How do you describe doubling down on unsustainable? This is what Jacob Dreizin and others have been saying--entering an economic war of choice at the worst possible time.
Since I read your article I've been nerding out on financial analysis. I've just read this one which paints a dire portrait and backs up you and Tom L. It's dense but worth wading through. It also predicts the ECB and Euro will likely be the first to collapse. Interestingly, as per Tom L's hypothesis that the Fed is at war with EU and Davos, the author seems to suggest that the Fed will be somewhat cushioned from the fallout.
Mark, thanks very much for your work compiling these great sources on economic matters. I am humbled that you presented my comment to help frame your presentation, which is excellent.
I think Mercouris did a very good job explaining the EU situation in understandable terms. It isn't pleasant to contemplate Luongo's view that at a high level we are dealing with a "turf war" between the commercial banks, central banks, Davos, and Russia (and that we are the collateral for all of them). Yet it is hard to argue against that. Of interest to me was Luongo noting that the ECB itself is potentially subject to bankruptcy due to its holdings of bonds in Italy, etc. Wasn't there a saying that the first purpose of any organization is its own preservation? There are any number of ways things could go sideways in Europe now. It is no longer a stable environment for investment and as you have noted well, the ECB is seemingly powerless at this point.
So much of the economic health of the West depends on energy and our current governments are doing all they can to make it scarcer and more unprofitable to produce and distribute. Their efforts can only be seen as purposely malicious and destructive. Even more disturbing is that as Denninger notes you cannot just flip a switch to bring more energy back online when the means of production and transportation have been shut down and disincentivized. Very tough times ahead for at the very least a few years.
I'll add my thanks for this article which I stayed up way late to get through last night - it was unputdownable. Thanks also for the mention.
I love watching Tom L go off - I worry about his blood pressure though. He's 100% right about the turf war. Putin gave a speech today at St Petersburg in which he stated the unipolar world order is over and there is no going back. For him to state it so categorically leads me to suspect the state of play is about to get ramped way up.
Yes. Scary in that the Russians are uber-serious and the Bidenistas are working without any clues. No one in the "leadership" of the West is either smart enough or grounded enough in reality to hear them. It reminds me of the famous sequence from Joseph Heller's "Catch 22" where one character says to another "I am going to kill you." The other character responds "Why?" The first character replies "Why not?" The Bidenistas may not come to their senses until faced with such a situation.
Mark, your articles are excellent, but I suggest writing Joe and not Zhou- the nickname isn’t funny, it confuses new readers, and no one else has followed you on this.
Everyone's a critic. I don't mean to quibble bitterboy, but in the face of the coup d'etat and installation of the hopelessly corrupt political hack who couldn't get himself elected out of a paper bag outside of Delaware, and didn't leave his basement for his entire "campaign" and whose running mate was even more unsavory ..to democrats..., in the face of that monumental injustice , I think Mark and the rest of his readers who do know the whole story are entitled to expect that newcomers should take the opportunity of their confusion to catch up.
Zhou is perfectly fine. It's a continual reminder that Biden and his family are bought and paid for by China (among others). Brandon doesn't convey any of that information. I also like the other name by one of the commenters on this blog: Josef R. Stolen.
Personally, I'm fine with Zhou (the nickname, not the sock puppet). Perhaps, so as not to confuse new readers, you could make your first reference in any given post be to "Zhou Biden". Thereafter, references to "Zhou" will be understood by all.
But, bottom line -- whatever you decide works for me.
I think Zhoe is perfect too. It's Mark's Substack and he can call him Zhou if he wants to. I had no problem working out who Zhou was. Zhou is original and funny.
Hinting at "Selected" QE to help fringe Eurozone members, a k a "friends" who could make things worse for TPTB. TBTF banks in EU did not address a single bad debt actor or loan after 2006-8. The reason why? Their largest "bad loan" customers are municipalities themselves, local, provincial, and state. Everything "government" is by and large financed by the banks. If those banks falter, the entire Eurozone "Project" collapses in on itself.
So spin the plates more is all they have. And why LaGarde announced today that their new "special tool" will be to "limit spreads". This is a subsidization trade on margin at best, and levers it all even worse.
“The dark night of fascism is always descending in the United States and yet lands only in Europe.”
-T. Wolfe
Cash is fungible, so who knows where this new QE will land.
One thing I didn't realize until I looked around a little bit prompted by your comment - wish I could remember where - was that even the commercial banks in Europe are invested in the PIGS debt as collateral. Oh boy what a mess and how set up for a complete collapse in a hurry! Tx
To follow up, Bill Blain covers this most cogently, and is certainly a better writer than I am:
The Age of Divergence – Buy Dollars, Sell Europe
Markets and Geopolitics intersect in the Great Game being played in Ukraine. The West’s economies are diverging as a result of inflation shocks and looming recession. Divergence will play into Russian’s hands, and presents a clear market strategy: Buy Dollars and Sell Europe.
