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Thursday, December 8

"New scheme that will use the pretext of climate change to wage economic war"

Oh yes. They co-opt then debase everything and anything that people value--freedom, democracy, human rights, environmentalism, you name it.  

I see Bernhard is in fine form: 

MoA - Green-washing The Trade War With China (moonofalabama.org) - December 8

[BEGIN REPORT]

Under the Trump administration the U.S. launched a trade war against China. It started with various tariffs on Chinese products. The Biden administration topped that by using the flimsy pretext of alleged 'forced labor' in Xinjiang to make it more difficult to import goods from China. This contradicted Biden's plan for climate change as nearly all solar panels are made from raw materials found in Xinjiang. The trade war continued with the chip war against China's technological progress.

The tariffs and restriction run counter to the World Trade Agreement which the U.S. is increasingly willing to ignore.

The administration has now developed a new scheme that will use the pretext of climate change to wage an economic war against China's and other countries' steel and aluminum industries. To be more effective it is trying to get the European Union on board:

The Biden administration on Wednesday sent a proposal to the European Union suggesting the creation of an international consortium that would promote trade in metals produced with less carbon emissions, while imposing tariffs on steel and aluminum from China and elsewhere, according to a copy viewed by The New York Times.
...
The proposed group, known as the Global Arrangement on Sustainable Steel and Aluminum, would wield the power of American and European markets to try to bolster domestic industries in a way that also mitigated climate change. To do so, member countries would jointly impose a series of tariffs against metals produced in environmentally harmful ways.

This is clearly not a policy to mitigate climate change but to limit free trade to the advantage of domestic industries.

The target of this effort is obviously China:

[REPORT CONTINUES]

Let's see what Brian Berletic has said recently about this.  He's put up many videos about China. Here's something from two days ago:

China's "Century of Humiliation" & US-Chinese Tensions Today w/Carl Zha - YouTube

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"No narrative, no meme, no worry."

[laughing]  E.B. Tucker. Interesting guy. Never heard him before.  Never heard of him before. The Duran features him today. He gets off to an annoyingly slow start, and so far in the interview hasn't directly answered Alexander Mercouris' piercingly clear questions, but within a half hour I sort of got onto his wavelength.  

Reserve currency, gold and inflation w/E.B. Tucker (Live) - YouTube

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Monday, December 5

"Control trade, control freedom."

The thinking that led to Bitcoin; best introduction for the general public I've seen:


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Sunday, December 4

"The mother of all stagflationary debt crises can be postponed, not avoided."

Is Roubini on target or talking through his hat? We'll soon find out. But what about creating a basket of precious metals instead of paper currencies as the global payments system? Just a thought.

Roubini Warns "The Mother Of All Economic Crises Looms" | ZeroHedge

SATURDAY, DEC 03, 2022 - 10:30 AM

Authored by Nouriel Roubini via Project Syndicate,

After years of ultra-loose fiscal, monetary, and credit policies and the onset of major negative supply shocks, stagflationary pressures are now putting the squeeze on a massive mountain of public- and private-sector debt. The mother of all economic crises looms, and there will be little that policymakers can do about it.

In the private sector, the mountain of debt includes that of households (such as mortgages, credit cards, auto loans, student loans, personal loans), businesses and corporations (bank loans, bond debt, and private debt), and the financial sector (liabilities of bank and nonbank institutions). In the public sector, it includes central, provincial, and local government bonds and other formal liabilities, as well as implicit debts such as unfunded liabilities from pay-as-you-go pension schemes and health-care systems – all of which will continue to grow as societies age.

Just looking at explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200% in 1999 to 350% in 2021. The ratio is now 420% across advanced economies, and 330% in China. In the United States, it is 420%, which is higher than during the Great Depression and after World War II.

Of course, debt can boost economic activity if borrowers invest in new capital (machinery, homes, public infrastructure) that yields returns higher than the cost of borrowing. But much borrowing goes simply to finance consumption spending above one’s income on a persistent basis – and that is a recipe for bankruptcy. Moreover, investments in “capital” can also be risky, whether the borrower is a household buying a home at an artificially inflated price, a corporation seeking to expand too quickly regardless of returns, or a government that is spending the money on “white elephants” (extravagant but useless infrastructure projects).

Such over-borrowing has been going on for decades, for various reasons. The democratization of finance has allowed income-strapped households to finance consumption with debt. Center-right governments have persistently cut taxes without also cutting spending, while center-left governments have spent generously on social programs that aren’t fully funded with sufficient higher taxes. And tax policies that favor debt over equity, abetted by central banks’ ultra-loose monetary and credit policies, has fueled a spike in borrowing in both the private and public sectors.

