Say Goodbye Front-Loaders, and Hello Incrementalists, If You Want to Say Goodbye Stagflation Buy Stabflation
“Even if financial problems don’t begin an episode, over time, if the episode makes financial conditions worse, they can add to the problem and intensify it ...." (Benjamin S. Bernanke)
Summary:
· If “Squeaky Bum Time” is good enough for Fergie, and the OED, it’s good enough for the OECD.
· Peak Bum Squeak may portend some, imminent, volatile global inflection points.
· “Goodbye, Stagflation.” - “Hello, Stabflation!”
· “Hello, Stabflation.” - “Pleased to meet you Emotional Finance Theory(EFT).”
· “Hello, EFT.” – “Do one, EMH!”
· Stabflation signals that there is a disinflationary, and destabilizing, global shortage of US Dollars.
· The current phase of the Crypto Crunch is a Black Swan at the systemically important interface of the crypto and fiat monetary systems.
· The timely Nobel Prize for economics awards should nudge the Fed to teleport from the Twentieth Century to the Twenty-First Century.
· Lazy journalism fails to connect the Nobel Economics Laureates to the Fed’s unofficial insolvency.
· Potentially, the greatest money laundering (and wire fraud) operation in US history hides in plain sight behind Fed interest rate hikes.
· The Fed’s “Fergie Time” is the global economy’s injury time.
· With one notable exception, the Fed’s Front-Loaders are all Free-Loaders.
· The exposure of unethical Fed Free-Loaders is the loss of Fed independence.
· The doyenne of Barbarous Relics, on the FOMC, from the Twentieth Century, broadcasts that the Fed’s cognitive blindness and bias are structural.
· The behavior of some Fed officials and the most important of the central bank’s financial stability policymaking processes are broadly consistent with the acronym VICE.
· The next GFC is Charles Evans’ US Soft Landing.
· Free-Loading Chairman Powell’s position is untenable, ideally, he should be replaced, by Esther George, but this probably won’t happen.
· If the “Front-Loaders” finally listen to, and follow, Esther George’s incremental rate hike proposal, they may still be able to Soft Land the economy and avoid having to aggressively money launder the Fed’s balance sheet losses.
· Free-Loading Chairman Powell needs to grow a pair and use his casting vote magic to turn Front-Loading into Incrementalism.
· As Kwasinomics became Keanonomics he took one for the relegated “Team”.
· Keanononimcs, in the form of a Kleptocracy, to build a war chest, for the guerrilla warfare, in opposition, of the Tories in Balkanised Britain will try to use the IMF as a cover.
· The IMF preferred Kishidanomics to Kwasi’s Keanonomics.
· Keanonomics will fail because Britain has no trading counterparties to go with its cheap currency.
· The failure of Kwasi’s Keanonomics is the enabler of the next leg, of the global reflation, via the Yen Carry Trade.
· The Yen Carry Trade is disinflationary unless you’re Japanese, but the Kishida Put will cover your bills if you are.
· Kishidanomics loves Friend Shoring and Yen Carry Trade global reflation.
· Japan Inc. positions for Friend Shoring and Yen Carry Trade global reflation.
· President Trump has got Mr. Liu’s Clubhouse Chinese Laundry Blues.
It’s Official, say hello to Squeaky Bum Time ….
This author has been criticized for liberally applying the term “Squeaky Bum Time” in this series of reports.
There’s no copyright on these immortal words.
· Squeaky Bummers are Peaky (Rate Hike) Blinders.
· Speaker Pelosi’s Bottom is now called Squeaker Pelosi’s Bottom.
(Source: the Author)
In response, to the criticism, this author, also, notes that the Squeak of Bums has become deafening, lately.
Peak Bum Squeak may portend some volatile inflection points, as is the case historically.
The author also notes that the term is now in the Oxford English Dictionary (OED).
If it’s good enough for the OED it’s also good enough for the OECD.
So, if it’s good enough for Fergie it’s good enough for everybody.
Next up, is the case for Stabflation.
Goodbye Stagflation, Hello Stabflation
The ephemeral market reaction, to the latest US inflation data, has confirmed that Mr. Market believes that Stagflation has become Stabflation. The bad inflation data elicited a violent sell-off that, then, second-guessed itself, and the assumed automatic 75-Basis points rate hike response, to become an equally violent rally. The rally discounted the assumed Fed ease in response to the afore-discounted, 75-Basis points recession delivering rate hike. Then, the next day, a whole new series of tightening over the course of 2023 was discounted into another single trading session.
Mr. Market behaves as though what he sees, and hears, in the moment, is all there is in the future. This is the hallmark of Stabflation. It is also the hallmark of Emotional Finance Theory (EFT). Stabflation must, therefore, be an extreme symptom of EFT.
At a time of Stabflation, when EFT rules apply, the rules and assumptions of the Efficient Market Hypothesis (EMH) do not apply. The recent behavior of the markets, around the latest US inflation data release, illustrates this clear distinction.
The behavior of the global central banks, with the exception of the Fed, has also gone into Stabflation crisis mode, despite what they advertise as inflation-fighting mode. In fact, the latter has triggered the former.
It's no longer about inflation, it’s, now, all about financial stability. There is a global shortage of US Dollars. This is disinflationary and depressionary. The Fed is still of the view that there is a global and domestic surplus of US Dollars that is chasing the price of goods, services, and wages higher.
At some point, the US Treasury will have to make more US Dollars available and the Fed will have to transmit them through the central bank reserve system to the global economy. At the moment, there is a risk that the US Treasury gets it horribly wrong.
The Treasury has already offered to buy back debt to, supposedly, liquify markets. This would make things worse because it would be the removal of the reserve financial asset from which all private US Dollar credit is created. Hence, the US Treasury’s well-intentioned offer is, actually, to shrink the supply of US Dollars whilst appearing to boost it.
The US Treasury is also offering to remove the finite supply of the only, alleged, “safe assets” available to skittish investors. This is just pulling the rug that will force investors to sell risk assets, at a loss, to meet any immediate demands for cash. The risk is, therefore, that the removal of, alleged, “safe assets” creates a financial market doom loop.
Right now, the finite existing supply of US Dollars is being rationed, globally, by stretched central bank emergency swap lines.
Countries that sell “things”, priced in US Dollars, are desperate to sell them cheaper, in price, in order, to get the safe haven currency that they all need. Holders of US Dollars, facing recession, and a shortage of currency, actually want the currency more than they want the “things” that are on offer. What everyone desperately needs are US Dollars. What nobody wants are “things”, other than the basic minimum required to sustain human life.
The US Dollar has become the best hedge against inflation, and recession, because the economic system that drives growth and inflation is broken. The US Dollar is the best hedge, against Stabflation, because it is the reserve currency of the whole system. Demand for the US Dollar, actually makes the financial instability component of the Stabflation worse.
