@G7 #Cancels @G20 And @1970s, But @1990s Still Has Zero Likes
History is kind to those who cancel it. (sic)
Summary:
· G7 has canceled the 1970s narrative.
· G7 has canceled G20 and all multipolar initiatives associated with it.
· Regime change by Cancel Culture could be on the G7 agenda.
· Disinflation price discovery by Cancel Culture is on the global commodity and capital markets agenda.
@1970s #Canceled ….
The last report suggested that this is not the 1970s, and, in fact, the 1990s is a better model that is “hiding in plain sight”.
Events since then have got some thought leaders believing that this is not the 1970s but it is still painful, nevertheless. They have not yet alighted upon the 1990s model, as the closest model, even though the commensurate rhyming and repeating events are happening in front of them.
Furthermore, said thought leaders have inferred that a 1970s repeat can only be avoided with appropriate policy response. The floor is now open for developed market policymakers to fill in the blanks and then sell this appropriate response with the support of the thought leaders. Actions, however, speak louder than words and political soundbites so some real action will be required. The disconnect, between the actions and the words, is where the risk lies.
This epochal developed economy policymaker leadership imperative, apparently, wishes to make use of the controversial method of Cancel Culture to nudge the process along. In effect, the 1970s reprise episode will be canceled, along with all those things and individuals deemed to be consistent with it.
Vae 1970s.
Vae Victis.
Victoria ad irritum cultura.
That’s all well and good, but the canceled void must be filled with the appropriate policy actions.
@G20 #Canceled by @G7 ….
The multi-polar order that China and Russia thought that they were creating, through the agency of G20, has been canceled by G7. In coordination with its G7 partners, America will cancel all trade privileges currently enjoyed by Russia.
Drilling down, through the G7 façade, to reveal its core, President Biden has then confirmed that a similar cancellation awaits all those who directly threaten a NATO member. This confirmation had the dual purpose of clarifying intentions and capabilities, in addition to de-escalating the potential outcome from non-NATO member Ukraine’s resistance to non-NATO Russia. Since it’s a non-NATO, localized conflict, the rules of engagement do not include World War III. One could say that World War III has been canceled.
In effect, the G20 multipolar order “under construction” is being canceled by the G7 multipole. America is not acting unilaterally it is acting multilaterally through the developed market multipolar agencies of its choice.
The G7/G20 dialectic has been both interesting to watch and apocryphal nature
G7 came into being in the 1970s that it is currently trying to cancel its current association with. After the GFC, the global growth story was driven by emerging markets, primarily China. The baton for global development thus changed hands from G7 to G20. COVID-19 and Ukraine 2022, have seen the G7 forcefully wrestling the baton back, from G20, with potentially lethal consequences for the latter.
Hitherto, China and Russia had been successfully manifesting their own multipolar destinies through the agency of the G20. All that manifest destiny has been effectively canceled by G7 sanctions. G20 and all the sanctioned global economic growth initiatives, associated with it, are collateral victims. G7 intends to drive the global growth initiative, going forward, and the global governance that goes with it. Those who resist, and their economies, may get canceled.
Vae Emergentes Mercatus.
Victoriam Developed Mercatus.
#RegimeChange by @CancelCulture ?
The pattern of emerging multipolar dots, emanating from G20 Indonesia 2022, has recently received a new dot from the World Economic Forum (WEF). President Putin’s attempt to create a Russian center of gravity, in the emerging Eurasian multipole, has literally been canceled by the WEF. The, whispered, inference is that this Russian President will also be canceled. The, inferred, silver lining does not end there.
It is unlikely that the EU will thank President Putin for his strengthening of the European Project. It is also unlikely that NATO will thank him for broadening its relevance and widening its membership. China may, or may not, thank him for providing an exclusive source of minerals; but it may require them to be heavily discounted in price for such recognition.
Presumably, the terms of President Putin’s posterity will be the main topic of discussion at the ensuing global policymaking forums. His exclusion from this table already seems to have gone through. His currently advertised intentions and capabilities to leave behind a wasteland in Ukraine will not have improved the terms of his cancellation posterity.
Davos will cancel President Putin and his sanctioned acolytes. This sanction pattern formation suggests an attempt at regime change in Russia via economic means. Xi Jinping has been put on notice that he risks a similar fate, should he maintain his support for the Putin regime. Responding with alacrity, to the message, China announced that Hong Kong’s autonomy may well last beyond its 2047 expiry date. Hong Kong’s theoretical autonomy has become a signal from China that it wishes to continue to engage with the global economic order, in its current configuration, for now at least. The established global order will attach more significance to Chinese compliance, with sanctions on Russia, than any political charade of autonomy in Hong Kong, however. President Xi is also rumored to have had a series of calls with EU leaders, pledging his willingness to broker a peace deal with Russia and Ukraine. This, once again, is not the same thing as complying with sanctions against Russia.
