World Economic News and Discussion

TMA1 wrote:

andalusia wrote:

TMA1 wrote:Chomsky certainly is blinded by his own biases and designs but this reads like a former commie to neolib sellout bitching about a former hero. Thry are both blinded by ideology and I reject Chomsky and his circle and the neoliberal worldview altogether.[/quote

The Latin American left should strongly consider  land value taxation to address the land concentration problem.

https://mcleveland.org/blog/index.php/2018/06/how-colonies-can-liberate-themselves-by-taxing-real-estate/ 

http://dollarsandsense.org/blog/2021/03/taxing-more-from-the-rich-is-difficult-this-is-how-to-do-it.html

Will check the links out bro thanks. And about magnumcromagnum's post that is sad. I've seen this trend a lot in the fortran world. Peter Levenda has been accused of spook connections same with Terence Mckenna. Messed up.

These are two good articles that make an important reason why the Founding Fathers of the US supported the Estate Tax.  

I think countries in Latin America that have a history of family wealth dominance being passed down should consider something like this.  


https://www.theatlantic.com/business/archive/2016/02/resistance-estate-tax/470403/?fbclid=IwAR365DSP8yR4wTHu7Fg9FFsmC-1sG7mjOVOMDs0S--VZXqi2Iilah7r0C_o

https://www.economist.com/lexingtons-notebook/2010/10/14/you-cant-take-it-with-you?fbclid=IwAR3hTaCFlMQy8Crt3Eqqr3k33EEziUQMqKFL8GR4DBE9sZVb9OZZjhXUTOA

Eurozone inflation hits record 5.9% in February, 17.03.2022.

In the euro area, inflation rose to 5.9% year-on-year in February. According to the statistical agency of the European Union (EU) Eurostat, published on March 17, this figure was a record for the entire existence of the currency.

“The eurozone annual inflation rate was 5.9% in February 2022, compared to 5.1% in January. A year earlier, this figure was 0.9%,” the Eurostat report says.

The agency attributed such a sharp jump to the rapidly increasing prices for resources - by 32% for the same February.

Thus, the inflation rate reached its highest level in the euro area since the introduction of the currency in 2002.

On March 16, the United Nations Conference on Trade and Development (UNCTAD) published a report in which it predicted the inevitability of shocks in the global economy , rising food and fuel prices. This is connected with the events in Ukraine.

The White House said on March 14 that the cost of gasoline in the United States will rise , so the country's authorities are considering a number of measures to reduce prices.

Representative of the UN World Food Program (WFP) Thomson Peary on March 11 put forward a hypothesis that the situation in Ukraine could lead to world hunger due to rising food prices.

As Russian President Vladimir Putin noted on March 10 at a meeting with the government , energy prices in the West are rising due to their own miscalculations.

On March 10, Deputy Foreign Minister of the Russian Federation Alexander Pankin, in an interview with Izvestia, indicated that the consequences of the sanctions imposed against the Russian Federation against the backdrop of a special operation in Ukraine would affect the global economy . According to him, in some industries the demand for Russia in the world reaches 50%. The Deputy Minister emphasized that the sanctions policy of the West will lead to a break in logistics, marketing and production chains and shock prices for goods.

On the same day, Chinese Foreign Minister Wang Yi stressed that new sanctions against Russia over Ukraine could exacerbate food and energy crises in the world .

Western sanctions were imposed after Russia launched an operation to protect civilians in the Donbass on February 24 . As Kremlin spokesman Dmitry Peskov clarified at the time, the special operation has two goals - the demilitarization and denazification of Ukraine.

A few days earlier, the situation in the region escalated significantly due to shelling by the Ukrainian military. The authorities of the Donetsk and Lugansk republics (DPR and LPR) announced the evacuation of residents in the Russian Federation, and also turned to Moscow for help. On February 21, Putin signed a decree recognizing the independence of the DNR and LNR.

https://iz.ru/1306559/2022-03-17/uroven-infliatcii-v-evrozone-za-fevral-dostig-rekordnoi-otmetki-v-59

Moscow, Tehran developing SWIFT alternative - Iranian ambassador. 24.03.2022.

Separate financial messaging system will allow countries to trade and bypass Western sanctions.
Russia and Iran have been cooperating to connect their interbank messaging systems in order to bypass the SWIFT financial transactions network, Kazem Jalali, ambassador of the Islamic Republic of Iran to Russia, said on Thursday.

Both countries are facing severe Western sanctions, making settlements in trade through SWIFT difficult or impossible.

“We are making efforts in this direction…” Jalali told reporters, as quoted by RIA Novosti news agency.

Last month, seven Russian banks were severed from SWIFT, effectively denying them access to international markets. The ban was part of the latest Western sanctions targeting Russia over its military operation in Ukraine.

https://www.rt.com/business/552610-moscow-tehran-developing-swift-alternative/

Cancel culture means silencing a target individual. I stated a factual opinion. Senile paranoia is not the basis of health policy.
An individual's previous intellectual contribution does not give them a blank check to push whatever insanity they want later.

link

The situation in Ukraine is hitting the Finnish economy hard, analysts have found out

Danske Bank: situation in Ukraine hits Finland harder than other Nordic countries

HELSINKI, 5 Apr-RIA Novosti. The situation in Ukraine and the subsequent anti-Russian sanctions
affect the Finnish economy more than other countries in the northern region, according to an
assessment by Danske Bank.

"Danske Bank lowered its growth forecasts for Finland and Sweden compared to the previous report
at the beginning of the year. Finland is expected to grow by 1.7% instead of 2.8%, and Sweden-by
2.5% instead of 3%. The Bank maintains its growth forecast forNorway (3.8%) and raises the forecast
for Denmark increased by one percentage point to 3.5%, " the report says.

Anyone who needs and example of the delusional propaganda spewed out in the west about western economies
can read the above numbers. So the massive surge of inflation in the EU and the severance of economic
links to Russia will simply drop the growth of the Finnish GDP for 2022 from 2.8% to 1.7%. Really, now?
No actual economic impact but simply movement in the noise?

At the same time you have hysterical yapping about Russia's GDP contracting by 15%. On what basis is the
Russian GDP going to contract if the Finnish GDP will not? Those banana republic natural gas and oil exports
to the EU will stop? And no gas in the EU has zero effect?

F*ck off.

