Tag Archives: Economics

Europe Commits Suicide-By-Sanctions

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Relentless Ukraine reporting helps conceal other conflicts

By Ron Paul

Source: Eurasia Review

A Swiss billboard is making the rounds on social media depicting a young woman on the telephone. The caption reads, “Does the neighbor heat the apartment to over 19 degrees (66F)? Please inform us.” While the Swiss government has dismissed the poster as a fake, the penalties Swiss citizens face for daring to warm their homes are very real. According to the Swiss newspaper Blick, those who violate the 66 degree heating limit could face as many as three years in prison!

Prison time for heating your home? In the “free” world? How is it possible in 2022, when Switzerland and the rest of the political west have achieved the greatest economic success in history, that the European continent faces a winter like something out of the dark ages?

Sanctions.

While long promoted – often by those opposed to war – as a less destructive alternative to war, sanctions are in reality acts of war. And as we know with interventionism and war, the result is often unintended consequences and even blowback.

European sanctions against Russia over its invasion of Ukraine earlier this year will likely go down in history as a prime example of how sanctions can result in unintended consequences. While seeking to punish Russia by cutting off gas and oil imports, European Union politicians forgot that Europe is completely dependent on Russian energy supplies and that the only people to suffer if those imports are shut down are the Europeans themselves.

The Russians simply pivoted to the south and east and found plenty of new buyers in China, India, and elsewhere. In fact, Russia’s state-run Gazprom energy company has reported that its profits have increased by 100 percent in the first half of this year.

Russia is getting rich while Europeans are facing a freezing winter and economic collapse. All because of the false belief that sanctions are a cost-free way to force other countries to do what you want them to do.

What happens when the people see dumb government policies making energy bills skyrocket as the economy grounds to a halt? They become desperate and take to the streets in protest.

This weekend thousands of Austrians took to the streets in a “Freedom Rally” to demand an end to sanctions and the opening of Nord Stream II, the gas pipeline on the verge of opening earlier this year. Last week an estimated 100,000 Czechs took to the streets of Prague to protest NATO and EU policy. In France, the “Yellow Vests” are back in the streets protesting the destruction of their economy in the name of “defeating” Russia in Ukraine. In Germany, Serbia, and elsewhere, protests are gearing up.

Even the Washington Post was forced to admit that sanctions on Russia are not having the intended effect. In an article yesterday, the paper worries that sanctions are inflicting “collateral damage in Russia and beyond, potentially even hurting the very countries that impose them. Some even worried that the sanctions intended to deter and weaken Putin could end up emboldening and strengthening him.”

This is all predictable. Sanctions kill. Sometimes they kill innocents in the country targeted for destruction and sometimes they kill innocents in the country imposing them. The solution, as always, is non-intervention. No sanctions, no “color revolutions,” no meddling. It’s really that simple.

THE WEST’S FALSE NARRATIVE ABOUT RUSSIA AND CHINA

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Vladimir Putin meets with Xi Jinping in Beijing just weeks before the invasion of Ukraine. Photograph: SPUTNIK/Reuters

By Jeffrey Sachs

Source: New Cold War

The world is on the edge of nuclear catastrophe in no small part because of the failure of Western political leaders to be forthright about the causes of the escalating global conflicts. The relentless Western narrative that the West is noble while Russia and China are evil is simple-minded and extraordinarily dangerous. It is an attempt to manipulate public opinion, not to deal with very real and pressing diplomacy.
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The essential narrative of the West is built into US national security strategy. The core US idea is that China and Russia are implacable foes that are “attempting to erode American security and prosperity.” These countries are, according to the US, “determined to make economies less free and less fair, to grow their. militaries, and to control information and data to repress their societies and expand their influence.”

The irony is that since 1980 the US has been in at least 15 overseas wars of choice (Afghanistan, Iraq, Libya, Panama, Serbia, Syria, and Yemen just to name a few), while China has been in none, and Russia only in one (Syria) beyond the former Soviet Union. The US has military bases in 85 countries, China in 3, and Russia in 1 (Syria) beyond the former Soviet Union.

President Joe Biden has promoted this narrative, declaring that the greatest challenge of our time is the competition with the autocracies, which “seek to advance their own power, export and expand their influence around the world, and justify their repressive policies and practices as a more efficient way to address today’s challenges.” US security strategy is not the work of any single US president but of the US security establishment, which is largely autonomous, and operates behind a wall of secrecy.

The overwrought fear of China and Russia is sold to a Western public through manipulation of the facts. A generation earlier George W. Bush, Jr. sold the public on the idea that America’s greatest threat was Islamic fundamentalism, without mentioning that it was the CIA, with Saudi Arabia and other countries, that had created, funded, and deployed the jihadists in Afghanistan, Syria, and elsewhere to fight America’s wars.

