Steve Bull's Blog, page 102
September 22, 2023
Jeffrey Sachs: NATO Expansion & Ukraine’s Destruction
Ukraine is being destroyed by U.S. arrogance, proving again Henry Kissinger’s adage that to be America’s enemy is dangerous, while to be its friend is fatal.
NATO Secretary General Jens Stoltenberg at the European Parliament on Sept. 7. (NATO, Flickr, CC BY-NC-ND 2.0)
During the disastrous Vietnam War, it was said that the U.S. government treated the public like a mushroom farm: keeping it in the dark and feeding it with manure. The heroic Daniel Ellsberg leaked the Pentagon Papers documenting the unrelenting U.S. government lying about the war in order to protect politicians who would be embarrassed by the truth. A half century later, during the Ukraine War, the manure is piled even higher.
According to the U.S. government and the ever-obsequious New York Times, the Ukraine war was “unprovoked,” the Times’ favorite adjective to describe the war. Putin, allegedly mistaking himself for Peter the Great, invaded Ukraine to recreate the Russian Empire. Yet last week, NATO Secretary-General Jens Stoltenberg committed a Washington gaffe, meaning that he accidentally blurted out the truth.
In testimony to the European Union Parliament, Stoltenberg made clear that it was America’s relentless push to enlarge NATO to Ukraine that was the real cause of the war and why it continues today. Here are Stoltenberg’s revealing words:
“The background was that President Putin declared in the autumn of 2021, and actually sent a draft treaty that they wanted NATO to sign, to promise no more NATO enlargement. That was what he sent us. And was a pre-condition to not invade Ukraine. Of course, we didn’t sign that.
…click on the above link to read the rest…
September 21, 2023
The Hard Asset Inflation / Paper Asset Deflation Theory
All fiat currencies are no more than floating abstractions of value. Society has put its faith in fiat currency issued by governments. These government-issued currencies are not backed by a physical commodity, such as gold or silver, but rather by the promises from the government that issued it. A difficult question investors today face is determining which assets will appreciate most thus rising in value and which form to hold their wealth.The value of fiat money is derived from supply and demand and the stability of the government that issues it. Over the years many promises have been made that simply cannot or will not be honored. History and many real-life examples exist that indicate that promises are easier to make than keep.
It is very possible in the near future we may see a strong bifurcation of the financial system. The Hard Asset Inflation / Paper Asset Deflation Theory laid out below is based on the idea that as wealthy individuals begin to realize the fragility of the current financial system they will shift their investment preferences to items of substance.
This repositioning of wealth in assets could occur rather rapidly during a period of inflation. If such a revamping of how the wealthy invest takes place it could drastically add to any inflationary trends. In short, some investments would fall like a stone while others soar. Imagine real estate doubling in value while pensions are cut and stocks falter. This dovetails with my theory the Fed should be ecstatic so many people have been willing to invest in intangible assets because it has helped to minimize inflation.
…click on the above link to read the rest…
September 19, 2023
Russia: The United States Is At War Against Us
Russian Foreign Minister Sergey Lavrov in fresh statements made to reporters has said the Untied States in waging war against Russia through the Ukraine proxy war.
Lavrov in the Russian-language comments described that Washington is not only transferring some $100 billion in military aid to Kiev, but is actually controlling its decision-making. He further said this is in order to try and inflict a “strategic defeat” on Russia.
The top Russian diplomat was speaking on the sidelines of the Eastern Economic Forum on Sunday morning. “No matter what it says, it [the US] controls this war, it supplies weapons, munition, intelligence information, data from satellites, it is pursuing a war against us,” he said, according to a translation.
“While what is going on is that Ukraine has been prepared, has long been prepared for inflicting strategic defeat to Russia using its hands and its bodies,” Lavrov emphasized.
He in prior comments Friday had said the US is also waging a global effort to isolate Moscow, and that this was the intent of the recent Saudi-hosted Ukraine peace summit.
“There is a real plot around the topic of the so-called (peace) negotiations, as well as attempts to turn everything upside down through pseudo diplomacy,” he said Friday. He explained:
“The West has been saying for months that this ‘peace formula’ is the only basis for negotiations. It starts from innocent topics … and then comes to the purpose for which it was concocted – inflicting a strategic defeat on Russia, to restore the borders of Ukraine as they were in 1991, court-martial the Russian leadership, force Russia to pay reparations, and then ‘mercifully’ agree to sign a peace agreement.”
…click on the above link to read the rest…
The Coming Collapse of the Global Ponzi Scheme
It won’t be long before governments around the world, including the one in Washington, self-destruct.
Strong words, but anything less would be naïve.
As economist Herbert Stein once said, “If something cannot go on forever, it has a tendency to stop.” Case in point: fiat money political regimes. Interventionist economies of the West are in a fatal downward spiral, comparable to that of the Roman Empire in the second century, burdened with unsustainable debt and the antiprosperity policies of governments, especially the Green New Deal.
In the global Ponzi scheme, thin air and deceit substitute for sound money. As hedge-fund manager Mitch Feierstein wrote in Planet Ponzi, “You don’t solve a Ponzi scheme; you end it.” Charles Ponzi and Bernie Madoff
made some of their investors a whole lot poorer, but the world didn’t come crashing down as a result.