What are the chances that the monkeypox are going to be an even worse lab-made pandemic than Covid? I have expected such a scenario since Bill Gates "predicted" the next pandemic, until we give up our freedom to organziations led by elitists like him.

TOP 11 countries in the World with PPP versus GDP

https://twitter.com/ShangguanJiewen/status/1532127238035886081/photo/1

Bad harvest forecast for EU, 09.06.2022.

Grain production is expected to drop across Europe this year due to dry weather, data shows.

Production of wheat and other grains in the European Union is expected to fall this year, the Wall Street Journal reports, citing a survey by agriculture consulting firm Strategie Grains, published on Thursday. A bad harvest in the EU could further pressure grain markets, it said.

According to the survey, the EU is expected to produce almost 5% less wheat this year compared with 2021. It was also forecast to produce 278.8 million metric tons of all grains in the 2022-2023 growing season, down over 4% from last year, because of the dry weather.

Production in France, which is the fifth-largest grower of wheat in the world, was also projected to decline by more than 5%. The country accounts for about 18% of European agricultural production, according to the French Ministry of Agriculture. France is also the fourth-biggest wheat exporter globally.

In addition to dry weather, the country’s agricultural land has been hit with severe storms, that damaged wheat, fruit and vineyard land.

“Combined with spells of extreme heat–the mercury having risen well above seasonal averages–this weather took a negative toll on the condition of all cereal crops in Europe, during the period of critical yield formation phases,” Strategie Grains said.

The grim forecast comes at a time when the grain crisis is being felt across the globe as wheat prices have surged to record highs over the past two months. The global food market, already affected by weather and the Covid pandemic, was dealt another blow due to the Russia-Ukraine conflict and Western sanctions on Moscow. Together, Russia and Ukraine export more than a quarter of the world’s wheat. Russia is also the world’s largest exporter of fertilizers.

This has sparked fears of global food insecurity and hunger. The executive director for the UN’s World Food Program, David Beasley, had earlier said that 49 million people in 43 countries are already “knocking on famine’s door.”

https://www.rt.com/business/556891-eu-bad-harvest-forecast/

The US dollar beats the euro for the first time in 20 years, 11.07.2022.

The euro touched a 20-year low and was surpassed by the dollar after sinking 1.4% and reaching 0.99 units for the US currency.

The eurozone currency is currently trading on international markets around 1.0067 dollars wholesale, its lowest level since December 11, 2002 when it was located at 1.0084 units, according to information from the Inveting.com .

Analysts explain this trend with the concern that an energy crisis after the temporary closure of the Russian Nord-1 gas pipeline for annual maintenance will lead the European Union into a recession, while the US currency was boosted by expectations that the Federal Reserve will raise rates faster and more than its peers.

In addition, according to the 'lightning estimate' of Eurostat, the statistical agency of the European Union reported that annual inflation in the euro area rose five tenths last month, from 8.1% in May to 8.6% in June. In June 2021, annual inflation in the euro area was 1.9%. Energy remains the largest component of inflation, with a cumulative rate of 41.9% in June compared to 39.1% in May.

Yandex Translate from Spanish

https://mundo.sputniknews.com/20220711/el-dolar-estadounidense-supera-al-euro-por-primera-vez-en-20-anos--1128080696.html

Global Planned Financial Tsunami Has Just Begun

By F. William Engdahl
Global Research, July 08, 2022

Since the creation of the US Federal Reserve over a century ago, every major financial market collapse has been deliberately triggered for political motives by the central bank. The situation is no different today, as clearly the US Fed is acting with its interest rate weapon to crash what is the greatest speculative financial bubble in human history, a bubble it created. Global crash events always begin on the periphery, such as with the 1931 Austrian Creditanstalt or the Lehman Bros. failure in September 2008. The June 15 decision by the Fed to impose the largest single rate hike in almost 30 years as financial markets are already in a meltdown, now guarantees a global depression and worse.

The extent of the “cheap credit” bubble that the Fed, the ECB and Bank of Japan have engineered with buying up of bonds and maintaining unprecedented near-zero or even negative interest rates for now 14 years, is beyond imagination. Financial media cover it over with daily nonsense reporting , while the world economy is being readied, not for so-called “stagflation” or recession. What is coming now in the coming months, barring a dramatic policy reversal, is the worst economic depression in history to date. Thank you, globalization and Davos.

Globalization
The political pressures behind globalization and the creation of the World Trade Organization out of the Bretton Woods GATT trade rules with the 1994 Marrakesh Agreement, ensured that the advanced industrial manufacturing of the West, most especially the USA, could flee offshore, “outsource” to create production in extreme low wage countries. No country offered more benefit in the late 1990s than China. China joined WHO in 2001 and from then on the capital flows into China manufacture from the West have been staggering. So too has been the buildup of China dollar debt. Now that global world financial structure based on record debt is all beginning to come apart.

When Washington deliberately allowed the September 2008 Lehman Bros financial collapse, the Chinese leadership responded with panic and commissioned unprecedented credit to local governments to build infrastructure. Some of it was partly useful, such as a network of high-speed railways. Some of it was plainly wasteful, such as construction of empty “ghost cities.” For the rest of the world, the unprecedented China demand for construction steel, coal, oil, copper and such was welcome, as fears of a global depression receded. But the actions by the US Fed and ECB after 2008, and of their respective governments, did nothing to address the systemic financial abuse of the world’s major private banks on Wall Street and Europe , as well as Hong Kong.

The August 1971 Nixon decision to decouple the US dollar, the world reserve currency, from gold, opened the floodgates to global money flows. Ever more permissive laws favoring uncontrolled financial speculation in the US and abroad were imposed at every turn, from Clinton’s repeal of Glass-Steagall at the behest of Wall Street in November 1999. That allowed creation of mega-banks so large that the government declared them “too big to fail.” That was a hoax, but the population believed it and bailed them out with hundreds of billions in taxpayer money.

Since the crisis of 2008 the Fed and other major global central banks have created unprecedented credit, so-called “helicopter money,” to bailout the major financial institutions. The health of the real economy was not a goal. In the case of the Fed, Bank of Japan, ECB and Bank of England, a combined $25 trillion was injected into the banking system via “quantitative easing” purchase of bonds, as well as dodgy assets like mortgage-backed securities over the past 14 years.

