinger-style, also means that in only 7 months, Russia annexed 120,000 km2 - or 22% of Ukrainian territory - that produces nearly 90% of GDP and has over 5 million citizens. Along the way, the allied forces basically destroyed the Ukrainian army, which they continue to do 24/7; billions of dollars of NATO equipment; accelerated the demise of most Western economies; and evaporated the notion of American hegemony.

As for Stupidistan Unplugged, the Oscar goes to Secretary Blinken, who gave away the game by saying the blow-up of the twin pipelines was a "tremendous strategic opportunity". Just like 9/11 was a "tremendous strategic opportunity" for indiscriminate invasion, bombing, killing, plunder across the lands of Islam.

Shock'n Awe is back: The EU is on the way to surefire Trade Devastation.From now on, any possibility of energy trade with Russia would have to be a consequence of the collapse of both NATO and the EU. That may happen, but it will take time. So what next? The EU cannot rely on Asia: far away and impossibly expensive in terms of LNG liquefaction and re-gasification costs. Any pipeline – for instance, from Kazakhstan - would be crossing Russia or coming from China via Russia. Forget about Turkmenistan; it already ships its gas to China.

The EU cannot rely on West Asia. Turk Stream is fully booked. The whole production of the Persian Gulf is already bought. If – and that’s a major “if” – there was more gas available, it would be a small amount from Azerbaijan (and Russia might disrupt it). Iran remains sanctioned by the Empire – a fabulous own goal. Iraq and Syria are still plundered by the US.

That leaves Africa – where, as it stands, France is being unceremoniously kicked out, nation after nation. Italy may eventually pipe gas to German industry from Algeria, Libya and the Cyprus-Israel fields. There will be an absolutely mad scramble for Saharan gas fields and gas in central Africa – from Uganda to South Sudan.

The Baltic may be a NATO lake, but Russia could easily decide to make waves, for instance transporting LNG in barges to German ports via Kaliningrad – which is ice-free during winter. If Lithuania would try to block it, Mr. Khinzal could settle the issue by presenting his business card. Russia could also use the Gulf of Finland, not a problem for those massive Russian icebreakers.

This means Russia could easily destroy the competition - as in absurdly expensive LNG coming from the US. After all, St. Petersburg to Hamburg is only about 800 nautical miles; and from Kaliningrad, only 400 nautical miles. The whole chessboard is about to be radically changed before the arrival of General Winter. 9/11 led to the bombing, invasion and occupation of Afghanistan. Pipeline 9/11 is leading to a Shock’n Awe on NATO – to take place in Ukraine. Blowback is back – with a vengeance."
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"Shopping At Kroger! Stock Up Now! Get It Before It's Gone!"

Full screen recommended.
Adventures with Danno, 10/6/22:
"Shopping At Kroger! 
Stock Up Now! Get It Before It's Gone!"
"In today's vlog we are at Kroger, and are noticing massive price increases! We are here to check out skyrocketing prices, and a lot of empty shelves! It's getting rough out here as stores seem to be struggling with getting products!"
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"How It Really Is"

 

"The Moral Hazard Society"

"The Moral Hazard Society"
by The ZMan

"For the last couple of weeks, there have been whispers that some large banks may be in trouble due to the rising dollar. The strength of the dollar is due, in part, to the Federal Reserve’s effort to fight inflation. It is also due to the decline in both the Euro and the British pound. Economic conditions in Europe are deteriorating quickly because of poor management at every level. The relative strength of a currency is the relative strength of the managerial elite that issues it.

Recently, the gossip has turned to Credit Suisse and Deutsche Bank, both of which have seen their share prices collapse. The former has lost about 60% since the start of the year and the latter is down around 50% off its recent high. Credit Suisse could be at risk of imminent collapse, due to its deteriorating credit condition. Banks need credit to function and right now, no one is excited about extending credit to a bank whose CEO is telling employees that the bank is not about to fail.

Some are calling the Credit Suisse crisis the Lehman moment. This refers to the collapse of Lehman Brothers in 2008, which triggered the financial crisis. Banks are dependent upon one another, so if one fails, it can set off a chain reaction where the next weak bank fails, then the next weakest bank. Get enough banks unable to make payments to other banks and the whole system crashes. This is why everyone is worried about the banks all of a sudden.

It is also why the market boomed on Monday. The stock market is wholly dependent on central bank policy now. Loose policy means lots of money creation in the banking system, which means lots of money flowing into markets. Tight central bank policy means the money gets fussy about where it flows. It can even sit on the sidelines and wait until things appear more stable. The robots are betting that Jerome Powell blinks and ends his tightening to save the banks.