For that—for a Ponzi scheme that would threaten to bankrupt capitalism across the entire Western world—you need people much smarter than Ponzi or Madoff. You need time, you need energy, you need motivation. In a word, you need Wall Street.
But Wall Street alone doesn’t have the strength to deliver a truly cataclysmic outcome. If your ambition is to create havoc on the largest possible scale, you need access to a balance sheet running into the tens of trillions. You need power. You need prestige. You need a remarkable willingness to deceive. In a word, you need Washington.
As Gary North wrote in a brief review of Feierstein’s book, “The central banks have colluded with the national governments in order to fund huge increases of national debt, beyond what can ever be paid off. In other words, [Feierstein] has described government promises as part of a gigantic international Ponzi scheme.”
…click on the above link to read the rest…
September 8, 2023
New energy bill could see Brits jailed for failing to comply with ‘cultish’ Net Zero regulations
The proposed Energy Bill has been criticized as an attack on freedom and home ownership
U.K. businesses and homeowners could be jailed for up to a year or fined £15,000 for non-compliance with new energy efficiency regulations proposed by the Conservative government, which have been described by critics as a “massive expansion of the state and its power over our lives.”
The Energy Bill, which returned to parliament for its third reading this week, outlines several new requirements homeowners must adhere to in relation to Net Zero, the government’s commitment to being carbon neutral by 2050.
For the first time, individuals face criminal charges for failing to comply with measures designed to reduce the country’s carbon footprint.
One such draconian regulation states that household appliances such as fridges, washing machines, and heat pumps must be fitted with smart functions that can be controlled by “any persons carrying out load control,” namely the National Grid, which oversees the majority of electricity transmission and distribution in Britain.
The vast majority of households in the country will not currently comply with the new measures outlined in the bill, meaning homeowners will be compelled to pay out significant sums to transform properties and make them “energy-efficient” or potentially face criminal charges for so-called “non-compliance.”
The bill has angered a number of backbench Conservative MPs who have threatened to rebel against the legislation, with some claiming it is the latest installment in the government’s “cult-like” obsession with Net Zero.
“We cannot impoverish our country to meet some, well, I’d like to call it in some cases almost cultish policy until we can afford it. Until it works, that’s when I think we should adopt all these policies,” said Richard Drax, the Conservative MP for South Dorset.
…click on the above link to read the rest…
September 5, 2023
Don’t Dismiss the Possibility of Gold Confiscation
If you hold precious metals in your portfolio, there is a good chance you fear hyperinflation and the crash of fiat currencies.
You probably distrust governments in general and believe they are self-serving and have no interest in your economic well-being. It is likely that your holdings in gold are your lifeline – your hope to get you through these times while holding on to your wealth.
But have you ever given any thought to the possibility of having this lifeline confiscated by the authorities?
In my conversations with friends and associates, I have often raised this question. The typical responses:
“They’d never do that.”
“I’ll deal with that if and when it happens.”
“I just wouldn’t give it to them.”
I consider these “wishful thinking” responses.
It’s an interesting thought that the greatest threat to gold and silver investment might not be the possibility of losing on the speculation, but the government taking it away from you. It’s a thought that I’ve found few want to even think about, let alone discuss.
If you fall into this camp, you’re in good company. Some of the forecasters whom I respect most highly also treat it either as unlikely or at best, “something we may need to look at in the future.” To date, in conversing with top advisors worldwide, the two primary reasons they believe gold will not be confiscated are:
“Confiscation would mean the government acknowledges the reality of the value of gold.”Yes, this is quite so. They would be changing their official view… which, of course, they do all the time. But I submit that all that they need to do is put the proper spin on it.
“They would meet greater resistance than they did back in ’33.”…click on the above link to read the rest…
Rising GDP + Rising Yields = A MAJOR Sign of “Uh-Oh”
Have you heard the good news?
The Atlanta Fed GDPNow estimates a 5.9% growth in real GDP for Q3 2023. In nominal terms, we can even boast of an 8.9% surge.
What fantastic news! Growth! Productivity!
This must mean we can all breath a collective sigh of relief as Powell continues his valiant war against inflation as GDP rises, right?
I can almost hear the champagne bottles popping from the Eccles Building to the Bezos-owned Washington Post.
The financial wizards have saved us once again, right?
Wrong.
Oh, so, so, so, so WRONG.
Why?
Debt-Driven Growth is Not Growth, but a Slow Death Trap
As usual, the answer lies in math, history and, of course, THE BOND MARKET.
For years and years, I have tried to make one point (and indicator) almost reflexively clear, namely: The Bond Market Is the Thing.
This is because the bond market reflects debt forces, the most cancerous of all market killers once they metastasize from the acceptable to the fantastical, and the cheap to the unaffordable.
Today, we stare upon the greatest national and global debt bubble in history.
And the cost of that debt is getting higher, not lower.
This should be the key theme of every conversation, but instead, our citizens are arguing over gender neutral bathrooms and exciting politicos (opportunists) scurrying for power like donkeys fighting for hay.