Quantitative madness
Here is where it began to go really bad. The largest Wall Street banks such as JP MorganChase, Wells Fargo, Citigroup or in London HSBC or Barclays, lent billions to their major corporate clients. The borrowers in turn used the liquidity, not to invest in new manufacturing or mining technology, but rather to inflate the value of their company stocks, so-called stock buy-backs, termed “maximizing shareholder value.”

BlackRock, Fidelity, banks and other investors loved the free ride. From the onset of Fed easing in 2008 to July 2020, some $5 trillions had been invested in such stock buybacks, creating the greatest stock market rally in history. Everything became financialized in the process. Corporations paid out $3.8 trillion in dividends in the period from 2010 to 2019. Companies like Tesla which had never earned a profit, became more valuable than Ford and GM combined. Cryptocurrencies such as Bitcoin reached market cap valuation over $1 trillion by late 2021. With Fed money flowing freely, banks and investment funds invested in high-risk, high profit areas like junk bonds or emerging market debt in places like Turkey, Indonesia or, yes, China.

The post-2008 era of Quantitative Easing and zero Fed interest rates led to absurd US Government debt expansion. Since January 2020 the Fed, Bank of England, European Central Bank and Bank of Japan have injected a combined $9 trillion in near zero rate credit into the world banking system. Since a Fed policy change in September 2019, it enabled Washington to increase public debt by a staggering $10 trillion in less than 3 years. Then the Fed again covertly bailed out Wall Street by buying $120 billion per month of US Treasury bonds and Mortgage-Backed Securities creating a huge bond bubble.

A reckless Biden Administration began doling out trillions in so-called stimulus money to combat needless lockdowns of the economy. US Federal debt went from a manageable 35% of GDP in 1980 to more than 129% of GDP today. Only the Fed Quantitative Easing, buying of trillions of US government and mortgage debt and the near zero rates made that possible. Now the Fed has begun to unwind that and withdraw liquidity from the economy with QT or tightening, plus rate hikes. This is deliberate. It is not about a stumbling Fed mis-judging inflation.

Energy drives the collapse
Sadly, the Fed and other central bankers lie. Raising interest rates is not to cure inflation. It is to force a global reset in control over the world’s assets, it’s wealth, whether real estate, farmland, commodity production, industry, even water. The Fed knows very well that Inflation is only beginning to rip across the global economy. What is unique is that now Green Energy mandates across the industrial world are driving this inflation crisis for the first time, something deliberately ignored by Washington or Brussels or Berlin.

The global shortages of fertilizers, soaring prices of natural gas, and grain supply losses from global draught or exploding costs of fertilizers and fuel or the war in Ukraine, guarantee that, at latest this September-October harvest time, we will undergo a global additional food and energy price explosion. Those shortages all are a result of deliberate policies.

Moreover, far worse inflation is certain, due to the pathological insistence of the world’s leading industrial economies led by the Biden Administration’s anti-hydrocarbon agenda. That agenda is typified by the astonishing nonsense of the US Energy Secretary stating, “buy E-autos instead” as the answer to exploding gasoline prices.

Similarly, the European Union has decided to phase out Russian oil and gas with no viable substitute as its leading economy, Germany, moves to shut its last nuclear reactor and close more coal plants. Germany and other EU economies as a result will see power blackouts this winter and natural gas prices will continue to soar. In the second week of June in Germany gas prices rose another 60% alone. Both the Green-controlled German government and the Green Agenda “Fit for 55” by the EU Commission continue to push unreliable and costly wind and solar at the expense of far cheaper and reliable hydrocarbons, insuring an unprecedented energy-led inflation.

Fed has pulled the plug
With the 0.75% Fed rate hike, largest in almost 30 years, and promise of more to come, the US central bank has now guaranteed a collapse of not merely the US debt bubble, but also much of the post-2008 global debt of $303 trillion. Rising interest rates after almost 15 years mean collapsing bond values. Bonds, not stocks, are the heart of the global financial system.

US mortgage rates have now doubled in just 5 months to above 6%, and home sales were already plunging before the latest rate hike. US corporations took on record debt owing to the years of ultra-low rates. Some 70% of that debt is rated just above “junk” status. That corporate non-financial debt totaled $9 trillion in 2006. Today it exceeds $18 trillion. Now a large number of those marginal companies will not be able to rollover the old debt with new, and bankruptcies will follow in coming months. The cosmetics giant Revlon just declared bankruptcy.

The highly-speculative, unregulated Crypto market, led by Bitcoin, is collapsing as investors realize there is no bailout there. Last November the Crypto world had a $3 trillion valuation. Today it is less than half, and with more collapse underway. Even before the latest Fed rate hike the stock value of the US megabanks had lost some $300 billion. Now with stock market further panic selling guaranteed as a global economic collapse grows, those banks are pre-programmed for a new severe bank crisis over the coming months.

As US economist Doug Noland recently noted, “Today, there’s a massive “periphery” loaded with “subprime” junk bonds, leveraged loans, buy-now-pay-later, auto, credit card, housing, and solar securitizations, franchise loans, private Credit, crypto Credit, DeFi, and on and on. A massive infrastructure has evolved over this long cycle to spur consumption for tens of millions, while financing thousands of uneconomic enterprises. The “periphery” has become systemic like never before. And things have started to Break.”

The Federal Government will now find its interest cost of carrying a record $30 trillion in Federal debt far more costly. Unlike the 1930s Great Depression when Federal debt was near nothing, today the Government, especially since the Biden budget measures, is at the limits. The US is becoming a Third World economy. If the Fed no longer buys trillions of US debt, who will? China? Japan? Not likely.

Deleveraging the bubble
With the Fed now imposing a Quantitative Tightening, withdrawing tens of billions in bonds and other assets monthly, as well as raising key interest rates, financial markets have begun a deleveraging. It will likely be jerky, as key players like BlackRock and Fidelity seek to control the meltdown for their purposes. But the direction is clear.

By late last year investors had borrowed almost $1 trillion in margin debt to buy stocks. That was in a rising market. Now the opposite holds, and margin borrowers are forced to give more collateral or sell their stocks to avoid default. That feeds the coming meltdown. With collapse of both stocks and bonds in coming months, go the private retirement savings of tens of millions of Americans in programs like 401-k. Credit card auto loans and other consumer debt in the USA has ballooned in the past decade to a record $4.3 trillion at end of 2021. Now interest rates on that debt, especially credit card, will jump from an already high 16%. Defaults on those credit loans will skyrocket.

