I have all sorts of things to get done today, so I’ll quickly point toward two thought provoking articles that dovetail with each other. They seem especially relevant at this juncture. First I turn to Alastair Crooke’s latest, which is timed for the NATO summit in Vilnius:
I sure hope the "pound of flesh from [our] corrupt ruling class" outcome that Kuntsler (and Doug Hoffman) mentions is the one we get, but what worries me is another thing Kuntsler wrote: "The question is whether the Blob sets America’s house on fire in the attempt to save itself and escape a legal accounting for its crimes."
I don't see it as any question at all. When have we ever seen this crew opt for any path other than maximum destruction of America and all that is good about it when the alternative for them is any sort of reckoning? God willing we will get that reckoning despite the Blob's best efforts, but houses on fire there will be, and lots of them.
Thanks for this, the voice of reason, it seems, may yet prevail. That would be nice. Infinitely preferable to Armageddon, as most reasonable people would agree. Let's see what develops in Vilnius. If you made as good a job of all the other thing you had to do as you did of this summation, that would have been an excellent day's work!
I suppose I can always be (successfully) accused of simplistic thinking...but...simplisticly thinking --
It seems to me that a gold-backed BRICs 'currency'...or settlement medium, if you will...is nothing more than a rational response to the risks currently perceived by creditors in holding dollars. Look at our national debt...look at our current rate of inflation...look at our Government's inability to balance its budget, or control spending, or raise taxes, or shut off the money printing machine. And then add in the risk that a neocon US government might decide to confiscate your USD one day if you don't behave? Would you want to hold your trading surplus in dollars if you had a choice?
And who are the creditors? Why the developing world, of course, which trades its natural resources and manufactured goods for good ol' greenbacks. I think its as simple as that.
And of course, creditors will think twice before accepting a wallet full of rubles or yuan instead of dollars. But they will accept rubles or yuan to settle current accounts. As far as investment in rubles and yuan is concerned, that's a different story. That's where the proponents of a new settlement medium will have to persuade creditors that the medium will be a better storehouse of value than USD.
I suppose this is where gold-backing comes in. Commenters here have asked why a creditor would prefer a BRICs bond and its a good question. But gold is not necessarily the answer. It can be a straight jacket, too. Ask FDR and Richard Nixon.
Last thought. I think an alternative settlement medium could be a major (and positive) wake up call for the US. And not necessarily a death sentence. We have been printing away with gleeful abandon for decades now and financing our neocon and neoliberal wet dreams with our creditors' indulgence. To the extent global creditors have a reasonable alternative, I would have thought the US will have to compete...and respond with more prudent fiscal policies. Perhaps, at the end of the day, this is what Jerome Powell is all about.
Just simplistic thinking. I'm sure there's a lot more to it than I am imagining.
I think none of your thinking is simplistic and all of it is just common sense. But since we're on the theme, let me try some simplistic thinking of my own by extending one of the points you made above: the worst financial thing to happen to the American people in the post-war era was when our nation's currency became the international reserve. The best financial thing that could happen to us now is for that status to go away.
Simplicity favors the people, and complexity favors the politicians, so no surprise at all that we the people became strong when we kept the nation's financial affairs simple, and we became weak when we allowed them to get complex. Time to go back to simplicity.
Bear in mind, as well, that the BRICS currency will start out simply as a settlement system backed by gold. Other features could flow from that pretty naturally--like gold backed bonds. There's undoubtedly a reason why countries around the world are buying gold. Not just BRICS countries, either. EU countries. They're not publicizing it, but it's happening.
I wonder what Armstrong expects to replace the Dollar (presumably as the primary reserve currency in the world) by 2029? He disparages the very idea of a BRICS currency but why could not one be developed and used as the reserve currency for trade among BRICS and SCO countries? As Powell noted, there is no reason there could not be more than one reserve currency in the world.
Armstrong is right, though, in that the premium put on the Dollar as the reserve currency to this point will wane in concert with the waning strength of the U.S. economy and the decline in trust of the American government and American banking system. The move away from the Dollar has been prompted and accelerated by the idiots in D.C. We are seeing that already in the increase of trade in other currencies. Still, the Dollar "will be with us" as A reserve currency until trustworthy replacements are available. And to engender that level of trust you have to have strength in the backing financial system - not something that develops overnight.
Yes agree with everything you said. I think Armstrong thinks the Yuan may rise in prominence as an additional reserve currency alongside the USD over the coming years.
Jay Powell famously said within the past year that he's OK with additional reserve currencies. He doesn't strike me as a guy who just spouts off without considering what his words mean.
How about our Ponzi Stock Markets collapse, as does the American economy and financial system, short term, but the dollar is in demand due to a shortage with the destruction of trillions due to losses.