Far better, in my opinion, if the people understood boring things like sovereign bonds…
In particular, they just need to consider and understand yields on Uncle Sam’s IOU (with particular emphasis on his 10-Year UST), which tells us the market’s measurement of the cost of debt.
…click on the above link to read the rest…
US Special Operations Command Will Deploy Argus AI Program to Scour Social Media for Disinformation, Misinformation and Malinformation, National Security Authority to Protect U.S. Internet from “Pain Points”
Annnd… Here we go. If you have not read the background {Go Deep}, you will not have the appropriate context to absorb the latest revelation about how the Dept of Defense will now conduct online monitoring operations, using enhanced AI to protect the U.S. internet from “disinformation” under the auspices of national security.
Gee, who would have predicted that U.S. internet operations would suddenly have a totally new set of enhanced AI guardians at the gateways? [image error]
Read Carefully – Eyes Wide Open:
The US Special Operations Command (USSOCOM) has contracted New York-based Accrete AI to deploy software that detects “real time” disinformation threats on social media.
The company’s Argus anomaly detection AI software analyzes social media data, accurately capturing “emerging narratives” and generating intelligence reports for military forces to speedily neutralize disinformation threats.
“Synthetic media, including AI-generated viral narratives, deep fakes, and other harmful social media-based applications of AI, pose a serious threat to US national security and civil society,” Accrete founder and CEO Prashant Bhuyan said.
“Social media is widely recognized as an unregulated environment where adversaries routinely exploit reasoning vulnerabilities and manipulate behavior through the intentional spread of disinformation.
“USSOCOM is at the tip of the spear in recognizing the critical need to identify and analytically predict social media narratives at an embryonic stage before those narratives evolve and gain traction. Accrete is proud to support USSOCOM’s mission.”
But wait… It gets worse!
[PRIVATE SECTOR VERSION] – The company also revealed that it will launch an enterprise version of Argus Social for disinformation detection later this year.
The AI software will provide protection for “urgent customer pain points” against AI-generated synthetic media, such as viral disinformation and deep fakes.
…click on the above link to read the rest…
September 4, 2023
Stop Using the Word ‘Sustainability’ for God’s Sake
No. This is not sustainable. Photo by Appolinary Kalashnikova on UnsplashFor millions of years us, humans, were part of Nature. We were born in the wild, lived in the wild, died in the wild. We ate what we found, drank the waters of rivers and streams, breathed air purified by trees. Just like any other mammalian species on Earth. The false belief, that we’ve somehow moved above and beyond that thanks to our ingenuity is just a fantasy. Or rather: pure unadulterated hogwash. We still eat plants and animals feeding on grass and seeds. We still drink the waters of rivers and streams. We still breathe air purified by trees. The only difference is, that today there is a massive blob of buildings, roads, machines, mines and supermarkets — now weighing more than all things living — placed between us and Nature.
All technology did, in its narrowest technical sense, is that it has enabled us to extract raw materials, clear-cut forests, harvest fish and food beyond all sustainable levels. Sustainability in its original sense means: an ability for something to go on unabated forever (or at least long enough not to matter). All I’m writing about on this blog since its inception, is that nothing — not a single thing — we do and call ‘civilization’ today can go on for much too long, let alone forever.
Extracting resources (especially by mining) destroys ecosystems, takes a lot of energy and precious fresh water, poisons rivers and the soil, and ultimately depletes the very resource it is going after. It is a self-destructing and thus a self-limiting activity. Mining is by definition unsustainable. Now, the problem is, that everything we call civilization today from buildings to roads, from agriculture to distributing food, from machines to electricity starts with extracting resources from the ground. No exceptions.
…click on the above link to read the rest…
September 3, 2023
The Failure of Neoliberalism
Backing Up Macro Alf, & Showcasing Ravel, in 11 plots and two averages
The macro commentator Alfonso Peccatiello, who writes as @MacroAlf on Twitter/X and publishes the Macro Compass newsletter, recently posted an excellent thread on private debt that cited my work:
Let me show you one of the most underrated and yet crucial long-term macro variables in the world. Debt. But not government debt: people should stop obsessing it! The government can print money in its own currency. Of course, this has limitations: capacity constraints, inflation, credibility…but there is much more vulnerable source of debt out there. Private sector debt levels and trends are by far a more important macro variable to follow.
Let me explain why. The private sector doesn’t have the luxury to print money: if you get indebted to your eyeballs and you lose your ability to generate income, the pain is real. This amazing chart from my friend @darioperkins proves the point quite eloquently…
Figure 1: Alf’s chart of private debt to GDP bubble for 4 key economies
This post follows up on Alf’s lead by producing a private debt-focused profile of all the major economies in the OECD whose debt levels are also recorded by the Bank of International Settlements. It combines data on inflation and unemployment rates from the OECD with private and government debt and house price data from the BIS.
The plots in this post run in reverse alphabetical order from the United States (see Figure 2) to Australia. Their message is the same that Alf made in his tweet stream (x-stream?): private debt matters, and the fact that conventional Neoclassical economics ignores it is a major reason why it has failed as a guide to economic theory and policy.
…click on the above link to read the rest…