The global financial system needs the US Treasury and the Federal Reserve to press the reboot button. There will, however, be conditions attached with the next rebooting. These conditions will be unpleasant for America’s foes. They will also be unpleasant for America’s allies and trade partners.
President Putin and OPEC are staring at defeat since the global economy has not abandoned the US Dollar yet. Maybe the global economy will abandon the US Dollar, one day, but not today. In the meantime, President Biden is making the USA and its economy less reliant upon malign global influencers. Chances are, therefore, that the US Dollar will be even more sought after going forward.
Stabflation may come close to describing what is happening. This happens when inflation is not allowed to run its course but is nudged backward and forwards by well-intentioned central bankers and policymakers respectively. The central bankers want the inflation to end because their mandates demand this, and the policymakers want to mitigate its impact on their potential voters. Often, the policymakers and central bankers are acting at cross purposes.
(Source: the Author)
In the last report, it was theorized that Stagflation should now be called Stabflation.
In addition, to Mr. Market, the IMF would appear to agree with the author’s designation.
The IMF does not comment on what Stabflation means for the solvency of central banks and governments, however. This would be tempting fate a little too much. The IMF would like fiscal and monetary authorities to read from the same page. Reading between the lines this implies that supply-side stimulus is in and demand-side stimulus is out. It also implies that monetary policy stimulus in the furtherance of supply-side stimulus is in.
Throughout the current, potential, unfolding global inflection point, the Fed continues to act and speak as if there is nothing wrong. At this point, however, Mr. Market really doesn’t care what the Fed says, anymore, because he knows he can make the Fed do what he wants it to do. All he has to do is threaten a global financial crisis and the Fed will become compliant.
The Fed’s global central banking partners don’t really care, about what the US central bank says, either as long as they can re-liquify themselves with emergency US Dollar swap lines. Liquidity preference for this limited supply, of US Dollars, works wonders in suppressing inflation. The problem is that it, also, causes a global recession. Before that, however, it also causes a global financial crisis.
Insolvent and lovin’ it (sic) ….
· The Crypto Crash will soon be framed as the next disinflationary headwind requiring remedial economic stimulus action.
(Source: the Author)
The Crypto Crash, envisioned by this author, is running its course. The latest course is occurring at the interface of crypto-currency and fiat currency, or rather, crypto-assets and, alleged, “safe assets”. At this interface point, the established fiat currency order, and its central bankers, will have to embrace, and mitigate, the crypto-threat rather than continue to make it worse.
What many call a Ponzi scheme, but in practice is more stable, than a central bank fiat money Ponzi scheme, is illustrating what happens when Mr. Crypto-Market reacts to Stabflation. This is important, because there is a whole unregulated shadow universe of crypto-assets, and crypto-currencies, out there, that can quite easily unleash the next global financial crisis.
Tether has moved its reserves into the safest thing that it can find. These “safe assets” are T-Bills, they are not commercial paper, neither are they commercial bank reserves deposited at the Fed. Tether doesn’t want commercial credit risk, it wants the nearest thing to risk-free cash as possible.
Tether must be seeing a confluence of ugliness between the crypto and fiat currency worlds.
Tether has, thus, signaled that there is a shortage of “safe crypto assets”, and, hence, yet another demand for “safe” fiat US Dollars. The global supply shortage of US Dollars, has, thereby, been magnified, exponentially, by the pyramid of global crypto-currencies.
This is a systemic Black Swan event in which contagion, from crypto, spills over into contagion for the global capital markets. The strong correlation of Bitcoin with risk assets evinces just how bad the situation can get. Observers will also remember that, despite its panacea billing how Bitcoin has been a terrible hedge against inflation and Stagflation. They may imagine how terrible it is as a hedge against Stabflation.
Were the Federal Reserve System banks to follow Tether’s conservative risk management strategy, commercial bank reserves at the Fed would collapse. The Fed would then have to sell the assets, on its balance sheet, in order to rebalance with its lower reserve liabilities. The Fed may, then, have to realize some of its losses on its balance sheet holdings. Furthermore, this selling would push yields higher and lead to further balance sheet losses. The fall in central bank reserves, and the spike in yields, would create a deflationary, but also a recessionary headwind. The recessionary headwind would be viewed as a greater threat than the current inflation.
Were Mr. Market, en masse, to switch to US T-Bills, like Tether, there wouldn’t be enough of them available to meet global demand. Demand could quite well push T-Bill yields negative again. This would be amusing, with annual inflation rising above 8%. Logistically, also, the US would not have enough US Dollars available to meet rapidly incoming, periodic, T-Bill redemptions. Banana Republics reach for the printing press at this point.
This amusing story, which could quite easily happen, illustrates that US Dollar Stabflation creates a shortage of US Dollars. The only solution, then, is to create more US Dollars. Funnily enough, the Fed has already been preparing, for this eventuality, by creating “out of thin air deferred assets”, on its balance sheet, which requires layering, with the real taxpayer-backed assets, and then introducing them back into the capital markets.
Before getting into, what sounds like Federal money laundering, the reader needs to pause and understand where the global economy is.
Whilst reflecting, the reader may also note, the recent cosmological references, to Black Holes, which have followed this author’s singularity at Jackson Hole.
This author does not claim plagiarism but would say that there is a strong element of affirmation in what others have written.
· Monetary Policy tightening is ending because the Fed has reached the technical “unrealized” insolvency event horizon.
· The Fed’s expanding balance sheet is a black hole that is pulling the central bank towards exclusive Financial Stability Policymaking to the exclusion of Monetary Policymaking.
· Jackson Hole should probably be renamed Central Bank Black Hole.
(Source: the Author)
As discussed previously, by this author, the Fed has reached the point at which it must expand its balance sheet, and cut interest rates, even though the hot inflation stain on its, Congressionally mandated, KPI sheet says not.
It’s official, the Fed is insolvent according to Bloomberg. Officially, also, this does not matter because the Fed is not like any normal financial entity. This lazy journalism feels like vested interests are leading it.
Somewhere else, on the landing page, in the public domain, it’s been made official that US pensions are dead. The editorial imperative has not directly made the connection to the fact that the pensions and social security system are, therefore, insolvent.
· Central Bank insolvency is aligning with fiscal insolvency at a rapid pace in the global economy.
· The alignment of central bank and fiscal insolvency promotes the exclusive interest in financial stability policy.
· The interest in financial stability policy will enable the application of Modern Monetary Monopsony Theory (MMMT).
(Source: the Author)
This author wonders how long it will take for lazy journalism to figure out that the US economy and its central bank are insolvent. The precedent is hiding, in plain sight, across the Pond.
· Britons are the useful idiots that US home flippers were, in the GFC, to enable the next global credit expansion.
(Source: the Author)
The Bank of England’s support for the index-linked Gilt market should be a big signal for the Fed. England’s inflation fundamentals are the worst in the developed world. Normally, rational investors would pile into the index-linked Gilt market, as an inflation hedge, based on the poor UK inflation fundamentals. Except that investors are behaving irrationally when faced with Stabflation risk.