Outside the US what we will see now, as the Swiss National Bank, Bank of England and even ECB are forced to follow the Fed raising rates, is the global snowballing of defaults, bankruptcies, amid a soaring inflation which the central bank interest rates have no power to control. About 27% of global nonfinancial corporate debt is held by Chinese companies, estimated at $23 trillion. Another $32 trillion corporate debt is held by US and EU companies. Now China is in the midst of its worst economic crisis since 30 years and little sign of recovery. With the USA, China’s largest customer, going into an economic depression, China’s crisis can only worsen. That will not be good for the world economy.

Italy, with a national debt of $3.2 trillion, has a debt-to-GDP of 150%. Only ECB negative interest rates have kept that from exploding in a new banking crisis. Now that explosion is pre-programmed despite soothing words from Lagarde of the ECB. Japan, with a 260% debt level is the worst of all industrial nations, and is in a trap of zero rates with more than $7.5 trillion public debt. The yen is now falling seriously, and destabilizing all of Asia.

The heart of the world financial system, contrary to popular belief, is not stock markets. It is bond markets—government, corporate and agency bonds. This bond market has been losing value as inflation has soared and interest rates have risen since 2021 in the USA and EU. Globally this comprises some $250 trillion in asset value a sum that, with every fed interest rise , loses more value. The last time we had such a major reverse in bond values was forty years ago in the Paul Volcker era with 20% interest rates to “squeeze out inflation.”

As bond prices fall, the value of bank capital falls. The most exposed to such a loss of value are major French banks along with Deutsche Bank in the EU, along with the largest Japanese banks. US banks like JP MorganChase are believed to be only slightly less exposed to a major bond crash. Much of their risk is hidden in off-balance sheet derivatives and such. However, unlike in 2008, today central banks can’t rerun another decade of zero interest rates and QE. This time, as insiders like ex-Bank of England head Mark Carney noted three years ago, the crisis will be used to force the world to accept a new Central Bank Digital Currency, a world where all money will be centrally issued and controlled. This is also what Davos WEF people mean by their Great Reset. It will not be good. A Global Planned Financial Tsunami Has Just Begun.

https://www.globalresearch.ca/global-planned-financial-tsunami-has-just-begun/5784217

What does that scumbag António Guterres say about this.

West deceived poor nations with Ukraine grain deal - Putin. 09.07.2022.

Developing countries receive the minimum from the exported grain, the Russian leader has said.

Western nations lied when they claimed Ukraine needed access to sea shipping to alleviate the surging food prices and risk of famine in poor countries, Russian President Vladimir Putin has said.

Most of the cargoes that came out of Ukraine under a Turkey- and UN-brokered deal with Russia went to the EU, Putin stated in a speech at the Eastern Economic Forum in Vladivostok, Russia on Wednesday. He added that he terms of the arrangement should probably be changed.

Putin made the remarks in reference to the arrangement allowing civilian ships to enter and leave Ukrainian Black Sea ports to deliver grain cargoes. The scheme was put into action in late July, with Turkey hosting a center that coordinates the deliveries.

The Russian leader noted that the deal was touted as a way to curb the surging global prices and help the most struggling nations. In practice, almost all of the grain shipped from Ukraine went to wealthy EU nations, he said.

Many European nations acted in decades and centuries past as colonizers, and they act in the same way today. They simply deceived developing nations once again. And they keep up the deceit.

With an attitude like this, problems with food availability will only grow worse, Putin warned.

On August 30, the UN Food Program reported that it had sent a second shipment with food assistance from Ukraine. The ship was carrying 37,000 metric tons of wheat grain to Yemen. Putin stressed that just two ships out of more than 80 that left Ukraine were actually traveling on hunger relief missions.

Earlier this week, Russian Foreign Minister Sergey Lavrov accused Western nations of failing to remove secondary restrictions on the export of food and fertilizers from Russia after the Ukraine deal was reached. The UN, which co-signed the agreement with Turkey, pledged to use its clout to have the restrictions lifted.

https://www.rt.com/russia/562332-west-deceived-poor-nations-grain-putin/

The ECB raised rates by 75 basis points for the first time in history, 09.08.2022.

The European Central Bank (ECB) raised its base rate by 75 basis points to 1.25% per annum. The ECB has resorted to such a measure for the first time in history.

“This important step will accelerate the transition from the prevailing accommodative rate level to levels that will ensure a timely return of inflation to the ECB’s medium-term target of 2%,” explains the regulator’s motivation in a press release on its website.

The European Central Bank did not rule out the possibility of a further increase in the indicator due to rising inflation. ECB staff have revised their inflation forecasts and are now expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024.

The last time the ECB adjusted the rate was in July, for the first time since 2011, raising it immediately by 50 basis points to 0.5% per annum. The regulator then explained that the change in the rate is associated with a reassessment of inflationary risks.

https://www.kommersant.ru/doc/5549189

Russia never blockaded the Ukr ports that are now shipping the grain. The deal brokered by Turkey is for Ukria to commit
to stop bitching and release the foreign ships trapped in its ports by the insane mine laying to "stop" a Russian sea invasion.

Ukria was using rail and trucks to ship the grain and other goods before the deal and is still doing this.

Everything reported by the western media is some form of propaganda. Even science subjects are bent to serve agendas.

The planet is promised the collapse of the world market and resistance to the dollar, by Vitaly Trofimov-Trofimov (political analyst) for VZGLYAD. 01.15.2023.

Typically, a Danish bank's annual "Outrageous Forecast" has an element of fantasy and comes true only half the time. But after 2022, even the most original predictions no longer seem impossible.

At the end of 2022, many made their predictions for the next year. This is common practice for banks. The Danish bank SAXO regularly releases a baseline forecast for the next year to retain customers and orient investors. It is full of restrained assessments. However, in parallel with it, the so-called Outrageous Predictions are released, in which analysts who disagree with the conclusions of the basic forecast can give their own picture of the world.

Usually, "Outrageous Prediction" has an element of fantasy and comes true only half the time. But Outrageous Predictions 2023 is significantly different from the baseline of the same year and, apparently, is really sincere. The abstract to the report explains: “Our Outrageous Predictions are not our baseline predictions of what will happen in the new year. Rather, they are intended as an exercise to encourage us to think about what unforeseen events could shake our world and financial markets.”

