There’s been a bit of a buzz around Zoltan Pozsar’s latest long analytical piece, War and Inflation. Pozsar is global head of short-term interest rate strategy at Credit Suisse, so financial types tend to take his missives seriously. The preferred narrative is that we’re at about peak inflation and will be getting back to the good times of low inflation soon. Pozsar suggests that may not be the case. I’m interested in this piece—it’s very long, so I’m excerpting it—for what it tells us about our rulers and about their view of the world. And us, their subjects.
Pozsar's world is fine as long as you're not an illegal alien getting raped or sold into a life of abuse and child porn. As long as you're not from the hollows of Appalachia where Oxy and fentanyl addiction are a serious--if short-lived--career path. As long as you're not an American when China decides to hoard all the precursor chemicals for the antibiotics we can no longer produce.
The American middle class paid for a billion Chinese and Indian dirt farmers to be raised out of abject poverty. The <strike>Pozsar</strike> Poseur class reaped the all-gain-no-pain benefits. In my heart of hearts I pray that Luongo's take is right and that the Fed squeezes the EU into a world of pain. The EU has skated on the US security blanket long enough. Time to put on your big girl panties, Europe, and start paying to protect yourselves. Or maybe tell the US to piss up a rope and do your own deals with Russia that removes them from pariah status? The world is realigning and it would be great if the US could look out for its own interests for a while--but that requires an America First political bloom.
Now I am scared. "Pozsar is global head of short-term interest rate strategy at Credit Suisse." Soros, a very clever predator, fancies himself a philosopher. And now a very influential member of the financial community is lecturing us on politics and policies. Yesterday's article on human capital was right on the money. This character dehumanizes us all, and assumes he can exercise some control over rates of interest making abstraction of reality. 'Protectionism' is when President Trump dares to counter Chinese protectionism and intellectual theft. 'Nativism' is when a country exercises some control over who coming from outside may permanently reside therein and imposes some minimum standards. And his 'geopolitics' as Mark has pointed out neglects the market, which one would assume to an economist would be the first thing to consider. Maybe Poznar neds a course in Austrian economics.
An economy is created by people, and productive work can give a person pride and a meaning in life no handout can replace. In World War 2 'Rosie the Riviter' and her male cohorts performed miracles, turning out ships at a rate the U-boats could not hope to destroy. Now I read in Zerohedge workers are slacking off on the job. Never fear, Pozsar and his abstractions will save us.
This is interesting for the perspective it presents. It appears Pozsar is an elite (and elitist) economist who has a narrow and flawed view of geopolitics (as you have noted by pointing out his gross errors) in that it is biased toward his preferred economic outcomes. On the other hand he certainly does understand the causes of inflation well.
If you want to understand the political impulse for open borders, offshoring of jobs, "onshoring" of jobs (cheap labor coming over the border), globalism, anti-"protectionism," he exemplifies this point of view. All of these are deflationary and good for business profits and investment. They are also good for governments in that they offset the inflationary effects of monetizing debt and (as we have seen in the last couple years) of distributing helicopter money into the broad money supply.
I think we are going to have an inflationary decade as long as carbon-based energy supply is throttled (little or no production capability expansion) and the availability of other commodities are constricted. Is this a big reason the West wants control of Russia? (I mean other than that Putin being an impediment to global control?) Pozsar gets it right when he says the problem is "supply side." But does he understand it is all about energy? He sure ought to, being on "the continent."
Typical Pozsar. While he gets some things right (inflation is coming from the supply-side), he misses the bigger picture (maybe intentionally) and doesn't hash out who the true factions at war are (Davos, NYbanks, BRICS).
What was interesting to me is that his 150 European clients are still living in a daydream to think that this is peak hawkishness. This tells me that there is more money coming from Europe to buy US bonds and stocks.
Thanks - snippets like these help broaden my knowledge & perspective. To think I spent 50+ yrs not having a thought abt such things! 😐
The LNG reference caught my notice. When HB's laptop came out, I was not the least interested in his depravity. It was the wheeling & dealing w/officials to gain position in ports capable to accept the yuge LNG tankers that caught my attn. Norfolk or VA Beach was one.