Or consider the Soviet Union’s invasion of Afghanistan in 1980, which was painted in the Western media as an act of unprovoked perfidy. Years later, we learned that the Soviet invasion was actually preceded by a CIA operation designed to provoke the Soviet invasion! The same misinformation occurred vis-à-vis Syria. The Western press is filled with recriminations against Putin’s military assistance to Syria’s Bashar al-Assad beginning in 2015, without mentioning that the US supported the overthrow of al-Assad beginning in 2011, with the CIA funding a major operation (Timber Sycamore) to overthrow Assad years before Russia arrived.

Or more recently, when US House Speaker Nancy Pelosi recklessly flew to Taiwan despite China’s warnings, no G7 foreign minister criticised Pelosi’s provocation, yet the G7 ministers together harshly criticised China’s “overreaction” to Pelosi’s trip.

The Western narrative about the Ukraine war is that it is an unprovoked attack by Putin in the quest to recreate the Russian empire. Yet the real history starts with the Western promise to Soviet President Mikhail Gorbachev that NATO would not enlarge to the East, followed by four waves of NATO aggrandisement: in 1999, incorporating three Central European countries; in 2004, incorporating 7 more, including in the Black Sea and Baltic States; in 2008, committing to enlarge to Ukraine and Georgia; and in 2022, inviting four Asia-Pacific leaders to NATO to take aim at China.

Nor do the Western media mention the US role in the 2014 overthrow of Ukraine’s pro-Russian president Viktor Yanukovych; the failure of the Governments of France and Germany, guarantors of the Minsk II agreement, to press Ukraine to carry out its commitments; the vast US armaments sent to Ukraine during the Trump and Biden Administrations in the lead-up to war; nor the refusal of the US to negotiate with Putin over NATO enlargement to Ukraine.

Of course, NATO says that is purely defensive, so that Putin should have nothing to fear. In other words, Putin should take no notice of the CIA operations in Afghanistan and Syria; the NATO bombing of Serbia in 1999; the NATO overthrow of Moammar Qaddafi in 2011; the NATO occupation of Afghanistan for 15 years; nor Biden’s “gaffe” calling for Putin’s ouster (which of course was no gaffe at all); nor US Defence Secretary Lloyd Austin stating that the US war aim in Ukraine is the weakening of Russia.

At the core of all of this is the US attempt to remain the world’s hegemonic power, by augmenting military alliances around the world to contain or defeat China and Russia. It’s a dangerous, delusional, and outmoded idea. The US has a mere 4.2% of the world population, and now a mere 16% of world GDP (measured at international prices). In fact, the combined GDP of the G7 is now less than that of the BRICS (Brazil, Russia, India, China, and South Africa), while the G7 population is just 6 percent of the world compared with 41 percent in the BRICS.
There is only one country whose self-declared fantasy is to be the world’s dominant power: the US. It’s past time that the US recognised the true sources of security: internal social cohesion and responsible cooperation with the rest of the world, rather than the illusion of hegemony. With such a revised foreign policy, the US and its allies would avoid war with China and Russia, and enable the world to face its myriad environment, energy, food and social crises.

Above all, at this time of extreme danger, European leaders should pursue the true source of European security: not US hegemony, but European security arrangements that respect the legitimate security interests of all European nations, certainly including Ukraine, but also including Russia, which continues to resist NATO enlargements into the Black Sea. Europe should reflect on the fact that the non-enlargement of NATO and the implementation of the Minsk II agreements would have averted this awful war in Ukraine. At this stage, diplomacy, not military escalation, is the true path to European and global security.

An Engineered Food and Poverty Crisis to Secure Continued US Dominance 

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By Colin Todhunter

Source: Dissident Voice

In March 2022, UN Secretary-General Antonio Guterres warned of a “hurricane of hunger and a meltdown of the global food system” in the wake of the crisis in Ukraine.

Guterres said food, fuel and fertiliser prices were skyrocketing with supply chains being disrupted and added this is hitting the poorest the hardest and planting the seeds for political instability and unrest around the globe.

According to the International Panel of Experts on Sustainable Food Systems, there is currently sufficient food and no risk of global food supply shortages.

We see an abundance of food but skyrocketing prices. The issue is not food shortage but speculation on food commodities and the manipulation of an inherently flawed global food system that serves the interests of corporate agribusiness traders and suppliers of inputs at the expense of people’s needs and genuine food security.

The war in Ukraine is a geopolitical trade and energy conflict. It is largely about the US engaging in a proxy war against Russia and Europe by attempting to separate Europe from Russia and imposing sanctions on Russia to harm Europe and make it further dependent on the US.

Economist Professor Michael Hudson recently stated that ultimately the war is against Europe and Germany. The purpose of the sanctions is to prevent Europe and other allies from increasing their trade and investment with Russia and China.