So what do Steen Jacobsen and his team of leading bank specialists portend for us?

War economy and accelerated deglobalization

Experts call 2022 a deep inflationary shock for the whole world. The main reason for this, however, is not SVO, but the overreaction of politicians to the 2020 and 2021 pandemic. The events in Ukraine were an addition and intensification of the general deterioration of the economic situation, but not its cause.

Analysts believe that the situation will be difficult. The central banks of European countries are already saying that they are trying to fight inflation, but in fact they will not be too zealous in this. This is because, in the long run, a heavily indebted government will almost always aim for a slow and heavy default rather than austerity. The burden of inflation will fall on ordinary Europeans.

Another threat the team of analysts considers is the collapse of the world market in pursuit of the creation of a sovereign economy by the largest countries in the world. Seeing political instability, the "weaponization" of the dollar and dependence on external supplies, countries will begin to create industries and enterprises on their territory in order to ensure their own defense capability. This will apply both to the direct production of weapons and to reducing dependence on those technologies that countries still do not own. For example, from Taiwanese computer chips and semiconductors.

Judging by the report, the NWO in Ukraine came as a surprise to the European community. The political and business elites were under the spell of Norman Angell, who in 1910 wrote the best-selling book The Grand Illusion. In it, he made rational arguments that Europe could not again be drawn into a serious war. They say that mutually beneficial trade over the previous decades has inflated to enormous proportions and led to the prosperity of the world.

The uncomfortable truth revealed with the start of the NWO is that mutual trade also has its limits. The pacifists were indignant: why fight when you can peacefully compete and trade? The NWO began, among other things, as a result of the fact that it became impossible to trade peacefully and compete. Under the influence of this belief, after the end of World War II, Western Europe came under the comforting umbrella of the US military, both directly and through extensive participation in NATO. Since the end of the Cold War, European national defense priorities have faded further. They mainly focused only on the "war on terror". And now European capitals face the risk that the US will completely abandon its old obligations to Europe.

According to the report, in 2023 EU members may go for the creation of the EU armed forces. If this decision is taken, there will be a concrete program for the creation of a fully equipped and ready to deploy operational forces based on land, sea, air and space, which will be financed in the amount of 10 trillion euros until 2028. Financing will go to the last reserves accumulated by Europe over the past 20 years. The EU's primary rapid deployment forces would then appear by 2025, with the participation of more than 20 EU member states. To finance the new armed forces, the EU will issue EU bonds, which will be funded based on the GDP performance of each member country.

World politics, France and anti-Brexit

The report says a lot about the fact that the militarization of economies is due to the "weaponization" of the dollar. The frozen Russian assets are only the first act of turning the world's reserve currencies into weapons. Banking analysts see the resistance of various countries to the dollar in a rather peculiar way. Many speculate that the Chinese yuan may become the new reserve currency, but SAXO experts doubt this. Their doubt is that China has so far shown no interest in relinquishing cross-border capital controls.

Recognizing the ongoing weaponization of the US dollar by the US government, non-US allies will move away from the US dollar and the IMF and towards establishing their own International Clearing Union (ICU) and a new reserve asset based on the ideas of economist John Maynard Keynes. This is an original idea from the time before the Bretton Woods Accords, which led the US to global financial power.

The new currency, according to the prophecy of experts, will be indexed for a basket of tradable goods, in which crude oil has the largest weight. The member countries' currencies will be exchanged for the new reserve currency at fixed exchange rates and adjusted according to relative current account movements among the member countries. All member countries of the ICU, the newly created monetary union, will withdraw from the IMF. And countries like Saudi Arabia and Hong Kong will stop pegging their currencies to the US dollar. Thus, global economic cooperation within the G20 will break up into the G7 countries and the BRICS countries. The speakers also touched on specific countries, predicting the nearest political scenario for them.

When French President Emmanuel Macron was elected for a second term in May 2022, he believed he could put France on the main road to reform. However, that was before the June 2022 legislative elections, when his party and his allies lost their absolute majority in parliament, forcing Macron to make compromises. Faced with strong opposition from the left-wing alliance NUPES and the far-right National Rally Marine Le Pen, the government is forecast to have no choice but to pass the basic laws and budget for 2023 on a fast track, and then announce Macron's resignation. His resignation will open the doors of the Élysée Palace to the right-wing candidate Le Pen.

Bankers believe that it is unfavorable in the UK. Liz Truss failed by easing taxes and curbing consumption. But 2023 will also be hard for Prime Minister Sunak as his tight fiscal program plunges the UK into a crushing recession with unemployment skyrocketing. The final nail in Sunak's political coffin will be the deferred budget deficit, which is also skyrocketing as tax revenues shrink. They believe a Labor government will come to power in the third quarter, promising to hold a referendum on UnBrexit around November 1, 2023. Supporters of returning to the EU will win.

Europeans should also expect price controls and other tough measures in 2023, as nearly all wars have brought price controls and rationing with them. In France, utilities will go bankrupt and be nationalized. This will be the result of a doomed attempt by Western officials to cap energy prices from Russia. Perhaps something like a new National Price and Income Board will be established in the UK and the US.

Controlling prices without solving the underlying problem will not only increase inflation, but also entail the risk of tearing the social fabric and the collapse of the European community due to declining living standards, lack of incentives for production, and misallocation of resources and investments.

Economy, gold and food

Today, the data center infrastructure needed to serve the digital economy continues to grow rapidly, and these centers could consume about 20% of the world's electricity in the coming decades. At the same time, the energy growth potential is severely limited – on the one hand, by attempts to reduce the use of fossil fuels, and, on the other hand, by the lack of evidence of alternatives such as wind and solar energy. 

Against this background, analysts predict that in 2023 the owners of large technology companies and other technophile billionaires will become frustrated with the lack of progress in developing the necessary energy infrastructure that would allow them to make the necessary energy transition. Record funds will be invested in the new energy sector, and whether they will be successful, the bank's analysts are in no hurry to prophesy. But, in their opinion, in 2023 gold will rise in price after a difficult year for it in 2022, when many investors were disappointed by its inability to rise in price - even when inflation jumped to a 40-year high. It turns out that the key to containing gold's potential was the market's misguided consensus bet that inflation would be temporary. Some of the countries may think about the gold standard.