On the contrary, UK investors are betting on a depression rather than inflation. Nobody wants to own index-linked Gilts. Nobody wants to own Gilts, period, because the UK taxpayers’ ability to pay, is suspect, and the UK Government’s desire to borrow is, apparently, boundless. The assumption is that the UK economy is insolvent and, therefore, has an inability to pay out future bond interest and principal payments, and pensions.
UK pension funds had been borrowing against the collateral value of their taxpayer-backed holdings to pay out pensions, many with pay-outs linked to inflation. Since the nation is now viewed as insolvent, the collateral has no value and hence lenders won’t fund pension cashflows. There is in fact no Sterling available to meet liabilities because the UK Government is no longer trusted to create more of it. Even if there was any Sterling available, it has no value because UK taxpayers are not viewed as good credits.
Consequently, Britain must borrow in someone else’s currency and accept the terms and conditions that come with it. Post-Brexit, it can’t borrow in Euros, hence, it is left with the options of Yen and US Dollars.
It is time for journalism to stop being lazy and easily led, even if this leads to questions that have embarrassing and unpleasant answers. To be fair, some connections are being made, belatedly, by less lazy journalists, to the precedent that the Bank of England has set. In this scenario, cash, foreign not Sterling, itself is preferable to “risk-free” government debt. The extreme liquidity preference is for non-Sterling liquidity, however.
Hence, Sterling interest rates can rise, vertiginously, and still, there are no willing holders, apart from the Bank of England. But as interest rates keep rising, the Bank of England becomes more insolvent on a mark-to-market basis. At this point, formal inflation and growth mandates don’t matter to the central bank. The central bank is now fully in financial stability policymaking mode.
If the Fed thinks that the UK scenario cannot happen in the USA, this author has another bridge that he would like to sell to the US central bank.
The Bank of England is making itself, and the UK economy, insolvent by hiking interest rates. Simultaneously, however, the Bank is loading its balance sheet, again, for the imminent Sterling capital market liquifying exercise. For some reason, lazy journalists think that the US economy and Fed are islands that are immune to this contagion. The fact is that they are on the biggest island, which can take the whole global system down with it.
Lazy journalists are also, distractedly, lauding the new Nobel Economic Laureates. These journalists should be making the connection between the seminal work, that has received the award, and the Fed’s, allegedly, improbable and inconsequential insolvency.
Lazy journalism is exactly what former New York Fed president Bill Dudley has recently demonstrated in spades. Dudley would have the Fed apologize, in advance, for inflicting the next global financial crisis.
The Fed shouldn’t apologize. It should, actually, thank its global partners for having a financial crisis that the US central bank can appear to resolve, thereby, exonerating itself. Then, the Fed should, quickly, start printing US Dollar cash.
More importantly, this is an opportunity for the Fed to make itself solvent, again, so a big thank you should be given to those who have provided the conditions precedent. The Fed can show its gratitude by printing what it and everyone else wants. That is US Dollars.
Whilst he is also at it, Dudley should apologize first for being part of the system, that he is now criticizing, and, did nothing to reform when he was on the inside.
· The Macklem Doctrine of America’s global imperative may make bigger fools out of the FOMC than the incoming inflation data.
· The Fed may embrace Macklem Doctrine when it sees the unrealized losses on its balance sheet from the recent spike in yields.
(Source: the Author)
Readers who wish to stay ahead, of the lazy journalistic discovery process, may wish to refresh themselves on how it all plays out by re-reading the February report on this subject.
It’s “Fergie Time” for the “Barbarous Relics” to join the Twenty-First Century ….
Having scored with “Squeaky Bum Time”, and had a shot at Stabflation, the author is going for a hat-trick with “Fergie Time”.
“Fergie Time” is where the Fed is, currently, hopefully, hiking interest rates for as long as it takes to get an inflation win. This will lead to injury time for the global economy.
Central bankers, on the whole, are a conservative lot. They believe that their conservative traditions enhance their credible commitment. Ben Bernanke would not agree.
This year’s Nobel Prize awards panel appears to have an epic sense of timing, in addition to an equally epic sense of humor. This year’s economics prizes go to an ugly trio of caricatures, including Benjamin S. Bernanke, for their research on banks and financial crises. If a new financial crisis were to, suddenly, appear, these three would look like heroes and the panel would look like savants. What a coincidence!
The Fed’s inertia and ineptitude are certainly going to be good for the sales of Chairman Bernanke’s new book. Momentarily lowering himself into the gutter, with the likes of this author, the former Fed Chair has unprecedentedly criticized the inertia and ineptitude of his successor in responding to inflation. Furthermore, the mudslinging and trash-talking extend to a new volume entitled “21st Century Monetary Policy”. A cynic would say that the trash-talking and sales of the new book are directly correlated.
(Source: the Author)
Previously, this author had suggested that Bernanke’s latest book was essential reading for perplexed central bankers. In the pre-launch, of his guide for the perplexed, Bernanke had taken the unprecedented public step of criticizing his successor, and his former colleagues, for their inertia towards inflation. Now, would be a good time for these inert readers to catch up on some vocational reading.
Bernanke’s previous criticism, and book publication, can be seen in an emerging narrative, on the way to becoming a Nobel Laureate. This narrative is not just self-promotion on his part. This author believes that it is global thought leadership in action. These same global thoughts are not currently held by Chairman Powell and his team.
Magnanimous in victory, but no less critical, Bernanke politely warned his former colleagues, once again, in his award acceptance speech. Even the deafest, and blindest, former colleague, could not have failed to catch on, to Bernanke’s drift, that they are drifting into another global financial crisis that is bigger, in magnitude, than their belated attempts to restore their credible commitment through fighting inflation.
Bernanke’s colleagues just don’t seem to get financial stability policymaking. This is a great pity because it is what central banks do most of the time these days. Powell’s Fed is not independent, it is slow-witted, and inert, possibly the worst two things that a central bank can be in the Twenty-First Century.
Chairman Powell, and his team, are still stuck in the Twentieth Century, pretending to be Paul Volcker, fighting the great inflation challenge of that epoch. Since then, the world has come off the Gold Standard and moved onto the central bank balance sheet funny-fiat-money standard. In this new standard, the US Dollar now acts as the role of Gold in the ancient regime.
The change in the central banking monetary system of exchange, from Gold to US Dollars, is the critical disconnect between the Twentieth and Twenty-First centuries. Gold Reserves and fixings have been replaced by central bank balance sheets and international swap lines. This is the new global financial stability policy standard. Growth and inflation mandates are domestic anachronisms that, oftentimes, get in the way of the global imperative.
Twenty-two years into the millennium, there are still some central bankers who still don’t understand what happened when the Bretton Woods system was superseded. Some even think that they must re-enact Bretton Woods solutions to Twenty-First Century problems. Ben Bernanke is not one of them. Unfortunately, he has retired.