Neoliberal policies since the 1980s have hollowed out the US economy. With its productive base severely weakened, the only way for the US to maintain hegemony is to undermine China and Russia and weaken Europe.

Hudson says that, beginning a year ago, Biden and the US neocons attempted to block Nord Stream 2 and all (energy) trade with Russia so that the US could monopolise it itself.

Despite the ‘green agenda’ currently being pushed, the US still relies on fossil fuel-based energy to project its power abroad. Even as Russia and China move away from the dollar, the control and pricing of oil and gas (and resulting debt) in dollars remains key to US attempts to retain hegemony.

The US knew beforehand how sanctions on Russia would play out. They would serve to divide the world into two blocks and fuel a new cold war with the US and Europe on one side with China and Russia being the two main countries on the other.

US policy makers knew Europe would be devastated by higher energy and food prices and food importing countries in the Global South would suffer due to rising costs.

It is not the first time the US has engineered a major crisis to maintain global hegemony and a spike in key commodity prices that effectively trap countries into dependency and debt.

In 2009, Andrew Gavin Marshall described how in 1973 – not long after coming off the gold standard – Henry Kissinger was integral to manipulating events in the Middle East (the Arab-Israeli war and the ‘energy crisis’). This served to continue global hegemony for the US, which had virtually bankrupted itself due to its war in Vietnam and had been threatened by the economic rise of Germany and Japan.

Kissinger helped secure huge OPEC oil price rises and thus sufficient profits for Anglo-American oil companies that had over-leveraged themselves in North Sea oil. He also cemented the petrodollar system with the Saudis and subsequently placed African nations, which had embarked on a path of (oil-based) industrialisation, on a treadmill of dependency and debt due to the spike in oil prices.

It is widely believed that the high-priced oil policy was aimed at hurting Europe, Japan and the developing world.

Today, the US is again waging a war on vast swathes of humanity, whose impoverishment is intended to ensure they remain dependent on the US and the financial institutions it uses to create dependency and indebtedness – the World Bank and IMF.

Hundreds of millions will experience (are experiencing) poverty and hunger due to US policy. These people (the ones that the US and Pfizer et al supposedly cared so much about and wanted to get a jab into each of their arms) are regarded with contempt and collateral damage in the great geopolitical game.

Contrary to what many believe, the US has not miscalculated the outcome of the sanctions placed on Russia. Michael Hudson notes energy prices are increasing, benefiting US oil companies and US balance of payments as an energy exporter. Moreover, by sanctioning Russia, the aim is to curtail Russian exports (of wheat and gas used for fertiliser production) and for agricultural commodity prices to therefore increase. This too will also benefit the US as an agricultural exporter.

This is how the US seeks to maintain dominance over other countries.

Current policies are designed to create a food and debt crisis for poorer nations especially. The US can use this debt crisis to force countries to continue privatising and selling off their public assets in order to service the debts to pay for the higher oil and food imports.

This imperialist strategy comes on the back of ‘COVID relief’ loans which have served a similar purpose. In 2021, an Oxfam review of IMF COVID-19 loans showed that 33 African countries were encouraged to pursue austerity policies. The world’s poorest countries are due to pay $43 billion in debt repayments in 2022, which could otherwise cover the costs of their food imports.

Oxfam and Development Finance International have also revealed that 43 out of 55 African Union member states face public expenditure cuts totalling $183 billion over the next five years.

The closure of the world economy in March 2020 (‘lockdown’) served to trigger an unprecedented process of global indebtedness. Conditionalities mean national governments will have to capitulate to the demands of Western financial institutions. These debts are largely dollar-denominated, helping to strengthen the US dollar and US leverage over countries.

The US is creating a new world order and needs to ensure much of the Global South remains in its orbit of influence rather than ending up in the Russian and especially Chinese camp and its belt road initiative for economic prosperity.

Post-COVID, this is what the war in Ukraine, sanctions on Russia and the engineered food and energy crisis are really about.

Back in 2014, Michael Hudson stated that the US has been able to dominate most of the Global South through agriculture and control of the food supply. The World Bank’s geopolitical lending strategy has transformed countries into food deficit areas by convincing them to grow cash crops – plantation export crops – not to feed themselves with their own food crops.

The oil sector and agribusiness have been joined at the hip as part of US geopolitical strategy.

The dominant notion of ‘food security’ promoted by global agribusiness players like Cargill, Archer Daniel Midland, Bunge and Louis Dreyfus and supported by the World Bank is based on the ability of people and nations to purchase food. It has nothing to do with self-sufficiency and everything to do with global markets and supply chains controlled by giant agribusiness players.

Along with oil, the control of global agriculture has been a linchpin of US geopolitical strategy for many decades. The Green Revolution was exported courtesy of oil-rich interests and poorer nations adopted agri-capital’s chemical- and oil-dependent model of agriculture that required loans for inputs and related infrastructure development.

