#Fragmentation Spring: The Paradigm That Shifted In “Speaker Pelosi’s Bottom” ….
“Long-term losses of 2 percent of global output due to shifting foreign direct investments underscore why global integration needs robust defense.” (IMF)
Summary:
· According to the IMF, the Global Polycrisis has reached the irreversible tipping point at which the dialectic, between China’s Belt & Road and America’s “Friend-Shoring” imperatives, fragments the global economy into blocs.
· IMF alleges that its Spring Meetings are the last chance to arrest this volatile epochal shift.
· The IMF’s “Fragmentation” thesis implies that there can be no return to pre-COVID and/or pre-GFC modalities if and when the tipping point is passed at the Spring Meetings.
· Global central banks have diverging reactions to the realization that there is no return to the pre-COVID/pre-GFC modality.
· Global central bank divergent reactions are a volatile economic headwind blown by financial instability.
· The Fed is in “Transientopia” while the ECB is in “Armageddon Time”.
· The Eurozone lacks a unifying fiscal policy, monetary policy, and foreign policy consensus.
· Italy warns the ECB that it’s Eurozone Armageddon Time.
· Germany pretends that EU/Eurozone fiscal settings can return to pre-COVID/pre-GFC levels.
· The Baltic Republics have split from Franco-German, Sino-Russian appeasement.
· OPEC’s “ill-advised” response to the “Platts’ Brent Tweak” reinforces the doctrine and dogma of US Friend Shoring, whilst, strengthening and rewarding the Exorbitant Privilege.
· OPEC’s “ill-advised” response to the “Platts’ Brent Tweak” makes the US economy relatively stronger than its trade partners and adversaries.
· The USA has been afforded Swing Producer status, hence, the opportunity to influence short-term inflation expectations in addition to even greater influence over long-term inflation expectations.
· America now has the opportunity to exert greater influence on long-term inflation expectations, and energy security, on China’s front doorstep, in Asian Friend-Shoring supply chains.
· China is “exporting deflation and détente” by playing OPEC “frienemies” off against each other, and Russia, over market share of its petroleum imports.
· The Ungovernable City of London is consolidating, for survival, but synergies and scale are not substitutes for real economic growth.
· The Ungovernable City of London will become ungoverned in order to attract capital.
· The Ungoverned Capital that the Ungoverned City attracts comes with illicit strings attached that will put the Ungovernable Kingdom (UK) beyond the G7 pale.
· The Ungovernable Kingdom’s (UK’s) recent request, for privileged access to American capital, through a bilateral trade deal, will be circumscribed by the humiliating precedent of its recent transition, from “Poor Man of Europe”, to aspiring “Poor Man of Asia”.
· Mester’s “Diligent and Judicious” is the Fed’s new “Transient” procrastination, but this time in relation to transient financial instability.
· The Fragmentation Paradigm shifted in Speaker Pelosi’s Bottom.
· Speaker Pelosi’s Bottom is in the money and right on the Election Cycle money.