Yes, we have an overly financialized, overly leveraged economy, are at the end of a credit cycle, and markets are overpriced. All of this will eventually correct one way or another. In the short term though we are still (believe it or not) the best game in town (if not the only game) for a lot of international institutional and individual investors. In fact, that is part of what has caused our financial system to be propped up and asset prices to skyrocket.
Given all of the problems in Europe, and the general macroeconomic instability everywhere now, I expect a lot of money to be coming into our markets from overseas in the shorter term (a lot already has). That will help prop our markets up for the time being. The time will come, however, when people find better investments elsewhere and that money will flow back out. So it goes.
Luongo, who occasionally does podcasts with Kunstler, would also disagree with Kunstler's apocalyptic view especially of the dollar. I probably should have made it clear that I was aware that his ideas about the sudden dumping of T-bills and so forth are not shared by most. The BRICS currency, as I described it recently based on a discussion at The Duran, will be strictly for settling international trade. My guess is that this won't be apocalyptic for the dollar, but that it will tighten the screws incrementally, unless the USG starts down the path of greater fiscal responsibility. That, according to Luongo, is one of Powell's aims in raising rates.
Good starting list, but key NeoCon architect Victoria Nuland and hubby Robert Kagen should be near the top of the list, as their work has proceeded without hindrance over multiple administrations. Also don't forget her role in the Steele Dossier/Russiagate matter.
From Kuntsler article: "A long list of public figures populating the Blob await a reckoning: Hillary and Bill Clinton and their retainers, Barack Obama and retinue, John Brennan, James Clapper, James Comey, Christopher Wray (plus Rosenstein, Strzok, McCabe, Carlin, Ohr, Mueller, Weissmann, Horowitz, Atkinson, Ciaramella, Vindman), Rep. Adam Schiff, Senator Mark Warner, William Barr, Avril Haines, Marie Yovanovitch, William Burns, James Boasberg, Marc Elias, Michael Bromwich, David Laufman, Alejandro Mayorkas, Xavier Baccera, Anthony Fauci, Rochelle Walensky, Francis Collins, Lloyd Austin. Mark Milley, Antony Blinken, Jake Sullivan, Ron Klain, Nancy Pelosi, Liz Cheney… the list goes way on, but there’s a start."
Additionally, and in no particular order: Mike Pence, Jeff Sessions, K Clinesmith, M McConnell, M Sussman, S Halper, Azra Turk, H Abedin, Paul Ryan, Chris Christie, A Kinzinger, Emmet Sullivan, Fiona Hill, Benjamin Wittes, Glenn Simpson, M Zuckerburg, E Swalwell, and yes, plus media, and yes, the list goes way on...
It's rather amusing to hear how the collective West still believes that it can "freeze" the conflict and make Russia accept a deal that will, as stated above, merely lead to a replay of 2014. Russia will do what it has to do and impose its terms as fait accompli.
“In that scenario, the BRICs dump their trillions in US bond holdings, sending all that putative “money” back to America, stoking a king-hell inflation, effectively bankrupting us.”
“Dumping” bond holdings would mean selling their bonds. Selling in the trillions would crash the market, losing a lot of money for the “dumpers.” The proceeds of the sale, assuming the buyers were American, would be in dollars. The “dumpers” would presumably want to convert those dollars to their home currency (since the whole point is to get out of dollar denominated investments). This would drive up the cost of their home currency, causing them to lose even more in the currency conversion. Where in this process is money coming to America? Why would they do this?
This is just Jim being his apocalyptic best, not an economist talking at that point. You can’t “dump” US Treasuries without hurting yourself. King Dollar still has miles of road ahead.
This is also what Luongo has been saying, as well--that the dollar isn't going away. OTOH, if the BRICS system is used for settlement in international trade, including oil, there will inevitably be an impact on the status of the dollar. Prince, rather than King? And that will in turn have an impact on domestic politics and budgets. A salutary impact.
Yes, they can control it. Just hold on to their safe US treasuries and collect the interest. Would anyone trade a US treasury for a bond issued by any BRICS country?
What interest? Short term treasuries don't roll over at the same rate. Long term lock you in to an unrealistically low rate. Anyway, I was referring to the whole gamut of investments, all unrealistically priced.
Name one BRICS country bond you would rather own than a US treasury. 10 year is now yielding 4%, and you are not “locked in” given the most liquid bond market in the world.
Please understand me. I am not comparing the relative values of investments. All I am saying is that values fluctuate, and that these fluctuations can be violent. Fluctuations are not always rational, and when extreme sentiment takes over cannot be controlled. This was in response to the previous comment "Why would they do this?" There were many cases in history where selling was forced. Just a word of caution, not investment advise.