It entailed trapping nations into a globalised food system that relies on export commodity mono-cropping to earn foreign exchange linked to sovereign dollar-denominated debt repayment and World Bank/IMF ‘structural adjustment’ directives. What we have seen has been the transformation of many countries from food self-sufficiency into food deficit areas.

And what we have also seen is countries being placed on commodity crop production treadmills. The need for foreign currency (US dollars) to buy oil and food entrenches the need to increase cash crop production for exports.

The World Trade Organization’s Agreement on Agriculture (AoA) set out the trade regime necessary for this type of corporate dependency that masquerades as ‘global food security’.

This is explained in a July 2022 report by Navdanya International – Sowing Hunger, Reaping Profits – A Food Crisis by Design – which notes international trade laws and trade liberalisation has benefited large agribusiness and continue to piggyback off the implementation of the Green Revolution.

The report states that US lobby and trade negotiations were headed by former Cargill Investors Service CEO and Goldman Sachs executive – Dan Amstutz – who in 1988 was appointed chief negotiator for the Uruguay round of GATT by Ronald Reagan. This helped to enshrine the interests of US agribusiness into the new rules that would govern the global trade of commodities and subsequent waves of industrial agriculture expansion.

The AoA removed protection of farmers from global market prices and fluctuations. At the same time, exceptions were made for the US and the EU to continue subsidising their agriculture to the advantage of large agribusiness.

Navdanya notes:

With the removal of state tariff protections and subsidies, small farmers were left destitute. The result has been a disparity in what farmers earn for what they produce, versus what consumers pay, with farmers earning less and consumers paying more as agribusiness middlemen take the biggest cut.

‘Food security’ has led to the dismantling of food sovereignty and food self-sufficiency for the sake of global market integration and corporate power.

We need look no further than India to see this in action. The now repealed recent farm legislation in India was aimed at giving the country the ‘shock therapy’ of neoliberalism that other countries have experienced.

The ‘liberalising’ legislation was in part aimed at benefiting US agribusiness interests and trapping India into food insecurity by compelling the country to eradicate its food buffer stocks – so vital to the nation’s food security – and then bid for food on a volatile global market from agribusiness traders with its foreign reserves.

The Indian government was only prevented from following this route by the massive, year-long farmer protest that occurred.

The current crisis is also being fuelled by speculation. Navdanya cites an investigation by Lighthouse Reports and The Wire to show how speculation by investment firms, banks and hedge funds on agricultural commodities are profiting off rising food prices. Commodity future prices are no longer linked to actual supply and demand in the market but are based purely on speculation.

Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus and investment funds like Black Rock and Vanguard continue to make huge financial killings, resulting in the price of bread almost doubling in some poorer countries.

The cynical ‘solution’ promoted by global agribusiness to the current food crisis is to urge farmers to produce more and seek better yields as if the crisis is that of underproduction. It means more chemical inputs, more genetic engineering techniques and suchlike, placing more farmers in debt and trapped in dependency.

It is the same old industry lie that the world will starve without its products and requires more of them. The reality is that the world is facing hunger and rising food prices because of the system big agribusiness has instituted.

And it is the same old story – pushing out new technologies in search of a problem and then using crises as justification for their rollout while ignoring the underlying reasons for such crises.

Navdanya sets out possible solutions to the current situation based on principles of agroecology, short supply lines, food sovereignty and economic democracy – policies that have been described at length in many articles and official reports over the years.

As for fighting back against the onslaught on ordinary people’s living standards, support is gathering among the labour movement in places like the UK. Rail union leader Mick Lynch is calling for a working class movement based on solidarity and class consciousness to fight back against a billionaire class that is acutely aware of its own class interests.

For too long, ‘class’ has been absent from mainstream political discourse. It is only through organised, united protest that ordinary people will have any chance of meaningful impact against the new world order of tyrannical authoritarianism and the devastating attacks on ordinary people’s rights, livelihoods and standards of living that we are witnessing.

More Billions to Ukraine as America Falls Apart

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By Ron Paul

Source: Ron Paul Institute

There is a video clip making the rounds showing President Biden speaking at a recent NATO summit about the seven billion dollars the US government had – at that time – provided to Ukraine. Attached to that is another clip showing the horrific state of several US major cities, including in Pennsylvania, California, and Ohio. The video of American cities is shocking: endless landscapes of filth, trash, homelessness, open fires on the street, drug-addicted zombies. It doesn’t look like the America most of us remember.

Watching Biden bragging about sending billions of dollars to corrupt leaders overseas with American cities looking like bombed-out Iraq or Libya is US foreign policy in a nutshell. The Washington elites tell the rest of America that they must “promote democracy” in some far-off land. Anyone who objects is considered in league with the appointed enemy of the day. Once it was Saddam, then Assad and Gaddafi. Now it’s Putin. The game is the same, only the names are changed.