Cleveland Fed president Loretta Mester epitomizes the kind of Barbarous Relic, from the Twentieth Century, lurking, in the Twenty-First Century, on the FOMC. She recently yearned, for times past, and her hero, when she affectionately reminisced that ‘ perhaps Paul Volcker said it best as he fought inflation in the 1980s: “…failure to carry through now in the fight on inflation will only make any subsequent effort more difficult, at much greater risk to the economy.”’
In her latest guidance, Mester, also said that, by the Fed’s measures, there are no financial stability risks, currently, out there. The cognitive blindness is, hence, systemic to the Fed, as an institution, by nature of its out-of-date processes for tracking the US economy. This blindness, also, missed the inflation spike, when it was occurring, back in March 2021, because the dogma and process blindly divined transient inflation. This blindness now misses the financial stability risk and the Fed’s current insolvency.
Mester intends to make the financial stability risk worse, by the application of her subjective monetary policy tool called “Perseverance”, and also to make it last for all of 2023. There is cognitive blindness and, then, there is sheer madness. Mester is drifting rapidly towards the latter affliction. This author wonders if she has attended any Nobel Laureate book-burning parties recently.
This author suspects that, in practice, Chairman Powell wants to apply the same monetary policy action used by Alan Greenspan, in the fin de siècle of the 20th Century, but more on this later.
Until Congressmen have read Bernanke’s new book and decided if there is something useful, for the dual mandate, in it, the Fed has little to fear from book reviews by esteemed economists. In the meantime, Chairman Powell sticks to his script and vows to do whatever it takes, because low inflation is “the bedrock of the economy”. Well, it is, at least until conventional economic wisdom decides that increasing labor force participation, and the working man/woman, are the bedrocks of the economy, that is.
(Source: the Author)
To be fair to Powell, and his team, they have tried to reprise the Greenspan 1990s era. This attempt is more in touch with the Bernanke School of thought than the Volcker School of thought. Sadly, however, because they started to address the current inflation threat too late, Powell’s team had to make their attempt look and sound more like Volcker’s. This regressive drift, towards Volcker, has had disastrous consequences for the global economy and the domestic economy of late.
· In essence, supply-side growth stimulus is the whole objective of central bank financial stability policy, pretending to be monetary policy, going forwards.
· Don’t fight the Fed’s great balance sheet rotation, track it with a “Hypergrowth Phase” demand-side to supply-side portfolio rotation instead.
· The great rotation, from demand side to supply side assets, market call was initiated by Augustin Carstens at Jackson Hole.
(Source: the Author)
Chairman Bernanke, a few good economists, and central bankers, including Christine Lagarde, and Governor Kuroda, are, however, in the Twenty-First Century dealing with the contemporary, rather than the historic, financial stability challenges of this epoch. Chairman Powell is a Barbarous Relic, in the Keynesian sense of the word, who threatens to spoil the party.
If he makes it, into the present, Chairman Powell will join the Biden Administration, and a handful of global economic architects, in the developed world. This group is trying to execute the supply-side process of “Friend Shoring” and fiscal stimulus; whilst fighting the malign influence of China and Russia at the same time. The first thing that Powell should do is read Bernanke’s book.
Unfortunately, readers, of Bernanke’s book, won’t find any cheat codes. No self-respecting central banker or economist would put his name to the explanation of what happens during financial crises, in which they find themselves to be insolvent. Any explanation could one day be used as evidence, should the central bankers find themselves on trial for breaking Federal laws on money laundering and wire fraud.
The current theory, and theorists, have not, yet, been rewarded with Nobel Prizes for economics, but one senses that they should. This author believes that the creative fiction, behind the narrative thesis, rather than economics, would be more deserving of the award.
(Source: the Author)
In the previous report, this author had half-suggested that prizes, of some kind, should, also, be given to the economists who had dreamed up the fiction known as the Fiscal Theory of the Price Level (FTPL) and the Government Budget Constraint (GBC). Some kind of recognition for these tautologies which manage to bring Monetarists and Keynesians together is worthy of recognition.
This author also suspected that FTPL and GBC would find their way into the case for, the defense of, the alleged money laundering and wire fraud that will be the response to the next financial crisis.
This author has noted that Chairman Powell’s policymaking is the prevailing law, at the Fed, but questioned if it is legal. Ever since he became Fed Chairman, Jay Powell has been very assiduous about making sure that the FOMC periodically affirms, for the record, that it is acting in compliance with its Congressional mandates. This may not just be a way of avoiding censure by Congress, for consistent failure to perform its duties. It may be a legal defense deposition for doing something that would be considered criminal in any other walk of life than central banking.
This author has, also, noted that whilst doing a great job, on making legal depositions, Chairman Powell is doing a crap job of policing the ethical behavior of his colleagues. If he does go, this will be what does for him.
MMMT versus Dope Inc: Who’s the real Dope?
Thus far, the subjects of Dope Inc. and Modern Monetary Monopsony Theory (MMMT) have been covered in this series of reports. Dialogue, with a prescient reader, and the recent Nobel Prizegiving have set the agenda for this next discussion topic. The subject matter is what the State Department calls a VICE. The acronym refers to the term Vertically Integrated Criminal Enterprise. Unfortunately, there may be a Federal Reserve VICE.
The back and forth has prompted the author to, prematurely, reveal his suspicion that the current layering exercise, on the Fed’s balance sheet, is possibly the greatest money laundering operation ever hiding in plain sight.
The mechanics, of this process, involve the creation of “deferred assets out of thin air” by the Federal Reserve. These “deferred out of thin air assets” are created, by the Fed, and not the US Treasury, to cover the losses on the central bank’s balance sheet.
Negative carry is handled by the Fed through a special form of accounting that allows monetary policy to continue uninterrupted. The Fed will continue to pay its interest expenses, but will finance it by creating a “deferred asset” out of thin air. The deferred asset is essentially an IOU the Fed writes against its future income. The Fed expects to eventually have positive net interest income again when it cuts rates during the next economic downturn. Those earnings will first go towards repaying the deferred asset before being remitted to the U.S. Treasury.
(Source: FedGuy, emphasis by the Author)
These “deferred out of thin air assets” are then layered with US taxpayers’ funds, in the form of US Treasury securities, on the Fed’s balance sheet. The layered proceeds are then integrated, into the real economy, through the Federal Reserve Bank system, by the injection of bank reserves, which are then multiplied through fractional reserve banking. The potential crime of wire fraud is also palpable in this process.
Congress does not mandate the alleged money laundering process.
Congress mandates that the Fed should manage inflation, and full employment, which the central bank does poorly. The Fed does what it is not mandated to do with great efficiency. If only this efficiency could be replicated in its mandates.
According to the latest FOMC meeting minutes the current size of the layering, of “ deferred out of thin air assets”, and hence unrealized losses, was valued at $2.9 Billion. The minutes were also at pains to say that this is all perfectly legal and even to be expected. The recorded minutes don’t see these losses, or the associated requirement for $2.9 Billion of layering, as a constraint on monetary policymaking.