Why is everybody so optimistic? Nothing will force our country to "turn inward and face its own stupendous failures of honor, decency, and integrity." The 'blob' has "the US reduced in a few short years to a broke, socially disordered, marginalized power" and can be expected to continue down the same path for the future. Our government is too heavily invested in the 'blob' for that to change. The people have given up and will make their own adjustments. We will survive as individuals. It is difficult to imagine anything that might bring us together as a Country.
I love Jim Kunstler but he does hold to the "Things are finally coming to a head and people are going to demand change" line. Of course, we'll get to that point eventually, but there's still a lot of ruin left in the nation. At present people seem to be completely docile.
I don't think docile is the word for most people. Resigned, maybe. What you can't change..... I don't think I am unique when I say I have had relations with people that have turned sour. You no longer have common ground, and each go on your own way. Or you feel cheated by a store and no longer shop there. All Washington seems to have embraced the 'blob.' Maybe a future election will change this. Maybe it won't. Meantime I don't trust my government to protect my life and my property, or even allow me to do so. They are not truthful with me. They are to be feared. It would seem we have lost our government, but more importantly our government has lost us. We are not the docile sheep at their command. We may do what we have to to stay within the law, but our government commands neither our respect nor our allegiance.
Shell shocked may be apt, but I also suggest incredulous. I could not fathom how corrupt our politicians and how obsessed they became with destroying Trump and anyone who supported him. People I once respected turned out to be shallow narcissists and psychopaths.
“Careful reassembly of the UN...”. I would expect Russia to demand the UK and maybe France to be dumped from the Security Council, replaced by India and maybe Brazil or South Africa.
Members of the blob are not going to be held to account. Changes will happen slowly, and are being fought every step by the uniparty. The judicial arm should sanction the unrestricted lawfare, but again are timid and showing too much deference to the doj / administration state.
And the eGOP seems more focused on stopping Trump and Maga supporters, than fighting the blob.
My forecast is the blob will keep supporting Ukraine and the current economic structure, and keep kicking the can down the road. They will take the least risky short term path.
The economic situation is changing relatively fast, but it will take time to have an impact on the us economy.
The more immediate issue is the recession, the pain caused by higher interest rates, and the 2024 US election. Biden is getting worse, see what happened in the UK with King Charles, and somehow he won’t be the Democratic candidate. Neither will it be Kennedy.
Russia has a vote on any negotiated peace, and after the farce / betrayal of Minsk 1 & 2, I don’t see them agreeing to a Minsk 3. Russia has the advantage now, and they have no reason to give up that advantage.
A black swan is the European Elections, but the existing powers seem adept at excluding the anti immigration, pro farmer, anti Ukraine supporters / parties. Just as the eGOP has done with the tea party and Trump Supporters.
Best guess - Netherlands legalised prostitution more or less and also cannabis. They had a very laissez faire attitude to society. Essentially their government appeared to be the most benign of all European parliaments and their peoples were kept soft and happy until the mask slipped.
The Swedes likewise have lived with governments who seemed to exist only to make their citizens' lives better - high taxes but also high wages which was fed back into society in excellent childcare, medical care and generous benefits like maternity and paternity leave. They had it great until the EU beast/Davos began to tighten its grip. Immigration has affected both countries severely and Rutte has collapsed his government because of the issue.
I think both countries were affected by their WWII history as well much like the Germans.
Right. Classical Liberalism--laissez faire--isn't just a matter of economics. It ultimately rests on philosophical underpinnings, a view of human nature and even broader reality, that has implications for morality. As the philosophical implications get worked out we see the effects on individuals and then on the broader society. This is why I have no patience for the idea that we need to forget about "culture war" and just get finances straight. A morally degenerate society will not be financially responsible because financial rectitude is ultimately a matter of moral rectitude.
Look no further than the EU, an ever-proliferating morass of rules, regs and undemocratic edicts and declarations. Unlike Holland and the Scandinavian countries (note: Norway is not a member of the EU!), Poland and Hungary have resisted the EU’s tyranny, mainly in immigration and social/economic matters. But France, hélas, has swallowed it whole, and we see the result.
Re The European elections, even when the so-called right wing anti-immigration parties are elected, they always fold and sell their souls. Witness Meloni in Italy. Immigrants are still pouring in.
I agree with Luongo's repeated assertions that China - as representative of the BRICS nations - does not want a disorderly destruction of the dollar, nor can they easily or readily disentangle themselves from America. And to quote his recent interview (https://www.youtube.com/watch?v=JiDG1ErRNi8 btwn 33:00 - 34:00) as long as goods keep crossing borders, tanks don't - in other words, we should not desire this disentanglement.
So I don't see Kunstler's scenario happening in a recoil fashion, but instead a gradual ratcheting of inflation and related hardships as the dollar transitions to a smaller global footprint.