What is seldom asked, is what is in this deal for those Americans who suffer to pay for our interventionist foreign policy. Do they really think a working American in Ohio or Pennsylvania is better off or safer because we are supposedly protecting Ukraine’s borders? I think most Americans would wonder why they aren’t bothering to protect our own borders.

A reported 200,000 illegals crossed the border into the US in July alone. You can believe they are learning quickly about the free money provided by the US government to illegals. They’ll probably get a voting card as well.

Last Friday the Pentagon announced that yet another $775 million would be sent to Ukraine. As Antiwar.com reported, it was the eighteenth weapons package to Ukraine in six months. Has there ever been a more idiotic US intervention in history?

Supporters of this proxy war may celebrate more aid to Ukraine, but the reality is that it is in no way aid to Ukraine. That’s not how the system works. It is money created out of thin air by the Fed and appropriated by Congress to be spent propping up the politically-connected military-industrial complex. It is a big check written by middle America to rich people who run Raytheon and Lockheed Martin. Americans watch their budget being stretched to the limit while the Beltway fat-cats loosen their belts to continue enjoying the gravy train.

Bloomberg reported earlier this summer that inflation is costing the average American household more than $5,200 this year. Inflation is a tax on middle class and poor Americans. The wealthy – like those who run Raytheon and Lockheed Martin – always get the new money first, before prices go up. The rest of us watch as the dollar buys less and less.

As Washington salivates over fighting Russia in Ukraine, the rest of America feels like we’re becoming Zimbabwe. How long until it takes a trillion dollars for a loaf of bread? Will there be a run on wheelbarrows?

There is a way out. It’s called “non-interventionism.” The war in Ukraine was caused by the US regime change in 2014 and the neocon insistence that Ukraine join NATO. The State Department and CIA thought it was a great victory to overthrow the elected government, but meanwhile the rest of us get the bill. No NATO and not one more penny for Ukraine!

A Most Peculiar Recession

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By Charles Hugh Smith

Source: Of Two Minds

So what are conventional pundits missing today? I would start with three dynamics.

Only old people experienced real recessions–those in 1973-74 and 1980-82. Recessions since then have been shorter and less systemic.

In the good old days, a recession laid waste to entire industries which never recovered their previous employment. People who were laid off couldn’t find another job. Major sectors of the economy dried up and blew away. Jobs were scarce and there was an oversupply of people looking for work.

We’re told consumer confidence is in the dumps and everyone expects the worst: recession! Oh Lordy. Interestingly, there isn’t much evidence of this near-panic behaviorally. Everyone’s tightening their belts and battening down the hatches, but it’s not the cliff-dive we see in a real recession.

There’s certainly a lot of froth to be scraped off the latte, but what I’m curious about are the armatures of the economy and what I’m seeing is the crowd ignoring key dynamics because they’re so busy pushing the Recessionary Play-Doh into the old playboard.

The entire notion that there is a hard and fast line indicating “recession” is not realistic or useful. The economy dropped 1% for two quarters in a row, quick hit the alarm, go to DefCon 1. Uh, OK, right.

The more useful approach is to look at data points as mostly signal noise that fail to reflect or illuminate the core dynamics of the economy. Here’s an example: the stagflation of the 1970s is a hot topic as the financial punditry compares then to now, seeking evidence of similarities strong enough to predict a Lost Decade ahead.

One key factor that’s rarely (if ever) mentioned was the staggering cost of cleaning up America’s industrial sector and polluted skies and waterways at the same time that the Cold War required the U.S. to strengthen its allies by allowing them unfettered access to the U.S. marketplace–exports to the U.S. that had a price advantage due to the dominance of the dollar and the relative weakness of allies’ currencies.

1972 exchange rates indicate that the Japanese yen was 302 to $1–an enormous advantage when compared to recent exchange rates of around 110 yen to the USD.

What few current pundits seem to grasp is the dominant dynamic of the entire era of 1945-1992 was the Cold War with the Soviet Union and its client states and allies. Strengthening allies’ economies was a core goal and so the costs to the domestic economy had to be absorbed: there was no choice.

The costs of cleaning up the nation and its vast industrial base was an enormous drag on the economy. The value of the trillions of dollars (in current dollars) invested was not in boosting profits, it was in restoring what had been heedlessly destroyed and damaged by rampant dumping of waste and pollutants and improving the health and well-being of the citizenry.

Check out the smog in early 1970s TV series filmed in Los Angeles for a taste of what was cleaned up.

But in a mind-boggling failure of conventional economics, our financial punditry is blind to the impact of the most consequential economic realities of the 1970s–the Cold War and the lengthy, painful, costly clean-up of the nation and its industrial base–on stagflation.