#Gettingthrough 2022, on the way to 2052, by @Macklem Doctrine ….
The threat from the Ukraine crisis has become an opportunity for the growth narrative observed under construction at the beginning of the year. This narrative has become doctrinaire, in the developed markets, under the author’s proxy-heading of Macklem Doctrine in honor of its originator.
Build Back a Better Macklem Doctrine And Disinflationary Growth Will Come….
(Source: the Author)
Macklem Doctrine remains stillborn in the USA. The Ukraine crisis has only crystalized the smallest modicum of bipartisan consensus, required to support a fiscal budget, that keeps the Federal Government open throughout this fiscal year. Funding to support Ukraine was directly taken from funding to support the COVID-19 fight, reflecting the underlying partisan backdrop. The Republicans have their eyes set on the election calendar; hence they do not want to be seen as bad guys, yet, neither do they want to support President Biden’s economic and political agendas either. The default political outcome is that the Republicans will only follow their patriotic duty to keep the Federal Government operating in this time of global crisis.
Treasury Secretary Yellen in her role as midwife, for the stillborn child, tried her best to coax Macklem Doctrine into the world, by applying the Socratic method of delivering new ideas. Questioning out loud the idea of inflation, she accepted that the FOMC must address the current spike but theorized that the Ukraine crisis will not make the spike worse. Consequently, the FOMC has some wiggle room to move rapidly but this process should end swiftly, by way of a soft landing, since the uncertainty from Ukraine is a greater threat to growth than to inflation.
Since it, arguably, the EU member that has the most at risk, from the Ukrainian situation, Germany has become a leader, of this global growth narrative, by necessity rather than by choice. Finance Minister Christian Lindner has marked the German crossing of this economic Rubicon with the announcement of "200 billion euros in funding for the transformation of the economy, society and the state." Short of World War III, or the demise of President Putin and the collapse in global commodity prices, there is no stopping this train from leaving the German station. President Biden has already signaled that World War III is unlikely to happen, so inert commodity prices, and the demise of President Putin, are now the two major obstacles to German transformation.
The EU is also accelerating its plans for deeper economic integration and fiscal stimulus to strengthen the bloc.
The probability of Putin’s demise has been elevated by the cancel culture strategy being applied in developed economies. This cancel culture strategy is also being aimed at the inflation threat.
#Pricediscovery by @CancelCulture ….
· Meaningless high spot commodity prices on screens are the reference point for meaningful discounts in the “constrained” physical markets.
(Source: the Author)
Cancel culture is now being applied to the commodity markets, capital markets, and cryptocurrency markets in order to prevent them from undermining the headline cancel culture strategy on President Putin. Price action that is a threat is simply canceled as if it never happened, and hence its negative impact cannot occur.
The recent behavior of the LME’s Nickel contract suggests that screen-based commodity trading is in a world of its own, which is diverging from geopolitical manipulated reality. The manipulated reality is now driving basis convergence of the markets by blunt policymaker intervention. Markets, just like supply chains are broken. The real price discovery mechanism is in the hands of the shady middlemen and not the regulated market places.
CTA’s and other speculators are walking away from the LME. They won’t be missed. The fact that the LME is controlled by HKEX should inform said speculators of how welcome they are in China. Eyebrows and suspicions will be raised further with the allegation that JP Morgan was on the other side of the bad Nickel price bets, by a Chinese counterparty, which has led to the LME market tinkering. Said eyebrows and suspicions will rise further with the news that JP Morgan is exiting Russia, where most of the global Nickel supply comes from. JP Morgan’s Nickel positioning and Ukraine positioning is “informed”, to say the very least.
Speculators may not be missed from other commodity exchanges if they walk away from them. With inflation spiking, policymakers have no interest in those who make it worse for genuine commercial hedgers, and businesses wishing to make and take physical delivery. Speculators are bad for supply chains, period!
Initial margins on energy futures contracts have been raised, significantly. The cost of leverage for margin operators will, also, rise as interest rates rise. Margin cost may rise further as curbs on leveraged commodity speculation get tightened as an inflation-fighting tool. Wild price swings amplify the impact of volatile variation margin payments.
Only those with deep pockets can play the current leverage game. Governments are the most leveraged and, arguably, the most solvent of all the players. In addition, they have the means and opportunity to tilt the rules of the game, against the leveraged speculators, in their favor. The ability to cancel undesired speculation is as strong as that which bans short-selling periodically.
@Truth is the first casualty to be #canceled in times of @Macklem Doctrine ….
It is ironic that Macklem Doctrine is being driven by the premise that global economic growth is falling into undemocratic hands. The doyens of Macklem Doctrine are not above and beyond a bit of market manipulation and price rigging, in the name of freedom and free markets, when necessity and inflation call.