The question will be can we transition with it? Will we be able to identify the source of our misery and expurgate it/them from our civic life? Can the middle class be saved? Can we revert to a self-reliant economy based on work? etc. etc.
What happens to the dollar in a SWIFT & BRICS financial world? I presume here the price of the Ukraine war to the Russians and the price of not invading Taiwan to the CCP will be involving the dollar *within* the BRICS framework, somewhere under the feathers. Sanction limitations (less ability to use finance instruments as a 'rules based order' tool. The BRICS money instrument by itself is backed by 2 strong economies (Russia, House of Saud), a very-large mercantilist one (CCP), and a large pot of basket-cases. Compared to the dollar, euro, pound sterling .... unlikely to be convincingly stable
Yes, the backed-by-gold approach is an element in the purported stability of a BRICS currency. But for perspective, some #s...
= All the gold already mined and yet to be mined is estimated at ~240,000 tonnes, which at (just a calibration point) $2000/oz, works out to just shy of $17 Trillion today-dollars.
= in terms of nominal 2023 GDP, the world output estimate is $105 Trillion.
The BRICS core would clock in at ~$28.5 Trillion; the US, UK, Canada, Australia, New Zealand + the EU comes in at ~$52 Trillion; non-aliged bloc (non-CCP greater Asia, Africa, South America less Brazil, Oceania) gets credited $25 Trillion. At this scale of productivity (really is a wealthy & growing world), gold-backing is but one component of the value of the currency.
The backing of the BRICS instrument is a legitimate concern. Perhaps it starts slowly as those nations feel the ground under them, but I gotta believe there will be massive interest in it once it gains some footing.
But I have difficulty seeing the US being able to impose our will in the BRICS financial universe. We - and EU/UK with us - are proven faithless actors. Russia appears very likely to be in the driver's seat for dictating the terms of the Ukraine resolution, and I have my doubts that we can project enough force to make Taiwan into a serious fight, especially since our carrier fleets appear to be nullified by hypersonics. The real question is whether we will even be willing to risk exposing more of our vulnerabilities to the arms-purchasing global community.
I agree - there is the thing: in a multi-polar world, every sovereign is a 'faithless actor' to any agreement for which they are not the center. Behaviors in many respects become easier to predict, as they are solidly based on national rational self-interest. The NGO/UN/WEFfie-queffie stuff goes poof!
Two comments. I would not want to be Zelensky at this point. He and his cabal are in a tough spot. I wonder how well they sleep at night?
Also, this partial quote "the US reduced in a few short years to a broke, socially disordered, marginalized power..." In a few short years??? Seems like we're there right now.
BRICS are physically incapable of “dumping their bonds” as any trade indicating such a move would nearly price the bids they would be trying to hit at close to zero. Thereby producing little or no cash, and thus, self-defeating.
Not happening. Trading in Treasuries would stop rather than price zero.
The mainstream media's atmospherics are now chock-full of trial balloons - pro-Zhou, anti-Zhou; pro-Kamu Sutra, anti-Kamu Sutra, pro-this/anti-that. We are seeing the shadows on the cave wall, but a deep struggle engaged is now becoming obvious. The truth is still hidden
The media pharisees are so pathetically and patently transparent in their bias -imagine if Trump had been called out for his “explosive temper” —- straight to St Elisabeth’s.
The only time Dems exhibit tolerance is when they are protecting their own. With a cabal of radical ideologists running Biden they are willing to tolerate a lot since his dementia allows them the freedom to enact what most of us see as on the wrong side of reality and dangerous to our health. They are truly psychopaths disguised as experts.
Tom Luongo is voting for sooner:
https://tomluongo.me/2023/07/11/macron-nato-and-the-end-of-the-empire-part-ii/
Ah, thanks.
I sure hope the "pound of flesh from [our] corrupt ruling class" outcome that Kuntsler (and Doug Hoffman) mentions is the one we get, but what worries me is another thing Kuntsler wrote: "The question is whether the Blob sets America’s house on fire in the attempt to save itself and escape a legal accounting for its crimes."
I don't see it as any question at all. When have we ever seen this crew opt for any path other than maximum destruction of America and all that is good about it when the alternative for them is any sort of reckoning? God willing we will get that reckoning despite the Blob's best efforts, but houses on fire there will be, and lots of them.
Thanks for this, the voice of reason, it seems, may yet prevail. That would be nice. Infinitely preferable to Armageddon, as most reasonable people would agree. Let's see what develops in Vilnius. If you made as good a job of all the other thing you had to do as you did of this summation, that would have been an excellent day's work!
