Geopolitical Roundup

Because everything important seems to be connected.

The story that’s got everyone freaking out today is that wholesale inflation is even worse than the consumer price index from yesterday. That means that, six months or so down the road, the economy will be even more of a sh*t show than it already is. You can read KD discussing what we’re heading into here: FIIIIRE! (PPI). No, FIIIIRE! isn’t an acronym, but KD had a reason for using all caps.

Influential analysts are predicting that the Fed is going to have to back off its Quantitative Tightening (QT - interest rate hikes) because of the looming really bad recession (no one dares use the D word, but they’re all thinking it). However, no one seems to want to discuss where this leads us in anything remotely like a long term. Yes, in the long term we’re all dead, but the process still matters. Another analyst, discussing Fed policy last night, voiced a scarey prospect if the Fed doesn’t ease up: "Take The Tragedy In Sri Lanka And Multiply By Ten": The Fed Just Lobbed A Financial Nuke That Will Obliterate The Global Economy. If you’ll recall, Sri Lanka is the country whose president just had to flee with nothing more than he could take in a suitcase. When last sighted he was seeking a safe haven in the Maldives. Does this mean that our ruling elites would all flee to China if the Fed doesn’t ease up? Here’s how the author starts that piece:

We are living in a period of mass “Jonestown” economic delusion. Just twenty months ago – central bankers were offering to buy nearly every junk bond known to mankind, dramatically distorting the “true cost of capital.” All the way from crypto to emerging markets – it was a moral hazard overdose. Everyone on earth was borrowing money at fantasy-land bond yields.

Now, the Fed is promising endless rate hikes and $1T of balance sheet reduction onto a planet with emerging market and Euro-zone credit markets in flames.

The other side of the coin is that there are outsiders who maintain that Powell is doing this on purpose—he’s using QT to wring inflation out of our economy, and damn the consequences for the EU. Wringing out inflation is a task of Sisyphean proportions, but Tom Luongo—for one—has long been saying that Powell knows exactly what’s ahead and sees this as the Fed’s opportunity to free the Fed from Davos and the EU and to enforce fiscal discipline on the US government. Wow! Powell and Jamie Dimon are on, like, a mission from God—I hope so, because if that’s their mission they’ll need some credible personage to cover their backs.

Have I mentioned yet that there’s an election coming up? There is—it happens in November, which leaves plenty of time for things to get much worse. Things that will make an impression on voters, no matter what the NYT and their pollsters want you to think:

Producer Price Inflation Unexpectedly Surges Back Near Record Highs In June

Initial Jobless Claims Soars To Highest Since Nov 2021

All of this bears watching, especially in light of the political turmoil that’s ongoing in Europe. Prognosticators we’re predicting major governments would be falling by Autumn. We have written in the past about the problems ahead for the UK, Germany, France, and Italy. Well, that process is moving faster than expected. Boris Johnson is out, of course, and a crowd of midgets appear to by vying for the PM spot. Germany is teetering on the verge of economic collapse. Now, today, two developments—in Italy and France—bode very ill for that united NATO that the US keeps touting:

Italian President Rejects PM Draghi's Resignation Offer

The latest word is that Draghi will, in fact, resign. The 5-Star party has withdrawn its support and Mario Salvini is unwilling to remain in a coalition without them. This is a hugely important development for the entire EU. Draghi is the ultimate Globalist insider and is the Davos handpicked caretaker of the Italian government.

Joumanna Bercetche 🇱🇧 @CNBCJou

I cannot overemphasize how significant Draghi’s resignation is for Italy & Europe. Comes at a time where: -Italy are in midst of economic downturn & gas crunch - largest recipient of EU recovery fund -ECB are putting together anti fragmentation tool for “unwarranted” tightening

Are the Euro masses finally turning on their masters?

In France, Macron—another handpicked Davos ruler—has experienced the first results of the disastrous—for him and his ruling coalition—parliamentary elections. The Right and the Hard Left rejected Macron’s effort to renew injection mandates—a win for normal people of all persuasions and a black eye for the Globalist eugenic elite:

Eva Vlaardingerbroek @EvaVlaar

🇫🇷 Yesterday the French National Assembly prevented the reintroduction of the vaccine passport for minors, international, & domestic travel after an amendment was put in by @dupontaignan. A major defeat for despot @macron and a major win for the people!

Pelham @Resist_05

France… Absolutely epic scenes as Marine Le Pen's National Rally and Jean-Luc Melenchon's La France Insoumise defeat Emmanuel Macrons, Covid Travel Passport

And then there’s the no longer phlegmatic Dutch:

Eva Vlaardingerbroek @EvaVlaar

🇳🇱The Dutch farmers have had enough and are courageously fighting back against the Great Reset. They deserve your full support. They certainly have mine. It’s very simple: No farmers, no food. #DutchFarmers #boeren

The almost universal theme in all this is the revolt of the plebes against their Globalist rulers. Europe is sliding into economic chaos and into open revolt against Davos and their Davos imposed rulers. The masses have figured out, finally, that their governments are not on their side.