Years of quantitative easing (QE) and credit easing kept borrowing costs near zero, and in some cases even negative (as in Europe and Japan until recently). By 2020, negative-yielding dollar-equivalent public debt was $17 trillion, and in some Nordic countries, even mortgages had negative nominal interest rates.

The explosion of unsustainable debt ratios implied that many borrowers – households, corporations, banks, shadow banks, governments, and even entire countries – were insolvent “zombies” that were being propped up by low interest rates (which kept their debt-servicing costs manageable). During both the 2008 global financial crisis and the COVID-19 crisis, many insolvent agents that would have gone bankrupt were rescued by zero- or negative-interest-rate policies, QE, and outright fiscal bailouts.

But now, inflation – fed by the same ultra-loose fiscal, monetary, and credit policies – has ended this financial Dawn of the Dead. With central banks forced to increase interest rates in an effort to restore price stability, zombies are experiencing sharp increases in their debt-servicing costs. For many, this represents a triple whammy, because inflation is also eroding real household income and reducing the value of household assets, such as homes and stocks. The same goes for fragile and over-leveraged corporations, financial institutions, and governments: they face sharply rising borrowing costs, falling incomes and revenues, and declining asset values all at the same time.

Worse, these developments are coinciding with the return of stagflation (high inflation alongside weak growth). The last time advanced economies experienced such conditions was in the 1970s. But at least back then, debt ratios were very low. Today, we are facing the worst aspects of the 1970s (stagflationary shocks) alongside the worst aspects of the global financial crisis. And this time, we cannot simply cut interest rates to stimulate demand.

After all, the global economy is being battered by persistent short- and medium-term negative supply shocks that are reducing growth and increasing prices and production costs. These include the pandemic’s disruptions to the supply of labor and goods; the impact of Russia’s war in Ukraine on commodity prices; China’s increasingly disastrous zero-COVID policy; and a dozen other medium-term shocks – from climate change to geopolitical developments – that will create additional stagflationary pressures.

Unlike in the 2008 financial crisis and the early months of COVID-19, simply bailing out private and public agents with loose macro policies would pour more gasoline on the inflationary fire. That means there will be a hard landing – a deep, protracted recession – on top of a severe financial crisis. As asset bubbles burst, debt-servicing ratios spike, and inflation-adjusted incomes fall across households, corporations, and governments, the economic crisis and the financial crash will feed on each other.

To be sure, advanced economies that borrow in their own currency can use a bout of unexpected inflation to reduce the real value of some nominal long-term fixed-rate debt. With governments unwilling to raise taxes or cut spending to reduce their deficits, central-bank deficit monetization will once again be seen as the path of least resistance. But you cannot fool all of the people all of the time. Once the inflation genie gets out of the bottle – which is what will happen when central banks abandon the fight in the face of the looming economic and financial crash – nominal and real borrowing costs will surge.

The mother of all stagflationary debt crises can be postponed, not avoided.

[END]

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Tuesday, November 29

NYT admits Ukraine military in desperate situation in Bakhmut

Brian Berletic, reporting today from southern Thailand for The New Atlas, updates viewers on the situation in Bakhmut. 

West Admits Ukraine's Bakhmut Setbacks + Boeing's Long-Range Rockets Proposed for Ukraine - YouTube

My comments:

When the Russians withdrew troops from Kherson, they simply transferred the troops, some of the best in their military, to support Wagner PMC in the battle for Bakhmut. But for months before then, Wagner has been moving very slowly and methodically to prevent Bakhmut from becoming another Mariupol. 

The last thing the Russian command wants is another Azovstal factory-type siege. They've had to go building by building in outlying areas to prevent the Ukrainians from digging into another large facility. But now there is a snowball effect from the slow onslaught, which is daily leading to hundreds of dead and wounded Ukranian troops.  

Looks like the situation is just going to have to play out because Nato and the US administration and it seems the British don't want to back down.   

What about western Europe? Here are two short reports today from India's Firstpost:

Still Hooked on Russian Gas? Europe Gulping Down Record Levels of Russian LNG | Europe Energy Crisis - YouTube

Germany Gets Ready to Spend $100 Billion | Berlin's Energy Subsidy Plan | Europe Energy Crisis - YouTube

But at this moment, Germany and the rest of the most influential EU members are continuing to back the American agenda in Ukraine.  As to what will happen when Europe can no longer gulp record levels of Russian LNG, we'll just have to see.  

As to whether anything will be left of Ukraine's military by then, well, it seems the Polish government is putting thousands iof its male citizens in Ukrainian military uniform and sending them off to Ukraine to get slaughtered. Once the Polish get tired of playing Russian Roulette, we'll see what happens next. 