I suppose I can always be (successfully) accused of simplistic thinking...but...simplisticly thinking --
It seems to me that a gold-backed BRICs 'currency'...or settlement medium, if you will...is nothing more than a rational response to the risks currently perceived by creditors in holding dollars. Look at our national debt...look at our current rate of inflation...look at our Government's inability to balance its budget, or control spending, or raise taxes, or shut off the money printing machine. And then add in the risk that a neocon US government might decide to confiscate your USD one day if you don't behave? Would you want to hold your trading surplus in dollars if you had a choice?
And who are the creditors? Why the developing world, of course, which trades its natural resources and manufactured goods for good ol' greenbacks. I think its as simple as that.
And of course, creditors will think twice before accepting a wallet full of rubles or yuan instead of dollars. But they will accept rubles or yuan to settle current accounts. As far as investment in rubles and yuan is concerned, that's a different story. That's where the proponents of a new settlement medium will have to persuade creditors that the medium will be a better storehouse of value than USD.
I suppose this is where gold-backing comes in. Commenters here have asked why a creditor would prefer a BRICs bond and its a good question. But gold is not necessarily the answer. It can be a straight jacket, too. Ask FDR and Richard Nixon.
Last thought. I think an alternative settlement medium could be a major (and positive) wake up call for the US. And not necessarily a death sentence. We have been printing away with gleeful abandon for decades now and financing our neocon and neoliberal wet dreams with our creditors' indulgence. To the extent global creditors have a reasonable alternative, I would have thought the US will have to compete...and respond with more prudent fiscal policies. Perhaps, at the end of the day, this is what Jerome Powell is all about.
Just simplistic thinking. I'm sure there's a lot more to it than I am imagining.
I think none of your thinking is simplistic and all of it is just common sense. But since we're on the theme, let me try some simplistic thinking of my own by extending one of the points you made above: the worst financial thing to happen to the American people in the post-war era was when our nation's currency became the international reserve. The best financial thing that could happen to us now is for that status to go away.
Simplicity favors the people, and complexity favors the politicians, so no surprise at all that we the people became strong when we kept the nation's financial affairs simple, and we became weak when we allowed them to get complex. Time to go back to simplicity.
Bear in mind, as well, that the BRICS currency will start out simply as a settlement system backed by gold. Other features could flow from that pretty naturally--like gold backed bonds. There's undoubtedly a reason why countries around the world are buying gold. Not just BRICS countries, either. EU countries. They're not publicizing it, but it's happening.
Martin Armstrong says the US dollar will be with us until 2029 and we don’t get a new political system until 2032. Goodness knows what happens in between! https://www.armstrongeconomics.com/markets-by-sector/foreign-exchange/brics-to-replace-the-dollar/
Yep. With 9 years of fun from now till then. Happy Times!
I wonder what Armstrong expects to replace the Dollar (presumably as the primary reserve currency in the world) by 2029? He disparages the very idea of a BRICS currency but why could not one be developed and used as the reserve currency for trade among BRICS and SCO countries? As Powell noted, there is no reason there could not be more than one reserve currency in the world.
Armstrong is right, though, in that the premium put on the Dollar as the reserve currency to this point will wane in concert with the waning strength of the U.S. economy and the decline in trust of the American government and American banking system. The move away from the Dollar has been prompted and accelerated by the idiots in D.C. We are seeing that already in the increase of trade in other currencies. Still, the Dollar "will be with us" as A reserve currency until trustworthy replacements are available. And to engender that level of trust you have to have strength in the backing financial system - not something that develops overnight.
Yes agree with everything you said. I think Armstrong thinks the Yuan may rise in prominence as an additional reserve currency alongside the USD over the coming years.
Jay Powell famously said within the past year that he's OK with additional reserve currencies. He doesn't strike me as a guy who just spouts off without considering what his words mean.
P.S. - For that same reason, I do not agree with Kunstler's apocalyptic view of the American economy and financial system - at least not short term.
How about our Ponzi Stock Markets collapse, as does the American economy and financial system, short term, but the dollar is in demand due to a shortage with the destruction of trillions due to losses.
Yes, we have an overly financialized, overly leveraged economy, are at the end of a credit cycle, and markets are overpriced. All of this will eventually correct one way or another. In the short term though we are still (believe it or not) the best game in town (if not the only game) for a lot of international institutional and individual investors. In fact, that is part of what has caused our financial system to be propped up and asset prices to skyrocket.
Given all of the problems in Europe, and the general macroeconomic instability everywhere now, I expect a lot of money to be coming into our markets from overseas in the shorter term (a lot already has). That will help prop our markets up for the time being. The time will come, however, when people find better investments elsewhere and that money will flow back out. So it goes.
I see you are Luongo follower - as am I!