Meanwhile …

Zhou is off on his excellent Mideast adventure—except that nothing has been excellent about it. His first stop was in Israel, where he predictably made a hash of things. Repeatedly. There’s no point in rehearsing his gaffes and rewriting of his personal history. The point is, this is just the first day or two. You know that his mental acuity, such as it ever is, will decline as the trip goes on, so worse awaits us. Whether or not Americans are paying attention, the rest of the world definitely is.

The question everyone should be asking is: What foreign leader takes the Zhou regime seriously at this point? Yes, you have to take any regime seriously when they have so many nukes, but who would enter into serious undertakings or agreements with a regime headed by Zhou? Because the office of the POTUS still does matter. Except that in this case no one knows from minute to minute whether Zhou will be there tomorrow. They all see the hash that Zhou’s team has made of the Russia - Ukraine situation, among other things. Countries that rely on the US for protection—Saudi Arabia comes immediately to mind—would be foolish not to hedge their bets. The Saudi elite must certainly be wondering whether Russia, rather than the US, may be better able to intercede for them with Iran. That’s almost certainly the meaning of Saudi Arabia’s continued very serious looking negotiations with BRICS, and Zhou’s trip is almost certainly not really about oil production so much as it is about Saudi support for the dollar.

Interestingly, Putin is going to be meeting with Turkiye’s Erdogan—in Teheran. It certainly appears that the Mideast is realigning, now that Russia is back in the game. The difference this time around is that one of the regional heavyweights, Turkiye, can no longer be counted on to follow the US lead. That changes a lot of things, and the Saudis, who have good reason to be wary about their relationship with the US, cannot afford to get this wrong. Enmity toward Russia will not be a position that works well for Saudi interests in the future. Whatever the result, the Saudi position will—at a minimum—be more nuanced than in the past. That is a game changer.

This, from a Russian source quoted by Andrei Martyanov, is the lay of the land that the hapless Zhou is supposed to be negotiating on this jaunt—the part in brackets is my attempt to communicate in better English what I think Martyanov means:

Translation: BRICS is waiting for new members: in addition to Argentina and Iran, Saudi Arabia, Turkey and Egypt are also preparing to submit applications for membership in the organization. This was stated to Izvestiya by a high-ranking source who was aware of the progress of the process. According to him, the Crown Prince of the Kingdom of Saudi Arabia (KSA) Mohammed bin Salman "‎is serious about joining the BRICS"‎. The interlocutor specified that this issue was also raised during the visit of Russian Foreign Minister Sergei Lavrov to Riyadh on June 1-2. — Russia supported the desire of Saudi Arabia to join the organization. In addition to the KSA, Turkey and Egypt also showed interest in the BRICS, they have been studying the possibility of joining for several years. But at the summit in Beijing, the issue of their entry was not discussed, but the membership of the KSA was discussed seriously. Members of the association are looking for a diplomatic solution, - said an informed source.

In fact, the name of one of the sources is known, she is Purnima Anand, the head of BRICS International Forum. So, there you go. Turkey, obviously, looks as a fit for BRICS, but Saudis joining BRICS--that is something else altogether and that is a [judgment on] what passes in the US for "diplomacy".

As for Putin, it sure doesn’t look like Ukraine has turned out to be a quagmire for him. If anything, the reverse is true. The economic as well as military wars against Russia are going very badly for the West. Putin is proceeding with his plans for a “multi-polar” world, while the US scrambles to react, while Europe is increasingly paralyzed politically and economically. Meanwhile, political turmoil looms in the US. Europe has sneezed, and the US will soon be catching the Globalist cold. The cure? November will tell the tale.

Finally, yes, Ukraine. Here are two links that offer a more or less current Sitrep. First, Larry Johnson exposes what passes as informed sources in the US media—based on CIA information:

WESTERN MEDIA AND MILITARY ANALYSTS STILL DAZED AND CONFUSED ABOUT THE WAR IN UKRAINE

Next, Moon of Alabama gives a fairly complete Sitrep:

Ukraine SitRep - Additional Defense Lines, A Failed Counterattack, Weapon Deliveries

What emerges is that the Russian advance in the East is continuing at an accelerated pace. Moon’s big picture view is that the Russian aim is to advance before Winter to the line that incorporates most of the Russian leaning areas of Ukraine:

running from Kharkiv through Dnipro down to to Zaporizhzhia in the south. It will be nibbled up piecemeal. Kharkiv, the anchor in the north is already under attack. Zaporizhzhia in the south is under long range artillery fire. The center around Dnipro will be attacked from the east as well as from the west side of the Dnieper river (see below). I believe that the Russian side intends to completely take that western line before the winter sets in.

The line Moon is referring to is the yellow line on the left of the map:

Interesting times!