One reason for this abject failure is these dynamics were difficult to measure, so they weren’t measured.We only manage what we measure and so if we don’t measure it, it doesn’t exist. If we measure things in a no-longer-relevant manner, for example GDP, we continue to act as if this misguided measure is of supreme importance when the reality is it’s dangerously misleading.

So what are conventional pundits missing today? I would start with three dynamics:

1. For the first time in multiple generations, there is a structural scarcity of labor. For a variety of reasons, there are fewer people willing to do the work at the offered wage than there are jobs. This is not temporary, it is demographic and social, not simply economic. All the supposedly easy fixes– automate everything, etc.–are not that easy.

2. The strength of the U.S. dollar is exporting inflation, to the benefit of the domestic economy. After offshoring critical supply chains–a disaster that will take years to reverse–now the U.S. is offshoring inflation and the resulting demand destruction.

3. Global capital flows are reversing. capital flowed from the Core to the Periphery to reap the gains of globalization. Now the flow is reversing and capital is flowing from the Periphery to the Core to preserve capital and lock in lower-risk returns. What looks expensive to those earning U.S. dollars may look cheap and secure to those fleeing depreciating currencies and assets.

In my analysis, these are consequential dynamics that merit little attention in conventional financial analysis.

There is much more to say but glance at these two charts: real (i.e. adjusted for official inflation) median household income and real Broad U.S. Dollar Index.

If we’re not measuring or pondering the core structural dynamics of the economy, we’re not going to make sense of no-longer-relevant data. This is a most peculiar recession, and few seem to be asking if the reason is we’re missing what’s changed structurally.

Charts courtesy of St. Louis Federal Reserve Database (FRED))

A Glance Ahead

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By James Howard Kunstler

Source: Kunstler.com

Satan is the father of lies and we have become Satanic, being and doing evil, most especially to ourselves….

hat’s ahead — like a few months down the road? Hysteria and chaos, if the “Joe Biden” regime can help it… and they’re helping it all they can. Twice vaxxed, twice boosted, and twice recent Covid-19 patient Dr. Anthony Fauci warned this week that the unvaxxed would “get into trouble” as the seasons turn this year. The part he left out is: the unvaxxed will be in trouble trying to keep up with helping their sick and dying vaccinated relatives whose immune systems have been damaged by their multiple vaxxes.

The boldness of Dr. Fauci’s lying is really something to behold. Who in the entire HHS-NIH-CDC bureaucracy has failed to notice that the mRNA “vaccines” have no efficacy whatever against Covid-19? The vaccinated are by far those still getting sick and increasingly disabled from the disease and even more from the vaxxes themselves. The emperor’s new clothes hang in shreds. Rumor is that many upper-level employees in these public health agencies are increasingly freaked out by their now-obvious complicity in a momentous crime. They know they will have to answer for allowing the mRNA fiasco to get this far, for going along to get along, and they’re preparing to mutiny to save their own asses. Wait for it.

The regime’s back-up plan is the comical monkeypox, transmitted to date mainly via all-male orgies. HHS Secretary Xavier Becerra declared a national monkeypox emergency this week, saying he’d “explore every option on the table” (except an official advisory against homosexual orgies). There is, of course, reasonable suspicion that monkeypox is but one device for shutting down the November mid-term election, or, more deviously, closing polling places and allowing only mail-in ballots — the easiest way to rig elections.

That will lead naturally to several state’s attorneys general seeking relief in the Supreme Court against the federal government’s unconstitutional takeover of the states’ duty to conduct their elections. The “Joe Biden” regime will lose that one, but not before royally pissing off at least half the adults in the land, leading to even greater-than-anticipated election losses for the Party of Chaos.

Meanwhile, the Party of Chaos is about to unleash its “Inflation Reduction Act,” which proposes to spend three quarters of a trillion dollars created from thin air into an economy already hyperventilating on three years of multi-trillion-dollar injections derived from no productive activity. At the same time, the act will raise taxes especially for low-end wage earners and small businesses, completing the regime’s destruction of the middle-class. The cherry-on-top is the provision to double the size of the Internal Revenue Service by hiring 87,000 new employees to harass ordinary American taxpayers. Is that what you voted for in 2020? I  thought not.

None of that is going to work as intended. More likely, passage of the act will trigger destruction of the dollar as the world’s reserve currency, and a stampede out of dollar-denominated investments, which is to say, a very severe financial crisis. Credit will freeze, the distribution and sales of goods will cease, interest will stop being paid on virtually all outstanding debt, the bond market will implode, few will have anything identifiable as money, and there will be little in the way of everyday goods like food and gasoline to buy anyway.