Luongo, who occasionally does podcasts with Kunstler, would also disagree with Kunstler's apocalyptic view especially of the dollar. I probably should have made it clear that I was aware that his ideas about the sudden dumping of T-bills and so forth are not shared by most. The BRICS currency, as I described it recently based on a discussion at The Duran, will be strictly for settling international trade. My guess is that this won't be apocalyptic for the dollar, but that it will tighten the screws incrementally, unless the USG starts down the path of greater fiscal responsibility. That, according to Luongo, is one of Powell's aims in raising rates.
Yep, yep, and yep (IMO). Thanks, Mark
Those are end dates, but my guess is that we'll start seeing changes sooner than that.
Yes I agree. I’ve taken control of my pension fund and bought gold recently. I am preparing!
Good starting list, but key NeoCon architect Victoria Nuland and hubby Robert Kagen should be near the top of the list, as their work has proceeded without hindrance over multiple administrations. Also don't forget her role in the Steele Dossier/Russiagate matter.
From Kuntsler article: "A long list of public figures populating the Blob await a reckoning: Hillary and Bill Clinton and their retainers, Barack Obama and retinue, John Brennan, James Clapper, James Comey, Christopher Wray (plus Rosenstein, Strzok, McCabe, Carlin, Ohr, Mueller, Weissmann, Horowitz, Atkinson, Ciaramella, Vindman), Rep. Adam Schiff, Senator Mark Warner, William Barr, Avril Haines, Marie Yovanovitch, William Burns, James Boasberg, Marc Elias, Michael Bromwich, David Laufman, Alejandro Mayorkas, Xavier Baccera, Anthony Fauci, Rochelle Walensky, Francis Collins, Lloyd Austin. Mark Milley, Antony Blinken, Jake Sullivan, Ron Klain, Nancy Pelosi, Liz Cheney… the list goes way on, but there’s a start."
Additionally, and in no particular order: Mike Pence, Jeff Sessions, K Clinesmith, M McConnell, M Sussman, S Halper, Azra Turk, H Abedin, Paul Ryan, Chris Christie, A Kinzinger, Emmet Sullivan, Fiona Hill, Benjamin Wittes, Glenn Simpson, M Zuckerburg, E Swalwell, and yes, plus media, and yes, the list goes way on...
Lines up with my list but include the media
Where’s the Soros monsters on this list? They should be at the top of the list.
It's rather amusing to hear how the collective West still believes that it can "freeze" the conflict and make Russia accept a deal that will, as stated above, merely lead to a replay of 2014. Russia will do what it has to do and impose its terms as fait accompli.
How is this scenario supposed to happen:
“In that scenario, the BRICs dump their trillions in US bond holdings, sending all that putative “money” back to America, stoking a king-hell inflation, effectively bankrupting us.”
“Dumping” bond holdings would mean selling their bonds. Selling in the trillions would crash the market, losing a lot of money for the “dumpers.” The proceeds of the sale, assuming the buyers were American, would be in dollars. The “dumpers” would presumably want to convert those dollars to their home currency (since the whole point is to get out of dollar denominated investments). This would drive up the cost of their home currency, causing them to lose even more in the currency conversion. Where in this process is money coming to America? Why would they do this?
This is just Jim being his apocalyptic best, not an economist talking at that point. You can’t “dump” US Treasuries without hurting yourself. King Dollar still has miles of road ahead.
This is also what Luongo has been saying, as well--that the dollar isn't going away. OTOH, if the BRICS system is used for settlement in international trade, including oil, there will inevitably be an impact on the status of the dollar. Prince, rather than King? And that will in turn have an impact on domestic politics and budgets. A salutary impact.
Why? Because they can't control it. You kiddies don't know what a real bear market is. Never seen one. Just wait.
Yes, they can control it. Just hold on to their safe US treasuries and collect the interest. Would anyone trade a US treasury for a bond issued by any BRICS country?
What interest? Short term treasuries don't roll over at the same rate. Long term lock you in to an unrealistically low rate. Anyway, I was referring to the whole gamut of investments, all unrealistically priced.
Name one BRICS country bond you would rather own than a US treasury. 10 year is now yielding 4%, and you are not “locked in” given the most liquid bond market in the world.
Please understand me. I am not comparing the relative values of investments. All I am saying is that values fluctuate, and that these fluctuations can be violent. Fluctuations are not always rational, and when extreme sentiment takes over cannot be controlled. This was in response to the previous comment "Why would they do this?" There were many cases in history where selling was forced. Just a word of caution, not investment advise.
Why is everybody so optimistic? Nothing will force our country to "turn inward and face its own stupendous failures of honor, decency, and integrity." The 'blob' has "the US reduced in a few short years to a broke, socially disordered, marginalized power" and can be expected to continue down the same path for the future. Our government is too heavily invested in the 'blob' for that to change. The people have given up and will make their own adjustments. We will survive as individuals. It is difficult to imagine anything that might bring us together as a Country.
Could not agree more perle.