The, almost, psychopathic ambivalence shown, in relation to the magnitude of the losses, would not get any FOMC members a regular job, on Main Street, if they were to be fired. They would, doubtless, find positions in the drug cartels with such unflappable credentials and layering skills. Failing that, there is Wall Street and the Hedge Fund community.
One Fed psychopath may soon be sending out his CV.
This same psychotic fingerprint is evident in the Fed’s attitude to ethical dealing. Atlanta Fed president Raphael Bostic is the latest in an increasing list of regional Fed presidents who get caught out breaking the ethical rules on insider trading. This is what happens, in the ivory tower, of economic watchers, when there is no one watching them.
The epiphany, of the latest, in-house, Fed ethics scandal, during an IMF summit, in Washington, is timely, to say the least. It puts Chairman Powell, and the Fed, in the spotlight. All the human fallibility, and conflicted interest, in the can of worms, can be seen squirming around alongside a global economy, in disarray, and in need of ethical leadership.
The notion that central banks can be trusted to be independent is broken. Independence has gone. Accountability should, now, take its place. Heads will roll, at the Fed, perhaps, even, the biggest head of all.
If you can get away with the greatest money laundering process, in the modern world, and you have innate psychotic tendencies, it is logical for you to assume that you will think that you can get away with a little, unethical, insider dealing. If Congress pulls you up, just point your finger at Nancy Pelosi who has been getting away with it for years. Policymakers and central bankers are unaccountable, and this is what happens when they are allowed to get too close to the moneymaking machine.
Fed officials, like Bostic, are Free-Loading. No amount of monetary policy tightening Front-Loading can hide this fact. Chairman Powell is complicit, because he is their leader and, therefore, responsible for their behavior by default.
Chairman Powell has, thus, also, become a Free-Loader, just like his corpulent psychotic colleagues. If he were honorable, he would resign. The most egregious, unethical, personal behavior, of Fed officials, in the central bank’s history, has happened on Powell’s watch. Bostic is not an isolated case. He is a serial case in a series of unethical events. There is a pattern of behavior at the Fed, not just in relation to its money laundering activities, that a law enforcement investigator would find to be of significance.
It’s not, just, a few bad apples it’s a whole tree with deep roots and broad branches. This is, in essence, what a VICE is.
All communication from Fed officials, except one, should, henceforth, be taken with a big pinch of salt, as the speakers might be talking their own books. Powell’s position is now untenable. He, clearly, cannot govern the ethical behavior of the FOMC, and the committee’s conflicting interests, so how can he govern their monetary policymaking decisions in good faith? He had a good pandemic, but since then it has all gone to hell in a handbasket. Termination can be a kindness in extreme circumstances.
There is one Fed official, however, who is an untainted beacon of light, and hope, for the Fed and the US economy. There is no hint of personal impropriety in her dealings and no sign that she is an eager participant in the Fed’s money laundering process. Indeed, she would like to constrain the money laundering by acting responsibly. Unfortunately, she will be retiring soon. This author hopes that she doesn’t disappear.
So, how are those Constraints which Esther mentioned working out for y’all?
Clearly, Kansas City Fed president Esther George wished to have her recent Jackson Hole event as a forum to discuss the constraints, of balance sheet losses, upon monetary policymaking. With hindsight, it is also clear that she was overruled. It is less clear, but still possible, that she was overruled by a bunch of, leaderless, money launderers with innate psychopathic tendencies.
It is also clear that the losses and, hence, the constraints have got larger since then.
After the Bostic scandal, it is evident that the biggest constraints are the judgment and behavior of Fed personnel themselves. These, potentially, psychotic individuals, with the exception of Esther George, have been exposed as conceited, predatory, and over-confident.
Over the summer, Esther George held a therapy session, at Jackson Hole, to help her colleagues work through their issues. Her conceited, venal, and over-confident guests appear to have been offended. In their pique, they, seem to have, collectively, self-reinforced all their biases, and human frailties, in order to scorn their well-intentioned host. Even now, as she offers professional counseling, they are still off on one, slagging her down and, dragging the house down.
Now, however, with another one of their number facing jail time, George’s patients have an opportunity for reflection and redemption.
Fed Guy the apparent Fed source, that unintentionally blew the whistle on the great money laundering caper, has recently updated on where the Fed’s head is at. Fed Guy presents himself as the new John Hilsenrath so he is always worth listening to.
· Deep Throat says mind the Fed’s QT (Credible Commitment) Gap.
· The Quality and Quantity of Tightening are constrained by Esther George’s soliloquy.
(Source: the Author)
Apparently, the Fed’s head is constrained, after all, as it should, already, have been when all the constraints were put on the table, at Jackson Hole, by Kansas City Fed president Esther George. Fed Guy’s use of the word solvency, together with the word constraint, is loaded with implications and inferences.
According to Fed Guy, global Solvency Constraints will constrain quantitative tightening, so much, that quantitative easing could quite possibly reappear, in the form of the “Fed Put”. He even cites the UK, and the Bank of England, as his and, therefore, the Fed’s precedent for acting to save the day.
Suddenly, “safe assets” aren’t safe anymore, with the notable exception of US Treasuries. Well, US Treasuries have to be safely solvent, don’t they, otherwise, the Fed and the global economy are insolvent and Fed Guy will look like a charlatan.
There’s no magic, and no prestige, as explained by this author, if US Treasuries are seen as risky.
It’s time for those “deferred out of thin air assets” that the Fed has been printing, to hide its losses, to get layered with some Q-eased US Treasuries issued in support of Biden’s “Friend Shoring” fiscal stimulus.
The only thing missing now is the FOMC. Apparently, some committee members are still MIA, allegedly, fighting inflation. Others may be talking to their brokers. Others may be talking to their lawyers.
Where’s Wally?
As the facts change, rapidly, and slowly, the Fed is changing its mind rapidly, and slowly. The resulting positioning and guidance are chaotic. This chaotic presentation simply begets a chaotic response from observers. The chaotic response, in itself, is a further monetary policy tightening event.
Fed Vice Chair Lael Brainard’s recent guidance was a study in chaos. Brainard, literally, set out the whole litany of rapid, and slow, changes in the economy with the usual disclaimer that the Fed’s own actions will have a lagged impact on this list. It was poor guidance. Central bankers’ credibility devolves from consistency and confidence. Brainard was lacking in both, on this occasion.
The conclusion to be drawn, from Brainard, is that the Fed could be forced into action to save the global economy before the lagged improvement of inflation occurs. Mr. Market speedily went about creating the conditions that will force the Fed to behave in this way.
The chaos recently articulated by Fed Governor Christopher Waller was more structured and better presented than that from Brainard. One could say that Waller’s structure was lagged.