Just as China wants it ... tick tock, tick tock, tick tock ... the countdown is on, and those influencers are no more than pawns full of empty words, bags of air. But be assured, God will get the glory, for it is His.
Pozsar's world is fine as long as you're not an illegal alien getting raped or sold into a life of abuse and child porn. As long as you're not from the hollows of Appalachia where Oxy and fentanyl addiction are a serious--if short-lived--career path. As long as you're not an American when China decides to hoard all the precursor chemicals for the antibiotics we can no longer produce.
The American middle class paid for a billion Chinese and Indian dirt farmers to be raised out of abject poverty. The <strike>Pozsar</strike> Poseur class reaped the all-gain-no-pain benefits. In my heart of hearts I pray that Luongo's take is right and that the Fed squeezes the EU into a world of pain. The EU has skated on the US security blanket long enough. Time to put on your big girl panties, Europe, and start paying to protect yourselves. Or maybe tell the US to piss up a rope and do your own deals with Russia that removes them from pariah status? The world is realigning and it would be great if the US could look out for its own interests for a while--but that requires an America First political bloom.
Gonna be an interesting three months.
Now I am scared. "Pozsar is global head of short-term interest rate strategy at Credit Suisse." Soros, a very clever predator, fancies himself a philosopher. And now a very influential member of the financial community is lecturing us on politics and policies. Yesterday's article on human capital was right on the money. This character dehumanizes us all, and assumes he can exercise some control over rates of interest making abstraction of reality. 'Protectionism' is when President Trump dares to counter Chinese protectionism and intellectual theft. 'Nativism' is when a country exercises some control over who coming from outside may permanently reside therein and imposes some minimum standards. And his 'geopolitics' as Mark has pointed out neglects the market, which one would assume to an economist would be the first thing to consider. Maybe Poznar neds a course in Austrian economics.
An economy is created by people, and productive work can give a person pride and a meaning in life no handout can replace. In World War 2 'Rosie the Riviter' and her male cohorts performed miracles, turning out ships at a rate the U-boats could not hope to destroy. Now I read in Zerohedge workers are slacking off on the job. Never fear, Pozsar and his abstractions will save us.
I expect a lot more European Regime changes due to the current mess.
Sri Lanke was a harbinger.
This is interesting for the perspective it presents. It appears Pozsar is an elite (and elitist) economist who has a narrow and flawed view of geopolitics (as you have noted by pointing out his gross errors) in that it is biased toward his preferred economic outcomes. On the other hand he certainly does understand the causes of inflation well.
If you want to understand the political impulse for open borders, offshoring of jobs, "onshoring" of jobs (cheap labor coming over the border), globalism, anti-"protectionism," he exemplifies this point of view. All of these are deflationary and good for business profits and investment. They are also good for governments in that they offset the inflationary effects of monetizing debt and (as we have seen in the last couple years) of distributing helicopter money into the broad money supply.
I think we are going to have an inflationary decade as long as carbon-based energy supply is throttled (little or no production capability expansion) and the availability of other commodities are constricted. Is this a big reason the West wants control of Russia? (I mean other than that Putin being an impediment to global control?) Pozsar gets it right when he says the problem is "supply side." But does he understand it is all about energy? He sure ought to, being on "the continent."
Typical Pozsar. While he gets some things right (inflation is coming from the supply-side), he misses the bigger picture (maybe intentionally) and doesn't hash out who the true factions at war are (Davos, NYbanks, BRICS).
What was interesting to me is that his 150 European clients are still living in a daydream to think that this is peak hawkishness. This tells me that there is more money coming from Europe to buy US bonds and stocks.
Yes. Thanks.
Thanks - snippets like these help broaden my knowledge & perspective. To think I spent 50+ yrs not having a thought abt such things! 😐
The LNG reference caught my notice. When HB's laptop came out, I was not the least interested in his depravity. It was the wheeling & dealing w/officials to gain position in ports capable to accept the yuge LNG tankers that caught my attn. Norfolk or VA Beach was one.
FWIW, Powell appears to have thrown cold water on hopes for any backing down from rate interests. Tending to confirm Luongo's theory.
Just as China wants it ... tick tock, tick tock, tick tock ... the countdown is on, and those influencers are no more than pawns full of empty words, bags of air. But be assured, God will get the glory, for it is His.