I love Jim Kunstler but he does hold to the "Things are finally coming to a head and people are going to demand change" line. Of course, we'll get to that point eventually, but there's still a lot of ruin left in the nation. At present people seem to be completely docile.
I don't think docile is the word for most people. Resigned, maybe. What you can't change..... I don't think I am unique when I say I have had relations with people that have turned sour. You no longer have common ground, and each go on your own way. Or you feel cheated by a store and no longer shop there. All Washington seems to have embraced the 'blob.' Maybe a future election will change this. Maybe it won't. Meantime I don't trust my government to protect my life and my property, or even allow me to do so. They are not truthful with me. They are to be feared. It would seem we have lost our government, but more importantly our government has lost us. We are not the docile sheep at their command. We may do what we have to to stay within the law, but our government commands neither our respect nor our allegiance.
For docile I read shell shocked by the last 3 years on top of being tranquilised by tv, education and easy western living.
Shell shocked may be apt, but I also suggest incredulous. I could not fathom how corrupt our politicians and how obsessed they became with destroying Trump and anyone who supported him. People I once respected turned out to be shallow narcissists and psychopaths.
“Careful reassembly of the UN...”. I would expect Russia to demand the UK and maybe France to be dumped from the Security Council, replaced by India and maybe Brazil or South Africa.
That wouldn't be surprising. You can see why the Euros are petrified.
Kunstler is a bit of an idealistic.
Members of the blob are not going to be held to account. Changes will happen slowly, and are being fought every step by the uniparty. The judicial arm should sanction the unrestricted lawfare, but again are timid and showing too much deference to the doj / administration state.
And the eGOP seems more focused on stopping Trump and Maga supporters, than fighting the blob.
My forecast is the blob will keep supporting Ukraine and the current economic structure, and keep kicking the can down the road. They will take the least risky short term path.
The economic situation is changing relatively fast, but it will take time to have an impact on the us economy.
The more immediate issue is the recession, the pain caused by higher interest rates, and the 2024 US election. Biden is getting worse, see what happened in the UK with King Charles, and somehow he won’t be the Democratic candidate. Neither will it be Kennedy.
Russia has a vote on any negotiated peace, and after the farce / betrayal of Minsk 1 & 2, I don’t see them agreeing to a Minsk 3. Russia has the advantage now, and they have no reason to give up that advantage.
A black swan is the European Elections, but the existing powers seem adept at excluding the anti immigration, pro farmer, anti Ukraine supporters / parties. Just as the eGOP has done with the tea party and Trump Supporters.
Keep your eyes on the Netherlands - govt collapsed a few days agp and they are the petri dish for Agenda 2030.
I always wonder how the Netherlands and especially the Scandinavians became so passive and weak after their empire glory and savage raider past.
Best guess - Netherlands legalised prostitution more or less and also cannabis. They had a very laissez faire attitude to society. Essentially their government appeared to be the most benign of all European parliaments and their peoples were kept soft and happy until the mask slipped.
The Swedes likewise have lived with governments who seemed to exist only to make their citizens' lives better - high taxes but also high wages which was fed back into society in excellent childcare, medical care and generous benefits like maternity and paternity leave. They had it great until the EU beast/Davos began to tighten its grip. Immigration has affected both countries severely and Rutte has collapsed his government because of the issue.
I think both countries were affected by their WWII history as well much like the Germans.
"a very laissez faire attitude to society"
Right. Classical Liberalism--laissez faire--isn't just a matter of economics. It ultimately rests on philosophical underpinnings, a view of human nature and even broader reality, that has implications for morality. As the philosophical implications get worked out we see the effects on individuals and then on the broader society. This is why I have no patience for the idea that we need to forget about "culture war" and just get finances straight. A morally degenerate society will not be financially responsible because financial rectitude is ultimately a matter of moral rectitude.
Precisely.
Thanks for your reply and explanation.
The humanist movement and reformation seems to have made a big impact on their social structure leading to who they are today.
Look no further than the EU, an ever-proliferating morass of rules, regs and undemocratic edicts and declarations. Unlike Holland and the Scandinavian countries (note: Norway is not a member of the EU!), Poland and Hungary have resisted the EU’s tyranny, mainly in immigration and social/economic matters. But France, hélas, has swallowed it whole, and we see the result.
Re The European elections, even when the so-called right wing anti-immigration parties are elected, they always fold and sell their souls. Witness Meloni in Italy. Immigrants are still pouring in.
Perhaps, as ‘they’ tell it, it will be different this time, yes?
I agree with Luongo's repeated assertions that China - as representative of the BRICS nations - does not want a disorderly destruction of the dollar, nor can they easily or readily disentangle themselves from America. And to quote his recent interview (https://www.youtube.com/watch?v=JiDG1ErRNi8 btwn 33:00 - 34:00) as long as goods keep crossing borders, tanks don't - in other words, we should not desire this disentanglement.