You realize, of course, that this is a description of economic collapse. If things roll that way, there will be absolutely no trust left in the US government. It will be either ignored or opposed. And in places like my own New York, under the tyrannical and titanically incompetent accidental Governor Kathy Hochul, there will be no trust in state government either. Meaning, we’re on our own, community-by-community. This will be a very interesting experiment in the dynamics of emergence — the self-organizing properties of systems in chaos. I doubt that it will resolve in the direction of the globalists’ dreams of transhuman technocracy. Every macro trend now runs against centralization.

But the process could conceivably invite an attempted Chinese takeover of the USA, if not militarily, then in a way similar to America’s asset-stripping operations in the collapsed Soviet Union of the 1990s, a looting spree — as seen many other times in history when empires founder. Or else, the rest of the world will just kick back and witness the spectacle of our struggle as the lights of Western Civ flicker out. (Europe will be right in it with us, by the way.) The other nations of the world are tired of us trying to push them around, with increasingly evil intentions. They will enjoy watching our tribulations. They will be convinced we deserve it.

This is what comes from a culture of immersive and pervasive dishonesty. Satan is the father of lies and we have become Satanic, being and doing evil, most especially to ourselves, whether you believe in a literal Satan or not. So, do you think now that being transgressive is… fun? You’ll be changing what’s left of your mind about that soon. Along with the threat of literal starvation will also arise a terrible hunger for truth: How did this happen? How did we come to do this?  Who was behind it? It won’t be hard to find out, once we’re motivated to look.

The United States Does Not Have an Economy

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By Paul Craig Roberts

Source: PaulCraigRoberts.org

The US financial sector has long looted other countries.  A number of participants have described the process.  First a country is enticed with bribes to the leaders to take out loans that cannot be serviced or repaid.  Then in comes the IMF. Austerity is imposed on the population.  Public services and employment are cut to free resources for debt service, and public assets are sold to repay the loan.  Living standards fall, and US corporations take over the country’s economy.

As foreign governments, having experienced or witnessed the economic carnage and fearing accountability, are less willing to be bribed into indebting their countries, American finance is now applying this technique to Americans. Contrary to the narrative in the financial press, the Federal Reserve is not raising interest rates in order to fight inflation.  It is ludicrous to think that a three-quarters of one percent rise in a very low interest rate is going to have any impact on a 9.1% rate of consumer inflation or that speculation that the Federal Reserve has in mind another three-quarters of one percent possibly followed by one half of one percent comprise an anti-inflation policy.  If all these increases occur, it still leaves the interest rate below the inflation rate.

Moreover, as I have previously explained, the inflation is not monetary.  The higher prices are the result of supply disruptions caused by Washington’s Covid lockdowns and Russian sanctions.  Production was stopped and supply chains are broken.  

The Federal Reserve’s rise in interest rates is just a continuation of its policy of concentrating income and wealth in the hands of the One Percent.  Quantitative Easing was the cloak for the Federal Reserve to print $8.2 trillion in new money which was directed or found its way into the prices of stocks and bonds, thus enriching the small number who own most of these financial instruments.  Having maxed out this avenue of wealth concentration, the Federal Reserve is now raising interest rates in order to drive up mortgage costs to aspiring home owners.  The Federal Reserve is driving individuals out of the housing market in order to free up properties for “private equity” firms to purchase homes for their rental values.  That private equity firms see rental income from the existing stock of houses as the best investment opportunity tells us that the US economy has played out.  When investment goes into existing assets, not into producing new assets, the economy ceases to grow.

The Obama regimes policy of bailing out the financial fraudsters responsible for the 2008 crash while foreclosing on their victims, reduced American homeownership from 70% to 63 percent. The Urban Institute predicts further declines. Today homeowners’ equity has declined from 85% after World War II to one-third, leaving two-thirds of homeowner equity in the hands of creditors.  This makes it completely clear that a financialized economy indebts the people for the sake of rentier income to the One Percent.  Indeed, the financialized economy created by the Federal Reserve has reimposed a class system akin to the landed British aristocracy that was overthrown.  Indeed, we have an economically far worst class system.  The landed British aristocrats produced food that fed the nation.  The American class system produces interest and fees for the financial system.

As Michael Hudson has shown us, a no-growth economy is the end result of a financialized economy.  A financialized economy is one in which consumer income is diverted by debt expansion away from the purchase of new goods and services into debt service and fees–interest on mortgages, car loans, credit card debt, student loan debt.  With such a large share of household income spent on debt service, little is left for driving the economy forward.

If American economists were capable of escaping from their neoliberal junk economics, they would realize that “the world’s largest economy” they attribute to the United States is total fiction.  The fact is that the United States does not have an economy.  Corporations driven by Wall Street located American manufacturing in Asia so that the One Percent could benefit from higher profits from lower labor costs, while the deserted city and states had to sell their income streams, such as Chicago’s parking meter revenues for 75 years, to foreigners for one lump sum payment to solve one year’s budget crisis.  