Waller set out the case for why there will be a housing crisis, next year because Fed policy acts with a lag, and house purchase and rental contracts are also lagged, over a longer period of time than consumer goods transactions. In short, the structure of the housing market creates a lagged response. Rather than accommodate this lagged effect, into his current thinking, Waller would rather wait for it to happen before reacting.
Waller’s description, of the “lagging” housing market dynamics, is pictorially represented in the latest Fannie Mae Home Purchase Sentiment Indexes housing and rental expectations data.
Waller also seems to be of the opinion that the global central banks’ financial crisis-fighting tools, such as central bank swap lines, can be pulled off the fence so swiftly that any crisis will be nipped in the bud. He obviously hasn’t been to the UK recently! He obviously hasn’t heard that these swap lines are already getting maxed out, either.
Suffice it to say, that Waller will apply more lagged headwinds, to the US economy, under the misplaced belief that he can easily reverse them at any time. Seemingly, monetary policy stimulus acts with less of a lag than contraction.
· The US will have a barnstorming attempt at a soft economic landing.
(Source: the Author)
Chicago Fed president Charles Evans has a name for the chaos, of which Brainard and Waller speak. That name is Soft Landing.
Evans currently foresees a swift improvement, in inflation, whilst the job market remains tight. This is his Soft Landing. This landing, allegedly, can, and will, occur when Fed Funds are circa the 4.5% consensus target.
From his comfort zone, Kashkari recently stated that he “is not comfortable saying that we (the FOMC) are going to pause.” Furthermore, his “bar” to changing position is “very high”. Hence, the bar to a recession is very low, by inference.
(Source: the Author)
It will be difficult, to land the US economy softly, if FOMC members, like Neel “Ex Culpa” Kashkari remain self-constrained in their comfort zones. Kashkari recently updated that his bar to a Hard Landing remains low.
The landing will, also, be hard if Fed Governor Michelle Bowman is allowed to handle the controls. Bowman recently tried her hand at explaining that, whilst currently disastrous for financial stability, the Fed’s extended forward guidance will liberate the economy from inflation. Evidently, she has forgotten how extended forward guidance, about transient inflation, and the need to be patient, played out. Forward guidance doesn’t work if it is based on erroneous assumptions and lazy analysis.
· Given the diversity, of the US real economy, smaller sustained rate hikes, as prescribed by Kansas City Fed president Esther George, are more appropriate.
(Source: the Author)
Fortunately, Esther George has not retired yet. She may, even, single-handedly pull off the Soft Landing. This would be nothing beyond her capabilities. In her latest guidance, she was clear that inflation is too high. She would not say that growth is too strong, or on the verge of stalling, however. Her guidance underlined the case for smaller, incremental rate hikes, that she has already made.
This kind of objectivity, without hyperbole, is exactly the way to speak when flying through Stabflationary storm clouds. Incremental rate hikes may also avoid destroying the value of the Fed’s balance sheet. If they actually repair the value of the Fed’s balance sheet, then, the central bank won’t have to do the aggressive money layering that it is currently obliged to do.
· Esther George’s sound monetary policy compass will be sorely missed when she retires.
(Source: the Author)
The Quality and Quantity of Tightening are Constrained ….
Kansas City Fed president Esther George continues to be the biggest Alpha Vixen, of central bankers, in the Deformed Hedgehog milieu.
(Source: the Author)
One of George’s colleagues appears to be hysterically lost. On closer inspection, and keeping in mind the psychotic tendencies, already identified, within the Fed, the hysteria is consistent with the unethical pattern of Powell’s Fed.
This author noted that whilst George was speaking calmly, and conciliatorily, an almost hysterically animated San Francisco Fed president Mary Daly was straining her vocal cords to drown the calm speaker out.
This dissonant contradiction highlights a critical issue for the Fed. The Hawks, who used to be Doves, are not used to being Hawks. Consequently, these newly-fledged Hawks are a little immature and a little bit too aggressive. They want inflation to be over, already, so that they can go back to being Doves again. We’ll call them Front-Loaders.
Esther George has always been a fully-fledged Hawk, but, she has been consistent, measured, and never too aggressive. George has always been incremental, in her approach to easing and tightening. She understands that true central bank credibility comes from consistency. She also understands that there is less chance of getting it wrong, especially given the lagged impacts of monetary policy, if one is incremental. We’ll call her an Incrementalist.
George’s wisdom appears to be lost on the newly-fledged Front-Loaders that used to be Doves. It’s painful to watch. With inflation remaining sticky and financial stability risk climbing, the need to remain tighter for longer suggests that an incremental approach, to tightening, is optimal.
The newly fledged Front-Loaders do not wish to be embarrassed again by suddenly changing from Front-Loaders to Incrementalists. Like all psychopaths, they place their personal prestige higher than the threat they pose to the US economy. They should be fired. George should be made the emergency Fed Chair. Sadly, we do not live in a perfect world.
The best, that we can hope for, is that Chairman Powell grows a pair and uses his casting vote power to magic Incrementalism into life. Since he dithered, and procrastinated, before he became a Free-Loader, the risk is that he will prevaricate for too long.
There was a strong contrast between Daly’s bitching and George’s beseeching styles. For a moment, this author imagined that he was watching Daly’s Wicked Witch, of the West Coast, versus George’s kindly Witch Glinda who’s really someone’s auntie from Kansas. Loretta Mester was Dorothy and Jay Powell was Toto. Charles Evans was the Tin Man. Neel “Ex Culpa” Kashkari was the Cowardly Lion and Jim Bullard was the Scarecrow.
What a show!
Unfortunately, the reality is much worse than the fantasy.
Daly’s psychotic guidance appeared vitriolic and personally aimed at George. It sounded like a case of refusal to accept another point of view as potentially better than one’s own.
Daly has decided to hike rates aggressively, come what may, even though the impact is lagged, and doesn’t want to lose face. This author remembers a similar stubborn refusal, by Daly, to accept that inflation wasn’t transient. It is not clear if this inflexibility is a character defect or just a lack of intelligence. Her inflexibility is dangerous.
Daly has decided to hike rates aggressively, come what may, even though the impact is lagged, and doesn’t want to lose face. This author remembers a similar stubborn refusal, by Daly, to accept that inflation wasn’t transient. It is not clear if this inflexibility is a character defect or just a lack of intelligence. Her inflexibility is dangerous.
George, magnanimously, claimed to understand the original case for Front-Loading but asked if the Front-Loaders should, now, reconsider their logic in the face of obvious financial stability challenges. She even gave Daly a way out, by emphasizing that the lagged nature of monetary policy actions is the exit door through which one does not lose face. Apparently, Daly will be damned before she will reconsider. The dissonance created, alone, just increases the volatility and the financial instability.
If Chairman Powell does no grow a pair and turn Incrementalist, the pair may get, painfully, grafted onto him, so that he is forced to turn, by Mr. Market.
Alternatively, Powell may be emasculated by being sacked for incompetence and overlooking unethical behavior.