Cassander, I agree very much with all that you say but am still hesitant at this point to commit to the U.S. equity markets. The points you make are true in general and historically. But we have never before had a government that seems intent on actually destroying our economy and a Fed that may well push tightening and raising rates to the point of causing a deep recession. There has to be some basis for actual growth (aside from financialization and leveraging). That will take time and credit and investment. I agree wholeheartedly with you on energy. That is the most important and best thing to start turning Western economies around; but even that will take time. Thanks very much for your thoughts.
The emerging consensus seems to be "Zhou". My reasoning at the time was that sooner or later more would come out.
"Proscription" should = prescription
Re the EU, the word is that yesterday in Kiev Germany, Italy, and France urged Zelensky to start negotiations with Russia. If serious, that runs counter to the Anglosphere position. Russia's response was to cut France off entirely from RF gas and possibly Italy as well. Germany is being reduced, too. Pressure. RF spokesman has said RF is in no hurry to negotiate at this point.
Re the USD, while the US is overall in a much stronger position economically than the EU, the dollar will certainly take a hit against the ruble and yuan that will force major changes in the US. Eventually. I mean re government spending.
I guess all those phone calls to Vadimir by Macron are finally bearing some much-belated fruit: the pressure should be on Mr Z. Can you imagine such pressure applied Before the May presidential elections? Pas du tout. The irony is (imo) that it was Trump who told Europe to step up to the plate, to pay its fair share of defense spending, harkening back to De Gaulle’s vision of a Europe of strong nation states ( if not “from the Atlantic to the Urals,” which expression worried, even back then, the Russians, but was eventually resolved by…diplomacy.)
So my wife gets a few bucks from a now deceased Aunt who had “ a few bucks”. We finally get a financial “expert” to care for it. We’re in our mid-50s so not yet retired but getting there. First meeting with the guy he asks “if you lost 10% would you be comfortable hanging in? 15%? 20%? What to do? I sit, reading, watching, thinking, sweating... Feel like I’m falling into an abyss. I’m a former LEO so got a small pension to fall back on - if that’s even there in a few years. Wife is a teacher...
In a previous post you asked "The Crash, The War, And Who Wins?" Nobody wins. I had hopes that President Trump would follow through when he said on December 5, 2020 that he would restore faith in our elections, but public sentiment even among conservatives is that it is time to move on. He is a doer, not a politician, and what would interest him is bringing down the cabal that has destroyed government of, by and for the people, which he thinks is now possible considering all the legal infractions committed and evidence available. Truly terrible people have taken over Washington with whom compromise is impossible, and I doubt that President Trump would be interested in the ceremonial role of President if they still retain power. As for the logic behind what is going on, arrogant people, like Humpty Dumpty in "Through the Looking Glass" truly believe they are the masters of whatever situation presents itself .
The complex smoke and mirrors that has been done is amazing.
If I understand it correctly.
The Fed somehow creates money out of thin air. That is called Quantitative Easing. The result is an increase in the money supply, which causes inflation.
The way to reduce inflation is with higher interest rates, that should be above the rate of inflation.
The official inflation rate is manipulated, but is around 8.5%, reality is probably closer to 17% per shadowstats.
What has been done is super low interest rates to keep the economy going. This is being done in Europe, Japan, and the US.
And the US congress, along with Europe, and Japan, have been running huge deficits in order to keep their economy above water. Which is financed by printing money. This should result in the currency being devalued, but through lots of creative financial stuff, the currencies have kept their value.
There has been talk of moving all currency to digital, this way you can force people to spend money or it goes away.
And financial games have been played to keep the price of gold down.
https://www.spectator.co.uk/article/france-could-plunge-the-eurozone-into-its-next-crisis
Just found this article. France is in more trouble than I realised.
How do you describe doubling down on unsustainable? This is what Jacob Dreizin and others have been saying--entering an economic war of choice at the worst possible time.
Since I read your article I've been nerding out on financial analysis. I've just read this one which paints a dire portrait and backs up you and Tom L. It's dense but worth wading through. It also predicts the ECB and Euro will likely be the first to collapse. Interestingly, as per Tom L's hypothesis that the Fed is at war with EU and Davos, the author seems to suggest that the Fed will be somewhat cushioned from the fallout.
https://www.lewrockwell.com/2022/06/alasdair-macleod/a-perfect-storm-in-banking-is-brewing/
Mark, thanks very much for your work compiling these great sources on economic matters. I am humbled that you presented my comment to help frame your presentation, which is excellent.