This is supported by the forecast that as spring arrives, China will decide to abandon its COVID policy, touting an effective treatment and perhaps even a new vaccine. Chinese demand will again spike commodity prices, causing global inflation to skyrocket, especially in the face of an increasingly weak US dollar. As far as food is concerned, many countries, including those in the EU, will have to drastically reduce meat consumption.

More than a third of the world's crops are used for animal feed, and about 80% of the world's agricultural land is used for grazing, some of which is former forest and even rainforest. This results in a staggering loss of biodiversity. Along with other environmental impacts such as soil erosion and contamination of local water resources from both livestock waste and excessive use of forage fertilizers. Globally, food production accounts for one-third of the planet's warming emissions, and the use of animals for meat production is twice as polluting as plant-based production.

One of the authors of the report estimates that to achieve the goal of zero emissions by 2050, meat consumption will need to be reduced to 24 kg per person per year, compared with the current average of about 70 kg. So, perhaps, in the near future, the countries of the collective West will feed their citizens with grasshoppers and other high-protein analogues of beef and pork. And, of course, according to the old tradition, Russia will be blamed for this.

https://vz.ru/opinions/2023/1/15/1194595.html

All Quiet (Panic) on the Western Front, by Pepe Escobar for Unz Review. 01.17.2023.

Shadows are falling / And I’ve been here all day / It’s too hot to sleep / And time is running away / Feel like my soul / has turned into steel /I’ve still got the scars / That the sun didn’t heal / There’s not even room enough / To be anywhere / Lord it’s not dark yet, / but it’s getting there

Bob Dylan, Not Dark Yet.

Lights! Action! Reset!

The World Economic Forum (WEF)’s Davos Freak Show is back in business on Monday.

The mainstream media of the collective West, in unison, will be spinning non-stop, for a week, all the “news” that are fit to print to extol new declinations of The Great Reset, re-baptized The Great Narrative, but actually framed as a benign offer by “stakeholder capitalism”. These are the main planks of the shady platform of a shady NGO registered in Cologny, a tony Geneva suburb.

The list of Davos attendees was duly leaked. Proverbially, it’s an Anglo-American Exceptionalist fun fest, complete with intel honchos such as the US Director of National Intelligence, Avril “Madam Torture” Haines; the head of MI6 Richard Moore; and FBI director Christopher Wray.

Remixed Diderot and D’Alembert Encyclopedias could be written about the Davos pathology – where a hefty list of multibillionaires, heads of state and corporate darlings (owned by BlackRock, Vanguard, State Street and co.) “engage” in selling Demented Dystopia packages to the unsuspecting masses.

But let’s cut to the chase and focus on a few panels next week – which could easily be mistaken for Straight to Hell sessions.

The Tuesday, January 17 list is particularly engaging. It features a “De-Globalization or Re-Globalization?” panel with speakers Ian Bremmer, Adam Tooze, Niall Ferguson, Péter Szijjártó and Ngaire Woods. Three Atlanticists/Exceptionalists stand out, especially the ultra-toxic Ferguson.

After “In Defense of Europe”, featuring a bunch of nullities including Poland’s Andrjez Duda, attendees will be greeted with a Special Season in Hell (sorry, Rimbaud) featuring none other than EC dominatrix Ursula von der Leyen, known by a vast majority of Germans as Ursula von der Leichen (“Ursula of Cadavers”) in a tag team with WEF mastermind, Third Reich emulator Klaus “Nosferatu” Schwab.

Rumors are that Lucifer, in his privileged underground abode, is green with envy.

There’s also “Ukraine: What Next?” with another bunch of nullities, and “War in Europe: Year 2” featuring Moldova woke chick Maia Sandu and Finnish party girl Sanna Marin.

In the War Criminal section, pride of place goes to “A Conversation with Henry Kissinger: Historical Perspectives on War”, where Dr. K. will sell all his trademark Divide and Rule permutations. Added sulphur will be provided by Thucydides strangler Graham Allison.

In his Special Address, “Liver Sausage” Chancellor Olaf Scholz will be side by side with Nosferatu, hoping he won’t be – literally – grilled.

Then, on Wednesday, January 18, comes the apotheosis: “Restoring Security and Peace” with speakers Fareed Zakaria – the US establishment’s pet brown man; NATO’s Jens “War is Peace” Stoltenberg; Andrzej Duda – again; and Canadian warmonger Chrystia Freeland – widely rumored to become the next NATO Secretary-General.

And it gets juicier: the coke comedian posing as warlord may join via zoom from Kiev.

The notion that this panel is entitled to emit judgments about “peace” deserves nothing less than its own Nobel Peace Prize.

How to monetize the whole world

Cynics of all persuasions may be excused for lamenting Mr. Zircon – currently on oceanic patrol encompassing the Atlantic, the Indian Ocean and of course “Mare Nostrum” Mediterranean – won’t be presenting his business card at Davos.

Analyst Peter Koenig has developed a convincing thesis that the WEF, the WHO and NATO may be running some sort of sophisticated death cult. The Great Reset does mingle merrily with NATO’s agenda as agent provocateur, financer and weaponizer of the proxy Empire vs. Russia war in black hole Ukraine. NAKO – an acronym for North Atlantic Killing Organization – would be more appropriate in this case.

As Koenig summarizes it, “NATO enters any territory where the ‘conventional’ media lie-machine, and social engineering are failing or not completing their people-ordaining goals fast enough.”

In parallel, very few people are aware that on June 13, 2019 in New York, a secret deal was clinched between the UN, the WEF, an array of oligarch-weaponized NGOs – with the WHO in the front line – and last but not least, the world’s top corporations, which are all owned by an interlinked maze with Vanguard and BlackRock at the center.

The practical result of the deal is the UN Agenda 2030.

Virtually every government in the NATOstan area and the “Western Hemisphere” (US establishment definition) has been hijacked by Agenda 2030 – which translates, essentially, as hoarding, privatizing and financializing all the earth’s assets, under the pretext of “protecting” them.

Translation: the marketization and monetization of the entire natural world (see, for instance, here, here and here.)

Davos superstar shills such as insufferable bore Niall Ferguson are just well rewarded vassals: western intellectuals of the Harvard, Yale and Princeton mould that would never dare bite the hand that feeds them.

Ferguson just wrote a column on Bloomberg titled “All is Not Quiet on the Eastern Front” – basically to peddle the risk of WWIII, on behalf of his masters, blaming of course “China as the arsenal of autocracy”.