Mr. Market buys the idea that the Fed will have to ease, as soon as it has tightened. He is, thus, by default, open to the possibility of baby steps being taken, by the Fed, to mitigate another GFC. Once he is introduced to Incrementalism he may like it. Anything is better than these 10% daily swings, either side of the unchanged line, that the Front-Loaders seem to think that their credibility will be rebuilt on.
Esther George looks big enough to allow Mr. Market and Chairman Powell to steal her valor. Mary Daly is a serial valor thief, which she pretends is the embracing of consensus. The Fed is, apparently, full of thieves, and money launderers, except George. Hence, it’s all set up nicely for a U-Turn.
When it comes to U-Turns, Britain is currently being manipulated to set precedents in this maneuver.
Beggars cannot be choosers ….
· Britons are the useful idiots that US home flippers were, in the GFC, to enable the next global credit expansion.
(Source: the Author)
This author believes that the economic crisis, in Britain, is being manipulated by global interests in, UK regime change and, a global economic stimulus. Britain is both a catalyst and a tool. Britons are actors. It is, therefore, no coincidence that things appeared to have come to a head during the recent IMF meetings in Washington.
Despite being the same, as Japan’s, Britain’s position, as the odd man out, was fully on display at the latest IMF meetings in Washington. This author has chosen to illustrate the ostracism, leading to UK regime change, and global economic stimulus, by comparison with Japan.
· Kishidanomics i.e. Abenomics II is the globally acceptable face of UK Kwasinomics.
(Source: the Author)
Japan receives plaudits, accolades, and affirmation, most recently from the IMF, for doing what the UK Government and the Bank of England are trying to do.
The BOJ owns 70% of the JGBs in issue. JGBs only trade by BOJ appointment. There is no liquid public JGB market. The JGB market has been Monopsonized by the BOJ.
The Japanese government has just written the developed world’s biggest put option, to date, by guaranteeing to pick up the energy bill for the whole economy. This fiscal put option ticket will, no doubt be deficit-financed and, then, Monopsonized by the BOJ.
The Bank of England, on the other hand, is heavily criticized, for its Gilt market intervention, even though its balance sheet has yet to reach the egregious zone occupied by the BOJ.
The Chancellor of the Exchequer got shafted, first by the IMF, and then by his own Prime Minister for attempting to be Japanese.
Somehow, the IMF seems to think that this unsustainable largesse is all perfectly normal, when it’s done by Japan, but not when it’s attempted by Britain. One has to ask whether the IMF is institutionally racist.
This author doesn’t think that the IMF is racist. It is however globally elitist, and imperialist, in a way that conflicts with the kind of Anglo-Saxon elitism and imperialism currently held by the UK Tory party.
A cabal, including the IMF, has decided that Britain, and its current leadership, cannot be allowed to get away with devaluing and inflating their way out of trouble. One senses that if a different UK government was in place that, was globally acceptable, then, the competitive devaluation strategy would be tolerated.
Maybe the departed UK Chancellor should have called himself Kwasisan. It is unlikely that this would have worked. The global cabal, including the IMF, has divined that the global reflation will, officially, occur courtesy of the Yen Carry Trade. This is logical since Japan is a front-line combatant in the “Techno-Economic War” with China. The current Yuan devaluation, from China, must be counter-attacked by, one of the good guys, in this case, the Yen devaluation.
The crisis of Kwasinomics was the catalyst to enable the global reflation via the Yen Carry Trade. This is why Kishidanomics is good and Kwasinomics was bad, in IMF’s frame of reference.
The global Yen Carry Trade is disinflationary since the US Dollar remains strong. “Things” that get priced, and traded, globally, in US Dollars, thus, fall in price even as the global economy is reflating. In fact, funnily enough, the fall in price, of these “things” is a global economic tailwind. The reader will note that this is, also, why Russia’s, and China’s, attempts to price “things” in other currencies are being so ruthlessly stomped.
The Yen Carry Trade is, however, inflationary, in Japan, but this is the whole point. Japanese policymakers, although not Japanese consumers crave inflation. The Japanese Government will pick up the inflation cost, by underwriting the nation’s energy consumption bills, until the global price of energy falls because of the US Dollar's strength. The energy cost mitigation is deficit-financed which effectively weakens the Yen.
Apparently, all this Yen Carry Trade skulduggery appears to have been agreed, at the highest global levels, under the aegis of the IMF. A little inflation never hurt the world’s most structurally deflation-prone economy in any case. That was the whole story with Abenomics and Kurodanomics. Nothing has changed. In fact, if anything, Japan really needs an economic stimulus if it is to stand up to China.
Japan Inc. is setting up, for the Yen Carry Trade, in addition to other “Friend Shoring” elements of President Biden’s global “Slam Dunk”. This global positioning is evinced by the strategic behavior of Sony and Honda. The two will combine onshore in the USA, and Japan, exclusively, to develop electric vehicles.
US ambassador to Japan “Rahmulus” Emanuel could also be seen, during the recent IMF meeting, encouraging other Asian trade partners to avail themselves of the Sony-Honda competitive strategic opportunity from the recent passing of the Chips Act.
As the author said, in the beginning, the provision of urgently required US Dollars, when they are scarce, globally, comes with some onerous geo-political conditions. Call this kind of golden parachute a kind of golden handcuff.
· The UK has turned Japanese in 2022 instead of 2023 as originally predicted by the Bank of England.
(Source: the Author)
This situation must be particularly galling, for the Bank of England, since the central bank (correctly) predicted that Britain would turn Japanese.
· “Weimar-on-Thames” style with an English accent UK economic policymaking seeks to nationalize the Bank of England “Kremlin-on-Thames” style with the same English accent.
(Source: the Author)
The Bank of England has been captured by the fiscal imperative, in the same way, that the BOJ has been fiscally dominated, first by Abenomics, and then by Kishidanomics.
Britons have taken to the streets to show their displeasure. Some provincials have gone even further and demanded to leave the Union. Britons don’t like Kwasinomics. Neither will they like the austerity that the short-lived experience of Kawsinomics precedes. If the austerity is enforced by international creditors, and the IMF, Britons will, doubtless, lust after the freedom that was once promised, by Boris Johnson, back when it all started to go wrong for them.
It is only a matter of time before the UK Chancellor calls the IMF for assistance, assuming that he has not done so already.
The IMF looks more approachable these days.
(Source: the Author)
The last report speculated about the imminent meeting between the UK Chancellor and the IMF. Britons were observed, in the streets, fomenting rebellion, and becoming ungovernable. This rebellion has continued with animal liberationists, belatedly, getting in on the action. Every, and any, Tom, Dick, and Harry/Harriet, with a grievance, and/or an issue, is airing it in public.
It didn’t take long for the meeting to get scheduled, on the sidelines of the IMF annual meetings in Washington. It took even less time for Kwarteng to get fired, and for “Lizzo” to soften, her cruel attitude, toward those who have no intention of voting for her in the next election.
