Straight Talk From Scott Ritter

I’m embedding Scott Ritter’s latest conversation with Andrew Napolitano. The title of the Youtube—Is the Tide Turning in the Ukraine Russian War—doesn’t actually convey the breadth of the discussion. The second half of the video—and the entire video is only 25 minutes long—doesn’t deal with the situation in Ukraine at all. Instead, Napolitano asks Ritter to comment on excerpts from interviews with high ranking Marines and Navy personnel regarding China and Taiwan.

Readers may be aware that Xi Jinping doesn’t answer phone calls from Zhou. Why would he? Remember that bizarre and insulting rant that Zhou launched into at the so-called SOTU? Saying, nobody in the world would change places with Xi? Meanwhile, Xi is traveling the world—something our regime now admits that Zhou simply isn’t up for—making diplomatic and trade deals, transforming the dynamics of world affairs. Why would he takes calls from Zhou? Ritter gets into that whole situation and the question of whether the US is prepared for war over Taiwan. It’s eye-opening—not news, but Ritter pulls no punches.

In the course of the discussion Ritter gets into the issue of the demands of the US military for future spending. Mark Milley says US military spending will need to double—to nearly a trillion dollars. Which leads one to wonder, How could drag shows possibly be that expensive? The real question is, Will the US any longer be in a position to be spending that kind of money when King Dollar is no longer the world’s sole reserve currency? That day of reckoning appears to be coming sooner than anyone ever thought. My view is that the American Empire will face very serious constraints on spending on military matters. I’m no economist, but I did take a look at an article that speaks of these matters in a general way—without getting into military spending per se:

Deflating the credit bubble

Obviously, this is the challenge facing Jay Powell. For our purposes, I’ll simply quote from the Summary/Conclusion and let readers fit those considerations into the scenario that Ritter sketches out. The author does mention, briefly, the expectation of the collective West that “sanctions” on Russia would magically lead to Russia’s collapse. The question of, Now what? is what faces us:

The official story, that inflation was transitory was baseless. But it was sanctions against a belligerent Russia backfiring on the NATO alliance which alerted everyone to the conditions for a collapse in credit values in the major western currencies. Accordingly, energy, commodity, food, and producer prices which had already been rising suddenly broke higher. Central banks were bewildered. They could see no reason for it, other than the Russian situation, and it was argued that Russia would either be defeated, or its economy would collapse under sanctions. Inflation was still deemed to be transient.

Officially, it remains transient, only it’s taking a little longer than first thought to return to 2%.

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Summary and conclusion

It seems extraordinary that the link between changes in the quantities of currency and credit, epitomised by deposit-based monetary statistics, and interest rates is being totally disregarded by governments, monetary authorities, and the entire investment establishment. But that is certainly the case today. And no one seems to expect much more than an increase of a few basis points in global interest rates before they subsequently decline.

Furthermore, rising prices measured by the CPI have caught the policy establishment unawares. Nor should we be surprised that the current situation continues to be analysed through a neo-Keynesian lens, when we know that it is Keynesian fallacies that has led us to the current crisis. The crisis is now of emerging debt traps not just for the US Government, but governments in nearly all the other major jurisdictions.

The Keynesian belief that government economic and monetary management is superior to free markets is set to be discredited by market reality, which can only be suppressed so far. It has led to savers being forced to accept deeply and further deepening negative yields on their bond investments. So far, they have been prepared to have their pockets picked by this means, but that cannot last much longer. When it becomes clear that inflation of prices is only a marker for currency debasement, and that this debasement can only continue, these deeply negative rates will no longer be available to subsidise profligate government spending.

…

It is increasingly difficult to see a way out of these difficulties, and the Keynesian hope that economic growth will deal with the debt problem is simply naïve. In 2010, respected economists (Carmen Reinhart and Kenneth Rogoff) concluded that at a government debt to GDP rate of over 90% it becomes exceedingly difficult for a nation to grow its way out of its debt burden. With advanced economies averaging debt to GDP ratios significantly greater than 90%, there are debt traps for governments almost everywhere ready to be sprung.

In highly indebted fiat currency economies, there can only be one outcome: once one falls into a crisis, the others will follow. The cost in terms of accelerating currency debasements will lead to the destruction of public faith in their currencies as well. And with a government core debt ratio to GDP of 112.6%, the US with its dollars is up there with the others to be destabilised, being over-owned by foreigners already beginning to sell dollars and transmitting risk to all currencies that regard the dollar as its principal reserve currency.

It can only be concluded that the adjustment to market reality is likely to be more violent than anything seen in the 1970s.

One thing we know for sure—what can’t continue, won’t.

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I’ll close with a depressing observation—what have we come to as a nation? That this is who we are as a people seems somehow very relevant to how we behave as a world power:

Dark_Chicago @dark_chicago

This young girl had the guts to pull the fire alarm when she heard the #Nashville shooter approaching, she was then shot dead. Her name was Evelyn Dieckhaus and the press has paid her and the other victims no respect what so ever. #TransTerrorism

Another hero: Covenant School head Katherine Koonce stopped meeting, confronted shooter

WZTV spoke with Metro Nashville Councilman Russ Pulley, who represents the area of Green Hills where the shooting took place. Pulley said he has confirmed with a witness that Koonce was on a Zoom call when the shots started ringing out.

The witness told Pulley when Koonce heard the shots, she abruptly ended the meeting and left her office and headed towards the shooter.

The witness account, which Pulley said he has verified, aligns with statements from Metro Nashville Chief of Police John Drake during a press briefing, who said, "I did see the head school person and she was in the hallway by the office."

Drake added, "She was in the hallway by herself. There was a confrontation I'm sure. You can tell the way she was laying in the hallway."