Among serial high-handed inanities, this one stands out. Ferguson writes, “There are two obvious problems with US strategy (…) The first is that if algorithmic weapons systems are the equivalent of tactical nuclear weapons, Putin may eventually be driven to using the latter, as he clearly lacks the former.”

Cluelessness here is a euphemism. Ferguson clearly has no idea “algorithmic weapons” mean; if he’s referring to electronic warfare, the US may have been able to maintain superiority for a while in Ukraine, but that’s over.

Well, that’s typical Ferguson – who wrote a whole Rothschild hagiography just like his column, drinking from the Rothschild archives that appeared to have been sanitized as he knows next to nothing meaningful about their history.

Ferguson has “deduced” that Russia is weak and China is strong. Nonsense. Both are strong – and Russia is more advanced technologically than China in their advanced offensive and defensive missile development, and can beat the US in a nuclear war as Russian air space is sealed by layered defenses such as the S-400 all the way to the already tested S-500s and designed S-600s.

As far as semiconductor chips, the advantage that Taiwan has in chip manufacture is in mass production of the most advanced chips; but China and Russia can fabricate the chips necessary for military use, though not engage in mass commercial production. The US has an important advantage here commercially with Taiwan, but that’s not a military advantage.

Ferguson gives away his game when he carps about the need to “deter a nascent Axis-like combination of Russia, Iran and China from risking simultaneous conflict in three theaters: Eastern Europe, the Middle East and the Far East.”

Here we have trademark Atlanticist demonization of the top three vectors of Eurasia integration mixed with a toxic cocktail of ignorance and arrogance: it’s NATO that is stoking “conflict” in Eastern Europe; and it’s the Empire that is being expelled from the “Far East” (oh, that’s so colonial) and soon from the Middle East (actually West Asia).

An AMGOT tale

Nobody with an IQ over room temperature will expect Davos next week to discuss any aspect of the NATO vs. Eurasia existential war seriously – not to mention propose diplomacy. So I’ll leave you with yet another typical tawdry story about how the Empire – who rules over Davos – deals in practice with its vassals.

While in Sicily earlier this year I learned that an ultra high-value Pentagon asset had landed in Rome, in haste, as part of an unscheduled visit. A few days later the reason for the visit was printed in La Repubblica, one of the papers of the toxic Agnelli clan.

That was a Mafia scam: a face-to-face “suggestion” for the Meloni government to imperatively provide Kiev, as soon as possible, with the costly anti-Samp-T missile system, developed by an European consortium, Eurosam, uniting MBDA Italy, MBDA France and Thales.

Italy possesses only 5 batteries of this system, not exactly brilliant against ballistic missiles but efficient against cruise missiles.

National Security Adviser Jake Sullivan had already called Palazzo Chigi to announce the “offer you can’t refuse”. Apparently that was not enough, thus the hasty envoy trip. Rome will have to toe the line. Or else. After all, never forget the terminology employed by US generals to designate Sicily, and Italy as a whole: AMGOT.

American government occupied territory.

Have fun with the Davos freak show.

https://www.unz.com/pescobar/all-quiet-panic-on-the-western-front/

Global South: Gold-Backed Currencies to Replace the US Dollar, by Pepe Escobar for The Cradle. 01.20.2023.

Let’s start with three interconnected multipolar-driven facts.

First: One of the key take aways from the World Economic Forum annual shindig in Davos, Switzerland is when Saudi Finance Minister Mohammed al-Jadaan, on a panel on “Saudi Arabia’s Transformation,” made it clear that Riyadh “will consider trading in currencies other than the US dollar.”

So is the petroyuan finally at hand? Possibly, but Al-Jadaan wisely opted for careful hedging: “We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries.”

Second: The Central Banks of Iran and Russia are studying the adoption of a “stable coin” for foreign trade settlements, replacing the US dollar, the ruble and the rial. The crypto crowd is already up in arms, mulling the pros and cons of a gold-backed central bank digital currency (CBDC) for trade that will be in fact impervious to the weaponized US dollar.

A gold-backed digital currency

The really attractive issue here is that this gold-backed digital currency would be particularly effective in the Special Economic Zone (SEZ) of Astrakhan, in the Caspian Sea.

Astrakhan is the key Russian port participating in the International North South Transportation Corridor (INTSC), with Russia processing cargo travelling across Iran in merchant ships all the way to West Asia, Africa, the Indian Ocean and South Asia.

The success of the INSTC – progressively tied to a gold-backed CBDC – will largely hinge on whether scores of Asian, West Asian and African nations refuse to apply US-dictated sanctions on both Russia and Iran.

As it stands, exports are mostly energy and agricultural products; Iranian companies are the third largest importer of Russian grain. Next will be turbines, polymers, medical equipment, and car parts. Only the Russia-Iran section of the INSTC represents a $25 billion business.

And then there’s the crucial energy angle of INSTC – whose main players are the Russia-Iran-India triad.
India’s purchases of Russian crude have increased year-by-year by a whopping factor of 33. India is the world’s third largest importer of oil; in December, it received 1.2 million barrels from Russia, which for several months now is positioned ahead of Iraq and Saudi Arabia as Delhi’s top supplier.

'A fairer payment system’

Third: South Africa holds this year’s rotating BRICS presidency. And this year will mark the start of BRICS+ expansion, with candidates ranging from Algeria, Iran and Argentina to Turkey, Saudi Arabia and the UAE.

South African Foreign Minister Naledi Pandor has just confirmed that the BRICS do want to find a way to bypass the US dollar and thus create “a fairer payment system not skewed toward wealthier countries.”
For years now, Yaroslav Lissovolik, head of the analytical department of Russian Sberbank’s corporate and investment business has been a proponent of closer BRICS integration and the adoption of a BRICS reserve currency.

Lissovolik reminds us that the first proposal “to create a new reserve currency based on a basket of currencies of BRICS countries was formulated by the Valdai Club back in 2018.”

Are you ready for the R5?

The original idea revolved around a currency basket similar to the Special Drawing Rights (SDR) model, composed of the national currencies of BRICS members – and then, further on down the road, other currencies of the expanded BRICS+ circle.

Lissovolik explains that choosing BRICS national currencies made sense because “these were among the most liquid currencies across emerging markets. The name for the new reserve currency — R5 or R5+ — was based on the first letters of the BRICS currencies all of which begin with the letter R (real, ruble, rupee, renminbi, rand).”