This author theorized that the IMF would recommend fiscal austerity, and structural economic reforms, involving privatization. He also concluded that the Tory government would use the IMF’s recommendations as a cover story to transfer economic wealth, and control, into the hands of their allies. This process, of hollowing-out, has already begun in anticipation of the inevitable need for austerity after a further round of deficit-financed attempted vote buying has passed.
This hollowing-out, of the state, was seen as a scorched earth policy, aimed at leaving nothing behind, for the following government to defend itself with, as the Tories-in-opposition waged a guerrilla war. Thus far, it all seems to be going to plan, as they say.
· UK underdog status risks becoming global pariah status in the developed world under the current regime.
(Source: the Author)
The UK’s bankrupt prostration, at the feet of the IMF, was framed, in some very negative context, prior to the meeting. This framing was a knife in the UK’s back. The knifing was made more painful because it came from a, once dependable, former colonial dependency. Britain’s predicted “global pariah” status was becoming clear. No doubt, the IMF would sharpen its axe, even finer, in view of this demotion and destruction of the credit rating of the UK.
Rhetorical knife in hand, Canada’s trade representative Mary Ng politely informed HMG that its application to join the Comprehensive and Progressive Agreement CPA for Trans-Pacific Partnership (CPATPP) will remain pending until further notice.
· Britain conflates the Commonwealth regime with the concurrent G7 global governance best practice regime.
(Source: the Author)
This author suspects that the reticence, of the CPATPP nations, comes not, from historical British Colonial oppression, but, from the fear of unfair competition instead. Britain is debasing its currency. “Lizzo” is also trying to legislate an emerging market set of economic rules that will make Britain aggressively beggar-thy-neighbor its trade partners.
But if there are no free markets to trade in, and everybody has got a regional trading bloc, having the cheapest currency in the world won’t boost your exports. You need counterparties, preferably with hard currencies. Outside of the EU, Britain is distinctly lacking in counterparties. In fact, the EU may be nixing Britain’s chances of joining anyone else’s trading bloc without first re-joining theirs.
“Lizzo” also intends to starve Britain’s COVID-ly experienced, and hence, entitled, workers back, to the coal face, with austerity and indentured slave working conditions. She will now try to make this appear more equitable by not cutting taxes, for the Bosses, who would have voted Conservative anyway.
Ditching Kwasi is supposed to attach the vote-losing, overzealously austere policies to him and then draw a line under them. This won’t fool anybody, because “Lizzo” is a narcissist and a control freak. They were “Lizzo’s” plans and the venal Kwarteng was happy to front them. As the Resignator said, to the PM: "Your (“Lizzo”) success is this country's success ", hence, all the policies and their failures are, by default, hers also.
Britain is not so much a global pariah, as a mad dog with a lethal bite. Maybe it’s time to put the old “female dog” down, too.
Britain is out of sync with its two main trading partners. It is trying to replace them with former colonies, whose economies are being undermined by exiting capital flight. These emerging economies are becoming submerging economies, in the economic sense. Britain is converging, by submerging, on these submerging economies.
(Source: the Author)
“Lizzo” remains committed to making Britain the cheapest, and easiest, place to do business, “Submerging Market’s” style, with little or no regard for its workers. Britons henceforth, ever, ever, ever shall be slaves. Even Asian nations are worried about losing their edge in the unfolding dialectic.
Britain hasn’t been globally blackballed, it just doesn’t have a sponsor, seconder, and/or any votes for membership of the various trading clubs out there. The former colonies, it seems, are in no mind to embrace their former colonial master, either. It’s a far cry from the heyday of the East India Company. Even the flagship, of the new colonial maritime dream, had, semiotically, broken down to reflect the pathos, in this occasion of unfolding historiographic tragedy. The functioning naval wreck couldn’t even make its therapist appointment on time.
Rumour HQ was putting it out, there, that all of this pretended catastrophe was a cunning plan to fool enemies, ungrateful former colonials, and the IMF into a false sense of security. Rumour HQ may also wish to write a new series called Blackadder goes Fifth.
As the sun sets, on the Empire, Britain is being forced into line with New World Order under construction that will, allegedly, cover what was mostly pink on the maps. Compliance involves ostracising and sanctioning China.
Boris Johnson labeled China a “systemic competitor”. This policy designation gave him license to ride the dragon in the hope of enriching his private empire and rebuilding the British Empire. Suddenly, with Johnson gone, China has been redesignated, as an “acute threat”, as “Lizzo” seeks to rebuild bridges, that he destroyed, with Washington and Brussels.
GCHQ’s DG Jeremy Fleming is already casting aspersions on the malign influence of China’s CBDC ambitions. This criticism neatly fits into the unfolding story of MMMT versus Dope Inc. that this author has been following.
MMMT is the currency of, Modern Monetary Monopsony Theory, hence, the good guys. China’s CBDC is the currency of the bad guys, and also the medium of exchange for Dope Inc.
MMMT versus Dope Inc. show me the money ….
The Fed isn’t the only VICE doing the money laundering, but at least the US central bank seems to be getting away with it. The same cannot be said for President Xi Jinping. Neither, it seems, can it be said for President Trump.
The concept of Dope Inc. was introduced, by the author, in a previous report. The introduction was to an emerging narrative that places the Chinese Communist Party, as the Snakehead, in a global narcotics operation that uses the Belt and Road as a logistics network. Dope Inc. was observed to be flooding America with drugs through the agency of the Mexican drug cartels.
There are new episodes in this series.
In one new episode, a state-sponsored Chinese gangster “transformed” the money laundering operation of Dope Inc. in North America. This was done through the application of Hawala techniques and cryptocurrency.
In the second new episode, the money laundering trail appears to lead directly to President Trump.
The information, and the photos, especially of the presidential helicopter being used, like an Uber, for the clandestine meetings, are slam-dunk evidence for President Trump’s indictment process.
The two new episodes are also a Slam Dunk for President Biden’s Mid Term-and-beyond-show ratings.
When the President Slam Dunks, it always seems to end up in the same “bottom” first. Evidently, Tulsi Gabbard has decided to call double dribble on the “elitist cabal of warmongers” involved in the Slam Dunk. The same-said elitist “bottom”, also has a way of monetizing the Slam Dunk well before lesser mortals get the good news.
This time, Madam Squeaker allegedly made a killing in WEED.
(Source: the Author)
In the last report, this author awarded Speaker Pelosi the new sobriquet “Squeaker Pelosi”. The award was made, not for her recently “making a killing in WEED”, but, for the audible key signals that her pecuniary behavior makes.
The author notes, with a wide smile, that Madam Squeaker is about to make another killing, so to speak, in the narcotics world.
It would seem that “Squeaker Pelosi” can smell blood, as well as narcotics, and money laundering, allegedly, in President Trump’s Clubhouse Chinese Laundry Blues.
Since he bailed on a real fight, with “Madam Squeaker”, back on Jan 6th, she may now intend to inflict the lethal revenge blow, on the former POTUS, with her gavel.
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