This is similar to what recently happened with the Bank of England. All of a sudden, there was no market for the long dated British bonds. This is why the British pound declined in value. This in turn created a crisis for British pension funds, as their collateral started to evaporate. The BoE had to step in and buy long dated bonds to guarantee their price and save the pension funds. As a result, the gilt and pound have stabilized over the last few days.

The weirdness of this age is right there in that action by the BoE. On the one hand, they are trying to fight inflation by reducing the money supply. They do this by raising interest rates, which reduces bank activity. This slows the creation of money, thus reducing the supply of money relative to demand. As relative demand increases, the relative value increases, which is what brings down inflation. In reality, it means a recession, which does the hard work of cratering demand.

Where we are now with the BoE, and probably the Federal Reserve, is that the bank is trying to reduce the amount of money in the system relative to demand. At the same time, they are trying to increase the money in the banking system in order to prevent the banks from running out of cash. Put another way, we may be in a situation where central banks are injecting and withdrawing money at the same time, which is one of those things that is supposed to be impossible.

The current crisis is due to the choices facing central banks. They can provide liquidity to the system or they can fight inflation. If they raise rates to fight inflation, major players who got sloppy with interest rate swaps, for example, are suddenly facing an extinction event, which threatens the whole system. On the other hand, if they protect the system by leaving rates alone, they face the political fury of governments contending with double digit inflation and energy shortages.

There is a bigger issue. The energy problems, the supply chain disruptions, inflation and the fragile credit markets are due to political incompetnace. Over the last three years, Western governments, led by Washington, have found every bad decision possible and then made it with furious enthusiasm. People cannot be blamed for thinking it is deliberate, because that is the best answer. The odds of rulers being this dumb this often strikes most people as impossible.

This is a time when Occam’s razor does not apply. They are this dumb. Liz Truss came to power promising to give rich people free money to boost the economy. This was a moronic plan that nearly blew up the economy in her first weeks. Truss is a simpleton who has no business in politics, so she thought it was a grand idea. She is in office because her predecessor was a bloated party boy who saw Churchill whenever he caught a glimpse of himself in the mirror.

Go back through British PM’s and it is one buffoon after another. This mirrors what has been happening in America. Joe Biden is in the late stages of dementia and he will be on the ticket for 2024. His predecessor was a carny act. The guy before that was a formless nobody who was willing to act the role created for him. The guy before that was a simpleton controlled by his father’s friends. You can do this in every Western country going back decades. They are as dumb as they act.

The crisis of competence in the managerial elite is not the root cause. The real first mover is the moral hazard economy. Going back to the 1970’s, the Western political system has come to rely on a handful of clever bankers to save the political class from their own idiocy. Starting with Paul Volcker, central banks have been the mother hen of political economy, always right there to kiss the boo-boo of the politicians or the pirates in the financial system when they stepped on a rake.

This safety net under the political economy of the West has warped the selection pressure on the people in the system. In a world of no real risk, feckless airheads like Liz Truss can rise to the top on promises to the powerful. After all, if she breaks something, nothing really bad can happen. The result of this risk-free political environment is that it rewards reckless behavior. The bigger the claim, the bigger the media splash, which means bigger political clout.

The same selection pressure can be seen in banking. In a world where bankers go to jail and lose all of their money if they screw up, there is a low tolerance for people who are reckless and foolish. In a world where the Fed steps in to not only save your bank but save your golden parachute and those of your colleagues, why would you not take the most dangerous risks? For over thirty years central banks have created a moral hazard, which in turn created a culture of reckless disregard.

It is this sense that no harm can ever come from error that is leading the West into a crisis from which it may not survive. It is this mentality that is leading to the game of chicken with nuclear weapons. The West is now led by a collection of mentally unfit bullies who think they own the school yard. At some point, like all bullies, they will get punched in the nose and see their own blood. In this case, it is reality that will do the punching and the bankers will not be their to kiss the boo-boo.

This raises the serious question. Bullies learn their lesson in the schoolyard because that lesson is not lethal. In the present age, how can the ruling class suddenly feel the pain of their own stupidity, without blowing up the world? How can real risk be reintroduced to change the selection pressure without risking collapse? The moral hazard society may have reached a point where there is no solution. The phrase that may be needed here is creative destruction.