So I don't see Kunstler's scenario happening in a recoil fashion, but instead a gradual ratcheting of inflation and related hardships as the dollar transitions to a smaller global footprint.
The question will be can we transition with it? Will we be able to identify the source of our misery and expurgate it/them from our civic life? Can the middle class be saved? Can we revert to a self-reliant economy based on work? etc. etc.
What happens to the dollar in a SWIFT & BRICS financial world? I presume here the price of the Ukraine war to the Russians and the price of not invading Taiwan to the CCP will be involving the dollar *within* the BRICS framework, somewhere under the feathers. Sanction limitations (less ability to use finance instruments as a 'rules based order' tool. The BRICS money instrument by itself is backed by 2 strong economies (Russia, House of Saud), a very-large mercantilist one (CCP), and a large pot of basket-cases. Compared to the dollar, euro, pound sterling .... unlikely to be convincingly stable
"unlikely to be convincingly stable"
Isn't that why its proposed to be backed by gold?
Yes, the backed-by-gold approach is an element in the purported stability of a BRICS currency. But for perspective, some #s...
= All the gold already mined and yet to be mined is estimated at ~240,000 tonnes, which at (just a calibration point) $2000/oz, works out to just shy of $17 Trillion today-dollars.
= in terms of nominal 2023 GDP, the world output estimate is $105 Trillion.
The BRICS core would clock in at ~$28.5 Trillion; the US, UK, Canada, Australia, New Zealand + the EU comes in at ~$52 Trillion; non-aliged bloc (non-CCP greater Asia, Africa, South America less Brazil, Oceania) gets credited $25 Trillion. At this scale of productivity (really is a wealthy & growing world), gold-backing is but one component of the value of the currency.
The backing of the BRICS instrument is a legitimate concern. Perhaps it starts slowly as those nations feel the ground under them, but I gotta believe there will be massive interest in it once it gains some footing.
But I have difficulty seeing the US being able to impose our will in the BRICS financial universe. We - and EU/UK with us - are proven faithless actors. Russia appears very likely to be in the driver's seat for dictating the terms of the Ukraine resolution, and I have my doubts that we can project enough force to make Taiwan into a serious fight, especially since our carrier fleets appear to be nullified by hypersonics. The real question is whether we will even be willing to risk exposing more of our vulnerabilities to the arms-purchasing global community.
I agree - there is the thing: in a multi-polar world, every sovereign is a 'faithless actor' to any agreement for which they are not the center. Behaviors in many respects become easier to predict, as they are solidly based on national rational self-interest. The NGO/UN/WEFfie-queffie stuff goes poof!
Agreed. If we can't project enough force in Ukraine, we certainly can't do it in Taiwan. And the hypersonics really have changed the game.
Agreed. RM above also pointed that out. I was waiting for others to jump on that.
Two comments. I would not want to be Zelensky at this point. He and his cabal are in a tough spot. I wonder how well they sleep at night?
Also, this partial quote "the US reduced in a few short years to a broke, socially disordered, marginalized power..." In a few short years??? Seems like we're there right now.
I don't think the Zman has been in Ukr these last 2 months at least. I'd bet he never goes back.
BRICS are physically incapable of “dumping their bonds” as any trade indicating such a move would nearly price the bids they would be trying to hit at close to zero. Thereby producing little or no cash, and thus, self-defeating.
Not happening. Trading in Treasuries would stop rather than price zero.
Good point
I was going to disagree with Kunstler on that but figured somebody with more knowledge than I would point that out. Tx.
The mainstream media's atmospherics are now chock-full of trial balloons - pro-Zhou, anti-Zhou; pro-Kamu Sutra, anti-Kamu Sutra, pro-this/anti-that. We are seeing the shadows on the cave wall, but a deep struggle engaged is now becoming obvious. The truth is still hidden
And they're still ratcheting up the "climate change " garbage with the obligatory annual "hottest year ever" headlines.
Yes.
There continues to be a steady drip of stories from the Left painting Zhou in a very negative light. Today from Axios re his explosive temper.
Making strait the way for Newsome or whichever midwit they have lined up.
The media pharisees are so pathetically and patently transparent in their bias -imagine if Trump had been called out for his “explosive temper” —- straight to St Elisabeth’s.
The only time Dems exhibit tolerance is when they are protecting their own. With a cabal of radical ideologists running Biden they are willing to tolerate a lot since his dementia allows them the freedom to enact what most of us see as on the wrong side of reality and dangerous to our health. They are truly psychopaths disguised as experts.
Thanks, Doug. You picked out exactly the points I intended by referring to Kunstler's article. The forest, more than the trees.