So BRICS already have a platform for their in-depth deliberations in 2023. As Lissovolik notes, “in the longer run, the R5 BRICS currency could start to perform the role of settlements/payments as well as the store of value/reserves for the central banks of emerging market economies.”

It is virtually certain that the Chinese yuan will be prominent right from the start, taking advantage of its “already advanced reserve status.”

Potential candidates that could become part of the R5+ currency basket include the Singapore dollar and the UAE’s dirham.

Quite diplomatically, Lissovolik maintains that, “the R5 project can thus become one of the most important contributions of emerging markets to building a more secure international financial system.”

The R5, or R5+ project does intersect with what is being designed at the Eurasia Economic Union (EAEU), led by the Macro-Economics Minister of the Eurasia Economic Commission, Sergey Glazyev.

A new gold standard

In Golden Ruble 3.0 , his most recent paper, Glazyev makes a direct reference to two by now notorious reports by Credit Suisse strategist Zoltan Pozsar, formerly of the IMF, US Department of Treasury, and New York Federal Reserve: War and Commodity Encumbrance (December 27) and War and Currency Statecraft (December 29).
Pozsar is a staunch supporter of a Bretton Woods III – an idea that has been getting enormous traction among the Fed-skeptical crowd.

What’s quite intriguing is that the American Pozsar now directly quotes Russia’s Glazyev, and vice-versa, implying a fascinating convergence of their ideas.

Let’s start with Glazyev’s emphasis on the importance of gold. He notes the current accumulation of multibillion-dollar cash balances on the accounts of Russian exporters in “soft” currencies in the banks of Russia’s main foreign economic partners: EAEU nations, China, India, Iran, Turkey, and the UAE.

He then proceeds to explain how gold can be a unique tool to fight western sanctions if prices of oil and gas, food and fertilizers, metals and solid minerals are recalculated:

“Fixing the price of oil in gold at the level of 2 barrels per 1g will give a second increase in the price of gold in dollars, calculated Credit Suisse strategist Zoltan Pozsar. This would be an adequate response to the ‘price ceilings’ introduced by the west – a kind of ‘floor,’ a solid foundation. And India and China can take the place of global commodity traders instead of Glencore or Trafigura.”

So here we see Glazyev and Pozsar converging. Quite a few major players in New York will be amazed.

Glazyev then lays down the road toward Gold Ruble 3.0. The first gold standard was lobbied by the Rothschilds in the 19th century, which “gave them the opportunity to subordinate continental Europe to the British financial system through gold loans.” Golden Ruble 1.0, writes Glazyev, “provided the process of capitalist accumulation.”

Golden Ruble 2.0, after Bretton Woods, “ensured a rapid economic recovery after the war.” But then the “reformer Khrushchev canceled the peg of the ruble to gold, carrying out monetary reform in 1961 with the actual devaluation of the ruble by 2.5 times, forming conditions for the subsequent transformation of the country [Russia] into a “raw material appendage of the Western financial system.”

What Glazyev proposes now is for Russia to boost gold mining to as much as 3 percent of GDP: the basis for fast growth of the entire commodity sector (30 percent of Russian GDP). With the country becoming a world leader in gold production, it gets “a strong ruble, a strong budget and a strong economy.”

All Global South eggs in one basket

Meanwhile, at the heart of the EAEU discussions, Glazyev seems to be designing a new currency not only based on gold, but partly based on the oil and natural gas reserves of participating countries.

Pozsar seems to consider this potentially inflationary: it could be if it results in some excesses, considering the new currency would be linked to such a large base.

Off the record, New York banking sources admit the US dollar would be “wiped out, since it is a valueless fiat currency, should Sergey Glazyev link the new currency to gold. The reason is that the Bretton Woods system no longer has a gold base and has no intrinsic value, like the FTX crypto currency. Sergey’s plan also linking the currency to oil and natural gas seems to be a winner.”

So in fact Glazyev may be creating the whole currency structure for what Pozsar called, half in jest, the “G7 of the East”: the current 5 BRICS plus the next 2 which will be the first new members of BRICS+.

Both Glazyev and Pozsar know better than anyone that when Bretton Woods was created the US possessed most of Central Bank gold and controlled half the world’s GDP. This was the basis for the US to take over the whole global financial system.

Now vast swathes of the non-western world are paying close attention to Glazyev and the drive towards a new non-US dollar currency, complete with a new gold standard which would in time totally replace the US dollar.

Pozsar completely understood how Glazyev is pursuing a formula featuring a basket of currencies (as Lissovolik suggested). As much as he understood the groundbreaking drive towards the petroyuan. He describes the industrial ramifications thus:

“Since as we have just said Russia, Iran, and Venezuela account for about 40 percent of the world’s proven oil reserves, and each of them are currently selling oil to China for renminbi at a steep discount, we find BASF’s decision to permanently downsize its operations at its main plant in Ludwigshafen and instead shift its chemical operations to China was motivated by the fact that China is securing energy at discounts, not markups like Europe.”

The race to replace the dollar

One key takeaway is that energy-intensive major industries are going to be moving to China. Beijing has become a big exporter of Russian liquified natural gas (LNG) to Europe, while India has become a big exporter of Russian oil and refined products such as diesel – also to Europe. Both China and India – BRICS members – buy below market price from fellow BRICS member Russia and resell to Europe with a hefty profit. Sanctions? What sanctions?

Meanwhile, the race to constitute the new currency basket for a new monetary unit is on. This long-distance dialogue between Glazyev and Pozsar will become even more fascinating, as Glazyev will be trying to find a solution to what Pozsar has stated: tapping of natural resources for the creation of the new currency could be inflationary if money supply is increased too quickly.

All that is happening as Ukraine – a huge chasm at a critical junction of the New Silk Road blocking off Europe from Russia/China – slowly but surely disappears into a black void. The Empire may have gobbled up Europe for now, but what really matters geoeconomically, is how the absolute majority of the Global South is deciding to commit to the Russia/China-led block.

Economic dominance of BRICS+ may be no more than 7 years away – whatever toxicities may be concocted by that large, dysfunctional nuclear rogue state on the other side of the Atlantic. But first, let’s get that new currency going.

https://www.unz.com/pescobar/global-south-gold-backed-currencies-to-replace-the-us-dollar/