"The Trick"

The trick is in what one emphasizes. We either make ourselves miserable,
or we make ourselves happy. The amount of work is the same.
- Carlos Castaneda

"A Tiger By The Tail"

"If he hollers, let ‘em go."
"A Tiger By The Tail"
by Addison Wiggin

“Eeny, meeny, miny, moe.”
- Children’s rhyme

“If the current level of output and employment is made to depend on inflation,” wrote the economist Friederick von Hayek, “a slowing-down in the pace of inflation will produce recessionary symptoms.” “Moreover,” Hayek continues, “As the economy becomes adjusted to a particular rate of inflation, the rate must itself be continuously increased if symptoms of a depression are to be avoided: to inflate is to have ‘a tiger by the tail’.”

Hayek was writing in the 1930s while the world faced a Great Depression, widespread deflation of asset prices. For years following the Panic of 2008, the Fed under the spell of chairpersons Bernanke and Yellen vowed not to allow a Great Depression redux. Low to negative rates were perceived to be, and accepted as, necessary to keep the economy from falling into an extended period of low growth and declining prices for goods and services.

Each of the Fed’s governors in their own way favored the beast they knew – inflation – over the beast they didn’t. We remember writing during Bernanke’s sentence as Fed chair that no one alive had faced a deflation of the magnitude last seen some 80 years before. Bernanke himself had only written a thesis on what mistakes the Fed made following the stock market bust in 1929.

Eeny meeny miny moe! “Inflation it will be!” the Fed sang in unison during the Panic of 2008. And carried that tune for a decade. Then, President Trump asked Jay Powell to become Fed chair. When he accepted he could not have known he was grabbing the tiger’s tail with both fists. What a cat it has turned out to be. Since the government lockdowns of the economy, the treasury and Fed have combined to dump over $11 trillion of dollars into the economy.

Powell’s recent comments suggest the Fed will not back down from their commitment to continue raising rates to tame the beast. What’s concerning us is the absolute disconnect between Fed policy, the markets and what Nomi Prins refers to as the “real economy”. (You can watch the full Session with Nomi by clicking here.) Hayek made the same observation some 90 years ago:

We are doing nothing less than this if we try to establish direct causal connections between the total quantity of money, the general level of all prices and, perhaps, also the total amount of production. For none of these magnitudes as such ever exerts an influence on the decisions of individuals; yet it is on the assumption of a knowledge of the decisions of individuals that the main propositions of non-monetary economic theory are based.

That’s a wonky way of saying, “for all the statements the Fed and Treasury make, there’s a giant disconnect between theory and the prices people pay for food and energy.” It’s also a way of saying when you have to make a choice between food and heat, you don’t give a rat’s patooty about the models economists-in-residence are following. The disconnect is created mainly by a fundamental misunderstanding in the way we actually track what happens in the economy.

When Powell raises rates in hopes of squashing consumer demand to attack the “general level of all prices,” the effect is what Christopher Leonard would call a “nuking of the economy.” If Powell styles himself a born-again Volcker, he who last had his grips on the tiger’s tail, “growth recession” and stagflation are still part of the plan. Even the “buy-the-dip” crowd are steering clear of this mess.

Plus ça change, plus c’est la même chose. If we spoke Austrian, we’d probably hear those words from Hayek’s mouth, too, albeit more guttural.

So it goes,"

P.S. The price of gas is one major data point facing consumers in the “Real Economy.” Recently, they’ve backed off enough where we’ve even said to ourselves; “Oh look, gas is only $3.78 a gallon. Yes!”

Jim Rickards offers an explanation for the recent drop: "Joe Biden is draining the U.S. Strategic Petroleum Reserve to keep prices down ahead of the midterm elections. But the Strategic Petroleum Reserve was never intended to be a price control mechanism. It was intended as a reserve for Americans in the face of a true national emergency such as war, natural disaster or infrastructure collapse.

The last release of reserves is scheduled for late October, which, incidentally, is just before the November 8 elections. What’s worse is that the reserve will have to be refilled at much higher prices. A lot of the oil in the reserve was purchased when oil was about $40. Today, oil is $85 and may be over $100 when Biden starts replenishing the reserve. Unfortunately, we’re witnessing a political scam and a threat to national security. But it’s all about the midterms.”

Wednesday, October 5, 2022

Must View! "Nuclear Winter Nightmare; Doomsday"

Full screen recommended.
"Nuclear Winter Nightmare; Doomsday"
by History
"World War 3 breaks out and a nuclear nightmare becomes reality as thousands of hydrogen bombs destroy the world's greatest cities. A deadly fallout of ash and debris creates a Nuclear Winter."
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Related:
Even we as a species couldn't be that stupid, could we? Really?
What do you think?