I think Mercouris did a very good job explaining the EU situation in understandable terms. It isn't pleasant to contemplate Luongo's view that at a high level we are dealing with a "turf war" between the commercial banks, central banks, Davos, and Russia (and that we are the collateral for all of them). Yet it is hard to argue against that. Of interest to me was Luongo noting that the ECB itself is potentially subject to bankruptcy due to its holdings of bonds in Italy, etc. Wasn't there a saying that the first purpose of any organization is its own preservation? There are any number of ways things could go sideways in Europe now. It is no longer a stable environment for investment and as you have noted well, the ECB is seemingly powerless at this point.
So much of the economic health of the West depends on energy and our current governments are doing all they can to make it scarcer and more unprofitable to produce and distribute. Their efforts can only be seen as purposely malicious and destructive. Even more disturbing is that as Denninger notes you cannot just flip a switch to bring more energy back online when the means of production and transportation have been shut down and disincentivized. Very tough times ahead for at the very least a few years.
Thanks again for this. Much appreciated!
I'll add my thanks for this article which I stayed up way late to get through last night - it was unputdownable. Thanks also for the mention.
I love watching Tom L go off - I worry about his blood pressure though. He's 100% right about the turf war. Putin gave a speech today at St Petersburg in which he stated the unipolar world order is over and there is no going back. For him to state it so categorically leads me to suspect the state of play is about to get ramped way up.
Thanks again for all you are doing.
Yes. Scary in that the Russians are uber-serious and the Bidenistas are working without any clues. No one in the "leadership" of the West is either smart enough or grounded enough in reality to hear them. It reminds me of the famous sequence from Joseph Heller's "Catch 22" where one character says to another "I am going to kill you." The other character responds "Why?" The first character replies "Why not?" The Bidenistas may not come to their senses until faced with such a situation.
You're welcome!
Mark, your articles are excellent, but I suggest writing Joe and not Zhou- the nickname isn’t funny, it confuses new readers, and no one else has followed you on this.
Everyone's a critic. I don't mean to quibble bitterboy, but in the face of the coup d'etat and installation of the hopelessly corrupt political hack who couldn't get himself elected out of a paper bag outside of Delaware, and didn't leave his basement for his entire "campaign" and whose running mate was even more unsavory ..to democrats..., in the face of that monumental injustice , I think Mark and the rest of his readers who do know the whole story are entitled to expect that newcomers should take the opportunity of their confusion to catch up.
PS. I think "Zhou" is mordantly funny and much in keeping with Mark's style and superior sense of humor. IMHO.
Is it okay if i still use Zhou?
Zhou is perfectly fine. It's a continual reminder that Biden and his family are bought and paid for by China (among others). Brandon doesn't convey any of that information. I also like the other name by one of the commenters on this blog: Josef R. Stolen.
I apologize for being unfunny, confusing, and out of step.
I vote "Brandon". Very American in its provenance and usage. Very "more in sorrow than in anger".
OK. Brandon it is. Or will be.
Personally, I'm fine with Zhou (the nickname, not the sock puppet). Perhaps, so as not to confuse new readers, you could make your first reference in any given post be to "Zhou Biden". Thereafter, references to "Zhou" will be understood by all.
But, bottom line -- whatever you decide works for me.
Baiden you mean.
I think Xhou is perfect.
I think Zhoe is perfect too. It's Mark's Substack and he can call him Zhou if he wants to. I had no problem working out who Zhou was. Zhou is original and funny.
Was there ever a time when there was not a single leader/statesman anywhere in the world?
Putin? Xi? Orban?
You missed the key point. The ECB held an emergency "Ad Hoc" meeting yesterday Before the Fed's announcement::
"European Central Bank holds emergency meeting to discuss market rout"
https://www.cnbc.com/2022/06/15/european-central-bank-last-minute-meeting-to-look-at-market-conditions.html
Hinting at "Selected" QE to help fringe Eurozone members, a k a "friends" who could make things worse for TPTB. TBTF banks in EU did not address a single bad debt actor or loan after 2006-8. The reason why? Their largest "bad loan" customers are municipalities themselves, local, provincial, and state. Everything "government" is by and large financed by the banks. If those banks falter, the entire Eurozone "Project" collapses in on itself.
So spin the plates more is all they have. And why LaGarde announced today that their new "special tool" will be to "limit spreads". This is a subsidization trade on margin at best, and levers it all even worse.
“The dark night of fascism is always descending in the United States and yet lands only in Europe.”
-T. Wolfe
Cash is fungible, so who knows where this new QE will land.