The offshoring of American production, carried out under the cloak of “globalism,” destroyed the American economy and the tax bases of cities and states.  While the real economy declines, the Democrat Party, seeking permanent power, has imposed a policy of open borders for immigrant-invaders.  How are these millions of peoples to support themselves in an economy whose manufacturing has been moved abroad?  How can a population, deserted by American corporations, that is experiencing debt deflation absorb the costs of support and social infrastructure for tens of millions of third world immigrant-invaders?

You will never hear it from the whores in the financial press, but the United States is on the precipice of economic and social collapse.  And what are the fools in Washington doing?  The idiots are ginning up wars with Russia, China, and Iran.  

Calm Before the Tempest?

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By Charles Hugh Smith

Source: Of Two Minds

Let’s start by stipulating the obvious: no one knows the future, and most of the guesses–oops, I mean forecasts–will be wrong. Arguing about the forecasts now won’t make any difference as to which ones are correct and which ones are wrong. Time alone will tell.

That said, here’s a scenario that fits the dynamics I see as most consequential: Core-Periphery and the demise of the waste is growth / financialization / globalization model as the reigning model of how the global economy should work.

Core-periphery dynamics are pretty simple: unraveling starts on the periphery and seeps toward the core. The core actually strengthens in the process as capital and talent seek havens where they’re treated well, and the core became the core by treating capital and talent well.

The periphery responds to the unraveling of financialization / globalization by tightening its grip on whatever capital and talent is still available, incentivizing the flight of capital and talent to the core.

A great many people think there are many core economies. In my analysis, there is only one, due to the qualifying requirements: 1) issues a reserve currency, i.e. not pegged to another currency 2) liquid global markets for securities, debt, commodities, etc., i.e. anyone anywhere can trade in size in the core markets 3) transparent market and governance mechanisms, i.e. no overnight devaluations, expropriations, capital restrictions, etc. 4) diverse economy not dependent on exports or imports for its well-being and 5) ease of flow: capital, talent, enterprises and employees all have essentially unlimited freedom of movement within the core.

We can argue about which nations qualify as core but it won’t change the outcome. Capital and talent will make their own decisions about risk, safety, exposure to devaluation and expropriation and where the odds of being treated fairly are highest. It’s a good exercise to put yourself in the shoes of a manager of a $10 billion fund and go through the decision tree of where to put this $10 billion to preserve its purchasing power first and foremost, and secondarily generate a return.

Would you really gamble $10 billion on a 15% return on the bonds of Timbukthree, whose currency has fallen 20% against the U.S. dollar this year? Or Timbukfour, which is dependent on exports of commodities in a shrinking global economy? Or Timbukfive, which is dependent on imports of commodities and exports of consumer goods in a shrinking global economy?? If you answer “yes,” you’re not actually playing like you are responsible for $10 billion.

As the periphery unravels financially, it also unravels politically and socially. Bordering states are at risk of destabilizing, and any entity with large exposure to the unraveling debt or markets starts unraveling, too. The destabilization spreads to second-tier nations whose exposure to the dynamics of unraveling are structural.

As all these dominoes fall, eventually those closest to the core also crumble, and then core itself is finally destabilized.

Humans have an interesting talent for adjusting to new circumstances, i.e. habituating to new conditions. Those households consuming 14,000 gallons of fresh water a month may well scream that they can’t possibly get by on 12,000 gallons, but then if circumstances change and all the water we have is what we can carry in buckets a kilometer over rough terrain, we find that we can live on the few gallons we can carry a kilometer.

The amount of waste in developed economies is beyond easy measure. It’s estimated 40% of all food in the U.S. is wasted. Energy, food and fresh water have been treated as if low cost and abundance were birthrights rather than brief explosions of excess. While we’re screaming about energy costs, empty buildings are brightly lit, water taps are left running and one individual per idling vehicle in a traffic jam frets about rising costs.

When the 1989 Loma Prieta earthquake closed the Bay Bridge across San Francisco Bay, the main artery between San Francisco and the East Bay, economic doom was predictably predicted. Yet people quickly managed via extra BART (subway) trains that rain beneath the Bay and carpools with four people per vehicle rather than one occupant.

Is it possible that all the predictable predictions of economic doom are somewhat exaggerated by the thrill of sensationalism and projections of past trends, as if people can’t possibly make consequential adjustments to their behaviors and consumption?

Systems have constraints, and so there are limits on what adjustments can be made without altering the structure, but in many cases, we’re far from reaching limits on basic conservation work-arounds.

Is it possible that things will prove less dire than currently expected? It seems little credence is being given to the potential to adjust to new conditions.

Is it beyond conception that the core actually strengthens for a length of time before the unraveling reaches it? In my crystal ball, it seems not just possible but likely. This will be the calm before The Tempest, when the unraveling reaches the core and structural changes are finally required.