This is the 'We'll see' war, which finds most Nato members running around like chickens with their heads cut off because they didn't think through what Russia would be prepared to do if Nato kept pushing at its border.  

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Monday, November 28

Water management principle, "Slow it, spread it, soak it."

Permaculture primer. Studying beavers. This farm cracked the code. Simple when you know how:


Sunday, November 27

"Ukraine is expendable."

Russia Ops in Ukraine (Update): Western Propaganda Implodes as War of Attrition Grinds On - YouTube

Years of war-watching have made me quite stoic but today's Ukraine war update from Brian Berletic of The New Atlas I found very disturbing. He goes into detail to analyze recent whoppers told by American and British propagandists about the war. In doing so, he makes it clear that this is no longer simply propaganda. It's arms-manufacturing sales pitch. As such, and applied to real warfare, it devalues all human life.

This can no longer be blamed only on the government and weapons manufacturers.  

What is to become of us?

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Skyrocketing U.S. energy costs

 "Any country that can't provide hot water or heat in the winter isn't much of a country."  

"We've reached the end of monetary policy's ability to tweak our economy. 

Quotes are from Tucker Carlson's report yesterday.  


Tucker Carlson: These are lunatic policies - YouTube

"Make it simple. Anything from Russia, cap it at 99 cents"

The Duran's Alex Christoforu, reporting this morning from Athens, manages to wring humor out of an unfunny situation. 

BTW his "tatters" comment is a quote from EC President Ursula von der Leyen from a few months ago.  Yes, Russia's economy is in tatters. Tatters, I tell you.  

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Thursday, November 24

"Ghana plans to buy oil with gold instead of U.S. dollars"

Here we go. What a Thanksgiving present for the U.S. Treasury.  All right, Pundita, don't smirk. The news report is below, but first I'll get in a few words: 

Everyone has been assuming that any real challenge to the U.S. dollar would be years down the road when (if) the BRICS countries (which are adding to their roster by at least 10 countries) put together a basket of currencies, with the yuan given the biggest weight, to rival the USD and Euro. 

There are big problems with implementing such a basket, not the least of which is that the Chinese are not ready to make the yuan a reserve currency. But this plan from Ghana leaps over the technical difficulties that a basket would entail. 

So, is this the long watched-for Next Black Swan Event? If Ghana's plan works, other governments will try the same.  But that would mean the price of gold going through the roof, which could well put the poorer governments right back in the soup.  Unless they took out gold loans from governments, such as China and Russia, that have been hoarding huge amounts of gold. However, if that happens, the IMF will have cardiac arrest and the USA will launch World Wars III, IV, and V at the same time lol. Pundita that's not funny. NOT FUNNY.   

Well, we'll just have to watch and wait.  And maybe buy gold.

Ghana plans to buy oil with gold instead of U.S. dollars | Reuters - November 24, 1:58 EST

[BEGIN REPORT]

ACCRA, Nov 24 (Reuters) - Ghana's government is working on a new policy to buy oil products with gold rather than U.S. dollar reserves, Vice-President Mahamudu Bawumia said on Facebook on Thursday.

The move is meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.

Ghana's Gross International Reserves stood at around $6.6 billion at the end of September 2022, equating to less than three months of imports cover. That is down from around $9.7 billion at the end of last year, according to the government.

If implemented as planned for the first quarter of 2023, the new policy "will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency," Bawumia said.

Using gold would prevent the exchange rate from directly impacting fuel or utility prices as domestic sellers would no longer need foreign exchange to import oil products, he explained.

"The barter of gold for oil represents a major structural change," he added.

The proposed policy is uncommon. While countries sometimes trade oil for other goods or commodities, such deals typically involve an oil-producing nation receiving non-oil goods rather than the opposite.

Ghana produces crude oil but it has relied on imports for refined oil products since its only refinery shut down after an explosion in 2017.

Bawumia's announcement was posted as Finance Minister Ken Ofori-Atta announced measures to cut spending and boost revenues in a bid to tackle a spiraling debt crisis.

In a 2023 budget presentation to parliament on Thursday, Ofori-Atta warned the West African nation was at high risk of debt distress and that the cedi's depreciation was seriously affecting Ghana's ability to manage its public debt.

The government is negotiating a relief package with the International Monetary Fund as the cocoa, gold and oil-producing nation faces its worst economic crisis in a generation.

Reporting by Cooper Inveen and Christian Akorlie Writing by Sofia Christensen Editing by Estelle Shirbon and Elaine Hardcastle

[END REPORT]

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