One thing I didn't realize until I looked around a little bit prompted by your comment - wish I could remember where - was that even the commercial banks in Europe are invested in the PIGS debt as collateral. Oh boy what a mess and how set up for a complete collapse in a hurry! Tx
To follow up, Bill Blain covers this most cogently, and is certainly a better writer than I am:
The Age of Divergence – Buy Dollars, Sell Europe
Markets and Geopolitics intersect in the Great Game being played in Ukraine. The West’s economies are diverging as a result of inflation shocks and looming recession. Divergence will play into Russian’s hands, and presents a clear market strategy: Buy Dollars and Sell Europe.
https://morningporridge.com/blog/blains-morning-porridge/the-age-of-divergence-buy-dollars-sell-europe/
Thanks, I'll check it out. It sounds similar to what Luongo is saying.
Cassander, I agree very much with all that you say but am still hesitant at this point to commit to the U.S. equity markets. The points you make are true in general and historically. But we have never before had a government that seems intent on actually destroying our economy and a Fed that may well push tightening and raising rates to the point of causing a deep recession. There has to be some basis for actual growth (aside from financialization and leveraging). That will take time and credit and investment. I agree wholeheartedly with you on energy. That is the most important and best thing to start turning Western economies around; but even that will take time. Thanks very much for your thoughts.
The emerging consensus seems to be "Zhou". My reasoning at the time was that sooner or later more would come out.
"Proscription" should = prescription
Re the EU, the word is that yesterday in Kiev Germany, Italy, and France urged Zelensky to start negotiations with Russia. If serious, that runs counter to the Anglosphere position. Russia's response was to cut France off entirely from RF gas and possibly Italy as well. Germany is being reduced, too. Pressure. RF spokesman has said RF is in no hurry to negotiate at this point.
Re the USD, while the US is overall in a much stronger position economically than the EU, the dollar will certainly take a hit against the ruble and yuan that will force major changes in the US. Eventually. I mean re government spending.
I guess all those phone calls to Vadimir by Macron are finally bearing some much-belated fruit: the pressure should be on Mr Z. Can you imagine such pressure applied Before the May presidential elections? Pas du tout. The irony is (imo) that it was Trump who told Europe to step up to the plate, to pay its fair share of defense spending, harkening back to De Gaulle’s vision of a Europe of strong nation states ( if not “from the Atlantic to the Urals,” which expression worried, even back then, the Russians, but was eventually resolved by…diplomacy.)
Amusing Reason - due to sanctions can’t fix pipe line for full flow…
https://abcnews.go.com/International/wireStory/russia-cuts-natural-gas-exports-european-countries-85459033
So my wife gets a few bucks from a now deceased Aunt who had “ a few bucks”. We finally get a financial “expert” to care for it. We’re in our mid-50s so not yet retired but getting there. First meeting with the guy he asks “if you lost 10% would you be comfortable hanging in? 15%? 20%? What to do? I sit, reading, watching, thinking, sweating... Feel like I’m falling into an abyss. I’m a former LEO so got a small pension to fall back on - if that’s even there in a few years. Wife is a teacher...
Things feel very unstable. Yikes 🥵😅
In a previous post you asked "The Crash, The War, And Who Wins?" Nobody wins. I had hopes that President Trump would follow through when he said on December 5, 2020 that he would restore faith in our elections, but public sentiment even among conservatives is that it is time to move on. He is a doer, not a politician, and what would interest him is bringing down the cabal that has destroyed government of, by and for the people, which he thinks is now possible considering all the legal infractions committed and evidence available. Truly terrible people have taken over Washington with whom compromise is impossible, and I doubt that President Trump would be interested in the ceremonial role of President if they still retain power. As for the logic behind what is going on, arrogant people, like Humpty Dumpty in "Through the Looking Glass" truly believe they are the masters of whatever situation presents itself .
KD rants to good effect:
Biden, Threats And Energy
https://market-ticker.org/akcs-www?post=246142
The complex smoke and mirrors that has been done is amazing.
If I understand it correctly.
The Fed somehow creates money out of thin air. That is called Quantitative Easing. The result is an increase in the money supply, which causes inflation.
The way to reduce inflation is with higher interest rates, that should be above the rate of inflation.
The official inflation rate is manipulated, but is around 8.5%, reality is probably closer to 17% per shadowstats.
What has been done is super low interest rates to keep the economy going. This is being done in Europe, Japan, and the US.
And the US congress, along with Europe, and Japan, have been running huge deficits in order to keep their economy above water. Which is financed by printing money. This should result in the currency being devalued, but through lots of creative financial stuff, the currencies have kept their value.
There has been talk of moving all currency to digital, this way you can force people to spend money or it goes away.
And financial games have been played to keep the price of gold down.
Yep. Shadow stats uses the old formula from 70’s and 80’s. I remember those days.